What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 170 added, 154 removed, 815 unchanged (28% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Income (Unaudited)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

15 unchanged sentences

Operating Income 40,918 20,228 161,293 103,488

Other income, net 1,110 831 1,305 1,107

Other income (expense), net 400 ( 72 ) 1,705 1,036

Interest charges 17,022 7,076 50,861 21,272

11 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

9 unchanged sentences

63 328 ( 698 ) 202

Net gain on interest rate swap cash flow hedges, net of tax of $ 32 , $ 267 , $ 175 and $ 213 , respectively

Net gain (loss) on interest rate swap cash flow hedges, net of tax of $( 634 ), $ 112 , $( 459 ) and $ 325 , respectively

( 1,851 ) 316 ( 1,340 ) 928

6 unchanged sentences

Condensed Consolidated Balance Sheets (Unaudited)

Assets June 30,

Assets September 30,

2024 December 31,

36 unchanged sentences

Condensed Consolidated Balance Sheets (Unaudited)

Capitalization and Liabilities June 30,

Capitalization and Liabilities September 30,

2024 December 31,

38 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

16 unchanged sentences

Accounts payable and other accrued liabilities 6,475 ( 11,128 )

Income taxes receivable/payable ( 6,036 ) 1,265

Income taxes receivable ( 8,734 ) ( 2,799 )

Customer deposits and refunds 981 3,076

17 unchanged sentences

Repayment of long-term debt ( 14,525 ) ( 16,009 )

Net cash used in financing activities ( 10,057 ) ( 62,027 )

Net Increase (Decrease) in Cash and Cash Equivalents 1,526 ( 2,035 )

Net cash provided by (used in) financing activities 35,044 ( 52,015 )

Net Decrease in Cash and Cash Equivalents ( 3,295 ) ( 4,411 )

Cash and Cash Equivalents—Beginning of Period 4,904 6,204

11 unchanged sentences

Compensation Treasury

Balance at March 31, 2023 17,790 $ 8,659 $ 379,703 $ 472,209 $ ( 1,983 ) $ 8,816 $ ( 8,816 ) $ 858,588

Balance at June 30, 2023 17,797 $ 8,662 $ 380,830 $ 477,795 $ ( 3,059 ) $ 9,001 $ ( 9,001 ) $ 864,228

Net income — — — 9,407 — — — 9,407

7 unchanged sentences

Treasury stock activities — — — — — ( 14 ) 14 —

Balance at June 30, 2023 17,797 $ 8,662 $ 380,830 $ 477,795 $ ( 3,059 ) $ 9,001 $ ( 9,001 ) $ 864,228

Balance at September 30, 2023 17,797 $ 8,662 $ 382,551 $ 476,601 $ ( 1,137 ) $ 8,987 $ ( 8,987 ) $ 866,677

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

9 unchanged sentences

— — — — — 1,927 ( 1,927 ) —

Balance at September 30, 2023 17,797 $ 8,662 $ 382,551 $ 476,601 $ ( 1,137 ) $ 8,987 $ ( 8,987 ) $ 866,677

Balance at June 30, 2024 22,299 $ 10,854 $ 755,751 $ 525,525 $ ( 1,576 ) $ 9,703 $ ( 9,703 ) $ 1,290,554

Balance at March 31, 2024 22,267 $ 10,838 $ 750,162 $ 521,689 $ ( 1,786 ) $ 9,562 $ ( 9,562 ) $ 1,280,903

Net income — — — 17,507 — — — 17,507

7 unchanged sentences

Treasury stock activities — — — — — 72 ( 72 ) —

Balance at June 30, 2024 22,299 $ 10,854 $ 755,751 $ 525,525 $ ( 1,576 ) $ 9,703 $ ( 9,703 ) $ 1,290,554

Balance at September 30, 2024 22,773 $ 11,085 $ 812,896 $ 528,426 $ ( 4,135 ) $ 9,775 $ ( 9,775 ) $ 1,348,272

Balance at December 31, 2023 (6)

10 unchanged sentences

— — — — — 725 ( 725 ) —

Balance at June 30, 2024 22,299 $ 10,854 $ 755,751 $ 525,525 $ ( 1,576 ) $ 9,703 $ ( 9,703 ) $ 1,290,554

Balance at September 30, 2024 22,773 $ 11,085 $ 812,896 $ 528,426 $ ( 4,135 ) $ 9,775 $ ( 9,775 ) $ 1,348,272

(1) 2.0 million shares of preferred stock at $ 0.01 par value have been authorized.

1 unchanged sentence

accordingly, no information has been included in the Condensed Consolidated Statements of Stockholders’ Equity.

(2) Includes 113 thousand, 108 thousand, 110 thousand, and 108 thousand shares at June 30, 2024, December 31, 2023, June 30, 2023 and December 31, 2022, respectively, held in a Rabbi Trust related to our Non-Qualified Deferred Compensation Plan.

(3) Includes shares issued under the Retirement Savings Plan and DRIP and/or ATM as applicable.

(2) Includes 113 thousand, 108 thousand, 107 thousand, and 108 thousand shares at September 30, 2024, December 31, 2023, September 30, 2023 and December 31, 2022, respectively, held in a Rabbi Trust related to our Non-Qualified Deferred Compensation Plan.

(3) Includes shares issued under the Retirement Savings Plan and DRIP as applicable.

(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 six months ended June 30, 2024 and 2023, we withheld 14 thousand and 20 thousand shares, respectively, for employee taxes.

For the nine months ended September 30, 2024 and 2023, we withheld 14 thousand and 20 thousand shares, respectively, for employee taxes.

(6) Includes 4.4 million shares issued during 2023 related to the acquisition of FCG.

22 unchanged sentences

In April 2024, the SEC issued a stay on the final rule as a result of various petitions being filed and that sought review of the final ruling in multiple courts of appeals.

