DOVER, Del., Nov. 9, 2017 /PRNewswire/ -- Chesapeake
Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or the
"Company") today reported third quarter financial results. The
Company's net income for the quarter ended September 30, 2017
was $6.8 million, compared to
$4.4 million for the same quarter of
2016. Earnings per share ("EPS") for the quarter ended
September 30, 2017 were $0.42
per share, compared to $0.29 per
share for the same quarter of 2016. The increase in net income
reflected margin growth across business units for both the
Regulated Energy and Unregulated Energy segments, as well as lower
operating and maintenance expenses for the quarter.
For the nine months ended September 30, 2017, the Company
reported net income of $32.0 million,
or $1.96 per share. This represents a
decrease of $789,000, or $0.18 per share, compared to the same period in
2016. Higher margins from the Eight Flags Energy, LLC ("Eight
Flags") combined heat and power ("CHP") plant, Peninsula Energy
Services Company, Inc. ("PESCO"), and Aspire Energy of Ohio, LLC ("Aspire Energy"), new services and
customer growth in the natural gas transmission and distribution
operations in Florida and on the
Delmarva Peninsula, and new rates for Eastern Shore Natural Gas
Company ("Eastern Shore") offset the increase in higher expenses to
generate and support growth and the impact of warmer weather.
An increase in outstanding shares as a result of the equity
issuance in September 2016 lowered
earnings per share by approximately $0.12 per share for the nine months ended
September 30, 2017.
"Our solid results for the third quarter reflect the diverse
sources of new gross margin throughout our Company," stated
Michael P. McMasters, President and
Chief Executive Officer. "Recently completed growth projects
are adding value for our stockholders. In the near term, we will
commence construction of Eastern Shore's largest ever expansion
project, expected to be completed in early 2018, as well other
projects that will cultivate future growth," he added.
"Investments in system expansion, acquisitions, new service
offerings and unique projects like Eight Flags, enhance the
continued growth in customers and deliveries in our natural gas
distribution and transmission businesses. Our employees
continue to excel in identifying new opportunities for growth, and
profitably managing current growth. We are also maintaining
operating efficiency while providing safe, reliable service to our
customers," he concluded.
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,
2017 and 2016
Operating income for the third quarter increased by $4.1 million to $14.2
million, compared to the same period in 2016, driven by
higher retail propane sales volumes and margins, implementation of
new rates for Eastern Shore (subject to refund), additional margin
from the Gas Reliability Infrastructure Program ("GRIP"), and
continued growth from the Company's Delmarva and Florida natural gas distribution operations.
Gross margin increased by $4.6
million, or 8.2 percent, which was offset by an increase in
other operating expenses of $473,000,
or 1.0 percent.
Regulated Energy Segment
Operating income for the Regulated Energy segment increased by
$2.1 million, or 15.7 percent,
compared to the same period in 2016. Higher operating income
resulted from increased gross margin of $1.5
million during the quarter, or 3.4 percent, and a decrease
in other operating expenses of $519,000.
The significant components of the $1.5
million gross margin increase included:
- $1.0 million of incremental
revenue from the implementation of new rates for Eastern Shore,
which were effective August 1,
2017.
- $406,000 generated from
additional GRIP investments in the Florida natural gas distribution operations;
and
- $566,000 increase from customer
growth in the natural gas distribution businesses (excluding
service expansions) which was partially offset by a $219,000 decrease in interruptible margin from
Eastern Shore.
The significant factors contributing to the net decrease of
$519,000 in other operating expenses
included:
- $1.6 million in lower outside
services and facilities and maintenance costs, due primarily to
lower consulting and service contractor costs;
- $437,000 in lower benefits and
employee-related costs in 2017 (since the Company is self-insured
for healthcare, benefits costs fluctuate depending upon claims
filed);
- $1.4 million in higher
depreciation, asset removal and property tax costs associated with
recent capital investments.
Unregulated Energy Segment
Operating income for the Unregulated Energy segment increased by
$2.1 million, or 67.9 percent,
compared to the same period in 2016. Gross margin increased by
$3.1 million, or 30.1 percent, which
was offset by an increase of $1.0
million, or 7.4 percent, in other operating expenses.
The significant components of the $3.1
million gross margin increase were as follows:
- $1.2 million of additional gross
margin from increased sales volumes of propane to wholesale and
retail customers on the Delmarva Peninsula and in Florida as well as higher sales of natural gas
by Aspire Energy;
- $440,000 and $271,000 of additional gross margin from retail
and wholesale propane margins, respectively, due primarily to
favorable supply management activities;
- $297,000 of additional gross
margin from Eight Flags operations, which was fully on-line in the
third quarter of 2017;
- $291,000 of additional gross
margin from Aspire Energy as a result of pricing amendments to
long-term sales agreements; and
- $233,000 in increased gross
margin due to the absence of the loss for Xeron recorded in the
third quarter of 2016.
The principal components of the $1.0
million increase in other operating expenses were:
$730,000 in higher staffing and
associated costs for additional personnel to support growth,
$293,000 in expenses associated with
the incremental margin from Eight Flags, and $347,000 in higher depreciation, amortization and
property tax costs due to increased capital investments and
amortization of intangible assets acquired through acquisitions in
2017.
Comparative Results for the Nine Months Ended
September 30, 2017 and 2016
Operating income for the nine months ended September 30,
2017 increased by $303,000 to
$62.6 million, compared to
$62.3 million for the same period in
2016. Gross margin increased by $14.0
million, or 7.3 percent, net of the negative impact of
weather, which reduced margin by approximately $1.8 million for the first nine months. Other
operating expenses increased by $13.7
million, or 10.7 percent, due primarily to a $4.3 million increase in depreciation,
amortization and property taxes and a $9.4
million increase in other operating expenses to support
growth.
Regulated Energy Segment
Operating income for the Regulated Energy segment decreased by
$745,000, or 1.4 percent, compared to
the same period in 2016, due principally to weather and the level
and timing of costs associated with growth. Gross margin increased
by $5.7 million, despite the impact
of weather, which reduced margin by approximately $850,000 for the nine months ended
September 30, 2017. The $3.5
million increase in depreciation, amortization and taxes and
$3.0 million increase in other
operating expenses largely reflect costs associated with recently
completed and planned growth projects. Of the total $6.4 million increase in other operating
expenses, $4.7 million is associated
with Eastern Shore's recently completed projects as well as
initiatives that are currently underway.
