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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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Large accelerated filer
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ý
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Accelerated filer
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¨
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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 (including deregulation) 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;
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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 recoverable in rates;
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•
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the timing of certification authorizations;
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•
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the loss of customers due to a 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 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 capital intensive nature of our regulated energy businesses;
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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 on our cost and funding obligations under our pension and other post retirement benefit plans of potential downturns in the financial markets, lower discount rates, and costs 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 our 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 ability to continue to hire, train and retain appropriately qualified personnel;
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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 various energy 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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possible increased federal, state and local regulation of the safety of our operations;
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•
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the inherent hazards and risks involved in our energy businesses;
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•
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the effect of accounting pronouncements issued periodically by accounting standard-setting bodies; and
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•
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risks related to cyber-attacks that could disrupt our business operations or result in failure of information technology systems.
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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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60,985
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78
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%
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$
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870,559
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82
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%
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Unregulated Energy
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16,355
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21
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%
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172,803
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16
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%
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Other businesses
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418
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1
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%
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25,224
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2
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%
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Total
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$
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77,758
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100
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%
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$
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1,068,586
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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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|||||||||
Residential
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$
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63,745
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61
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%
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$
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27,945
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32
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%
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$
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46,686
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59
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%
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Commercial
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33,776
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33
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%
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31,116
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36
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%
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42,585
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54
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%
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Industrial
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7,214
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7
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%
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21,988
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25
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%
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3,111
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4
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%
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Other
(1)
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(1,175
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)
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(1
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)%
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5,512
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7
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%
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(12,954
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)
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(17
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)%
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|||
Total Operating Revenues
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$
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103,560
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100
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%
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$
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86,561
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100
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%
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$
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79,428
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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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3,734,888
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31
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%
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1,575,038
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6
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%
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303,642
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48
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%
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|||
Commercial
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3,696,839
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30
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%
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7,834,533
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32
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%
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313,757
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49
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%
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|||
Industrial
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4,617,183
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38
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%
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14,990,843
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62
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%
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18,880
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3
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%
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Other
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82,655
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1
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%
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(84,763
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)
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—
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%
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(1,740
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)
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—
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%
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Total
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12,131,565
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100
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%
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24,315,651
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100
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%
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634,539
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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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63,901
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90
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%
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66,900
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90
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%
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24,039
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76
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%
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Commercial
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6,637
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9
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%
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5,609
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8
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%
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7,389
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24
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%
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Industrial
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118
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1
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%
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1,702
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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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70,661
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100
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%
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74,211
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100
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%
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31,430
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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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18,320
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39
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%
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Local distribution companies - non-affiliated
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9,485
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20
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%
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Commercial and industrial
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18,995
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41
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%
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Other
(2)
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44
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—
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%
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Total Operating Revenues
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$
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46,844
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|
100
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%
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|||
Contracted firm transportation capacity
(in Dts/d)
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Local distribution companies - affiliated
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101,152
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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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28
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%
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Commercial and industrial
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67,923
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29
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%
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Total
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236,368
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|
100
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%
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|
|
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Designed day capacity
(in Dts/d)
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236,368
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100
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%
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(in thousands)
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Delmarva Peninsula and Pennsylvania
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Florida
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||||||||||
Operating Revenues
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|
|
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|
||||||||||
Residential bulk
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$
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23,676
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|
|
34
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%
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|
$
|
5,554
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|
|
31
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%
|
Residential metered
|
|
7,857
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|
|
11
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%
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|
4,770
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|
|
27
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%
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||
Commercial bulk
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|
16,261
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|
|
23
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%
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|
4,533
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|
|
26
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%
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||
Commercial metered
|
|
—
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|
|
—
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%
|
|
1,862
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|
|
11
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%
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||
Wholesale
|
|
18,355
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|
|
26
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%
|
|
673
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|
|
4
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%
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||
Other
(1)
|
|
4,259
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|
|
6
|
%
|
|
272
|
|
|
1
|
%
|
||
Total Operating Revenues
|
|
$
|
70,408
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|
|
100
|
%
|
|
$
|
17,664
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
||||||
Volume
(in gallons)
|
|
|
|
|
|
|
|
|
||||||
Residential bulk
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|
9,511
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|
|
20
|
%
|
|
1,320
|
|
|
22
|
%
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||
Residential metered
|
|
3,749
|
|
|
8
|
%
|
|
960
|
|
|
16
|
%
|
||
Commercial bulk
|
|
12,228
|
|
|
26
|
%
|
|
2,215
|
|
|
38
|
%
|
||
Commercial metered
|
|
—
|
|
|
—
|
%
|
|
747
|
|
|
12
|
%
|
||
Wholesale
|
|
21,173
|
|
|
46
|
%
|
|
741
|
|
|
12
|
%
|
||
Other
|
|
—
|
|
|
—
|
%
|
|
(2
|
)
|
|
—
|
%
|
||
Total
|
|
46,661
|
|
|
100
|
%
|
|
5,981
|
|
|
100
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
Average customers
|
|
|
|
|
|
|
|
|
||||||
Residential bulk
|
|
25,532
|
|
|
68
|
%
|
|
8,763
|
|
|
54
|
%
|
||
Residential metered
|
|
8,188
|
|
|
22
|
%
|
|
6,224
|
|
|
38
|
%
|
||
Commercial bulk
|
|
3,689
|
|
|
10
|
%
|
|
975
|
|
|
6
|
%
|
||
Commercial metered
|
|
—
|
|
|
—
|
%
|
|
270
|
|
|
2
|
%
|
||
Wholesale
|
|
34
|
|
|
—
|
%
|
|
7
|
|
|
—
|
%
|
||
Total
|
|
37,443
|
|
|
100
|
%
|
|
16,239
|
|
|
100
|
%
|
|
Operating revenues
|
|
Deliveries
|
|||
|
(in thousands)
|
|
(in Dts)
|
|||
Supply to Columbia Gas of Ohio
|
$
|
4,884
|
|
|
1,258
|
|
Supply to Consumers Gas Cooperative
|
4,019
|
|
|
635
|
|
|
Supply to Marketers - affiliated
|
3,330
|
|
|
1,342
|
|
|
Supply to Marketers - unaffiliated
|
2,507
|
|
|
1,009
|
|
|
Other (including natural gas gathering and processing)
|
1,992
|
|
|
260
|
|
|
Total
|
$
|
16,732
|
|
|
4,504
|
|
•
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Charters for the Audit Committee, Compensation Committee and Corporate Governance Committee of the Board of Directors; and
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Name
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|
Age
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|
Position
|
Michael P. McMasters
|
|
57
|
|
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.
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Beth W. Cooper
|
|
49
|
|
Senior Vice President (September 2008 - present)
Chief Financial Officer (September 2008 - present)
Assistant Secretary (March 2015-present) Corporate Secretary (June 2005 - March 2015)
Vice President (June 2005 - September 2008)
Treasurer (March 2003 - May 2012)
Ms. Cooper also previously served as Assistant Vice President, Assistant Treasurer, Director of Internal Audit and Director of Strategic Planning.
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Elaine B. Bittner
|
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46
|
|
Senior Vice President of Strategic Development (May 2013 - present)
Chief Operating Officer - Sharp, Aspire Energy, PESCO and Xeron (May 2014 - 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 and Director of Environmental Affairs and Environmental Engineer. |
Stephen C. Thompson
|
|
55
|
|
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.
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Jeffry M. Householder
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|
58
|
|
President of Florida Public Utilities Company (June 2010 - present)
Prior to joining Chesapeake Utilities, Mr. Householder operated a consulting practice that provided business development and regulatory services to utilities, propane retailers and industrial clients.
|
James F. Moriarty
|
|
58
|
|
Vice President, General Counsel & Corporate Secretary (March 2015 - present)
Prior to joining Chesapeake Utilities, Mr. Moriarty was a Partner at Locke Lord LLP and Fulbright & Jaworski, LLP, both international law firms with offices in Washington, D.C.
|
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Quarter Ended
|
|
High
|
|
Low
|
|
Close
|
|
Dividends
Declared
Per Share
|
||||||||
2015
|
|
|
|
|
|
|
|
|
|
||||||||
|
March 31
|
|
$
|
52.22
|
|
|
$
|
44.83
|
|
|
$
|
50.61
|
|
|
$
|
0.2700
|
|
|
June 30
|
|
$
|
55.72
|
|
|
$
|
44.37
|
|
|
$
|
53.85
|
|
|
$
|
0.2875
|
|
|
September 30
|
|
$
|
56.15
|
|
|
$
|
45.25
|
|
|
$
|
53.08
|
|
|
$
|
0.2875
|
|
|
December 31
|
|
$
|
61.13
|
|
|
$
|
49.50
|
|
|
$
|
56.75
|
|
|
$
|
0.2875
|
|
2014
|
|
|
|
|
|
|
|
|
|
||||||||
|
March 31
|
|
$
|
43.01
|
|
|
$
|
37.49
|
|
|
$
|
42.11
|
|
|
$
|
0.2567
|
|
|
June 30
|
|
$
|
47.69
|
|
|
$
|
39.77
|
|
|
$
|
47.55
|
|
|
$
|
0.2700
|
|
|
September 30
|
|
$
|
48.73
|
|
|
$
|
39.28
|
|
|
$
|
41.66
|
|
|
$
|
0.2700
|
|
|
December 31
|
|
$
|
52.66
|
|
|
$
|
40.88
|
|
|
$
|
49.66
|
|
|
$
|
0.2700
|
|
|
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, 2015 through October 31, 2015
(1)
|
377
|
|
|
$
|
53.43
|
|
|
—
|
|
|
—
|
|
November 1, 2015 through November 30, 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
December 1, 2015 through December 31, 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
377
|
|
|
$
|
53.43
|
|
|
—
|
|
|
—
|
|
(1)
|
In October, we 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, 377 shares were purchased through the reinvestment of dividends.
|
(2)
|
Except for the purpose described in Footnote
(1)
, we have no publicly announced plans or programs to repurchase our shares.
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||||
Chesapeake Utilities
|
$
|
100
|
|
|
$
|
108
|
|
|
$
|
116
|
|
|
$
|
158
|
|
|
$
|
200
|
|
|
$
|
233
|
|
Industry Index
|
$
|
100
|
|
|
$
|
121
|
|
|
$
|
119
|
|
|
$
|
142
|
|
|
$
|
178
|
|
|
$
|
214
|
|
S&P 500 Index
|
$
|
100
|
|
|
$
|
102
|
|
|
$
|
118
|
|
|
$
|
156
|
|
|
$
|
177
|
|
|
$
|
180
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Operating
(1)
|
|
|
|
|
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Revenues
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
301,902
|
|
|
$
|
300,442
|
|
|
$
|
264,637
|
|
Unregulated Energy
|
162,108
|
|
|
184,961
|
|
|
166,723
|
|
|||
Other businesses and eliminations
|
(4,766
|
)
|
|
13,431
|
|
|
12,946
|
|
|||
Total revenues
|
$
|
459,244
|
|
|
$
|
498,834
|
|
|
$
|
444,306
|
|
Operating income
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
60,985
|
|
|
$
|
50,451
|
|
|
$
|
50,084
|
|
Unregulated Energy
|
16,355
|
|
|
11,723
|
|
|
12,353
|
|
|||
Other businesses and eliminations
|
418
|
|
|
105
|
|
|
297
|
|
|||
Total operating income
|
$
|
77,758
|
|
|
$
|
62,279
|
|
|
$
|
62,734
|
|
Net income from continuing operations
|
$
|
41,140
|
|
|
$
|
36,092
|
|
|
$
|
32,787
|
|
Assets
|
|
|
|
|
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Gross property, plant and equipment
|
$
|
1,070,263
|
|
|
$
|
883,131
|
|
|
$
|
805,394
|
|
Net property, plant and equipment
|
$
|
854,950
|
|
|
$
|
689,762
|
|
|
$
|
631,246
|
|
Total assets
|
$
|
1,068,586
|
|
|
$
|
904,469
|
|
|
$
|
837,522
|
|
Capital expenditures
(1)
|
$
|
142,713
|
|
|
$
|
98,057
|
|
|
$
|
108,039
|
|
Capitalization
|
|
|
|
|
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Stockholders’ equity
|
$
|
358,138
|
|
|
$
|
300,322
|
|
|
$
|
278,773
|
|
Long-term debt, net of current maturities
|
149,340
|
|
|
158,486
|
|
|
117,592
|
|
|||
Total capitalization
|
$
|
507,478
|
|
|
$
|
458,808
|
|
|
$
|
396,365
|
|
Current portion of long-term debt
|
9,151
|
|
|
9,109
|
|
|
11,353
|
|
|||
Short-term debt
|
173,397
|
|
|
88,231
|
|
|
105,666
|
|
|||
Total capitalization and short-term financing
|
$
|
690,026
|
|
|
$
|
556,148
|
|
|
$
|
513,384
|
|
(1)
|
These amounts exclude the results of distributed energy due to their reclassification to discontinued operations. We closed our distributed energy operation in 2007. 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 our common shares as a result of the merger.
|
For the Year Ended December 31,
|
|
|
|
|
|
|
|
|
||||||||||||||||||
2012
|
|
2011
|
|
2010
|
|
2009
(2)
|
|
2008
|
|
2007
|
|
2006
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
246,208
|
|
|
$
|
256,226
|
|
|
$
|
269,438
|
|
|
$
|
138,671
|
|
|
$
|
116,123
|
|
|
$
|
128,566
|
|
|
$
|
124,438
|
|
133,049
|
|
|
149,586
|
|
|
146,793
|
|
|
119,973
|
|
|
161,290
|
|
|
115,190
|
|
|
94,320
|
|
|||||||
13,245
|
|
|
12,215
|
|
|
11,315
|
|
|
10,141
|
|
|
14,030
|
|
|
14,530
|
|
|
12,442
|
|
|||||||
$
|
392,502
|
|
|
$
|
418,027
|
|
|
$
|
427,546
|
|
|
$
|
268,785
|
|
|
$
|
291,443
|
|
|
$
|
258,286
|
|
|
$
|
231,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
46,999
|
|
|
$
|
43,911
|
|
|
$
|
43,267
|
|
|
$
|
26,668
|
|
|
$
|
23,833
|
|
|
$
|
21,739
|
|
|
$
|
18,618
|
|
8,355
|
|
|
9,619
|
|
|
8,150
|
|
|
8,390
|
|
|
3,600
|
|
|
5,244
|
|
|
3,650
|
|
|||||||
1,281
|
|
|
175
|
|
|
513
|
|
|
(1,322
|
)
|
|
1,046
|
|
|
1,131
|
|
|
1,064
|
|
|||||||
$
|
56,635
|
|
|
$
|
53,705
|
|
|
$
|
51,930
|
|
|
$
|
33,736
|
|
|
$
|
28,479
|
|
|
$
|
28,114
|
|
|
$
|
23,332
|
|
$
|
28,863
|
|
|
$
|
27,622
|
|
|
$
|
26,056
|
|
|
$
|
15,897
|
|
|
$
|
13,607
|
|
|
$
|
13,218
|
|
|
$
|
10,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
697,159
|
|
|
$
|
625,488
|
|
|
$
|
584,385
|
|
|
$
|
543,905
|
|
|
$
|
381,689
|
|
|
$
|
352,838
|
|
|
$
|
325,836
|
|
$
|
541,781
|
|
|
$
|
487,704
|
|
|
$
|
462,757
|
|
|
$
|
436,587
|
|
|
$
|
280,671
|
|
|
$
|
260,423
|
|
|
$
|
240,825
|
|
$
|
733,746
|
|
|
$
|
709,066
|
|
|
$
|
670,993
|
|
|
$
|
615,811
|
|
|
$
|
385,795
|
|
|
$
|
381,557
|
|
|
$
|
325,585
|
|
$
|
78,210
|
|
|
$
|
44,431
|
|
|
$
|
46,955
|
|
|
$
|
26,294
|
|
|
$
|
30,844
|
|
|
$
|
30,142
|
|
|
$
|
49,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
256,598
|
|
|
$
|
240,780
|
|
|
$
|
226,239
|
|
|
$
|
209,781
|
|
|
$
|
123,073
|
|
|
$
|
119,576
|
|
|
$
|
111,152
|
|
101,907
|
|
|
110,285
|
|
|
89,642
|
|
|
98,814
|
|
|
86,422
|
|
|
63,256
|
|
|
71,050
|
|
|||||||
$
|
358,505
|
|
|
$
|
351,065
|
|
|
$
|
315,881
|
|
|
$
|
308,595
|
|
|
$
|
209,495
|
|
|
$
|
182,832
|
|
|
$
|
182,202
|
|
8,196
|
|
|
8,196
|
|
|
9,216
|
|
|
35,299
|
|
|
6,656
|
|
|
7,656
|
|
|
7,656
|
|
|||||||
61,199
|
|
|
34,707
|
|
|
63,958
|
|
|
30,023
|
|
|
33,000
|
|
|
45,664
|
|
|
27,554
|
|
|||||||
$
|
427,900
|
|
|
$
|
393,968
|
|
|
$
|
389,055
|
|
|
$
|
373,917
|
|
|
$
|
249,151
|
|
|
$
|
236,152
|
|
|
$
|
217,412
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Common Stock Data and Ratios
|
|
|
|
|
|
||||||
Basic earnings per share from continuing operations
(1) (5)
|
$
|
2.73
|
|
|
$
|
2.48
|
|
|
$
|
2.27
|
|
Diluted earnings per share from continuing operations
(1) (5)
|
$
|
2.72
|
|
|
$
|
2.47
|
|
|
$
|
2.26
|
|
Return on average equity from continuing operations
(1)
|
12.1
|
%
|
|
12.2
|
%
|
|
12.2
|
%
|
|||
Common equity / total capitalization
|
70.6
|
%
|
|
65.5
|
%
|
|
70.3
|
%
|
|||
Common equity / total capitalization and short-term financing
|
51.9
|
%
|
|
54.0
|
%
|
|
54.3
|
%
|
|||
Book value per share
(5)
|
$
|
23.45
|
|
|
$
|
20.59
|
|
|
$
|
19.28
|
|
Market price:
|
|
|
|
|
|
||||||
High
|
$
|
61.130
|
|
|
$
|
52.660
|
|
|
$
|
40.780
|
|
Low
|
$
|
44.370
|
|
|
$
|
37.493
|
|
|
$
|
30.560
|
|
Close
|
$
|
56.750
|
|
|
$
|
49.660
|
|
|
$
|
40.013
|
|
Weighted average number of shares outstanding
(5)
|
15,094,423
|
|
|
14,551,308
|
|
|
14,430,962
|
|
|||
Shares outstanding at year-end
(5)
|
15,270,659
|
|
|
14,588,711
|
|
|
14,457,345
|
|
|||
Registered common shareholders
|
2,396
|
|
|
2,329
|
|
|
2,345
|
|
|||
Cash dividends declared per share
(5)
|
$
|
1.13
|
|
|
$
|
1.07
|
|
|
$
|
1.01
|
|
Dividend yield (annualized)
(3)
|
2.0
|
%
|
|
2.2
|
%
|
|
2.6
|
%
|
|||
Payout ratio from continuing operations
(1) (4)
|
41.5
|
%
|
|
43.0
|
%
|
|
44.6
|
%
|
|||
Additional Data
|
|
|
|
|
|
||||||
Customers
|
|
|
|
|
|
||||||
Natural gas distribution
|
144,872
|
|
|
141,227
|
|
|
138,210
|
|
|||
Electric distribution
|
31,430
|
|
|
31,272
|
|
|
31,151
|
|
|||
Propane distribution
|
53,682
|
|
|
53,272
|
|
|
51,988
|
|
|||
Volumes
|
|
|
|
|
|
||||||
Natural gas deliveries (in Dts)
|
79,564,618
|
|
|
77,623,201
|
|
|
74,117,121
|
|
|||
Electric Distribution (in MWHs)
|
634,539
|
|
|
643,332
|
|
|
649,025
|
|
|||
Propane distribution (in thousands of gallons)
|
52,643
|
|
|
53,525
|
|
|
48,511
|
|
|||
Other unregulated natural gas services deliveries (in Dts)
|
4,504
|
|
|
—
|
|
|
—
|
|
|||
Heating degree-days (Delmarva Peninsula)
|
|
|
|
|
|
||||||
Actual HDD
|
4,363
|
|
|
4,826
|
|
|
4,638
|
|
|||
10-year average HDD (normal)
|
4,496
|
|
|
4,483
|
|
|
4,454
|
|
|||
Heating degree-days (Florida)
|
|
|
|
|
|
||||||
Actual HDD
|
569
|
|
|
888
|
|
|
671
|
|
|||
10-year average HDD (normal)
|
859
|
|
|
856
|
|
|
885
|
|
|||
Cooling degree-days (Florida)
|
|
|
|
|
|
||||||
Actual CDD
|
3,338
|
|
|
2,705
|
|
|
2,750
|
|
|||
10-year average CDD (normal)
|
2,760
|
|
|
2,768
|
|
|
2,750
|
|
|||
Propane bulk storage capacity (in thousands of gallons)
|
4,060
|
|
|
3,833
|
|
|
3,566
|
|
|||
Total employees
|
832
|
|
|
753
|
|
|
842
|
|
(1)
|
These amounts exclude the results of a former distributed energy subsidiary due to its reclassification to discontinued operations in 2007.
