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DATE

Thursday, May 7, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

  • Chair of the Board, President, and Chief Executive Officer — Jeffrey Householder
  • Executive Vice President, Chief Financial Officer — Beth W. Cooper
  • Senior Vice President, Chief Operating Officer, and incoming Chief Financial Officer — Jeffrey S. Sylvester
  • Executive Vice President, General Counsel, Corporate Secretary, and Chief Policy and Risk Officer — James F. Moriarty

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TAKEAWAYS

  • Adjusted Net Income -- $59 million, reflecting a 16% increase driven by higher margin from transmission and distribution growth.
  • Adjusted Earnings Per Share -- $2.47, representing an 11% increase compared to the first quarter of 2025.
  • Adjusted Gross Margin -- $206 million, up 13%; with regulated segment margin at $148 million (+15%) and unregulated segment margin at $59 million (+8%).
  • Regulated Operating Income -- $71 million, up 18% year over year.
  • Unregulated Operating Income -- $28 million, rising 8%, primarily from higher propane consumption and Aspire performance.
  • Transmission and Infrastructure Margin Contribution -- $12 million incremental margin from projects, with $11 million from distribution growth, rate updates, and increased usage due to colder weather.
  • Customer Growth Rates -- Delmarva residential up 3.3%, Florida Public Utilities up 2.2%, and Florida City Gas up 2%.
  • WRU LNG Storage Facility Schedule -- Construction delays due to winter weather and design changes will result in significantly reduced 2026 margin contribution; full-year EPS reduced by approximately $0.10; project expected to come online early 2027 with forecasted $17 million 2027 margin.
  • 2026 Capital Investment -- $122 million deployed through March 31, consistent with $450 million to $500 million full-year CapEx guidance.
  • Dividend Increase -- Annualized dividend raised by $0.20, or 7.3%, to $2.94 per share, marking the 66th consecutive annual payment and 23rd consecutive increase.
  • Dividend Payout Policy -- Board-approved target payout range of 45%-50%, supporting a 10-year dividend CAGR of 9%, and enabling 50%-55% earnings retention.
  • 2028 EPS Guidance Reaffirmed -- Long-term EPS CAGR goal of 8% through 2028, with specific guidance of $7.75 to $8.00 per share.
  • Florida City Gas Rate Case -- Filed for $47 million base rate increase and 11.25% ROE, with interim rates of $16 million expected to be effective in Q3 2026; full hearing anticipated in late 2026 or early 2027.
  • Active Growth Projects -- Delmarva Regional Enhancement project ($75 million, 20 miles; permitting underway, construction start next year), feasibility studies for gas extension into Accomack County, VA (supported by $6.5 million grant), and continued evaluation of LNG capacity for space and cruise industries around Cape Canaveral.
  • Equity Capitalization -- 50% as of March 31, 2026; 107,000 shares issued YTD; $60 million of equity expected to be issued in 2026 for capital program support.
  • Liquidity Position -- 74% of total $793 million debt capital available via revolving credit and private placement shelves as of March 31.
  • Cost Management -- Operating income and net income rose at a higher percentage than gross margin, attributed to effective cost controls.
  • Sector-Specific Drivers -- Incremental EPS driven by $0.27 from natural gas demand (including $0.21 from transmission projects), $0.17 from infrastructure investment margins, $0.13 from permanent rates, $0.14 from cold weather impact, and $0.07 from off-system gas sales; partially offset by $0.20 higher payroll, $0.29 operational expenses, $0.04 greater customer service costs, $0.05 increased D&A, and $0.05 from debt/equity actions.

SUMMARY

Chesapeake Utilities Corporation (CPK 0.64%) delivered double-digit gains in all primary financial metrics as customer and infrastructure-driven margin growth sustained momentum. Management disclosed that weather disruptions and required design changes will delay the WRU LNG facility's margin contribution, resulting in an approximate $0.10 EPS reduction for the year. The company reaffirmed its long-term EPS growth target and 2028 guidance, continuing active investment across regions while raising its dividend for the 23rd consecutive year. Equity issuance and refinancing activities were outlined to maintain capital structure alignment, with regulatory milestones—including the Florida City Gas rate case—set to impact future rates and earnings trajectory. The call detailed expansion project pipelines for regulated and unregulated businesses as well as continued business transformation through new leadership roles and technology upgrades.