At this time, it is uncertain when the review will be completed, the final outcome of the review, and the ultimate disclosure requirements.

At this time, it is uncertain as to when the review will be completed, the final outcome of the review, and the ultimate disclosure requirements.

Calculation of Earnings Per Share

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

13 unchanged sentences

Diluted Earnings Per Share $ 0.78 $ 0.53 $ 3.66 $ 3.47

(1) Weighted average shares for the three and six months ended June 30, 2024 reflect the impact of 4.4 million common shares issued in November 2023 in connection with the acquisition of FCG.

(1) Weighted average shares for the three and nine months ended September 30, 2024 reflect the impact of 4.4 million common shares issued in November 2023 in connection with the acquisition of FCG.

See Notes 3 and 9 for additional details on the acquisition and related equity offering.

6 unchanged sentences

The purchase price of the acquisition was funded with $ 366.4 million of net proceeds from the issuance of 4.4 million shares of our common stock, the issuance of approximately $ 550.0 million principal amount of uncollateralized senior notes, and borrowings under the Company's Revolver.

See Note 14, Long-Term Debt , and Note 9, Stockholders' Equity, for additional details on these financing activities .

See Note 9, Stockholders' Equity, and Note 14, Long-Term Debt , for additional details on these financing activities .

We accounted for the acquisition of FCG using the acquisition method.

25 unchanged sentences

Other transaction costs of $ 15.9 million, related primarily to the debt and equity financings executed in connection with the acquisition, were deferred on the consolidated balance sheet or recorded in equity as an offset to proceeds received, as appropriate, as of December 31, 2023.

For the three and six months ended June 30, 2024, the Company’s consolidated results include $ 32.5 million and $ 68.4 million of operating revenue, respectively, and $ 1.9 million and $ 6.0 million of net income, respectively, attributable to FCG.

These results include $ 1.4 million and $ 2.3 million of transaction and transition-related expenses, respectively, for the three and six months ended June 30, 2024.

For the three and nine months ended September 30, 2024, the Company’s consolidated results include $ 33.4 million and $ 101.8 million of operating revenue, respectively, and $ 3.9 million and $ 9.9 million of net income, respectively, attributable to FCG.

These results include $ 0.8 million and $ 3.1 million of transaction and transition-related expenses, respectively, for the three and nine months ended September 30, 2024.

Acquisition of J.T.

9 unchanged sentences

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

The operating revenues and net income of this acquisition were not material to our consolidated results for the three and six months ended June 30, 2024.

The operating revenues and net income of this acquisition were not material to our consolidated results for the three and nine months ended September 30, 2024.

Revenue Recognition

2 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 tables display our revenue by major source based on product and service type for the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

The following tables display our revenue by major source based on product and service type for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

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

19 unchanged sentences

Propane delivery operations — 22,929 — 22,929 — 23,197 — 23,197

Compressed Natural Gas Services

CNG / RNG Services

Marlin Gas Services — 3,832 — 3,832 — 2,595 — 2,595

Other RNG — 51 — 51 — — — —

Total CNG / RNG Services — 3,883 — 3,883 — 2,595 — 2,595

Other and eliminations

4 unchanged sentences

$ 130,633 $ 35,567 $ ( 6,062 ) $ 160,138 $ 102,411 $ 34,970 $ ( 5,834 ) $ 131,547

(1 ) Total operating revenues for the three months ended June 30, 2024 include other revenue (revenues from sources other than contracts with customers) of $ 0.1 million for both our Regulated and Unregulated Energy segments, and $ 0.2 million and $ 0.1 million for our Regulated and Unregulated Energy segments, respectively, for the three months ended June 30, 2023.

(1 ) Total operating revenues for the three months ended September 30, 2024 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 September 30, 2023.

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.

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

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

19 unchanged sentences

Propane delivery operations — 112,541 — 112,541 — 110,492 — 110,492

Compressed Natural Gas Services

CNG / RNG Services

Marlin Gas Services — 10,907 — 10,907 — 9,834 — 9,834

Other RNG — 51 — 51 — — — —

Total CNG / RNG Services — 10,958 — 10,958 — 9,834 — 9,834

Other and eliminations

4 unchanged sentences

$ 429,684 $ 160,089 $ ( 17,619 ) $ 572,154 $ 345,822 $ 158,886 $ ( 19,439 ) $ 485,269

(1) Total operating revenues for the six months ended June 30, 2024 include other revenue (revenues from sources other than contracts with customers) of $ 0.7 million and $ 0.2 million for our Regulated and Unregulated Energy segments, respectively, and $ 0.8 million and $ 0.2 million for our Regulated and Unregulated Energy segments, respectively, for the six months ended June 30, 2023.

(1) Total operating revenues for the nine months ended September 30, 2024 include other revenue (revenues from sources other than contracts with customers) of $ 0.9 million and $ 0.3 million for our Regulated and Unregulated Energy segments, respectively, and $ 0.9 million and $ 0.3 million for our Regulated and Unregulated Energy segments, respectively, for the nine months ended September 30, 2023.

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 .

1 unchanged sentence

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 June 30, 2024 and December 31, 2023 were as follows:

The balances of our trade receivables, contract assets, and contract liabilities as of September 30, 2024 and December 31, 2023 were as follows:

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

5 unchanged sentences

Our trade receivables are included in trade and other receivables in the condensed consolidated balance sheets.

Our current contract assets are included in other current assets in the condensed consolidated balance sheet.

Our non-current contract assets are included in receivables and other deferred charges in the condensed consolidated balance sheet and primarily relate to operations and maintenance costs incurred by Eight Flags that have not yet been recovered through rates for the sale of electricity to our electric distribution operation pursuant to a long-term service agreement.

Our current contract assets are included in other current assets in the condensed consolidated balance sheets.