|
(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)
|
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.
|
For the Year Ended December 31,
|
|
|
|
|
|
|
|
|
||||||||||||||||||
2012
|
|
2011
|
|
2010
|
|
2009
(2)
|
|
2008
|
|
2007
|
|
2006
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
2.01
|
|
|
$
|
1.93
|
|
|
$
|
1.83
|
|
|
$
|
1.45
|
|
|
$
|
1.33
|
|
|
$
|
1.31
|
|
|
$
|
1.19
|
|
$
|
1.99
|
|
|
$
|
1.91
|
|
|
$
|
1.82
|
|
|
$
|
1.43
|
|
|
$
|
1.32
|
|
|
$
|
1.29
|
|
|
$
|
1.17
|
|
11.6
|
%
|
|
11.6
|
%
|
|
11.6
|
%
|
|
11.2
|
%
|
|
11.2
|
%
|
|
11.5
|
%
|
|
11.0
|
%
|
|||||||
71.6
|
%
|
|
68.6
|
%
|
|
71.6
|
%
|
|
68.0
|
%
|
|
58.7
|
%
|
|
65.4
|
%
|
|
61.0
|
%
|
|||||||
60.0
|
%
|
|
61.1
|
%
|
|
58.2
|
%
|
|
56.1
|
%
|
|
49.4
|
%
|
|
50.6
|
%
|
|
51.1
|
%
|
|||||||
$
|
17.82
|
|
|
$
|
16.78
|
|
|
$
|
15.84
|
|
|
$
|
14.89
|
|
|
$
|
12.02
|
|
|
$
|
11.76
|
|
|
$
|
11.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
32.613
|
|
|
$
|
29.687
|
|
|
$
|
28.133
|
|
|
$
|
23.333
|
|
|
$
|
23.227
|
|
|
$
|
24.833
|
|
|
$
|
23.767
|
|
$
|
26.593
|
|
|
$
|
24.000
|
|
|
$
|
18.673
|
|
|
$
|
14.680
|
|
|
$
|
14.620
|
|
|
$
|
18.667
|
|
|
$
|
18.600
|
|
$
|
30.267
|
|
|
$
|
28.900
|
|
|
$
|
27.680
|
|
|
$
|
21.367
|
|
|
$
|
20.987
|
|
|
$
|
21.233
|
|
|
$
|
20.433
|
|
14,379,216
|
|
|
14,333,699
|
|
|
14,211,831
|
|
|
10,969,980
|
|
|
10,217,772
|
|
|
10,114,562
|
|
|
9,048,693
|
|
|||||||
14,396,248
|
|
|
14,350,959
|
|
|
14,286,293
|
|
|
14,091,471
|
|
|
10,240,682
|
|
|
10,166,115
|
|
|
10,032,126
|
|
|||||||
2,396
|
|
|
2,481
|
|
|
2,482
|
|
|
2,670
|
|
|
1,914
|
|
|
1,920
|
|
|
1,978
|
|
|||||||
$
|
0.96
|
|
|
$
|
0.91
|
|
|
$
|
0.87
|
|
|
$
|
0.83
|
|
|
$
|
0.81
|
|
|
$
|
0.78
|
|
|
$
|
0.77
|
|
3.2
|
%
|
|
3.2
|
%
|
|
3.2
|
%
|
|
3.9
|
%
|
|
3.9
|
%
|
|
3.7
|
%
|
|
3.8
|
%
|
|||||||
47.8
|
%
|
|
47.4
|
%
|
|
47.6
|
%
|
|
57.6
|
%
|
|
60.5
|
%
|
|
60.2
|
%
|
|
65.2
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
124,015
|
|
|
121,934
|
|
|
120,230
|
|
|
117,887
|
|
|
65,201
|
|
|
62,884
|
|
|
59,132
|
|
|||||||
31,066
|
|
|
30,986
|
|
|
30,966
|
|
|
31,030
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
49,312
|
|
|
48,824
|
|
|
48,100
|
|
|
48,680
|
|
|
34,981
|
|
|
34,143
|
|
|
33,282
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
66,784,690
|
|
|
57,493,022
|
|
|
49,310,314
|
|
|
50,159,227
|
|
|
46,539,142
|
|
|
42,910,964
|
|
|
41,826,357
|
|
|||||||
670,998
|
|
|
694,653
|
|
|
751,507
|
|
|
105,739
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
37,438
|
|
|
37,387
|
|
|
39,807
|
|
|
32,546
|
|
|
27,956
|
|
|
29,785
|
|
|
24,243
|
|
|||||||
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
3,936
|
|
|
4,221
|
|
|
4,831
|
|
|
4,729
|
|
|
4,431
|
|
|
4,504
|
|
|
3,931
|
|
|||||||
4,491
|
|
|
4,499
|
|
|
4,528
|
|
|
4,462
|
|
|
4,401
|
|
|
4,376
|
|
|
4,372
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
633
|
|
|
753
|
|
|
1,501
|
|
|
911
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
915
|
|
|
920
|
|
|
863
|
|
|
849
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2,871
|
|
|
2,858
|
|
|
2,859
|
|
|
2,770
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
2,756
|
|
|
2,718
|
|
|
2,695
|
|
|
2,687
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
3,400
|
|
|
3,351
|
|
|
3,041
|
|
|
3,042
|
|
|
2,471
|
|
|
2,441
|
|
|
2,315
|
|
|||||||
738
|
|
|
711
|
|
|
734
|
|
|
757
|
|
|
448
|
|
|
445
|
|
|
437
|
|
(4)
|
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.
|
(5)
|
Shares and per share amounts for all periods presented reflect the three-for-two stock split declared on July 2, 2014, effected in the form of a stock dividend, and distributed on September 8, 2014.
|
•
|
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 our bulk delivery capabilities, our community gas system services and our propane vehicle fuel offerings ;
|
•
|
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 while capitalizing on opportunities across the natural gas value chain;
|
•
|
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 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;
|
•
|
continuing to build our brand in a culture with a shared mission, vision and values;
|
•
|
achieving strong growth in earnings and capital investment, thereby generating above regulated return on equity performance;
|
•
|
maintaining a consistent and competitive dividend for stockholders;
|
•
|
maximizing shareholder value; and
|
•
|
creating and maintaining a diversified customer base, energy portfolio and utility foundation.
|
•
|
Propane forward contracts entered into by Xeron;
|
•
|
Propane put options, call options and swap agreements entered into by Sharp; and
|
•
|
Natural gas futures contracts entered into by PESCO.
|
(in thousands except per share)
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
||||||||||||
For the Year Ended December 31,
|
2015
|
|
2014
|
|
(decrease)
|
|
2014
|
|
2013
|
|
(decrease)
|
||||||||||||
Business Segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Regulated Energy
|
$
|
60,985
|
|
|
$
|
50,451
|
|
|
$
|
10,534
|
|
|
$
|
50,451
|
|
|
$
|
50,084
|
|
|
$
|
367
|
|
Unregulated Energy
|
16,355
|
|
|
11,723
|
|
|
4,632
|
|
|
11,723
|
|
|
12,353
|
|
|
(630
|
)
|
||||||
Other businesses and eliminations
|
418
|
|
|
105
|
|
|
313
|
|
|
105
|
|
|
297
|
|
|
(192
|
)
|
||||||
Operating Income
|
77,758
|
|
|
62,279
|
|
|
15,479
|
|
|
62,279
|
|
|
62,734
|
|
|
(455
|
)
|
||||||
Gains from sales of businesses
|
—
|
|
|
7,139
|
|
|
(7,139
|
)
|
|
7,139
|
|
|
—
|
|
|
7,139
|
|
||||||
Other income, net of other expenses
|
293
|
|
|
101
|
|
|
192
|
|
|
101
|
|
|
372
|
|
|
(271
|
)
|
||||||
Interest charges
|
10,006
|
|
|
9,482
|
|
|
524
|
|
|
9,482
|
|
|
8,234
|
|
|
1,248
|
|
||||||
Income Before Income Taxes
|
68,045
|
|
|
60,037
|
|
|
8,008
|
|
|
60,037
|
|
|
54,872
|
|
|
5,165
|
|
||||||
Income taxes
|
26,905
|
|
|
23,945
|
|
|
2,960
|
|
|
23,945
|
|
|
22,085
|
|
|
1,860
|
|
||||||
Net Income
|
$
|
41,140
|
|
|
$
|
36,092
|
|
|
$
|
5,048
|
|
|
$
|
36,092
|
|
|
$
|
32,787
|
|
|
$
|
3,305
|
|
Earnings Per Share of Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
2.73
|
|
|
$
|
2.48
|
|
|
$
|
0.25
|
|
|
$
|
2.48
|
|
|
$
|
2.27
|
|
|
$
|
0.21
|
|
Diluted
|
$
|
2.72
|
|
|
$
|
2.47
|
|
|
$
|
0.25
|
|
|
$
|
2.47
|
|
|
$
|
2.26
|
|
|
$
|
0.21
|
|
(in thousands, except per share)
|
|
Pre-tax
Income |
|
Net
Income |
|
Earnings
Per Share |
||||||
Year ended December 31, 2014 Reported Results
|
|
$
|
60,037
|
|
|
$
|
36,092
|
|
|
$
|
2.47
|
|
|
|
|
|
|
|
|
||||||
Adjusting for unusual items:
|
|
|
|
|
|
|
||||||
Gains on sales of businesses, recorded in 2014
|
|
(7,139
|
)
|
|
(4,292
|
)
|
|
(0.29
|
)
|
|||
Asset impairment charges, recorded in 2014
|
|
6,880
|
|
|
4,136
|
|
|
0.28
|
|
|||
Weather impact
|
|
(4,408
|
)
|
|
(2,650
|
)
|
|
(0.18
|
)
|
|||
Gain from a customer billing system settlement
|
|
1,500
|
|
|
902
|
|
|
0.06
|
|
|||
|
|
(3,167
|
)
|
|
(1,904
|
)
|
|
(0.13
|
)
|
|||
Increased (Decreased) Gross Margins:
|
|
|
|
|
|
|
||||||
Higher retail propane margins
|
|
8,930
|
|
|
5,369
|
|
|
0.37
|
|
|||
Service expansions (see Major Projects and Initiatives table)
|
|
5,215
|
|
|
3,135
|
|
|
0.21
|
|
|||
Other natural gas growth
|
|
4,260
|
|
|
2,561
|
|
|
0.17
|
|
|||
GRIP
|
|
4,151
|
|
|
2,496
|
|
|
0.17
|
|
|||
FPU electric base rate increase
|
|
2,465
|
|
|
1,482
|
|
|
0.10
|
|
|||
Propane wholesale marketing
|
|
(1,179
|
)
|
|
(709
|
)
|
|
(0.05
|
)
|
|||
Decreased wholesale propane sales
|
|
(446
|
)
|
|
(268
|
)
|
|
(0.02
|
)
|
|||
|
|
23,396
|
|
|
14,066
|
|
|
0.95
|
|
|||
Increased Other Operating Expenses:
|
|
|
|
|
|
|
||||||
Higher payroll and benefits costs
|
|
(4,071
|
)
|
|
(2,447
|
)
|
|
(0.17
|
)
|
|||
Higher depreciation, asset removal and property tax costs due to new capital investments
|
|
(3,265
|
)
|
|
(1,963
|
)
|
|
(0.13
|
)
|
|||
Higher facility maintenance and service contractor costs
|
|
(2,499
|
)
|
|
(1,502
|
)
|
|
(0.10
|
)
|
|||
Costs associated with a customer billing system settlement and other transactions
|
|
(1,081
|
)
|
|
(650
|
)
|
|
(0.04
|
)
|
|||
Increased incentive compensation
|
|
(910
|
)
|
|
(547
|
)
|
|
(0.04
|
)
|
|||
|
|
(11,826
|
)
|
|
(7,109
|
)
|
|
(0.48
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net contribution from Aspire Energy, including impact of shares issued
|
|
567
|
|
|
341
|
|
|
(0.06
|
)
|
|||
Adjustment for other shares issued in 2015
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|||
Interest Charges
|
|
(525
|
)
|
|
(316
|
)
|
|
(0.02
|
)
|
|||
Net Other Changes
|
|
(437
|
)
|
|
(259
|
)
|
|
(0.02
|
)
|
|||
Tax Rate Change
|
|
—
|
|
|
229
|
|
|
0.02
|
|
|||
Year ended December 31, 2015 Reported Results
|
|
$
|
68,045
|
|
|
$
|
41,140
|
|
|
$2.72
|
(in thousands, except per share amounts)
|
|
Pre-tax
Income
|
|
Net
Income
|
|
Earnings
Per Share
|
||||||
Year ended December 31, 2013 Reported Results
|
|
$
|
54,872
|
|
|
$
|
32,787
|
|
|
$
|
2.26
|
|
Adjusting for unusual items:
|
|
|
|
|
|
|
||||||
Gains on sales of businesses
|
|
7,139
|
|
|
4,266
|
|
|
0.29
|
|
|||
Asset impairment charges
|
|
(6,880
|
)
|
|
(4,111
|
)
|
|
(0.28
|
)
|
|||
Weather impact
|
|
2,799
|
|
|
1,672
|
|
|
0.11
|
|
|||
Regulatory recovery of litigation-related costs in 2013
|
|
(1,494
|
)
|
|
(893
|
)
|
|
(0.06
|
)
|
|||
Accrual for additional taxes other than income in 2013
|
|
990
|
|
|
592
|
|
|
0.04
|
|
|||
One-time sales tax expense recorded by Sandpiper in conjunction with the 2013 ESG acquisition
|
|
726
|
|
|
434
|
|
|
0.03
|
|
|||
|
|
3,280
|
|
|
1,960
|
|
|
0.13
|
|
|||
Increased (Decreased) Gross Margins:
|
|
|
|
|
|
|
||||||
Major projects (see Major Projects and Initiatives table)
|
|
|
|
|
|
|
||||||
Service expansions
|
|
5,591
|
|
|
3,341
|
|
|
0.23
|
|
|||
Margin generated by Sandpiper
|
|
5,544
|
|
|
3,313
|
|
|
0.23
|
|
|||
GRIP
|
|
2,862
|
|
|
1,710
|
|
|
0.12
|
|
|||
Other natural gas growth
|
|
2,671
|
|
|
1,596
|
|
|
0.11
|
|
|||
Increased wholesale propane sales
|
|
1,391
|
|
|
831
|
|
|
0.06
|
|
|||
FPU electric base rate increase
|
|
1,269
|
|
|
758
|
|
|
0.05
|
|
|||
|
|
19,328
|
|
|
11,549
|
|
|
0.80
|
|
|||
Increased Other Operating Expenses:
|
|
|
|
|
|
|
||||||
Higher payroll and benefits costs
|
|
(5,164
|
)
|
|
(3,085
|
)
|
|
(0.21
|
)
|
|||
Expenses from acquisitions
|
|
(3,526
|
)
|
|
(2,107
|
)
|
|
(0.14
|
)
|
|||
Higher depreciation, asset removal and property tax costs due to new capital investments
|
|
(2,842
|
)
|
|
(1,698
|
)
|
|
(0.12
|
)
|
|||
Higher facility maintenance and service contractor costs
|
|
(2,735
|
)
|
|
(1,634
|
)
|
|
(0.11
|
)
|
|||
Increased incentive compensation
|
|
(1,356
|
)
|
|
(810
|
)
|
|
(0.06
|
)
|
|||
Transaction costs
|
|
(760
|
)
|
|
(454
|
)
|
|
(0.03
|
)
|
|||
|
|
(16,383
|
)
|
|
(9,788
|
)
|
|
(0.67
|
)
|
|||
Interest Charges
|
|
(1,247
|
)
|
|
(745
|
)
|
|
(0.05
|
)
|
|||
Net Other Changes
|
|
187
|
|
|
329
|
|
|
—
|
|
|||
Year ended December 31, 2014 Reported Results
|
|
$
|
60,037
|
|
|
$
|
36,092
|
|
|
$
|
2.47
|
|
|
Gross Margin for the Period
|
|
||||||||||||||||||||||||||||||
(in thousands)
|
Year Ended
|
|
Year Ended
|
|
|
|||||||||||||||||||||||||||
|
December 31,
|
|
December 31,
|
|
Estimate
|
|||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
Variance
|
|
2014
|
|
2013
|
|
Variance
|
|
2016
|
|
2017
|
|
||||||||||||||||
Existing major projects and initiatives
|
$
|
25,270
|
|
|
$
|
7,115
|
|
|
$
|
18,155
|
|
|
$
|
7,115
|
|
|
$
|
—
|
|
|
$
|
7,115
|
|
|
$
|
37,275
|
|
|
$
|
36,493
|
|
|
Future major projects and initiatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,200
|
|
|
18,150
|
|
|
||||||||
Total
|
$
|
25,270
|
|
|
$
|
7,115
|
|
|
$
|
18,155
|
|
|
$
|
7,115
|
|
|
$
|
—
|
|
|
$
|
7,115
|
|
|
$
|
44,475
|
|
|
$
|
54,643
|
|
|
|
|
|
|
|
Gross Margin for the Period
(1)
|
|
|
|
|
|
||||||||||||||||||||||
(in thousands)
|
Year Ended
|
|
Year Ended
|
|
|
|
||||||||||||||||||||||||||
|
December 31,
|
|
December 31,
|
|
Estimate for
|
|||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
Variance
|
|
2014
|
|
2013
|
|
Variance
|
|
2016
|
|
2017
|
|
||||||||||||||||
Acquisition:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Aspire Energy
(2)
|
$
|
6,324
|
|
|
$
|
—
|
|
|
$
|
6,324
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,824
|
|
|
$
|
14,198
|
|
|
Natural Gas Transmission Expansions and Contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Short-term contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
New Castle County, Delaware
|
$
|
2,682
|
|
|
$
|
2,026
|
|
|
$
|
656
|
|
|
$
|
2,026
|
|
|
$
|
—
|
|
|
$
|
2,026
|
|
|
$
|
2,294
|
|
|
$
|
1,561
|
|
|
Kent County, Delaware
(3)
|
2,270
|
|
|
—
|
|
|
2,270