The significant components of the $5.7
million gross margin increase included:
- $1.6 million generated by
additional GRIP investments in the Florida natural gas distribution
operations;
- $1.6 million from growth in
natural gas distribution and transmission services (excluding
service expansions);
- $1.4 million generated from
recently completed natural gas transmission expansions, which are
more fully discussed in the "Major Projects and Initiatives"
section later in this press release;
- $1.0 million from the
implementation of Eastern Shore's new rates, as discussed
previously;
- $534,000 from new natural gas
transmission and distribution services provided to Eight Flags' CHP
plant; and
- $249,000 generated as a result of
the rate case settlement by the Company's Delaware natural gas distribution
operations.
The foregoing increases were offset by a decrease in gross
margin of $1.2 million from lower
customer consumption of energy for the Company's distribution
operations in Florida and on the
Delmarva Peninsula, due primarily to weather, particularly warmer
weather during the first quarter.
The significant components of the $6.4
million increase in other operating expenses included:
- $3.5 million in higher
depreciation, asset removal and property tax costs associated with
recent capital investments;
- $1.6 million in higher payroll
costs for additional personnel to support growth;
- $855,000 in increased regulatory
expenses, due primarily to Eastern Shore's rate case; and
- $722,000 in higher benefits and
employee-related costs in 2017 (since the Company is self-insured
for healthcare, benefits costs fluctuate depending upon filed
claims).
Unregulated Energy Segment
Operating income for the Unregulated Energy segment for the nine
months ended September 30, 2017 was
$10.5 million, an increase of
$1.2 million, or 13.3 percent,
compared to the same period in 2016. Gross margin increased by
$8.4 million, or 18.6 percent, which
was offset by an increase of $7.2
million, or 20.0 percent, in operating expenses for the nine
months ended September 30, 2017.
The significant components of the $8.4
million gross margin increase were as follows:
- $4.2 million of additional gross
margin from Eight Flags' CHP plant, which commenced operations in
June 2016;
- $1.8 million from PESCO, due to
an increase in the number of contracts and customers served as well
as additional revenue in the first quarter from providing natural
gas to a customer in Ohio under a
supplier agreement, which expired on March
31, 2017;
- $1.1 million of additional gross
margin from Aspire Energy as a result of pricing amendments to
long-term gas sales agreements;
- $728,000 of additional gross
margin from wholesale propane sales, due primarily to favorable
supply management activities; and
- $168,000 of additional gross
margin, due primarily to higher sales of propane in Florida, a portion of which was associated
with the timing of deliveries due partially to weather conditions
in the third quarter of 2017, offset by the impact of warmer
weather during the first six months of 2017.
The significant components of the $7.2
million increase in other operating expenses included:
- $2.8 million in higher operating
expenses by Eight Flags' CHP plant in support of the margin
generated;
- $1.5 million in higher payroll
costs for additional personnel to support growth;
- $950,000 in higher benefits and
employee-related costs in 2017 (since the Company is self-insured
for healthcare, benefits costs fluctuate depending upon claims
filed);
- $800,000 in higher depreciation
expense, of which $424,000 relates to
a credit adjustment in 2016 recorded in conjunction with the final
valuation for Aspire Energy; and
- $350,000 in higher outside
services costs associated primarily with growth and ongoing
compliance activities.
The Company also incurred $367,000
in non-operating expenses to complete the wind-down of Xeron's
operations.
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 2016 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 are presented on a
diluted basis.
Conference Call
Chesapeake Utilities will host a conference call on Friday,
November 10, 2017, at 10:30 a.m.
Eastern Time to discuss the Company's financial results for
the quarter and nine months ended September 30, 2017. To
participate in this call, dial 855.801.6270 and reference
Chesapeake Utilities' 2017 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 is a diversified energy company engaged in
natural gas distribution, transmission, gathering and processing,
and marketing; electricity generation and distribution; propane gas
distribution; and other businesses. Information about Chesapeake
Utilities and its family of businesses is available at
http://www.chpk.com or through its IR 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
Senior Vice President & Chief Financial Officer
302.734.6799
Financial
Summary
(in thousands,
except per share data)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Gross Margin
(1)
|
|
|
|
|
|
|
|
Regulated
Energy segment
|
$
|
46,909
|
|
|
$
|
45,375
|
|
|
$
|
151,147
|
|
|
$
|
145,446
|
|
Unregulated
Energy segment
|
13,272
|
|
|
10,202
|
|
|
53,827
|
|
|
45,380
|
|
Other
businesses and eliminations
|
(105)
|
|
|
(57)
|
|
|
(325)
|
|
|
(166)
|
|
Total Gross
Margin
|
$
|
60,076
|
|
|
$
|
55,520
|
|
|
$
|
204,649
|
|
|
$
|
190,660
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
|
|
|
|
|
Regulated Energy segment
|
$
|
15,168
|
|
|
$
|
13,115
|
|
|
$
|
51,915
|
|
|
$
|
52,660
|
|
Unregulated Energy segment
|
(989)
|
|
|
(3,080)
|
|
|
10,504
|
|
|
9,267
|
|
Other
businesses and eliminations
|
60
|
|
|
121
|
|
|
161
|
|
|
350
|
|
Total
Operating Income
|
14,239
|
|
|
10,156
|
|
|
62,580
|
|
|
62,277
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense), net
|
239
|
|
|
(28)
|
|
|
(643)
|
|
|
(68)
|
|
Interest
Charges
|
3,321
|
|
|
2,722
|
|
|
9,133
|
|
|
7,996
|
|
Pre-tax
Income
|
11,157
|
|
|
7,406
|
|
|
52,804
|
|
|
54,213
|
|
Income
Taxes
|
4,324
|
|
|
2,990
|
|
|
20,781
|
|
|
21,401
|
|
Net
Income
|
$
|
6,833
|
|
|
$
|
4,416
|
|
|
$
|
32,023
|
|
|
$
|
32,812
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
of Common Stock
|
|
|
|
|
|
|
|
Basic
|
$
|
0.42
|
|
|
$
|
0.29
|
|
|
$
|
1.96
|
|
|
$
|
2.14
|
|
Diluted
|
$
|
0.42
|
|
|
$
|
0.29
|
|
|
$
|
1.96
|
|
|
$
|
2.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 and excludes
depreciation, amortization and accretion. Gross margin should not
be considered an alternative to operating income or net income,
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 structure
for non-regulated segments. The Company's management uses gross
margin in measuring its business units' performance. Other
companies may calculate gross margin in a different
manner.
