DOVER, Del., Nov. 5, 2015 /PRNewswire/ -- Chesapeake
Utilities Corporation (NYSE: CPK) today reported third quarter and
year-to-date financial results. The Company's net income for the
three months ended September 30, 2015 was $5.1 million, or $0.33 per share. This represents an increase of
$1.9 million, or $0.11 per share, over the same quarter in
2014.
For the nine months ended September 30, 2015, the Company
reported net income of $32.5 million
or $2.16 per share. This represents
an increase of $6.5 million or
$0.38 per share, compared to the same
period in 2014.
"Our higher results for the third quarter and year-to-date are
the current harvest of our continued growth in productive assets,
which now exceed $1.0 billion, and
the concerted efforts of our employees to reap sustained earnings
growth from those assets," stated Michael
P. McMasters, President and Chief Executive Officer of
Chesapeake Utilities Corporation. "We are currently working on
several large growth projects, including the combined heat and
power plant in Florida and new
natural gas transmission services on the Delmarva Peninsula, while
continuing to identify and develop additional growth opportunities
within and beyond our current markets to provide future earnings
and dividend growth for our investors."
A more detailed discussion and analysis of the Company's results
for each segment is provided in the following pages.
Comparative Results for the Quarters Ended September 30,
2015 and September 30, 2014
The Company's operating income for the three months ended
September 30, 2015 was $10.9
million, an increase of $3.1
million over the same quarter in 2014. The increase in
operating income was driven by a $5.1
million increase in gross margin, which was partially offset
by an increase of $2.0 million in
other operating expenses to support growth. The higher consolidated
operating income reflected improved results in both the regulated
and unregulated energy segments. Additional details on key
variances in gross margin and other operating expenses are provided
in the Financial Summary Highlights section later in this
release. As a result of the sale of BravePoint, Inc.
("BravePoint") in October 2014, the
Company no longer reports the Other segment.
Regulated Energy Segment
Operating income for the Regulated Energy segment increased by
$2.6 million to $11.8 million for the quarter ended
September 30, 2015, compared to the same quarter in
2014. The increased operating income reflects additional
gross margin of $4.3 million,
partially offset by a $1.7 million
increase in other operating expenses. The significant components of
the gross margin increase included:
- $1.7 million generated from
natural gas service expansions completed in 2014 and 2015;
- $1.1 million generated by
additional Gas Reliability Infrastructure Program ("GRIP")
investments by the Florida natural
gas distribution operations;
- $896,000 from customer growth in
natural gas distribution and transmission services beyond recent
service expansions; and
- $673,000 from a base rate
increase in the Florida electric
distribution operation that was approved by the Florida Public
Service Commission ("PSC") in September
2014.
The significant components of the increase in other operating
expenses included:
- $696,000 in higher payroll and
benefits costs as a result of additional personnel to support
growth;
- $507,000 in higher depreciation,
asset removal and property tax costs associated with recent capital
investments to support growth; and
- $208,000 in higher accruals for
incentive compensation as a result of the higher quarterly
financial results.
Unregulated Energy Segment
The Unregulated Energy segment reported an operating loss of
$1.0 million for the quarter ended
September 30, 2015, compared to an operating loss of
$2.0 million for the same quarter in
2014. The Unregulated Energy segment typically reports an operating
loss in the third quarter due to the seasonal nature of the
operations of a large portion of this segment. The reduction in the
operating loss reflects $3.8 million
in higher gross margin partially offset by a $2.8 million increase in other operating
expenses. The significant components of the gross margin
increase included:
- $2.0 million generated by Aspire
Energy of Ohio, LLC, ("Aspire
Energy of Ohio"), following the
acquisition of Gatherco, Inc. ("Gatherco") on April 1, 2015;
- $1.0 million of additional gross
margin in the propane distribution business as a result of higher
retail propane margins per gallon due to the retail pricing
strategy guided by local market conditions, and lower propane
costs; and
- $479,000 in higher gross margin
from the Company's natural gas marketing subsidiary, Peninsula
Energy Services Company, Inc. ("PESCO") generated as the results of
its strategic growth initiatives have started to materialize.
The significant components of the increase in other operating
expenses included:
- $1.9 million in costs from the
operation of Aspire Energy of Ohio, following the acquisition of Gatherco on
April 1, 2015;
- $443,000 in higher payroll and
benefits costs as a result of additional personnel hired to support
growth;
- $141,000 in higher depreciation
and property tax costs reflecting a higher level of assets
resulting from our growth;
- $126,000 in additional costs for
facility maintenance; and
- $102,000 in higher accruals for
incentive compensation as a result of the higher year-to-date
financial results and a larger workforce.
Comparative Results for the Nine Months Ended September 30, 2015 and September 30, 2014
The Company's operating income for the nine months ended
September 30, 2015 was $61.6
million, an increase of $11.7
million over the same period in 2014. A gain from a
customer billing system settlement in the second quarter of 2015
contributed $1.5 million to operating
income in the year-to-date results. The remainder of the
increase in 2015 operating income was driven by an increase in
gross margin of $16.1 million, which
was partially offset by an increase of $5.9
million in other operating expenses necessary to support
growth.
Regulated Energy Segment
Operating income for the Regulated Energy segment increased by
$6.6 million to $47.6 million for the nine months ended
September 30, 2015, compared to the same period in 2014. The
increased operating income reflects the $1.5
million gain from a customer billing system
settlement. The remainder of the increase in operating income
was due to an increase in gross margin of $12.9 million, partially offset by a $7.8 million increase in other operating
expenses. The significant components of the gross margin increase
included:
- $4.1 million generated from
natural gas service expansions completed in 2014 and 2015, as more
fully discussed in the Major Projects and Initiatives section
below;
- $3.2 million in customer growth
in natural gas distribution and transmission services beyond recent
service expansions;
- $3.1 million generated by the
Florida GRIP; and
- $2.4 million from a base rate
increase for the Florida electric
distribution operation.
The significant components of the increase in other operating
expenses included:
- $1.9 million in higher payroll
and benefit costs as a result of additional personnel to support
growth and increased overtime on the Delmarva Peninsula in early
2015 due to colder weather;
- $1.3 million in higher
depreciation, asset removal and property tax costs associated with
recent capital investments to support growth;
- $987,000 in legal and consulting
costs associated with the billing system settlement and other
transactions;
- $811,000 in higher accruals for
incentive compensation as a result of improved year-to-date
financial performance;
- $680,000 in higher service
contractor and other consulting costs;
- $497,000 in additional
amortization expense due to a change in the amortization of
regulatory assets and liabilities, primarily in the Florida electric distribution operation;
and
- $353,000 in additional costs for
facility maintenance.
Unregulated Energy Segment
Operating income for the Unregulated Energy segment increased by
$4.8 million to $13.7 million for the nine months ended
September 30, 2015, compared to the same period in 2014. The
increased operating income was driven by a $10.4 million increase in gross margin, which was
partially offset by a $5.5 million
increase in other operating expenses. The significant
components of the gross margin increase included:
- $6.7 million generated from
higher retail propane margins per gallon due to the retail pricing
strategy, guided by local market conditions, and lower propane
costs as a result of favorable supply management and hedging
activities;
- $3.7 million in gross margin
generated from Aspire Energy of Ohio, which was acquired in April 2015 and therefore not included in prior
year results;
- $404,000 in additional gross
margin generated by PESCO due to the execution of its growth
strategy; partially offset by
- $854,000 in decreased gross
margin for Xeron, inc. ("Xeron"), due to lower volatility in
wholesale propane prices.
