CHESAPEAKE UTILITIES CORP
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
CPK$140.28-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001628280-26-031397
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001628280-26-054477
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 215 previous paragraphs and 269 current paragraphs.
148 unchanged; 60 reworded; 35 added; 6 removed; 1 previous and 26 current paragraphs rearranged.
Tables are not compared: 17 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
Recent Developments
Current report
In July 2026, the Company announced the Florida Energy Pathway ("FEP"), an intrastate natural gas transportation project to be developed, constructed and operated by Peninsula Pipeline. The project is currently contemplated as a 24-inch pipeline extending from Palm Beach County to Miami-Dade County and is intended to increase natural gas transportation capacity, enhance system reliability and support continued residential and commercial growth in south Florida. The Company has secured firm transportation commitments totaling approximately 250,000 Dts/d from multiple investment-grade shippers and continues to solicit additional binding commitments. Total project investment is currently estimated at approximately $1.2 billion, subject to final engineering, design, permitting, regulatory approvals, and other development activities. Subject to the satisfaction of these conditions and final commissioning, the project is anticipated to be in service in 2030. The Company is evaluating financing alternatives, including the potential participation of one or more third parties that may collectively own up to 49 percent of the project.
Current report
Gross Margin (GAAP) for the Regulated Energy segment for the quarter ended June 30, 2026 was $91.9 million, an increase of $5.6 million, or 6.5 percent, compared to the same period in 2025. The increase in gross margin largely reflects incremental margin attributable to pipeline expansion projects, organic growth in our natural gas distribution businesses and regulatory infrastructure programs.
Current report
Gross Margin (GAAP) for the Unregulated Energy segment for the quarter ended June 30, 2026 was $9.4 million, a slight decrease compared to the same period in 2025. The decrease in gross margin was primarily attributable to lower volumes associated with our CNG, RNG and LNG transportation and hold services partially offset by improved margins from our propane distribution business.
Current report
Gross Margin (GAAP) for the Unregulated Energy segment for the six months ended June 30, 2026 was $51.7 million, an increase of $1.7 million, or 3.4 percent, compared to the same period in 2025. The increase in gross margin was primarily attributable to improved margins from our propane distribution business and increased performance from Aspire Energy, partially offset by lower total margins associated with our CNG, RNG and LNG transportation and hold services.
Current report
Net income (GAAP) for the six months ended June 30, 2026 was $84.7 million, or $3.51 per share, compared to $74.8 million, or $3.22 per share, for the same period of 2025. Net income for the six months ended June 30, 2025 included $0.6 million of transaction and transition-related expenses in connection with the acquisition and integration of FCG. Excluding these costs, net income increased by $9.3 million or 12.3 percent compared to the prior-year period.
Current report
Our adjusted net income for the three months ended June 30, 2026 was $25.4 million, or $1.05 per share, compared to $24.3 million, or $1.04 per share, for the same quarter in 2025. Operating income for the second quarter of 2026 was $52.9 million, an increase of $2.6 million compared to the same period in 2025. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $2.1 million or 4.1 percent compared to the prior-year period. The increase in adjusted gross margin in the second quarter of 2026 was primarily driven by incremental margin from pipeline expansion projects, regulatory infrastructure programs, natural gas organic growth, and improved margins from our propane distribution business. These factors were partially offset by decreased customer consumption, lower total margins associated with our CNG, RNG and LNG transportation and hold services, and increased operating expenses compared to the prior-year period. Higher operating expenses were largely driven by increased depreciation, amortization and property taxes, payroll, benefits and other employee-related expenses, credit, collections and customer service costs, and higher facilities, maintenance costs and outside services compared to the prior-year period. Depreciation, amortization and property taxes increased during the current period attributable to growth partially offset by the impact of the FCG depreciation study and the absence of a regulatory item compared to the prior-year period. Current period margin and expenses include offsetting reductions in both adjusted gross margin and depreciation and amortization expense related to the absence of recovered costs associated with Hurricane Michael.
Current report
Our adjusted net income for the six months ended June 30, 2026 was $84.7 million, or $3.51 per share, compared to $75.4 million, or $3.25 per share, for the same period in 2025. Operating income for the first six months of 2026 was $152.3 million, an increase of $15.2 million compared to the same period in 2025. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $14.4 million or 10.4 percent compared to the prior-year period. The increase in adjusted gross margin in the first half of 2026 was primarily driven by incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects and natural gas organic growth, improved performance from Aspire Energy and our propane distribution business, and increased customer consumption compared to the prior-year period. These factors were partially offset by lower total margins associated with our CNG, RNG and LNG transportation and hold services and higher operating expenses compared to the prior-year period. The increase in operating expenses was primarily attributable to higher payroll, benefits and other employee-related expenses, depreciation, amortization and property taxes, facilities, maintenance costs and outside services, and increased credit, collections and customer service costs compared to the prior-year period. Depreciation, amortization and property taxes increased during the current period attributable to growth partially offset by the impact of the FCG depreciation study and the absence of a regulatory item compared to the prior-year period. Current period margin and expenses include offsetting reductions in both adjusted gross margin and depreciation and amortization expense related to the absence of recovered costs associated with Hurricane Michael.
Current report
Major Projects and Initiatives (ongoing and recently completed)
Current report
The average number of residential customers served on the Delmarva Peninsula increased by approximately 2.8 percent and 3.0 percent, respectively, for the three and six months ended June 30, 2026, while the average number of residential customers served by the Company's Florida natural gas distribution service territories increased by approximately 1.8 percent and 1.9 percent, respectively, for the three and six months ended June 30, 2026.
Current report
For the six months ended June 30, 2026 compared to the six months ended June 30, 2025:
Current report
Items contributing to the period-over-period increase in adjusted gross margin are listed in the following table:
Current report
Contributions from Regulated Infrastructure Programs
Current report
Natural Gas Distribution Customer Growth
Current report
Changes in Customer Consumption
Current report
Customer consumption, inclusive of weather-related consumption, decreased adjusted gross margin by $0.3 million for the six months ended June 30, 2026.
Current report
Items contributing to the period-over-period increase in operating expenses are listed in the following table:
Current report
Operating results for the Unregulated Energy segment second quarter of 2026 reflect a $1.0 million decrease compared to the same period in 2025. The increase in adjusted gross margin in the Unregulated Energy segment during the second quarter of 2026 was primarily due to higher margins from our propane distribution business and improved performance from Aspire Energy. These factors were primarily offset by lower levels of CNG, RNG and LNG services and lower consumption levels from Aspire Energy and our propane distribution business compared to the prior-year period. The increase in operating expenses included higher facilities, maintenance and outside service costs, and higher depreciation, amortization and property tax costs compared to the prior-year period.