|
Financial Summary
Highlights
Key variances,
between the three months ended September 30, 2016 and 2017,
included:
|
|
|
|
|
|
|
|
(in
thousands, except per share data)
|
|
Pre-tax
Income
|
|
Net
Income
|
|
Earnings
Per Share
|
Third Quarter of
2016 Reported Results
|
|
$
|
7,406
|
|
|
$
|
4,416
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
Adjusting for
unusual items:
|
|
|
|
|
|
|
Absence of Xeron's
third quarter 2016 loss
|
|
545
|
|
|
334
|
|
|
0.02
|
|
Weather
impact
|
|
(333)
|
|
|
(204)
|
|
|
(0.01)
|
|
|
|
212
|
|
|
130
|
|
|
0.01
|
|
Increased Gross
Margins:
|
|
|
|
|
|
|
Customer consumption
(non-weather)
|
|
1,166
|
|
|
714
|
|
|
0.05
|
|
Implementation of new
rates for Eastern Shore*
|
|
1,020
|
|
|
625
|
|
|
0.04
|
|
Retail propane
margins
|
|
440
|
|
|
270
|
|
|
0.02
|
|
GRIP*
|
|
406
|
|
|
249
|
|
|
0.02
|
|
Natural gas growth
(excluding service expansions)
|
|
347
|
|
|
213
|
|
|
0.01
|
|
Eight Flags' CHP
plant
|
|
304
|
|
|
186
|
|
|
0.01
|
|
Pricing amendments to
Aspire Energy's long-term agreements
|
|
291
|
|
|
178
|
|
|
0.01
|
|
Higher wholesale
propane volumes and margins
|
|
271
|
|
|
166
|
|
|
0.01
|
|
|
|
4,245
|
|
|
2,601
|
|
|
0.17
|
|
Decreased
(Increased) Other Operating Expenses:
|
|
|
|
|
|
|
Higher depreciation,
asset removal and property tax costs due to new capital
investments
|
|
(1,710)
|
|
|
(1,047)
|
|
|
(0.07)
|
|
Lower outside
services and facilities maintenance costs
|
|
1,678
|
|
|
1,028
|
|
|
0.07
|
|
Higher payroll
expense
|
|
(913)
|
|
|
(559)
|
|
|
(0.04)
|
|
Lower benefit and
other employee-related expenses
|
|
295
|
|
|
181
|
|
|
0.01
|
|
Eight Flags'
operating expenses
|
|
293
|
|
|
179
|
|
|
0.01
|
|
|
|
(357)
|
|
|
(218)
|
|
|
(0.02)
|
|
|
|
|
|
|
|
|
Net other
changes
|
|
(349)
|
|
|
(96)
|
|
|
(0.01)
|
|
|
|
(349)
|
|
|
(96)
|
|
|
(0.01)
|
|
|
|
|
|
|
|
|
EPS impact of
increase in outstanding shares due to September 2016
offering
|
|
—
|
|
|
—
|
|
|
(0.02)
|
|
Third Quarter of
2017 Reported Results
|
|
$
|
11,157
|
|
|
$
|
6,833
|
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*See the Major
Projects and Initiatives table later in this press
release.
|
Key variances, between the nine months ended September 30, 2016 and 2017, included:
|
|
|
|
|
|
|
(in thousands,
except per share data)
|
|
Pre-tax
Income
|
|
Net
Income
|
|
Earnings
Per Share
|
Nine Months Ended
September 30, 2016 Reported Results
|
|
$
|
54,213
|
|
|
$
|
32,812
|
|
|
$
|
2.14
|
|
|
|
|
|
|
|
|
Adjusting for
unusual items:
|
|
|
|
|
|
|
Weather
impact
|
|
(1,782)
|
|
|
(1,081)
|
|
|
(0.07)
|
|
Wind-down and absence
of loss from Xeron operations
|
|
(341)
|
|
|
(207)
|
|
|
(0.01)
|
|
|
|
(2,123)
|
|
|
(1,288)
|
|
|
(0.08)
|
|
Increased Gross
Margins:
|
|
|
|
|
|
|
Eight Flags' CHP
plant
|
|
4,721
|
|
|
2,863
|
|
|
0.19
|
|
Natural gas
marketing
|
|
1,760
|
|
|
1,067
|
|
|
0.07
|
|
GRIP*
|
|
1,619
|
|
|
982
|
|
|
0.06
|
|
Natural gas growth
(excluding service expansions)
|
|
1,574
|
|
|
955
|
|
|
0.06
|
|
Service
expansions*
|
|
1,371
|
|
|
831
|
|
|
0.05
|
|
Pricing amendments to
Aspire Energy's long-term agreements
|
|
1,143
|
|
|
693
|
|
|
0.04
|
|
Implementation of new
rates for Eastern Shore*
|
|
1,020
|
|
|
619
|
|
|
0.04
|
|
Wholesale propane
margins
|
|
728
|
|
|
441
|
|
|
0.03
|
|
Customer consumption
(non-weather)
|
|
700
|
|
|
425
|
|
|
0.03
|
|
Implementation of
Delaware Division settled rates
|
|
249
|
|
|
151
|
|
|
0.01
|
|
|
|
14,885
|
|
|
9,027
|
|
|
0.58
|
|
Increased Other
Operating Expenses:
|
|
|
|
|
|
|
Higher depreciation,
asset removal and property tax costs due to new capital
investments
|
|
(4,251)
|
|
|
(2,578)
|
|
|
(0.17)
|
|
Higher payroll
expense
|
|
(3,074)
|
|
|
(1,864)
|
|
|
(0.12)
|
|
Eight Flags'
operating expenses
|
|
(2,821)
|
|
|
(1,711)
|
|
|
(0.11)
|
|
Higher benefit and
other employee-related expenses
|
|
(1,669)
|
|
|
(1,012)
|
|
|
(0.07)
|
|
Higher regulatory
expenses associated with rate filings
|
|
(855)
|
|
|
(519)
|
|
|
(0.03)
|
|
Higher outside
services and facilities maintenance costs
|
|
(318)
|
|
|
(193)
|
|
|
(0.01)
|
|
|
|
(12,988)
|
|
|
(7,877)
|
|
|
(0.51)
|
|
|
|
|
|
|
|
|
Interest
charges
|
|
(1,136)
|
|
|
(689)
|
|
|
(0.04)
|
|
Net other
changes
|
|
(47)
|
|
|
38
|
|
|
(0.01)
|
|
|
|
(1,183)
|
|
|
(651)
|
|
|
(0.05)
|
|
|
|
|
|
|
|
|
EPS impact of
increase in outstanding shares due to September 2016
offering
|
|
—
|
|
|
—
|
|
|
(0.12)
|
|
Nine Months Ended
September 30, 2017 Reported Results
|
|
$
|
52,804
|
|
|
$
|
32,023
|
|
|
$
|
1.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*See the Major
Projects and Initiatives table later in this press
release.
|
|
Major Projects and Initiatives
The following table summarizes gross margin for the Company's
major projects and initiatives recently completed and initiatives
currently underway, but which will be completed in the future.
