|
|
|
|
FORM
|
10-Q
|
|
|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
CHESAPEAKE UTILITIES CORPORATION
(Exact name of registrant as specified in its charter)
|
||
|
|
|
|
|
Delaware
|
|
51-0064146
|
|
(State or other jurisdiction
of incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
Title of each class
|
Trading Symbol(s)
|
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
|
|
☐
|
|
|
|
|
|
|
|
|
|
ITEM 1.
|
||
|
|
|
|
|
ITEM 2.
|
||
|
|
|
|
|
ITEM 3.
|
||
|
|
|
|
|
ITEM 4.
|
||
|
|
|
|
|
|
|
|
|
ITEM 1.
|
||
|
|
|
|
|
ITEM 1A.
|
||
|
|
|
|
|
ITEM 2.
|
||
|
|
|
|
|
ITEM 3.
|
||
|
|
|
|
|
ITEM 5.
|
||
|
|
|
|
|
ITEM 6.
|
||
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(in thousands, except shares and per share data)
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Revenues
|
|
|
|
|
|
|
|
|
||||||||
|
Regulated Energy
|
|
$
|
73,518
|
|
|
$
|
73,403
|
|
|
$
|
176,473
|
|
|
$
|
177,021
|
|
|
Unregulated Energy and other
|
|
23,533
|
|
|
21,139
|
|
|
73,268
|
|
|
77,984
|
|
||||
|
Total Operating Revenues
|
|
97,051
|
|
|
94,542
|
|
|
249,741
|
|
|
255,005
|
|
||||
|
Operating Expenses
|
|
|
|
|
|
|
|
|
||||||||
|
Regulated Energy cost of sales
|
|
16,387
|
|
|
18,317
|
|
|
51,219
|
|
|
54,833
|
|
||||
|
Unregulated Energy and other cost of sales
|
|
6,573
|
|
|
6,857
|
|
|
24,609
|
|
|
31,267
|
|
||||
|
Operations
|
|
34,607
|
|
|
31,531
|
|
|
70,559
|
|
|
66,945
|
|
||||
|
Maintenance
|
|
4,143
|
|
|
3,600
|
|
|
7,979
|
|
|
7,280
|
|
||||
|
Gain from a settlement
|
|
(130
|
)
|
|
(130
|
)
|
|
(130
|
)
|
|
(130
|
)
|
||||
|
Depreciation and amortization
|
|
12,247
|
|
|
11,464
|
|
|
24,500
|
|
|
22,392
|
|
||||
|
Other taxes
|
|
5,247
|
|
|
4,738
|
|
|
10,894
|
|
|
10,131
|
|
||||
|
Total Operating Expenses
|
|
79,074
|
|
|
76,377
|
|
|
189,630
|
|
|
192,718
|
|
||||
|
Operating Income
|
|
17,977
|
|
|
18,165
|
|
|
60,111
|
|
|
62,287
|
|
||||
|
Other income (expense), net
|
|
(279
|
)
|
|
(320
|
)
|
|
3,039
|
|
|
(380
|
)
|
||||
|
Interest charges
|
|
5,054
|
|
|
5,552
|
|
|
10,868
|
|
|
11,180
|
|
||||
|
Income from Continuing Operations Before Income Taxes
|
|
12,644
|
|
|
12,293
|
|
|
52,282
|
|
|
50,727
|
|
||||
|
Income Taxes on Continuing Operations
|
|
1,983
|
|
|
3,379
|
|
|
12,580
|
|
|
13,002
|
|
||||
|
Income from Continuing Operations
|
|
10,661
|
|
|
8,914
|
|
|
39,702
|
|
|
37,725
|
|
||||
|
Income (loss) from Discontinued Operations, Net of Tax
|
|
295
|
|
|
(610
|
)
|
|
184
|
|
|
(757
|
)
|
||||
|
Net Income
|
|
$
|
10,956
|
|
|
$
|
8,304
|
|
|
$
|
39,886
|
|
|
$
|
36,968
|
|
|
Weighted Average Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
||||||||
|
Basic
|
|
16,448,490
|
|
|
16,401,028
|
|
|
16,431,724
|
|
|
16,393,022
|
|
||||
|
Diluted
|
|
16,503,603
|
|
|
16,445,743
|
|
|
16,487,807
|
|
|
16,439,333
|
|
||||
|
Basic Earnings Per Share of Common Stock:
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings from Continuing Operations
|
|
$
|
0.65
|
|
|
$
|
0.55
|
|
|
$
|
2.42
|
|
|
$
|
2.31
|
|
|
Earnings (loss) from Discontinued Operations
|
|
0.02
|
|
|
(0.04
|
)
|
|
0.01
|
|
|
(0.05
|
)
|
||||
|
Basic Earnings Per Share of Common Stock
|
|
$
|
0.67
|
|
|
$
|
0.51
|
|
|
$
|
2.43
|
|
|
$
|
2.26
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Diluted Earnings Per Share of Common Stock:
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings from Continuing Operations
|
|
$
|
0.64
|
|
|
$
|
0.54
|
|
|
$
|
2.41
|
|
|
$
|
2.30
|
|
|
Earnings (loss) from Discontinued Operations
|
|
0.02
|
|
|
(0.04
|
)
|
|
0.01
|
|
|
(0.05
|
)
|
||||
|
Diluted Earnings Per Share of Common Stock
|
|
$
|
0.66
|
|
|
$
|
0.50
|
|
|
$
|
2.42
|
|
|
$
|
2.25
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
|
Net Income
|
|
$
|
10,956
|
|
|
$
|
8,304
|
|
|
$
|
39,886
|
|
|
$
|
36,968
|
|
|
Other Comprehensive Income (Loss), net of tax:
|
|
|
|
|
|
|
|
|
||||||||
|
Employee Benefits, net of tax:
|
|
|
|
|
|
|
|
|
||||||||
|
Amortization of prior service cost, net of tax of $(5), $(5), $(10) and $(10), respectively
|
|
(14
|
)
|
|
(14
|
)
|
|
(28
|
)
|
|
(29
|
)
|
||||
|
Net gain, net of tax of $28, $42, $55 and $86, respectively
|
|
80
|
|
|
121
|
|
|
160
|
|
|
242
|
|
||||
|
Cash Flow Hedges, net of tax:
|
|
|
|
|
|
|
|
|
||||||||
|
Unrealized gain (loss) on commodity contract cash flow hedges, net of tax of $651, $(850), $653 and $343, respectively
|
|
1,703
|
|
|
(2,115
|
)
|
|
1,710
|
|
|
868
|
|
||||
|
Unrealized loss on interest rate swap cash flow hedges, net of tax of $(14), $0, $(14) and $0, respectively
|
|
(37
|
)
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
||||
|
Total Other Comprehensive Income (Loss), net of tax
|
|
1,732
|
|
|
(2,008
|
)
|
|
1,805
|
|
|
1,081
|
|
||||
|
Comprehensive Income
|
|
$
|
12,688
|
|
|
$
|
6,296
|
|
|
$
|
41,691
|
|
|
$
|
38,049
|
|
|
Assets
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
(in thousands, except shares and per share data)
|
|
|
|
|
||||
|
Property, Plant and Equipment
|
|
|
|
|
||||
|
Regulated Energy
|
|
$
|
1,499,389
|
|
|
$
|
1,441,473
|
|
|
Unregulated Energy
|
|
277,209
|
|
|
265,209
|
|
||
|
Other businesses and eliminations
|
|
39,798
|
|
|
39,850
|
|
||
|
Total property, plant and equipment
|
|
1,816,396
|
|
|
1,746,532
|
|
||
|
Less: Accumulated depreciation and amortization
|
|
(357,303
|
)
|
|
(336,876
|
)
|
||
|
Plus: Construction work in progress
|
|
66,267
|
|
|
54,141
|
|
||
|
Net property, plant and equipment
|
|
1,525,360
|
|
|
1,463,797
|
|
||
|
Current Assets
|
|
|
|
|
||||
|
Cash and cash equivalents
|
|
3,590
|
|
|
6,985
|
|
||
|
Trade and other receivables
|
|
48,799
|
|
|
50,899
|
|
||
|
Less: Allowance for credit losses
|
|
(2,104
|
)
|
|
(1,337
|
)
|
||
|
Trade receivables, net
|
|
46,695
|
|
|
49,562
|
|
||
|
Accrued revenue
|
|
12,076
|
|
|
20,846
|
|
||
|
Propane inventory, at average cost
|
|
3,951
|
|
|
5,824
|
|
||
|
Other inventory, at average cost
|
|
5,397
|
|
|
6,067
|
|
||
|
Regulatory assets
|
|
3,625
|
|
|
5,144
|
|
||
|
Storage gas prepayments
|
|
1,943
|
|
|
3,541
|
|
||
|
Income taxes receivable
|
|
9,827
|
|
|
20,050
|
|
||
|
Prepaid expenses
|
|
9,167
|
|
|
13,928
|
|
||
|
Derivative assets, at fair value
|
|
1,270
|
|
|
—
|
|
||
|
Other current assets
|
|
1,017
|
|
|
2,879
|
|
||
|
Total current assets
|
|
98,558
|
|
|
134,826
|
|
||
|
Deferred Charges and Other Assets
|
|
|
|
|
||||
|
Goodwill
|
|
32,684
|
|
|
32,668
|
|
||
|
Other intangible assets, net
|
|
7,520
|
|
|
8,129
|
|
||
|
Investments, at fair value
|
|
9,571
|
|
|
9,229
|
|
||
|
Operating lease right-of-use assets
|
|
11,546
|
|
|
11,563
|
|
||
|
Regulatory assets
|
|
74,814
|
|
|
73,407
|
|
||
|
Receivables and other deferred charges
|
|
62,122
|
|
|
49,579
|
|
||
|
Total deferred charges and other assets
|
|
198,257
|
|
|
184,575
|
|
||
|
Total Assets
|
|
$
|
1,822,175
|
|
|
$
|
1,783,198
|
|
|
Capitalization and Liabilities
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
(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)
|
|
8,013
|
|
|
7,984
|
|
||
|
Additional paid-in capital
|
|
263,272
|
|
|
259,253
|
|
||
|
Retained earnings
|
|
326,454
|
|
|
300,607
|
|
||
|
Accumulated other comprehensive loss
|
|
(4,462
|
)
|
|
(6,267
|
)
|
||
|
Deferred compensation obligation
|
|
5,659
|
|
|
4,543
|
|
||
|
Treasury stock
|
|
(5,659
|
)
|
|
(4,543
|
)
|
||
|
Total stockholders’ equity
|
|
593,277
|
|
|
561,577
|
|
||
|
Long-term debt, net of current maturities
|
|
430,106
|
|
|
440,168
|
|
||
|
Total capitalization
|
|
1,023,383
|
|
|
1,001,745
|
|
||
|
Current Liabilities
|
|
|
|
|
||||
|
Current portion of long-term debt
|
|
15,600
|
|
|
45,600
|
|
||
|
Short-term borrowing
|
|
286,405
|
|
|
247,371
|
|
||
|
Accounts payable
|
|
46,382
|
|
|
54,069
|
|
||
|
Customer deposits and refunds
|
|
30,707
|
|
|
30,939
|
|
||
|
Accrued interest
|
|
2,169
|
|
|
2,554
|
|
||
|
Dividends payable
|
|
7,244
|
|
|
6,644
|
|
||
|
Accrued compensation
|
|
9,260
|
|
|
16,236
|
|
||
|
Regulatory liabilities
|
|
10,328
|
|
|
5,991
|
|
||
|
Derivative liabilities, at fair value
|
|
802
|
|
|
1,844
|
|
||
|
Other accrued liabilities
|
|
20,926
|
|
|
12,076
|
|
||
|
Total current liabilities
|
|
429,823
|
|
|
423,324
|
|
||
|
Deferred Credits and Other Liabilities
|
|
|
|
|
||||
|
Deferred income taxes
|
|
193,595
|
|
|
180,656
|
|
||
|
Regulatory liabilities
|
|
130,180
|
|
|
127,744
|
|
||
|
Environmental liabilities
|
|
4,520
|
|
|
6,468
|
|
||
|
Other pension and benefit costs
|
|
28,185
|
|
|
30,569
|
|
||
|
Operating lease - liabilities
|
|
10,055
|
|
|
9,896
|
|
||
|
Deferred investment tax credits and other liabilities
|
|
2,434
|
|
|
2,796
|
|
||
|
Total deferred credits and other liabilities
|
|
368,969
|
|
|
358,129
|
|
||
|
Environmental and other commitments and contingencies (Notes 6 and 7)
|
|
|
|
|
||||
|
Total Capitalization and Liabilities
|
|
$
|
1,822,175
|
|
|
$
|
1,783,198
|
|
|
|
|
Six Months Ended
|
||||||
|
|
|
June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
(in thousands)
|
|
|
|
|
||||
|
Operating Activities
|
|
|
|
|
||||
|
Net income
|
|
$
|
39,886
|
|
|
$
|
36,968
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
|
Depreciation and amortization
|
|
24,500
|
|
|
22,684
|
|
||
|
Depreciation and accretion included in other costs
|
|
4,807
|
|
|
4,322
|
|
||
|
Deferred income taxes
|
|
12,232
|
|
|
7,746
|
|
||
|
Gain on sale of discontinued operations
|
|
(200
|
)
|
|
—
|
|
||
|
Realized gain on commodity contracts and sale of assets
|
|
(3,496
|
)
|
|
(572
|
)
|