Current report
•Propane margins and service fees -Adjusted gross margin increased by $1.5 million due to increased margins which are impacted by market pricing, competition and the availability and price of alternative energy sources.
Current report
•Propane customer consumption -Adjusted gross margin decreased by $0.3 million due to lower customer consumption compared to the prior-year period.
Current report
CNG/RNG/LNG Transportation and Infrastructure
Current report
•CNG, RNG and LNG services -Adjusted gross margin decreased by $1.0 million during the second quarter of 2026 due to lower levels of CNG and RNG hold services.
Current report
•Customer consumption -Adjusted gross margin decreased by $0.4 million attributable to lower customer consumption compared to the prior-year.
Current report
For the six months ended June 30, 2026 compared to the six months ended June 30, 2025:
Current report
Items contributing to the period-over-period increase in adjusted gross margin are listed in the following table:
Current report
Propane Operations
Current report
•Propane margins and service fees -Adjusted gross margin increased by $1.8 million due primarily to increased margins which are impacted by market pricing, competition and the availability and price of alternative energy sources.
Current report
Aspire Energy
Current report
CNG/RNG/LNG Transportation and Infrastructure
Current report
•CNG, RNG and LNG services -Adjusted gross margin decreased by $1.2 million compared to the prior-year period due to lower levels of CNG and RNG hold services.
Current report
Items contributing to the period-over-period increase in operating expenses are listed in the following table:
Current report
Other income, net, was $0.5 million for the six months ended June 30, 2026 compared to $1.0 million during the prior-year period.
Current report
Interest charges for the six months ended June 30, 2026 increased by $1.2 million compared to the same period in 2025, attributable primarily to the full-period impact of the Senior Notes issued in August and September 2025. The increase was partially offset by lower interest expense resulting from reduced average outstanding Revolver borrowings, scheduled debt repayments, and higher capitalized interest compared to the prior-year period.
Current report
•Proceeds from the issuance of common stock of $16.8 million;
Current report
•$12.6 million of net repayments related to long-term debt and lease obligations.
Removed paragraphs (6)
Previous report
Gross Margin (GAAP) for the Unregulated Energy segment for the three months ended March 31, 2026 was $42.3 million, an increase of $2.4 million, or 6.0 percent, compared to the same period in 2025. The increase in gross margin was primarily attributable to higher results from our propane distribution business largely attributable to increased customer consumption from colder year-over-year weather in our Delmarva service areas, and increased performance from Aspire Energy.
Previous report
Recently Completed and Ongoing Major Projects and Initiatives
Previous report
The average number of residential customers served on the Delmarva Peninsula, by FPU and by FCG increased by approximately 3.3 percent, 2.2 percent, and 2.0 percent, respectively, for the three months ended March 31, 2026.
Previous report
Operating Expenses
Previous report
•Increased customer consumption -Adjusted gross margin increased by $0.4 million due to increased customer consumption during the current year primarily related to year-over-year colder weather in our Ohio service area.
Previous report
Operating Expenses
Reworded paragraphs (60)
Previous wording
The following tables reconcile Gross Margin, Net Income, and EPS, all as defined under GAAP, to our non-GAAP financial measures of Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS for the three months ended March 31, 2026 and 2025:
Current wording
The following tables reconcile Gross Margin, Net Income, and EPS, all as defined under GAAP, to our non-GAAP financial measures of Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS for the three and six months ended June 30, 2026 and 2025:
Previous wording
Gross Margin (GAAP) for the Regulated Energy segment for the three months ended March 31, 2026 was $114.9 million, an increase of $17.7 million, or 18.2 percent, compared to the same period in 2025. The increase in gross margin largely reflects incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects, and organic growth in our natural gas distribution businesses.
Current wording
Gross Margin (GAAP) for the Regulated Energy segment for the six months ended June 30, 2026 was $206.8 million, an increase of $23.3 million, or 12.7 percent, compared to the same period in 2025. The increase in gross margin largely reflects incremental margin attributable to pipeline expansion projects, regulatory initiatives and infrastructure programs, and organic growth in our natural gas distribution businesses.
Previous wording
Net income (GAAP) for the three months ended March 31, 2026 was $59.3 million, or $2.47 per share, compared to $50.9 million, or $2.21 per share, for the same quarter of 2025. Net income for the three months ended March 31, 2025 included $0.2 million of transaction and transition-related expenses in connection with the acquisition and integration of FCG. Excluding these costs, net income increased by $8.2 million or 16.0 percent compared to the prior-year period.
Current wording
Net income (GAAP) for the quarter ended June 30, 2026 was $25.4 million, or $1.05 per share, compared to $23.9 million, or $1.02 per share, for the same quarter of 2025. Net income for the three months ended June 30, 2025 included $0.4 million of transaction and transition-related expenses in connection with the acquisition and integration of FCG. Excluding these costs, net income increased by $1.1 million or 4.5 percent compared to the prior-year period.
Previous wording
Results of Operations for the Three Months Ended March 31, 2026
Current wording
Results of Operations for the Three and Six Months Ended June 30, 2026
Previous wording
(2) Refer to Major Projects and Initiatives table for additional information.
Current wording
(2) Refer to the Major Projects and Initiatives table for additional information.
Previous wording
(4) Reflects the impact of approximately 0.8 million common shares issued under the DRIP/DSSP and ATM program.
Current wording
(4) Reflects the impact of approximately 0.6 million common shares issued under the DRIP/DSPP and ATM program.
Previous wording
Key variances between the three months ended March 31, 2025 and March 31, 2026 included:
Current wording
Key variances between the six months ended June 30, 2025 and June 30, 2026 included:
Previous wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of an amendment to its Transportation Service Agreement with FPU for a project that will support additional supply to communities in the St. Cloud, Florida area. The project is driven by the need to expand gas service to future communities that are expected in that area. Peninsula Pipeline will construct pipeline expansions that will allow FPU to serve the expected new growth. The expansion will provide FPU with an additional 10,000 Dts/d. The Florida PSC approved the project in May 2024, and it is expected to be complete in the second quarter of 2026. For the three months ended March 31, 2026, these projects generated incremental adjusted gross margin of $0.9 million. We expect this expansion to generate approximately $3.2 million in 2026 and annually thereafter.
