Good morning. My name is Tracy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Chesapeake Utilities First Quarter 2013 Earnings Conference Call. [Operator Instructions] Thank you. I'll now introduce and turn the call over to Ms. Beth Cooper, Senior Vice President and Chief Financial Officer. You may begin your conference.

Good morning, everyone, and welcome to the Chesapeake Utilities Corporation First Quarter 2013 Earnings Conference Call. Before we begin, I would like to mention that we have prepared a presentation to accompany our discussion today. You can access this presentation on our website under the Investors section. It is located under the Events and Webcast sub section. Turning to Slide 2, before we begin, let me remind you that matters discussed in this conference call may include forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements. Please refer to the Safe Harbor for forward-looking statements and the company's 2012 annual report on Form 10-K. The Form 10-K includes further information on the risks and uncertainties related to the company's forward-looking statements. Now, I'll turn the call over to Mike McMasters, President and Chief Executive Officer.

Thanks, Beth, and good morning, everyone. Yesterday morning, we announced results for the first quarter of 2013. As shown on Slide 3, the company's first quarter 2013 net income increased by $4.2 million or 39% from $10.7 million to $14.9 million. Earnings per share also increased by 39% from $1.11 per share to $1.54 per share. The higher performance reflects continued growth in our regulated businesses, strong retail margins per gallon in the Propane Distribution business, and the return to normal weather. As it relates to weather, it accounted for $3.2 million quarter-over-quarter increase in gross margin. Strong retail propane margins per gallon added $2.1 million in gross margin. Growth in the natural gas businesses contributed an additional $1.6 million in gross margin. Overall, the continued favorable natural gas prices relative to other fuels is providing opportunities for growth through the conversion of large volume commercial industrial customers for oil and propane to natural gas. Our employees' ability to develop these opportunities and extend our natural gas transmission and distribution systems is generating value for our customers, the communities we serve and our investors. We are constantly working on new plans and programs to support and supplement our growth. We have made filings in Delaware and Maryland to provide us with the tools that we believe will assist us in increasing the conversion of residential and medium volume of commercial customers in the areas that we have recently extended service. In Florida, we are by attempting to enhance our growth by converting customers along our mains that are being replaced as a part of our GRIP program. We continue to explore other end-use and geographic markets to grow our business. Our success this quarter, and more importantly, over the last few years, reflects the hard work and commitment of our employees, our financial discipline and the fundamental strength of our businesses. Beth will now highlight the key accomplishments and results for the business segments during the first quarter of 2013. More detailed discussions of the changes in gross margin and other operating expenses by business segment are provided in our press release and on Form 10-Q.

Thanks, Mike. Moving to Slide 4. Chesapeake's Regulated Energy businesses, which include our natural gas transmission and distribution, and electric distribution operations, generated operating income of $17.3 million in the first quarter of 2013, up $2.5 million or 17% from $14.8 million in 2012. The higher operating income was driven by a $3.3 million increase in gross margin, which more than offset an $819,000 increase in other operating expenses. The gross margin growth was principally due to new natural gas transmission and distribution expansions completed, and services initiated in 2012, additional residential, commercial and industrial growth on both the Delmarva Peninsula and in Florida, and higher consumption as it results of more normal temperatures. On Slide 5, you will see that operating income from Unregulated Energy operations increased by $4.2 million or 82% during the first quarter of 2013. The higher operating income was driven by a $5 million increase in gross margin, which more than offset an $806,000 increase in other operating expenses. The gross margin growth was principally due to strong margins in the Propane business, higher sales as a result of more normal weather and results from our acquisition of Glades Gas. The strong retail margins per gallon in the winter months were achieved as the drop in propane cost in late 2012 and early 2013 outpaced the decline in retail prices driven by the market quarter-over-quarter. We cannot be certain that this level of margin can be sustained, and therefore, do not include it in our expectations. Ultimately, the sustainability of these margins will be a function of whether propane cost remain low in competitive retail pricing in our various markets. In regards to the Glades acquisition, this purchase was completed in February and increased our Florida customer base by 3,000 customers or 21%. The other…

Thanks, Beth. Prior to the financial crisis, our growth was heavily dependent upon new residential construction. Since then, our residential customer growth has been around 2%. While we are seeing glimmers of hope, we expect that pace to continue for the foreseeable future. In 2008, the natural gas prices fell relative to other competing energy sources, we adjusted our strategy. See Slide 11. Since then, our strategy has been to expand our service to new areas to provide opportunities for future growth through conversions, supplemented by new construction and further economic development in those areas. Energy price differentials continued to provide the opportunity to expand, to serve industrial and larger commercial customers based on economics that are attractive to both the customer and our shareholders. These initial extensions then provide the future opportunities to supplement our residential and smaller commercial customer growth. As shown on Slide 12, in 2011 and 2012, we completed 4 major expansion projects on Delmarva. These projects are expected to generate approximately $3.2 million in annual gross margin in 2013, or $1.2 million in incremental margin over 2012. In 2013, we will also complete construction of facilities to serve 2 customers, NRG Energy and Delaware City Refinery. These expansions are expected to generate between $2.9 million and $3.3 million in annualized margins. While these projects are not expected to be completed until near the end of the fourth quarter, we have executed short-term capacity contracts that will add $1.4 million in margin in 2013. In September of 2012, the company filed an application with the Maryland Public Service Commission for the approval of the acquisition of Eastern Shore Gas. In April 2013, the company reached a settlement with all parties, which will be accepted by the Maryland Public Service Commission, will enable us to close on…

[Operator Instructions] And your first question comes from the line of Spencer Joyce with Hilliard.

