What changed in this filing

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Item 1. Financial Statements

2025-05-07 compared with 2024-11-07 · 219 added, 352 removed, 633 unchanged (47% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Income (Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

(in thousands, except per share data)

Three Months Ended

(in millions, except shares and per share data)

Operating Revenues

4 unchanged sentences

Operating Expenses

Natural gas and electric costs 28,366 26,518 105,662 105,692

Propane and natural gas costs 9,835 10,576 53,396 55,786

Regulated natural gas and electric costs 71.5 49.9

Unregulated propane and natural gas costs 44.8 31.3

Operations 58.0 51.6

FCG transaction and transition-related expenses 819 3,899 3,114 3,899

Maintenance 5.4 5.9

1 unchanged sentence

Other taxes 9.4 9.5

FCG transaction and transition-related expenses 0.3 0.9

Total Operating Expenses 211.9 166.1

Operating Income 86.8 79.6

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

Other income, net 0.6 0.2

Interest charges 18.1 17.0

11 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

(in thousands)

Three Months Ended

(in millions)

Net Income $ 50.9 $ 46.2

Other Comprehensive Income (Loss), net of tax:

Employee Benefits, net of tax:

Reclassifications of amortization of prior service credit and actuarial loss, net of tax of $ 1 , $ 3 , $ 10 and $ 10 , respectively

Cash Flow Hedges, net of tax:

Net gain (loss) on commodity contract cash flow hedges, net of tax of $( 225 ), $ 525 , $ 381 and $( 250 ), respectively

( 609 ) 1,385 1,031 ( 660 )

Reclassifications of net (gain) loss on commodity contract cash flow hedges, net of tax $ 24 , $ 124 , $( 258 ) and $ 76 , respectively

Net gain on commodity contract cash flow hedges, net of tax of $ 0.2 and $ 0.5 , respectively

Reclassifications of net (gain) on commodity contract cash flow hedges, net of tax $( 0.2 ) and $( 0.3 ), respectively

( 0.5 ) ( 0.8 )

Net gain (loss) on interest rate swap cash flow hedges, net of tax of $( 0.2 ) and $ 0.1 , respectively

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

Reclassifications of net (gain) on interest rate swap cash flow hedges, net of tax of $ 0.0 and $ 0.0 , respectively

5 unchanged sentences

Condensed Consolidated Balance Sheets (Unaudited)

Assets September 30,

Assets March 31,

2025 December 31,

(in thousands, except per share data)

(in millions, except shares and per share data)

Property, Plant and Equipment

34 unchanged sentences

Condensed Consolidated Balance Sheets (Unaudited)

Capitalization and Liabilities September 30,

Capitalization and Liabilities March 31,

2025 December 31,

(in thousands, except per share data)

(in millions, except shares and per share data)

Capitalization

36 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended

September 30,

(in thousands)

Three Months Ended

(in millions)

Operating Activities

6 unchanged sentences

Unrealized gain on investments and commodity contracts 0.4 ( 0.8 )

Employee benefits and compensation ( 72 ) 315

Share-based compensation 2.3 2.1

Other, net ( 195 ) —

Changes in assets and liabilities:

18 unchanged sentences

Common stock dividends ( 14.5 ) ( 12.9 )

Issuance of stock under the Dividend Reinvestment Plan, net of offering fees 56,749 ( 28 )

Proceeds from issuance of common stock, net of expenses 19.8 —

Tax withholding payments related to net settled stock compensation ( 1.0 ) ( 1.5 )

1 unchanged sentence

Net borrowings (repayments) under line of credit agreements 20.3 ( 10.2 )

Proceeds from long-term debt, net of offering fees ( 107 ) 79,840

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

Repayment of long-term debt and finance lease obligation ( 2.0 ) ( 1.9 )

Net cash provided by (used in) financing activities 20.9 ( 25.8 )

6 unchanged sentences

Common Stock (1)

(in thousands, except per share data)

(dollars in millions, shares in thousands (except per share data)) Number of

Value Additional Paid-In

4 unchanged sentences

Compensation Treasury

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

Other comprehensive loss — — — — 1,922 — — 1,922

Dividend declared ($ 0.590 per share)

— — — ( 10,601 ) — — — ( 10,601 )

Issuance under various plans (3)

— — ( 2 ) — — — — ( 2 )

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

— — 1,723 — — — — 1,723

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

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, 2023 22,235 $ 10.8 $ 749.4 $ 488.7 $ ( 2.8 ) $ 9.1 $ ( 9.1 ) $ 1,246.1

Net income — — — 46.2 — — — 46.2

Other comprehensive loss — — — — 242 — — 242

Other comprehensive income — — — — 1.0 — — 1.0

Dividends declared ($ 0.590 per share)

6 unchanged sentences

— — — — — 0.5 ( 0.5 ) —

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

Net income — — — 17,507 — — — 17,507

Other comprehensive income — — — — ( 2,559 ) — — ( 2,559 )

Dividend declared ($ 0.640 per share)

— — — ( 14,606 ) — — — ( 14,606 )

Issuance under various plans (3)

474 231 55,428 — — — — 55,659

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

— — 1,717 — — — — 1,717

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

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

Balance at March 31, 2024 22,267 $ 10.8 $ 750.2 $ 521.7 $ ( 1.8 ) $ 9.6 $ ( 9.6 ) $ 1,280.9

Balance at December 31, 2024 22,899 $ 11.1 $ 830.5 $ 550.3 $ ( 1.7 ) $ 9.8 $ ( 9.8 ) $ 1,390.2

22,235 $ 10,823 $ 749,356 $ 488,663 $ ( 2,738 ) $ 9,050 $ ( 9,050 ) $ 1,246,104

Net income — — — 50.9 — — — 50.9

2 unchanged sentences

— — — ( 14.8 ) — — — ( 14.8 )

Issuance under various plans (3)

Issuance under various plans and ATM program (3)

161 0.1 19.7 — — — — 19.8

3 unchanged sentences

— — — — — 2.4 ( 2.4 ) —

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

Balance at March 31, 2025 23,089 $ 11.2 $ 852.0 $ 586.4 $ ( 2.3 ) $ 12.2 $ ( 12.2 ) $ 1,447.3

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

No shares have been issued or are outstanding;

No preferred shares have been issued or are outstanding;

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

(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.