Current wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of an amendment to its Transportation Service Agreement with FPU for a project that will support additional supply to communities in the St. Cloud, Florida area. The project is driven by the need to expand gas service to future communities that are expected in that area. Peninsula Pipeline will construct pipeline expansions that will allow FPU to serve the expected new growth. The expansion will provide FPU with an additional 10,000 Dts/d. The Florida PSC approved the project in May 2024, and it is expected to be complete in the third quarter of 2026. For the three and six months ended June 30, 2026, these projects generated incremental adjusted gross margin of $0.2 million and $1.1 million, respectively. We expect this expansion to generate approximately $3.2 million in 2026 and annually thereafter.
Previous wording
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. Construction of the pipeline facilities will occur in two separate phases. Phase one consists of three extensions with associated facilities, and a gas injection interconnect with associated facilities. Phase two will consist of two additional pipeline extensions. The petition was approved by the Florida PSC in November 2022. The various phases of the project commenced in the first quarter of 2023, and construction was completed in 2025. The project generated incremental adjusted gross margin of $0.6 million for the three months ended March 31, 2026, and is expected to contribute adjusted gross margin of approximately $4.3 million in 2026 and annually thereafter.
Current wording
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. Construction of the pipeline facilities will occur in two separate phases. Phase one consists of three extensions with associated facilities, and a gas injection interconnect with associated facilities. Phase two will consist of two additional pipeline extensions. The petition was approved by the Florida PSC in November 2022. The various phases of the project commenced in the first quarter of 2023, and construction was completed in 2025. The project generated incremental adjusted gross margin of $0.6 million and $1.2 million, respectively, for the three and six months ended June 30, 2026 and is expected to contribute adjusted gross margin of approximately $4.3 million in 2026 and annually thereafter.
Previous wording
In June 2025, Eastern Shore filed a limited amended application with the FERC requesting revised initial transportation rates for the project. The revised rates reflected increased capital costs associated with unanticipated changes in global markets and supply chains, including the availability of skilled laborers with the requisite certifications to work on this project. Eastern Shore requested expedited action by the FERC in relation to this matter and an approved order was issued in July 2025. Construction commenced shortly after approval and is well underway. The weather during the first quarter resulted in several brief slowdowns which had a cumulative impact on the overall timeline. Project construction and commissioning are expected to be complete in the latter part of the year with the FERC approval process to immediately follow. The Company expects to receive full approval for in-service of the facility by the beginning of 2027. The project generated adjusted gross margin of $0.4 million for the three months ended March 31, 2026. The project is expected to contribute adjusted gross margin of approximately $1.5 million in 2026 and $17.1 million in 2027 and annually thereafter.
Current wording
In June 2025, Eastern Shore filed a limited amended application with the FERC requesting revised initial transportation rates for the project. The revised rates reflected increased capital costs associated with unanticipated changes in global markets and supply chains, including the availability of skilled laborers with the requisite certifications to work on this project. Eastern Shore requested expedited action by the FERC in relation to this matter and an approved order was issued in July 2025. Construction commenced shortly after approval and is well underway. The weather during the first quarter of 2026 resulted in several brief slowdowns which had a cumulative impact on the overall timeline. Project construction and commissioning are expected to be complete in the latter part of the year with the FERC approval process to immediately follow. The Company expects to receive full approval for in-service of the facility by the beginning of 2027. The project generated adjusted gross margin of $0.4 million and $0.8 million, respectively, for the three and six months ended June 30, 2026. The project is expected to contribute adjusted gross margin of approximately $1.5 million in 2026 and $17.1 million in 2027 and annually thereafter.
Previous wording
In December 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreements with FPU for projects that will support additional supply to communities on the East Coast of Florida. The projects are driven by the need for increased supply to coastal portions of the state that have experienced an increase in population growth. Peninsula Pipeline will construct several pipeline extensions which will support FPU’s distribution system in the areas of Boynton Beach and New Smyrna Beach with an additional 15,000 Dts/d and 3,400 Dts/d, respectively. The Florida PSC approved the projects in March 2024. New Smyrna Beach was placed into service during May 2025 and construction is projected to be complete for Boynton Beach in the second quarter of 2026. The projects generated incremental adjusted gross margin of $1.0 million for the three months ended March 31, 2026, and are expected to contribute adjusted gross margin of approximately $6.0 million in 2026 and annually thereafter.
Current wording
In December 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreements with FPU for projects that will support additional supply to communities on the East Coast of Florida. The projects are driven by the need for increased supply to coastal portions of the state that have experienced an increase in population growth. Peninsula Pipeline will construct several pipeline extensions which will support FPU’s distribution system in the areas of Boynton Beach and New Smyrna Beach with an additional 15,000 Dts/d and 3,400 Dts/d, respectively. The Florida PSC approved the projects in March 2024. New Smyrna Beach was placed into service during May 2025 and construction is projected to be complete for Boynton Beach in the third quarter of 2026. The projects generated incremental adjusted gross margin of $0.3 million and $1.3 million, respectively, for the three and six months ended June 30, 2026, and are expected to contribute adjusted gross margin of approximately $6.0 million in 2026 and annually thereafter.
Previous wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreements with FPU for projects that will support additional supply to communities located in Central Florida. The projects are driven by the need for increased supply to communities in central Florida that are experiencing significant population growth. Peninsula Pipeline's extensions support FPU’s distribution system around the Plant City and Lake Mattie area's of Florida with an additional 5,000 Dts/d and 8,700 Dts/d, respectively. The Florida PSC approved the projects in March 2024. The Plant City project was completed in the fourth quarter of 2024, and the Lake Mattie project went into service in July 2025. The projects generated incremental adjusted gross margin of $0.8 million for the three months ended March 31, 2026, and both projects are expected to contribute total adjusted gross margin of approximately $4.3 million in 2026 and annually thereafter.
Current wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreements with FPU for projects that will support additional supply to communities located in Central Florida. The projects are driven by the need for increased supply to communities in central Florida that are experiencing significant population growth. Peninsula Pipeline's extensions support FPU’s distribution system around the Plant City and Lake Mattie area's of Florida with an additional 5,000 Dts/d and 8,700 Dts/d, respectively. The Florida PSC approved the projects in March 2024. The Plant City project was completed in the fourth quarter of 2024, and the Lake Mattie project went into service in July 2025. These projects generated incremental adjusted gross margin of $0.8 million and $1.6 million, respectively, for the three and six months ended June 30, 2026, and are expected to contribute total adjusted gross margin of approximately $4.3 million in 2026 and annually thereafter.