||
|
Unrealized loss (gain) on investments/commodity contracts
|
|
130
|
|
|
(1,089
|
)
|
||
|
Employee benefits and compensation
|
|
21
|
|
|
764
|
|
||
|
Share-based compensation
|
|
2,322
|
|
|
1,095
|
|
||
|
Changes in assets and liabilities:
|
|
|
|
|
||||
|
Accounts receivable and accrued revenue
|
|
11,455
|
|
|
51,362
|
|
||
|
Propane inventory, storage gas and other inventory
|
|
4,140
|
|
|
6,458
|
|
||
|
Regulatory assets/liabilities, net
|
|
4,133
|
|
|
(1,610
|
)
|
||
|
Prepaid expenses and other current assets
|
|
6,016
|
|
|
9,660
|
|
||
|
Accounts payable and other accrued liabilities
|
|
(1,604
|
)
|
|
(56,902
|
)
|
||
|
Income taxes (payable) receivable
|
|
(1,480
|
)
|
|
4,316
|
|
||
|
Customer deposits and refunds
|
|
(232
|
)
|
|
(4,316
|
)
|
||
|
Accrued compensation
|
|
(7,086
|
)
|
|
(5,365
|
)
|
||
|
Other assets and liabilities, net
|
|
(3,866
|
)
|
|
(946
|
)
|
||
|
Net cash provided by operating activities
|
|
91,678
|
|
|
74,575
|
|
||
|
Investing Activities
|
|
|
|
|
||||
|
Property, plant and equipment expenditures
|
|
(82,779
|
)
|
|
(90,443
|
)
|
||
|
Proceeds from sale of assets
|
|
4,273
|
|
|
207
|
|
||
|
Proceeds from the sale of discontinued operations
|
|
200
|
|
|
—
|
|
||
|
Environmental expenditures
|
|
(1,948
|
)
|
|
(644
|
)
|
||
|
Net cash used in investing activities
|
|
(80,254
|
)
|
|
(90,880
|
)
|
||
|
Financing Activities
|
|
|
|
|
||||
|
Common stock dividends
|
|
(12,976
|
)
|
|
(11,759
|
)
|
||
|
Issuance (repurchase) of stock under the Dividend Reinvestment Plan
|
|
359
|
|
|
(368
|
)
|
||
|
Tax withholding payments related to net settled stock compensation
|
|
(977
|
)
|
|
(692
|
)
|
||
|
Change in cash overdrafts due to outstanding checks
|
|
(3,431
|
)
|
|
548
|
|
||
|
Net borrowings under line of credit agreements
|
|
42,319
|
|
|
6,220
|
|
||
|
Proceeds from issuance of long-term debt, net of offering fees
|
|
(13
|
)
|
|
29,956
|
|
||
|
Repayment of long-term debt and capital lease obligation
|
|
(40,100
|
)
|
|
(6,435
|
)
|
||
|
Net cash (used) provided by financing activities
|
|
(14,819
|
)
|
|
17,470
|
|
||
|
Net (Decrease) Increase in Cash and Cash Equivalents
|
|
(3,395
|
)
|
|
1,165
|
|
||
|
Cash and Cash Equivalents—Beginning of Period
|
|
6,985
|
|
|
6,089
|
|
||
|
Cash and Cash Equivalents—End of Period
|
|
$
|
3,590
|
|
|
$
|
7,254
|
|
|
|
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 March 31, 2019
|
16,397,017
|
|
|
$
|
7,980
|
|
|
$
|
255,307
|
|
|
$
|
284,111
|
|
|
$
|
(3,739
|
)
|
|
$
|
4,376
|
|
|
$
|
(4,376
|
)
|
|
$
|
543,659
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
8,304
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,304
|
|
|||||||
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,008
|
)
|
|
—
|
|
|
—
|
|
|
(2,008
|
)
|
|||||||
|
Dividend declared ($0.4050 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,653
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,653
|
)
|
|||||||
|
Dividend reinvestment plan
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||
|
Share-based compensation and tax benefit (3)(4)
|
6,759
|
|
|
4
|
|
|
1,079
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,083
|
|
|||||||
|
Treasury stock activities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
318
|
|
|
(318
|
)
|
|
—
|
|
|||||||
|
Balance at June 30, 2019
|
16,403,776
|
|
|
$
|
7,984
|
|
|
$
|
256,385
|
|
|
$
|
285,762
|
|
|
$
|
(5,747
|
)
|
|
$
|
4,694
|
|
|
$
|
(4,694
|
)
|
|
$
|
544,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Balance at December 31, 2018
|
16,378,545
|
|
|
$
|
7,971
|
|
|
$
|
255,651
|
|
|
$
|
261,530
|
|
|
$
|
(6,713
|
)
|
|
$
|
3,854
|
|
|
$
|
(3,854
|
)
|
|
$
|
518,439
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
36,968
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,968
|
|
|||||||
|
Prior period reclassification
|
—
|
|
|
—
|
|
|
—
|
|
|
115
|
|
|
(115
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,081
|
|
|
—
|
|
|
—
|
|
|
1,081
|
|
|||||||
|
Dividend declared ($0.775 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,851
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,851
|
)
|
|||||||
|
Dividend reinvestment plan
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||
|
Share-based compensation and tax benefit (3)(4)
|
25,231
|
|
|
13
|
|
|
736
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
749
|
|
|||||||
|
Treasury stock activities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
840
|
|
|
(840
|
)
|
|
—
|
|
|||||||
|
Balance at June 30, 2019
|
16,403,776
|
|
|
$
|
7,984
|
|
|
$
|
256,385
|
|
|
$
|
285,762
|
|
|
$
|
(5,747
|
)
|
|
$
|
4,694
|
|
|
$
|
(4,694
|
)
|
|
$
|
544,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Balance at March 31, 2020
|
16,433,105
|
|
|
$
|
7,998
|
|
|
$
|
259,521
|
|
|
$
|
322,804
|
|
|
$
|
(6,194
|
)
|
|
$
|
5,468
|
|
|
$
|
(5,468
|
)
|
|
584,129
|
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
10,956
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,956
|
|
|||||||
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,732
|
|
|
—
|
|
|
—
|
|
|
1,732
|
|
|||||||
|
Dividend declared ($0.440 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,306
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,306
|
)
|
|||||||
|
Retirement Savings Plan and Dividend Reinvestment Plan
|
21,833
|
|
|
11
|
|
|
1,921
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,932
|
|
|||||||
|
Share-based compensation and tax benefit (3) (4)
|
8,870
|
|
|
4
|
|
|
1,830
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,834
|
|
|||||||
|
Treasury stock activities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
191
|
|
|
(191
|
)
|
|
—
|
|
|||||||
|
Balance at June 30, 2020
|
16,463,808
|
|
|
$
|
8,013
|
|
|
$
|
263,272
|
|
|
$
|
326,454
|
|
|
$
|
(4,462
|
)
|
|
$
|
5,659
|
|
|
$
|
(5,659
|
)
|
|
$
|
593,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Balance at December 31, 2019
|
16,403,776
|
|
|
$
|
7,984
|
|
|
$
|
259,253
|
|
|
$
|
300,607
|
|
|
$
|
(6,267
|
)
|
|
$
|
4,543
|
|
|
$
|
(4,543
|
)
|
|
$
|
561,577
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
39,886
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,886
|
|
|||||||
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,805
|
|
|
—
|
|
|
—
|
|
|
1,805
|
|
|||||||
|
Dividend declared ($0.8450 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,009
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,009
|
)
|
|||||||
|
Retirement Savings Plan and Dividend Reinvestment Plan
|
25,576
|
|
|
13
|
|
|
2,273
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,286
|
|
|||||||
|
Share-based compensation and tax benefit (3) (4)
|
34,456
|
|
|
16
|
|
|
1,746
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,762
|
|
|||||||
|
Treasury stock activities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,116
|
|
|
(1,116
|
)
|
|
—
|
|
|||||||
|
Cumulative effect of the adoption of ASU 2016-13
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|||||||
|
Balance at June 30, 2020
|
16,463,808
|
|
|
$
|
8,013
|
|
|
$
|
263,272
|
|
|
$
|
326,454
|
|
|
$
|
(4,462
|
)
|
|
$
|
5,659
|
|
|
$
|
(5,659
|
)
|
|
$
|
593,277
|
|
|
(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 107,141 shares at June 30, 2020, 95,329 shares at December 31, 2019, 105,409 shares at June 30, 2019 and 97,053 shares at December 31, 2018,
|
|
(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 six months ended June 30, 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
|
794
|
|
|
|
Recoveries
|
450
|
|
|
|
Deductions:
|
|
||
|
Write offs
|
(477
|
)
|
|
|
Balance at June 30, 2020
|
$
|
2,104
|
|
|
2.
|
Calculation of Earnings Per Share
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(in thousands, except shares and per share data)
|
|
|
|
|
|
|
|
|
||||||||
|
Calculation of Basic Earnings Per Share:
|
|
|
|
|
|
|
|
|
||||||||
|
Income from Continuing Operations
|
|
$
|
10,661
|
|
|
$
|
8,914
|
|
|
$
|
39,702
|
|
|
$
|
37,725
|
|
|
Income (Loss) from Discontinued Operations
|
|
295
|
|
|
(610
|
)
|
|
184
|
|
|
(757
|
)
|
||||
|
Net Income
|
|
$
|
10,956
|
|
|
$
|
8,304
|
|
|
$
|
39,886
|
|
|
$
|
36,968
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted average shares outstanding
|
|
16,448,490
|
|
|
16,401,028
|
|
|
16,431,724
|
|
|
16,393,022
|
|
||||
|
Basic Earnings Per Share from Continuing Operations
|
|
$
|
0.65
|
|
|
$
|
0.55
|
|
|
$
|
2.42
|
|
|
$
|
2.31
|
|
|
Basic Earnings (Loss) Per Share from Discontinued Operations
|
|
0.02
|
|
|
(0.04
|
)
|
|
0.01
|
|
|
(0.05
|
)
|
||||
|
Basic Earnings Per Share
|
|
$
|
0.67
|
|
|
$
|
0.51
|
|
|
$
|
2.43
|
|
|
$
|
2.26
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Calculation of Diluted Earnings Per Share:
|
|
|
|
|
|
|
|
|
||||||||
|
Reconciliation of Denominator:
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted shares outstanding—Basic
|
|
16,448,490
|
|
|
16,401,028
|
|
|
16,431,724
|
|
|
16,393,022
|
|
||||
|
Effect of dilutive securities—Share-based compensation
|
|
55,113
|
|
|
44,715
|
|
|
56,083
|
|
|
46,311
|
|
||||
|
Adjusted denominator—Diluted
|
|
16,503,603
|
|
|
16,445,743
|
|
|
16,487,807
|
|
|
16,439,333
|
|
||||
|
Diluted Earnings Per Share from Continuing Operations
|
|
$
|
0.64
|
|
|
$
|
0.54
|
|
|
$
|
2.41
|
|
|
$
|
2.30
|
|
|
Diluted Earnings (Loss) Per Share from Discontinued Operations
|
|
0.02
|
|
|
(0.04
|
)
|
|
0.01
|
|
|
(0.05
|
)
|
||||
|
Diluted Earnings Per Share
|
|
$
|
0.66
|
|
|
$
|
0.50
|
|
|
$
|
2.42
|
|
|
$
|
2.25
|
|
|
3.