Our non-current contract assets are included in receivables and other deferred charges in the condensed consolidated balance sheets and primarily relate to operations and maintenance costs incurred by Eight Flags that have not yet been recovered through rates for the sale of electricity to our electric distribution operation pursuant to a long-term service agreement.

At times, we receive advances or deposits from our customers before we satisfy our performance obligation, resulting in contract liabilities.

1 unchanged sentence

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

For the three and six months ended June 30, 2024 and 2023, the amounts recognized in revenue were not material.

For the three and nine months ended September 30, 2024 and 2023, the amounts recognized in revenue were not material.

Remaining Performance Obligations

Certain of 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 June 30, 2024, are expected to be recognized as follows:

Revenue for these businesses for the remaining performance obligations, at September 30, 2024, are expected to be recognized as follows:

(in thousands) 2024 2025 2026 2027 2028 2029 2030 and thereafter

9 unchanged sentences

The application was the first in the state and included four programs including, Home Energy Counseling, Home Performance with Energy Star, Assisted Home Performance with Energy Star, and a standard Offer Program in which customers can participate and allow for recovery.

The evidentiary hearing on this matter was held in April 2024 with all programs, with the exception of the Offer Program, approved by the PSC and rates became effective May 1, 2024.

In April 2024 all programs, with the exception of the Offer Program, were approved by the PSC and rates became effective May 1, 2024.

Delaware Natural Gas Rate Case:

In May 2024, our Delaware natural gas division provided notice to the Delaware PSC of its intent to file a petition seeking a general rate base increase based on a test period ending in December 2024.

The filing is expected to be submitted to the Delaware PSC in August 2024 and the outcome of the application will be subject to review and approval by the Delaware PSC.

In August 2024, our Delaware natural gas division filed an application for a natural gas rate case with the Delaware PSC.

In connection with the application, we are seeking approval of the following:

(i) permanent rate relief of approximately $ 12.1 million with a return on equity ("ROE") of 11.5 percent;

(ii) proposed changes to depreciation rates which were part of a depreciation study also submitted with the filing;

and (iii) authorization to make certain changes to tariffs.

In September 2024, interim rates were approved by the Delaware PSC in the amount of $ 2.5 million on an annualized basis effective in October 2024.

The discovery process has commenced and hearing for the proceeding has been scheduled for May 2025.

The outcome of the application is subject to review and approval by the Delaware PSC.

Maryland Natural Gas Rate Case:

1 unchanged sentence

In connection with the application, we are seeking approval of the following:

(i) permanent rate relief of approximately $ 6.9 million;

(i) permanent rate relief of approximately $ 6.9 million with a ROE of 11.5 percent;

(ii) authorization to make certain changes to tariffs to include a unified rate structure and to consolidate the Maryland natural gas distribution businesses which we anticipate will be called Chesapeake Utilities of Maryland, Inc.;

and (iii) authorization to establish a rider for recovery of the costs associated with our new technology systems.

In August 2024, the Maryland natural gas distribution businesses, the Maryland Office of Peoples' Counsel ("OPC") and PSC Staff reached a settlement agreement which provided for, among other things, an increase in annual base rates of $ 2.6 million.

In September 2024, the Maryland Public Utility Judge issued an order approving the settlement agreement in part.

The $ 2.6 million increase in annual base rates was approved and the Company will file a Phase II filing to determine rate design across the Maryland natural gas distribution businesses, consolidation of the applicable tariffs and recovery of technology costs.

The outcome of the application is subject to review and approval by the Maryland PSC.

Rate changes are suspended until December 2024.

Maryland Natural Gas Depreciation Study:

In January 2024, our Maryland natural gas distribution businesses filed a joint petition for approval of their proposed unified depreciation rates with the Maryland PSC.

A settlement agreement between the Company, PSC staff and the OPC was reached and the final order approving the settlement agreement went into effect in July 2024 which will include an annual benefit of $ 1.2 million.

A settlement agreement between the Company, PSC staff and the OPC was reached and the final order approving the settlement agreement went into effect in July 2024, with new depreciation rates effective as of January 1, 2023.

The approved depreciation rates will result in an annual reduction in depreciation expense of approximately $ 1.2 million.

Wildlight Expansion:

10 unchanged sentences

In June 2023, the Florida PSC issued an order approving a single total base revenue increase of $ 23.3 million (which included an incremental increase of $ 14.1 million, a previously approved increase of $ 3.8 million for a liquefied natural gas facility, and $ 5.3 million to transfer the SAFE investments from a rider clause to base rates), with new rates becoming effective as of May 1, 2023.

The Commission also approved FCG's proposed RSAM with a $ 25.0 million reserve amount, continuation and expansion of the capital SAFE program, implementation of an automated metering infrastructure pilot, and continuation of the storm damage reserve with a target reserve of $ 0.8 million.

On June 23, 2023, the Florida OPC filed a motion for reconsideration of the PSC’s approval of RSAM, which was denied on September 12, 2023.

On July 7, 2023, the Florida OPC filed a notice of appeal with the Florida Supreme Court, which is pending.

The Florida OPC filed their initial brief on January 31, 2024 with answer briefs filed on April 30, 2024.

The Florida PSC also approved FCG's proposed RSAM with a $ 25.0 million reserve amount, continuation and expansion of the capital SAFE program, implementation of an automated metering infrastructure pilot, and continuation of the storm damage reserve with a target reserve of $ 0.8 million.

In June 2023, the Florida OPC filed a motion for reconsideration of the PSC’s approval of RSAM, which was denied in September 2023.

In July 2023, the Florida OPC filed a notice of appeal with the Florida Supreme Court, which is pending.

The Florida OPC filed their initial brief in January 2024 with answer briefs filed in April 2024.

Oral arguments in the case are scheduled for December 2024.

The RSAM is recorded as either an increase or decrease to accrued removal costs which is reflected on the Company’s balance sheets and a corresponding increase or decrease to depreciation and amortization expense.