(2) Includes 126 thousand, 114 thousand, 111 thousand, and 108 thousand shares at March 31, 2025, December 31, 2024, March 31, 2024 and December 31, 2023, respectively, held in a Rabbi Trust related to our Non-Qualified Deferred Compensation Plan.

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

See Notes 3 and 9 for details associated with the FCG acquisition and related financing.

For the three months ended March 31, 2025 and 2024, we withheld 8 thousand and 14 thousand shares, respectively, for employee taxes.

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

10 unchanged sentences

Revenue and earnings are typically greater during the first and fourth quarters, when consumption of energy is highest due to colder temperatures.

Recent Accounting Standards Yet to be Adopted

Recently Adopted Accounting Standards

Segment Reporting (ASC 280) - In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segments Disclosures, which modifies required disclosures about a public entity’s reportable segments and addresses requests from investors for more detailed information about a reportable segment’s expenses and a more comprehensive reconciliation of each segment's reported profit or loss.

ASU 2023-07 will be effective for our annual financial statements beginning January 1, 2024 and our interim financial statements beginning January 1, 2025.

ASU 2023-07 only impacts disclosures, and as a result, will not have a material impact on our financial position or results of operations.

We adopted ASU 2023-07 for our annual financial statements beginning January 1, 2024 and our interim financial statements beginning January 1, 2025.

ASU 2023-07 only impacts disclosures, and as a result, did not have an impact on our financial position or results of operations.

Income Taxes (ASC 740) - In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which modifies required income tax disclosures primarily related to an entity's rate reconciliation and information pertaining to income taxes paid.

These enhancements have been made to address requests from investors related to transparency and usefulness of income tax disclosures.

ASU 2023-09 will be effective for our annual financial statements beginning January 1, 2024.

These enhancements address requests from investors related to transparency and usefulness of income tax disclosures.

ASU 2023-09 became effective for our annual financial statements beginning January 1, 2025.

ASU 2023-09 only impacts disclosures, and as a result, will not have a material impact on our financial position or results of operations.

Recent Accounting Standards Yet to be Adopted

Income Statement Expense Disaggregation (ASC 220) - In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , which requires disclosure in the notes to financial statements of specified information about certain costs and expenses.

ASU 2024-03 will be effective for our annual financial statements beginning January 1, 2027 and our interim financial statements beginning January 1, 2028.

ASU 2024-04 only impacts disclosures, and as a result, will not have an impact on our financial position or results of operations.

Climate-Related Disclosures - In March 2024, the SEC issued a final rule that requires a public entity to provide disclosures surrounding material Scope 1 and Scope 2 emissions, climate-related risks and the material impact of those risks, and material climate targets and goals.

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 as to when the review will be completed, the final outcome of the review, and the ultimate disclosure requirements.

In March 2025, the SEC withdrew its defense of the final rule.

We will continue to monitor any further developments related to the stay and review process.

Calculation of Earnings Per Share

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

(in thousands, except per share data)

Three Months Ended

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

Calculation of Basic Earnings Per Share:

1 unchanged sentence

Weighted average shares outstanding 22,957 22,250

22,501 17,797 22,346 17,784

Basic Earnings Per Share $ 2.22 $ 2.07

Calculation of Diluted Earnings Per Share:

Net Income $ 17,507 $ 9,407 $ 81,946 $ 61,884

Reconciliation of Denominator:

Weighted shares outstanding—Basic 22,957 22,250

22,501 17,797 22,346 17,784

Effect of dilutive securities—Share-based compensation 84 56

1 unchanged sentence

Diluted Earnings Per Share $ 2.21 $ 2.07

(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.

Acquisition of Florida City Gas

On November 30, 2023, we completed the acquisition of FCG for $ 922.8 million in cash, which included working capital adjustments as defined in the agreement that were settled during the first quarter of 2024, pursuant to the stock purchase agreement with Florida Power & Light Company.

Upon completion of the acquisition, FCG became a wholly-owned subsidiary of the Company and is included within our Regulated Energy segment.

FCG serves approximately 120,000 residential and commercial natural gas customers across eight counties in Florida, including Miami-Dade, Broward, Brevard, Palm Beach, Hendry, Martin, St.

Lucie and Indian River.

Its natural gas system includes approximately 3,800 miles of distribution main and 80 miles of transmission pipe.

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 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.

As FCG is a regulated utility, the measurement of the fair value of most of the assets acquired and liabilities assumed were determined using the predecessor’s carrying value.

In certain other instances where assets and liabilities are not subject to regulation, we determined the fair value in accordance with the principles of ASC Topic 820, Fair Value Measurements.

The excess of the purchase price for FCG over the fair value of the assets acquired and liabilities assumed has been reflected as goodwill within the Regulated Energy segment.

