Chesapeake Utilities : 2024 Q1 Conference Call Presentation

C HESA PEA KE U TIL ITIES C O R PO R ATIO N

First Quarter 2024

Earnings Conference Call

May 9, 2024

1

Today's Presenters

Jeff Householder

Chair of the Board, President, and Chief Executive Officer

Beth Cooper

Executive Vice President, Chief Financial Officer, Treasurer,

and Assistant Corporate Secretary

Jim Moriarty

Executive Vice President, General Counsel, Corporate

Secretary, and Chief Policy and Risk Officer

Lucia Dempsey

Head of Investor Relations

2

Safe Harbor for Forward-Looking Statements

Safe Harbor Statement

Some of the statements in this presentation are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable law. Such forward--looking statements may be identified by the use of words, such as "project," "believe," "expect," "anticipate," "intend," "plan," "estimate," "continue," "potential," "forecast" or other similar words, or future or conditional verbs such as "may," "will," "should," "would" or "could." These statements represent our intentions, plans, expectations, assumptions and beliefs about our future financial performance, business strategy, projected plans and objectives. These statements are subject to many risks and uncertainties and actual results may materially differ from those expressed in these forward-looking statements. Please refer to Chesapeake Utilities Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC and other SEC filings concerning factors that could cause those results to be different than contemplated in this presentation.

Non-GAAP Financial Information

This presentation includes non-GAAP financial measures including Adjusted Gross Margin, Adjusted Net Income and Adjusted Earnings Per Share ("EPS*"). A "non-GAAP financial measure" is generally defined as a numerical measure of a company's historical or future performance that includes or excludes amounts, or that is subject to adjustments, so as to be different from the most directly comparable measure calculated or presented in accordance with GAAP. Our management believes certain non-GAAP financial measures, when considered together with GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period.

The Company calculates Adjusted Gross Margin by deducting the purchased cost of natural gas, propane and electricity and the cost of labor spent on direct revenue-producing activities from operating revenues. The costs included in Adjusted Gross Margin exclude depreciation and amortization and certain costs presented in operations and maintenance expenses in accordance with regulatory requirements. The Company calculates Adjusted Net Income and Adjusted EPS by deducting costs and expenses associated with significant acquisitions that may affect the comparison of period-over-period results. These non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute for, the comparable GAAP measures. The Company believes that these non-GAAP measures are useful and meaningful to investors as a basis for making investment decisions and provide investors with information that demonstrates the profitability achieved by the Company under allowed rates for regulated energy operations and under the Company's competitive pricing structures for unregulated energy operations. The Company's management uses these non-GAAP financial measures in assessing a business unit and Company performance. Other companies may calculate these non-GAAP financial measures in a different manner.

See Appendix for a reconciliation of Gross Margin, Net Income and EPS, all as defined under GAAP, to our non-GAAP measures of Adjusted Gross Margin, Adjusted Net Income, and Adjusted EPS for each of the periods presented.

*Unless otherwise noted, EPS and Adjusted EPS information is presented on a diluted basis.

3

Executing On Our Long-Term Growth Plan

Growth in earnings to support dividend growth and increased shareholder value

Prudently		Proactively		Continually
deploy		manage		execute on
investment		regulatory		business
capital		agenda		transformation

Foundation of operational excellence across the organization

4

Q1 2024 Highlights: Continuing to Build Momentum

Operational Accomplishments	Strategic Capital Investments
• Increasing margin contributions from continued transmission expansions
•	Reaffirmed 2024 capital
• Regulated natural gas distribution customer growth of 2x national average
	investment guidance of $300M
• Realized meaningful contribution from non-regulated businesses		to $360M
• Weather was colder than last year, but warmer than normal	•	Multiple regulatory initiatives
• Prudently managing expenses amid impact of FCG financings and challenging
	approved supporting natural gas
economic environment
	demand
Florida City Gas (FCG) Integration
•	Multiple expansions of
• Delivered incremental margin contributions from FCG		transmission systems under
• Executing capital investment plan consistent with acquisition expectations		construction to support strong
	customer growth
• Realized efficiencies by leveraging enterprise-wide processes including management
of SAFE & GUARD programs	•	Continuing our business
• Filed three new RNG projects with the Florida Public Service Commission (PSC)		transformation initiatives to
and one supply header project to support demand for natural gas service		support our larger footprint and
• Filed for a $50 million increase in the SAFE program with the Florida PSC		achieve operational efficiencies

Remain on track to achieve 2024 Adjusted EPS guidance of $5.33-$5.45 and longer-term 2025 and 2028 outlook

1 See appendix for GAAP to non-GAAP reconciliation for adjusted diluted earnings per share.	5
2 Excludes TCJA impact in 2017; 2023 excludes transaction-related costs associated with the FCG acquisition.