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,748
|
|
|
—
|
|
|
||||||||
Total short-term Contracts
|
4,952
|
|
|
2,026
|
|
|
2,926
|
|
|
2,026
|
|
|
—
|
|
|
2,026
|
|
|
6,042
|
|
|
1,561
|
|
|
||||||||
Long-term Contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Kent County, Delaware
|
1,844
|
|
|
463
|
|
|
1,381
|
|
|
463
|
|
|
—
|
|
|
463
|
|
|
1,815
|
|
|
1,789
|
|
|
||||||||
Polk County, Florida
|
908
|
|
|
—
|
|
|
908
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,627
|
|
|
1,627
|
|
|
||||||||
Total long-term contracts
|
$
|
2,752
|
|
|
$
|
463
|
|
|
$
|
2,289
|
|
|
$
|
463
|
|
|
$
|
—
|
|
|
$
|
463
|
|
|
$
|
3,442
|
|
|
$
|
3,416
|
|
|
Total Expansions & Contracts
|
$
|
7,704
|
|
|
$
|
2,489
|
|
|
$
|
5,215
|
|
|
$
|
2,489
|
|
|
$
|
—
|
|
|
$
|
2,489
|
|
|
$
|
9,484
|
|
|
$
|
4,977
|
|
|
Florida GRIP
|
$
|
7,508
|
|
|
$
|
3,357
|
|
|
$
|
4,151
|
|
|
$
|
3,357
|
|
|
$
|
—
|
|
|
$
|
3,357
|
|
|
$
|
11,405
|
|
|
$
|
13,756
|
|
|
Florida Electric Rate Case
|
$
|
3,734
|
|
|
$
|
1,269
|
|
|
$
|
2,465
|
|
|
$
|
1,269
|
|
|
$
|
—
|
|
|
$
|
1,269
|
|
|
$
|
3,562
|
|
|
$
|
3,562
|
|
|
Total Existing Major Projects and Initiatives
|
$
|
25,270
|
|
|
$
|
7,115
|
|
|
$
|
18,155
|
|
|
$
|
7,115
|
|
|
$
|
—
|
|
|
$
|
7,115
|
|
|
$
|
37,275
|
|
|
$
|
36,493
|
|
|
|
|
Estimated Margin for
(1)
|
||||||||||
Project
|
|
2016
|
|
2017
|
|
Annualized
Margin |
||||||
White Oak Mainline Expansion Project in Kent County, Delaware
|
|
$
|
1,300
|
|
|
$
|
5,800
|
|
|
$
|
5,800
|
|
Eastern Shore System Reliability Project
|
|
—
|
|
|
2,250
|
|
|
4,500
|
|
|||
Eastern Shore TETLP Capacity Expansion Project
|
|
2,200
|
|
|
2,800
|
|
|
2,800
|
|
|||
Eight Flags CHP plant in Nassau County, Florida
|
|
3,700
|
|
|
7,300
|
|
|
7,300
|
|
|||
|
|
$
|
7,200
|
|
|
$
|
18,150
|
|
|
$
|
20,400
|
|
For the Periods Ended December 31,
|
2015
|
|
2014
|
|
Variance
|
|
2014
|
|
2013
|
|
Variance
|
||||||
Delmarva
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual HDD
|
4,363
|
|
|
4,826
|
|
|
(463
|
)
|
|
4,826
|
|
|
4,638
|
|
|
188
|
|
10-Year Average HDD ("Normal")
|
4,496
|
|
|
4,483
|
|
|
13
|
|
|
4,483
|
|
|
4,454
|
|
|
29
|
|
Variance from Normal
|
(133
|
)
|
|
343
|
|
|
|
|
343
|
|
|
184
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Florida
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual HDD
|
569
|
|
|
888
|
|
|
(319
|
)
|
|
888
|
|
|
671
|
|
|
217
|
|
10-Year Average HDD ("Normal")
|
859
|
|
|
856
|
|
|
3
|
|
|
856
|
|
|
885
|
|
|
(29
|
)
|
Variance from Normal
|
(290
|
)
|
|
32
|
|
|
|
|
32
|
|
|
(214
|
)
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ohio
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual HDD
|
2,404
|
|
|
—
|
|
|
N/A
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
10-Year Average HDD ("Normal")
|
2,903
|
|
|
—
|
|
|
N/A
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
Variance from Normal
|
(499
|
)
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Florida
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual CDD
|
3,338
|
|
|
2,705
|
|
|
633
|
|
|
2,705
|
|
|
2,750
|
|
|
(45
|
)
|
10-Year Average CDD ("Normal")
|
2,760
|
|
|
2,768
|
|
|
(8
|
)
|
|
2,768
|
|
|
2,750
|
|
|
18
|
|
Variance from Normal
|
578
|
|
|
(63
|
)
|
|
|
|
(63
|
)
|
|
—
|
|
|
|
(in thousands)
|
2015 vs. 2014
|
|
2015 vs. Normal
|
|
2014 vs. 2013
|
|
2014 vs. Normal
|
||||||||
Delmarva
|
|
|
|
|
|
|
|
||||||||
Regulated Energy
|
$
|
(1,414
|
)
|
|
$
|
(183
|
)
|
|
$
|
232
|
|
|
$
|
765
|
|
Unregulated Energy
|
(780
|
)
|
|
593
|
|
|
1,431
|
|
|
1,324
|
|
||||
Florida
|
|
|
|
|
|
|
|
||||||||
Regulated Energy
|
(1,326
|
)
|
|
(922
|
)
|
|
877
|
|
|
145
|
|
||||
Unregulated Energy
|
(888
|
)
|
|
297
|
|
|
292
|
|
|
485
|
|
||||
Total
|
$
|
(4,408
|
)
|
|
$
|
(215
|
)
|
|
$
|
2,832
|
|
|
$
|
2,719
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
||||||||||||
For the Year Ended December 31,
|
2015
|
|
2014
|
|
(decrease)
|
|
2014
|
|
2013
|
|
(decrease)
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
301,902
|
|
|
$
|
300,442
|
|
|
$
|
1,460
|
|
|
$
|
300,442
|
|
|
$
|
264,637
|
|
|
$
|
35,805
|
|
Cost of sales
|
122,814
|
|
|
134,560
|
|
|
(11,746
|
)
|
|
134,560
|
|
|
118,817
|
|
|
15,743
|
|
||||||
Gross margin
|
179,088
|
|
|
165,882
|
|
|
13,206
|
|
|
165,882
|
|
|
145,820
|
|
|
20,062
|
|
||||||
Operations & maintenance
|
83,616
|
|
|
76,046
|
|
|
7,570
|
|
|
76,046
|
|
|
65,713
|
|
|
10,333
|
|
||||||
(Gain from a settlement)/asset impairment charge
|
(1,497
|
)
|
|
6,449
|
|
|
(7,946
|
)
|
|
6,449
|
|
|
—
|
|
|
6,449
|
|
||||||
Depreciation & amortization
|
24,195
|
|
|
21,915
|
|
|
2,280
|
|
|
21,915
|
|
|
19,822
|
|
|
2,093
|
|
||||||
Other taxes
|
11,789
|
|
|
11,021
|
|
|
768
|
|
|
11,021
|
|
|
10,201
|
|
|
820
|
|
||||||
Other operating expenses
|
118,103
|
|
|
115,431
|
|
|
2,672
|
|
|
115,431
|
|
|
95,736
|
|
|
19,695
|
|
||||||
Operating Income
|
$
|
60,985
|
|
|
$
|
50,451
|
|
|
$
|
10,534
|
|
|
$
|
50,451
|
|
|
$
|
50,084
|
|
|
$
|
367
|
|
(in thousands)
|
|
||
Gross margin for the year ended December 31, 2014
|
$
|
165,882
|
|
Factors contributing to the gross margin increase for the year ended December 31, 2015:
|
|
||
Service expansions
|
5,215
|
|
|
Additional revenue from GRIP in Florida
|
4,151
|
|
|
Natural gas distribution customer growth
|
3,322
|
|
|
Weather and other
|
(3,096
|
)
|
|
FPU Electric base rate increase
|
2,465
|
|
|
Growth in natural gas transmission services (other than service expansions)
|
938
|
|
|
Other
|
210
|
|
|
Gross margin for the year ended December 31, 2015
|
$
|
179,088
|
|
•
|
$1.6 million
from interruptible service that commenced in April 2015 to an industrial customer facility in Kent County, Delaware. The interruptible service was replaced by short-term OPT ≤ 90 Service in December 2015, which generated an additional
$646,000
of gross margin. The short-term OPT ≤ 90 Service is expected to be replaced by a 20-year OPT ≤ 90 Service.
|
•
|
$1.4 million
from a new service to the same industrial customer in Kent County, Delaware, that commenced on October 1, 2014 upon completion of new facilities, which included approximately 5.5 miles of pipeline lateral and metering facilities extending from Eastern Shore's mainline to the new industrial customer facility.
|
•
|
$334,000
from a short-term contract with an existing industrial customer in New Castle County, Delaware to provide 50,000 Dts/d of service from April 2014 to April 2015. This contract was subsequently amended to provide 55,580 Dts/d of service at a lower reservation rate through August 2020. Although the lower rate decreased gross margin by
$437,000
for 2015, the extension of the contract at a higher volume generated additional gross margin of
$771,000
for 2015. This service generated
$2.3 million
of gross margin in 2015 compared to
$1.9 million
of gross margin generated in 2014.
|
•
|
$322,000
from two short-term contracts with the same industrial customer in New Castle County, Delaware, to provide an additional 10,000 Dts/d of OPT ≤ 90 Service transmission service from December 2014 to March 2015 and November 2015 to March 2016, respectively.
|
•
|
$908,000
from natural gas transmission service as part of the major expansion initiative in Polk County, Florida.
|
•
|
$1.9 million
from Florida natural gas customer growth due primarily to new services to commercial and industrial customers; and
|
•
|
$1.4 million
from a
2.7 percent
increase in residential customers in the Delmarva natural gas distribution operations, as well as growth in commercial and industrial customers in Worcester County, Maryland.
|
•
|
$678,000
from natural gas transmission service to commercial customers in Florida, and
|
•
|
$137,000
from interruptible service to an industrial customer in New Castle County, Delaware.
|
•
|
$2.9 million
in higher depreciation, asset removal and property tax costs associated with recent capital investments;
|
•
|
$2.8 million
in higher payroll and benefits costs as a result of additional personnel to support growth and increased overtime on the Delmarva Peninsula in early 2015 due to colder weather;
|
•
|
$1.4 million
in higher service contractor and other consulting costs;
|
•
|
$987,000
in legal and consulting costs associated with the billing system settlement and other initiatives; and
|
•
|
$480,000
in higher accruals for incentive compensation as a result of improved year-to-date financial performance; partially offset by:
|
•
|
$1.5 million
gain from the billing system settlement, which reduced other operating expenses for 2015.
|
(in thousands)
|
|
||
Gross margin for the year ended December 31, 2013
|
$
|
145,820
|
|
Factors contributing to the gross margin increase for the year ended December 31, 2014:
|
|
||
Margin from acquisitions
|
5,718
|
|
|
Service expansions
|
5,591
|
|
|
Additional revenue from GRIP in Florida
|
2,862
|
|
|
Other natural gas growth
|
2,671
|
|
|
Increased customer consumption—weather and other
|
1,432
|
|
|
Implementation of electric rates in Florida
|
1,269
|
|
|
Other
|
519
|
|
|
Gross margin for the year ended December 31, 2014
|
$
|
165,882
|
|
•
|
$2.1 million from long-term natural gas transmission services that commenced in November 2013 to industrial customers located in New Castle and Kent Counties, Delaware, which displaced short-term services provided to the same customers from May through October 2013.
|
•
|
$1.9 million from a short-term contract with an existing industrial customer to provide an additional 50,000 Dts/d of natural gas transmission services from April 2014 to April 2015. This new service was subsequently extended to August 2014 to provide 55,580 Dts/d of service through August 2020. This short-term contract is expected to generate $2.2 million of gross margin in 2015.
|
•
|
$1.1 million from other major service expansions completed in 2013 that facilitated new natural gas transmission and distribution services in Sussex County, Delaware; Worcester and Cecil Counties, Maryland; and Indian River County, Florida.
|
•
|
$463,000 from a new service to an industrial customer facility in Kent County, Delaware that commenced on October 1, 2014. This service required construction of new facilities, including approximately 5.5 miles of pipeline lateral and metering facilities, extending from Eastern Shore's mainline to the new industrial customer facility, and is expected to generate annual gross margin of $1.2 million to $1.8 million.
|
•
|
$2.0 million from natural gas customer growth in Florida due primarily to new services to commercial and industrial customers.
|
•
|
$788,000 from a three percent increase in residential customers, as well as growth in commercial and industrial customers, in our Delmarva natural gas distribution operations.
|
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
||||||||||||
For the Year Ended December 31,
|
2015
|
|
2014
|
|
(decrease)
|
|
2014
|
|
2013
|
|
(decrease)
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
162,108
|
|
|
$
|
184,961
|
|
|
$
|
(22,853
|
)
|
|
$
|
184,961
|
|
|
$
|
166,723
|
|
|
$
|
18,238
|
|
Cost of sales
|
101,791
|
|
|
137,081
|
|
|
(35,290
|
)
|
|
137,081
|
|
|
121,348
|
|
|
15,733
|
|
||||||
Gross margin
|
60,317
|
|
|
47,880
|
|
|
12,437
|
|
|
47,880
|
|
|
45,375
|
|
|
2,505
|
|
||||||
Operations & maintenance
|
36,536
|
|
|
30,197
|
|
|
6,339
|
|
|
30,197
|
|
|
26,657
|
|
|
3,540
|
|
||||||
Asset impairment charges
|
—
|
|
|
432
|
|
|
(432
|
)
|
|
432
|
|
|
—
|
|
|
432
|
|
||||||
Depreciation & amortization
|
5,679
|
|
|
3,994
|
|
|
1,685
|
|
|
3,994
|
|
|
3,686
|
|
|
308
|
|
||||||
Other taxes
|
1,747
|
|
|
1,534
|
|
|
213
|
|
|
1,534
|
|
|
2,679
|
|
|
(1,145
|
)
|
||||||
Other operating expenses
|
43,962
|
|
|
36,157
|
|
|
7,805
|
|
|
36,157
|
|
|
33,022
|
|
|
3,135
|
|
||||||
Operating Income
|
$
|
16,355
|
|
|
$
|
11,723
|
|
|
$
|
4,632
|
|
|
$
|
11,723
|
|
|
$
|
12,353
|
|
|
$
|
(630
|
)
|
(in thousands)
|
|
||
Gross margin for the year ended December 31, 2014
|
$
|
47,880
|
|
Factors contributing to the gross margin increase for the year ended December 31, 2015:
|
|
||
Increase in retail propane margins
|
8,930
|
|
|
Margin generated by Aspire Energy
|
6,345
|
|
|
Decreased customer consumption - weather and other
|
(1,792
|
)
|
|
Propane Wholesale Marketing
|
(1,179
|
)
|
|
Other
|
133
|
|
|
Gross margin for the year ended December 31, 2015
|
$
|
60,317
|
|
•
|
$1.4 million
in higher payroll and benefits expense due to increased seasonal overtime and additional resources hired to support growth;
|
•
|
$553,000
in additional costs for facility maintenance; and
|
•
|
$411,000
in increased accruals for incentive compensation as a result of improved year-to-date financial results in 2015 as well as a larger workforce.
