Welcome to Chesapeake Utilities Corporation's fourth quarter and full year 2025 earnings conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. So others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star 0. I would now like to turn the call over to Lucia Dempsey, Head of Investor Relations.

Thank you, and good morning, everyone. Today's presentation can be accessed on our website under the Investors page and Events and Presentations subsection. After our prepared remarks, we will open the call up for questions. On slide two, we show our typical disclaimers, while I remind you that matters discussed on this conference call may include forward-looking statements that involve risks and uncertainties. Forward-looking statements and projections could differ materially from our actual results. The Safe Harbor for Forward-Looking Statements section of our 2025 Annual Report on Form 10-K provides further information on the factors that could cause such statements to differ from our actual results. Additionally, the company evaluates its performance based on certain non-GAAP measures, including adjusted growth margin, adjusted net income, and adjusted earnings per share. And the information presented today includes the appropriate disclosures in accordance with the SEC's Regulation G, A reconciliation of these non-GAP measures to the related GAP measures has been provided in the appendix of this presentation, our earnings release, and our 2025 Annual Report on Form 10 . Here at Chesapeake Utilities, safety is our first priority. We start all meetings with a safety moment, and we'll do so here, with a moment on women's heart health, as highlighted on Slide 3. As February is American Heart Month, it's a good time to take care of ourselves and our loved ones by making small changes that can have a big impact on our heart health. Cardiovascular disease is the number one killer for women in particular, so it's important to understand the unique risk factors women face across various stages of life, including pregnancy and menopause. We are proud to be a longstanding supporter of the American Heart Association, which has in-depth resources for managing heart health risks and implementing changes that support long-term cardiovascular health. It's now my pleasure to introduce our presenters today. Jeff Householder, Chair of the Board, President, and Chief Executive Officer, will summarize the highlights and accomplishments of 2025 and introduce our theme for 2026. Jim Moriarty, Executive Vice President, General Counsel, Corporate Secretary, and Chief Policy and Risk Officer, will provide updates on our regulatory strategy, business transformation efforts, and stakeholder engagement. And Beth Cooper, Executive Vice President, Chief Financial Officer, Treasurer, and Assistant Corporate Secretary, will discuss our full-year financial results, financing updates, and investment highlights. I'll now turn the call over to Jeff.