Other operating expenses increased by $5.5 million due primarily to:
- $3.8 million in costs from the
operation of Aspire Energy of Ohio, following the acquisition of
Gatherco;
- $1.0 million in higher payroll
and benefits expense due to increased seasonal overtime and
additional resources hired to support growth;
- $379,000 in additional costs for
facility maintenance; and
- $337,000 in increased accruals
for incentive compensation as a result of improved year-to-date
financial results in 2015 as well as a larger workforce.
Matters discussed in this release may include forward-looking
statements that involve risks and uncertainties. Actual results may
differ materially from those in the forward-looking statements.
Please refer to the Safe Harbor for Forward-Looking Statements in
the Company's 2014 Annual Report on Form 10-K for further
information on the risks and uncertainties related to the Company's
forward-looking statements.
The discussions of the results use the term "gross margin," a
non-Generally Accepted Accounting Principles ("GAAP") financial
measure, which management uses to evaluate the performance of the
Company's business segments. For an explanation of the calculation
of "gross margin," see the footnote to the Financial
Summary.
Unless otherwise noted, earnings per share information is
presented on a diluted basis.
Conference Call
Chesapeake Utilities Corporation will host a conference call on
Friday, November 6, 2015 at
10:30 a.m. Eastern Time to discuss
the Company's financial results for the quarter ended
September 30, 2015. To participate in this call, dial
866.821.5457 and reference Chesapeake Utilities Corporation's 2015
Third Quarter Financial Results Conference Call. To access the
replay recording of this call, please visit the Company's website
at http://investor.chpk.com/results.cfm or download the replay
on your mobile device by accessing the Audio cast section of the
Company's IR App.
About Chesapeake Utilities Corporation
Chesapeake Utilities Corporation is a diversified energy company
engaged in natural gas distribution, transmission, gathering and
processing, and marketing; electricity distribution; propane gas
distribution and wholesale marketing; and other related services.
Information about Chesapeake Utilities Corporation and the
Chesapeake family of businesses is
available at http://www.chpk.com or through its IR App.
For more information, contact:
Beth W. Cooper
Senior Vice President & Chief Financial Officer
302.734.6799
Financial
Summary
(in thousands, except per share)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Gross Margin
(1)
|
|
|
|
|
|
|
|
Regulated
Energy segment
|
$
|
40,635
|
|
|
$
|
36,316
|
|
|
$
|
134,023
|
|
|
$
|
121,148
|
|
Unregulated
Energy segment
|
10,207
|
|
|
6,448
|
|
|
45,929
|
|
|
35,563
|
|
Other
businesses and eliminations
|
(49)
|
|
|
2,880
|
|
|
(156)
|
|
|
7,021
|
|
Total Gross
Margin
|
$
|
50,793
|
|
|
$
|
45,644
|
|
|
$
|
179,796
|
|
|
$
|
163,732
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
|
|
|
|
|
|
|
Regulated Energy segment
|
$
|
11,828
|
|
|
$
|
9,202
|
|
|
$
|
47,616
|
|
|
$
|
41,004
|
|
Unregulated Energy segment
|
(1,022)
|
|
|
(1,972)
|
|
|
13,666
|
|
|
8,843
|
|
Other
businesses and eliminations
|
103
|
|
|
562
|
|
|
305
|
|
|
25
|
|
Total
Operating Income
|
10,909
|
|
|
7,792
|
|
|
61,587
|
|
|
49,872
|
|
|
|
|
|
|
|
|
|
Other Income (Loss),
net of Other Expenses
|
36
|
|
|
(32)
|
|
|
(3)
|
|
|
380
|
|
Interest
Charges
|
2,492
|
|
|
2,495
|
|
|
7,425
|
|
|
6,954
|
|
Pre-tax
Income
|
8,453
|
|
|
5,265
|
|
|
54,159
|
|
|
43,298
|
|
Income
Taxes
|
3,334
|
|
|
2,085
|
|
|
21,638
|
|
|
17,303
|
|
Net
Income
|
$
|
5,119
|
|
|
$
|
3,180
|
|
|
$
|
32,521
|
|
|
$
|
25,995
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
of Common Stock
|
|
|
|
|
|
|
|
Basic
|
$
|
0.34
|
|
|
$
|
0.22
|
|
|
$
|
2.16
|
|
|
$
|
1.79
|
|
Diluted
|
$
|
0.33
|
|
|
$
|
0.22
|
|
|
$
|
2.16
|
|
|
$
|
1.78
|
|
(1) "Gross margin" is determined 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. Gross margin should
not be considered an alternative to operating income or net income,
which are determined in accordance with GAAP. Chesapeake 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 structure for non-regulated segments.
Chesapeake's management uses gross
margin in measuring its business units' performance and has
historically analyzed and reported gross margin information
publicly. Other companies may calculate gross margin in a different
manner.
Financial Summary Highlights
Key variances for the three months ended September 30, 2015 included:
(in thousands,
except per share)
|
|
Pre-tax
Income
|
|
Net
Income
|
|
Earnings
Per Share
|
Third Quarter of 2014
Reported Results
|
|
$
|
5,265
|
|
|
$
|
3,180
|
|
|
$
|
0.22
|
|
Adjusting for Unusual
Items:
|
|
|
|
|
|
|
Absence of
BravePoint, which was sold in October 2014
|
|
(454)
|
|
|
(274)
|
|
|
(0.02)
|
|
|
|
(454)
|
|
|
(274)
|
|
|
(0.02)
|
|
Increased (Decreased)
Gross Margins:
|
|
|
|
|
|
|
Contribution from
Aspire Energy of Ohio
|
|
2,037
|
|
|
1,230
|
|
|
0.08
|
|
Service expansions
(See Major Projects and Initiatives table)
|
|
1,708
|
|
|
1,031
|
|
|
0.07
|
|
GRIP
|
|
1,144
|
|
|
691
|
|
|
0.05
|
|
Higher retail propane
margins
|
|
1,029
|
|
|
621
|
|
|
0.04
|
|
Natural gas growth
(excluding service expansions)
|
|
895
|
|
|
540
|
|
|
0.04
|
|
FPU electric base
rate increase
|
|
673
|
|
|
406
|
|
|
0.03
|
|
Natural gas
marketing
|
|
479
|
|
|
289
|
|
|
0.02
|
|
|
|
7,965
|
|
|
4,808
|
|
|
0.33
|
|
Increased Other
Operating Expenses:
|
|
|
|
|
|
|
Expenses from Aspire Energy
of Ohio
|
|
(1,933)
|
|
|
(1,167)
|
|
|
(0.08)
|
|
Higher payroll and benefits
costs
|
|
(1,098)
|
|
|
(663)
|
|
|
(0.05)
|
|
Higher
depreciation, asset removal and property tax costs due to
recent capital investments
|
|
(647)
|
|
|
(391)
|
|
|
(0.03)
|
|
Increased accrual for
incentive compensation
|
|
(314)
|
|
|
(190)
|
|
|
(0.01)
|
|
|
|
(3,992)
|
|
|
(2,411)
|
|
|
(0.17)
|
|
Interest
Charges
|
|
3
|
|
|
2
|
|
|
—
|
|
Net Other Changes
(1)
|
|
(334)
|
|
|
(186)
|
|
|
(0.03)
|
|
Third Quarter of 2015
Reported Results
|
|
$
|
8,453
|
|
|
$
|
5,119
|
|
|
$
|
0.33
|
|
1) The earnings per share impact, net of other
changes shown above, includes $(0.01)
of dilution from the issuance of 592,970 shares of Chesapeake's
common stock in conjunction with the merger of Gatherco into Aspire
Energy of Ohio on April 1, 2015.