Previous wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of Transportation Service Agreements with FCG for projects that will support the transportation of additional renewable energy supply to FCG. The projects, located in Florida’s Brevard, Indian River and Miami-Dade counties, will bring renewable natural gas produced from local landfills into FCG’s natural gas distribution system. Peninsula Pipeline will construct several pipeline extensions which will support FCG's distribution system in Brevard County, Indian River County, and Miami-Dade County. Benefits of these projects include increased gas supply to serve expected FCG growth, strengthened system reliability and additional system flexibility. The Florida PSC approved the petition at its July 2024 meeting. In October 2025, the Florida PSC approved amendments to the Transportation Service Agreements that were filed to include Peninsula Pipeline as a party to the related interconnection agreements. The projects are underway and are estimated to be completed in the second half of 2026. These three renewable projects generated adjusted gross margin of $1.3 million for the three months ended March 31, 2026, and are projected to generate total adjusted gross margin of approximately $5.4 million in 2026 and $6.4 million annually thereafter.
Current wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of Transportation Service Agreements with FCG for projects that will support the transportation of additional renewable energy supply to FCG. The projects, located in Florida’s Brevard, Indian River and Miami-Dade counties, will bring renewable natural gas produced from local landfills into FCG’s natural gas distribution system. Peninsula Pipeline will construct several pipeline extensions which will support FCG's distribution system in Brevard County, Indian River County, and Miami-Dade County. Benefits of these projects include increased gas supply to serve expected FCG growth, strengthened system reliability and additional system flexibility. The Florida PSC approved the petition at its July 2024 meeting. In October 2025, the Florida PSC approved amendments to the Transportation Service Agreements that were filed to include Peninsula Pipeline as a party to the related interconnection agreements. The projects are underway and are estimated to be completed in the second half of 2026. These three renewable projects generated incremental adjusted gross margin of $0.7 million and $2.0 million, respectively, for the three and six months ended June 30, 2026, and are projected to generate total adjusted gross margin of approximately $5.4 million in 2026 and $6.4 million annually thereafter.
Previous wording
In September 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of the Transportation Service Agreement with FCG for a series of projects that will enhance gas infrastructure in Miami-Dade County. The proposed expansion consists of the development of several pipeline projects to support growth and FCG's distribution system, as well as enhance FCG's access to gas from various points in the Miami-Dade County area. The expansion was approved in February 2025 and interim services began in August 2025 with permanent facilities expected to be in service by the second quarter of 2026. The project generated adjusted gross margin of $1.9 million for the three months ended March 31, 2026 and is expected to contribute adjusted gross margin of approximately $7.6 million in 2026 and annually thereafter.
Current wording
In September 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of the Transportation Service Agreement with FCG for a series of projects that will enhance gas infrastructure in Miami-Dade County. The proposed expansion consists of the development of several pipeline projects to support growth and FCG's distribution system, as well as enhance FCG's access to gas from various points in the Miami-Dade County area. The expansion was approved in February 2025 and interim services began in August 2025 with permanent facilities expected to be in service by the second half of 2026. The project generated adjusted gross margin of $1.9 million and $3.8 million, respectively, for the three and six months ended June 30, 2026, and is expected to contribute adjusted gross margin of approximately $7.6 million in 2026 and annually thereafter.
Previous wording
In February 2023, FPU filed a petition with the Florida PSC for approval of the GUARD program. GUARD is a ten-year program to enhance the safety, reliability, and accessibility of portions of our natural gas distribution system. We identified various categories of projects to be included in GUARD, which include the relocation of mains and service lines located in rear easements and other difficult to access areas to the front of the street, the replacement of problematic distribution mains, service lines, and maintenance and repair equipment and system reliability projects. In August 2023, the Florida PSC approved the GUARD program, which included $205.0 million of capital expenditures projected to be spent over a 10-year period. For the three months ended March 31, 2026, there was $0.9 million of incremental adjusted gross margin generated pursuant to the program. The program is expected to generate $10.1 million of adjusted gross margin in 2026 and $13.0 million in 2027.
Current wording
In February 2023, FPU filed a petition with the Florida PSC for approval of the GUARD program. GUARD is a ten-year program to enhance the safety, reliability, and accessibility of portions of our natural gas distribution system. We identified various categories of projects to be included in GUARD, which include the relocation of mains and service lines located in rear easements and other difficult to access areas to the front of the street, the replacement of problematic distribution mains, service lines, and maintenance and repair equipment and system reliability projects. In August 2023, the Florida PSC approved the GUARD program, which included $205.0 million of capital expenditures projected to be spent over a 10-year period. For the three and six months ended June 30, 2026, there was $0.9 million and $1.8 million, respectively, of incremental adjusted gross margin generated pursuant to the program. The program is expected to generate $10.9 million of adjusted gross margin in 2026 and $13.0 million in 2027.
Previous wording
In June 2023, the Florida PSC issued the approval order for the continuation of the SAFE program beyond its 2025 expiration date and inclusion of 150 miles of additional mains and services located in rear property easements. The SAFE program is designed to relocate certain mains and facilities associated with rear lot easements to street front locations to improve FCG's ability to inspect and maintain the facilities and reduce opportunities for damage and theft. In the same order, the Florida PSC approved a replacement of 160 miles of pipe that was used in the 1970s and 1980s and shown through industry research to exhibit premature failure in the form of cracking. The program includes projected capital expenditures of $205.0 million over a 10-year period. For the three months ended March 31, 2026, there was $1.1 millionof incremental adjusted gross margin generated pursuant to the program. The program is expected to generate $12.7 million of adjusted gross margin in 2026 and $16.4 million in 2027.
Current wording
In June 2023, the Florida PSC issued the approval order for the continuation of the SAFE program beyond its 2025 expiration date and inclusion of 150 miles of additional mains and services located in rear property easements. The SAFE program is designed to relocate certain mains and facilities associated with rear lot easements to street front locations to improve FCG's ability to inspect and maintain the facilities and reduce opportunities for damage and theft. In the same order, the Florida PSC approved a replacement of 160 miles of pipe that was used in the 1970s and 1980s and shown through industry research to exhibit premature failure in the form of cracking. The program includes projected capital expenditures of $205.0 million over a 10-year period. For the three and six months ended June 30, 2026, there was $0.7 million and $1.8 million, respectively, of incremental adjusted gross margin generated pursuant to the program. The program is expected to generate $12.7 million of adjusted gross margin in 2026 and $16.4 million in 2027.
