Chesapeake Utilities Corporation Reports Record Results For Fiscal Year 2019 And Updates Earnings Guidance
DOVER, Del., Feb. 26, 2020 /PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or the "Company") today announced financial results for the year and the fourth quarter ended December 31, 2019. Net income for 2019 was $65.2 million, or $3.96 per share compared to $56.6 million, or $3.45 per share for 2018. Fourth quarter 2019 net income was $22.6 million, or $1.37 per share compared to $17.8 million, or $1.08 per share in 2018.
In the fourth quarter of 2019, the Company completed the previously announced sales of the assets and contracts of its natural gas marketing subsidiary, Peninsula Energy Services Company, Inc. (PESCO) and recorded a pre-tax gain of $7.3 million ($5.4 million after tax). As a result, PESCO's results for all periods presented have been separately reported as discontinued operations and its assets and liabilities have been reclassified as held for sale where applicable. There are no other items included in discontinued operations. Additional details on the transactions to sell PESCO's assets and contracts are included on page 7 of this press release.
The Company's net income from continuing operations for 2019 was $61.1 million, or $3.72 per share. This represents an increase of $4.3 million or $0.25 per share compared to 2018. Higher earnings for 2019 reflect increased gross margin from recently completed and ongoing pipeline expansion projects, incremental margin from the acquisition of certain assets of Marlin Gas Transport, Inc. ("Marlin Gas Transport"), R. F. Ohl Fuel Oil, Inc. ("Ohl") and Boulden Inc. ("Boulden"), organic growth in the natural gas distribution operations and higher retail propane margins. A Florida Public Service Commission ("PSC") regulatory order that enabled the Company to retain tax savings associated with lower federal tax rates resulting from the United States Tax Cuts and Jobs Act ("TCJA") in several natural gas distribution operations and continued growth in gross margin from Aspire Energy of Ohio ("Aspire Energy") also contributed to higher earnings growth in 2019. These increases were partially offset by higher operating expenses and interest expense to support the Company's growth initiatives, a one-time pension settlement expense of $0.5 million associated with de-risking the Chesapeake Utilities Corporation Pension Plan (included with Other expense, net on the condensed consolidated statement of income) as well as $4.9 million in lower gross margin due to a decline in customer consumption as a result of warmer weather in 2019 compared to 2018.
The Company's net income from continuing operations for the quarter ended December 31, 2019 was $17.2 million, compared to $17.8 million for the same quarter of 2018. Earnings from continuing operations for the quarter ended December 31, 2019 were $1.04 per share compared to $1.08 per share for the same quarter of 2018. Slightly lower earnings for the fourth quarter of 2019 were largely the result of higher interest, increased stock compensation expense associated with leadership transitions during 2019, increased insurance expense and the pension settlement expense mentioned above.
"2019 was a remarkable year, whether measured by our record earnings and superior growth, the initiatives we completed, those we set into motion or by how effectively our employee team worked together to drive efficiency, increase collaboration and achieve continuous improvement across the organization," stated Jeffry M. Householder, President and Chief Executive Officer. "When I stepped into the role of CEO at the beginning of 2019, I was energized by the Company's prospects and our employees' commitment to our shareholders, customers and the communities we serve. My excitement grew over 2019 given the effort and accomplishments of our team. We reported record earnings on operating income that exceeded $100 million for the first time in our history, and compound annual growth in earnings has exceeded 8.5% for multiple trailing periods including the 10 years ended 2019. Strategically, we successfully and profitably exited the natural gas marketing business, completed seamless integrations of Marlin Gas Transport and Ohl, while acquiring Boulden and announcing the purchase of Elkton Gas - all while continuing to harvest organic growth, expanding our pipeline and distribution service capacity and ensuring safe, reliable and clean energy service to our customers. In recognition of our team's success, we have updated our financial guidance and increased our expectations for earnings through 2022."
Increasing Earnings Guidance
The Company previously provided guidance that its EPS should grow at an average annual rate of 7.75 percent to 9.50 percent through 2022, from a base level of $2.89 per share (2017 adjusted, diluted EPS). That guidance suggested 2022 EPS of $4.20 to $4.55. Given the investments already made, those underway and the growth prospects included in the Company's strategic growth plan, Management is updating EPS guidance and increasing the forecasted range for 2022 to $4.70 to $4.90 per share. The Company has historically achieved an average earnings growth at or above this range and therefore continues to view its long-term growth prospects as comparable to its historical growth.
*Unless otherwise noted, EPS information is presented on a diluted basis.
**This press release includes references to non-Generally Accepted Accounting Principles ("GAAP") financial measures, including gross margin. A "non-GAAP financial measure" is generally defined as a numerical measure of a company's historical or future performance that includes or excludes amounts, or that is subject to adjustments, so as to be different from the most directly comparable measure calculated or presented in accordance with GAAP. Our management believes certain non-GAAP financial measures, when considered together with GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period.
The Company calculates "gross margin" by deducting the cost of sales from operating revenue. Cost of sales includes the purchased fuel cost for natural gas, electricity and propane, and the cost of labor spent on direct revenue-producing activities and excludes depreciation, amortization and accretion. Other companies may calculate gross margin in a different manner. Gross margin should not be considered an alternative to operating income or net income, both of which are determined in accordance with GAAP. The Company believes that gross margin, although a non-GAAP measure, is useful and meaningful to investors as a basis for making investment decisions. It provides investors with information that demonstrates the profitability achieved by the Company under its allowed rates for regulated operations and under its competitive pricing structures for unregulated businesses. The Company's management uses gross margin in measuring its business units' performance.
Operating Results for the Years Ended December 31, 2019 and 2018
Consolidated Results
Year Ended December 31,
(in thousands) 2019 2018 Change Percent
Change
Gross margin $
325,104 $
300,146 $
24,958 8.3
%
Depreciation,
amortization and %
property taxes 45,423 40,220 5,203 12.9
Other operating 173,394 165,083 8,311 5.0
expenses %
Operating income $
106,287 $
94,843 $
11,444 12.1
%
Operating income, for the year ended December 31, 2019 increased by $11.4 million, or 12.1 percent, compared to the same period in 2018. The increase in operating income reflects higher earnings across the Company generated by recent expansion investments, additional earnings from acquisitions completed in 2018 and 2019, organic growth within existing businesses, higher retail propane margins, regulatory initiatives and rate/pricing mechanisms, and the absence of a one-time non-recurring severance charge recorded in 2018. These increases were partially offset by higher operating expenses to support the Company's growth initiatives and lower gross margin due to a decline in customer consumption as a result of warmer weather in 2019 compared to 2018.