|
(in thousands)
|
|
||
Gross margin for the year ended December 31, 2013
|
$
|
45,375
|
|
Factors contributing to the gross margin increase for the year ended December 31, 2014:
|
|
||
Increased customer consumption—weather and other
|
1,412
|
|
|
Increased wholesale propane sales
|
1,391
|
|
|
Decrease in retail propane margins
|
(356
|
)
|
|
Other
|
58
|
|
|
Gross margin for the year ended December 31, 2014
|
$
|
47,880
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||
Long-term debt, net of current maturities
|
$
|
149,340
|
|
|
29
|
%
|
|
$
|
158,486
|
|
|
35
|
%
|
Stockholders’ equity
|
358,138
|
|
|
71
|
%
|
|
300,322
|
|
|
65
|
%
|
||
Total capitalization, excluding short-term borrowings
|
$
|
507,478
|
|
|
100
|
%
|
|
$
|
458,808
|
|
|
100
|
%
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||
Short-term debt
|
$
|
173,397
|
|
|
25
|
%
|
|
$
|
88,231
|
|
|
16
|
%
|
Long-term debt, including current maturities
|
158,491
|
|
|
23
|
%
|
|
167,595
|
|
|
30
|
%
|
||
Stockholders’ equity
|
358,138
|
|
|
52
|
%
|
|
300,322
|
|
|
54
|
%
|
||
Total capitalization, including short-term borrowings
|
$
|
690,026
|
|
|
100
|
%
|
|
$
|
556,148
|
|
|
100
|
%
|
(in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Average borrowings
|
$
|
102,062
|
|
|
$
|
68,928
|
|
|
$
|
67,367
|
|
Weighted average interest rate
|
1.22
|
%
|
|
1.28
|
%
|
|
1.34
|
%
|
|||
Maximum month-end borrowings
|
$
|
168,757
|
|
|
$
|
86,040
|
|
|
$
|
102,554
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
105,142
|
|
|
$
|
79,284
|
|
|
$
|
72,931
|
|
Investing activities
|
(165,558
|
)
|
|
(86,586
|
)
|
|
(114,781
|
)
|
|||
Financing activities
|
58,697
|
|
|
8,520
|
|
|
41,845
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
(1,719
|
)
|
|
1,218
|
|
|
(5
|
)
|
|||
Cash and cash equivalents—beginning of period
|
4,574
|
|
|
3,356
|
|
|
3,361
|
|
|||
Cash and cash equivalents—end of period
|
$
|
2,855
|
|
|
$
|
4,574
|
|
|
$
|
3,356
|
|
•
|
The changes in net regulatory assets and liabilities increased cash flows by
$14.9 million
, due primarily to the change in fuel costs collected through the various fuel cost recovery mechanisms.
|
•
|
The change in income taxes receivable increased cash flows by
$11.0 million
, due primarily to the receipt of a tax refund related to our 2014 federal income tax obligation. Our tax deductions, which were higher than projected, due to bonus depreciation (approved by the President of the United States in December 2014), reduced our 2014 federal income tax obligation.
|
•
|
Net income, adjusted for non-cash adjustments and reconciling activities, increased cash flows by
$7.6 million
, due primarily to higher earnings and higher non-cash adjustments for depreciation and amortization.
|
•
|
Changes in customer deposits and refunds increased cash flows by $2.9 million.
|
•
|
Changes in net accounts receivable and payable decreased cash flows by
$6.4 million
, due primarily to the timing of the collections and payments associated with trading contracts entered into by our propane wholesale and marketing subsidiary and net cash flows from accounts receivable and payable attributed to Aspire Energy. This decrease was partially offset by an increase in net cash flow from receivables and payables in various other operations.
|
•
|
Net cash flows from changes in propane, natural gas and materials inventories decreased by approximately
$2.7 million
.
|
•
|
Net income, adjusted for non-cash adjustments and reconciling activities, increased cash flows by $15.1 million.
|
•
|
Changes in net accounts receivable and payable increased cash flows by $15.1 million, due primarily to the timing of the collections and payments associated with trading contracts entered into by our propane wholesale and marketing subsidiary.
|
•
|
Net cash flows from changes in inventories increased by approximately $8.7 million as a result of lower commodity prices, which decreased the carrying value of our inventory.
|
•
|
These increases in operating cash flow were partially offset by a decrease in cash flows from changes in net regulatory assets and liabilities of $13.3 million, due primarily to a change in fuel cost collected through fuel cost recovery mechanisms and additional piping and conversion costs during 2014, which will be recovered through future rates.
|
•
|
Higher net income tax payments decreased cash flows by $18.2 million.
|
•
|
An increase in cash paid for capital expenditures year-over-year, due primarily to our GRIP investment in our Florida natural gas distribution operations and Eight Flags' construction of the CHP plant, which decreased cash flows by
$47.5 million
.
|
•
|
We paid
$20.7 million
in cash (
$27.5 million
paid, less
$6.8 million
of cash acquired) through our short-term borrowings in conjunction with the acquisition of Gatherco on April 1, 2015. In addition to the net cash consideration, we also issued
592,970
shares of our common stock, which had no cash flow impact.
|
•
|
We paid $20.2 million for various acquisitions in 2013. There were no corresponding transactions during 2014.
|
•
|
We received $10.2 million associated with the disposition of BravePoint in October 2014, compared to $2.3 million received from the sale of equity securities during 2013.
|
•
|
Net borrowings/repayments under the line of credit agreements increased cash flows by
$98.7 million
due to an increase in short-term borrowing, which includes the $35.0 million we borrowed under the Revolver. In 2014, we used the proceeds from the issuance of
$50.0 million
of Series B Notes to repay borrowings under our lines of credit arrangements.
|
•
|
Book overdrafts decreased cash flows by
$3.4 million
.
|
•
|
Net proceeds from and repayments of long-term debt decreased cash flows by
$50.8 million
due primarily to the
$50.0 million
issuance of Series B Notes in May 2014.
|
•
|
Net borrowings/repayments under the line of credit agreements decreased cash flows by $62.6 million. The proceeds from the issuance of the Series B Notes were used to repay borrowings under line of credit agreements.
|
•
|
Net proceeds from and repayments of long-term debt increased cash flows by $28.2 million due primarily to the $50.0 million issuance of the Series B Notes in May 2014, compared to $20.0 million from the issuance of the Series A Notes in December 2013.
|
|
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)
|
$
|
7,798
|
|
|
$
|
18,669
|
|
|
$
|
26,226
|
|
|
$
|
101,000
|
|
|
$
|
153,693
|
|
Operating leases
(2)
|
1,270
|
|
|
1,133
|
|
|
697
|
|
|
2,215
|
|
|
5,315
|
|
|||||
Capital leases
(2)
(3)
|
1,353
|
|
|
2,852
|
|
|
620
|
|
|
—
|
|
|
4,825
|
|
|||||
Purchase obligations
(4)
|
|
|
|
|
|
|
|
|
|
||||||||||
Transmission capacity
|
27,750
|
|
|
55,067
|
|
|
44,907
|
|
|
100,133
|
|
|
227,857
|
|
|||||
Storage — Natural Gas
|
1,482
|
|
|
2,502
|
|
|
1,365
|
|
|
641
|
|
|
5,990
|
|
|||||
Commodities
|
27,272
|
|
|
6,452
|
|
|
1,128
|
|
|
—
|
|
|
34,852
|
|
|||||
Electric supply
|
15,792
|
|
|
32,812
|
|
|
17,020
|
|
|
—
|
|
|
65,624
|
|
|||||
Unfunded benefits
(5)
|
407
|
|
|
731
|
|
|
680
|
|
|
1,707
|
|
|
3,525
|
|
|||||
Funded benefits
(6)
|
2,091
|
|
|
4
|
|
|
—
|
|
|
3,608
|
|
|
5,703
|
|
|||||
Total Contractual Obligations
|
$
|
85,215
|
|
|
$
|
120,222
|
|
|
$
|
92,643
|
|
|
$
|
209,304
|
|
|
$
|
507,384
|
|
(1)
|
This represents 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 $8.2 million, $15.0 million, $12.7 million and $21.9 million, respectively, for the periods indicated above. Expected interest payments for all periods total $58.0 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 and Disposition
, for further information.
|
(4)
|
See Item 8
, Financial Statements and Supplementary Data,
Note 20
, Other Commitments and Contingencies
, for further information.
|
(5)
|
We have recorded long-term liabilities of
$3.5 million
at
December 31, 2015
for unfunded post-employment and post-retirement benefit plans. The amounts specified in the table are based on expected payments to current retirees and assume 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.
|
(6)
|
We have recorded long-term liabilities of
$26.0 million
at
December 31, 2015
for two qualified, defined benefit pension plans. The assets funding these plans are in a separate trust and are not our considered assets of ours or included in our balance sheets. The Contractual Obligations table above includes
$2.1 million
, reflecting the expected payments we will make to the trust funds in 2015. 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
$3.6 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.
|
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Statements of Income
|
|||||||||||
|
For the Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
(in thousands, except shares and per share data)
|
|
|
|
|
|
||||||
Operating Revenues
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
301,902
|
|
|
$
|
300,442
|
|
|
$
|
264,637
|
|
Unregulated Energy
|
162,108
|
|
|
184,961
|
|
|
166,723
|
|
|||
Other businesses and eliminations
|
(4,766
|
)
|
|
13,431
|
|
|
12,946
|
|
|||
Total operating revenues
|
459,244
|
|
|
498,834
|
|
|
444,306
|
|
|||
Operating Expenses
|
|
|
|
|
|
||||||
Regulated energy cost of sales
|
122,814
|
|
|
134,560
|
|
|
118,818
|
|
|||
Unregulated energy and other cost of sales
|
97,228
|
|
|
143,556
|
|
|
126,017
|
|
|||
Operations
|
107,562
|
|
|
102,197
|
|
|
91,452
|
|
|||
Maintenance
|
11,803
|
|
|
9,706
|
|
|
7,509
|
|
|||
(Gain from a settlement)/asset impairment charges
|
(1,500
|
)
|
|
6,881
|
|
|
—
|
|
|||
Depreciation and amortization
|
29,972
|
|
|
26,316
|
|
|
23,965
|
|
|||
Other taxes
|
13,607
|
|
|
13,339
|
|
|
13,811
|
|
|||
Total operating expenses
|
381,486
|
|
|
436,555
|
|
|
381,572
|
|
|||
Operating Income
|
77,758
|
|
|
62,279
|
|
|
62,734
|
|
|||
Gains from sales of businesses
|
—
|
|
|
7,139
|
|
|
—
|
|
|||
Other income, net of other expenses
|
293
|
|
|
101
|
|
|
372
|
|
|||
Interest charges
|
10,006
|
|
|
9,482
|
|
|
8,234
|
|
|||
Income Before Income Taxes
|
68,045
|
|
|
60,037
|
|
|
54,872
|
|
|||
Income taxes
|
26,905
|
|
|
23,945
|
|
|
22,085
|
|
|||
Net Income
|
$
|
41,140
|
|
|
$
|
36,092
|
|
|
$
|
32,787
|
|
Weighted Average Common Shares Outstanding:
|
|
|
|
|
|
||||||
Basic
|
15,094,423
|
|
|
14,551,308
|
|
|
14,430,962
|
|
|||
Diluted
|
15,143,373
|
|
|
14,604,944
|
|
|
14,543,446
|
|
|||
Earnings Per Share of Common Stock:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.73
|
|
|
$
|
2.48
|
|
|
$
|
2.27
|
|
Diluted
|
$
|
2.72
|
|
|
$
|
2.47
|
|
|
$
|
2.26
|
|
Cash Dividends Declared Per Share of Common Stock
|
$
|
1.1325
|
|
|
$
|
1.0667
|
|
|
$
|
1.0133
|
|
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
|
|||||||||||
|
For the Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Net Income
|
$
|
41,140
|
|
|
$
|
36,092
|
|
|
$
|
32,787
|
|
Other Comprehensive Income (Loss), net of tax:
|
|
|
|
|
|
||||||
Employee Benefits, net of tax:
|
|
|
|
|
|
||||||
Amortization of prior service cost, net of tax of $(27), $(24) and $(24), respectively
|
(40
|
)
|
|
(34
|
)
|
|
(36
|
)
|
|||
Net gain (loss), net of tax of $73, $(1,997) and $1,673, respectively
|
103
|
|
|
(3,076
|
)
|
|
2,565
|
|
|||
Cash Flow Hedges, net of tax:
|
|
|
|
|
|
||||||
Unrealized loss on commodity contract cash flow hedges, net of tax of $(150), $(22) and $0, respectively
|
(227
|
)
|
|
(33
|
)
|
|
—
|
|
|||
Total Other Comprehensive Income (Loss)
|
(164
|
)
|
|
(3,143
|
)
|
|
2,529
|
|
|||
Comprehensive Income
|
$
|
40,976
|
|
|
$
|
32,949
|
|
|
$
|
35,316
|
|
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Balance Sheets
|
|||||||
|
As of December 31,
|
||||||
Assets
|
2015
|
|
2014
|
||||
(in thousands, except shares and per share data)
|
|
|
|
||||
Property, Plant and Equipment
|
|
|
|
||||
Regulated energy
|
$
|
842,756
|
|
|
$
|
766,855
|
|
Unregulated energy
|
145,734
|
|
|
84,773
|
|
||
Other businesses and eliminations
|
18,999
|
|
|
18,497
|
|
||
Total property, plant and equipment
|
1,007,489
|
|
|
870,125
|
|
||
Less: Accumulated depreciation and amortization
|
(215,313
|
)
|
|
(193,369
|
)
|
||
Plus: Construction work in progress
|
62,774
|
|
|
13,006
|
|
||
Net property, plant and equipment
|
854,950
|
|
|
689,762
|
|
||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
2,855
|
|
|
4,574
|
|
||
Accounts receivable (less allowance for uncollectible accounts of $909 and $1,120, respectively)
|
41,007
|
|
|
53,300
|
|
||
Accrued revenue
|
12,452
|
|
|
13,617
|
|
||
Propane inventory, at average cost
|
6,619
|
|
|
7,250
|
|
||
Other inventory, at average cost
|
3,803
|
|
|
3,699
|
|
||
Regulatory assets
|
8,268
|
|
|
8,967
|
|
||
Storage gas prepayments
|
3,410
|
|
|
4,258
|
|
||
Income taxes receivable
|
24,950
|
|
|
18,806
|
|
||
Deferred income taxes
|
831
|
|
|
—
|
|
||
Prepaid expenses
|
7,146
|
|
|
6,652
|
|
||
Mark-to-market energy assets
|
153
|
|
|
1,055
|
|
||
Other current assets
|
1,044
|
|
|
195
|
|
||
Total current assets
|
112,538
|
|
|
122,373
|
|
||
Deferred Charges and Other Assets
|
|
|
|
||||
Goodwill
|
14,548
|
|
|
4,952
|
|
||
Other intangible assets, net
|
2,222
|
|
|
2,404
|
|
||
Investments, at fair value
|
3,644
|
|
|
3,678
|
|
||
Regulatory assets
|
77,519
|
|
|
78,136
|
|
||
Receivables and other deferred charges
|
3,165
|
|
|
3,164
|
|
||
Total deferred charges and other assets
|
101,098
|
|
|
92,334
|
|
||
Total Assets
|
$
|
1,068,586
|
|
|
$
|
904,469
|
|
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Balance Sheets
|
|||||||
|
As of December 31,
|
||||||
Capitalization and Liabilities
|
2015
|
|
2014
|
||||
(in thousands, except shares and per share data)
|
|
|
|
||||
Capitalization
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Common stock, par value $0.4867 per share (authorized 25,000,000)
|
$
|
7,432
|
|
|
$
|
7,100
|
|
Additional paid-in capital
|
190,311
|
|
|
156,581
|
|
||
Retained earnings
|
166,235
|
|
|
142,317
|
|
||
Accumulated other comprehensive loss
|
(5,840
|
)
|
|
(5,676
|
)
|
||
Deferred compensation obligation
|
1,883
|
|
|
1,258
|
|
||
Treasury stock
|
(1,883
|
)
|
|
(1,258
|
)
|
||
Total stockholders’ equity
|
358,138
|
|
|
300,322
|
|
||
Long-term debt, net of current maturities
|
149,340
|
|
|
158,486
|
|
||
Total capitalization
|
507,478
|
|
|
458,808
|
|
||
Current Liabilities
|
|
|
|
||||
Current portion of long-term debt
|
9,151
|
|
|
9,109
|
|
||
Short-term borrowing
|
173,397
|
|
|
88,231
|
|
||
Accounts payable
|
39,300
|
|
|
44,610
|
|
||
Customer deposits and refunds
|
27,173
|
|
|
25,197
|
|
||
Accrued interest
|
1,311
|
|
|
1,352
|
|
||
Dividends payable
|
4,390
|
|
|
3,939
|
|
||
Deferred income taxes
|
—
|
|
|
832
|
|
||
Accrued compensation
|
10,014
|
|
|
10,076
|
|
||
Regulatory liabilities
|
7,365
|
|
|
3,268
|
|
||
Mark-to-market energy liabilities
|
433
|
|
|
1,018
|
|
||
Other accrued liabilities
|
7,059
|
|
|
6,603
|
|
||
Total current liabilities
|
279,593
|
|
|
194,235
|
|
||
Deferred Credits and Other Liabilities
|
|
|
|
||||
Deferred income taxes
|
193,431
|
|
|
160,232
|
|
||
Regulatory liabilities
|
43,064
|
|
|
43,419
|
|
||
Environmental liabilities
|
8,942
|
|
|
8,923
|
|
||
Other pension and benefit costs
|
33,481
|
|
|
35,027
|
|
||
Deferred investment tax credits and other liabilities
|
2,597
|
|
|
3,825
|
|
||
Total deferred credits and other liabilities
|
281,515
|
|
|
251,426
|
|
||
Other commitments and contingencies (Note 19 and 20)
|
|
|
|
||||
Total Capitalization and Liabilities
|
$
|
1,068,586
|
|
|
$
|
904,469
|
|
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Statements of Cash Flows
