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FORM 10-Q
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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CHESAPEAKE UTILITIES CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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51-0064146
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock - par value per share $0.4867
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CPK
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New York Stock Exchange, Inc.
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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ITEM 1.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 1.
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ITEM 1A.
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ITEM 2.
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ITEM 3.
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ITEM 5.
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ITEM 6.
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Three Months Ended
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||||||
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March 31,
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||||||
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2020
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2019
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(in thousands, except shares and per share data)
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Operating Revenues
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Regulated Energy
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$
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102,955
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$
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103,618
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Unregulated Energy and other
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49,755
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56,846
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Total Operating Revenues
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152,710
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160,464
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Operating Expenses
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Regulated Energy cost of sales
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34,832
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36,516
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Unregulated Energy and other cost of sales
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18,036
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24,411
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Operations
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35,992
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35,413
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Maintenance
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3,836
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3,680
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Depreciation and amortization
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12,252
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10,928
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Other taxes
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5,649
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5,392
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Total Operating Expenses
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110,597
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116,340
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Operating Income
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42,113
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44,124
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Other income (expense), net
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3,318
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(57
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)
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Interest charges
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5,814
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5,628
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Income from Continuing Operations Before Income Taxes
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39,617
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38,439
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Income Taxes on Continuing Operations
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10,591
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9,625
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Income from Continuing Operations
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29,026
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28,814
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Loss from Discontinued Operations, Net of Tax
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(96
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)
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(150
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)
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Net Income
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$
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28,930
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$
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28,664
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Weighted Average Common Shares Outstanding:
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Basic
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16,414,773
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16,384,927
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Diluted
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16,471,827
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16,432,852
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Basic Earnings Per Share of Common Stock:
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Earnings from Continuing Operations
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$
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1.77
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$
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1.76
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Loss from Discontinued Operations
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(0.01
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)
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(0.01
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)
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Basic Earnings Per Share of Common Stock
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$
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1.76
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$
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1.75
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Diluted Earnings Per Share of Common Stock:
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Earnings from Continuing Operations
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$
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1.77
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$
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1.75
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Loss from Discontinued Operations
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(0.01
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)
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(0.01
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)
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Diluted Earnings Per Share of Common Stock
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$
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1.76
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$
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1.74
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Three Months Ended
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||||||
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March 31,
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||||||
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2020
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2019
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(in thousands)
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Net Income
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$
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28,930
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$
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28,664
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Other Comprehensive Income (Loss), net of tax:
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Employee Benefits, net of tax:
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Amortization of prior service cost, net of tax of $(5), and $(5), respectively
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(14
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)
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(14
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)
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Net gain, net of tax of $28, and $42, respectively
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80
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121
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Cash Flow Hedges, net of tax:
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Unrealized gain on commodity contract cash flow hedges, net of tax of $2, and $1,194, respectively
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7
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2,982
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Total Other Comprehensive Income, net of tax
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73
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3,089
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Comprehensive Income
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$
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29,003
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$
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31,753
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Assets
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March 31,
2020 |
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December 31,
2019 |
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(in thousands, except shares and per share data)
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Property, Plant and Equipment
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Regulated Energy
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$
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1,447,089
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$
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1,441,473
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Unregulated Energy
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274,970
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265,209
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Other businesses and eliminations
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39,370
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39,850
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Total property, plant and equipment
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1,761,429
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1,746,532
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Less: Accumulated depreciation and amortization
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(345,206
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)
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(336,876
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)
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Plus: Construction work in progress
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75,510
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54,141
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Net property, plant and equipment
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1,491,733
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1,463,797
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Current Assets
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Cash and cash equivalents
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3,982
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6,985
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Trade and other receivables
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46,730
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50,899
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Less: Allowance for credit losses
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(1,421
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)
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(1,337
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)
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Trade receivables, net
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45,309
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49,562
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Accrued revenue