Regulated Energy Segment
Year Ended December 31,
(in thousands) 2019 2018 Change Percent
Change
Gross margin $
240,203 $
223,453 $
16,750 7.5
%
Depreciation, 51,683 46,523 5,160 11.1
amortization and
property taxes %
Other operating 101,936 97,715 4,221 4.3
expenses
%
Operating income $
86,584 $
79,215 $
7,369 9.3
%
Operating income for the Regulated Energy segment increased by $7.4 million, or 9.3 percent, for the year ended December 31, 2019 compared to the same period in 2018. Higher operating income resulted from increased gross margin of $16.8 million, offset by $5.2 million in higher depreciation, amortization and property taxes and $4.2 million in higher other operating expenses. In February 2019, the Florida PSC issued a final order regarding the treatment of the TCJA impact, allowing us to retain the savings associated with lower federal tax rates for certain of our natural gas distribution operations. As a result, $1.3 million in reserves for customer refunds, recorded in 2018, were reversed in the first quarter of 2019. Excluding the impact of the reversal, gross margin and operating income for 2019 increased by $15.5 million and $6.1 million, or 6.9 percent and 7.7 percent, respectively.
The key components of the increase in gross margin are shown below:
(in thousands)
Eastern Shore Natural Gas Company
("Eastern Shore") and Peninsula
Pipeline Company ("Peninsula
Pipeline") service expansions
(including related Florida
natural gas distribution
operation expansions) $
12,600
Natural gas distribution -
customer growth (excluding
service expansions) 4,718
2018 retained tax savings for
certain Florida natural gas
distribution operations 1,321
Retained tax savings for certain
Florida natural gas operations
in 2019 associated with TCJA 1,023
Sandpiper Energy, Inc.'s
("Sandpiper") margin primarily
from natural gas conversions 983
Florida Gas Reliability
Infrastructure Program ("GRIP")
(1) 508
Decreased customer consumption -
primarily due to warmer weather (3,295)
Other variances (1,108)
Period-over-period increase in
gross margin $
16,750
(1) In 2019, the Company recorded a
reduction in depreciation
expense totaling $1.3 million
as a result of a Florida PSC
approved depreciation study
that lowered annual
depreciation rates. The
Company also recorded $0.6
million in lower GRIP margin
due to a concurrent reduction
in surcharges collected from
customers as a result of the
reduced depreciation rates.
The major components of the increase in other operating expenses are as follows:
(in thousands)
Payroll, benefits and other
employee-related expenses $
3,705
Insurance (non-health) expense -
both insured and self-insured
components 1,847
Stock compensation expense
associated with leadership
transitions during 2019 908
Vehicle expenses due to additional
fleet to support growth 268
Timing of excavation and inspection
activities in 2018 to comply with
the Company's integrity management
program (1,733)
Facilities and maintenance costs
due to consolidation of facilities (542)
Other variances (232)
Period-over-period increase in
other operating expenses $
4,221
Unregulated Energy Segment
Year Ended December 31,
(in thousands) 2019 2018 Change Percent
Change
Gross margin $
85,266 $
77,196 $
8,070 10.5
%
Depreciation, 10,129 8,263 1,866 22.6
amortization and
property taxes %
Other operating 55,198 51,809 3,389 6.5
expenses
%
Operating income $
19,939 $
17,124 $
2,815 16.4
%
Operating income for the Unregulated Energy segment increased by $2.8 million in 2019 compared to 2018. Gross margin increased by $8.1 million, or 10.5 percent, partially offset by other operating expenses increasing by $3.4 million and an increase of $1.9 million in depreciation, amortization and property taxes.
The key components of the increase in gross margin are shown below:
(in thousands) Margin Impact
Marlin Gas Services (acquired assets
of Marlin Gas Transport in December
2018) $
5,300
Propane Operations:
Increased retail propane margins per
gallon driven by favorable market
conditions and supply management 3,229
Ohl acquisition (assets acquired in
December 2018) 1,200
Boulden acquisition (assets acquired
in December 2019) 329
Decrease in customer consumption due
primarily to the absence of the 2018
Bomb Cyclone (1,800)
Lower wholesale propane margins due to
non-recurring impact of the 2018
Bomb Cyclone (866)
Aspire Energy -higher margins from
rate increases 518
Higher Eight Flags margin from
increased production 418
Other variances (258)
Period-over-period increase in gross
margin $
8,070
The key components of the increase in other operating expenses are as follows:
(in thousands)
Operating expenses for
Unregulated Energy
acquisitions $
3,314
Insurance expense (non-health)
- both insured and self-
insured components 415
Other variances (340)
Period-over-period increase
in other operating expenses $
3,389
Operating Results for the Quarters Ended December 31, 2019 and 2018
Consolidated Results
Three Months Ended
December 31,
(in thousands) 2019 2018 Change Percent
Change
Gross margin $
88,900 $
82,981 $
5,919 7.1
%
Depreciation, 11,812 10,481 1,331 12.7
amortization and
property taxes %
Other operating 47,446 43,627 3,819 8.8
expenses
%
Operating income $
29,642 $
28,873 $
769 2.7
%
Operating income during the fourth quarter of 2019 increased by $0.8 million, or 2.7 percent, compared to the same period in 2018. The increase in operating income reflects a $5.9 million increase in gross margin, offset by $1.3 million in higher depreciation, amortization and property taxes and $3.8 million in higher other operating expenses to support the Company's growth initiatives and recognition of stock compensation expense associated with leadership transitions during 2019.
Regulated Energy Segment
Three Months Ended
December 31,
(in thousands) 2019 2018 Change Percent
Change
Gross margin $
63,054 $
60,528 $
2,526 4.2
%
Depreciation, 12,989 12,121 868 7.2
amortization and
property taxes %
Other operating 28,791 26,122 2,669 10.2
expenses
%
Operating income $
21,274 $
22,285 $
(1,011) (4.5)
%
Operating income for the Regulated Energy segment decreased by $1.0 million in the fourth quarter of 2019 compared to the same period in 2018. This decrease was driven by a $2.7 million increase in other operating expenses which were impacted by the recognition during the quarter of stock compensation expense associated with leadership transitions that occurred during 2019, higher insurance (non-health) expenses and a $0.9 million increase in depreciation, amortization and property taxes. Higher expenses during the quarter offset a $2.5 million increase in gross margin.
