|
FORM 10-K
|
|
|
|
|
CHESAPEAKE UTILITIES CORPORATION
|
||
(Exact name of registrant as specified in its charter)
|
||
|
|
|
State of Delaware
|
|
51-0064146
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Common Stock—par value per share $0.4867
|
CPK
|
New York Stock Exchange, Inc.
|
Large accelerated filer
|
|
☒
|
|
Accelerated filer
|
|
☐
|
|
|
|
|
|||
Non-accelerated filer
|
|
☐
|
|
Smaller reporting company
|
|
☐
|
|
|
|
|
Emerging growth company
|
|
☐
|
|
Page
|
•
|
state and federal legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rate structures, and affect the speed and the degree to which competition enters the electric and natural gas industries;
|
•
|
the outcomes of regulatory, environmental and legal matters, including whether pending matters are resolved within current estimates and whether the related costs are adequately covered by insurance or recoverable in rates;
|
•
|
the impact of climate change, including the impact of greenhouse gas emissions or other legislation or regulations intended to address climate change;
|
•
|
the impact of significant changes to current tax regulations and rates;
|
•
|
the timing of certification authorizations associated with new capital projects and the ability to construct facilities at or below estimated costs;
|
•
|
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;
|
•
|
possible increased federal, state and local regulation of the safety of our operations;
|
•
|
the inherent hazards and risks involved in transporting and distributing natural gas and electricity;
|
•
|
the economy in our service territories or markets, the nation, and worldwide, including the impact of economic conditions (which we do not control ) on demand for electricity, natural gas, propane or other fuels;
|
•
|
risks related to cyber-attacks or cyber-terrorism that could disrupt our business operations or result in failure of information technology systems or result in the loss or exposure of confidential or sensitive customer, employee or Company information;
|
•
|
adverse weather conditions, including the effects of hurricanes, ice storms and other damaging weather events;
|
•
|
customers' preferred energy sources;
|
•
|
industrial, commercial and residential growth or contraction in our markets or service territories;
|
•
|
the effect of competition on our businesses from other energy suppliers and alternative forms of energy;
|
•
|
the timing and extent of changes in commodity prices and interest rates;
|
•
|
the effect of spot, forward and future market prices on our various energy businesses;
|
•
|
the extent of our success in connecting natural gas and electric supplies to transmission systems, establishing and maintaining key supply sources; and expanding natural gas and electric markets;
|
•
|
the creditworthiness of counterparties with which we are engaged in transactions;
|
•
|
the capital-intensive nature of our regulated energy businesses;
|
•
|
our ability to access the credit and capital markets to execute our business strategy, including our ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general economic conditions;
|
•
|
the ability to successfully execute, manage and integrate a merger, acquisition or divestiture of assets or businesses and the related regulatory or other conditions associated with the merger, acquisition or divestiture;
|
•
|
the impact on our costs 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 health care legislation and regulation;
|
•
|
the ability to continue to hire, train and retain appropriately qualified personnel; and
|
•
|
the effect of accounting pronouncements issued periodically by accounting standard-setting bodies.
|
Our strategy is to consistently produce industry leading total shareholder return by profitably investing capital into opportunities that leverage our skills and expertise in energy distribution and transmission to achieve high levels of service and growth. The key elements of our strategy include:
•
capital investment in growth opportunities that generate our target returns;
•
expanding our energy distribution and transmission operations within our existing service areas as well as into new geographic areas;
•
providing new services in our current service areas;
•
expanding our footprint in potential growth markets through strategic acquisitions that complement our businesses;
•
entering new energy markets and businesses that complement our existing operations and growth strategy; and
•
operating as a customer-centric full-service energy supplier/partner/provider, while providing safe and reliable service.
Our employees strive to build meaningful connections that generate opportunities to grow our businesses, develop new markets, and enrich the communities in which we live, work and serve.
|
|
|
|
|
|
|
|
||||
Operations
|
|
Areas Served
|
|
Net Income
|
|
Total Assets
|
||||
(in thousands)
|
|
|
|
|
|
|
||||
Natural Gas Distribution
|
|
|
|
|
|
|
||||
Delmarva Natural Gas (Delaware division, Maryland division and Sandpiper Energy)
|
|
Delaware/Maryland
|
|
$
|
9,873
|
|
|
$
|
280,002
|
|
Central Florida Gas and FPU
|
|
Florida
|
|
13,721
|
|
|
420,483
|
|
||
Natural Gas Transmission
|
|
|
|
|
|
|
||||
Eastern Shore
|
|
Delaware/Maryland/
Pennsylvania
|
|
17,965
|
|
|
447,041
|
|
||
Peninsula Pipeline
|
|
Florida
|
|
5,571
|
|
|
115,685
|
|
||
|
|
|
|
|
|
|
||||
Electric Distribution
|
|
|
|
|
|
|
||||
FPU
|
|
Florida
|
|
640
|
|
|
170,855
|
|
||
Total Regulated Energy
|
|
|
|
$
|
47,770
|
|
|
$
|
1,434,066
|
|
|
|
|
|
|||||||||||||||
|
|
Delmarva
Natural Gas Distribution
|
|
Florida
Natural Gas Distribution (2)
|
|
FPU
Electric
Distribution
|
||||||||||||
Operating Revenues (in thousands)
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential
|
|
$
|
62,708
|
|
60
|
%
|
|
$
|
38,248
|
|
34
|
%
|
|
$
|
45,738
|
|
59
|
%
|
Commercial
|
|
33,070
|
|
32
|
%
|
|
33,126
|
|
30
|
%
|
|
38,254
|
|
49
|
%
|
|||
Industrial
|
|
8,314
|
|
8
|
%
|
|
37,202
|
|
34
|
%
|
|
2,128
|
|
3
|
%
|
|||
Other (1)
|
|
152
|
|
<1%
|
|
|
2,327
|
|
2
|
%
|
|
(8,704
|
)
|
(11
|
)%
|
|||
Total Operating Revenues
|
|
$
|
104,244
|
|
100
|
%
|
|
110,903
|
|
100
|
%
|
|
$
|
77,416
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Volumes (in Dts for natural gas/KW Hours for electric)
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential
|
|
3,871,032
|
|
29
|
%
|
|
1,744,486
|
|
4
|
%
|
|
306,445
|
|
47
|
%
|
|||
Commercial
|
|
3,776,388
|
|
29
|
%
|
|
6,190,350
|
|
14
|
%
|
|
310,856
|
|
49
|
%
|
|||
Industrial
|
|
5,358,474
|
|
40
|
%
|
|
32,736,870
|
|
76
|
%
|
|
27,929
|
|
4
|
%
|
|||
Other
|
|
220,541
|
|
2
|
%
|
|
2,574,925
|
|
6
|
%
|
|
—
|
|
—
|
%
|
|||
Total Volumes
|
|
13,226,435
|
|
100
|
%
|
|
43,246,631
|
|
100
|
%
|
|
645,230
|
|
100
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||||
Average Number of Customers (3)
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential
|
|
73,995
|
|
91
|
%
|
|
74,915
|
|
90
|
%
|
|
24,573
|
|
77
|
%
|
|||
Commercial
|
|
7,097
|
|
9
|
%
|
|
5,478
|
|
7
|
%
|
|
7,243
|
|
23
|
%
|
|||
Industrial
|
|
169
|
|
<1%
|
|
|
2,453
|
|
3
|
%
|
|
2
|
|
<1%
|
|
|||
Other
|
|
15
|
|
<1%
|
|
|
12
|
|
<1%
|
|
|
—
|
|
—
|
%
|
|||
Total Average Number of Customers
|
|
81,276
|
|
100
|
%
|
|
82,858
|
|
100
|
%
|
|
31,818
|
|
100
|
%
|
|
Eastern Shore
|
|
Peninsula Pipeline
|
||||||||
Operating Revenues (in thousands)
|
|
|
|
|
|
||||||
Local distribution companies - affiliated (1)
|
$
|
24,709
|
|
33
|
%
|
|
$
|
14,003
|
|
85
|
%
|
Local distribution companies - non-affiliated
|
25,171
|
|
35
|
%
|
|
840
|
|
5
|
%
|
||
Commercial and industrial - affiliated
|
—
|
|
—
|
%
|
|
1,120
|
|
7
|
%
|
||
Commercial and industrial - non-affiliated
|
22,527
|
|
31
|
%
|
|
490
|
|
3
|
%
|
||
Other (2)
|
516
|
|
1
|
%
|
|
—
|
|
—
|
%
|
||
Total Operating Revenues
|
$
|
72,923
|
|
100
|
%
|
|
$
|
16,453
|
|
100
|
%
|
|
|
|
|
|
|
||||||
Contracted firm transportation capacity (in Dts/d)
|
|
|
|
|
|
||||||
Local distribution companies - affiliated
|
125,152
|
|
42
|
%
|
|
243,500
|
|
95
|
%
|
||
Local distribution companies - non-affiliated
|
76,619
|
|
26
|
%
|
|
4,825
|
|
2
|
%
|
||
Commercial and industrial - affiliated
|
—
|
|
—
|
%
|
|
1,500
|
|
1
|
%
|
||
Commercial and industrial - non-affiliated
|
96,348
|
|
32
|
%
|
|
5,100
|
|
2
|
%
|
||
Total Contracted firm transportation capacity
|
298,119
|
|
100
|
%
|
|
254,925
|
|
100
|
%
|
||
|
|
|
|
|
|
||||||
Design day capacity (in Dts/d)
|
298,119
|
|
100
|
%
|
|
254,925
|
|
100
|
%
|
|
Natural Gas Distribution
|
|
|
||||
|
Delmarva
|
Florida
|
Electric Distribution
|
Natural Gas Transmission
|
|||
Operation/Division
|
Delaware
|
Maryland
|
Sandpiper
|
Chesapeake's Florida natural gas division
|
FPU
|
FPU
|
Eastern Shore
|
Regulatory Agency
|
Delaware PSC
|
Maryland PSC
|
Maryland PSC
|
Florida PSC
|
Florida PSC
|
Florida PSC
|
FERC
|
Effective date - Last Rate Order
|
01/01/2017
|
12/1/2007
|
12/01/2019
|
01/14/2010
|
01/14/2010(1)
|
01/03/2018
|
08/01/2017
|
Rate Base (in Rates)
|
Not stated
|
Not stated
|
Not stated
|
$46,680,000
|
$68,940,000
|
$11,850,000
|
Not stated
|
Annual Rate Increase Approved
|
$2,250,000
|
$648,000
|
N/A(2)
|
$2,540,000
|
$7,970,000
|
$1,560,000
|
$9,800,000
|
Capital Structure (in rates)(3)*
|
Not stated
|
LTD: 42.00% STD: 5.00% Equity: 53.00%
|
Not stated
|
LTD: 30.63% STD: 6.26% Equity: 43.49% Other: 19.62%
|
LTD: 30.75% Equity: 46.67% Other: 22.58%
|
LTD: 21.91% STD: 23.50% Equity: 54.59%
|
Not stated
|
Allowed Return on Equity
|
9.75% (4)
|
10.75%(4)
|
Not Stated (5)
|
10.80%(4)
|
10.85%(4)
|
10.25%(4), (6)
|
Not Stated
|
TJCA Refund Status associated with customer rates
|
Refunded
|
Refunded
|
Refunded
|
Retained
|
Retained
|
Refunded
|
Refunded
|
Operation(s)/Division(s)
|
|
Jurisdiction
|
|
Infrastructure mechanism
|
|
Revenue normalization
|
Delaware division
|
|
Delaware
|
|
Yes
|
|
No
|
Maryland division
|
|
Maryland
|
|
No
|
|
Yes
|
Sandpiper Energy
|
|
Maryland
|
|
Yes
|
|
Yes
|
FPU and Central Florida Gas natural gas divisions
|
|
Florida
|
|
Yes
|
|
No
|
FPU electric division
|
|
Florida
|
|
Yes
|
|
No
|
|
|
|
|
Maximum Daily Firm Transportation Capacity (Dts)
|
|
Contract Expiration Date
|
Division
|
|
Pipeline
|
|
|
||
Delmarva Natural Gas Distribution
|
|
Eastern Shore
|
|
125,152
|
|
2020-2028
|
|
|
Columbia Gas(1)
|
|
15,160
|
|
2020-2024
|
|
|
Transco(1)
|
|
27,732
|
|
2019-2028
|
|
|
TETLP(1)
|
|
50,000
|
|
2027
|
|
|
|
|
|
|
|
Florida Natural Gas Distribution
|
|
Gulfstream(2)
|
|
10,000
|
|
2022
|
|
|
FGT
|
|
53,409 - 84,817
|
|
2020-2041
|
|
|
Peninsula Pipeline
|
|
237,500
|
|
2033-2048
|
|
|
Peoples Gas
|
|
2,660
|
|
2024-2035
|
|
|
Florida Southeast Connection
|
|
5,000
|
|
2045
|
|
|
Southern Natural Gas Company
|
|
5,000
|
|
2020
|
Counterparty
|
Area Served by Contract
|
Contracted Amount (MW)
|
Contract Expiration Date
|
Gulf Power Company
|
Northwest Florida
|
Full Requirement*
|
2026
|
FPL
|
Northeast Florida
|
Full Requirement*
|
2026
|
Eight Flags
|
Northeast Florida
|
21
|
2036
|
Rayonier
|
Northeast Florida
|
1.7 to 3.0
|
2036
|
WestRock Company
|
Northwest Florida
|
As-available
|
N/A
|
Operations
|
|
Area Served
|
|
Net Income
|
|
Total Assets
|
||||
(in thousands)
|
|
|
|
|
|
|
||||
Propane Operations (Sharp, FPU and Flo-gas)
|
|
Delaware, Maryland, Virginia,
Pennsylvania, Florida
|
|
$
|
6,297
|
|
|
$
|
134,791
|
|
Energy Transmission (Aspire Energy)
|
|
Ohio
|
|
3,822
|
|
|
94,124
|
|
||
Energy Generation (Eight Flags)
|
|
Florida
|
|
1,908
|
|
|
38,569
|
|
||
Marlin Gas Services
|
|
The Eastern U.S.