1 unchanged sentence

In general, the net impact of these income statement line items is adjusted, in part, by RSAM or its reversal to earn the targeted regulatory ROE.

For the three and six months ended June 30, 2024, the Company recorded decreases to asset removal costs and depreciation expense of $ 2.3 million and $ 5.7 million, respectively, as a result of the RSAM adjustment.

For the three and nine months ended September 30, 2024, the Company recorded decreases to asset removal costs and depreciation expense of $ 3.2 million and $ 8.9 million, respectively, as a result of the RSAM adjustment.

Storm Protection Plan:

1 unchanged sentence

The SPPCRC rules allow the utility to file for recovery of associated costs for the SPP.

Our Florida electric distribution operation’s SPP plan was filed during the first quarter of 2022 and approved in the fourth quarter of 2022, with modifications, by the Florida PSC.

Our Florida electric distribution operation’s initial SPP plan was filed during the first quarter of 2022 and approved in the fourth quarter of 2022, with modifications, by the Florida PSC.

Rates associated with this initiative were effective in January 2023.

The Commission voted to approve the projections in November 2023.

FPU projects to spend $ 13.6 million on the program in 2024.

The Florida PSC voted to approve the projections in November 2023.

FPU projects to spend $ 13.6 million on the program in 2024 for both capital and operating expenses associated with the program.

In October 2024, the Florida PSC approved the Company's projected 2025 SPP costs of $ 20.4 million for both capital and operating expenses.

GUARD Program :

6 unchanged sentences

The SAFE program is designed to relocate certain mains and facilities associated with rear lot easements to street front locations to improve FCG's ability to inspect and maintain the facilities and reduce opportunities for damage and theft.

In the same order, the Commission approved a replacement of 160 miles of pipe that was used in the 1970s and 1980s and shown through industry research to exhibit premature failure in the form of cracking.

In the same order, the Florida PSC approved a replacement of 160 miles of pipe that was used in the 1970s and 1980s and shown through industry research to exhibit premature failure in the form of cracking.

The program includes projected capital expenditures of $ 205.0 million over a 10-year period.

1 unchanged sentence

Specifically, the requested modifications will enable FCG to accelerate remediation related to problematic pipe and facilities consisting of obsolete and exposed pipe.

If approved, these efforts will serve to improve the safety and reliability of service to FCG's customers.

These modifications, if approved, will result in an estimated additional $ 50.0 million in capital expenditures associated with the SAFE Program which would increase the total projected capital expenditures to $ 255.0 million over a 10-year period.

The Commission decision is expected in September 2024.

These efforts will serve to improve the safety and reliability of service to FCG's customers and the modifications will increase the total projected capital expenditures to $ 50.0 million in capital expenditures associated with the SAFE Program, which would increase the total projected capital expenditures to approximately $ 255.0 million over a 10-year period.

The Florida PSC approved the modifications in September 2024.

Newberry Expansion :

1 unchanged sentence

The petition was approved by the Florida PSC in the third quarter of 2023.

Peninsula Pipeline will construct a

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

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

A filing to address the acquisition and conversion of existing Company owned propane community gas systems in Newberry was made in November 2023.

The Florida PSC approved it in April 2024.

The Company began the conversions of the community gas systems in the second quarter of 2024.

The Florida PSC approved it in April 2024 and conversions of the community gas systems in the second quarter of 2024.

East Coast Reinforcement Projects:

15 unchanged sentences

Benefits of these projects include increased gas supply to serve expected FCG growth, strengthened system reliability and additional system flexibility.

The Florida PSC approved the petition at it's July 2024 meeting with the projects estimated to be completed in the first half of 2025.

The Florida PSC approved the petition at its July 2024 meeting with the projects estimated to be completed in the first half of 2025.

Cloud Project Amendment :

In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for its approval of an amendment to its Transportation Service Agreement with FPU for a project that will support additional supply to communities in the St.

In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of an amendment to its Transportation Service Agreement with FPU for a project that will support additional supply to communities in the St.

Cloud, Florida area.

4 unchanged sentences

Pioneer Supply Header Pipeline Project :

In March 2024, Peninsula Pipeline filed a petition with the Florida PSC for its approval of Firm Transportation Service Agreements with both FCG and FPU for a project that will support greater supply growth of natural gas service in southeast Florida.

In March 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of Firm Transportation Service Agreements with both FCG and FPU for a project that will support greater supply growth of natural gas service in southeast Florida.

The project consists of the transfer of a pipeline asset from FCG to Peninsula Pipeline.

1 unchanged sentence

The Florida PSC approved the petition in July 2024.

Miami Inner Loop Projects:

In September 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of the Transportation Service Agreement with FCG for a series of projects that will enhance the infrastructure in Miami-Dade county.

The proposed expansion consists of the development of several pipeline projects to support growth and support FCG's distribution system in the area and also enhance FCG's ability to obtain gas from various access points in the Miami-Dade county area.

FPU Electric Rate Case :

In June 2024, our Florida Electric division provided notice to the Florida PSC of its intent to file a petition seeking a general rate base increase based on a 2025 projected test year.

The filing is expected to be submitted to the Florida PSC in August 2024 and the outcome of the application will be subject to review and approval by the Florida PSC.

In August 2024, our Florida Electric division filed a petition with the Florida PSC seeking a general base rate increase of $ 12.6 million with a ROE of 11.3 percent based on a 2025 projected test year.

The outcome of the application will be subject to review and approval by the Florida PSC.

In October 2024, annualized interim rates of approximately $ 1.8 million, were approved with an effective date of November 1, 2024.

Eastern Shore

4 unchanged sentences

In December 2023, the FERC issued its schedule for preparation of the Environmental Assessment ("EA").

April 2024, the FERC issued their EA with no significant impacts noted.

The EA comment period closed May 28, 2024, and Eastern Shore responded to the one adverse comment received.