|
Acquisitions and Divestitures
|
|
|
|
Three Months
|
|
Six Months
|
||||||||||||
|
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
(in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
Operating revenues(1)
|
|
$
|
3
|
|
|
$
|
41,280
|
|
|
$
|
23
|
|
|
$
|
118,302
|
|
|
Cost of sales(1)
|
|
10
|
|
|
40,539
|
|
|
1
|
|
|
115,701
|
|
||||
|
Other operating expenses
|
|
39
|
|
|
1,470
|
|
|
197
|
|
|
3,460
|
|
||||
|
Operating loss
|
|
(46
|
)
|
|
(729
|
)
|
|
(175
|
)
|
|
(859
|
)
|
||||
|
Interest and other expense
|
|
(6
|
)
|
|
(101
|
)
|
|
(29
|
)
|
|
(166
|
)
|
||||
|
Loss from Discontinued Operations before income taxes
|
|
(52
|
)
|
|
(830
|
)
|
|
(204
|
)
|
|
(1,025
|
)
|
||||
|
Gain on sale of Discontinued Operations
|
|
200
|
|
|
—
|
|
|
200
|
|
|
|
|||||
|
Income tax benefit
|
|
(147
|
)
|
|
(220
|
)
|
|
(188
|
)
|
|
(268
|
)
|
||||
|
Gain (Loss) from Discontinued Operations, Net of Tax
|
|
$
|
295
|
|
|
$
|
(610
|
)
|
|
$
|
184
|
|
|
$
|
(757
|
)
|
|
(in thousands)
|
|
Three Months Ended June 30, 2019
|
Six Months Ended June 30, 2019
|
||||
|
Depreciation and amortization
|
|
$
|
146
|
|
$
|
291
|
|
|
Deferred income taxes
|
|
$
|
(1,021
|
)
|
$
|
375
|
|
|
Realized loss on commodity contracts
|
|
$
|
(97
|
)
|
$
|
(681
|
)
|
|
|
|
Three months ended June 30, 2020
|
|
Three Months Ended June 30, 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
|
|
$
|
11,758
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,758
|
|
|
$
|
8,256
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,256
|
|
|
Florida natural gas division
|
|
7,231
|
|
|
—
|
|
|
—
|
|
|
7,231
|
|
|
7,015
|
|
|
—
|
|
|
—
|
|
|
7,015
|
|
||||||||
|
FPU electric distribution
|
|
15,701
|
|
|
—
|
|
|
—
|
|
|
15,701
|
|
|
20,464
|
|
|
—
|
|
|
—
|
|
|
20,464
|
|
||||||||
|
FPU natural gas distribution
|
|
19,498
|
|
|
—
|
|
|
—
|
|
|
19,498
|
|
|
18,663
|
|
|
—
|
|
|
—
|
|
|
18,663
|
|
||||||||
|
Maryland natural gas division
|
|
3,979
|
|
|
—
|
|
|
—
|
|
|
3,979
|
|
|
3,186
|
|
|
—
|
|
|
—
|
|
|
3,186
|
|
||||||||
|
Sandpiper natural gas/propane operations
|
|
2,858
|
|
|
—
|
|
|
—
|
|
|
2,858
|
|
|
3,482
|
|
|
—
|
|
|
—
|
|
|
3,482
|
|
||||||||
|
Total energy distribution
|
|
61,025
|
|
|
—
|
|
|
—
|
|
|
61,025
|
|
|
61,066
|
|
|
—
|
|
|
—
|
|
|
61,066
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Energy transmission
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Aspire Energy
|
|
—
|
|
|
4,555
|
|
|
—
|
|
|
4,555
|
|
|
—
|
|
|
5,422
|
|
|
—
|
|
|
5,422
|
|
||||||||
|
Eastern Shore
|
|
18,277
|
|
|
—
|
|
|
—
|
|
|
18,277
|
|
|
17,740
|
|
|
—
|
|
|
—
|
|
|
17,740
|
|
||||||||
|
Peninsula Pipeline
|
|
5,361
|
|
|
—
|
|
|
—
|
|
|
5,361
|
|
|
3,565
|
|
|
—
|
|
|
—
|
|
|
3,565
|
|
||||||||
|
Total energy transmission
|
|
23,638
|
|
|
4,555
|
|
|
—
|
|
|
28,193
|
|
|
21,305
|
|
|
5,422
|
|
|
—
|
|
|
26,727
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Energy generation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Eight Flags
|
|
—
|
|
|
3,694
|
|
|
—
|
|
|
3,694
|
|
|
—
|
|
|
4,235
|
|
|
—
|
|
|
4,235
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Propane operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Propane delivery operations
|
|
—
|
|
|
17,260
|
|
|
—
|
|
|
17,260
|
|
|
—
|
|
|
17,488
|
|
|
—
|
|
|
17,488
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Energy delivery services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Marlin Gas Services
|
|
—
|
|
|
2,248
|
|
|
—
|
|
|
2,248
|
|
|
—
|
|
|
1,108
|
|
|
—
|
|
|
1,108
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Other and eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Eliminations
|
|
(11,145
|
)
|
|
(16
|
)
|
|
(4,340
|
)
|
|
(15,501
|
)
|
|
(8,968
|
)
|
|
(2,628
|
)
|
|
(4,618
|
)
|
|
(16,214
|
)
|
||||||||
|
Other
|
|
—
|
|
|
—
|
|
|
132
|
|
|
132
|
|
|
—
|
|
|
—
|
|
|
132
|
|
|
132
|
|
||||||||
|
Total other and eliminations
|
|
(11,145
|
)
|
|
(16
|
)
|
|
(4,208
|
)
|
|
(15,369
|
)
|
|
(8,968
|
)
|
|
(2,628
|
)
|
|
(4,486
|
)
|
|
(16,082
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Total operating revenues (1)
|
|
$
|
73,518
|
|
|
$
|
27,741
|
|
|
$
|
(4,208
|
)
|
|
$
|
97,051
|
|
|
$
|
73,403
|
|
|
$
|
25,625
|
|
|
$
|
(4,486
|
)
|
|
$
|
94,542
|
|
|
|
|
Six months ended June 30, 2020
|
|
Six months ended June 30, 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
|
|
$
|
38,325
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38,325
|
|
|
$
|
35,805
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35,805
|
|
|
Florida natural gas division
|
|
15,708
|
|
|
—
|
|
|
—
|
|
|
15,708
|
|
|
14,915
|
|
|
—
|
|
|
—
|
|
|
14,915
|
|
||||||||
|
FPU electric distribution
|
|
29,920
|
|
|
—
|
|
|
—
|
|
|
29,920
|
|
|
34,842
|
|
|
—
|
|
|
—
|
|
|
34,842
|
|
||||||||
|
FPU natural gas distribution
|
|
44,942
|
|
|
—
|
|
|
—
|
|
|
44,942
|
|
|
42,449
|
|
|
—
|
|
|
—
|
|
|
42,449
|
|
||||||||
|
Maryland natural gas division
|
|
13,117
|
|
|
—
|
|
|
—
|
|
|
13,117
|
|
|
13,233
|
|
|
—
|
|
|
—
|
|
|
13,233
|
|
||||||||
|
Sandpiper natural gas/propane operations
|
|
9,150
|
|
|
—
|
|
|
—
|
|
|
9,150
|
|
|
10,564
|
|
|
—
|
|
|
—
|
|
|
10,564
|
|
||||||||
|
Total energy distribution
|
|
151,162
|
|
|
—
|
|
|
—
|
|
|
151,162
|
|
|
151,808
|
|
|
—
|
|
|
—
|
|
|
151,808
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Energy transmission
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Aspire Energy
|
|
—
|
|
|
14,336
|
|
|
—
|
|
|
14,336
|
|
|
—
|
|
|
18,892
|
|
|
—
|
|
|
18,892
|
|
||||||||
|
Eastern Shore
|
|
37,556
|
|
|
—
|
|
|
—
|
|
|
37,556
|
|
|
36,796
|
|
|
—
|
|
|
—
|
|
|
36,796
|
|
||||||||
|
Peninsula Pipeline
|
|
10,185
|
|
|
—
|
|
|
—
|
|
|
10,185
|
|
|
7,131
|
|
|
—
|
|
|
—
|
|
|
7,131
|
|
||||||||
|
Total energy transmission
|
|
47,741
|
|
|
14,336
|
|
|
—
|
|
|
62,077
|
|
|
43,927
|
|
|
18,892
|
|
|
—
|
|
|
62,819
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Energy generation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Eight Flags
|
|
—
|
|
|
8,017
|
|
|
—
|
|
|
8,017
|
|
|
—
|
|
|
8,377
|
|
|
—
|
|
|
8,377
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Propane operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Propane delivery operations
|
|
—
|
|
|
55,883
|
|
|
—
|
|
|
55,883
|
|
|
—
|
|
|
64,017
|
|
|
—
|
|
|
64,017
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Energy delivery services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Marlin Gas Services
|
|
—
|
|
|
3,557
|
|
|
—
|
|
|
3,557
|
|
|
—
|
|
|
3,541
|
|
|
—
|
|
|
3,541
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Other and eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Eliminations
|
|
(22,430
|
)
|
|
(40
|
)
|
|
(8,749
|
)
|
|
(31,219
|
)
|
|
(18,714
|
)
|
|
(8,123
|
)
|
|
(8,984
|
)
|
|
(35,821
|
)
|
||||||||
|
Other
|
|
—
|
|
|
—
|
|
|
264
|
|
|
264
|
|
|
—
|
|
|
—
|
|
|
264
|
|
|
264
|
|
||||||||
|
Total other and eliminations
|
|
(22,430
|
)
|
|
(40
|
)
|
|
(8,485
|
)
|
|
(30,955
|
)
|
|
(18,714
|
)
|
|
(8,123
|
)
|
|
(8,720
|
)
|
|
(35,557
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Total operating revenues (1)
|
|
$
|
176,473
|
|
|
$
|
81,753
|
|
|
$
|
(8,485
|
)
|
|
$
|
249,741
|
|
|
$
|
177,021
|
|
|
$
|
86,704
|
|
|
$
|
(8,720
|
)
|
|
$
|
255,005
|
|
|
|
|
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 6/30/2020
|
|
35,764
|
|
|
18
|
|
|
4,338
|
|
|
347
|
|
||||
|
Increase (decrease)
|
|
$
|
(11,666
|
)
|
|
$
|
—
|
|
|
$
|
873
|
|
|
$
|
(242
|
)
|
|
(in thousands)
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025
|
|
2026 and thereafter
|
||||||||||||||
|
Eastern Shore and Peninsula Pipeline
|
$
|
19,059
|
|
|
$
|
35,720
|
|
|
$
|
28,513
|
|
|
$
|
22,930
|
|
|
$
|
20,641
|
|
|
$
|
19,283
|
|
|
$
|
175,743
|
|
|
Natural gas distribution operations
|
1,950
|
|
|
4,124
|
|
|
5,167
|
|
|
4,936
|
|
|
4,699
|
|
|
4,166
|
|
|
32,996
|
|
|||||||
|
FPU electric distribution
|
283
|
|
|
566
|
|
|
566
|
|
|
566
|
|
|
566
|
|
|
275
|
|
|
825
|
|
|||||||
|
Total revenue contracts with remaining performance obligations
|
$
|
21,292
|
|
|
$
|
40,410
|
|
|
$
|
34,246
|
|
|
$
|
28,432
|
|
|
$
|
25,906
|
|
|
$
|
23,724
|
|
|
$
|
209,564
|
|
|
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)
|
|
$12,788
|
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)
|
|
$4,029
|
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)
|
|
$3,739
|
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)
|
|
$8,244
|
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)
|
|
$19,201
|
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
|
|
$312
|
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)
|
|
$6,823
|
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 $3.3 million to $14.2 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 the new mobile compressed natural gas distribution and pipeline solutions subsidiary. Also included in this segment are other unregulated energy services, such as energy-related
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Revenues, Unaffiliated Customers
|
|
|
|
|
|
|
|
|
||||||||
|
Regulated Energy
|
|
$
|
73,043
|
|
|
$
|
72,880
|
|
|
$
|
175,536
|
|
|
$
|
175,951
|
|
|
Unregulated Energy
|
|
24,008
|
|
|
21,662
|
|
|
74,205
|
|
|
79,054
|
|
||||
|
Total operating revenues, unaffiliated customers
|
|
$
|
97,051
|
|
|
$
|
94,542
|
|
|
$
|
249,741
|
|
|
$
|
255,005
|
|
|
Intersegment Revenues (1)
|
|
|
|
|
|
|
|
|
||||||||
|
Regulated Energy
|
|
$
|
475
|
|
|
$
|
523
|
|
|
$
|
937
|
|
|
$
|
1,070
|
|
|
Unregulated Energy
|
|
3,733
|
|
|
3,963
|
|
|
7,548
|
|
|
7,650
|
|
||||
|
Other businesses
|
|
132
|
|
|
132
|
|
|
264
|
|
|
264
|
|
||||
|
Total intersegment revenues
|
|
$
|
4,340
|
|
|
$
|
4,618
|
|
|
$
|
8,749
|
|
|
$
|
8,984
|
|
|
Operating Income
|
|
|
|
|
|
|
|
|
||||||||
|
Regulated Energy
|
|
$
|
18,006
|
|
|
$
|
18,028
|
|
|
$
|
45,894
|
|
|
$
|
47,769
|
|
|
Unregulated Energy
|
|
281
|
|
|
(771
|
)
|
|
14,142
|
|
|
14,486
|
|
||||
|
Other businesses and eliminations
|
|
(310
|
)
|
|
908
|
|
|
75
|
|
|
32
|
|
||||
|
Operating income
|
|
17,977
|
|
|
18,165
|
|
|
60,111
|
|
|
62,287
|
|
||||
|
Other income (expense), net
|
|
(279
|
)
|
|
(320
|
)
|
|
3,039
|
|
|
(380
|
)
|
||||
|
Interest charges
|
|
5,054
|
|
|
5,552
|
|
|
10,868
|
|
|
11,180
|
|
||||
|
Income from Continuing Operations before Income Taxes
|
|
12,644
|
|
|
12,293
|
|
|
52,282
|
|
|
50,727
|
|
||||
|
Income Taxes on Continuing Operations
|
|
1,983
|
|
|
3,379
|
|
|
12,580
|
|
|
13,002
|
|
||||
|
Income from Continuing Operations
|
|
10,661
|
|
|
8,914
|
|
|
39,702
|
|
|
37,725
|
|
||||
|
Income (loss) from Discontinued Operations, Net of Tax
|
|
295
|
|
|
(610
|
)
|
|
184
|
|
|
(757
|
)
|
||||
|
Net Income
|
|
$
|
10,956
|
|
|
$
|
8,304
|
|
|
$
|
39,886
|
|
|
$
|
36,968
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
|
Identifiable Assets
|
|
|
|
|
||||
|
Regulated Energy segment
|
|
$
|
1,477,616
|
|
|
$
|
1,434,066
|
|
|
Unregulated Energy segment
|
|
296,140
|
|
|
296,810
|
|
||
|
Other businesses and eliminations
|
|
48,419
|
|
|
52,322
|
|
||
|
Total identifiable assets
|
|
$
|
1,822,175
|
|
|
$
|
1,783,198
|
|
|
9.