Thank you, Lucia. Good morning. It's great to speak with you today. As shown on slide 5, 2025 was a year of outstanding performance and growth. I'm proud of everything our team has done the last year to deliver with purpose. We have once again reached significant new heights across our entire enterprise. 2025 was our 19th consecutive year of earnings growth. We generated adjusted earnings of $6.01 per share, reflecting industry-leading growth of 12% relative to full year 2024. Above average resident across our service areas continues to serve as the primary driver for our capital program. $170 million through 2025, a 32% increase over our 2024 capital spend, and $20 million above our 2025 guidance range, a record of non-acquisition capital. 2025 was also a record year for incremental adjusted gross margin growth of $71 million. Included in that was transmission project margin of $19 million and incremental infrastructure margin of $14 million. Our proactive regulatory approach also contributed to our full-year results with completed rate cases in our Maryland, Delaware, and Florida electric jurisdictions driving an additional $13 million of gross margin in 2025. And lastly, we were pleased to end the year back at our target equity capitalization of 50%, exactly in line with the goal we laid out at the start of 2025. and ahead of the schedule we established at the time of the FCG acquisition. Slide 6 provides additional detail on our record levels of earnings growth. For the fourth quarter and full year 2025, we generated double-digit growth and adjusted gross margin, adjusted net income, and adjusted earnings per share. These results demonstrate our commitment to providing high-quality, safe, and reliable service for all customers and driving value for all stakeholders. I'll now shift to slide 7, which highlights our above-average customer growth. We operate in some of the fastest-growing regions of the country. In 2025, we added nearly 11,000 residential, commercial, and industrial customers across our natural gas and electric distribution service areas. In Delmarva, residential customer growth was 4.1%. Florida Public Utilities was up 3.6%, and Florida City Gas recorded a 2.2% increase. Residential community expansion drives corresponding commercial infrastructure growth. Our customer additions led to an incremental $7.4 million of adjusted gross margin in 2025. We also see additional growth opportunities in Ohio, which has quickly become a top spot for data center build-outs. In addition to starting construction this year on the Duncan Plains Pipeline to support AEP's data center fuel cell, we've been providing temporary virtual pipeline service through Marlin for a data center construction project north of Columbus, Ohio. We continue to explore a number of gas transportation projects and look forward to further expansion in the Ohio market. Before I discuss our strategy and goals for the next year, I'd like to reflect on the significant progress we've made in just the first two years following our acquisition of Florida City Gas in late 2023, as detailed on slide eight. FCG has proved to be a strong strategic and cultural fit and immediately provided a wide range of investment expansion and improvement opportunities. We quickly got to work and have already invested approximately $250 million of CapEx, which is 50% of our five-year FCG-related investment goal. These projects are expanding and reinforcing FCG's ability to provide reliable and affordable energy to meet customer demand. We've also fully integrated the FCG team into the Chesapeake family and aligned a number of functions and processes with our legacy operations under our one company approach. FCG is now active on our 1CX SAP customer billing platform and we've consolidated all regulated customer service operations into one coordinated team. These integration and investment accomplishments are important for several reasons. One, we've done what we said we would do. We've also strengthened our track record of above average growth, and we're demonstrating our ability to finance, integrate, and capitalize on transformational opportunities that support consistent long-term growth. I'd now like to talk about our outlook, strategy, and goals for 2026 and beyond. Core to that discussion and to our record-breaking performance and growth over the last year are the three pillars of our growth strategy shown on slide nine. We remain committed to prudently deploying capital, proactively managing our regulatory agenda, and continually transforming our business operations, as we believe consistent and successful execution will continue to drive top quartile growth and total shareholder return. I'll move to slide 10 to introduce our theme for this year, transforming for growth powered by people, which particularly resonates with where we are today. We're building on a well-established blueprint for top-quartile performance. We're transforming the business to prepare for a new level of scale and growth. And we're powered by strong relationships across all stakeholders – teammates, customers, regulators, investors, and our communities. In this year of transformation, there are a few specific deliverables that we're focused on for 2026. Focus on investing $450 to $500 million of CapEx, including successful completion of a number of projects and initiating construction on a new set of opportunities that are presently under development. We're focused on reaching a successful outcome on our general rate case for Florida City Gas, which Jim will discuss shortly in more detail. As part of a whole host of business transformation initiatives across our organization, we're undertaking the largest technology system implementation in our history with our multi-year enterprise resource plan, or ERP. I know I've said it before when we were embarking on the 1CX project, but this ERP implementation, which we're calling OneCore, is going to be bigger and even more transformational than anything we've done thus far. And Jim will discuss more on that. And finally, we're focused on maintaining a strong balance sheet under our significant capital investment program and continue to drive strong earnings and dividend growth in support of top quartile shareholder return. I'll now turn to slide 11, which provides a detailed look into our 2026 capital plan. Following a record-breaking $470 million of capital invested in 2025, we're initiating full-year 2026 capital expenditure guidance of $450 million to $500 million. This plan assumes levels of transmission, distribution, and infrastructure investment similar to last year, alongside an increase in technology CapEx for the ERP. I will note that approximately 20-30% of this capital will drive margin growth in 2027 or later, given regulatory recovery timelines and expected project completion dates. Slide 12 provides an update on our major capital projects. Nearly all are generating margin through interim or full service, driving $22.8 million of adjusted gross margin in full year 2025. We forecast these projects to contribute approximately $47 million of gross margin in 2026 and an additional $9 million in 2027. According to slide 13, I'd like to highlight two projects for eastern shore natural gas that could further support the significant demand growth in our northern service areas. The first is the Del Marva Regional Enhancement Project, which I am pleased to be announcing today. This investment includes over 20 miles of 16 and 24-inch pipeline and looping to add firm capacity and improve reliability, driven by increased shipper demand identified during our latest open season. We currently estimate capital investment of approximately $75 million and an in-service date around the end of 2028. The second project was announced a few weeks ago when we were awarded a $6.5 million grant by the Acomack County Board of Supervisors to begin to assess feasibility, design, and engineering of new infrastructure that would bring natural gas to Virginia's eastern shore. We're working with local stakeholders and potential customers to ascertain the size, route, and cost for this potential system, which could extend natural gas from Princess Anne, Maryland, to Temperanceville, Virginia, serving homes and major employees, including the NASA Wallops Flight Facility, Wallops Island Operations, and other regional, commercial, and industrial customers. While still in very early stages, we are excited about the opportunity to extend our system into Virginia to deliver safe, reliable natural gas to the Acomac County community. I'll now shift to slide 14 to discuss our five-year capital investment guidance of $1.5 to $1.8 billion through 2028. Given our 2024 and 2025 capital spend, combined with our identified and ongoing capital investments, we've invested and identified a total of $1.6 billion toward our five-year range. As we've discussed, we intend to provide a more significant update to this range a year from now in order to incorporate outcomes of our strategic planning session this summer and make additional headway on multiple potential investment projects under evaluation and development. With that, I'll turn to Jim to discuss our second and third pillars, regulatory strategy and business transformation initiatives.

