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Wednesday, December 8, 2021

CHESAPEAKE UTILITIES CORP Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations (kind 10-Q)

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Administration's Dialogue and Evaluation of Monetary Situation and Outcomes of
Operations is designed to supply a reader of the monetary statements with a
narrative report on our monetary situation, outcomes of operations and
liquidity. This dialogue and evaluation needs to be learn together with the
hooked up unaudited condensed consolidated monetary statements and notes thereto
and our Annual Report on Kind 10-Okay for the yr ended December 31, 2020,
together with the audited consolidated monetary statements and notes thereto.

Protected Harbor for Ahead-Wanting Statements
We make statements on this Quarterly Report on Kind 10-Q that don't immediately or
solely relate to historic info. Such statements are "forward-looking
statements" throughout the which means of the Non-public Securities Litigation Reform Act
of 1995. One can usually determine forward-looking statements by means of
forward-looking phrases, similar to "challenge," "consider," "count on," "anticipate,"
"intend," "plan," "estimate," "proceed," "potential," "forecast" or different
comparable phrases, or future or conditional verbs similar to "might," "will," "ought to,"
"would" or "may." These statements signify our intentions, plans,
expectations, assumptions and beliefs about future monetary efficiency,
enterprise technique, projected plans and targets of the Firm.
Ahead-looking statements communicate solely as of the date they're made or as of the
date indicated and we don't undertake any obligation to replace forward-looking
statements because of new data, future occasions or in any other case. These
statements are topic to many dangers, uncertainties and different necessary components
that might trigger precise future outcomes to vary materially from these expressed
within the forward-looking statements. Along with the chance components described
underneath Merchandise 1A, Danger Elements in our 2020 Annual Report on Kind 10-Okay, such components
embody, however should not restricted to:
•state and federal legislative and regulatory initiatives that have an effect on value and
funding restoration, have an effect on charge buildings, and have an effect on the velocity and
the diploma to which competitors enters the electrical and pure gasoline industries;
•the outcomes of regulatory, environmental and authorized issues, together with whether or not
pending issues are resolved inside present estimates and whether or not the associated
prices are adequately coated by insurance coverage or recoverable in charges;
•the affect of local weather change, together with the affect of greenhouse gasoline emissions
or different laws or laws meant to handle local weather change;
•the affect of great adjustments to present tax laws and charges;
•the timing of certification authorizations related to new capital initiatives
and the power to assemble services at or beneath estimated prices;
•the supply to supplies essential to assemble new capital initiatives;
•adjustments in environmental and different legal guidelines and laws to which we're topic
and environmental circumstances of property that we now, or might sooner or later, personal
or function;
•potential elevated federal, state and native regulation of the security of our
operations;
•the inherent hazards and dangers concerned in transporting and distributing
pure gasoline, electrical energy, and propane;
•the financial system in our service territories or markets, the nation, and worldwide,
together with the affect of financial circumstances (which we don't management ) on demand
for pure gasoline, electrical energy, propane or different fuels;
•dangers associated to cyber-attacks or cyber-terrorism that might disrupt our
enterprise operations or end in failure of knowledge know-how methods or
end result within the loss or publicity of confidential or delicate buyer, worker
or Firm data;
•adversarial climate circumstances, together with the consequences of hurricanes, ice storms and
different damaging climate occasions;
•prospects' most well-liked vitality sources;
•industrial, business and residential development or contraction in our markets or
service territories;
•the impact of competitors on our companies from different vitality suppliers and
different types of vitality;
•the timing and extent of adjustments in commodity costs and rates of interest;
•the impact of spot, ahead and future market costs on our varied vitality
companies;
•the extent of our success in connecting pure gasoline and electrical provides to
our transmission methods, establishing and sustaining key provide sources, and
increasing pure gasoline and electrical markets;
•the creditworthiness of counterparties with which we're engaged in
transactions;
•the capital-intensive nature of our regulated vitality companies;
•our skill to entry the credit score and capital markets to execute our enterprise
technique, together with our skill to acquire financing on favorable phrases, which
might be affected by varied components, together with credit score scores and common
financial circumstances;
•the power to efficiently execute, handle and combine a merger, acquisition
or divestiture of property or companies and the associated regulatory or different
circumstances related to the merger, acquisition or divestiture;
•the affect on our prices and funding obligations, underneath our pension and different
post-retirement profit plans, of potential downturns within the monetary markets,
decrease low cost charges, and prices related to well being care laws and
regulation;
•the power to proceed to rent, practice and retain appropriately certified
personnel;

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•the impact of accounting pronouncements issued periodically by accounting
standard-setting our bodies; and
•dangers associated to the outbreak of a pandemic, together with the length and scope
of the pandemic and the corresponding affect on our provide chains, our
personnel, our contract counterparties, common financial circumstances and development,
and the monetary markets.

Introduction

We're an vitality supply firm engaged within the distribution of pure gasoline,
electrical energy, and propane; the transmission of pure gasoline; the era of
electrical energy and steam, and in offering associated companies to our prospects.

Our technique is concentrated on rising earnings from a secure utility basis and
investing in associated companies and companies that present alternatives for
returns higher than conventional utility returns. We're targeted on figuring out
and growing alternatives throughout the vitality worth chain, with emphasis on
midstream and downstream investments which can be accretive to earnings per share,
per our long-term development technique and create alternatives to
proceed our document of high tier returns on fairness relative to our peer group.
Presently, our development technique is concentrated on the next platforms, together with:
•Optimizing the earnings development in our current companies, which incorporates natural development,
territory expansions, new pipeline expansions, and new services in addition to
elevated alternatives for collaboration and efficiencies throughout the group as a
results of our ongoing enterprise transformation.
•Development of Marlin Fuel Companies' CNG transport enterprise and enlargement into LNG and RNG
transport companies in addition to methane seize.
•Figuring out and enterprise extra strategic propane and complementary enterprise
acquisitions that present a bigger basis in present markets and develop our model and
presence into new strategic development markets.
•Pursuit of development alternatives that allow us to make the most of our built-in set of vitality
supply companies to take part in renewable vitality alternatives.


As a result of seasonality of our enterprise, outcomes for interim intervals should not
essentially indicative of outcomes for all the fiscal yr. Income and
earnings are usually higher through the first and fourth quarters, when
consumption of vitality is often highest as a consequence of colder temperatures.
The next discussions and people later within the doc on working earnings
and phase outcomes embody the usage of the time period "gross margin," which is
decided by deducting the price of gross sales from working income. Price of gross sales
consists of the bought value of pure gasoline, electrical energy and propane and the fee
of labor spent on direct revenue-producing actions, and excludes
depreciation, amortization and accretion. Gross margin shouldn't be thought of
a substitute for working earnings or internet earnings, that are decided in
accordance with GAAP. We consider that gross margin, though a non-GAAP measure,
is beneficial and significant to buyers as a foundation for making funding
choices. It gives buyers with data that demonstrates the
profitability achieved by us underneath our allowed charges for regulated vitality
operations and underneath our aggressive pricing buildings for unregulated vitality
operations. Our administration makes use of gross margin in measuring our enterprise items'
efficiency and has traditionally analyzed and reported gross margin data
publicly. Different firms might calculate gross margin in a unique method.
Earnings per share data is offered for persevering with operations on a
diluted foundation, except in any other case famous.




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Outcomes of Operations for the Three and 9 Months Ended September 30, 2021
Overview

Chesapeake Utilities is a Delaware company shaped in 1947. We're a
diversified vitality firm engaged, by means of our working divisions and
subsidiaries, in regulated vitality, unregulated vitality and different companies. We
function totally on the Delmarva Peninsula and in Florida, Pennsylvania and
Ohio and supply pure gasoline distribution and transmission; electrical
distribution and era; propane gasoline distribution; cellular compressed pure
gasoline companies; steam era; and different energy-related companies.

In March 2020, the U.S. Facilities for Illness Management and Prevention ("CDC")
declared a nationwide emergency as a result of quickly rising outbreak of COVID-19.
In response to this declaration and the fast unfold of COVID-19 inside the
United States, federal, state and native governments all through the nation
imposed various levels of restrictions on social and business exercise to
promote social distancing in an effort to sluggish the unfold of the sickness. These
restrictions considerably impacted financial circumstances in the US in
2020 and have continued all through 2021. We're thought of an "important
enterprise," which has allowed us to proceed operational actions and
building initiatives whereas adhering to the security procedures meant to restrict
the unfold of the virus. At the moment, restrictions proceed to be lifted as
vaccines have turn out to be broadly obtainable in the US. For instance, the
state of emergency in Florida was terminated in Could 2021 adopted by Delaware
and Maryland in July 2021, leading to lowered restrictions. The expiration of
the states of emergency in our service territories has concluded our skill to
defer incremental pandemic associated prices for consideration by means of the
relevant regulatory course of. Regardless of these constructive state orders and in mild
of the continued emergence and rising prevalence of recent variants of COVID-19,
we proceed to function underneath our pandemic response plan, monitor developments
affecting staff, prospects, suppliers, stockholders and take all precautions
warranted to function safely and to adjust to the CDC, and the Occupational
Security and Well being Administration, with a view to defend our staff, prospects
and the communities we serve.

Impacts from the restrictions imposed in our service territories and the
implementation of our pandemic response plan, included lowered consumption of
vitality largely within the business and industrial sectors, greater unhealthy debt
bills and incremental bills related to COVID-19, together with private
protecting gear and premium pay for area personnel. The extra
working bills we incurred help the continuing supply of our important
companies throughout these unprecedented occasions. Consult with Be aware 5, Charges and Different
Regulatory Actions, for additional data on the regulated property
established because of the incremental bills incurred related to
COVID-19.

Environmental, Social and Governance Initiatives

ESG initiatives are embedded inside Chesapeake Utilities tradition and are an
integral a part of our technique. ESG is on the core of our well-established
tradition and our knowledgeable enterprise choices. Over time, we have now lowered our
greenhouse gasoline emissions, whereas responsibly rising our companies. We now have additionally
helped to speed up the discount of emissions by a lot of our prospects Our
mixed efforts have enhanced the sustainability of our native communities. We
sit up for publishing our inaugural Company Accountability and
Sustainability Report which can embody, however not be restricted to, a number of of the
areas described beneath.

Advancing Environmental Initiatives
We're pursuing a three-part motion plan that helps decarbonization and a
decrease carbon vitality future. First, we're taking actions that may proceed to
scale back our greenhouse gasoline emissions. For instance, we have now largely accomplished our
Florida GRIP to exchange older parts of our pure gasoline distribution system.
The remaining capital expenditures related to this program can be invested
by means of 2022. Our Elkton Fuel subsidiary additionally reached a settlement settlement with
the Maryland PSC to speed up its Aldyl-A pipeline substitute program and to
get better the prices of the plan within the type of a set cost rider by means of a
5-year surcharge. All through our pipeline system, we have now additionally carried out
improved emission detection know-how at our pipeline compressor stations.

The second part of our motion plan is offering companies and help to our
prospects who're lowering their greenhouse gasoline emissions. Our extension from
Japanese Shore's Del-Mar Power Pathway Venture, which was just lately accomplished,
brings pure gasoline to our distribution system in Somerset County, Maryland for
the primary time. As a part of this challenge, our companies allow the conversion by
two vital industrial prospects in Somerset County from much less
environmentally pleasant gas sources, together with in a single case, wooden chips.
Equally, a number of of our business prospects proceed to transform their automobile
fleet to compressed pure gasoline or propane, additional lowering their greenhouse
gasoline emissions and positively impacting the setting.

