Chesapeake Utilities Corporation

Greetings and welcome to the Utilispeak Utilities Corporation's first quarter results conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star 0. As a reminder, this conference is being recorded Wednesday, May 5, 2021. I would now like to turn the conference over to Beth Cooper, Executive Vice President and Chief Financial Officer. Please go ahead.

Thank you, and good afternoon, everyone. We appreciate you joining us today to review our first quarter 2021 results. We announced our financial results for the quarter yesterday. As you saw, our strong financial results indicate we continue growing and operating effectively, serving our customers, identifying and finalizing new investment projects, and keeping our employees as safe as possible. As shown on slide two, participating with me on the call today are Jeff Householder, President and Chief Executive Officer, and Jim Moriarty, Executive Vice President, General Counsel, Corporate Secretary, and Chief Policy and Risk Officer. We also have other members of our management team joining us virtually. Today's presentation can be accessed on our website under the Investors section and Events and Webcast subsection. After our prepared remarks, we will open the call up for questions. Moving to slide three, I would like to remind you that matters discussed in 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 the company's 2020 Annual Report on Form 10-K provides further information on the factors that could cause such statements to differ from our actual results. Now I'll turn the call over to Jeff to provide opening remarks on the company's first quarter 2021 performance and the key contributing drivers to our results.

Jeff? Thank you, Beth. Good afternoon, and thank you all for joining our call today. We've had a very strong start to 2021 with continued profitable growth initiatives across our business units. As shown on slide four, earnings per share from continuing operations was $1.96, an increase of 19 cents, or 10.7%, compared to our first quarter 2020 earnings per share of $1.77. Gross margin increased more than $17 million over the first quarter of 2020. Our results were driven by growth across the company. We also experienced increased consumer consumption, resulting from weather that more closely resembled normal temperatures. Some of the key margin drivers included pipeline expansion projects, the Hurricane Michael regulatory settlement, organic natural gas distribution, customer growth, contributions from Elkton Gas and Western Natural Gas, increased retail propane margins per gallon, and increased business at Marlin Gas Services. As our General Counsel, Jim Moriarty, is fond of saying, we are the beneficiaries of geography. We're fortunate to provide energy delivery services to communities that are experiencing significant growth. legislative initiatives that signal support for continued expansion of our systems in Florida. In all of our service areas, the demand for natural gas, propane, and electricity has never been higher. We continue to see customer additions at a rate that's more than twice the national average. In the past year, our utility distribution customer count increased by 7.4%. Growth opportunities to serve new customers was the primary driver of our capital investment in the first quarter. We projected capital investments for 2021 at approximately $200 million, and we're on track to achieve that target. Our first quarter capital investment totaled just under $49 million. Earlier today, our Board of Directors approved an annualized dividend payment of $1.92 per share, a $0.16 per share, or 9.1% dividend increase. The $0.16 per share increase in the annualized dividend closely aligns our five-year earnings growth rate of 9.4% through December 31, 2020, with our five-year dividend growth rate of 9.5%, as shown on slide 5. including this most recent increase. The Board's decision to raise the dividend reflects the company's ongoing commitment to dividend growth that is supported by earnings growth, while maintaining a payout ratio that enables a healthy reinvestment of earnings for growth and ensures liquidity to fund operations. Chesapeake Utilities has paid dividends to its shareholders without interruption for 60 years. and has increased its annualized dividend every year since 2004. I'll add more about our continued growth initiatives and capital investment projects across our business units in just a few minutes, but let me turn the call back over to Beth for further discussion of our first quarter results.