Gross margin reflects operating revenue less cost of sales,
excluding depreciation, amortization and accretion (dollars in
thousands):
|
Gross Margin for
the Period
|
|
Three Months
Ended
|
Nine Months
Ended
|
Year
Ended
|
|
|
|
|
|
|
September
30,
|
September
30,
|
December
31,
|
Estimate
for
|
|
2017
|
|
2016
|
|
Variance
|
2017
|
|
2016
|
|
Variance
|
2016
|
2017
|
|
2018
|
|
2019
|
Major Projects and
Initiatives
Recently Completed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Investment
Projects
|
$
|
9,807
|
|
$
|
8,963
|
|
$
|
844
|
$
|
29,533
|
|
$
|
21,822
|
|
$
|
7,711
|
$
|
29,819
|
$
|
35,346
|
|
$
|
31,814
|
|
$
|
32,724
|
Eastern Shore Rate Case
(1)
|
1,020
|
|
—
|
|
1,020
|
1,020
|
|
—
|
|
1,020
|
—
|
TBD
|
|
TBD
|
|
TBD
|
Settled Delaware
Division Rate Case
|
431
|
|
469
|
|
(38)
|
1,596
|
|
1,347
|
|
249
|
1,487
|
2,250
|
|
2,250
|
|
2,250
|
Total Major
Projects and Initiatives Recently Completed
|
11,258
|
|
9,432
|
|
1,826
|
32,149
|
|
23,169
|
|
8,980
|
31,306
|
37,596
|
|
34,064
|
|
34,974
|
Future Major
Projects and Initiatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Investment
Projects
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Eastern Shore
System Expansion
|
—
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
126
|
|
9,313
|
|
15,799
|
Northwest Florida
Expansion
|
—
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
—
|
|
3,484
|
|
5,127
|
Other Florida Pipeline
Expansions
|
—
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
—
|
|
2,044
|
|
2,542
|
Total Future Major
Projects and Initiatives
|
—
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
126
|
|
14,841
|
|
23,468
|
Total
|
$
|
11,258
|
|
$
|
9,432
|
|
$
|
1,826
|
$
|
32,149
|
|
$
|
23,169
|
|
$
|
8,980
|
$
|
31,306
|
$
|
37,722
|
|
$
|
48,905
|
|
$
|
58,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In
January 2017, Eastern Shore filed a rate case with the FERC to
recover the costs of the 2016 System Reliability Project and other
investments and expenses
associated with the expansion, reliability and safety initiatives
completed by ESNG since its last rate settlement in 2012.
Settlement discussions among Eastern Shore,
intervenors and the FERC Staff are ongoing and future margin
contributions will be provided once a settlement is
finalized. For the third quarter of 2017, a portion of
the
increase in rates, implemented subject to refund in August 2017,
has been recorded as revenue and the remainder has been reserved
pending the settlement.
|
Major Projects and Initiatives Recently
Completed
The following table summarizes gross margin generated from the
Company's major projects and initiatives recently completed
(dollars in thousands):
|
Gross Margin for
the Period
|
|
Three Months
Ended
|
Nine Months
Ended
|
Year
Ended
|
|
|
|
|
|
|
|
September
30,
|
September
30,
|
December
31,
|
|
Estimate
for
|
|
2017
|
|
2016
|
|
Variance
|
2017
|
|
2016
|
|
Variance
|
2016
|
|
2017
|
|
2018
|
|
2019
|
Capital Investment
Projects:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
Expansions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term contracts
(Delaware)
|
$
|
1,283
|
|
$
|
3,080
|
|
$
|
(1,797)
|
|
$
|
5,140
|
|
$
|
8,271
|
|
$
|
(3,131)
|
$
|
11,454
|
|
$
|
5,642
|
|
$
|
1,096
|
|
$
|
1,096
|
Long-term contracts
(Delaware)
|
2,793
|
|
862
|
|
1,931
|
|
7,089
|
|
2,587
|
|
4,502
|
1,815
|
|
7,611
|
|
7,605
|
|
7,583
|
Total Service
Expansions
|
4,076
|
|
3,942
|
|
134
|
|
12,229
|
|
10,858
|
|
1,371
|
13,269
|
|
13,253
|
|
8,701
|
|
8,679
|
Florida
GRIP
|
3,393
|
|
2,987
|
|
406
|
|
10,002
|
|
8,383
|
|
1,619
|
11,552
|
|
13,727
|
|
14,407
|
|
15,085
|
Eight Flags' CHP
Plant
|
2,338
|
|
2,034
|
|
304
|
|
7,302
|
|
2,581
|
|
4,721
|
4,998
|
|
8,366
|
|
8,706
|
|
8,960
|
Total Capital
Investment Projects
|
9,807
|
|
8,963
|
|
844
|
|
29,533
|
|
21,822
|
|
7,711
|
29,819
|
|
35,346
|
|
31,814
|
|
32,724
|
Eastern Shore Rate
Case (1)
|
1,020
|
|
—
|
|
1,020
|
|
1,020
|
|
—
|
|
1,020
|
—
|
|
TBD
|
|
TBD
|
|
TBD
|
Settled Delaware
Division Rate Case
|
431
|
|
469
|
|
(38)
|
|
1,596
|
|
1,347
|
|
249
|
1,487
|
|
2,250
|
|
2,250
|
|
2,250
|
Total Major
Projects and Initiatives Recently Completed
|
$
|
11,258
|
|
$
|
9,432
|
|
$
|
1,826
|
|
$
|
32,149
|
|
$
|
23,169
|
|
$
|
8,980
|
$
|
31,306
|
|
$
|
37,596
|
|
$
|
34,064
|
|
$
|
34,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In January 2017, Eastern
Shore filed a rate case with the FERC to recover the costs of the
2016 System Reliability Project and other investments and expenses
associated with the expansion, reliability and safety initiatives
completed by ESNG since its last rate settlement in 2012.