Key variances for the nine months ended September 30, 2015 included:
(in thousands,
except per share)
|
|
Pre-tax
Income
|
|
Net
Income
|
|
Earnings
Per Share
|
Nine months ended
September 30, 2014 Reported Results
|
|
$
|
43,298
|
|
|
$
|
25,995
|
|
|
$
|
1.78
|
|
Adjusting for Unusual
Items:
|
|
|
|
|
|
|
Gain from a
customer billing system settlement
|
|
1,500
|
|
|
902
|
|
|
0.06
|
|
Gain on sale of business, recorded in 2014
|
|
(397)
|
|
|
(238)
|
|
|
(0.02)
|
|
Absence of
BravePoint, which was sold in October 2014
|
|
303
|
|
|
182
|
|
|
0.01
|
|
|
|
1,406
|
|
|
846
|
|
|
0.05
|
|
Increased (Decreased)
Gross Margins:
|
|
|
|
|
|
|
Higher retail propane
margins
|
|
6,742
|
|
|
4,048
|
|
|
0.28
|
|
Service expansions
(See Major Projects and Initiatives table)
|
|
4,085
|
|
|
2,453
|
|
|
0.17
|
|
Contribution from
Aspire Energy of Ohio
|
|
3,661
|
|
|
2,198
|
|
|
0.15
|
|
Natural gas growth
(excluding service expansions)
|
|
3,149
|
|
|
1,891
|
|
|
0.13
|
|
GRIP
|
|
3,070
|
|
|
1,843
|
|
|
0.13
|
|
FPU electric base
rate increase
|
|
2,366
|
|
|
1,421
|
|
|
0.10
|
|
Propane wholesale
marketing
|
|
(854)
|
|
|
(513)
|
|
|
(0.04)
|
|
|
|
22,219
|
|
|
13,341
|
|
|
0.92
|
|
Increased Other
Operating Expenses:
|
|
|
|
|
|
|
Expenses from Aspire
Energy of Ohio
|
|
(3,828)
|
|
|
(2,298)
|
|
|
(0.16)
|
|
Higher payroll and
benefits costs
|
|
(2,762)
|
|
|
(1,658)
|
|
|
(0.11)
|
|
Higher depreciation,
asset removal costs and property tax costs due to recent capital
investments
|
|
(1,700)
|
|
|
(1,021)
|
|
|
(0.07)
|
|
Increased accruals
for incentive compensation
|
|
(1,150)
|
|
|
(690)
|
|
|
(0.05)
|
|
Costs associated with
a customer billing system settlement and other
transactions
|
|
(1,081)
|
|
|
(649)
|
|
|
(0.04)
|
|
Higher facility
maintenance
|
|
(729)
|
|
|
(438)
|
|
|
(0.03)
|
|
Higher service
contractor and other consulting costs
|
|
(694)
|
|
|
(417)
|
|
|
(0.03)
|
|
Higher amortization
expense
|
|
(463)
|
|
|
(278)
|
|
|
(0.02)
|
|
|
|
(12,407)
|
|
|
(7,449)
|
|
|
(0.51)
|
|
Interest
Charges
|
|
(471)
|
|
|
(283)
|
|
|
(0.02)
|
|
Net Other Changes
(1)
|
|
114
|
|
|
71
|
|
|
(0.06)
|
|
Nine months ended
September 30, 2015 Reported Results
|
|
$
|
54,159
|
|
|
$
|
32,521
|
|
|
$
|
2.16
|
|
(1) The earnings per share impact, net of other
changes shown above, includes $(0.06)
of dilution from the issuance of 592,970 shares of Chesapeake's
common stock in conjunction with the merger of Gatherco into Aspire
Energy of Ohio on April 1, 2015.
Major Projects and Initiatives
The following table summarizes gross margin for the Company's
existing and future major projects and initiatives (dollars in
thousands):
|
Gross Margin for
the Period
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Total
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
Estimate
for
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Margin
|
|
2015
|
|
2016
|
|
2017
|
Existing major
projects
and initiatives
|
$
|
7,490
|
|
|
$
|
1,928
|
|
|
$
|
17,030
|
|
|
$
|
3,848
|
|
|
$
|
7,114
|
|
|
$
|
25,510
|
|
|
$
|
33,438
|
|
|
$
|
35,295
|
|
Future major
projects
and initiatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,200
|
|
|
17,450
|
|
|
$
|
7,490
|
|
|
$
|
1,928
|
|
|
$
|
17,030
|
|
|
$
|
3,848
|
|
|
$
|
7,114
|
|
|
$
|
25,510
|
|
|
$
|
44,638
|
|
|
$
|
52,745
|
|
Existing Major Projects and Initiatives
The following table summarizes the Company's major projects and
initiatives commenced since 2014 (dollars in thousands):
|
Gross Margin for
the Period (1)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Total
|
|
|
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
Estimate
for
|
|
|
2015
|
|
2014
|
|
Variance
|
|
2015
|
|
2014
|
|
Variance
|
|
Margin
|
|
2015
|
|
2016
|
|
2017
|
|
Acquisition:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aspire Energy of
Ohio
(formerly Gatherco) (2)
|
$
|
2,037
|
|
|
$
|
—
|
|
|
$
|
2,037
|
|
|
$
|
3,661
|
|
|
$
|
—
|
|
|
$
|
3,661
|
|
|
$
|
—
|
|
|
$
|
7,673
|
|
|
$
|
13,000
|
|
|
$
|
13,000
|
|
|
Natural Gas
Transmission
Expansions and Contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Castle
County,
Delaware
|
$
|
507
|
|
|
$
|
657
|
|
|
$
|
(150)
|
|
|
$
|
1,998
|
|
|
$
|
1,256
|
|
|
$
|
742
|
|
|
$
|
2,026
|
|
|
$
|
2,505
|
|
|
$
|
2,029
|
|
|
$
|
1,561
|
|
|
Kent County,
Delaware (3)
|
1,055
|
|
|
—
|
|
|
1,055
|
|
|
1,453
|
|
|
—
|
|
|
1,453
|
|
|
—
|
|
|
1,663
|
|
|
—
|
|
|
—
|
|
|
Total short-term
Contracts
|
1,562
|
|
|
657
|
|
|
905
|
|
|
3,451
|
|
|
1,256
|
|
|
2,195
|
|
|
2,026
|
|
|
4,168
|
|
|
2,029
|
|
|
1,561
|
|
|
Long-term
Contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kent County,
Delaware
|
463
|
|
|
—
|
|
|
463
|
|
|
1,389
|
|
|
—
|
|
|
1,389
|
|
|
463
|
|
|
1,844
|
|
|
1,815
|
|
|
1,789
|
|
|
Polk County,
Florida
|
340
|
|
|
—
|
|
|
340
|
|
|
501
|
|
|
—
|
|
|
501
|
|
|
—
|
|
|
908
|
|
|
1,627
|
|
|
1,627
|
|
|
Total long-term
contracts
|
$
|
803
|
|
|
$
|
—
|
|
|
$
|
803
|
|
|
$
|
1,890
|
|
|
$
|
—
|
|
|
$
|
1,890
|
|
|
$
|
463
|
|
|
$
|
2,752
|
|
|
$
|
3,442
|
|
|
$
|
3,416
|
|
|
Total Expansions
&
Contracts
|
$
|
2,365
|
|
|
$
|
657
|
|
|
$
|
1,708
|
|
|
$
|
5,341
|
|
|
$
|
1,256
|
|
|
$
|
4,085
|
|
|
$
|
2,489
|
|
|
$
|
6,920
|
|
|
$
|
5,471
|
|
|
$
|
4,977
|
|
|
Florida
GRIP
|
$
|
2,067
|
|
|
$
|
923
|
|
|
$
|
1,144
|
|
|
$
|
5,314
|
|
|
$
|
2,244
|
|
|
$
|
3,070
|
|
|
$
|
3,356
|
|
|
$
|
7,355
|
|
|
$
|
11,405
|
|
|
$
|
13,756
|
|
|
Florida Electric
Rate Case
|
$
|
1,021
|
|
|
$
|
348
|
|
|
$
|
673
|
|
|
$
|
2,714
|
|
|
$
|
348
|
|
|
$
|
2,366
|
|
|
$
|
1,269
|
|
|
$
|
3,562
|
|
|
$
|
3,562
|
|
|
$
|
3,562
|
|
|
Total Major
Projects and Initiatives
|
$
|
7,490
|
|
|
$
|
1,928
|
|
|
$
|
5,562
|
|
|
$
|
17,030
|
|
|
$
|
3,848
|
|
|
$
|
13,182
|
|
|
$
|
7,114
|
|
|
$
|
25,510
|
|
|
$
|
33,438
|
|
|
$
|