In connection with the TCJA, which was signed into law in December 2017, our customer rates for our regulated businesses were adjusted as applicable as approved by the regulators.

Regulatory liabilities related to accumulated deferred income taxes (“ADIT”) associated with the TCJA amounted to $ 85.2 million and $ 85.8 million at June 30, 2024 and December 31, 2023, respectively.

In April 2024, the FERC issued their EA with no significant impacts noted.

The EA comment period closed in May 2024, and Eastern Shore responded to the one adverse comment received.

In connection with the TCJA, which was signed into law in December 2017, customer rates for our regulated businesses were adjusted as applicable as approved by the regulators.

Regulatory liabilities related to accumulated deferred income taxes (“ADIT”) associated with the TCJA amounted to $ 84.9 million and $ 85.8 million at September 30, 2024 and December 31, 2023, respectively.

With the exception of the ADIT balance of $ 34.2 million attributable to Eastern Shore, such amounts are being amortized in accordance with approvals received from the Delaware, Maryland, and Florida PSCs in 2018 and 2019.

7 unchanged sentences

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

As of June 30, 2024 and December 31, 2023, we had approximately $ 3.4 million and $ 3.6 million, respectively, in environmental liabilities related to the former MGP sites, and related regulatory assets of approximately $ 0.3 million and $ 0.5 million at the respective balance sheet dates for future recovery of environmental costs from customers.

As of September 30, 2024 and December 31, 2023, we had approximately $ 3.4 million and $ 3.6 million, respectively, in environmental liabilities related to the former MGP sites, and related regulatory assets of approximately $ 0.3 million and $ 0.5 million at the respective balance sheet dates for future recovery of environmental costs from customers.

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

15 unchanged sentences

Florida Natural Gas has firm transportation service contracts with FGT and Gulfstream.

Pursuant to a capacity release program approved by the Florida PSC, all of the capacity under these agreements has been released to various third

Pursuant to a capacity release program approved by the Florida PSC, all of the capacity under these agreements has been released to various third parties.

Under the terms of these capacity release agreements, Chesapeake Utilities is contingently liable to FGT and Gulfstream should any party, that acquired the capacity through release, fail to pay the capacity charge.

To date, Chesapeake Utilities has not been required to make a payment resulting from this contingency.

FPU’s electric supply contracts require FPU to maintain an acceptable standard of creditworthiness based on specific financial ratios.

FPU’s electric supply contracts require FPU to maintain an acceptable standard of creditworthiness.

FPU’s agreement with Florida Power & Light Company requires FPU to meet or exceed a debt service coverage ratio of 1.25 times based on the results of the prior 12 months.

If FPU fails to meet this ratio, it must provide an irrevocable letter of credit or pay all amounts outstanding under the agreement within five business days.

FPU’s electric supply agreement with Gulf Power requires FPU to meet the following ratios based on the average of the prior six quarters:

(a) funds from operations interest coverage ratio (minimum of two times), and (b) total debt to total capital (maximum of 65 percent).

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 June 30, 2024, FPU was in compliance with all of the requirements of its supply contracts.

If FPU fails to meet this standard, it must provide an Adequate Assurance of Performance which can include an irrevocable letter of credit, a prepayment, a security interest in an asset or a performance bond or guaranty.

As of September 30, 2024, FPU was in compliance with all of the requirements of its 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 June 30, 2024 was $ 35.0 million.

The aggregate amount guaranteed related to our subsidiaries at June 30, 2024 was $ 27.0 million with the guarantees expiring on various dates through June 2025.

The maximum authorized liability under such guarantees and letters of credit as of September 30, 2024 was $ 35.0 million.

The aggregate amount guaranteed related to our subsidiaries at September 30, 2024 was $ 27.5 million with the guarantees expiring on various dates through September 2025.

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

The amount of specific purpose guarantees outstanding at June 30, 2024 was $ 4.0 million.

As of June 30, 2024, we have issued letters of credit totaling $ 7.0 million related to various transportation, transmission, capacity and storage agreements as well as our primary insurance carriers.

These letters of credit have various expiration dates through February 2025 and to date, none have been used.

The amount of specific purpose guarantees outstanding at September 30, 2024 was $ 4.0 million.

As of September 30, 2024, we have issued letters of credit totaling $ 6.3 million related to various transportation, transmission, capacity and storage agreements as well as our primary insurance carriers.

These letters of credit have various expiration dates through September 2025 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.

7 unchanged sentences

• Unregulated Energy.

Includes energy transmission, energy generation (the operations of our Eight Flags' CHP plant), propane distribution operations, mobile compressed natural gas distribution and pipeline solutions operations, and sustainable energy investments including renewable natural gas.

Includes energy transmission, energy generation (the operations of our Eight Flags' CHP plant), propane distribution operations, mobile compressed natural gas distribution and pipeline

solutions operations, and sustainable energy investments including renewable natural gas.

Also included in this segment are other unregulated energy services, such as energy-related merchandise sales and heating, ventilation and air conditioning, plumbing and electrical services.

2 unchanged sentences

The following tables present financial information about our reportable segments:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

14 unchanged sentences

Operating income 40,918 20,228 161,293 103,488

Other income, net 1,110 831 1,305 1,107

Other income (expense), net 400 ( 72 ) 1,705 1,036

Interest charges 17,022 7,076 50,861 21,272

3 unchanged sentences

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

(in thousands) June 30, 2024 December 31, 2023

(in thousands) September 30, 2024 December 31, 2023

Identifiable Assets

9 unchanged sentences

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

For the six months ended June 30, 2024, we received net proceeds of $ 2.5 million for issuances under the DRIP.

For the nine months ended September 30, 2024, we received net proceeds of $ 56.8 million for issuances under the DRIP.

There were no issuances under the DRIP during 2023.