Settlement discussions among Eastern Shore, intervenors and the
FERC Staff are ongoing and future margin contributions will be
provided once a settlement is finalized. For the third
quarter of 2017, a portion of the increase in rates, implemented
subject to refund in August 2017, has been recorded as revenue and
the remainder has been reserved pending the settlement.
|
Service Expansions
In August 2014, Eastern Shore
entered into a precedent agreement with an electric power generator
in Kent County, Delaware, to
provide a 20-year OPT 90≤ natural gas transmission service for
45,000 dekatherms per day ("Dts/d") deliverable to the lateral
serving the customer's facility. In July
2016, the FERC authorized Eastern Shore to construct and
operate the project, which consists of 5.4 miles of 16-inch
pipeline looping and new compression capability in Delaware. Eastern Shore provided interim
services to this customer pending construction of facilities.
Construction of the project was completed, and long-term service
commenced in March 2017. This service
generated an additional gross margin of $106,000 during the nine months ended
September 30, 2017 compared to the same period in 2016. There
was no incremental margin change during the third quarter as the
margin generated from the permanent services equated to the margin
generated from providing interim services during the third quarter
of 2016. This service is expected to generate gross margin of
$7.0 million for 2017 and between
$5.8 million and $7.8 million
annually through the remaining term of the agreement.
In October 2015, Eastern Shore
submitted an application to the FERC to make certain meter tube and
control valve replacements and related improvements at its Texas
Eastern Transmission, LP ("TETLP") interconnect facilities to
increase natural gas receipts from TETLP by 53,000 Dts/d, for a
total capacity of 160,000 Dts/d. In December
2015, the FERC authorized Eastern Shore to proceed with this
project, which was completed and placed in service in March 2016. Approximately 35 percent of the
increased capacity has been subscribed on a short-term firm service
basis through October 2017. This
service generated an additional gross margin of $80,000 and $1.3
million for the three and nine months ended
September 30, 2017, respectively, compared to the same periods
in 2016. The remaining capacity is available for firm or
interruptible service.
System Reliability Project: In July 2016, the FERC authorized Eastern Shore to
construct and operate the proposed System Reliability Project,
which consisted of 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. A 2.5 mile looping segment was completed and
placed into service in December 2016.
The remaining looping and the new compressor were completed and
placed into service in the second quarter of 2017. This project was
included in Eastern Shore's January
2017 base rate case filing with the FERC. The Company has
assumed recovery of this project's costs in August 2017, coinciding with the proposed
effectiveness of new rates, subject to refund pending final
resolution of the base rate case.
GRIP
GRIP is a natural gas pipe replacement program approved by the
Florida Public Service Commission ("PSC"), designed to expedite the
replacement of qualifying distribution mains and services (any
material other than coated steel or plastic) to enhance the
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 has invested $110.5
million to replace 240 miles of qualifying distribution
mains, including $7.6 million during
the first nine months of 2017. The increased investment in GRIP
generated additional gross margin of $406,000 and $1.6
million for the three and nine months ended
September 30, 2017, respectively, compared to the same periods
in 2016.
Eight Flags' CHP plant
In June 2016, Eight Flags
completed construction of a CHP plant on Amelia Island, Florida. This CHP plant, which consists of a
natural-gas-fired turbine and associated electric generator,
produces approximately 20 megawatts of base load power and includes
a heat recovery steam generator capable of providing approximately
75,000 pounds per hour of residual steam. In June 2016, Eight Flags began selling power
generated from the CHP plant to Florida Public Utilities Company
("FPU"), the Company's wholly-owned subsidiary, pursuant to a
20-year power purchase agreement for distribution to FPU's retail
electric customers. In July 2016, it
also started selling steam to the industrial customer that owns the
property on which Eight Flags' CHP plant is located, pursuant to a
separate 20-year contract.
The CHP plant is powered by natural gas transported by FPU
through its distribution system and by Peninsula Pipeline Company,
Inc. ("Peninsula Pipeline"), the Company's wholly-owned
Florida intrastate pipeline
subsidiary. For the three and nine months ended September 30,
2017, Eight Flags and other affiliates of the Company generated
$304,000 and $4.7 million, respectively, in additional gross
margin as a result of these services that began in June 2016. This amount includes gross margin of
$7,000 and $534,000, for the three and nine months ended
September 30, 2017, respectively, attributable to
natural gas distribution and transportation services provided to
the CHP plant by the Company's regulated affiliates.
Major Projects and Initiatives Currently
Underway
Northwest Florida Expansion Project: Peninsula
Pipeline and the Company's Florida
natural gas division are constructing a pipeline in Escambia County, Florida that will
interconnect with the Florida Gas Transmission Company ("FGT")
interstate pipeline. The project consists of 33 miles of 12-inch
transmission line from the FGT interconnect that will be operated
by Peninsula Pipeline and 8 miles of 8-inch lateral distribution
lines that will be operated by the Company's Florida natural gas division. The Company has
signed agreements to serve two large customers and is marketing to
other customers close to the facilities. The estimated annual gross
margin associated with this project, once in service, is
approximately $5.1 million.
New Smyrna Beach, Florida
Project: Peninsula Pipeline is constructing a pipeline in
Volusia County, Florida that will
interconnect with FGT's pipeline. The project consists of 14 miles
of transmission line from the FGT interconnect that will be
operated by Peninsula Pipeline. The Company entered into an
agreement to serve FPU customers. The estimated annual gross margin
associated with this project, once in service, is approximately
$1.4 million.
2017 Expansion Project: In May
2016, Eastern Shore submitted a request to the FERC to
initiate the FERC's pre-filing process for its proposed 2017
Expansion Project. This project, which will expand Eastern Shore's
firm service capacity by 26 percent, will provide 61,162 Dts/d of
additional firm natural gas transportation service on Eastern
Shore's pipeline system with an additional 52,500 Dts/d of firm
transportation service at certain Eastern Shore receipt facilities
pursuant to precedent agreements Eastern Shore entered into with
existing customers. We expect to invest approximately $115.0 million in this expansion project and for
the project to generate approximately $15.8
million of gross margin in the first full year after the new
transportation services go into effect. On October 4, 2017, FERC issued a Certificate of
Public Convenience and Necessity authorizing Eastern Shore to
construct and operate the proposed 2017 Expansion Project.
Other major factors influencing gross margin
Weather and Consumption
Temperature variation
in 2017 negatively impacted the Company's earnings. Compared to the
prior year, cooler temperatures in Florida during the third quarter of 2017,
reduced gross margin by $333,000, and
warmer temperatures in all of the Company's service territories
during the first nine months of 2017, reduced gross margin by
$1.8 million, respectively. Warmer
than normal temperatures for the quarter and nine months ended
September 30, 2017, reduced gross
margin by $193,000 and $4.3 million, respectively. The following table
summarizes heating degree-day ("HDD") and cooling degree-day
("CDD") variances from the 10-year average HDD/CDD ("Normal") for
the three and nine months ended September 30, 2017 and
2016.