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16,931
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20,846
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Propane inventory, at average cost
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5,136
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5,824
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Other inventory, at average cost
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5,621
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6,067
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Regulatory assets
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4,441
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5,144
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Storage gas prepayments
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753
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3,541
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Income taxes receivable
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15,230
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20,050
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Prepaid expenses
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10,707
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13,928
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Derivative assets, at fair value
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151
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|
|
—
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Other current assets
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3,666
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|
|
2,879
|
|
||
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Total current assets
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|
111,927
|
|
|
134,826
|
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||
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Deferred Charges and Other Assets
|
|
|
|
|
||||
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Goodwill
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32,668
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32,668
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Other intangible assets, net
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7,824
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8,129
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Investments, at fair value
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7,217
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9,229
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Operating lease right-of-use assets
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11,696
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11,563
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Regulatory assets
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|
73,552
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|
|
73,407
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||
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Receivables and other deferred charges
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|
51,602
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|
|
49,579
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|
||
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Total deferred charges and other assets
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|
184,559
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|
|
184,575
|
|
||
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Total Assets
|
|
$
|
1,788,219
|
|
|
$
|
1,783,198
|
|
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Capitalization and Liabilities
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
(in thousands, except shares and per share data)
|
|
|
|
|
||||
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Capitalization
|
|
|
|
|
||||
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Stockholders’ equity
|
|
|
|
|
||||
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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)
|
|
7,998
|
|
|
7,984
|
|
||
|
Additional paid-in capital
|
|
259,521
|
|
|
259,253
|
|
||
|
Retained earnings
|
|
322,804
|
|
|
300,607
|
|
||
|
Accumulated other comprehensive loss
|
|
(6,194
|
)
|
|
(6,267
|
)
|
||
|
Deferred compensation obligation
|
|
5,468
|
|
|
4,543
|
|
||
|
Treasury stock
|
|
(5,468
|
)
|
|
(4,543
|
)
|
||
|
Total stockholders’ equity
|
|
584,129
|
|
|
561,577
|
|
||
|
Long-term debt, net of current maturities
|
|
440,183
|
|
|
440,168
|
|
||
|
Total capitalization
|
|
1,024,312
|
|
|
1,001,745
|
|
||
|
Current Liabilities
|
|
|
|
|
||||
|
Current portion of long-term debt
|
|
15,600
|
|
|
45,600
|
|
||
|
Short-term borrowing
|
|
254,339
|
|
|
247,371
|
|
||
|
Accounts payable
|
|
52,568
|
|
|
54,068
|
|
||
|
Customer deposits and refunds
|
|
29,122
|
|
|
30,939
|
|
||
|
Accrued interest
|
|
5,014
|
|
|
2,554
|
|
||
|
Dividends payable
|
|
6,655
|
|
|
6,644
|
|
||
|
Accrued compensation
|
|
7,518
|
|
|
16,236
|
|
||
|
Regulatory liabilities
|
|
13,524
|
|
|
5,991
|
|
||
|
Derivative liabilities, at fair value
|
|
1,986
|
|
|
1,844
|
|
||
|
Other accrued liabilities
|
|
16,170
|
|
|
12,077
|
|
||
|
Total current liabilities
|
|
402,496
|
|
|
423,324
|
|
||
|
Deferred Credits and Other Liabilities
|
|
|
|
|
||||
|
Deferred income taxes
|
|
186,431
|
|
|
180,656
|
|
||
|
Regulatory liabilities
|
|
128,027
|
|
|
127,744
|
|
||
|
Environmental liabilities
|
|
6,046
|
|
|
6,468
|
|
||
|
Other pension and benefit costs
|
|
28,043
|
|
|
30,569
|
|
||
|
Operating lease liabilities
|
|
10,165
|
|
|
9,896
|
|
||
|
Deferred investment tax credits and other liabilities
|
|
2,699
|
|
|
2,796
|
|
||
|
Total deferred credits and other liabilities
|
|
361,411
|
|
|
358,129
|
|
||
|
Environmental and other commitments and contingencies (Notes 6 and 7)
|
|
|
|
|
||||
|
Total Capitalization and Liabilities
|
|
$
|
1,788,219
|
|
|
$
|
1,783,198
|
|
|
|
|
Three Months Ended
|
||||||
|
|
|
March 31,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
(in thousands)
|
|
|
|
|
||||
|
Operating Activities
|
|
|
|
|
||||
|
Net income
|
|
$
|
28,930
|
|
|
$
|
28,664
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
|
Depreciation and amortization
|
|
12,252
|
|
|
11,074
|
|
||
|
Depreciation and accretion included in other costs
|
|
2,361
|
|
|
2,135
|
|
||
|
Deferred income taxes
|
|
5,738
|
|
|
3,430
|
|
||
|
Realized gain on commodity contracts and sale of assets
|
|
(4,458
|
)
|
|
(363
|
)
|
||
|
Unrealized loss (gain) on investments and commodity contracts
|
|
1,511
|
|
|
(721
|
)
|
||
|
Employee benefits and compensation
|
|
11
|
|
|
382
|
|
||
|
Share-based compensation
|
|
1,056
|
|
|
487
|
|
||
|
Changes in assets and liabilities:
|
|
|
|
|
||||
|
Accounts receivable and accrued revenue
|
|
8,139
|
|
|
18,147
|
|
||
|
Propane inventory, storage gas and other inventory
|
|
3,921
|
|
|
7,207
|
|
||
|
Regulatory assets/liabilities, net
|
|
7,309
|
|
|
3,121
|
|
||
|
Prepaid expenses and other current assets
|
|
3,359
|
|
|
11,873
|
|
||
|
Accounts payable and other accrued liabilities
|
|
(4,243
|
)
|
|
(44,783
|
)
|
||
|
Income taxes receivable
|
|
4,820
|
|
|
6,241
|
|
||
|
Customer deposits and refunds
|
|
(1,817
|
)
|
|
(4,445
|
)
|
||
|
Accrued compensation
|
|
(8,766
|
)
|
|
(5,548
|
)
|
||
|
Other assets and liabilities, net
|
|
(1,315
|
)
|
|
3,585
|
|
||
|
Net cash provided by operating activities
|
|
58,808
|
|
|
40,486
|
|
||
|
Investing Activities
|
|
|
|
|
||||
|
Property, plant and equipment expenditures
|
|
(35,182
|
)
|
|
(43,216
|
)
|
||
|
Proceeds from sale of assets
|
|
4,106
|
|
|
115
|
|
||
|
Environmental expenditures
|
|
(422
|
)
|
|
(268
|
)
|
||
|
Net cash used in investing activities
|
|
(31,498
|
)
|
|
(43,369
|
)
|
||
|
Financing Activities
|
|
|
|
|
||||
|
Common stock dividends
|
|
(6,483
|
)
|
|
(5,877
|
)
|
||
|
Issuance (repurchase) of stock under the Dividend Reinvestment Plan
|
|
192
|
|
|
(183
|
)
|
||
|
Tax withholding payments related to net settled stock compensation
|
|
(977
|
)
|
|
(692
|
)
|
||
|
Change in cash overdrafts due to outstanding checks
|
|
(4,727
|
)
|
|
84
|
|
||
|
Net borrowings (repayments) under line of credit agreements
|
|
11,695
|
|
|
(18,149
|
)
|
||
|
Proceeds from issuance of long-term debt, net of offering fees
|
|
(13
|
)
|
|
30,000
|
|
||
|
Repayment of long-term debt and capital lease obligation
|
|
(30,000
|
)
|
|
(414
|
)
|
||
|
Net cash (used) provided by financing activities
|
|
(30,313
|
)
|
|
4,769
|
|
||
|
Net Increase (Decrease) in Cash and Cash Equivalents
|
|
(3,003
|
)
|
|
1,886
|
|
||
|
Cash and Cash Equivalents—Beginning of Period
|
|
6,985
|
|
|
6,089
|
|
||
|
Cash and Cash Equivalents—End of Period
|
|
$
|
3,982
|
|
|
$
|
7,975
|
|
|
|
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, 2018
|
16,378,545
|
|
|
$
|
7,971
|
|
|
$
|
255,651
|
|
|
$
|
261,530
|
|
|
$
|
(6,713
|
)
|
|
$
|
3,854
|
|
|
$
|
(3,854
|
)
|
|
$
|
518,439
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
28,664
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,664
|
|
|||||||
|
Prior period reclassification
|
—
|
|
|
—
|
|
|
—
|
|
|
115
|
|
|
(115
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,089
|
|
|
—
|
|
|
—
|
|
|
3,089
|
|
|||||||
|
Dividend declared ($0.3700 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,198
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,198
|
)
|
|||||||
|
Dividend reinvestment plan
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||
|
Share-based compensation and tax benefit (3)(4)
|
18,472
|
|
|
9
|
|
|
(343
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(334
|
)
|
|||||||
|
Treasury stock activities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
522
|
|
|
(522
|
)
|
|
—
|
|
|||||||
|
Balance at March 31, 2019
|
16,397,017
|
|
|
$
|
7,980
|
|
|
$
|
255,307
|
|
|
$
|
284,111
|
|
|
$
|
(3,739
|
)
|
|
$
|
4,376
|
|
|
$
|
(4,376
|
)
|
|
$
|
543,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Balance at December 31, 2019
|
16,403,776
|
|
|
$
|
7,984
|
|
|
$
|
259,253
|
|
|
$
|
300,607
|
|
|
$
|
(6,267
|
)
|
|
$
|
4,543
|
|
|
$
|
(4,543
|
)
|
|
$
|
561,577
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
28,930
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,930
|
|
|||||||
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|||||||
|
Dividend declared ($0.4050 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,703
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,703
|
)
|
|||||||
|
Dividend reinvestment plan
|
3,743
|
|
|
2
|
|
|
352
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
354
|
|
|||||||
|
Share-based compensation and tax benefit (3) (4)
|
25,586
|
|
|
12
|
|
|
(84
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(72
|
)
|
|||||||
|
Treasury stock activities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
925
|
|
|
(925
|
)
|
|
—
|
|
|||||||
|
Cumulative effect of the adoption of ASU 2016-13
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|||||||
|
Balance at March 31, 2020
|
16,433,105
|
|
|
$
|
7,998
|
|
|
$
|
259,521
|
|
|
$
|
322,804
|
|
|
$
|
(6,194
|
)
|
|
$
|
5,468
|
|
|
$
|
(5,468
|
)
|
|
$
|
584,129
|
|
|
(1)
|
2,000,000 shares of preferred stock at $0.01 par value have been authorized. No shares have been issued or are outstanding; accordingly, no information has been included in the statements of stockholders’ equity.
|
|
(2)
|
Includes 104,871 shares at March 31, 2020, and 95,329 shares at December 31, 2019, respectively, held in a Rabbi Trust related to our Non-Qualified Deferred Compensation Plan.
|
|
(3)
|
Includes amounts for shares issued for directors’ compensation.
|
|
(4)
|
The shares issued under the SICP are net of shares withheld for employee taxes. For the three months ended March 31, 2020 and 2019, we withheld 10,319 and 7,635 shares, respectively, for employee taxes.
|
|
(in thousands)
|
|
||
|
Balance at December 31, 2019
|
$
|
1,337
|
|
|
Additions:
|
|
||
|
Provision for credit losses
|
273
|
|
|
|
Recoveries
|
84
|
|
|
|
Deductions:
|
|
||
|
Write offs
|
(273
|
)
|
|
|
Balance at March 31, 2020
|
$
|
1,421
|
|
|
2.
|
Calculation of Earnings Per Share
|
|
|
|
Three Months Ended
|
||||||
|
|
|
March 31,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
(in thousands, except shares and per share data)
|
|
|
|
|
||||
|
Calculation of Basic Earnings Per Share:
|
|
|
|
|
||||
|
Income from Continuing Operations
|
|
$
|
29,026
|
|
|
$
|
28,814
|
|
|
Loss from Discontinued Operations
|
|
(96
|
)
|
|
(150
|
)
|
||
|
Net Income
|
|
$
|
28,930
|
|
|
$
|
28,664
|
|
|
|
|
|
|
|
||||
|
Weighted average shares outstanding
|
|
16,414,773
|
|
|
16,384,927
|
|
||
|
|
|
|
|
|
||||
|
Basic Earnings Per Share from Continuing Operations
|
|
$
|
1.77
|
|
|
$
|
1.76
|
|
|
Basic Loss Per Share from Discontinued Operations
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||
|
Basic Earnings Per Share
|
|
$
|
1.76
|
|
|
$
|
1.75
|
|
|
|
|
|
|
|
||||
|
Calculation of Diluted Earnings Per Share:
|
|
|
|
|
||||
|
Reconciliation of Denominator:
|
|
|
|
|
||||
|
Weighted shares outstanding—Basic
|
|
16,414,773
|
|
|
16,384,927
|
|
||
|
Effect of dilutive securities—Share-based compensation
|
|
57,054
|
|
|
47,925
|
|
||
|
Adjusted denominator—Diluted
|
|
16,471,827
|
|
|
16,432,852
|
|
||
|
|
|
|
|
|
||||
|
Diluted Earnings Per Share from Continuing Operations
|
|
$
|
1.77
|
|
|
$
|
1.75
|
|
|
Diluted Loss Per Share from Discontinued Operations
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||
|
Diluted Earnings Per Share
|
|
$
|
1.76
|
|
|
$
|
1.74
|
|
|
3.