Thank you, Jeff. It is great to be with you all again today. I'll start with slide 15, which includes updates on our regulatory agenda. As Jeff mentioned, the successful rate cases in our Delaware, Maryland, and Florida electric jurisdictions drove over $12 million of incremental gross margin in 2025 and are expected to generate over $18 million in 2026, the first full year of revised rates. Our Florida City Gas Depreciation Study also concluded last week. the Florida Public Service Commission denied our request for a two-year amortization of the $19 million excess depreciation reserve and adopted its staff recommendation of only $6.8 million covered over the life of the assets. This results in annual depreciation savings of approximately $500,000. Given the timing of the order, we opted to not reopen the books for 2025, and instead will apply two years' worth of reduced depreciation expense, or close to $1 million, in 2026. And as you'll recall, achieving our 2025 earnings guidance included appropriate cost recovery and return on equity at FCG, which did not happen. filing a general rate case and utilize depreciation expense savings from the excess reserve to delay a customer rate adjustment for as long as possible. Given the outcome of the depreciation study, however, we immediately submitted a notice of intent indicating our plan to file a general rate case for FCG in mid-April of 2026. This rate request will ensure appropriate cost recovery, interim rates to be effective by early July, 2026, and look forward to FCG returning to its earnings contribution levels in 2027 and beyond. I'd like to turn to the two core elements of our theme for 2026, which Jeff introduced earlier. Starting with transformation for growth. 16 provides an update on our business transformation efforts, which is a particular focus this year as we implement significant transformations within technology, systems, and processes to drive continued operational excellence as a much larger organization. We've identified five key transformation themes, customer experience excellence, digital agility, employee experience, and financial modernization, each of which will be addressed through one or more projects in 2026. In January of this year, we held an official kickoff event for our ERP project, which we're calling OneCore. We brought together 130 teammates to align around our objectives and goals as we implement SAP solutions for our finance, supply chain, asset management, and human resource functions. We expect to invest approximately $75 million in 2026 and are targeting a system go-live date in Q2 of 2027. We are also implementing employee training and wellness programs, new software tools, and organizational structure updates across the company to strengthen our people, simplify processes, and leverage new technologies. These initiatives will deliver better service for our customers and facilitate continued long-term growth of the organization. The second element of our 2026 theme is Powered by People, which recognizes the important role all our stakeholder groups play to drive our long-term success. Slide 17 provides highlights on the work underway to actively engage with our key stakeholder groups, teammates, customers, regulators, legislators, partners, investors, and our communities overall. We're focused on attracting and retaining change-focused teammates and have rolled out multiple programs on training, development, organizational change management, and wellness. We are committed to placing our more than 440,000 customers at the center of everything we do as we continue to prioritize to maintain strong, constructive relationships with regulators, legislators, business partners, and investors. Whether seeking project approval or capital financing, we rely on these trusted partners to enable sustainable, positive growth for all stakeholders. We are thankful for the communities in which we work and live. We support local organizations. We communicate with Arne's core to our mission and reflect it in the work we do each and every day. I'll turn the call over to Beth for a more detailed discussion of our financial results.