Q1 2024 Strong Financial Performance

Adjusted Diluted

Earnings Per Share1

+3%	$2.10
$2.04
Q1 2023	Q1 2024

Key Adjusted Gross Margin Drivers

$25.4M $3.5M $2.8M

Contribution from	Pipeline Expansions	Regulated
FCG and other	and Natural Gas	Infrastructure
acquisitions	Organic Growth	Programs
		and Recovery
		Mechanisms

$1.9M		$1.0M		$0.6M
Changes in		Increased Gathering		Higher Propane
Customer		Fees for Aspire		Margins per Gallon
Consumption		Energy		and Fees

1 Diluted Earnings Per Share Growth from Continuing Operations; 2024 excludes transaction and transition-related costs associated with the FCG acquisition.

6

FCG Integration Fully On-Track

Achieving

Synergies

• Reviewing operational efficiencies
• Consolidating processes and resources
• Analyzing technology enhancements

Optimizing

Operations

• "Best of Both" approach to customer care, project management and operations
• Sharing resources and insight between legacy and FCG businesses

Accelerating

Investment

Opportunities

• Identifying capital projects to drive growth as one combined company
• Leveraging regulatory expertise to accelerate project reviews and approvals

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Major Projects and Initiatives Driving Adj. Gross Margin Growth

Our projects and initiatives underway will continue to drive adjusted gross margin growth while

new projects and regulatory initiatives will increase earnings across our guidance period

		Three Months ended	Year Ended		Estimate for
Project/Initiative		March 31,	December		Fiscal
(in thousands)		2024		2023		2023		2024		2025
Pipeline Expansions:
Southern Expansion	$	586	$	-	$	586	$	2,344	$	2,344
Beachside Pipeline Extension		603		-		1,810		2,451		2,414
North Ocean City Connector		-		-		-		-		494
St. Cloud / Twin Lakes Expansion		146		-		264		584		584
Wildlight		199		26		471		2,000		2,038				Peninsula Pipeline Company
Lake Wales		114		-		265		454		454
							East Coast Transmission Projects
Newberry		-		-		-		862		2,585
Boynton Beach		-		-		-		-		3,342			Capex: $35.8 million
New Smyrna Beach		-		-		-		-		1,710
Total Pipeline Expansions		1,648		26		3,396		8,695		15,965			2025 Gross Margin: $5.1 million
													Full-Year Annualized Margin: $6.3 million
CNG/RNG/LNG Transportation and Infrastructure		3,435		3,521		11,181	$	12,500	$	13,969
Regulatory Initiatives:													• Boynton Beach and New Smyrna Beach
Florida GUARD Program		589		-		353		3,231		5,602				to increase supply capability and enhance
FCG SAFE Program		412		-		-		2,683		5,293				reliability for FPU's distribution systems
Capital Cost Surcharge Programs		831		720		2,829		3,979		4,374
Florida Rate Case Proceeding1		5,595		4,097		15,835		17,153		17,153
Maryland Rate Case Proceeding2		-		-		-		TBD		TBD
Electric Storm Protection Plan		630		206		1,326		2,433		3,951
Total Regulatory Initiatives		8,057		5,023		20,343		29,479		36,373
Total	$	13,140	$	8,570	$	34,920	$	50,674	$	66,307
		Year-Over-Year Change	$	15,754	$	15,633

1	Includes adjusted gross margin during 2023 comprised of both interim rates and permanent base rates which became effective in March 2023.	8
2	Rate case application and depreciation study filed with the Maryland PSC in January 2024.

2024 Capital Investment On Track to Drive Margin Growth

Q1 Capital Spend Progress

21%

in Q1

79% in Q2 - Q4

Quarter-to-date capital expenditures on track, with $70.6M in spending on strategic growth opportunities and technology transformation

$300 - $360M 2024E Capital Expenditures

General Corporate CapEx: $4 - $6M

Unregulated Energy CapEx: $31 - $36M

• Propane Distribution: $13 - $15M
• Energy Transmission: $5 - $6M
• Other Unregulated: $13 - $15M

Regulated Energy CapEx: $265 - $318M

• Natural Gas Distribution: $150 - $170M
• Natural Gas Transmission: $90 - $120M
• Electric Distribution: $25 - $28M

We remain on track for 5-Year CapEx Plan of

$1.5 - $1.8B

2024E Capex

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Key Drivers of Performance - Three Months Ended March 31, 2024

Our core business performance, strong customer demand and recent acquisition of Florida City Gas drove increased

earnings per share, only partially offset by financing costs related to the FCG acquisition.

Adjusted Diluted Earnings Per Share1

Q1

2023

		Increase in	Lower	Depreciation,
		legacy
		legacy	amortization
		business
		business	and property
	Legacy	operating
	customer	tax costs2
	expenses
	business	consumption	Florida City
	growth	(excluding	Gas
	(Excluding		FCG)	acquisition3
	weather			Interest
			and other
	& FCG)
			changes
	Contribution			shares
Absence of			outstanding
from recent			due to
Reduction	acquisitions			equity
in state tax			offerings
rate

Q1

2024

1 See appendix for GAAP to non-GAAP reconciliation for adjusted diluted earnings per share.

2 Includes a benefit from RSAM of $3.4 million, pre-tax, or $0.11 per share.	10
3 Does not include RSAM benefit, which is included in depreciation expense.