|
Stockholder's Equity
|
|
|
|
Defined Benefit
|
|
Commodity
|
|
Interest Rate
|
|
|
||||||||
|
|
|
Pension and
|
|
Contracts
|
|
Swap
|
|
|
||||||||
|
|
|
Postretirement
|
|
Cash Flow
|
|
Cash Flow
|
|
|
||||||||
|
|
|
Plan Items
|
|
Hedges
|
|
Hedges
|
|
Total
|
||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
|
As of December 31, 2019
|
|
$
|
(4,933
|
)
|
|
$
|
(1,334
|
)
|
|
$
|
—
|
|
|
$
|
(6,267
|
)
|
|
Other comprehensive income (loss) before reclassifications
|
|
—
|
|
|
2,770
|
|
|
(29
|
)
|
|
2,741
|
|
||||
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
132
|
|
|
(1,060
|
)
|
|
(8
|
)
|
|
(936
|
)
|
||||
|
Net current-period other comprehensive income
|
|
132
|
|
|
1,710
|
|
|
(37
|
)
|
|
1,805
|
|
||||
|
As of June 30, 2020
|
|
$
|
(4,801
|
)
|
|
$
|
376
|
|
|
$
|
(37
|
)
|
|
$
|
(4,462
|
)
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
|
As of December 31, 2018
|
|
$
|
(5,928
|
)
|
|
$
|
(785
|
)
|
|
$
|
—
|
|
|
$
|
(6,713
|
)
|
|
Other comprehensive income before reclassifications
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|
1,000
|
|
||||
|
Amounts reclassified from accumulated other comprehensive income/(loss)
|
|
213
|
|
|
(132
|
)
|
|
—
|
|
|
81
|
|
||||
|
Net prior-period other comprehensive income
|
|
213
|
|
|
868
|
|
|
—
|
|
|
1,081
|
|
||||
|
Prior-year reclassification
|
|
—
|
|
|
(115
|
)
|
|
—
|
|
|
(115
|
)
|
||||
|
As of June 30, 2019
|
|
$
|
(5,715
|
)
|
|
$
|
(32
|
)
|
|
$
|
—
|
|
|
$
|
(5,747
|
)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
|
Amortization of defined benefit pension and postretirement plan items:
|
|
|
|
|
|
|
|
|
||||||||
|
Prior service credit (1)
|
|
$
|
19
|
|
|
$
|
19
|
|
|
$
|
38
|
|
|
$
|
39
|
|
|
Net loss(1)
|
|
(108
|
)
|
|
(163
|
)
|
|
(215
|
)
|
|
(328
|
)
|
||||
|
Total before income taxes
|
|
(89
|
)
|
|
(144
|
)
|
|
(177
|
)
|
|
(289
|
)
|
||||
|
Income tax benefit
|
|
23
|
|
|
37
|
|
|
45
|
|
|
76
|
|
||||
|
Net of tax
|
|
(66
|
)
|
|
(107
|
)
|
|
(132
|
)
|
|
(213
|
)
|
||||
|
Gains and losses on commodity contracts cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
|
Propane swap agreements (2)
|
|
238
|
|
|
252
|
|
|
1,465
|
|
|
858
|
|
||||
|
Natural gas swaps (2)(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
|
Natural gas futures (2)(3)
|
|
—
|
|
|
(125
|
)
|
|
—
|
|
|
(698
|
)
|
||||
|
Total before income taxes
|
|
238
|
|
|
127
|
|
|
1,465
|
|
|
171
|
|
||||
|
Income tax expense
|
|
(66
|
)
|
|
(34
|
)
|
|
(405
|
)
|
|
(39
|
)
|
||||
|
Net of tax
|
|
172
|
|
|
93
|
|
|
1,060
|
|
|
132
|
|
||||
|
Gains on interest rate swap cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
|
Interest rate swap agreements
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||
|
Total before income taxes
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||
|
Income tax expense
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||
|
Net of tax
|
|
8
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
|
Total reclassifications for the period
|
|
$
|
114
|
|
|
$
|
(14
|
)
|
|
$
|
936
|
|
|
$
|
(81
|
)
|
|
10.
|
Employee Benefit Plans
|
|
|
|
Chesapeake
Pension Plan |
|
FPU
Pension Plan |
|
Chesapeake SERP
|
|
Chesapeake
Postretirement Plan |
|
FPU
Medical Plan |
||||||||||||||||||||||||||||||
|
For the Three Months Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Interest cost
|
|
$
|
46
|
|
|
$
|
104
|
|
|
$
|
518
|
|
|
$
|
615
|
|
|
$
|
16
|
|
|
$
|
21
|
|
|
$
|
8
|
|
|
$
|
9
|
|
|
$
|
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
|
|
|
78
|
|
|
(92
|
)
|
|
51
|
|
|
21
|
|
|
47
|
|
|
1
|
|
|
2
|
|
|
10
|
|
|
12
|
|
||||||||||
|
Amortization of pre-merger regulatory asset
|
|
—
|
|
|
—
|
|
|
—
|
|
|
191
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||||||
|
Total periodic cost
|
|
$
|
69
|
|
|
$
|
78
|
|
|
$
|
(92
|
)
|
|
$
|
242
|
|
|
$
|
21
|
|
|
$
|
47
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
12
|
|
|
$
|
14
|
|
|
|
|
Chesapeake
Pension Plan
|
|
FPU
Pension Plan
|
|
Chesapeake SERP
|
|
Chesapeake
Postretirement
Plan
|
|
FPU
Medical
Plan
|
||||||||||||||||||||||||||||||
|
For the Six Months Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Interest cost
|
|
$
|
92
|
|
|
$
|
209
|
|
|
$
|
1,036
|
|
|
$
|
1,230
|
|
|
$
|
32
|
|
|
$
|
42
|
|
|
$
|
16
|
|
|
$
|
19
|
|
|
$
|
20
|
|
|
$
|
24
|
|
|
Expected return on plan assets
|
|
(84
|
)
|
|
(254
|
)
|
|
(1,490
|
)
|
|
(1,386
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
Amortization of prior service credit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
||||||||||
|
Amortization of net loss
|
|
130
|
|
|
203
|
|
|
270
|
|
|
258
|
|
|
10
|
|
|
52
|
|
|
24
|
|
|
24
|
|
|
—
|
|
|
—
|
|
||||||||||
|
Net periodic cost (benefit)
|
|
138
|
|
|
158
|
|
|
(184
|
)
|
|
102
|
|
|
42
|
|
|
94
|
|
|
2
|
|
|
4
|
|
|
20
|
|
|
24
|
|
||||||||||
|
Amortization of pre-merger regulatory asset
|
|
—
|
|
|
—
|
|
|
—
|
|
|
381
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||||||
|
Total periodic cost
|
|
$
|
138
|
|
|
$
|
158
|
|
|
$
|
(184
|
)
|
|
$
|
483
|
|
|
$
|
42
|
|
|
$
|
94
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
24
|
|
|
$
|
28
|
|
|
For the Three Months Ended June 30, 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 June 30, 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
|
|
|
For the Six Months Ended June 30, 2020
|
|
Chesapeake
Pension
Plan
|
|
FPU
Pension
Plan
|
|
Chesapeake SERP
|
|
Chesapeake
Postretirement
Plan
|
|
FPU
Medical
Plan
|
|
Total
|
||||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Prior service credit
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(38
|
)
|
|
$
|
—
|
|
|
$
|
(38
|
)
|
|
Net loss
|
|
130
|
|
|
270
|
|
|
10
|
|
|
24
|
|
|
—
|
|
|
434
|
|
||||||
|
Total recognized in net periodic benefit cost
|
|
130
|
|
|
270
|
|
|
10
|
|
|
(14
|
)
|
|
—
|
|
|
396
|
|
||||||
|
Recognized from accumulated other comprehensive loss/(gain) (1)
|
|
130
|
|
|
52
|
|
|
10
|
|
|
(14
|
)
|
|
—
|
|
|
178
|
|
||||||
|
Recognized from regulatory asset
|
|
—
|
|
|
218
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
218
|
|
||||||
|
Total
|
|
$
|
130
|
|
|
$
|
270
|
|
|
$
|
10
|
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
396
|
|
|
For the Six Months Ended June 30, 2019
|
|
Chesapeake
Pension
Plan
|
|
FPU
Pension
Plan
|
|
Chesapeake SERP
|
|
Chesapeake
Postretirement
Plan
|
|
FPU
Medical
Plan
|
|
Total
|
||||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Prior service credit
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(39
|
)
|
|
$
|
—
|
|
|
$
|
(39
|
)
|
|
Net loss
|
|
203
|
|
|
258
|
|
|
52
|
|
|
24
|
|
|
—
|
|
|
537
|
|
||||||
|
Total recognized in net periodic benefit cost
|
|
203
|
|
|
258
|
|
|
52
|
|
|
(15
|
)
|
|
—
|
|
|
498
|
|
||||||
|
Recognized from accumulated other comprehensive loss/(gain) (1)
|
|
203
|
|
|
49
|
|
|
52
|
|
|
(15
|
)
|
|
—
|
|
|
289
|
|
||||||
|
Recognized from regulatory asset
|
|
—
|
|
|
209
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
209
|
|
||||||
|
Total
|
|
$
|
203
|
|
|
$
|
258
|
|
|
$
|
52
|
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
498
|
|
|
11.
|
Investments
|
|
(in thousands)
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
Rabbi trust (associated with the Non-Qualified Deferred Compensation Plan)
|
$
|
9,551
|
|
|
$
|
9,202
|
|
|
Investments in equity securities
|
20
|
|
|
27
|
|
||
|
Total
|
$
|
9,571
|
|
|
$
|
9,229
|
|
|
12.
|
Share-Based Compensation
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
|
Awards to non-employee directors
|
|
$
|
181
|
|
|
$
|
157
|
|
|
$
|
357
|
|
|
$
|
305
|
|
|
Awards to key employees
|
|
1,085
|
|
|
452
|
|
|
1,965
|
|
|
790
|
|
||||
|
Total compensation expense
|
|
1,266
|
|
|
609
|
|
|
2,322
|
|
|
1,095
|
|
||||
|
Less: tax benefit
|
|
(331
|
)
|
|
(158
|
)
|
|
(607
|
)
|
|
(285
|
)
|
||||
|
Share-based compensation amounts included in net income
|
|
$
|
935
|
|
|
$
|
451
|
|
|
$
|
1,715
|
|
|
$
|
810
|
|
|
|
|
Number of Shares
|
|
Weighted Average
Fair Value
|
|||
|
Outstanding—December 31, 2019
|
|
157,817
|
|
|
$
|
80.28
|
|
|
Granted
|
|
66,857
|
|
|
$
|
92.78
|
|
|
Vested
|
|
(35,651
|
)
|
|
$
|
66.48
|
|
|
Expired
|
|
(5,302
|
)
|
|
$
|
65.32
|
|
|
Outstanding—June 30, 2020
|
|
183,721
|
|
|
$
|
86.98
|
|
|
13.
|
Derivative Instruments
|
|
Business unit
|
|
Commodity
|
|
Quantity hedged (in millions)
|
|
Designation
|
|
Longest Expiration date of hedge
|
|
Sharp
|
|
Propane (gallons)
|
|
22.5
|
|
Cash flows hedges
|
|
May 2023
|
|
(in thousands)
|
Balance Sheet Location
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
|
Sharp
|
Other Current Assets
|
|
$
|
595
|
|
|
$
|
2,317
|
|
|
|
|
Derivative Assets
|
||||||||
|
|
|
|
|
Fair Value As Of
|
||||||
|
(in thousands)
|
|
Balance Sheet Location
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
|
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
||||
|
Propane swap agreements
|
|
Derivative assets, at fair value
|
|
$
|
1,270
|
|
|
$
|
—
|
|
|
Total asset derivatives
|
|
|
|
$
|
1,270
|
|
|
$
|
—
|
|
|
|
|
Derivative Liabilities
|
||||||||
|
|
|
|
|
Fair Value As Of
|
||||||
|
(in thousands)
|
|
Balance Sheet Location
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
|
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
||||
|
Propane swap agreements
|
|
Derivative liabilities, at fair value
|
|
$
|
751
|
|
|
$
|
1,844
|
|
|
Interest rate swap agreements
|
|
Derivative liabilities, at fair value
|
|
51
|
|
|
—
|
|
||
|
Total liability derivatives
|
|
|
|
$
|
802
|
|
|
$
|
1,844
|
|
|
|
|
|
|
Amount of Gain (Loss) on Derivatives:
|
||||||||||||||
|
|
|
Location of Gain
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
(in thousands)
|
|
(Loss) on Derivatives
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Propane swap agreements
|
|
Cost of sales
|
|
$
|
238
|
|
|
$
|
252
|
|
|
$
|
1,465
|
|
|
$
|
858
|
|
|
Propane swap agreements
|
|
Other comprehensive income (loss)
|
|
2,354
|
|
|
(494
|
)
|
|
2,363
|
|
|
515
|
|
||||
|
Interest rate swap agreements
|
|
Interest expense
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||
|
Interest rate swap agreements
|
|
Other comprehensive loss
|
|
(51
|
)
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
||||
|
Natural gas swap contracts
|
|
Other comprehensive loss
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(67
|
)
|
||||
|
Natural gas futures contracts
|
|
Other comprehensive income (loss)
|
|
—
|
|
|
(2,463
|
)
|
|
—
|
|
|
763
|
|
||||
|
Total
|
|
|
|
$
|
2,552
|
|
|
$
|
(2,713
|
)
|
|
$
|
3,788
|
|
|
$
|
2,069
|
|
|
14.