Thanks, Jim, and good morning, everyone. Slide 18 shows our record-breaking financial results for full year 2025. We generated approximately $639 million of adjusted gross margin, $141 million of adjusted net income, and $6.01 of adjusted earnings per share in 2025, all representing double-digit increases over full year 2024. Adjusted net income was up 16%, which translated into a 12% increase in adjusted EPS after we purposefully advanced our equity-to-total capitalization ratio back to 50% to support our CapEx program at a faster pace than our forecasted financial models post-FCG. This reflects Chesapeake's highest level of annual earnings and our 19th year of consecutive earnings growth, as I will discuss in more detail shortly. Our results were driven by consistent growth across our entire business, as detailed on slide 19. For full year 2025, our key margin drivers added $2.41 per share, only partially offset by increased expenses and financing costs of $1.79 per share. Record levels of capital investment drove 58 cents of incremental adjusted EPS from transmission expansion projects and 43 cents from infrastructure projects to improve reliability and resiliency across our regulated businesses. Growth in our service areas and increasing demand for natural gas drove $0.51 of incremental adjusted EPS, including $0.28 of higher customer consumption and $0.23 of distribution system customer growth. Permanent rates from the three rate cases we completed in 2025 added $0.39 of adjusted EPS, and our unregulated businesses generated $0.29 of net incremental earnings per share, largely driven by substantial growth in our Marlin virtual pipeline transportation business and supported by strong performance in our propane and Aspire energy operations. As I just mentioned, these positive margin gains were partially offset by a few factors, most notably 51 cents from the absence of the RSAM benefit we recorded in 2024 and were unable to repeat given the outcome of the Florida City Gas Depreciation Study. We also incurred 31 cents per share of increased depreciation and amortization expense related to our significant levels of capital investment and $0.41 per share of additional operating expenses directly attributable to our sustained growth. However, we continue to drive operational efficiencies leading to operational expenses at only approximately 45% of adjusted gross margin for full year 2025. Lastly, financing activity, including our debt and equity issuances over the last 12 months to fund our capital expenditures and return to our target capital structure, reduced adjusted EPS by 35 cents per share, particularly as we accelerated our equity capitalization back to 50%. Shifting to slide 20, adjusted gross margin for our regulated segment was $494 million in 2025, a 12% increase over full year 2024. This growth continues to be driven by strength in our core business operations, with high levels of capital investment to support rapidly growing service areas and improve regulatory recovery following our three rate cases. Our focus on cost management enabled similar growth in our regulated operating income, up 13% to approximately $222 million for full year 2025, despite again the absence of the $15.5 million RSAM benefit recorded in 2024. Moving to slide 21, we continue to see outstanding performance from our unregulated segment with full-year 2025 adjusted gross margin of $145 million, up 13% relative to the prior year. Our Marlin Gas Services business continues to meet the rapid growth in demand for virtual pipeline transportation, driving $11 million of additional gross margin with our propane and Aspire energy businesses contributing an additional $5.7 million of gross margin in 2025. I'll now move to slide 22 to highlight our financing and capital accomplishments this past year. I'm proud to report that we ended 2025 at an equity capitalization of 50 percent meeting the goal we set at the start of the year, three years ahead of the target we actually established for ourselves following the acquisition of Florida City Gas. We issued $123 million of equity, or 961,000 shares, ending the year with nearly 24 million shares outstanding. Our equity capitalization was also boosted by $76 million of retained earnings. We also made meaningful moves to further strengthen our balance sheet and access to capital. At the start of the year, we secured our inaugural credit rating with Fitch, earning investment-grade issuer and instrument ratings. Then in June, we amended and extended one of our long-term shelf agreements, followed by a $200 million debt issuance in August and September. And just last week, we extended and amended our second private placement shelf facility, providing us additional debt capacity. We ended the year maintaining strong liquidity with 78% of our total capacity of $755 million available between our revolving credit facility and our private placement shelf facilities. As we look to 2026, we are excited to refinance the first tranche of debt we issued in conjunction with the Florida City Gas Acquisition and plan to finance our robust capital program with a mix of earnings retained in the business, equity, and debt, generally maintaining our 50-50 capital structure overall. Slide 23 demonstrates how our dividend policy remains a key component of our capital allocation strategy. We also remain committed to consistent dividend growth. Our annualized dividend per share of $2.74 reflects a 7% annual increase from 2024 and is reflected in the long-term dividend CAGR of 9%. Our policy also facilitates significant earnings reinvestment, as our board-approved dividend payout target range of 45% to 50% allowed us to retain 54% of earnings in 2025 to support our capital investment plan, a higher percentage than most of our peers. We will continue to support long-term dividend growth while reinvesting significant earnings back into the company, enabling our investors to benefit from both long-term top-quartile earnings and strong dividend growth. As shown on slide 24, our 2025 adjusted EPS result was remarkable for a number of reasons. First, we generated 12% growth relative to 2024, which is significantly above the industry average. It is particularly meaningful that we achieve this growth rate despite receiving no recovery and amortization of the excess depreciation reserve, and also while successfully driving our equity capitalization back to 50%. Second, 2025 marks our 19th year of consecutive earnings growth. Since 2007, we've grown year-over-year earnings, demonstrating our unwavering track record of higher earnings performance and commitment to increasing shareholder value. Third, our 2025 EPS represents a 9.1% CAGR over this 19-year time period, which highlights our ability to drive consistent, above-average returns now and into the future. And speaking of the future, we are reaffirming our 2028 adjusted EPS range of $7.75 to $8 per share as we remain on track to meet our long-term adjusted EPS growth target of 8%. Before we open the call for Q&A, I'd like to highlight some of the reasons that Chesapeake Utilities remains a uniquely valuable investment for years to come, as shown on slide 25. As I just discussed, we take financial discipline and execution very seriously and are highly focused on building on our track record of performance and growth, with many financial records being set in 2025. We will continue to execute on our three pillars of growth, enabled by continued growing demand for natural gas throughout our service areas and the need for continued reliability, capacity, and expansion. Our disciplined approach to financing, including ensuring balance sheet strength and upholding investment-grade credit metrics, keep us well-positioned to address market volatility and achieve successful regulatory outcomes as we fund our growth plan. All of these elements set the stage for growth in 2026 and beyond. As we transform the company for growth, we are continually reminded that we are powered by people and that strengthening relationships and creating value for all stakeholders will continue to differentiate us now and into the future. We sincerely appreciate your continued interest, support, and investment in our company, and thank you for joining us today. With that, we'll take your questions.

