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FORM 10-K
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C
HESAPEAKE
U
TILITIES
C
ORPORATION
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(Exact name of registrant as specified in its charter)
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State of Delaware
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51-0064146
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock—par value per share $0.4867
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New York Stock Exchange, Inc.
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Securities registered pursuant to Section 12(g) of the Act:
8.25% Convertible Debentures Due 2014
(Title of class)
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
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Smaller Reporting Company
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¨
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Page
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•
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state and federal legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rate structures, and affect the speed at and the degree to which competition enters the electric and natural gas industries (including deregulation);
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•
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the outcomes of regulatory, tax, environmental and legal matters, including whether pending matters are resolved within current estimates and whether the costs associated with such matters are adequately covered by insurance or recovered in rates;
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•
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the loss of customers due to government-mandated sale of our utility distribution facilities;
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•
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industrial, commercial and residential growth or contraction in our markets or service territories;
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•
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the weather and other natural phenomena, including the economic, operational and other effects of hurricanes, ice storms and other damaging weather events;
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•
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the timing and extent of changes in commodity prices and interest rates;
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•
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general economic conditions, including any potential effects arising from terrorist attacks and any consequential hostilities or other hostilities or other external factors over which we have no control;
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•
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changes in environmental and other laws and regulations to which we are subject and environmental conditions of property that we now or may in the future own or operate;
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•
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the results of financing efforts, including our ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general economic conditions;
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•
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the impact to the asset values and resulting higher costs and funding obligations of the Company's pension and other postretirement benefit plans as a result of potential downturns in the financial markets, lower discount rates or impacts associated with the Patient Protection and Affordable Care Act;
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•
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the creditworthiness of counterparties with which we are engaged in transactions;
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•
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the extent of success in connecting natural gas and electric supplies to transmission systems and in expanding natural gas and electric markets;
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•
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the effect of accounting pronouncements issued periodically by accounting standard-setting bodies;
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•
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conditions of the capital markets and equity markets during the periods covered by the forward-looking statements;
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•
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the ability to successfully execute, manage and integrate merger, acquisition or divestiture plans, regulatory or other limitations imposed as a result of a merger, acquisition or divestiture, and the success of the business following a merger, acquisition or divestiture;
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•
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the ability to establish and maintain new key supply sources;
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•
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the effect of spot, forward and future market prices on our distribution, wholesale marketing and energy trading businesses;
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•
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the effect of competition on our businesses;
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•
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the ability to construct facilities at or below estimated costs;
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•
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risks related to cyber-attack or failure of information technology systems; and
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•
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changes in technology affecting our advanced information services business.
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(dollars in thousands)
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Operating Income
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Total Assets
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||||||||||
Regulated Energy
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$
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50,084
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|
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80
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%
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$
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708,950
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85
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%
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Unregulated Energy
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12,353
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20
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%
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100,585
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12
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%
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Other
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297
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—
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%
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27,987
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|
|
3
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%
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||
Total
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$
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62,734
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|
|
100
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%
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$
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837,522
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100
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%
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|||||||||||||||
(in thousands)
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Delmarva
Natural Gas Distribution
(2)
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Florida Natural Gas Distribution
(3)
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FPU Electric Distribution
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||||||||||||
Operating Revenues
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|
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||||||||||
Residential
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$
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52,594
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59
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%
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$
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26,543
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|
34
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%
|
|
$
|
41,349
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|
55
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%
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Commercial
|
28,445
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|
32
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%
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|
36,591
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|
46
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%
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|
38,430
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|
51
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%
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|||
Industrial
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6,349
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7
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%
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16,197
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21
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%
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4,088
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5
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%
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|||
Other
(1)
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1,869
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|
2
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%
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(555
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)
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(1
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)%
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(8,917
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)
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(11
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)%
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|||
Total Operating Revenues
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$
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89,257
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100
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%
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$
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78,776
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100
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%
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$
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74,950
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100
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%
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|||||||||
Volume
(in Dts for natural gas/MWHs for electric)
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||||||||||
Residential
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3,189,000
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30
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%
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1,542,732
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7
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%
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289,745
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45
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%
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|||
Commercial
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3,378,707
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31
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%
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4,133,188
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18
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%
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309,813
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|
48
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%
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|||
Industrial
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4,169,615
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39
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%
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17,143,536
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75
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%
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31,120
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5
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%
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|||
Other
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69,090
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—
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%
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(81,723
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)
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—
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%
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18,347
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2
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%
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|||
Total
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10,806,412
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100
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%
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22,737,733
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100
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%
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649,025
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100
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%
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|||
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|||||||||
Average Customers
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Residential
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60,685
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90
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%
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64,056
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90
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%
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23,742
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|
76
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%
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|||
Commercial
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6,445
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10
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%
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5,904
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8
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%
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7,407
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24
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%
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|||
Industrial
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110
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—
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%
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1,005
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2
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%
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2
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—
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%
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|||
Other
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5
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—
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%
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—
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—
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%
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|
—
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—
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%
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|||
Total
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67,245
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|
100
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%
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70,965
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100
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%
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31,151
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100
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%
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(in thousands)
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Eastern Shore
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Operating Revenues
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Local distribution companies - affiliated
(1)
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$
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16,326
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44
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%
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Local distribution companies - non-affiliated
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8,473
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23
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%
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Commercial and industrial
|
12,321
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|
33
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%
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Other
(2)
|
45
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|
—
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%
|
|
Total Operating Revenues
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$
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37,165
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|
100
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%
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|
|
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|||
Contracted firm transportation capacity
(in Dts/d)
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|
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Local distribution companies - affiliated
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100,652
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43
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%
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|
Local distribution companies - non-affiliated
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67,293
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|
29
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%
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Commercial and industrial
|
65,934
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|
28
|
%
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|
Total
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233,879
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|
100
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%
|
|
|
|
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|||
Designed day capacity
(in Dts/d)
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234,379
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|
—
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(in thousands)
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Delmarva Peninsula
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Florida
|
||||||||
Operating Revenues
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|
||||||||
Residential bulk
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$
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24,573
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|
31
|
%
|
$
|
5,526
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|
28
|
%
|
Residential metered
|
7,723
|
|
10
|
%
|
4,779
|
|
24
|
%
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||
Commercial bulk
|
18,169
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|
23
|
%
|
6,692
|
|
33
|
%
|
||
Commercial metered
|
—
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|
—
|
%
|
1,899
|
|
9
|
%
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||
Wholesale
|
24,576
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|
31
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%
|
610
|
|
3
|
%
|
||
Other
(1)
|
4,591
|
|
5
|
%
|
525
|
|
3
|
%
|
||
Total Operating Revenues
|
$
|
79,632
|
|
100
|
%
|
$
|
20,031
|
|
100
|
%
|
|
|
|
|
|
||||||
Volume
(in gallons)
|
|
|
|
|
||||||
Residential bulk
|
9,192
|
|
22
|
%
|
1,391
|
|
21
|
%
|
||
Residential metered
|
3,318
|
|
8
|
%
|
1,027
|
|
15
|
%
|
||
Commercial bulk
|
10,482
|
|
25
|
%
|
3,136
|
|
47
|
%
|
||
Commercial metered
|
—
|
|
—
|
%
|
673
|
|
10
|
%
|
||
Wholesale
|
18,885
|
|
45
|
%
|
449
|
|
7
|
%
|
||
Other
|
—
|
|
—
|
%
|
(42
|
)
|
—
|
%
|
||
Total
|
41,877
|
|
100
|
%
|
6,634
|
|
100
|
%
|
||
|
|
|
|
|
||||||
Average customers
|
|
|
|
|
||||||
Residential bulk
|
23,760
|
|
67
|
%
|
8,542
|
|
53
|
%
|
||
Residential metered
|
7,255
|
|
20
|
%
|
6,441
|
|
40
|
%
|
||
Commercial bulk
|
3,962
|
|
11
|
%
|
1,014
|
|
6
|
%
|
||
Commercial metered
|
—
|
|
—
|
%
|
264
|
|
1
|
%
|
||
Wholesale
|
32
|
|
—
|
%
|
3
|
|
—
|
%
|
||
Other
|
715
|
|
2
|
%
|
—
|
|
—
|
%
|
||
Total
|
35,724
|
|
100
|
%
|
16,264
|
|
100
|
%
|
•
|
Charters for the Audit Committee, Compensation Committee and Corporate Governance Committee of the Board Directors; and
|
Name
|
|
Age
|
|
Position
|
Michael P. McMasters
|
|
55
|
|
President (March 2010 - present)
Chief Executive Officer (January 2011 - present)
Director (March 2010 - present)
Executive Vice President (September 2008 - February 2010)
Chief Operating Officer (September 2008 - December 2010)
Chief Financial Officer (January 1997 - September 2008)
Mr. McMasters also previously served as Senior Vice President, Vice President, Treasurer, Director of Accounting and Rates, and Controller.
|
Beth W. Cooper
|
|
47
|
|
Senior Vice President (September 2008 - present)
Chief Financial Officer (September 2008 - present)
Corporate Secretary (June 2005 - present)
Vice President (June 2005 - September 2008)
Treasurer (March 2003 - May 2012)
Ms. Cooper also previously served as Assistant Vice President, Assistant Treasurer, Assistant Secretary, Director of Internal Audit, and Director of Strategic Planning.
|
Elaine B. Bittner
|
|
44
|
|
Senior Vice President of Strategic Development (May 2013 - present)
Vice President of Strategic Development (June 2010 - May 2013) Vice President, Eastern Shore (May 2005 - June 2010) Ms. Bittner also previously served as Director of Eastern Shore; Director of Customer Services and Regulatory Affairs for Eastern Shore; Director of Environmental Affairs and Environmental Engineer. |
Stephen C. Thompson
|
|
53
|
|
Senior Vice President (September 2004 - present)
President, Eastern Shore (January 1997 - present)
Vice President (May 1997 - September 2004)
Mr. Thompson also previously served as Director of Gas Supply and Marketing for Eastern Shore; Superintendent of Eastern Shore; and Regional Manager for Florida distribution operations.
|
Jeffry M. Householder
|
|
56
|
|
President of Florida Public Utilities Company (June 2010 - present)
|
|
Quarter Ended
|
|
High
|
|
Low
|
|
Close
|
|
Dividends
Declared
Per Share
|
||||||||
2013
|
|
|
|
|
|
|
|
|
|
||||||||
|
March 31
|
|
$
|
50.39
|
|
|
$
|
45.84
|
|
|
$
|
49.05
|
|
|
$
|
0.365
|
|
|
June 30
|
|
$
|
55.86
|
|
|
$
|
48.26
|
|
|
$
|
51.49
|
|
|
$
|
0.385
|
|
|
September 30
|
|
$
|
60.08
|
|
|
$
|
50.84
|
|
|
$
|
52.49
|
|
|
$
|
0.385
|
|
|
December 31
|
|
$
|
61.17
|
|
|
$
|
50.53
|
|
|
$
|
60.02
|
|
|
$
|
0.385
|
|
2012
|
|
|
|
|
|
|
|
|
|
||||||||
|
March 31
|
|
$
|
43.83
|
|
|
$
|
39.89
|
|
|
$
|
41.12
|
|
|
$
|
0.345
|
|
|
June 30
|
|
$
|
45.15
|
|
|
$
|
40.22
|
|
|
$
|
43.72
|
|
|
$
|
0.365
|
|
|
September 30
|
|
$
|
48.51
|
|
|
$
|
43.65
|
|
|
$
|
47.36
|
|
|
$
|
0.365
|
|
|
December 31
|
|
$
|
48.92
|
|
|
$
|
41.17
|
|
|
$
|
45.40
|
|
|
$
|
0.365
|
|
|
Total
Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced Plans
or Programs
(2)
|
|
Maximum Number of
Shares That May Yet Be
Purchased Under the Plans
or Programs
(2)
|
|||||
Period
|
|
|
|
|
|
|
|
|||||
October 1, 2013 through October 31, 2013
(1)
|
274
|
|
|
$
|
50.61
|
|
|
—
|
|
|
—
|
|
November 1, 2013 through November 30, 2013
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
December 1, 2013 through December 31, 2013
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
274
|
|
|
$
|
50.61
|
|
|
—
|
|
|
—
|
|
(1)
|
Chesapeake purchased shares of common stock on the open market for the purpose of reinvesting the dividend on shares held in the Rabbi Trust accounts for certain Directors and Senior Executives under the Non-Qualified Deferred Compensation Plan. The Non-Qualified Deferred Compensation Plan is discussed in detail in
Item 8, Financial Statements and Supplementary Data
(see
Note 16, Employee Benefit Plans
, in the Consolidated Financial Statements). During the quarter, 274 shares were purchased through the reinvestment of dividends.
|
(2)
|
Except for the purpose described in Footnote
(1)
, Chesapeake has no publicly announced plans or programs to repurchase its shares.
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
||||||||||||
Chesapeake
|
$
|
100
|
|
|
$
|
106
|
|
|
$
|
141
|
|
|
$
|
152
|
|
|
$
|
164
|
|
|
$
|
223
|
|
Industry Index
|
$
|
100
|
|
|
$
|
108
|
|
|
$
|
125
|
|
|
$
|
147
|
|
|
$
|
145
|
|
|
$
|
175
|
|
S&P 500
|
$
|
100
|
|
|
$
|
126
|
|
|
$
|
145
|
|
|
$
|
148
|
|
|
$
|
171
|
|
|
$
|
226
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Operating
(1)
|
|
|
|
|
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Revenues
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
264,637
|
|
|
$
|
246,208
|
|
|
$
|
256,226
|
|
Unregulated Energy
|
166,723
|
|
|
133,049
|
|
|
149,586
|
|
|||
Other
|
12,946
|
|
|
13,245
|
|
|
12,215
|
|
|||
Total revenues
|
$
|
444,306
|
|
|
$
|
392,502
|
|
|
$
|
418,027
|
|
Operating income
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
50,084
|
|
|
$
|
46,999
|
|
|
$
|
43,911
|
|
Unregulated Energy
|
12,353
|
|
|
8,355
|
|
|
9,619
|
|
|||
Other
|
297
|
|
|
1,281
|
|
|
175
|
|
|||
Total operating income
|
$
|
62,734
|
|
|
$
|
56,635
|
|
|
$
|
53,705
|
|
Net income from continuing operations
|
$
|
32,787
|
|
|
$
|
28,863
|
|
|
$
|
27,622
|
|
Assets
|
|
|
|
|
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Gross property, plant and equipment
|
$
|
805,394
|
|
|
$
|
697,159
|
|
|
$
|
625,488
|
|
Net property, plant and equipment
|
$
|
631,246
|
|
|
$
|
541,781
|
|
|
$
|
487,704
|
|
Total assets
|
$
|
837,522
|
|
|
$
|
733,746
|
|
|
$
|
709,066
|
|
Capital expenditures
(1)
|
$
|
108,039
|
|
|
$
|
78,210
|
|
|
$
|
44,431
|
|
Capitalization
|
|
|
|
|
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Stockholders’ equity
|
$
|
278,773
|
|
|
$
|
256,598
|
|
|
$
|
240,780
|
|
Long-term debt, net of current maturities
|
117,592
|
|
|
101,907
|
|
|
110,285
|
|
|||
Total capitalization
|
$
|
396,365
|
|
|
$
|
358,505
|
|
|
$
|
351,065
|
|
Current portion of long-term debt
|
11,353
|
|
|
8,196
|
|
|
8,196
|
|
|||
Short-term debt
|
105,666
|
|
|
61,199
|
|
|
34,707
|
|
|||
Total capitalization and short-term financing
|
$
|
513,384
|
|
|
$
|
427,900
|
|
|
$
|
393,968
|
|
(1)
|
These amounts exclude the results of distributed energy and water services due to their reclassification to discontinued operations. We closed our distributed energy operation in 2007. All assets of the water businesses were sold in 2004 and 2003. These amounts also include accruals for capital expenditures that we have incurred for each reporting period.
|
(2)
|
These amounts include the financial position and results of operation of FPU for the period from the merger (October 28, 2009) to December 31, 2009. These amounts also include the effects of acquisition accounting and issuance of Chesapeake common shares as a result of the merger.
|
(3)
|
ASC 718,
Compensation—Stock Compensation,
and ASC 715,
Compensation—Retirement Plans
, were adopted in the year 2006; therefore, they were not applicable for the years prior to 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2010
|
|
2009
(2)
|
|
2008
|
|
2007
|
|
2006
(3)
|
|
2005
|
|
2004
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
269,438
|
|
|
$
|
138,671
|
|
|
$
|
116,123
|
|
|
$
|
128,566
|
|
|
$
|
124,438
|
|
|
$
|
124,445
|
|
|
$
|
98,037
|
|
146,793
|
|
|
119,973
|
|
|
161,290
|
|
|
115,190
|
|
|
94,320
|
|
|
90,995
|
|
|
67,607
|
|
|||||||
11,315
|
|
|
10,141
|
|
|
14,030
|
|
|
14,530
|
|
|
12,442
|
|
|
14,045
|
|
|
12,311
|
|
|||||||
$
|
427,546
|
|
|
$
|
268,785
|
|
|
$
|
291,443
|
|
|
$
|
258,286
|
|
|
$
|
231,200
|
|
|
$
|
229,485
|
|
|
$
|
177,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
43,267
|
|
|
$
|
26,668
|
|
|
$
|
23,833
|
|
|
$
|
21,739
|
|
|
$
|
18,618
|
|
|
$
|
16,278
|
|
|
$
|
16,270
|
|
8,150
|
|
|
8,390
|
|
|
3,600
|
|
|
5,244
|
|
|
3,650
|
|
|
4,167
|
|
|
3,185
|
|
|||||||
513
|
|
|
(1,322
|
)
|
|
1,046
|
|
|
1,131
|
|
|
1,064
|
|
|
1,476
|
|
|
722
|
|
|||||||
$
|
51,930
|
|
|
$
|
33,736
|
|
|
$
|
28,479
|
|
|
$
|
28,114
|
|
|
$
|
23,332
|
|
|
$
|
21,921
|
|
|
$
|
20,177
|
|
$
|
26,056
|
|
|
$
|
15,897
|
|
|
$
|
13,607
|
|
|
$
|
13,218
|
|
|
$
|
10,748
|
|
|
$
|
10,699
|
|
|
$
|
9,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
584,385
|
|
|
$
|
543,905
|
|
|
$
|
381,689
|
|
|
$
|
352,838
|
|
|
$
|
325,836
|
|
|
$
|
280,345
|
|
|
$
|
250,267
|
|
$
|
462,757
|
|
|
$
|
436,587
|
|
|
$
|
280,671
|
|
|
$
|
260,423
|
|
|
$
|
240,825
|
|
|
$
|
201,504
|
|
|
$
|
177,053
|
|
$
|
670,993
|
|
|
$
|
615,811
|
|
|
$
|
385,795
|
|
|
$
|
381,557
|
|
|
$
|
325,585
|
|
|
$
|
295,980
|
|
|
$
|
241,938
|
|
$
|
46,955
|
|
|
$
|
26,294
|
|
|
$
|
30,844
|
|
|
$
|
30,142
|
|
|
$
|
49,154
|
|
|
$
|
33,423
|
|
|
$
|
17,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
226,239
|
|
|
$
|
209,781
|
|
|
$
|
123,073
|
|
|
$
|
119,576
|
|
|
$
|
111,152
|
|
|
$
|
84,757
|
|
|
$
|
77,962
|
|
89,642
|
|
|
98,814
|
|
|
86,422
|
|
|
63,256
|
|
|
71,050
|
|
|
58,991
|
|
|
66,190
|
|
|||||||
$
|
315,881
|
|
|
$
|
308,595
|
|
|
$
|
209,495
|
|
|
$
|
182,832
|
|
|
$
|
182,202
|
|
|
$
|
143,748
|
|
|
$
|
144,152
|
|
9,216
|
|
|
35,299
|
|
|
6,656
|
|
|
7,656
|
|
|
7,656
|
|
|
4,929
|
|
|
2,909
|
|
|||||||
63,958
|
|
|
30,023
|
|
|
33,000
|
|
|
45,664
|
|
|
27,554
|
|
|
35,482
|
|
|
5,002
|
|
|||||||
$
|
389,055
|
|
|
$
|
373,917
|
|
|
$
|
249,151
|
|
|
$
|
236,152
|
|
|
$
|
217,412
|
|
|
$
|
184,159
|
|
|
$
|
152,063
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Common Stock Data and Ratios
|
|
|
|
|
|
||||||
Basic earnings per share from continuing operations
(1)
|
$
|
3.41
|
|
|
$
|
3.01
|
|
|
$
|
2.89
|
|
Diluted earnings per share from continuing operations
(1)
|
$
|
3.39
|
|
|
$
|
2.99
|
|
|
$
|
2.87
|
|
Return on average equity from continuing operations
(1)
|
12.2
|
%
|
|
11.6
|
%
|
|
11.6
|
%
|
|||
Common equity / total capitalization
|
70.3
|
%
|
|
71.6
|
%
|
|
68.6
|
%
|
|||
Common equity / total capitalization and short-term financing
|
54.3
|
%
|
|
60.0
|
%
|
|
61.1
|
%
|
|||
Book value per share
|
$
|
28.92
|
|
|
$
|
26.74
|
|
|
$
|
25.15
|
|
Market price:
|
|
|
|
|
|
||||||
High
|
$
|
61.170
|
|
|
$
|
48.920
|
|
|
$
|
44.530
|
|
Low
|
$
|
45.840
|
|
|
$
|
39.890
|
|
|
$
|
36.000
|
|
Close
|
$
|
60.020
|
|
|
$
|
45.400
|
|
|
$
|
43.350
|
|
Average number of shares outstanding
|
9,620,641
|
|
|
9,586,144
|
|
|
9,555,799
|
|
|||
Shares outstanding at year-end
|
9,638,230
|
|
|
9,597,499
|
|
|
9,567,307
|
|
|||
Registered common shareholders
|
2,345
|
|
|
2,396
|
|
|
2,481
|
|
|||
Cash dividends declared per share
|
$
|
1.52
|
|
|
$
|
1.44
|
|
|
$
|
1.37
|
|
Dividend yield (annualized)
(4)
|
2.6
|
%
|
|
3.2
|
%
|
|
3.2
|
%
|
|||
Payout ratio from continuing operations
(1) (5)
|
44.6
|
%
|
|
47.8
|
%
|
|
47.4
|
%
|
|||
Additional Data
|
|
|
|
|
|
||||||
Customers
|
|
|
|
|
|
||||||
Natural gas distribution
|
138,210
|
|
|
124,015
|
|
|
121,934
|
|
|||
Electric distribution
|
31,151
|
|
|
31,066
|
|
|
30,986
|
|
|||
Propane distribution
|
51,988
|
|
|
49,312
|
|
|
48,824
|
|
|||
Volumes
|
|
|
|
|
|
||||||
Natural gas deliveries (in Dts)
|
74,117,121
|
|
|
66,784,690
|
|
|
57,493,022
|
|
|||
Electric Distribution (in MWHs)
|
649,025
|
|
|
670,998
|
|
|
694,653
|
|
|||
Propane distribution (in thousands of gallons)
|
48,511
|
|
|
37,438
|
|
|
37,387
|
|
|||
Heating degree-days (Delmarva Peninsula)
|
|
|
|
|
|
||||||
Actual HDD
|
4,638
|
|
|
3,936
|
|
|
4,221
|
|
|||
10-year average HDD (normal)
|
4,454
|
|
|
4,491
|
|
|
4,499
|
|
|||
Heating degree-days (Florida)
|
|
|
|
|
|
||||||
Actual HDD
|
671
|
|
|
633
|
|
|
753
|
|
|||
10-year average HDD (normal)
|
885
|
|
|
915
|
|
|
920
|
|
|||
Cooling degree-days (Florida)
|
|
|
|
|
|
||||||
Actual CDD
|
2,750
|
|
|
2,871
|
|
|
2,858
|
|
|||
10-year average CDD (normal)
|
2,750
|
|
|
2,756
|
|
|
2,718
|
|
|||
Propane bulk storage capacity (in thousands of gallons)
|
3,566
|
|
|
3,400
|
|
|
3,351
|
|
|||
Total employees
(1)
|
842
|
|
|
738
|
|
|
711
|
|
(1)
|
These amounts exclude the results of distributed energy and water services due to their reclassification to discontinued operations. We closed our distributed energy operation in 2007. All assets of the water businesses were sold in 2004 and 2003.