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We proceed to see vital demand for brand new pure gasoline service in each our
Delmarva and Florida territories, with our development charges greater than double the
business's development charges. In a lot of our native markets, pure gasoline is a cleaner
gas choice than different vitality sources. Pure gasoline is a vital
part of the nation's vitality transition and we're dedicated to responsibly
increasing the infrastructure in our rising service areas.

RNG alternatives with ongoing initiatives to remodel landfill, meals, dairy and
poultry waste into usable vitality. The event of a number of RNG initiatives is the
third part of our motion plan. Our participation in these initiatives extends
from transporting the RNG to market by pipeline or our Marlin Fuel Companies
compressed pure gasoline trailers, to potential investments in biogas crops and,
in some circumstances, the photo voltaic vitality services to supply electrical energy to the crops
and considerably enhance the RNG carbon depth rating. In October 2021, we
accomplished building of the Noble Street Landfill Renewable Pure Fuel pipeline
challenge. That is our first RNG transportation challenge and, when mixed with
our beforehand introduced initiatives, will develop our skill to make the most of RNG in our
companies territories. We're persevering with to actively think about different renewable
initiatives and the potential of accelerating the variety of RNG initiatives in our
diversified vitality portfolio. We're dedicated to remaining disciplined in our
method by pursuing initiatives that meet our return thresholds and strategic
targets.

We even have a number of different initiatives underway, together with plans so as to add
extra small photo voltaic services alongside our system, and our participation in a
pilot program to mix hydrogen into the pure gasoline distribution system that
serves our Eight Flags mixed warmth and energy plant. We're optimistic about
this pilot program and consider that hydrogen will proceed to realize in effectivity
and turn out to be extra worth aggressive over time.

To finance these initiatives, we're working with a lot of our key banking companions
to make the most of sustainable financing capability at enticing pricing. Only in the near past,
we secured $9.6 million in sustainability linked financing from Financial institution of America
to fund capital investments in vitality supply options supplied by our
subsidiary, Marlin Fuel Companies.

Advancing Social Initiatives
Selling fairness, variety and inclusion ("EDI"). Our success is the direct
results of our staff and our robust tradition that absolutely engages our crew and
promotes fairness, variety, inclusion, integrity, accountability and
reliability. Throughout the third quarter, we had been acknowledged as a High Office in
Delaware for the tenth consecutive yr. This follows recognition as a High
Office nationally earlier within the yr. These recognitions are a testomony to
our staff' dedication to excellence.

We consider {that a} mixture of various crew members and an inclusive tradition
contributes to the success of our Firm and to enhanced societal development.
Throughout the third quarter, we had been very excited to rent William Hughston as Vice
President and Chief Human Sources Officer. Mr. Hughston brings great EDI
expertise to the crew, together with drawing from his huge expertise together with his
earlier function as Chief Range Officer. Moreover, in October 2021, we
introduced the addition of our third feminine Director to our Board of Administrators,
Lisa Bisaccia. Ms. Bisaccia's addition continues our regular progress of gender
and ethnic variety that represents the communities we serve. Our Board of
Administrators consists of, three feminine administrators, an African American director and a
director who's of Center Japanese descent.

We established an EDI Council in 2020, complementing and broadening the work our
Ladies in Power group began years in the past. The Council oversees our efforts to
enhance variety in recruitment, worker growth and development, cultural
consciousness and associated insurance policies. These efforts are expanded by means of the broad
attain of our six Worker Useful resource Teams and different partnerships we have now within the
neighborhood. Staff have entry to communications and on-demand studying
classes on an array of matters, together with fairness, variety and inclusion,
by means of our "EDI Smart" webinars. We now have additionally expanded our provider variety
program to collect data that may allow us to additional develop, measure and
report on the variety of our suppliers and related spend.

Security on the middle of Chesapeake Utilities tradition and the best way we do enterprise.
There may be nothing extra necessary than the security of our crew, our prospects and
our communities. The significance of security is exhibited all through our
group, with the path and tone set by the Board of Administrators and our
President and Chief Govt Officer. Staff are required to attend month-to-month
security conferences and incorporate security moments at operational and different
conferences. Up to now in 2021, 4 of our enterprise items have been acknowledged with
awards from the American Fuel Affiliation for his or her dedication to security.

The achievement of superior security efficiency is each an necessary brief and
long-term strategic initiative in managing our operations. Our new
state-of-the-art coaching middle, named 'Security City,' gives staff
hands-on coaching and simulated on-the-job area experiences, additional growing
our crew and enhancing the reliability and integrity of our methods.

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Security City has additionally expanded our neighborhood outreach by providing security coaching
to many regional first responders. Our second Security City facility can be
positioned in Florida and is within the closing phases of planning.

Advancing Governance Initiatives
Dedication to sound governance practices. According to our tradition of
teamwork, the broad duty of ESG stewardship is supported throughout our
group by the dedication and efforts of the Board and its Committees, as
properly because the entrepreneurship and dedication of our crew. As stewards of
long-term enterprise worth, the Board is dedicated to overseeing the
sustainability of the Firm. The Board and Company Governance Committee
yearly evaluate our company governance paperwork and practices to make sure that
they supply the suitable framework underneath which we function. In recent times,
we have now obtained nationwide recognition because the Governance Group of the 12 months, and
simply this yr had been additionally acknowledged as Finest for Company Governance Amongst North
American Utilities by Moral Boardroom journal. To study extra about our
company governance practices and transparency, stakeholder engagement, the
expertise and variety of our Board members, and our Enterprise Code of Ethics
and Conduct, which highlights our dedication to the very best moral requirements
and the significance of participating in sustainable practices, please view our Proxy
Assertion filed with the Securities and Trade Fee on March 22, 2021.
Moreover, please view Chesapeake Utilities' information releases and historic
quarterly earnings convention calls for added discussions on ESG and our
sustainability practices.

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Operational Highlights

Our internet earnings for the three months ended September 30, 2021 was $12.5 million,
or $0.71 per share, in comparison with $9.3 million, or $0.56 per share, for a similar
quarter of 2020. Working earnings for the three months ended September 30, 2021
elevated by $2.7 million, or 15.6 p.c, over the identical interval in 2020. Throughout
the third quarter of 2020, we settled the Hurricane Michael restricted continuing
which resulted in $1.9 million in working earnings being acknowledged that associated
to the primary and second quarters of 2020. Excluding the absence of this timing
distinction, working earnings elevated $4.6 million in comparison with the third
quarter of 2020. Greater efficiency within the third quarter of 2021 was generated
from continued pipeline enlargement initiatives, contributions from the 2020
acquisitions of Elkton Fuel and Western Pure Fuel, greater margins from
consumption returning towards pre-pandemic ranges, pure gasoline distribution
development, elevated propane margins, and margin development from elevated funding
within the Florida GRIP program. We recorded greater depreciation, amortization and
property taxes associated to latest capital investments and working bills
related primarily with development initiatives, together with payroll, advantages and
different employee-related bills. These expense will increase had been largely offset by
$3.0 million of decrease pandemic associated prices and the institution of regulatory
property for COVID-19 bills.

                                                                       Three Months Ended
                                                                          September 30,                   Enhance
                                                                     2021               2020             (lower)
(in hundreds besides per share)
Gross Margin
 Regulated Power phase                                        $   65,102$ 66,491$    (1,389)
 Unregulated Power phase                                          14,897            13,068                1,829
Different companies and eliminations                                       (28)              (51)                  23
Whole Gross Margin                                               $   79,971$ 79,508$       463

Working Revenue
Regulated Power phase                                         $   23,538$ 20,482$     3,056
Unregulated Power phase                                           (2,883)           (3,092)                 209
Different companies and eliminations                                      (542)               16                 (558)
Whole Working Revenue                                               20,113            17,406                2,707
Different earnings (expense), internet                                             339               (40)                 379
Curiosity prices                                                      4,975             4,584                  391
Revenue from Persevering with Operations Earlier than Revenue Taxes                15,477            12,782                2,695
Revenue Taxes on Persevering with Operations                                 2,993             3,502                 (509)
Revenue from Persevering with operations                                    12,484             9,280                3,204
Revenue (Loss) from Discontinued Operations, internet of tax                   (9)              (19)                  10
Web Revenue                                                       $   12,475$  9,261$     3,214
Fundamental Earnings Per Share of Widespread Inventory
Earnings from Persevering with Operations                              $     0.71$   0.56$      0.15
Earnings from Discontinued Operations                                     -                 -                    -
Fundamental Earnings Per Share of Widespread Inventory                         $     0.71$   0.56$      0.15
Diluted Earnings Per Share of Widespread Inventory
Earnings from Persevering with Operations                              $     0.71$   0.56$      0.15
Earnings from Discontinued Operations                                     -                 -                    -
Diluted Earnings Per Share of Widespread Inventory                       $     0.71$   0.56$      0.15



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Key variances in persevering with operations, between the third quarter of 2021 and
the third quarter of 2020, included:

                                                                    Pre-tax             Web             Earnings
(in hundreds, besides per share information)                               Revenue            Revenue            Per Share

Third Quarter of 2020 Reported Outcomes from Persevering with
Operations

                                                        $ 12,782

$ 9,280$ 0.56

Adjusting for Uncommon Gadgets:
Absence of timing of Hurricane Michael Settlement (first
and second quarter 2020 impacts recorded within the third
quarter of 2020)

                                                    (1,933)           (1,444)              (0.08)
Regulatory deferral of COVID-19 bills per PSCs orders             2,437             1,821                0.10

Favorable earnings tax affect related the CARES Act
acknowledged through the third quarter of 2021

                              -               922                0.05
                                                                       504             1,299                0.07

Elevated (Decreased) Gross Margins:
Elevated retail propane margins and charges                              994               743                0.04
Margin contributions from 2020 and 2021 acquisitions*                  855               638                0.04
Japanese Shore and Peninsula Pipeline service expansions*               795               594                0.03
Improved margin from electrical operations                               653               488                0.03
Pure gasoline development (excluding service expansions)                      620               463                0.03

Elevated buyer consumption – primarily as a consequence of a return
towards pre-pandemic circumstances

                                         536               400                0.02
Florida GRIP*                                                          475               355                0.02
                                                                     4,928             3,681                0.21

(Elevated) Decreased Working Bills (Excluding Price
of Gross sales):
Depreciation, amortization and property tax prices as a consequence of
new capital investments

                                             (1,715)           (1,281)              (0.07)
Payroll, advantages and different employee-related bills               (1,317)             (984)              (0.06)

Working bills for Elkton Fuel and Western Pure Fuel
acquisitions

                                                          (531)             (397)              (0.02)
Web discount in bills related to the COVID-19
pandemic                                                               608               454                0.03
                                                                    (2,955)           (2,208)              (0.12)

Different earnings tax results                                                 -               269                0.02
Web different adjustments                                                      218               163                   -

Change in shares excellent as a consequence of 2020 and 2021 fairness
choices

                                                                -                 -               (0.03)
                                                                       218               432               (0.01)

Third Quarter of 2021 Reported Outcomes from Persevering with
Operations

                                                        $ 15,477

$ 12,484$ 0.71

*See the Main Tasks and Initiatives desk.



