Good morning, everyone, and welcome to Chesapeake Utilities Corporation's Fourth Quarter and Full Year 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Ms. Lucia Dempsey, Head of Investor Relations. Please go ahead, ma'am.

Thank you, and good morning, everyone. Today's presentation can be accessed on our website under the Investors page and Events and Presentations subsection. After our prepared remarks, we will open up the call for questions. On Slide 2, we show our typical disclaimers, while I remind you that matters discussed on this conference call may include forward-looking statements that involve risks and uncertainties. Forward-looking statements and projections could differ materially from our actual results. The safe harbor for forward-looking statements section of our 2024 annual report on Form 10-K provides further information on the factors that could cause such statements to differ from our actual results. Additionally, the company evaluates its performance based on certain non-GAAP measures, including adjusted gross margin, adjusted net income and adjusted earnings per share, and the information presented today includes the appropriate disclosures in accordance with the SEC's Regulation G. A reconciliation of these non-GAAP measures to the related GAAP measures has been provided in the appendix of this presentation in our earnings release and in our 2024 annual report on Form 10-K. Here at Chesapeake Utilities, safety is our first priority. We start all meetings with a safety moment, and we'll do so here with a moment on heart health, as highlighted on Slide 3. February is not quite over, and so it's still a great time to celebrate American Heart Month by refocusing on our heart and cardiovascular health. Heart disease affects more than 1.5 million Americans and millions more around the world. However, there is so much we can do to improve our heart health, so we encourage you to take a step today and every day to strengthen your heart. The only side effects will be improved physical and mental health overall. I'll now introduce our presenters today. Jeff Householder, Chair of the Board, President and Chief Executive Officer, will provide an update on the many ways we delivered with purpose throughout 2024, including executing on our core growth strategy. Beth Cooper, Executive Vice President, Chief Financial Officer, Treasurer and Assistant Corporate Secretary, will discuss our full year financial results, strong balance sheet and dividend and earnings growth trajectory. And Jim Moriarty, Executive Vice President, General Counsel, Corporate Secretary and Chief Policy and Risk Officer, will review our active regulatory agenda, key project updates and summarize our community engagement work in 2024. With that, it is my pleasure to turn the call over to Jeff.

Thank you, Lucia. Good morning, and thanks to all of you for joining our call today. 2024 was a pivotal year for Chesapeake Utilities. We were persistent in our mission to deliver energy that makes life better for the communities we serve, and we successfully positioned the company to be a much larger, more scalable enterprise. Our theme for this year's annual report, delivering with purpose reaching new heights isn't just a marketing phrase. It's an embodiment of how we operate each and every day at all levels across the company. So let me start by telling you how we delivered in 2024. Turning to Slide 6. Adjusted diluted earnings per share for the fourth quarter was $1.63, bringing our full year 2024 EPS to $5.39 at the midpoint of our guidance range. This is a significant accomplishment in light of our efforts to integrate the SCG acquisition, warmer-than-normal temperatures, our decision to accelerate the return to our target capital structure and a delay in the finalization of our Maryland rate case. As I'll go into more detail shortly, we invested $356 million of capital in 2024, which is a record level of capital investment and at the upper end of our annual guidance range of $300 million to $360 million and well on the way toward our 5-year capital forecast of $1.5 billion to $1.8 billion through 2028. As Jim will discuss in more detail, we were very active on the regulatory front, including filing three rate cases, two depreciation studies, receiving approval for 12 projects filed with the Florida Public Service Commission and completing additional regulatory filings related to consolidating and expanding our infrastructure reliability and energy conservation programs. We also implemented OneCX, our company-wide SAP customer billing system, rolled out a new safety data management system and…

Thanks, Jeff, and good morning, everyone. Our full year results, as shown on Slide 15, demonstrate exceptional operational and financial performance. 2024 adjusted gross margin was $567 million, up 25% from 2023, driven by the addition of Florida City Gas, infrastructure expansions and replacements, distribution growth and our unregulated business portfolio's performance. This strong margin growth, coupled with operational efficiencies drove significant growth in adjusted net income, up 24% to approximately $122 million for full year 2024. With this performance, we were pleased to generate full year adjusted earnings per share of $5.39, up $0.08 over full year 2023 and in line with expectations. As Jeff touched on, this is such a significant accomplishment. Undertaking the transaction in the midst of a higher interest rate environment and pressure on utility valuations and then delivering squarely in the middle of the guidance range despite the factors that Jeff mentioned is truly a testament to the conviction of our team to deliver. I'll now turn to Slide 16 and highlight some of the key drivers of our full year 2024 adjusted diluted EPS. Florida City Gas generated a gross margin contribution of $2.88 per share with the first full year as a member of the Chesapeake family. Our regulated operations generated $0.61 of incremental EPS for the year, and our unregulated operations generated an additional $0.19 per share. Increased operating expenses partially offset this margin growth by $1.52 per share. These expense increases were driven by the addition of Florida City Gas, higher insurance, facilities and vehicle expense, increased depreciation and amortization and the absence of a onetime state tax benefit recorded in 2023. We also incurred increased interest expense of $1.15 per share and $0.96 per share of dilution due to increased shares outstanding driven by the financing of the Florida…