Goodwill resulting from the acquisition is largely attributable to expansion opportunities provided within our existing regulated operations in Florida, including planned customer growth and growth in rate base through continued investment in our utility infrastructure, as well as natural gas transmission infrastructure supporting the distribution operations.

The goodwill recognized in connection with the acquisition of FCG is deductible for income tax purposes.

The components of the preliminary purchase price allocation are as follows:

(in thousands)

Assets acquired:

Acquisition Date Fair Value

Accounts receivable, net 14,138

Regulatory assets - current 2,983

Other current assets 2,082

Property, plant and equipment 454,410

Goodwill 460,875

Regulatory assets - non-current 3,381

Other deferred charges and other assets 18,309

Total assets acquired 958,439

Liabilities assumed:

Current liabilities ( 20,934 )

Regulatory liabilities ( 14,137 )

Other deferred credits and other liabilities ( 548 )

Total liabilities assumed ( 35,619 )

Net purchase price $ 922,820

Direct transaction costs of $ 10.4 million associated with the FCG acquisition were reflected in “FCG transaction-related expenses” on our consolidated statement of income for the year ended December 31, 2023.

In addition, interest charges included $ 4.1 million related to fees and expenses associated with the Bridge Facility, which was terminated without any funds drawn, for the year ended December 31, 2023.

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 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.

Lee and Son's

In December 2023, Sharp acquired the propane operating assets of J.T.

Lee and Son's in Cape Fear, North Carolina for $ 3.9 million.

In connection with this acquisition, we recorded a $ 0.3 million liability which is subject to the seller's adherence to various provisions contained in the purchase agreement through the first anniversary of the transaction closing.

Through this acquisition, we expanded our operating footprint in North Carolina, where customers are served by Diversified Energy.

Sharp added approximately 3,000 customers and distribution of approximately 800,000 gallons of propane annually.

The transaction also included a bulk plant with 60,000 gallons of propane storage, enabling the Company to realize efficiencies with additional storage capacity and overlapping delivery territories.

In connection with this acquisition, we recorded $ 2.7 million in property plant and equipment, $ 0.9 million in goodwill, $ 0.2 million in working capital, and less than $ 0.1 million in intangible assets associated primarily with 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.

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 nine months ended September 30, 2024.

There were no acquisitions completed during 2024 or during the three months ended March 31, 2025.

T he Company’s consolidated results include certain transaction and transition-related expenses for the three months ended March 31, 2025 and 2024 related to the integration of the FCG acquisition which was completed in November 2023.

Refer to our Annual Report on Form 10-K for the year ended December 31, 2024 for additional details on the FCG acquisition as well as previous acquisitions.

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 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

The following tables display our revenue by major source based on product and service type for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

(in millions) Regulated Energy Unregulated Energy Other Businesses and Eliminations Total Regulated Energy Unregulated Energy Other Businesses and Eliminations Total

Energy distribution

5 unchanged sentences

Maryland natural gas division (1)

Sandpiper natural gas/propane operations 3,925 — — 3,925 3,748 — — 3,748

Elkton Gas 1,024 — — 1,024 1,011 — — 1,011

Total energy distribution 118,017 — — 118,017 89,005 — — 89,005

Energy transmission

Aspire Energy — 4,576 — 4,576 — 4,798 — 4,798

Aspire Energy Express 373 — — 373 373 — — 373

Eastern Shore 19,538 — — 19,538 19,228 — — 19,228

Peninsula Pipeline 9,005 — — 9,005 7,904 — — 7,904

Total energy transmission 28,916 4,576 — 33,492 27,505 4,798 — 32,303

Energy generation

Eight Flags — 4,242 — 4,242 — 4,437 — 4,437

Propane operations

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

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

Eliminations ( 16,300 ) ( 63 ) ( 6,107 ) ( 22,470 ) ( 14,099 ) ( 57 ) ( 5,879 ) ( 20,035 )

Other — 45 45 — — 45 45

Total other and eliminations ( 16,300 ) ( 63 ) ( 6,062 ) ( 22,425 ) ( 14,099 ) ( 57 ) ( 5,834 ) ( 19,990 )

Total operating revenues (1)

12.9 — — 12.9 9.9 — — 9.9

(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.

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

Energy distribution

Delaware natural gas division $ 54,800 $ — $ — $ 54,800 $ 60,809 $ — $ — $ 60,809

Florida natural gas distribution

124,814 — — 124,814 125,446 — — 125,446

Florida City Gas 101,820 — — 101,820 — — — —

FPU electric distribution 72,366 — — 72,366 78,455 — — 78,455

Maryland natural gas division 17,879 — — 17,879 20,331 — — 20,331

Sandpiper natural gas/propane operations (1)

8.4 — — 8.4 7.0 — — 7.0

Elkton Gas (1)

4.0 — — 4.0 2.9 — — 2.9

Total energy distribution 185.7 — — 185.7 155.5 — — 155.5

13 unchanged sentences

Total CNG / RNG Services — 8.2 — 8.2 — 3.4 — 3.4

Other and eliminations

Other Businesses and Eliminations

Eliminations ( 19.2 ) ( 0.1 ) ( 7.6 ) ( 26.9 ) ( 16.7 ) ( 0.1 ) ( 5.8 ) ( 22.6 )

Other — — 136 136 — — 136 136

Total other and eliminations ( 48,906 ) ( 186 ) ( 17,619 ) ( 66,711 ) ( 43,626 ) ( 187 ) ( 19,439 ) ( 63,252 )

Total operating revenues (2)

$ 199.6 $ 106.7 $ ( 7.6 ) $ 298.7 $ 168.4 $ 83.1 $ ( 5.8 ) $ 245.7

(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.