|
Fair Value of Financial Instruments
|
|
|
|
|
|
Fair Value Measurements Using:
|
||||||||||||
|
As of June 30, 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
|
|
$
|
20
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Investments—guaranteed income fund
|
|
2,334
|
|
|
—
|
|
|
—
|
|
|
2,334
|
|
||||
|
Investments—mutual funds and other
|
|
7,217
|
|
|
7,217
|
|
|
—
|
|
|
—
|
|
||||
|
Total investments
|
|
9,571
|
|
|
7,237
|
|
|
—
|
|
|
2,334
|
|
||||
|
Derivative assets
|
|
1,270
|
|
|
—
|
|
|
1,270
|
|
|
—
|
|
||||
|
Total assets
|
|
$
|
10,841
|
|
|
$
|
7,237
|
|
|
$
|
1,270
|
|
|
$
|
2,334
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
|
Derivative liabilities
|
|
$
|
802
|
|
|
$
|
—
|
|
|
$
|
802
|
|
|
$
|
—
|
|
|
|
Six Months Ended
June 30, |
||||||
|
|
2020
|
|
2019
|
||||
|
(in thousands)
|
|
|
|
||||
|
Beginning Balance
|
$
|
803
|
|
|
$
|
686
|
|
|
Purchases and adjustments
|
226
|
|
|
110
|
|
||
|
Transfers
|
1,345
|
|
|
—
|
|
||
|
Distribution
|
(50
|
)
|
|
(12
|
)
|
||
|
Investment income
|
10
|
|
|
7
|
|
||
|
Ending Balance
|
$
|
2,334
|
|
|
$
|
791
|
|
|
15.
|
Long-Term Debt
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
(in thousands)
|
|
2020
|
|
2019
|
||||
|
FPU secured first mortgage bonds (1) :
|
|
|
|
|
||||
|
9.08% bond, due June 1, 2022
|
|
$
|
7,992
|
|
|
$
|
7,990
|
|
|
Uncollateralized senior notes:
|
|
|
|
|
||||
|
5.50% note, due October 12, 2020
|
|
2,000
|
|
|
2,000
|
|
||
|
5.93% note, due October 31, 2023
|
|
10,500
|
|
|
12,000
|
|
||
|
5.68% note, due June 30, 2026
|
|
17,400
|
|
|
20,300
|
|
||
|
6.43% note, due May 2, 2028
|
|
5,600
|
|
|
6,300
|
|
||
|
3.73% note, due December 16, 2028
|
|
18,000
|
|
|
18,000
|
|
||
|
3.88% note, due May 15, 2029
|
|
45,000
|
|
|
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
|
|
(786
|
)
|
|
(822
|
)
|
||
|
Total long-term debt
|
|
445,706
|
|
|
485,768
|
|
||
|
Less: current maturities
|
|
(15,600
|
)
|
|
(45,600
|
)
|
||
|
Total long-term debt, net of current maturities
|
|
$
|
430,106
|
|
|
$
|
440,168
|
|
|
(in thousands)
|
|
Total Borrowing Capacity
|
|
Less: Amount of Debt Issued
|
|
Less: Unfunded Commitments
|
|
Remaining Borrowing Capacity
|
||||||||
|
Shelf Agreement
|
|
|
|
|
|
|
|
|
||||||||
|
Prudential Shelf Agreement (1) (2)
|
|
$
|
370,000
|
|
|
$
|
(170,000
|
)
|
|
$
|
(50,000
|
)
|
|
$
|
150,000
|
|
|
MetLife Shelf Agreement (3)
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
||||
|
NYL Shelf Agreement (4)
|
|
150,000
|
|
|
(100,000
|
)
|
|
(40,000
|
)
|
|
10,000
|
|
||||
|
Total Shelf Agreements as of June 30, 2020
|
|
$
|
670,000
|
|
|
$
|
(270,000
|
)
|
|
$
|
(90,000
|
)
|
|
$
|
310,000
|
|
|
|
|
|
|
|
Outstanding borrowings at
|
|
|
||||||||||
|
(in thousands)
|
Total Facility
|
|
LIBOR Based Interest Rate
|
|
June 30, 2020
|
|
December 31, 2019
|
|
Available at June 30, 2020
|
||||||||
|
Bank Credit Facility
|
|
|
|
|
|
|
|
|
|
||||||||
|
Existing Bilateral Facilities
|
|
|
|
|
|
|
|
|
|
||||||||
|
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
|
|
77,501
|
|
|
57,150
|
|
|
2,499
|
|
||||
|
Committed revolving credit facility C
|
45,000
|
|
|
plus 0.75 percent
|
|
32,412
|
|
|
42,040
|
|
|
12,588
|
|
||||
|
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
|
|
80,000
|
|
|
50,000
|
|
|
70,000
|
|
||||
|
Total existing bilateral facilities
|
370,000
|
|
|
|
|
284,913
|
|
|
244,190
|
|
|
85,087
|
|
||||
|
Incremental Facilities
|
|
|
|
|
|
|
|
|
|
||||||||
|
Committed revolving credit facility F
|
35,000
|
|
|
plus 1.75 percent
|
|
—
|
|
|
—
|
|
|
35,000
|
|
||||
|
Committed revolving credit facility G
|
15,000
|
|
|
plus 1.75 percent
|
|
—
|
|
|
—
|
|
|
15,000
|
|
||||
|
Committed revolving credit facility H
|
25,000
|
|
|
plus 1.75 percent
|
|
—
|
|
|
—
|
|
|
25,000
|
|
||||
|
Committed revolving credit facility I
|
20,000
|
|
|
plus 1.75 percent
|
|
—
|
|
|
—
|
|
|
20,000
|
|
||||
|
Total incremental facilities
|
95,000
|
|
|
|
|
—
|
|
|
—
|
|
|
95,000
|
|
||||
|
Total short term credit facilities
|
$
|
465,000
|
|
|
|
|
284,913
|
|
|
244,190
|
|
|
$
|
180,087
|
|
||
|
Book overdrafts(1)
|
|
|
|
|
1,492
|
|
|
3,181
|
|
|
|
||||||
|
Total short-term borrowing
|
|
|
|
|
$
|
286,405
|
|
|
$
|
247,371
|
|
|
|
||||
|
17.
|
Leases
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
|
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
( in thousands)
|
|
Classification
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
Operating lease cost (1)
|
|
Operations expense
|
|
$
|
629
|
|
|
$
|
654
|
|
|
$
|
1,255
|
|
|
$
|
1,288
|
|
|
Finance lease cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Amortization of lease assets
|
|
Depreciation and amortization
|
|
—
|
|
|
249
|
|
|
—
|
|
|
650
|
|
||||
|
Interest on lease liabilities
|
|
Interest expense
|
|
—
|
|
|
1
|
|
|
—
|
|
|
5
|
|
||||
|
Net lease cost
|
|
|
|
$
|
629
|
|
|
$
|
904
|
|
|
$
|
1,255
|
|
|
$
|
1,943
|
|
|
(in thousands)
|
|
Balance sheet classification
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
|
Assets
|
|
|
|
|
|
|
||||
|
Operating lease assets
|
|
Operating lease right-of-use assets
|
|
$
|
11,546
|
|
|
$
|
11,563
|
|
|
Total lease assets
|
|
|
|
$
|
11,546
|
|
|
$
|
11,563
|
|
|
Liabilities
|
|
|
|
|
|
|
||||
|
Current
|
|
|
|
|
|
|
||||
|
Operating lease liabilities
|
|
Other accrued liabilities
|
|
$
|
1,647
|
|
|
$
|
1,705
|
|
|
Noncurrent
|
|
|
|
|
|
|
||||
|
Operating lease liabilities
|
|
Operating lease - liabilities
|
|
10,055
|
|
|
9,896
|
|
||
|
Total lease liabilities
|
|
|
|
$
|
11,702
|
|
|
$
|
11,601
|
|
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||
|
Weighted-average remaining lease term (in years)
|
|
|
|
|
||
|
Operating leases
|
|
8.6
|
|
|
8.88
|
|
|
Weighted-average discount rate
|
|
|
|
|
||
|
Operating leases
|
|
3.8
|
%
|
|
3.8
|
%
|
|
|
|
Six Months Ended
|
||||||
|
|
|
June 30,
|
||||||
|
(in thousands)
|
|
2020
|
|
2019
|
||||
|
Operating cash flows from operating leases
|
|
$
|
1,034
|
|
|
$
|
1,100
|
|
|
Operating cash flows from finance leases
|
|
$
|
—
|
|
|
$
|
5
|
|
|
Financing cash flows from finance leases
|
|
$
|
—
|
|
|
$
|
650
|
|
|
(in thousands)
|
|
Operating
Leases (1)
|
||
|
Remainder of 2020
|
|
$
|
1,089
|
|
|
2021
|
|
2,031
|
|
|
|
2022
|
|
1,937
|
|
|
|
2023
|
|
1,874
|
|
|
|
2024
|
|
1,619
|
|
|
|
2025
|
|
1,383
|
|
|
|
Thereafter
|
|
3,876
|
|
|
|
Total lease payments
|
|
$
|
13,809
|
|
|
Less: Interest
|
|
2,107
|
|
|
|
Present value of lease liabilities
|
|
$
|
11,702
|
|
|
•
|
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
|
|
|
||||||||
|
|
|
June 30,
|
|
Increase /
|
||||||||
|
|
|
2020
|
|
2019
|
|
(decrease)
|
||||||
|
(in thousands except per share)
|
|
|
|
|
|
|
||||||
|
Gross Margin
|
|
|
|
|
|
|
||||||
|
Regulated Energy segment
|
|
$
|
57,131
|
|
|
$
|
55,086
|
|
|
$
|
2,045
|
|
|
Unregulated Energy segment
|
|
17,032
|
|
|
14,380
|
|
|
2,652
|
|
|||
|
Other businesses and eliminations
|
|
(73
|
)
|
|
(97
|
)
|
|
24
|
|
|||
|
Total Gross Margin
|
|
$
|
74,090
|
|
|
$
|
69,369
|
|
|
$
|
4,721
|
|
|
|
|
|
|
|
|
|
||||||
|
Operating Income
|
|
|
|
|
|
|
||||||
|
Regulated Energy segment
|
|
$
|
18,006
|
|
|
$
|
18,028
|
|
|
$
|
(22
|
)
|
|
Unregulated Energy segment
|
|
281
|
|
|
(771
|
)
|
|
1,052
|
|
|||
|
Other businesses and eliminations
|
|
(310
|
)
|
|
908
|
|
|
(1,218
|
)
|
|||
|
Total Operating Income
|
|
17,977
|
|
|
18,165
|
|
|
(188
|
)
|
|||
|
Other expense, net
|
|
(279
|
)
|
|
(320
|
)
|
|
41
|
|
|||
|
Interest charges
|
|
5,054
|
|
|
5,552
|
|
|
(498
|
)
|
|||
|
Income from Continuing Operations Before Income Taxes
|
|
12,644
|
|
|
12,293
|
|
|
351
|
|
|||
|
Income Taxes on Continuing Operations
|
|
1,983
|
|
|
3,379
|
|
|
(1,396
|
)
|
|||
|
Income from Continuing operations
|
|
10,661
|
|
|
8,914
|
|
|
1,747
|
|
|||
|
Gain (Loss) from Discontinued Operations
|
|
295
|
|
|
(610
|
)
|
|
905
|
|
|||
|
Net Income
|
|
$
|
10,956
|
|
|
$
|
8,304
|
|
|
$
|
2,652
|
|
|
Basic Earnings Per Share of Common Stock
|
|
|
|
|
|
|
||||||
|
Earnings from Continuing Operations
|
|
$
|
0.65
|
|
|
$
|
0.55
|
|
|
$
|
0.10
|
|
|
Earnings (loss) from Discontinued Operations
|
|
0.02
|
|
|
(0.04
|
)
|
|
0.06
|
|
|||
|
Basic Earnings Per Share of Common Stock
|
|
$
|
0.67
|
|
|
$
|
0.51
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
||||||
|
Diluted Earnings Per Share of Common Stock
|
|
|
|
|
|
|
||||||
|
Earnings from Continuing Operations
|
|
$
|
0.64
|
|
|
$
|
0.54
|
|
|
$
|
0.10
|
|
|
Earnings (loss) from Discontinued Operations
|
|
0.02
|
|
|
(0.04
|
)
|
|
0.06
|
|
|||
|
Diluted Earnings Per Share of Common Stock
|
|
$
|
0.66
|
|
|
$
|
0.50
|
|
|
$
|
0.16
|
|
|
(in thousands, except per share data)
|
|
Pre-tax
Income |
|
Net
Income |
|
Earnings
Per Share |
||||||
|
Second Quarter of 2019 Reported Results from Continuing Operations
|
|
$
|
12,293
|
|
|
$
|
8,914
|
|
|
$
|
0.54
|
|
|
|
|
|
|
|
|
|
||||||
|
Adjusting for Unusual Items:
|
|
|
|
|
|
|
||||||
|
Unfavorable COVID-19 impacts
|
|
(3,595
|
)
|
|
(2,557
|
)
|
|
(0.15
|
)
|
|||
|
Increased customer consumption - primarily due to colder weather
|
|
2,013
|
|
|
1,432
|
|
|
0.08
|
|
|||
|
Favorable federal income tax impact associated with the CARES Act
|
|
—
|
|
|
1,669
|
|
|
0.10
|
|
|||
|
|
|
(1,582
|
)
|
|
544
|
|
|
0.03
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Increased (Decreased) Gross Margins:
|
|
|
|
|
|
|
||||||
|
Eastern Shore and Peninsula Pipeline service expansions*
|
|
1,776
|
|
|
1,263
|
|
|
0.07
|
|
|||
|
Increased gross margin from demand for Marlin Gas Services *
|
|
1,077
|
|
|
766
|
|
|
0.05
|
|
|||
|
Increased retail propane margins per gallon
|
|
867
|
|
|
616
|
|
|
0.04
|
|
|||
|
Natural gas growth (excluding service expansions)
|
|
832
|
|
|
592
|
|
|
0.04
|
|
|||
|
Margin contributions from Boulden acquisition (completed December 2019)*
|
|
549
|
|
|
390
|
|
|
0.02
|
|
|||
|
|
|
5,101
|
|
|
3,627
|
|
|
0.22
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
(Increased) Decreased Operating Expenses (Excluding Cost of Sales):
|
|
|
|
|
|
|
||||||
|
Payroll, Benefits and other employee-related expenses
|
|
(967
|
)
|
|
(688
|
)
|
|
(0.05
|
)
|
|||
|
Depreciation, asset removal and property tax costs due to new capital investments
|
|
(932
|
)
|
|
(663
|
)
|
|
(0.04
|
)
|
|||
|
Insurance expense (non-health) - both insured and self-insured
|
|
(547
|
)
|
|
(389
|
)
|
|
(0.02
|
)
|
|||
|
Operating expenses from Boulden acquisition (completed December 2019) *
|
|
(498
|
)
|
|
(354
|
)
|
|
(0.02
|
)
|
|||
|
|
|
(2,944
|
)
|
|
(2,094
|
)
|
|
(0.13
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
Other income tax effects
|
|
—
|
|
|
(177
|
)
|
|
(0.01
|
)
|
|||
|
Interest charges
|
|
(436
|
)
|
|
(310
|
)
|
|
(0.02
|
)
|
|||
|
Lower pension expense
|
|
371
|
|
|
264
|
|
|
0.02
|
|
|||
|
Net other changes
|
|