  • The $75 million Delmarva Regional Enhancement project is advancing with permitting initiated, targeting construction next year to support transmission expansion needs.
  • Management stated that high demand in South Florida points to a likely future expansion of capacity, with evaluation underway and an intrastate pipeline considered most appropriate for the market.
  • The company has not committed to issuing annual EPS guidance, instead maintaining a practice of long-term growth-oriented guidance unless rate case developments materially shift expected margin.
  • Chesapeake Utilities underscored technology and process improvement as core to scaling operational efficiency under incoming CFO leadership.
  • Ohio and Delmarva Peninsula remain active areas for possible new data center-related natural gas service, with management confirming "great interest" in these growth prospects.
  • Management indicated readiness for additional LNG storage expansions at the Bishopville WRU facility following increased peak demand driven by this winter's extreme temperatures.
  • The company detailed that homebuilding activity and builder agreements secure a sizable pipeline for future residential customer growth, despite any quarter-to-quarter seasonal fluctuations.
  • Guidance adjustments on capital allocation and equity needs are anticipated by February 2027, depending on the pace of investment progress and recent actual results.

INDUSTRY GLOSSARY

  • Aspire Operations: Chesapeake Utilities' unregulated natural gas gathering and infrastructure business in Ohio.
  • WRU LNG Storage Facility: Large-scale liquefied natural gas storage and peak-shaving site in Bishopville, Maryland, serving Delmarva region utility reliability and capacity.
  • FERC: Federal Energy Regulatory Commission, the primary federal agency overseeing U.S. interstate natural gas transmission and certain project approvals.
  • ATM Program: At-The-Market equity issuance program, allowing for controlled, opportunistic issuance of shares to raise capital.
  • One Core Project: Chesapeake Utilities' internal initiative focusing on business transformation through core process and technology modernization.

Full Conference Call Transcript

Here at Chesapeake Utilities, safety is our first priority. We start all meetings with a safety moment, and we'll do so here as highlighted on Slide 3. May is Electrical Safety Month and a great time to ensure we are safely using the power of electricity. Be mindful of overloaded outlets, damaged cords and using electrical appliances near water. Also be sure to use lithium-ion batteries safely, only use the correct charger, avoid charging on beds or couches and never use damaged or overheating batteries. Small daily choices can prevent fires, injuries and protect ourselves, our homes and our loved ones. I'll now introduce our presenters today.

Jeff Householder, Chair of the Board, President and Chief Executive Officer, will provide an update on this quarter's key accomplishments and our capital growth program. Jim Moriarty, Executive Vice President, General Counsel, Corporate Secretary and Chief Policy and Risk Officer, will discuss the Florida City Gas rate case and stakeholder engagement. Jeff Sylvester, current Senior Vice President and Chief Operating Officer and incoming Chief Financial Officer, joins us today for his first earnings call. Jeff will summarize our first quarter performance and financing updates. And Beth Cooper, Executive Vice President and Chief Financial Officer, who has announced her retirement at the end of June, joins us for her 71st and final earnings call.

Beth will discuss dividend and earnings growth and then close with our value proposition. With that, it's my distinct pleasure to turn the call over to Jeff Householder.

Jeffrey Householder: Thank you, Lucia, and good morning, all. Let me start today by recognizing Beth Cooper, who announced her retirement in March following 36 years of service to the company. In the last 18 years as our Chief Financial Officer, Beth's strategic and financial leadership has led to incomparable growth, including a $3 billion increase in our market capitalization, 10x growth in total assets and net income as well as a 366% increase in earnings per share. Most importantly, Beth embodies the best of Chesapeake Utilities. She has an authentic passion for delivering results and an impressive ability to build connections and relationships internally and externally. So thank you, Beth. It's been an honor to work alongside you.

We are eternally grateful for your significant contributions to this company. I'd also like to welcome Jeff Sylvester to our call, who will transition from COO to formally assume the CFO role on July 1 of this year. Jeff brings deep financial and operational knowledge of our business, along with valuable expertise in data analytics and process and technology transformation, all of which are fundamental to our next stage of growth and development. I look forward to continuing to work closely with Jeff as we remain focused on the 3 pillars of our growth strategy, prudent deployment of capital, a proactive regulatory agenda and business transformation actions that meet the energy delivery and service expectations of our customers and communities.