Our internet earnings for the 9 months ended September 30, 2021 was $60.8 million,
or $3.45 per share, in comparison with $49.1 million, or $2.97 per share, for a similar
interval of 2020. Working earnings for the 9 months ended September 30, 2021
elevated by $16.8 million, or 21.6 p.c, over the identical interval in 2020. The
development in 2021 displays elevated consumption pushed primarily by colder climate
in comparison with the identical interval of 2020, enlargement initiatives and acquisitions
accomplished in 2020. Additional contributing to the improved efficiency within the first
9 months of 2021 was natural development, consumption returning to pre-pandemic
ranges, elevated propane margins, elevated margins from funding within the
Florida GRIP program, and the affect of the Hurricane Michael regulatory
continuing settlement. These margin will increase had been partially offset by greater
depreciation, amortization and property taxes associated to latest capital
investments and working bills related primarily with development initiatives
and a return towards pre-pandemic working ranges, together with payroll, advantages
and different employee-related bills and out of doors companies prices. The working
expense will increase had been partially offset by $2.3 million lower in pandemic
associated prices in comparison with 2020 and the institution of regulatory property for
COVID-19 bills as accredited by the PSCs.

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                                                                        9 Months Ended
                                                                          September 30,                   Enhance
                                                                     2021               2020             (lower)
(in hundreds besides per share)
Gross Margin
 Regulated Power phase                                        $ 209,718$ 191,745$    17,973
 Unregulated Power phase                                         71,625             61,883                9,742
Different companies and eliminations                                     (102)              (210)                 108
Whole Gross Margin                                               $ 281,241$ 253,418$    27,823

Working Revenue
Regulated Power phase                                         $  79,210$  66,376$    12,834
Unregulated Power phase                                          15,777             11,050                4,727
Different companies and eliminations                                     (699)                92                 (791)
Whole Working Revenue                                              94,288             77,518               16,770
Different earnings, internet                                                    2,180              2,997                 (817)
Curiosity prices                                                    15,134             15,452                 (318)
Revenue from Persevering with Operations Earlier than Revenue Taxes               81,334             65,063               16,271
Revenue Taxes on Persevering with Operations                               20,563             16,082                4,481
Revenue from Persevering with operations                                   60,771             48,981               11,790
Revenue (Loss) from Discontinued Operations                             (17)               165                 (182)
Web Revenue                                                       $  60,754$  49,146$    11,608
Fundamental Earnings Per Share of Widespread Inventory
Earnings from Persevering with Operations                              $    3.46$    2.97$      0.49
Earnings from Discontinued Operations                                    -               0.01                (0.01)
Fundamental Earnings Per Share of Widespread Inventory                         $    3.46$    2.98$      0.48
Diluted Earnings Per Share of Widespread Inventory
Earnings from Persevering with Operations                              $    3.45$    2.96$      0.49
Earnings from Discontinued Operations                                    -               0.01                (0.01)
Diluted Earnings Per Share of Widespread Inventory                       $    3.45$    2.97$      0.48





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Key variances in persevering with operations, between the 9 months ended
September 30, 2021 and the 9 months ended September 30, 2020, included:

                                                                    Pre-tax             Web             Earnings
(in hundreds, besides per share information)                               Revenue            Revenue            Per Share

9 Months Ended September 30, 2020 Reported Outcomes from
Persevering with Operations

                                             $ 65,063

$ 48,981$ 2.96

Adjusting for Uncommon Gadgets:
Regulatory deferral of COVID-19 bills per PSCs orders             3,312             2,437                0.14
Good points from gross sales of property                                          (1,563)           (1,150)              (0.07)

Web affect of CARES Act objects acknowledged through the second
quarter of 2020 and third quarter of 2021

                                -              (748)              (0.06)
                                                                     1,749               539                0.01
Elevated (Decreased) Gross Margins:
Elevated buyer consumption - primarily climate associated           6,485             4,772                0.27
Japanese Shore and Peninsula Pipeline service expansions*             6,037             4,442                0.25
Margin contributions from 2020 and 2021 acquisitions*                3,936             2,896                0.16
Elevated propane margins and charges                                   2,712             1,995                0.11

Elevated buyer consumption – primarily as a consequence of a return
towards pre-pandemic circumstances

                                       2,280             1,677                0.10
Pure gasoline development (excluding service expansions)                    2,237             1,646                0.09
Florida GRIP*                                                        1,408             1,036                0.06
Improved margin from electrical operations                               931               685                0.04

Aspire Power improved margin together with pure gasoline liquid
processing

                                                             897               660                0.04
Sandpiper infrastructure rider related to conversions             624               459                0.04
                                                                    27,547            20,268                1.16

(Elevated) Decreased Working Bills (Excluding Price
of Gross sales):
Depreciation, amortization and property tax prices as a consequence of
new capital investments

                                             (5,802)           (4,269)              (0.24)

Payroll, advantages and different employee-related bills due
to development

                                                           (4,679)           (3,443)              (0.20)

Working bills for Elkton Fuel and Western Pure Fuel
acquisitions

                                                        (2,499)           (1,839)              (0.10)

Web improve in working bills related to a return
towards pre-pandemic circumstances

                                        (969)             (713)              (0.04)
Insurance coverage expense (non-health)                                        (420)             (309)              (0.02)
                                                                   (14,369)          (10,573)              (0.60)

Different earnings tax results                                                 -               554                0.03
Web different adjustments                                                    1,344             1,002                0.07

Change in shares excellent as a consequence of 2020 and 2021 fairness
choices

                                                                -                 -               (0.18)
                                                                     1,344             1,556               (0.08)

9 Months Ended September 30, 2021 Reported Outcomes from
Persevering with Operations

                                             $ 81,334

$ 60,771$ 3.45

*See the Main Tasks and Initiatives desk.

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Abstract of Key Elements
Not too long ago Accomplished and Ongoing Main Tasks and Initiatives
We continually pursue and develop extra initiatives and initiatives to serve
current and new prospects, and to additional develop our companies and earnings,
with the intention to extend shareholder worth. The next desk consists of
the main initiatives/initiatives just lately accomplished and at the moment underway. Main
initiatives and initiatives which have generated constant year-over-year margin
contributions are faraway from the desk. Sooner or later, we are going to add new
initiatives and initiatives to this desk as soon as negotiations are considerably
accomplished and the related earnings might be estimated.
                                                                            

Gross Margin for the Interval

                                       Three Months Ended                    9 Months Ended                12 months Ended                  Estimate for
                                          September 30,                        September 30,                 December 31,                    Fiscal
in hundreds                         2021               2020               2021              2020                2020                2021              2022
Pipeline Expansions:
Western Palm Seaside County,
Florida Enlargement (1)            $    1,175$  1,020          $  

3,515 $ 2,988$ 4,167$ 4,811$ 5,227
Del-Mar Power Pathway (1) (2) 1,049

               924              2,854             1,565                 2,462             4,578             

6,708

Callahan Intrastate Pipeline (2)
(3)                                   1,893             1,378              5,673             1,452                 2,926             7,564             7,564
Guernsey Energy Station                   47                 -                141                 -                     -               404             1,486
Winter Haven Enlargement                    -                 -                  -                 -                     -                 -               658
Beachside Pipeline Enlargement              -                 -                  -                 -                     -                 -                 -
Whole Pipeline Expansions             4,164             3,322             12,183             6,005                 9,555            17,357            21,643

CNG Transportation                    1,598             1,592              5,383             5,047                 7,231             7,300             8,500

RNG Transportation                        -                 -                  -                 -                     -                86             1,000

Acquisitions:
Elkton Fuel                              590               357              2,648               357                 1,344             3,900             4,113
  Western Pure Fuel                   372                 -              1,312                 -                   389             2,066             2,251
Escambia Meter Station                  250                 -                333                 -                     -               583             1,000
Whole Acquisitions                    1,212               357              4,293               357                 1,733             6,549             7,364

Regulatory Initiatives:
Florida GRIP                          4,306             3,831             12,543            11,135                15,178            16,950            18,797
Hurricane Michael Regulatory
Continuing                            3,264             8,261              8,984             8,261                10,864            11,014            11,014
Capital Price Surcharge Applications         433               129                690               389                   523             1,186             1,985
Elkton STRIDE Plan                        -                 -                  -                 -                     -                45               299
Whole Regulatory Initiatives          8,003            12,221             22,217            19,785                26,565            29,195            32,095

Whole                            $   14,977$ 17,492$  44,076$ 31,194$     45,084$ 60,487$ 70,602

(1) Consists of gross margin generated from interim companies.
(2) Consists of gross margin from pure gasoline distribution companies.
(3) Prior quarter quantities have been revised to adapt to the present interval
presentation.

Detailed Dialogue of Main Tasks and Initiatives

Pipeline Expansions

West Palm Seaside County, Florida Enlargement
Peninsula Pipeline is establishing 4 transmission strains to carry extra
pure gasoline to our distribution system in West Palm Seaside, Florida. The primary
part of this challenge was positioned into service in December 2018 and generated
incremental gross margin of $0.2 million and $0.5 million for the three and 9
months ended September 30, 2021, respectively, in comparison with 2020. We count on to
full the rest of the challenge in phases by means of the fourth quarter of
2021, and estimate that the challenge will generate annual gross margin of $4.8
million in 2021 and $5.2 million yearly thereafter.


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Del-Mar Power Pathway
In December 2019, the FERC issued an order approving the development of the
Del-Mar Power Pathway challenge. Japanese Shore just lately accomplished this challenge.
The brand new services: (i) guarantee a further 14,300 Dekatherms per day ("Dts/d")
of agency service to 4 prospects, (ii) present extra pure gasoline
transmission pipeline infrastructure in jap Sussex County, Delaware, and
(iii) signify the primary extension of Japanese Shore's pipeline system into
Somerset County, Maryland. Building of the challenge started in January 2020.
Together with interim companies, this challenge generated extra gross margin of
$0.1 million and $1.3 million for the three and 9 months ended September 30,
2021, respectively. The estimated annual gross margin from this challenge,
together with preliminary pure gasoline distribution service in Somerset County, Maryland,
is roughly $4.6 million in 2021 and $6.7 million yearly thereafter.

Callahan Intrastate Pipeline
Peninsula Pipeline accomplished the development of a collectively owned intrastate
transmission pipeline with Seacoast Fuel Transmission in Nassau County, Florida
in June 2020. The 26-mile pipeline serves rising demand for vitality in each
Nassau and Duval Counties. For the three and 9 months ended September 30,
2021, the challenge generated $0.5 million and $4.2 million, respectively, in
extra gross margin, which incorporates margin from pure gasoline distribution
service. The estimated annual gross margin from this challenge, together with pure
gasoline distribution service, is roughly $7.6 million in 2021 and past.

Guernsey Energy StationGuernsey Energy Station and our affiliate, Aspire Power Categorical, entered right into a
precedent agency transportation capability settlement whereby Guernsey Energy Station
will assemble an influence era facility and Aspire Power Categorical will
present agency pure gasoline transportation service to this facility. Guernsey Energy
Station commenced building of the challenge in October 2019. Within the second
quarter of 2021, Aspire Power Categorical commenced building of the gasoline
transmission services to supply the agency transportation service to the facility
era facility. For the 9 months ended September 30, 2021, we acknowledged
roughly $0.1 million, barely decrease than initially estimated in consequence
of a building delay within the challenge. The challenge is anticipated to be in service
within the fourth quarter of 2021, and produce gross margin of roughly $0.4
million in 2021 and $1.5 million in 2022 and past.