Just a quick question here. Can you all talk a little bit about how. The STRIDE legislation in Maryland may affect you guys? I guess, at first glance, it's pretty exciting but I guess, with most of your alls expansion being relatively new, I guess, it may not be the most important thing, but do you see that changing the game any in Maryland for you guys?

In our Maryland and Delaware operations, really up here on Delmarva, we are in a pretty good shape as it relates to cast-iron, bare steel replacements, those types of things.

Okay. And then 1 other just small kind of nitpicky thing. On Slide 4, where you break out some stuff on the regulated side, the D&A stayed really relatively stable, actually declined a bit. Beth, I think we may have touched on this before, can you say again what is keeping that lower with the CapEx build?

Yes. We had an amortization that we had [indiscernible] actually at the end of the year where we had an adjustment related to -- it was on the Florida side and it was related to the gain that had been sitting on our books. They had -- FPU had actually -- there was an accumulated amount that was set up as a liability, and actually, we're amortizing that and that's the credit that you're actually seeing. The tax...

Okay. And then on a year-over-year basis kind of for the rest of the year, will it look somewhat similar to this quarter or will we see it revert kind of more to a traditional, a little bit of increase there?

They're going to continue to have the credit that we're -- you're going to have that benefit coming through the rest of the year so you'll have a full year impact of that. And then what you'll also continue to have, Spencer, as we start to have some of those capital expenditures come into play for the year, the depreciation expense will go up because of that.

[Operator Instructions] Your next question comes from the line of Dave Parker with Robert W. Baird. David E. Parker - Robert W. Baird & Co. Incorporated, Research Division: A couple of questions. When you look at more normal weather, and I think you talked about this a little bit, Mike, in your prepared comments but particularly the pickup on the propane side, you think that's sticky? Or is it -- or do you think that maybe there may be some slip margin as -- if we keep on more normal weather going forward?

It is hard to tell, Dave, but it's not unusual after a real warm year that the following year margins get a little bit thicker. And so we don't know if it's just a general trend because of a general, maybe short term situation because of that or if the competition becomes more intent as customers -- or trying to -- or our competitors are trying to add market share as we go down the road. David E. Parker - Robert W. Baird & Co. Incorporated, Research Division: Okay. I think -- so does -- if I ask the same question on every conference call but you continue to have success picking off propane producers, I mean, delivery companies. And I assume that, that trend will continue, but could you enlighten us, Mike, a little bit with -- obviously it adds margin to your overall business particularly, I guess, with the switching. So what's the kind of the magic and what you are looking for and how does that fit within your footprint? Are they bolt-on acquisitions or is it -- are there some sweet spots geographically? Or how do you just look at this overall industry for further acquisition opportunities?

Well, we really have these 2 different markets that we're seeing. One, in Florida, there's quite a few small propane distributors throughout the state, and we have a team down there that's pretty familiar with the players down there. And so through those relationships, we're familiar with some things that are happening. So those are some relatively small bolt-on things going on in Florida. For the Eastern Shore Gas acquisition on Delmarva, that's more unusual, I guess, you'd say, it was just an opportunity that presented itself. And with our extension of natural gas service into that area, we were able to make that transaction work. So that's -- I would not want to forecast that type of thing to happen with that kind of scale, but you are going to -- you have seen some recurring ones down in Florida. Now, probably some more small ones coming down the road. David E. Parker - Robert W. Baird & Co. Incorporated, Research Division: With gas rates going up a little bit and oil prices coming down, I assume that brings propane down, too. Are you getting closer to your -- are we moving towards a point where it's less attractive or are -- we just moved into a new territory where customers just can't wait to get the gas?

Well, it's -- propane prices right now are at maybe twice the natural gas, and oil is multiple over that. But in Florida, the prices are a little bit less elastic given the relatively low consumption, at least at the residential level. So I don't think we've seen, at least on the propane side, a lot of change in demand there. In terms of converting propane customers, the economic value creation is higher in the North than it is in the South, again, on the residential side simply because of the volume consumed. And so it's such a fairly tough thing to do converting residential customers in Florida, it will be a little tougher than Delmarva. David E. Parker - Robert W. Baird & Co. Incorporated, Research Division: All right. It was a lot activity for natural gas pipeline infrastructure being proposed in the state of Florida, is there an opportunity for you to participate in that, Mike?

We're always talking to people, Dave, and we're going to continue talking to them, and maybe we can get -- maybe, there will be an opportunity but it's just going to be -- it's -- we're at almost a wait and see thing but I can't say we're waiting but it will be -- we'll have to see how it turns out. I think there's some pretty big players doing that, and so it may be pretty hard to participate in that. David E. Parker - Robert W. Baird & Co. Incorporated, Research Division: And your stock's up today so your market cap is getting bigger every second, how about that? Well, congrats on a good quarter and strategic execution has been fantastic. So, congratulations.

[Operator Instructions] At this time, there are no further questions in queue.

Well, I just want to take a minute to thank everybody for their interest in the company, and we'll be talking to you later. Thank you.

Thanks.

Thank you for joining. Ladies and gentlemen, this now concludes today's conference call. You may now disconnect.