2 unchanged sentences

Defined benefit pension and postretirement plan items, unrealized gains (losses) of our propane swap agreements designated as commodity contract 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 loss.

The following tables present the changes in the balances of accumulated other comprehensive loss components as of June 30, 2024 and 2023.

The following tables present the changes in the balances of accumulated other comprehensive loss components as of September 30, 2024 and 2023.

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

5 unchanged sentences

As of December 31, 2023 $ ( 2,584 ) $ ( 274 ) $ 120 $ ( 2,738 )

Other comprehensive income before reclassifications — 1,640 511 2,151

Other comprehensive income (loss) before reclassifications — 1,031 ( 1,340 ) ( 309 )

Amounts reclassified from accumulated other comprehensive income (loss) 41 ( 698 ) ( 431 ) ( 1,088 )

Net current-period other comprehensive income (loss) 41 333 ( 1,771 ) ( 1,397 )

As of June 30, 2024 $ ( 2,557 ) $ 605 $ 376 $ ( 1,576 )

As of September 30, 2024 $ ( 2,543 ) $ 59 $ ( 1,651 ) $ ( 4,135 )

As of December 31, 2022 $ ( 2,506 ) $ 1,092 $ 35 $ ( 1,379 )

2 unchanged sentences

Net prior-period other comprehensive income (loss) 32 ( 458 ) 668 242

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

As of September 30, 2023 $ ( 2,474 ) $ 634 $ 703 $ ( 1,137 )

Deferred gains or losses for our commodity contract and interest rate swap cash flow hedges are recognized in earnings upon settlement and are included in the effects of gains and losses from derivative instruments.

3 unchanged sentences

Employee Benefit Plans

Net periodic (benefit) cost for the FPU Pension Plan for the three and six months ended June 30, 2024 and 2023 is set forth in the following table:

Three Months Ended Six Months Ended

June 30, June 30,

Net periodic (benefit) cost for the FPU Pension Plan for the three and nine months ended September 30, 2024 and 2023 is set forth in the following table:

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

4 unchanged sentences

Total periodic (benefit) cost $ ( 56 ) $ 75 $ ( 168 ) $ 225

Amounts reclassified from accumulated other comprehensive income (loss) and regulatory assets were not material during the three and six months ended June 30, 2024 and 2023.

Net periodic benefit costs for our other pension and postretirement benefit plans were not material for the three and six months ended June 30, 2024 and 2023.

Net periodic benefit costs for our other pension and postretirement benefit plans were not material for the three and nine months ended September 30, 2024 and 2023.

In addition, total amounts reclassified from accumulated other comprehensive income (loss) and regulatory assets related to all pension and postretirement benefit plans were not material during the three and nine months ended September 30, 2024 and 2023.

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

1 unchanged sentence

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 (loss).

During the three and six months ended June 30, 2024, there were no contributions to the FPU Pension Plan and we do not expect to contribute to the FPU Pension Plan during 2024.

During the three and nine months ended September 30, 2024, there were no contributions to the FPU Pension Plan and we do not expect to contribute to the FPU Pension Plan during 2024.

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 postretirement benefit plans for the three and six months ended June 30, 2024 were immaterial.

Cash benefits paid under these other postretirement benefit plans for the three and nine months ended September 30, 2024 were not material.

We expect to pay total cash benefits of less than $ 1.0 million for these other postretirement benefit plans in 2024.

6 unchanged sentences

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

Assets held in the Rabbi Trust, recorded as Investments on the condensed consolidated balance sheet, had a fair value of $ 13.6 million at June 30, 2024 and $ 12.3 million at December 31, 2023.

Assets held in the Rabbi Trust, recorded as Investments on the condensed consolidated balance sheets, had a fair value of $ 14.1 million at September 30, 2024 and $ 12.3 million at December 31, 2023.

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

3 unchanged sentences

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 and six months ended June 30, 2024 and 2023:

Three Months Ended Six Months Ended

June 30, June 30,

The table below presents the amounts included in net income related to share-based compensation expense for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

11 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 six months ended June 30, 2024:

The table below presents the summary of the stock activity for awards to key employees for the nine months ended September 30, 2024:

(in thousands, except per share data) Number of Shares Weighted Average

4 unchanged sentences

Expired ( 27 ) $ 86.24

Outstanding—June 30, 2024 253 $ 117.89

During the six months ended June 30, 2024, we granted awards of 110 thousand shares of common stock to officers and key employees under the SICP, including awards granted in February 2024.

Outstanding—September 30, 2024 253 $ 117.96

During the nine months ended September 30, 2024, we granted awards of 110 thousand shares of common stock to officers and key employees under the SICP, including awards granted in February 2024.

The shares granted are multi-year awards that will vest no later than the three-year service period ending December 31, 2026.

3 unchanged sentences

Total combined payments for the employees’ tax obligations to the taxing authorities were approximately $ 1.5 million.

At June 30, 2024, the aggregate intrinsic value of the SICP awards granted to key employees was approximately $ 26.9 million.

At June 30, 2024, there was approximately $ 12.8 million of unrecognized compensation cost related to these awards, which will be recognized through 2026.

At September 30, 2024, the aggregate intrinsic value of the SICP awards granted to key employees was approximately $ 31.5 million.

At September 30, 2024, there was approximately $9.0 million of unrecognized compensation cost related to these awards, which will be recognized through 2026.

Non-employee Directors

3 unchanged sentences

Accordingly, our directors that served on the Board as of May 2024 each received approximately 1 thousand shares of common stock, respectively, with a weighted average fair value of $ 110.53 per share.

At June 30, 2024, there was $ 0.7 million of unrecognized compensation expense related to shares granted to non-employee directors.

At September 30, 2024, there was $ 0.5 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 2025.

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 June 30, 2024, our natural gas and electric distribution operations did not have any outstanding derivative contracts.

As of September 30, 2024, our natural gas and electric distribution operations did not have any outstanding derivative contracts.