Thank you, Beth, and good morning, everyone. As Jeff discussed earlier, a proactive regulatory agenda is our second fundamental growth driver, and I would like to share several updates in this area, as shown on Slide 22. For our Maryland jurisdiction, in September 2024, we received approval for a $2.6 million revenue increase. In November of 2024, we filed a Phase 2 proceeding to determine a schedule for incorporating this increase into customer rates and a hearing will be held next month. Last August, we filed a rate case in our Delaware jurisdiction, proposing a $12.1 million rate increase and an ROE of 11.5%. We subsequently received interim rate relief of $2.5 million, which was effective in October of last year. On Monday, February 24, we filed a second interim rate increase for $8.3 million, while we continue to work on resolving the rate proceeding. The hearing is currently scheduled for May. We also filed a rate case for our Florida electric operations last August proposing a $12.6 million rate increase and an 11.3% ROE. Interim rates of $1.8 million were approved and went into effect November 1, 2024. Last week, we received an initial recommendation from the Florida PSC staff indicating a $9.9 million increase in rates, which is subject to PSC commission review and approval. And finally, earlier this week, we filed an updated depreciation study for Florida City Gas, requesting approval of revised annual depreciation rates as well as a reduction related to a reserve imbalance that would be amortized over a 2-year period. This filing reflects our transition to a typical strategy for depreciation expense. Slide 23 provides an update on our Eastern Shore Worcester Resiliency upgrade, an $80 million liquefied natural gas storage project designed to support growth and resiliency at the southern end of our Delmarva system. As Jeff mentioned, we were pleased to receive FERC approval of the project in January of this year, enabling us to remain on track with our construction schedule. The storage tanks are complete and are currently on their way for delivery to our service area. We continue to expect the project to be in service in the third quarter of 2025, just in time for next year's winter peak. Turning now to Slide 24. I would like to provide a recap on our community engagement efforts throughout 2024. I am continually impressed with the dedication of our teammates who shared their time and talents across nearly 7,000 hours of volunteerism during the year. As a company, we also provided $575,000 in charitable donations and community sponsorships to over 75 organizations within our four focus areas of giving safety and health, community development, education and environmental stewardship. Delivering excellence for all stakeholders is the foundation for long-term growth and success, enabling us to continue serving our customers and driving value for our stakeholders for years to come so that no one is left behind. With that, I will turn the call to Jeff for concluding remarks.

Thanks, Jim. 2024 has been an exciting turning point for the company, and I believe we've successfully demonstrated our ability to integrate the meaningful acquisition of Florida City Gas, deliver on our 2024 EPS and capital guidance ranges and position the company to achieve the significant growth embedded in our 2025 EPS guidance and through significant capital investment, proactive regulatory initiatives and continued business transformation initiatives put us on the path to achieve our longer-term capital and EPS targets. As I mentioned at the start of this call, our theme for the year is delivering with purpose, reaching new heights. We have an exciting year ahead of us, new goals to meet, including at least 14% adjusted EPS growth and new opportunities to explore. We'll be reaching new heights in 2025, and I look forward to updating you on our progress throughout the year and sharing our successes a year from now. With that, we'll take your questions. Operator?

Thank you. [Operator Instructions]. We'll go first this morning to Chris Ellinghaus at Siebert Williams Shank. Chris, please go ahead.

Hi, good morning, everybody.

Good morning.

Jeff, all the executive orders that have been coming out, particularly things like tariffs, and just energy policy in general, have you got any thoughts on what you've seen? And does it change anything in terms of your strategic thinking?

Good morning. It doesn't. We - as you might imagine, have been actively reviewing and trying to understand what those executive orders are doing. We're generally encouraged on one hand that we're going to be able to put projects into service, hopefully, a little quicker than we might have otherwise anticipated. We'll see if that actually happens. It's certainly a little bit chaotic at this point, trying to think your way through what is occurring there. But we've got lots of people that are on top of that, including Jim Moriarty, who's been following all of those for us fairly closely. So Jim, you might want to jump in here.