Operator? floor is now open for your questions. At this time, if you have a question or comment, please press star 1 on your telephone keypad. If at any point your question is answered, you may remove yourself from the queue by pressing star 2. Again, we ask that you pick up your handset when posing your questions to provide optimal sound quality. Thank you. Our first question is coming from Nicholas Campanella with Barclays. Your line is open.

Good morning. This is Michael Brown for Nicholas Campanella. My first question is, you reaffirmed your full year 28 EPS target. Can you walk us through the growth rate for full year 25 to full year 27 to reach a full year 28?

Michael, I'm sorry. Good morning. This is Beth. Can you restate your question? Would you mind? Thank you.

You reaffirmed your full year 28 EPS target. Can you walk us through the growth rate from full year 25 through full year 27 to get to full year 28?

We have, at the present time, as I talked about on the call, we have reaffirmed our 2028 EPS guidance, and Michael, you may recall this, but I will just remind you. as a company, you know, we've historically provided long-term EPS guidance, you know, given some of the capital expenditures that we incur and how, you know, the timing of getting some of those capital expenditures underway and completed. And so what we've done is actually put out there our long-term EPS CAGR of 8% and, again, reaffirmed our, you know, 2028 EPS guidance. Also in conjunction with that, we have put out our annual capital guidance this year and some of the projects that are underway that will hopefully, both with that information and also the information that we include in our major projects table, enable you to provide, you know, a forecast as we move through that period to 2028.

We'll take our next question from Chris Ellinghouse Swiss. Good morning, Chris.

Good morning, Chris.

The first quarter thus far, it seems like we've had some pretty cold, what you're thinking about tailwinds.

Great question. You know, certainly weather has been top of mind for us, like many across the country with the weather that we've experienced. As you may recall, in our northern service territories, on the Maryland side, we have weather normalization, right? So that's going to somewhat stabilize the impact of the weather for our Maryland operations. In Delaware, there will certainly be an impact, and we've begun to quantify the first part of that for January, but the numbers certainly are preliminary and we're not in a position to really talk about that just yet. Similarly, on the propane side, there will be some benefit that comes from the weather. In Florida, you also may recall with the colder weather there. Also, in weather, we have a greater portion of our bill that is more of a fixed than a variable component. So, again, more weather normalized when you get to Florida. So, yes, coming out of the gate, there will be some impact in January and as we're seeing into February. What we're also, Chris, being very mindful of is, you know, the impact on our customers and wanting to work with them certainly from a payment standpoint working with them to hopefully put those that may need it in touch with you know some of the social service agencies and then finally from an operation standpoint you know i can't say enough about from our standpoint how our team operated during this you know this challenging time how our facilities were maintained a no disruption of service across our systems and again we look forward to providing more information you know when we jump on our first quarter call okay i'm not quite sure if you have insights into this but i'm guessing service areas um in certain parts of our um areas in florida absolutely i can tell you i've just been down in florida and when i landed it wasn't the normal temperatures i'm I'm traditionally accustomed to, so yes, there would be. But again, with our rate design over the last several years, you know, we have limited that a little bit more than, you know, as we've moved over the last couple of years. But certainly there will be some, and there will also be some, to your point, that may come from certainly the propane side as well down there.

Okay. The growth in the FCG customers, you do have this wide ranging, maybe the more Miami.

There are portions of Florida that certainly have higher growth than others. I think if, you know, and I would say it's probably closer to, you know, the three-ish percent in some of those areas. What I would also say, though, is just, you know, despite what individuals may think about, you know, growth, let's say, in more of a metropolitan area like Miami, what you are seeing, we saw this last year on one of the trips down there when we took, you know, took a ride in the service area and with our team looked at some of what's going on. There is a lot of redevelopment that's going on there. So opportunities to particularly have increased margin that comes from commercial infrastructure that's being constructed when, you know, particular buildings are being torn down and multi-unit dwellings are being constructed. Again, there may be more opportunities as well. So, yes, higher in certain markets, but there are opportunities from a commercial side and a residential side, even in some of those lower growing markets. The other thing, Chris, that I would point out, and I think your point to some degree, I would just highlight, you know, we try to make it very clear in our earnings release. In Florida, in particular, the amount of commercial infrastructure that is supporting the residential growth that is going on down there is pretty phenomenal. It's also happening on the peninsula, but to a much lesser degree, more driven there by residential. So, you know, we're continuing to see the levels of growth that we had thought we would experience over the last several years since Florida City Gas. So that's been exciting that it's been on track.