Previous wording
In December 2025 Eastern Shore submitted a 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 PHMSA regulation. The capital cost surcharge mechanism was approved in Eastern Shore's last rate case. In conjunction with the filing of this surcharge, a cumulative adjustment to the existing surcharge to reflect additional depreciation was included. The FERC issued an order approving the surcharge as filed in December 2025. The combined revised surcharge became effective January 1, 2026.
Current wording
In December 2025 Eastern Shore submitted a 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 PHMSA regulation. The capital cost surcharge mechanism was approved in Eastern Shore's last rate case. In conjunction with the filing of this surcharge, a cumulative adjustment to the existing surcharge to reflect additional depreciation was included. The FERC approved the surcharge as filed in December 2025. The combined revised surcharge became effective January 1, 2026.
Previous wording
In March 2026, 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 a slight decrease to the revenue requirement of the currently effective surcharge as a result of the true-up. The FERC issued an order approving the surcharge as filed effective April 1, 2026. For the three months ended March 31, 2026, there was $0.8 millionof incremental adjusted gross margin generated pursuant to the program. Eastern Shore expects to generate adjusted gross margin of approximately $9.0 million in 2026 and $10.1 million in 2027 from relocation projects, which is ultimately dependent upon the timing of filings and the completion of construction.
Current wording
In March 2026, 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 a slight decrease to the revenue requirement of the currently effective surcharge as a result of the true-up. The FERC approved the surcharge as filed effective April 1, 2026. For the three and six months ended June 30, 2026, there was $0.9 million and $1.7 million, respectively, of incremental adjusted gross margin generated pursuant to the program. Eastern Shore expects to generate adjusted gross margin of approximately$9.0 million in 2026 and$10.1 million in 2027 from relocation projects, which is ultimately dependent upon the timing of filings and the completion of construction.
Previous wording
In 2020, the Florida PSC implemented the Storm Protection Plan ("SPP") and Storm Protection Plan Cost Recovery Clause ("SPPCRC"), which require electric utilities to petition the Florida PSC for approval of a Transmission and Distribution Storm Protection Plan that covers the utility’s immediate 10-year planning period with updates to the plan at least every 3 years. The SPPCRC rules allow the utility to file for recovery of associated costs related to its SPP. Our Florida electric distribution operation's SPP and SPPCRC were filedand approved in 2022, with modifications, by the Florida PSC. Rates associated with this initiative were effective in January 2023. In October 2024, the Florida PSC approved the Company's projected 2025 SPP costs of$20.4 million for both capital and operating expenses. Our Florida electric distribution operations filed an updated SPP plan in January 2025 which was approved in June 2025, with modifications by the Florida PSC. For the three months ended March 31, 2026, this initiative generated additional adjusted gross margin of $2.2 million and is expected to generate$10.7 million of adjusted gross margin in 2026 and$11.0 million in 2027. We expect continued investment under the SPP going forward.
Current wording
In 2020, the Florida PSC implemented the Storm Protection Plan ("SPP") and Storm Protection Plan Cost Recovery Clause ("SPPCRC"), which require electric utilities to petition the Florida PSC for approval of a Transmission and Distribution Storm Protection Plan that covers the utility’s immediate 10-year planning period with updates to the plan at least every 3 years. The SPPCRC rules allow the utility to file for recovery of associated costs related to its SPP. Our Florida electric distribution operation's SPP and SPPCRC were filedand approved in 2022, with modifications, by the Florida PSC. Rates associated with this initiative were effective in January 2023. In October 2024, the Florida PSC approved the Company's projected 2025 SPP costs of$20.4 million for both capital and operating expenses. Our Florida electric distribution operations filed an updated SPP plan in January 2025 which was approved in June 2025, with modifications by the Florida PSC. For the three and six months ended June 30, 2026, this initiative generated additional adjusted gross margin of $0.3 million and $2.5 million, respectively, and is expected to generate$9.7 million of adjusted gross margin in 2026 and$10.4 million in 2027. We expect continued investment under the SPP going forward.
Previous wording
In October 2025, FPU and FCG filed a joint petition for approval to establish a recovery surcharge for actual, estimated and projected relocation costs pursuant to the Florida Administrative Code which enables companies to recover the costs associated with relocating or reconstructing facilities that have been required by governmental entities. The Florida PSC approved the petition in February 2026, with the surcharge effective in March 2026. For the three months ended March 31, 2026, there was $0.5 million of adjusted gross margin generated. The projected total revenue for both 2026 and 2027 is $0.5 million for FPU and $1.0 million for FCG.
Current wording
In October 2025, FPU and FCG filed a joint petition for approval to establish a recovery surcharge for actual, estimated and projected relocation costs pursuant to the Florida Administrative Code which enables companies to recover the costs associated with relocating or reconstructing facilities that have been required by governmental entities. The Florida PSC approved the petition in February 2026, with the surcharge effective in March 2026. For the three and six months ended June 30, 2026, there was $0.4 million and $0.9 million, respectively, of adjusted gross margin generated. The projected total revenue for both 2026 and 2027 is $0.5 million for FPU and $1.0 million for FCG.
Previous wording
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; and (iii) authorization to establish a rider for recovery of the costs associated with our new technology systems. In September 2024, the Maryland Public Utility Judge approved a $2.6 million increase in annual base rates, which was followed by the Company submitting 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. In March 2025 the Phase II was approved, including an additional $0.9 million in revenue requirement, for a total cumulative increase of $3.5 million. A final order was issued in April 2025 and included approval of the consolidation of the operations and the assets of CUC-Maryland Division, Sandpiper Energy, and Elkton Gas into one entity which was renamed and operates as Chesapeake Utilities of Maryland, Inc. For the three months ended March 31, 2026, there was $1.3 million of incremental adjusted gross margin generated and the proceeding is expected to result in additional adjusted gross margin of approximately $3.5 million in 2026 and 2027.