|
|
986
|
|
|
27,269
|
|
||
Other
|
|
Other
|
|
382
|
|
|
171
|
|
||
Total
|
|
|
|
$
|
13,395
|
|
|
$
|
294,924
|
|
|
|
Operating Revenues (in thousands)
|
|
Volumes (in thousands of gallons)
|
|
Average Number of Customers (1)
|
||||||||||||||||||||||||||||||||
|
|
Mid-Atlantic
|
|
Florida
|
|
Mid-Atlantic
|
|
Florida
|
|
Mid-Atlantic (2)
|
|
Florida
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Residential bulk
|
|
$
|
26,190
|
|
|
30
|
%
|
|
$
|
6,639
|
|
|
34
|
%
|
|
10,491
|
|
|
18
|
%
|
|
1,489
|
|
|
23
|
%
|
|
27,729
|
|
|
67
|
%
|
|
10,416
|
|
|
60
|
%
|
Residential metered
|
|
9,407
|
|
|
11
|
%
|
|
4,852
|
|
|
25
|
%
|
|
4,146
|
|
|
7
|
%
|
|
818
|
|
|
13
|
%
|
|
9,863
|
|
|
23
|
%
|
|
5,922
|
|
|
34
|
%
|
||
Commercial bulk
|
|
20,079
|
|
|
23
|
%
|
|
4,506
|
|
|
23
|
%
|
|
13,979
|
|
|
24
|
%
|
|
2,372
|
|
|
36
|
%
|
|
4,418
|
|
|
10
|
%
|
|
934
|
|
|
5
|
%
|
||
Commercial metered
|
|
—
|
|
|
—
|
%
|
|
1,971
|
|
|
10
|
%
|
|
—
|
|
|
—
|
%
|
|
814
|
|
|
13
|
%
|
|
—
|
|
|
—
|
%
|
|
271
|
|
|
1
|
%
|
||
Wholesale
|
|
21,154
|
|
|
24
|
%
|
|
862
|
|
|
4
|
%
|
|
25,629
|
|
|
44
|
%
|
|
983
|
|
|
15
|
%
|
|
26
|
|
|
<1%
|
|
|
6
|
|
|
<1%
|
|
||
AutoGas
|
|
4,806
|
|
|
6
|
%
|
|
—
|
|
|
—
|
%
|
|
3,895
|
|
|
7
|
%
|
|
—
|
|
|
—
|
%
|
|
86
|
|
|
<1%
|
|
|
—
|
|
|
—
|
%
|
||
Other (3)
|
|
6,822
|
|
|
6
|
%
|
|
676
|
|
|
4
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Total
|
|
$
|
88,458
|
|
|
100
|
%
|
|
$
|
19,506
|
|
|
100
|
%
|
|
58,140
|
|
|
100
|
%
|
|
6,476
|
|
|
100
|
%
|
|
42,122
|
|
|
100
|
%
|
|
17,549
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
Deliveries
|
|||||||||
|
(in thousands)
|
|
% of Total
|
|
(in thousands Dts)
|
|
% of Total
|
|||||
Supply to Columbia Gas of Ohio
|
$
|
13,391
|
|
|
41
|
%
|
|
2,607
|
|
|
41
|
%
|
Supply to CGC
|
12,544
|
|
|
39
|
%
|
|
1,615
|
|
|
25
|
%
|
|
Supply to Marketers - affiliated
|
1,952
|
|
|
6
|
%
|
|
929
|
|
|
15
|
%
|
|
Supply to Marketers - unaffiliated
|
2,307
|
|
|
7
|
%
|
|
1,096
|
|
|
17
|
%
|
|
Other (including natural gas gathering and processing)
|
2,299
|
|
|
7
|
%
|
|
120
|
|
|
2
|
%
|
|
Total
|
$
|
32,493
|
|
|
100
|
%
|
|
6,367
|
|
|
100
|
%
|
Name
|
|
Age
|
|
Officer Since
|
|
Offices Held During the Past Five Years
|
Jeffry M. Householder
|
|
62
|
|
2010
|
|
President (January 2019 - present) Chief Executive Officer (January 2019 - present) Director (January 2019 - present)
President of FPU (June 2010 - February 2019) |
Beth W. Cooper
|
|
53
|
|
2005
|
|
Executive Vice President (February 2019 - present)
Chief Financial Officer (September 2008 - present)
Senior Vice President (September 2008 - February 2019)
Assistant Corporate Secretary (March 2015 - present) Corporate Secretary (June 2005 - March 2015)
|
James F. Moriarty
|
|
62
|
|
2015
|
|
Executive Vice President (February 2019 - present) General Counsel & Corporate Secretary (March 2015 - present) Chief Policy and Risk Officer (February 2019 - present)
Senior Vice President (February 2017 - February 2019) Vice President (March 2015 - February 2017)
|
Kevin J. Webber
|
|
61
|
|
2010
|
|
Senior Vice President (February 2019 - present) President FPU (February 2019 - present) Vice President Gas Operations and Business Development Florida Business Units (July 2010 - February 2019)
|
•
|
Charters for the Audit Committee, Compensation Committee, Investment Committee, and Corporate Governance Committee of the Board of Directors; and
|
|
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, 2019 through October 31, 2019 (1)
|
406
|
|
|
$
|
94.79
|
|
|
—
|
|
|
—
|
|
November 1, 2019 through November 30, 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
December 1, 2019 through December 31, 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
406
|
|
|
$
|
94.79
|
|
|
—
|
|
|
—
|
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||
Chesapeake Utilities
|
$
|
100
|
|
|
$
|
117
|
|
|
$
|
141
|
|
|
$
|
168
|
|
|
$
|
177
|
|
|
$
|
212
|
|
Industry Index
|
$
|
100
|
|
|
$
|
111
|
|
|
$
|
134
|
|
|
$
|
154
|
|
|
$
|
165
|
|
|
$
|
195
|
|
S&P 500 Index
|
$
|
100
|
|
|
$
|
101
|
|
|
$
|
113
|
|
|
$
|
138
|
|
|
$
|
132
|
|
|
$
|
174
|
|
|
For the Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Operating (1)
|
|
|
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
Regulated Energy
|
$
|
343,006
|
|
|
$
|
345,281
|
|
|
$
|
326,310
|
|
|
$
|
305,689
|
|
|
$
|
301,902
|
|
Unregulated Energy
|
154,150
|
|
|
161,904
|
|
|
140,076
|
|
|
108,364
|
|
|
105,861
|
|
|||||
Other businesses and eliminations
|
(17,552
|
)
|
|
(16,869
|
)
|
|
(16,740
|
)
|
|
(9,318
|
)
|
|
(3,920
|
)
|
|||||
Total revenues
|
$
|
479,604
|
|
|
$
|
490,316
|
|
|
$
|
449,646
|
|
|
$
|
404,735
|
|
|
$
|
403,843
|
|
Operating income from Continuing Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Regulated Energy
|
$
|
86,584
|
|
|
$
|
79,215
|
|
|
$
|
74,584
|
|
|
$
|
71,515
|
|
|
$
|
62,137
|
|
Unregulated Energy
|
19,939
|
|
|
17,124
|
|
|
14,941
|
|
|
11,732
|
|
|
14,244
|
|
|||||
Other businesses and eliminations
|
(236
|
)
|
|
(1,496
|
)
|
|
205
|
|
|
402
|
|
|
418
|
|
|||||
Total operating income from Continuing Operations
|
$
|
106,287
|
|
|
$
|
94,843
|
|
|
$
|
89,730
|
|
|
$
|
83,649
|
|
|
$
|
76,799
|
|
Income from Continuing Operations
|
$
|
61,142
|
|
|
$
|
56,862
|
|
|
$
|
60,326
|
|
|
$
|
43,284
|
|
|
$
|
39,813
|
|
Income/(Loss) from Discontinued Operations, Net of tax
|
(1,391
|
)
|
|
(282
|
)
|
|
(2,202
|
)
|
|
1,391
|
|
|
1,327
|
|
|||||
Gain on sale of Discontinued Operations, Net of Tax
|
5,402
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net Income
|
$
|
65,153
|
|
|
$
|
56,580
|
|
|
$
|
58,124
|
|
|
$
|
44,675
|
|
|
$
|
41,140
|
|
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross property, plant and equipment (1)
|
$
|
1,746,532
|
|
|
$
|
1,568,441
|
|
|
$
|
1,310,993
|
|
|
$
|
1,175,595
|
|
|
$
|
1,007,489
|
|
Net property, plant and equipment (1)
|
$
|
1,463,797
|
|
|
$
|
1,353,520
|
|
|
$
|
1,124,938
|
|
|
$
|
986,664
|
|
|
$
|
854,951
|
|
Total assets (2)
|
$
|
1,783,198
|
|
|
$
|
1,693,671
|
|
|
$
|
1,414,934
|
|
|
$
|
1,229,219
|
|
|
$
|
1,067,421
|
|
Capital expenditures (3)
|
$
|
198,986
|
|
|
$
|
282,861
|
|
|
$
|
179,337
|
|
|
$
|
169,376
|
|
|
$
|
195,261
|
|
Capitalization
|
|
|
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders’ equity
|
$
|
561,577
|
|
|
$
|
518,439
|
|
|
$
|
486,294
|
|
|
$
|
446,086
|
|
|
$
|
358,138
|
|
Long-term debt, net of current maturities
|
440,168
|
|
|
316,020
|
|
|
197,395
|
|
|
136,954
|
|
|
149,006
|
|
|||||
Total capitalization
|
$
|
1,001,745
|
|
|
$
|
834,459
|
|
|
$
|
683,689
|
|
|
$
|
583,040
|
|
|
$
|
507,144
|
|
Current portion of long-term debt
|
45,600
|
|
|
11,935
|
|
|
9,421
|
|
|
12,099
|
|
|
9,151
|
|
|||||
Short-term debt
|
247,371
|
|
|
294,458
|
|
|
250,969
|
|
|
209,871
|
|
|
173,397
|
|
|||||
Total capitalization and short-term financing
|
$
|
1,294,716
|
|
|
$
|
1,140,852
|
|
|
$
|
944,079
|
|
|
$
|
805,010
|
|
|
$
|
689,692
|
|
|
For the Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Common Stock Data and Ratios
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic Earnings Per Share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings Per Share from Continuing Operations
|
$
|
3.73
|
|
|
$
|
3.48
|
|
|
$
|
3.69
|
|
|
$
|
2.78
|
|
|
$
|
2.64
|
|
Earnings/(Loss) Per Share from Discontinued Operations
|
0.24
|
|
|
(0.02
|
)
|
|
(0.13
|
)
|
|
0.09
|
|
|
0.09
|
|
|||||
Basic Earnings Per Share
|
$
|
3.97
|
|
|
$
|
3.46
|
|
|
$
|
3.56
|
|
|
$
|
2.87
|
|
|
$
|
2.73
|
|
Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings Per Share from Continuing Operations
|
$
|
3.72
|
|
|
$
|
3.47
|
|
|
$
|
3.68
|
|
|
$
|
2.77
|
|
|
$
|
2.63
|
|
Earnings/(Loss) Per Share from Discontinued Operations
|
0.24
|
|
|
(0.02
|
)
|
|
(0.13
|
)
|
|
0.09
|
|
|
0.09
|
|
|||||
Diluted Earnings Per Share
|
$
|
3.96
|
|
|
$
|
3.45
|
|
|
$
|
3.55
|
|
|
$
|
2.86
|
|
|
$
|
2.72
|
|
Diluted earnings per share growth - 1 year (1)
|
7.2
|
%
|
|
(5.7
|
)%
|
|
32.9
|
%
|
|
5.3
|
%
|
|
11.0
|
%
|
|||||
Diluted earnings per share growth - 5 year (1)
|
9.4
|
%
|
|
10.0
|
%
|
|
14.3
|
%
|
|
9.0
|
%
|
|
8.9
|
%
|
|||||
Diluted earnings per share growth - 10 year (1)
|
11.3
|
%
|
|
11.3
|
%
|
|
11.5
|
%
|
|
9.8
|
%
|
|
8.9
|
%
|
|||||
Return on average equity (1)
|
11.3
|
%
|
|
11.2
|
%
|
|
13.0
|
%
|
|
11.0
|
%
|
|
11.7
|
%
|
|||||
Common equity / total capitalization
|
56.1
|
%
|
|
62.1
|
%
|
|
71.1
|
%
|
|
76.5
|
%
|
|
70.6
|
%
|
|||||
Common equity / total capitalization and short-term financing
|
43.4
|
%
|
|
45.4
|
%
|
|
51.5
|
%
|
|
55.4
|
%
|
|
51.9
|
%
|
|||||
Capital expenditures / average total capitalization (1)
|
21.7
|
%
|
|
37.3
|
%
|
|
30.2
|
%
|
|
31.1
|
%
|
|
29.5
|
%
|
|||||
Book value per share
|
$
|
34.23
|
|
|
$
|
31.65
|
|
|
$
|
29.75
|
|
|
$
|
27.36
|
|
|
$
|
23.45
|
|
Weighted average number of shares outstanding
|
16,398,443
|
|
|
16,369,616
|
|
|
16,336,789
|
|
|
15,570,539
|
|
|
15,094,423
|
|
|||||
Shares outstanding at year-end
|
16,403,776
|
|
|
16,378,545
|
|
|
16,344,442
|
|
|
16,303,499
|
|
|
15,270,659
|
|
|||||
Cash dividends declared per share
|
$
|
1.59
|
|
|
$
|
1.44
|
|
|
$
|
1.28
|
|
|
$
|
1.20
|
|
|
$
|
1.13
|
|
Dividend yield (annualized) (2)
|
1.7
|
%
|
|
1.8
|
%
|
|
1.7
|
%
|
|
1.8
|
%
|
|
2.0
|
%
|
|||||
Book yield (3)
|
4.8
|
%
|
|
4.7
|
%
|
|
4.5
|
%
|
|
4.7
|
%
|
|
5.1
|
%
|
|||||
Payout ratio (1)(4)
|
42.6
|
%
|
|
41.4
|
%
|
|
34.7
|
%
|
|
43.2
|
%
|
|
42.8
|
%
|
|||||
Additional Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Customers
|
|
|
|
|
|
|
|
|
|
||||||||||
Natural gas distribution
|
164,134
|
|
|
158,387
|
|
|
153,537
|
|
|
149,179
|
|
|
144,872
|
|
|||||
Electric distribution
|
31,818
|
|
|
32,185
|
|
|
32,026
|
|
|
31,695
|
|
|
31,430
|
|
|||||
Propane operations
|
59,671
|
|
|
56,915
|
|
|
54,760
|
|
|
54,947
|
|
|
53,682
|
|
|||||
Total employees
|
955
|
|
|
983
|
|
|
945
|
|
|
903
|
|
|
832
|
|
(in thousands except per share data)
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
||||||||||||
For the Year Ended December 31,
|
2019
|
|
2018
|
|
(decrease)
|
|
2018
|
|
2017
|
|
(decrease)
|
||||||||||||
Business Segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Regulated Energy
|
$
|
86,584
|
|
|
$
|
79,215
|
|
|
$
|
7,369
|
|
|
$
|
79,215
|
|
|
$
|
74,584
|
|
|
$
|
4,631
|
|
Unregulated Energy
|
19,939
|
|
|
17,124
|
|
|
2,815
|
|
|
17,124
|
|
|
14,941
|
|
|
2,183
|
|
||||||
Other businesses and eliminations
|
(236
|
)
|
|
(1,496
|
)
|
|
1,260
|
|
|
(1,496
|
)
|
|
205
|
|
|
(1,701
|
)
|
||||||
Operating Income
|
106,287
|
|
|
94,843
|
|
|
11,444
|
|
|
94,843
|
|
|
89,730
|
|
|
5,113
|
|
||||||
Other expense, net
|
(1,830
|
)
|
|
(603
|
)
|
|
(1,227
|
)
|
|
(603
|
)
|
|
(2,204
|
)
|
|
1,601
|
|
||||||
Interest charges
|
22,224
|
|
|
16,146
|
|
|
6,078
|
|
|
16,146
|
|
|
12,530
|
|
|
3,616
|
|
||||||
Income from Continuing Operations Before Income Taxes
|
82,233
|
|
|
78,094
|
|
|
4,139
|
|
|
78,094
|
|
|
74,996
|
|
|
3,098
|
|
||||||
Income Taxes on Continuing Operations
|
21,091
|
|
|
21,232
|
|
|
(141
|
)
|
|
21,232
|
|
|
14,670
|
|
|
6,562
|
|
||||||
Income from Continuing Operations
|
61,142
|
|
|
56,862
|
|
|
4,280
|
|
|
56,862
|
|
|
60,326
|
|
|
(3,464
|
)
|
||||||
Loss from Discontinued Operations, Net of tax
|
(1,391
|
)
|
|
(282
|
)
|
|
(1,109
|
)
|
|
(282
|
)
|
|
(2,202
|
)
|
|
1,920
|
|
||||||
Gain on sale of Discontinued Operations, Net of tax
|
5,402
|
|
|
—
|
|
|
5,402
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net Income
|
$
|
65,153
|
|
|
$
|
56,580
|
|
|
$
|
8,573
|
|
|
$
|
56,580
|
|
|
$
|
58,124
|
|
|
$
|
(1,544
|
)
|
Basic Earnings Per Share of Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings Per Share from Continuing Operations
|
$
|
3.73
|
|
|
$
|
3.48
|
|
|
$
|
0.25
|
|
|
$
|
3.48
|
|
|
$
|
3.69
|
|
|
$
|
(0.21
|
)
|
Earnings/(loss) Per Share from Discontinued Operations
|
0.24
|
|
|
(0.02
|
)
|
|
0.26
|
|
|
(0.02
|
)
|
|
(0.13
|
)
|
|
0.11
|
|
||||||
Basic Earnings Per Share of Common Stock
|
$
|
3.97
|
|
|
$
|
3.46
|
|
|
$
|
0.51
|
|
|
$
|
3.46
|
|
|
$
|
3.56
|
|
|
$
|
(0.10
|
)
|
Diluted Earnings Per Share of Common Stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings Per Share from Continuing Operations
|
$
|
3.72
|
|
|
$
|
3.47
|
|
|
$
|
0.25
|
|
|
$
|
3.47
|
|
|
$
|
3.68
|
|
|
$
|
(0.21
|
)
|
Earnings/(loss) Per Share from Discontinued Operations
|
0.24
|
|
|
(0.02
|
)
|
|
0.26
|
|
|
(0.02
|
)
|
|
(0.13
|
)
|
|
0.11
|
|
||||||
Diluted Earnings Per Share of Common Stock
|
$
|
3.96
|
|
|
$
|
3.45
|
|
|
$
|
0.51
|
|
|
$
|
3.45
|
|
|
$
|
3.55
|
|
|
$
|
(0.10
|
)
|
(in thousands, except per share data)
|
|
Pre-tax
Income |
|
Net
Income |
|
Earnings
Per Share |
||||||
Year ended December 31, 2018 Reported Results from Continuing Operations
|
|
$
|
78,094
|
|
|
$
|
56,862
|
|
|
$
|
3.47
|
|
Adjusting for unusual items:
|
|
|
|
|
|
|
||||||
Decreased customer consumption - primarily due to warmer weather
|
|
(4,852
|
)
|
|
(3,607
|
)
|
|
(0.22
|
)
|
|||
Nonrecurring separation expenses associated with a former executive
|
|
1,548
|
|
|
1,421
|
|
|
0.09
|
|
|||
2018 retained tax savings for certain Florida natural gas operations*
|
|
1,321
|
|
|
990
|
|
|
0.06
|
|
|||
Lower wholesale propane margins due to non-recurring impact of the 2018 Bomb Cyclone
|
|
(866
|
)
|
|
(644
|
)
|
|
(0.04
|
)
|
|||
Pension settlement expense associated with the de-risking of the Chesapeake Utilities Pension Plan (1)
|
|
(693
|
)
|
|
(515
|
)
|
|
(0.03
|
)
|
|||
|
|
(3,542
|
)
|
|
(2,355
|
)
|
|
(0.14
|
)
|
|||
Increased (Decreased) Gross Margins:
|
|
|
|
|
|
|
||||||
Eastern Shore and Peninsula Pipeline service expansions (including related Florida natural gas distribution operation expansions)*
|
|
12,600
|
|
|
9,369
|
|
|
0.57
|
|
|||
Margin contribution from Unregulated Energy acquisitions*
|
|
6,830
|
|
|
5,078
|
|
|
0.31
|
|
|||
Natural gas distribution growth (excluding service expansions)
|
|
4,718
|
|
|
3,508
|
|
|
0.21
|
|
|||
Increased retail propane margins
|
|
3,229
|
|
|
2,401
|
|
|
0.15
|
|
|||
Retained tax savings for certain Florida natural gas operations in 2019 associated with TCJA*
|
|
1,023
|
|
|
760
|
|
|
0.05
|
|
|||
Sandpiper's margin primarily from natural gas conversions
|
|
983
|
|
|
731
|
|
|
0.04
|
|
|||
Higher Aspire Energy margins from rate increases
|
|
518
|
|
|
385
|
|
|
0.02
|
|
|||
Florida GRIP*
|
|
508
|
|
|
378
|
|
|
0.02
|
|
|||
Higher Eight Flags margin from increased production
|
|
418
|
|
|
311
|
|
|
0.02
|
|
|||
|
|
30,827
|
|
|
22,921
|
|
|
1.39
|
|
|||
(Increased) Decreased Other Operating Expenses (Excluding Cost of Sales):
|
|
|
|
|
|
|
||||||
Depreciation, amortization and property tax costs due to new capital investments
|
|
(5,727
|
)
|
|
(4,258
|
)
|
|
(0.26
|
)
|
|||
Operating expenses for Unregulated Energy acquisitions
|
|
(4,636
|
)
|
|
(3,447
|
)
|
|
(0.21
|
)
|
|||
Payroll, benefits and other employee-related expenses
|
|
(4,204
|
)
|
|
(3,126
|
)
|
|
(0.19
|
)
|
|||
Insurance expense (non-health) - both insured and self-insured components
|
|
(2,267
|
)
|
|
(1,685
|
)
|
|
(0.10
|
)
|
|||
Stock compensation expense associated with leadership transitions during 2019
|
|
(1,114
|
)
|
|
(828
|
)
|
|
(0.05
|
)
|
|||
Vehicle expenses due to additional fleet to support growth
|
|
(309
|
)
|
|
(230
|
)
|
|
(0.01
|
)
|
|||
Timing of excavation and inspection activities in 2018 to comply with the Company's integrity management program
|
|
1,733
|
|
|
1,289
|
|
|
0.08
|
|
|||
Facilities and maintenance costs due to consolidation of facilities
|
|
581
|
|
|
432
|
|
|
0.03
|
|
|||
|
|
|
|
|
|
|
||||||
|
|
(15,943
|
)
|
|
(11,853
|
)
|
|
(0.71
|
)
|
|||
Other income tax effects
|
|
—
|
|
|
816
|
|
|
0.05
|
|
|||
Interest charges
|
|
(6,078
|
)
|
|
(4,519
|
)
|
|
(0.27
|
)
|
|||
Net Other changes
|
|
(1,125
|
)
|
|
(730
|
)
|
|
(0.07
|
)
|
|||
Year ended December 31, 2019 Reported Results from Continuing Operations
|
|
$
|
82,233
|
|
|
$
|
61,142
|
|
|
$
|
3.72
|
|
|
|
Gross Margin for the Period
|
||||||||||||||||||
|
|
Year Ended December 31,
|
|
Estimate for Fiscal
|
||||||||||||||||
(in thousands)
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
||||||||||
Expansions:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2017 Eastern Shore System Expansion - including interim services
|
|
$
|
483
|
|
|
$
|
9,103
|
|
|
$
|
16,434
|
|
|
$
|
15,799
|
|
|
$
|
15,799
|
|
Northwest Florida Expansion (including related natural gas distribution services)
|
|
—
|
|
|
4,350
|
|
|
6,516
|
|
|
6,500
|
|
|
6,500
|
|
|||||
Western Palm Beach County, Florida Expansion
|
|
—
|
|
|
54
|
|
|
2,139
|
|
|
5,047
|
|
|
5,227
|
|
|||||
Del-Mar Energy Pathway - including interim services
|
|
—
|
|
|
—
|
|
|
731
|
|
|
2,512
|
|
|
4,100
|
|
|||||
Auburndale
|
|
—
|
|
|
—
|
|
|
283
|
|
|
679
|
|
|
679
|
|
|||||
Callahan Intrastate Pipeline
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,219