Okay. Chris, I'll just add, this is Jeff, I'll just add a little detail to that specific to your question. If you look at the City Gas service territories, where we're seeing significant residential growth followed by, as Beth indicated, a substantial amount of commercial service growth is in the Port St. Lucie area, around Vero Beach, and then up in the Brevard County area, especially to the west of the county, out in the Vieira communities. And so those are significantly higher growth areas than what we're experiencing currently in the Miami portion of that service territory.

Thanks, Jeff. that's kind of what you talk about the ERP and what you see benefits where quantify any of that I was just you know I was just gonna start off you know one of the ways you know that we've been talking about it internally Chris and we've been working on establishing some metrics would be as we think about and talk about from time to time, you know, our O&M expenses as a percentage of gross margin. So, you know, as this project starts to be underway on the back end, certainly of this project and many other technology improvements that we're making, you'll see us referring to that in particular as we talk about that benchmark O&M as a percentage of gross margin. And you may recall Chris we've been talking about that pretty much since Jeff became our CEO coming out of the gate and talking about that each year and if you look at our history we've been on a declining path as we've continued to grow so I would say that out of the gate Jeff maybe you know I'll turn it to you and you can touch on just some of the things that we're thinking about from the technology standpoint?

Sure. I think this is a drive to accumulate data in a more proactive way that allows us to actually utilize that data and making better decisions about the company. I mean, that's fundamentally what this is. To specifically talk about a handful of areas that we believe we'll see efficiencies and ultimately some cost savings. I think there are opportunities on the customer service side, certainly with respect to electronic billing, moving customers into a portal relationship with the company, reducing the number of calls to our call centers, automatic meter reading, and all of those things I think are on the horizon for us that will provide significant efficiencies. There are a variety of supply chain issues here that we believe that kind of march down this one company approach that we've been looking at to standardize things across all of our operating areas over the last few years. We've just sort of scratched the surface, I think, on the way we buy materials and supplies and services in the company. And so I think there are significant opportunities there. There are a number of field services operations activities, especially in the way we schedule work and control kind of the flow of orders back and forth from a computer system out into the field and back without having to physically touch those. There are a variety of accounting and finance improvements that I think we'll see, just how we process accounts payable, I mean, and on and on and on. I mean, it's the sort of classic ERP opportunity here. And so linking that into our recently installed what we call 1CX, the SAP, Customer Service Billing and Field Services Management systems that we have in place across the company now, I think will continue to drive some of the cost savings that Beth was trying to support and to quantify. We haven't gotten to a number. I mean, I walk around with one in my head, but I'm certainly not ready to begin to publicly describe that. But I think it is significant, and I think we will see that we will realize those cost savings, and they will flow through ultimately to keep customers' bills down, to allow us to redeploy some of those dollars in support of some of the capital operations that we're pursuing, and to, you know, make the company more efficient and less costly.

Okay. Maybe one last question for Jim. Jim, how surprised the decision, you know, somewhat of a tacit invitation?

Thank you, Chris. I mean, that's a very good question. You know, our purpose all along was to kind of simplify what was the RSAM to a more traditional approach to depreciation. I think in some ways we got caught up in the continuing tendency of the Supreme Court review and action. And while that was still pending, I think the OPC took a certain stand against what we were trying to do. And then that just fed into taking a lot longer than we or really anyone anticipated to land, you know, with a decision. You know, we were – our approach was to, you know, avoid as long as possible a general rate increase filing. But with this decision now, you know, we made the decision to go forward. And that's what we're doing. So I guess we were surprised in some way that a relatively simple, straightforward application of traditional approaches got caught up in this vortex for the past year. But, you know, we're accepting it and we're moving on and we'll be filing here very shortly.

So there seemed to be some sympathy at the Supreme Court when they did it, you know, some.

Well, I think ultimately that's helpful for us. You know, it really will address an issue that we're no longer going to deal with, and that is the validity of the R-STAMP. But I think in supporting that approach, I think it helps all of us in Florida that are, you know, filing rate cases. Did I lose you, Chris?

We'll take our next question from Mike Brown with Barclays.

I just have a good one. are you planning on giving guidance this year for your 26th we again what we are doing is basically reaffirming our 2028 guidance at this time we don't historically other than the year post florida city gas we gave guidance on an annual basis in 2024 coming out of the acquisition because we knew that year with the transaction just occurring at the end of the year, we knew we could be accretive, but it was much less than what our historical run rate had been. So we provided annual guidance. But we have a long-term track record going back to 2018 when we initiated guidances, we follow a long-term view of the CAGR that we can achieve over a period of time. And so the short answer, after I gave you the long-winded answer, Mike, is that we will not be at this time giving annual guidance for 2026.