|
|||||||||||
|
For the Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net Income
|
$
|
41,140
|
|
|
$
|
36,092
|
|
|
$
|
32,787
|
|
Adjustments to reconcile net income to net operating cash:
|
|
|
|
|
|
||||||
Goodwill & long-lived asset impairment
|
—
|
|
|
6,881
|
|
|
—
|
|
|||
Depreciation and amortization
|
29,972
|
|
|
26,316
|
|
|
23,965
|
|
|||
Depreciation and accretion included in other costs
|
6,978
|
|
|
6,577
|
|
|
6,123
|
|
|||
Deferred income taxes, net
|
20,520
|
|
|
22,235
|
|
|
14,860
|
|
|||
Realized gain on sale of assets/investments
|
(340
|
)
|
|
(7,293
|
)
|
|
(854
|
)
|
|||
Unrealized loss (gain) on investments/commodity contracts
|
96
|
|
|
501
|
|
|
(706
|
)
|
|||
Employee benefits and compensation
|
1,235
|
|
|
684
|
|
|
1,119
|
|
|||
Share-based compensation
|
1,937
|
|
|
1,958
|
|
|
1,631
|
|
|||
Other, net
|
47
|
|
|
3
|
|
|
(28
|
)
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable and accrued revenue
|
17,097
|
|
|
20,683
|
|
|
(21,244
|
)
|
|||
Propane inventory, storage gas and other inventory
|
1,527
|
|
|
4,177
|
|
|
(4,492
|
)
|
|||
Regulatory assets/liabilities, net
|
3,883
|
|
|
(11,014
|
)
|
|
2,328
|
|
|||
Prepaid expenses and other current assets
|
(759
|
)
|
|
(699
|
)
|
|
(1,064
|
)
|
|||
Accounts payable and other accrued liabilities
|
(10,897
|
)
|
|
(8,047
|
)
|
|
18,824
|
|
|||
Income taxes receivable
|
(4,967
|
)
|
|
(15,936
|
)
|
|
2,311
|
|
|||
Customer deposits and refunds
|
1,976
|
|
|
(927
|
)
|
|
(3,362
|
)
|
|||
Accrued compensation
|
(331
|
)
|
|
37
|
|
|
837
|
|
|||
Other assets and liabilities, net
|
(3,972
|
)
|
|
(2,944
|
)
|
|
(104
|
)
|
|||
Net cash provided by operating activities
|
105,142
|
|
|
79,284
|
|
|
72,931
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Property, plant and equipment expenditures
|
(144,618
|
)
|
|
(97,164
|
)
|
|
(97,120
|
)
|
|||
Change in intangibles
|
—
|
|
|
14
|
|
|
—
|
|
|||
Proceeds from sale of assets
|
164
|
|
|
10,797
|
|
|
199
|
|
|||
Proceeds from sale of investments
|
—
|
|
|
—
|
|
|
2,300
|
|
|||
Acquisitions, net of cash acquired
|
(20,930
|
)
|
|
—
|
|
|
(20,201
|
)
|
|||
Environmental expenditures
|
(174
|
)
|
|
(233
|
)
|
|
41
|
|
|||
Net cash used by investing activities
|
(165,558
|
)
|
|
(86,586
|
)
|
|
(114,781
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Common stock dividends
|
(15,924
|
)
|
|
(13,887
|
)
|
|
(13,081
|
)
|
|||
Issuance (Purchase) of stock for Dividend Reinvestment Plan
|
813
|
|
|
(165
|
)
|
|
(1,342
|
)
|
|||
Change in cash overdrafts due to outstanding checks
|
2,450
|
|
|
(921
|
)
|
|
(1,666
|
)
|
|||
Net borrowing (repayment) under line of credit agreements
|
82,178
|
|
|
(16,513
|
)
|
|
46,133
|
|
|||
Proceeds from issuance of long-term debt
|
—
|
|
|
49,975
|
|
|
26,766
|
|
|||
Repayment of long-term debt and capital lease obligation
|
(10,820
|
)
|
|
(9,969
|
)
|
|
(14,957
|
)
|
|||
Other
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||
Net cash provided by financing activities
|
58,697
|
|
|
8,520
|
|
|
41,845
|
|
|||
Net (Decrease) Increase in Cash and Cash Equivalents
|
(1,719
|
)
|
|
1,218
|
|
|
(5
|
)
|
|||
Cash and Cash Equivalents — Beginning of Period
|
4,574
|
|
|
3,356
|
|
|
3,361
|
|
|||
Cash and Cash Equivalents — End of Period
|
$
|
2,855
|
|
|
$
|
4,574
|
|
|
$
|
3,356
|
|
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Statements of Stockholders' Equity
|
||||||||||||||||||||||||||||||
|
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
|
|||||||||||||||
Balance at December 31, 2012
|
14,396,248
|
|
|
$
|
4,671
|
|
|
$
|
150,750
|
|
|
$
|
106,239
|
|
|
$
|
(5,062
|
)
|
|
$
|
982
|
|
|
$
|
(982
|
)
|
|
$
|
256,598
|
|
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
32,787
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,787
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,529
|
|
|
—
|
|
|
—
|
|
|
2,529
|
|
|||||||
Dividend declared ($1.0133 per share)
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(14,752
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,758
|
)
|
|||||||
Conversion of Debentures
|
26,075
|
|
|
8
|
|
|
287
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
295
|
|
|||||||
Share-based compensation and tax benefit
(2) (3)
|
35,022
|
|
|
12
|
|
|
1,310
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,322
|
|
|||||||
Treasury stock activities
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
142
|
|
|
(142
|
)
|
|
—
|
|
|||||||
Balance at December 31, 2013
|
14,457,345
|
|
|
4,691
|
|
|
152,341
|
|
|
124,274
|
|
|
(2,533
|
)
|
|
1,124
|
|
|
(1,124
|
)
|
|
278,773
|
|
|||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
36,092
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,092
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,143
|
)
|
|
—
|
|
|
—
|
|
|
(3,143
|
)
|
|||||||
Dividend declared ($1.0667per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,675
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,675
|
)
|
|||||||
Retirement savings plan and dividend reinvestment plan
|
43,367
|
|
|
16
|
|
|
1,844
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,860
|
|
|||||||
Conversion of Debentures
|
47,313
|
|
|
15
|
|
|
520
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
535
|
|
|||||||
Share-based compensation and tax benefit
(2) (3)
|
40,686
|
|
|
13
|
|
|
1,876
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,889
|
|
|||||||
Stock split in the form of stock dividend
|
—
|
|
|
2,365
|
|
|
—
|
|
|
(2,374
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|||||||
Treasury stock activities
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
134
|
|
|
(134
|
)
|
|
—
|
|
|||||||
Balance at December 31, 2014
|
14,588,711
|
|
|
7,100
|
|
|
156,581
|
|
|
142,317
|
|
|
(5,676
|
)
|
|
1,258
|
|
|
(1,258
|
)
|
|
300,322
|
|
|||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
41,140
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,140
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(164
|
)
|
|
—
|
|
|
—
|
|
|
(164
|
)
|
|||||||
Dividend declared ($1.1325 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,222
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,222
|
)
|
|||||||
Retirement savings plan and dividend reinvestment plan
|
43,275
|
|
|
21
|
|
|
2,214
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,235
|
|
|||||||
Common stock issued in acquisition
|
592,970
|
|
|
289
|
|
|
29,876
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,165
|
|
|||||||
Share-based compensation and tax benefit
(2) (3)
|
45,703
|
|
|
22
|
|
|
1,640
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,662
|
|
|||||||
Treasury stock activities
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
625
|
|
|
(625
|
)
|
|
—
|
|
|||||||
Balance at December 31, 2015
|
15,270,659
|
|
|
$
|
7,432
|
|
|
$
|
190,311
|
|
|
$
|
166,235
|
|
|
$
|
(5,840
|
)
|
|
$
|
1,883
|
|
|
$
|
(1,883
|
)
|
|
$
|
358,138
|
|
(1)
|
Includes
70,631
,
57,382
and
51,743
shares at December 31, 2015, 2014 and 2013, respectively, held in a Rabbi Trust related to our Non-Qualified Deferred Compensation Plan.
|
(2)
|
Includes amounts for shares issued for directors’ compensation.
|
(3)
|
The shares issued under the SICP are net of shares withheld for employee taxes. For 2015, 2014 and 2013, we withheld
12,620
,
12,687
and
15,617
shares, respectively, for taxes.
|
|
As of December 31,
|
||||||
(in thousands)
|
2015
|
|
2014
|
||||
Property, plant and equipment
|
|
|
|
||||
Regulated Energy
|
|
|
|
||||
Natural gas distribution – Delmarva
|
$
|
207,127
|
|
|
$
|
193,071
|
|
Natural gas distribution – Florida
|
286,538
|
|
|
234,344
|
|
||
Natural gas transmission – Delmarva
|
249,274
|
|
|
243,560
|
|
||
Natural gas transmission – Florida
|
20,291
|
|
|
18,240
|
|
||
Electric distribution – Florida
|
79,526
|
|
|
77,640
|
|
||
Unregulated Energy
|
|
|
|
||||
Propane distribution – Delmarva
|
66,403
|
|
|
61,390
|
|
||
Propane distribution – Florida
|
24,589
|
|
|
23,142
|
|
||
Other unregulated natural gas services – Ohio
|
54,607
|
|
|
—
|
|
||
Other unregulated energy
|
135
|
|
|
241
|
|
||
Other
|
18,999
|
|
|
18,497
|
|
||
Total property, plant and equipment
|
1,007,489
|
|
|
870,125
|
|
||
Less: Accumulated depreciation and amortization
|
(215,313
|
)
|
|
(193,369
|
)
|
||
Plus: Construction work in progress
|
62,774
|
|
|
13,006
|
|
||
Net property, plant and equipment
|
$
|
854,950
|
|
|
$
|
689,762
|
|
|
2015
|
|
2014
|
|
2013
|
Natural gas distribution – Delmarva
|
2.4%
|
|
2.5%
|
|
2.5%
|
Natural gas distribution – Florida
|
2.9%
|
|
2.9%
|
|
3.4%
|
Natural gas transmission – Delmarva
|
2.7%
|
|
2.7%
|
|
2.7%
|
Natural gas transmission – Florida
|
4.0%
|
|
4.0%
|
|
4.8%
|
Electric distribution – Florida
|
3.5%
|
|
3.8%
|
|
3.6%
|
Asset Description
|
Useful Life
|
Propane distribution mains
|
10-37 years
|
Propane bulk plants and tanks
|
10-40 years
|
Propane equipment
|
5-33 years
|
Meters and meter installations
|
5-33 years
|
Measuring and regulating station equipment
|
5-37 years
|
Natural gas pipelines
|
45 years
|
Natural gas right of ways
|
Perpetual
|
Natural gas processing equipment
|
20-25 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,
|
||||||
|
2015
|
|
2014
|
||||
(in thousands)
|
|
|
|
||||
Regulatory Assets
|
|
|
|
||||
Under-recovered purchased fuel and conservation cost recovery
(1)
|
$
|
4,598
|
|
|
$
|
6,865
|
|
Under-recovered GRIP revenue
(1)
|
3,091
|
|
|
1,491
|
|
||
Deferred post retirement benefits
(2)
|
19,479
|
|
|
19,762
|
|
||
Deferred conversion and development costs
(1)
|
5,729
|
|
|
3,745
|
|
||
Environmental regulatory assets and expenditures
(3)
|
4,158
|
|
|
4,452
|
|
||
Acquisition adjustment
(4)
|
43,735
|
|
|
45,607
|
|
||
Loss on reacquired debt
(5)
|
1,259
|
|
|
1,372
|
|
||
Other
|
3,738
|
|
|
3,809
|
|
||
Total Regulatory Assets
|
$
|
85,787
|
|
|
$
|
87,103
|
|
Regulatory Liabilities
|
|
|
|
||||
Self insurance
(6)
|
$
|
1,031
|
|
|
$
|
1,003
|
|
Over-recovered purchased fuel and conservation cost recovery
(1)
|
6,994
|
|
|
2,936
|
|
||
Storm reserve
(6)
|
2,973
|
|
|
2,982
|
|
||
Accrued asset removal cost
(7)
|
39,206
|
|
|
39,583
|
|
||
Other
|
225
|
|
|
183
|
|
||
Total Regulatory Liabilities
|
$
|
50,429
|
|
|
$
|
46,687
|
|
(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)
|
All of our environmental expenditures incurred to date and our 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.
|
(4)
|
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 us 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.
|
(5)
|
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.
|
(6)
|
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.
|
(7)
|
In accordance with typical regulatory policy, 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.
|
|
For the Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
(in thousands, except shares and per share data)
|
|
|
|
|
|
||||||
Calculation of Basic Earnings Per Share:
|
|
|
|
|
|
||||||
Net Income
|
$
|
41,140
|
|
|
$
|
36,092
|
|
|
$
|
32,787
|
|
Weighted average shares outstanding
|
15,094,423
|
|
|
14,551,308
|
|
|
14,430,962
|
|
|||
Basic Earnings Per Share
|
$
|
2.73
|
|
|
$
|
2.48
|
|
|
$
|
2.27
|
|
Calculation of Diluted Earnings Per Share:
|
|
|
|
|
|
||||||
Reconciliation of Numerator:
|
|
|
|
|
|
||||||
Net Income
|
$
|
41,140
|
|
|
$
|
36,092
|
|
|
$
|
32,787
|
|
Effect of 8.25% Convertible debentures
|
—
|
|
|
—
|
|
|
43
|
|
|||
Adjusted numerator — Diluted
|
$
|
41,140
|
|
|
$
|
36,092
|
|
|
$
|
32,830
|
|
Reconciliation of Denominator:
|
|
|
|
|
|
||||||
Weighted shares outstanding — Basic
|
15,094,423
|
|
|
14,551,308
|
|
|
14,430,962
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Share-based Compensation
|
48,950
|
|
|
53,636
|
|
|
37,866
|
|
|||
8.25% Convertible debentures
(1)
|
—
|
|
|
—
|
|
|
74,618
|
|
|||
Adjusted denominator — Diluted
|
15,143,373
|
|
|
14,604,944
|
|
|
14,543,446
|
|
|||
Diluted Earnings Per Share
|
$
|
2.72
|
|
|
$
|
2.47
|
|
|
$
|
2.26
|
|
(in thousands)
|
Net Purchase Price
|
|
|
Chesapeake Utilities common stock issued
|
$
|
30,164
|
|
Cash
|
27,494
|
|
|
Acquired debt
|
1,696
|
|
|
Aggregate amount paid in the acquisition
|
59,354
|
|
|
Less: cash acquired
|
(6,806
|
)
|
|
Net amount paid in the acquisition
|
$
|
52,548
|
|
(in thousands)
|
Purchase Price Allocation
|
||
Purchase price
|
$
|
57,658
|
|
|
|
||
Property plant and equipment
|
53,202
|
|
|
Cash
|
6,806
|
|
|
Accounts receivable
|
3,629
|
|
|
Income taxes receivable
|
3,012
|
|
|
Other assets
|
247
|
|
|
Total assets acquired
|
66,896
|
|
|
|
|
||
Long-term debt
|
1,696
|
|
|
Deferred income taxes
|
12,987
|
|
|
Accounts payable
|
3,837
|
|
|
Other current liabilities
|
314
|
|
|
Total liabilities assumed
|
18,834
|
|
|
Net identifiable assets acquired
|
48,062
|
|
|
Goodwill
|
$
|
9,596
|
|
•
|
Regulated Energy
. The Regulated Energy segment includes natural gas distribution, natural gas transmission and electric distribution operations. All operations in this segment are regulated, as to their rates and services, by the PSC 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. Effective April 1, 2015, this segment includes Aspire Energy, whose services include natural gas gathering, processing, transportation and supply (See Note 4,
Acquisitions and Dispositions
, regarding the acquisition of Gatherco). 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.
|
|
For the Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Operating Revenues, Unaffiliated Customers
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
300,674
|
|
|
$
|
299,345
|
|
|
$
|
263,573
|
|
Unregulated Energy
|
158,570
|
|
|
184,557
|
|
|
161,760
|
|
|||
Other businesses and eliminations
|
—
|
|
|
14,932
|
|
|
18,973
|
|
|||
Total operating revenues, unaffiliated customers
|
$
|
459,244
|
|
|
$
|
498,834
|
|
|
$
|
444,306
|
|
Intersegment Revenues
(1)
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
1,228
|
|
|
$
|
1,097
|
|
|
$
|
1,064
|
|
Unregulated Energy
|
3,537
|
|
|
404
|
|
|
4,963
|
|
|||
Other businesses
|
880
|
|
|
979
|
|
|
1,017
|
|
|||
Total intersegment revenues
|
$
|
5,645
|
|
|
$
|
2,480
|
|
|
$
|
7,044
|
|
Operating Income
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
60,985
|
|
|
$
|
50,451
|
|
|
$
|
50,084
|
|
Unregulated Energy
|
16,355
|
|
|
11,723
|
|
|
12,353
|
|
|||
Other businesses and eliminations
|
418
|
|
|
105
|
|
|
297
|
|
|||
Operating Income
|
77,758
|
|
|
62,279
|
|
|
62,734
|
|
|||
Gains from sales of businesses
|
—
|
|
|
7,139
|
|
|
—
|
|
|||
Other income, net of other expenses
|
293
|
|
|
101
|
|
|
372
|
|
|||
Interest charges
|
10,006
|
|
|
9,482
|
|
|
8,234
|
|
|||
Income Before Income taxes
|
68,045
|
|
|
60,037
|
|
|
54,872
|
|
|||
Income taxes
|
26,905
|
|
|
23,945
|
|
|
22,085
|
|
|||
Net Income
|
$
|
41,140
|
|
|
$
|
36,092
|
|
|
$
|
32,787
|
|
Depreciation and Amortization
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
24,195
|
|
|
$
|
21,915
|
|
|
$
|
19,822
|
|
Unregulated Energy
|
5,679
|
|
|
3,994
|
|
|
3,686
|
|
|||
Other businesses and eliminations
|
98
|
|
|
407
|
|
|
457
|
|
|||
Total depreciation and amortization
|
$
|
29,972
|
|
|
$
|
26,316
|
|
|
$
|
23,965
|
|
Capital Expenditures
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
98,372
|
|
|
$
|
84,959
|
|
|
$
|
95,944
|
|
Unregulated Energy
|
38,347
|
|
|
9,648
|
|
|
4,829
|
|
|||
Other businesses
|
5,994
|
|
|
3,450
|
|
|
7,266
|
|
|||
Total capital expenditures
|
$
|
142,713
|
|
|
$
|
98,057
|
|
|
$
|
108,039
|
|
(1)
|
All significant intersegment revenues are billed at market rates and have been eliminated from consolidated revenues.