|
Acquisitions and Divestitures
|
|
|
|
Three Months Ended
|
||||||
|
|
|
March 31,
|
||||||
|
(in thousands)
|
|
2020
|
|
2019
|
||||
|
Operating revenues(1)
|
|
$
|
—
|
|
|
$
|
77,022
|
|
|
Cost of sales(1)
|
|
(9
|
)
|
|
75,162
|
|
||
|
Other operating expenses
|
|
116
|
|
|
1,991
|
|
||
|
Operating loss
|
|
(107
|
)
|
|
(131
|
)
|
||
|
Interest and other expense
|
|
(24
|
)
|
|
(70
|
)
|
||
|
Loss from Discontinued Operations before income taxes
|
|
(131
|
)
|
|
(201
|
)
|
||
|
Income tax benefit
|
|
(35
|
)
|
|
(51
|
)
|
||
|
Loss from Discontinued Operations, Net of Tax
|
|
$
|
(96
|
)
|
|
$
|
(150
|
)
|
|
(in thousands)
|
|
Three Months Ended
March 31, 2019
|
||
|
Depreciation and amortization
|
|
$
|
146
|
|
|
Deferred income taxes
|
|
$
|
1,396
|
|
|
Realized loss on commodity contracts
|
|
$
|
584
|
|
|
|
|
Three months ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||||||||
|
(in thousands)
|
|
Regulated Energy
|
|
Unregulated Energy
|
|
Other and Eliminations
|
|
Total
|
|
Regulated Energy
|
|
Unregulated Energy
|
|
Other and Eliminations
|
|
Total
|
||||||||||||||||
|
Energy distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Delaware natural gas division
|
|
$
|
26,567
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,567
|
|
|
$
|
27,549
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27,549
|
|
|
Florida natural gas division
|
|
8,477
|
|
|
—
|
|
|
—
|
|
|
8,477
|
|
|
7,900
|
|
|
—
|
|
|
—
|
|
|
7,900
|
|
||||||||
|
FPU electric distribution
|
|
14,219
|
|
|
—
|
|
|
—
|
|
|
14,219
|
|
|
14,378
|
|
|
—
|
|
|
—
|
|
|
14,378
|
|
||||||||
|
FPU natural gas distribution
|
|
25,444
|
|
|
—
|
|
|
—
|
|
|
25,444
|
|
|
23,786
|
|
|
—
|
|
|
—
|
|
|
23,786
|
|
||||||||
|
Maryland natural gas division
|
|
9,138
|
|
|
—
|
|
|
—
|
|
|
9,138
|
|
|
10,047
|
|
|
—
|
|
|
—
|
|
|
10,047
|
|
||||||||
|
Sandpiper Energy natural gas/propane operations
|
|
6,292
|
|
|
—
|
|
|
—
|
|
|
6,292
|
|
|
7,082
|
|
|
—
|
|
|
—
|
|
|
7,082
|
|
||||||||
|
Total energy distribution
|
|
90,137
|
|
|
—
|
|
|
—
|
|
|
90,137
|
|
|
90,742
|
|
|
—
|
|
|
—
|
|
|
90,742
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Energy transmission
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Aspire Energy
|
|
—
|
|
|
9,781
|
|
|
—
|
|
|
9,781
|
|
|
—
|
|
|
13,470
|
|
|
—
|
|
|
13,470
|
|
||||||||
|
Eastern Shore
|
|
19,279
|
|
|
—
|
|
|
—
|
|
|
19,279
|
|
|
19,056
|
|
|
—
|
|
|
—
|
|
|
19,056
|
|
||||||||
|
Peninsula Pipeline
|
|
4,824
|
|
|
—
|
|
|
—
|
|
|
4,824
|
|
|
3,565
|
|
|
—
|
|
|
—
|
|
|
3,565
|
|
||||||||
|
Total energy transmission
|
|
24,103
|
|
|
9,781
|
|
|
—
|
|
|
33,884
|
|
|
22,621
|
|
|
13,470
|
|
|
—
|
|
|
36,091
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Energy generation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Eight Flags
|
|
—
|
|
|
4,323
|
|
|
—
|
|
|
4,323
|
|
|
—
|
|
|
4,142
|
|
|
—
|
|
|
4,142
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Propane operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Propane delivery operations
|
|
—
|
|
|
38,282
|
|
|
—
|
|
|
38,282
|
|
|
—
|
|
|
46,125
|
|
|
—
|
|
|
46,125
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Energy delivery services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Marlin Gas Services
|
|
—
|
|
|
1,309
|
|
|
—
|
|
|
1,309
|
|
|
—
|
|
|
2,434
|
|
|
—
|
|
|
2,434
|
|
||||||||
|
Other
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
Total energy delivery services
|
|
—
|
|
|
1,329
|
|
|
—
|
|
|
1,329
|
|
|
—
|
|
|
2,434
|
|
|
—
|
|
|
2,434
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Other and eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Eliminations
|
|
(11,285
|
)
|
|
(25
|
)
|
|
(4,409
|
)
|
|
(15,719
|
)
|
|
(9,745
|
)
|
|
(5,496
|
)
|
|
(4,366
|
)
|
|
(19,607
|
)
|
||||||||
|
Other
|
|
—
|
|
|
341
|
|
|
133
|
|
|
474
|
|
|
—
|
|
|
405
|
|
|
132
|
|
|
537
|
|
||||||||
|
Total other and eliminations
|
|
(11,285
|
)
|
|
316
|
|
|
(4,276
|
)
|
|
(15,245
|
)
|
|
(9,745
|
)
|
|
(5,091
|
)
|
|
(4,234
|
)
|
|
(19,070
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Total operating revenues (1)
|
|
$
|
102,955
|
|
|
$
|
54,031
|
|
|
$
|
(4,276
|
)
|
|
$
|
152,710
|
|
|
$
|
103,618
|
|
|
$
|
61,080
|
|
|
$
|
(4,234
|
)
|
|
$
|
160,464
|
|
|
|
|
Trade Receivables
|
|
Contract Assets (Current)
|
|
Contract Assets (Non-current)
|
|
Contract Liabilities (Current)
|
||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at 12/31/2019
|
|
$
|
47,430
|
|
|
$
|
18
|
|
|
$
|
3,465
|
|
|
$
|
589
|
|
|
Balance at 3/31/2020
|
|
43,614
|
|
|
18
|
|
|
4,098
|
|
|
428
|
|
||||
|
Increase (decrease)
|
|
$
|
(3,816
|
)
|
|
$
|
—
|
|
|
$
|
633
|
|
|
$
|
(161
|
)
|
|
(in thousands)
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025
|
|
2026 and thereafter
|
||||||||||||||
|
Eastern Shore and Peninsula Pipeline
|
$
|
28,084
|
|
|
$
|
34,404
|
|
|
$
|
27,249
|
|
|
$
|
21,795
|
|
|
$
|
19,548
|
|
|
$
|
18,699
|
|
|
$
|
177,607
|
|
|
Natural gas distribution operations
|
2,992
|
|
|
4,124
|
|
|
5,167
|
|
|
4,936
|
|
|
4,699
|
|
|
4,166
|
|
|
32,996
|
|
|||||||
|
FPU electric distribution
|
424
|
|
|
566
|
|
|
566
|
|
|
566
|
|
|
566
|
|
|
275
|
|
|
825
|
|
|||||||
|
Total revenue contracts with remaining performance obligations
|
$
|
31,500
|
|
|
$
|
39,094
|
|
|
$
|
32,982
|
|
|
$
|
27,297
|
|
|
$
|
24,813
|
|
|
$
|
23,140
|
|
|
$
|
211,428
|
|
|
5.
|
Rates and Other Regulatory Activities
|
|
|
|
Regulatory Liabilities related to Accumulated Deferred Income Taxes ("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)
|
|
$12,818
|
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)
|
|
$4,058
|
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)
|
|
$3,752
|
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)
|
|
$8,274
|
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)
|
|
$19,209
|
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
|
|
$291
|
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)
|
|
$5,704
|
In January 2019, PSC issued order approving amortization of ADIT through purchased power cost recovery, storm reserve and rates.
|
|
TCJA benefit is provided to 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.
|
|
MGP Site (Jurisdiction)
|
Status
|
Estimated Cost to Clean up
(Expect to Recover through Rates with Customers)
|
|
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.
|
|
7.
|
Other Commitments and Contingencies
|
|
8.
|
Segment Information
|
|
•
|
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, the natural gas marketing and related services subsidiary (PESCO), previously reported in the Unregulated Energy segment, are reflected in discontinued operations. See Note 3, Acquisitions and Divestitures for additional details of the sale of PESCO.
|
|
|
|
Three Months Ended
|
||||||
|
|
|
March 31,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
(in thousands)
|
|
|
|
|
||||
|
Operating Revenues, Unaffiliated Customers
|
|
|
|
|
||||
|
Regulated Energy
|
|
$
|
102,494
|
|
|
$
|
103,071
|
|
|
Unregulated Energy
|
|
50,216
|
|
|
57,393
|
|
||
|
Total operating revenues, unaffiliated customers
|
|
$
|
152,710
|
|
|
$
|
160,464
|
|
|
Intersegment Revenues (1)
|
|
|
|
|
||||
|
Regulated Energy
|
|
$
|
461
|
|
|
$
|
547
|
|
|
Unregulated Energy
|
|
3,815
|
|
|
3,687
|
|
||
|
Other businesses
|
|
132
|
|
|
132
|
|
||
|
Total intersegment revenues
|
|
$
|
4,408
|
|
|
$
|
4,366
|
|
|
Operating Income
|
|
|
|
|
||||
|
Regulated Energy
|
|
$
|
27,888
|
|
|
$
|
29,741
|
|
|
Unregulated Energy
|
|
13,841
|
|
|
15,258
|
|
||
|
Other businesses and eliminations
|
|
384
|
|
|
(875
|
)
|
||
|
Operating income
|
|
42,113
|
|
|
44,124
|
|
||
|
Other income (expense), net
|
|
3,318
|
|
|
(57
|
)
|
||
|
Interest charges
|
|
5,814
|
|
|
5,628
|
|
||
|
Income from Continuing Operations before Income Taxes
|
|
39,617
|
|
|
38,439
|
|
||
|
Income Taxes on Continuing Operations
|
|
10,591
|
|
|
9,625
|
|
||
|
Income from Continuing Operations
|
|
29,026
|
|
|
28,814
|
|
||
|
Loss from Discontinued Operations, net of tax
|
|
(96
|
)
|
|
(150
|
)
|
||
|
Net Income
|
|
$
|
28,930
|
|
|
$
|
28,664
|
|
|
|
|
|
|
|
||||
|
(in thousands)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
|
Identifiable Assets
|
|
|
|
|
||||
|
Regulated Energy segment
|
|
$
|
1,448,114
|
|
|
$
|
1,434,066
|
|
|
Unregulated Energy segment
|
|
295,470
|
|
|
296,810
|
|
||
|
Other businesses and eliminations
|
|
44,635
|
|
|
52,322
|
|
||
|
Total identifiable assets
|
|
$
|
1,788,219
|
|
|
$
|
1,783,198
|
|
|
9.