|
|
|
6,400
|
|
|||||
Guernsey Power Station
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,400
|
|
|||||
Total Expansions
|
|
483
|
|
|
13,507
|
|
|
26,103
|
|
|
33,756
|
|
|
40,105
|
|
|||||
Acquisitions:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Marlin Gas Services
|
|
—
|
|
|
110
|
|
|
5,410
|
|
|
6,400
|
|
|
7,000
|
|
|||||
Ohl Propane
|
|
—
|
|
|
—
|
|
|
1,200
|
|
|
1,236
|
|
|
1,250
|
|
|||||
Boulden Propane
|
|
—
|
|
|
—
|
|
|
329
|
|
|
4,000
|
|
|
4,200
|
|
|||||
Elkton Gas Company
|
|
—
|
|
|
—
|
|
|
—
|
|
|
TBD (4)
|
|
|
TBD
|
|
|||||
Total Acquisitions
|
|
—
|
|
|
110
|
|
|
6,939
|
|
|
11,636
|
|
|
12,450
|
|
|||||
Regulatory Initiatives:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Florida GRIP(1) (2)
|
|
13,454
|
|
|
13,020
|
|
|
13,528
|
|
|
14,858
|
|
|
15,831
|
|
|||||
Tax benefit retained by certain Florida entities(3)
|
|
—
|
|
|
—
|
|
|
2,740
|
|
|
1,400
|
|
|
1,500
|
|
|||||
Hurricane Michael regulatory proceeding
|
|
—
|
|
|
—
|
|
|
—
|
|
|
TBD
|
|
|
TBD
|
|
|||||
Total Regulatory Initiatives
|
|
13,454
|
|
|
13,020
|
|
|
16,268
|
|
|
16,258
|
|
|
17,331
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
|
|
$
|
13,937
|
|
|
$
|
26,637
|
|
|
$
|
49,310
|
|
|
$
|
61,650
|
|
|
$
|
69,886
|
|
|
For the Years Ended December 31,
|
||||||||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
2018
|
|
2017
|
|
Variance
|
||||||
Delmarva
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual HDD
|
4,089
|
|
|
4,251
|
|
|
(162
|
)
|
|
4,251
|
|
|
3,800
|
|
|
451
|
|
10-Year Average HDD ("Normal")
|
4,323
|
|
|
4,379
|
|
|
(56
|
)
|
|
4,379
|
|
|
4,374
|
|
|
5
|
|
Variance from Normal
|
(234
|
)
|
|
(128
|
)
|
|
|
|
(128
|
)
|
|
(574
|
)
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Florida
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual HDD
|
619
|
|
|
780
|
|
|
(161
|
)
|
|
780
|
|
|
533
|
|
|
247
|
|
10-Year Average HDD ("Normal")
|
792
|
|
|
800
|
|
|
(8
|
)
|
|
800
|
|
|
818
|
|
|
(18
|
)
|
Variance from Normal
|
(173
|
)
|
|
(20
|
)
|
|
|
|
(20
|
)
|
|
(285
|
)
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ohio
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual HDD
|
5,498
|
|
|
5,845
|
|
|
(347
|
)
|
|
5,845
|
|
|
5,126
|
|
|
719
|
|
10-Year Average HDD ("Normal")
|
5,983
|
|
|
5,823
|
|
|
160
|
|
|
5,823
|
|
|
5,914
|
|
|
(91
|
)
|
Variance from Normal
|
(485
|
)
|
|
22
|
|
|
|
|
22
|
|
|
(788
|
)
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Florida
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual CDD
|
3,200
|
|
|
3,105
|
|
|
95
|
|
|
3,105
|
|
|
3,013
|
|
|
92
|
|
10-Year Average CDD ("Normal")
|
2,939
|
|
|
2,889
|
|
|
50
|
|
|
2,889
|
|
|
2,865
|
|
|
24
|
|
Variance from Normal
|
261
|
|
|
216
|
|
|
|
|
216
|
|
|
148
|
|
|
|
|
|
Gross Margin increase
|
||||||
|
|
For the Year Ended December 31, 2019
|
||||||
(in thousands)
|
|
Delmarva
|
|
Florida
|
||||
Customer growth:
|
|
|
|
|
||||
Residential
|
|
$
|
1,179
|
|
|
$
|
769
|
|
Commercial and industrial, excluding the impact of the Northwest Florida expansion project
|
|
664
|
|
|
2,106
|
|
||
Total customer growth
|
|
$
|
1,843
|
|
|
$
|
2,875
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
||||||||||||
For the Year Ended December
|
2019
|
|
2018
|
|
(decrease)
|
|
2018
|
|
2017
|
|
(decrease)
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
343,006
|
|
|
$
|
345,281
|
|
|
$
|
(2,275
|
)
|
|
$
|
345,281
|
|
|
$
|
326,310
|
|
|
$
|
18,971
|
|
Cost of sales
|
102,803
|
|
|
121,828
|
|
|
(19,025
|
)
|
|
121,828
|
|
|
118,769
|
|
|
3,059
|
|
||||||
Gross margin
|
240,203
|
|
|
223,453
|
|
|
16,750
|
|
|
223,453
|
|
|
207,541
|
|
|
15,912
|
|
||||||
Operations & maintenance
|
102,099
|
|
|
97,741
|
|
|
4,358
|
|
|
97,741
|
|
|
90,931
|
|
|
6,810
|
|
||||||
Gain from a settlement
|
(130
|
)
|
|
(130
|
)
|
|
—
|
|
|
(130
|
)
|
|
(130
|
)
|
|
—
|
|
||||||
Depreciation & amortization
|
35,227
|
|
|
31,876
|
|
|
3,351
|
|
|
31,876
|
|
|
28,554
|
|
|
3,322
|
|
||||||
Other taxes
|
16,423
|
|
|
14,751
|
|
|
1,672
|
|
|
14,751
|
|
|
13,602
|
|
|
1,149
|
|
||||||
Other operating expenses
|
153,619
|
|
|
144,238
|
|
|
9,381
|
|
|
144,238
|
|
|
132,957
|
|
|
11,281
|
|
||||||
Operating Income
|
$
|
86,584
|
|
|
$
|
79,215
|
|
|
$
|
7,369
|
|
|
$
|
79,215
|
|
|
$
|
74,584
|
|
|
$
|
4,631
|
|
(in thousands)
|
Margin Impact
|
||
Eastern Shore and Peninsula Pipeline service expansions (including related Florida natural gas distribution operation expansions)
|
$
|
12,600
|
|
Natural gas distribution - customer growth (excluding service expansions)
|
4,718
|
|
|
2018 retained tax savings for certain Florida natural gas distribution operations
|
1,321
|
|
|
Retained tax savings for certain Florida natural gas operations in 2019 associated with TCJA
|
1,023
|
|
|
Sandpiper's margin primarily from natural gas conversions
|
983
|
|
|
Florida GRIP (1)
|
508
|
|
|
Decreased customer consumption - primarily due to warmer weather
|
(3,295
|
)
|
|
Other
|
(1,108
|
)
|
|
Year-over-year increase in gross margin
|
$
|
16,750
|
|
•
|
$7.3 million from Eastern Shore's services in conjunction with its 2017 System Expansion Project.
|
•
|
$4.6 million generated from Peninsula Pipeline's Western Palm Beach County Pipeline, Northwest Pipeline Expansion and Auburndale Projects.
|
•
|
$0.7 million generated from interim services in advance of Eastern Shore's Del-Mar Energy Pathway Project.
|
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
||||||||||||
For the Year Ended December 31,
|
2019
|
|
2018
|
|
(decrease)
|
|
2018
|
|
2017
|
|
(decrease)
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
154,150
|
|
|
$
|
161,904
|
|
|
$
|
(7,754
|
)
|
|
$
|
161,904
|
|
|
$
|
140,076
|
|
|
$
|
21,828
|
|
Cost of sales
|
68,884
|
|
|
84,708
|
|
|
(15,824
|
)
|
|
84,708
|
|
|
69,716
|
|
|
14,992
|
|
||||||
Gross margin
|
85,266
|
|
|
77,196
|
|
|
8,070
|
|
|
77,196
|
|
|
70,360
|
|
|
6,836
|
|
||||||
Operations & maintenance
|
52,038
|
|
|
48,697
|
|
|
3,341
|
|
|
48,697
|
|
|
44,833
|
|
|
3,864
|
|
||||||
Depreciation & amortization
|
10,129
|
|
|
8,263
|
|
|
1,866
|
|
|
8,263
|
|
|
7,741
|
|
|
522
|
|
||||||
Other taxes
|
3,160
|
|
|
3,112
|
|
|
48
|
|
|
3,112
|
|
|
2,845
|
|
|
267
|
|
||||||
Other operating expenses
|
65,327
|
|
|
60,072
|
|
|
5,255
|
|
|
60,072
|
|
|
55,419
|
|
|
4,653
|
|
||||||
Operating Income
|
$
|
19,939
|
|
|
$
|
17,124
|
|
|
$
|
2,815
|
|
|
$
|
17,124
|
|
|
$
|
14,941
|
|
|
$
|
2,183
|
|
(in thousands)
|
|
Margin Impact
|
||
Marlin Gas Services (acquired assets of Marlin Gas Transport in December 2018)
|
|
$
|
5,300
|
|
Propane Operations:
|
|
|
||
Increased retail propane margins per gallon driven by favorable market conditions and supply management
|
|
3,229
|
|
|
Ohl acquisition (assets acquired in December 2018)
|
|
1,200
|
|
|
Boulden acquisition (assets acquired in December 2019)
|
|
329
|
|
|
Decrease in customer consumption due primarily to the absence of the 2018 Bomb Cyclone
|
|
(1,800
|
)
|
|
Lower wholesale propane margins due to non-recurring impact of the 2018 Bomb Cyclone
|
|
(866
|
)
|
|
Aspire Energy - higher margins from rate increases
|
|
518
|
|
|
Eight Flags - higher margin from increased production
|
|
418
|
|
|
Other variances
|
|
(258
|
)
|
|
Year-over-year increase in gross margin
|
|
$
|
8,070
|
|
•
|
Increased Retail Propane Margins - Gross margin increased by $3.2 million, due to lower propane inventory costs and favorable market conditions. These market conditions, which include competition with other propane suppliers, as well as the availability and price of alternative energy sources, may fluctuate based on changes in demand, supply and other energy commodity prices.
|
•
|
Ohl Propane - Gross margin increased by $1.2 million as a result of the acquisition of certain assets of Ohl in December 2018.
|
•
|
Boulden Propane - Gross margin increased by $0.3 million as a result of the acquisition of certain assets of Boulden by Sharp in December 2019.
|
•
|
Decreased Customer Consumption Primarily Driven by Weather - Gross margin decreased by $1.1 million for the Mid-Atlantic propane operations due primarily to extreme weather conditions during the January 2018 "Bomb Cyclone," which drove weather-related consumption in 2018, along with warmer weather in the Mid-Atlantic region in 2019. Weather in Florida was approximately 21 percent warmer in 2019 reducing consumption by propane distribution customers and decreasing gross margin by approximately $0.7 million.
|
•
|
Lower Wholesale Propane Margins and Volumes - Gross margin decreased by $0.9 million in 2019 due to a lower margin per gallon and a decrease in volumes delivered for the Mid-Atlantic propane operations as a result of higher demand in 2018 associated with the Bomb Cyclone.
|
•
|
Increased Margin Driven by Changes in Rates - Gross margin increased by $0.5 million, due primarily to changes in customer rates in 2019.
|
•
|
Increased Production - Gross margin increased by $0.4 million as a result of increased production associated with a higher output of electricity after the turbine upgrade.
|
(in thousands)
|
|
||
Operating expenses for unregulated energy acquisitions
|
$
|
3,314
|
|
Depreciation and amortization due to new capital investments
|
1,866
|
|
|
Insurance expense (non-health) - both insured and self-insured components
|
415
|
|
|
Other variances
|
(340
|
)
|
|
Period-over-period increase in other operating expenses
|
$
|
5,255
|
|
•
|
PESCO’s Florida retail operations were sold to Gas South. The initial closing for the transaction was completed in November 2019 with subsequent closings occurring in December 2019.
|
•
|
PESCO’s other non-Florida retail operations and contracts were sold to UET in October 2019.
|
•
|
PESCO’s Mid-Atlantic wholesale contracts and Chesapeake Utilities’ Delaware division, Maryland division and Sandpiper Energy asset management agreements were sold to NJRES in October 2019.
|
•
|
PESCO's producer services portfolio was sold to DFS in December 2019.
|
(in thousands)
|
|
||
Long-term debt - largely for the NYL Shelf Notes issued in November 2018 and Prudential Shelf Notes issued in August 2019
|
$
|
3,007
|
|
Lower capitalization of interest largely as a result of Eastern Shore's 2017 System Expansion Project being fully completed
|
1,309
|
|
|
Higher short-term borrowings to support growth
|
1,186
|
|
|
Term Notes - issued in connection with Hurricane Michael
|
383
|
|
|
Other
|
193
|
|
|
Year-over-year increase
|
$
|
6,078
|
|
|
|
For the Year Ended December 31, 2019
|
||
(dollars in thousands)
|
|
|||
Regulated Energy:
|
|
|
||
Natural gas distribution
|
|
$
|
62,744
|
|
Natural gas transmission
|
|
62,000
|
|
|
Electric distribution
|
|
5,860
|
|
|
Total Regulated Energy
|
|
130,604
|
|
|
Unregulated Energy:
|
|
|
||
Propane distribution (1)
|
|
38,347
|
|
|
Energy transmission
|
|
11,206
|
|
|
Other unregulated energy
|
|
10,481
|
|
|
Total Unregulated Energy
|
|
60,034
|
|
|
Other:
|
|
|
||
Corporate and other businesses
|
|
8,348
|
|
|
Total Other
|
|
8,348
|
|
|
Total 2019 Capital Expenditures
|
|
$
|
198,986
|
|
|
Estimate for Fiscal 2020
|
||||||
(dollars in thousands)
|
Low
|
|
High
|
||||
Regulated Energy:
|
|
|
|
||||
Natural gas distribution
|
$
|
72,000
|
|
|
$
|
83,000
|
|
Natural gas transmission
|
83,000
|
|
|
96,000
|
|
||
Electric distribution
|
5,000
|
|
|
7,000
|
|
||
Total Regulated Energy
|
160,000
|
|
|
186,000
|
|
||
Unregulated Energy:
|
|
|
|
||||
Propane distribution
|
10,000
|
|
|
11,000
|
|
||
Energy transmission
|
6,000
|
|
|
6,000
|
|
||
Other unregulated energy
|
6,000
|
|
|
8,000
|
|
||
Total Unregulated Energy
|
22,000
|
|
|
25,000
|
|
||
Other:
|
|
|
|
||||
Corporate and other businesses
|
3,000
|
|
|
4,000
|
|
||
Total Other
|
3,000
|
|
|
4,000
|
|
||
Total 2020 Expected Capital Expenditures
|
$
|
185,000
|
|
|
$
|
215,000
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||
Long-term debt, net of current maturities
|
$
|
440,168
|
|
|
44
|
%
|
|
$
|
316,020
|
|
|
38
|
%
|
Stockholders’ equity
|
561,577
|
|
|
56
|
%
|
|
518,439
|
|
|
62
|
%
|
||
Total capitalization, excluding short-term borrowings
|
$
|
1,001,745
|
|
|
100
|
%
|
|
$
|
834,459
|
|
|
100
|
%
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||
Short-term debt
|
$
|
247,371
|
|
|
19
|
%
|
|
$
|
294,458
|
|
|
26
|
%
|
Long-term debt, including current maturities
|
485,768
|
|
|
38
|
%
|
|
327,955
|
|
|
29
|
%
|
||
Stockholders’ equity
|
561,577
|
|
|
43
|
%
|
|
518,439
|
|
|
45
|
%
|
||
Total capitalization, including short-term borrowings
|
$
|
1,294,716
|
|
|
100
|
%
|
|
$
|
1,140,852
|
|
|
100
|
%
|
|
|
Total Borrowing Capacity
|
|
Less: Amount of Debt Issued
|
|
Less: Unfunded Commitments
|
|
Remaining Borrowing Capacity
|
||||||||
Shelf Agreement
|
|
|
|
|
|
|
|
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Prudential Shelf Agreement (1)
|
|
$
|
220,000
|
|
|
$
|
(170,000
|
)
|
|
$
|
—
|
|
|
$
|
50,000
|
|
MetLife Shelf Agreement
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
||||
NYL Shelf Agreement (2)
|
|
150,000
|
|
|
(100,000
|
)
|
|
—
|
|
|
50,000
|
|
||||
Total
|
|
$
|
520,000
|
|
|
$
|
(270,000
|
)
|
|
$
|
—
|
|
|
$
|
250,000
|
|
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Average borrowings during the year
|
$
|
257,587
|
|
|
$
|
238,750
|
|
|
$
|
183,561
|
|
Weighted average interest rate for the year
|
3.11
|
%
|
|
2.93
|
%
|
|
2.03
|
%
|
|||
Maximum month-end borrowings
|
$
|
244,190
|
|
|
$
|
290,103
|
|
|
$
|
240,671
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
102,964
|
|
|
$
|
117,362
|
|
|
$
|
110,089
|
|
Investing activities
|
(186,587
|
)
|
|
(256,848
|
)
|
|
(186,895
|
)
|
|||
Financing activities
|
84,519
|
|
|
139,961
|
|
|
78,242
|
|
|||
Net increase in cash and cash equivalents
|
896
|
|
|
475
|
|
|
1,436
|
|
|||
Cash and cash equivalents—beginning of period
|
6,089
|
|
|
5,614
|
|
|
4,178
|
|
|||
Cash and cash equivalents—end of period
|
$
|
6,985
|
|
|
$
|
6,089
|
|
|
$
|
5,614
|
|
•
|
Changes in net accounts receivable and accrued revenue and accounts payable and accrued liabilities decreased cash flows by $45.1 million, in part due to the absence of PESCO which ceased invoicing the majority of its former customers during the middle of the fourth quarter of 2019 and had also settled most of its outstanding vendor obligations at December 31, 2019. The remainder of the decrease was primarily driven by the timing of the receipt of payments from continuing operations.
|
•
|
Changes in net prepaid expenses and other current assets, customer deposits and refunds and other assets and liabilities, net increased cash flows by $38.2 million.
|
•
|
Changes in net regulatory assets and liabilities decreased cash flows by $10.1 million due primarily to the change in fuel costs collected through the various cost recovery mechanisms.
|
•
|
Net income, adjusted for non-cash adjustments and reconciling activities, decreased cash flows by $7.8 million, primarily due to recognition of the gain on the sale of the assets of PESCO, partially offset by increases in depreciation, amortization, and deferred income taxes;
|
•
|
Net cash flows from changes in propane inventory, storage gas and other inventories increased by approximately $6.1 million;
|
•
|
Net cash flows from income taxes receivable decreased by $4.2 million due primarily to the absence of tax refunds associated with lower corporate tax rates implemented in the prior year as a component of the TCJA.
|
•
|
Cash used to pay for capital expenditures was $184.7 million for the year ended December 31, 2019, compared to $240.4 million in December 31, 2018, resulting in increased cash flows of $55.7 million;
|
•
|
Net cash of $24.0 million was primarily used to acquire certain propane operating assets of Boulden in 2019 compared to net cash of $16.7 million used to acquire operating assets of Ohl and Marlin Gas Services in 2018; and
|
•
|
Change in cash flows of $22.9 million for the year ended December 31, 2019 is attributed to the proceeds from the sale of assets and contracts for PESCO.
|
•
|
Decreased cash flows from repayments of short-term borrowing of $95.3 million under our line of credit arrangements;
|
•
|
Increased cash flows of $44.8 million associated with the issuance of long-term debt. For the year ended December 31, 2019, we received net proceeds of $199.6 million from the issuance of Term Notes, Prudential Shelf Notes and uncollateralized senior notes. For the year ended December 31, 2018 we had received $154.8 million in net cash proceeds from the Revolver, the Term Notes and the issuance of the NYL Shelf Notes (Series A) in May and November 2018;
|
•
|
Decreased cash flows of $7.5 million as a result of repayment of long-term debt;
|
•
|
Increased cash flows of $4.8 million as a result of changes in cash overdrafts in 2019; and
|
•
|
Cash dividend payments of $24.7 million in 2019 compared to $22.0 million for 2018.