|
(2)
|
These amounts include the financial position and results of operation of FPU for the period from the merger closing (October 28, 2009) to December 31, 2009.
|
(3)
|
ASC Topic 718,
Compensation—Stock Compensation
, and ASC Topic 715,
Compensation—Retirement Plans
, were adopted in the year 2006; therefore, they were not applicable for the years prior to 2006.
|
(4)
|
Dividend yield (annualized) is calculated by multiplying the fourth quarter dividend by four (4), then dividing that amount by the closing common stock price at December 31.
|
(5)
|
The payout ratio from continuing operations is calculated by dividing cash dividends declared per share (for the year) by basic earnings per share from continuing operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2010
|
|
2009
(2)
|
|
2008
|
|
2007
|
|
2006
(3)
|
|
2005
|
|
2004
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
2.75
|
|
|
$
|
2.17
|
|
|
$
|
2.00
|
|
|
$
|
1.96
|
|
|
$
|
1.78
|
|
|
$
|
1.83
|
|
|
$
|
1.68
|
|
$
|
2.73
|
|
|
$
|
2.15
|
|
|
$
|
1.98
|
|
|
$
|
1.94
|
|
|
$
|
1.76
|
|
|
$
|
1.81
|
|
|
$
|
1.64
|
|
11.6
|
%
|
|
11.2
|
%
|
|
11.2
|
%
|
|
11.5
|
%
|
|
11.0
|
%
|
|
13.2
|
%
|
|
12.8
|
%
|
|||||||
71.6
|
%
|
|
68.0
|
%
|
|
58.7
|
%
|
|
65.4
|
%
|
|
61.0
|
%
|
|
59.0
|
%
|
|
54.1
|
%
|
|||||||
58.2
|
%
|
|
56.1
|
%
|
|
49.4
|
%
|
|
50.6
|
%
|
|
51.1
|
%
|
|
46.0
|
%
|
|
51.3
|
%
|
|||||||
$
|
23.75
|
|
|
$
|
22.33
|
|
|
$
|
18.03
|
|
|
$
|
17.64
|
|
|
$
|
16.62
|
|
|
$
|
14.41
|
|
|
$
|
13.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
42.200
|
|
|
$
|
35.000
|
|
|
$
|
34.840
|
|
|
$
|
37.250
|
|
|
$
|
35.650
|
|
|
$
|
35.780
|
|
|
$
|
27.550
|
|
$
|
28.010
|
|
|
$
|
22.020
|
|
|
$
|
21.930
|
|
|
$
|
28.000
|
|
|
$
|
27.900
|
|
|
$
|
23.600
|
|
|
$
|
20.420
|
|
$
|
41.520
|
|
|
$
|
32.050
|
|
|
$
|
31.480
|
|
|
$
|
31.850
|
|
|
$
|
30.650
|
|
|
$
|
30.800
|
|
|
$
|
26.700
|
|
9,474,554
|
|
|
7,313,320
|
|
|
6,811,848
|
|
|
6,743,041
|
|
|
6,032,462
|
|
|
5,836,463
|
|
|
5,735,405
|
|
|||||||
9,524,195
|
|
|
9,394,314
|
|
|
6,827,121
|
|
|
6,777,410
|
|
|
6,688,084
|
|
|
5,883,099
|
|
|
5,778,976
|
|
|||||||
2,482
|
|
|
2,670
|
|
|
1,914
|
|
|
1,920
|
|
|
1,978
|
|
|
2,026
|
|
|
2,026
|
|
|||||||
$
|
1.31
|
|
|
$
|
1.25
|
|
|
$
|
1.21
|
|
|
$
|
1.18
|
|
|
$
|
1.16
|
|
|
$
|
1.14
|
|
|
$
|
1.12
|
|
3.2
|
%
|
|
3.9
|
%
|
|
3.9
|
%
|
|
3.7
|
%
|
|
3.8
|
%
|
|
3.7
|
%
|
|
4.2
|
%
|
|||||||
47.6
|
%
|
|
57.6
|
%
|
|
60.5
|
%
|
|
60.2
|
%
|
|
65.2
|
%
|
|
62.3
|
%
|
|
66.7
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
120,230
|
|
|
117,887
|
|
|
65,201
|
|
|
62,884
|
|
|
59,132
|
|
|
54,786
|
|
|
50,878
|
|
|||||||
30,966
|
|
|
31,030
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
48,100
|
|
|
48,680
|
|
|
34,981
|
|
|
34,143
|
|
|
33,282
|
|
|
32,117
|
|
|
34,888
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
49,310,314
|
|
|
50,159,227
|
|
|
46,539,142
|
|
|
42,910,964
|
|
|
41,826,357
|
|
|
43,716,921
|
|
|
39,469,915
|
|
|||||||
751,507
|
|
|
105,739
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
39,807
|
|
|
32,546
|
|
|
27,956
|
|
|
29,785
|
|
|
24,243
|
|
|
26,178
|
|
|
24,979
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
4,831
|
|
|
4,729
|
|
|
4,431
|
|
|
4,504
|
|
|
3,931
|
|
|
4,792
|
|
|
4,553
|
|
|||||||
4,528
|
|
|
4,462
|
|
|
4,401
|
|
|
4,376
|
|
|
4,372
|
|
|
4,436
|
|
|
4,389
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
1,501
|
|
|
911
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
863
|
|
|
849
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2,859
|
|
|
2,770
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
2,695
|
|
|
2,687
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
3,041
|
|
|
3,042
|
|
|
2,471
|
|
|
2,441
|
|
|
2,315
|
|
|
2,315
|
|
|
2,045
|
|
|||||||
734
|
|
|
757
|
|
|
448
|
|
|
445
|
|
|
437
|
|
|
423
|
|
|
426
|
|
•
|
executing a capital investment program in pursuit of organic growth opportunities that generate returns equal to or greater than our cost of capital;
|
•
|
expanding the regulated energy distribution and transmission businesses into new geographic areas and providing new services in our current service territories;
|
•
|
expanding the propane distribution business in existing and new markets through leveraging our community gas system services and our bulk delivery capabilities;
|
•
|
expanding both our regulated energy and unregulated energy businesses through strategic acquisitions;
|
•
|
utilizing our expertise across our various businesses to improve overall performance;
|
•
|
pursuing and entering new unregulated energy markets and business lines that will complement our existing strategy and operating units;
|
•
|
enhancing marketing channels to attract new customers;
|
•
|
providing reliable and responsive customer service to existing customers so they become our best promoters;
|
•
|
engaging our customers through a distinctive service excellence initiative;
|
•
|
developing and retaining a high performing team that advances our goals;
|
•
|
empowering and engaging our employees at all levels to live our brand and vision;
|
•
|
demonstrating community leadership and engaging our local communities and governments in a cooperative and mutually beneficial way;
|
•
|
maintaining a capital structure that enables us to access capital as needed;
|
•
|
maintaining a consistent and competitive dividend for shareholders; and
|
•
|
creating and maintaining a diversified customer base, energy portfolio and utility foundation.
|
•
|
Propane forward contracts entered into by Xeron; and
|
•
|
Propane put and call options entered into by Sharp.
|
(in thousands except per share)
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
||||||||||||
For the Year Ended December 31,
|
2013
|
|
2012
|
|
(decrease)
|
|
2012
|
|
2011
|
|
(decrease)
|
||||||||||||
Business Segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Regulated Energy
|
$
|
50,084
|
|
|
$
|
46,999
|
|
|
$
|
3,085
|
|
|
$
|
46,999
|
|
|
$
|
43,911
|
|
|
$
|
3,088
|
|
Unregulated Energy
|
12,353
|
|
|
8,355
|
|
|
3,998
|
|
|
8,355
|
|
|
9,619
|
|
|
(1,264
|
)
|
||||||
Other
|
297
|
|
|
1,281
|
|
|
(984
|
)
|
|
1,281
|
|
|
175
|
|
|
1,106
|
|
||||||
Operating Income
|
62,734
|
|
|
56,635
|
|
|
6,099
|
|
|
56,635
|
|
|
53,705
|
|
|
2,930
|
|
||||||
Other Income
|
372
|
|
|
271
|
|
|
101
|
|
|
271
|
|
|
906
|
|
|
(635
|
)
|
||||||
Interest Charges
|
8,234
|
|
|
8,747
|
|
|
(513
|
)
|
|
8,747
|
|
|
9,000
|
|
|
(253
|
)
|
||||||
Pre-tax Income
|
54,872
|
|
|
48,159
|
|
|
6,713
|
|
|
48,159
|
|
|
45,611
|
|
|
2,548
|
|
||||||
Income Taxes
|
22,085
|
|
|
19,296
|
|
|
2,789
|
|
|
19,296
|
|
|
17,989
|
|
|
1,307
|
|
||||||
Net Income
|
$
|
32,787
|
|
|
$
|
28,863
|
|
|
$
|
3,924
|
|
|
$
|
28,863
|
|
|
$
|
27,622
|
|
|
$
|
1,241
|
|
Earnings Per Share of Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
3.41
|
|
|
$
|
3.01
|
|
|
$
|
0.40
|
|
|
$
|
3.01
|
|
|
$
|
2.89
|
|
|
$
|
0.12
|
|
Diluted
|
$
|
3.39
|
|
|
$
|
2.99
|
|
|
$
|
0.40
|
|
|
$
|
2.99
|
|
|
$
|
2.87
|
|
|
$
|
0.12
|
|
(in thousands, except per share)
|
|
Pre-tax
Income |
|
Net
Income |
|
Earnings
Per Share |
||||||
Year ended December 31, 2012 Reported Results
|
|
$
|
48,159
|
|
|
$
|
28,863
|
|
|
$
|
2.99
|
|
Adjusting for unusual items:
|
|
|
|
|
|
|
||||||
Weather impact (due primarily to significantly warmer-than-normal weather in 2012)
|
|
3,399
|
|
|
2,037
|
|
|
0.21
|
|
|||
Regulatory recovery of litigation-related costs
|
|
1,494
|
|
|
895
|
|
|
0.09
|
|
|||
Accrual for additional taxes other than income
|
|
(990
|
)
|
|
(593
|
)
|
|
(0.06
|
)
|
|||
One-time sales tax expensed by Sandpiper associated with the acquisition
|
|
(726
|
)
|
|
(435
|
)
|
|
(0.04
|
)
|
|||
|
|
3,177
|
|
|
1,904
|
|
|
0.20
|
|
|||
Increased (Decreased) Gross Margins:
|
|
|
|
|
|
|
||||||
Major projects (see Major Project Highlights table)
|
|
|
|
|
|
|
||||||
Contribution from Sandpiper
|
|
4,432
|
|
|
2,656
|
|
|
0.27
|
|
|||
Service expansions
|
|
3,710
|
|
|
2,223
|
|
|
0.23
|
|
|||
Higher propane margins
|
|
3,163
|
|
|
1,896
|
|
|
0.20
|
|
|||
Contribution from other new acquisitions
|
|
2,016
|
|
|
1,208
|
|
|
0.12
|
|
|||
Other natural gas growth
|
|
1,824
|
|
|
1,094
|
|
|
0.11
|
|
|||
Propane wholesale marketing
|
|
(1,137
|
)
|
|
(681
|
)
|
|
(0.07
|
)
|
|||
|
|
14,008
|
|
|
8,396
|
|
|
0.86
|
|
|||
Increased Other Operating Expenses:
|
|
|
|
|
|
|
||||||
Expenses from acquisitions
|
|
(5,309
|
)
|
|
(3,182
|
)
|
|
(0.33
|
)
|
|||
Higher payroll and benefits costs
|
|
(2,407
|
)
|
|
(1,443
|
)
|
|
(0.15
|
)
|
|||
Increased incentive bonuses
|
|
(2,002
|
)
|
|
(1,200
|
)
|
|
(0.12
|
)
|
|||
Higher depreciation, asset removal and property tax costs due to new capital investments
|
|
(1,555
|
)
|
|
(932
|
)
|
|
(0.10
|
)
|
|||
|
|
(11,273
|
)
|
|
(6,757
|
)
|
|
(0.70
|
)
|
|||
Net Other Changes
|
|
801
|
|
|
381
|
|
|
0.04
|
|
|||
Year ended December 31, 2013 Reported Results
|
|
$
|
54,872
|
|
|
$
|
32,787
|
|
|
$
|
3.39
|
|
(in thousands, except per share amounts)
|
Pre-tax
Income
|
|
Net
Income
|
|
Earnings
Per Share
|
||||||
Year Ended December 31, 2011 Reported Results
|
$
|
45,611
|
|
|
$
|
27,622
|
|
|
$
|
2.87
|
|
Adjusting for unusual items:
|
|
|
|
|
|
||||||
Weather impact
|
(3,627
|
)
|
|
(2,197
|
)
|
|
(0.23
|
)
|
|||
Amortization of FPU acquisition premium and costs
|
(2,354
|
)
|
|
(1,426
|
)
|
|
(0.15
|
)
|
|||
Severance and pension settlement charge in 2011
|
1,299
|
|
|
787
|
|
|
0.08
|
|
|||
Florida natural gas reserve and sales tax reserve reversal in 2011
|
(1,049
|
)
|
|
(636
|
)
|
|
(0.07
|
)
|
|||
Amortization of deferred tax gain
|
684
|
|
|
414
|
|
|
0.04
|
|
|||
Litigation settlement with a major propane supplier in 2011
|
(575
|
)
|
|
(348
|
)
|
|
(0.04
|
)
|
|||
Gain from the sale of Internet Protocol asset in 2011
|
(553
|
)
|
|
(335
|
)
|
|
(0.03
|
)
|
|||
|
(6,175
|
)
|
|
(3,741
|
)
|
|
(0.40
|
)
|
|||
Increased Margins:
|
|
|
|
|
|
||||||
Major projects (see Major Project Highlights table)
|
|
|
|
|
|
||||||
Service expansions
|
4,466
|
|
|
2,705
|
|
|
0.28
|
|
|||
Other natural gas growth
|
1,795
|
|
|
1,088
|
|
|
0.11
|
|
|||
Higher propane margins
|
2,724
|
|
|
1,650
|
|
|
0.17
|
|
|||
BravePoint
|
2,602
|
|
|
1,576
|
|
|
0.16
|
|
|||
|
11,587
|
|
|
7,019
|
|
|
0.72
|
|
|||
Increased Other Operating Expenses:
|
|
|
|
|
|
||||||
BravePoint, primarily due to employee-related costs
|
(1,523
|
)
|
|
(923
|
)
|
|
(0.10
|
)
|
|||
Higher depreciation, asset removal and facilities costs
|
(1,326
|
)
|
|
(803
|
)
|
|
(0.08
|
)
|
|||
Acquisition-related costs and increased capacity for future growth
|
(758
|
)
|
|
(459
|
)
|
|
(0.05
|
)
|
|||
|
(3,607
|
)
|
|
(2,185
|
)
|
|
(0.23
|
)
|
|||
|
|
|
|
|
|
||||||
Net other changes
|
743
|
|
|
148
|
|
|
0.03
|
|
|||
Year Ended December 31, 2012 Reported Results
|
$
|
48,159
|
|
|
$
|
28,863
|
|
|
$
|
2.99
|
|
|
|
Gross Margin
|
||||||||||||||
Major Projects
|
|
2011
|
|
2012
|
|
2013
|
|
2014
(1)
|
||||||||
Acquisition:
|
|
|
|
|
|
|
|
|
||||||||
ESG acquisition being served by Sandpiper in Worcester County, Maryland
(2)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,432
|
|
|
$
|
9,817
|
|
Service Expansions
|
|
|
|
|
|
|
|
|
||||||||
Natural Gas Distribution:
|
|
|
|
|
|
|
|
|
||||||||
Long-term
|
|
|
|
|
|
|
|
|
||||||||
Sussex County, Delaware
|
|
$
|
1
|
|
|
$
|
590
|
|
|
$
|
670
|
|
|
$
|
694
|
|
Natural Gas Transmission:
|
|
|
|
|
|
|
|
|
||||||||
Short-term
|
|
|
|
|
|
|
|
|
||||||||
New Castle County, Delaware
(3) (4) (5)
|
|
$
|
168
|
|
|
$
|
868
|
|
|
$
|
398
|
|
|
$
|
1,862
|
|
Kent County, Delaware
(3)
|
|
—
|
|
|
—
|
|
|
1,158
|
|
|
—
|
|
||||
Total Short-term
|
|
$
|
168
|
|
|
$
|
868
|
|
|
$
|
1,556
|
|
|
$
|
1,862
|
|
Long-term
|
|
|
|
|
|
|
|
|
||||||||
Sussex County, Delaware
|
|
$
|
156
|
|
|
$
|
1,269
|
|
|
$
|
1,437
|
|
|
$
|
1,725
|
|
New Castle County, Delaware
(6)
|
|
243
|
|
|
530
|
|
|
1,637
|
|
|
2,964
|
|
||||
Nassau County, Florida
|
|
—
|
|
|
1,540
|
|
|
1,314
|
|
|
1,300
|
|
||||
Worcester County, Maryland
|
|
—
|
|
|
90
|
|
|
417
|
|
|
547
|
|
||||
Cecil County, Maryland
|
|
—
|
|
|
147
|
|
|
926
|
|
|
1,147
|
|
||||
Indian River, Florida
|
|
—
|
|
|
—
|
|
|
350
|
|
|
840
|
|
||||
Kent County, Delaware
|
|
—
|
|
|
—
|
|
|
437
|
|
|
2,660
|
|
||||
Total Long-term
|
|
$
|
399
|
|
|
$
|
3,576
|
|
|
$
|
6,518
|
|
|
$
|
11,183
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Service Expansions
|
|
$
|
568
|
|
|
$
|
5,034
|
|
|
$
|
8,744
|
|
|
$
|
13,739
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Major Projects
|
|
$
|
568
|
|
|
$
|
5,034
|
|
|
$
|
13,176
|
|
|
$
|
23,556
|
|
For the Periods Ended December 31,
|
2013
|
|
2012
|
|
Variance
|
|
2012
|
|
2011
|
|
Variance
|
||||||
Delmarva
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual HDD
|
4,638
|
|
|
3,936
|
|
|
702
|
|
|
3,936
|
|
|
4,221
|
|
|
(285
|
)
|
10-Year Average HDD ("Normal")
|
4,454
|
|
|
4,491
|
|
|
(37
|
)
|
|
4,491
|
|
|
4,499
|
|
|
(8
|
)
|
Variance from Normal
|
184
|
|
|
(555
|
)
|
|
|
|
(555
|
)
|
|
(278
|
)
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Florida
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual HDD
|
671
|
|
|
633
|
|
|
38
|
|
|
633
|
|
|
753
|
|
|
(120
|
)
|
10-Year Average HDD ("Normal")
|
885
|
|
|
915
|
|
|
(30
|
)
|
|
915
|
|
|
920
|
|
|
(5
|
)
|
Variance from Normal
|
(214
|
)
|
|
(282
|
)
|
|
|
|
(282
|
)
|
|
(167
|
)
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Florida
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual CDD
|
2,750
|
|
|
2,871
|
|
|
(121
|
)
|
|
2,871
|
|
|
2,858
|
|
|
13
|
|
10-Year Average CDD ("Normal")
|
2,750
|
|
|
2,756
|
|
|
(6
|
)
|
|
2,756
|
|
|
2,718
|
|
|
38
|
|
Variance from Normal
|
—
|
|
|
115
|
|
|
|
|
115
|
|
|
140
|
|
|
|
(in thousands)
|
2013 vs. 2012
|
|
2013 vs. Normal
|
|
2012 vs. 2011
|
|
2012 vs. Normal
|
||||||||
Delmarva
|
|
|
|
|
|
|
|
||||||||
Regulated Energy
|
$
|
984
|
|
|
$
|
493
|
|
|
$
|
(446
|
)
|
|
$
|
(909
|
)
|
Unregulated Energy
|
3,069
|
|
|
260
|
|
|
(2,246
|
)
|
|
(2,713
|
)
|
||||
Florida
|
|
|
|
|
|
|
|
||||||||
Regulated Energy
|
(571
|
)
|
|
(1,204
|
)
|
|
(479
|
)
|
|
(1,193
|
)
|
||||
Unregulated Energy
|
(83
|
)
|
|
(316
|
)
|
|
(456
|
)
|
|
(242
|
)
|
||||
Total
|
$
|
3,399
|
|
|
$
|
(767
|
)
|
|
$
|
(3,627
|
)
|
|
$
|
(5,057
|
)
|
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
||||||||||||
For the Year Ended December 31,
|
2013
|
|
2012
|
|
(decrease)
|
|
2012
|
|
2011
|
|
(decrease)
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
264,637
|
|
|
$
|
246,208
|
|
|
$
|
18,429
|
|
|
$
|
246,208
|
|
|
$
|
256,226
|
|
|
$
|
(10,018
|
)
|
Cost of sales
|
118,817
|
|
|
111,402
|
|
|
7,415
|
|
|
111,402
|
|
|
128,111
|
|
|
(16,709
|
)
|
||||||
Gross margin
|
145,820
|
|
|
134,806
|
|
|
11,014
|
|
|
134,806
|
|
|
128,115
|
|
|
6,691
|
|
||||||
Operations & maintenance
|
65,713
|
|
|
61,113
|
|
|
4,600
|
|
|
61,113
|
|
|
59,816
|
|
|
1,297
|
|
||||||
Depreciation & amortization
|
19,822
|
|
|
18,653
|
|
|
1,169
|
|
|
18,653
|
|
|
16,512
|
|
|
2,141
|
|
||||||
Other taxes
|
10,201
|
|
|
8,041
|
|
|
2,160
|
|
|
8,041
|
|
|
7,876
|
|
|
165
|
|
||||||
Other operating expenses
|
95,736
|
|
|
87,807
|
|
|
7,929
|
|
|
87,807
|
|
|
84,204
|
|
|
3,603
|
|
||||||
Operating Income
|
$
|
50,084
|
|
|
$
|
46,999
|
|
|
$
|
3,085
|
|
|
$
|
46,999
|
|
|
$
|
43,911
|
|
|
$
|
3,088
|
|
(in thousands)
|
|
||
Gross margin for the year ended December 31, 2012
|
$
|
134,806
|
|
Factors contributing to the gross margin increase for the year ended December 31, 2013:
|
|
||
Contribution from Sandpiper
|
4,432
|
|
|
Service expansions
|
3,710
|
|
|
Other natural gas growth
|
1,824
|
|
|
Additional surcharge for GRIP in Florida
|
724
|
|
|
Increased customer consumption—weather and other
|
455
|
|
|
Other
|
(131
|
)
|
|
Gross margin for the year ended December 31, 2013
|
$
|
145,820
|
|
•
|
$1.5 million
from expansions of natural gas transmission and distribution services - Expansion initiatives completed in 2012 and 2013 in Sussex County, Delaware; Worcester and Cecil Counties, Maryland; and Nassau and Indian River Counties, Florida.