I'll now move on to Slide 5. We had a strong start to the year, reporting a 16% increase in adjusted net income and an 11% increase in adjusted earnings per share compared with the first quarter of last year. We generated an incremental $12 million of margin from transmission and infrastructure projects and $11 million of margin from distribution system growth, updated rates and increased customer usage given the much colder winter we experienced in the first quarter. Slide 6 highlights the connection between growth in our service areas and our long-term growth strategy.

I can continue to report a quarter of solid commercial customer growth and above-average residential customer growth, 3.3% in Delmarva, 2.2% for Florida Public Utilities and 2% for Florida City Gas. Increasing demand for natural gas and propane remains core to our long-term growth strategy. Population growth, homebuilding and the needs of our customers continue to provide investment opportunities to upgrade and expand our energy delivery systems and invest in technology that provides safe, reliable and affordable service to our customers. Investing in our delivery systems and continuously improving our business operations to realize meaningful service and value improvements will drive long-term earnings growth and enable us to appropriately scale the enterprise.

Now let's shift to Slide 7, which summarizes our 2026 projected capital program and our progress to-date. Through the end of the first quarter, we've invested $122 million of capital across the business. This is in line with our full year 2026 capital expenditure guidance of $450 million to $500 million. Slide 8 shows additional detail on our major capital projects. We forecast these projects to contribute approximately $31 million of gross margin in 2026 and an additional $20 million in 2027. We've made some recent updates to one of the projects on the table on Slide 9, WRU, our LNG storage facility in Bishopville, Maryland.

As you can see in the latest photos on Slide 9, there has been significant construction progress at the Delmarva site. You may recall that last fall, the FERC Notice to Proceed process took a couple of months longer than we expected. We had hoped to make up much of this time, but the severe winter weather in the first quarter and a few design modifications that will simplify future expansion kept us from accelerating construction. The snow, ice and freezing temperatures we experienced in January and February significantly limited the pace of construction. The site was actually totally inaccessible for several days due to roadway travel restrictions.

While the winter weather boosted usage and margins in our existing businesses, it was not helpful to the WRU construction schedule. WRU is a substantial complex project that will deliver significant peak day service capabilities to Delmarva customers. The tanks and primary structural and control room facilities are in place. We're working to complete the control electronics, on-site piping and interconnections to our Eastern Shore Natural Gas Transmission System. Coming out of this winter, I spent quite a bit of time assessing our progress and the overall project schedule. I'm happy with the effort we're making to push the project to completion.

I'm also realistic about where we stand today and the need to build an additional time for a FERC commissioning process that is not governed by a specific time requirement. We're engaged in a third-party pre-commissioning process, so I don't foresee any substantive FERC issues, but we're building in additional time in the schedule. So the schedule changes mean that we expect significantly reduced margin contributions from WRU in 2026. This impact is partially offset by the margin benefits from weather this quarter and incremental Eastern Shore Natural Gas peaking capacity, which will be online prior to the full in-service date of WRU. However, full year EPS will be reduced by approximately $0.10.

The project is still on track to come online early next year and generate $17 million of 2027 margin. I will say that the extreme temperatures this winter only solidified the need for this project and will likely lead to a potential LNG facility expansion at the site in the near future. Increased storage at the southern end of our system will further improve reliability, reduce supply costs during peak usage times and enable continued system expansion to serve customer growth in the future. I'll now shift to Slide 10 to highlight several projects that are in progress or on the horizon.

There are a number of potential expansion opportunities ahead of us that provide significant growth potential as we serve growing demand across our service areas. The first is the Delmarva Regional Enhancement, which we discussed on our last earnings call. This $75 million 20-mile project expands transmission infrastructure in our Delmarva region. Permitting has begun and construction is expected to start next year. We are also evaluating opportunities for potential expansions of this project as demand remains high. We've also discussed a project to explore the potential for extending our Eastern Shore natural gas system into Accomack County, Virginia.

Supported by a $6.5 million grant, we're beginning feasibility and design studies to assess the opportunity to serve customers on Virginia's Eastern Shore, including the NASA Wallops Island facility. We also remain engaged with partners in the community at the Cape and Port of Canaveral to explore potential opportunities for LNG transportation and storage. We're continuing to identify and evaluate potential sites for storage as demand remains high for the space and cruise industries there. And lastly, we continue to evaluate multiple opportunities to expand transmission capacity into South Florida to serve the substantial population growth and energy demand in the Greater Miami area.