The key components of the increase in gross margin are shown below:
(in thousands) Margin Impact
Eastern Shore and Peninsula
Pipeline service expansions
(including related Florida
natural gas distribution
operation expansions) $
2,128
Natural gas distribution -
customer growth (excluding
service expansions) 875
Increased margin primarily from
the storm recovery surcharge
(associated with Hurricanes
Irma and Matthew) for Florida
electric distribution
operations 596
Florida GRIP (1) 118
Other variances (1,191)
Quarter-over-quarter increase
in gross margin $
2,526
(1) In 2019, the Company recorded a
reduction in depreciation
expense totaling $0.5 million
as a result of a Florida PSC
approved depreciation study
that lowered annual
depreciation rates. The
Company also recorded $0.2
million in lower GRIP margin
due to a concurrent reduction
in surcharges collected from
customers as a result of the
reduced depreciation rates.
The major components of the increase in other operating expenses are as follows:
(in thousands) Other Operating
Expenses
Payroll, benefits
and other employee-
related expenses $
1,406
Stock compensation
expense associated
with leadership
transitions during
2019 908
Insurance expense
(non-health) -
both insured and
self-insured
components 872
Timing of excavation
and inspection
activities in 2018
to comply with the
Company's integrity
management program (733)
Other variances 216
Quarter-over-
quarter increase in
other operating
expenses $
2,669
Unregulated Energy Segment
Three Months Ended
December 31,
(in thousands) 2019 2018 Change Percent
Change
Gross margin $
25,926 $
22,560 $
3,366 14.9
%
Depreciation, 3,056 2,496 560 22.4
amortization and
property taxes %
Other operating 14,249 13,459 790 5.9
expenses
%
Operating income $
8,621 $
6,605 $
2,016 30.5
%
Operating income for the Unregulated Energy segment increased by $2.0 million for the three months ended December 31, 2019, compared to the same period in 2018. The increase in operating income reflects a $3.4 million increase in gross margin offset by $0.8 million in higher other operating expenses and $0.6 million in higher depreciation, amortization and property taxes.
The major components of the increase in gross margin are shown below:
(in thousands) Margin Impact
Marlin Gas Services (acquired
assets of Marlin Gas
Transport in December 2018) $
947
Propane Operations:
Increased retail margins per
gallon for certain customer
classes 1,513
Ohl acquisition (assets
acquired in December 2018) 517
Boulden acquisition (assets
acquired in December 2019) 329
Other variances 60
Quarter-over-quarter
increase in gross margin $
3,366
The major components of the increase in other operating expenses are as follows:
(in thousands) Other
Operating
Expenses
Operating expenses for
Unregulated Energy
acquisitions $
859
Other variances (69)
Quarter-over-quarter increase
in other operating expenses $
790
Divestiture of PESCO
During the fourth quarter of 2019, the Company sold PESCO's assets and contracts in four separate transactions and accordingly, has exited the natural gas marketing business. As a result of the sales agreements, the Company began to report PESCO as discontinued operations during the third quarter of 2019 and excluded PESCO's performance from continuing operations for all periods presented and classified its assets and liabilities as held for sale where applicable.
The Company received a total of $22.9 million in cash consideration from the buyers inclusive of working capital of $8.0 million. The Company recognized a pre-tax gain of $7.3 million ($5.4 million after tax) in connection with the closing of these transactions during the fourth quarter of 2019. The final working capital true up, and the sale of certain contracts, is expected to be completed in the first quarter of 2020.
Conference Call
Chesapeake Utilities will host a conference call on Thursday, February 27, 2020 at 4:15 p.m. Eastern Time to discuss the Company's financial results for the year and quarter ended December 31, 2019. To participate in this call, dial 855.801.6270 and reference Chesapeake Utilities Corporation's 2019 Financial Results Conference Call. To access the replay recording of this call, the accompanying transcript, and other pertinent quarterly information, use the link CPK - Conference Call Audio Replay, or visit the Investors/Events and Presentations section of Company's website at www.chpk.com.
About Chesapeake Utilities Corporation
Chesapeake Utilities is a diversified energy company engaged in natural gas distribution and transmission; electricity generation and distribution; propane gas operations; and other businesses. Information about Chesapeake Utilities and its family of businesses is available at www.chpk.com or through its Investor Relations App.
Please note that Chesapeake Utilities Corporation is not affiliated with Chesapeake Energy, an oil and natural gas exploration company headquartered in Oklahoma City, Oklahoma.