|
•
|
$1.4 million
from short-term natural gas transmission services - From May to October 2013, Eastern Shore provided short-term transmission services to industrial customers located in New Castle and Kent Counties, Delaware by using existing system capacity. In November 2013, upon completion of construction of new facilities, these short-term contracts were replaced with long-term service contracts.
|
•
|
$702,000
from long-term transmission services commenced in November 2013 - In November 2013, Eastern Shore began providing long-term transmission services to industrial customers, which displaced the short-term services previously
|
•
|
$1.5 million
from Florida customer growth - Our Florida natural gas distribution operation experienced additional gross margin due primarily to new services to commercial and industrial customers.
|
•
|
$566,000
from Delmarva customer growth - We experienced
two
percent residential customer growth, as well as growth in commercial and industrial customers, in our Delmarva natural gas distribution operation.
|
(in thousands)
|
|
||
Gross margin for the year ended December 31, 2011
|
$
|
128,115
|
|
Factors contributing to the gross margin increase for the year ended December 31, 2012:
|
|
||
Service expansions
|
4,466
|
|
|
Other natural gas growth
|
1,795
|
|
|
Florida natural gas regulatory reserve
|
(750
|
)
|
|
Eastern Shore rate case settlement
|
737
|
|
|
Other
|
673
|
|
|
Decreased customer consumption—weather and other
|
(230
|
)
|
|
Gross margin for the year ended December 31, 2012
|
$
|
134,806
|
|
•
|
$589,000 from new natural gas distribution services in Sussex County, Delaware - We initiated new natural gas distribution service to several industrial customers in Sussex County, Delaware in late 2011 and during 2012.
|
•
|
$700,000 from short-term natural gas transmission services - Eastern Shore provided a short-term transmission service from November 2011 to October 2012 for 9,415 Dts/d to an industrial customer, which generated additional gross margin of $713,000 in 2012. This short-term service was replaced by a long-term service contract for the same capacity in November 2012.
|
•
|
$1.1 million from the Sussex County expansion - In conjunction with providing new natural gas distribution service in Sussex County, Delaware, as previously discussed, Eastern Shore initiated new natural gas transmission service in 2011 and 2012.
|
•
|
$1.5 million from the Nassau County, Florida expansion - Peninsula Pipeline generated additional gross margin during 2012 as a result of this new transmission service.
|
•
|
$237,000 from the Worcester and Cecil Counties, Maryland expansions - We generated additional transmission gross margin of $90,000 and $147,000 during 2012 as a result of Eastern Shore's expansion to Worcester and Cecil Counties, Maryland, respectively.
|
•
|
$1.1 million from Delmarva customer growth - Our Delmarva natural gas distribution operation generated $1.1 million of additional gross margin, due primarily to the addition of 12 new large commercial and industrial customers in 2011 and two-percent growth in residential customers.
|
•
|
$986,000 from Florida customer growth - Our Florida natural gas distribution operation generated $986,000 of additional gross margin due primarily to growth in commercial and industrial customers.
|
•
|
$360,000 in expired natural gas transmission contracts - Partially offsetting the above increases in gross margin was a decrease in gross margin as a result of expired natural gas transmission contracts.
|
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
||||||||||||
For the Year Ended December 31,
|
2013
|
|
2012
|
|
(decrease)
|
|
2012
|
|
2011
|
|
(decrease)
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
166,723
|
|
|
$
|
133,049
|
|
|
$
|
33,674
|
|
|
$
|
133,049
|
|
|
$
|
149,586
|
|
|
$
|
(16,537
|
)
|
Cost of sales
|
121,348
|
|
|
97,137
|
|
|
24,211
|
|
|
97,137
|
|
|
112,415
|
|
|
(15,278
|
)
|
||||||
Gross margin
|
45,375
|
|
|
35,912
|
|
|
9,463
|
|
|
35,912
|
|
|
37,171
|
|
|
(1,259
|
)
|
||||||
Operations & maintenance
|
26,657
|
|
|
22,804
|
|
|
3,853
|
|
|
22,804
|
|
|
22,863
|
|
|
(59
|
)
|
||||||
Depreciation & amortization
|
3,686
|
|
|
3,420
|
|
|
266
|
|
|
3,420
|
|
|
3,229
|
|
|
191
|
|
||||||
Other taxes
|
2,679
|
|
|
1,333
|
|
|
1,346
|
|
|
1,333
|
|
|
1,460
|
|
|
(127
|
)
|
||||||
Other operating expenses
|
33,022
|
|
|
27,557
|
|
|
5,465
|
|
|
27,557
|
|
|
27,552
|
|
|
5
|
|
||||||
Operating Income
|
$
|
12,353
|
|
|
$
|
8,355
|
|
|
$
|
3,998
|
|
|
$
|
8,355
|
|
|
$
|
9,619
|
|
|
$
|
(1,264
|
)
|
(in thousands)
|
|
||
Gross margin for the year ended December 31, 2012
|
$
|
35,912
|
|
Factors contributing to the gross margin increase for the year ended December 31, 2013:
|
|
||
Increased customer consumption—weather and other
|
4,233
|
|
|
Increase in propane margins
|
3,163
|
|
|
Contributions from acquisitions
|
1,989
|
|
|
Other
|
1,215
|
|
|
Decreased propane wholesale marketing margins
|
(1,137
|
)
|
|
Gross margin for the year ended December 31, 2013
|
$
|
45,375
|
|
•
|
$3.0 million
from increased weather-related consumption - Temperatures on the Delmarva Peninsula returned to more normal levels in 2013, which generated additional gross margin of
$3.1 million
. This was offset by an
$83,000
decrease in gross margin in Florida.
|
•
|
$573,000
from non-weather related volumes - This was attributable to the timing of deliveries to bulk customers.
|
•
|
$675,000
from higher wholesale sales - An increase in wholesale propane sales generated additional gross margin.
|
•
|
$2.7 million from decreased weather-related consumption - Significantly warmer weather, particularly during the first three months of 2012, when propane demand for heating is typically at its highest, resulted in decreased propane consumption.
|
•
|
$515,000 from decreased non-weather-related volume - Our Delmarva and Florida propane distribution operations experienced a decline in sales volume, beyond the estimated weather impact in 2012, due to the timing of deliveries to bulk-delivery customers, conservation and other factors. This was partially offset by additional gross margin generated from 1,180 customers acquired in late 2011 and early 2012, following the purchase of the operating assets of several small propane distribution companies in Florida.
|
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
||||||||||||
For the Year Ended December 31,
|
2013
|
|
2012
|
|
(decrease)
|
|
2012
|
|
2011
|
|
(decrease)
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
19,990
|
|
|
$
|
18,357
|
|
|
$
|
1,633
|
|
|
$
|
18,357
|
|
|
$
|
13,829
|
|
|
$
|
4,528
|
|
Cost of sales
|
10,544
|
|
|
8,872
|
|
|
1,672
|
|
|
8,872
|
|
|
7,051
|
|
|
1,821
|
|
||||||
Gross margin
|
9,446
|
|
|
9,485
|
|
|
(39
|
)
|
|
9,485
|
|
|
6,778
|
|
|
2,707
|
|
||||||
Operations & maintenance
|
7,761
|
|
|
6,953
|
|
|
808
|
|
|
6,953
|
|
|
5,515
|
|
|
1,438
|
|
||||||
Depreciation & amortization
|
457
|
|
|
438
|
|
|
19
|
|
|
438
|
|
|
413
|
|
|
25
|
|
||||||
Other taxes
|
931
|
|
|
814
|
|
|
117
|
|
|
814
|
|
|
676
|
|
|
138
|
|
||||||
Other operating expenses
|
9,149
|
|
|
8,205
|
|
|
944
|
|
|
8,205
|
|
|
6,604
|
|
|
1,601
|
|
||||||
Operating Income — Other
|
297
|
|
|
1,280
|
|
|
(983
|
)
|
|
1,280
|
|
|
174
|
|
|
1,106
|
|
||||||
Operating Income — Eliminations
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
|
1
|
|
|
—
|
|
||||||
Operating Income
|
$
|
297
|
|
|
$
|
1,281
|
|
|
$
|
(984
|
)
|
|
$
|
1,281
|
|
|
$
|
175
|
|
|
$
|
1,106
|
|
|
December 31,
2013
|
|
December 31,
2012
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||
Long-term debt, net of current maturities
|
$
|
117,592
|
|
|
30
|
%
|
|
$
|
101,907
|
|
|
28
|
%
|
Stockholders’ equity
|
278,773
|
|
|
70
|
%
|
|
256,598
|
|
|
72
|
%
|
||
Total capitalization, excluding short-term borrowings
|
$
|
396,365
|
|
|
100
|
%
|
|
$
|
358,505
|
|
|
100
|
%
|
|
December 31,
2013 |
|
December 31,
2012 |
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||
Short-term debt
|
$
|
105,666
|
|
|
21
|
%
|
|
$
|
61,199
|
|
|
14
|
%
|
Long-term debt, including current maturities
|
128,945
|
|
|
25
|
%
|
|
110,103
|
|
|
26
|
%
|
||
Stockholders’ equity
|
278,773
|
|
|
54
|
%
|
|
256,598
|
|
|
60
|
%
|
||
Total capitalization, including short-term borrowings
|
$
|
513,384
|
|
|
100
|
%
|
|
$
|
427,900
|
|
|
100
|
%
|
(in thousands)
|
2013
|
2012
|
2011
|
||||||
Average borrowings
|
$
|
67,367
|
|
$
|
23,419
|
|
$
|
11,000
|
|
Weighted average interest rate
|
1.34
|
%
|
1.79
|
%
|
2.35
|
%
|
|||
Maximum month-end borrowings
|
$
|
102,554
|
|
$
|
56,421
|
|
$
|
35,357
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
72,931
|
|
|
$
|
66,641
|
|
|
$
|
71,121
|
|
Investing activities
|
(114,781
|
)
|
|
(70,598
|
)
|
|
(47,836
|
)
|
|||
Financing activities
|
41,845
|
|
|
4,681
|
|
|
(22,291
|
)
|
|||
Net increase in cash and cash equivalents
|
(5
|
)
|
|
724
|
|
|
994
|
|
|||
Cash and cash equivalents—beginning of period
|
3,361
|
|
|
2,637
|
|
|
1,643
|
|
|||
Cash and cash equivalents—end of period
|
$
|
3,356
|
|
|
$
|
3,361
|
|
|
$
|
2,637
|
|
•
|
Net income, adjusted for reconciling activities, increased cash flows by
$5.6 million
, due primarily to higher earnings and increased non-cash items, such as depreciation and amortization expenses included in our earnings;
|
•
|
Lower net regulatory liabilities increased cash flows by
$7.3 million
, due primarily to an increase in fuel cost collected through the fuel cost recovery mechanisms during 2013 and the absence of the $1.2 million refund by Eastern Shore in January 2012 to customers as a result of its rate case settlement;
|
•
|
Higher inventory balances in 2013 decreased cash flows by
$5.1 million
due primarily to higher propane costs; and
|
•
|
Lower customer deposits decreased cash flows by
$1.7 million
due to refunds to customers during the year.
|
•
|
Lower customer deposits decreased cash flows by
$6.7 million
, due primarily to the absence in 2012 of a large deposit made by an industrial customer in 2011 and refunds to customers during 2012;
|
•
|
Higher net regulatory liabilities decreased cash flows by
$2.5 million
, primarily as a result of a reduction in fuel costs due and collected from regulated customers during 2012; and
|
•
|
Lower propane inventory, storage gas and other inventory increased cash flows by
$3.1 million
, as a result of lower commodity prices during 2012, partially offset by an increase in the pipes and other construction inventory purchased during 2012.
|
•
|
Increased cash paid for capital expenditures during 2013, decreased cash flows by
$24.3 million
; and
|
•
|
Cash paid for acquisitions during 2013, due primarily to the ESG acquisition in May 2013, decreased cash flows by
$20.1 million
.
|
•
|
Increased cash paid for capital expenditures during 2012, decreased cash flows by
$25.7 million
; and
|
•
|
Cash receipts of $2.2 million from the sale of FPU's office building in West Palm Beach, Florida in 2012 increased cash flows.
|
•
|
Higher net short-term borrowings to fund capital expenditures and working capital needs increased cash flows by
$20.2 million
;
|
•
|
Net cash provided by long-term debt, due primarily to the new issuances during 2013, partially offset by the repayment of FPU’s first mortgage bonds prior to their maturities, increased cash flows by $20.0 million;
|
•
|
Book overdrafts decreased cash flows by
$2.3 million
; and
|
•
|
Higher cash dividends paid during 2013 decreased cash flows by
$746,000
.
|
•
|
Higher short-term borrowings to fund capital expenditures and working capital needs increased cash flows by
$26.1 million
;
|
•
|
Lower scheduled principal payments during 2012 increased cash flows by
$932,000
; and
|
•
|
Higher cash dividends paid during 2012 decreased cash flows by
$672,000
.