(159
|
)
|
|
(107
|
)
|
|
(0.01
|
)
|
|||
|
|
|
(224
|
)
|
|
(330
|
)
|
|
(0.02
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
Second Quarter of 2020 Reported Results from Continuing Operations
|
|
$
|
12,644
|
|
|
$
|
10,661
|
|
|
$
|
0.64
|
|
|
|
|
Six Months Ended
|
|
|
||||||||
|
|
|
June 30,
|
|
Increase
|
||||||||
|
|
|
2020
|
|
2019
|
|
(decrease)
|
||||||
|
(in thousands except per share)
|
|
|
|
|
|
|
||||||
|
Gross Margin
|
|
|
|
|
|
|
||||||
|
Regulated Energy segment
|
|
$
|
125,254
|
|
|
$
|
122,188
|
|
|
$
|
3,066
|
|
|
Unregulated Energy segment
|
|
48,815
|
|
|
46,922
|
|
|
1,893
|
|
|||
|
Other businesses and eliminations
|
|
(158
|
)
|
|
(205
|
)
|
|
47
|
|
|||
|
Total Gross Margin
|
|
$
|
173,911
|
|
|
$
|
168,905
|
|
|
5,006
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Operating Income
|
|
|
|
|
|
|
||||||
|
Regulated Energy segment
|
|
$
|
45,894
|
|
|
$
|
47,769
|
|
|
$
|
(1,875
|
)
|
|
Unregulated Energy segment
|
|
14,142
|
|
|
14,486
|
|
|
(344
|
)
|
|||
|
Other businesses and eliminations
|
|
75
|
|
|
32
|
|
|
43
|
|
|||
|
Total Operating Income
|
|
60,111
|
|
|
62,287
|
|
|
(2,176
|
)
|
|||
|
Other income (expense), net
|
|
3,039
|
|
|
(380
|
)
|
|
3,419
|
|
|||
|
Interest charges
|
|
10,868
|
|
|
11,180
|
|
|
(312
|
)
|
|||
|
Income from Continuing Operations Before Income Taxes
|
|
52,282
|
|
|
50,727
|
|
|
1,555
|
|
|||
|
Income taxes on Continuing Operations
|
|
12,580
|
|
|
13,002
|
|
|
(422
|
)
|
|||
|
Income from Continuing operations
|
|
39,702
|
|
|
37,725
|
|
|
1,977
|
|
|||
|
Income (loss) from Discontinued Operations
|
|
184
|
|
|
(757
|
)
|
|
941
|
|
|||
|
Net Income
|
|
$
|
39,886
|
|
|
$
|
36,968
|
|
|
$
|
2,918
|
|
|
Basic Earnings Per Share of Common Stock
|
|
|
|
|
|
|
||||||
|
Earnings from Continuing Operations
|
|
$
|
2.42
|
|
|
$
|
2.31
|
|
|
$
|
0.11
|
|
|
Earnings (loss) from Discontinued Operations
|
|
0.01
|
|
|
(0.05
|
)
|
|
0.06
|
|
|||
|
Basic Earnings Per Share of Common Stock
|
|
$
|
2.43
|
|
|
$
|
2.26
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
||||||
|
Diluted Earnings Per Share of Common Stock
|
|
|
|
|
|
|
||||||
|
Earnings from Continuing Operations
|
|
$
|
2.41
|
|
|
$
|
2.30
|
|
|
$
|
0.11
|
|
|
Earnings (loss) from Discontinued Operations
|
|
0.01
|
|
|
(0.05
|
)
|
|
0.06
|
|
|||
|
Diluted Earnings Per Share of Common Stock
|
|
$
|
2.42
|
|
|
$
|
2.25
|
|
|
$
|
0.17
|
|
|
(in thousands, except per share data)
|
|
Pre-tax
Income |
|
Net
Income |
|
Earnings
Per Share |
||||||
|
Six Months Ended June 30, 2019 Reported Results from Continuing Operations:
|
|
$
|
50,727
|
|
|
$
|
37,725
|
|
|
$
|
2.30
|
|
|
|
|
|
|
|
|
|
||||||
|
Adjusting for Unusual Items:
|
|
|
|
|
|
|
||||||
|
Unfavorable COVID-19 impacts
|
|
(3,800
|
)
|
|
(2,764
|
)
|
|
(0.17
|
)
|
|||
|
Decreased customer consumption - primarily due to milder weather
|
|
(1,931
|
)
|
|
(1,405
|
)
|
|
(0.09
|
)
|
|||
|
Absence of Florida tax savings (net of GRIP refunds) recorded in first quarter of 2019 for 2018
|
|
(910
|
)
|
|
(667
|
)
|
|
(0.04
|
)
|
|||
|
Gains from sales of assets
|
|
3,162
|
|
|
2,317
|
|
|
0.14
|
|
|||
|
Favorable income tax impact associated with the CARES Act
|
|
—
|
|
|
1,669
|
|
|
0.10
|
|
|||
|
|
|
(3,479
|
)
|
|
(850
|
)
|
|
(0.06
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
Increased (Decreased) Gross Margins:
|
|
|
|
|
|
|
||||||
|
Eastern Shore and Peninsula Pipeline service expansions*
|
|
2,839
|
|
|
2,065
|
|
|
0.12
|
|
|||
|
Margin contribution from Boulden acquisition (completed December 2019)*
|
|
2,437
|
|
|
1,773
|
|
|
0.11
|
|
|||
|
Increased retail propane margins per gallon
|
|
2,009
|
|
|
1,461
|
|
|
0.09
|
|
|||
|
Natural gas growth (excluding service expansions)
|
|
1,928
|
|
|
1,403
|
|
|
0.09
|
|
|||
|
Aspire Energy rate increases
|
|
308
|
|
|
224
|
|
|
0.01
|
|
|||
|
|
|
9,521
|
|
|
6,926
|
|
|
0.42
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
(Increased) Decreased Operating Expenses (Excluding Cost of Sales):
|
|
|
|
|
|
|
||||||
|
Depreciation, asset removal and property taxes
|
|
(2,421
|
)
|
|
(1,761
|
)
|
|
(0.11
|
)
|
|||
|
Insurance expense (non-health) - both insured and self-insured
|
|
(1,578
|
)
|
|
(1,148
|
)
|
|
(0.07
|
)
|
|||
|
Operating expenses from Boulden acquisition (completed December 2019)
|
|
(1,032
|
)
|
|
(751
|
)
|
|
(0.05
|
)
|
|||
|
Facilities maintenance costs
|
|
(757
|
)
|
|
(550
|
)
|
|
(0.03
|
)
|
|||
|
Payroll, benefits and other employee-related expenses
|
|
261
|
|
|
190
|
|
|
0.01
|
|
|||
|
|
|
(5,527
|
)
|
|
(4,020
|
)
|
|
(0.25
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
Other income tax effects
|
|
—
|
|
|
(849
|
)
|
|
(0.05
|
)
|
|||
|
Interest Charges
|
|
(783
|
)
|
|
(570
|
)
|
|
(0.03
|
)
|
|||
|
Lower pension expense
|
|
743
|
|
|
540
|
|
|
0.03
|
|
|||
|
Net other changes
|
|
1,080
|
|
|
800
|
|
|
0.05
|
|
|||
|
|
|
1,040
|
|
|
(79
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Six Months Ended June 30, 2020 Reported Results from Continuing Operations
|
|
$
|
52,282
|
|
|
$
|
39,702
|
|
|
$
|
2.41
|
|
|
|
Gross Margin for the Period
|
||||||||||||||||||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Year Ended
|
|
Estimate for
|
||||||||||||||||||||
|
|
June 30,
|
|
June 30,
|
|
December 31,
|
|
Fiscal
|
||||||||||||||||||||
|
in thousands
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2019
|
|
2020
|
|
2021
|
||||||||||||||
|
Pipeline Expansions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Regulated Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
West Palm Beach County, Florida Expansion(1)
|
$
|
967
|
|
|
$
|
161
|
|
|
$
|
1,968
|
|
|
$
|
293
|
|
|
$
|
2,139
|
|
|
$
|
4,092
|
|
|
$
|
5,227
|
|
|
Del-Mar Energy Pathway(1)
|
452
|
|
|
189
|
|
|
641
|
|
|
353
|
|
|
731
|
|
|
2,398
|
|
|
4,100
|
|
|||||||
|
Auburndale
|
170
|
|
|
—
|
|
|
340
|
|
|
—
|
|
|
283
|
|
|
679
|
|
|
679
|
|
|||||||
|
Callahan Intrastate Pipeline (including related natural gas distribution services)
|
536
|
|
|
—
|
|
|
536
|
|
|
—
|
|
|
—
|
|
|
4,039
|
|
|
7,564
|
|
|||||||
|
Guernsey Power Station
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
700
|
|
|||||||
|
Total Pipeline Expansions
|
2,125
|
|
|
350
|
|
|
3,485
|
|
|
646
|
|
|
3,153
|
|
|
11,208
|
|
|
18,270
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Virtual Pipeline Growth:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Compressed Natural Gas Transportation
|
2,107
|
|
|
1,030
|
|
|
3,454
|
|
|
3,359
|
|
|
5,410
|
|
|
6,900
|
|
|
7,700
|
|
|||||||
|
Renewable Natural Gas Transportation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
|||||||
|
Total Virtual Pipeline Growth
|
2,107
|
|
|
1,030
|
|
|
3,454
|
|
|
3,359
|
|
|
5,410
|
|
|
6,900
|
|
|
8,700
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Boulden Propane
|
549
|
|
|
—
|
|
|
2,437
|
|
|
—
|
|
|
329
|
|
|
3,800
|
|
|
4,200
|
|
|||||||
|
Elkton Gas
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,207
|
|
|
3,992
|
|
|||||||
|
Total Acquisitions
|
549
|
|
|
—
|
|
|
2,437
|
|
|
—
|
|
|
329
|
|
|
5,007
|
|
|
8,192
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Regulatory Initiatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Florida GRIP
|
3,609
|
|
|
3,530
|
|
|
7,305
|
|
|
7,311
|
|
|
13,939
|
|
|
15,206
|
|
|
16,898
|
|
|||||||
|
Hurricane Michael regulatory proceeding
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
TBD
|
|
|
TBD
|
|
|||||||
|
Total Regulatory Initiatives
|
3,609
|
|
|
3,530
|
|
|
7,305
|
|
|
7,311
|
|
|
13,939
|
|
|
15,206
|
|
|
16,898
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Total
|
$
|
8,390
|
|
|
$
|
4,910
|
|
|
$
|
16,681
|
|
|
$
|
11,316
|
|
|
$
|
22,831
|
|
|
$
|
38,321
|
|
|
$
|
52,060
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||
|
|
|
June 30, 2020
|
|
June 30, 2020
|
||||||||||
|
(in thousands)
|
|
Delmarva Peninsula
|
Florida
|
|
Delmarva Peninsula
|
Florida
|
||||||||
|
Customer Growth:
|
|
|
|
|
|
|
||||||||
|
Residential
|
|
$
|
326
|
|
$
|
171
|
|
|
$
|
767
|
|
$
|
394
|
|
|
Commercial and industrial
|
|
70
|
|
265
|
|
|
224
|
|
543
|
|
||||
|
Total Customer Growth
|
|
$
|
396
|
|
$
|
436
|
|
|
$
|
991
|
|
$
|
937
|
|
|
|
|
Three Months Ended
|
|
|
||||||||
|
|
|
June 30,
|
|
Increase
|
||||||||
|
|
|
2020
|
|
2019
|
|
(decrease)
|
||||||
|
(in thousands)
|
|
|
|
|
|
|
||||||
|
Revenue
|
|
$
|
73,518
|
|
|
$
|
73,403
|
|
|
$
|
115
|
|
|
Cost of sales
|
|
16,387
|
|
|
18,317
|
|
|
(1,930
|
)
|
|||
|
Gross margin
|
|
57,131
|
|
|
55,086
|
|
|
2,045
|
|
|||
|
Operations & maintenance
|
|
25,456
|
|
|
24,149
|
|
|
1,307
|
|
|||
|
Depreciation & amortization
|
|
9,347
|
|
|
8,969
|
|
|
378
|
|
|||
|
Other taxes
|
|
4,322
|
|
|
3,940
|
|
|
382
|
|
|||
|
Total operating expenses
|
|
39,125
|
|
|
37,058
|
|
|
2,067
|
|
|||
|
Operating income
|
|
$
|
18,006
|
|
|
$
|
18,028
|
|
|
$
|
(22
|
)
|
|
(in thousands)
|
Margin Impact
|
||
|
Eastern Shore and Peninsula Pipeline service expansions
|
$
|
1,776
|
|
|
Increased customer consumption - primarily due to colder weather
|
1,127
|
|
|
|
Natural gas growth (excluding service expansions)
|
832
|
|
|
|
Unfavorable COVID-19 impacts on gross margin
|
(2,201
|
)
|
|
|
Other variances
|
511
|
|
|
|
Quarter-over-quarter increase in gross margin
|
$
|
2,045
|
|
|
(in thousands)
|
|
||
|
Unfavorable COVID-19 impacts (higher operating and bad debt expenses)
|
$
|
1,014
|
|
|
Depreciation, asset removal and property tax costs due to new capital investments
|
682
|
|
|
|
Payroll, Benefits and other employee-related expenses
|
612
|
|
|
|
Insurance expense (non-health) - both insured and self-insured
|
438
|
|
|
|
Other variances
|
(679
|
)
|
|
|
Quarter-over-quarter increase in other operating expenses
|
$
|
2,067
|
|
|
|
|
Six Months Ended
|
|
|
||||||||
|
|
|
June 30,
|
|
Increase
|
||||||||
|
|
|
2020
|
|
2019
|
|
(decrease)
|
||||||
|
(in thousands)
|
|
|
|
|
|
|
||||||
|
Revenue
|
|
$
|
176,473
|
|
|
$
|
177,021
|
|
|
$
|
(548
|
)
|
|
Cost of sales
|
|
51,219
|
|
|
54,833
|
|
|
(3,614
|
)
|
|||
|
Gross margin
|
|
125,254
|
|
|
122,188
|
|
|
3,066
|
|
|||
|
Operations & maintenance
|
|
51,697
|
|
|
48,697
|
|
|
3,000
|
|
|||
|
Depreciation & amortization
|
|
18,666
|
|
|
17,415
|
|
|
1,251
|
|
|||
|
Other taxes
|
|
8,997
|
|
|
8,307
|
|
|
690
|
|
|||
|
Total operating expenses
|
|
79,360
|
|
|
74,419
|
|
|
4,941
|
|
|||
|
Operating income
|
|
$
|
45,894
|
|
|
$
|
47,769
|
|
|
$
|
(1,875
|
)
|
|
(in thousands)
|
Margin Impact
|
||
|
Eastern Shore and Peninsula Pipeline service expansions
|
$
|
2,839
|
|
|
Natural gas distribution - customer growth (excluding service expansions)
|
1,928
|
|
|
|
Increased customer consumption
|
620
|
|
|
|
Absence of Florida tax savings (net of GRIP refunds) recorded in the first quarter of 2019 for 2018
|
(910
|
)
|
|
|
Unfavorable COVID-19 impacts on gross margin