We ultimately believe that a future expansion into this area is necessary and are evaluating numerous options to meet the growing demand in South Florida. With that, I'll turn to Jim to provide regulatory and stakeholder engagement updates.

James Moriarty: Thank you, Jeff, and good to be with all of you today. I'll start with Slide 11. On April 20, we filed a rate case for our Florida City Gas business, requesting a base rate increase of approximately $47 million and an ROE of 11.25%. This request comes more than 3 years following FCG's last rate increase request prior to our acquisition and updates cost recovery for a number of key areas, including capital investment, operational expense, insurance, depreciation and property taxes. Included in our filing was a request for interim rates of $16 million, which we expect to be effective in the third quarter of this year.

While a full procedural schedule has not yet been set, we expect the hearing to occur in the fourth quarter of 2026 or in early 2027, with full rates expected to be effective shortly thereafter. We remain conscious of the impact to our customers, so we have incorporated cost savings and efficiencies across the business into our overall assumptions wherever possible. We value the opportunity to serve our FCG customers and we'll continue to work together with the Florida PSC staff and Office of Public Counsel to achieve a constructive outcome. Speaking of customers, I'll now turn to Slide 12 to provide an update on stakeholder engagement.

In March of this year, we published our 2025 Annual Report, which includes highlights of our 2025 stakeholder engagement work, including investments in our teammates, customers and communities. We believe that serving all stakeholders creates a virtuous and sustainable cycle of long-term performance and growth. So we remain focused on driving collaboration and value with all those we serve so that no one is left behind. With that, I am very pleased to turn the call to Jeff Sylvester, who will discuss our financial results in more detail.

Jeffrey S. Sylvester: Thanks, Jim, and good morning, everyone. I'm excited to be here today, and I'm honored to be stepping into the Chief Financial Officer role on July 1 of this year. I started my career in finance, so I'm looking forward to reengaging in our financial operations and expanding the collaboration between our finance and operational teams, the latter of which I've led for the last 7 years. A top priority of mine over that period has been the implementation of our One Company approach and related operational and technological transformations. Slide 13 provides an overview of our business transformation themes, all of which form a stronger platform for efficient and effective operations as we become a much larger organization.

Mike Galtman, who has served as our Chief Accounting Officer for the last 7 years, has recently transitioned into a newly established Chief Transformation Officer role. His new responsibilities embed him deeply into our transformation efforts, including the [ One Core ] project and ongoing improvements across our finance, technology and operational areas. Melissa Barnes has recently joined the team as our new Chief Accounting Officer. Melissa brings a wealth of experience in technical accounting, external reporting, large-scale finance transformations and internal controls. She is already adding tremendous value, and we are excited to have her on board. Now shifting to the results for the quarter.

As shown on Slide 14, our financial results continue to demonstrate strong performance and growth across all metrics. Adjusted gross margin was approximately $206 million, up 13% and adjusted net income was approximately $59 million, up 16% from the first quarter of 2025. Adjusted earnings per share were $2.47 this quarter, representing an 11% increase over the first quarter of 2025. Slide 15 provides additional detail on the key drivers of our first quarter performance. Continued demand for natural gas drove $0.27 of incremental adjusted EPS, including $0.21 related to transmission capital projects and a $0.06 of distribution growth across our service areas.

Margin from our infrastructure program investments contributed an additional $0.17 per share this quarter and permanent rates from our 3 rate cases added $0.13 in the first quarter 2026 adjusted EPS. Cold weather across our system, particularly in Delmarva region and in our Propane and Aspire businesses drove increased consumption that added $0.14 of earnings for the quarter. We also benefited from improved Aspire system performance driven by rate changes and higher gathering fees. We also had gains from off-system natural gas sales within the quarter, driving a combined $0.07 of incremental earnings per share.

These gains were partially offset by a few factors, including $0.20 of higher payroll and benefit expenses, $0.29 increased operational expenses, $0.04 of higher credit collections and customer service costs. As I mentioned earlier, we were able to achieve a higher percentage increase in operating income and net income as compared to gross margin, demonstrating that we are effectively managing our cost structure despite the significant growth in margin. We also incurred $0.05 per share of increased depreciation and amortization expense, driven by increasing levels of capital investment as we actively deploy capital.