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
After 2024
|
|
Total
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt (1)
|
$
|
45,600
|
|
|
$
|
38,700
|
|
|
$
|
38,200
|
|
|
$
|
364,100
|
|
|
$
|
486,600
|
|
Operating leases (2)
|
2,104
|
|
|
3,582
|
|
|
3,182
|
|
|
4,916
|
|
|
13,784
|
|
|||||
Purchase obligations (3)
|
|
|
|
|
|
|
|
|
|
||||||||||
Transmission capacity
|
34,484
|
|
|
58,408
|
|
|
47,102
|
|
|
162,273
|
|
|
302,267
|
|
|||||
Storage capacity
|
814
|
|
|
871
|
|
|
109
|
|
|
—
|
|
|
1,794
|
|
|||||
Commodities
|
19,105
|
|
|
104
|
|
|
—
|
|
|
—
|
|
|
19,209
|
|
|||||
Electric supply
|
6,333
|
|
|
12,739
|
|
|
12,838
|
|
|
38,857
|
|
|
70,767
|
|
|||||
Unfunded benefits (4)
|
351
|
|
|
700
|
|
|
607
|
|
|
1,401
|
|
|
3,059
|
|
|||||
Funded benefits (5)
|
4,425
|
|
|
—
|
|
|
—
|
|
|
8,287
|
|
|
12,712
|
|
|||||
Total Contractual Obligations
|
$
|
113,216
|
|
|
$
|
115,104
|
|
|
$
|
102,038
|
|
|
$
|
579,834
|
|
|
$
|
910,192
|
|
(in thousands)
|
Balance at December 31, 2018
|
|
Increase (Decrease) in Fair Market Value
|
|
Less Amounts Settled
|
|
Balance at December 31, 2019
|
||||||||
Sharp
|
$
|
(1,522
|
)
|
|
$
|
1,177
|
|
|
$
|
(1,499
|
)
|
|
$
|
(1,844
|
)
|
Total
|
$
|
(1,522
|
)
|
|
$
|
1,177
|
|
|
$
|
(1,499
|
)
|
|
$
|
(1,844
|
)
|
(in thousands)
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Total Fair Value
|
||||||||||
Price based on Mont Belvieu - Sharp
|
$
|
(1,525
|
)
|
|
$
|
(296
|
)
|
|
$
|
(23
|
)
|
|
—
|
|
|
$
|
(1,844
|
)
|
|
Total
|
$
|
(1,525
|
)
|
|
$
|
(296
|
)
|
|
$
|
(23
|
)
|
|
$
|
—
|
|
|
$
|
(1,844
|
)
|
•
|
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the reporting units within the Unregulated Energy reportable segment.
|
•
|
We evaluated the appropriateness of management’s valuation methodology, including testing the mathematical accuracy of the calculation.
|
•
|
We assessed the historical accuracy of management’s revenue and operating margin forecasts.
|
•
|
We compared the significant assumptions used by management to current industry and economic trends, current and historical performance of each reporting unit, and other relevant factors.
|
•
|
We performed sensitivity analyses of the significant assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions.
|
•
|
We evaluated whether the assumptions were consistent with evidence obtained in other areas of the audit, including testing the Company’s fair value of all reporting units, inclusive of the Regulated and Unregulated Energy reporting units, in relation to the market capitalization of the Company and assessed the results.
|
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Statements of Income
|
|||||||||||
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
(in thousands, except shares and per share data)
|
|
|
|
|
|
||||||
Operating Revenues
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
343,006
|
|
|
$
|
345,281
|
|
|
$
|
326,310
|
|
Unregulated Energy
|
154,150
|
|
|
161,904
|
|
|
140,076
|
|
|||
Other businesses and eliminations
|
(17,552
|
)
|
|
(16,869
|
)
|
|
(16,740
|
)
|
|||
Total operating revenues
|
479,604
|
|
|
490,316
|
|
|
449,646
|
|
|||
Operating Expenses
|
|
|
|
|
|
||||||
Regulated Energy cost of sales
|
102,803
|
|
|
121,828
|
|
|
118,769
|
|
|||
Unregulated Energy and other cost of sales
|
51,697
|
|
|
68,342
|
|
|
53,420
|
|
|||
Operations
|
137,844
|
|
|
132,523
|
|
|
121,949
|
|
|||
Maintenance
|
15,679
|
|
|
14,387
|
|
|
12,701
|
|
|||
Gain from a settlement
|
(130
|
)
|
|
(130
|
)
|
|
(130
|
)
|
|||
Depreciation and amortization
|
45,423
|
|
|
40,220
|
|
|
36,386
|
|
|||
Other taxes
|
20,001
|
|
|
18,303
|
|
|
16,821
|
|
|||
Total operating expenses
|
373,317
|
|
|
395,473
|
|
|
359,916
|
|
|||
Operating Income
|
106,287
|
|
|
94,843
|
|
|
89,730
|
|
|||
Other expense, net
|
(1,830
|
)
|
|
(603
|
)
|
|
(2,204
|
)
|
|||
Interest charges
|
22,224
|
|
|
16,146
|
|
|
12,530
|
|
|||
Income from Continuing Operations Before Income Taxes
|
82,233
|
|
|
78,094
|
|
|
74,996
|
|
|||
Income Taxes on Continuing Operations
|
21,091
|
|
|
21,232
|
|
|
14,670
|
|
|||
Income from Continuing Operations
|
61,142
|
|
|
56,862
|
|
|
60,326
|
|
|||
Loss from Discontinued Operations, Net of tax
|
(1,391
|
)
|
|
(282
|
)
|
|
(2,202
|
)
|
|||
Gain on sale of Discontinued Operations, Net of tax
|
5,402
|
|
|
—
|
|
|
—
|
|
|||
Net Income
|
$
|
65,153
|
|
|
$
|
56,580
|
|
|
$
|
58,124
|
|
|
|
|
|
|
|
||||||
Weighted Average Common Shares Outstanding:
|
|
|
|
|
|
||||||
Basic
|
16,398,443
|
|
|
16,369,616
|
|
|
16,336,789
|
|
|||
Diluted
|
16,448,486
|
|
|
16,419,870
|
|
|
16,383,352
|
|
|||
Basic Earnings Per Share of Common Stock:
|
|
|
|
|
|
||||||
Earnings Per Share from Continuing Operations
|
$
|
3.73
|
|
|
$
|
3.48
|
|
|
$
|
3.69
|
|
Earnings/(Loss) Per Share from Discontinued Operations
|
0.24
|
|
|
(0.02
|
)
|
|
(0.13
|
)
|
|||
Basic Earnings Per Share of Common Stock
|
$
|
3.97
|
|
|
$
|
3.46
|
|
|
$
|
3.56
|
|
|
|
|
|
|
|
||||||
Diluted Earnings Per Share of Common Stock:
|
|
|
|
|
|
||||||
Earnings Per Share from Continuing Operations
|
$
|
3.72
|
|
|
$
|
3.47
|
|
|
$
|
3.68
|
|
Earnings/(Loss) Per Share from Discontinued Operations
|
0.24
|
|
|
(0.02
|
)
|
|
(0.13
|
)
|
|||
Diluted Earnings Per Share of Common Stock
|
$
|
3.96
|
|
|
$
|
3.45
|
|
|
$
|
3.55
|
|
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
|
|||||||||||
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Net Income
|
$
|
65,153
|
|
|
$
|
56,580
|
|
|
$
|
58,124
|
|
Other Comprehensive Income (Loss), net of tax:
|
|
|
|
|
|
||||||
Employee Benefits, net of tax:
|
|
|
|
|
|
||||||
Amortization of prior service cost, net of tax of $(20), $(22) and $(31), respectively
|
(57
|
)
|
|
(55
|
)
|
|
(46
|
)
|
|||
Net gain(loss), net of tax of $368, $(49), and $432, respectively
|
1,052
|
|
|
(108
|
)
|
|
663
|
|
|||
Cash Flow Hedges, net of tax:
|
|
|
|
|
|
||||||
Unrealized (loss) on commodity contract cash flow hedges, net of tax of $(176), $(555) and $(8), respectively
|
(434
|
)
|
|
(1,371
|
)
|
|
(11
|
)
|
|||
Total Other Comprehensive Income (Loss)
|
561
|
|
|
(1,534
|
)
|
|
606
|
|
|||
Comprehensive Income
|
$
|
65,714
|
|
|
$
|
55,046
|
|
|
$
|
58,730
|
|
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Balance Sheets
|
|||||||
|
As of December 31,
|
||||||
Assets
|
2019
|
|
2018
|
||||
(in thousands, except shares and per share data)
|
|
|
|
||||
Property, Plant and Equipment
|
|
|
|
||||
Regulated Energy
|
$
|
1,441,473
|
|
|
$
|
1,297,416
|
|
Unregulated Energy
|
265,209
|
|
|
236,440
|
|
||
Other businesses and eliminations
|
39,850
|
|
|
34,585
|
|
||
Total property, plant and equipment
|
1,746,532
|
|
|
1,568,441
|
|
||
Less: Accumulated depreciation and amortization
|
(336,876
|
)
|
|
(294,089
|
)
|
||
Plus: Construction work in progress
|
54,141
|
|
|
79,168
|
|
||
Net property, plant and equipment
|
1,463,797
|
|
|
1,353,520
|
|
||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
6,985
|
|
|
6,089
|
|
||
Accounts receivable (less allowance for uncollectible accounts of $1,337 and $1,058, respectively)
|
49,562
|
|
|
53,837
|
|
||
Accrued revenue
|
20,846
|
|
|
22,640
|
|
||
Propane inventory, at average cost
|
5,824
|
|
|
9,791
|
|
||
Other inventory, at average cost
|
6,067
|
|
|
7,127
|
|
||
Regulatory assets
|
5,144
|
|
|
4,796
|
|
||
Storage gas prepayments
|
3,541
|
|
|
3,433
|
|
||
Income taxes receivable
|
20,050
|
|
|
15,300
|
|
||
Prepaid expenses
|
13,928
|
|
|
10,079
|
|
||
Derivative assets, at fair value
|
—
|
|
|
82
|
|
||
Other current assets
|
2,879
|
|
|
5,682
|
|
||
Current assets held for sale
|
—
|
|
|
52,681
|
|
||
Total current assets
|
134,826
|
|
|
191,537
|
|
||
Deferred Charges and Other Assets
|
|
|
|
||||
Goodwill
|
32,668
|
|
|
21,568
|
|
||
Other intangible assets, net
|
8,129
|
|
|
3,850
|
|
||
Investments, at fair value
|
9,229
|
|
|
6,711
|
|
||
Operating lease right-of-use assets
|
11,563
|
|
|
—
|
|
||
Regulatory assets
|
73,407
|
|
|
72,422
|
|
||
Receivables and other deferred charges
|
49,579
|
|
|
36,401
|
|
||
Noncurrent assets held for sale
|
—
|
|
|
7,662
|
|
||
Total deferred charges and other assets
|
184,575
|
|
|
148,614
|
|
||
Total Assets
|
$
|
1,783,198
|
|
|
$
|
1,693,671
|
|
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Balance Sheets
|
|||||||
|
As of December 31,
|
||||||
Capitalization and Liabilities
|
2019
|
|
2018
|
||||
(in thousands, except shares and per share data)
|
|
|
|
||||
Capitalization
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Preferred stock, par value $0.01 per share (authorized 2,000,000 shares), no shares issued and outstanding
|
$
|
—
|
|
|
$
|
—
|
|
Common stock, par value $0.4867 per share (authorized 50,000,000 shares)
|
7,984
|
|
|
7,971
|
|
||
Additional paid-in capital
|
259,253
|
|
|
255,651
|
|
||
Retained earnings
|
300,607
|
|
|
261,530
|
|
||
Accumulated other comprehensive loss
|
(6,267
|
)
|
|
(6,713
|
)
|
||
Deferred compensation obligation
|
4,543
|
|
|
3,854
|
|
||
Treasury stock
|
(4,543
|
)
|
|
(3,854
|
)
|
||
Total stockholders’ equity
|
561,577
|
|
|
518,439
|
|
||
Long-term debt, net of current maturities
|
440,168
|
|
|
316,020
|
|
||
Total capitalization
|
1,001,745
|
|
|
834,459
|
|
||
Current Liabilities
|
|
|
|
||||
Current portion of long-term debt
|
45,600
|
|
|
11,935
|
|
||
Short-term borrowing
|
247,371
|
|
|
294,458
|
|
||
Accounts payable
|
54,068
|
|
|
98,681
|
|
||
Customer deposits and refunds
|
30,939
|
|
|
32,620
|
|
||
Accrued interest
|
2,554
|
|
|
2,317
|
|
||
Dividends payable
|
6,644
|
|
|
6,060
|
|
||
Accrued compensation
|
16,236
|
|
|
13,923
|
|
||
Regulatory liabilities
|
5,991
|
|
|
7,883
|
|
||
Derivative liabilities, at fair value
|
1,844
|
|
|
1,604
|
|
||
Other accrued liabilities
|
12,077
|
|
|
10,081
|
|
||
Current liabilities held for sale
|
—
|
|
|
48,672
|
|
||
Total current liabilities
|
423,324
|
|
|
528,234
|
|
||
Deferred Credits and Other Liabilities
|
|
|
|
||||
Deferred income taxes
|
180,656
|
|
|
156,820
|
|
||
Regulatory liabilities
|
127,744
|
|
|
135,039
|
|
||
Environmental liabilities
|
6,468
|
|
|
7,638
|
|
||
Other pension and benefit costs
|
30,569
|
|
|
28,513
|
|
||
Operating lease - liabilities
|
9,896
|
|
|
—
|
|
||
Deferred investment tax credits and other liabilities
|
2,796
|
|
|
2,968
|
|
||
Total deferred credits and other liabilities
|
358,129
|
|
|
330,978
|
|
||
Environmental and other commitments and contingencies (Note 20 and 21)
|
|
|
|
|
|
||
Total Capitalization and Liabilities
|
$
|
1,783,198
|
|
|
$
|
1,693,671
|
|
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Statements of Cash Flows
|
|||||||||||
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net Income
|
$
|
65,153
|
|
|
$
|
56,580
|
|
|
$
|
58,124
|
|
Adjustments to reconcile net income to net operating cash:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
45,900
|
|
|
40,802
|
|
|
36,599
|
|
|||
Depreciation and accretion included in operations expenses
|
8,752
|
|
|
8,535
|
|
|
8,122
|
|
|||
Deferred income taxes, net
|
24,476
|
|
|
21,226
|
|
|
11,085
|
|
|||
Gain on sale of discontinued operations
|
(7,344
|
)
|
|
—
|
|
|
—
|
|
|||
Realized gain (loss) on sale of assets/commodity contracts
|
(4,135
|
)
|
|
5,497
|
|
|
3,179
|
|
|||
Unrealized loss (gain) on investments/commodity contracts
|
(1,595
|
)
|
|
429
|
|
|
(1,001
|
)
|
|||
Employee benefits and compensation
|
1,985
|
|
|
856
|
|
|
1,577
|
|
|||
Share-based compensation
|
4,279
|
|
|
2,813
|
|
|
2,490
|
|
|||
Other, net
|
—
|
|
|
—
|
|
|
(750
|
)
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable and accrued revenue
|
36,489
|
|
|
(16,311
|
)
|
|
(19,506
|
)
|
|||
Propane inventory, storage gas and other inventory
|
8,227
|
|
|
2,107
|
|
|
(9,036
|
)
|
|||
Regulatory assets/liabilities, net
|
(7,812
|
)
|
|
2,250
|
|
|
(2,855
|
)
|
|||
Prepaid expenses and other current assets
|
11,115
|
|
|
(7,421
|
)
|
|
(7,001
|
)
|
|||
Accounts payable and other accrued liabilities
|
(62,021
|
)
|
|
35,907
|
|
|
15,596
|
|
|||
Income taxes receivable (payable)
|
(4,750
|
)
|
|
(522
|
)
|
|
8,110
|
|
|||
Customer deposits and refunds
|
(1,811
|
)
|
|
(596
|
)
|
|
5,513
|
|
|||
Accrued compensation
|
2,120
|
|
|
708
|
|
|
2,488
|
|
|||
Other assets and liabilities, net
|
(16,064
|
)
|
|
(35,498
|
)
|
|
(2,645
|
)
|
|||
Net cash provided by operating activities
|
102,964
|
|
|
117,362
|
|
|
110,089
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Property, plant and equipment expenditures
|
(184,727
|
)
|
|
(240,351
|
)
|
|
(175,329
|
)
|
|||
Proceeds from sale of assets
|
427
|
|
|
782
|
|
|
708
|
|
|||
Acquisitions, net of cash acquired
|
(23,988
|
)
|
|
(16,654
|
)
|
|
(11,945
|
)
|
|||
Proceeds from the sale of discontinued operations
|
22,871
|
|
|
—
|
|
|
—
|
|
|||
Environmental expenditures
|
(1,170
|
)
|
|
(625
|
)
|
|
(329
|
)
|
|||
Net cash used in investing activities
|
(186,587
|
)
|
|
(256,848
|
)
|
|
(186,895
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Common stock dividends
|
(24,693
|
)
|
|
(22,043
|
)
|
|
(19,928
|
)
|
|||
Issuance of stock for Dividend Reinvestment Plan
|
(721
|
)
|
|
(706
|
)
|
|
89
|
|
|||
Proceeds from issuance of common stock, net of expenses
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||
Tax withholding payments related to net settled stock compensation
|
(692
|
)
|
|
(1,210
|
)
|
|
(692
|
)
|
|||
Change in cash overdrafts due to outstanding checks
|
(1,174
|
)
|
|
(5,943
|
)
|
|
1,738
|
|
|||
Net borrowings (repayments) under line of credit agreements
|
(45,913
|
)
|
|
49,432
|
|
|
39,338
|
|
|||
Proceeds from issuance of long-term debt
|
199,648
|
|
|
154,819
|
|
|
69,807
|
|
|||
Repayment of long-term debt and finance lease obligation
|
(41,936
|
)
|
|
(34,388
|
)
|
|
(12,100
|
)
|
|||
Net cash provided by financing activities
|
84,519
|
|
|
139,961
|
|
|
78,242
|
|
|||
Net Increase in Cash and Cash Equivalents
|
896
|
|
|
475
|
|
|
1,436
|
|
|||
Cash and Cash Equivalents — Beginning of Period
|
6,089
|
|
|
5,614
|
|
|
4,178
|
|
|||
Cash and Cash Equivalents — End of Period
|
$
|
6,985
|
|
|
$
|
6,089
|
|
|
$
|
5,614
|
|
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Statements of Stockholders' Equity
|
||||||||||||||||||||||||||||||
|
Common Stock (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