|
Stockholder's Equity
|
|
|
|
Defined Benefit
|
|
Commodity
|
|
|
||||||
|
|
|
Pension and
|
|
Contract
|
|
|
||||||
|
|
|
Postretirement
|
|
Cash Flow
|
|
|
||||||
|
|
|
Plan Items
|
|
Hedges
|
|
Total
|
||||||
|
(in thousands)
|
|
|
|
|
|
|
||||||
|
As of December 31, 2019
|
|
$
|
(4,933
|
)
|
|
$
|
(1,334
|
)
|
|
$
|
(6,267
|
)
|
|
Other comprehensive income before reclassifications
|
|
—
|
|
|
895
|
|
|
895
|
|
|||
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
66
|
|
|
(888
|
)
|
|
(822
|
)
|
|||
|
Net current-period other comprehensive income
|
|
66
|
|
|
7
|
|
|
73
|
|
|||
|
As of March 31, 2020
|
|
$
|
(4,867
|
)
|
|
$
|
(1,327
|
)
|
|
$
|
(6,194
|
)
|
|
(in thousands)
|
|
|
|
|
|
|
||||||
|
As of December 31, 2018
|
|
$
|
(5,928
|
)
|
|
$
|
(785
|
)
|
|
$
|
(6,713
|
)
|
|
Other comprehensive income before reclassifications
|
|
—
|
|
|
3,021
|
|
|
3,021
|
|
|||
|
Amounts reclassified from accumulated other comprehensive income
|
|
107
|
|
|
(39
|
)
|
|
68
|
|
|||
|
Net prior-period other comprehensive income
|
|
107
|
|
|
2,982
|
|
|
3,089
|
|
|||
|
Prior-year reclassification
|
|
|
|
|
(115
|
)
|
|
(115
|
)
|
|||
|
As of March 31, 2019
|
|
$
|
(5,821
|
)
|
|
$
|
2,082
|
|
|
$
|
(3,739
|
)
|
|
|
|
Three Months Ended
|
||||||
|
|
|
March 31,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
(in thousands)
|
|
|
|
|
||||
|
Amortization of defined benefit pension and postretirement plan items:
|
|
|
|
|
||||
|
Prior service credit (1)
|
|
$
|
19
|
|
|
$
|
19
|
|
|
Net loss(1)
|
|
(108
|
)
|
|
(163
|
)
|
||
|
Total before income taxes
|
|
(89
|
)
|
|
(144
|
)
|
||
|
Income tax benefit
|
|
23
|
|
|
37
|
|
||
|
Net of tax
|
|
$
|
(66
|
)
|
|
$
|
(107
|
)
|
|
Gains and losses on commodity contracts cash flow hedges:
|
|
|
|
|
||||
|
Propane swap agreements (2)
|
|
$
|
1,227
|
|
|
$
|
606
|
|
|
Natural gas swaps (2)(3)
|
|
—
|
|
|
11
|
|
||
|
Natural gas futures (2)(3)
|
|
—
|
|
|
(573
|
)
|
||
|
Total before income taxes
|
|
1,227
|
|
|
44
|
|
||
|
Income tax benefit (expense)
|
|
(339
|
)
|
|
(5
|
)
|
||
|
Net of tax
|
|
888
|
|
|
39
|
|
||
|
Total reclassifications for the period
|
|
$
|
822
|
|
|
$
|
(68
|
)
|
|
10.
|
Employee Benefit Plans
|
|
|
|
Chesapeake
Pension Plan |
|
FPU
Pension Plan |
|
Chesapeake SERP
|
|
Chesapeake
Postretirement Plan |
|
FPU
Medical Plan |
||||||||||||||||||||||||||||||
|
For the Three Months Ended March 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Interest cost
|
|
$
|
46
|
|
|
$
|
105
|
|
|
$
|
518
|
|
|
$
|
615
|
|
|
$
|
16
|
|
|
$
|
21
|
|
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
10
|
|
|
$
|
12
|
|
|
Expected return on plan assets
|
|
(42
|
)
|
|
(127
|
)
|
|
(745
|
)
|
|
(693
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
Amortization of prior service credit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
||||||||||
|
Amortization of net loss
|
|
65
|
|
|
101
|
|
|
135
|
|
|
129
|
|
|
5
|
|
|
26
|
|
|
12
|
|
|
12
|
|
|
—
|
|
|
—
|
|
||||||||||
|
Net periodic cost (benefit)
|
|
69
|
|
|
79
|
|
|
(92
|
)
|
|
51
|
|
|
21
|
|
|
47
|
|
|
1
|
|
|
3
|
|
|
10
|
|
|
12
|
|
||||||||||
|
Amortization of pre-merger regulatory asset
|
|
—
|
|
|
—
|
|
|
—
|
|
|
190
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||||||
|
Total periodic cost
|
|
$
|
69
|
|
|
$
|
79
|
|
|
$
|
(92
|
)
|
|
$
|
241
|
|
|
$
|
21
|
|
|
$
|
47
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
12
|
|
|
$
|
14
|
|
|
For the Three Months Ended March 31, 2020
|
|
Chesapeake
Pension Plan |
|
FPU
Pension Plan |
|
Chesapeake SERP
|
|
Chesapeake
Postretirement Plan |
|
FPU
Medical Plan |
|
Total
|
||||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Prior service credit
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
Net loss
|
|
65
|
|
|
135
|
|
|
5
|
|
|
12
|
|
|
—
|
|
|
217
|
|
||||||
|
Total recognized in net periodic benefit cost
|
|
65
|
|
|
135
|
|
|
5
|
|
|
(7
|
)
|
|
—
|
|
|
198
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Recognized from accumulated other comprehensive loss/(gain) (1)
|
|
65
|
|
|
26
|
|
|
5
|
|
|
(7
|
)
|
|
—
|
|
|
89
|
|
||||||
|
Recognized from regulatory asset
|
|
—
|
|
|
109
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
||||||
|
Total
|
|
$
|
65
|
|
|
$
|
135
|
|
|
$
|
5
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
198
|
|
|
For the Three Months Ended March 31, 2019
|
|
Chesapeake
Pension Plan |
|
FPU
Pension Plan |
|
Chesapeake SERP
|
|
Chesapeake
Postretirement Plan |
|
FPU
Medical Plan |
|
Total
|
||||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Prior service credit
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
Net loss
|
|
101
|
|
|
129
|
|
|
26
|
|
|
12
|
|
|
—
|
|
|
268
|
|
||||||
|
Total recognized in net periodic benefit cost
|
|
101
|
|
|
129
|
|
|
26
|
|
|
(7
|
)
|
|
—
|
|
|
249
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Recognized from accumulated other comprehensive loss/(gain) (1)
|
|
101
|
|
|
24
|
|
|
26
|
|
|
(7
|
)
|
|
—
|
|
|
144
|
|
||||||
|
Recognized from regulatory asset
|
|
—
|
|
|
105
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105
|
|
||||||
|
Total
|
|
$
|
101
|
|
|
$
|
129
|
|
|
$
|
26
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
249
|
|
|
11.
|
Investments
|
|
(in thousands)
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
Rabbi trust (associated with the Non-Qualified Deferred Compensation Plan)
|
$
|
7,194
|
|
|
$
|
9,202
|
|
|
Investments in equity securities
|
23
|
|
|
27
|
|
||
|
Total
|
$
|
7,217
|
|
|
$
|
9,229
|
|
|
12.
