Chesapeake Utilities (CPK) risk factors, FY2024 10-K

FINANCIAL RISKS

1. 01Our financial results may fluctuate significantly and may not fully reflect the underlying performance of our business
2. 02Fluctuations in propane gas prices could negatively affect results of operations
3. 03If we fail to comply with our debt covenant obligations, we could experience adverse financial consequences that could affect our liquidity and ability to borrow funds
4. 04Increases in interest rates may adversely affect our results of operations and cash flows
5. 05Continuing or worsening inflationary and/or supply chain issues may adversely impact our financial condition and results of operations
6. 06Disruptions, uncertainty or volatility in the credit and capital markets may exert downward pressure on the market price of the Company’s common stock
7. 07Current market conditions could adversely impact the return on plan assets for our Company sponsored defined benefit plans, which may require significant additional funding

OPERATIONAL RISKS

1. 08We must construct new facilities to support future growth in earnings in our natural gas and electric distribution and natural gas transmission operations
2. 09We do not own all of the land on which our pipelines and facilities are located, which could result in disruptions to our operations
3. 10We operate in a competitive environment, and we may lose customers to competitors
4. 11Fluctuations in weather may cause a significant variance in our earnings
5. 12Severe weather events (such as a major hurricane, flood, or tornado), natural disasters and acts of terrorism could adversely impact earnings and access to insurance coverage
6. 13Operating events affecting public safety and the reliability of our natural gas and electric distribution and transmission systems could adversely affect our operations and increase our costs
7. 14A security breach disrupting our operating systems, facilities, and workforce or exposing confidential information may adversely affect our reputation, disrupt our operations and increase our costs
8. 15The Company’s business, results of operations, financial condition and cash flows could be adversely affected by interruption of the Company’s information technology or network systems as well as the Company’s implementation of its technology roadmap
9. 16Chesapeake Utilities Corporation 2024 Form 10-K Page 19
10. 17Concerns relating to the responsible use of new and evolving technologies, such as artificial intelligence (AI), may result in reputational or financial harm and liability
11. 18Failure to attract and retain an appropriately qualified employee workforce could adversely affect operations
12. 19A strike, work stoppage or a labor dispute could adversely affect our operations
13. 20Our businesses are capital-intensive, and the increased costs and/or delays of capital projects may adversely affect our future earnings
14. 21Our regulated energy business may be at risk if franchise agreements are not renewed, or new franchise agreements are not obtained, which could adversely affect our future results or operating cash flows and financial condition
15. 22Chesapeake Utilities Corporation 2024 Form 10-K Page 20
16. 23Energy conservation could lower energy consumption, which would adversely affect our earnings
17. 24Commodity price increases may adversely affect the operating costs and competitive positions of our natural gas, electric and propane operations, which may adversely affect our financial condition, results of operations and cash flows
18. 25Our use of derivative instruments may adversely affect our results of operations
19. 26Chesapeake Utilities Corporation 2024 Form 10-K Page 21
20. 27Our ability to grow our businesses could be adversely affected if we are not successful in making acquisitions or integrating the acquisitions we have completed
21. 28An impairment of our assets including long-lived assets, goodwill and other intangible assets, could negatively impact our financial condition and results of operations

REGULATORY, LEGAL AND ENVIRONMENTAL RISKS

1. 29Regulation of our businesses, including changes in the regulatory environment, may adversely affect our financial condition, results of operations and cash flows
2. 30We may face certain regulatory and financial risks related to pipeline safety legislation
3. 31Pipeline integrity programs and repairs may impose significant costs and liabilities on the Company
4. 32We are subject to operating and litigation risks that may not be fully covered by insurance
5. 33Costs of compliance with environmental laws may be significant
6. 34Unanticipated changes in our tax provisions or exposure to additional tax liabilities could affect our profitability and cash flow
7. 35Our business may be subject in the future to additional regulatory and financial risks associated with global warming and climate change
8. 36Climate changes may impact the demand for our services in the future and could result in more frequent and more severe weather events, which ultimately could adversely affect our financial results
9. 37Our certificate of incorporation and bylaws may delay or prevent a transaction that stockholders would view as favorable