|
(2,430
|
)
|
|
|
Other variances
|
1,019
|
|
|
|
Period-over-period increase in gross margin
|
$
|
3,066
|
|
|
(in thousands)
|
|
||
|
Depreciation, asset removal and property tax costs due to new capital investments
|
$
|
1,909
|
|
|
Insurance expense (non-health) - both insured and self-insured
|
1,272
|
|
|
|
Unfavorable COVID-19 impacts (higher operating and bad debt expenses)
|
906
|
|
|
|
Facilities maintenance costs
|
837
|
|
|
|
Other variances
|
17
|
|
|
|
Period-over-period increase in other operating expenses
|
$
|
4,941
|
|
|
|
|
Three Months Ended
|
|
|
||||||||
|
|
|
June 30,
|
|
Increase
|
||||||||
|
|
|
2020
|
|
2019
|
|
(decrease)
|
||||||
|
(in thousands)
|
|
|
|
|
|
|
||||||
|
Revenue
|
|
$
|
27,741
|
|
|
$
|
25,625
|
|
|
$
|
2,116
|
|
|
Cost of sales
|
|
10,709
|
|
|
11,245
|
|
|
(536
|
)
|
|||
|
Gross margin
|
|
17,032
|
|
|
14,380
|
|
|
2,652
|
|
|||
|
Operations & maintenance
|
|
12,959
|
|
|
11,881
|
|
|
1,078
|
|
|||
|
Depreciation & amortization
|
|
2,889
|
|
|
2,477
|
|
|
412
|
|
|||
|
Other taxes
|
|
903
|
|
|
793
|
|
|
110
|
|
|||
|
Total operating expenses
|
|
16,751
|
|
|
15,151
|
|
|
1,600
|
|
|||
|
Operating gain/loss
|
|
$
|
281
|
|
|
$
|
(771
|
)
|
|
$
|
1,052
|
|
|
(in thousands)
|
|
Margin Impact
|
||
|
Propane Operations
|
|
|
||
|
Increased retail propane margins per gallon driven by favorable market conditions and supply management
|
|
$
|
867
|
|
|
Boulden acquisition (assets acquired in December 2019)
|
|
549
|
|
|
|
Increase in customer consumption - primarily due to colder weather
|
|
535
|
|
|
|
Marlin Gas Services - increased gross margin from demand for services
|
|
1,077
|
|
|
|
Aspire Energy
|
|
|
||
|
Increase in customer consumption - primarily due to colder weather
|
|
351
|
|
|
|
Unfavorable COVID-19 impacts on gross margin
|
|
(317
|
)
|
|
|
Other variances
|
|
(410
|
)
|
|
|
Quarter-over-quarter increase in gross margin
|
|
$
|
2,652
|
|
|
•
|
Increased Retail Propane Margins - Gross margin increased by $0.9 million, in the second 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 market pricing and 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.
|
|
•
|
Propane Operations - Boulden - Gross margin increased by $0.5 million due to the inclusion of operating results from Boulden, which was acquired by Sharp in December 2019.
|
|
•
|
Increased Customer Consumption Primarily Driven by Weather - Gross margin increased by $0.5 million due to colder weather on the Delmarva Peninsula for the three months ended June 30, 2020, compared to the same period in 2019.
|
|
•
|
Gross margin increased by $1.1 million in the second quarter of 2020, as compared to the same period in the prior year due to higher demand for compressed natural gas hold services and pipeline integrity solutions.
|
|
•
|
Increased Customer Consumption Primarily Driven by Weather - Gross margin increased by $0.4 million due to increased consumption as weather in Ohio was approximately 50 percent colder for the three months ended June 30, 2020 compared to the same period in 2019.
|
|
•
|
Gross margin decreased by $0.3 million, as a result of the lower customer consumption, which was caused by the slowing of economic activities in our service territories as a result of restrictions imposed to promote social distancing and slow down the spread of COVID-19.
|
|
(in thousands)
|
|
||
|
Depreciation, asset removal and property tax costs due to new capital investments
|
$
|
453
|
|
|
Payroll, Benefits and other employee-related expenses
|
302
|
|
|
|
Unfavorable COVID-19 impacts (operating and bad debt expenses)
|
369
|
|
|
|
Operating expenses from Boulden acquisition (completed December 2019) *
|
305
|
|
|
|
Insurance expense (non-health) - both insured and self-insured
|
218
|
|
|
|
Other variances
|
(47
|
)
|
|
|
Quarter-over-quarter increase in other operating expenses
|
$
|
1,600
|
|
|
|
|
Six Months Ended
|
|
|
|||||||
|
|
|
June 30,
|
|
Increase
|
|||||||
|
|
|
2020
|
2019
|
|
(decrease)
|
||||||
|
(in thousands)
|
|
|
|
|
|
||||||
|
Revenue
|
|
$
|
81,753
|
|
$
|
86,704
|
|
|
$
|
(4,951
|
)
|
|
Cost of sales
|
|
32,938
|
|
39,782
|
|
|
(6,844
|
)
|
|||
|
Gross margin
|
|
48,815
|
|
46,922
|
|
|
1,893
|
|
|||
|
Operations & maintenance
|
|
26,997
|
|
25,703
|
|
|
1,294
|
|
|||
|
Depreciation & amortization
|
|
5,806
|
|
4,943
|
|
|
863
|
|
|||
|
Other taxes
|
|
1,870
|
|
1,790
|
|
|
80
|
|
|||
|
Total operating expenses
|
|
34,673
|
|
32,436
|
|
|
2,237
|
|
|||
|
Operating income
|
|
$
|
14,142
|
|
$
|
14,486
|
|
|
$
|
(344
|
)
|
|
(in thousands)
|
|
|
||
|
Propane Operations
|
|
|
||
|
Boulden acquisition (assets acquired in December 2019)
|
|
$
|
2,437
|
|
|
Increased retail propane margins per gallon driven by favorable market conditions and supply management
|
|
2,009
|
|
|
|
Decrease in customer consumption - primarily due to milder weather
|
|
(2,003
|
)
|
|
|
Aspire Energy
|
|
|
||
|
Decrease in customer consumption - primarily due to milder weather
|
|
(549
|
)
|
|
|
Higher margins from negotiated rate increases
|
|
308
|
|
|
|
Unfavorable COVID-19 impacts on gross margin
|
|
(442
|
)
|
|
|
Other variances
|
|
133
|
|
|
|
Period-over-period increase in gross margin
|
|
$
|
1,893
|
|
|
•
|
Propane Operations - Boulden - Gross margin increased by $2.4 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 $2.0 million, for the six months ended June 30, 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 market pricing and 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 $2.0 million primarily from the Mid-Atlantic propane operations as weather on the Delmarva Peninsula was 8 percent warmer for the six months ended June 30, 2020 compared to the same period in 2019.
|
|
•
|
Decreased Customer Consumption Primarily Driven by Weather - Gross margin decreased by $0.5 million due to decreased consumption as weather in Ohio was approximately 7 percent warmer for the six months ended June 30, 2020 compared to the same period in 2019.
|
|
•
|
Increased Margin Driven by Changes in Rates - Gross margin increased by $0.3 million in 2020, as compared to the prior year, due primarily to higher margins from negotiated rate increases.
|
|
•
|
Gross margin decreased by $0.4 million as a result of the lower customer consumption, which was caused by the slowing of economic activities in our service territories as a result of restrictions imposed to promote social distancing and slow down the spread of COVID-19.
|
|
(in thousands)
|
|
||
|
Depreciation, asset removal and property tax costs due to new capital investments
|
$
|
901
|
|
|
Operating expenses from Boulden acquisition (completed in December 2019)
|
646
|
|
|
|
Unfavorable COVID-19 impacts (higher operating and bad debt expenses)
|
487
|
|
|
|
Insurance expense (non-health) - both insured and self-insured
|
414
|
|
|
|
Other variances
|
(211
|
)
|
|
|
Period-over-period increase in other operating expenses
|
$
|
2,237
|
|
|
|
2020
|
||||||
|
(dollars in thousands)
|
Low
|
|
High
|
||||
|
Regulated Energy:
|
|
|
|
||||
|
Natural gas distribution
|
$
|
75,000
|
|
|
$
|
80,000
|
|
|
Natural gas transmission
|
70,000
|
|
|
80,000
|
|
||
|
Electric distribution
|
5,000
|
|
|
7,000
|
|
||
|
Total Regulated Energy
|
150,000
|
|
|
167,000
|
|
||
|
Unregulated Energy:
|
|
|
|
||||
|
Propane distribution
|
10,000
|
|
|
13,000
|
|
||
|
Energy transmission
|
10,000
|
|
|
15,000
|
|
||
|
Other unregulated energy
|
14,000
|
|
|
19,000
|
|
||
|
Total Unregulated Energy
|
34,000
|
|
|
47,000
|
|
||
|
Other:
|
|
|
|
||||
|
Corporate and other businesses
|
1,000
|
|
|
1,000
|
|
||
|
Total Other
|
1,000
|
|
|
1,000
|
|
||
|
Total 2020 Expected Capital Expenditures
|
$
|
185,000
|
|
|
$
|
215,000
|
|
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
||||||
|
Long-term debt, net of current maturities
|
|
$
|
430,106
|
|
|
42
|
%
|
|
$
|
440,168
|
|
|
44
|
%
|
|
Stockholders’ equity
|
|
593,277
|
|
|
58
|
%
|
|
561,577
|
|
|
56
|
%
|
||
|
Total capitalization, excluding short-term debt
|
|
$
|
1,023,383
|
|
|
100
|
%
|
|
$
|
1,001,745
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|
|
||||||
|
Short-term debt
|
|
$
|
286,405
|
|
|
21
|
%
|
|
$
|
247,371
|
|
|
19
|
%
|
|
Long-term debt, including current maturities
|
|
445,706
|
|
|
34
|
%
|
|
485,768
|
|
|
38
|
%
|
||
|
Stockholders’ equity
|
|
593,277
|
|
|
45
|
%
|
|
561,577
|
|
|
43
|
%
|
||
|
Total capitalization, including short-term debt
|
|
$
|
1,325,388
|
|
|
100
|
%
|
|
$
|
1,294,716
|
|
|
100
|
%
|
|
(in thousands)
|
|
Total Borrowing Capacity
|
|
Less: Amount of Debt Issued
|
|
Less: Unfunded Commitments
|
|
Remaining Borrowing Capacity
|
||||||||
|
Shelf Agreement
|
|
|
|
|
|
|
|
|
||||||||
|
Prudential Shelf Agreement (1) (2)
|
|
$
|
370,000
|
|
|
$
|
(170,000
|
)
|
|
$
|
(50,000
|
)
|
|
$
|
150,000
|
|
|
MetLife Shelf Agreement (3)
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
||||
|
NYL Shelf Agreement (4)
|
|
150,000
|
|
|
(100,000
|
)
|
|
(40,000
|
)
|
|
10,000
|
|
||||
|
Total Shelf Agreements as of June 30, 2020
|
|
670,000
|
|
|
(270,000
|
)
|
|
(90,000
|
)
|
|
310,000
|
|
||||
|
|
|
Six Months Ended
|
||||||
|
|
|
June 30,
|
||||||
|
(in thousands)
|
|
2020
|
|
2019
|
||||
|
Net cash provided by (used in):
|
|
|
|
|
||||
|
Operating activities
|
|
$
|
91,678
|
|
|
$
|
74,575
|
|
|
Investing activities
|
|
(80,254
|
)
|
|
(90,880
|
)
|
||
|
Financing activities
|
|
(14,819
|
)
|
|
17,470
|
|
||
|
Net increase (decrease) in cash and cash equivalents
|
|
(3,395
|
)
|
|
1,165
|
|
||
|
Cash and cash equivalents—beginning of period
|
|
6,985
|
|
|
6,089
|
|
||
|
Cash and cash equivalents—end of period
|
|
$
|
3,590
|
|
|
$
|
7,254
|
|
|
•
|
Changes in net accounts receivable and accrued revenue and accounts payable and accrued liabilities increased cash flows by $15.4 million, due in part to the timing and receipt of payments and the absence of PESCO, whose assets and contracts were sold in the fourth quarter of 2019;
|
|
•
|
Changes in net regulatory assets and liabilities increased cash flows by $5.7 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, increased cash flows by $5.4 million, due primarily to deferred income taxes, unrealized loss from investments and commodity contracts and depreciation and amortization, offset by realized gains on sale of assets;
|
|
•
|
Net cash flows from income taxes receivable decreased by $5.8 million due primarily to the implementation of the federal tax law associated with CARES Act;
|
|
•
|
Changes in net prepaid expenses and other current assets, customer deposits and refunds, accrued compensation and other assets and liabilities, net decreased cash flows by $4.2 million; and
|
|
•
|
Net cash flows from changes in propane inventory, storage gas and other inventories decreased by approximately $2.3 million.