Winter Haven Enlargement
In Could 2021, Peninsula Pipeline filed a petition with the Florida PSC for
approval of its Transportation Service Settlement with CFG for an incremental
6,800 Dts/d of agency service within the Winter Haven, Florida space. As a part of this
settlement, Peninsula Pipeline will assemble a brand new interconnect with FGT and a
new regulator station for CFG. CFG will use the extra agency service to
help new incremental load as a consequence of development within the space, together with offering
service, most instantly, to a brand new can manufacturing facility, in addition to
reliability and operational advantages to CFG's current distribution system in
the realm. In reference to Peninsula Pipeline's new regulator station, CFG is
additionally extending its distribution system to connect with the brand new station. We count on
this enlargement to generate extra gross margin of $0.7 million starting in
2022 and past.

Beachside Pipeline Enlargement
In June 2021, Peninsula Pipeline and Florida Metropolis Fuel entered right into a
Transportation Service Settlement for an incremental 10,176 Dts/d of agency service
in Indian River County, Florida, to help Florida Metropolis Fuel' development alongside the
Indian River's barrier island. As a part of this settlement, Peninsula Pipeline
will assemble roughly 11.3 miles of pipeline from its current pipeline
within the Sebastian, Florida, space east underneath the ICW and southward on the barrier
island. We count on this enlargement to generate extra annual gross margin of
$2.5 million in 2023 and past.

CNG Transportation

Marlin Fuel Companies gives CNG non permanent maintain companies, contracted pipeline
integrity companies, emergency companies for broken pipelines and specialised gasoline
companies for purchasers who've distinctive necessities. Marlin Fuel Companies
generated extra gross margin of $0.3 million on a year-to-date foundation. We
estimate that Marlin Fuel Companies will generate annual gross margin of
roughly $7.3 million in 2021 and $8.5 million in 2022, with the potential
for added development in future years. Marlin Fuel Companies continues to actively
develop the territories it serves, in addition to leverage its patented know-how to
serve different markets, together with pursuing liquefied pure gasoline transportation
alternatives and RNG transportation alternatives from various provide sources
to numerous pipeline interconnection factors, as additional outlined beneath.

RNG Transportation

Noble Street Landfill RNG Venture
In September 2020, Fortistar and Rumpke Waste & Recycling introduced graduation
of building of the Noble Street Landfill RNG Venture in Shiloh, Ohio. The
challenge consists of the development of a brand new state-of-the-art facility that may
make the most of

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superior, patented know-how to deal with landfill gasoline by eradicating carbon dioxide
and different elements to purify the gasoline and produce pipeline high quality RNG. In
October 2021, we introduced that Aspire Power had accomplished building of its
Noble Street Landfill RNG pipeline challenge, a 33.1-mile pipeline, which can
transport RNG generated from the landfill to Aspire Power's pipeline system,
displacing conventionally produced pure gasoline. Along side this
enlargement, Aspire Power additionally upgraded an current compressor station and
put in two new metering and regulation websites. As soon as flowing, the RNG quantity
will signify almost 10 p.c of Aspire Power's gasoline gathering volumes.

Bioenergy DevCo
In June 2020, our Delmarva pure gasoline operations and Bioenergy DevCo ("BDC"), a
developer of anaerobic digestion services that create renewable vitality and
wholesome soil merchandise from natural materials, entered into an settlement associated
to a challenge to extract RNG from poultry manufacturing waste. BDC and our
associates are collaborating on this challenge along with a number of different
challenge websites the place natural waste might be transformed right into a carbon-negative vitality
supply.

Marlin Fuel Companies will transport the RNG created from the natural waste from
the BDC facility to an Japanese Shore interconnection, the place the sustainable gas
can be launched into our transmission system and finally distributed to
our pure gasoline prospects.

CleanBay Venture
In July 2020, our Delmarva pure gasoline operations and CleanBay Renewables Inc.
("CleanBay") introduced a brand new partnership to carry RNG to our operations. As half
of this partnership, we are going to transport the RNG produced at CleanBay's deliberate
Westover, Maryland bio-refinery, to our pure gasoline infrastructure within the
Delmarva Peninsula area. Japanese Shore and Marlin Fuel Companies, will transport
the RNG from CleanBay to our Delmarva pure gasoline distribution system the place it
is finally delivered to the Delmarva pure gasoline distribution finish use
prospects.

At the moment, we count on to generate $0.1 million in 2021 in incremental
margin from these RNG transportation initiatives . Timing of incremental margin
from RNG transportation initiatives relies upon the development schedules of
every challenge. As we proceed to finalize contract phrases and full the
essential allowing related to every of those initiatives, extra
data can be supplied concerning incremental margin. Along with these
initiatives, the Firm is continuous to pursue different RNG initiatives that present
alternatives for the Firm throughout all the worth chain.

Acquisitions

Elkton Fuel
In July 2020, we closed on the acquisition of Elkton Fuel, which gives pure
gasoline distribution service to roughly 7,000 residential and business
prospects inside a franchised space of Cecil County, Maryland. The acquisition worth
was roughly $15.6 million, which included $0.6 million of working capital.
Elkton Fuel' territory is contiguous to our franchised service territory in Cecil
County, Maryland. For the three and 9 months ended September 30, 2021, we
generated $0.2 million and $2.3 million, respectively, in extra gross
margin from Elkton Fuel and estimate that this acquisition will generate gross
margin of roughly $3.9 million in 2021 and $4.1 million thereafter.

Western Pure Fuel
In October 2020, Sharp acquired sure propane working property of Western
Pure Fuel, which gives propane distribution service all through
Jacksonville, Florida and the encircling communities, for about $6.7
million, internet of money acquired. The acquisition was accounted for as a enterprise
mixture inside our Unregulated Power Phase within the fourth quarter of 2020.
We generated $0.4 million and $1.3 million in extra gross margin for the
three and 9 months ended September 30, 2021, respectively, from Western
Pure Fuel and we estimate that this acquisition will generate gross margin of
roughly $2.1 million in 2021 and develop to $2.3 million of gross margin in
2022, with extra alternatives for development sooner or later.

Escambia Meter Station
In June 2021, Peninsula Pipeline bought the Escambia Meter Station from
Florida Energy and Mild and entered right into a Transportation Service Settlement with
Gulf Energy Firm to supply as much as 530,000 Dts/d of agency service from an
interconnect with FGT to Florida Energy & Mild's Crist Lateral pipeline. The
Florida Energy & Mild Crist Lateral gives gasoline provide to their pure gasoline
fired energy plant owned by Florida Energy & Mild in Pensacola, Florida. We
generated $0.3 million in extra gross margin within the third quarter of 2021
and we estimate that this acquisition will generate gross margin of
roughly $0.6 million in 2021 and develop to $1.0 million of gross margin in
2022.




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Regulatory Initiatives

Florida GRIP
Florida GRIP is a pure gasoline pipe substitute program accredited by the Florida
PSC that permits automated restoration, by means of charges, of prices related to the
substitute of mains and companies. Because the program's inception in August 2012,
we have now invested $183.6 million of capital expenditures to exchange 337 miles of
qualifying distribution mains, together with $17.7 million of recent pipes through the
first 9 months of 2021. We count on to generate annual gross margin of
roughly $17.0 million in 2021, and $18.8 million in 2022.

Hurricane Michael
In August 2019, FPU filed a restricted continuing requesting restoration of
storm-related prices related to Hurricane Michael (capital and bills)
by means of a change in base charges. In March 2020, we filed an replace to our
unique submitting to account for precise prices incurred by means of December 2019,
revised the amortization interval of the storm-related prices, and included prices
associated to Hurricane Dorian.

In September 2019, FPU filed a petition with the Florida PSC, for approval of
its consolidated electrical depreciation charges. The petition was joined to the
Hurricane Michael docket. The accredited charges, which had been a part of the settlement
settlement in September 2020 that's described beneath, had been retroactively utilized
efficient January 1, 2020.

In September 2020, the Florida PSC accredited a settlement settlement between FPU
and the Workplace of the Public Counsel concerning closing value restoration and charges
related to Hurricane Michael. Beforehand, in late 2019, the Florida PSC
accredited an interim charge improve, topic to refund, efficient January 1, 2020,
related to the restoration effort following Hurricane Michael. We absolutely
reserved these interim charges, pending a closing decision and settlement of the
restricted continuing. The settlement settlement allowed us to: (a) refund the
over-collection of interim charges by means of the gas clause; (b) document regulatory
property for storm prices within the quantity of $45.8 million together with curiosity which
can be amortized over six years; (c) get better these storm prices by means of a
surcharge for a complete of $7.7 million yearly; and (d) gather an annual
improve in income of $3.3 million to get better capital prices related to new
plant investments and a regulatory asset for the price of elimination and
undepreciated plant. The brand new base charges and storm surcharge had been efficient on
November 1, 2020. The next desk summarizes the affect of the Hurricane
Michael regulatory continuing for the three and 9 months ended September 30,
2021:

                                                For the Three Months Ended             For the 9 Months Ended
                                                      September 30,                          September 30,
(in hundreds)                                   2021              2020 (1)             2021               2020
Gross Margin                                 $    3,264$   8,261$    8,984$  8,261
Depreciation                                       (305)              (883)               (913)             (883)
Amortization of regulatory property                 2,079              6,238               6,237             6,238
Working earnings                                  1,490              2,906               3,660             2,906
Amortization of legal responsibility related to
curiosity expense                                   (293)            (1,132)               (930)           (1,132)
Pre-tax earnings                                    1,783              4,038               4,590             4,038
Revenue tax expense                                  451              1,106               1,213             1,106
Web earnings                                   $    1,332$   2,932$    3,377$  2,932


(1) Quantities mirrored for the quarter ended September 30, 2020 embody the
cumulative impact of the Hurricane Michael settlement courting again to January 1,
2020.
Capital Price Surcharge Applications
In December 2019, the FERC accredited Japanese Shore's capital value surcharge,
which turned efficient January 1, 2020. The surcharge, an accredited merchandise within the
settlement of Japanese Shore's final common charge case, permits Japanese Shore to
get better capital prices related to mandated freeway or railroad relocation
initiatives that required the substitute of current Japanese Shore services.
Japanese Shore expects to supply gross margin of roughly $1.2 million in
2021 and $2.0 million in 2022 from relocation initiatives, which is finally
dependent upon the timing of filings and the completion of building.

Elkton Fuel STRIDE Plan

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In March 2021, Elkton Fuel filed a STRIDE plan with the Maryland PSC. The STRIDE
plan proposes to extend the velocity of Elkton Fuel' Aldyl-A pipeline substitute
program and to get better the prices of the plan within the type of a set cost rider
by means of a proposed 5-year surcharge. Beneath Elkton Fuel' proposed STRIDE plan, the
Aldyl-A pipelines would get replaced by 2023. In June 2021, we reached a
settlement with the Maryland PSC Employees and the Maryland Workplace of the Peoples
Counsel. The STRIDE plan is anticipated to enter service within the fourth quarter of
2021 and is anticipated to generate $0.3 million of extra gross margin in 2022
and $0.4 million yearly thereafter.