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Identifiable Assets
|
|
|
|
||||
Regulated Energy
|
$
|
870,559
|
|
|
$
|
796,021
|
|
Unregulated Energy
|
172,803
|
|
|
84,732
|
|
||
Other businesses
|
25,224
|
|
|
23,716
|
|
||
Total identifiable assets
|
$
|
1,068,586
|
|
|
$
|
904,469
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
9,497
|
|
|
$
|
8,870
|
|
|
$
|
7,837
|
|
Cash paid for income taxes, net of refunds
|
$
|
11,076
|
|
|
$
|
17,588
|
|
|
$
|
4,993
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Capital property and equipment acquired on account, but not paid as of December 31
|
$
|
2,668
|
|
|
$
|
459
|
|
|
$
|
341
|
|
Common stock issued for the Retirement Savings Plan
|
$
|
690
|
|
|
$
|
602
|
|
|
—
|
|
|
Common stock issued for the conversion of debentures
|
$
|
—
|
|
|
$
|
535
|
|
|
$
|
295
|
|
Common stock issued under the SICP
|
$
|
1,594
|
|
|
$
|
1,533
|
|
|
$
|
850
|
|
Capital lease obligation
|
$
|
4,824
|
|
|
$
|
6,130
|
|
|
$
|
7,126
|
|
Common stock issued in acquisition
|
$
|
30,164
|
|
|
$
|
—
|
|
|
$
|
—
|
|
At December 31, 2014
|
Quantity in
Gallons
|
|
Estimated Market
Prices
|
|
Weighted Average Contract Prices
|
|||
Forward Contracts
|
|
|
|
|
|
|||
Sale
|
4,200,000
|
|
|
$0.5400 - $0.7900
|
|
$
|
0.6714
|
|
Purchase
|
4,201,000
|
|
|
$0.4700 - $1.3176
|
|
$
|
0.6416
|
|
|
Asset Derivatives
|
||||||||
|
|
|
Fair Value As Of
|
||||||
(in thousands)
|
Balance Sheet Location
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
||||
Forward contracts
|
Mark-to-market energy assets
|
|
$
|
1
|
|
|
$
|
407
|
|
Derivatives designated as fair value hedges
|
|
|
|
|
|
||||
Put options
|
Mark-to-market energy assets
|
|
152
|
|
|
622
|
|
||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
||||
Call options
|
Mark-to-market energy assets
|
|
—
|
|
|
26
|
|
||
Total asset derivatives
|
|
|
$
|
153
|
|
|
$
|
1,055
|
|
|
Liability Derivatives
|
||||||||
|
|
|
Fair Value As Of
|
||||||
(in thousands)
|
Balance Sheet Location
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
||||
Forward contracts
|
Mark-to-market energy liabilities
|
|
$
|
1
|
|
|
$
|
283
|
|
Propane swap agreements
|
Mark-to-market energy liabilities
|
|
—
|
|
|
735
|
|
||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
||||
Propane swap agreements
|
Mark-to-market energy liabilities
|
|
323
|
|
|
—
|
|
||
Natural gas futures contracts
|
Mark-to-market energy liabilities
|
|
109
|
|
|
—
|
|
||
Total liability derivatives
|
|
|
$
|
433
|
|
|
$
|
1,018
|
|
|
Amount of Gain (Loss) on Derivatives:
|
||||||||||||
|
Location of Gain
(Loss) on Derivatives
|
|
For the Year Ended December 31,
|
||||||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||
Realized gain on forward contracts and options
(1)
|
Revenue
|
|
$
|
426
|
|
|
$
|
1,423
|
|
|
$
|
1,127
|
|
Unrealized gain (loss) on forward contracts
(1)
|
Revenue
|
|
(126
|
)
|
|
57
|
|
|
217
|
|
|||
Call options
|
Cost of Sales
|
|
—
|
|
|
—
|
|
|
97
|
|
|||
Propane swap agreements
|
Cost of Sales
|
|
18
|
|
|
(735
|
)
|
|
—
|
|
|||
Derivatives designated as fair value hedges:
|
|
|
|
|
|
|
|
||||||
Put/Call option
|
Cost of Sales
|
|
528
|
|
|
235
|
|
|
(28
|
)
|
|||
Put/Call option
(2)
|
Propane Inventory
|
|
43
|
|
|
517
|
|
|
(100
|
)
|
|||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
|
||||||
Propane swap agreements
|
Cost of Sales
|
|
(120
|
)
|
|
(341
|
)
|
|
—
|
|
|||
Propane swap agreements
|
Other Comprehensive Loss
|
|
(323
|
)
|
|
—
|
|
|
—
|
|
|||
Call options
|
Cost of Sales
|
|
(81
|
)
|
|
(17
|
)
|
|
—
|
|
|||
Call options
|
Other Comprehensive Loss
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
|||
Natural gas futures contracts
|
Other Comprehensive Income
|
|
109
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
|
$
|
474
|
|
|
$
|
1,084
|
|
|
$
|
1,313
|
|
(1)
|
All of the realized and unrealized gain (loss) on forward contracts represents the effect of trading activities on our consolidated statements of income.
|
(2)
|
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.
|
|
|
|
Fair Value Measurements Using:
|
||||||||||||
As of December 31, 2015
|
Fair Value
|
|
Quoted Prices in
Active Markets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments—equity securities
|
$
|
18
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investments—guaranteed income fund
|
$
|
279
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
279
|
|
Investments—mutual funds and other
|
$
|
3,347
|
|
|
$
|
3,347
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mark-to-market energy assets, including put options
|
$
|
153
|
|
|
$
|
—
|
|
|
$
|
153
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Mark-to-market energy liabilities, including swap agreements and natural gas futures contracts
|
$
|
433
|
|
|
$
|
—
|
|
|
$
|
433
|
|
|
$
|
—
|
|
|
For the Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
(in thousands)
|
|
|
|
||||
Beginning Balance
|
$
|
287
|
|
|
$
|
458
|
|
Purchases and adjustments
|
69
|
|
|
76
|
|
||
Transfers/Disbursements
|
(82
|
)
|
|
(253
|
)
|
||
Investment income
|
5
|
|
|
6
|
|
||
Ending Balance
|
$
|
279
|
|
|
$
|
287
|
|
|
|
||||||
(in thousands)
|
December 31,
2015 |
|
December 31,
2014 |
||||
Rabbi trust (associated with the Non-qualified Deferred Compensation Plan)
|
$
|
3,626
|
|
|
$
|
3,678
|
|
Investments in equity securities
|
18
|
|
|
—
|
|
||
Total
|
$
|
3,644
|
|
|
$
|
3,678
|
|
|
As of December 31,
|
||||||||||||||
|
2015
|
|
2014
|
||||||||||||
(in thousands)
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Customer lists
|
$
|
4,012
|
|
|
$
|
2,048
|
|
|
$
|
3,993
|
|
|
$
|
1,719
|
|
Non-Compete agreements
|
270
|
|
|
103
|
|
|
103
|
|
|
72
|
|
||||
Other
|
270
|
|
|
179
|
|
|
270
|
|
|
171
|
|
||||
Total
|
$
|
4,552
|
|
|
$
|
2,330
|
|
|
$
|
4,366
|
|
|
$
|
1,962
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Current Income Tax Expense
|
|
|
|
|
|
||||||
Federal
|
$
|
4,875
|
|
|
$
|
434
|
|
|
$
|
4,882
|
|
State
|
1,533
|
|
|
1,311
|
|
|
2,382
|
|
|||
|
(23
|
)
|
|
(35
|
)
|
|
(39
|
)
|
|||
Total current income tax expense
|
6,385
|
|
|
1,710
|
|
|
7,225
|
|
|||
Deferred Income Tax Expense
(1)
|
|
|
|
|
|
||||||
Property, plant and equipment
|
21,205
|
|
|
20,382
|
|
|
16,758
|
|
|||
Deferred gas costs
|
(1,539
|
)
|
|
1,614
|
|
|
(209
|
)
|
|||
Pensions and other employee benefits
|
(84
|
)
|
|
537
|
|
|
(335
|
)
|
|||
FPU merger related premium cost and deferred gain
|
(556
|
)
|
|
(802
|
)
|
|
(686
|
)
|
|||
Net operating loss carryforwards
|
2,078
|
|
|
(112
|
)
|
|
62
|
|
|||
Other
|
(584
|
)
|
|
616
|
|
|
(730
|
)
|
|||
Total deferred income tax expense
|
20,520
|
|
|
22,235
|
|
|
14,860
|
|
|||
Total Income Tax Expense
|
$
|
26,905
|
|
|
$
|
23,945
|
|
|
$
|
22,085
|
|
(1)
|
Includes
$2.1 million
,
$2.6 million
, and
$2.1 million
of deferred state income taxes for the years
2015
,
2014
and
2013
, respectively.
|
|
For the Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Reconciliation of Effective Income Tax Rates
|
|
|
|
|
|
||||||
Continuing Operations
|
|
|
|
|
|
||||||
Federal income tax expense
(1)
|
$
|
23,865
|
|
|
$
|
21,121
|
|
|
$
|
19,205
|
|
State income taxes, net of federal benefit
|
3,062
|
|
|
2,946
|
|
|
3,105
|
|
|||
ESOP dividend deduction
|
(263
|
)
|
|
(267
|
)
|
|
(256
|
)
|
|||
Other
|
241
|
|
|
145
|
|
|
31
|
|
|||
Total Income Tax Expense
|
$
|
26,905
|
|
|
$
|
23,945
|
|
|
$
|
22,085
|
|
Effective Income Tax Rate
|
39.54
|
%
|
|
39.88
|
%
|
|
40.25
|
%
|
(1)
|
Federal income taxes were recorded at
35%
for each year represented.
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
(in thousands)
|
|
|
|
||||
Deferred Income Taxes
|
|
|
|
||||
Deferred income tax liabilities:
|
|
|
|
||||
Property, plant and equipment
|
$
|
185,448
|
|
|
$
|
152,877
|
|
Acquisition adjustment
|
15,490
|
|
|
16,140
|
|
||
Loss on reacquired debt
|
485
|
|
|
529
|
|
||
Deferred gas costs
|
683
|
|
|
2,222
|
|
||
Other
|
5,961
|
|
|
4,507
|
|
||
Total deferred income tax liabilities
|
208,067
|
|
|
176,275
|
|
||
Deferred income tax assets:
|
|
|
|
||||
Pension and other employee benefits
|
6,570
|
|
|
6,532
|
|
||
Environmental costs
|
2,445
|
|
|
2,313
|
|
||
Net operating loss carryforwards
|
943
|
|
|
1,186
|
|
||
Self insurance
|
278
|
|
|
275
|
|
||
Storm reserve liability
|
1,153
|
|
|
1,150
|
|
||
Other
|
4,078
|
|
|
3,755
|
|
||
Total deferred income tax assets
|
15,467
|
|
|
15,211
|
|
||
Deferred Income Taxes Per Consolidated Balance Sheets
|
$
|
192,600
|
|
|
$
|
161,064
|
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
(in thousands)
|
|
|
|
||||
FPU secured first mortgage bonds:
|
|
|
|
||||
9.08% bond, due June 1, 2022
|
$
|
7,973
|
|
|
$
|
7,969
|
|
Uncollateralized Senior Notes:
|
|
|
|
||||
6.64% note, due October 31, 2017
|
5,456
|
|
|
8,182
|
|
||
5.50% note, due October 12, 2020
|
10,000
|
|
|
12,000
|
|
||
5.93% note, due October 31, 2023
|
24,000
|
|
|
27,000
|
|
||
5.68% note, due June 30, 2026
|
29,000
|
|
|
29,000
|
|
||
6.43% note, due May 2, 2028
|
7,000
|
|
|
7,000
|
|
||
3.73% note, due December 16, 2028
|
20,000
|
|
|
20,000
|
|
||
3.88% note, due May 15, 2029
|
50,000
|
|
|
50,000
|
|
||
Promissory notes
|
238
|
|
|
314
|
|
||
Capital lease obligation
|
4,824
|
|
|
6,130
|
|
||
Total long-term debt
|
158,491
|
|
|
167,595
|
|
||
Less: current maturities
|
(9,151
|
)
|
|
(9,109
|
)
|
||
Total long-term debt, net of current maturities
|
$
|
149,340
|
|
|
$
|
158,486
|
|
|
|
|
|
Outstanding borrowings at
|
|
|||||||||
(in thousands)
|
Total Facility
|
Interest Rate
|
Expiration Date
|
December 31, 2015
|
December 31, 2014
|
Available at December 31, 2015
|
||||||||
Bank Credit Facility
|
|
|
|
|
|
|
||||||||
Committed revolving credit facility A
|
$
|
55,000
|
|
LIBOR plus 1.25 percent
|
October 31, 2016
|
$
|
30,000
|
|
$
|
20,000
|
|
$
|
25,000
|
|
Committed revolving credit facility B
|
30,000
|
|
LIBOR plus 1.25 percent
(1)
|
October 31, 2016
|
23,757
|
|
16,040
|
|
6,243
|
|
||||
Committed revolving credit facility C
|
35,000
|
|
LIBOR plus 0.85 percent
|
December 20, 2016
|
30,000
|
|
—
|
|
5,000
|
|
||||
Committed revolving credit facility D
|
150,000
|
|
LIBOR plus 1.25 percent
(2)
|
October 8, 2020
|
35,000
|
|
—
|
|
115,000
|
|
||||
Short-term revolving credit Note E
|
50,000
|
|
LIBOR plus 0.80 percent
(3)
|
October 31, 2016
|
50,000
|
|
50,000
|
|
—
|
|
||||
Total short term credit facilities
|
$
|
320,000
|
|
|
|
$
|
168,757
|
|
$
|
86,040
|
|
$
|
151,243
|
|
Book overdrafts
(4)
|
|
|
|
4,640
|
|
2,191
|
|
|
||||||
Total short-term borrowing
|
|
|
|
$
|
173,397
|
|
$
|
88,231
|
|
|
•
|
a funded indebtedness ratio of no greater than
65 percent
; and
|
•
|
a fixed charge coverage ratio of at least
1.20
to
1.0
.
|
|
|
Defined Benefit Pension and Postretirement Plan Items
|
|
Commodity Contracts Cash Flow Hedges
|
|
Total
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
As of December 31, 2014
|
|
$
|
(5,643
|
)
|
|
$
|
(33
|
)
|
|
$
|
(5,676
|
)
|
Other comprehensive loss before reclassifications
|
|
(286
|
)
|
|
(350
|
)
|
|
(636
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
|
349
|
|
|
123
|
|
|
472
|
|
|||
Net current-period other comprehensive gain/(loss)
|
|
63
|
|
|
(227
|
)
|
|
(164
|
)
|
|||
As of December 31, 2015
|
|
$
|
(5,580
|
)
|
|
$
|
(260
|
)
|
|
$
|
(5,840
|
)
|
|
|
Defined Benefit Pension and Postretirement Plan Items
|
|
Commodity Contracts Cash Flow Hedges
|
|
Total
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
As of December 31, 2013
|
|
$
|
(2,533
|
)
|
|
$
|
—
|
|
|
$
|
(2,533
|
)
|
Other comprehensive loss before reclassifications
|
|
(3,242
|
)
|
|
(482
|
)
|
|
(3,724
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
|
132
|
|
|
449
|
|
|
581
|
|
|||
Net current-period other comprehensive loss
|
|
(3,110
|
)
|
|
(33
|
)
|
|
(3,143
|
)
|
|||
As of December 31, 2014
|
|
$
|
(5,643
|
)
|
|
$
|
(33
|
)
|
|
$
|
(5,676
|
)
|
For the Year Ended December 31,
|
2015
|
|
2014
|
||||
(in thousands)
|
|
|
|
||||
Amortization of defined benefit pension and postretirement plan items:
|
|
|
|
||||
Prior service cost
(1)
|
$
|
68
|
|
|
$
|
58
|
|
Net gain
(1)
|
(650
|
)
|
|
(279
|
)
|
||
Total before income taxes
|
(582
|
)
|
|
(221
|
)
|
||
Income tax benefit
|
233
|
|
|
89
|
|
||
Net of tax
|
$
|
(349
|
)
|
|
$
|
(132
|
)
|
|
|
|
|
||||
Gains and losses on commodity contracts cash flow hedges
|
|
|
|
||||
Propane swap agreements
(2)
|
$
|
(120
|
)
|
|
$
|
(735
|
)
|
Call options
(2)
|
(55
|
)
|
|
(17
|
)
|
||
Natural gas futures
(2)
|
(31
|
)
|
|
—
|
|
||
Total before income taxes
|
(206
|
)
|
|
(752
|
)
|
||
Income tax benefit
|
83
|
|
|
303
|
|
||
Net of tax
|
$
|
(123
|
)
|
|
$
|
(449
|
)
|
|
|
|
|
||||
Total reclassifications for the period
|
$
|
(472
|
)
|
|
$
|
(581
|
)
|
(1)
|
These amounts are included in the computation of net periodic benefits. See Note 16
, Employee Benefit Plans
, for additional details.
|
(2)
|
These amounts are included in the effects of gains and losses from derivative instruments. See Note 7,
Derivative Instruments
, for additional details.