For more information, contact:
Beth W. Cooper
Executive Vice President, Chief Financial Officer, and Assistant Corporate Secretary
302.734.6799
Financial Summary
(in thousands, except per-share data)
Year Ended Quarter Ended
December 31,
December 31,
2019 2018 2019 2018
Gross Margin
Regulated Energy segment $
240,203 $
223,453 $
63,054 $
60,528
Unregulated Energy segment 85,266 77,196 25,926 22,560
Other businesses and
eliminations (365) (503) (80) (107)
Total Gross Margin $
325,104 $
300,146 $
88,900 $
82,981
Operating Income
Regulated Energy segment $
86,584 $
79,215 $
21,274 $
22,285
Unregulated Energy segment 19,939 17,124 8,621 6,605
Other businesses and
eliminations (236) (1,496) (253) (17)
Total Operating Income $
106,287 $
94,843 $
29,642 $
28,873
Other expense, net (1,830) (603) (1,108) (434)
Interest Charges 22,224 16,146 5,642 4,383
Income from Continuing
Operations Before Income Taxes 82,233 78,094 22,892 24,056
Income Taxes on Continuing
Operations 21,091 21,232 5,723 6,260
Income from Continuing
Operations 61,142 56,862 17,169 17,796
Income/(Loss) from Discontinued
Operations, Net of tax (1,391) (282) (9) 5
Gain on sale of Discontinued
Operations, Net of tax 5,402 5,402
Net Income $
65,153 $
56,580 $
22,562 $
17,801
Basic Earnings Per Share of
Common Stock:
Earnings Per Share from
Continuing Operations $
3.73 $
3.48 $
1.05 $
1.09
Earnings/(Loss) Per Share from
Discontinued Operations 0.24 (0.02) 0.33
Basic Earnings per Share of
Common Stock $
3.97 $
3.46 $
1.38 $
1.09
Diluted Earnings Per Share of
Common Stock:
Earnings Per Share from
Continuing Operations $
3.72 $
3.47 $
1.04 $
1.08
Earnings/(Loss) Per Share from
Discontinued Operations 0.24 (0.02) 0.33
Diluted Earnings Per Share of
Common Stock $
3.96 $
3.45 $
1.37 $
1.08
Financial Summary Highlights
Key variances in continuing
operations for the year ended
December 31, 2019 included:
(in thousands, except per share data) Pre-tax Net Earnings
Income Income Per Share
Year ended December 31, 2018 Reported
Results from Continuing Operations $
78,094 $
56,862 $
3.47
Adjusting for unusual items:
Decreased customer consumption -
primarily due to warmer weather (4,852) (3,607) (0.22)
Nonrecurring separation expenses
associated with a former executive 1,548 1,421 0.09
2018 retained tax savings for certain
Florida natural gas operations* 1,321 990 0.06
Lower wholesale propane margins due
to non-recurring impact of the 2018 (866) (644) (0.04)
Bomb Cyclone
Pension settlement expense associated
with the de-risking of the
Chesapeake (693) (515) (0.03)
Utilities Pension Plan (1)
(3,542) (2,355) (0.14)
Increased (Decreased) Gross Margins:
Eastern Shore and Peninsula Pipeline
service expansions (including
related 12,600 9,369 0.57
Florida natural gas distribution
operation expansions)*
Margin contribution from Unregulated
Energy acquisitions* 6,830 5,078 0.31
Natural gas distribution growth
(excluding service expansions) 4,718 3,508 0.21
Increased retail propane margins 3,229 2,401 0.15
Retained tax savings for certain
Florida natural gas operations in
2019 1,023 760 0.05
associated with TCJA*
Sandpiper's margin primarily from
natural gas conversions 983 731 0.04
Higher Aspire Energy margins from
rate increases 518 385 0.02
Florida GRIP* 508 378 0.02
Higher Eight Flags margin from
increased production 418 311 0.02
30,827 22,921 1.39
(Increased) Decreased Other Operating
Expenses (Excluding Cost of Sales):
Depreciation, amortization and
property tax costs due to new
capital investments (5,727) (4,258) (0.26)
Operating expenses for Unregulated
Energy acquisitions (4,636) (3,447) (0.21)
Payroll, benefits and other employee-
related expenses (4,204) (3,126) (0.19)
Insurance expense (non-health) -
both insured and self-insured
components (2,267) (1,685) (0.10)
Stock compensation expense associated
with leadership transitions during
2019 (1,114) (828) (0.05)
Vehicle expenses due to additional
fleet to support growth (309) (230) (0.01)
Timing of excavation and inspection
activities in 2018 to comply with
the 1,733 1,289 0.08
Company's integrity management
program
Facilities and maintenance costs due
to consolidation of facilities 581 432 0.03
(15,943) (11,853) (0.71)
Other income tax effects 816 0.05
Interest Charges (6,078) (4,519) (0.27)
Net Other Changes (1,125) (730) (0.07)
Year ended December 31, 2019 Reported
Results from Continuing Operations $
82,233 $
61,142 $
3.72
(1) In the fourth quarter of 2019,
the Company executed a de-
risking strategy for its
Pension Plan. This amount
reflects a portion of the
cost of the pension
settlement that was charged
to expense as it was deemed
not recoverable through the
regulatory process.
* See the Major Projects and
Initiatives table later in
this press release.
Key variances in continuing operations for the fourth quarter ended
December 31, 2019 included:
(in thousands, except per
share) Pre-tax Net Earnings
Income Income Per Share
Fourth Quarter 2018
Reported Results from
Continuing Operations $
24,056 $
17,796 $
1.08
Adjusting for Unusual
items:
Pension settlement
expense associated with
the de-risking of the
Chesapeake (693) (520) (0.03)
Utilities Pension Plan
(1)
Increased (Decreased)
Gross Margins:
Eastern Shore and
Peninsula Pipeline
service expansions
(including new service
in 2,128 1,596 0.10
Northwest Florida for
related Florida natural
gas distribution
operations)*
Margin contributions from
Unregulated Energy
acquisitions* 1,794 1,345 0.08
Increased retail propane
margins 1,513 1,135 0.07
Natural gas growth
(excluding service
expansions) 875 656 0.04
Increased margin
primarily from the storm
recovery surcharge
(associated with 596 447 0.03
Hurricanes Irma and
Matthew) for Florida
electric distribution
operations
Florida GRIP* 118 88 0.01
7,024 5,267 0.33
(Increased) Decreased
Other Operating Expenses
(Excluding Cost of
Sales):
Payroll, benefits and
other employee-related
expenses (1,829) (1,371) (0.08)
Operating expenses for
Unregulated Energy
acquisitions (1,269) (952) (0.06)
Stock compensation
expense associated with
leadership transitions
during 2019 (1,114) (836) (0.05)
Insurance expense (non-
health) - both insured
and self-insured
components (1,044) (783) (0.05)
Depreciation,
amortization and
property tax costs due
to new capital
investments (1,016) (762) (0.05)
Timing of excavation and
inspection activities in
2018 to comply with the 733 550 0.03
Company's integrity
management program
(5,539) (4,154) (0.26)
Interest Charges (1,259) (944) (0.06)
Other income tax effects 83 0.01
Net Other Changes (697) (359) (0.03)
Fourth Quarter 2019
Reported Results from
Continuing Operations $
22,892 $
17,169 $
1.04
(1) In the fourth quarter of 2019,
the Company executed a de-
risking strategy for its
Pension Plan. This amount
reflects a portion of the
cost of the pension
settlement that was charged
to expense as it was deemed
not recoverable through the
regulatory process.
* See the Major Projects and
Initiatives table later in
this press release.
The following information highlights certain key factors contributing to the Company's results for the year and quarter ended December 31, 2019:
Recently Completed and Ongoing Major Projects and Initiatives
The Company constantly pursues and develops additional projects and initiatives to serve existing and new customers, and to further grow its businesses and earnings, with the intention of increasing shareholder value. The following represent the major projects/initiatives recently completed and currently underway. In the future, the Company will add new projects and initiatives to this table once substantially finalized and the associated earnings can be estimated.