Yes, good morning, Chris. I think what I would say is that the tone and content of the executive orders are very favorable to the industry, energy generally, natural gas specifically. And so, we see a lot of opportunity there. I think there's an attempt to rebalance power between the executive branch, the legislative branch and the federal agencies. We've been able to work with everybody, and we take seriously our responsibilities, to each of those agencies and our elected members. So, we see it overall as positive.

Just to cap that off, I mean, our strategy has not changed. We're trying to deploy capital and pretty effectively doing that, frankly, see a lot of opportunities in the future to continue to do that. We have a very proactive regulatory agenda, as we mentioned earlier, and we've been very successful along those lines, and we continue to transform the company to make sure that our administrative capabilities keep pace with the growth. And so, not to sound like a broken record, but it's kind of those three things that we're focused on. And at this point, nothing in the executive orders, or what we see coming down the road today, is going to keep us from doing any of those things.

Okay. Jeff, you're a Florida expert. What - do you have any thoughts about the Florida Supreme Court oral argument from December?

On the RSAM issue?

Yes.

Yes. Sure. I have all kinds of thoughts on that. I will tell you, though, that they I don't believe are going to be particularly instructive for us moving forward. The RSAM was an interesting mechanism. We filed a day or two ago a sort of a typical depreciation study for Florida City Gas, and asked for a little bit of an accelerated treatment on the excess depreciation, which would, in fact, deal with that additional $25 million, or $26 million that was left over when the first tranche of RSAM was completed. And so RSAM for us, we completed the initial tranche of RSAM in 2024, the piece that City Gas had in place as part of the NextEra rate case that they did. And we've moved on to a more traditional depreciation study, which we find compelling for us in many ways. And I think the commission will find the same way. And so again, it accelerates what normally is kind of a 5-year depreciation of that excess depreciation amount to 2 years. Which would be a great thing for us if we can get it, and we believe that we'll be successful there. So - I'm not to be flipping about the Supreme Court notion. And Jim, I don't you may want to weigh in on that as well.

Yes. I mean I think the court is seriously looking at the statute, and what the agency did and the support that was in the four corners of the decision. So I think if the commission were - I'm sorry, the court were to remand it, it would probably be to allow the commission another opportunity to address the issue, which we've kind of done here going forward now.

Okay. Jim, let me ask you another question. With the FERC decision on the LNG project, they had the error. And they - once you had filed for clarification, they corrected that very quickly. But it seemed like it took a long time for you to make that filing, which seemed kind of peculiar to me. Is there a reason for that?

No. I think if you look at the calendar, we read the decision carefully when we got it, and then almost immediately filed for that clarification. We also were weighing the pending rehearing period, which, as you know, is 30 days from the decision, and we're gratified that no rehearings or protests were filed. So we're now in the next phase, but we're very thankful to the commission for issuing the decision.

Okay. And one last thing. Beth, can you sort of give us some color on weather for the quarter, and how that influenced results?

In terms of coming up for the fourth quarter, and how that impacted results overall?

Yes. I mean, I was particularly thinking about propane, because it was kind of a relatively mild quarter. So I just wanted to get your thoughts?

Sure. It was, Chris, as we started the quarter. I will tell you that as we ended up getting closer to the end of the year, there was a little bit more favorable weather, from a propane standpoint that positively impacted us. So not certainly as much as we've seen as we're coming into the first quarter here, but there was the last two weeks of December, we're favorable in that regard.

Okay. Thank you, guys. Appreciate the color.

Thank you for your questions, Chris. Appreciate it.

Thank you. We'll go next now to Dylan Lipner of Ladenburg.

Good morning, Dylan.

Hi, good morning. Congrats on a great quarter. All my questions were answered. I thought I hung up on it, but look forward to speaking to you guys soon.

Sounds great. Thank you, Dylan.

Thank you, Dylan.

Thank you. [Operator Instructions]. And ladies and gentlemen, I have no further questions coming in this morning. Mr. Householder, I'd like to turn the conference back to you, sir, for any closing comments.

Thank you, and thank all of you for joining our call this morning, and we certainly look forward to seeing many of you at our Investor Day that's coming up in a couple of weeks down in Cape Canaveral. We'll try to showcase, certainly things that are going on across the company, but there's a lot happening in Florida these days. And so, we'll be able to talk about that in more detail. Thanks again, and goodbye.

Thank you, Mr. Householder. Again, ladies and gentlemen, this does conclude Chesapeake Utilities Corporation's fourth quarter and full year 2024 earnings call. Again, thanks so much for joining us, everyone, and we wish you all a great day. Goodbye.