35,295
|
|
|
(1) Gross margin of $4.7
million and $16.5 million for
the three and nine months ended September
30, 2014, respectively, and $21.8
million for the year ended December
31, 2014, related to projects initiated prior to 2014.
These projects were previously disclosed and are excluded from this
table as they no longer result in period-over-period variances.
(2) During the three and nine months ended
September 30, 2015, the Company
incurred $1.9 million and
$3.8 million, respectively, in other
operating expenses related to Aspire Energy of Ohio's operation. The Company expects to incur
a total of $6.0 million in other
operating expenses in 2015.
(3) The gross margin is attributable to interruptible
service Eastern Shore provided to an industrial customer beginning
in April 2015. The interruptible
service will be replaced by a 20-year contract for OPT ≤ 90 Service
beginning in the third quarter of 2016.
Gatherco Acquisition
On April
1, 2015, the Company completed the merger with Gatherco,
pursuant to which Gatherco merged with and into Aspire Energy of
Ohio, a newly formed, wholly-owned
subsidiary of Chesapeake. As a
result of this merger, Aspire Energy of Ohio provides unregulated natural gas
midstream services including natural gas gathering services and
natural gas liquid processing services to over 300 producers
through 16 gathering systems and over 2,000 miles of pipelines in
Central and Eastern Ohio. Aspire Energy of Ohio also supplies natural gas to Columbia Gas
of Ohio, regional marketers of
natural gas, and over 6,000 customers in Ohio through the Consumers Gas Cooperative, an
independent entity, which Aspire Energy of Ohio manages under an operating agreement.
Aspire Energy of Ohio generated
$2.0 million in additional gross
margin and incurred $1.9 million in
other operating expenses for the three months ended September 30, 2015. For the six months
following the merger through September 30,
2015, it generated $3.7
million of gross margin and incurred $3.8 million of other operating expenses.
The results of Aspire Energy of Ohio are projected to have a minimal impact on
the Company's earnings per share in 2015, since the merger was
completed after the first quarter, which has historically produced
a significant portion of Gatherco's annual earnings. This
acquisition is expected to be accretive to the Company's earnings
in the first full year of operations, which will include the first
quarter of 2016.
Service Expansions
During 2014, Eastern Shore Natural
Gas Company, ("Eastern Shore"), the Company's interstate pipeline
subsidiary, executed a one-year contract with an industrial
customer in New Castle County,
Delaware to provide 50,000 Dts/d of additional transmission
service from April 2014 to April
2015. This contract was subsequently amended to provide
55,580 Dts/d of transmission service at a lower reservation rate
through August 2020. The net impact
of the contract resulted in a gross margin decline of $150,000 for the quarter ended September 30, 2015. For the nine months ended
September 30, 2015, the extension of
the contract generated additional gross margin of $509,000, net of the impact of the lower rate,
compared to the same period in 2014, and will generate additional
gross margin of $334,000 for 2015
compared to 2014.
In December 2014, Eastern Shore
executed another short-term contract with the same customer in
New Castle County, Delaware to
provide an additional 10,000 Dts/d of Off Peak ≤ 90 firm
transportation service ("OPT ≤ 90 Service") from December 2014 to March 2015. The OPT ≤ 90
Service is a new firm transportation service that allows Eastern
Shore not to schedule service for up to 90 days during the peak
months of November through April each year. This short-term
contract generated additional gross margin of $233,000 for the nine months ended
September 30, 2015.
On October 1, 2014, Eastern Shore
commenced a new lateral service to an industrial customer facility
in Kent County, Delaware. This
service commenced after construction of new facilities, including
approximately 5.5 miles of pipeline lateral and metering facilities
extending from Eastern Shore's mainline to the new industrial
customer facility. This service generated $463,000 and $1.4
million of gross margin for the three and nine months ended
September 30, 2015, respectively. On an annual basis,
this service is expected to generate $1.8
million of gross margin in 2015 and annual gross margin of
approximately $1.2 million to $1.8
million during the 37-year service period.
In April 2015, Eastern Shore
commenced interruptible service to the same industrial customer in
Kent County, Delaware and
generated additional gross margin of $1.1
million and $1.5 million for
the three and nine months ended September
30, 2015, respectively. The interruptible service is
expected to generate $1.7 million of
gross margin in 2015, and it is expected to be replaced by a
20-year OPT ≤ 90 Service beginning in the third quarter of
2016.
On January 16, 2015, the Florida
PSC approved a firm transportation agreement between Peninsula
Pipeline Company, Inc. ("Peninsula Pipeline"), and Chesapeake's Florida natural gas distribution division.
Under this agreement, Peninsula Pipeline provides natural gas
transmission service to support Chesapeake's expansion of natural gas
distribution service in Polk
County, Florida. Peninsula Pipeline began the initial
phase of its service to Chesapeake
in March 2015, generating
$340,000 and $501,000 of additional gross margin for the three
and nine months ended September 30,
2015, respectively. This service will generate an
estimated annual gross margin of $908,000 in 2015 and, once completed, all phases
of this service will generate an estimated annualized gross margin
of $1.6 million.