Thank you. One more question. Thank you.

Oh, sure.

Can you provide an update on the Florida Pipeline Project that starts in the Indian time gas up and kind of where that stands at this point and when it will make it into the plan so we are Jeff do you want to start this one off no no go Beth go sorry no I'm going to defer to you Jeff and let you kick this one off okay all right fairly simple explanation we are continuing the engineering design on that project and are working through in fact I'm looking across the hall at the group of engineering folks that are working on that project as we speak. I think we're in pretty good shape to get an engineering design cost estimate here over the next 30 to 60 days on at least the first significant segments of that to get down toward our distribution system in Miami. I believe that we will be on time with our estimated project start date, which I will probably hold back a little bit on describing when that is, but certainly sometime this year. It looks like we will, you know, be able to, you know, find the pipe and get the right-of-ways that we need to identify completed. So I'm pretty comfortable that we're on the right track with that project at this point.

Thank you, Beth. Thank you.

We'll take our next question from Paul Fremont with Lattenburg. Your line is open.

Thank you very much. And hopefully you have less snow down there than we have up here, Beth. Can I, I guess for, good morning, for my first question, I'd like to maybe draw your attention to page 43 PDF of your 10K. I think you're basically saying that the adjusted gross margin from full circle dairy and noble was 10.9 million in 2025, and you're projecting 26 to be 28.5 million and 27 to be $29.7 million, I guess. Can you walk us through the delta between 25 and 26?

So Paul, the line that you're looking at is actually a compilation of Marlin full circle dairy and our noble RNG project that is in Ohio. It is not just full circle dairy. And so some of the growth, a big part of the growth that year over year we've been experiencing, particularly if you look in the major project table, is actually coming more from Marlin because as can imagine with the facilities being in place for both Full Circle Dairy and our Ohio operations, you know, there's not a steady, they've both been in operation now for a year. And so the opportunities for Full Circle Dairy for us and, you know, certainly we're going to have a follow up with you and our other analysts would be around, you know, the production tax credit side. I know you've been talking to me about that. I think we've talked previously on the phone before around the investment tax credit, that that's really something for us that gets amortized over the life of the project. It is not a one and done. So the big part of the growth that you're seeing in any margin there is really going to be related to what Marlin is doing and less about those two facilities that are operating as planned.

And if I look at that up list, I mean, wouldn't that essentially offset the absence of RSAM for 2026 based on the…

Well, that would be great if we stopped there at the margin line. But as you know, there's operating expenses that are associated with that growth. And so, you know, with Marlin and it continuing to serve increasing amounts of, you know, in increasing projects, there's certainly costs associated with the labor side and other incremental expenses that are variable. And so you can't just unfortunately look at that line. I like to look at that line too, but then I have to remind myself that there's variable costs. So a significant chunk of that would be offset in payroll-related costs. We have to buy additional equipment to support that demand that's associated with depreciation and certainly property, taxes associated with that. That all gets factored into it. So we can certainly walk through some of that as we get together, but that would need to be factored into your calculations.

And then can you just quantify specifically the amount of PTC benefit that you're expecting to book in 26?

We have some preliminary estimates on that. We are continuing to refine those, and I would certainly love for us to set up some time and walk through that. We're not quite there. We're still noodling with that a little bit, but we can certainly walk through where we are and our assumptions behind that.

Great. And then can you also maybe, I guess this would be more Jim, can you walk us through what, how interim rates are set in Florida and what we should expect in terms of when interim rates come into play in July?

Do you want me to start that, Jim?

I don't know.

Jim, do you?

Well, I can take a pass at that.

Yeah, Jim, so I make some trouble. Yeah, please go ahead. Thank you. Yeah.