Volume of Derivative Activity

As of June 30, 2024, the volume of our commodity derivative contracts were as follows:

As of September 30, 2024, 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

5 unchanged sentences

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 unrealized gains of approximately $ 0.7 million from accumulated other comprehensive income (loss) related to our commodity cash flow hedges to earnings during the 12 -month period ended June 30, 2025.

The amount of unrealized losses that we expect to reclassify from accumulated other comprehensive income (loss) related to our commodity cash flow hedges to earnings during the 12 -month period ended September 30, 2025 is not material.

Interest Rate Swap Activities

1 unchanged sentence

In September 2022, we entered into an interest rate swap with a notional amount of $ 50.0 million through September 2025, with pricing of 3.98 percent.

In July 2024, we entered into an agreement for an additional interest rate swap effective August 1, 2024 through August 2029, at a notional amount of $ 50.0 million and pricing of 3.97 percent.

In August 2024, we entered into an additional interest rate swap through August 2029, at a notional amount of $ 50.0 million and pricing of 3.97 percent.

Our interest rate swaps are cash settled monthly as the counter-party pays us the 30-day SOFR rate less the fixed rate.

5 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 included within other current assets on the consolidated balance sheet with a balance of $ 2.8 million and $ 2.1 million as of June 30, 2024 and December 31, 2023, respectively.

We currently maintain a broker margin account for Sharp included within other current assets on the consolidated balance sheets which had a balance of $ 1.9 million and $ 2.1 million as of September 30, 2024 and December 31, 2023, respectively.

Financial Statements Presentation

1 unchanged sentence

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

Fair values of the derivative contracts recorded in the condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023, are as follows:

Fair values of the derivative contracts recorded in the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, are as follows:

Derivative Assets

Fair Value As Of

(in thousands) Balance Sheet Location June 30, 2024 December 31, 2023

(in thousands) Balance Sheet Location September 30, 2024 December 31, 2023

Derivatives designated as cash flow hedges

3 unchanged sentences

$ 527 $ 1,067

(1) Derivative assets, at fair value, include $ 1.2 million in current assets in the condensed consolidated balance sheet at June 30, 2024 and $ 1.0 million at December 31, 2023, with the remainder of the balance classified as long-term .

(1) Derivative assets, at fair value, include $ 0.4 million in current assets in the condensed consolidated balance sheet at September 30, 2024 and $ 1.0 million at December 31, 2023, with the remainder of the balances classified as long-term .

Derivative Liabilities

Fair Value As Of

(in thousands) Balance Sheet Location June 30, 2024 December 31, 2023

(in thousands) Balance Sheet Location September 30, 2024 December 31, 2023

Derivatives designated as cash flow hedges

2 unchanged sentences

Total Derivative Liabilities (1)

(1) Derivative liabilities, at fair value, included less than $ 0.1 million in current liabilities in the condensed consolidated balance sheet at June 30, 2024 and $ 0.4 million at December 31, 2023, with the remainder of the balance classified as long-term.

$ 2,663 $ 1,281

(1) Derivative liabilities, at fair value, include $ 0.6 million in current liabilities in the condensed consolidated balance sheet at September 30, 2024 and $ 0.4 million at December 31, 2023, with the remainder of the balances classified as long-term.

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

Amount of Gain (Loss) on Derivatives

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

Location of Gain For the Three Months Ended September 30, For the Nine Months Ended September 30,

(in thousands) (Loss) on Derivatives 2024 2023 2024 2023

18 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 June 30, 2024 and December 31, 2023:

Fair Value Measurements Using:

As of June 30, 2024 Fair Value Quoted Prices in

As of September 30, 2024 Fair Value Quoted Prices in

Active Markets

22 unchanged sentences

Derivative liabilities $ 1,281 $ — $ 1,281 $ —

The changes in the fair value of Level 3 investments for the six months ended June 30, 2024 and 2023 were not material.

The changes in the fair value of Level 3 investments for the nine months ended September 30, 2024 and 2023 were not material.

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

At June 30, 2024, there were no non-financial assets or liabilities required to be reported at fair value.

At September 30, 2024, 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 June 30, 2024, long-term debt, which includes current maturities but excludes debt issuance costs, had a carrying value of approximately $ 1.2 billion, compared to the estimated fair value of approximately $ 1.1 billion.

At December 31, 2023, long-term debt, which includes the current maturities but excludes debt issuance costs, had a carrying value of approximately $ 1.2 billion, compared to a fair value of approximately $ 1.2 billion.

At September 30, 2024, long-term debt, which includes current maturities but excludes debt issuance costs, had both a carrying value and estimated fair value of approximately $ 1.2 billion.

At December 31, 2023, long-term debt, which includes the current maturities but excludes debt issuance costs, had both a carrying value and estimated fair value of approximately $ 1.2 billion.

The fair value was calculated using a discounted cash flow methodology that incorporates a market interest rate based on published corporate borrowing rates for debt instruments with similar terms and average maturities, and with adjustments for duration, optionality, and risk profile.

2 unchanged sentences

Our outstanding long-term debt is shown below:

June 30, December 31,

September 30, December 31,

(in thousands) 2024 2023

28 unchanged sentences

All of our outstanding Senior Notes set forth certain business covenants to which we are subject when any note is outstanding, including covenants that limit or restrict our ability, and the ability of our subsidiaries, to incur indebtedness, or place or permit liens and encumbrances on any of our property or the property of our subsidiaries.

On November 1, 2024, we issued 5.20 percent Senior Notes due in October 2029 in the aggregate principal amount of $ 100.0 million.

The proceeds received were used to reduce short-term borrowings under our Revolver and to fund capital expenditures.

These Senior Notes have similar covenants and default provisions as our other Senior Notes, and have semi-annual principal payments due on May 1 and November 1 of each year beginning in 2025.