(1) In accordance with the Maryland PSC approval of our natural gas base rate proceeding, effective April 2025, our natural gas distribution businesses in Maryland (Maryland natural gas division, Sandpiper natural gas/propane operations and Elkton Gas) will be consolidated for rate-making and other purposes and will be presented in a consolidated basis consistent with the final rate order going forward.

(2) Total operating revenues for the three months ended March 31, 2025 include other revenue (revenues from sources other than contracts with customers) of $ 0.5 million loss and $ 0.1 million for our Regulated Energy and Unregulated Energy segments, respectively, and $ 0.6 million and $ 0.1 million for our Regulated Energy and Unregulated Energy segments, respectively, for the three months ended March 31, 2024.

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

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

The balances of our trade receivables, contract assets, and contract liabilities as of December 31, 2024 and March 31, 2025 were as follows:

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

(in thousands)

(in millions)

Balance at 12/31/2024 $ 66.2 $ — $ 3.0 $ 1.2

3 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 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.

2 unchanged sentences

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

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

For the three months ended March 31, 2025 and 2024, 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 September 30, 2024, are expected to be recognized as follows:

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

Revenue for these businesses for the remaining performance obligations, at March 31, 2025, are expected to be recognized as follows:

(in millions) 2025 2026 2027 2028 2029 2030 2031 and thereafter

Eastern Shore and Peninsula Pipeline $ 28.0 $ 34.9 $ 31.1 $ 29.0 $ 26.6 $ 21.2 $ 109.6

6 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.

In September 2023, the Delaware Division submitted the Energy Efficiency Rider application for natural gas with the Delaware PSC after obtaining an affirmative recommendation from the Delaware Energy Efficiency Advisory Council (“EEAC”).

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.

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 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;

In August 2024, our Delaware natural gas division filed an application for a natural gas rate case with the Delaware PSC seeking approval of the following:

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

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

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

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.

Annualized interim rates were approved by the Delaware PSC in the amount of $ 2.5 million and became effective in October 2024.

A settlement among the Company, PSC staff and the Delaware Division of the Public Advocate was reached providing an annual revenue increase of $ 6.1 million, dividing the rate case into two phases and suspending the procedural schedule.

The related, fully executed settlement agreement has been filed in the docket and awaits Delaware PSC approval, with a hearing scheduled in May 2025.

Interim rates, set to recover the $ 6.1 million increase went into effect in March 2025.

A procedural schedule is pending in Phase II which will address tariff-related changes including rate design.

Maryland Natural Gas Rate Case:

In January 2024, our natural gas distribution businesses in Maryland, CUC-Maryland Division, Sandpiper Energy, Inc., and Elkton Gas Company (collectively, “Maryland natural gas distribution businesses”), filed a joint application for a natural gas rate case with the Maryland PSC.

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

In January 2024, our natural gas distribution businesses in Maryland, CUC-Maryland Division, Sandpiper Energy, Inc., and Elkton Gas Company (collectively, the “Maryland natural gas distribution businesses”), filed a joint application for a natural gas rate case with the Maryland PSC.

In connection with the application, we sought approval of the following:

(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.;

(ii) authorization to make certain changes to tariffs to include a unified rate structure and to consolidate the Maryland natural gas distribution businesses;

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

In August 2024, the Maryland natural gas distribution businesses, the Maryland OPC and PSC staff reached a settlement which provided for, among other things, an increase in annual base rates of $ 2.6 million.

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

The $ 2.6 million increase in annual base rates was approved and the Company filed a Phase II filing in November 2024 to determine rate design across the Maryland natural gas distribution businesses, consolidation of the applicable tariffs and recovery of technology costs.

The hearing was held in March 2025 and Phase II was approved including an additional $ 0.9 million in revenue requirement for a total cumulative increase of $ 3.5 million.

The approval also included the consolidation of the operations of CUC-Maryland Division, Sandpiper Energy, and Elkton Gas into one entity which was renamed and will operate as Chesapeake Utilities of Maryland, Inc.

Maryland Natural Gas Depreciation Study:

In January 2024, 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, 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.

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

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

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

Wildlight Expansion:

In August 2022, Peninsula Pipeline and FPU filed a joint petition with the Florida PSC for approval of its Transportation Service Agreement associated with the Wildlight planned community located in Nassau County, Florida.

The project enables us to meet the significant growing demand for service in Yulee, Florida.

The agreement enables us to construct the project during the build-out of the community and charge the reservation rate as each phase of the project goes into service.

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

The project enables us to meet the significant growing demand for service in Yulee, Florida, and to construct the project during the build-out of the community and charge the reservation rate as each phase of the project goes into service.

Construction of the pipeline facilities will occur in two separate phases.

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The various phases of the project commenced in the first quarter of 2023, with construction on the overall project continuing through 2025.

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

FCG Natural Gas Rate Case:

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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 a notice of appeal with the Florida Supreme Court in July 2023, 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.

Oral arguments in the case were held in 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.

In order to earn the targeted regulatory return on equity ("ROE") in each reporting period subject to the conditions of the effective rate agreement, RSAM is calculated using a trailing thirteen-month average of rate base and capital structure in conjunction with the trailing twelve-month regulatory base net operating income, which primarily includes the base portion of rates and other revenues, net of operations and maintenance expenses, depreciation and amortization, interest and tax expenses.