GRIP
GRIP is a natural gas pipe replacement program approved by the
Florida PSC, designed to expedite the replacement of qualifying
distribution mains and services (any material other than coated
steel or plastic) to enhance reliability and integrity of the
Company's Florida natural gas
distribution systems. This program allows recovery, through
regulated rates, of capital and other program-related costs,
inclusive of a return on investment, associated with the
replacement of the mains and services. Since the program's
inception in August 2012, the
Company's Florida natural gas
distribution operations have invested $69.6
million to replace 153 miles of qualifying distribution
mains, $25.5 million of which was
invested during the first nine months of 2015. The Company
expects to invest an additional $3.4
million in this program through the end of 2015. The
increased investment in GRIP generated additional gross margin of
$1.1 million and $3.1 million, for the three and nine months ended
September 30, 2015, respectively,
compared to the same periods in 2014.
Florida Electric Rate Case
On September 15, 2014, the Florida
PSC approved a settlement agreement between Florida Public
Utilities Company ("FPU") and the Florida Office of Public Counsel
in FPU's base rate case filing for its electric operation, which
included, among other things, an increase in FPU's annual revenue
requirement of approximately $3.8
million and a 10.25 percent rate of return on common equity.
The new rates became effective for all meter reads on or after
November 1, 2014. Previously,
the Florida PSC approved interim rate relief, effective for meter
readings on or after August 10, 2014.
The higher base rates in FPU's electric operation generated
$673,000 and $2.4 million in additional gross margin for the
three and nine months ended September 30, 2015,
respectively.
Future Major Projects and Initiatives
White Oak Mainline Expansion Project: In December 2014, Eastern Shore entered into a
precedent agreement with an industrial customer in Kent County, Delaware, to provide a 20-year
natural gas transmission service for 45,000 Dts/d for the
customer's new facility, upon the satisfaction of certain
conditions. This new service will be provided as OPT ≤ 90 Service
and is expected to generate at least $5.8
million in annual gross margin. In November 2014, Eastern Shore requested
authorization by the Federal Energy Regulatory Commission ("FERC")
to construct 7.2 miles of 16-inch pipeline looping and 3,550
horsepower of new compression in Delaware to provide this service. The
estimated cost of these new facilities is approximately
$30.0 million. Eastern Shore
anticipates receiving the FERC's authorization in 2015, with
service targeted to commence in the third quarter of 2016,
following construction of the new facilities. As previously
discussed, during the three and nine months ended September 30, 2015, the Company generated
$1.1 million and $1.5 million, respectively, in additional gross
margin by providing interruptible service to this customer.
System Reliability Project: On May
22, 2015, Eastern Shore submitted an application to the FERC
seeking authorization to construct, own and operate approximately
10.1 miles of 16-inch pipeline looping and auxiliary facilities in
New Castle and Kent Counties, Delaware and a new compressor at its existing
Bridgeville compressor station in
Sussex County, Delaware.
Eastern Shore further proposes to reinforce critical points on its
pipeline system. The total project will benefit all of
Eastern Shore's customers by modifying the pipeline system to
respond to severe operational conditions experienced during actual
winter peak days in 2014 and 2015. Since the project is intended to
improve system reliability, Eastern Shore requested a
predetermination of rolled-in rate treatment for the costs of the
project and an order granting the requested authorization by
December 2015. This project is
expected to be in service by late third quarter of 2016 and will be
included in Eastern Shore's upcoming 2017 rate case filing. The
estimated cost of the project is $32.1
million. The estimated annual gross margin associated with
this project, assuming recovery in the 2017 rate case filing, is
approximately $4.5 million.
Texas Eastern Transmission, LP ("TETLP") Capacity
Expansion Project: On October 13,
2015, Eastern Shore submitted an application to the FERC to
make certain measurement and related improvements at its TETLP
interconnect facilities which will enable Eastern Shore to increase
natural gas receipts from TETLP by 53,000 Dts/day, for a total
capacity of 160,000 Dts/d. Eastern Shore expects the project to be
approved by the end of the year and in service by the end of
February 2016. On a short-term basis,
the Company anticipates that Eastern Shore will generate
approximately $2.1 million in
additional gross margin.
Eight Flags: Eight Flags Energy, LLC, ("Eight Flags"),
one of the Company's unregulated energy subsidiaries, is engaged in
the development and construction of a Combined Heat and Power
("CHP") plant in Nassau County,
Florida. This CHP plant, which will consist of a
natural-gas-fired turbine and associated electric generator, is
designed to generate approximately 20 megawatts of base load power
and will include a heat recovery system generator capable of
providing approximately 75,000 pounds per hour of unfired steam.
Eight Flags will sell the power generated from the CHP plant to FPU
for distribution to its retail electric customers pursuant to a
20-year power purchase agreement. It will also sell the steam to an
industrial customer pursuant to a separate 20-year contract. FPU
will transport natural gas through its distribution system to Eight
Flags' CHP plant, which will produce power and steam. On a
consolidated basis, this project is expected to generate
approximately $7.3 million in annual
gross margin, which could fluctuate based upon various factors,
including, but not limited to, the quantity of steam delivered and
the CHP plant's hours of operations. Eight Flags' CHP plant is
expected to be operational at the beginning of the third quarter of
2016. Chesapeake's total projected
investment, by Eight Flags and other Chesapeake affiliates, to construct the CHP
plant and associated facilities is approximately $40.0 million.
The following table summarizes estimated in-service dates and
gross margin for the foregoing projects (dollars in thousands):
|
|
|
|
Estimate
for
|
Project
|
|
Estimated
In-Service
Date
|
|
Annualized
Margin
|
|
2016
|
|
2017
|
Eastern Shore White
Oak Mainline Expansion Project in Kent County, Delaware
|
|
Third quarter of
2016
|
|
$
|
5,400
|
|
|
$
|
5,400
|
|
|
$
|
5,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eastern Shore System
Reliability Project
|
|
Late third quarter of
2016
|
|
4,500
|
|
|
—
|
|
|
2,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eastern Shore TETLP
Capacity Expansion Project
|
|
February
2016
|
|
2,100
|
|
|
2,100
|
|
|
2,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eight Flags CHP plant
in Nassau County, Florida
|
|
Early third quarter
of 2016
|
|
7,300
|
|
|
3,700
|
|
|
7,300
|
|
|
|
|
|
$
|
19,300
|
|
|
$
|
11,200
|
|
|
$
|
17,450
|
|
Other factors contributing to gross margin
increase
Weather and Consumption
Weather was not a
significant factor in the gross margin increase for the quarter
ended September 30, 2015, compared to
the same period in 2014. Weather was also not a significant
factor in the gross margin increase for the nine months ended
September 30, 2015, compared to the
same period in 2014, because the first quarter of 2015 and 2014
were both significantly colder than normal (10-year average
weather) on the Delmarva Peninsula. The following tables
summarize the heating degree-day ("HDD") and cooling degree-day
("CDD") information for the three and nine months ended
September 30, 2015 and 2014 and the
gross margin variance resulting from weather fluctuations in those
periods.