(in thousands, except shares and per share data)
|
Number
of
Shares(2)
|
|
Par
Value
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Deferred
Compensation
|
|
Treasury
Stock
|
|
Total
|
|||||||||||||||
Balance at December 31, 2016
|
16,303,499
|
|
|
$
|
7,935
|
|
|
$
|
250,967
|
|
|
$
|
192,062
|
|
|
$
|
(4,878
|
)
|
|
$
|
2,416
|
|
|
$
|
(2,416
|
)
|
|
$
|
446,086
|
|
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
58,124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58,124
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
606
|
|
|
—
|
|
|
—
|
|
|
606
|
|
|||||||
Dividends declared ($1.2800 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,045
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,045
|
)
|
|||||||
Retirement savings plan and dividend reinvestment plan
|
10,771
|
|
|
5
|
|
|
730
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
735
|
|
|||||||
Stock issuance (3)
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||||
Share-based compensation and tax benefit (4) (5)
|
30,172
|
|
|
15
|
|
|
1,783
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,798
|
|
|||||||
Treasury stock activities(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
979
|
|
|
(979
|
)
|
|
—
|
|
|||||||
Balance at December 31, 2017
|
16,344,442
|
|
|
7,955
|
|
|
253,470
|
|
|
229,141
|
|
|
(4,272
|
)
|
|
3,395
|
|
|
(3,395
|
)
|
|
486,294
|
|
|||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
56,580
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56,580
|
|
|||||||
Cumulative effect of the adoption of ASU 2014-09
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,498
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,498
|
)
|
|||||||
Reclassification upon the adoption of ASU 2018-02
|
—
|
|
|
—
|
|
|
—
|
|
|
907
|
|
|
(907
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,534
|
)
|
|
—
|
|
|
—
|
|
|
(1,534
|
)
|
|||||||
Dividends declared ($1.4350 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,600
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,600
|
)
|
|||||||
Dividend reinvestment plan
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||||
Share-based compensation and tax benefit (4) (5)
|
34,103
|
|
|
16
|
|
|
2,184
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,200
|
|
|||||||
Treasury stock activities(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
459
|
|
|
(459
|
)
|
|
—
|
|
|||||||
Balance at December 31, 2018
|
16,378,545
|
|
|
7,971
|
|
|
255,651
|
|
|
261,530
|
|
|
(6,713
|
)
|
|
3,854
|
|
|
(3,854
|
)
|
|
518,439
|
|
|||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
65,153
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65,153
|
|
|||||||
Prior period reclassification
|
—
|
|
|
—
|
|
|
|
|
115
|
|
|
(115
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
561
|
|
|
—
|
|
|
—
|
|
|
561
|
|
||||||||
Dividends declared ($1.585 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,191
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,191
|
)
|
|||||||
Dividend reinvestment plan
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||||
Share-based compensation and tax benefit (4) (5)
|
25,231
|
|
|
13
|
|
|
3,605
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,618
|
|
|||||||
Treasury stock activities (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
689
|
|
|
(689
|
)
|
|
—
|
|
|||||||
Balances at December 31, 2019
|
16,403,776
|
|
|
$
|
7,984
|
|
|
$
|
259,253
|
|
|
$
|
300,607
|
|
|
$
|
(6,267
|
)
|
|
$
|
4,543
|
|
|
$
|
(4,543
|
)
|
|
$
|
561,577
|
|
|
As of December 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Property, plant and equipment
|
|
|
|
||||
Regulated Energy
|
|
|
|
||||
Natural gas distribution - Delmarva Peninsula and Florida
|
$
|
705,095
|
|
|
$
|
657,630
|
|
Natural gas transmission - Delmarva Peninsula, Pennsylvania and Florida
|
608,727
|
|
|
537,654
|
|
||
Electric distribution
|
127,651
|
|
|
102,133
|
|
||
Unregulated Energy
|
|
|
|
||||
Propane operations – Mid-Atlantic and Florida
|
141,841
|
|
|
123,632
|
|
||
Natural gas transmission and supply – Ohio
|
73,658
|
|
|
70,225
|
|
||
Electricity and steam generation
|
35,436
|
|
|
35,239
|
|
||
Mobile CNG and pipeline solutions
|
14,014
|
|
|
7,240
|
|
||
Other unregulated energy
|
104
|
|
|
104
|
|
||
Other
|
40,006
|
|
|
34,584
|
|
||
Total property, plant and equipment
|
1,746,532
|
|
|
1,568,441
|
|
||
Less: Accumulated depreciation and amortization
|
(336,876
|
)
|
|
(294,089
|
)
|
||
Plus: Construction work in progress
|
54,141
|
|
|
79,168
|
|
||
Net property, plant and equipment
|
$
|
1,463,797
|
|
|
$
|
1,353,520
|
|
|
2019
|
|
2018
|
|
2017
|
Natural gas distribution – Delmarva Peninsula
|
2.5%
|
|
2.5%
|
|
2.5%
|
Natural gas distribution – Florida
|
2.6%
|
|
2.9%
|
|
2.9%
|
Natural gas transmission – Delmarva Peninsula
|
2.6%
|
|
2.7%
|
|
2.8%
|
Natural gas transmission – Florida
|
2.4%
|
|
2.3%
|
|
3.5%
|
Electric distribution
|
3.4%
|
|
3.4%
|
|
3.4%
|
Asset Description
|
Useful Life
|
Propane distribution mains
|
10-37 years
|
Propane bulk plants and tanks
|
10-40 years
|
Propane equipment, 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
|
CHP plant
|
30 years
|
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
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
(in thousands, except shares and per share data)
|
|
|
|
|
|
||||||
Calculation of Basic Earnings Per Share:
|
|
|
|
|
|
||||||
Income from Continuing Operations
|
$
|
61,142
|
|
|
$
|
56,862
|
|
|
$
|
60,326
|
|
Income/(Loss) from Discontinued Operations
|
4,011
|
|
|
(282
|
)
|
|
(2,202
|
)
|
|||
Net Income
|
$
|
65,153
|
|
|
$
|
56,580
|
|
|
$
|
58,124
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding
|
16,398,443
|
|
|
16,369,616
|
|
|
16,336,789
|
|
|||
Earnings Per Share from Continuing Operations
|
$
|
3.73
|
|
|
$
|
3.48
|
|
|
$
|
3.69
|
|
Earnings/(Loss) Per Share from Discontinued Operations
|
0.24
|
|
|
(0.02
|
)
|
|
(0.13
|
)
|
|||
Basic Earnings Per Share
|
$
|
3.97
|
|
|
$
|
3.46
|
|
|
$
|
3.56
|
|
|
|
|
|
|
|
||||||
Calculation of Diluted Earnings Per Share:
|
|
|
|
|
|
||||||
Reconciliation of Denominator:
|
|
|
|
|
|
||||||
Weighted average shares outstanding — Basic
|
16,398,443
|
|
|
16,369,616
|
|
|
16,336,789
|
|
|||
Effect of dilutive securities — Share-based compensation
|
50,043
|
|
|
50,254
|
|
|
46,563
|
|
|||
Adjusted denominator — Diluted
|
16,448,486
|
|
|
16,419,870
|
|
|
16,383,352
|
|
|||
Earnings Per Share from Continuing Operations
|
$
|
3.72
|
|
|
$
|
3.47
|
|
|
$
|
3.68
|
|
Earnings/(Loss) Per Share from Discontinued Operations
|
0.24
|
|
|
(0.02
|
)
|
|
(0.13
|
)
|
|||
Diluted Earnings Per Share
|
$
|
3.96
|
|
|
$
|
3.45
|
|
|
$
|
3.55
|
|
|
|
For the Year Ended
|
||||||
|
|
December 31, 2019
|
||||||
|
|
Operating Revenues
|
|
Operating Income
|
||||
(in thousands)
|
|
|
|
|
||||
Marlin Gas Services
|
|
$
|
5,702
|
|
|
$
|
1,500
|
|
Ohl propane acquisition
|
|
$
|
1,662
|
|
|
$
|
385
|
|
Boulden acquisition
|
|
$
|
550
|
|
|
$
|
239
|
|
•
|
PESCO’s Florida retail operations were sold to Gas South. The initial closing for the transaction was completed in November 2019 with subsequent closings occurring in December 2019.
|
•
|
PESCO’s other non-Florida retail operations and contracts were sold to UET in October 2019.
|
•
|
PESCO’s Mid-Atlantic wholesale contracts and Chesapeake Utilities’ Delaware division, Maryland division and Sandpiper Energy asset management agreements were sold to NJRES in October 2019.
|
•
|
PESCO's producer services portfolio was sold to DFS in December 2019.
|
|
|
For the Year Ended December 31,
|
|||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
|||||||||
Operating revenues(1)
|
|
$
|
161,289
|
|
|
$
|
258,713
|
|
|
$
|
184,519
|
|
|||
Cost of sales(1)
|
|
157,646
|
|
|
252,111
|
|
|
182,307
|
|
||||||
Other operating expenses
|
|
5,222
|
|
|
6,825
|
|
|
4,522
|
|
||||||
Operating loss
|
|
(1,579
|
)
|
|
(223
|
)
|
|
(2,310
|
)
|
||||||
Interest and other expense
|
|
315
|
|
|
297
|
|
|
253
|
|
||||||
Loss from Discontinued Operations before income taxes
|
|
(1,894
|
)
|
|
(520
|
)
|
|
(2,563
|
)
|
||||||
Gain on sale of Discontinued Operations
|
|
7,344
|
|
|
—
|
|
|
—
|
|
||||||
Income tax (benefit) / expense
|
|
1,439
|
|
|
(238
|
)
|
|
(361
|
)
|
||||||
Gain / (Loss) from Discontinued Operations, Net of Tax
|
|
$
|
4,011
|
|
|
$
|
(282
|
)
|
|
$
|
(2,202
|
)
|
|
|
As of
|
|||
(in thousands)
|
|
December 31, 2018
|
|||
Property, plant and equipment
|
|
$
|
1,242
|
|
|
Less: accumulated depreciation
|
|
(206
|
)
|
||
Net property, plant and equipment (1)
|
|
1,036
|
|
||
Current assets (2)
|
|
52,681
|
|
||
Deferred charges and other assets (1)
|
|
6,626
|
|
||
Assets of Discontinued Operations held for sale
|
|
$
|
60,343
|
|
|
|
|
|
|
||
Current liabilities (3)
|
|
$
|
48,672
|
|
|
Liabilities of Discontinued Operations held for sale
|
|
$
|
48,672
|
|
|
Net assets
|
|
$
|
11,671
|
|
|
|
For the Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Depreciation and amortization
|
|
$
|
477
|
|
|
$
|
582
|
|
|
$
|
213
|
|
Property, plant and equipment expenditures
|
|
—
|
|
|
115
|
|
|
11,766
|
|
|||
Deferred income taxes
|
|
(125
|
)
|
|
1,088
|
|
|
(1,515
|
)
|
|||
Realized / (loss) gain on commodity contracts
|
|
(2,161
|
)
|
|
5,002
|
|
|
4,911
|
|
|
|
For the Year Ended December 31, 2019
|
|
For the Year Ended December 31, 2018
|
||||||||||||||||||||||||||||
(in thousands)
|
|
Regulated Energy
|
|
Unregulated Energy
|
|
Other and Eliminations
|
|
Total
|
|
Regulated Energy
|
|
Unregulated Energy
|
|
Other and Eliminations
|
|
Total
|
||||||||||||||||
Energy distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Delaware natural gas division
|
|
$
|
62,659
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62,659
|
|
|
$
|
70,338
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70,338
|
|
Florida natural gas division
|
|
28,485
|
|
|
—
|
|
|
—
|
|
|
28,485
|
|
|
25,341
|
|
|
—
|
|
|
—
|
|
|
25,341
|
|
||||||||
FPU electric distribution
|
|
77,416
|
|
|
—
|
|
|
—
|
|
|
77,416
|
|
|
79,803
|
|
|
—
|
|
|
—
|
|
|
79,803
|
|
||||||||
FPU natural gas distribution
|
|
82,418
|
|
|
—
|
|
|
—
|
|
|
82,418
|
|
|
81,118
|
|
|
—
|
|
|
—
|
|
|
81,118
|
|
||||||||
Maryland natural gas division
|
|
22,517
|
|
|
—
|
|
|
—
|
|
|
22,517
|
|
|
24,172
|
|
|
—
|
|
|
—
|
|
|
24,172
|
|
||||||||
Sandpiper natural gas/propane operations
|
|
19,068
|
|
|
—
|
|
|
—
|
|
|
19,068
|
|
|
22,088
|
|
|
—
|
|
|
—
|
|
|
22,088
|
|
||||||||
Total energy distribution
|
|
292,563
|
|
|
—
|
|
|
—
|
|
|
292,563
|
|
|
302,860
|
|
|
—
|
|
|
—
|
|
|
302,860
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Energy transmission
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Aspire Energy
|
|
—
|
|
|
32,493
|
|
|
—
|
|
|
32,493
|
|
|
—
|
|
|
35,407
|
|
|
—
|
|
|
35,407
|
|
||||||||
Eastern Shore
|
|
72,924
|
|
|
—
|
|
|
—
|
|
|
72,924
|
|
|
64,248
|
|
|
—
|
|
|
—
|
|
|
64,248
|
|
||||||||
Peninsula Pipeline
|
|
16,453
|
|
|
—
|
|
|
—
|
|
|
16,453
|
|
|
11,927
|
|
|
—
|
|
|
—
|
|
|
11,927
|
|
||||||||
Total energy transmission
|
|
89,377
|
|
|
32,493
|
|
|
—
|
|
|
121,870
|
|
|
76,175
|
|
|
35,407
|
|
|
—
|
|
|
111,582
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Energy generation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Eight Flags
|
|
—
|
|
|
16,749
|
|
|
—
|
|
|
16,749
|
|
|
—
|
|
|
17,302
|
|
|
—
|
|
|
17,302
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Propane operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Propane delivery operations
|
|
—
|
|
|
107,964
|
|
|
—
|
|
|
107,964
|
|
|
—
|
|
|
123,603
|
|
|
—
|
|
|
123,603
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Energy delivery services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Marlin Gas Services
|
|
—
|
|
|
5,702
|
|
|
—
|
|
|
5,702
|
|
|
—
|
|
|
121
|
|
|
—
|
|
|
121
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other and eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Eliminations
|
|
(38,934
|
)
|
|
(10,407
|
)
|
|
(18,080
|
)
|
|
(67,421
|
)
|
|
(33,754
|
)
|
|
(16,486
|
)
|
|
(17,522
|
)
|
|
(67,762
|
)
|
||||||||
Other
|
|
—
|
|
|
1,649
|
|
|
528
|
|
|
2,177
|
|
|
—
|
|
|
1,957
|
|
|
653
|
|
|
2,610
|
|
||||||||
Total other and eliminations
|
|
(38,934
|
)
|
|
(8,758
|
)
|
|
(17,552
|
)
|
|
(65,244
|
)
|
|
(33,754
|
)
|
|
(14,529
|
)
|
|
(16,869
|
)
|
|
(65,152
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total operating revenues (1)
|
|
$
|
343,006
|
|
|
$
|
154,150
|
|
|
$
|
(17,552
|
)
|
|
$
|
479,604
|
|
|
$
|
345,281
|
|
|
$
|
161,904
|
|
|
$
|
(16,869
|
)
|
|
$
|
490,316
|
|
|
|
|
|
|
|
|
||||||
|
|
Trade Receivables
|
|
Contract Assets (Noncurrent)
|
|
Contract Liabilities (Current)
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Balance at 12/31/2018
|
|
$
|
52,140
|
|
|
$
|
2,614
|
|
|
$
|
480
|
|
Balance at 12/31/2019
|
|
47,430
|
|
|
3,465
|
|
|
589
|
|
|||
Increase (decrease)
|
|
$
|
(4,710
|
)
|
|
$
|
851
|
|
|
$
|
109
|
|
(in thousands)
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 and thereafter
|
||||||||||||
Eastern Shore and Peninsula Pipeline
|
$
|
37,307
|
|
|
$
|
34,000
|
|
|
$
|
27,034
|
|
|
$
|
21,608
|
|
|
$
|
19,385
|
|
|
$
|
194,868
|
|
Natural gas distribution operations
|
3,996
|
|
|
4,058
|
|
|
5,100
|
|
|
4,916
|
|
|
4,681
|
|
|
37,149
|
|
||||||
FPU electric distribution
|
566
|
|
|
566
|
|
|
566
|
|
|
566
|
|
|
566
|
|
|
1,100
|
|
||||||
Total revenue contracts with remaining performance obligations
|
$
|
41,869
|
|
|
$
|
38,624
|
|
|
$
|
32,700
|
|
|
$
|
27,090
|
|
|
$
|
24,632
|
|
|
$
|
233,117
|
|
•
|
Regulated Energy. Includes energy distribution and transmission services (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. Includes energy transmission, energy generation (the operations of our Eight Flags' CHP plant), propane operations, and our mobile compressed natural gas and pipeline solutions subsidiary. 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. These operations are unregulated as to their rates and services. Effective in the third quarter of 2019, PESCO's results, previously reported in the Unregulated Energy segment, are reflected in discontinued operations. See Note 4, Acquisitions and Divestitures for additional details regarding the divestiture of PESCO.