The interim rate filing in Florida typically comes about 60 days after the actual filing So we're looking for those, as you well know, sometime in probably July, early July. The traditional methodology for determining interim rates is to look at kind of existing rate base. Could be some adjustments in there. look at the bottom end of the ROE range and to do a relatively straightforward calculation of any deficiency that exists there and to apply it to calculating the interim rates. So we're assuming that we would see interim rates in effect for the last half of this year or until certainly the permanent rates actually go into effect. And so we'll see what the timing looks like on that. I don't think at this point we're quite ready to describe what we believe that interim rate calculation will result in. There are some things that we are and will, I'm sure, debate with the Public Service Commission as we file for interim rate. One of those, as you may recall, is that the current return on equity for Citigas is about 100 basis points lower than what we would traditionally see at other gas utilities in Florida. That was set because of the RSAM. And so the rate-making deal that was established by NextEra before we acquired the company reduced ROEs from the more traditional levels down about 100 basis points. And so we'll argue that that's no longer applicable. And there are a couple of other things that will roll around in there. What I will tell you, though, Paul, is that you were – I think the path you were down a second ago is one that I continue to go down. Between the weather impacts, between the other associated opportunities that we have within the company and the interim rates, I believe that we will not see significant impacts resulting from missing out on the depreciation study result that that we had anticipated for this year. And in fact, as you may know, what would be traditionally done by the Florida Public Service Commission is if that depreciation study result had occurred the way we had filed it in 26, that would have been a reduction most likely to the interim rates. And so I think there is a, you know, it's disappointing that we didn't get that depreciation result. But in the great scheme of things, I think we'll be able to overcome that with the several things that are going right for us this year.

Great. And then last question for me, it looks as if there are three sort of additional RNG projects that maybe came online in 25. Are those, can you describe if, are those dairy or otherwise in terms of, in terms of their nature? Those are basically, go ahead Beth, sorry.

No, go ahead Beth.

Those are essentially RNG transport projects from landfills. So that's just the pipeline? Yes, that's the pipeline or the Marlin service that begins before the pipeline shows up. And so that's what you're seeing there. We don't have the production facility investment.

Great. Thank you very much. Thank you, Paul.

We'll take our next question from Alex Kania with BTIG. Your line is open.

Good morning. Morning. Just thoughts on just the overall customer growth. I mean, again, just Delmarva continues to be, you know, really strong. I'm just kind of wondering if you see that as kind of sustainable or kind of any reason why that, you know, that number can't continue in the near future?

Sure. So being based here on the Delmarva Peninsula, I can tell you in talking with our team, you know, we continue to actually see strong growth in Delaware. It is not slowing down. In fact, you've heard, in fact, Alex, on a couple of calls ago, Jeff, actually, we talked about a small town by the name of Ellendale, which for someone who's from Delaware, again, it would not have been an area that I would have thought would be close to the resort areas, but it's about a half hour to 45 minutes in. That is one of the new areas that we have begun to provide natural gas distribution service to, and it continues. There is a lot of planned, also, infrastructure growth, particularly in the southern county of Delaware, that is being anticipated given, you know, it's a growing population. There's a lot of retirement activity that's happening in terms of new developments so the infrastructure that's coming along like medical facilities other types of things to support that growth are also continuing to stay at pretty high levels so we continue to be excited and what i would add to that which is again even you know more exciting when you layer this on top right is as that growth continues it also supports the need for additional pipeline capacity to bring more gas into the southern part of the Delmarbo Peninsula. And so, you know, we've got projects. Jeff just talked about the newest one today. I think you're going to see, Alex, continued upstream pipeline demands that necessitate increased expansion there. So all continues. Nothing has changed in terms of our view at this time.

Great. Thanks. And then just maybe a follow-up on your comments a little bit earlier, just on a little opportunity on the financing of the SCG acquisition debt. Could you just talk a little bit about kind of what that opportunity might be in terms of kind of a help on, you know, interest expense and, you know, if you see some additional ongoing opportunities down that path in the next couple years?

Absolutely. Great question. An area that, you know, I absolutely love, so you're spot on this morning. Yes. I mean, when we did the Florida City gas, you know, financing, we unfortunately, you know, had to place debt that had a six handle to it, a six plus, you know, handle to it. And so we have steady retirements that are going to happen over the next several years. So there's going to be a robust refinancing plan that has to take place. You're going to see us, Alex, take a similar approach to what we did last year, which means we'll be looking at blending a portfolio of different tenors to accomplish a rate that's much more in line, you know, with what we would be expecting and based upon our history in terms of our long-term debt portfolio. you. So, you know, I don't think it's unreasonable to think that, you know, the opportunity exists for us to shave anywhere from 50 to 100 bps off of the coupon rate as long as things stay where they are. And so, you know, that's what you should expect to see from us this year.

Great. Thank you.

Thank you.

And that does conclude the Q&A portion of today's call. I would now like to hand it back to Jeff Householder for any closing remarks.

Thank you. And thank all of you for joining us this morning. We'll continue to provide significant information on our capital deployment, our project status, and our margin production throughout the year. We look forward to continuing our long track record of strong growth and top quartile financial success.

And we'll look forward to seeing many of you at the AGA financial forum out in scottsdale here in the next couple of months so thanks again we'll talk to you soon goodbye thank you this concludes chesapeake utilities corporations fourth quarter and full year quarter 2025 earnings conference call please disconnect your line at this time and have a wonderful day