In order to earn the targeted regulatory ROE in each reporting period subject to the conditions of the effective rate agreement, RSAM is calculated using a trailing thirteen-month average of rate base and capital structure in conjunction with the trailing twelve-month regulatory base net operating income, which primarily includes the base portion of rates and other revenues, net of operations and maintenance expenses, depreciation and amortization, interest and tax expenses.

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 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.

At December 31, 2024, the RSAM reserve had been completely utilized.

In February 2025, FCG filed a depreciation study with the Florida PSC.

The application is requesting approval of revised annual depreciation rates, as well as a reduction related to a reserve imbalance that would be amortized over a two-year period.

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

The Florida OPC filed a motion to hold this filing in abeyance, which was denied in April 2025.

A final ruling on the depreciation study is expected in September 2025.

Storm Protection Plan:

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Rates associated with this initiative were effective in January 2023.

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.

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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 and 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 commenced in the second quarter of 2024.

East Coast Reinforcement Projects:

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The Florida PSC approved the projects in March 2024.

Construction is projected to be complete in the first and second quarters of 2025 for Boynton Beach and New Smyrna Beach, respectively.

Construction is projected to be complete in the second and fourth quarters of 2025 for New Smyrna Beach and Boynton Beach, respectively.

Central Florida Reinforcement Projects :

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The Florida PSC approved the projects in May 2024.

Completion of the projects is projected for the fourth quarter of 2024 for Plant City and the fourth quarter of 2025 for Lake Mattie.

The Plant City project was completed in the fourth quarter of 2024, and the Lake Mattie project is projected to be completed during the fourth quarter of 2025.

Renewable Natural Gas Supply Projects :

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Pioneer Supply Header Pipeline Project :

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.

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 supporting 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.

Peninsula Pipeline will proceed to provide transportation service to both FCG and FPU using the pipeline asset, which supports continued customer growth and system reinforcement of these distribution systems.

The Florida PSC approved the petition in July 2024.

Peninsula Pipeline will provide transportation service to both FCG and FPU using the pipeline asset, which supports continued customer growth and system reinforcement of these distribution systems.

The Florida PSC approved the petition in July 2024 and the project was completed in September 2024.

Miami Inner Loop Projects:

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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.

The project was approved in February 2025 and construction is expected to be complete in the second half of 2025.

FPU Electric Rate Case :

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.

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

2025, the Florida PSC approved the permanent rate increase, but the order was subsequently protested.

In May 2025, the Company reached a settlement agreement with the interested parties to resolve all outstanding issues in its current base rate case, which was filed as a joint motion for approval with the Florida PSC.

This settlement allows for a total revenue increase of approximately $ 8.6 million on an annual basis.

The Company anticipates this agreement to be on the Florida PSC hearing agenda for review and approval in June 2025.

Eastern Shore

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The project will provide long-term incremental supply necessary to support the growing demand of the participating shippers.

Eastern Shore has requested certificate authorization by December 2024, with a target in-service date by the third quarter of 2025.

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

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.

In January 2025, the FERC approved the project, and construction is expected to be complete in the second quarter of 2026.

Salisbury Integrity Project:

Eastern Shore submitted a Prior Notice Filing under its Blanket Certificate to the FERC in March 2025 requesting to construct, own, operate, and maintain approximately 5.5 miles of 10-inch looping pipeline in Wicomico County, Maryland.

The project is necessary to comply with pipeline integrity management regulations of the Pipeline and Hazardous Materials Safety Administration ("PHMSA").

Capital Cost Surcharge:

In March 2025, Eastern Shore submitted an annual true-up filing with the FERC regarding a capital cost surcharge to recover capital costs associated with the replacement of existing Eastern Shore facilities because of mandated highway relocation projects as well as compliance with a PHMSA regulation.

The capital cost surcharge mechanism was approved in Eastern Shore's last rate case.

There was no impact to the currently effective surcharge as a result of this filing.

The FERC issued an order approving the surcharge as filed effective April 1, 2025.

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

Regulatory liabilities related to accumulated deferred income taxes (“ADIT”) associated with the TCJA amounted to $ 84.3 million and $ 84.6 million at March 31, 2025 and December 31, 2024, 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.

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

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.

As of March 31, 2025 and December 31, 2024, we had approximately $ 3.3 million and $ 3.2 million, respectively, in environmental liabilities related to the former MGP sites, and related regulatory assets of approximately $ 0.3 million and $ 0.3 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.

We continue to expect that all costs related to environmental remediation and related activities, including any potential future remediation costs for which we do not currently have approval for regulatory recovery, will be recoverable from customers through rates.

Remediation is ongoing for the MGPs in Winter Haven and Key West in Florida and in Seaford, Delaware.

Remediation is ongoing for the MGPs in Winter Haven and Key West, Florida and in Seaford, Delaware.

The remaining clean-up costs are estimated to range from $ 0.3 million to $ 0.8 million for these three sites.

The Environmental Protection Agency has approved a "site-wide ready for anticipated use" status for the Sanford, Florida MGP site, which is the final step before delisting a site.

The Environmental Protection Agency has approved a "site-wide ready for anticipated use" status for the Sanford, Florida

MGP site, which is the final step before delisting a site.

The remaining remediation expenses for the Sanford MGP site are not material.

The remedial actions approved by the Florida Department of Environmental Protection have been implemented on the east parcel of our West Palm Beach, Florida site.

Similar remedial actions have been initiated on the site's west parcel, and construction of active remedial systems are expected to be completed in 2024.