Gross Margin for the Period
Year Ended December 31, Estimate for Fiscal
(in thousands) 2018 2019 2020 2021
---
Expansions:
---
2017 Eastern Shore
System Expansion - $
9,103 $
16,434 $
15,799 $
15,799
including interim
services
Northwest Florida
Expansion (including
related 4,350 6,516 6,500 6,500
natural gas
distribution services)
Western Palm Beach
County, Florida
Expansion 54 2,139 5,047 5,227
Del-Mar Energy Pathway
- including interim
services 731 2,512 4,100
Auburndale 283 679 679
Callahan Intrastate
Pipeline 3,219 6,400
Guernsey Power Station 1,400
Total Expansions 13,507 26,103 33,756 40,105
Acquisitions:
---
Marlin Gas Services 110 5,410 6,400 7,000
Ohl Propane 1,200 1,236 1,250
Boulden Propane 329 4,000 4,200
Elkton Gas Company TBD (4) TBD
Total Acquisitions 110 6,939 11,636 12,450
Regulatory Initiatives:
---
Florida GRIP(1) (2) 13,020 13,528 14,858 15,831
Tax benefit retained by
certain Florida
entities(3) 2,740 1,400 1,500
Hurricane Michael
regulatory proceeding TBD TBD
Total Regulatory
Initiatives 13,020 16,268 16,258 17,331
Total $
26,637 $
49,310 $
61,650 $
69,886
(1) All periods shown have been
adjusted to reflect lower customer
rates as a result of the TCJA.
Lower customer rates are offset by
the corresponding decrease in
federal income tax expense and
have no negative impact on net
income.
(2) For the year ended December 31,
2019, the Company recorded a
reduction in depreciation expense
totaling $1.3 million as a result
of a Florida PSC approved
depreciation study that lowered
annual depreciation rates. For the
year ended December 31, 2019, the
Company also recorded $0.6 million
in lower GRIP margin due to a
concurrent reduction in surcharge
collected from customers as a
result of the reduced depreciation
rates.
(3) The amount disclosed for the year
ended December 31, 2019 includes
tax savings of $1.3 million for
the year ended December 31, 2018.
The tax savings were recorded in
the first quarter of 2019 due to
an order by the Florida PSC
allowing reversal of a TCJA refund
reserve, recorded in 2018, which
increased gross margin for the
year ended December 31, 2019 by
that amount.
(4) The amount of margin to be
generated by Elkton Gas Company in
2020 will depend, largely, on the
date the acquisition closes.
Further guidance will be provided
during 2020 as the timing becomes
certain.
Detailed Discussion of Major Projects and Initiatives
Expansions
2017 Eastern Shore System Expansion
Eastern Shore has completed the construction of a system expansion project that increased its capacity by 26 percent. The project generated $7.3 million in incremental gross margin for the year ended December 31, 2019 compared 2018. The project is expected to produce gross margin of approximately $15.8 million annually, from 2020 through 2022; and $13.2 million annually thereafter based on current customer capacity commitments.
Northwest Florida Expansion
In May 2018, Peninsula Pipeline completed construction of transmission lines, and the Company's Florida natural gas division completed construction of lateral distribution lines, to serve customers in Northwest Florida. The project generated incremental gross margin of $2.2 million for the year ended December 31, 2019 compared to 2018. The estimated annual gross margin from this project is $6.5 million for 2020 and beyond, with the opportunity for additional margin as the remaining capacity is sold.
Western Palm Beach County, Florida Expansion
Peninsula Pipeline is constructing four transmission lines to bring additional natural gas to the Company's distribution system in West Palm Beach, Florida. The first phase of this project was placed into service in December 2018 and generated incremental gross margin of $2.1 million for the year ended December 31, 2019 compared to 2018. The Company expects to complete the remainder of the project in phases through early 2020, and estimates that the project will generate gross margin of $5.0 million in 2020 and $5.2 million annually thereafter.
Del-Mar Energy Pathway
In December 2019, the FERC issued an order approving the construction of the Del-Mar Energy Pathway project. Eastern Shore anticipates that this project will be fully in-service by the beginning of the fourth quarter of 2021. The new facilities will provide an additional 14,300 Dekatherms per day ("Dts/d") of firm service to four customers, will provide additional natural gas transmission pipeline infrastructure in eastern Sussex County, Delaware, and will represent the first extension of Eastern Shore's pipeline system into Somerset County, Maryland. Interim services in advance of this project generated gross margin of $0.7 million for the year ended December 31, 2019. The estimated annual gross margin from this project is approximately $2.5 million in 2020, $4.1 million in 2021 and $5.1 million annually thereafter.
Auburndale
In August 2019, the Florida PSC approved Peninsula Pipeline's Transportation Service Agreement with the Florida Division of Chesapeake Utilities. Peninsula Pipeline purchased an existing pipeline owned by the Florida Division of Chesapeake Utilities and Calpine and constructed pipeline facilities in Polk County, Florida. Peninsula Pipeline will provide transportation service to the Florida Division of Chesapeake Utilities increasing both delivery capacity and downstream pressure as well as introducing a secondary source of natural gas for the Florida Division of Chesapeake Utilities' distribution system. Peninsula Pipeline generated gross margin from this project of $0.3 million for the year ended December 31, 2019 and expects to generate annual gross margin of $0.7 million in 2020 and beyond.
Callahan Intrastate Pipeline
In May 2018, Peninsula Pipeline announced a plan to construct a jointly owned intrastate transmission pipeline in Nassau County, Florida with Seacoast Gas Transmission. The 26-mile pipeline, having an initial capacity of 148,000 Dts/d, will serve growing demand in both Nassau and Duval Counties, Florida. The project is expected to be placed in-service during the third quarter of 2020 and is expected to generate gross margin for Peninsula Pipeline of $3.2 million in 2020 and $6.4 million annually thereafter.
Guernsey Power Station
Guernsey Power Station, LLC ("Guernsey Power Station") and the Company's affiliate, Aspire Energy Express, LLC ("Aspire Energy Express"), entered into a precedent firm transportation capacity agreement whereby Guernsey Power Station will construct a power generation facility and Aspire Energy Express will provide natural gas transportation service to this facility. Guernsey Power Station, LLC commenced construction of the project in October 2019. Aspire Energy Express is expected to commence construction of the gas transmission facilities to provide the firm transportation service to the power generation facility in the third quarter of 2020. This project is expected to produce gross margin of approximately $1.4 million annually once placed into service in the first quarter of 2021.