HDD and CDD Information
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
|
2015
|
|
2014
|
|
Variance
|
|
2015
|
|
2014
|
|
Variance
|
Delmarva
|
|
|
|
|
|
|
|
|
|
|
|
Actual HDD
|
41
|
|
|
89
|
|
|
(48)
|
|
|
3,249
|
|
|
3,262
|
|
|
(13)
|
|
10-Year Average HDD
("Normal")
|
65
|
|
|
61
|
|
|
4
|
|
|
2,908
|
|
|
2,893
|
|
|
15
|
|
Variance from
Normal
|
(24)
|
|
|
28
|
|
|
|
|
341
|
|
|
369
|
|
|
|
Florida
|
|
|
|
|
|
|
|
|
|
|
|
Actual HDD
|
—
|
|
|
—
|
|
|
—
|
|
|
501
|
|
|
574
|
|
|
(73)
|
|
10-Year Average HDD
("Normal")
|
—
|
|
|
—
|
|
|
—
|
|
|
557
|
|
|
555
|
|
|
2
|
|
Variance from
Normal
|
—
|
|
|
—
|
|
|
|
|
(56)
|
|
|
19
|
|
|
|
Florida
|
|
|
|
|
|
|
|
|
|
|
|
Actual CDD
|
1,591
|
|
|
1,528
|
|
|
63
|
|
|
2,827
|
|
|
2,498
|
|
|
329
|
|
10-Year Average CDD
("Normal")
|
1,524
|
|
|
1,519
|
|
|
5
|
|
|
2,506
|
|
|
2,501
|
|
|
5
|
|
Variance from
Normal
|
67
|
|
|
9
|
|
|
|
|
321
|
|
|
(3)
|
|
|
|
Gross Margin Variance attributed to Weather
(in
thousands)
|
Q3 2015
vs. Q3
2014
|
|
Q3 2015
vs. Normal
|
|
Q3 2014
vs. Normal
|
|
YTD 2015 vs.
YTD 2014
|
|
YTD 2015
vs. Normal
|
|
YTD 2014
vs. Normal
|
Delmarva
|
|
|
|
|
|
|
|
|
|
|
|
Regulated Energy
segment
|
$
|
(157)
|
|
|
$
|
(31)
|
|
|
$
|
167
|
|
|
$
|
(87)
|
|
|
$
|
872
|
|
|
$
|
803
|
|
Unregulated Energy
segment
|
(8)
|
|
|
27
|
|
|
(13)
|
|
|
20
|
|
|
1,005
|
|
|
1,037
|
|
Florida
|
|
|
|
|
|
|
|
|
|
|
|
Regulated Energy
segment
|
(232)
|
|
|
(40)
|
|
|
38
|
|
|
134
|
|
|
(239)
|
|
|
(284)
|
|
Unregulated Energy
segment
|
—
|
|
|
—
|
|
|
—
|
|
|
(10)
|
|
|
122
|
|
|
81
|
|
Total
|
$
|
(397)
|
|
|
$
|
(44)
|
|
|
$
|
192
|
|
|
$
|
57
|
|
|
$
|
1,760
|
|
|
$
|
1,637
|
|
Propane prices
Higher retail margins per gallon
generated $597,000 and $5.7 million in additional gross margin by the
Delmarva propane distribution operation for the three and nine
months ended September 30, 2015,
respectively, compared to the same periods in 2014. A large
decline in propane prices in the first quarter of 2015 had a
significant impact on the amount of revenue and cost of sales
associated with the Company's propane distribution operations.
Based on the Mont Belvieu wholesale propane index, propane prices
in the first quarter of 2015 were approximately 59 percent lower
than prices in the same quarter in 2014. As a result of favorable
supply management and hedging activities, the Delmarva propane
distribution operation experienced a decrease in its average
propane cost in addition to the decrease in wholesale prices, which
generated increased retail margins per gallon. During the second
and third quarters of 2015, wholesale propane prices continued to
remain significantly lower than prices in the same quarters of
2014.
In Florida, higher retail
propane margins per gallon as a result of local market conditions
generated $432,000 and $1.1 million of additional gross margin for the
three and nine months ended September 30,
2015, respectively.
These market conditions, which are influenced by 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. The level of
retail margins per gallon generated during the first nine months of
2015 is not typical and, therefore, is not included in the
Company's long-term financial plans or forecasts.
Xeron, which benefits from wholesale price volatility by
entering into trading transactions, generated additional gross
margin of $131,000 for the three
months ended September 30, 2015. On a
year-to-date basis, Xeron experienced a gross margin decrease of
$854,000, compared to the same period
in 2014, due to lower wholesale price volatility.
Other Natural Gas Growth - Distribution
Operations
In addition to service expansions, the natural gas distribution
operations on the Delmarva Peninsula generated $250,000 and $1.1
million in additional gross margin for the three and nine
months ended September 30, 2015,
respectively, compared to the same periods in 2014, due to an
increase in residential, commercial and industrial customers
served. The number of residential customers on the Delmarva
Peninsula increased by 2.7 percent in the third quarter of 2015,
compared to the same quarter in 2014. The natural gas
distribution operations in Florida
generated $443,000 and $1.4 million in additional gross margin for the
three and nine months ended September 30,
2015, respectively, compared to the same periods in 2014,
due primarily to an increase in commercial and industrial customers
in Florida.
Capital Expenditures
The Company has revised its
capital expenditures forecast for 2015 to be in the range of
$130.0 million to $160.0 million,
excluding amounts expended to acquire Gatherco. This range
represents a significant increase over the average level of annual
capital expenditures during the past three years, which equaled
$94.8 million. The updated capital
forecast reflects a shift in the timing of certain capital
expenditures from 2015 to 2016. Major projects currently underway,
such as the Eight Flags' CHP plant and associated facilities,
anticipated new facilities to serve an industrial customer in
Kent County, Delaware under the
OPT ≤ 90 Service, and additional GRIP investments projected for
2015, account for approximately $99.0
million of the capital expenditures forecast for 2015. In
addition, Eastern Shore is seeking FERC approval of a $32.1 million project to construct facilities
that will improve the overall reliability and flexibility of its
pipeline system. Capital expenditures are subject to
continuous review and modification by the Company's management and
Board of Directors, and some anticipated capital expenditures are
subject to approval by the applicable regulators. Actual
capital requirements may vary from the above estimates due to a
number of factors, including changing economic conditions, changes
in customer expectations or service needs, 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.
In order to fund the 2015 capital expenditures currently
budgeted, the Company expects to increase the level of borrowings
during the remainder of 2015 to supplement cash provided by
operating activities. The Company's target ratio of equity to total
capitalization, including short-term borrowings, is between 50 and
60 percent, and the Company has maintained a ratio of equity to
total capitalization, including short-term borrowings, between 54
and 60 percent during the past three years. If the Company
increases the level of debt during 2015 and 2016 to fund the
budgeted capital expenditures, the ratio of equity to total
capitalization, including short-term borrowings, will temporarily
decline.
On October 8, 2015, the Company
entered into a new revolving credit facility with certain lenders,
which increased the Company's borrowing capacity by $150.0 million. To facilitate the
refinancing of a portion of the short-term borrowings into
long-term debt, as appropriate, the Company also entered into a
long-term private placement shelf agreement for $150.0 million. The exact timing of any
long-term debt or equity issuance(s) will be based on market
conditions. In addition, for larger capital projects, the Company
will seek to align, as much as feasible, any such long-term debt or
equity issuance(s) with the earnings associated with commencement
of service for the projects.