Lastly, financing activities included in our debt and equity issuances over the last 12 months as we return to our target capital structure, reduced adjusted EPS by $0.05. Shifting to Slide 16; adjusted gross margin for our regulated segment was approximately $148 million this quarter, up 15% from the first quarter of last year. As mentioned earlier, our focus on cost management enabled similar growth in our regulated operating income, up 18% to approximately $71 million in the first quarter of 2026. Our Unregulated Energy segment also demonstrated strong margin growth relative to the first quarter of last year, with adjusted gross margin of 8% to approximately $59 million in the first quarter of 2026.

This incremental margin was primarily driven by higher propane consumption and strong performance in our Ohio Aspire operations. Much of this fell to the bottom line, enabling unregulated operating income growth of 8% to $28 million for the first quarter of this year. I'll now move to Slide 17 to review our capital structure and financing activities. At March 31, our equity capitalization was 50% with 107,000 shares issued during the first 3 months of the year. We also continue to maintain strong liquidity and sufficient capacity to support growth with ability of 74% of our total debt capital of $793 million between our revolving credit facility and private placement shelf facilities as of March 31, 2026.

To support our robust capital investment program, we expect to issue $60 million of equity throughout full year 2026 using our ATM and waiver programs. We also look forward to refinancing the first tranche of debt issued during the Florida City Gas acquisition, which should generate overall interest expense savings. With that, it's my distinct pleasure to turn the call over to Beth.

Beth Cooper: Thanks, Jeff, and good morning, everyone. As shown on Slide 18, yesterday, our Board of Directors approved a $0.20 or 7.3% increase in our annualized dividend payment from $2.74 per share to $2.94 per share. This reflects our 66th consecutive year of dividend payments and our 23rd consecutive year of dividend increases. Alongside our equity and debt plans, our dividend policy continues to be a key component of our capital allocation strategy as we fund growth capital investment to drive earnings growth and overall total shareholder return.

Previously, our Board approved a dividend payout target range of 45% to 50% enabling us to deliver a long-term dividend CAGR of 9%, which aligns with our long-term earnings growth rate over that same 10-year time period. This payout ratio also enables us to retain 50% to 55% of earnings, which has been a meaningful part of our financing plan as we fund increasing levels of capital to drive sustainable business growth to meet increasing customer demand. Slide 19 demonstrates our track record of strong and consistent earnings growth over the last approximate 19 years, most of which made up my tenure as CFO.

We remain committed to a long-term earnings per share compounded annual growth rate of 8% through 2028 and are reaffirming our 2028 earnings per share guidance of $7.75 to $8 per share. As we mentioned on previous calls, we expect to revisit our capital guidance range by February 2027, given the progress we have made in the last 2 years, coupled with our expectations for capital investment in 2026. Moving to Slide 20; there is no better way to close our call than to summarize what an amazing and wonderful place to work Chesapeake has been for me over the last 36 years.

I am extremely grateful to have served as CFO for the last 18 years during such pivotal growth. Much of what has made my experience so special are the key drivers that often make Chesapeake a differentiated investment. Delivering on our promises and taking our commitment seriously has never wavered. We have driven significant growth over the last several decades, and I have complete confidence in the team's ability to continue this track record for years to come. Our talented team focused on our growth strategy is capable of great things. While these 3 pillars have been formalized in the last few years, they have always been core to our operations.

We invest wisely, manage our regulatory agenda and continue to find new and better ways of working each and every year. Especially near and dear to me is our financial discipline. I participated in more than 20 acquisitions and over $2.5 billion of equity and debt raises across the last 3 decades and can assure you that each transaction is carefully planned and executed. We recognize the value of long-term relationships with our financial partners and prioritize our financial health, diligent financial planning and analysis as well as strategic alignment in all we do. And lastly, we are powered by our stakeholders, each and every one of you, our investors, our bankers, our partners, our teammates and our customers.

