Chesapeake Utilities Corporation is a diversified energy company that provides superior service to its customers and communities. For more than 100 years the Company has successfully delivered safe, secure, reliable and efficient solutions that are environmentally and economically smart. Chesapeake positions itself for long-term growth that creates superior value.

Letter from
the President

My Fellow Shareholders

How good it is to report that 2015 was another record year for Chesapeake Utilities Corporation. We posted record earnings for the ninth consecutive year. Our earnings per share reached $2.72 (diluted), surpassing 2014's record by 10.1 percent. Total shareholder return, including stock price and dividends, was 16.7 percent in 2015, bringing our compound annual shareholder return to 14.4 percent for the past 10 years. Remarkably, over the same period, our total shareholder return has been in the 85th percentile of the more than 2,000 companies listed on the New York Stock Exchange ("NYSE").

Foundation for Growth

Our approach to growth is relatively simple. It starts with persistent effort by our employees. They aspire to excel in everything they do, serving our customers, communities and investors with personal care and commitment. Every day, I grow prouder of their efforts and accomplishments as they continuously embody our shared values of Aspiring and Caring.

We have a plan for growth that challenges all of us to excel, and it is the spirited discipline and drive of our employees that makes our strategic planning process and the resulting plan work. Contrary to the old adage that too many cooks spoil the broth, we involve all of our business units in our strategic planning process and in identifying and developing new growth opportunities. Our strategic planning process requires that all of our business units look ahead together as one Company to develop a five-year plan, which we update every year, or more often if market forces dictate. This concerted effort produces a dynamic plan that challenges all of us to focus on investment opportunities that can sustain the growth required to achieve our aggressive targets over the long term.

As part of the process, our Growth Council oversees the evaluation and development of large and strategically significant projects. The Growth Council includes executives with operations, engineering, business development, regulatory, financial and legal backgrounds. The Council weighs the benefits and risks associated with each project, including its strategic and operational fit before it is presented for Board approval. After approval, the Council monitors further development until the project is fully launched and executed. This process supports sound resource allocation decisions and provides the discipline to develop and execute large and strategically significant growth projects. We're proud of our growth process and our record of successful execution.

Compound Annual Shareholder Return

Total shareholder return for 2015 was 16.7 percent. In addition, our shareholders have earned more than 14 percent returns during each of the periods shown on a compound annual basis.

Continued Growth

We grew in 2015 by nearly every measure, as you will see throughout our annual report. Looking forward, we currently have several opportunities under development that we expect to start generating earnings and growth in 2016 and 2017. The foundation for this growth has already been laid. We are currently in the process of laying the foundation for more growth that we would expect to materialize in 2018, 2019 and 2020. Rest assured that we will continue our relentless efforts to drive growth by focusing on long-term, sustainable growth opportunities. We will remain both aggressive and disciplined, aspiring and careful, in our quest for growth with enduring value. These values are ingrained in our culture, strategic planning and our growth process.

Ralph Adkins, Chair Emeritus, Retiring After 54 Years of Service

After 54 years of service with Chesapeake Utilities Corporation, Ralph Adkins, former CEO and Chair of the Board and currently Chair Emeritus, is retiring. Over the years, Ralph has been involved in initiatives such as the Central Florida Gas Company and Plant City Natural Gas Company acquisitions in the mid to late 1980s, our acquisitions of propane distribution assets, our acquisition of Florida Public Utilities in 2009 and our acquisition of Gatherco, Inc., which was merged into our subsidiary, Aspire Energy of Ohio, in 2015.

In 1962, when Ralph joined the Company, we had $3.1 million in revenue and net income of $247,000. Net plant was less than $6 million in 1962; today, it is more than $850 million, 140 times larger than it was when Ralph joined the Company.

Needless to say, a lot changed during Ralph's tenure. This year, our net income was $41 million, 165 times 1962's earnings. Ralph was with the Company in the 1970s, when the country was experiencing shortages of natural gas and our supplies were curtailed by 61 percent. Today, there is an abundance of domestically-produced natural gas. In 1962, we served Delaware and the Eastern Shore of Maryland. Today, we are also serving customers in Pennsylvania, Virginia, Florida and Ohio. In the early 1980s, Forbes Magazine recognized us as an up-and-coming company. Today, we are continuing that tradition by achieving top quartile performance in many of the key metrics that we monitor. In 1993, while Ralph was our CEO, Chesapeake Utilities Corporation was first listed on the NYSE as "CPK." On March 9, 2016, we celebrated with Ralph and his family by ringing The Closing Bell® at the NYSE. Many thanks, Ralph, for your faithful service over 54 years.

Thanks also to John Schimkaitis, who succeeded Ralph as Chair of the Board, and thanks to all of our Board members for supporting the stretch goals we set each year and cheering us on as we cross those goal lines. Thanks to our employees for all they do every day. And to all of you, our profound thanks for your abiding trust and confidence in us.

Sincerely,

Michael P. McMasters
President and Chief Executive Officer