Remaining remedial costs for West Palm Beach, including completion of the construction of the system on the west parcel, are estimated to take between five and fifteen years of operation, maintenance and monitoring, and final site work for closeout of the property is estimated to be between $ 3.0 million and $ 5.4 million.

Similar remedial actions have been initiated on the site's west parcel, and construction of the systems required to remediate the site are now complete with remediation activities ongoing as of March 31, 2025.

Remaining remedial costs for West Palm Beach, including completion of the construction for the system start-up on the west parcel, and continued operation and maintenance, are estimated to take between five and fifteen years of operation, maintenance and monitoring, and final site work for closeout of the property is estimated to be between $ 2.8 million and $ 5.2 million.

Other Commitments and Contingencies

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In March 2023, our Delmarva Peninsula natural gas distribution operations entered into asset management agreements with a third party to manage their natural gas transportation and storage capacity.

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

The agreements were effective in April 2023 and expire in March 2026.

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

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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.

As of March 31, 2025, 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.

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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 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.

The maximum authorized liability under such guarantees and letters of credit as of March 31, 2025 was $ 38.0 million.

The aggregate amount guaranteed related to our subsidiaries at March 31, 2025 was $ 28.6 million with the guarantees expiring on various dates through March 2026.

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

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.

The amount of specific purpose guarantees outstanding at March 31, 2025 was $ 5.2 million.

As of March 31, 2025, we have issued letters of credit totaling $ 7.6 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 2026 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.

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We use the management approach to identify operating segments.

We organize our business around differences in regulatory environment and/or products or services, and the operating results of each segment are regularly reviewed by the chief operating decision maker, our President and Chief Executive Officer, in order to make decisions about resources and to assess performance.

We organize our business around differences in regulatory environment and/or products or services, and the operating results of each segment are regularly reviewed

by the chief operating decision maker, our President and Chief Executive Officer ("CEO"), in order to make decisions about resources and to assess performance.

Our operations are entirely domestic and are comprised of two reportable segments:

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• 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-related investments.

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.

These operations are unregulated as to their rates and services.

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 tables present financial information about our reportable segments:

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

(in thousands)

The remainder of our operations are presented as “Other Businesses and Eliminations,” which consists of unregulated subsidiaries that own real estate leased to the Company, as well as certain corporate costs not allocated to other operations.

The following table presents information about our reportable segments:

Three Months Ended March 31,

(in millions) Regulated Unregulated Other Businesses and Eliminations (1)

Total Regulated Unregulated Other Businesses and Eliminations (1)

Operating revenues, unaffiliated customers $ 199.2 $ 99.5 $ — $ 298.7 $ 167.9 $ 77.8 $ — $ 245.7

Regulated Energy $ 130,157 $ 101,911 $ 425,084 $ 344,190

Unregulated Energy 29,981 29,636 147,070 141,079

Total operating revenues, unaffiliated customers $ 160,138 $ 131,547 $ 572,154 $ 485,269

Intersegment revenues (2)

Regulated Energy $ 476 $ 500 $ 4,600 $ 1,632

Unregulated Energy 5,586 5,333 13,019 17,807

Other businesses 45 45 136 136

Total intersegment revenues $ 6,107 $ 5,878 $ 17,755 $ 19,575

Operating Income (Loss)

Regulated Energy $ 43,935 $ 24,912 $ 142,549 $ 91,828

Unregulated Energy ( 3,061 ) ( 4,723 ) 18,606 11,529

Other businesses and eliminations 44 39 138 131

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

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

0.4 7.2 ( 7.6 ) — 0.5 5.3 ( 5.8 ) —

199.6 106.7 ( 7.6 ) 298.7 168.4 83.1 ( 5.8 ) 245.7

Natural gas, propane and electric costs 71.5 52.2 ( 7.4 ) 116.3 49.9 37.1 ( 5.8 ) 81.2

Operations and maintenance expenses 41.7 21.8 ( 0.1 ) 63.4 39.0 18.6 ( 0.1 ) 57.5

Depreciation and amortization 17.6 4.9 — 22.5 12.5 4.5 — 17.0

Other segment items (3)

8.3 1.5 ( 0.1 ) 9.7 8.9 1.5 — 10.4

Segment operating income $ 60.5 $ 26.3 $ — $ 86.8 $ 58.1 $ 21.4 $ 0.1 $ 79.6

Other income, net 0.6 0.2

Interest charges 18.1 17.0

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Net Income $ 50.9 $ 46.2

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

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

Capital expenditures $ 96.1 $ 14.8 $ 2.0 $ 112.9 $ 59.9 $ 9.8 $ 0.9 $ 70.6

(1) Other revenues and other operating income (loss) amounts are attributable to eliminations and unregulated subsidiaries that own real estate leased to the Company.

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

(3) Other segment items for each reportable segment include:

Regulated - Other taxes and transaction and transition costs related to the integration of FCG;

Unregulated - Other taxes.

(in millions) March 31, 2025 December 31, 2024

Identifiable Assets

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Common Stock Issuances

In November 2023, in connection with our acquisition of FCG, we completed an equity offering resulting in the issuance of approximately 4.4 million shares of our common stock at a price per share of $ 82.72 (net of underwriter discounts and commissions).

We received net proceeds of $ 366.4 million which were used to partially finance the acquisition.

We maintain an effective shelf registration statement with the SEC for the issuance of shares under our DRIP and other plans.

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 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.

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.