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Operating Revenues, Unaffiliated Customers
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
340,857
|
|
|
$
|
343,313
|
|
|
$
|
323,972
|
|
Unregulated Energy
|
138,747
|
|
|
147,003
|
|
|
125,674
|
|
|||
Total operating revenues, unaffiliated customers
|
$
|
479,604
|
|
|
$
|
490,316
|
|
|
$
|
449,646
|
|
Intersegment Revenues (1)
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
2,149
|
|
|
$
|
1,968
|
|
|
$
|
2,338
|
|
Unregulated Energy
|
15,403
|
|
|
14,902
|
|
|
14,402
|
|
|||
Other businesses
|
528
|
|
|
652
|
|
|
774
|
|
|||
Total intersegment revenues
|
$
|
18,080
|
|
|
$
|
17,522
|
|
|
$
|
17,514
|
|
Operating Income
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
86,584
|
|
|
$
|
79,215
|
|
|
$
|
74,584
|
|
Unregulated Energy
|
19,939
|
|
|
17,124
|
|
|
14,941
|
|
|||
Other businesses and eliminations
|
(236
|
)
|
|
(1,496
|
)
|
|
205
|
|
|||
Operating Income
|
106,287
|
|
|
94,843
|
|
|
89,730
|
|
|||
Other expense, net
|
(1,830
|
)
|
|
(603
|
)
|
|
(2,204
|
)
|
|||
Interest charges
|
22,224
|
|
|
16,146
|
|
|
12,530
|
|
|||
Income from Continuing Operations before Income Taxes
|
$
|
82,233
|
|
|
$
|
78,094
|
|
|
$
|
74,996
|
|
Income Taxes on Continuing Operations
|
21,091
|
|
|
21,232
|
|
|
14,670
|
|
|||
Income from Continuing Operations
|
61,142
|
|
|
56,862
|
|
|
60,326
|
|
|||
Loss from Discontinued Operations, Net of tax
|
(1,391
|
)
|
|
(282
|
)
|
|
(2,202
|
)
|
|||
Gain on sale of Discontinued Operations, Net of tax
|
5,402
|
|
|
—
|
|
|
—
|
|
|||
Net Income
|
$
|
65,153
|
|
|
$
|
56,580
|
|
|
$
|
58,124
|
|
Depreciation and Amortization
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
35,227
|
|
|
$
|
31,876
|
|
|
$
|
28,554
|
|
Unregulated Energy
|
10,129
|
|
|
8,263
|
|
|
7,741
|
|
|||
Other businesses and eliminations
|
67
|
|
|
81
|
|
|
91
|
|
|||
Total depreciation and amortization
|
$
|
45,423
|
|
|
$
|
40,220
|
|
|
$
|
36,386
|
|
Capital Expenditures
|
|
|
|
|
|
||||||
Regulated Energy
|
$
|
130,604
|
|
|
$
|
235,912
|
|
|
$
|
159,011
|
|
Unregulated Energy
|
60,034
|
|
|
38,585
|
|
|
14,424
|
|
|||
Other businesses
|
8,348
|
|
|
8,364
|
|
|
5,902
|
|
|||
Total capital expenditures
|
$
|
198,986
|
|
|
$
|
282,861
|
|
|
$
|
179,337
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Identifiable Assets (1)
|
|
|
|
||||
Regulated Energy segment
|
$
|
1,434,066
|
|
|
$
|
1,345,805
|
|
Unregulated Energy segment (1)
|
296,810
|
|
|
245,702
|
|
||
Other businesses and eliminations
|
52,322
|
|
|
41,821
|
|
||
Total identifiable assets (1)
|
$
|
1,783,198
|
|
|
$
|
1,633,328
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
22,611
|
|
|
$
|
16,741
|
|
|
$
|
12,420
|
|
Cash paid for income taxes, net of refunds
|
$
|
3,221
|
|
|
$
|
477
|
|
|
$
|
(4,114
|
)
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Capital property and equipment acquired on account, but not paid for as of December 31
|
$
|
13,470
|
|
|
$
|
39,402
|
|
|
$
|
15,457
|
|
Common stock issued under the SICP
|
$
|
1,691
|
|
|
$
|
2,006
|
|
|
$
|
1,127
|
|
Capital lease obligation
|
$
|
—
|
|
|
$
|
1,310
|
|
|
$
|
2,070
|
|
Business unit
|
|
Commodity
|
|
Quantity hedged (in millions)
|
|
Designation
|
|
Longest expiration date of hedge
|
Sharp
|
|
Propane (gallons)
|
|
9.9
|
|
Cash flows hedges
|
|
June 2022
|
(in thousands)
|
Balance Sheet Location
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Sharp
|
Other Current Assets
|
|
$
|
2,317
|
|
|
$
|
2,173
|
|
|
Derivative Assets
|
||||||||
|
|
|
Fair Value as of
|
||||||
(in thousands)
|
Balance Sheet Location
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Derivatives designated as fair value hedges
|
|
|
|
|
|
||||
Propane put options
|
Derivative assets, at fair value
|
|
$
|
—
|
|
|
$
|
71
|
|
Derivatives designated as cash flow hedges
|
|
|
|
|
|
||||
Propane swap agreements
|
Derivative assets, at fair value
|
|
—
|
|
|
11
|
|
||
Total Derivative Assets
|
|
|
$
|
—
|
|
|
$
|
82
|
|
|
Derivative Liabilities
|
||||||||
|
|
|
Fair Value as of
|
||||||
(in thousands)
|
Balance Sheet Location
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
||||
Propane swap agreements
|
Derivative liabilities, at fair value
|
|
$
|
1,844
|
|
|
$
|
1,604
|
|
Total Derivative Liabilities
|
|
|
$
|
1,844
|
|
|
$
|
1,604
|
|
|
Amount of Gain (Loss) on Derivatives:
|
||||||||||||
|
Location of Gain
(Loss) on Derivatives
|
|
For the Year Ended December 31,
|
||||||||||
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
||||||
Realized gain on forward contracts and options (1)
|
Revenue
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
112
|
|
Propane swap agreements
|
Cost of sales
|
|
—
|
|
|
(13
|
)
|
|
8
|
|
|||
Derivatives designated as fair value hedges
|
|
|
|
|
|
|
|
||||||
Put/Call option
|
Cost of sales
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
|
||||||
Propane swap agreements
|
Cost of sales
|
|
1,520
|
|
|
(647
|
)
|
|
1,607
|
|
|||
Propane swap agreements
|
Other comprehensive income (loss)
|
|
(253
|
)
|
|
(2,773
|
)
|
|
487
|
|
|||
Natural gas swap contracts
|
Other comprehensive income (loss)
|
|
(63
|
)
|
|
200
|
|
|
986
|
|
|||
Natural gas futures contracts
|
Other comprehensive income (loss)
|
|
(294
|
)
|
|
532
|
|
|
(1,476
|
)
|
|||
Total
|
|
|
$
|
910
|
|
|
$
|
(2,701
|
)
|
|
$
|
1,715
|
|
|
|
|
Fair Value Measurements Using:
|
||||||||||||
As of December 31, 2019
|
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
|
$
|
27
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investments—guaranteed income fund
|
803
|
|
|
—
|
|
|
—
|
|
|
803
|
|
||||
Investments—mutual funds and other
|
8,399
|
|
|
8,399
|
|
|
—
|
|
|
—
|
|
||||
Total investments
|
9,229
|
|
|
8,426
|
|
|
—
|
|
|
803
|
|
||||
Derivative assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
$
|
9,229
|
|
|
$
|
8,426
|
|
|
$
|
—
|
|
|
$
|
803
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
1,844
|
|
|
$
|
—
|
|
|
$
|
1,844
|
|
|
$
|
—
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
(in thousands)
|
|
|
|
||||
Beginning Balance
|
$
|
686
|
|
|
$
|
648
|
|
Purchases and adjustments
|
131
|
|
|
68
|
|
||
Transfers/disbursements
|
(29
|
)
|
|
(41
|
)
|
||
Investment income
|
15
|
|
|
11
|
|
||
Ending Balance
|
$
|
803
|
|
|
$
|
686
|
|
|
As of December 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Rabbi trust (associated with the Non-Qualified Deferred Compensation Plan)
|
$
|
9,202
|
|
|
$
|
6,689
|
|
Investments in equity securities
|
27
|
|
|
22
|
|
||
Total
|
$
|
9,229
|
|
|
$
|
6,711
|
|
|
As of December 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Goodwill
|
|
|
|
||||
Regulated Energy
|
|
|
|
||||
Florida Natural Gas Distribution(1)
|
$
|
3,353
|
|
|
$
|
3,353
|
|
Unregulated Energy(2)
|
|
|
|
||||
Mid-Atlantic Propane Operations(3)
|
13,299
|
|
|
2,147
|
|
||
Florida Propane Operations
|
1,188
|
|
|
1,188
|
|
||
Aspire Energy
|
10,120
|
|
|
10,120
|
|
||
Marlin Gas Services
|
4,708
|
|
|
4,760
|
|
||
Total Goodwill
|
$
|
32,668
|
|
|
$
|
21,568
|
|
|
As of December 31,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
(in thousands)
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Customer relationships (1)
|
$
|
9,391
|
|
|
$
|
3,463
|
|
|
$
|
4,801
|
|
|
$
|
3,066
|
|
Non-Compete agreements (1) (2)
|
2,252
|
|
|
451
|
|
|
1,793
|
|
|
202
|
|
||||
Patents
|
452
|
|
|
118
|
|
|
452
|
|
|
—
|
|
||||
Other
|
270
|
|
|
204
|
|
|
270
|
|
|
198
|
|
||||
Total
|
$
|
12,365
|
|
|
$
|
4,236
|
|
|
$
|
7,316
|
|
|
$
|
3,466
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Current Income Tax Expense
|
|
|
|
|
|
||||||
Federal
|
$
|
(2,271
|
)
|
|
$
|
48
|
|
|
$
|
2,046
|
|
State
|
(492
|
)
|
|
581
|
|
|
610
|
|
|||
Other
|
(47
|
)
|
|
(47
|
)
|
|
(71
|
)
|
|||
Total current income tax expense (benefit)
|
(2,810
|
)
|
|
582
|
|
|
2,585
|
|
|||
Deferred Income Tax Expense (1)
|
|
|
|
|
|
||||||
Property, plant and equipment
|
25,910
|
|
|
19,189
|
|
|
8,181
|
|
|||
Deferred gas costs
|
79
|
|
|
(1,435
|
)
|
|
2,002
|
|
|||
Pensions and other employee benefits
|
(454
|
)
|
|
446
|
|
|
180
|
|
|||
FPU merger-related premium cost and deferred gain
|
(278
|
)
|
|
(528
|
)
|
|
(1,148
|
)
|
|||
Net operating loss carryforwards
|
(3,776
|
)
|
|
(183
|
)
|
|
193
|
|
|||
Other
|
2,420
|
|
|
3,161
|
|
|
2,677
|
|
|||
Total deferred income tax expense
|
23,901
|
|
|
20,650
|
|
|
12,085
|
|
|||
Income Tax Expense from Continuing Operations
|
21,091
|
|
|
21,232
|
|
|
14,670
|
|
|||
Income Tax Expense (benefit) from Discontinued Operations
|
1,439
|
|
|
(238
|
)
|
|
(361
|
)
|
|||
Total Income Tax
|
$
|
22,530
|
|
|
$
|
20,994
|
|
|
$
|
14,309
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Reconciliation of Effective Income Tax Rates for Continuing Operations
|
|
|
|
|
|
||||||
Federal income tax expense (1)
|
$
|
17,246
|
|
|
$
|
16,491
|
|
|
$
|
26,249
|
|
State income taxes, net of federal benefit
|
5,088
|
|
|
4,057
|
|
|
2,000
|
|
|||
ESOP dividend deduction
|
(173
|
)
|
|
(158
|
)
|
|
(257
|
)
|
|||
Revaluation of deferred tax assets and liabilities
|
—
|
|
|
—
|
|
|
(14,299
|
)
|
|||
Other
|
(1,070
|
)
|
|
842
|
|
|
977
|
|
|||
Total Income Tax Expense for Continuing Operations
|
$
|
21,091
|
|
|
$
|
21,232
|
|
|
$
|
14,670
|
|
Effective Income Tax Rate for Continuing Operations (2)
|
25.65
|
%
|
|
27.19
|
%
|
|
19.56
|
%
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
(in thousands)
|
|
|
|
||||
Deferred Income Taxes
|
|
|
|
||||
Deferred income tax liabilities:
|
|
|
|
||||
Property, plant and equipment
|
$
|
173,466
|
|
|
$
|
153,423
|
|
Acquisition adjustment
|
6,969
|
|
|
8,896
|
|
||
Loss on reacquired debt
|
220
|
|
|
32
|
|
||
Deferred gas costs
|
1,223
|
|
|
1,139
|
|
||
Natural gas conversion costs
|
4,956
|
|
|
3,987
|
|
||
Storm reserve liability
|
10,316
|
|
|
97
|
|
||
Other
|
1,456
|
|
|
2,544
|
|
||
Total deferred income tax liabilities
|
198,606
|
|
|
170,118
|
|
||
Deferred income tax assets:
|
|
|
|
||||
Pension and other employee benefits
|
3,818
|
|
|
3,711
|
|
||
Environmental costs
|
1,486
|
|
|
1,710
|
|
||
Net operating loss carryforwards
|
5,523
|
|
|
2,010
|
|
||
Self-insurance
|
146
|
|
|
151
|
|
||
Storm reserve liability
|
96
|
|
|
—
|
|
||
Other
|
6,881
|
|
|
5,716
|
|
||
Total deferred income tax assets
|
17,950
|
|
|
13,298
|
|
||
Deferred Income Taxes Per Consolidated Balance Sheets
|
$
|
180,656
|
|
|
$
|
156,820
|
|
|
As of December 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
FPU secured first mortgage bonds:
|
|
|
|
||||
9.08% bond, due June 1, 2022
|
$
|
7,990
|
|
|
$
|
7,986
|
|
Uncollateralized Senior Notes:
|
|
|
|
||||
5.50% note, due October 12, 2020
|
2,000
|
|
|
4,000
|
|
||
5.93% note, due October 31, 2023
|
12,000
|
|
|
15,000
|
|
||
5.68% note, due June 30, 2026
|
20,300
|
|
|
23,200
|
|
||
6.43% note, due May 2, 2028
|
6,300
|
|
|
7,000
|
|
||
3.73% note, due December 16, 2028
|
18,000
|
|
|
20,000
|
|
||
3.88% note, due May 15, 2029
|
50,000
|
|
|
50,000
|
|
||
3.25% note, due April 30, 2032
|
70,000
|
|
|
70,000
|
|
||
3.48% note, due May 31, 2038
|
50,000
|
|
|
50,000
|
|
||
3.58% note, due November 30, 2038
|
50,000
|
|
|
50,000
|
|
||
3.98% note, due August 20, 2039
|
100,000
|
|
|
—
|
|
||
2.98% note, due December 20, 2034
|
70,000
|
|
|
—
|
|
||
Term Note due January 21, 2020
|
—
|
|
|
30,000
|
|
||
Term Note due February 28, 2020
|
30,000
|
|
|
—
|
|
||
Promissory notes
|
—
|
|
|
26
|
|
||
Finance lease obligations
|
—
|
|
|
1,310
|
|
||
Less: debt issuance costs
|
(822
|
)
|
|
(567
|
)
|
||
Total long-term debt
|
485,768
|
|
|
327,955
|
|
||
Less: current maturities
|
(45,600
|
)
|
|
(11,935
|
)
|
||
Total long-term debt, net of current maturities
|
$
|
440,168
|
|
|
$
|
316,020
|
|
Year
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Payments
|
|
$
|
45,600
|
|
|
$
|
13,600
|
|
|
$
|
25,100
|
|
|
$
|
20,600
|
|
|
$
|
17,600
|
|
|
$
|
364,100
|
|
|
$
|
486,600
|
|
(in thousands)
|
|
Total Borrowing Capacity
|
|
Less Amount of Debt Issued
|
|
Less Unfunded Commitments
|
|
Remaining Borrowing Capacity
|
||||||||
Shelf Agreement
|
|
|
|
|
|
|
|
|
||||||||
Prudential Shelf Agreement (1)
|
|
$
|
220,000
|
|
|
$
|
(170,000
|
)
|
|
$
|
—
|
|
|
$
|
50,000
|
|
MetLife Shelf Agreement
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
||||
NYL Shelf Agreement (2)
|
|
150,000
|
|
|
(100,000
|
)
|
|
—
|
|
|
50,000
|
|
||||
Total
|
|
$
|
520,000
|
|
|
$
|
(270,000
|
)
|
|
$
|
—
|
|
|
$
|
250,000
|
|
|
|
|
|
|
Year Ended
|
||||||
|
|
|
|
|
December 31,
|
||||||
( in thousands)
|
|
Classification
|
|
|
2019
|
|
2018
|
||||
Operating lease cost (1)
|
|
Operations expense
|
|
|
$
|
2,577
|
|
|
$
|
3,339
|
|
Finance lease cost:
|
|
|
|
|
|
|
|
||||
Amortization of lease assets
|
|
Depreciation and amortization
|
|
|
650
|
|
|
1,451
|
|
||
Interest on lease liabilities
|
|
Interest expense
|
|
|
5
|
|
|
49
|
|
||
Net lease cost
|
|
|
|
|
$
|
3,232
|
|
|
$
|
4,839
|
|
(in thousands)
|
|
Balance sheet classification
|
|
Amount
|
||
Assets
|
|
|
|
|
||
Operating lease assets
|
|
Operating lease right-of-use assets
|
|
$
|
11,563
|
|
Liabilities
|
|
|
|
|
||
Current
|
|
|
|
|
||
Operating lease liabilities
|
|
Other accrued liabilities
|
|
1,705
|
|
|
Noncurrent
|
|
|
|
|
||
Operating lease liabilities
|
|
Operating lease - liabilities
|
|
9,896
|
|
|
Total lease liabilities
|
|
|
|
$
|
11,601
|
|
|
|
December 31, 2019
|
|
Weighted-average remaining lease term (in years)
|
|
|
|
Operating leases
|
|
8.88
|
|
Weighted-average discount rate
|
|
|
|
Operating leases
|
|
3.8
|
%
|
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Operating cash flows from operating leases
|
|
$
|
2,230
|
|
|
$
|
2,759
|
|
Operating cash flows from finance leases
|
|
$
|
5
|
|
|
$
|
49
|
|
Financing cash flows from finance leases
|
|
$
|
650
|
|
|
$
|
1,451
|
|
(in thousands)
|
|
Operating Leases (1)
|
||
2020
|
|
$
|
2,104
|
|
2021
|
|
1,866
|
|
|
2022
|
|
1,716
|
|
|
2023
|
|
1,719
|
|
|
2024
|
|
1,463
|
|
|
Thereafter
|
|
4,916
|
|
|
Total lease payments
|
|
13,784
|
|
|
Less: Interest
|
|
2,183
|
|
|
Present value of lease liabilities
|
|
$
|
11,601
|
|
|
|
Defined Benefit Pension and Postretirement Plan Items
|
|
Commodity Contract Cash Flow Hedges
|
|
Total
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
As of December 31, 2017
|
|
$
|
(4,743
|
)
|
|
$
|
471
|
|
|
$
|
(4,272
|
)
|
Other comprehensive loss before reclassifications
|
|
(602
|
)
|
|
(3,130
|
)
|
|