COVID-19 Regulatory Continuing
In October 2020, the Florida PSC accredited a joint petition of our pure gasoline
and electrical distribution utilities in Florida to ascertain a regulatory asset
to document incremental bills incurred as a consequence of COVID-19. The regulatory asset
will permit us to hunt restoration of those prices within the subsequent base charge proceedings.
In November 2020, the Workplace of Public Counsel filed a protest to the order
approving the institution of this regulatory asset therapy. The Firm's
Florida regulated enterprise items reached a settlement with Workplace of Public
Counsel in June 2021. The settlement allowed the enterprise items to ascertain a
regulatory asset of $2.1 million. This quantity consists of COVID-19 associated
incremental bills for unhealthy debt write-offs, personnel protecting gear,
cleansing and enterprise data companies for distant work. Our Florida
regulated enterprise items will amortize the quantity over two years starting
January 1, 2022 and get better the regulatory asset by means of the Bought Fuel
Adjustment and Swing Service mechanisms for the pure gasoline enterprise items and
by means of the Gasoline Bought Energy Price Restoration clause for the electrical division.
This leads to annual extra gross margin of $1.0 million that can be
offset by a corresponding amortization of regulatory asset expense for each 2022
and 2023.

Different main components influencing gross margin
Climate Impression
Climate was not a major issue within the third quarter. For the nine-month
interval, climate circumstances accounted for $6.5 million of elevated gross margin
in comparison with the identical interval in 2020, primarily as a consequence of a 7.2 p.c improve in
HDDs and a return to pre-pandemic circumstances that resulted in elevated buyer
consumption. Assuming regular temperatures, as detailed beneath, gross margin would
have been greater by $1.3 million. The next desk summarizes HDD and CDD
variances from the 10-year common HDD/CDD ("Regular") for the three and 9
months ended September 30, 2021 and 2020.
                                       Three Months Ended                                              9 Months Ended
                                         September 30,                                                   September 30,
                                  2021                   2020               Variance              2021                   2020               Variance
Delmarva Peninsula
Precise HDD                            9                     43                 (34)               2,595                  2,416                 179
10-12 months Common HDD
("Regular")                           47                     48                  (1)               2,736                  2,797                 (61)
Variance from Regular                (38)                    (5)                                    (141)                  (381)
Florida
Precise HDD                            1                      2                  (1)                 573                    412                 161
10-12 months Common HDD
("Regular")                            1                      -                   1                  550                    613                 (63)
Variance from Regular                  -                      2                                       23                   (201)
Ohio
Precise HDD                           41                     86                 (45)               3,489                  3,383                 106
10-12 months Common HDD
("Regular")                           78                     79                  (1)               3,660                  3,691                 (31)
Variance from Regular                (37)                     7                                     (171)                  (308)
Florida
Precise CDD                        1,330                  1,365                 (35)               2,340                  2,637                (297)
10-12 months Common CDD
("Regular")                        1,402                  1,416                 (14)               2,563                  2,559                   4
Variance from Regular                (72)                   (51)                                    (223)                    78



Pure Fuel Distribution Margin Development
Buyer development for our pure gasoline distribution operations, because of the
addition of recent prospects and the conversion of consumers from different gas
sources to pure gasoline service, generated $0.6 million and $2.2 million of
extra margin for the three and 9 months ended September 30, 2021,
respectively. The common variety of residential prospects served on the

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Delmarva Peninsula elevated by 4.0 p.c and 4.1 p.c for the three and
9 months ended September 30, 2021, whereas Florida prospects elevated by and
4.7 p.c and 5.0 p.c, for the three and 9 months ended September 30,
2021, respectively. A bigger share of the margin development was generated from
residential development given the enlargement of pure gasoline into new housing
communities and conversions to pure gasoline as our distribution infrastructure
continues to construct out. We anticipate continued buyer development, as new
communities proceed to construct out as a consequence of inhabitants development, extra
infrastructure is added to help the expansion. The main points for the three and
9 months ended September 30, 2021 are supplied within the following desk:

                                      Three Months Ended                    9 Months Ended
                                      September 30, 2021                    September 30, 2021
 (in hundreds)                Delmarva Peninsula      Florida       Delmarva Peninsula       Florida
 Buyer Development:
 Residential                  $      226$    208      $             1,049      $   788
 Business and industrial            84                   102                      183          217
 Whole Buyer Development        $      310$    310      $             1,232      $ 1,005




Regulated Power Phase

For the quarter ended September 30, 2021, in comparison with the quarter ended
September 30, 2020:
                                     Three Months Ended
                                       September 30,             Enhance
                                     2021           2020        (lower)
(in hundreds)
Income                          $   80,396$ 82,762$    (2,366)
Price of gross sales                        15,294        16,271             (977)
Gross margin                         65,102        66,491           (1,389)
Operations & upkeep             24,477        26,364           (1,887)
Depreciation & amortization          12,296        15,314           (3,018)
Different taxes                           4,791         4,331              460
Whole working bills             41,564        46,009           (4,445)
Working earnings                 $   23,538$ 20,482$     3,056



Working earnings for the Regulated Power phase for the third quarter of 2021
was $23.5 million, a rise of $3.1 million, or 14.9 p.c, over the identical
interval in 2020. Throughout the third quarter of 2020, we settled the Hurricane
Michael restricted continuing, which resulted in $1.9 million in working earnings
being acknowledged that associated to the primary and second quarters of 2020.
Excluding this timing distinction, working earnings elevated $5.0 million
in comparison with the third quarter of 2020. Greater working earnings displays
continued pipeline expansions by Japanese Shore and Peninsula Pipeline, elevated
consumption from a return towards pre-pandemic consumption ranges, natural development
in our pure gasoline distribution companies, and working outcomes from the
Elkton Fuel and Escambia Meter Station acquisitions accomplished in 2020 and 2021,
in addition to decrease bills. Working bills decreased by $3.0 million in contrast
to the prior yr quarter as a consequence of a decrease stage of total pandemic associated prices
in comparison with 2020 and the institution of regulatory property for COVID-19
bills as licensed by the PSCs.

Gadgets contributing to the quarter-over-quarter lower in gross margin are
listed within the following desk:

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(in hundreds)
Margin affect from the Hurricane Michael regulatory continuing settlement
(consists of the absence of first and second quarter 2020 affect recorded within the
third quarter of 2020)                                                          $       (5,507)
Japanese Shore and Peninsula Pipeline service expansions                                    795
Improved margin from electrical operations                                                   653
Pure gasoline development (excluding service expansions)                                          620
Margin contribution from 2020 and 2021 acquisitions                                        483
Florida GRIP                                                                               475

Elevated buyer consumption – primarily as a consequence of a return towards pre-pandemic
circumstances

                                                                                 314
Japanese Shore capital surcharge                                                            304
Different variances                                                                            474
Quarter-over-quarter lower in gross margin                               

$ (1,389)

The next narrative dialogue gives additional element and evaluation of the
vital objects within the foregoing desk.

Margin Impression from Hurricane Michael Regulatory Continuing Settlement
We noticed a lower in gross margin of $5.5 million because of the settlement
of the Hurricane Michael regulatory continuing which included the absence of
interim charges from the primary and second quarter of 2020 that had been first
mirrored within the third quarter of 2020. Consult with Be aware 5, Charges and Different
Regulatory Actions, within the condensed consolidated monetary statements for
extra data.

Japanese Shore and Peninsula Pipeline Service Expansions
We generated extra gross margin of $0.7 million from Peninsula Pipeline's
Western Palm Seaside County and Callahan initiatives and $0.1 million from Japanese
Shore's Del-Mar Power Pathway challenge.

Improved Margin from Electrical Operations
Our electrical operations generated extra gross margin of $0.7 million as a consequence of
elevated consumption and development.

Pure Fuel Distribution Buyer Development
We generated extra gross margin of $0.6 million from pure gasoline buyer
development. Gross margin elevated by $0.3 million in Florida and $0.3 million on
the Delmarva Peninsula for the three months ended September 30, 2021, as
in comparison with the identical interval in 2020, due primarily to residential buyer
development of 4.0 p.c and 4.7 p.c on the Delmarva Peninsula and in Florida,
respectively.

Acquisitions

Gross margin elevated by $0.5 million as a consequence of margin contributed from Elkton Fuel
and the Escambia Meter Station which had been accomplished in July 2020 and June 2021,
respectively.

Florida GRIP
Continued funding within the Florida GRIP generated extra gross margin of
$0.5 million in third quarter of 2021 in comparison with the identical interval in 2020.

Elevated buyer consumption - primarily as a consequence of return towards pre-pandemic
consumption
The absence of unfavorable COVID-19 impacts, resulted in a return in the direction of
pre-pandemic consumption, positively impacting gross margin by $0.3 million for
the three months ended September 30, 2021 in comparison with the identical interval in 2020.

Japanese Shore Capital Surcharge
Japanese Shore's capital surcharge resulted in $0.3 million of extra margin
for the three months ended September 30, 2021. Consult with Be aware 5, Charges and Different
Regulatory Actions, within the condensed consolidated monetary statements for
extra data.

Working Bills
Gadgets contributing to the quarter-over-quarter lower in working bills
are listed within the following desk:

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(in hundreds)
Absence of Hurricane Michael Depreciation and Amortization cumulative
adjustment (first and second quarter 2020)

                                    $        (3,574)
Regulatory deferral of COVID-19 bills per PSCs orders                               (2,437)
Web discount in bills related to the COVID-19 pandemic                          (546)

Depreciation, asset elimination and property tax prices as a consequence of new capital
investments

                                                                             1,181

Payroll, advantages and different employee-related bills as a consequence of development

               612
Working bills from the Elkton Fuel acquisition                                        204
Different variances                                                                           115
Quarter-over-quarter lower in working bills                         

$ (4,445)



For the 9 Months Ended September 30, 2021, in comparison with the 9 months ended
September 30, 2020:

                                     9 Months Ended
                                       September 30,             Enhance
                                    2021           2020         (lower)
(in hundreds)
Income                          $ 282,503$ 259,235$    23,268
Price of gross sales                       72,785         67,490            5,295
Gross margin                       209,718        191,745           17,973
Operations & upkeep            79,363         78,062            1,301
Depreciation & amortization         36,156         33,979            2,177
Different taxes                         14,989         13,328            1,661
Whole working bills           130,508        125,369            5,139
Working earnings                 $  79,210$  66,376$    12,834



Working earnings for the Regulated Power phase for the primary 9 months of
2021 was $79.2 million, a rise of $12.8 million, or 19.3 p.c, over the
identical interval in 2020. Greater working earnings displays continued pipeline
expansions by Japanese Shore and Peninsula Pipeline, working outcomes from the
Elkton Fuel and Escambia Meter Station acquisitions accomplished in 2020 and 2021,
and elevated consumption from a return towards pre-pandemic consumption ranges.
Additional contributing to the working earnings development was margin from natural
development in our pure gasoline distribution companies and elevated consumption
pushed primarily by colder climate in comparison with the identical interval of 2020. These
margin will increase had been offset by greater depreciation, amortization and property
taxes, together with amortization of the regulatory asset related to the
Hurricane Michael regulatory continuing settlement, bills related to
Elkton Fuel, and better different working bills. The working expense will increase
had been partially offset by $2.5 million related to a discount in pandemic
associated prices in comparison with 2020 and the institution of regulatory property for
COVID-19 bills as accredited by the PSCs.