Current wording
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; and (iii) authorization to establish a rider for recovery of the costs associated with our new technology systems. In September 2024, the Maryland Public Utility Judge approved a $2.6 million increase in annual base rates, which was followed by the Company submitting 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. In March 2025, the Phase II was approved, including an additional $0.9 million in revenue requirement, for a total cumulative increase of $3.5 million. A final order was issued in April 2025 and included approval of the consolidation of the operations and the assets of CUC-Maryland Division, Sandpiper Energy, and Elkton Gas into one entity which was renamed and operates as Chesapeake Utilities of Maryland, Inc. For the three and six months ended June 30, 2026, there was $0.1 million and $1.4 million, respectively, of incremental adjusted gross margin generated and the proceeding is expected to result in additional adjusted gross margin of approximately $3.5 million in 2026 and 2027.
Previous wording
authorization to make certain changes to tariffs. 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 all interested parties was reached and approved by the Delaware PSC in June 2025 providing an annual revenue increase of $6.1 million, as well as dividing the rate case into two phases. Rates set to recover the approved components of the increase were effective in March 2025 and approved tariff-related changes including rate design were effective as of October 15, 2025. For the three months ended March 31, 2026, there was $1.3 million of incremental adjusted gross margin generated and final rates are expected to generate approximately $6.1 million of adjusted gross margin in 2026 and 2027.
Current wording
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. 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 all interested parties was reached and approved by the Delaware PSC in June 2025 providing an annual revenue increase of $6.1 million, as well as dividing the rate case into two phases. Rates set to recover the approved components of the increase were effective in March 2025 and approved tariff-related changes including rate design were effective as of October 15, 2025. For the six months ended June 30, 2026, there was $1.2 million of incremental adjusted gross margin generated and final rates are expected to generate approximately $6.1 million of adjusted gross margin in 2026 and 2027.
Previous wording
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. Annualized interim rates of approximately $1.8 million were approved with an effective date of November 1, 2024. In March 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. This settlement which was approved by the Florida PSC in July 2025, provides for a total base rate increase of approximately $8.6 million on an annual basis, with $1.0 million of the increase deferred from the first year's base rate increase and recovered over three years. A step-up rate increase was also approved for up to $0.7 million, upon completion of the purchase and refurbishment of certain substations, which is expected to be completed in December 2026. For the three months ended March 31, 2026, there was $1.5 million of incremental adjusted gross margin generatedand final rates are expectedto generate approximately $8.6 million of adjusted gross margin in 2026 and $9.1 million in 2027.
Current wording
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. Annualized interim rates of approximately $1.8 million were approved with an effective date of November 1, 2024. In March 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. This settlement which was approved by the Florida PSC in July 2025, provides for a total base rate increase of approximately $8.6 million on an annual basis, with $1.0 million of the increase deferred from the first year's base rate increase and recovered over three years. A step-up rate increase was also approved for up to $0.7 million, upon completion of the purchase and refurbishment of certain substations, which is expected to be completed in December 2026. For the six months ended June 30, 2026, there was $1.5 million of incremental adjusted gross margin generatedand final rates are expectedto generate approximately $8.6 million of adjusted gross margin in 2026 and $9.1 million in 2027.
Previous wording
In April 2026, Florida City Gas filed a petition with the Florida PSC. In connection with the application, we are seeking approval of the following: (i) interim rate relief of approximately $16.2 million, subject to refund, pending the outcome of the rate case proceeding; (ii) general base rate increase of $46.9 million with a ROE of 11.25 percent based on a 2027 projected test year; (iii) reclassification of approximately $16.4 million in the existing SAFE program revenues from surcharge recovery to base rates; (iv) authorization to retain the unamortized portion of the previously approved acquisition adjustment; and (v) further implementation of the advanced metering infrastructure (“AMI”). The outcome of the application will be subject to review and approval by the Florida PSC.
Current wording
In April 2026, Florida City Gas filed a petition with the Florida PSC. In connection with the application, we are seeking approval of the following: (i) interim rate relief of approximately $16.2 million, subject to refund, pending the outcome of the rate case proceeding; (ii) general base rate increase of $46.9 million with a ROE of 11.25 percent based on a 2027 projected test year; (iii) reclassification of approximately $16.4 million in the existing SAFE program revenues from surcharge recovery to base rates; (iv) authorization to retain the unamortized portion of the previously approved acquisition adjustment; and (v) further implementation of the advanced metering infrastructure (“AMI”). In July 2026, interim rates of $16.2 million on an annualized basis were approved by the Florida PSC with rates effective July 20, 2026, subject to refund pending the final outcome of the rate case proceeding. The discovery process has commenced, and the hearing for the proceeding is scheduled for late September 2026. The ultimate outcome of the application is subject to review and approval by the Florida PSC.
Previous wording
For the three months ended March 31, 2026, increased customer consumption, which includes the effects of colder weather conditions, largely in our Delmarva service areas, compared to the prior-year period resulted in a$4.5 million increase in adjusted gross margin.
Current wording
For the six months ended June 30, 2026, increased customer consumption, which includes the effects of colder weather conditions, largely in our Delmarva service areas, compared to the prior-year period resulted in a$1.8 million increase in adjusted gross margin.
Previous wording
The following table summarizes HDD and CDD variances from the 10-year average HDD/CDD ("Normal") for the three months ended March 31, 2026 and 2025.
Current wording
The following table summarizes HDD and CDD variances from the 10-year average HDD/CDD ("Normal") for the three and six months ended June 30, 2026 and 2025.
Previous wording
Our adjusted net income for the three months ended March 31, 2026 was $59.3 million, or $2.47 per share, compared to $51.1 million, or $2.22 per share, for the same period in 2025. Operating income for the first three months of 2026 was $99.4 million, an increase of $12.6 million compared to the same period in 2025. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $12.3 million or 14.1 percent compared to the prior-year period. The increase in adjusted gross margin in the first quarter of 2026 was primarily driven by incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects and natural gas organic growth, increased customer consumption resulting from year-over-year colder temperatures largely in the Company's Delmarva service areas, and improved performance at Aspire Energy. Higher operating expenses were driven largely by increased payroll, benefits and other employee-related expenses and higher facilities, maintenance costs and outside services compared to the prior-year period. Depreciation and amortization expense for the current period includes decreases related to certain regulatory items including the absence of recovered costs associated with Hurricane Michael and the impact of the FCG depreciation study. These amounts were largely offset by additional depreciation, amortization and property taxes associated with growth.