HDD and CDD
Information
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
|
2017
|
|
2016
|
|
Variance
|
|
2017
|
|
2016
|
|
Variance
|
Delmarva
|
|
|
|
|
|
|
|
|
|
|
|
Actual HDD
|
16
|
|
|
11
|
|
|
5
|
|
|
2,262
|
|
|
2,590
|
|
|
(328)
|
|
10-Year Average HDD
("Delmarva Normal")
|
62
|
|
|
65
|
|
|
(3)
|
|
|
2,845
|
|
|
2,919
|
|
|
(74)
|
|
Variance from
Delmarva Normal
|
(46)
|
|
|
(54)
|
|
|
|
|
(583)
|
|
|
(329)
|
|
|
|
Florida
|
|
|
|
|
|
|
|
|
|
|
|
Actual HDD
|
—
|
|
|
—
|
|
|
—
|
|
|
298
|
|
|
514
|
|
|
(216)
|
|
10-Year Average HDD
("Florida Normal")
|
—
|
|
|
—
|
|
|
—
|
|
|
602
|
|
|
553
|
|
|
49
|
|
Variance from Florida
Normal
|
—
|
|
|
—
|
|
|
|
|
(304)
|
|
|
(39)
|
|
|
|
Ohio
|
|
|
|
|
|
|
|
|
|
|
|
Actual HDD
|
80
|
|
|
39
|
|
|
41
|
|
|
3,072
|
|
|
3,596
|
|
|
(524)
|
|
10-Year Average HDD
("Ohio Normal")
|
92
|
|
|
103
|
|
|
(11)
|
|
|
3,866
|
|
|
3,865
|
|
|
1
|
|
Variance from Ohio
Normal
|
(12)
|
|
|
(64)
|
|
|
|
|
(794)
|
|
|
(269)
|
|
|
|
Florida
|
|
|
|
|
|
|
|
|
|
|
|
Actual CDD
|
1,526
|
|
|
1,679
|
|
|
(153)
|
|
|
2,606
|
|
|
2,792
|
|
|
(186)
|
|
10-Year Average CDD
("Florida CDD Normal")
|
1,542
|
|
|
1,523
|
|
|
19
|
|
|
2,579
|
|
|
2,548
|
|
|
31
|
|
Variance from Florida
CDD Normal
|
(16)
|
|
|
156
|
|
|
|
|
27
|
|
|
244
|
|
|
|
Propane Operations
The Company's Florida and Delmarva propane distribution
operations added $2.0 million and
$1.4 million, in incremental margin
for the three and nine months ended September 30, 2017, respectively, compared to the
same periods in 2016. Higher volumes sold to retail customers
and improved margins due to effective supply management activities
generated $905,000 and $440,000, in incremental margin, for the three
months ended September 30, 2017,
respectively, compared to the same period in 2016 and higher
service revenue added $187,000 in
additional margin, during the quarter.
For the nine months ended September
2017, higher volumes sold to retail customers and improved
margins due to effective supply management activities generated
$142,000 and $121,000, in incremental margin, respectively,
compared to the same period in 2016 and higher service revenue
added $244,000, in additional margin
during the period.
Wholesale propane margins increased, generating additional gross
margin of $271,000 and $728,000 for the three and nine months ended
September 30, 2017, respectively, due
primarily to higher volumes sold and improved margins resulting
from supply management activities.
PESCO
PESCO provides natural gas supply and
supply management services to residential, commercial, industrial
and wholesale customers in Florida, on the Delmarva Peninsula, in
Ohio, and, as a result of the
recent acquisition of certain operating assets of ARM Energy
Management, LLC, in western Pennsylvania. PESCO competes with regulated
utilities and other unregulated third-party marketers to sell
natural gas supplies directly to residential, commercial and
industrial customers through competitively-priced contracts. PESCO
does not currently own or operate any natural gas transmission or
distribution assets but sells gas that is delivered to retail,
commercial or wholesale customers through affiliated and
non-affiliated local distribution company systems and transmission
pipelines. The Company's Delmarva natural gas distribution
operations entered into asset management agreements with PESCO to
manage a portion of their natural gas pipeline and storage capacity
for three years beginning on April 1,
2017.
For the three months ended September 30,
2017, PESCO's gross margin increased by $56,000. For the nine months ended
September 30, 2017, PESCO generated
additional gross margin of $1.8
million compared to the same period in 2016, largely as a
result of revenues from a natural gas supplier agreement with a
customer in Ohio which expired on
March 31, 2017, as well as additional
customers in Florida, partially
offset by lower margin in the Mid-Atlantic region, primarily during
the first quarter of 2017.
Xeron
As disclosed previously, Xeron's
operations were wound down during the second quarter of 2017.
As a result, Xeron did not generate an operating loss during the
third quarter of 2017 and will not report operating results during
the fourth quarter of 2017 or subsequent years. During the
third quarter of 2016, Xeron generated a pre-tax loss of
$486,000. On a year-to-date basis,
Xeron's pre-tax operating loss increased by $375,000, compared to the same period in 2016,
driven primarily by non-recurring employee severance costs and
costs associated with the termination of leased office space in
Houston, Texas. The Company does
not anticipate incurring any additional costs that will have a
material impact associated with winding down Xeron's
operations.
Other Natural Gas Growth - Distribution
Operations
In addition to service expansions, the
Company's natural gas distribution operations on the Delmarva
Peninsula generated $379,000 and
$1.0 million in additional gross
margin for the three and nine months ended September 30, 2017,
respectively, compared to the same periods in 2016, due to an
increase in residential, commercial and industrial customers
served. The average number of residential customers on the Delmarva
Peninsula increased by 3.7 percent and 3.8 percent during the three
and nine months ended September 30, 2017, respectively,
compared to the same periods in 2016. The Company's natural gas
distribution operations in Florida
generated $187,000 and $1.2 million in additional gross margin for the
three and nine months ended September 30, 2017, respectively,
compared to the same periods in 2016, due primarily to an increase
in commercial and industrial customers in Florida.