(3,732
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
|
439
|
|
|
1,759
|
|
|
2,198
|
|
|||
Net current-period other comprehensive loss
|
|
(163
|
)
|
|
(1,371
|
)
|
|
(1,534
|
)
|
|||
Stranded tax reclassification to retained earnings
|
|
(1,022
|
)
|
|
115
|
|
|
(907
|
)
|
|||
As of December 31, 2018
|
|
(5,928
|
)
|
|
(785
|
)
|
|
(6,713
|
)
|
|||
Other comprehensive income/(loss) before reclassifications
|
|
(872
|
)
|
|
2,161
|
|
|
1,289
|
|
|||
Amounts reclassified from accumulated other comprehensive income/(loss)
|
|
1,867
|
|
|
(2,595
|
)
|
|
(728
|
)
|
|||
Net current-period other comprehensive income/(loss)
|
|
995
|
|
|
(434
|
)
|
|
561
|
|
|||
Prior-year reclassification
|
|
—
|
|
|
(115
|
)
|
|
(115
|
)
|
|||
As of December 31, 2019
|
|
$
|
(4,933
|
)
|
|
$
|
(1,334
|
)
|
|
$
|
(6,267
|
)
|
|
|
For the Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Amortization of defined benefit pension and postretirement plan items:
|
|
|
|
|
|
|
||||||
Prior service cost (1)
|
|
$
|
77
|
|
|
$
|
77
|
|
|
$
|
77
|
|
Net gain (1)
|
|
(2,600
|
)
|
|
(579
|
)
|
|
(636
|
)
|
|||
Total before income taxes
|
|
(2,523
|
)
|
|
(502
|
)
|
|
(559
|
)
|
|||
Income tax benefit (4)
|
|
656
|
|
|
63
|
|
|
223
|
|
|||
Net of tax
|
|
$
|
(1,867
|
)
|
|
$
|
(439
|
)
|
|
$
|
(336
|
)
|
|
|
|
|
|
|
|
||||||
Gains and losses on commodity contracts cash flow hedges
|
|
|
|
|
|
|
||||||
Propane swap agreements (2)
|
|
$
|
1,520
|
|
|
$
|
(647
|
)
|
|
$
|
1,607
|
|
Natural gas swaps (2)(3)
|
|
7
|
|
|
197
|
|
|
(822
|
)
|
|||
Natural gas futures (2)(3)
|
|
2,096
|
|
|
(2,010
|
)
|
|
(456
|
)
|
|||
Total before income taxes
|
|
3,623
|
|
|
(2,460
|
)
|
|
329
|
|
|||
Income tax impact (4)
|
|
(1,028
|
)
|
|
701
|
|
|
(159
|
)
|
|||
Net of tax
|
|
$
|
2,595
|
|
|
$
|
(1,759
|
)
|
|
$
|
170
|
|
|
|
|
|
|
|
|
||||||
Total reclassifications for the period
|
|
$
|
728
|
|
|
$
|
(2,198
|
)
|
|
$
|
(166
|
)
|
|
Chesapeake
Pension Plan
|
|
|
FPU
Pension Plan
|
|
|
Chesapeake
SERP |
||||||||||||||||||
At December 31,
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefit obligation — beginning of year
|
$
|
10,712
|
|
|
$
|
11,443
|
|
|
|
$
|
59,377
|
|
|
$
|
64,664
|
|
|
|
$
|
2,285
|
|
|
$
|
2,428
|
|
Interest cost
|
375
|
|
|
384
|
|
|
|
2,452
|
|
|
2,339
|
|
|
|
74
|
|
|
83
|
|
||||||
Actuarial loss (gain)
|
1,443
|
|
|
(610
|
)
|
|
|
6,508
|
|
|
(4,739
|
)
|
|
|
159
|
|
|
(74
|
)
|
||||||
Effect of settlement
|
(5,833
|
)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||||
Benefits paid
|
(483
|
)
|
|
(505
|
)
|
|
|
(3,033
|
)
|
|
(2,887
|
)
|
|
|
(361
|
)
|
|
(152
|
)
|
||||||
Benefit obligation — end of year
|
6,214
|
|
|
10,712
|
|
|
|
65,304
|
|
|
59,377
|
|
|
|
2,157
|
|
|
2,285
|
|
||||||
Change in plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of plan assets — beginning of year
|
8,649
|
|
|
9,350
|
|
|
|
43,601
|
|
|
48,396
|
|
|
|
—
|
|
|
—
|
|
||||||
Actual return on plan assets
|
1,180
|
|
|
(647
|
)
|
|
|
7,978
|
|
|
(3,113
|
)
|
|
|
—
|
|
|
—
|
|
||||||
Employer contributions
|
1,117
|
|
|
451
|
|
|
|
1,157
|
|
|
1,205
|
|
|
|
361
|
|
|
152
|
|
||||||
Effect of settlement
|
(5,833
|
)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|||||||
Benefits paid
|
(483
|
)
|
|
(505
|
)
|
|
|
(3,033
|
)
|
|
(2,887
|
)
|
|
|
(361
|
)
|
|
(152
|
)
|
||||||
Fair value of plan assets — end of year
|
4,630
|
|
|
8,649
|
|
|
|
49,703
|
|
|
43,601
|
|
|
|
—
|
|
|
—
|
|
||||||
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Funded status
|
(1,584
|
)
|
|
(2,063
|
)
|
|
|
(15,601
|
)
|
|
(15,776
|
)
|
|
|
(2,157
|
)
|
|
(2,285
|
)
|
||||||
Accrued pension cost
|
$
|
(1,584
|
)
|
|
$
|
(2,063
|
)
|
|
|
$
|
(15,601
|
)
|
|
$
|
(15,776
|
)
|
|
|
$
|
(2,157
|
)
|
|
$
|
(2,285
|
)
|
Assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount rate
|
3.00
|
%
|
|
4.00
|
%
|
|
|
3.25
|
%
|
|
4.25
|
%
|
|
|
3.00
|
%
|
|
4.00
|
%
|
||||||
Expected return on plan assets
|
6.00
|
%
|
|
6.00
|
%
|
|
|
6.50
|
%
|
|
6.50
|
%
|
|
|
—
|
%
|
|
—
|
%
|
|
Chesapeake
Pension Plan |
|
|
FPU
Pension Plan |
|
|
Chesapeake
SERP |
||||||||||||||||||||||||||||||
For the Years Ended December 31,
|
2019 (1)
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Components of net periodic pension cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest cost
|
$
|
375
|
|
|
$
|
384
|
|
|
$
|
402
|
|
|
|
$
|
2,452
|
|
|
$
|
2,339
|
|
|
$
|
2,482
|
|
|
|
$
|
74
|
|
|
$
|
83
|
|
|
$
|
89
|
|
Expected return on assets
|
(487
|
)
|
|
(542
|
)
|
|
(495
|
)
|
|
|
(2,770
|
)
|
|
(3,091
|
)
|
|
(2,779
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Amortization of actuarial loss
|
391
|
|
|
343
|
|
|
399
|
|
|
|
505
|
|
|
404
|
|
|
513
|
|
|
|
85
|
|
|
101
|
|
|
87
|
|
|||||||||
Settlement expense
|
1,982
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|||||||||
Net periodic pension cost
|
2,261
|
|
|
185
|
|
|
306
|
|
|
|
187
|
|
|
(348
|
)
|
|
216
|
|
|
|
217
|
|
|
184
|
|
|
176
|
|
|||||||||
Amortization of pre-merger regulatory asset
|
—
|
|
|
—
|
|
|
—
|
|
|
|
543
|
|
|
761
|
|
|
761
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Total periodic cost
|
$
|
2,261
|
|
|
$
|
185
|
|
|
$
|
306
|
|
|
|
$
|
730
|
|
|
$
|
413
|
|
|
$
|
977
|
|
|
|
$
|
217
|
|
|
$
|
184
|
|
|
$
|
176
|
|
Assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Discount rate
|
3.00
|
%
|
|
3.50
|
%
|
|
3.75
|
%
|
|
|
4.25
|
%
|
|
3.75
|
%
|
|
4.00
|
%
|
|
|
4.00
|
%
|
|
3.50
|
%
|
|
3.75
|
%
|
|||||||||
Expected return on plan assets
|
6.00
|
%
|
|
6.00
|
%
|
|
6.00
|
%
|
|
|
6.50
|
%
|
|
6.50
|
%
|
|
6.50
|
%
|
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Chesapeake Pension Plan
|
|
FPU Pension Plan
|
||||||||||||||
At December 31,
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||
Asset Category
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Equity securities
|
—
|
%
|
|
49
|
%
|
|
53
|
%
|
|
53
|
%
|
|
50
|
%
|
|
55
|
%
|
Debt securities
|
92
|
%
|
|
41
|
%
|
|
38
|
%
|
|
37
|
%
|
|
41
|
%
|
|
37
|
%
|
Other
|
8
|
%
|
|
10
|
%
|
|
9
|
%
|
|
10
|
%
|
|
9
|
%
|
|
8
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
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
|
||||||||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||
|
At December 31, 2019
|
|
At December 31, 2018
|
||||||||||||||||||||||||||||
Asset Category
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual Funds - Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Large Cap (1)
|
$
|
3,553
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,553
|
|
|
$
|
3,399
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,399
|
|
U.S. Mid Cap (1)
|
1,604
|
|
|
—
|
|
|
—
|
|
|
1,604
|
|
|
1,478
|
|
|
—
|
|
|
—
|
|
|
1,478
|
|
||||||||
U.S. Small Cap (1)
|
726
|
|
|
—
|
|
|
—
|
|
|
726
|
|
|
670
|
|
|
—
|
|
|
—
|
|
|
670
|
|
||||||||
International (2)
|
9,855
|
|
|
—
|
|
|
—
|
|
|
9,855
|
|
|
9,226
|
|
|
—
|
|
|
—
|
|
|
9,226
|
|
||||||||
Alternative Strategies (3)
|
4,739
|
|
|
—
|
|
|
—
|
|
|
4,739
|
|
|
5,726
|
|
|
—
|
|
|
—
|
|
|
5,726
|
|
||||||||
|
20,477
|
|
|
—
|
|
|
—
|
|
|
20,477
|
|
|
20,499
|
|
|
—
|
|
|
—
|
|
|
20,499
|
|
||||||||
Mutual Funds - Debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fixed income (4)
|
19,220
|
|
|
—
|
|
|
—
|
|
|
19,220
|
|
|
18,630
|
|
|
—
|
|
|
—
|
|
|
18,630
|
|
||||||||
High Yield (4)
|
2,476
|
|
|
—
|
|
|
—
|
|
|
2,476
|
|
|
2,818
|
|
|
—
|
|
|
—
|
|
|
2,818
|
|
||||||||
|
21,696
|
|
|
—
|
|
|
—
|
|
|
21,696
|
|
|
21,448
|
|
|
—
|
|
|
—
|
|
|
21,448
|
|
||||||||
Mutual Funds - Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodities (5)
|
1,708
|
|
|
—
|
|
|
—
|
|
|
1,708
|
|
|
1,902
|
|
|
—
|
|
|
—
|
|
|
1,902
|
|
||||||||
Real Estate (6)
|
2,288
|
|
|
—
|
|
|
—
|
|
|
2,288
|
|
|
2,216
|
|
|
—
|
|
|
—
|
|
|
2,216
|
|
||||||||
Guaranteed deposit (7)
|
—
|
|
|
—
|
|
|
1,147
|
|
|
1,147
|
|
|
—
|
|
|
—
|
|
|
627
|
|
|
627
|
|
||||||||
|
3,996
|
|
|
—
|
|
|
1,147
|
|
|
5,143
|
|
|
4,118
|
|
|
—
|
|
|
627
|
|
|
4,745
|
|
||||||||
Total Pension Plan Assets in fair value hierarchy
|
$
|
46,169
|
|
|
$
|
—
|
|
|
$
|
1,147
|
|
|
47,316
|
|
|
$
|
46,065
|
|
|
$
|
—
|
|
|
$
|
627
|
|
|
46,692
|
|
||
Investments measured at net asset value (8)
|
|
|
|
|
|
|
7,017
|
|
|
|
|
|
|
|
|
5,558
|
|
||||||||||||||
Total Pension Plan Assets
|
|
|
|
|
|
|
$
|
54,333
|
|
|
|
|
|
|
|
|
$
|
52,250
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
(in thousands)
|
|
|
|
||||
Balance, beginning of year
|
$
|
627
|
|
|
$
|
436
|
|
Purchases
|
2,274
|
|
|
1,674
|
|
||
Transfers in
|
3,090
|
|
|
2,375
|
|
||
Disbursements
|
(4,907
|
)
|
|
(3,872
|
)
|
||
Investment income
|
63
|
|
|
14
|
|
||
Balance, end of year
|
$
|
1,147
|
|
|
$
|
627
|
|
|
Chesapeake
Postretirement Plan |
|
FPU
Medical Plan |
||||||||||||
At December 31,
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation — beginning of year
|
$
|
1,002
|
|
|
$
|
1,128
|
|
|
$
|
1,187
|
|
|
$
|
1,287
|
|
Interest cost
|
39
|
|
|
38
|
|
|
48
|
|
|
47
|
|
||||
Plan participants contributions
|
149
|
|
|
136
|
|
|
38
|
|
|
41
|
|
||||
Actuarial loss (gain)
|
73
|
|
|
(131
|
)
|
|
47
|
|
|
(89
|
)
|
||||
Benefits paid
|
(163
|
)
|
|
(169
|
)
|
|
(96
|
)
|
|
(99
|
)
|
||||
Benefit obligation — end of year
|
1,100
|
|
|
1,002
|
|
|
1,224
|
|
|
1,187
|
|
||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets — beginning of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions(1)
|
14
|
|
|
33
|
|
|
58
|
|
|
58
|
|
||||
Plan participants contributions
|
149
|
|
|
136
|
|
|
38
|
|
|
41
|
|
||||
Benefits paid
|
(163
|
)
|
|
(169
|
)
|
|
(96
|
)
|
|
(99
|
)
|
||||
Fair value of plan assets — end of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Reconciliation:
|
|
|
|
|
|
|
|
||||||||
Funded status
|
(1,100
|
)
|
|
(1,002
|
)
|
|
(1,224
|
)
|
|
(1,187
|
)
|
||||
Accrued postretirement cost
|
$
|
(1,100
|
)
|
|
$
|
(1,002
|
)
|
|
$
|
(1,224
|
)
|
|
$
|
(1,187
|
)
|
Assumptions:
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
3.00
|
%
|
|
4.00
|
%
|
|
3.25
|
%
|
|
4.25
|
%
|
|
Chesapeake
Postretirement Plan |
|
FPU
Medical Plan |
||||||||||||||||||||
For the Years Ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Components of net periodic postretirement cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest cost
|
$
|
39
|
|
|
$
|
38
|
|
|
$
|
41
|
|
|
$
|
48
|
|
|
$
|
47
|
|
|
$
|
50
|
|
Amortization of actuarial loss
|
46
|
|
|
58
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost (credit)
|
(77
|
)
|
|
(77
|
)
|
|
(77
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic cost
|
8
|
|
|
19
|
|
|
17
|
|
|
48
|
|
|
47
|
|
|
50
|
|
||||||
Amortization of pre-merger regulatory asset
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
8
|
|
||||||
Total periodic cost
|
$
|
8
|
|
|
$
|
19
|
|
|
$
|
17
|
|
|
$
|
56
|
|
|
$
|
55
|
|
|
$
|
58
|
|
Assumptions
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount rate
|
4.00
|
%
|
|
3.50
|
%
|
|
3.75
|
%
|
|
4.25
|
%
|
|
3.75
|
%
|
|
4.00
|
%
|
(in thousands)
|
Chesapeake
Pension
Plan
|
|
FPU
Pension
Plan
|
|
Chesapeake
SERP
|
|
Chesapeake
Postretirement
Plan
|
|
FPU
Medical
Plan
|
|
Total
|
||||||||||||
Prior service cost (credit)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(447
|
)
|
|
$
|
—
|
|
|
$
|
(447
|
)
|
Net loss (gain)
|
2,241
|
|
|
19,339
|
|
|
575
|
|
|
604
|
|
|
(32
|
)
|
|
22,727
|
|
||||||
Total
|
$
|
2,241
|
|
|
$
|
19,339
|
|
|
$
|
575
|
|
|
$
|
157
|
|
|
$
|
(32
|
)
|
|
$
|
22,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accumulated other comprehensive loss (gain) pre-tax(1)
|
$
|
2,241
|
|
|
$
|
3,674
|
|
|
$
|
575
|
|
|
$
|
157
|
|
|
$
|
(6
|
)
|
|
$
|
6,641
|
|
Post-merger regulatory asset
|
—
|
|
|
15,665
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
15,639
|
|
||||||
Subtotal
|
2,241
|
|
|
19,339
|
|
|
575
|
|
|
157
|
|
|
(32
|
)
|
|
22,280
|
|
||||||
Pre-merger regulatory asset
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
||||||
Total unrecognized cost
|
$
|
2,241
|
|
|
$
|
19,339
|
|
|
$
|
575
|
|
|
$
|
157
|
|
|
$
|
(26
|
)
|
|
$
|
22,286
|
|
|
Chesapeake Pension
Plan(1)
|
|
FPU Pension
Plan(1)
|
|
Chesapeake
SERP(2)
|
|
Chesapeake
Postretirement
Plan(2)
|
|
FPU
Medical
Plan(2)
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
2020
|
$
|
115
|
|
|
$
|
3,281
|
|
|
$
|
151
|
|
|
$
|
90
|
|
|
$
|
86
|
|
2021
|
$
|
368
|
|
|
$
|
3,348
|
|
|
$
|
150
|
|
|
$
|
87
|
|
|
$
|
90
|
|
2022
|
$
|
106
|
|
|
$
|
3,424
|
|
|
$
|
148
|
|
|
$
|
85
|
|
|
$
|
91
|
|
2023
|
$
|
927
|
|
|
$
|
3,498
|
|
|
$
|
146
|
|
|
$
|
67
|
|
|
$
|
79
|
|
2024
|
$
|
111
|
|
|
$
|
3,549
|
|
|
$
|
144
|
|
|
$
|
64
|
|
|
$
|
80
|
|
Years 2025 through 2029
|
$
|
2,300
|
|
|
$
|
18,429
|
|
|
$
|
748
|
|
|
$
|
264
|
|
|
$
|
389
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Awards to non-employee directors
|
$
|
620
|
|
|
$
|
539
|
|
|
$
|
540
|
|
Awards to key employees
|
3,659
|
|
|
2,871
|
|
|
1,950
|
|
|||
Total compensation expense
|
4,279
|
|
|
3,410
|
|
|
2,490
|
|
|||
Less: tax benefit
|
(1,117
|
)
|
|
(934
|
)
|
|
(1,003
|
)
|
|||
Share-based compensation amounts included in net income
|
$
|
3,162
|
|
|
$
|
2,476
|
|
|
$
|
1,487
|
|
|
Number of
Shares
|
|
Weighted Average
Fair Value
|
|||
Outstanding — December 31, 2017
|
132,642
|
|
|
$
|
59.31
|
|
Granted
|
49,494
|
|
|
67.76
|
|
|
Vested
|
(29,786
|
)
|
|
47.39
|
|
|
Vested - Accelerated pursuant to separation agreement
|
(16,676
|
)
|
|
75.78
|
|
|
Expired
|
(3,933
|
)
|
|
49.66
|
|
|
Outstanding — December 31, 2018
|
131,741
|
|
|
67.24
|
|
|
Granted (1)
|
88,048
|
|
|
92.74
|
|
|
Vested
|
(25,831
|
)
|
|
67.08
|
|
|
Expired
|
(15,086
|
)
|
|
69.28
|
|
|
Forfeited (2)
|
(21,055
|
)
|
|
71.67
|
|
|
Outstanding — December 31, 2019
|
157,817
|
|
|
$
|
80.28
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
(amounts except shares, in thousands)
|
|
|
|
|
|
|
||||||
Shares withheld to satisfy tax obligations
|
|
7,635
|
|
|
16,918
|
|
|
10,269
|
|
|||
Amounts remitted to tax authorities to satisfy obligations
|
|
$
|
692
|
|
|
$
|
1,210
|
|
|
$
|
692
|
|
Tax benefit associated with settlement of share based payments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
349
|
|
|
|
Regulatory Liabilities related to ADIT
|
|
|
|
Operation and Regulatory Jurisdiction
|
|
Amount (in thousands)
|
Status
|
|
Status of Customer Rate impact related to lower federal corporate income tax rate
|
Eastern Shore (FERC)
|
|
$34,190
|
Will be addressed in Eastern Shore's next rate case filing.