Chesapeake
Utilities Corporation and Subsidiaries
Condensed
Consolidated Statements of Income (Unaudited)
(in thousands,
except shares and per share data)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating
Revenues
|
|
|
|
|
|
|
|
Regulated
Energy
|
$
|
63,796
|
|
|
$
|
59,356
|
|
|
$
|
235,438
|
|
|
$
|
223,168
|
|
Unregulated Energy
and other
|
28,117
|
|
|
32,263
|
|
|
119,238
|
|
|
155,286
|
|
Total Operating
Revenues
|
91,913
|
|
|
91,619
|
|
|
354,676
|
|
|
378,454
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
Regulated Energy cost
of sales
|
23,161
|
|
|
23,040
|
|
|
101,414
|
|
|
102,020
|
|
Unregulated Energy
and other cost of sales
|
17,959
|
|
|
22,935
|
|
|
73,465
|
|
|
112,702
|
|
Operations
|
26,388
|
|
|
25,365
|
|
|
79,522
|
|
|
76,604
|
|
Maintenance
|
2,603
|
|
|
2,562
|
|
|
8,033
|
|
|
7,168
|
|
Gain
from a settlement
|
—
|
|
|
—
|
|
|
(1,500)
|
|
|
—
|
|
Depreciation and amortization
|
7,636
|
|
|
6,774
|
|
|
22,155
|
|
|
20,146
|
|
Other taxes
|
3,257
|
|
|
3,151
|
|
|
10,000
|
|
|
9,942
|
|
Total operating
expenses
|
81,004
|
|
|
83,827
|
|
|
293,089
|
|
|
328,582
|
|
Operating
Income
|
10,909
|
|
|
7,792
|
|
|
61,587
|
|
|
49,872
|
|
Other income (loss),
net of other expenses
|
36
|
|
|
(32)
|
|
|
(3)
|
|
|
380
|
|
Interest
charges
|
2,492
|
|
|
2,495
|
|
|
7,425
|
|
|
6,954
|
|
Income Before
Income Taxes
|
8,453
|
|
|
5,265
|
|
|
54,159
|
|
|
43,298
|
|
Income
taxes
|
3,334
|
|
|
2,085
|
|
|
21,638
|
|
|
17,303
|
|
Net
Income
|
$
|
5,119
|
|
|
$
|
3,180
|
|
|
$
|
32,521
|
|
|
$
|
25,995
|
|
Weighted Average
Common Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
15,258,819
|
|
|
14,574,678
|
|
|
15,035,569
|
|
|
14,539,841
|
|
Diluted
|
15,306,843
|
|
|
14,616,665
|
|
|
15,083,641
|
|
|
14,588,130
|
|
Earnings Per Share
of Common Stock:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.34
|
|
|
$
|
0.22
|
|
|
$
|
2.16
|
|
|
$
|
1.79
|
|
Diluted
|
$
|
0.33
|
|
|
$
|
0.22
|
|
|
$
|
2.16
|
|
|
$
|
1.78
|
|
Chesapeake
Utilities Corporation and Subsidiaries
Condensed
Consolidated Balance Sheets (Unaudited)
|
Assets
|
|
September 30,
2015
|
|
December 31,
2014
|
(in thousands,
except shares)
|
|
|
|
|
Property,
Plant and Equipment
|
|
|
|
|
Regulated
Energy
|
|
$
|
813,145
|
|
|
$
|
766,855
|
|
Unregulated
Energy
|
|
141,393
|
|
|
84,773
|
|
Other businesses and
eliminations
|
|
19,190
|
|
|
18,497
|
|
Total property,
plant and equipment
|
|
973,728
|
|
|
870,125
|
|
Less:
Accumulated depreciation and amortization
|
|
(210,979)
|
|
|
(193,369)
|
|
Plus:
Construction work in progress
|
|
56,441
|
|
|
13,006
|
|
Net property,
plant and equipment
|
|
819,190
|
|
|
689,762
|
|
Current
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
3,781
|
|
|
4,574
|
|
Accounts receivable
(less allowance for uncollectible accounts of $1,088 and $1,120,
respectively)
|
|
39,861
|
|
|
53,300
|
|
Accrued
revenue
|
|
8,797
|
|
|
13,617
|
|
Propane inventory, at
average cost
|
|
4,211
|
|
|
7,250
|
|
Other inventory, at
average cost
|
|
4,143
|
|
|
3,699
|
|
Regulatory
assets
|
|
7,653
|
|
|
8,967
|
|
Storage gas
prepayments
|
|
3,839
|
|
|
4,258
|
|
Income taxes
receivable
|
|
6,935
|
|
|
18,806
|
|
Deferred income
taxes
|
|
338
|
|
|
—
|
|
Prepaid
expenses
|
|
7,507
|
|
|
6,652
|
|
Mark-to-market energy
assets
|
|
286
|
|
|
1,055
|
|
Other current
assets
|
|
339
|
|
|
195
|
|
Total current
assets
|
|
87,690
|
|
|
122,373
|
|
Deferred
Charges and Other Assets
|
|
|
|
|
Goodwill
|
|
16,048
|
|
|
4,952
|
|
Other intangible
assets, net
|
|
2,317
|
|
|
2,404
|
|
Investments, at fair
value
|
|
3,412
|
|
|
3,678
|
|
Regulatory
assets
|
|
77,332
|
|
|
78,136
|
|
Receivables and other
deferred charges
|
|
2,453
|
|
|
3,164
|
|
Total deferred
charges and other assets
|
|
101,562
|
|
|
92,334
|
|
Total
Assets
|
|
$
|
1,008,442
|
|
|
$
|
904,469
|
|
Chesapeake
Utilities Corporation and Subsidiaries
Condensed
Consolidated Balance Sheets (Unaudited)
|
Capitalization and
Liabilities
|
|
September 30,
2015
|
|
December 31,
2014
|
(in thousands,
except shares and per share data)
|
|
|
|
|
Capitalization
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Common stock,
par value $0.4867 per share
|
|
|
|
|
(authorized
25,000,000 shares)
|
|
$
|
7,429
|
|
|
$
|
7,100
|
|
Additional
paid-in capital
|
|
189,321
|
|
|
156,581
|
|
Retained
earnings
|
|
162,036
|
|
|
142,317
|
|
Accumulated
other comprehensive loss
|
|
(5,471)
|
|
|
(5,676)
|
|
Deferred
compensation obligation
|
|
1,863
|
|
|
1,258
|
|
Treasury
stock
|
|
(1,863)
|
|
|
(1,258)
|
|
Total
stockholders' equity
|
|
353,315
|
|
|
300,322
|
|
Long-term debt,
net of current maturities
|
|
155,909
|
|
|
158,486
|
|
Total
capitalization
|
|
509,224
|
|
|
458,808
|
|
Current
Liabilities
|
|
|
|
|
Current portion of
long-term debt
|
|
9,139
|
|
|
9,109
|
|
Short-term
borrowing
|
|
127,093
|
|
|
88,231
|
|
Accounts
payable
|
|
41,129
|
|
|
44,610
|
|
Customer deposits and
refunds
|
|
24,020
|
|
|
25,197
|
|
Accrued
interest
|
|
3,242
|
|
|
1,352
|
|
Dividends
payable
|
|
4,388
|
|
|
3,939
|
|
Deferred income
taxes
|
|
—
|
|
|
832
|
|
Accrued
compensation
|
|
8,909
|
|
|
10,076
|
|
Regulatory
liabilities
|
|
9,346
|
|
|
3,268
|
|
Mark-to-market energy
liabilities
|
|
154
|
|
|
1,018
|
|
Other accrued
liabilities
|
|
9,443
|
|
|
6,603
|
|
Total current
liabilities
|
|
236,863
|
|
|
194,235
|
|
Deferred
Credits and Other Liabilities
|
|
|
|
|
Deferred income
taxes
|
|
174,247
|
|
|
160,232
|
|
Regulatory
liabilities
|
|
43,356
|
|
|
43,419
|
|
Environmental
liabilities
|
|
9,003
|
|
|
8,923
|
|
Other pension and
benefit costs
|
|
32,619
|
|
|
35,027
|
|
Deferred investment
tax credits and other liabilities
|
|
3,130
|
|
|
3,825
|
|
Total deferred
credits and other liabilities
|
|
262,355
|
|
|
251,426
|
|
Total
Capitalization and Liabilities
|
|
$
|
1,008,442
|
|
|
$
|
904,469
|
|
Chesapeake
Utilities Corporation and Subsidiaries
Distribution
Utility Statistical Data (Unaudited)
|
|
|
For the Three
Months Ended September 30, 2015
|
|
For the Three
Months Ended September 30, 2014
|
|
|
Delmarva NG
Distribution
|
|
Chesapeake
Florida NG
Division
|
|
FPU NG
Distribution
|
|
FPU Electric
Distribution
|
|
Delmarva NG
Distribution
|
|
Chesapeake
Florida NG
Division
|
|
FPU NG
Distribution
|
|
FPU Electric
Distribution
|
Operating
Revenues
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
$
|
5,133
|
|
|
$
|
1,103
|
|
|
$
|
4,076
|
|
|
$
|
14,821
|
|
|
$
|
5,175
|
|
|
$
|
1,036
|
|
|
$
|
4,537
|
|
|
$
|
13,093
|
|
Commercial
|
|
4,967
|
|
|
1,117
|
|
|
4,891
|
|
|
12,585
|
|
|
5,553
|
|
|
1,010
|
|
|
6,952
|
|
|
10,896
|
|
Industrial
|
|
1,611
|
|
|
1,478
|
|
|
3,469
|
|
|
812
|
|
|
1,672
|
|
|
1,233
|
|
|
2,567
|
|
|
478
|
|
Other
(1)
|
|
263
|
|
|
744
|
|
|
2,073
|
|
|
(4,021)
|
|
|
559
|
|
|
788
|
|
|
(358)
|
|
|
(2,582)
|
|
Total Operating
Revenues
|
|
$
|
11,974
|
|
|
$
|
4,442
|
|
|
$
|
14,509
|
|
|
$
|
24,197
|
|
|
$
|
12,959
|
|
|
$
|
4,067
|
|
|
$
|
13,698
|
|
|
$
|
21,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (in
Dts/MWHs)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
176,715
|
|
|
48,481
|
|
|
197,177
|
|
|
96,857
|
|
|
174,962
|
|
|
44,996
|
|
|
192,663
|
|
|
95,041
|
|
Commercial
|
|
461,219
|
|
|
1,305,028
|
|
|
469,011
|
|
|
95,059
|
|
|
470,647
|
|
|
290,901
|
|
|
518,360
|
|
|
92,455
|
|
Industrial
|
|
1,041,864
|
|
|
2,503,874
|
|
|
881,556
|
|
|
4,570
|
|
|
991,396
|
|
|
2,830,265
|
|
|
784,824
|
|
|
7,090
|
|
Other
|
|
28,552
|
|
|
—
|
|
|
(42,998)
|
|
|
(1,274)
|
|
|
31,036
|
|
|
—
|
|
|
(15,200)
|
|
|
1,707
|
|
Total
|
|
1,708,350
|
|
|
3,857,383
|
|
|
1,504,746
|
|
|
195,212
|
|
|
1,668,041
|
|
|
3,166,162
|
|
|
1,480,647
|
|
|
196,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
62,989
|
|
|
14,789
|
|
|
52,100
|
|
|
24,103
|
|
|
61,326
|
|
|
14,356
|
|
|
50,691
|
|
|
23,894
|
|
Commercial
|
|
6,571
|
|
|
1,355
|
|
|
4,223
|
|
|
7,412
|
|
|
6,453
|
|
|
1,380
|
|
|
4,343
|
|
|
7,411
|
|
Industrial
|
|
120
|
|
|
69
|
|
|
1,663
|
|
|
2
|
|
|
110
|
|
|
59
|
|
|
1,347
|
|
|
2
|
|
Other
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
69,684
|
|
|
16,213
|
|
|
57,986
|
|
|
31,517
|
|
|
67,896
|
|
|
15,795
|
|
|
56,381
|
|
|
31,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Chesapeake
Utilities Corporation and Subsidiaries
Distribution
Utility Statistical Data (Unaudited)
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For the Nine
Months Ended September 30, 2015
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For the Nine
Months Ended September 30, 2014
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Delmarva NG
Distribution
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Chesapeake
Florida NG
Division
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FPU NG
Distribution
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FPU Electric
Distribution
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Delmarva NG
Distribution
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Chesapeake
Florida NG
Division
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FPU NG
Distribution
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FPU Electric
Distribution
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Operating
Revenues
(in
thousands)
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Residential
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$