We are nothing without our dedicated teammates, growing customers, close-knit communities and trusted partners. The bottom line is that the relationships we've built, both internally and externally are what matter the most. I will forever treasure the valuable connections I've made and will carry them with me as I embark on my next adventures. Thank you for your personal support and encouragement of me over the years. I have been humbled by the outreach of so many wonderful colleagues and friends. I remain committed to Chesapeake's mission and sincerely appreciate your continued interest, support and investment in the company as well. Thank you all. With that, we'll take your questions. Operator?

Operator: [Operator Instructions] Our first question today comes from Tate Sullivan with Maxim Group.

Tate Sullivan: Congratulations, Beth, on all your achievements over the years at CPK and pleasure working with you. And moving to some of the comments from the call. Jeff, did you mention a new LNG storage exploration project in Florida in the Cape or is that -- have you mentioned that before? And is it for LNG delivery and not regasification of that natural gas?

Jeffrey Householder: Yes. We've been looking, Tate, at the opportunity, certainly subsequent to our acquisition of Florida City Gas and the inclusion of that service territory around Cape Canaveral and the Port of Canaveral. Lots of cruise ships coming and going. They're already fueling with liquefied natural gas, many of them. Most of that gas is being barged in from Jacksonville. And there are certainly -- there's a limit to the capacity that the LNG facility in Jacksonville can provide and folks keep launching rockets from the Spaceport there, utilizing LNG and they'd like to expand that.

And so we've had the possibility of working potentially with someone else to develop an LNG facility at the Cape that would provide service to both of those industries, and we continue to do that. We have been looking at property up and down the intercoastal and even some inland sites, thought we had a -- probably the best location is a facility that's on the canal that runs down to the Port of Canaveral, pursued that for some period of time. The port has other designs on that property, which is certainly fine.

That would have been the easiest, simplest, cheapest facility location, but there are many others that we're looking at, and we're pretty confident that we'll find something and develop that project.

Tate Sullivan: Just one follow-up on that. Is Marlin currently delivering LNG in Florida or is that not the case?

Jeffrey Householder: No, certainly not any quantity. We have some capability to move LNG with Marlin tankers but we have -- serving either the port or the Spaceport. Those are coming, like I said, principally on the cruise ship side, down the intercoastal being barged in from Jacksonville and then truck deliveries from a variety of places into the Spaceport.

Tate Sullivan: And one more, if I may. The customer growth rate, still an impressive growth rate, but the annual growth compared to the fourth quarter was down a little bit. Is that -- I mean, should I read into that in terms of where the range may fall in the EPS guide -- EPS for 2028 or was that just a quarter of weakness?

Jeffrey Householder: No. I think that's probably as much weather as it is anything else, especially in Delmarva. And we see those kinds of fluctuations seasonally in Florida. So we have a lot of homebuilding activity on the books and certainly a lot of builder and developer agreements that we've executed for many thousands of residences, both on the Peninsula of Florida and the Peninsula of Delmarva. So we're not signaling anything other than just the usual sort of seasonal fluctuations in building activity.

Tate Sullivan: Congratulations Beth.

Beth Cooper: I appreciate it. It's been great working with you.

Operator: Our next question comes from J.C. Vidales with Ladenburg.

Juan Carlos Vidales: Beth, congratulations. It's been great to work with you.

Beth Cooper: Thank you, JC. It's been great with you as well.

Juan Carlos Vidales: So just a couple of questions. So I think this is the first time we kind of see some equity guidance for the year. In terms of the total CapEx plan that you all have, are you all able to give us some color in terms of your equity assumptions for that plan?

Beth Cooper: So I mean, in terms of the total capital budget of $450 million to $500 million for the year, you'll recall that we have a substantial portion of our earnings that are getting reinvested because of our dividend payout policy. And so above and beyond that right now, just given the level of CapEx range that's out there, we've indicated that we expect to issue about $60 million plus. It could be a little bit more than that. But generally, that's a good area right now to assume. And it's a small amount that we'll be able to manage through our ATM and our traditional waiver program.

Juan Carlos Vidales: Okay. And then just a follow-up. In terms of a go forward for -- I think you gave guidance to '28 in CapEx. Is that a good assumption to use in terms of sizing of equity needs for the following years?

Beth Cooper: Well, as we've indicated, we're going to be readdressing the entire guidance range in February of 2027, given our progress and where we come -- where we've actually been from an actual standpoint through 2025 and our guidance right now for 2026. If you were to look at what the run rate is in the base CapEx guidance range that is out there, it would be slightly less than this amount because the CapEx -- the average CapEx that's assumed on an annual basis is lower than the $450 million to $500 million.