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
Less than 1
year
|
|
1 — 3 years
|
|
3 — 5 years
|
|
More than 5
years
|
|
Total
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
(1)
|
$
|
10,504
|
|
|
$
|
15,601
|
|
|
$
|
18,669
|
|
|
$
|
77,226
|
|
|
$
|
122,000
|
|
Operating leases
(2)
|
1,249
|
|
|
1,949
|
|
|
865
|
|
|
2,745
|
|
|
6,808
|
|
|||||
Capital leases
(2)
(3)
|
1,083
|
|
|
3,000
|
|
|
3,000
|
|
|
625
|
|
|
7,708
|
|
|||||
Purchase obligations
(4)
|
|
|
|
|
|
|
|
|
|
||||||||||
Transmission capacity
|
27,981
|
|
|
67,837
|
|
|
47,950
|
|
|
132,122
|
|
|
275,890
|
|
|||||
Storage — Natural Gas
|
3,193
|
|
|
8,376
|
|
|
4,167
|
|
|
1,508
|
|
|
17,244
|
|
|||||
Commodities
|
50,066
|
|
|
23,109
|
|
|
6,870
|
|
|
—
|
|
|
80,045
|
|
|||||
Electric supply
|
14,435
|
|
|
30,617
|
|
|
29,614
|
|
|
13,978
|
|
|
88,644
|
|
|||||
Forward purchase contracts — Propane
(5)
|
2,477
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,477
|
|
|||||
Unfunded benefits
(6)
|
452
|
|
|
953
|
|
|
819
|
|
|
2,887
|
|
|
5,111
|
|
|||||
Funded benefits
(7)
|
3,166
|
|
|
70
|
|
|
—
|
|
|
2,961
|
|
|
6,197
|
|
|||||
Total Contractual Obligations
|
$
|
114,606
|
|
|
$
|
151,512
|
|
|
$
|
111,954
|
|
|
$
|
234,052
|
|
|
$
|
612,124
|
|
(1)
|
Principal payments on long-term debt, see
Item 8, Financial Statements and Supplementary Data, Note 12, Long-Term Debt
, for additional discussion of this item. The expected interest payments on long-term debt are
$6.9 million
,
$12.1 million
,
$9.9 million
and
$16.8 million
, respectively, for the periods indicated above. Expected interest payments for all periods total
$45.8 million
.
|
(2)
|
See
Item 8, Financial Statements and Supplementary Data,
Note 14, Lease Obligations
, for further information.
|
(3)
|
See
Item 8, Financial Statements and Supplementary Data, Note 4, Acquisitions
, for further information.
|
(4)
|
See
Item 8, Financial Statements and Supplementary Data, Note 20, Other Commitments and Contingencies
, for further information.
|
(5)
|
We have also entered into forward sale contracts. See
Item 7A, Quantitative and Qualitative Disclosures About Market Risk
for further information.
|
(6)
|
We have recorded long-term liabilities of
$5.1 million
at
December 31, 2013
for unfunded post-employment and post-retirement benefit plans. The amounts specified in the table are based on expected payments to current retirees and assumes a retirement age of 62 for currently active employees. There are many factors that would cause actual payments to differ from these amounts, including early retirement, future health care costs that differ from past experience and discount rates implicit in calculations.
|
(7)
|
We have recorded long-term liabilities of
$13.1 million
at
December 31, 2013
for two qualified, defined benefit pension plans. The assets funding these plans are in a separate trust and are not considered assets of the Company or included in the Company’s balance sheets. The Contractual Obligations table above includes
$3.1 million
, reflecting the expected payments we will make to the trust funds in 2014. Additional contributions may be required in future years based on the actual return earned by the plan assets and other actuarial assumptions, such as the discount rate and long-term expected rate of return on plan assets. See
Item 8, Financial Statements and Supplementary Data, Note 16, Employee Benefit Plan
s, for further information on the plans. Additionally, the Contractual Obligations table includes deferred compensation obligations totaling
$3.1 million
, funded with Rabbi Trust assets in the same amount. The Rabbi Trust assets are recorded under Investments on the Balance Sheet. We assume a retirement age of 65 for purposes of distribution from this account.
|
•
|
In June 2013, our propane distribution operation entered into put options to protect against the decline in propane prices and related potential inventory losses associated with
1.3 million
gallons purchased for the propane price cap program in the upcoming heating season. If the put options are exercised, we would receive the difference between the market price and the strike price if propane prices fall below the strike prices of
$0.830
per gallon in December 2013 through February of 2014 and
$0.860
per gallon in January through March 2014. We account for these options as fair value hedges, and there is no ineffective portion of these hedges. We paid
$120,000
to purchase these put options. As of December 31, 2013, the put options had a fair value of
$20,000
. The change in the fair value of the put options effectively reduced our propane inventory balance.
|
•
|
In May 2013, our propane distribution operation entered into a call option to protect against an increase in propane prices associated with
630,000
gallons expected to be purchased at market-based prices to supply the demands of our propane price cap program customers. The retail price that we can charge to those customers during the upcoming heating season is capped at a pre-determined level. The call option is exercised if the propane prices rise above the strike price of
$0.975
per gallon in January through March 2014. We account for this call option as a derivative instrument on a mark-to-market basis with any change in its fair value being reflected in current period earnings. We paid
$72,000
to purchase this call option. As of December 31, 2013, the call option had a fair value of
$169,000
.
|
•
|
In May 2012, our propane distribution operation entered into call options to protect against an increase in propane prices associated with
1,260,000
gallons purchased for the propane price cap program for the months of December 2012 through March 2013. The strike prices of these call options ranged from
$0.905
per gallon to
$0.990
per gallon during this four-
|
At December 31, 2013
|
Quantity in
Gallons
|
|
Estimated Market
Prices
|
|
Estimated Market
Contract Prices
|
|||
Forward Contracts
|
|
|
|
|
|
|||
Sale
|
1,892,000
|
|
|
$0.9900 - $1.4750
|
|
$
|
1.2786
|
|
Purchase
|
1,991,000
|
|
|
$0.9411 - $1.4600
|
|
$
|
1.2444
|
|
At December 31, 2012
|
Quantity in
Gallons
|
|
Estimated Market
Prices
|
|
Weighted Average
Contract Prices
|
|||
Forward Contracts
|
|
|
|
|
|
|||
Sale
|
1,262,000
|
|
|
$0.7550-$1.3650
|
|
$
|
0.9214
|
|
Purchase
|
2,648,000
|
|
|
$0.7550-$1.3300
|
|
$
|
0.9291
|
|
(in thousands)
|
2013
|
|
2012
|
||||
Mark-to-market energy assets, including put/call options
|
$
|
385
|
|
|
$
|
210
|
|
Mark-to-market energy liabilities
|
$
|
127
|
|
|
$
|
331
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
(in thousands, except shares and per share data)
|
|
|
|
|
|
||||||
Operating Revenues
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
264,637
|
|
|
$
|
246,208
|
|
|
$
|
256,226
|
|
Unregulated Energy
|
166,723
|
|
|
133,049
|
|
|
149,586
|
|
|||
Other
|
12,946
|
|
|
13,245
|
|
|
12,215
|
|
|||
Total operating revenues
|
444,306
|
|
|
392,502
|
|
|
418,027
|
|
|||
Operating Expenses
|
|
|
|
|
|
||||||
Regulated energy cost of sales
|
118,818
|
|
|
111,402
|
|
|
128,111
|
|
|||
Unregulated energy and other cost of sales
|
126,017
|
|
|
101,957
|
|
|
118,787
|
|
|||
Operations
|
91,452
|
|
|
82,387
|
|
|
79,810
|
|
|||
Maintenance
|
7,509
|
|
|
7,423
|
|
|
7,449
|
|
|||
Depreciation and amortization
|
23,965
|
|
|
22,510
|
|
|
20,153
|
|
|||
Other taxes
|
13,811
|
|
|
10,188
|
|
|
10,012
|
|
|||
Total operating expenses
|
381,572
|
|
|
335,867
|
|
|
364,322
|
|
|||
Operating Income
|
62,734
|
|
|
56,635
|
|
|
53,705
|
|
|||
Other income, net of other expenses
|
372
|
|
|
271
|
|
|
906
|
|
|||
Interest charges
|
8,234
|
|
|
8,747
|
|
|
9,000
|
|
|||
Income Before Income Taxes
|
54,872
|
|
|
48,159
|
|
|
45,611
|
|
|||
Income taxes
|
22,085
|
|
|
19,296
|
|
|
17,989
|
|
|||
Net Income
|
$
|
32,787
|
|
|
$
|
28,863
|
|
|
$
|
27,622
|
|
Weighted Average Common Shares Outstanding:
|
|
|
|
|
|
||||||
Basic
|
9,620,641
|
|
|
9,586,144
|
|
|
9,555,799
|
|
|||
Diluted
|
9,695,630
|
|
|
9,671,507
|
|
|
9,651,058
|
|
|||
Earnings Per Share of Common Stock:
|
|
|
|
|
|
||||||
Basic
|
$
|
3.41
|
|
|
$
|
3.01
|
|
|
$
|
2.89
|
|
Diluted
|
$
|
3.39
|
|
|
$
|
2.99
|
|
|
$
|
2.87
|
|
Cash Dividends Declared Per Share of Common Stock
|
$
|
1.520
|
|
|
$
|
1.440
|
|
|
$
|
1.365
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Net Income
|
$
|
32,787
|
|
|
$
|
28,863
|
|
|
$
|
27,622
|
|
Other Comprehensive Income (Loss), net of tax:
|
|
|
|
|
|
||||||
Employee Benefits, net of tax:
|
|
|
|
|
|
||||||
Amortization of prior service cost, net of tax of ($24), ($26) and $432, respectively
|
(36
|
)
|
|
(37
|
)
|
|
645
|
|
|||
Net gain (loss), net of tax of $1,673, ($331) and ($1,164), respectively
|
2,565
|
|
|
(498
|
)
|
|
(1,812
|
)
|
|||
Total other comprehensive income (loss)
|
2,529
|
|
|
(535
|
)
|
|
(1,167
|
)
|
|||
Comprehensive Income
|
$
|
35,316
|
|
|
$
|
28,328
|
|
|
$
|
26,455
|
|
|
As of December 31,
|
||||||
Assets
|
2013
|
|
2012
|
||||
(in thousands, except shares and per share data)
|
|
|
|
||||
Property, Plant and Equipment
|
|
|
|
||||
Regulated energy
|
$
|
691,522
|
|
|
$
|
585,429
|
|
Unregulated energy
|
76,267
|
|
|
70,218
|
|
||
Other
|
21,002
|
|
|
20,067
|
|
||
Total property, plant and equipment
|
788,791
|
|
|
675,714
|
|
||
Less: Accumulated depreciation and amortization
|
(174,148
|
)
|
|
(155,378
|
)
|
||
Plus: Construction work in progress
|
16,603
|
|
|
21,445
|
|
||
Net property, plant and equipment
|
631,246
|
|
|
541,781
|
|
||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
3,356
|
|
|
3,361
|
|
||
Accounts receivable (less allowance for uncollectible accounts of $1,635 and $826, respectively)
|
75,293
|
|
|
53,787
|
|
||
Accrued revenue
|
13,910
|
|
|
11,688
|
|
||
Propane inventory, at average cost
|
10,456
|
|
|
7,612
|
|
||
Other inventory, at average cost
|
4,880
|
|
|
5,841
|
|
||
Regulatory assets
|
2,436
|
|
|
2,736
|
|
||
Storage gas prepayments
|
4,318
|
|
|
3,716
|
|
||
Income taxes receivable
|
2,609
|
|
|
4,703
|
|
||
Deferred income taxes
|
1,696
|
|
|
791
|
|
||
Prepaid expenses
|
6,910
|
|
|
6,020
|
|
||
Mark-to-market energy assets
|
385
|
|
|
210
|
|
||
Other current assets
|
160
|
|
|
132
|
|
||
Total current assets
|
126,409
|
|
|
100,597
|
|
||
Deferred Charges and Other Assets
|
|
|
|
||||
Goodwill
|
4,354
|
|
|
4,090
|
|
||
Other intangible assets, net
|
2,975
|
|
|
2,798
|
|
||
Investments, at fair value
|
3,098
|
|
|
4,168
|
|
||
Regulatory assets
|
66,584
|
|
|
77,408
|
|
||
Receivables and other deferred charges
|
2,856
|
|
|
2,904
|
|
||
Total deferred charges and other assets
|
79,867
|
|
|
91,368
|
|
||
Total Assets
|
$
|
837,522
|
|
|
$
|
733,746
|
|
|
As of December 31,
|
||||||
Capitalization and Liabilities
|
2013
|
|
2012
|
||||
(in thousands, except shares and per share data)
|
|
|
|
||||
Capitalization
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Common stock, par value $0.4867 per share (authorized 25,000,000)
|
$
|
4,691
|
|
|
$
|
4,671
|
|
Additional paid-in capital
|
152,341
|
|
|
150,750
|
|
||
Retained earnings
|
124,274
|
|
|
106,239
|
|
||
Accumulated other comprehensive loss
|
(2,533
|
)
|
|
(5,062
|
)
|
||
Deferred compensation obligation
|
1,124
|
|
|
982
|
|
||
Treasury stock
|
(1,124
|
)
|
|
(982
|
)
|
||
Total stockholders’ equity
|
278,773
|
|
|
256,598
|
|
||
Long-term debt, net of current maturities
|
117,592
|
|
|
101,907
|
|
||
Total capitalization
|
396,365
|
|
|
358,505
|
|
||
Current Liabilities
|
|
|
|
||||
Current portion of long-term debt
|
11,353
|
|
|
8,196
|
|
||
Short-term borrowing
|
105,666
|
|
|
61,199
|
|
||
Accounts payable
|
53,482
|
|
|
41,992
|
|
||
Customer deposits and refunds
|
26,140
|
|
|
29,271
|
|
||
Accrued interest
|
1,235
|
|
|
1,437
|
|
||
Dividends payable
|
3,710
|
|
|
3,502
|
|
||
Accrued compensation
|
8,394
|
|
|
7,435
|
|
||
Regulatory liabilities
|
4,157
|
|
|
1,577
|
|
||
Mark-to-market energy liabilities
|
127
|
|
|
331
|
|
||
Other accrued liabilities
|
7,678
|
|
|
7,226
|
|
||
Total current liabilities
|
221,942
|
|
|
162,166
|
|
||
Deferred Credits and Other Liabilities
|
|
|
|
||||
Deferred income taxes
|
142,597
|
|
|
125,205
|
|
||
Deferred investment tax credits
|
74
|
|
|
113
|
|
||
Regulatory liabilities
|
4,402
|
|
|
5,454
|
|
||
Environmental liabilities
|
9,155
|
|
|
9,114
|
|
||
Other pension and benefit costs
|
21,000
|
|
|
33,535
|
|
||
Accrued asset removal cost—Regulatory liability
|
39,510
|
|
|
38,096
|
|
||
Other liabilities
|
2,477
|
|
|
1,558
|
|
||
Total deferred credits and other liabilities
|
219,215
|
|
|
213,075
|
|
||
Other commitments and contingencies (Note 19 and 20)
|
|
|
|
||||
Total Capitalization and Liabilities
|
$
|
837,522
|
|
|
$
|
733,746
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net Income
|
$
|
32,787
|
|
|
$
|
28,863
|
|
|
$
|
27,622
|
|
Adjustments to reconcile net income to net operating cash:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
23,965
|
|
|
22,510
|
|
|
20,153
|
|
|||
Depreciation and accretion included in other costs
|
6,123
|
|
|
5,547
|
|
|
5,116
|
|
|||
Deferred income taxes, net
|
14,860
|
|
|
13,881
|
|
|
17,320
|
|
|||
(Gain) loss on sale of assets
|
(152
|
)
|
|
93
|
|
|
(453
|
)
|
|||
Unrealized (gain) loss on commodity contracts
|
(217
|
)
|
|
339
|
|
|
(41
|
)
|
|||
Unrealized gain on investments
|
(489
|
)
|
|
(451
|
)
|
|
(282
|
)
|
|||
Realized gain on sale of investments, net
|
(702
|
)
|
|
(88
|
)
|
|
—
|
|
|||
Employee benefits and compensation
|
1,119
|
|
|
1,199
|
|
|
1,960
|
|
|||
Share-based compensation
|
1,631
|
|
|
1,419
|
|
|
1,450
|
|
|||
Other, net
|
(28
|
)
|
|
(27
|
)
|
|
(50
|
)
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Sale (purchase) of investments
|
(39
|
)
|
|
(301
|
)
|
|
660
|
|
|||
Accounts receivable and accrued revenue
|
(21,244
|
)
|
|
21,549
|
|
|
14,979
|
|
|||
Propane inventory, storage gas and other inventory
|
(4,492
|
)
|
|
603
|
|
|
(2,484
|
)
|
|||
Regulatory assets
|
(395
|
)
|
|
252
|
|
|
18
|
|
|||
Prepaid expenses and other current assets
|
(1,064
|
)
|
|
(713
|
)
|
|
(345
|
)
|
|||
Other deferred charges
|
(101
|
)
|
|
26
|
|
|
179
|
|
|||
Long-term receivables
|
(228
|
)
|
|
(290
|
)
|
|
76
|
|
|||
Accounts payable and other accrued liabilities
|
18,824
|
|
|
(19,936
|
)
|
|
(13,612
|
)
|
|||
Income taxes receivable
|
2,311
|
|
|
2,223
|
|
|
(185
|
)
|
|||
Accrued interest
|
(202
|
)
|
|
(200
|
)
|
|
(152
|
)
|
|||
Customer deposits and refunds
|
(3,362
|
)
|
|
(1,647
|
)
|
|
5,096
|
|
|||
Accrued compensation
|
837
|
|
|
437
|
|
|
19
|
|
|||
Regulatory liabilities
|
2,723
|
|
|
(5,220
|
)
|
|
(2,527
|
)
|
|||
Other liabilities
|
466
|
|
|
(3,427
|
)
|
|
(3,396
|
)
|
|||
Net cash provided by operating activities
|
72,931
|
|
|
66,641
|
|
|
71,121
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Property, plant and equipment expenditures
|
(97,120
|
)
|
|
(72,776
|
)
|
|
(47,037
|
)
|
|||
Proceeds from sale of assets
|
199
|
|
|
2,279
|
|
|
937
|
|
|||
Proceeds from sale of investments
|
2,300
|
|
|
630
|
|
|
(300
|
)
|
|||
Acquisitions
|
(20,201
|
)
|
|
(124
|
)
|
|
(791
|
)
|
|||
Environmental expenditures
|
41
|
|
|
(607
|
)
|
|
(645
|
)
|
|||
Net cash used by investing activities
|
(114,781
|
)
|
|
(70,598
|
)
|
|
(47,836
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Common stock dividends
|
(13,081
|
)
|
|
(12,335
|
)
|
|
(11,663
|
)
|
|||
Purchase of stock for Dividend Reinvestment Plan
|
(1,342
|
)
|
|
(1,273
|
)
|
|
(1,244
|
)
|
|||
Change in cash overdrafts due to outstanding checks
|
(1,666
|
)
|
|
597
|
|
|
91
|
|
|||
Net borrowing (repayment) under line of credit agreements
|
46,133
|
|
|
25,894
|
|
|
(241
|
)
|
|||
Other short-term borrowing
|
—
|
|
|
—
|
|
|
(29,100
|
)
|
|||
Proceeds from issuance of long-term debt
|
27,000
|
|
|
—
|
|
|
29,000
|
|
|||
Repayment of long-term debt and capital lease obligation
|
(15,191
|
)
|
|
(8,202
|
)
|
|
(9,134
|
)
|
|||
Other
|
(8
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided (used) by financing activities
|
41,845
|
|
|
4,681
|
|
|
(22,291
|
)
|
|||
Net Increase (Decrease) in Cash and Cash Equivalents
|
(5
|
)
|
|
724
|
|
|
994
|
|
|||
Cash and Cash Equivalents — Beginning of Period
|
3,361
|
|
|
2,637
|
|
|
1,643
|
|
|||
Cash and Cash Equivalents — End of Period
|
$
|
3,356
|
|
|
$
|
3,361
|
|
|
$
|
2,637
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
(in thousands, except shares and per share data)
|
Number
of
Shares
(1)
|
|
Par
Value
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Deferred
Compensation
|
|
Treasury
Stock
|
|
Total
|
|||||||||||||||
Balances at December 31, 2010
|
9,524,195
|
|
|
$
|
4,635
|
|
|
$
|
148,159
|
|
|
$
|
76,805
|
|
|
$
|
(3,360
|
)
|
|
$
|
777
|
|
|
$
|
(777
|
)
|
|
$
|
226,239
|
|
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
27,622
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,622
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,167
|
)
|
|
—
|
|
|
—
|
|
|
(1,167
|
)
|
|||||||
Dividend declared ($1.365 per share)
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
(13,179
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,201
|
)
|
|||||||
Retirement Savings Plan
|
2,002
|
|
|
1
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80
|
|
|||||||
Conversion of Debentures
|
10,680
|
|
|
5
|
|
|
176
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
181
|
|
|||||||
Share-based compensation and tax benefit
(2) (3)
|
30,430
|
|
|
15
|
|
|
1,011
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,026
|
|
|||||||
Treasury stock activities
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
(40
|
)
|
|
—
|
|
|||||||
Balance at December 31, 2011
|
9,567,307
|
|
|
4,656
|
|
|
149,403
|
|
|
91,248
|
|
|
(4,527
|
)
|
|
817
|
|
|
(817
|
)
|
|
240,780
|
|
|||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
28,863
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,863
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(535
|
)
|
|
—
|
|
|
—
|
|
|
(535
|
)
|
|||||||
Dividend declared ($1.440 per share)
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(13,872
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,879
|
)
|
|||||||
Conversion of Debentures
|
10,975
|
|
|
5
|
|
|
181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
186
|
|
|||||||
Share-based compensation and tax benefit
(2) (3)
|
19,217
|
|
|
10
|
|
|
1,173
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,183
|
|
|||||||
Treasury stock activities
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
165
|
|
|
(165
|
)
|
|
—
|
|
|||||||
Balance at December 31, 2012
|
9,597,499
|
|
|
4,671
|
|
|
150,750
|
|
|
106,239
|
|
|
(5,062
|
)
|
|
982
|
|
|
(982
|
)
|
|
256,598
|
|
|||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
32,787
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,787
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,529
|
|
|
—
|
|
|
—
|
|
|
2,529
|
|
|||||||
Dividend declared ($1.520 per share)
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(14,752
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,758
|
)
|
|||||||
Conversion of Debentures
|
17,383
|
|
|
8
|
|
|
287
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
295
|
|
|||||||
Share-based compensation and tax benefit
(2) (3)
|
23,348
|
|
|
12
|
|
|
1,310
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,322
|
|
|||||||
Treasury stock activities
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
142
|
|
|
(142
|
)
|
|
—
|
|
|||||||
Balance at December 31, 2013
|
9,638,230
|
|
|
$
|
4,691
|
|
|
$
|
152,341
|
|
|
$
|
124,274
|
|
|
$
|
(2,533
|
)
|
|
$
|
1,124
|
|
|
$
|
(1,124
|
)
|
|
$
|
278,773
|
|
(1)
|
Includes
34,495
,
33,461
and
30,597
shares at December 31, 2013, 2012 and 2011, respectively, held in a Rabbi Trust related to our Deferred Compensation Plan.