Regulatory Proceedings
Delaware Division Rate Case
In December 2016, the Delaware PSC approved a
settlement agreement, which, among other things, provided for an
increase in the Company's Delaware
division revenue requirement of $2.25
million and a rate of return on common equity of 9.75
percent. The new authorized rates went into effect on January 1, 2017. For the three months ended
September 30, 2017, compared to the
same period in 2016, revenue decreased by $38,000, reflecting the variance between settled
and interim rates. For the nine months ended September 30, 2017, compared to the same period
in 2016, the Company recorded incremental revenue of approximately
$249,000 related to the rate
case. Any amounts collected through 2016 interim rates in
excess of the respective portion of the $2.25 million were refunded to the ratepayers in
March 2017.
Eastern Shore Rate Case
In January 2017, Eastern Shore
filed a base rate proceeding with the FERC, as required by the
terms of its 2012 rate case settlement agreement. Eastern Shore's
proposed rates were based on a cost of service of approximately
$60 million, resulting in an overall
requested revenue increase of approximately $18.9 million and a requested rate of return on
common equity of 13.75 percent. The filing includes incremental
rates for the White Oak Mainline Expansion project, which benefits
a single customer. Eastern Shore also proposed a revision to its
depreciation rates and negative salvage rate based on the results
of independent, third-party depreciation and negative salvage value
studies. In March 2017, the FERC
issued an order suspending the effectiveness of the proposed tariff
rates for the usual five-month period.
On August 1, 2017, Eastern Shore
implemented new rates, subject to refund based upon the outcome of
the rate proceeding. Eastern Shore recorded incremental
revenue of approximately $1.0 million
for the three and nine months ended September 30, 2017, and established a regulatory
liability to reserve a portion of the total incremental revenues
generated by the new rates until resolution of the rate case.
Settlement discussions continue with the other parties to the
case.
Investing for Future Growth
To support and
continue its growth, the Company has expanded, and will continue to
expand, its resources and capabilities. Eastern Shore has expanded,
and has announced significant additional expansions to, its
transmission system, and is, therefore, increasing its staffing.
The Company requested recovery of most of Eastern Shore's increased
staffing costs in its 2017 rate case filing. Growth in
non-regulated energy businesses, including Aspire Energy, PESCO and
Eight Flags, requires additional staff as well as corporate
resources to support the increased level of business operations.
Finally, to allow the Company to continue to identify and move
growth initiatives forward and to assist in developing additional
initiatives, resources have been added in the Company's corporate
shared services departments. In the three and nine months ended
September 30, 2017, the Company's
staffing and associated costs increased by $617,000 and $4.7
million, or three percent and nine percent, respectively,
compared to the same periods in 2016. The Company is
prudently managing the pace and magnitude of the investments being
made, while ensuring that it appropriately expands its human
resources and systems capabilities to capitalize on future growth
opportunities.
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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Operating
Revenues
|
|
|
|
|
|
|
|
Regulated
Energy
|
$
|
69,703
|
|
|
$
|
70,019
|
|
|
$
|
238,353
|
|
|
$
|
226,630
|
|
Unregulated Energy
and other
|
57,233
|
|
|
38,329
|
|
|
198,827
|
|
|
130,356
|
|
Total Operating
Revenues
|
126,936
|
|
|
108,348
|
|
|
437,180
|
|
|
356,986
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
Regulated Energy cost
of sales
|
22,794
|
|
|
24,644
|
|
|
87,206
|
|
|
81,184
|
|
Unregulated Energy
and other cost of sales
|
44,066
|
|
|
28,183
|
|
|
145,325
|
|
|
85,142
|
|
Operations
|
29,667
|
|
|
30,126
|
|
|
92,990
|
|
|
85,370
|
|
Maintenance
|
2,737
|
|
|
3,542
|
|
|
9,370
|
|
|
8,925
|
|
Gain from a
settlement
|
—
|
|
|
—
|
|
|
(130)
|
|
|
(130)
|
|
Depreciation and
amortization
|
9,362
|
|
|
8,209
|
|
|
27,267
|
|
|
23,493
|
|
Other
taxes
|
4,071
|
|
|
3,488
|
|
|
12,572
|
|
|
10,725
|
|
Total operating
expenses
|
112,697
|
|
|
98,192
|
|
|
374,600
|
|
|
294,709
|
|
Operating
Income
|
14,239
|
|
|
10,156
|
|
|
62,580
|
|
|
62,277
|
|
Other income
(expense), net
|
239
|
|
|
(28)
|
|
|
(643)
|
|
|
(68)
|
|
Interest
charges
|
3,321
|
|
|
2,722
|
|
|
9,133
|
|
|
7,996
|
|
Income Before
Income Taxes
|
11,157
|
|
|
7,406
|
|
|
52,804
|
|
|
54,213
|
|
Income
taxes
|
4,324
|
|
|
2,990
|
|
|
20,781
|
|
|
21,401
|
|
Net
Income
|
$
|
6,833
|
|
|
$
|
4,416
|
|
|
$
|
32,023
|
|
|
$
|
32,812
|
|
Weighted Average
Common Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
16,344,442
|
|
|
15,372,413
|
|
|
16,334,210
|
|
|
15,324,932
|
|
Diluted
|
16,389,635
|
|
|
15,412,783
|
|
|
16,378,633
|
|
|
15,365,955
|
|
Earnings Per Share
of Common Stock:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.42
|
|
|
$
|
0.29
|
|
|
$
|
1.96
|
|
|
$
|
2.14
|
|
Diluted
|
$
|
0.42
|
|
|