In November 2024, we established a new ATM program under which we may sell shares of our common stock up to an aggregate offering price of $ 100.0 million.

This current ATM program is active through November 2027.

For the three months ended March 31, 2025 and 2024, we received net proceeds of $ 19.8 million and $ 0.1 million, respectively, associated with shares issued under the direct stock purchase and waiver components of the DRIP as well as shares issued under our ATM program.

Accumulated Other Comprehensive Loss

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 September 30, 2024 and 2023.

The following tables present the changes in the balances of accumulated other comprehensive loss components for the three months ended March 31, 2025 and 2024.

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

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Plan Items Hedges Hedges Total

(in thousands)

(in millions)

As of December 31, 2024 $ ( 2.1 ) $ 0.4 $ — $ ( 1.7 )

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Net current-period other comprehensive income (loss) — 0.2 ( 0.8 ) ( 0.6 )

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

As of March 31, 2025 $ ( 2.1 ) $ 0.6 $ ( 0.8 ) $ ( 2.3 )

As of December 31, 2023 $ ( 2.6 ) $ ( 0.3 ) $ 0.1 $ ( 2.8 )

Other comprehensive income (loss) before reclassifications — ( 660 ) 928 268

Amounts reclassified from accumulated other comprehensive income (loss) 32 202 ( 260 ) ( 26 )

Other comprehensive income before reclassifications — 1.5 0.4 1.9

Amounts reclassified from accumulated other comprehensive loss — ( 0.8 ) ( 0.1 ) ( 0.9 )

Net prior-period other comprehensive income (loss) — 0.7 0.3 1.0

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

As of March 31, 2024 $ ( 2.6 ) $ 0.4 $ 0.4 $ ( 1.8 )

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.

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Employee Benefit Plans

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

(in thousands)

Net periodic (benefit) cost for the FPU Pension Plan for the three months ended March 31, 2025 and 2024 is set forth in the following table:

Three Months Ended

(in millions)

Interest cost $ 0.6 $ 0.6

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Total periodic (benefit) cost $ ( 0.1 ) $ —

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.

Net periodic costs for our other pension and postretirement benefit plans were not material for the three months ended March 31, 2025 and 2024.

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

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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 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.

During the three months ended March 31, 2025, there were no contributions to the FPU Pension Plan and we do not expect to contribute to the FPU Pension Plan during 2025.

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 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.

Cash benefits paid under these other postretirement benefit plans for the three months ended March 31, 2025 were not material.

We expect to pay total cash benefits of approximately $ 0.3 million for these other postretirement benefit plans in 2025.

Non-Qualified Deferred Compensation Plan

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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 sheets, had a fair value of $ 14.1 million at September 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 $ 14.4 million at both March 31, 2025 and December 31, 2024.

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

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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 nine months ended September 30, 2024 and 2023:

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

(in thousands)

The table below presents the amounts included in net income related to share-based compensation expense for the three months ended March 31, 2025 and 2024:

Three Months Ended

(in millions)

Awards to key employees $ 2.1 $ 1.9

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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 nine months ended September 30, 2024:

The table below presents the summary of the stock activity for awards to key employees for the three months ended March 31, 2025:

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

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Expired ( 26 ) $ 113.44

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.

Outstanding—March 31, 2025 285 $ 115.55

During the three months ended March 31, 2025, we granted awards of 95 thousand shares of common stock to officers and key employees under the SICP, including awards granted in February 2025.

The shares granted are multi-year awards that will vest no later than the three-year service period ending December 31, 2027.

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Total combined payments for the employees’ tax obligations to the taxing authorities were approximately $ 1.0 million.

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.

At March 31, 2025, the aggregate intrinsic value of the SICP awards granted to key employees was approximately $ 36.7 million.

At March 31, 2025, there was approximately $ 13.3 million of unrecognized compensation cost related to these awards, which will be recognized through 2027.

Non-employee Directors

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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 September 30, 2024, there was $ 0.5 million of unrecognized compensation expense related to shares granted to non-employee directors.

At March 31, 2025, there was $ 0.1 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.

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

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

As of March 31, 2025, our natural gas and electric distribution operations did not have any outstanding derivative contracts.

Volume of Derivative Activity

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

As of March 31, 2025, 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

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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 June 2024 through March 2027) 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 April 2025 through March 2027) 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.

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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.

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.

The amount of unrealized gains 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 March 31, 2026 is $ 0.6 million.

Interest Rate Swap Activities

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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 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.

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.

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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 sheets which had a balance of $ 1.9 million and $ 2.1 million as of September 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 $ 2.4 million and $ 1.9 million as of March 31, 2025 and December 31, 2024, respectively.

Financial Statements Presentation

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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 September 30, 2024 and December 31, 2023, are as follows:

Fair values of the derivative contracts recorded in the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024, are as follows:

Derivative Assets

Fair Value As Of

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

(in millions) Balance Sheet Location March 31, 2025 December 31, 2024

Derivatives designated as cash flow hedges

2 unchanged sentences

Total Derivative Assets (1)

$ 527 $ 1,067

(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 .

(1) Derivative assets, at fair value, include $ 0.6 million in current assets in the condensed consolidated balance sheet at March 31, 2025 and $ 0.6 million at December 31, 2024, with the remainder of the balances classified as long-term .

Derivative Liabilities

Fair Value As Of

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

(in millions) Balance Sheet Location March 31, 2025 December 31, 2024

Derivatives designated as cash flow hedges

2 unchanged sentences

Total Derivative Liabilities (1)

$ 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.