|
(2)
|
Includes amounts for shares issued for Directors’ compensation.
|
(3)
|
The shares issued under the PIP are net of shares withheld for employee taxes. For 2013, 2012 and 2011, we withheld
10,411
,
5,670
and
12,234
shares, respectively, for taxes.
|
|
As of December 31,
|
||||||
(in thousands)
|
2013
|
|
2012
|
||||
Property, plant and equipment
|
|
|
|
||||
Regulated Energy
|
|
|
|
||||
Natural gas distribution – Delmarva
|
$
|
179,724
|
|
|
$
|
149,558
|
|
Natural gas distribution – Florida
|
199,289
|
|
|
170,943
|
|
||
Natural gas transmission
|
242,163
|
|
|
202,968
|
|
||
Electric distribution – Florida
|
70,346
|
|
|
61,960
|
|
||
Unregulated Energy
|
|
|
|
||||
Propane distribution—Delmarva
|
54,865
|
|
|
53,156
|
|
||
Propane distribution – Florida
|
20,829
|
|
|
16,823
|
|
||
Other unregulated energy
|
573
|
|
|
239
|
|
||
Other
|
21,002
|
|
|
20,067
|
|
||
Total property, plant and equipment
|
788,791
|
|
|
675,714
|
|
||
Less: Accumulated depreciation and amortization
|
(174,148
|
)
|
|
(155,378
|
)
|
||
Plus: Construction work in progress
|
16,603
|
|
|
21,445
|
|
||
Net property, plant and equipment
|
$
|
631,246
|
|
|
$
|
541,781
|
|
|
2013
|
|
2012
|
|
2011
|
|||
Natural gas distribution – Delmarva
|
2.7
|
%
|
|
2.5
|
%
|
|
2.5
|
%
|
Natural gas distribution – Florida
|
3.3
|
%
|
|
3.2
|
%
|
|
3.5
|
%
|
Natural gas transmission
|
2.7
|
%
|
|
2.7
|
%
|
|
2.6
|
%
|
Electric distribution – Florida
|
3.6
|
%
|
|
3.8
|
%
|
|
4.2
|
%
|
Asset Description
|
Useful Life
|
Propane distribution mains
|
10-37 years
|
Propane bulk plants and tanks
|
10-40 years
|
Liquefied petroleum gas equipment
|
5-33 years
|
Meters and meter installations
|
5-33 years
|
Measuring and regulating station equipment
|
5-37 years
|
Office furniture and equipment
|
3-10 years
|
Transportation equipment
|
4-20 years
|
Structures and improvements
|
5-45 years
|
Other
|
Various
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
(in thousands)
|
|
|
|
||||
Regulatory Assets
|
|
|
|
||||
Under-recovered purchased fuel costs
(1)
|
$
|
1,549
|
|
|
$
|
2,219
|
|
Deferred post retirement benefits
(2)
|
8,578
|
|
|
17,755
|
|
||
Deferred transaction and transition costs
(3)
|
471
|
|
|
1,035
|
|
||
Deferred conversion and development costs
(1)
|
1,320
|
|
|
842
|
|
||
Environmental regulatory assets and expenditures
(4)
|
5,170
|
|
|
5,432
|
|
||
Acquisition adjustment
(5)
|
47,478
|
|
|
48,724
|
|
||
Loss on reacquired debt
(6)
|
1,486
|
|
|
1,484
|
|
||
Other
|
2,968
|
|
|
2,653
|
|
||
Total Regulatory Assets
|
$
|
69,020
|
|
|
$
|
80,144
|
|
Regulatory Liabilities
|
|
|
|
||||
Self insurance
(9)
|
$
|
1,000
|
|
|
$
|
1,212
|
|
Over-recovered purchased fuel costs
(1)
|
2,818
|
|
|
218
|
|
||
Conservation cost recovery
(1)
|
51
|
|
|
356
|
|
||
Storm reserve
(9)
|
2,875
|
|
|
2,742
|
|
||
Accrued asset removal cost
(8)
|
39,510
|
|
|
38,096
|
|
||
Deferred gains
(7)
|
783
|
|
|
1,977
|
|
||
Other
|
1,032
|
|
|
526
|
|
||
Total Regulatory Liabilities
|
$
|
48,069
|
|
|
$
|
45,127
|
|
(1)
|
We are allowed to recover the asset or are required to pay the liability in rates. We do not earn an overall rate of return on these assets.
|
(2)
|
The Florida PSC allowed FPU to treat as a regulatory asset the portion of the unrecognized costs pursuant to
ASC Topic 715, Compensation - Retirement Benefits
, related to its regulated operations. See
Note 16, Employee Benefit Plans,
for additional information.
|
(3)
|
The Florida PSC approved the inclusion of the FPU merger-related costs in our rate base and the recovery of those costs in rates. The balances at December 31, 2013 and 2012 include the gross-up of this regulatory asset for income tax because a portion of the merger-related costs is not tax-deductible.
|
(4)
|
All of our environmental expenditures incurred to date and current estimate of future environmental expenditures have been approved by various PSCs for recovery. See
Note 19, Environmental Commitments and Contingencies
, for additional information on our environmental contingencies.
|
(5)
|
We are allowed to include the premiums paid in various natural gas utility acquisitions in Florida in our rate bases and recover them over a specific time period pursuant to the Florida PSC approvals. Included in these amounts are
$1.3 million
of the premium paid by FPU,
$34.2 million
of the premium paid by Chesapeake in 2009, including the gross up of the amount for income tax, because it is not tax deductible, and
$746,000
of the premium paid by FPU in 2010.
|
(6)
|
Gains and losses resulting from the reacquisition of long-term debt are amortized over future periods as adjustments to interest expense in accordance with established regulatory practice.
|
(7)
|
Pursuant to the Florida PSC order, we are required to defer and amortize over a specific time period certain gains identified during the FPU merger integration.
|
(8)
|
In accordance with regulatory treatment, our depreciation rates are comprised of two components – historical cost and the estimated cost of removal, net of estimated salvage, of certain regulated properties. We collect these costs in base rates through depreciation expense with a corresponding credit to accumulated depreciation. Because the accumulated estimated removal costs meet the requirements of authoritative guidance related to regulated operations, we have accounted for them as a regulatory liability and have reclassified them from accumulated depreciation to accumulated removal costs in our consolidated balance sheets.
|
(9)
|
We have self-insurance and storm reserves that allow us to collect through rates amounts to be used against general claims, storm restoration costs and other losses as they are incurred.
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
(in thousands, except shares and per share data)
|
|
|
|
|
|
||||||
Calculation of Basic Earnings Per Share:
|
|
|
|
|
|
||||||
Net Income
|
$
|
32,787
|
|
|
$
|
28,863
|
|
|
$
|
27,622
|
|
Weighted average shares outstanding
|
9,620,641
|
|
|
9,586,144
|
|
|
9,555,799
|
|
|||
Basic Earnings Per Share
|
$
|
3.41
|
|
|
$
|
3.01
|
|
|
$
|
2.89
|
|
Calculation of Diluted Earnings Per Share:
|
|
|
|
|
|
||||||
Reconciliation of Numerator:
|
|
|
|
|
|
||||||
Net Income
|
$
|
32,787
|
|
|
$
|
28,863
|
|
|
$
|
27,622
|
|
Effect of 8.25% Convertible debentures
|
43
|
|
|
53
|
|
|
61
|
|
|||
Adjusted numerator — Diluted
|
$
|
32,830
|
|
|
$
|
28,916
|
|
|
$
|
27,683
|
|
Reconciliation of Denominator:
|
|
|
|
|
|
||||||
Weighted shares outstanding — Basic
|
9,620,641
|
|
|
9,586,144
|
|
|
9,555,799
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Share-based Compensation
|
25,244
|
|
|
23,499
|
|
|
23,792
|
|
|||
8.25% Convertible debentures
|
49,745
|
|
|
61,864
|
|
|
71,467
|
|
|||
Adjusted denominator — Diluted
|
9,695,630
|
|
|
9,671,507
|
|
|
9,651,058
|
|
|||
Diluted Earnings Per Share
|
$
|
3.39
|
|
|
$
|
2.99
|
|
|
$
|
2.87
|
|
•
|
Regulated Energy
. The Regulated Energy segment includes natural gas distribution, natural gas transmission operations and electric distribution operations. All operations in this segment are regulated, as to their rates and services, by the PSCs having jurisdiction in each operating territory or by the FERC in the case of Eastern Shore.
|
•
|
Unregulated Energy.
The Unregulated Energy segment includes propane distribution and wholesale marketing operations, and natural gas marketing operations, which are unregulated as to their rates and services. Also included in this segment are other unregulated energy services, such as energy-related merchandise sales and heating, ventilation and air conditioning, plumbing and electrical services.
|
•
|
Other
. The “Other” segment consists primarily of our advanced information services subsidiary, as well as our unregulated subsidiaries that own real estate leased to Chesapeake and certain corporate costs not allocated to other operations.
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Operating Revenues, Unaffiliated Customers
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
263,573
|
|
|
$
|
245,042
|
|
|
$
|
255,405
|
|
Unregulated Energy
|
161,760
|
|
|
130,020
|
|
|
149,586
|
|
|||
Other
|
18,973
|
|
|
17,440
|
|
|
13,036
|
|
|||
Total operating revenues, unaffiliated customers
|
$
|
444,306
|
|
|
$
|
392,502
|
|
|
$
|
418,027
|
|
Intersegment Revenues
(1)
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
1,064
|
|
|
$
|
1,166
|
|
|
$
|
821
|
|
Unregulated Energy
|
4,963
|
|
|
3,029
|
|
|
—
|
|
|||
Other
|
1,017
|
|
|
917
|
|
|
793
|
|
|||
Total intersegment revenues
|
$
|
7,044
|
|
|
$
|
5,112
|
|
|
$
|
1,614
|
|
Operating Income
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
50,084
|
|
|
$
|
46,999
|
|
|
$
|
43,911
|
|
Unregulated Energy
|
12,353
|
|
|
8,355
|
|
|
9,619
|
|
|||
Other
|
297
|
|
|
1,281
|
|
|
175
|
|
|||
Operating Income
|
62,734
|
|
|
56,635
|
|
|
53,705
|
|
|||
Other income
|
372
|
|
|
271
|
|
|
906
|
|
|||
Interest charges
|
8,234
|
|
|
8,747
|
|
|
9,000
|
|
|||
Income Before Income taxes
|
54,872
|
|
|
48,159
|
|
|
45,611
|
|
|||
Income taxes
|
22,085
|
|
|
19,296
|
|
|
17,989
|
|
|||
Net Income
|
$
|
32,787
|
|
|
$
|
28,863
|
|
|
$
|
27,622
|
|
Depreciation and Amortization
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
19,822
|
|
|
$
|
18,653
|
|
|
$
|
16,512
|
|
Unregulated Energy
|
3,686
|
|
|
3,420
|
|
|
3,229
|
|
|||
Other and eliminations
|
457
|
|
|
437
|
|
|
412
|
|
|||
Total depreciation and amortization
|
$
|
23,965
|
|
|
$
|
22,510
|
|
|
$
|
20,153
|
|
Capital Expenditures
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
95,944
|
|
|
$
|
69,056
|
|
|
$
|
37,104
|
|
Unregulated Energy
|
4,829
|
|
|
3,969
|
|
|
2,432
|
|
|||
Other
|
7,266
|
|
|
5,185
|
|
|
4,895
|
|
|||
Total capital expenditures
|
$
|
108,039
|
|
|
$
|
78,210
|
|
|
$
|
44,431
|
|
(1)
|
All significant intersegment revenues are billed at market rates and have been eliminated from consolidated revenues.
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
Identifiable Assets
|
|
|
|
||||
Regulated Energy
|
$
|
708,950
|
|
|
$
|
615,438
|
|
Unregulated Energy
|
100,585
|
|
|
79,287
|
|
||
Other
|
27,987
|
|
|
39,021
|
|
||
Total identifiable assets
|
$
|
837,522
|
|
|
$
|
733,746
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
7,837
|
|
|
$
|
8,086
|
|
|
$
|
7,746
|
|
Cash paid for income taxes
|
$
|
10,243
|
|
|
$
|
3,809
|
|
|
$
|
2,327
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Capital property and equipment acquired on account, but not paid as of December 31
|
$
|
341
|
|
|
$
|
7,065
|
|
|
$
|
1,811
|
|
Retirement Savings Plan
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
80
|
|
Conversion of Debentures
|
$
|
295
|
|
|
$
|
186
|
|
|
$
|
181
|
|
Performance Incentive Plan
|
$
|
355
|
|
|
$
|
427
|
|
|
$
|
280
|
|
Director Stock Compensation Plan
|
$
|
495
|
|
|
$
|
443
|
|
|
$
|
456
|
|
Capital Lease Obligation
|
$
|
7,126
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Quantity in
|
|
Estimated Market
|
|
Weighted Average
|
|||
At December 31, 2013
|
Gallons
|
|
Prices
|
|
Contract Prices
|
|||
Forward Contracts
|
|
|
|
|
|
|||
Sale
|
1,892,000
|
|
|
$0.9900 - $1.4750
|
|
$
|
1.2786
|
|
Purchase
|
1,991,000
|
|
|
$0.9411 - $1.4600
|
|
$
|
1.2444
|
|
|
Asset Derivatives
|
||||||||
|
|
|
Fair Value As Of
|
||||||
(in thousands)
|
Balance Sheet Location
|
|
December 31, 2013
|
|
December 31, 2012
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
||||
Forward contracts
|
Mark-to-market energy assets
|
|
$
|
196
|
|
|
$
|
182
|
|
Call Option
|
Mark-to-market energy assets
|
|
169
|
|
|
—
|
|
||
Derivatives designated as fair value hedges
|
|
|
|
|
|
||||
Call option
|
Mark-to-market energy assets
|
|
—
|
|
|
28
|
|
||
Put option
|
Mark-to-market energy assets
|
|
20
|
|
|
—
|
|
||
Total asset derivatives
|
|
|
$
|
385
|
|
|
$
|
210
|
|
|
Liability Derivatives
|
||||||||
|
|
|
Fair Value As Of
|
||||||
(in thousands)
|
Balance Sheet Location
|
|
December 31, 2013
|
|
December 31, 2012
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
||||
Forward contracts
|
Mark-to-market energy liabilities
|
|
$
|
127
|
|
|
$
|
331
|
|
Total liability derivatives
|
|
|
$
|
127
|
|
|
$
|
331
|
|
(1)
|
As a fair value hedge with no ineffective portion, the unrealized gains and losses associated with this call option are recorded in cost of sales, offset by the corresponding change in the value of propane inventory (hedged item), which is also recorded in cost of sales. The amounts in cost of sales offset to zero and the unrealized gains and losses of this call option effectively changed the value of propane inventory.
|
|
|
|
Amount of Trading Revenue
|
||||||||||
|
Location of Gain
|
|
For the Year Ended December 31,
|
||||||||||
(in thousands)
|
(Loss) on Derivatives
|
|
2013
|
|
2012
|
|
2011
|
||||||
Realized gain on forward contracts and options
|
Revenue
|
|
$
|
1,127
|
|
|
$
|
2,695
|
|
|
$
|
2,215
|
|
Unrealized gain (loss) on forward contracts
|
Revenue
|
|
217
|
|
|
(339
|
)
|
|
41
|
|
|||
Total
|
|
|
$
|
1,344
|
|
|
$
|
2,356
|
|
|
$
|
2,256
|
|
|
For the Year Ended December 31, 2013
|
||
(in thousands)
|
|
||
Beginning Balance
|
$
|
—
|
|
Transfers in due to change in trustee
|
425
|
|
|
Purchases and adjustments
|
41
|
|
|
Transfers
|
(16
|
)
|
|
Investment income
|
8
|
|
|
Ending Balance
|
$
|
458
|
|
|
As of December 31,
|
||||||
(in thousands)
|
2013
|
|
2012
|
||||
Rabbi trust associated with 401(k) SERP
|
$
|
2,991
|
|
|
$
|
2,116
|
|
Rabbi trust (associated with the deferred compensation plan)
|
107
|
|
|
39
|
|
||
Investments in equity securities
|
—
|
|
|
2,013
|
|
||
Total
|
$
|
3,098
|
|
|
$
|
4,168
|
|
|
As of December 31,
|
||||||
(in thousands)
|
2013
|
|
2012
|
||||
Regulated Energy segment
|
$
|
2,790
|
|
|
$
|
3,216
|
|
Unregulated Energy segment
|
1,564
|
|
|
874
|
|
||
Total
|
$
|
4,354
|
|
|
$
|
4,090
|
|
|
As of December 31,
|
||||||||||||||
|
2013
|
|
2012
|
||||||||||||
(in thousands)
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Customer lists
|
$
|
3,993
|
|
|
$
|
1,389
|
|
|
$
|
3,693
|
|
|
$
|
1,067
|
|
Non-Compete agreements
|
353
|
|
|
87
|
|
|
103
|
|
|
43
|
|
||||
Other
|
270
|
|
|
165
|
|
|
270
|
|
|
158
|
|
||||
Total
|
$
|
4,616
|
|
|
$
|
1,641
|
|
|
$
|
4,066
|
|
|
$
|
1,268
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Current Income Tax Expense
|
|
|
|
|
|
||||||
Federal
|
$
|
4,882
|
|
|
$
|
3,483
|
|
|
$
|
—
|
|
State
|
2,382
|
|
|
1,990
|
|
|
742
|
|
|||
Investment tax credit adjustments, net
|
(39
|
)
|
|
(58
|
)
|
|
(73
|
)
|
|||
Total current income tax expense
|
7,225
|
|
|
5,415
|
|
|
669
|
|
|||
Deferred Income Tax Expense
(1)
|
|
|
|
|
|
||||||
Property, plant and equipment
|
16,758
|
|
|
13,688
|
|
|
16,670
|
|
|||
Deferred gas costs
|
(209
|
)
|
|
515
|
|
|
591
|
|
|||
Pensions and other employee benefits
|
(335
|
)
|
|
553
|
|
|
786
|
|
|||
FPU merger related premium cost and deferred gain
|
(686
|
)
|
|
(509
|
)
|
|
—
|
|
|||
Net operating loss carryforwards
|
62
|
|
|
740
|
|
|
(1,000
|
)
|
|||
Other
|
(730
|
)
|
|
(1,106
|
)
|
|
273
|
|
|||
Total deferred income tax expense
|
14,860
|
|
|
13,881
|
|
|
17,320
|
|
|||
Total Income Tax Expense
|
$
|
22,085
|
|
|
$
|
19,296
|
|
|
$
|
17,989
|
|
Reconciliation of Effective Income Tax Rates
|
|
|
|
|
|
||||||
Continuing Operations
|
|
|
|
|
|
||||||
Federal income tax expense
(2)
|
$
|
19,205
|
|
|
$
|
16,745
|
|
|
$
|
16,146
|
|
State income taxes, net of federal benefit
|
3,105
|
|
|
2,571
|
|
|
2,216
|
|
|||
ESOP dividend deduction
|
(256
|
)
|
|
(235
|
)
|
|
(236
|
)
|
|||
Other
|
31
|
|
|
215
|
|
|
(137
|
)
|
|||
Total Income Tax Expense
|
$
|
22,085
|
|
|
$
|
19,296
|
|
|
$
|
17,989
|
|
Effective Income Tax Rate
|
40.25
|
%
|
|
40.07
|
%
|
|
39.44
|
%
|
(1)
|
Includes
$2.1 million
,
$1.9 million
, and
$2.3 million
of deferred state income taxes for the years 2013, 2012 and 2011, respectively.
|
(2)
|
Federal income taxes were recorded at
35%
for each year represented.