Acquisitions
Marlin Gas Services
In December 2018, Marlin Gas Services, the Company's wholly-owned subsidiary, acquired certain operating assets of Marlin Gas Transport, a supplier of mobile compressed natural gas and pipeline solutions, primarily to utilities and pipelines. Marlin Gas Services provides temporary hold services, pipeline integrity services, emergency services for damaged pipelines and specialized gas services for customers who have unique requirements. Marlin Gas Services generated incremental gross margin of $5.3 million for the year ended December 31, 2019 compared to 2018. The Company estimates that Marlin Gas Services will generate annual gross margin of approximately $6.4 million in 2020 and $7.0 million in 2021 and beyond. Marlin Gas Services continues to actively expand the territories it serves, as well as leverage its patented technology to serve liquefied natural gas transportation needs and to aid in the transportation of renewable natural gas from the supply sources to various pipeline interconnection points.
Ohl Propane
In December 2018, Sharp Energy, Inc. ("Sharp") acquired 2,500 residential and commercial propane customers and operating assets located between two of Sharp's existing districts in Pennsylvania from Ohl. These customers and assets have been assimilated into Sharp and generated $1.2 million of incremental gross margin for the year ended December 31, 2019 compared to 2018.
Boulden Propane
In December 2019, Sharp acquired certain propane customers and operating assets of Boulden which provides propane distribution service to approximately 5,200 customers in Delaware, Maryland and Pennsylvania. The customers and assets acquired from Boulden have been assimilated into Sharp. The operations acquired from Boulden generated $0.3 million of incremental gross margin for the year ended December 31, 2019. The Company estimates that this acquisition will generate additional gross margin of approximately $4.0 million in 2020, and $4.2 million in 2021, with the potential for additional growth in future years.
Elkton Gas Company
In December 2019, the Company entered into an agreement with South Jersey Industries, Inc., to acquire Elkton Gas Company, which provides natural gas distribution service to approximately 7,000 residential and commercial customers in Cecil County, Maryland contiguous to Chesapeake's existing franchise territory in Cecil County. The acquisition is expected to close in the second half of 2020, subject to approval by the Maryland PSC.
Regulatory Initiatives
Florida GRIP
Florida GRIP is a natural gas pipe replacement program approved by the Florida PSC that allows automatic recovery, through rates, of costs associated with the replacement of mains and services. Since the program's inception in August 2012, the Company has invested $143.9 million of capital expenditures to replace 303 miles of qualifying distribution mains, including $16.7 million and $13.3 million of new pipes during 2019 and 2018, respectively. GRIP generated additional gross margin of $0.5 million for the year ended 2019 compared to 2018.
For the year ended December 31, 2019, the Company recorded a reduction in depreciation expense totaling $1.3 million as a result of a Florida PSC approved depreciation study that lowered annual depreciation rates. For the year ended December 31, 2019, the Company also recorded $0.6 million in lower GRIP margin due to a concurrent reduction in surcharges collected from customers as a result of the reduced depreciation rates.
Florida Tax Savings Related to the TCJA
In February 2019, the Florida PSC issued orders authorizing certain of the Company's natural gas distribution operations to retain a portion of the tax savings associated with the lower federal tax rates resulting from the TCJA. In accordance with the PSC orders, the Company recognized $1.3 million in margin during the first quarter of 2019, reflecting the reversal of reserves recorded during 2018. The Company expects the annual savings beginning in 2019 to continue in future years, and recognized additional margin of $1.0 million for the year ended December 31, 2019.
Hurricane Michael
In October 2018, Hurricane Michael passed through Florida Public Utilities Company's ("FPU") electric distribution service territory in Northwest Florida. The hurricane caused widespread and severe damage to FPU's infrastructure resulting in 100 percent of its customers in the Northwest Florida service territory losing electrical service. FPU expended more than $65.0 million to restore service as quickly as possible, which has been recorded as new plant and equipment, charged against FPU's accumulated depreciation or charged against FPU's storm reserve. Additionally, amounts currently being reviewed by the Florida PSC for regulatory asset treatment have been recorded as receivables and other deferred charges.
In August 2019, FPU filed a limited proceeding requesting recovery of storm-related costs associated with Hurricane Michael (plant investment and expenses) through a change in base rates. FPU also requested treatment and recovery of certain storm-related costs as a regulatory asset for items currently not allowed to be recovered through the storm reserve as well as the recovery of plant investment replaced as a result of the storm. The Company has proposed an overall return component on both the plant additions and regulatory assets. In the fourth quarter of 2019, FPU along with the Office of Public Counsel in Florida, filed a joint motion with the Florida PSC to approve an interim rate increase, subject to refund, pending the final ruling on the recovery of the restoration costs incurred. The petition was approved by the Florida PSC in November 2019 and interim rate increases were implemented effective January 2020. FPU continues to work with the Florida PSC and expects to reach a final ruling in the second half of 2020.
Weather and Consumption
Weather did not have a material impact on fourth quarter 2019 results, compared to the fourth quarter of 2018. For the full year, weather conditions accounted for decreased gross margin of $4.9 million in 2019 compared to 2018 and $3.4 million compared to Normal temperatures as defined below. The following table summarizes heating degree day ("HDD") and cooling degree day ("CDD") variances from the 10-year average HDD/CDD ("Normal") for the year and quarter ended December 31, 2019 compared to the same periods in 2018.
HDD and CDD Information
For the Years Ended For the Quarters Ended
December 31, December 31,
2019 2018 Variance 2019 2018 Variance
Delmarva
Actual HDD 4,089 4,251 (162) 1,513 1,522 (9)
10-Year Average
HDD ("Normal") 4,323 4,379 (56) 1,519 1,533 (14)
Variance from
Normal (234) (128) (6) (11)
Florida
Actual HDD 619 780 (161) 240 273 (33)
10-Year Average
HDD ("Normal") 792 800 (8) 260 267 (7)
Variance from
Normal (173) (20) (20) 6
Ohio
Actual HDD 5,498 5,845 (347) 1,967 2,138 (171)
10-Year Average
HDD ("Normal") 5,983 5,823 160 2,133 2,048 85
Variance from
Normal (485) 22 (166) 90
Florida
Actual CDD 3,200 3,105 95 360 401 (41)
10-Year Average
CDD ("Normal") 2,939 2,889 50 314 296 18
Variance from
Normal 261 216 46 105
Natural Gas Distribution Growth
New customer growth for the Company's natural gas distribution operations generated $4.7 million of additional margin for the year ended December 31, 2019 compared to 2018. The average number of residential customers served on the Delmarva Peninsula and in Florida increased by approximately 3.7 percent during 2019. Growth in commercial and industrial customers also contributed additional margin during 2019. The details are provided in the following table:
Gross Margin Increase
(in thousands) For the Year Ended December 31,
2019
Delmarva Florida
Peninsula
Customer growth:
Residential $
1,179 $
769
Commercial and
industrial,
excluding the impact
of the Northwest
Florida expansion
project 664 2,106
Total customer growth $
1,843 $
2,875
Capital Investment Growth and Associated Financing Plans
The Company's capital expenditures were $199.0 million (including the purchase of certain propane assets of Boulden) for 2019. The following table shows total capital expenditures for the year ended December 31, 2019 by segment and by business line:
For the Year
Ended
December 31,
(dollars in thousands) 2019
Regulated Energy:
Natural gas distribution $
62,744
Natural gas transmission 62,000
Electric distribution 5,860
Total Regulated Energy 130,604
Unregulated Energy:
Propane distribution (1) 38,347
Energy transmission 11,206
Other unregulated energy 10,481
Total Unregulated Energy 60,034
Other:
Corporate and other businesses 8,348
Total 2019 Capital Expenditures $
198,986
(1) This amount includes $24.5
million for the acquisition
of certain propane
operating assets of Boulden
completed in December 2019.