|
|
Chesapeake
Pension Plan
|
|
FPU
Pension Plan
|
||||||||||||
At December 31,
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation — beginning of year
|
$
|
11,981
|
|
|
$
|
10,268
|
|
|
$
|
68,173
|
|
|
$
|
55,876
|
|
Interest cost
|
407
|
|
|
425
|
|
|
2,504
|
|
|
2,613
|
|
||||
Actuarial loss (gain)
|
(401
|
)
|
|
1,891
|
|
|
(3,374
|
)
|
|
12,785
|
|
||||
Benefits paid
|
(486
|
)
|
|
(603
|
)
|
|
(2,868
|
)
|
|
(3,101
|
)
|
||||
Benefit obligation — end of year
|
11,501
|
|
|
11,981
|
|
|
64,435
|
|
|
68,173
|
|
||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets — beginning of year
|
9,078
|
|
|
8,743
|
|
|
45,077
|
|
|
44,337
|
|
||||
Actual return on plan assets
|
(289
|
)
|
|
305
|
|
|
(1,464
|
)
|
|
1,485
|
|
||||
Employer contributions
|
449
|
|
|
633
|
|
|
1,462
|
|
|
2,356
|
|
||||
Benefits paid
|
(486
|
)
|
|
(603
|
)
|
|
(2,868
|
)
|
|
(3,101
|
)
|
||||
Fair value of plan assets — end of year
|
8,752
|
|
|
9,078
|
|
|
42,207
|
|
|
45,077
|
|
||||
Reconciliation:
|
|
|
|
|
|
|
|
||||||||
Funded status
|
(2,749
|
)
|
|
(2,903
|
)
|
|
(22,228
|
)
|
|
(23,096
|
)
|
||||
Accrued pension cost
|
$
|
(2,749
|
)
|
|
$
|
(2,903
|
)
|
|
$
|
(22,228
|
)
|
|
$
|
(23,096
|
)
|
Assumptions:
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
3.75
|
%
|
|
3.50
|
%
|
|
4.00
|
%
|
|
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,
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Components of net periodic pension cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest cost
|
$
|
407
|
|
|
$
|
425
|
|
|
$
|
405
|
|
|
$
|
2,504
|
|
|
$
|
2,613
|
|
|
$
|
2,367
|
|
Expected return on assets
|
(530
|
)
|
|
(516
|
)
|
|
(486
|
)
|
|
(3,107
|
)
|
|
(3,089
|
)
|
|
(2,866
|
)
|
||||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of actuarial loss
|
392
|
|
|
176
|
|
|
322
|
|
|
456
|
|
|
8
|
|
|
330
|
|
||||||
Net periodic pension cost
|
269
|
|
|
85
|
|
|
240
|
|
|
(147
|
)
|
|
(468
|
)
|
|
(169
|
)
|
||||||
Amortization of pre-merger regulatory asset
|
—
|
|
|
—
|
|
|
—
|
|
|
761
|
|
|
761
|
|
|
761
|
|
||||||
Total periodic cost
|
$
|
269
|
|
|
$
|
85
|
|
|
$
|
240
|
|
|
$
|
614
|
|
|
$
|
293
|
|
|
$
|
592
|
|
Assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount rate
|
3.50
|
%
|
|
4.25
|
%
|
|
3.50
|
%
|
|
3.75
|
%
|
|
4.75
|
%
|
|
3.75
|
%
|
||||||
Expected return on plan assets
|
6.00
|
%
|
|
6.00
|
%
|
|
6.00
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
At December 31,
|
2015
|
|
2014
|
||||
(in thousands)
|
|
|
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation — beginning of year
|
$
|
2,650
|
|
|
$
|
2,210
|
|
Interest cost
|
91
|
|
|
92
|
|
||
Actuarial loss (gain)
|
(85
|
)
|
|
437
|
|
||
Benefits paid
|
(146
|
)
|
|
(89
|
)
|
||
Benefit obligation — end of year
|
2,510
|
|
|
2,650
|
|
||
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets — beginning of year
|
—
|
|
|
—
|
|
||
Employer contributions
|
146
|
|
|
89
|
|
||
Benefits paid
|
(146
|
)
|
|
(89
|
)
|
||
Fair value of plan assets — end of year
|
—
|
|
|
—
|
|
||
Reconciliation:
|
|
|
|
||||
Funded status
|
(2,510
|
)
|
|
(2,650
|
)
|
||
Accrued pension cost
|
$
|
(2,510
|
)
|
|
$
|
(2,650
|
)
|
Assumptions:
|
|
|
|
||||
Discount rate
|
3.75
|
%
|
|
3.50
|
%
|
For the Years Ended December 31,
|
2015
|
|
2014
|
|
2013
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Components of net periodic pension cost:
|
|
|
|
|
|
||||||
Interest cost
|
$
|
91
|
|
|
$
|
92
|
|
|
$
|
81
|
|
Amortization of prior service cost
|
9
|
|
|
19
|
|
|
19
|
|
|||
Amortization of actuarial loss
|
99
|
|
|
47
|
|
|
64
|
|
|||
Net periodic pension cost
|
$
|
199
|
|
|
$
|
158
|
|
|
$
|
164
|
|
Assumptions:
|
|
|
|
|
|
||||||
Discount rate
|
3.50
|
%
|
|
4.25
|
%
|
|
3.50
|
%
|
|
Chesapeake
Pension Plan |
|
FPU
Pension Plan |
||||||||||||||
At December 31,
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||
Asset Category
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Equity securities
|
48.01
|
%
|
|
51.42
|
%
|
|
54.40
|
%
|
|
48.56
|
%
|
|
52.62
|
%
|
|
55.02
|
%
|
Debt securities
|
39.62
|
%
|
|
37.31
|
%
|
|
36.54
|
%
|
|
41.74
|
%
|
|
37.69
|
%
|
|
36.54
|
%
|
Other
|
12.37
|
%
|
|
11.27
|
%
|
|
9.06
|
%
|
|
9.70
|
%
|
|
9.69
|
%
|
|
8.44
|
%
|
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)
|
$
|
3,641
|
|
|
$
|
4,030
|
|
|
$
|
—
|
|
|
$
|
7,671
|
|
U.S. Mid Cap
(1)
|
1,577
|
|
|
1,609
|
|
|
—
|
|
|
3,186
|
|
||||
U.S. Small Cap
(1)
|
865
|
|
|
818
|
|
|
—
|
|
|
1,683
|
|
||||
International
(2)
|
9,416
|
|
|
—
|
|
|
—
|
|
|
9,416
|
|
||||
Alternative Strategies
(3)
|
2,737
|
|
|
—
|
|
|
—
|
|
|
2,737
|
|
||||
|
18,236
|
|
|
6,457
|
|
|
—
|
|
|
24,693
|
|
||||
Debt securities
|
|
|
|
|
|
|
|
||||||||
Fixed income
(4)
|
18,565
|
|
|
—
|
|
|
—
|
|
|
18,565
|
|
||||
High Yield
(4)
|
2,521
|
|
|
—
|
|
|
—
|
|
|
2,521
|
|
||||
|
21,086
|
|
|
—
|
|
|
—
|
|
|
21,086
|
|
||||
Other
|
|
|
|
|
|
|
|
||||||||
Commodities
(5)
|
1,365
|
|
|
—
|
|
|
—
|
|
|
1,365
|
|
||||
Real Estate
(6)
|
2,529
|
|
|
—
|
|
|
—
|
|
|
2,529
|
|
||||
Guaranteed deposit
(7)
|
—
|
|
|
—
|
|
|
1,286
|
|
|
1,286
|
|
||||
|
3,894
|
|
|
—
|
|
|
1,286
|
|
|
5,180
|
|
||||
Total Pension Plan Assets
|
$
|
43,216
|
|
|
$
|
6,457
|
|
|
$
|
1,286
|
|
|
$
|
50,959
|
|
(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 in investment grade and fixed income securities.
|
(5)
|
Includes funds that invest primarily in commodity-linked derivative instruments and fixed income securities.
|
(6)
|
Includes funds that invest primarily in real estate.
|
(7)
|
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)
|
$
|
4,069
|
|
|
$
|
4,028
|
|
|
$
|
—
|
|
|
$
|
8,097
|
|
U.S. Mid Cap
(1)
|
1,733
|
|
|
1,714
|
|
|
—
|
|
|
3,447
|
|
||||
U.S. Small Cap
(1)
|
873
|
|
|
821
|
|
|
—
|
|
|
1,694
|
|
||||
International
(2)
|
9,621
|
|
|
—
|
|
|
—
|
|
|
9,621
|
|
||||
Alternative Strategies
(3)
|
5,531
|
|
|
—
|
|
|
—
|
|
|
5,531
|
|
||||
|
21,827
|
|
|
6,563
|
|
|
—
|
|
|
28,390
|
|
||||
Debt securities
|
|
|
|
|
|
|
|
||||||||
Fixed income
(4)
|
17,717
|
|
|
—
|
|
|
—
|
|
|
17,717
|
|
||||
High Yield
(4)
|
2,658
|
|
|
—
|
|
|
—
|
|
|
2,658
|
|
||||
|
20,375
|
|
|
—
|
|
|
—
|
|
|
20,375
|
|
||||
Other
|
|
|
|
|
|
|
|
||||||||
Commodities
(5)
|
1,819
|
|
|
—
|
|
|
—
|
|
|
1,819
|
|
||||
Real Estate
(6)
|
2,427
|
|
|
—
|
|
|
—
|
|
|
2,427
|
|
||||
Guaranteed deposit
(7)
|
—
|
|
|
—
|
|
|
1,144
|
|
|
1,144
|
|
||||
|
4,246
|
|
|
—
|
|
|
1,144
|
|
|
5,390
|
|
||||
Total Pension Plan Assets
|
$
|
46,448
|
|
|
$
|
6,563
|
|
|
$
|
1,144
|
|
|
$
|
54,155
|
|
(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 in investment grade and fixed income securities.
|
(5)
|
Includes funds that invest primarily in commodity-linked derivative instruments and fixed income securities.
|
(6)
|
Includes funds that invest primarily in real estate.
|
(7)
|
Includes investment in a group annuity product issued by an insurance company.
|
|
For the Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
(in thousands)
|
|
|
|
||||
Balance, beginning of year
|
$
|
1,144
|
|
|
$
|
602
|
|
Purchases
|
1,926
|
|
|
1,811
|
|
||
Transfers in
|
1,900
|
|
|
2,390
|
|
||
Disbursements
|
(3,688
|
)
|
|
(3,704
|
)
|
||
Investment income
|
4
|
|
|
45
|
|
||
Balance, end of year
|
$
|
1,286
|
|
|
$
|
1,144
|
|
|
Chesapeake
Postretirement Plan |
|
FPU
Medical Plan |
||||||||||||
At December 31,
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation — beginning of year
|
$
|
1,238
|
|
|
$
|
1,262
|
|
|
$
|
1,712
|
|
|
$
|
1,519
|
|
Interest cost
|
42
|
|
|
39
|
|
|
57
|
|
|
69
|
|
||||
Plan participants contributions
|
108
|
|
|
106
|
|
|
75
|
|
|
97
|
|
||||
Actuarial loss (gain)
|
(58
|
)
|
|
6
|
|
|
(132
|
)
|
|
375
|
|
||||
Benefits paid
|
(177
|
)
|
|
(175
|
)
|
|
(268
|
)
|
|
(348
|
)
|
||||
Benefit obligation — end of year
|
1,153
|
|
|
1,238
|
|
|
1,444
|
|
|
1,712
|
|
||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets — beginning of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
(1)
|
69
|
|
|
69
|
|
|
193
|
|
|
251
|
|
||||
Plan participants contributions
|
108
|
|
|
106
|
|
|
75
|
|
|
97
|
|
||||
Benefits paid
|
(177
|
)
|
|
(175
|
)
|
|
(268
|
)
|
|
(348
|
)
|
||||
Fair value of plan assets — end of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Reconciliation:
|
|
|
|
|
|
|
|
||||||||
Funded status
|
(1,153
|
)
|
|
(1,238
|
)
|
|
(1,444
|
)
|
|
(1,712
|
)
|
||||
Accrued postretirement cost
|
$
|
(1,153
|
)
|
|
$
|
(1,238
|
)
|
|
$
|
(1,444
|
)
|
|
$
|
(1,712
|
)
|
Assumptions:
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
3.75
|
%
|
|
3.50
|
%
|
|
4.00
|
%
|
|
3.75
|
%
|
(1)
|
The Chesapeake 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,
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Components of net periodic postretirement cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest cost
|
$
|
42
|
|
|
$
|
39
|
|
|
$
|
47
|
|
|
$
|
57
|
|
|
$
|
69
|
|
|
$
|
63
|
|
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Actuarial loss
|
72
|
|
|
55
|
|
|
74
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Prior service cost
|
(77
|
)
|
|
(77
|
)
|
|
(77
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic cost
|
37
|
|
|
17
|
|
|
44
|
|
|
57
|
|
|
69
|
|
|
63
|
|
||||||
Amortization of pre-merger regulatory asset
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
8
|
|
||||||
Net periodic cost
|
$
|
37
|
|
|
$
|
17
|
|
|
$
|
44
|
|
|
$
|
65
|
|
|
$
|
77
|
|
|
$
|
71
|
|
Assumptions
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount rate
|
3.50
|
%
|
|
4.25
|
%
|
|
3.50
|
%
|
|
3.75
|
%
|
|
4.75
|
%
|
|
3.75
|
%
|
(in thousands)
|
Chesapeake
Pension
Plan
|
|
FPU
Pension
Plan
|
|
Chesapeake
SERP
|
|
Chesapeake
Postretirement
Plan
|
|
FPU
Medical
Plan
|
|
Total
|
||||||||||||
Prior service cost (credit)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(755
|
)
|
|
$
|
—
|
|
|
$
|
(755
|
)
|
Net loss
|
4,434
|
|
|
20,410
|
|
|
866
|
|
|
793
|
|
|
99
|
|
|
26,602
|
|
||||||
Total
|
$
|
4,434
|
|
|
$
|
20,410
|
|
|
$
|
866
|
|
|
$
|
38
|
|
|
$
|
99
|
|
|
$
|
25,847
|
|
Accumulated other comprehensive loss pre-tax
(1)
|
$
|
4,434
|
|
|
$
|
3,878
|
|
|
$
|
866
|
|
|
$
|
38
|
|
|
$
|
19
|
|
|
$
|
9,235
|
|
Post-merger regulatory asset
|
—
|
|
|
16,532
|
|
|
—
|
|
|
—
|
|
|
80
|
|
|
16,612
|
|
||||||
Subtotal
|
4,434
|
|
|
20,410
|
|
|
866
|
|
|
38
|
|
|
99
|
|
|
25,847
|
|
||||||
Pre-merger regulatory asset
|
—
|
|
|
2,826
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
2,864
|
|
||||||
Total unrecognized cost
|
$
|
4,434
|
|
|
$
|
23,236
|
|
|
$
|
866
|
|
|
$
|
38
|
|
|
$
|
137
|
|
|
$
|
28,711
|
|
(1)
|
The total amount of accumulated other comprehensive loss recorded on our consolidated balance sheet as of
December 31, 2015
is net of income tax benefits of
$3.7 million
.
|
(in thousands)
|
Chesapeake
Pension
Plan
|
|
FPU
Pension
Plan
|
|
Chesapeake
SERP
|
|
Chesapeake
Postretirement
Plan
|
|
FPU
Medical
Plan
|
|
Total
|
||||||||||||
Prior service cost (credit)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(77
|
)
|
|
$
|
—
|
|
|
$
|
(77
|
)
|
Net loss
|
$
|
412
|
|
|
$
|
512
|
|
|
$
|
87
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
1,078
|
|
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)
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
$
|
591
|
|
|
$
|
2,980
|
|
|
$
|
151
|
|
|
$
|
82
|
|
|
$
|
149
|
|
2017
|
$
|
717
|
|
|
$
|
3,000
|
|
|
$
|
150
|
|
|
$
|
80
|
|
|
$
|
130
|
|
2018
|
$
|
640
|
|
|
$
|
3,047
|
|
|
$
|
150
|
|
|
$
|
79
|
|
|
$
|
93
|
|
2019
|
$
|
686
|
|
|
$
|
3,129
|
|
|
$
|
148
|
|
|
$
|
79
|
|
|
$
|
100
|
|
2020
|
$
|
646
|
|
|
$
|
3,218
|
|
|
$
|
147
|
|
|
$
|
73
|
|
|
$
|
94
|
|
Years 2021 through 2025
|
$
|
4,706
|
|
|
$
|
17,469
|
|
|
$
|
960
|
|
|
$
|
322
|
|
|
$
|
424
|
|
(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,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Awards to non-employee directors
|
$
|
640
|
|
|
$
|
540
|
|
|
$
|
478
|
|
Awards to key employees
|
1,297
|
|
|
1,418
|
|
|
1,153
|
|
|||
Total compensation expense
|
1,937
|
|
|
1,958
|
|
|
1,631
|
|
|||
Less: tax benefit
|
(780
|
)
|
|
(790
|
)
|
|
(657
|
)
|
|||
Share-Based Compensation amounts included in net income
|
$
|
1,157
|
|
|
$
|
1,168
|
|
|
$
|
974
|
|
|
Number of
Shares
|
|
Weighted Average
Grant Date Fair Value
|
|||
Outstanding — December 31, 2013
|
—
|
|
|
$
|
—
|
|
Granted
(1)
|
13,827
|
|
|
$
|
41.60
|
|
Vested
(1)
|
(13,827
|
)
|
|
$
|
41.60
|
|
Outstanding — December 31, 2014
|
—
|
|
|
$
|
—
|
|
Granted
|
14,484
|
|
|
$
|
45.54
|
|
Vested
|
(14,484
|
)
|
|
$
|
45.54
|
|
Outstanding — December 31, 2015
|
—
|
|
|
$
|
—
|
|
|
Number of
Shares
|
|
Weighted Average
Fair Value
|
|||
Outstanding — December 31, 2013
|
121,142
|
|
|
$
|
28.20
|
|
Granted
|
41,442
|
|
|
$
|
39.99
|
|
Vested
|
(39,546
|
)
|
|
$
|
26.87
|
|
Outstanding — December 31, 2014
|
123,038
|
|
|
$
|
32.60
|
|
Granted
|
33,719
|
|
|
$
|
47.65
|
|
Vested
|
(43,839
|
)
|
|
$
|
28.01
|
|
Expired
|
(2,520
|
)
|
|
$
|
28.83
|
|
Outstanding — December 31, 2015
|
110,398
|
|
|
$
|
38.34
|
|
|
For the Quarters Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
(in thousands except per share amounts)
|
|
|
|
|
|
|
|
||||||||
2015
(1)
|
|
|
|
|
|
|
|
||||||||
Operating Revenues
|
$
|
170,081
|
|
|
$
|
92,682
|
|
|
$
|
91,913
|
|
|
$
|
104,567
|
|
Operating Income
|
$
|
37,508
|
|
|
$
|
13,170
|
|
|
$
|
10,909
|
|
|
$
|
16,171
|
|
Net Income
|
$
|
21,109
|
|
|
$
|
6,294
|
|
|
$
|
5,119
|
|
|
$
|
8,619
|
|
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.45
|
|
|
$
|
0.41
|
|
|
$
|
0.34
|
|
|
$
|
0.56
|
|
Diluted
|
$
|
1.44
|
|
|
$
|
0.41
|
|
|
$
|
0.33
|
|
|
$
|
0.56
|
|
2014
(1)
|
|
|
|
|
|
|
|
||||||||
Operating Revenues
|
$
|
186,337
|
|
|
$
|
100,497
|
|
|
$
|
91,619
|
|
|
$
|
120,380
|
|
Operating Income
|
$
|
31,623
|
|
|
$
|
10,457
|
|
|
$
|
7,792
|
|
|
$
|
12,408
|
|
Net Income
|
$
|
17,681
|
|
|
$
|
5,134
|
|
|
$
|
3,180
|
|
|
$
|
10,097
|
|
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.22
|
|
|
$
|
0.35
|
|
|
$
|
0.22
|
|
|
$
|
0.69
|
|
Diluted
|
$
|
1.21
|
|
|
$
|
0.35
|
|
|
$
|
0.22
|
|
|
$
|
0.69
|
|
(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 3.3
|
|
First Amendment to the Amended and Restated Bylaws of Chesapeake Utilities Corporation, effective December 3, 2014, is incorporated herein by reference to Exhibit 3.3 of our Annual Report on Form 10-K for the year ended December 31, 2014.