Gadgets contributing to the period-over-period improve in gross margin are listed
within the following desk:

(in hundreds)
Japanese Shore and Peninsula Pipeline service expansions                      $        6,037
Margin contribution from 2020 and 2021 acquisitions                         

2,624

Pure gasoline development (excluding service expansions)                           

2,237

Elevated buyer consumption – primarily as a consequence of a return towards
pre-pandemic circumstances

2,112

Elevated buyer consumption - primarily climate associated                  

1,510

Florida GRIP                                                                

1,408

Improved margin from electrical operations                                                931

Sandpiper Power infrastructure rider related to conversions

             624
Different variances                                                                         490
Interval-over-period improve in gross margin                                  $       17,973



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The next narrative dialogue gives additional element and evaluation of the
vital objects within the foregoing desk.

Japanese Shore and Peninsula Pipeline Service Expansions
We generated extra gross margin of $4.7 million from Peninsula Pipeline's
Western Palm Seaside County and Callahan initiatives and $1.3 million from Japanese
Shore's Del-Mar Power Pathway challenge.

Acquisitions

Gross margin elevated by $2.6 million as a consequence of margin contributed from Elkton Fuel
and the Escambia Meter Station which had been accomplished in July 2020 and June 2021,
respectively.

Pure Fuel Distribution Buyer Development
We generated extra gross margin of $2.2 million from pure gasoline buyer
development. Gross margin elevated by $1.0 million in Florida and $1.2 million on
the Delmarva Peninsula for the 9 months ended September 30, 2021, as in contrast
to the identical interval in 2020, due primarily to residential buyer development of 4.1
p.c and 5.0 p.c on the Delmarva Peninsula and in Florida, respectively.

Elevated buyer consumption - primarily as a consequence of return towards pre-pandemic
circumstances
The absence of unfavorable COVID-19 impacts through the first 9 months of
2021, resulted in a return to pre-pandemic consumption, positively impacting
gross margin by $2.1 million in comparison with the identical interval in 2020.

Elevated Buyer Consumption - primarily climate associated
Gross margin elevated by $1.5 million for the for the 9 months ended
September 30, 2021, in comparison with the identical interval in 2020, primarily as a consequence of a 7
p.c improve in HDDs on the Delmarva Peninsula and a 39 p.c improve in
HDDs in Florida that resulted in elevated buyer consumption of vitality.

Florida GRIP
Continued funding within the Florida GRIP generated extra gross margin of
$1.4 million for the 9 months ended September 30, 2021 in comparison with the identical
interval in 2020.

Improved Margin from Electrical Operations
Our electrical operations generated extra gross margin of $0.9 million as a consequence of
elevated consumption and development.

Sandpiper Power Infrastructure Rider Related to Conversions
We generated extra margin of $0.6 million related to the conversion of
Sandpiper Power”s propane prospects to pure gasoline prospects for the 9
months ended September 30, 2021 in comparison with the identical interval in 2020.

Working Bills
Gadgets contributing to the period-over-period improve in working bills are
listed within the following desk:
(in hundreds)
Depreciation, asset elimination and property tax prices as a consequence of new capital
investments                                                                  $         4,563
Payroll, advantages and different employee-related bills as a consequence of development                    2,601
Working bills from the Elkton Fuel acquisition                                     1,238

Web improve in working bills related to a return towards
pre-pandemic circumstances

                                                                  853
Regulatory deferral of COVID-19 bills per PSCs orders                    

(3,312)

Different variances                                                                         (804)
Interval-over-period improve in working bills                            $         5,139



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Unregulated Power Phase

For the quarter ended September 30, 2021, in comparison with the quarter ended
September 30, 2020:

                                     Three Months Ended
                                       September 30,             Enhance
                                     2021           2020        (lower)
(in hundreds)
Income                          $   32,110$ 22,714$     9,396
Price of gross sales                        17,213         9,646            7,567
Gross margin                         14,897        13,068            1,829
Operations & upkeep             13,382        12,412              970
Depreciation & amortization           3,491         2,968              523
Different taxes                             907           780              127
Whole working bills             17,780        16,160            1,620
Working loss                   $   (2,883)$ (3,092)$       209



Working outcomes for the Unregulated Power phase for the third quarter of
2021 elevated by $0.2 million in comparison with the identical interval in 2020. The
working outcomes for this phase usually exhibit seasonality with the primary
and fourth quarters producing greater outcomes as a consequence of colder temperatures. The
outcomes for the third quarter should not indicative of the outcomes for all the
yr.

Greater working outcomes through the third quarter had been pushed by elevated
propane margins, contributions from the acquisition of Western Pure Fuel and
margin enchancment from Aspire Power in addition to elevated consumption within the
propane companies as volumes proceed returning towards pre-pandemic ranges.
Elevated working outcomes had been partially offset by greater working bills,
depreciation, amortization and property taxes associated to latest capital
investments, and bills related to Western Pure Fuel.
Gross Margin
Gadgets contributing to the quarter-over-quarter improve in gross margin are
listed within the following desk:
(in hundreds)
Propane Operations
Elevated retail propane margins and repair charge                                     $        751
Western Pure Fuel acquisition (accomplished in October 2020)                                   372
Elevated wholesale propane margins                                                           243

Elevated buyer consumption – primarily as a consequence of a return towards pre-pandemic
circumstances

                                                                                    222
Elevated buyer consumption - primarily climate associated                                    122
Aspire Power
Elevated margin together with enhancements from pure gasoline liquid processing                    320
Different variances                                                                              (201)
Quarter-over-quarter improve in gross margin                               

$ 1,829


The next narrative dialogue gives additional element and evaluation of the
vital objects within the foregoing desk.
Propane Operations
•Elevated Retail Propane Margins and Service Charge - Gross margin elevated by
$0.8 million for the three months ended September 30, 2021, as a consequence of decrease propane
stock prices and favorable market circumstances in addition to resuming evaluation
of our customary service charges which had been suspended because of the
COVID-19 pandemic throughout the identical interval within the prior yr. These market
circumstances, which embody market pricing and competitors with different propane
suppliers, in addition to the supply and worth of other vitality sources,
might fluctuate based mostly on adjustments in demand, provide and different vitality commodity
costs.
•Western Pure Fuel - Gross margin elevated by $0.4 million as a result of margin
generated from Western Pure Fuel,

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which was acquired by Sharp in October 2020.
•Elevated Wholesale Propane Margins - Gross margin elevated by $0.2 million
through the third quarter of 2021 over the identical interval in 2020, as a consequence of decrease
propane stock prices and favorable market circumstances. These circumstances have a tendency
to fluctuate based mostly on adjustments in demand, provide and different vitality commodity
costs.
•Elevated Buyer Consumption - primarily as a consequence of a return towards pre-pandemic
circumstances - Gross margin elevated as a result of absence of unfavorable COVID-19
impacts, leading to a return towards pre-pandemic consumption, positively
impacting gross margin by $0.2 million for the three months ended September 30,
2021 in comparison with the identical interval in 2020.
•Elevated Buyer Consumption - primarily climate associated - Gross margin
improve by $0.1 million as a consequence of development and favorable pricing through the third
quarter of 2021.
Aspire Power
•Gross margin elevated by $0.3 million through the third quarter of 2021 over
the identical interval in 2020, together with enhancements from pure gasoline liquid
processing.

Different Working Bills
Gadgets contributing to the quarter-over-quarter improve in working bills
are listed within the following desk:
(in hundreds)
Depreciation, amortization and property tax prices as a consequence of new capital
investments                                                                     $         595
Payroll, advantages and different employee-related bills as a consequence of development                       427
Working bills from the Western Pure Fuel acquisition                               273
Web improve in working bills related to a return towards pre-pandemic
circumstances                                                                                123
Different variances                                                                           202
Quarter-over-quarter improve in working bills                         

$ 1,620


For the 9 months ended September 30, 2021, in comparison with the 9 months ended
September 30, 2020:

                                     9 Months Ended
                                       September 30,             Enhance
                                    2021           2020         (lower)
(in hundreds)
Income                          $ 141,642$ 104,466$    37,176
Price of gross sales                       70,017         42,583           27,434
Gross margin                        71,625         61,883            9,742
Operations & upkeep            42,560         39,408            3,152
Depreciation & amortization         10,271          8,774            1,497
Different taxes                          3,017          2,651              366
Whole working bills            55,848         50,833            5,015
Working earnings                 $  15,777$  11,050$     4,727



Working earnings for the Unregulated Power phase for the 9 months ended
September 30, 2021 was $15.8 million, a rise of $4.7 million or 42.8
p.c, over the identical interval in 2020. Greater working earnings resulted from
elevated consumption pushed primarily by colder climate in comparison with the identical
interval in 2020, greater retail propane margins per gallon, and contributions from
the acquisition of the Western Pure Fuel propane property. These margin
will increase had been partially offset by greater depreciation, amortization and
property taxes associated to latest capital investments, elevated payroll and
advantages prices, new bills related to Western Pure Fuel and better
different working bills.

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Gross Margin
Gadgets contributing to the period-over-period improve in gross margin are listed
within the following desk:
(in hundreds)
Propane Operations
Elevated buyer consumption - primarily climate associated        $ 3,823
Elevated retail propane margins and repair charges                   2,403

Western Pure Fuel acquisition (accomplished in October 2020) 1,312
Elevated wholesale propane margins per gallon

                        309
Marlin Fuel Companies
Elevated demand for CNG companies                                     337

Aspire Power
Elevated buyer consumption – primarily climate associated 1,152
Improved margin together with pure gasoline liquid processing

               897
Different variances                                                      (491)
Interval-over-period improve in gross margin                       $ 9,742


The next narrative dialogue gives additional element and evaluation of the
vital objects within the foregoing desk.
Propane Operations
•Elevated Buyer Consumption Primarily Climate Associated - Gross margin
elevated by $3.8 million, as climate on the Delmarva Peninsula was 7 p.c
colder for the 9 months ended September 30, 2021 in comparison with the identical interval
in 2020.
•Elevated Retail Propane Margins and Service Charges - Gross margin elevated by
$2.4 million, as a consequence of decrease propane stock prices and favorable market
circumstances in addition to resuming the evaluation of our customary service charges
which had been suspended because of the COVID-19 pandemic throughout the identical
interval within the prior yr. These market circumstances, which embody competitors
with different propane suppliers, in addition to the supply and worth of
different vitality sources, might fluctuate based mostly on adjustments in demand, provide and
different vitality commodity costs.
•Western Pure Fuel - Gross margin elevated by $1.3 million as a result of margin
generated from Western Pure Fuel, which was acquired by Sharp in October 2020.
•Elevated Wholesale Propane Margins - Gross margin elevated by $0.3 million
through the third quarter of 2021 over the identical interval in 2020, as a consequence of decrease
propane stock prices and favorable market circumstances. These circumstances have a tendency
to fluctuate based mostly on adjustments in demand, provide and different vitality commodity
costs.
Marlin Fuel Companies
•Gross margin elevated by $0.3 million for the 9 months ended September 30,
2021, as in comparison with the identical interval within the prior yr as a consequence of greater demand for
CNG maintain companies.
Aspire Power
•Elevated Buyer Consumption Primarily Climate Associated - Gross margin
elevated by $1.2 million as a consequence of greater consumption of gasoline as climate in Ohio
was roughly 3 p.c colder for the 9 months ended September 30, 2021
over the identical interval in 2020.
•Improved Margin together with pure gasoline liquid processing - Gross margin
elevated by $0.9 million, together with enhancements from pure gasoline liquid
processing, for the 9 months ended September 30, 2021, as in comparison with the
identical interval in 2020.