Current wording
Operating income for the Regulated Energy segment for the second quarter of 2025 was $55.2 million, an increase of $3.4 million over the same period in 2025. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $2.9 million, or 5.5 percent, compared to the same period in 2025. Higher operating income reflects incremental margin from pipeline expansion projects, regulatory initiatives and infrastructure programs, organic growth in our natural gas distribution businesses and improved margins from our propane distribution business. These factors were partially offset by decreased customer consumption compared to the prior-year period. Excluding the transaction and transition-related expenses described above, the increase in total operating expenses of $4.1 million was largely attributable to additional depreciation, amortization and property taxes associated with growth, higher expenses associated with payroll, benefits and other employee related expenses, and increased costs related to credit, collections and customer service. Depreciation and amortization expense for the current period includes decreases related to certain regulatory items including the absence of recovered costs associated with Hurricane Michael and the impact of the FCG depreciation study.
Previous wording
We generated increased adjusted gross margin of $6.9 million for the three months ended March 31, 2026 from natural gas transmission service expansions of Peninsula Pipeline and Eastern Shore.
Current wording
We generated increased adjusted gross margin of $4.9 million for the three months ended June 30, 2026 from natural gas transmission service expansions of Peninsula Pipeline and Eastern Shore.
Previous wording
Customer consumption, inclusive of weather-related consumption, increased adjusted gross margin by $1.7 million for the three months ended March 31, 2026.
Current wording
Decreased customer consumption, inclusive of weather-related consumption, reduced adjusted gross margin by $2.0 million for the three months ended June 30, 2026.
Previous wording
There is no impact to earnings as this $2.0 million decrease in adjusted gross margin for the three months ended March 31, 2026, is offset by a corresponding decrease in depreciation and amortization expense for the period.
Current wording
There is no impact to earnings as this $1.9 million decrease in adjusted gross margin for the three months ended June 30, 2026, is offset by a corresponding decrease in depreciation and amortization expense for the period.
Previous wording
Operating income for the Regulated Energy segment for the first quarter of 2026 was $71.1 million, an increase of $10.6 million, over the same period in 2025. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $10.3 million, or 16.9 percent, compared to the same period in 2025. Higher operating income reflects incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects, and organic growth in our natural gas distribution businesses. Excluding the transaction and transition-related expenses described above, the increase in total operating expenses of $9.3 million was largely attributable to higher expenses associated with payroll, benefits and other employee related expenses, higher facilities, maintenance costs and outside services, and increased costs related to credit, collections and customer service. Depreciation and amortization expense for the current period includes decreases related to certain regulatory items including the absence of recovered costs associated with Hurricane Michael and the impact of the FCG depreciation study. These amounts were largely offset by additional depreciation, amortization and property taxes associated with growth.
Current wording
Operating income for the Regulated Energy segment for the six months ended June 30, 2026 was $126.4 million, an increase of $14.1 million, over the same period in 2025. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $13.3 million, or 11.8 percent, compared to the same period in 2025. Higher operating income is largely attributable to incremental margin from pipeline expansion projects, regulatory initiatives and infrastructure programs, and organic growth in our natural gas distribution businesses compared to the prior-year period. Excluding the transaction and transition-related expenses described above, the increase in total operating expenses of $13.3 million was largely attributable to higher expenses associated with payroll, benefits and other employee related expenses, additional depreciation, amortization and property taxes associated with growth, higher facilities, maintenance costs and outside services, and increased costs related to credit, collections and customer service. Depreciation and amortization expense for the current period includes decreases related to certain regulatory items including the absence of recovered costs associated with Hurricane Michael and the impact of the FCG depreciation study.
Previous wording
(1)Includes adjusted gross margin contributions from permanent base rates. Refer to Major Projects discussion for additional information.
Current wording
(1)Includes adjusted gross margin contributions from interim and permanent base rates. Refer to the Major Projects and Initiatives discussion for additional information.
Previous wording
Regulated infrastructure programs generated incremental adjusted gross margin of $5.5 million for the three months ended March 31, 2026. The increase in adjusted gross margin was primarily related to FCG's SAFE program, Florida's GUARD program, Eastern Shore's Capital Cost Surcharge program, and FPU Electric's SPP. Refer to Note 5, Rates and Other Regulatory Activities, in the condensed consolidated financial statements for additional information.
Current wording
Regulated infrastructure programs generated incremental adjusted gross margin of $8.7 million for the six months ended June 30, 2026. The increase in adjusted gross margin was primarily related to FCG's SAFE program, Florida's GUARD program, Eastern Shore's Capital Cost Surcharge program, and FPU Electric's SPP. Refer to Note 5, Rates and Other Regulatory Activities, in the condensed consolidated financial statements for additional information.
Previous wording
Rate changes associated with the Delaware and Maryland natural gas rate cases and Florida Electric base rate case contributed additional adjusted gross margin of $4.1 million for the three months ended March 31, 2026. Refer to Note 5, Rates and Other Regulatory Activities, in the condensed consolidated financial statements for additional information.
Current wording
Rate changes associated with the Delaware and Maryland natural gas rate cases and Florida Electric base rate case contributed additional adjusted gross margin of $4.1 million for the six months ended June 30, 2026. Refer to Note 5, Rates and Other Regulatory Activities, in the condensed consolidated financial statements for additional information.
Previous wording
We generated additional adjusted gross margin of $2.0 million from natural gas customer growth. Adjusted gross margin increased by $1.5 million for our Florida natural gas distribution service territories and $0.5 million on the Delmarva Peninsula for the three months ended March 31, 2026, as compared to the same period in 2025, due to residential customer growth in these service areas, as well as growth attributable to commercial and industrial customers.
Current wording
We generated additional adjusted gross margin of $4.0 million from natural gas customer growth. Adjusted gross margin increased by $3.1 million for our Florida natural gas distribution service territories and $0.9 million on the Delmarva Peninsula for the six months ended June 30, 2026, as compared to the same period in 2025, due to residential customer growth in these service areas, as well as growth attributable to commercial and industrial customers.
Previous wording
Off-system natural gas capacity sales increased adjusted gross margin by $1.1 million for the three months ended March 31, 2026.
Current wording
Off-system natural gas capacity sales increased adjusted gross margin by $1.4 million for the six months ended June 30, 2026.
Previous wording
Operating results for the Unregulated Energy segment for the three months ended March 31, 2026 reflect a $2.0 million increase compared to the same period in 2025. The increase in adjusted gross margin in the Unregulated Energy segment during the first quarter of 2026 was primarily due to increased consumption in our propane distribution business which was impacted by colder weather in the Delmarva service areas as well as improved performance from Aspire Energy. The increase in operating expenses included higher payroll, benefits and other employee-related expenses, increased facilities, maintenance and outside service costs, and higher depreciation, amortization and property tax costs compared to the prior-year period.