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
(in thousands)
|
|
|
|
||||
Deferred Income Taxes
|
|
|
|
||||
Deferred income tax liabilities:
|
|
|
|
||||
Property, plant and equipment
|
$
|
134,414
|
|
|
$
|
118,212
|
|
Acquisition adjustment
|
16,790
|
|
|
17,440
|
|
||
Loss on reacquired debt
|
573
|
|
|
572
|
|
||
Deferred gas costs
|
607
|
|
|
816
|
|
||
Other
|
2,850
|
|
|
2,784
|
|
||
Total deferred income tax liabilities
|
155,234
|
|
|
139,824
|
|
||
Deferred income tax assets:
|
|
|
|
||||
Pension and other employee benefits
|
5,390
|
|
|
7,382
|
|
||
Environmental costs
|
2,083
|
|
|
1,917
|
|
||
Net operating loss carryforwards
|
1,444
|
|
|
1,587
|
|
||
Self insurance
|
403
|
|
|
484
|
|
||
Storm reserve liability
|
1,109
|
|
|
1,058
|
|
||
Other
|
3,904
|
|
|
2,982
|
|
||
Total deferred income tax assets
|
14,333
|
|
|
15,410
|
|
||
Deferred Income Taxes Per Consolidated Balance Sheet
|
$
|
140,901
|
|
|
$
|
124,414
|
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
(in thousands)
|
|
|
|
||||
FPU secured first mortgage bonds:
|
|
|
|
||||
9.57% bond, due May 1, 2018
|
$
|
—
|
|
|
$
|
5,444
|
|
10.03% bond, due May 1, 2018
|
—
|
|
|
2,994
|
|
||
9.08% bond, due June 1, 2022
|
7,967
|
|
|
7,962
|
|
||
Uncollateralized senior notes:
|
|
|
|
||||
7.83% note, due January 1, 2015
|
2,000
|
|
|
4,000
|
|
||
6.64% note, due October 31, 2017
|
10,909
|
|
|
13,636
|
|
||
5.50% note, due October 12, 2020
|
14,000
|
|
|
16,000
|
|
||
5.93% note, due October 31, 2023
|
30,000
|
|
|
30,000
|
|
||
5.68% note, due June 30, 2026
|
29,000
|
|
|
29,000
|
|
||
6.43% note, due May 2, 2028
|
7,000
|
|
|
—
|
|
||
3.73% note, due December 16, 2028
|
20,000
|
|
|
—
|
|
||
Convertible debentures:
|
|
|
|
||||
8.25% due March 1, 2014
|
646
|
|
|
942
|
|
||
Promissory notes
|
445
|
|
|
125
|
|
||
Capital lease obligation
|
6,978
|
|
|
—
|
|
||
Total long-term debt
|
128,945
|
|
|
110,103
|
|
||
Less: current maturities
|
(11,353
|
)
|
|
(8,196
|
)
|
||
Total long-term debt, net of current maturities
|
$
|
117,592
|
|
|
$
|
101,907
|
|
|
|
|
|
Outstanding borrowings at
|
|
|||||||||
(in thousands)
|
Total Facility
|
Interest Rate
|
Expiration Date
|
December 31, 2013
|
December 31, 2012
|
Available at December 31, 2013
|
||||||||
Bank revolving credit
|
|
|
|
|
|
|
||||||||
Facility A
|
|
|
|
|
|
|
||||||||
Committed
|
$
|
55,000
|
|
LIBOR plus 1.25 percent
|
June 28, 2014
|
$
|
35,000
|
|
$
|
30,000
|
|
$
|
20,000
|
|
Uncommitted
|
20,000
|
|
Rate offered by the bank
|
June 28, 2014
|
—
|
|
—
|
|
20,000
|
|
||||
Bank revolving credit
|
|
|
|
|
|
|
||||||||
Facility B
|
|
|
|
|
|
|
||||||||
Committed
|
30,000
|
|
LIBOR plus 1.25 percent
(1)
|
October 31, 2014
|
17,554
|
|
16,421
|
|
12,446
|
|
||||
Uncommitted
(2)
|
20,000
|
|
Rate offered by the bank
|
October 31, 2014
|
10,000
|
|
—
|
|
10,000
|
|
||||
Short-term revolving credit Note
|
40,000
|
|
LIBOR plus 0.80 percent
(3)
|
October 31, 2014
|
40,000
|
|
10,000
|
|
—
|
|
||||
Total short term credit facilities
|
$
|
165,000
|
|
|
|
$
|
102,554
|
|
$
|
56,421
|
|
$
|
62,446
|
|
Book overdrafts
(4)
|
|
|
|
3,112
|
|
4,778
|
|
|
||||||
Total short-term borrowing
|
|
|
|
$
|
105,666
|
|
$
|
61,199
|
|
|
•
|
a funded indebtedness ratio of no greater than
65 percent
; and
|
•
|
a fixed charge coverage ratio of at least
1.20
to
1.0
.
|
|
|
For the Year Ended December 31, 2013
|
||
(in thousands)
|
|
|
||
Beginning balance
|
|
$
|
(5,062
|
)
|
Other comprehensive income before reclassifications
|
|
2,251
|
|
|
Amounts reclassified from accumulated other comprehensive loss
|
|
278
|
|
|
Net current-period other comprehensive income
|
|
2,529
|
|
|
Ending balance
|
|
$
|
(2,533
|
)
|
(1)
|
These amounts are included in the computation of net periodic benefits See
Note 16, Employee Benefit Plans
, for additional details.
|
|
Chesapeake
Pension Plan
|
|
FPU
Pension Plan
|
||||||||||||
At December 31,
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation — beginning of year
|
$
|
11,933
|
|
|
$
|
11,672
|
|
|
$
|
64,512
|
|
|
$
|
57,999
|
|
Interest cost
|
405
|
|
|
458
|
|
|
2,367
|
|
|
2,577
|
|
||||
Actuarial loss (gain)
|
(1,092
|
)
|
|
726
|
|
|
(8,007
|
)
|
|
6,915
|
|
||||
Benefits paid
|
(978
|
)
|
|
(923
|
)
|
|
(2,996
|
)
|
|
(2,979
|
)
|
||||
Benefit obligation — end of year
|
10,268
|
|
|
11,933
|
|
|
55,876
|
|
|
64,512
|
|
||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets — beginning of year
|
8,430
|
|
|
7,162
|
|
|
41,954
|
|
|
37,836
|
|
||||
Actual return on plan assets
|
967
|
|
|
849
|
|
|
4,747
|
|
|
4,526
|
|
||||
Employer contributions
|
324
|
|
|
1,342
|
|
|
632
|
|
|
2,571
|
|
||||
Benefits paid
|
(978
|
)
|
|
(923
|
)
|
|
(2,996
|
)
|
|
(2,979
|
)
|
||||
Fair value of plan assets — end of year
|
8,743
|
|
|
8,430
|
|
|
44,337
|
|
|
41,954
|
|
||||
Reconciliation:
|
|
|
|
|
|
|
|
||||||||
Funded status
|
(1,525
|
)
|
|
(3,503
|
)
|
|
(11,539
|
)
|
|
(22,558
|
)
|
||||
Accrued pension cost
|
$
|
(1,525
|
)
|
|
$
|
(3,503
|
)
|
|
$
|
(11,539
|
)
|
|
$
|
(22,558
|
)
|
Assumptions:
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
4.25
|
%
|
|
3.50
|
%
|
|
4.75
|
%
|
|
3.75
|
%
|
||||
Expected return on plan assets
|
6.00
|
%
|
|
6.00
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
|
Chesapeake
Pension Plan |
|
FPU
Pension Plan |
||||||||||||||||||||
For the Years Ended December 31,
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Components of net periodic pension cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest cost
|
$
|
405
|
|
|
$
|
458
|
|
|
$
|
520
|
|
|
$
|
2,367
|
|
|
$
|
2,577
|
|
|
$
|
2,695
|
|
Expected return on assets
|
(486
|
)
|
|
(418
|
)
|
|
(424
|
)
|
|
(2,866
|
)
|
|
(2,627
|
)
|
|
(2,783
|
)
|
||||||
Amortization of prior service cost
|
(1
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of actuarial loss
|
322
|
|
|
255
|
|
|
156
|
|
|
330
|
|
|
196
|
|
|
—
|
|
||||||
Net periodic pension cost
|
240
|
|
|
290
|
|
|
247
|
|
|
(169
|
)
|
|
146
|
|
|
(88
|
)
|
||||||
Settlement expense
|
—
|
|
|
—
|
|
|
217
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of pre-merger regulatory asset
|
—
|
|
|
—
|
|
|
—
|
|
|
761
|
|
|
761
|
|
|
761
|
|
||||||
Total periodic cost
|
$
|
240
|
|
|
$
|
290
|
|
|
$
|
464
|
|
|
$
|
592
|
|
|
$
|
907
|
|
|
$
|
673
|
|
Assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount rate
|
3.50
|
%
|
|
4.25
|
%
|
|
5.00
|
%
|
|
3.75
|
%
|
|
4.50
|
%
|
|
5.25
|
%
|
||||||
Expected return on plan assets
|
6.00
|
%
|
|
6.00
|
%
|
|
6.00
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
At December 31,
|
2013
|
|
2012
|
||||
(in thousands)
|
|
|
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation — beginning of year
|
$
|
2,352
|
|
|
$
|
2,160
|
|
Interest cost
|
81
|
|
|
90
|
|
||
Actuarial loss (gain)
|
(134
|
)
|
|
191
|
|
||
Benefits paid
|
(89
|
)
|
|
(89
|
)
|
||
Benefit obligation — end of year
|
2,210
|
|
|
2,352
|
|
||
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets — beginning of year
|
|
|
|
||||
Employer contributions
|
89
|
|
|
89
|
|
||
Benefits paid
|
(89
|
)
|
|
(89
|
)
|
||
Fair value of plan assets — end of year
|
—
|
|
|
—
|
|
||
Reconciliation:
|
|
|
|
||||
Funded status
|
(2,210
|
)
|
|
(2,352
|
)
|
||
Accrued pension cost
|
$
|
(2,210
|
)
|
|
$
|
(2,352
|
)
|
Assumptions:
|
|
|
|
||||
Discount rate
|
4.25
|
%
|
|
3.50
|
%
|
For the Years Ended December 31,
|
2013
|
|
2012
|
|
2011
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Components of net periodic pension cost:
|
|
|
|
|
|
||||||
Interest cost
|
$
|
81
|
|
|
$
|
90
|
|
|
$
|
107
|
|
Amortization of prior service cost
|
19
|
|
|
19
|
|
|
19
|
|
|||
Amortization of actuarial loss
|
64
|
|
|
46
|
|
|
38
|
|
|||
Net periodic pension cost
|
164
|
|
|
155
|
|
|
164
|
|
|||
Settlement expense
|
—
|
|
|
—
|
|
|
219
|
|
|||
Total periodic cost
|
$
|
164
|
|
|
$
|
155
|
|
|
$
|
383
|
|
Assumptions:
|
|
|
|
|
|
||||||
Discount rate
|
3.50
|
%
|
|
4.25
|
%
|
|
5.00
|
%
|
|
Chesapeake
Pension Plan |
|
FPU
Pension Plan |
||||||||||||||
At December 31,
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
||||||
Asset Category
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Equity securities
|
54.40
|
%
|
|
52.07
|
%
|
|
51.75
|
%
|
|
55.02
|
%
|
|
52.81
|
%
|
|
51.98
|
%
|
Debt securities
|
36.54
|
%
|
|
38.00
|
%
|
|
37.88
|
%
|
|
36.54
|
%
|
|
38.04
|
%
|
|
38.05
|
%
|
Other
|
9.06
|
%
|
|
9.93
|
%
|
|
10.37
|
%
|
|
8.44
|
%
|
|
9.15
|
%
|
|
9.97
|
%
|
Total
|
100.00
|
%
|
|
100.00
|
%
|
|
100.00
|
%
|
|
100.00
|
%
|
|
100.00
|
%
|
|
100.00
|
%
|
Asset Allocation Strategy
|
|||||
Asset Class
|
Minimum
Allocation Percentage |
|
Maximum
Allocation Percentage |
||
Domestic Equities (Large Cap, Mid Cap and Small Cap)
|
14
|
%
|
|
32
|
%
|
Foreign Equities (Developed and Emerging Markets)
|
13
|
%
|
|
25
|
%
|
Fixed Income (Inflation Bond and Taxable Fixed)
|
26
|
%
|
|
40
|
%
|
Alternative Strategies (Long/Short Equity and Hedge Fund of Funds)
|
6
|
%
|
|
14
|
%
|
Diversifying Assets (High Yield Fixed Income, Commodities, and Real Estate)
|
7
|
%
|
|
19
|
%
|
Cash
|
0
|
%
|
|
5
|
%
|
|
Fair Value Measurement Hierarchy
|
|
|
||||||||||||
Asset Category
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
|
|
|
|
|
|
|
||||||||
U.S. Large Cap
(1)
|
$
|
3,964
|
|
|
$
|
4,118
|
|
|
$
|
—
|
|
|
$
|
8,082
|
|
U.S. Mid Cap
(1)
|
—
|
|
|
3,412
|
|
|
—
|
|
|
3,412
|
|
||||
U.S. Small Cap
(1)
|
—
|
|
|
1,736
|
|
|
—
|
|
|
1,736
|
|
||||
International
(2)
|
10,687
|
|
|
—
|
|
|
—
|
|
|
10,687
|
|
||||
Alternative Strategies
(3)
|
5,235
|
|
|
—
|
|
|
—
|
|
|
5,235
|
|
||||
|
19,886
|
|
|
9,266
|
|
|
—
|
|
|
29,152
|
|
||||
Debt securities
|
|
|
|
|
|
|
|
||||||||
Inflation Protected
(4)
|
2,462
|
|
|
—
|
|
|
—
|
|
|
2,462
|
|
||||
Fixed income
(5)
|
—
|
|
|
14,305
|
|
|
—
|
|
|
14,305
|
|
||||
High Yield
(5)
|
—
|
|
|
2,629
|
|
|
—
|
|
|
2,629
|
|
||||
|
2,462
|
|
|
16,934
|
|
|
—
|
|
|
19,396
|
|
||||
Other
|
|
|
|
|
|
|
|
||||||||
Commodities
(6)
|
1,939
|
|
|
—
|
|
|
—
|
|
|
1,939
|
|
||||
Real Estate
(7)
|
1,991
|
|
|
—
|
|
|
—
|
|
|
1,991
|
|
||||
Guaranteed deposit
(8)
|
—
|
|
|
—
|
|
|
602
|
|
|
602
|
|
||||
|
3,930
|
|
|
—
|
|
|
602
|
|
|
4,532
|
|
||||
Total Pension Plan Assets
|
$
|
26,278
|
|
|
$
|
26,200
|
|
|
$
|
602
|
|
|
$
|
53,080
|
|
(1)
|
Includes funds that invest primarily in United States common stocks.
|
(2)
|
Includes funds that invest primarily in foreign equities and emerging markets equities.
|
(3)
|
Includes funds that actively invest in both equity and debt securities, funds that sell short securities and funds that
provide long-term capital appreciation. The funds may invest in debt securities below investment grade.
|
(4)
|
Includes funds that invest primarily in inflation-indexed bonds issued by the U.S. government.
|
(5)
|
Includes funds that invest in investment grade and fixed income securities.
|
(6)
|
Includes funds that invest primarily in commodity-linked derivative instruments and fixed income securities.
|
(7)
|
Includes funds that invest primarily in real estate.
|
(8)
|
Includes investment in a group annuity product issued by an insurance company.
|
|
Fair Value Measurement Hierarchy
|
|
|
||||||||||||
Asset Category
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
|
|
|
|
|
|
|
||||||||
U.S. Large Cap
(1)
|
$
|
3,504
|
|
|
$
|
3,443
|
|
|
$
|
—
|
|
|
$
|
6,947
|
|
U.S. Mid Cap
(1)
|
—
|
|
|
3,078
|
|
|
—
|
|
|
3,078
|
|
||||
U.S. Small Cap
(1)
|
—
|
|
|
1,523
|
|
|
—
|
|
|
1,523
|
|
||||
International
(2)
|
10,019
|
|
|
—
|
|
|
—
|
|
|
10,019
|
|
||||
Alternative Strategies
(3)
|
4,978
|
|
|
—
|
|
|
—
|
|
|
4,978
|
|
||||
|
18,501
|
|
|
8,044
|
|
|
—
|
|
|
26,545
|
|
||||
Debt securities
|
|
|
|
|
|
|
|
||||||||
Inflation Protected
(4)
|
2,507
|
|
|
—
|
|
|
—
|
|
|
2,507
|
|
||||
Fixed income
(5)
|
—
|
|
|
14,109
|
|
|
—
|
|
|
14,109
|
|
||||
High Yield
(5)
|
—
|
|
|
2,547
|
|
|
—
|
|
|
2,547
|
|
||||
|
2,507
|
|
|
16,656
|
|
|
—
|
|
|
19,163
|
|
||||
Other
|
|
|
|
|
|
|
|
||||||||
Commodities
(6)
|
1,918
|
|
|
—
|
|
|
—
|
|
|
1,918
|
|
||||
Real Estate
(7)
|
2,048
|
|
|
—
|
|
|
—
|
|
|
2,048
|
|
||||
Guaranteed deposit
(8)
|
—
|
|
|
—
|
|
|
710
|
|
|
710
|
|
||||
|
3,966
|
|
|
—
|
|
|
710
|
|
|
4,676
|
|
||||
Total Pension Plan Assets
|
$
|
24,974
|
|
|
$
|
24,700
|
|
|
$
|
710
|
|
|
$
|
50,384
|
|
(1)
|
Includes funds that invest primarily in United States common stocks.
|
(2)
|
Includes funds that invest primarily in foreign equities and emerging markets equities.
|
(3)
|
Includes funds that actively invest in both equity and debt securities, funds that sell short securities and funds that provide long-term capital
appreciation. The funds may invest in debt securities below investment grade.
|
(4)
|
Includes funds that invest primarily in inflation-indexed bonds issued by the U.S. government.
|
(5)
|
Includes funds that invest in investment grade and fixed income securities.
|
(6)
|
Includes funds that invest primarily in commodity-linked derivative instruments and fixed income securities.
|
(7)
|
Includes funds that invest primarily in real estate.
|
(8)
|
Includes investment in a group annuity product issued by an insurance company.
|
|
For the Year Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
(in thousands)
|
|
|
|
||||
Balance, beginning of year
|
$
|
710
|
|
|
$
|
897
|
|
Purchases
|
618
|
|
|
79
|
|
||
Transfers in
|
3,175
|
|
|
3,620
|
|
||
Disbursements
|
(3,966
|
)
|
|
(3,902
|
)
|
||
Investment income
|
65
|
|
|
16
|
|
||
Balance, end of year
|
$
|
602
|
|
|
$
|
710
|
|
|
Chesapeake
Postretirement Plan |
|
FPU
Medical Plan |
||||||||||||
At December 31,
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation — beginning of year
|
$
|
1,415
|
|
|
$
|
1,396
|
|
|
$
|
1,774
|
|
|
$
|
4,081
|
|
Service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Interest cost
|
47
|
|
|
55
|
|
|
63
|
|
|
79
|
|
||||
Plan participants contributions
|
92
|
|
|
111
|
|
|
104
|
|
|
92
|
|
||||
Curtailment gain
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,651
|
)
|
||||
Actuarial loss (gain)
|
(108
|
)
|
|
39
|
|
|
(165
|
)
|
|
500
|
|
||||
Benefits paid
|
(184
|
)
|
|
(186
|
)
|
|
(257
|
)
|
|
(328
|
)
|
||||
Benefit obligation — end of year
|
1,262
|
|
|
1,415
|
|
|
1,519
|
|
|
1,774
|
|
||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets — beginning of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
(1)
|
92
|
|
|
75
|
|
|
153
|
|
|
236
|
|
||||
Plan participants contributions
|
92
|
|
|
111
|
|
|
104
|
|
|
92
|
|
||||
Benefits paid
|
(184
|
)
|
|
(186
|
)
|
|
(257
|
)
|
|
(328
|
)
|
||||
Fair value of plan assets — end of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Reconciliation:
|
|
|
|
|
|
|
|
||||||||
Funded status
|
(1,262
|
)
|
|
(1,415
|
)
|
|
(1,519
|
)
|
|
(1,774
|
)
|
||||
Accrued postretirement cost
|
$
|
(1,262
|
)
|
|
$
|
(1,415
|
)
|
|
$
|
(1,519
|
)
|
|
$
|
(1,774
|
)
|
Assumptions:
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
4.25
|
%
|
|
3.50
|
%
|
|
4.75
|
%
|
|
3.75
|
%
|
(1)
|
Chesapeake’s Postretirement Plan does not receive a Medicare Part-D subsidy. The FPU Medical Plan did not receive a significant subsidy for the post-merger period.