|
Share-Based Compensation
|
|
|
|
Three Months Ended
|
||||||
|
|
|
March 31,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
(in thousands)
|
|
|
|
|
||||
|
Awards to non-employee directors
|
|
$
|
176
|
|
|
$
|
149
|
|
|
Awards to key employees
|
|
880
|
|
|
338
|
|
||
|
Total compensation expense
|
|
1,056
|
|
|
487
|
|
||
|
Less: tax benefit
|
|
(276
|
)
|
|
(127
|
)
|
||
|
Share-based compensation amounts included in net income
|
|
$
|
780
|
|
|
$
|
360
|
|
|
|
|
Number of Shares
|
|
Weighted Average
Fair Value
|
|||
|
Outstanding—December 31, 2019
|
|
157,817
|
|
|
$
|
80.28
|
|
|
Granted
|
|
65,775
|
|
|
$
|
92.78
|
|
|
Vested
|
|
(35,651
|
)
|
|
$
|
66.48
|
|
|
Expired
|
|
(5,302
|
)
|
|
$
|
65.32
|
|
|
Outstanding—March 31, 2020
|
|
182,639
|
|
|
$
|
87.01
|
|
|
Business unit
|
|
Commodity
|
|
Quantity hedged (in millions)
|
|
Designation
|
|
Longest Expiration date of hedge
|
|
Sharp
|
|
Propane (gallons)
|
|
15.9
|
|
Cash flows hedges
|
|
June 2022
|
|
(in thousands)
|
Balance Sheet Location
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
|
Sharp
|
Other Current Assets
|
|
$
|
3,111
|
|
|
$
|
2,317
|
|
|
|
|
Derivative Assets
|
||||||||
|
|
|
|
|
Fair Value As Of
|
||||||
|
(in thousands)
|
|
Balance Sheet Location
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
|
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
||||
|
Propane swap agreements
|
|
Derivative assets, at fair value
|
|
$
|
151
|
|
|
$
|
—
|
|
|
Total asset derivatives
|
|
|
|
$
|
151
|
|
|
$
|
—
|
|
|
|
|
Derivative Liabilities
|
||||||||
|
|
|
|
|
Fair Value As Of
|
||||||
|
(in thousands)
|
|
Balance Sheet Location
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
|
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
||||
|
Propane swap agreements
|
|
Derivative liabilities, at fair value
|
|
$
|
1,986
|
|
|
$
|
1,844
|
|
|
Total liability derivatives
|
|
|
|
$
|
1,986
|
|
|
$
|
1,844
|
|
|
|
|
|
|
Amount of Gain (Loss) on Derivatives:
|
||||||
|
|
|
Location of Gain
|
|
For the Three Months Ended March 31,
|
||||||
|
(in thousands)
|
|
(Loss) on Derivatives
|
|
2020
|
|
2019
|
||||
|
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
||||
|
Propane swap agreements
|
|
Cost of sales
|
|
$
|
1,227
|
|
|
$
|
606
|
|
|
Propane swap agreements
|
|
Other comprehensive income
|
|
9
|
|
|
1,009
|
|
||
|
Natural gas swap contracts
|
|
Other comprehensive loss
|
|
—
|
|
|
(59
|
)
|
||
|
Natural gas futures contracts
|
|
Other comprehensive income
|
|
—
|
|
|
3,226
|
|
||
|
Total
|
|
|
|
$
|
1,236
|
|
|
$
|
4,782
|
|
|
14.
|
Fair Value of Financial Instruments
|
|
|
|
|
|
Fair Value Measurements Using:
|
||||||||||||
|
As of March 31, 2020
|
|
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
|
|
$
|
23
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Investments—guaranteed income fund
|
|
835
|
|
|
—
|
|
|
—
|
|
|
835
|
|
||||
|
Investments—mutual funds and other
|
|
6,359
|
|
|
6,359
|
|
|
—
|
|
|
—
|
|
||||
|
Total investments
|
|
7,217
|
|
|
6,382
|
|
|
—
|
|
|
835
|
|
||||
|
Derivative assets
|
|
151
|
|
|
—
|
|
|
151
|
|
|
—
|
|
||||
|
Total assets
|
|
$
|
7,368
|
|
|
$
|
6,382
|
|
|
$
|
151
|
|
|
$
|
835
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
|
Derivative liabilities
|
|
$
|
1,986
|
|
|
$
|
—
|
|
|
$
|
1,986
|
|
|
$
|
—
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
(in thousands)
|
|
|
|
||||
|
Beginning Balance
|
$
|
803
|
|
|
$
|
686
|
|
|
Purchases and adjustments
|
9
|
|
|
6
|
|
||
|
Transfers
|
57
|
|
|
—
|
|
||
|
Distribution
|
(38
|
)
|
|
—
|
|
||
|
Investment income
|
4
|
|
|
3
|
|
||
|
Ending Balance
|
$
|
835
|
|
|
$
|
695
|
|
|
15.
|
Long-Term Debt
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
(in thousands)
|
|
2020
|
|
2019
|
||||
|
FPU secured first mortgage bonds (1) :
|
|
|
|
|
||||
|
9.08% bond, due June 1, 2022
|
|
$
|
7,991
|
|
|
$
|
7,990
|
|
|
Uncollateralized senior notes:
|
|
|
|
|
||||
|
5.50% note, due October 12, 2020
|
|
2,000
|
|
|
2,000
|
|
||
|
5.93% note, due October 31, 2023
|
|
12,000
|
|
|
12,000
|
|
||
|
5.68% note, due June 30, 2026
|
|
20,300
|
|
|
20,300
|
|
||
|
6.43% note, due May 2, 2028
|
|
6,300
|
|
|
6,300
|
|
||
|
3.73% note, due December 16, 2028
|
|
18,000
|
|
|
18,000
|
|
||
|
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
|
|
|
100,000
|
|
||
|
2.98% note, due December 20, 2034
|
|
70,000
|
|
|
70,000
|
|
||
|
Term Note due February 28, 2020
|
|
—
|
|
|
30,000
|
|
||
|
Less: debt issuance costs
|
|
(808
|
)
|
|
(822
|
)
|
||
|
Total long-term debt
|
|
455,783
|
|
|
485,768
|
|
||
|
Less: current maturities
|
|
(15,600
|
)
|
|
(45,600
|
)
|
||
|
Total long-term debt, net of current maturities
|
|
$
|
440,183
|
|
|
$
|
440,168
|
|
|
(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
|
)
|
|
$
|
—
|
|
|
NYL Shelf Agreement (2)
|
|
150,000
|
|
|
(100,000
|
)
|
|
(40,000
|
)
|
|
10,000
|
|
||||
|
Total Shelf Agreements as of March 31, 2020
|
|
370,000
|
|
|
(270,000
|
)
|
|
(90,000
|
)
|
|
10,000
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Subsequent amendments / renewals:
|
|
|
|
|
|
|
|
|
||||||||
|
Prudential Shelf Agreement (3)
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
||||
|
MetLife Shelf Agreement (4)
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
||||
|
Total Shelf Agreements added after March 31, 2020
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||
|
Total Shelf Agreements as of May 5, 2020
|
|
$
|
670,000
|
|
|
$
|
(270,000
|
)
|
|
$
|
(90,000
|
)
|
|
$
|
310,000
|
|
|
16.
|
Short-Term Borrowings
|
|
|
|
|
|
|
Outstanding borrowings at
|
|
|
||||||||||
|
(in thousands)
|
Total Facility
|
|
LIBOR Based Interest Rate
|
|
March 31, 2020
|
|
December 31, 2019
|
|
Available at March 31, 2020
|
||||||||
|
Bank Credit Facility
|
|
|
|
|
|
|
|
|
|
||||||||
|
Committed revolving credit facility A
|
$
|
55,000
|
|
|
plus 0.75 percent
|
|
$
|
55,000
|
|
|
$
|
55,000
|
|
|
$
|
—
|
|
|
Committed revolving credit facility B
|
80,000
|
|
|
plus 0.75 percent
|
|
72,389
|
|
|
57,150
|
|
|
7,611
|
|
||||
|
Committed revolving credit facility C
|
45,000
|
|
|
plus 0.75 percent
|
|
35,515
|
|
|
42,040
|
|
|
9,485
|
|
||||
|
Committed revolving credit facility D
|
40,000
|
|
|
plus 0.85 percent
|
|
40,000
|
|
|
40,000
|
|
|
—
|
|
||||
|
Committed revolving credit facility E(2)
|
150,000
|
|
|
plus 1.125 percent
|
|
50,000
|
|
|
50,000
|
|
|
100,000
|
|
||||
|
Total short term credit facilities
|
$
|
370,000
|
|
|
|
|
252,904
|
|
|
244,190
|
|
|
$
|
117,096
|
|
||
|
Book overdrafts(1)
|
|
|
|
|
1,435
|
|
|
3,181
|
|
|
|
||||||
|
Total short-term borrowing
|
|
|
|
|
$
|
254,339
|
|
|
$
|
247,371
|
|
|
|
||||
|
17.