|
|
|
|
• Exhibit 4.1
|
|
Form of Indenture between Chesapeake Utilities Corporation and Boatmen’s Trust Company, as Trustee, relating to its 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 dated December 27, 2000, between Chesapeake Utilities Corporation, as issuer, and Pacific Life Insurance Company, relating to the private placement of Chesapeake Utilities Corporation’s 7.83% Senior Notes. †
|
|
|
|
• Exhibit 4.3
|
|
Note Agreement dated October 31, 2002, between Chesapeake Utilities Corporation, as issuer, and Massachusetts Mutual Life Insurance Company, C.M. Life Insurance Company, American United Life Insurance Company, Pioneer Mutual Life Insurance Company and The State Life Insurance Company, relating to the private placement of Chesapeake Utilities Corporation’s 6.64% Senior Notes due 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 dated October 18, 2005, between Chesapeake Utilities Corporation, as issuer, and Prudential Investment Management, Inc., relating to the private placement of Chesapeake Utilities Corporation’s 5.5% Senior Notes due 2020, 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 dated October 31, 2008, among Chesapeake Utilities Corporation, as issuer, General American Life Insurance Company and New England Life Insurance Company, relating to the private placement of Chesapeake Utilities Corporation's 5.93% Senior Notes due 2023.†
|
|
|
|
• Exhibit 4.6
|
|
Note Agreement dated June 29, 2010, among Chesapeake Utilities Corporation, as issuer, Metropolitan Life Insurance Company and New England Life Insurance Company, relating to the private placement of Chesapeake Utilities Corporation’s 5.68% Senior Notes due 2026 and Chesapeake Utilities Corporation’s 6.43% Senior Notes due 2028.†
|
|
|
|
• Exhibit 4.7
|
|
Note Agreement dated September 5, 2013, among Chesapeake Utilities Corporation, as issuer, and certain note holders, relating to the private placement of Chesapeake Utilities Corporation’s 3.73% Senior Notes due 2028 and Chesapeake Utilities Corporation’s 3.88% Senior Notes due 2029.†
|
|
|
• Exhibit 4.8
|
|
Form of Indenture of Mortgage and Deed of Trust dated September 1, 1942, between Florida Public Utilities Company and the trustee, 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 4.9
|
|
Seventeenth Supplemental Indenture dated April 12, 2011, between Chesapeake Utilities Corporation and Florida Public Utilities Company, 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 4.10
|
|
Sixteenth Supplemental Indenture dated December 1, 2009, between Chesapeake Utilities Corporation and Florida Public Utilities Company, pursuant to which Chesapeake Utilities Corporation 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 4.11
|
|
Thirteenth Supplemental Indenture dated 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 4.12
|
|
Private Shelf Agreement dated October 8, 2015, between Chesapeake Utilities Corporation, as issuer, and Prudential Investment Management Inc., relating to the purchase of Chesapeake Utilities Corporation unsecured Senior Notes, is incorporated herein by reference to Exhibit 4.1 of our Quarterly Report on Form 10-Q for the period ended September 30, 2015, File No. 001-11590.
|
|
|
|
• 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 Cash Bonus Incentive Plan, effective January 1, 2015, is incorporated herein by reference to our Proxy Statement dated March 31, 2015, in connection with our Annual Meeting held on May 6, 2015, File No. 001-11590.
|
|
|
|
• Exhibit 10.3*
|
|
Chesapeake Utilities Corporation Directors Stock Compensation Plan, effective May 5, 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 Employee Stock Award Plan, effective May 5, 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 Performance Incentive Plan, effective May 5, 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 10.6*
|
|
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. 001-11590.
|
|
|
|
• Exhibit 10.7*
|
|
Non-Qualified Deferred Compensation Plan, effective January 1, 2014, is incorporated herein by reference to Exhibit 10.8 of our Annual Report on Form 10-K for the year ended December 31, 2013, File No. 001-11590.
|
|
|
|
• Exhibit 10.8*
|
|
Consulting Agreement dated January 2, 2013, 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 10.9*
|
|
Executive Employment Agreement dated January 14, 2011, 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 10.10*
|
|
Amendment to Executive Employment Agreement effective January 1, 2014, 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 10.11*
|
|
Executive Employment Agreement dated January 9, 2013, 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 10.12*
|
|
Executive Employment Agreement dated January 9, 2013, 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 10.13*
|
|
Executive Employment Agreement dated January 9, 2013, 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 10.14*
|
|
Executive Employment Agreement dated January 1, 2015, between Chesapeake Utilities Corporation and Jeffry M. Householder, is incorporated herein by reference to Exhibit 10.15 of our Annual Report on Form 10-K for the year ended December 31, 2014, File No. 001-11590.
|
|
|
|
• Exhibit 10.15*
|
|
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 10.16*
|
|
Form of Performance Share Agreement, effective January 7, 2014 for the period 2014 to 2016, pursuant to Chesapeake Utilities Corporation 2013 Stock and Incentive Compensation Plan by and between Chesapeake Utilities Corporation and each of Michael P. McMasters, Beth W. Cooper, Stephen C. Thompson, Elaine B. Bittner, and Jeffry M. Householder is incorporated herein by reference to Exhibit 10.18 of our Annual Report on Form 10-K for the year ended December 31, 2013, File No. 001-11590.
|
|
|
|
• Exhibit 10.17*
|
|
Form of Performance Share Agreement, effective January 13, 2015 for the period 2015 to 2017, pursuant to Chesapeake Utilities Corporation 2013 Stock and Incentive Compensation Plan by and between Chesapeake Utilities Corporation and each of Michael P. McMasters, Beth W. Cooper, Stephen C. Thompson, Elaine B. Bittner and Jeffry M. Householder, is incorporated herein by reference to Exhibit 10.19 of our Annual Report on Form 10-K for the year ended December 31, 2014, File No. 001-11590.
|
|
|
|
• Exhibit 10.18*
|
|
Form of Performance Share Agreement, dated March 6, 2015 for the period 2015 to 2017, pursuant to Chesapeake Utilities Corporation 2013 Stock and Incentive Compensation Plan by and between Chesapeake Utilities Corporation and James F. Moriarty is incorporated herein by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the period ended September 30, 2015, File No. 001-11590.
|
|
|
|
• Exhibit 10.19*
|
|
Form of Performance Share Agreement, dated January 12, 2016 for the period 2016 to 2018, pursuant to Chesapeake Utilities Corporation 2013 Stock and Incentive Compensation Plan by and between Chesapeake Utilities Corporation and each of Michael P. McMasters, Beth W. Cooper, Stephen C. Thompson, Elaine B. Bittner, Jeffry M. Householder and James F. Moriarty, is filed herewith.
|
|
|
|
• Exhibit 10.20*
|
|
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 10.21*
|
|
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 10.22
|
|
Revolving Credit Agreement dated December 29, 2014, between Chesapeake Utilities Corporation and Citizens Bank, National Association, as lender, is incorporated herein by reference to Exhibit 10.25 of our Annual Report on Form 10-K for the year ended December 31, 2014, File No. 001-11590.
|
|
|
|
• Exhibit 10.23
|
|
Revolving Credit Agreement dated October 8, 2015, between Chesapeake Utilities Corporation and PNC Bank, National Association, Bank of America, N.A., Citizens Bank N.A., Royal Bank of Canada and Wells Fargo Bank, National Association as lenders, is incorporated herein by reference to Exhibit 10.1 of our Quarterly Report on Form 10-Q for the period ended September 30, 2015, File No. 001-11590.
|
|
|
• Exhibit 10.24
|
|
First Amendment dated February 25, 2016 to the Revolving Credit Agreement dated October 8, 2015, between Chesapeake Utilities Corporation and PNC Bank, National Association, Bank of America, N.A., Citizens Bank N.A., Royal Bank of Canada and Wells Fargo Bank, National Association as lenders, is filed herewith.
|
• Exhibit 10.25
|
|
Promissory Note, contained as an exhibit to the Revolving Credit Agreement dated December 29, 2014, between Chesapeake Utilities Corporation and Citizens Bank, National Association, as lender, is incorporated herein by reference to Exhibit 10.26 of our Annual Report on Form 10-K for the year ended December 31, 2014, File No. 001-11590.
|
|
|
|
• 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 February 26, 2016, 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 February 26, 2016, is filed herewith.
|
|
|
|
• Exhibit 32.1
|
|
Certificate of Chief Executive Officer of Chesapeake Utilities Corporation pursuant to 18 U.S.C. Section 1350, dated February 26, 2016 is filed herewith.
|
|
|
|
• Exhibit 32.2
|
|
Certificate of Chief Financial Officer of Chesapeake Utilities Corporation pursuant to 18 U.S.C. Section 1350, dated February 26, 2016, 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.
|
†
|
These agreements have not been 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 copies to the SEC upon request.
|
|
C
HESAPEAKE
U
TILITIES
C
ORPORATION
|
||
|
|
|
|
|
By:
|
|
/s/ M
ICHAEL
P. M
C
M
ASTERS
|
|
|
|
Michael P. McMasters,
|
|
|
|
President and Chief Executive Officer
|
|
|
|
Date: February 26, 2016
|
/
S
/ J
OHN
R. S
CHIMKAITIS
|
|
|
/
S
/ R
ALPH
J. A
DKINS
|
John R. Schimkaitis
|
|
|
Ralph J. Adkins,
|
Chair of the Board and Director
|
|
|
Chair Emeritus and Director
|
Date: February 26, 2016
|
|
|
Date: February 26, 2016
|
|
|
|
|
/
S
/ M
ICHAEL
P. M
C
M
ASTERS
|
|
|
/
S
/ B
ETH
W. C
OOPER
|
Michael P. McMasters,
|
|
|
Beth W. Cooper, Senior Vice President
|
President, Chief Executive Officer and Director
|
|
|
and Chief Financial Officer
|
Date: February 26, 2016
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
Date: February 26, 2016
|
|
|
|
|
/
S
/ E
UGENE
H. B
AYARD
,E
SQ
|
|
|
/
S
/ R
ICHARD
B
ERNSTEIN
|
Eugene H. Bayard, Esq., Director
|
|
|
Richard Bernstein, Director
|
Date: February 26, 2016
|
|
|
Date: February 26, 2016
|
|
|
|
|
/
S
/ T
HOMAS
J. B
RESNAN
|
|
|
/
S
/ R
ONALD
G. F
ORSYTHE
, J
R
.
|
Thomas J. Bresnan, Director
|
|
|
Dr. Ronald G. Forsythe, Jr., Director
|
Date: February 26, 2016
|
|
|
Date: February 26, 2016
|
|
|
|
|
/
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: February 26, 2016
|
|
|
Date: February 26, 2016
|
|
|
|
|
/
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: February 26, 2016
|
|
|
Date: February 26, 2016
|
|
|
|
|
/
S
/ C
ALVERT
A. M
ORGAN
, JR.
|
|
|
/
S
/ D
IANNA
F. M
ORGAN
|
Calvert A. Morgan, Jr., Director
|
|
|
Dianna F. Morgan, Director
|
Date: February 26, 2016
|
|
|
Date: February 26, 2016
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|||||||||
2015
|
$
|
1,120
|
|
|
$
|
979
|
|
|
$
|
246
|
|
|
(1,436
|
)
|
|
$
|
909
|
|
2014
|
$
|
1,635
|
|
|
$
|
1,073
|
|
|
$
|
85
|
|
|
(1,673
|
)
|
|
$
|
1,120
|
|
2013
|
$
|
826
|
|
|
$
|
1,796
|
|
|
$
|
249
|
|
|
(1,236
|
)
|
|
$
|
1,635
|
|
(1)
|
Recoveries.
|
(2)
|
Uncollectible accounts charged off.
|
1.
|
Amendment to Credit Agreement
. Subject to the terms and conditions set forth herein, and in reliance upon the representations and warranties of the Borrower made herein, the definition of “Change of Control, in
Section 1.1
,
Certain Definitions
, of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
|
2.
|
Effectiveness; Conditions Precedent
. This Amendment, and the amendments contained herein, shall not be effective until the satisfaction of each of the following conditions precedent:
|
(a)
|
The Administrative Agent shall have received one or more counterparts of this Amendment, duly executed by the Borrower, the Administrative Agent and the Required Lenders;
|
(b)
|
The Administrative Agent shall have received such other documents in connection with this Amendment as the Administrative Agent or its counsel may reasonably request; and
|
(c)
|
All fees and expenses payable to the Administrative Agent (including the fees and expenses of counsel to the Administrative Agent estimated to date) shall have been paid in full (without prejudice to final settling of accounts for such fees and expenses).
|
3.
|
Representations and Warranties
. In order to induce the Administrative Agent and the Lenders to enter into this Amendment, the Borrower represents and warrants to the Administrative Agent and such Lenders as follows:
|
(a)
|
The representations and warranties of the Borrower are true and correct in all material respects (unless qualified by materiality or reference to the absence of a Material Adverse Change, in which event they are true and correct), except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that the representations and warranties contained in
Section 6.6
of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to
Section 8.11
of the Credit Agreement;
|
(b)
|
No Event of Default or Potential Default has occurred and is continuing or would result after giving effect to this Amendment;
|
(c)
|
No Material Adverse Change has occurred since the date of the last audited financial statements of the Borrower delivered to the Administrative Agent;
|
(d)
|
This Amendment has been duly authorized, executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms;
|
(e)
|
The Borrower is in compliance with each of the covenants and conditions set forth in the Credit Agreement;
|
(f)
|
There has been no material adverse change from any certificate, report, statement, agreement or other document or other written information previously supplied to the Administrative Agent or the Lenders furnished by or on behalf of the Borrower in connection with the transactions contemplated by this Amendment or the other Loan Documents; and
|
(g)
|
All material consents, licenses and approvals required for the delivery and performance by the Borrower of this Amendment and the other Loan Documents and the enforceability of this Amendment and the other Loan Documents against the Borrower is in full force and effect and none other is so required or necessary.
|
4.
|
Entire Agreement
. This Amendment, together with all the Loan Documents (collectively, the “
Relevant Documents
”), sets forth the entire understanding and agreement of the parties hereto in relation to the subject matter hereof and supersedes any prior negotiations and agreements among the parties relating to such subject matter. No promise, condition, representation or warranty, express or implied, not set forth in the Relevant Documents shall bind any party hereto, and no such party has relied on any such promise, condition, representation or warranty. Each of the parties hereto acknowledges that, except as otherwise expressly stated in the Relevant Documents, no representations, warranties or commitments, express or implied, have been made by any party to the other in relation to the subject matter hereof or thereof. None of the terms or conditions of this Amendment may be changed,
|
5.
|
Full Force and Effect of Agreement
. Except as hereby specifically amended, modified or supplemented, the Credit Agreement and all other Loan Documents are hereby confirmed and ratified in all respects and shall be and remain in full force and effect according to their respective terms. The parties hereto acknowledge and agree that the amendments contained herein do not constitute a novation of the Credit Agreement, the other Loan Documents or the Indebtedness described therein and shall not affect, diminish or abrogate any Borrower’s liability under the Credit Agreement or any other Loan Document.
|
6.
|
Counterparts
. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic imaging means (i.e., in “.pdf” or “.tif” format) shall be effective as delivery of a manually executed counterpart of this Amendment.
|
7.
|
Governing Law; Jurisdiction, Etc
. THIS AMENDMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, AND SHALL BE FURTHER SUBJECT TO THE PROVISIONS OF
SECTION 12.12
OF THE CREDIT AGREEMENT.
|
8.
|
Enforceability
. Should any one or more of the provisions of this Amendment be determined to be illegal or unenforceable as to one or more of the parties hereto, all other provisions nevertheless shall remain effective and binding on the parties hereto.
|
9.
|
Ratification and Confirmation of Loan Documents
. Borrower hereby consents to, acknowledges and agrees to the amendments set forth herein and hereby confirms and ratifies in all respects the Loan Documents (including, without limitation, the continuation of Borrower’s payment and performance obligations thereunder) and the enforceability of each Loan Document against Borrower in accordance with its terms, in each case upon and after the effectiveness of this Amendment and the amendments contemplated hereby.
|
10.
|
References
. All references in any of the Loan Documents to the “Credit Agreement” shall mean the Credit Agreement, as amended hereby.
|
11.
|
Successors and Assigns
. This Amendment shall be binding upon and inure to the benefit of the Borrower the Administrative Agent and each Lender, and their respective successors and assignees to the extent such assignees are permitted assignees as provided in
Section 12.9
of the Credit Agreement.
|
|
For the Year Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
(in thousands, except ratio of earnings to fixed charges)
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
|
$
|
41,140
|
|
|
$
|
36,092
|
|
|
$
|
28,863
|
|
|
$
|
27,622
|
|
|
$
|
26,056
|
|
Add:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income taxes
|
26,905
|
|
|
23,945
|
|
|
19,296
|
|
|
17,989
|
|
|
16,923
|
|
|||||
Portion of rents representative of interest factor
|
565
|
|
|
588
|
|
|
464
|
|
|
363
|
|
|
356
|
|
|||||
Interest on indebtedness
|
9,933
|
|
|
9,439
|
|
|
8,707
|
|
|
8,954
|
|
|
9,090
|
|
|||||
Amortization of debt discount and expense
|
74
|
|
|
42
|
|
|
40
|
|
|
46
|
|
|
56
|
|
|||||
Capitalized interest (allowed funds used during construction)
|
38
|
|
|
58
|
|
|
111
|
|
|
25
|
|
|
1
|
|
|||||
Earnings as adjusted
|
$
|
78,655
|
|
|
$
|
70,164
|
|
|
$
|
57,481
|
|
|
$
|
54,999
|
|
|
$
|
52,482
|
|
Fixed Charges
|
|
|
|
|
|
|
|
|
|
||||||||||
Portion of rents representative of interest factor
|
$
|
565
|
|
|
$
|
588
|
|
|
$
|
464
|
|
|
$
|
363
|
|
|
$
|
356
|
|
Interest on indebtedness
|
9,933
|
|
|
9,439
|
|
|
8,707
|
|
|
8,954
|
|
|
9,090
|
|
|||||
Amortization of debt discount and expense
|
74
|
|
|
42
|
|
|
40
|
|
|
46
|
|
|
56
|
|
|||||
Capitalized interest (allowed funds used during construction)
|
38
|
|
|
58
|
|
|
111
|
|
|
25
|
|
|
1
|
|
|||||
Fixed Charges
|
$
|
10,610
|
|
|
$
|
10,127
|
|
|
$
|
9,322
|
|
|
$
|
9,388
|
|
|
$
|
9,503
|
|
Ratio of Earnings to Fixed Charges
|
7.41
|
|
|
6.93
|
|
|
6.17
|
|
|
5.86
|
|
|
5.52
|
|
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
|
Aspire Energy of Ohio, LLC
|
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
|
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/ Baker Tilly Virchow Krause, LLP
|
|
Philadelphia, Pennsylvania
|
February 26, 2016
|
1.
|
I have reviewed this annual report on Form 10-K for the year ended
December 31, 2015
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, 2015
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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/
S
/ B
ETH
W. C
OOPER
|
Beth W. Cooper
Senior Vice President and Chief Financial Officer
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/
S
/ M
ICHAEL
P. M
C
M
ASTERS
|
Michael P. McMasters
|
February 26, 2016
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/
S
/ B
ETH
W. C
OOPER
|
Beth W. Cooper
|
February 26, 2016
|