Current wording
Operating results for the Unregulated Energy segment for the six months ended June 30, 2026 reflect a $1.0 million increase compared to the same period in 2025. The increase in adjusted gross margin in the Unregulated Energy segment during the first half of 2026 was primarily due to increased consumption in our propane distribution business which was impacted by colder weather in the Delmarva service areas during the fist quarter of 2026, higher propane margins, and improved performance from Aspire Energy. These factors were partially offset by lower levels of CNG, RNG and LNG services compared to the prior-year period. The increase in operating expenses were largely attributable to higher payroll, benefits and other employee-related expenses, increased facilities, maintenance and outside service costs, and higher depreciation, amortization and property tax costs compared to the prior-year period.
Previous wording
•Propane customer consumption -Adjusted gross margin increased by $2.4 million due to increased customer consumption resulting primarily from colder year-over-year weather in our Delmarva service areas.
Current wording
•Propane customer consumption -Adjusted gross margin increased by $2.1 million due to increased customer consumption which was impacted by colder year-over-year weather in our Delmarva service areas.
Previous wording
•Increased performance from Aspire Energy -Adjusted gross margin increased by $1.4 million compared to the prior-year period due to negotiated rate changes and increased gathering fees.
Current wording
•Increased performance from Aspire Energy -Adjusted gross margin increased by $1.8 million compared to the prior-year period due primarily to negotiated rate changes and increased gathering fees.
Previous wording
Other income, net, which includes non-operating investment income, interest income, late fees charged to customers, gains or losses from the sale of assets and pension and other benefits expense, was not material in the first quarter of 2026 compared to $0.6 million during the prior-year period.
Current wording
Other income, net, which includes non-operating investment income, interest income, late fees charged to customers, gains or losses from the sale of assets and pension and other benefits expense, amounted to $0.5 million in the second quarter of 2026 compared to $0.4 million during the prior-year period.
Showing the first 40 of 60 pairs. Open the source sections for the rest.
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Current report — wording carried from elsewhere
Key variances between the second quarter of 2025 and 2026 included:
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(1)Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transition services, consulting, system integration, rebranding and legal fees.
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(1) Transaction and transition-related expenses attributable to the acquisition and integration of FCG have been excluded from the Company’s non-GAAP
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measures of adjusted net income and adjusted EPS. See reconciliations above for a detailed comparison to the related GAAP measures.
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(2) Refer to the Major Projects and Initiatives table for additional information.
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(3)The current period includes offsetting reductions in both adjusted gross margin and depreciation and amortization expense related to the absence of
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recovered costs associated with Hurricane Michael.
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(4) Reflects the impact of approximately 0.6 million common shares issued under the DRIP/DSPP and ATM program.
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(2) The current period includes offsetting reductions in both adjusted gross margin and depreciation and amortization expense related to the absence of recovered costs associated with Hurricane Michael. See Key variances table above for additional information.
Current report — wording carried from elsewhere
(1) The current period includes offsetting reductions in both adjusted gross margin and depreciation and amortization expense related to the absence of recovered costs associated with Hurricane Michael.
Current report — wording carried from elsewhere
Regulated infrastructure programs generated incremental adjusted gross margin of $3.2 million in the second quarter of 2026. The increase in adjusted gross margin was primarily related to FCG's SAFE program, Florida Natural Gas' GUARD program, Eastern Shore's Capital Cost Surcharge program, and FPU Electric's SPP. Refer to Note 5, Rates and Other Regulatory Activities, in the condensed consolidated financial statements for additional information.
Current report — wording carried from elsewhere
We generated additional adjusted gross margin of $2.0 million from natural gas customer growth. Adjusted gross margin increased by $1.6 million for our Florida natural gas distribution service territories and $0.4 million on the Delmarva Peninsula for the three months ended June 30, 2026, as compared to the same period in 2025, due to residential customer growth of 1.8 percent and 2.8 percent in Florida and on the Delmarva Peninsula, respectively, as well as growth attributable to commercial and industrial customers.
Current report — wording carried from elsewhere
(1) Adjusted Gross Margin is a non-GAAP measure utilized by management to review business unit performance. For a more detailed discussion on the differences between Gross Margin (GAAP) and Adjusted Gross Margin, see the Reconciliation of GAAP to Non-GAAP Measures presented above.
Current report — wording carried from elsewhere
(3)Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transition services, consulting, system integration, rebranding and legal fees.
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Natural Gas Transmission Service Expansions, including interim services
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We generated increased adjusted gross margin of $11.8 million for the six months ended June 30, 2026 from natural gas transmission service expansions of Peninsula Pipeline and Eastern Shore.
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Absence of Recovered Costs Associated with Hurricane Michael
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There is no impact to earnings as this $3.9 million decrease in adjusted gross margin for the six months ended June 30, 2026, is offset by a corresponding decrease in depreciation and amortization expense for the period.
Current report — wording carried from elsewhere
(1)The current period includes offsetting reductions in both adjusted gross margin and depreciation and amortization expense related to the absence of recovered costs associated with Hurricane Michael.
Current report — wording carried from elsewhere
(1) Adjusted Gross Margin is a non-GAAP measure utilized by management to review business unit performance. For a more detailed discussion on the differences between Gross Margin (GAAP) and Adjusted Gross Margin, see the Reconciliation of GAAP to Non-GAAP Measures presented above.
Current report — wording carried from elsewhere
The following narrative discussion provides further detail and analysis of the significant items in the table above.
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•Increased performance from Aspire Energy -Adjusted gross margin increased by $0.4 million during the second quarter of 2026 compared to the prior quarter due to negotiated rate changes and increased gathering fees.
Current report — wording carried from elsewhere
The following narrative discussion provides further detail and analysis of the significant items in the table above.
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Income tax expense was $31.0 million and $27.4 million for the six ended June 30, 2026 and June 30, 2025, respectively, resulting in an effective income tax rate of 26.8 percent during both of the periods then ended.
Current report — wording carried from elsewhere
30, 2026 and 2025, we received net proceeds of $16.8 million and $61.2 million, respectively, associated with shares issued under the DRIP/DSPP as well as shares issued under our ATM program.
Current report — wording carried from elsewhere
Our BOD 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
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Previous report — wording carried elsewhere
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)