|
Leases
|
|
|
|
|
|
Three Months Ended
|
||||||
|
|
|
|
|
March 31,
|
||||||
|
( in thousands)
|
|
Classification
|
|
2020
|
|
2019
|
||||
|
Operating lease cost (1)
|
|
Operations expense
|
|
$
|
626
|
|
|
$
|
635
|
|
|
Finance lease cost:
|
|
|
|
|
|
|
||||
|
Amortization of lease assets
|
|
Depreciation and amortization
|
|
—
|
|
|
401
|
|
||
|
Interest on lease liabilities
|
|
Interest expense
|
|
—
|
|
|
4
|
|
||
|
Net lease cost
|
|
|
|
$
|
626
|
|
|
$
|
1,040
|
|
|
(in thousands)
|
|
Balance sheet classification
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
|
Assets
|
|
|
|
|
|
|
||||
|
Operating lease assets
|
|
Operating lease right-of-use assets
|
|
$
|
11,696
|
|
|
$
|
11,563
|
|
|
Total lease assets
|
|
|
|
$
|
11,696
|
|
|
$
|
11,563
|
|
|
Liabilities
|
|
|
|
|
|
|
||||
|
Current
|
|
|
|
|
|
|
||||
|
Operating lease liabilities
|
|
Other accrued liabilities
|
|
$
|
1,608
|
|
|
$
|
1,705
|
|
|
Noncurrent
|
|
|
|
|
|
|
||||
|
Operating lease liabilities
|
|
Operating lease - liabilities
|
|
10,165
|
|
|
9,896
|
|
||
|
Total lease liabilities
|
|
|
|
$
|
11,773
|
|
|
$
|
11,601
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||
|
Weighted-average remaining lease term (in years)
|
|
|
|
|
||
|
Operating leases
|
|
8.75
|
|
|
8.88
|
|
|
Weighted-average discount rate
|
|
|
|
|
||
|
Operating leases
|
|
3.8
|
%
|
|
3.8
|
%
|
|
|
|
Three Months Ended
|
||||||
|
|
|
March 31,
|
||||||
|
(in thousands)
|
|
2020
|
|
2019
|
||||
|
Operating cash flows from operating leases
|
|
$
|
527
|
|
|
$
|
537
|
|
|
Operating cash flows from finance leases
|
|
$
|
—
|
|
|
$
|
4
|
|
|
Financing cash flows from finance leases
|
|
$
|
—
|
|
|
$
|
401
|
|
|
•
|
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;
|
|
•
|
the effect of accounting pronouncements issued periodically by accounting standard-setting bodies; and
|
|
•
|
risks related to the outbreak of a pandemic, including the duration and scope of the pandemic and the corresponding impact on our supply chains, our personnel, our contract counterparties, general economic conditions and growth, and the financial markets.
|
|
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.
|
|
|
|
Three Months Ended
|
|
|
||||||||
|
|
|
March 31,
|
|
Increase
|
||||||||
|
|
|
2020
|
|
2019
|
|
(decrease)
|
||||||
|
(in thousands except per share)
|
|
|
|
|
|
|
||||||
|
Gross Margin
|
|
|
|
|
|
|
||||||
|
Regulated Energy segment
|
|
$
|
68,123
|
|
|
$
|
67,102
|
|
|
$
|
1,021
|
|
|
Unregulated Energy segment
|
|
31,803
|
|
|
32,542
|
|
|
(739
|
)
|
|||
|
Other businesses and eliminations
|
|
(85
|
)
|
|
(107
|
)
|
|
22
|
|
|||
|
Total Gross Margin
|
|
$
|
99,841
|
|
|
$
|
99,537
|
|
|
$
|
304
|
|
|
|
|
|
|
|
|
|
||||||
|
Operating Income
|
|
|
|
|
|
|
||||||
|
Regulated Energy segment
|
|
$
|
27,888
|
|
|
$
|
29,741
|
|
|
$
|
(1,853
|
)
|
|
Unregulated Energy segment
|
|
13,841
|
|
|
15,258
|
|
|
(1,417
|
)
|
|||
|
Other businesses and eliminations
|
|
384
|
|
|
(875
|
)
|
|
1,259
|
|
|||
|
Total Operating Income
|
|
42,113
|
|
|
44,124
|
|
|
(2,011
|
)
|
|||
|
Other income (expense), net
|
|
3,318
|
|
|
(57
|
)
|
|
3,375
|
|
|||
|
Interest charges
|
|
5,814
|
|
|
5,628
|
|
|
186
|
|
|||
|
Income from Continuing Operations Before Income Taxes
|
|
39,617
|
|
|
38,439
|
|
|
1,178
|
|
|||
|
Income Taxes on Continuing Operations
|
|
10,591
|
|
|
9,625
|
|
|
966
|
|
|||
|
Income from Continuing operations
|
|
29,026
|
|
|
28,814
|
|
|
212
|
|
|||
|
Loss from Discontinued Operations
|
|
(96
|
)
|
|
(150
|
)
|
|
54
|
|
|||
|
Net Income
|
|
$
|
28,930
|
|
|
$
|
28,664
|
|
|
$
|
266
|
|
|
Basic Earnings Per Share of Common Stock
|
|
|
|
|
|
|
||||||
|
Earnings from Continuing Operations
|
|
$
|
1.77
|
|
|
$
|
1.76
|
|
|
$
|
0.01
|
|
|
Loss from Discontinued Operations
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
—
|
|
|||
|
Basic Earnings Per Share of Common Stock
|
|
$
|
1.76
|
|
|
$
|
1.75
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
||||||
|
Diluted Earnings Per Share of Common Stock
|
|
|
|
|
|
|
||||||
|
Earnings from Continuing Operations
|
|
$
|
1.77
|
|
|
$
|
1.75
|
|
|
$
|
0.02
|
|
|
Loss from Discontinued Operations
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
—
|
|
|||
|
Diluted Earnings Per Share of Common Stock
|
|
$
|
1.76
|
|
|
$
|
1.74
|
|
|
$
|
0.02
|
|
|
(in thousands, except per share data)
|
|
Pre-tax
Income |
|
Net
Income |
|
Earnings
Per Share |
||||||
|
First Quarter of 2019 Reported Results from Continuing Operations
|
|
$
|
38,439
|
|
|
$
|
28,814
|
|
|
$
|
1.75
|
|
|
|
|
|
|
|
|
|
||||||
|
Adjusting for Unusual Items:
|
|
|
|
|
|
|
||||||
|
Decreased customer consumption primarily due to warmer weather
|
|
(4,220
|
)
|
|
(3,092
|
)
|
|
(0.19
|
)
|
|||
|
Absence of Florida tax savings (net of GRIP refunds) recorded in Q1 2019 for 2018
|
|
(910
|
)
|
|
(667
|
)
|
|
(0.04
|
)
|
|||
|
Gains from sales of assets
|
|
3,162
|
|
|
2,317
|
|
|
0.14
|
|
|||
|
|
|
(1,968
|
)
|
|
(1,442
|
)
|
|
(0.09
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
Increased (Decreased) Gross Margins:
|
|
|
|
|
|
|
||||||
|
Margin contribution from Boulden acquisition (completed December 2019)*
|
|
1,888
|
|
|
1,383
|
|
|
0.08
|
|
|||
|
Increased retail propane margins per gallon
|
|
1,217
|
|
|
892
|
|
|
0.05
|
|
|||
|
Natural gas distribution growth (excluding service expansions)
|
|
1,096
|
|
|
803
|
|
|
0.05
|
|
|||
|
Peninsula Pipeline service expansions*
|
|
1,039
|
|
|
761
|
|
|
0.05
|
|
|||
|
Higher Aspire Energy margins from negotiated rate increases
|
|
388
|
|
|
284
|
|
|
0.02
|
|
|||
|
Marlin Gas Services - higher level of pipeline integrity services for existing customers in 2019*
|
|
(982
|
)
|
|
(720
|
)
|
|
(0.04
|
)
|
|||
|
|
|
4,646
|
|
|
3,403
|
|
|
0.21
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
(Increased) Decreased Operating Expenses (Excluding Cost of Sales):
|
|
|
|
|
|
|
||||||
|
Depreciation, amortization and property tax costs due to new capital investments
|
|
(1,347
|
)
|
|
(987
|
)
|
|
(0.06
|
)
|
|||
|
Insurance expense (non-health) - both insured and self-insured
|
|
(1,028
|
)
|
|
(753
|
)
|
|
(0.05
|
)
|
|||
|
Operating expenses from Boulden acquisition (completed December 2019)
|
|
(535
|
)
|
|
(392
|
)
|
|
(0.02
|
)
|
|||
|
Facilities maintenance costs and outside services
|
|
(462
|
)
|
|
(338
|
)
|
|
(0.02
|
)
|
|||
|
Payroll, Benefits and other employee-related expenses
|
|
1,293
|
|
|
947
|
|
|
0.06
|
|
|||
|
|
|
(2,079
|
)
|
|
(1,523
|
)
|
|
(0.09
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
Interest Charges
|
|
(186
|
)
|
|
(136
|
)
|
|
(0.01
|
)
|
|||
|
Other income tax effects
|
|
—
|
|
|
(651
|
)
|
|
(0.04
|
)
|
|||
|
Net other changes
|
|
765
|
|
|
561
|
|
|
0.04
|
|
|||
|
|
|
579
|
|
|
(226
|
)
|
|
(0.01
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
First Quarter of 2020 Reported Results from Continuing Operations
|
|
$
|