|
|
Implemented one-time bill credit (totaling $0.9 million) in April 2018. Customer rates were adjusted in April 2018.
|
Delaware Division (Delaware PSC)
|
|
$12,847
|
PSC approved amortization of ADIT in January 2019.
|
|
Implemented one-time bill credit (totaling $1.5 million) in April 2019. Customer rates were adjusted in March 2019.
|
Maryland Division (Maryland PSC)
|
|
$4,087
|
PSC approved amortization of ADIT in May 2018.
|
|
Implemented one-time bill credit (totaling $0.4 million) in July 2018. Customer rates were adjusted in May 2018.
|
Sandpiper Energy (Maryland PSC)
|
|
$3,765
|
PSC approved amortization of ADIT in May 2018.
|
|
Implemented one-time bill credit (totaling $0.6 million) in July 2018. Customer rates were adjusted in May 2018.
|
Chesapeake Florida Gas Division/Central Florida Gas (Florida PSC)
|
|
$8,304
|
PSC issued order authorizing amortization and retention of net ADIT liability by the Company in February 2019.
|
|
Florida PSC's final order was issued in February 2019. Excluding GRIP, tax savings arising from the TCJA rate reduction will be retained by the Company.
GRIP: Tax savings for 2018 will be refunded to customers in 2020 through the annual GRIP cost recovery mechanism. Future customer GRIP surcharges will be adjusted to reflect tax savings associated with TCJA. |
FPU Natural Gas (excludes Fort Meade and Indiantown) (Florida PSC)
|
|
$19,218
|
Same treatment on a net basis as Chesapeake Florida Gas Division (above).
|
|
Same treatment on a net basis as Chesapeake Florida Gas Division (above).
|
FPU Fort Meade and Indiantown Divisions
|
|
$294
|
Same treatment on a net basis as Chesapeake Florida Gas Division (above).
|
|
Tax rate reduction: The impact was immaterial for the divisions.
GRIP (Applicable to Fort Meade division only): Same treatment as Chesapeake Florida Gas Division (above). |
FPU Electric (Florida PSC)
|
|
$5,769
|
In January 2019, PSC issued order approving amortization of ADIT through purchased power cost recovery, storm reserve and rates.
|
|
TCJA benefit will flow back to its customers through a combination of reductions to the fuel cost recovery rate, base rates, as well as application to the storm reserve over the next several years.
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
(in thousands)
|
|
|
|
||||
Regulatory Assets
|
|
|
|
||||
Under-recovered purchased fuel and conservation cost recovery (1)
|
$
|
5,144
|
|
|
$
|
4,631
|
|
Under-recovered GRIP revenue (2)
|
—
|
|
|
165
|
|
||
Deferred postretirement benefits (3)
|
16,311
|
|
|
15,517
|
|
||
Deferred conversion and development costs (1)
|
20,881
|
|
|
16,727
|
|
||
Environmental regulatory assets and expenditures (4)
|
2,241
|
|
|
2,731
|
|
||
Acquisition adjustment (5)
|
30,329
|
|
|
33,255
|
|
||
Loss on reacquired debt (6)
|
869
|
|
|
942
|
|
||
Other
|
2,776
|
|
|
3,250
|
|
||
Total Regulatory Assets
|
$
|
78,551
|
|
|
$
|
77,218
|
|
|
|
|
|
||||
|
|
|
|
||||
Regulatory Liabilities
|
|
|
|
||||
Self-insurance (7)
|
$
|
873
|
|
|
$
|
947
|
|
Over-recovered purchased fuel and conservation cost recovery (1)
|
2,724
|
|
|
5,856
|
|
||
Over-recovered GRIP revenue (2)
|
2,668
|
|
|
1,563
|
|
||
Storm reserve (7)
|
1,437
|
|
|
677
|
|
||
Accrued asset removal cost (8)
|
36,767
|
|
|
42,401
|
|
||
Deferred income taxes due to rate change (9)
|
89,191
|
|
|
91,236
|
|
||
Other
|
75
|
|
|
242
|
|
||
Total Regulatory Liabilities
|
$
|
133,735
|
|
|
$
|
142,922
|
|
|
|
|
|
MGP Site (Jurisdiction)
|
Status
|
Estimated Cost to Clean Up
(Expect to Recover through Rates)
|
West Palm Beach (Florida)
|
Remedial actions approved by the Florida Department of Environmental Protection have been implemented on the east parcel of the site. We expect to implement similar remedial actions on the site's west parcel in 2020.
|
Between $4.5 million to $15.4 million, including costs associated with the relocation of FPU’s operations at this site, and any potential costs associated with future redevelopment of the properties.
|
Sanford (Florida)
|
In March 2018, the United States Environmental Protection Agency ("EPA") approved a "site-wide ready for anticipated use" status, which is the final step before delisting a site. Construction has been completed and restrictive covenants are in place to ensure protection of human health. The only remaining activity is long-term groundwater monitoring.
|
FPU's remaining remediation expenses, including attorneys' fees and costs, are anticipated to be immaterial.
|
Winter Haven (Florida)
|
Remediation is ongoing.
|
Not expected to exceed $0.4 million.
|
Seaford (Delaware)
|
Conducted investigations of on-site and off-site impacts in the vicinity of the site, from 2014 through 2018, and submitted the findings to Delaware Department of Natural Resources and Environmental Control ("DNREC") in a March 2019 report. An interim action involving air-sparging/vapor extraction is being implemented, in accordance with the DNREC-approved Work Plan.
|
Between $0.2 million and $0.5 million.
|
Year
|
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
Beyond 2024
|
|
Total
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase Obligations
|
|
$
|
60,735
|
|
|
$
|
72,123
|
|
|
$
|
60,049
|
|
|
$
|
201,131
|
|
|
$
|
394,038
|
|
|
For the Quarters Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
(in thousands except per share amounts)
|
|
|
|
|
|
|
|
||||||||
2019 (1)
|
|
|
|
|
|
|
|
||||||||
Operating Revenues
|
$
|
160,464
|
|
|
$
|
94,541
|
|
|
$
|
92,626
|
|
|
$
|
131,973
|
|
Operating Income
|
$
|
44,123
|
|
|
$
|
18,164
|
|
|
$
|
14,358
|
|
|
$
|
29,642
|
|
Net Income:
|
|
|
|
|
|
|
|
||||||||
Income from Continuing Operations
|
$
|
28,814
|
|
|
$
|
8,913
|
|
|
$
|
6,246
|
|
|
$
|
17,169
|
|
Loss from Discontinued Operations, Net of Tax
|
(149
|
)
|
|
(609
|
)
|
|
(624
|
)
|
|
(9
|
)
|
||||
Gain on sale of Discontinued Operations, Net of Tax
|
—
|
|
|
—
|
|
|
—
|
|
|
5,402
|
|
||||
|
$
|
28,665
|
|
|
$
|
8,304
|
|
|
$
|
5,622
|
|
|
$
|
22,562
|
|
Basic Earnings Per Share of Common Stock:
|
|
|
|
|
|
|
|
||||||||
Earnings Per Share from Continuing Operations
|
$
|
1.76
|
|
|
$
|
0.54
|
|
|
$
|
0.38
|
|
|
$
|
1.05
|
|
Earnings/(Loss) Per Share from Discontinued Operations
|
(0.01
|
)
|
|
(0.03
|
)
|
|
(0.04
|
)
|
|
0.33
|
|
||||
|
$
|
1.75
|
|
|
$
|
0.51
|
|
|
$
|
0.34
|
|
|
$
|
1.38
|
|
Diluted Earnings Per Share of Common Stock:
|
|
|
|
|
|
|
|
||||||||
Earnings Per Share from Continuing Operations
|
$
|
1.75
|
|
|
$
|
0.54
|
|
|
$
|
0.38
|
|
|
$
|
1.04
|
|
Earnings/(Loss) Per Share from Discontinued Operations
|
(0.01
|
)
|
|
(0.04
|
)
|
|
(0.04
|
)
|
|
0.33
|
|
||||
|
$
|
1.74
|
|
|
$
|
0.50
|
|
|
$
|
0.34
|
|
|
$
|
1.37
|
|
2018 (1)
|
|
|
|
|
|
|
|
||||||||
Operating Revenues
|
$
|
168,831
|
|
|
$
|
93,872
|
|
|
$
|
93,400
|
|
|
$
|
134,214
|
|
Operating Income
|
$
|
40,853
|
|
|
$
|
12,238
|
|
|
$
|
12,879
|
|
|
$
|
28,873
|
|
Net Income:
|
|
|
|
|
|
|
|
||||||||
Income from Continuing Operations
|
$
|
27,271
|
|
|
$
|
5,705
|
|
|
$
|
6,090
|
|
|
$
|
17,796
|
|
Income/(Loss) from Discontinued Operations
|
(415
|
)
|
|
680
|
|
|
(552
|
)
|
|
5
|
|
||||
|
$
|
26,856
|
|
|
$
|
6,385
|
|
|
$
|
5,538
|
|
|
$
|
17,801
|
|
Basic Earnings Per Share of Common Stock:
|
|
|
|
|
|
|
|
||||||||
Earnings Per Share from Continuing Operations
|
$
|
1.67
|
|
|
$
|
0.35
|
|
|
$
|
0.37
|
|
|
$
|
1.09
|
|
Earnings/(Loss) Per Share from Discontinued Operations
|
(0.03
|
)
|
|
0.04
|
|
|
(0.03
|
)
|
|
—
|
|
||||
|
$
|
1.64
|
|
|
$
|
0.39
|
|
|
$
|
0.34
|
|
|
$
|
1.09
|
|
Diluted Earnings Per Share of Common Stock:
|
|
|
|
|
|
|
|
||||||||
Earnings Per Share from Continuing Operations
|
$
|
1.66
|
|
|
$
|
0.35
|
|
|
$
|
0.37
|
|
|
$
|
1.09
|
|
Earnings/(Loss) Per Share from Discontinued Operations
|
(0.02
|
)
|
|
0.04
|
|
|
(0.04
|
)
|
|
—
|
|
||||
|
$
|
1.64
|
|
|
$
|
0.39
|
|
|
$
|
0.33
|
|
|
$
|
1.09
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
• Exhibit 4.2
|
|
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 4.3
|
|
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 4.4
|
|
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 4.5
|
|
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 4.8
|
|
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 due 2022, 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 4.10
|
|
First Amendment to Private Shelf Agreement dated September 14, 2018, between Chesapeake Utilities Corporation, as issuer, and PGIM, Inc. (formerly known as Prudential Investment Management, Inc.), and other purchasers that may become party thereto. †
|
|
|
|
• Exhibit 4.11
|
|
Master Note Agreement dated March 2, 2017, among Chesapeake Utilities Corporation, as issuer, NYL Investors LLC, and other certain note holders that may become party thereto from time to time relating to the private placement of Chesapeake Utilities Corporation’s 3.48% Senior Notes due 2038 and Chesapeake Utilities Corporation’s 3.58% Senior Notes due 2038. †
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
||
• 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.
|
||
|
|
|
• Exhibit 104
|
|
Cover Page Interactive Data File - formatted in Inline XBRL and contained in Exhibit 101.
|
*
|
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.
|
|
CHESAPEAKE UTILITIES CORPORATION
|
||
|
|
|
|
|
By:
|
|
/s/ JEFFRY M. HOUSEHOLDER
|
|
|
|
Jeffry M. Householder
|
|
|
|
President, Chief Executive Officer and Director
|
|
|
|
February 26, 2020
|
/s/ JEFFRY M. HOUSEHOLDER
|
|
|
/S/ BETH W. COOPER
|
Jeffry M. Householder
|
|
|
Beth W. Cooper, Executive Vice President,
|
President, Chief Executive Officer and Director
|
|
|
Chief Financial Officer,
|
February 26, 2020
|
|
|
and Assistant Corporate Secretary
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
February 26, 2020
|
|
|
|
|
/S/ JOHN R. SCHIMKAITIS
|
|
|
/S/ DENNIS S. HUDSON, III
|
John R. Schimkaitis
|
|
|
Dennis S. Hudson, III, Director
|
Chair of the Board and Director
|
|
|
February 26, 2020
|
February 26, 2020
|
|
|
|
|
|
|
|
/S/ EUGENE H. BAYARD, ESQ
|
|
|
/S/ LILA A. JABER
|
Eugene H. Bayard, Esq., Director
|
|
|
Lila A. Jaber, Director
|
February 26, 2020
|
|
|
February 26, 2020
|
|
|
|
|
/S/ THOMAS J. BRESNAN
|
|
|
/S/ PAUL L. MADDOCK, JR.
|
Thomas J. Bresnan, Director
|
|
|
Paul L. Maddock, Jr., Director
|
February 26, 2020
|
|
|
February 26, 2020
|
|
|
|
|
/S/ RONALD G. FORSYTHE, JR.
|
|
|
/S/ CALVERT A. MORGAN, JR.
|
Dr. Ronald G. Forsythe, Jr., Director
|
|
|
Calvert A. Morgan, Jr., Director
|
February 26, 2020
|
|
|
February 26, 2020
|
|
|
|
|
/S/ THOMAS P. HILL, JR.
|
|
|
/S/ DIANNA F. MORGAN
|
Thomas P. Hill, Jr., Director
|
|
|
Dianna F. Morgan, Director
|
February 26, 2020
|
|
|
February 26, 2020
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|||||||||
2019
|
1,058
|
|
|
$
|
1,392
|
|
|
$
|
278
|
|
|
$
|
(1,391
|
)
|
|
$
|
1,337
|
|
2018
|
876
|
|
|
1,119
|
|
|
133
|
|
|
(1,070
|
)
|
|
1,058
|
|
||||
2017
|
897
|
|
|
541
|
|
|
339
|
|
|
(901
|
)
|
|
876
|
|
1.
|
Atmos Energy Corporation
|
2.
|
Black Hills Corporation
|
3.
|
New Jersey Resources Corporation
|
4.
|
NiSource, Inc.
|
5.
|
NW Natural
|
6.
|
Northwestern Corporation
|
7.
|
OneGas, Inc.
|
8.
|
RGC Resources, Inc.
|
9.
|
South Jersey Industries, Inc.
|
10.
|
Spire, Inc.
|
11.
|
Unitil Corporation
|
1.
|
Atmos Energy Corporation
|
2.
|
Black Hills Corporation
|
3.
|
New Jersey Resources Corporation
|
4.
|
NiSource, Inc.
|
5.
|
NW Natural
|
6.
|
Northwestern Corporation
|
7.
|
OneGas, Inc.
|
8.
|
RGC Resources, Inc.
|
9.
|
South Jersey Industries, Inc.
|
10.
|
Spire, Inc.
|
11.
|
Unitil Corporation
|
Title:
|
Chief Executive Officer
|
1.
|
Atmos Energy Corporation
|
2.
|
Black Hills Corporation
|
3.
|
New Jersey Resources Corporation
|
4.
|
NiSource, Inc.
|
5.
|
NW Natural
|
6.
|
Northwestern Corporation
|
7.
|
OneGas, Inc.
|
8.
|
RGC Resources, Inc.
|
9.
|
South Jersey Industries, Inc.
|
10.
|
Spire, Inc.
|
11.
|
Unitil Corporation
|
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
|
Aspire Energy of Ohio, LLC
|
Delaware
|
Aspire Energy, LLC
|
Florida
|
Aspire Energy Express, LLC
|
Delaware
|
Marlin Gas Services, LLC
|
Delaware
|
Chesapeake Elkton, LLC
|
Delaware
|
OnSight Renewables, 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
|
|
|
Subsidiaries of Chesapeake OnSight Services, LLC
|
State Incorporated
|
Eight Flags Energy, LLC
|
Delaware
|
Amelia Island Energy, LLC
|
Delaware
|
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
|
/s/ Baker Tilly Virchow Krause, LLP
|
|
Philadelphia, Pennsylvania
|
February 26, 2020
|
1.
|
I have reviewed this annual report on Form 10-K for the year ended December 31, 2019 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/ JEFFRY M. HOUSEHOLDER
|
Jeffry M. Householder
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K for the year ended December 31, 2019 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/ BETH W. COOPER
|
Beth W. Cooper
Executive Vice President, Chief Financial Officer, and Assistant Corporate Secretary
|
/s/ JEFFRY M. HOUSEHOLDER
|
Jeffry M. Householder
|
February 26, 2020
|
/S/ BETH W. COOPER
|
Beth W. Cooper
|
February 26, 2020
|