(1) Derivative liabilities, at fair value, include $ 0.1 million in current liabilities in the condensed consolidated balance sheet at March 31, 2025 and no current derivative liabilities at December 31, 2024, 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 September 30, For the Nine Months Ended September 30,

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

Location of Gain For the Three Months Ended March 31,

(in millions) (Loss) on Derivatives 2025 2024

Derivatives designated as cash flow hedges

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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 September 30, 2024 and December 31, 2023:

Fair Value Measurements Using:

As of September 30, 2024 Fair Value Quoted Prices in

As of March 31, 2025 Fair Value Quoted Prices in

Active Markets

1 unchanged sentence

(Level 2) Significant

(in thousands)

Investments—equity securities $ 23 $ 23 $ — $ —

(in millions)

Investments—guaranteed income fund $ 1.0 $ — $ — $ 1.0

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(Level 2) Significant

(in thousands)

Investments—equity securities $ 21 $ 21 $ — $ —

(in millions)

Investments—guaranteed income fund $ 1.1 $ — $ — $ 1.1

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Derivative liabilities $ 0.1 $ — $ 0.1 $ —

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

The changes in the fair value of Level 3 investments for the three months ended March 31, 2025 and 2024 were not material.

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

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

At March 31, 2025, 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.

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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 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.

At March 31, 2025, long-term debt, which includes current maturities but excludes debt issuance costs, had both a carrying value and estimated fair value of approximately $ 1.3 billion.

At December 31, 2024, long-term debt, which includes the current maturities but excludes debt issuance costs, had a carrying value of approximately $ 1.3 billion compared to an estimated fair value of $ 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:

September 30, December 31,

(in thousands) 2024 2023

March 31, December 31,

(in millions) 2025 2024

Uncollateralized Senior Notes:

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3.88% notes, due May 2029 25.0 25.0

5.20% notes, due October 2029 100.0 100.0

6.62% notes, due December 2030 100.0 100.0

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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.

On November 1, 2024, we issued 5.20 percent Senior Notes due in November 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.

These notes have varying final maturity dates of between three and 15 years, and the outstanding principal balance of the notes (net of annual payments on the 6.73 percent notes which begin in 2029) will be due on their respective maturity dates with interest payments payable semiannually until the principal has been paid in full.

These Senior Notes have similar covenants and default provisions as our other Senior Notes.

On March 14, 2023 we issued 5.43 percent Senior Notes due in March 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 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 sixth year after the issuance.

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

Shelf Agreements

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

At March 31, 2025, a total of $ 255.0 million of borrowing capacity was available under these Shelf Agreements.

Short-Term Borrowings

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.

As of March 31, 2025, we are authorized by our Board of Directors to borrow up to $ 450.0 million of short-term debt, as required.

At March 31, 2025 and December 31, 2024, we had $ 215.4 million and $ 196.5 million, respectively, of short-term borrowings outstanding at a weighted average interest rate of 5.08 percent and 5.06 percent, respectively.

There were no borrowings outstanding under the sustainable investment sublimit of the 364-day tranche at March 31, 2025.

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.

We may also request increases under the Revolver of up to $ 50.0 million under the 364-day tranche and up to $ 100.0 million under the five-year tranche, with the lenders having sole discretion of whether to approve each requested increase.

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.

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These conditions include our compliance with financial covenants and the continued accuracy of representations and warranties contained in the Revolver's loan documents.

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 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.

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, 2025, we were in compliance with this covenant.

Our total available credit under the Revolver at March 31, 2025 was $ 227.0 million.

As of March 31, 2025, we had issued $ 7.6 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.

The letters of credit reduce the available borrowings under the Revolver.

In connection with our acquisition of FCG, we entered into a 364-day Bridge Facility commitment with Barclays Bank PLC and other lending parties for up to $ 965.0 million.

Upon closing of the FCG acquisition in November 2023, and with the completion of other financing activities as defined in the lending agreement, this facility was terminated with no funds drawn to finance the transaction.

For additional information regarding the acquisition and related financing, see Note 3, Acquisitions, Note 9, Stockholders Equity , and Note 14, Long-Term Debt .

We have entered into lease arrangements for office space, land, equipment, pipeline facilities and warehouses.

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

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.

The amounts disclosed in our consolidated balance sheet at March 31, 2025, 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 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 Nine Months Ended

September 30, September 30,

(in thousands) Classification 2024 2023 2024 2023

Operating lease cost (1)

Operations expense $ 744 $ 750 $ 2,218 $ 2,318

(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 sheets at September 30, 2024 and December 31, 2023:

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

As of March 31, 2025, we have not entered into any leases, which have not yet commenced, that would entitle us to significant rights or create additional obligations.

Total operating lease

cost and cash paid for amounts included in the measurement of lease liabilities included in our condensed consolidated financial statements were not material as of March 31, 2025 and 2024.

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 March 31, 2025 and December 31, 2024:

(in millions) Balance sheet classification March 31, 2025 December 31, 2024

Operating lease assets Operating lease right-of-use assets $ 9.7 $ 10.5

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Total lease liabilities $ 10.3 $ 11.1

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

The following table presents our weighted-average remaining lease terms and weighted-average discount rates for our operating leases at March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

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 September 30, 2024 and 2023:

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 September 30, 2024 and for each of the next five years and thereafter:

(in thousands) Operating Leases (1)

The following table presents the future undiscounted maturities of our operating and financing leases at March 31, 2025 and for each of the next five years and thereafter:

(in millions) Operating Leases (1)

Remainder of 2025 $ 1.7

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