On November 20, 2023, we issued Senior Notes in the aggregate principal amount of $ 550.0 million at an average interest rate of 6.54 percent that were used to partially finance our acquisition of FCG which closed during the fourth quarter of 2023.

5 unchanged sentences

We have entered into Shelf Agreements with Prudential and MetLife with terms that extend through February 2026, however neither of such lenders have any obligation to purchase debt thereunder.

At June 30, 2024, a total of $ 255.0 million of borrowing capacity was available under these agreements.

At September 30, 2024, a total of $ 255.0 million of borrowing capacity was available under these agreements.

Short-Term Borrowings

As of June 30, 2024, we are authorized by our Board of Directors to borrow up to $ 375.0 million of short-term debt, as required.

At June 30, 2024 and December 31, 2023, we had $ 207.1 million and $ 179.9 million, respectively, of short-term borrowings outstanding at a weighted average interest rate of 5.95 percent and 5.83 percent, respectively.

There were no borrowings outstanding under the sustainable investment sublimit of the 364-day tranche at June 30, 2024.

In August 2024, we amended and restated our Revolver which increased the total borrowing capacity to $ 450.0 million, including $ 250.0 million available under the 364-day tranche which now expires in August 2025 and $ 200.0 million available under the five-year tranche which now expires in August 2029.

Borrowings under both tranches of the amended and restated Revolver continue to be 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 September 30, 2024, we are authorized by our Board of Directors to borrow up to $ 450.0 million of short-term debt, as required.

At September 30, 2024 and December 31, 2023, we had $ 214.8 million and $ 179.9 million, respectively, of short-term borrowings outstanding at a weighted average interest rate of 5.35 percent and 5.83 percent, respectively.

There were no borrowings outstanding under the sustainable investment sublimit of the 364-day tranche at September 30, 2024.

In August 2024, we amended and restated our revolving credit agreement, which increased the total borrowing capacity under the Revolver to $ 450.0 million, including $ 250.0 million available under the 364-day tranche which now expires in August 2025 and $ 200.0 million available under the five-year tranche which now expires in August 2029.

Borrowings under both tranches of the Revolver continue to be 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.

The 364-day tranche continues to bear interest (i) based upon the SOFR, plus a 10 -basis point credit spread adjustment, and an applicable margin of 1.05 percent or less, with such margin based on total indebtedness as a percentage of total capitalization or (ii) the base rate, solely at our discretion.

The five-year tranche continues to bear interest (i) based upon the SOFR, plus a 10-basis point credit spread adjustment, and an applicable margin of 1.25 percent or less, with such margin based on total indebtedness as a percentage of total capitalization or (ii) the base rate, solely at our discretion.

As of June 30, 2024, the pricing under the 364-day tranche of the Revolver included a commitment fee of 10 -basis points on undrawn amounts and an interest rate of 80 -basis points over SOFR plus a 10 -basis point SOFR adjustment on outstanding balances.

As of June 30, 2024, the pricing under the five-year tranche of the Revolver included a commitment fee of 10 -basis points on undrawn amounts and an interest rate of 100 -basis points over SOFR plus a 10 -basis point SOFR adjustment on outstanding balances.

We also utilize interest rate swaps to manage rate risk under our Revolver.

3 unchanged sentences

We are required by the financial covenants in the Revolver to maintain, at the end of each fiscal year, a funded indebtedness ratio as described above.

As of June 30, 2024, we were in compliance with this covenant.

Our total available credit under the Revolver at June 30, 2024 was $ 163.0 million.

As of June 30, 2024, we had issued $ 7.0 million in letters of credit to various counterparties under the Revolver.

As of September 30, 2024, we were in compliance with this covenant.

Our total available credit under the Revolver at September 30, 2024 was $ 232.2 million.

As of September 30, 2024, we had issued $ 6.3 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.

7 unchanged sentences

We lease land at various locations throughout our service territories to enable us to inject natural gas into underground storage and distribution systems, for bulk storage capacity, for our propane operations and for storage of equipment used in repairs and maintenance of our infrastructure.

We lease natural gas compressors to ensure timely and reliable

transportation of natural gas to our customers.

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

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

4 unchanged sentences

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

The amounts disclosed in our consolidated balance sheet at June 30, 2024, 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 September 30, 2024, 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 June 30, 2024, 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 September 30, 2024, 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 condensed consolidated statements of income:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(in thousands) Classification 2024 2023 2024 2023

2 unchanged sentences

(1) Includes short-term leases and variable lease costs, which are not material .

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, 2024 and December 31, 2023:

(in thousands) Balance sheet classification June 30, 2024 December 31, 2023

The following table presents the balance and classifications of our right of use assets and lease liabilities included in our condensed consolidated balance sheets at September 30, 2024 and December 31, 2023:

(in thousands) Balance sheet classification September 30, 2024 December 31, 2023

Operating lease assets Operating lease right-of-use assets $ 10,945 $ 12,426

2 unchanged sentences

Total lease liabilities $ 11,554 $ 13,004

The following table presents our weighted-average remaining lease terms and weighted-average discount rates for our operating leases at June 30, 2024 and December 31, 2023:

June 30, 2024 December 31, 2023

The following table presents our weighted-average remaining lease terms and weighted-average discount rates for our operating leases at September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

Weighted-average remaining lease term ( in years )

2 unchanged sentences

Operating leases 3.5 % 3.5 %

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 June 30, 2024 and 2023:

Six Months Ended

Nine Months Ended

September 30,

(in thousands) 2024 2023

Operating cash flows from operating leases $ 2,204 $ 2,196

The following table presents the future undiscounted maturities of our operating and financing leases at June 30, 2024 and for each of the next five years and thereafter:

The following table presents the future undiscounted maturities of our operating and financing leases at September 30, 2024 and for each of the next five years and thereafter:

(in thousands) Operating Leases (1)

6 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