39,617
|
|
|
$
|
29,026
|
|
|
$
|
1.77
|
|
|
|
|
Gross Margin for the Period
|
||||||||||||||||||
|
|
|
Three Months Ended
|
|
Year Ended
|
|
Estimate for
|
||||||||||||||
|
|
|
March 31,
|
|
December 31,
|
|
Fiscal
|
||||||||||||||
|
in thousands
|
|
2020
|
|
2019
|
|
2019
|
|
2020
|
|
2021
|
||||||||||
|
Expansions:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Western Palm Beach County, Florida Expansion - including interim services
|
|
$
|
1,000
|
|
|
$
|
131
|
|
|
$
|
2,139
|
|
|
$
|
5,227
|
|
|
$
|
5,227
|
|
|
Del-Mar Energy Pathway - including interim services
|
|
189
|
|
|
165
|
|
|
731
|
|
|
2,512
|
|
|
4,100
|
|
|||||
|
Auburndale
|
|
170
|
|
|
—
|
|
|
283
|
|
|
679
|
|
|
679
|
|
|||||
|
Callahan Intrastate Pipeline
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,219
|
|
|
6,400
|
|
|||||
|
Guernsey Power Station
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
700
|
|
|||||
|
Marlin Gas Services
|
|
1,347
|
|
|
2,329
|
|
|
5,410
|
|
|
6,400
|
|
|
7,000
|
|
|||||
|
Total Expansions
|
|
2,706
|
|
|
2,625
|
|
|
8,563
|
|
|
18,037
|
|
|
24,106
|
|
|||||
|
Acquisitions:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Boulden Propane
|
|
1,888
|
|
|
—
|
|
|
329
|
|
|
3,800
|
|
|
4,200
|
|
|||||
|
Elkton Gas
|
|
—
|
|
|
—
|
|
|
—
|
|
|
TBD
|
|
|
TBD
|
|
|||||
|
Total Acquisitions
|
|
1,888
|
|
|
—
|
|
|
329
|
|
|
3,800
|
|
|
4,200
|
|
|||||
|
Regulatory Initiatives
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Florida GRIP (1)
|
|
3,695
|
|
|
3,782
|
|
|
13,528
|
|
|
14,858
|
|
|
15,831
|
|
|||||
|
Hurricane Michael regulatory proceeding
|
|
—
|
|
|
—
|
|
|
—
|
|
|
TBD
|
|
|
TBD
|
|
|||||
|
Total Regulatory Initiatives
|
|
3,695
|
|
|
3,782
|
|
|
13,528
|
|
|
14,858
|
|
|
15,831
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Total
|
|
$
|
8,289
|
|
|
$
|
6,407
|
|
|
$
|
22,420
|
|
|
$
|
36,695
|
|
|
$
|
44,137
|
|
|
|
Three Months Ended
|
|
|
|||||
|
|
March 31,
|
|
|
|||||
|
|
2020
|
|
2019
|
|
Variance
|
|||
|
Delmarva
|
|
|
|
|
|
|||
|
Actual HDD
|
1,859
|
|
|
2,322
|
|
|
(463
|
)
|
|
10-Year Average HDD ("Normal")
|
2,349
|
|
|
2,362
|
|
|
(13
|
)
|
|
Variance from Normal
|
(490
|
)
|
|
(40
|
)
|
|
|
|
|
Florida
|
|
|
|
|
|
|||
|
Actual HDD
|
334
|
|
|
361
|
|
|
(27
|
)
|
|
10-Year Average HDD ("Normal")
|
495
|
|
|
518
|
|
|
(23
|
)
|
|
Variance from Normal
|
(161
|
)
|
|
(157
|
)
|
|
|
|
|
Ohio
|
|
|
|
|
|
|||
|
Actual HDD
|
2,496
|
|
|
2,996
|
|
|
(500
|
)
|
|
10-Year Average HDD ("Normal")
|
3,019
|
|
|
3,045
|
|
|
(26
|
)
|
|
Variance from Normal
|
(523
|
)
|
|
(49
|
)
|
|
|
|
|
Florida
|
|
|
|
|
|
|||
|
Actual CDD
|
226
|
|
|
134
|
|
|
92
|
|
|
10-Year Average CDD ("Normal")
|
105
|
|
|
97
|
|
|
8
|
|
|
Variance from Normal
|
121
|
|
|
37
|
|
|
|
|
|
|
|
Gross Margin Increase
|
||||||
|
|
|
Three Months Ended March 31, 2020
|
||||||
|
Customer growth:
|
|
Delmarva Peninsula
|
|
Florida
|
||||
|
Residential
|
|
$
|
441
|
|
|
$
|
223
|
|
|
Commercial and industrial
|
|
154
|
|
|
278
|
|
||
|
Total customer growth
|
|
$
|
595
|
|
|
$
|
501
|
|
|
|
|
Three Months Ended
|
|
|
||||||||
|
|
|
March 31,
|
|
Increase
|
||||||||
|
|
|
2020
|
|
2019
|
|
(decrease)
|
||||||
|
(in thousands)
|
|
|
|
|
|
|
||||||
|
Revenue
|
|
$
|
102,955
|
|
|
$
|
103,618
|
|
|
$
|
(663
|
)
|
|
Cost of sales
|
|
34,832
|
|
|
36,516
|
|
|
(1,684
|
)
|
|||
|
Gross margin
|
|
68,123
|
|
|
67,102
|
|
|
1,021
|
|
|||
|
Operations & maintenance
|
|
26,241
|
|
|
24,548
|
|
|
1,693
|
|
|||
|
Depreciation & amortization
|
|
9,319
|
|
|
8,446
|
|
|
873
|
|
|||
|
Other taxes
|
|
4,675
|
|
|
4,367
|
|
|
308
|
|
|||
|
Total operating expenses
|
|
40,235
|
|
|
37,361
|
|
|
2,874
|
|
|||
|
Operating income
|
|
$
|
27,888
|
|
|
$
|
29,741
|
|
|
$
|
(1,853
|
)
|
|
(in thousands)
|
Margin Impact
|
||
|
Natural gas distribution growth (excluding service expansions)
|
$
|
1,096
|
|
|
Peninsula Pipeline service expansions
|
1,039
|
|
|
|
Tax savings (net of GRIP refunds) recorded in Q1 2019 for 2018 associated with lower federal tax rates for certain Florida natural gas distribution operations
|
(910
|
)
|
|
|
Decreased customer consumption - primarily due to warmer weather
|
(521
|
)
|
|
|
Other variances
|
317
|
|
|
|
Quarter-over-quarter increase in gross margin
|
$
|
1,021
|
|
|
(in thousands)
|
|
||
|
Depreciation, amortization and property tax costs due to growth investments
|
$
|
1,227
|
|
|
Insurance expense (non-health) - both insured and self-insured components
|
834
|
|
|
|
Outside services, regulatory, and facilities maintenance costs
|
540
|
|
|
|
Payroll, benefits and other employee-related expenses
|
200
|
|
|
|
Other variances
|
73
|
|
|
|
Quarter-over-quarter increase in other operating expenses
|
$
|
2,874
|
|
|
|
|
Three Months Ended
|
|
|
||||||||
|
|
|
March 31,
|
|
Increase
|
||||||||
|
|
|
2020
|
|
2019
|
|
(decrease)
|
||||||
|
(in thousands)
|
|
|
|
|
|
|
||||||
|
Revenue
|
|
$
|
54,031
|
|
|
$
|
61,081
|
|
|
$
|
(7,050
|
)
|
|
Cost of sales
|
|
22,228
|
|
|
28,539
|
|
|
(6,311
|
)
|
|||
|
Gross margin
|
|
31,803
|
|
|
32,542
|
|
|
(739
|
)
|
|||
|
Operations & maintenance
|
|
14,076
|
|
|
13,823
|
|
|
253
|
|
|||
|
Depreciation & amortization
|
|
2,918
|
|
|
2,465
|
|
|
453
|
|
|||
|
Other taxes
|
|
968
|
|
|
996
|
|
|
(28
|
)
|
|||
|
Total operating expenses
|
|
17,962
|
|
|
17,284
|
|
|
678
|
|
|||
|
Operating income
|
|
$
|
13,841
|
|
|
$
|
15,258
|
|
|
$
|
(1,417
|
)
|
|
(in thousands)
|
|
Margin Impact
|
||
|
Propane Operations
|
|
|
||
|
Decrease in customer consumption - primarily due to warmer weather
|
|
$
|
(2,799
|
)
|
|
Boulden acquisition (assets acquired in December 2019)
|
|
1,888
|
|
|
|
Increased retail propane margins per gallon driven by favorable market conditions and supply management
|
|
1,217
|
|
|
|
Aspire Energy
|
|
|
||
|
Decrease in customer consumption - primarily due to warmer weather
|
|
(900
|
)
|
|
|
Higher margins from negotiated rate increases
|
|
388
|
|
|
|
Marlin Gas Services - higher level of pipeline integrity services for existing customers in 2019
|
|
(982
|
)
|
|
|
Other variances
|
|
449
|
|
|
|
Quarter-over-quarter decrease in gross margin
|
|
$
|
(739
|
)
|
|
•
|
Decreased Customer Consumption Primarily Driven by Weather - Gross margin decreased by $2.7 million for the Mid-Atlantic propane operations and by $0.1 million in Florida as weather on the Delmarva Peninsula and in Florida was approximately 20 and 7 percent, respectively, warmer for the three months ended March 31, 2020 compared to the same period in 2019.
|
|
•
|
Propane Operations - Boulden - Gross margin increased by $1.9 million due to the inclusion of operating results from Boulden, which was acquired by Sharp in December 2019.
|
|
•
|
Increased Retail Propane Margins - Gross Margin increased by $1.2 million, in the first quarter of 2020, as compared to the same period in the prior year, 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.