|
|
•
|
Decreased cash flows of $63.6 million primarily from repayments of the $30 million term notes during the six months ended June 30, 2020 coupled with issuance of $30.0 million term notes in January 2019;
|
|
•
|
Increased cash flows from short-term borrowing of $36.1 million under our line of credit arrangements;
|
|
•
|
Decreased cash flows of $4.0 million as a result of changes in cash overdrafts in 2020; and
|
|
•
|
Cash dividends of $13.0 million paid during the six months ended June 30, 2020, compared to $11.8 million for the six months ended June 30, 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)
|
|
17,644
|
|
|
16,819
|
|
|
—
|
|
|
—
|
|
|
34,463
|
|
|||||
|
Total
|
|
$
|
17,644
|
|
|
$
|
16,819
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34,463
|
|
|
(in thousands)
|
Balance at December 31, 2019
|
|
Increase (Decrease) in Fair Market Value
|
|
Less Amounts Settled
|
|
Balance at June 30, 2020
|
||||||||
|
Sharp
|
$
|
(1,844
|
)
|
|
$
|
898
|
|
|
$
|
1,465
|
|
|
$
|
519
|
|
|
Total
|
$
|
(1,844
|
)
|
|
$
|
898
|
|
|
$
|
1,465
|
|
|
$
|
519
|
|
|
(in thousands)
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Total Fair Value
|
||||||||||||
|
Price based on Mont Belvieu - Sharp
|
$
|
129
|
|
|
$
|
303
|
|
|
$
|
88
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
519
|
|
|
Total
|
$
|
129
|
|
|
$
|
303
|
|
|
$
|
88
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
519
|
|
|
|
|
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)
|
|||||
|
April 1, 2020 through April 30, 2020 (1)
|
|
496
|
|
|
$
|
85.57
|
|
|
—
|
|
|
—
|
|
|
May 1, 2020
through May 31, 2020 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
June1, 2020
through June30, 2020 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
|
496
|
|
|
$
|
85.57
|
|
|
—
|
|
|
—
|
|
|
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.
|
|
|
|
|
|
104
|
|
Cover Page Interactive Data File - formatted in Inline XBRL and contained in Exhibit 101
|
|
CHESAPEAKE UTILITIES CORPORATION
|
|
|
|
/S/ BETH W. COOPER
|
|
Beth W. Cooper
Executive Vice President, Chief Financial Officer, and Assistant Corporate Secretary
|
|
Schedule 5.6
|
Disclosed Matters
|
|
Schedule 5.13
|
Subsidiaries; Equity Interests
|
|
(a)
|
[Reserved.]
|
|
(c)
|
Revolving Loan Requests.
|
|
(i)
|
third, towards payment of principal of Revolving Loans then due hereunder.
|
|
(b)
|
Default Rate.
|
|
(b)
|
Successor LIBOR Rate.
|
|
(a)
|
Increased Costs Generally. If any Change in Law shall:
|
|
(e)
|
[Reserved.]
|
|
(f)
|
[Reserved.];
|
|
(c)
|
In connection with the covenants set forth in this Section 6.10, it is understood
|
|
Until the Termination Date, the Borrower covenants and agrees with the Lender that: Section 7.1
|
[Reserved.]
|
|
(c)
|
The Borrower will not, and will not permit any of its Subsidiaries to, change its
|
|
(n)
|
[Reserved.]
|
|
(p)
|
Change of Control. A Change of Control shall occur.
|
|
Name
|
Jurisdiction of Organization
|
Owner
|
Ownership Percentage
|
|
Eastern Shore Natural Gas Company
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
Sharp Energy, Inc.
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
Sharpgas, Inc.
|
Delaware
|
Sharp Energy, Inc.
|
100%
|
|
Xeron, Inc.
|
Mississippi
|
Chesapeake Utilities Corporation
|
100%
|
|
Peninsula Energy Services Company, Inc.
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
Peninsula Pipeline Company, Inc.
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
Florida Public Utilities Company
|
Florida
|
Chesapeake Utilities Corporation
|
100%
|
|
Flo-Gas Corporation
|
Florida
|
Florida Public Utilities Company
|
100%
|
|
Chesapeake Service Company
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
Skipjack, Inc.
|
Delaware
|
Chesapeake Service Company
|
100%
|
|
Chesapeake Investment Company
|
Delaware
|
Chesapeake Service Company
|
100%
|
|
Eastern Shore Real Estate, Inc.
|
Delaware
|
Chesapeake Service Company
|
100%
|
|
Chesapeake OnSight Services, LLC
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
Sandpiper Energy, Inc.
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
Eight Flags Energy, LLC
|
Delaware
|
Chesapeake OnSight Services, LLC
|
100%
|
|
Austin Cox Home Services, Inc. (Inactive)
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
Grove Energy, Inc. (Inactive)
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
Aspire Energy, LLC
|
Florida
|
Chesapeake Utilities Corporation
|
100%
|
|
Aspire Energy Express, LLC
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
Marlin Gas Services, LLC
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
Aspire Energy of Ohio, LLC
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
CPK Elkton, LLC
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
OnSight Renewables, LLC
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
Amelia Island Energy, LLC
|
Delaware
|
Chesapeake OnSight Services, LLC
|
100%
|
|
Sharp Water, Inc. (Inactive)
|
Delaware
|
Chesapeake Utilities Corporation
|
100%
|
|
(a)
|
The Business Day of the Proposed Loan is [ ], 20[ ].
|
|
(b)
|
The Type and amount of the Proposed Loan and, in the case of a LIBOR Loan or
|
|
Type of Revolving Loan (ABR, LIBOR, or Daily LIBOR)
|
Amount
|
Initial Interest Period
|
|
|
|
months
|
|
|
|
months
|
|
1)
|
Funded Debt to Total Capitalization. The Funded Debt to Total Capitalization (as defined in the Credit Agreement) is % for the period ending , 20 , which is less than the maximum Total Debt to Total Capitalization of 65.0% permitted.
|
|
2)
|
The representations and warranties of the Borrower contained in the Credit Agreement and in the other Credit Documents (as defined in the Credit Agreement) are true on and as of this date with the same effect as though such representations and warranties have been made on and as of the date hereof and the Borrower has performed and complied in all respects with all covenants and conditions thereof.
|
|
3)
|
No event has occurred and is continuing or exists as of the date hereof, which constitutes a Default or an Event of Default (as each term is defined in the Credit Agreement).
|
|
By:
|
(Name)
|
|
BORROWERS (“B”)
|
Chesapeake Utilities Corporation 909 Silver Lake Boulevard Dover, Delaware 19904
Contact Person: Thomas E. Mahn Telephone:302.734.6750
|
||
|
LENDER (“L”)
|
Citizens Bank, National Association Commercial Banking
919 North Market Street, Suite 800
Wilmington, DE 19801
Contact Person: Edward S. Winslow Telephone:302.425.7364
Email:Edward.S.Winslow@citizensbank.com
Contact Person: Cindy F. Tentarelli Telephone:302.425.7326
Email:Cindy.F.Tentarelli@citizensbank.com
|
||
|
BORROWERS’ COUNSEL (“BC”)
|
Baker & Hostetler LLP Key Tower
127 Public Square, Suite 2000
Cleveland, Ohio 44114
Contact Person: Phillip M. Callesen Telephone:216.861.7884
E-mail:pcallesen@bakerlaw.com
|
||
|
LENDER’S COUNSEL (“LC”)
|
Pepper Hamilton LLP
1313 Market Street, Suite 5100
Wilmington, DE 19801
Contact Person: Christopher J. Lamb, Esquire Telephone:302.777.6548
Fax:302.397.2713
Email:lambc@pepperlaw.com
Contact Person: Ashleigh Reibach Huggett, Esquire Telephone:215.981.4381
Fax:866.894.9746
Email:reibacha@pepperlaw.com
|
||
|
|
Responsible Party
|
Status
|
|
Credit Documents
|
|
|
|
1.Credit Agreement
|
LC
|
Received
|
|
2.Revolving Loan Note- $25,000,000
|
LC
|
Received
|
|
|
|
|
|
Organizational Documents
|
|
|
|
3.Certificate - Chesapeake Utilities Corporation
|
B/BC
|
Received
|
|
a. Certificate of Incorporation
|
B/BC
|
Received
|
|
b. Bylaws
|
B/BC
|
Received
|
|
c. Resolutions
|
B/BC
|
Received
|
|
d. Good Standing Certificate
|
B/BC
|
Received
|
|
e. Incumbency
|
B/BC
|
Received
|
|
|
|
|
|
Searches
|
|
|
|
4.UCC/Judgment/Pending Litigation/Tax/
Bankruptcy Searches
|
BC
|
Received
|
|
|
|
|
|
Due Diligence
|
|
|
|
5.Know Your Customer / Patriot Act / W-9 / W-8
|
L/B
|
Satisfied
|
|
6.Financial Information
|
B
|
Satisfied
|
|
7.Compliance Certificate with attachments
evidencing pro-forma compliance
|
B
|
Satisfied
|
|
|
|
|
|
Insurance
|
|
|
|
8.Liability
|
B
|
Received
|
|
9.Workers Compensation
|
B
|
On liability certificate
|
|
10.Property
|
B
|
Received
|
|
11.Business Interruption
|
B
|
On property
certificate
|
|
|
|
|
|
Miscellaneous
|
|
|
|
12.Borrower’s Counsel Opinion
|
BC
|
Received
|
|
13.Disbursement Authorization and Sources and
Uses
|
L/B
|
N/A
|
|
|
Responsible Party
|
Status
|
|
14.Committed Loan Notice
|
B/BC
|
N/A
|
|
15.Citizens Bank Automatic Payment
Authorization Form
|
B/BC
|
N/A
|
|
Date of Loan
|
Amount of Prime Rate Loan
|
Amount Converted to Prime Rate Loan
|
Amount of Prime Rate Loans converted to LIBOR Rate Loans
|
Unpaid Principal Balance of Prime Rate Loans
|
Notation Made By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of Loan
|
Amount of LIBOR Rate Loan
|
Amount Converted to LIBOR Rate Loan
|
Amount of LIBOR Rate Loans converted to Prime Rate Loans
|
Unpaid Principal Balance of LIBOR Rate Loans
|
Notation Made By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Date of Prepayment: _______________.
|
|
2.
|
Type of Loans: _______________. Specify whether LIBOR Rate Loans, Prime Rate Loans or a combination thereof.
|
|
3.
|
In the principal amount of $______________. If a combination of LIBOR Rate Loans and Prime Rate Loans, specify the principal amount allocable to each.
|
|
4.
|
Conditions to Prepayment (if any): ______________.
|
|
By:
|
Name: Beth W. Cooper
|
|
Date
|
Type of Revolving Loan
|
Amount of Revolving Loan
|
Amount of principal converted, repaid or prepaid
|
Interest Rate if LIBOR
Loan
|
Interest Period if LIBOR
Loan
|
Notation Made By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of Loan
|
Amount of Prime Rate Loan
|
Amount Converted to Prime Rate Loan
|
Amount of Prime Rate Loans converted to LIBOR Rate Loans
|
Unpaid Principal Balance of Prime Rate Loans
|
Notation Made By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of Loan
|
Amount of LIBOR Rate Loan
|
Amount Converted to LIBOR Rate Loan
|
Amount of LIBOR Rate Loans converted to Prime Rate Loans
|
Unpaid Principal Balance of LIBOR Rate Loans
|
Notation Made By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 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 June 30, 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
|
|
August 5, 2020
|
|
/S/ BETH W. COOPER
|
|
Beth W. Cooper
|
|
August 5, 2020
|