|
|
Chesapeake
Postretirement Plan |
|
FPU
Medical Plan |
||||||||||||||||||||
For the Years Ended December 31,
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Components of net periodic postretirement cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
125
|
|
Interest cost
|
47
|
|
|
55
|
|
|
64
|
|
|
63
|
|
|
79
|
|
|
176
|
|
||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Actuarial loss
|
74
|
|
|
73
|
|
|
67
|
|
|
—
|
|
|
—
|
|
|
55
|
|
||||||
Prior service cost
|
(77
|
)
|
|
(77
|
)
|
|
(77
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic cost
|
$
|
44
|
|
|
$
|
51
|
|
|
$
|
54
|
|
|
$
|
63
|
|
|
$
|
80
|
|
|
$
|
356
|
|
Curtailment gain
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(892
|
)
|
|
—
|
|
||||||
Amortization of pre-merger regulatory asset
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
8
|
|
||||||
Net periodic cost
|
$
|
44
|
|
|
$
|
51
|
|
|
$
|
54
|
|
|
$
|
71
|
|
|
$
|
(804
|
)
|
|
$
|
364
|
|
Assumptions
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount rate
|
3.50
|
%
|
|
4.25
|
%
|
|
5.00
|
%
|
|
3.75
|
%
|
|
4.50
|
%
|
|
5.25
|
%
|
(in thousands)
|
Chesapeake
Pension
Plan
|
|
FPU
Pension
Plan
|
|
Chesapeake
SERP
|
|
Chesapeake
Postretirement
Plan
|
|
FPU
Medical
Plan
|
|
Total
|
||||||||||||
Prior service cost (credit)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
(909
|
)
|
|
$
|
—
|
|
|
$
|
(881
|
)
|
Net loss
|
2,483
|
|
|
5,298
|
|
|
659
|
|
|
972
|
|
|
(142
|
)
|
|
9,270
|
|
||||||
Total
|
$
|
2,483
|
|
|
$
|
5,298
|
|
|
$
|
687
|
|
|
$
|
63
|
|
|
$
|
(142
|
)
|
|
$
|
8,389
|
|
Accumulated other comprehensive loss pre-tax
(1)
|
$
|
2,483
|
|
|
$
|
1,007
|
|
|
$
|
687
|
|
|
$
|
63
|
|
|
$
|
(27
|
)
|
|
$
|
4,213
|
|
Post-merger regulatory asset
|
—
|
|
|
4,291
|
|
|
—
|
|
|
—
|
|
|
(115
|
)
|
|
4,176
|
|
||||||
Subtotal
|
2,483
|
|
|
5,298
|
|
|
687
|
|
|
63
|
|
|
(142
|
)
|
|
8,389
|
|
||||||
Pre-merger regulatory asset
|
—
|
|
|
4,348
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|
4,402
|
|
||||||
Total unrecognized cost
|
$
|
2,483
|
|
|
$
|
9,646
|
|
|
$
|
687
|
|
|
$
|
63
|
|
|
$
|
(88
|
)
|
|
$
|
12,791
|
|
(1)
|
The total amount of accumulated other comprehensive loss recorded on our consolidated balance sheet as of December 31, 2013 is net of income tax benefits of
$1.7 million
.
|
(in thousands)
|
Chesapeake
Pension
Plan
|
|
FPU
Pension
Plan
|
|
Chesapeake
SERP
|
|
Chesapeake
Postretirement
Plan
|
|
FPU
Medical
Plan
|
|
Total
|
||||||||||||
Prior service cost (credit)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
(77
|
)
|
|
$
|
—
|
|
|
$
|
(58
|
)
|
Net loss
|
$
|
149
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
264
|
|
Amortization of pre-merger regulatory asset
|
$
|
—
|
|
|
$
|
761
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
769
|
|
|
Chesapeake
Pension
Plan
(1)
|
|
FPU
Pension
Plan
(1)
|
|
Chesapeake
SERP
(2)
|
|
Chesapeake
Postretirement
Plan
(2)
|
|
FPU
Medical
Plan
(2)
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
2014
|
$
|
494
|
|
|
$
|
2,814
|
|
|
$
|
88
|
|
|
$
|
95
|
|
|
$
|
245
|
|
2015
|
$
|
622
|
|
|
$
|
2,886
|
|
|
$
|
138
|
|
|
$
|
97
|
|
|
$
|
223
|
|
2016
|
$
|
572
|
|
|
$
|
2,946
|
|
|
$
|
146
|
|
|
$
|
98
|
|
|
$
|
203
|
|
2017
|
$
|
1,071
|
|
|
$
|
2,988
|
|
|
$
|
143
|
|
|
$
|
96
|
|
|
$
|
166
|
|
2018
|
$
|
634
|
|
|
$
|
3,048
|
|
|
$
|
140
|
|
|
$
|
95
|
|
|
$
|
133
|
|
Years 2019 through 2023
|
$
|
3,984
|
|
|
$
|
16,362
|
|
|
$
|
890
|
|
|
$
|
436
|
|
|
$
|
393
|
|
(1)
|
The pension plan is funded; therefore, benefit payments are expected to be paid out of the plan assets.
|
(2)
|
Benefit payments are expected to be paid out of our general funds.
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Directors Stock Compensation Plan
|
$
|
478
|
|
|
$
|
443
|
|
|
$
|
407
|
|
Performance Incentive Plan
|
1,153
|
|
|
976
|
|
|
1,043
|
|
|||
Total compensation expense
|
1,631
|
|
|
1,419
|
|
|
1,450
|
|
|||
Less: tax benefit
|
657
|
|
|
569
|
|
|
581
|
|
|||
Share-Based Compensation amounts included in net income
|
$
|
974
|
|
|
$
|
850
|
|
|
$
|
869
|
|
|
Number of
Shares
|
|
Weighted Average
Grant Date Fair Value
|
|||
Outstanding — December 31, 2011
|
—
|
|
|
$
|
—
|
|
Granted
|
10,800
|
|
|
$
|
41.06
|
|
Vested
|
10,800
|
|
|
$
|
41.06
|
|
Outstanding — December 31, 2012
|
—
|
|
|
$
|
—
|
|
Granted
|
9,427
|
|
|
$
|
52.49
|
|
Vested
|
9,427
|
|
|
$
|
52.49
|
|
Outstanding — December 31, 2013
|
—
|
|
|
$
|
—
|
|
|
Number of
Shares
|
|
Weighted Average
Fair Value
|
|||
Outstanding — December 31, 2011
|
87,414
|
|
|
$
|
34.47
|
|
Granted
|
35,706
|
|
|
$
|
39.62
|
|
Vested
|
13,837
|
|
|
$
|
29.19
|
|
Forfeited
(1)
|
21,600
|
|
|
$
|
36.57
|
|
Expired
|
3,038
|
|
|
$
|
26.29
|
|
Outstanding — December 31, 2012
|
84,645
|
|
|
$
|
37.86
|
|
Granted
|
23,491
|
|
|
$
|
44.85
|
|
Vested
|
24,332
|
|
|
$
|
33.26
|
|
Expired
|
3,043
|
|
|
$
|
39.12
|
|
Outstanding — December 31, 2013
|
80,761
|
|
|
$
|
42.30
|
|
(1)
|
Includes shares settled with a cash payment pursuant to the terms of a separation agreement with a former named executive officer.
|
(i)
|
charge a monthly fixed charge to customers in portions of eastern Sussex County, Delaware, which will enable us to extend our distribution system to provide natural gas service to these customers economically without upfront contributions from these customers; and
|
(ii)
|
offer optional service choices to customers to facilitate conversions to natural gas, including a conversion finance service to help customers manage their cost of conversion equipment.
|
|
For the Quarters Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
(in thousands except per share amounts)
|
|
|
|
|
|
|
|
||||||||
2013
(1)
|
|
|
|
|
|
|
|
||||||||
Operating Revenue
|
$
|
140,729
|
|
|
$
|
94,146
|
|
|
$
|
86,545
|
|
|
$
|
122,887
|
|
Operating Income
|
$
|
26,550
|
|
|
$
|
9,152
|
|
|
$
|
8,720
|
|
|
$
|
18,312
|
|
Net Income
|
$
|
14,869
|
|
|
$
|
4,356
|
|
|
$
|
3,879
|
|
|
$
|
9,683
|
|
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.55
|
|
|
$
|
0.45
|
|
|
$
|
0.40
|
|
|
$
|
1.01
|
|
Diluted
|
$
|
1.54
|
|
|
$
|
0.45
|
|
|
$
|
0.40
|
|
|
$
|
1.00
|
|
2012
(1)
|
|
|
|
|
|
|
|
||||||||
Operating Revenue
|
$
|
120,914
|
|
|
$
|
83,897
|
|
|
$
|
78,175
|
|
|
$
|
109,516
|
|
Operating Income
|
$
|
20,073
|
|
|
$
|
10,455
|
|
|
$
|
7,564
|
|
|
$
|
18,543
|
|
Net Income
|
$
|
10,727
|
|
|
$
|
5,060
|
|
|
$
|
3,219
|
|
|
$
|
9,857
|
|
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.12
|
|
|
$
|
0.53
|
|
|
$
|
0.34
|
|
|
$
|
1.03
|
|
Diluted
|
$
|
1.11
|
|
|
$
|
0.52
|
|
|
$
|
0.33
|
|
|
$
|
1.02
|
|
(1)
|
The sum of the four quarters does not equal the total year due to rounding.
|
|
|
|
• Exhibit 3.1
|
|
Amended and Restated Certificate of Incorporation of Chesapeake Utilities Corporation is incorporated herein by reference to Exhibit 3.1 of our Quarterly Report on Form 10-Q for the period ended June 30, 2010, File No. 001-11590.
|
|
|
|
• Exhibit 3.2
|
|
Amended and Restated Bylaws of Chesapeake Utilities Corporation, effective December 4, 2012, are incorporated herein by reference to Exhibit 3 of our Current Report on Form 8-K, filed December 7, 2012, File No. 001-11590.
|
|
|
|
• Exhibit 4.1
|
|
Form of Indenture between Chesapeake and Boatmen’s Trust Company, Trustee, with respect to the 8 1/4% Convertible Debentures is incorporated herein by reference to Exhibit 4.2 of our Registration Statement on Form S-2, Reg. No. 33-26582, filed on January 13, 1989.
|
|
|
|
• Exhibit 4.2
|
|
Note Purchase Agreement entered into by Chesapeake on December 27, 2000, pursuant to which Chesapeake privately placed $20 million of its 7.83% Senior Notes, due in 2015, is incorporated by reference to Exhibit 4.4 of our Annual Report on Form 10-K for the year ended December 31, 2009, File No. 001-11590.
|
|
|
|
• Exhibit 4.3
|
|
Note Agreement entered into by Chesapeake on October 31, 2002, pursuant to which Chesapeake privately placed $30 million of its 6.64% Senior Notes, due in 2017, is incorporated herein by reference to Exhibit 2 of our Current Report on Form 8-K, filed November 6, 2002, File No. 001-11590.
|
|
|
|
• Exhibit 4.4
|
|
Note Agreement entered into by Chesapeake on October 18, 2005, pursuant to which Chesapeake, on October 12, 2006, privately placed $20 million of its 5.5% Senior Notes, due in 2020, with Prudential Investment Management, Inc., is incorporated herein by reference to Exhibit 4.1 of our Annual Report on Form 10-K for the year ended December 31, 2005, File No. 001-11590.
|
|
|
|
• Exhibit 4.5
|
|
Note Agreement entered into by Chesapeake on October 31, 2008, pursuant to which Chesapeake, on October 31, 2008, privately placed $30 million of its 5.93% Senior Notes, due in 2023, with General American Life Insurance Company and New England Life Insurance Company, is incorporated by reference to Exhibit 4.7 of our Annual Report on Form 10-K for the year ended December 31, 2009, File No. 001-11590.
|
|
|
|
• Exhibit 4.6
|
|
Note Agreement entered into by Chesapeake on June 23, 2011, pursuant to which Chesapeake privately placed $29 million of its 5.68% Senior Notes, due in 2026, with Metropolitan Life Insurance Company and New England Life Insurance Company is not being filed herewith pursuant to Item 601(b)(4)(v) of Regulation S-K under the Securities Act of 1933, as amended. We hereby agree to furnish a copy of that agreement to the SEC upon request.
|
|
|
|
• Exhibit 4.7
|
|
Note Agreement entered into by Chesapeake on June 23, 2011, pursuant to which Chesapeake privately placed $7 million of its 6.43% Senior Notes, due in 2028, with Metropolitan Life Insurance Company is not being filed herewith pursuant to Item 601(b)(4)(v) of Regulation S-K under the Securities Act of 1933, as amended. We hereby agree to furnish a copy of that agreement to the SEC upon request.
|
|
|
|
• Exhibit 4.8
|
|
Note Agreement entered into by Chesapeake on September 5, 2013 pursuant to which Chesapeake privately placed Series A Notes of its 3.73% Senior Notes, due 2028 and will issue Series B Notes to the Noteholders is not being filed herewith pursuant to Item 601(b)(4)(v) of Regulation S-K under the Securities Act of 1933, as amended. We hereby agree to furnish a copy of the agreement to the SEC upon request.
|
|
|
|
• Exhibit 4.9
|
|
Form of Indenture of Mortgage and Deed of Trust between Florida Public Utilities Company and the trustee, dated September 1, 1942 for the First Mortgage Bonds, is incorporated herein by reference to Exhibit 7-A of Florida Public Utilities Company’s Registration No. 2-6087.
|
|
|
|
• Exhibit 4.10
|
|
Seventeenth Supplemental Indenture entered into by Chesapeake Utilities Corporation and Florida Public Utilities Company, on April 12, 2011, pursuant to which Chesapeake Utilities Corporation guarantees the payment and performance obligations of Florida Public Utilities Company under the Indenture, is incorporated herein by reference to Exhibit 4.1 of our Quarterly Report on Form 10-Q for the period ended March 31, 2011, File No. 001-11590.
|
|
|
|
• Exhibit 4.11
|
|
Sixteenth Supplemental Indenture entered into by Chesapeake Utilities Corporation and Florida Public Utilities Company, on December 1, 2009, pursuant to which Chesapeake Utilities Corporation, on December 1, 2009 guaranteed the secured First Mortgage Bonds of Florida Public Utilities Company under the Merger Agreement, is incorporated herein by reference to Exhibit 4.9 of our Annual Report on Form 10-K for the year ended December 31, 2010, File No. 001-11590.
|
|
|
|
• Exhibit 4.12
|
|
Thirteenth Supplemental Indenture entered into by Florida Public Utilities Company on June 1, 1992, pursuant to which Florida Public Utilities, on May 1, 1992, privately placed $8,000,000 of its 9.08% First Mortgage Bonds, is incorporated herein by reference to Exhibit 4 to Florida Public Utilities Company’s Quarterly Report on Form 10-Q for the period ended June 30, 1992.
|
|
|
|
• Exhibit 10.1*
|
|
Chesapeake Utilities Corporation Cash Bonus Incentive Plan, dated January 1, 2005, is incorporated herein by reference to Exhibit 10.3 of our Annual Report on Form 10-K for the year ended December 31, 2004, File No. 001-11590.
|
|
|
|
• Exhibit 10.2*
|
|
Chesapeake Utilities Corporation Directors Stock Compensation Plan, adopted in 2005, is incorporated herein by reference to our Proxy Statement dated March 28, 2005, in connection with our Annual Meeting held on May 5, 2005, File No. 001-11590.
|
|
|
|
• Exhibit 10.3*
|
|
Chesapeake Utilities Corporation Employee Stock Award Plan, adopted in 2005, is incorporated herein by reference to our Proxy Statement dated March 28, 2005, in connection with our Annual Meeting held on May 5, 2005, File No. 001-11590.
|
|
|
|
• Exhibit 10.4*
|
|
Chesapeake Utilities Corporation Performance Incentive Plan, adopted in 2005, is incorporated herein by reference to our Proxy Statement dated March 28, 2005, in connection with our Annual Meeting held on May 5, 2005, File No. 001-11590.
|
|
|
|
• Exhibit 10.5*
|
|
Chesapeake Utilities Corporation 2013 Stock and Incentive Compensation Plan, effective May 2, 2013 is incorporated herein by reference to our Proxy Statement dated March 29, 2013 in connection with our Annual Meeting held on May 2, 2013, File No. 0000019745.
|
|
|
|
• Exhibit 10.6*
|
|
Chesapeake Utilities Corporation Deferred Compensation Plan, amended and restated as of January 1, 2009, is incorporated herein by reference to Exhibit 10.5 of our Annual Report on Form 10-K for the year ended December 31, 2008, File No. 001-11590.
|
|
|
|
• Exhibit 10.7*
|
|
First Amendment to the Chesapeake Utilities Corporation Deferred Compensation Plan, dated December 28, 2010, is incorporated herein by reference to Exhibit 10.6 of our Annual Report on Form 10-K for the year ended December 31, 2010, File No. 001-11590.
|
|
|
|
• Exhibit 10.8*
|
|
Non-Qualified Deferred Compensation Plan, effective January 1, 2014, is filed herewith.
|
|
|
|
• Exhibit 10.9*
|
|
Consulting Agreement dated January 2, 2013, by and between Chesapeake Utilities Corporation and John R. Schimkaitis, is incorporated herein by reference to Exhibit 10.7 of our Annual Report on Form 10-K for the year ended December 31, 2012, File No. 001-11590.
|
|
|
|
• Exhibit 10.10*
|
|
Executive Employment Agreement dated January 14, 2011, by and between Chesapeake Utilities Corporation and Michael P. McMasters, is incorporated herein by reference to Exhibit 10.1 of our Current Report on Form 8-K, filed January 21, 2011, File No. 001-11590.
|
|
|
|
• Exhibit 10.11*
|
|
Amendment to Executive Employment Agreement effective January 1, 2014, by and between Chesapeake Utilities Corporation and Michael P. McMasters, is incorporated herein by reference to Exhibit 10.1 of our Current Report on Form 8-K filed January 14, 2014, File No. 001-11590.
|
|
|
• Exhibit 10.12*
|
|
Executive Employment Agreement dated January 9, 2013, by and between Chesapeake Utilities Corporation and Stephen C. Thompson, is incorporated herein by reference to Exhibit 10.9 of our Annual Report on Form 10-K for the year ended December 31, 2012, File No. 001-11590.
|
|
|
|
• Exhibit 10.13*
|
|
Executive Employment Agreement dated January 9, 2013, by and between Chesapeake Utilities Corporation and Beth W. Cooper, is incorporated herein by reference to Exhibit 10.10 of our Annual Report on Form 10-K for the year ended December 31, 2012, File No. 001-11590.
|
|
|
|
• Exhibit 10.14*
|
|
Executive Employment Agreement dated January 9, 2013, by and between Chesapeake Utilities Corporation and Elaine B. Bittner, incorporated herein by reference to Exhibit 10.11 of our Annual Report on Form 10-K for the year ended December 31, 2012, File No. 001-11590.
|
|
|
|
• Exhibit 10.15*
|
|
Form of Performance Share Agreement, effective January 14, 2011 for the period 2011 to 2013, pursuant to Chesapeake Utilities Corporation Performance Incentive Plan by and between Chesapeake Utilities Corporation and each of Michael P. McMasters, Beth W. Cooper, Stephen C. Thompson and Elaine B. Bittner, is incorporated herein by reference to Exhibit 10.2 of our Current Report on Form 8-K, filed January 21, 2011, File No. 001-11590.
|
|
|
|
• Exhibit 10.16*
|
|
Form of Performance Share Agreement, effective January 5, 2012 for the period 2012 to 2014, pursuant to Chesapeake Utilities Corporation Performance Incentive Plan by and between Chesapeake Utilities Corporation and each of Michael P. McMasters, Beth W. Cooper, Stephen C. Thompson and Elaine B. Bittner, is incorporated herein by reference to Exhibit 10.1 of our Current Report on Form 8-K, filed January 5, 2012, File No. 001-11590.