Different Working Bills
Gadgets contributing to the period-over-period improve in working bills are
listed within the following desk:

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(in hundreds)
Depreciation, amortization and property tax prices as a consequence of new capital
investments

                                                                    $       1,650
Payroll, advantages and different employee-related bills as a consequence of development                    1,170
Working bills from the Western Pure Fuel acquisition                              880

Web improve in working bills related to a return towards
pre-pandemic circumstances

                                                                  406
Insurance coverage expense (non-health)                                                           404
Different variances                                                                          505
Interval-over-period improve in working bills                              $       5,015



OTHER EXPENSE, NET
For the quarter ended September 30, 2021 in comparison with the quarter ended
September 30, 2020
Different expense, internet, which incorporates non-operating funding earnings (expense),
curiosity earnings, late charges charged to prospects, good points or losses from the sale
of property and pension and different advantages expense, elevated by $0.4 million in
the third quarter of 2021, in comparison with the identical interval in 2020.

For the 9 months ended September 30, 2021 in comparison with the 9 months ended
September 30, 2020
Different expense, internet, which incorporates non-operating funding earnings (expense),
curiosity earnings, late charges charged to prospects, good points or losses from the sale
of property and pension and different advantages expense, decreased by $0.8 million in
the primary 9 months of 2021, in comparison with the identical interval in 2020. The lower
was primarily as a consequence of good points on two property gross sales which had been accomplished within the
first quarter of 2020, partially offset by good points from the gross sales of CGS from
Sharp to our Delaware Division.

INTEREST CHARGES
For the quarter ended September 30, 2021 in comparison with the quarter ended
September 30, 2020
Curiosity prices for the three months ended September 30, 2021 elevated by $0.4
million, in comparison with the identical interval in 2020, attributable primarily to a $0.8
million improve of an amortization credit score/discount in curiosity expense
related to a regulatory legal responsibility that was established in reference to
the Hurricane Michael regulatory continuing settlement. Partially offsetting the
elevated prices was a lower of $0.3 million in decrease curiosity expense from
decrease ranges of excellent borrowings underneath our revolving credit score services and
the restructuring of our revolving credit score services, and a lower of $0.2
million in curiosity expense because of a number of long-term debt placements in
2020.

For the 9 months ended September 30, 2021 in comparison with the 9 months ended
September 30, 2020
Curiosity prices for the 9 months ended September 30, 2021 decreased by $0.3
million, in comparison with the identical interval in 2020, attributable primarily to a
lower of $1.5 million in decrease curiosity expense from decrease ranges of
excellent borrowings underneath our revolving credit score services and the
restructuring of our revolving credit score services. Partially offsetting the
curiosity financial savings was a rise of $0.6 million in curiosity expense in consequence
of a number of long-term debt placements in 2020, $0.4 million as a consequence of decrease
capitalized curiosity related to development initiatives, and $0.2 million of an
amortization credit score/discount in curiosity expense related to a regulatory
legal responsibility that was established in reference to the Hurricane Michael
regulatory continuing settlement.

INCOME TAXES
For the quarter ended September 30, 2021 in comparison with the quarter ended
September 30, 2020
Revenue tax expense was $3.0 million for the quarter ended September 30, 2021,
in comparison with $3.5 million for the quarter ended September 30, 2020. Our efficient
earnings tax charge was 19.3 p.c and 27.4 p.c, for the three months ended
September 30, 2021 and 2020, respectively. Throughout the third quarter 2021, we
acknowledged a $0.9 million discount in tax expense related sure provisions
of the CARES Act which allowed us to carryback internet working losses into prior
yr intervals the place the federal earnings tax charge was greater.. Excluding this
affect of the CARES Act, our efficient tax charge for the three months ended
September 30, 2021 was 25.3 p.c.

For the 9 months ended September 30, 2021 in comparison with the 9 months ended
September 30, 2020
Revenue tax expense was $20.6 million for the 9 months ended September 30,
2021, in comparison with $16.1 million for the 9 months ended September 30, 2020.
Our efficient earnings tax charge was 25.3 p.c and 24.7 p.c, for the 9
months ended September 30, 2021 and 2020, respectively.

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FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
Our capital necessities replicate the capital-intensive and seasonal nature of
our enterprise and are principally attributable to funding in new plant and
gear, retirement of excellent debt and seasonal variability in working
capital. We depend on money generated from operations, short-term borrowings, and
different sources to satisfy regular working capital necessities and to quickly
finance capital expenditures. We may additionally subject long-term debt and fairness to
fund capital expenditures and to take care of our capital construction inside our
goal capital construction vary. We keep an efficient shelf registration
assertion with the SEC for the issuance of shares of frequent inventory in varied
sorts of fairness choices, together with shares of frequent inventory underneath our ATM fairness
program, in addition to an efficient registration assertion with respect to the
DRIP. Relying on our capital wants and topic to market circumstances, in
addition to different potential debt and fairness choices, we might think about issuing
extra shares underneath the direct share buy part of the DRIP and/or
underneath the ATM fairness program. Starting within the third quarter of 2020, we issued
shares of frequent inventory underneath each the DRIP and the ATM fairness program.
Our vitality companies are weather-sensitive and seasonal. We usually generate a
massive portion of our annual internet earnings and subsequent will increase in our accounts
receivable within the first and fourth quarters of every yr as a consequence of vital
volumes of pure gasoline, electrical energy, and propane delivered by our distribution
operations, and our pure gasoline transmission operations to prospects through the
peak-heating season. As well as, our pure gasoline and propane inventories, which
often peak within the fall months, are largely drawn down within the heating season
and supply a supply of money because the stock is used to fulfill winter gross sales
demand.
Capital expenditures for investments in new or acquired plant and gear are
our largest capital necessities. Our capital expenditures had been $151.4 million
for the 9 months ended September 30, 2021. Within the desk beneath, we have now
supplied an up to date vary of our forecasted capital expenditures for 2021:
                                                                  2021
          ({dollars} in hundreds)                           Low           Excessive
          Regulated Power:
          Pure gasoline distribution                     $  76,000      $ 

79,000

          Pure gasoline transmission                        58,000         

63,000

          Electrical distribution                            8,000          

8,000

          Whole Regulated Power                         142,000       

150,000

Unregulated Power:

          Propane distribution                            11,000         

12,000

          Power transmission                             16,000         

20,000

          Different unregulated vitality                        13,000         

15,000

          Whole Unregulated Power                        40,000         

47,000

Different:

          Company and different companies                   3,000          

3,000

          Whole Different                                      3,000          

3,000

Whole 2021 Forecasted Capital Expenditures $ 185,000$ 200,000



The 2021 forecast, which excludes any potential acquisitions, consists of capital
expenditures related to the next initiatives: Delmarva Pure Fuel
distribution's Somerset County enlargement, Japanese Shore's Del-Mar Power
Pathway, Florida'sWestern Palm Seaside County enlargement and different potential
pipeline initiatives, continued expenditures underneath the Florida GRIP, additional
expansions of our pure gasoline distribution and transmission methods, continued
pure gasoline and electrical system infrastructure enchancment actions,
services to help Marlin Fuel Companies' CNG transport development and enlargement
into RNG and LNG transport, data know-how methods, and different strategic
initiatives and investments, together with renewable vitality investments.

The capital expenditure projection is topic to steady evaluate and
modification. Precise capital necessities might range from the above estimates due
to numerous components, together with altering financial circumstances, capital delays
as a consequence of COVID-19 which can be higher than at the moment anticipated, buyer development in
current areas, regulation, new development or acquisition alternatives and
availability of capital. Traditionally, precise capital expenditures have
usually lagged behind the budgeted quantities.
The timing of capital expenditures can range based mostly on delays in regulatory
approvals, securing environmental approvals and different permits. The regulatory
utility and approval course of has lengthened previously few years, and we
count on this pattern to proceed.


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Capital Construction
We're dedicated to sustaining a sound capital construction and robust credit score
scores. This dedication, together with enough and well timed charge reduction for our
regulated vitality operations, is meant to make sure our skill to draw
capital from exterior sources at an affordable value, which can profit our
prospects, collectors, staff and stockholders.
The next desk presents our capitalization, excluding and together with
short-term borrowings, as of September 30, 2021 and December 31, 2020:
                                                                     September 30, 2021                         December 31, 2020
(in hundreds)
Lengthy-term debt, internet of present maturities                    $         505,459             40  %       $         508,499             42  %
Stockholders' fairness                                                   750,962             60  %                 697,085             58  %
Whole capitalization, excluding short-term debt              $       1,256,421            100  %       $       1,205,584            100  %

                                                                     September 30, 2021                         December 31, 2020
(in hundreds)
Quick-term debt                                              $         192,026             13  %       $         175,644             13  %
Lengthy-term debt, together with present maturities                           521,665             36  %                 522,099             37  %
Stockholders' fairness                                                   750,962             51  %                 697,085             50  %
Whole capitalization, together with short-term debt              $       1,464,653            100  %       $       1,394,828            100  %


Our goal ratio of fairness to whole capitalization, together with short-term
borrowings, is between 50 and 60 p.c. Our fairness to whole capitalization
ratio, together with short-term borrowings, was 51 p.c as of September 30, 2021.
We search to align everlasting financing with the in-service dates of our capital
initiatives. We might make the most of extra non permanent short-term debt when the financing value
is enticing as a bridge to the everlasting long-term financing or if the fairness
markets are risky.
Within the third and fourth quarters of 2020, we issued 1.0 million shares of frequent
inventory by means of our DRIP and the ATM packages and obtained internet proceeds of
roughly $83.0 million, which was added to the overall funds after which used
to pay down short-term borrowing. Within the first 9 months of 2021, we issued
lower than 0.1 million shares at a mean worth per share of $116.63 and
obtained internet proceeds of $6.6 million underneath the DRIP. See Be aware 9, Stockholders'
Fairness, within the condensed consolidated monetary statements for added
data on commissions and charges paid in reference to these issuances.
We used the web proceeds from the ATM fairness program and the DRIP, after
deducting the commissions or different charges and associated providing bills payable by
us, for common company functions, together with, however not restricted to, financing of
capital expenditures, compensation of short-term debt, financing acquisitions,
investing in subsidiaries, and common working capital functions.
Shelf Agreements
We now have entered into Shelf Agreements with Prudential, MetLife and NYL, whom are
underneath no obligation to buy any unsecured debt. The next desk
summarizes our Shelf Agreements at September 30, 2021:
                                                   Whole                                                                Remaining
                                                 Borrowing          Much less: Quantity of          Much less: Unfunded             Borrowing
(in hundreds)                                    Capability            Debt Issued             Commitments               Capability
Shelf Settlement
Prudential Shelf Settlement (1)                 $   370,000$   (220,000)         $               -          $    150,000
MetLife Shelf Settlement (1)                        150,000                     -                          -               150,000
NYL Shelf Settlement (1)                            150,000              (140,000)                         -                10,000
Whole Shelf Agreements as of September
30, 2021                                       $   670,000$   (360,000)         $               -          $    310,000

(1) The Prudential, MetLife and NYL Shelf Agreements expire in April 2023, Could
2023
and November 2021, respectively.