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53,339
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$
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3,788
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$
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17,646
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$
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37,495
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$
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51,016
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$
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3,617
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$
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18,399
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$
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33,607
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Commercial
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27,950
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3,610
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20,435
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32,524
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28,304
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3,312
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24,982
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28,362
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Industrial
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5,379
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4,536
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11,955
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2,361
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4,677
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3,794
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9,354
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2,911
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Other
(1)
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(3,466)
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2,275
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|
557
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(8,979)
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(3,122)
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2,362
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(1,746)
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(6,152)
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Total Operating
Revenues
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$
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83,202
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$
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14,209
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$
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50,593
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$
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63,401
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$
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80,875
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$
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13,085
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$
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50,989
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$
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58,728
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Volume (in
Dts/MWHs)
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Residential
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3,128,130
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255,273
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970,570
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244,344
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2,953,300
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254,612
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957,430
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244,631
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Commercial
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2,954,973
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4,069,566
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1,886,076
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239,633
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2,851,167
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1,019,970
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1,939,673
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238,878
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Industrial
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3,372,321
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8,187,722
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3,035,617
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14,220
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3,163,735
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9,861,224
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2,930,761
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23,960
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Other
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57,008
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—
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(151,631)
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4,074
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57,088
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—
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(97,953)
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(4,309)
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Total
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9,512,432
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12,512,561
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5,740,632
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502,271
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9,025,290
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11,135,806
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5,729,911
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503,160
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Average
Customers
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Residential
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63,700
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14,805
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51,907
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24,022
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62,028
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14,364
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50,781
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23,868
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Commercial
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6,637
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1,351
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4,258
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7,390
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6,531
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1,363
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4,383
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7,413
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Industrial
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117
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68
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1,606
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2
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109
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60
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1,280
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2
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Other
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5
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—
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—
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—
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7
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—
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—
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—
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Total
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70,459
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16,224
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57,771
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31,414
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68,675
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15,787
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56,444
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31,283
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(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.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/chesapeake-utilities-corporation-reports-higher-third-quarter-results-300172877.html
SOURCE Chesapeake Utilities Corporation