|
|
|
|
• Exhibit 10.17*
|
|
Form of Performance Share Agreement, effective January 8, 2013 for the period 2013 to 2015, pursuant to Chesapeake Utilities Corporation Performance Incentive Plan by and between Chesapeake Utilities Corporation and each of Michael P. McMasters, Beth W. Cooper, Stephen C. Thompson and Elaine B. Bittner, is incorporated herein by reference to Exhibit 10.15 of our Annual Report on Form 10-K for the year ended December 31, 2012, File No. 001-11590.
|
|
|
|
• Exhibit 10.18*
|
|
Form of Performance Share Agreement, effective January 7, 2014 for the period 2014 to 2016, pursuant to Chesapeake Utilities Corporation Performance Incentive Plan by and between Chesapeake Utilities Corporation and each of Michael P. McMasters, Beth W. Cooper, Stephen C. Thompson and Elaine B. Bittner, is filed herewith.
|
|
|
|
• Exhibit 10.19*
|
|
Chesapeake Utilities Corporation Supplemental Executive Retirement Plan, as amended and restated effective January 1, 2009, is incorporated herein by reference to Exhibit 10.27 of our Annual Report on Form 10-K for the year ended December 31, 2008, File No. 001-11590.
|
|
|
|
• Exhibit 10.20*
|
|
First Amendment to the Chesapeake Utilities Corporation Supplemental Executive Retirement Plan as amended and restated effective January 1, 2009, is incorporated herein by reference to Exhibit 10.30 of our Annual Report on Form 10-K for the year ended December 31, 2010, File No. 001-11590.
|
|
|
|
• Exhibit 10.21*
|
|
Chesapeake Utilities Corporation Supplemental Executive Retirement Savings Plan, as amended and restated effective January 1, 2009, is incorporated herein by reference to Exhibit 10.28 of our Annual Report on Form 10-K for the year ended December 31, 2008, File No. 001-11590.
|
|
|
|
• Exhibit 10.22*
|
|
First Amendment to the Chesapeake Utilities Corporation Supplemental Executive Retirement Savings Plan, dated October 28, 2010, is incorporated herein by reference to Exhibit 10.1 of our Quarterly Report on Form 10-Q for the period ended September 30, 2010, File No. 001-11590.
|
|
|
|
• Exhibit 10.23*
|
|
Second Amendment to the Chesapeake Utilities Corporation Supplemental Executive Retirement Savings Plan, effective January 1, 2012, is incorporated herein by reference to Exhibit 10.20 of our Annual Report on Form 10-K for the year ended December 31, 2012, File No. 001-11590.
|
|
|
|
• Exhibit 10.24
|
|
Amended and Restated Electric Service Contract between Florida Public Utilities Company and JEA dated November 6, 2008, is incorporated herein by reference to Exhibit 10.1 of Florida Public Utilities Company’s Current Report on Form 8-K, filed on November 6, 2008, File No. 001-10908.
|
|
|
• Exhibit 10.25
|
|
Networking Operating Agreement between Florida Public Utilities Company and Southern Company Services, Inc. dated December 27, 2007 and amended on June 3, 2008, is incorporated herein by reference to Exhibit 10.3 of Florida Public Utilities Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2008, File No. 001-10608.
|
|
|
|
• Exhibit 10.26
|
|
Network Integration Transmission Service Agreement between Florida Public Utilities Company and Southern Company Services, Inc. dated December 27, 2007 and amended on June 3, 2008, is incorporated herein by reference to Exhibit 10.4 of Florida Public Utilities Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2008, File No. 001-10608.
|
|
|
|
• Exhibit 10.27
|
|
Form of Service Agreement for Firm Transportation Service between Florida Public Utilities Company and Florida Gas Transmission Company, LLC dated November 1, 2007 for the period November 2007 to February 2016 (Contract No. 107033), is incorporated herein by reference to Exhibit 10.1 of Florida Public Utilities Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2007, File No. 001-10608.
|
|
|
|
• Exhibit 10.28
|
|
Form of Service Agreement for Firm Transportation Service between Florida Public Utilities Company and Florida Gas Transmission Company, LLC dated November 1, 2007 for the period November 2007 to March 2022 (Contract No. 107034), is incorporated herein by reference to Exhibit 10.2 of Florida Public Utilities Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2007, File No. 001-10608.
|
|
|
|
• Exhibit 10.29
|
|
Form of Service Agreement for Firm Transportation Service between Florida Public Utilities Company and Florida Gas Transmission Company, LLC dated November 1, 2007 for the period November 2007 to February 2022 (Contract No. 107035), is incorporated herein by reference to Exhibit 10.3 of Florida Public Utilities Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2007, File No. 001-10608.
|
|
|
|
• Exhibit 10.30
|
|
Form of Service Agreement for Generation Services entered into by Florida Public Utilities Company and Gulf Power Company, dated December 28, 2006, effective January 1, 2008 is hereby incorporated herein by reference to Exhibit 10(s) on Florida Public Utilities Company’s Annual Report on Form 10-K for the year ended December 31, 2006, File No. 001-10608.
|
|
|
|
• Exhibit 10.31
|
|
Amendment to Form of Service Agreement for Generation Services entered into by Florida Public Utilities Company and Gulf Power Company, effective January 25, 2011, is incorporated herein by reference to Exhibit 10.43 of our Annual Report on Form 10-K for the year ended December 31, 2010, File No. 001-10608.
|
|
|
|
• Exhibit 12
|
|
Computation of Ratio of Earning to Fixed Charges is filed herewith.
|
|
|
|
• Exhibit 14.1
|
|
Code of Ethics for Financial Officers is filed herewith.
|
|
|
|
• Exhibit 14.2
|
|
Business Code of Ethics and Conduct is filed herewith.
|
|
|
|
• Exhibit 21
|
|
Subsidiaries of the Registrant is filed herewith.
|
|
|
|
• Exhibit 23.1
|
|
Consent of Independent Registered Public Accounting Firm is filed herewith.
|
|
|
|
• Exhibit 31.1
|
|
Certificate of Chief Executive Officer of Chesapeake Utilities Corporation pursuant to Exchange Act Rule 13a-14(a) and 15d – 14(a), dated March 6, 2014, is filed herewith.
|
|
|
|
• Exhibit 31.2
|
|
Certificate of Chief Financial Officer of Chesapeake Utilities Corporation pursuant to Exchange Act Rule 13a-14(a) and 15d – 14(a), dated March 6, 2014, is filed herewith.
|
|
|
|
• Exhibit 32.1
|
|
Certificate of Chief Executive Officer of Chesapeake Utilities Corporation pursuant to 18 U.S.C. Section 1350, dated March 6, 2014, is filed herewith.
|
|
|
|
• Exhibit 32.2
|
|
Certificate of Chief Financial Officer of Chesapeake Utilities Corporation pursuant to 18 U.S.C. Section 1350, dated March 6, 2014, is filed herewith.
|
|
||
• Exhibit 101.INS XBRL Instance Document is filed herewith.
|
||
|
||
• Exhibit 101.SCH XBRL Taxonomy Extension Schema Document is filed herewith.
|
||
|
||
• Exhibit 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document is filed herewith.
|
||
|
||
• Exhibit 101.DEF XBRL Taxonomy Extension Definition Linkbase Document is filed herewith.
|
||
|
||
• Exhibit 101.LAB XBRL Taxonomy Extension Label Linkbase Document is filed herewith.
|
||
|
• Exhibit 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document is filed herewith.
|
*
|
Management contract or compensatory plan or agreement.
|
|
C
HESAPEAKE
U
TILITIES
C
ORPORATION
|
||
|
|
|
|
|
By:
|
|
/s/ M
ICHAEL
P. M
C
M
ASTERS
|
|
|
|
Michael P. McMasters,
|
|
|
|
President and Chief Executive Officer
|
|
|
|
Date: March 6, 2014
|
/
S
/ R
ALPH
J. A
DKINS
|
|
|
/
S
/ M
ICHAEL
P. M
C
M
ASTERS
|
Ralph J. Adkins,
|
|
|
Michael P. McMasters,
|
Chairman of the Board and Director
|
|
|
President, Chief Executive Officer and Director
|
Date: March 6, 2014
|
|
|
Date: March 6, 2014
|
|
|
|
|
/
S
/ B
ETH
W. C
OOPER
|
|
|
/
S
/ E
UGENE
H. B
AYARD
,E
SQ
|
Beth W. Cooper, Senior Vice President
|
|
|
Eugene H. Bayard, Esq., Director
|
and Chief Financial Officer
|
|
|
Date: March 6, 2014
|
(Principal Financial and Accounting Officer)
|
|
|
|
Date: March 6, 2014
|
|
|
|
|
|
|
|
/
S
/ R
ICHARD
B
ERNSTEIN
|
|
|
/
S
/ T
HOMAS
J. B
RESNAN
|
Richard Bernstein, Director
|
|
|
Thomas J. Bresnan, Director
|
Date: March 6, 2014
|
|
|
Date: March 6, 2014
|
|
|
|
|
/
S
/ T
HOMAS
P. H
ILL
, J
R
.
|
|
|
/
S
/ D
ENNIS
S. H
UDSON
, III
|
Thomas P. Hill, Jr., Director
|
|
|
Dennis S. Hudson, III, Director
|
Date: March 6, 2014
|
|
|
Date: March 6, 2014
|
|
|
|
|
/
S
/ P
AUL
L. M
ADDOCK
, J
R
.
|
|
|
/S/
J
OSEPH
E
.
M
OORE
,
E
SQ
|
Paul L. Maddock, Jr., Director
|
|
|
Joseph E. Moore, Esq., Director
|
Date: March 6, 2014
|
|
|
Date: March 6, 2014
|
|
|
|
|
/
S
/ C
ALVERT
A. M
ORGAN
, JR.
|
|
|
/
S
/ D
IANNA
F. M
ORGAN
|
Calvert A. Morgan, Jr., Director
|
|
|
Dianna F. Morgan, Director
|
Date: March 6, 2014
|
|
|
Date: March 6, 2014
|
|
|
|
|
/
S
/ J
OHN
R. S
CHIMKAITIS
|
|
|
|
John R. Schimkaitis
|
|
|
|
Vice Chairman of Board and Director
|
|
|
|
Date: March 6, 2014
|
|
|
|
R
EPORT
OF
I
NDEPENDENT
R
EGISTERED
P
UBLIC
A
CCOUNTING
F
IRM
|
|
|
|
|
Additions
|
|
|
|
|
|||||||||||
For the Year Ended December 31,
|
Balance at
Beginning of
Year
|
|
Charged to
Income
|
|
Other
Accounts
(1)
|
|
Deductions
(2)
|
|
Balance at End
of Year
|
|||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|||||||||
Reserve Deducted From Related Assets
|
|
|
|
|
|
|
|
|
|
|||||||||
Reserve for Uncollectible Accounts
|
|
|
|
|
|
|
|
|
|
|||||||||
2013
|
$
|
826
|
|
|
$
|
1,796
|
|
|
$
|
249
|
|
|
(1,236
|
)
|
|
$
|
1,635
|
|
2012
|
$
|
1,090
|
|
|
$
|
826
|
|
|
$
|
354
|
|
|
(1,444
|
)
|
|
$
|
826
|
|
2011
|
$
|
1,194
|
|
|
$
|
1,157
|
|
|
$
|
293
|
|
|
(1,554
|
)
|
|
$
|
1,090
|
|
(1)
|
Recoveries.
|
(2)
|
Uncollectible accounts charged off.
|
Y AND PARTICIPATION
|
8
|
|
For the Year Ended December 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009 (a)
|
||||||||||
(in thousands, except ratio of earnings to fixed charges)
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
|
$
|
32,787
|
|
|
$
|
28,863
|
|
|
$
|
27,622
|
|
|
$
|
26,056
|
|
|
$
|
15,897
|
|
Add:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income taxes
|
22,085
|
|
|
19,296
|
|
|
17,989
|
|
|
16,923
|
|
|
10,918
|
|
|||||
Portion of rents representative of interest factor
|
542
|
|
|
464
|
|
|
363
|
|
|
356
|
|
|
333
|
|
|||||
Interest on indebtedness
|
8,202
|
|
|
8,707
|
|
|
8,954
|
|
|
9,090
|
|
|
7,042
|
|
|||||
Amortization of debt discount and expense
|
33
|
|
|
40
|
|
|
46
|
|
|
56
|
|
|
43
|
|
|||||
Capitalized interest (allowed funds used during construction)
|
131
|
|
|
111
|
|
|
25
|
|
|
1
|
|
|
41
|
|
|||||
Earnings as adjusted
|
$
|
63,780
|
|
|
$
|
57,481
|
|
|
$
|
54,999
|
|
|
$
|
52,482
|
|
|
$
|
34,274
|
|
Fixed Charges
|
|
|
|
|
|
|
|
|
|
||||||||||
Portion of rents representative of interest factor
|
$
|
542
|
|
|
$
|
464
|
|
|
$
|
363
|
|
|
$
|
356
|
|
|
$
|
333
|
|
Interest on indebtedness
|
8,202
|
|
|
8,707
|
|
|
8,954
|
|
|
9,090
|
|
|
7,042
|
|
|||||
Amortization of debt discount and expense
|
33
|
|
|
40
|
|
|
46
|
|
|
56
|
|
|
43
|
|
|||||
Capitalized interest (allowed funds used during construction)
|
131
|
|
|
111
|
|
|
25
|
|
|
1
|
|
|
41
|
|
|||||
Fixed Charges
|
$
|
8,908
|
|
|
$
|
9,322
|
|
|
$
|
9,388
|
|
|
$
|
9,503
|
|
|
$
|
7,459
|
|
Ratio of Earnings to Fixed Charges
|
7.16
|
|
|
6.17
|
|
|
5.86
|
|
|
5.52
|
|
|
4.59
|
|
(a)
|
Includes the results from the merger with Florida Public Utilities Company, which became effective on October 28, 2009.
|
•
|
Maintain high standards of honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships.
|
•
|
Take reasonable actions within the scope of his or her responsibilities to ensure that the disclosures in reports and documents filed by Chesapeake with the SEC and in other public communications made by Chesapeake are accurate, complete, fairly stated, timely and understandable.
|
•
|
Comply with applicable laws, rules and regulations, including the rules, regulations and policies of public regulatory agencies.
|
•
|
Act at all times in good faith, responsibly, with due care, and diligence in carrying out his or her responsibilities.
|
•
|
Maintain the confidentiality of confidential financial or other information acquired in the course of employment, except when disclosure is properly authorized or is required by applicable law or legal process, and not use any such confidential information for personal advantage.
|
•
|
Not take any action to coerce, manipulate, mislead or fraudulently influence an independent accountant or internal auditor engaged in the performance of an audit or review of Chesapeake’s financial statements or accounting books and records, with the purpose of rendering the financial statements false or misleading.
|
•
|
Report promptly any violation of this Code of Ethics for Financial Officers either directly to the Director of Internal Audit or the Chairman of the Audit Committee.
|
I.
|
Compliance with Laws, Rules, Regulations, Policies and Procedures
|
II.
|
Conflicts of Interest
|
•
|
Ownership of a material financial interest in any business or other enterprise that does business (whether as a supplier, customer or otherwise), or is seeking to do business, with the Company.
|
•
|
Serving as a director, officer or partner of, or in any other managerial role with respect to, or as a consultant to, any business or other enterprise that does business (whether as a supplier, customer or otherwise), or is seeking to do business, with the Company.
|
•
|
Ownership of a material financial interest in, or serving as a director, officer or partner of, or in any other managerial role with respect to, or as a consultant to, any competitor of the Company.
|
•
|
Acting as a broker, finder or other intermediary in any transaction involving the Company.
|
•
|
Any situation where the employee, officer or director will receive any payment of money, services, loan, guarantee or any other personal benefits from within the Company or a third party in anticipation of or as a result of any transaction or business relationship between the Company and a third party.
|
•
|
Ownership of a material financial interest in any business or other enterprise that does business (whether as a supplier, customer or otherwise), or is seeking to do business, with any competitor of the Company.
|
•
|
Serving as a director, officer or partner of, or in any other managerial role with respect to, or as a consultant to, any business or other enterprise that does business (whether as a supplier, customer or otherwise), or is seeking to do business, with any competitor of the Company.
|
•
|
Taking a public position or making public statements contrary to the best interests of the Company or that could result in embarrassment to the Company.
|
•
|
Taking for themselves personally opportunities that they discovered through the use of Company property or information or through their position with the Company;
|
•
|
Using property or information of the Company or their position with the Company for personal gain; or
|
•
|
Engaging in any business in competition with the Company.
|
•
|
Trade secrets and other proprietary technical information or data.
|
•
|
Undisclosed financial and accounting information.
|
•
|
Strategic information concerning current and future business plans.
|
•
|
Pricing information.
|
•
|
Customer records.
|
•
|
Employee personnel records (e.g., job applications, resumes, performance evaluations and records, compensation information, notices regarding performance, termination notices, etc.).
|
•
|
Research information and records.
|
A.
|
Maintenance of Accurate Records
|
•
|
No undisclosed or unrecorded fund or asset of the Company shall be established or maintained for any purpose.
|
•
|
No employee or officer of the Company shall intentionally conceal or fail to record or report any matter that is required to be recorded or reported.
|
•
|
No employee or officer of the Company shall improperly record or report any matter, or improperly alter any record or report of any matter.
|
B.
|
Documentation of Disbursement of Funds
|
•
|
Current or prospective customer, supplier or competitor of the Company or to government officials; or
|
•
|
Any director, officer, employee, general partner, stockholder or owner of a current or prospective customer, supplier or competitor,
|
•
|
It is consistent with customary business practices;
|
•
|
It is not for an improper purpose;
|
•
|
It is not in contravention of any applicable laws, rules, regulations or ethical standards; and
|
•
|
Public disclosure of the full details of the gift would not cause embarrassment to the Company.
|
•
|
It does not go beyond common courtesies usually associated with accepted business practices;
|
•
|
It does not interfere with the recipient’s independence or judgment in carrying out his or her responsibilities on behalf of the Company; and
|
•
|
Public disclosure of the full details of the gift or gratuity would not cause embarrassment to the Company.
|
•
|
Providing all customers with exceptional service;
|
•
|
Dealing fairly and ethically with all customers and treating customers with respect;
|
•
|
Providing customers with accurate and clear information regarding the services offered by the Company; and
|
•
|
Investigating promptly and resolving on fair terms all customer complaints and inquiries.
|
XV.
|
Compliance Procedures
|
A.
|
Distribution of this Code of Ethics
|
B.
|
Reporting Violations
|
XVI.
|
Amendments and Waivers
|
Subsidiaries
|
State Incorporated
|
Eastern Shore Natural Gas Company
|
Delaware
|
Sharp Energy, Inc.
|
Delaware
|
Chesapeake Service Company
|
Delaware
|
Xeron, Inc.
|
Mississippi
|
Chesapeake OnSight Services, LLC
|
Delaware
|
Peninsula Energy Services Company, Inc.
|
Delaware
|
Peninsula Pipeline Company, Inc.
|
Delaware
|
Florida Public Utilities Company
|
Florida
|
Sandpiper Energy, Inc.
|
Delaware
|
Grove Energy, Inc.
|
Delaware
|
Austin Cox Home Services, Inc.
|
Delaware
|
|
|
Subsidiary of Sharp Energy, Inc.
|
State Incorporated
|
Sharpgas, Inc.
|
Delaware
|
|
|
Subsidiary of Florida Public Utilities Company
|
State Incorporated
|
Flo-Gas Corporation
|
Florida
|
|
|
Subsidiaries of Chesapeake Service Company
|
State Incorporated
|
Skipjack, Inc.
|
Delaware
|
BravePoint, Inc.
|
Georgia
|
Chesapeake Investment Company
|
Delaware
|
Eastern Shore Real Estate, Inc.
|
Delaware
|
|
|
Subsidiary of Chesapeake OnSight Services, LLC
|
State Incorporated
|
Eight Flags Energy, LLC
|
Delaware
|
C
ONSENT
OF
I
NDEPENDENT
R
EGISTERED
P
UBLIC
A
CCOUNTING
F
IRM
|
|
/s/ ParenteBeard LLC
|
|
Philadelphia, Pennsylvania
|
March 6, 2014
|
1.
|
I have reviewed this annual report on Form 10-K for the year ended
December 31, 2013
of Chesapeake Utilities Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/
S
/ M
ICHAEL
P. M
C
M
ASTERS
|
Michael P. McMasters
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K for the year ended
December 31, 2013
of Chesapeake Utilities Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/
S
/ B
ETH
W. C
OOPER
|
Beth W. Cooper
Senior Vice President and Chief Financial Officer
|
/
S
/ M
ICHAEL
P. M
C
M
ASTERS
|
Michael P. McMasters
|
March 6, 2014
|
/
S
/ B
ETH
W. C
OOPER
|
Beth W. Cooper
|
March 6, 2014
|