|
|
•
|
Decreased Customer Consumption Primarily Driven by Weather - Gross margin decreased by $0.9 million due to decreased consumption as weather in Ohio was approximately 17 percent warmer for the three months ended March 31, 2020 compared to the same period in 2019.
|
|
•
|
Increased Margin Driven by Changes in Rates - Gross margin increased by $0.4 million in the first quarter of 2020, as compared to the same period in the prior year, due primarily to higher margins from negotiated rate increases.
|
|
•
|
Gross margin decreased by $1.0 million in the first quarter of 2020, as compared to the same period in the prior year. First quarter 2019 results included gross margin from existing customers for a higher level of pipeline integrity services.
|
|
(in thousands)
|
|
||
|
Operating expenses for Boulden (assets acquired in December 2019)
|
$
|
342
|
|
|
Depreciation, amortization and property taxes due to new capital investments
|
448
|
|
|
|
Insurance expense (non-health) - both insured and self-insured components
|
194
|
|
|
|
Payroll, benefits and other employee-related expenses
|
(292
|
)
|
|
|
Other variances
|
(14
|
)
|
|
|
Quarter-over-quarter increase in other operating expenses
|
$
|
678
|
|
|
|
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
|
|
|
(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
|
)
|
|
$
|
—
|
|
|
NYL Shelf Agreement (2)
|
|
150,000
|
|
|
(100,000
|
)
|
|
(40,000
|
)
|
|
10,000
|
|
||||
|
Total Shelf Agreements as of March 31, 2020
|
|
370,000
|
|
|
(270,000
|
)
|
|
(90,000
|
)
|
|
10,000
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Subsequent amendments / renewals:
|
|
|
|
|
|
|
|
|
||||||||
|
Prudential Shelf Agreement (3)
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
||||
|
MetLife Shelf Agreement (4)
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
||||
|
Total Shelf Agreements added after March 31, 2020
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||
|
Total Shelf Agreements as of May 5, 2020
|
|
$
|
670,000
|
|
|
$
|
(270,000
|
)
|
|
$
|
(90,000
|
)
|
|
$
|
310,000
|
|
|
|
|
Three Months Ended
|
||||||
|
|
|
March 31,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
(in thousands)
|
|
|
|
|
||||
|
Net cash provided by (used in):
|
|
|
|
|
||||
|
Operating activities
|
|
$
|
58,808
|
|
|
$
|
40,486
|
|
|
Investing activities
|
|
(31,498
|
)
|
|
(43,369
|
)
|
||
|
Financing activities
|
|
(30,313
|
)
|
|
4,769
|
|
||
|
Net increase (decrease) in cash and cash equivalents
|
|
(3,003
|
)
|
|
1,886
|
|
||
|
Cash and cash equivalents—beginning of period
|
|
6,985
|
|
|
6,089
|
|
||
|
Cash and cash equivalents—end of period
|
|
$
|
3,982
|
|
|
$
|
7,975
|
|
|
•
|
Changes in net accounts receivable and accrued revenue and accounts payable and accrued liabilities increased cash flows by $30.5 million, due in part to the timing and receipt of payments and the absence of PESCO, whose assets and contracts we sold in the fourth quarter of 2019;
|
|
•
|
Changes in net regulatory assets and liabilities increased cash flows by $4.2 million due primarily to the change in fuel costs collected through the various cost recovery mechanisms;
|
|
•
|
Net income, adjusted for reconciling activities, increased cash flows by $2.3 million, due primarily to deferred income taxes, unrealized loss from investments and commodity contracts and depreciation and amortization, offset by realized gain from property sales due to consolidation of facilities in line with our strategic initiatives;
|
|
•
|
Changes in net prepaid expenses and other current assets, accrued compensation and other assets and liabilities, net decreased cash flows by $16.6 million; and
|
|
•
|
Net cash flows from changes in propane inventory, storage gas and other inventories decreased by approximately $3.3 million.
|
|
•
|
Decreased cash flows of $59.6 million from repayments of term notes of $29.6 million during the three months ended March 31, 2020 and decreased cash flows of $30.0 million from the issuance of term notes in January 2019;
|
|
•
|
Increased cash flows from short-term borrowing of $29.8 million under our line of credit arrangements; and
|
|
•
|
Cash dividends of $6.5 million paid during the three months ended March 31, 2020, compared to $5.9 million for the three months ended March 31, 2019.
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
|
Less than 1 year
|
|
1 - 3 years
|
|
3 - 5 years
|
|
More than 5 years
|
|
Total
|
||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Purchase obligations - Commodity (1)
|
|
8,276
|
|
|
6,402
|
|
|
—
|
|
|
—
|
|
|
14,678
|
|
|||||
|
Total
|
|
$
|
8,276
|
|
|
$
|
6,402
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,678
|
|
|
(in thousands)
|
Balance at December 31, 2019
|
|
Increase (Decrease) in Fair Market Value
|
|
Less Amounts Settled
|
|
Balance at March 31, 2020
|
||||||||
|
Sharp
|
$
|
(1,844
|
)
|
|
$
|
(1,218
|
)
|
|
$
|
1,227
|
|
|
$
|
(1,835
|
)
|
|
Total
|
$
|
(1,844
|
)
|
|
$
|
(1,218
|
)
|
|
$
|
1,227
|
|
|
$
|
(1,835
|
)
|
|
(in thousands)
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Total Fair Value
|
||||||||||||
|
Price based on Mont Belvieu - Sharp
|
$
|
(1,083
|
)
|
|
$
|
(681
|
)
|
|
$
|
(71
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,835
|
)
|
|
Total
|
$
|
(1,083
|
)
|
|
$
|
(681
|
)
|
|
$
|
(71
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,835
|
)
|
|
|
|
Total
Number of
Shares
|
|
Average
Price Paid
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced Plans
|
|
Maximum Number of
Shares That May Yet Be
Purchased Under the Plans
|
|||||
|
Period
|
|
Purchased
|
|
per Share
|
|
or Programs (2)
|
|
or Programs (2)
|
|||||
|
January 1, 2020
through January 31, 2020 (1) |
|
411
|
|
|
$
|
93.41
|
|
|
—
|
|
|
—
|
|
|
February 1, 2020
through February 29, 2020 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
March 1, 2020
through March 31, 2020 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
|
411
|
|
|
$
|
93.41
|
|
|
—
|
|
|
—
|
|
|
Item 6.
|
Exhibits
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document.
|
|
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
CHESAPEAKE UTILITIES CORPORATION
|
|
|
|
/S/ BETH W. COOPER
|
|
Beth W. Cooper
Executive Vice President, Chief Financial Officer, and Assistant Corporate Secretary
|
|
2.
|
Term.
|
|
(ii)
|
any one person or Group acquires (or has acquired during the twelve
|
|
(iv)
|
any one person or Group acquires (or has acquired during the twelve
|
|
4.
|
Office.
|
|
5.
|
Compensation and Benefits.
|
|
6.
|
Termination.
|
|
7.
|
Maximum Payment Upon Termination.
|
|
9.
|
Covenants.
|
|
(ii)
|
in the performance of Executive’s duties to the Company;
|
|
(iv)
|
as otherwise required by law or legal process.
|
|
(ii)
|
does not disclose trade secrets, except pursuant to court order.
|
|
2.
|
Term.
|
|
(ii)
|
any one person or Group acquires (or has acquired during the twelve
|
|
(iv)
|
any one person or Group acquires (or has acquired during the twelve
|
|
4.
|
Office.
|
|
5.
|
Compensation and Benefits.
|
|
6.
|
Termination.
|
|
7.
|
Maximum Payment Upon Termination.
|
|
9.
|
Covenants.
|
|
(ii)
|
in the performance of Executive’s duties to the Company;
|
|
(iv)
|
as otherwise required by law or legal process.
|
|
(d)
|
Non-solicitation of Third Parties. During the Restricted Period, the Executive
|
|
(i)
|
Cooperation with the Company. Executive agrees to:
|
|
(ii)
|
does not disclose trade secrets, except pursuant to court order.
|
|
|
|
|
3.10
|
Environmental Matters. Describe pending or threatened material litigation or proceeding arising under, relating to or in connection with any Environmental Law below:
|
|
(1)
|
in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of LIBOR permanently or indefinitely ceases to provide LIBOR; or
|
|
(2)
|
in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.
|
|
(1)
|
a public statement or publication of information by or on behalf of the administrator of LIBOR announcing that such administrator has ceased or will cease to provide LIBOR, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR;
|
|
(2)
|
a public statement or publication of information by a Governmental Authority having jurisdiction over the Bank, the regulatory supervisor for the administrator of LIBOR, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for LIBOR, a resolution authority with jurisdiction over the administrator for LIBOR or a court or an entity with similar insolvency or resolution authority over the administrator for LIBOR, which states that the administrator of LIBOR has ceased or will cease to provide LIBOR permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR; or
|
|
(3)
|
a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR or a Governmental Authority having jurisdiction over the Bank announcing that LIBOR is no longer representative.
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2020 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 quarterly report on Form 10-Q for the quarter ended March 31, 2020 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
|
|
May 6, 2020
|
|
/S/ BETH W. COOPER
|
|
Beth W. Cooper
|
|
May 6, 2020
|