The Senior Notes, Shelf Agreements or Shelf Notes set forth sure enterprise
covenants to which we're topic when any word is excellent, together with
covenants that restrict or limit our skill, and the power of our
subsidiaries, to incur indebtedness, or place or allow liens and encumbrances
on any of our property or the property of our subsidiaries.

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Quick-term Borrowings
We're licensed by our Board of Administrators to borrow as much as $400.0 million of
short-term debt, as required. At September 30, 2021 and December 31, 2020, we
had $192.0 million and $175.6 million, respectively, of short-term borrowings
excellent at a weighted common rate of interest of 0.82 p.c and 1.28
p.c. Included within the September 30, 2021 stability, is $70.0 million in
short-term debt for which we have now entered into rate of interest swap agreements.
In August 2021 we amended and restated our Revolver right into a multi-tranche
facility totaling $400.0 million with a number of collaborating lenders. The 2
tranches of the power consist of 1 $200.0 million 364-day short-term debt
tranche and a $200.0 million five-year tranche, each of which have three (3)
one-year extension choices, which might be licensed by the Chief Monetary
Officer. We're eligible to ascertain the compensation time period for particular person
borrowings underneath the 5 yr tranche of the power and to the extent that an
particular person mortgage underneath the revolver exceeded 12 months, the excellent stability
can be categorized as a part of long-term debt.
The supply of funds underneath the Revolver is topic to circumstances specified
within the credit score settlement, all of which we at the moment fulfill. These circumstances
embody our compliance with monetary covenants and the continued accuracy of
representations and warranties contained in these agreements. We're required by
the monetary covenants within the Revolver to take care of, on the finish of every fiscal
yr, a funded indebtedness ratio of no higher than 65 p.c. As of
September 30, 2021, we're in compliance with this covenant.

The 364-day tranche of the Revolver expires in August 2022 and the five-year
tranche expires in August 2026; each tranches can be found to supply funds for
our short-term money wants to satisfy seasonal working capital necessities and to
quickly fund parts of our capital expenditures. Borrowings underneath each
tranches of the Revolver are topic to a pricing grid, together with the dedication
charge and the rate of interest charged. Our pricing is adjusted every quarter based mostly
upon whole indebtedness to whole capitalization ratio. As of September 30, 2021,
the pricing underneath the 364-day tranche of the Revolver doesn't embody an unused
dedication charge and maintains an rate of interest of 0.70 p.c over LIBOR. As of
September 30, 2021, the pricing underneath the five-year tranche of the Revolver
included an unused dedication charge of 0.09 p.c and an rate of interest of 0.95
p.c over LIBOR.

Our whole obtainable credit score underneath the Revolver at September 30, 2021 was $203.4
million. As of September 30, 2021, we had issued $4.6 million in letters of
credit score to numerous counterparties underneath the syndicated Revolvers. These letters
of credit score should not included within the excellent short-term borrowings and we do
not anticipate that they are going to be drawn upon by the counterparties. The letters
of credit score scale back the obtainable borrowings underneath our syndicated Revolver.
Within the fourth quarter of 2020, the Firm entered into two $30.0 million
rate of interest swaps with a complete notional quantity of $60.0 million by means of
September and December 2021 with pricing of 0.205 and 0.20 p.c,
respectively. In February 2021, we entered into a further rate of interest swap
with a notional quantity of $40.0 million by means of December 2021 with pricing of
0.17 p.c. Our short-term borrowing relies on the 30-day LIBOR charge. The
rate of interest swaps are money settled month-to-month because the counter-party pays us the
30-day LIBOR charge much less the fastened charge.
Lengthy-Time period Debt
On August 25, 2021, we entered right into a Be aware Settlement with a number of lenders to
subject $50.0 million in uncollateralized senior notes. Beneath the Be aware Settlement,
we are going to subject the senior notes on January 25, 2022 at a charge of two.49 p.c for
a 15-year time period. These senior notes, when issued, may have comparable covenants and
default provisions as the present senior notes, and may have an annual
principal fee starting within the sixth yr after the issuance. The proceeds
obtained from the issuances of the senior notes can be used to scale back our
short-term borrowings underneath our strains of credit score and to fund capital
expenditures. As well as, on September 24, 2021, we entered into an Gear
Financing Settlement with Banc of America Leasing & Capital, LLC to subject $9.6
million in sustainability linked financing for the acquisition of apparatus by our
subsidiary, Marlin Fuel Companies. The gear safety word bears a 2.46
p.c rate of interest and has a time period of ten years. Beneath the phrases of the
settlement, we granted a safety curiosity within the gear to the lender, to
function collateral.

Money Flows

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The next desk gives a abstract of our working, investing and financing
money flows for the 9 months ended September 30, 2021 and 2020:

                                                                9 Months Ended
                                                                  September 30,
(in hundreds)                                                 2021           2020
Web money supplied by (utilized in):
Working actions                                        $ 152,784$ 115,880
Investing actions                                         (148,076)      (136,551)
Financing actions                                           (2,321)        16,742
Web improve (lower) in money and money equivalents            2,387       

(3,929)

Money and money equivalents-beginning of interval                   3,499       

6,985

Money and money equivalents-end of interval                     $   5,886

$ 3,056



Money Flows Supplied By Working Actions
Adjustments in our money flows from working actions are attributable primarily
to adjustments in internet earnings, adjusted for non-cash objects similar to depreciation and
adjustments in deferred earnings taxes, and dealing capital. Adjustments in working
capital are decided by quite a lot of components, together with climate, the costs of
pure gasoline, electrical energy and propane, the timing of buyer collections,
funds for purchases of pure gasoline, electrical energy and propane, and deferred
gas value recoveries.

Throughout the 9 months ended September 30, 2021 and 2020, internet money supplied by
working actions was $152.8 million and $115.9 million, respectively,
leading to a rise in money flows of $36.9 million. Important working
actions producing the money flows change had been as follows:
•Adjustments in internet accounts receivable and accrued income and accounts payable and
accrued liabilities elevated money flows by $31.4 million;
•Web earnings, adjusted for non-cash changes and reconciling actions,
elevated money flows by $10.5 million, due primarily to greater internet earnings, and
greater depreciation and amortization;
•Web money flows from earnings taxes receivable elevated by $7.0 million;
•Adjustments in internet pay as you go bills and different present property, buyer deposits and
refunds, accrued compensation and different internet property and liabilities, decreased
money flows by $0.5 million;
•Adjustments in internet regulatory property and liabilities decreased money flows by $4.3
million due primarily to the change in gas prices collected by means of the varied
value restoration mechanisms; and
•Web money flows from adjustments in propane stock, storage gasoline and different
inventories decreased by roughly $7.2 million.

Money Flows Utilized in Investing Actions

Web money utilized in investing actions totaled $148.1 million and $136.6 million
through the 9 months ended September 30, 2021 and 2020, respectively,
leading to a lower in money flows of $11.5 million. Money paid for capital
expenditures was $148.2 million for the primary 9 months of 2021, in comparison with
$123.4 million for a similar interval in 2020, leading to decreased money flows of
$24.8 million. The lower was offset by a rise in money flows as a result of
absence of acquisitions that occurred within the third quarter of 2020.

Money Flows Utilized in Financing Actions

Web money utilized in financing actions totaled $2.3 million through the 9
months ended September 30, 2021 in comparison with $16.7 million of internet money supplied
by financing actions over the identical interval in 2020, leading to a lower in
money flows of $19.0 million. The rise in internet money utilized in financing
actions resulted primarily from the next:

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•Lengthy-term debt repayments of $10.1 million;
•Money dividends of $23.3 million paid through the 9 months ended September 30,
2021, in comparison with $20.0 million for the 9 months ended September 30, 2020;
and
•Money flows of $7.1 million because of issuing shares of our frequent inventory
underneath the DRIP program.

These will increase in money used had been partially offset by elevated money supplied by
short-term debt of $16.4 million.
Off-Stability Sheet Preparations
The Board of Administrators has licensed us to subject company ensures securing
obligations of our subsidiaries and to acquire letters of credit score securing our
subsidiaries' obligations. The utmost licensed legal responsibility underneath such
ensures and letters of credit score as of September 30, 2021 was $20.0 million. The
mixture quantity assured at September 30, 2021 was $8.0 million, with the
ensures expiring on varied dates by means of September 24, 2022.
As of September 30, 2021, we have now issued letters of credit score totaling
roughly $4.6 million associated to the electrical transmission companies for
FPU's electrical division, the agency transportation service settlement between TETLP
and our Delaware and Maryland divisions, to our present and former main
insurance coverage carriers. These letters of credit score have varied expiration dates
by means of September 30, 2022. We now have not drawn upon these letters of credit score as of
September 30, 2021 and don't anticipate that the counterparties will draw upon
these letters of credit score. We count on that they are going to be renewed to the extent
essential sooner or later. Further data is offered in Be aware 7, Different
Commitments and Contingencies, within the condensed consolidated monetary
statements.

Contractual Obligations
There was no materials change within the contractual obligations offered in
our 2020 Annual Report on Kind 10-Okay, apart from commodity buy obligations
entered into within the extraordinary course of our enterprise. The next desk
summarizes commodity buy contract obligations at September 30, 2021:

                                                                            

Funds Due by Interval

                                            Lower than 1 yr           1 - 3 years           3 - 5 years           Greater than 5 years            Whole
(in hundreds)
Buy obligations - Commodity (1)       $         30,597          $     37,437          $          -          $                -          $ 68,034
Whole                                      $         30,597          $     37,437          $          -          $                -          $ 68,034



(1) Along with the obligations famous above, we have now agreements with
commodity suppliers which have provisions with no minimal buy necessities.
There are not any financial penalties for lowering the quantities bought; nonetheless, the
propane contracts permit the suppliers to scale back the quantities obtainable within the
winter season if we don't buy specified quantities through the summer time season.
Beneath these contracts, the commodity costs will fluctuate as market costs
fluctuate.
Charges and Regulatory Issues
Our pure gasoline distribution operations in Delaware, Maryland and Florida and
electrical distribution operation in Florida are topic to regulation by the
respective state PSC; Japanese Shore is topic to regulation by the FERC; and
Peninsula Pipeline and Aspire Power Categorical, our intrastate pipeline
subsidiaries, are topic to regulation (excluding value of service) by the
Florida PSC and Public Utilities Fee of Ohio, respectively. We often
are concerned in regulatory issues in every of the jurisdictions wherein we
function. Our vital regulatory issues are absolutely described in Be aware 5, Charges
and Different Regulatory Actions, to the condensed consolidated monetary
statements on this Quarterly Report on Kind 10-Q.
Current Authoritative Pronouncements on Monetary Reporting and Accounting
Current accounting developments, relevant to us, and their affect on our
monetary place, outcomes of operations and money flows are described in Be aware
1, Abstract of Accounting Insurance policies, to the condensed consolidated monetary
statements on this Quarterly Report on Kind 10-Q.

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