Juan Carlos Vidales: Okay, great. And then just one last question for me. Should we expect or do you all expect to potentially issue '26 EPS guidance following the decision on your interim rates here in Florida? I know maybe the depreciation ruling kind of potentially made you all not issue guidance for this year, but should we expect to change once you get an order on interim rates?

Beth Cooper: What we have typically done, we've given annual guidance only really one time in our history to-date. We've been a long-term guidance company putting out long-term CAGRs because as you have seen, as you've looked at our past, we have some fairly large transmission projects that don't necessarily make our earnings per share CAGRs a straight line as you look at it from year-to-year, but over the long-term, have generated that 8% plus from an EPS growth standpoint. What you will see us put out this year would be additional margin information if there were to be a final rate case settlement this year.

And we've already provided some indication about our expectations with information that we know, but it's certainly subject to being fine-tuned on the interim rate side. So we build a lot of our earnings estimates in through the margin table, just given, again, those large projects, those large initiatives that we have underway.

Juan Carlos Vidales: That's it from me. Beth, once again, congrats and looking forward catching up at AGA.

Operator: Our next question comes from Alex Kania with BTIG.

Alexis Kania: Again, congrats, Beth, and good luck to Jeff and Jeff in the aftermath of that departing. So just maybe 2 questions just on some projects. First might just be on thinking about the example of the kind of the small projects in Ohio with respect to kind of the large load data center. Do you kind of see any other opportunities like that evolving across the system?

Jeffrey Householder: I mean we hope to see that. Certainly, we're actively pursuing those opportunities in the areas that we currently serve. Ohio is certainly a place of interest to us. We have, as you know, facilities there and the [ AEE ] agreement that we've announced here recently. And it's an area that seems to be of great interest from a data center perspective. And so as you might imagine, we are actively interested in doing what we do to extend gas service to those data centers. So I have nothing to report today, but we have great interest in that service area. And there are other things going on in other places.

I mean it's interesting to see some of the potential activity in Florida, and we've certainly had some interest in data center locations on the Delmarva Peninsula. So we'll see where all that goes. We're as interested in that as everybody else in the country is at this point. So we're, I think, positioned well in the service areas that we're currently in.

Alexis Kania: Okay, great. That's helpful. And then just on the South Florida capacity expansion, are there any -- I'm thinking maybe kind of further downstream in terms of what events or catalysts you might be willing to keep in mind to see -- to assess kind of the potential progress of that project? And maybe just to confirm to the extent that there -- do you see an opportunity, would that be kind of be treated as an intrastate project rather than having to go through a FERC process?

Jeffrey Householder: Yes, I'll take that in reverse order. I do think that for us would be of interest as an intrastate pipeline. We have invested significantly in intrastate pipes in Florida. One of the things that was interesting to us about Florida City Gas and that acquisition was the full knowledge that there were capacity constraints in South Florida. And certainly, Florida City Gas is not the only entity that serves in South Florida that's experiencing that. So I think the growth in population, the growth in customers and the growth in demand requires that at some point, we find a way to increase capacity capabilities in the South Florida area.

Again, we're in a very nice position, I think, to be able to do that. We serve facilities in the West Palm Beach area, close to interstate transmission interconnections, and we believe that there are possibilities to again expand the capacity all the way down to South Florida. So I look forward to someday, hopefully, being able to talk about a project that gets more gas down to that growing load center.

Operator: At this time, there are no further questions in queue. I will now turn the meeting back to Jeff Householder.

Jeffrey Householder: Thank you. We appreciate your continued interest in Chesapeake Utilities. So thank you for joining the call today. We look forward to seeing many of you here in a week or 2 in Scottsdale at the AGA Financial Forum. I'll end just by continuing to congratulate Beth on her very long years of service with Chesapeake Utilities. It's been a remarkable run. She's been a great colleague and a great friend. And I'll leave you with one last statistic. She served as CFO in our company for 18 years. In every one of those years, we had record earnings. I'll see you all in Arizona. Goodbye.

Operator: Thank you. This concludes Chesapeake Utilities Corporation's first quarter 2026 earnings conference call. Please disconnect your line at this time, and have a wonderful day.