The following table shows a range of the expected 2020 capital expenditures by segment and by business line:
Estimate for Fiscal 2020
(dollars in thousands) Low High
Regulated Energy:
Natural gas distribution $
72,000 $
83,000
Natural gas transmission 83,000 96,000
Electric distribution 5,000 7,000
Total Regulated Energy 160,000 186,000
Unregulated Energy:
Propane distribution 10,000 11,000
Energy transmission 6,000 6,000
Other unregulated energy 6,000 8,000
Total Unregulated Energy 22,000 25,000
Other:
Corporate and other businesses 3,000 4,000
Total 2020 Expected Capital
Expenditures $
185,000 $
215,000
The capital expenditure projection is subject to continuous review and modification. Actual capital requirements may vary from the above estimates due to a number of factors, including changing economic conditions, customer growth in existing areas, regulation, new growth or acquisition opportunities and availability of capital. Historically, actual capital expenditures have typically lagged behind the budgeted amounts.
Management reaffirms its capital expenditure guidance of $750 million to $1 billion for 2018 to 2022. Through the first two years of the five-year forecast period, the Company has invested $482 million in new capital expenditures.
The Company's target ratio of equity to total capitalization, including short-term borrowings, is between 50 and 60 percent. The Company's equity to total capitalization ratio, including short term borrowings, was 43 percent as of December 31, 2019. The Company seeks to align permanent financing with the in-service dates of its capital projects. The Company may utilize more temporary short-term debt, when the financing cost is attractive, as a bridge to the permanent long-term financing.
Chesapeake Utilities Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
For the Periods Ended December 31, 2019 and 2018
(in thousands, except shares and per share data)
Year Ended Fourth Quarter
2019 2018 2019 2018
Operating Revenues
Regulated Energy $
343,006 $
345,281 $
91,405 $
92,614
Unregulated Energy 154,150 161,904 45,903 55,886
Other businesses and
eliminations (17,552) (16,869) (5,335) (14,286)
Total Operating Revenues 479,604 490,316 131,973 134,214
Operating Expenses
Regulated energy cost of
sales 102,803 121,828 28,351 32,086
Unregulated energy and other
cost of sales 51,697 68,342 14,722 19,147
Operations 137,844 132,523 38,284 34,833
Maintenance 15,679 14,387 4,479 3,968
Gain from a settlement (130) (130)
Depreciation and amortization 45,423 40,220 11,812 10,481
Other taxes 20,001 18,303 4,683 4,826
Total operating expenses 373,317 395,473 102,331 105,341
Operating Income 106,287 94,843 29,642 28,873
Other expense, net (1,830) (603) (1,108) (434)
Interest charges 22,224 16,146 5,642 4,383
Income from Continuing
Operations Before Income
Taxes 82,233 78,094 22,892 24,056
Income Taxes on Continuing
Operations 21,091 21,232 5,723 6,260
Income from Continuing
Operations 61,142 56,862 17,169 17,796
Income/(Loss) from
Discontinued Operations, Net
of tax (1,391) (282) (9) 5
Gain on sale of Discontinued
Operations, Net of tax 5,402 5,402
Net Income $
65,153 $
56,580 $
22,562 $
17,801
Weighted Average Common
Shares Outstanding:
Basic 16,398,443 16,369,616 16,403,776 16,378,545
Diluted 16,448,486 16,419,870 16,461,112 16,430,594
Basic Earnings Per Share of
Common Stock:
Earnings Per Share from
Continuing Operations $
3.73 $
3.48 $
1.05 $
1.09
Earnings/(Loss) from
Discontinued Operations 0.24 (0.02) 0.33
Basic Earnings per Share of
Common Stock $
3.97 $
3.46 $
1.38 $
1.09
Diluted Earnings Per Share of
Common Stock:
Earnings Per Share from
Continuing Operations $
3.72 $
3.47 $
1.04 $
1.08
Earnings/(Loss) Per Share
from Discontinued Operations 0.24 (0.02) 0.33
Diluted Earnings Per Share of
Common Stock $
3.96 $
3.45 $
1.37 $
1.08
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
As of December 31,
Assets 2019 2018
(in thousands, except
shares and per share data)
Property, Plant and
Equipment
Regulated energy $
1,441,473 $
1,297,416
Unregulated energy 265,209 236,440
Other 39,850 34,585
Total property, plant and
equipment 1,746,532 1,568,441
Less: Accumulated
depreciation and
amortization (336,876) (294,089)
Plus: Construction work in
progress 54,141 79,168
Net property, plant and
equipment 1,463,797 1,353,520
Current Assets
Cash and cash equivalents 6,985 6,089
Accounts receivable (less
allowance for
uncollectible 49,562 53,837
accounts of $1,337 and
$1,058, respectively)
Accrued revenue 20,846 22,640
Propane inventory, at
average cost 5,824 9,791
Other inventory, at average
cost 6,067 7,127
Regulatory assets 5,144 4,796
Storage gas prepayments 3,541 3,433
Income taxes receivable 20,050 15,300
Prepaid expenses 13,928 10,079
Derivative assets, at fair
value 82
Other current assets 2,879 5,682
Current assets held for
sale 52,681
Total current assets 134,826 191,537
Deferred Charges and Other
Assets
Goodwill 32,668 21,568
Other intangible assets,
net 8,129 3,850
Investments, at fair value 9,229 6,711
Operating lease right-of-
use assets 11,563
Regulatory assets 73,407 72,422
Receivables and other
deferred charges 49,579 36,401
