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| We also achieved synergies from the absence of certain corporate and shared service costs that NextEra had allocated to this business |
| Operating income also increased, delivering 18.4% growth as adjusted, driven primarily by, first, permanent rate changes associated with the Florida Natural Gas rate base rate proceedings, second, Florida City Gas’ earnings contribution for December, third, continued strong customer growth in natural gas distribution operations, including propane CGS conversions, fourth, additional pipeline expansions in our natural gas transmission entities, and finally, incremental margin from our regulated infrastructure program |
| We believe we have a solid plan in place to achieve our 2024 guidance, the plan that also lays the groundwork for 2025 and beyond |
| Slide 7 shows the impressive customer growth in our regulated natural gas distribution utilities |
| In 2023, our team executed successfully on all fronts, leading to our 17th year of increased earnings, excluding the Florida City Gas transaction costs |
| Our core businesses continued to generate strong performance, delivering $1.50 of incremental EPS this year |
| Slide 15 shows our history of strong dividend growth and specifically the approximate 9% dividend compounded annual growth rate that we have delivered over the last 10 years |
| The team's collective efforts drove this performance while successfully consummating the largest acquisition in our history, closing the transaction in record time |
| Our legacy businesses continued their impressive growth trajectory as we invested $211 million in capital projects, advanced our regulatory initiatives, and prudently managed expenses |
| We continued expanding our footprint with strong customer gains in our regulated natural gas distribution businesses, with an impressive 5.4% average residential customer growth rate for our combined Delmarva service territories and nearly 4% in Florida |
| We are proud of this history and are committed to continuing our track record of driving value and returns for our shareholders |
| The key takeaway here is that the FCG acquisition, along with continued robust investment in our legacy businesses, supports our goal of delivering top quartile performance for years to come |
| Our shareholders benefit from an energized team that is focused on customers and investments to serve those customers in growing service areas |
| Altogether, Chesapeake Utilities is an attractive investment opportunity |
| In addition to the transformative projects we initiated and completed in 2023, we continue to take a customer-centric view of our energy delivery mission and are excited about our initiatives to enhance the customer experience |
| We expect the transaction to drive significant incremental earnings growth well into the future as we deploy our operational and regulatory expertise on a much broader scale |
| The first step in the five-year initiative is the implementation of our SAP customer service application, which is intended to improve the customer experience in our regulated utilities, standardized processes across our distribution systems, and drive operational efficiencies |
| Finally, I would like to showcase a recent achievement that really demonstrates the entrepreneurial, innovative and competitive market mindset embedded throughout our entire enterprise |
| These programs are contributing to our ability to maintain safe and reliable service for our customers, which also contribute to margin growth over the next 10 years |
| The key drivers of growth in 2023 were our regulated infrastructure replacement programs and improved cost recovery mechanisms, rate changes resulting from the recent Florida natural gas base rate proceeding, our pipeline expansions and natural gas distribution organic growth and increased fees in margins per gallon in our propane business |
| Our regulated investments in safety and reliability under our approved infrastructure programs will also continue, including programs like GUARD and SAFE in Florida, where we are able to recognize timely cost recovery on these investments |
| Importantly, we continue to expect strong contributions from our legacy assets as well as Florida City Gas |
| For the year, stockholders equity increased by $413 million or approximately 50%, primarily driven by our equity financing for the Florida City Gas acquisition, our strong net income performance and issuances through our dividend reinvestment and stock compensation plan |
| As you saw in our press release, we delivered excellent performance in 2023 |
| We believe that our disciplined investments will continue to drive top quartile earnings performance into the future |
| These investments will drive continued regulated customer growth, bolster the safety and reliability of our systems, and by investing in pipelines and interconnect, create additional pathways to market for sustainable fuels |
| Strategically, Florida City Gas also meshes well with our legacy businesses with significant opportunities to drive growth, identify operational synergies and begin to pursue recovery of the transaction premium |
| We have continued to see strong residential customer growth even with the increases in mortgage rates over the past year |
| Our disciplined capital investments will drive earnings growth well into the future |
| Chesapeake has consistently identified and executed upon opportunities across its value chain to generate incremental margin growth |
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| On Page 14 of the press release, you identified reduced demand for CNG, LNG, RNG of a nickel for the fourth quarter |
| It also reflects the delay in margin ramp from new capital projects that we have identified given our expected timelines for the required approvals and construction |
| As you can see on Slide 14, while at the operating income level our results were down by 10.7% versus last year |
| It sort of looks like in the fourth quarter, there was a little bit of a slowing in customer growth |
| And this was in the face of headwinds from significantly warmer weather that lowered customer consumption and impacted earnings by $0.54 |
| I mean we have a general downturn in many of our service territories as you kind of come into the winter anyway |
| The company was not immune to the challenging economic environment and the impact that had on interest rates |
| I know when we look at our backlogs and the number of customers that are in there, it certainly seems like growth is going to continue, but there could be some of that, that causes it to back off a little bit if that does pick up |
| One of the issues that we find in our systems, especially those on Delmarva, but certainly in the new construction activity and the developments in Florida |
| Higher operating expenses linked to growth in our core business resulted in a $0.47 impact, representing only 48.1% of the incremental margin |
| And then just lastly, your outlook for distribution customer growth in Delmarva and Florida, it seems as if it's below what, I guess, the trailing 12 months was |
| Is that an economic slowdown that you're seeing at all? Beth Cooper I think that goes to what Jeff mentioned, is that we've continued to expect just given where mortgage rates have been that there might be more of a dampening |
| Following up on the customer growth question |
| And so there are some limitations, frankly, in some of the towns that we serve on being able to operate, to construct service lines and those sorts of things during the winter period |
| So they're hugely a little bit of a downturn, but I think the economies has something to do with that as well, as Beth indicated |
| Lower consumption largely from weather drove the performance, although we partially mitigated this through rate and fee management within propane and Aspire Energy |
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