Noncurrent assets held for
sale 7,662
Total deferred charges and
other assets 184,575 148,614
Total Assets $
1,783,198 $
1,693,671
Chesapeake Utilities Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
As of December 31,
Capitalization and Liabilities 2019 2018
(in thousands, except shares and
per share data)
Capitalization
Stockholders' equity
Preferred stock, par value $0.01
per share (authorized 2,000,000
shares),
$
$
no shares issued and outstanding
Common stock, par value $0.4867
per share (authorized 50,000,000
shares) 7,984 7,971
Additional paid-in capital 259,253 255,651
Retained earnings 300,607 261,530
Accumulated other comprehensive
loss (6,267) (6,713)
Deferred compensation obligation 4,543 3,854
Treasury stock (4,543) (3,854)
Total stockholders' equity 561,577 518,439
Long-term debt, net of current
maturities 440,168 316,020
Total capitalization 1,001,745 834,459
Current Liabilities
Current portion of long-term
debt 45,600 11,935
Short-term borrowing 247,371 294,458
Accounts payable 54,068 98,681
Customer deposits and refunds 30,939 32,620
Accrued interest 2,554 2,317
Dividends payable 6,644 6,060
Accrued compensation 16,236 13,923
Regulatory liabilities 5,991 7,883
Derivative liabilities, at fair
value 1,844 1,604
Other accrued liabilities 12,077 10,081
Current liabilities held for sale 48,672
Total current liabilities 423,324 528,234
Deferred Credits and Other
Liabilities
Deferred income taxes 180,656 156,820
Regulatory liabilities 127,744 135,039
Environmental liabilities 6,468 7,638
Other pension and benefit costs 30,569 28,513
Operating lease -liabilities 9,896
Deferred investment tax credits
and other liabilities 2,796 2,968
Total deferred credits and other
liabilities 358,129 330,978
Environmental and other
commitments and contingencies
(1)
Total Capitalization and
Liabilities $
1,783,198 $
1,693,671
(1) Refer to Note 20 and 21 in the
Company's Annual Report on
Form 10-K for further
information.
Chesapeake Utilities Corporation and Subsidiaries
Distribution Utility Statistical Data (Unaudited)
For the Three Months Ended December 31, 2019
For the Three Months Ended December 31, 2018
Delmarva Chesapeake FPU NG FPU Electric Delmarva NG Chesapeake FPU NG FPU Electric
Utilities' Distribution Distribution Distribution Utilities'
Florida Florida Distribution Distribution
NG Distribution NG Division NG Division
Operating Revenues
(in thousands)
Residential $
15,569 $
1,587 $
8,169 $
10,618 $
15,647 $
1,313 $
5,846 $
9,450
Commercial 8,087 1,622 6,784 9,416 8,260 1,566 6,491 8,711
Industrial 2,300 3,232 6,753 511 2,274 3,117 5,995 411
Other (1) 5,425 769 356 (2,145) 5,426 883 3,901 298
Total Operating Revenues $
31,381 $
7,210 $
22,062 $
18,400 $
31,607 $
6,879 $
22,233 $
18,870
Volumes (in Dts for natural gas and KWHs for electric)
Residential 918,892 92,584 355,510 71,039 962,407 90,091 327,226 65,844
Commercial 977,449 1,157,869 439,246 76,916 947,924 1,192,733 417,254 69,464
Industrial 1,410,990 7,095,966 1,280,375 9,546 1,518,671 6,577,922 1,220,219 3,350
Other 82,532 802,196 23,313 919,192 1,686
Total 3,389,863 8,346,419 2,877,327 157,501 3,452,315 7,860,746 2,883,891 140,344
Average Customers
Residential 74,884 17,511 58,280 24,759 72,219 16,703 56,181 24,573
Commercial 7,112 1,556 3,959 7,271 6,992 1,550 3,893 7,508
Industrial 169 16 2,455 2 162 17 2,380 2
Other 19 12 4 12
Total 82,184 19,083 64,706 32,032 79,377 18,270 62,466 32,083
For the Year Ended December 31, 2019
For the Year Ended December 31, 2018
Delmarva Chesapeake FPU NG FPU Electric Delmarva NG Chesapeake FPU NG FPU Electric
Utilities' Distribution Distribution Distribution Utilities'
Florida Florida Distribution Distribution
NG Distribution NG Division NG Division
Operating Revenues
(in thousands)
Residential $
62,708 $
6,232 $
32,016 $
45,738 $
70,466 $
5,086 $
30,334 $
44,788
Commercial 33,070 6,418 26,708 38,254 36,916 6,236 26,993 39,442
Industrial 8,314 12,682 24,520 2,128 8,289 10,911 22,296 1,543
Other (1) 152 3,153 (826) (8,704) 928 3,108 1,494 (5,970)
Total Operating Revenues $
104,244 $
28,485 $
82,418 $
77,416 $
116,599 $
25,341 $
81,117 $
79,803
Volumes (in Dts for natural gas and KWHs for electric)
Residential 3,871,032 352,104 1,392,382 306,445 4,142,567 369,067 1,393,785 307,269
Commercial 3,776,388 4,475,776 1,714,574 310,856 3,792,220 4,719,725 1,722,081 302,687
Industrial 5,358,474 27,768,125 4,968,745 27,929 5,549,387 19,858,336 4,900,998 15,160
Other 220,541 2,574,925 80,254 2,338,815 7,402
Total 13,226,435 32,596,005 10,650,626 645,230 13,564,428 24,947,128 10,355,679 632,518
Average Customers
Residential 73,995 17,262 57,653 24,573 71,322 16,450 55,701 24,686
Commercial 7,097 1,546 3,932 7,243 6,979 1,519 3,915 7,497
Industrial 169 17 2,436 2 157 16 2,312 2
Other 15 12 5 11
Total 81,276 18,825 64,033 31,818 78,463 17,985 61,939 32,185
(1) Operating Revenues from "Other"
sources include unbilled revenue,
under (over) recoveries of fuel
cost, conservation revenue, other
miscellaneous charges, fees for
billing services provided to third
parties and adjustments for pass-
through taxes.
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SOURCE Chesapeake Utilities Corporation