$
|
0.29
|
|
|
$
|
1.96
|
|
|
$
|
2.14
|
|
Chesapeake
Utilities Corporation and Subsidiaries
Condensed
Consolidated Balance Sheets (Unaudited)
|
Assets
|
|
September 30,
2017
|
|
December 31,
2016
|
(in thousands,
except shares and per share data)
|
|
|
|
|
Property,
Plant and Equipment
|
|
|
|
|
Regulated
Energy
|
|
$
|
1,050,332
|
|
|
$
|
957,681
|
|
Unregulated
Energy
|
|
207,331
|
|
|
196,800
|
|
Other businesses and
eliminations
|
|
26,061
|
|
|
21,114
|
|
Total property,
plant and equipment
|
|
1,283,724
|
|
|
1,175,595
|
|
Less:
Accumulated depreciation and amortization
|
|
(267,138)
|
|
|
(245,207)
|
|
Plus:
Construction work in progress
|
|
69,053
|
|
|
56,276
|
|
Net property,
plant and equipment
|
|
1,085,639
|
|
|
986,664
|
|
Current
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
3,386
|
|
|
4,178
|
|
Accounts receivable
(less allowance for uncollectible accounts of $912 and $909,
respectively)
|
|
52,775
|
|
|
62,803
|
|
Accrued
revenue
|
|
14,307
|
|
|
16,986
|
|
Propane inventory, at
average cost
|
|
5,226
|
|
|
6,457
|
|
Other inventory, at
average cost
|
|
12,711
|
|
|
4,576
|
|
Regulatory
assets
|
|
9,761
|
|
|
7,694
|
|
Storage gas
prepayments
|
|
6,876
|
|
|
5,484
|
|
Income taxes
receivable
|
|
26,741
|
|
|
22,888
|
|
Prepaid
expenses
|
|
10,899
|
|
|
6,792
|
|
Mark-to-market energy
assets
|
|
1,526
|
|
|
823
|
|
Other current
assets
|
|
4,797
|
|
|
2,470
|
|
Total current
assets
|
|
149,005
|
|
|
141,151
|
|
Deferred
Charges and Other Assets
|
|
|
|
|
Goodwill
|
|
21,944
|
|
|
15,070
|
|
Other intangible
assets, net
|
|
4,608
|
|
|
1,843
|
|
Investments, at fair
value
|
|
6,380
|
|
|
4,902
|
|
Regulatory
assets
|
|
75,793
|
|
|
76,803
|
|
Receivables and other
deferred charges
|
|
3,381
|
|
|
2,786
|
|
Total deferred
charges and other assets
|
|
112,106
|
|
|
101,404
|
|
Total
Assets
|
|
$
|
1,346,750
|
|
|
$
|
1,229,219
|
|
Chesapeake
Utilities Corporation and Subsidiaries
Condensed
Consolidated Balance Sheets (Unaudited)
|
Capitalization and
Liabilities
|
|
September 30,
2017
|
|
December 31,
2016
|
(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 25,000,000 shares)
|
|
7,955
|
|
|
7,935
|
|
Additional
paid-in capital
|
|
252,722
|
|
|
250,967
|
|
Retained
earnings
|
|
208,402
|
|
|
192,062
|
|
Accumulated
other comprehensive loss
|
|
(5,259)
|
|
|
(4,878)
|
|
Deferred
compensation obligation
|
|
3,366
|
|
|
2,416
|
|
Treasury
stock
|
|
(3,366)
|
|
|
(2,416)
|
|
Total
stockholders' equity
|
|
463,820
|
|
|
446,086
|
|
Long-term debt,
net of current maturities
|
|
201,248
|
|
|
136,954
|
|
Total
capitalization
|
|
665,068
|
|
|
583,040
|
|
Current
Liabilities
|
|
|
|
|
Current portion of
long-term debt
|
|
12,136
|
|
|
12,099
|
|
Short-term
borrowing
|
|
203,098
|
|
|
209,871
|
|
Accounts
payable
|
|
53,284
|
|
|
56,935
|
|
Customer deposits and
refunds
|
|
32,493
|
|
|
29,238
|
|
Accrued
interest
|
|
3,361
|
|
|
1,312
|
|
Dividends
payable
|
|
5,312
|
|
|
4,973
|
|
Accrued
compensation
|
|
8,544
|
|
|
10,496
|
|
Regulatory
liabilities
|
|
5,338
|
|
|
1,291
|
|
Mark-to-market energy
liabilities
|
|
1,732
|
|
|
773
|
|
Other accrued
liabilities
|
|
13,972
|
|
|
7,063
|
|
Total current
liabilities
|
|
339,270
|
|
|
334,051
|
|
Deferred
Credits and Other Liabilities
|
|
|
|
|
Deferred income
taxes
|
|
252,273
|
|
|
222,894
|
|
Regulatory
liabilities
|
|
42,915
|
|
|
43,064
|
|
Environmental
liabilities
|
|
8,382
|
|
|
8,592
|
|
Other pension and
benefit costs
|
|
32,059
|
|
|
32,828
|
|
Deferred investment
tax credits and other liabilities
|
|
6,783
|
|
|
4,750
|
|
Total deferred
credits and other liabilities
|
|
342,412
|
|
|
312,128
|
|
Total
Capitalization and Liabilities
|
|
$
|
1,346,750
|
|
|
$
|
1,229,219
|
|
Chesapeake
Utilities Corporation and Subsidiaries
Distribution
Utility Statistical Data (Unaudited)
|
|
|
|
For the Three
Months Ended September 30, 2017
|
|
For the Three
Months Ended September 30, 2016
|
|
|
Delmarva NG
Distribution
|
|
Chesapeake
Utilities Florida
NG Division
|
|
FPU NG
Distribution
|
|
FPU Electric
Distribution
|
|
Delmarva NG
Distribution
|
|
Chesapeake
Utilities Florida
NG Division
|
|
FPU NG
Distribution
|
|
FPU Electric
Distribution
|
Operating
Revenues
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
$
|
5,705
|
|
|
$
|
1,247
|
|
|
$
|
6,544
|
|
|
$
|
14,112
|
|
|
$
|
5,327
|
|
|
$
|
1,139
|
|
|
$
|
5,016
|
|
|
$
|
15,186
|
|
Commercial
|
|
5,888
|
|
|
1,344
|
|
|
6,070
|
|
|
11,701
|
|
|
5,136
|
|
|
1,201
|
|
|
5,752
|
|
|
11,991
|
|
Industrial
|
|
1,700
|
|
|
1,524
|
|
|
5,025
|
|
|
748
|
|
|
1,695
|
|
|
1,581
|
|
|
4,825
|
|
|
676
|
|
Other
(1)
|
|
92
|
|
|
954
|
|
|
(854)
|
|
|
(2,481)
|
|
|
(76)
|
|
|
908
|
|
|
797
|
|
|
(1,805)
|
|
Total Operating
Revenues
|
|
$
|
13,385
|
|
|
$
|
5,069
|
|
|
$
|
16,785
|
|
|
$
|
24,080
|
|
|
$
|
12,082
|
|
|
$
|
4,829
|
|
|
$
|
16,390
|
|
|
$
|
26,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (in
Dts/MWHs)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
184,993
|
|
|
53,228
|
|
|
247,118
|
|
|
93,889
|
|
|
176,886
|
|
|
47,274
|
|
|
196,831
|
|
|
99,896
|
|
Commercial
|
|
449,543
|
|
|
1,172,625
|
|
|
366,318
|
|
|
88,917
|
|
|
469,921
|
|
|
1,313,963
|
|
|
409,155
|
|
|
90,013
|
|
Industrial
|
|
1,169,465
|
|
|
2,393,709
|
|
|
1,082,701
|
|
|
4,340
|
|
|
1,135,077
|
|
|
2,313,776
|
|
|
1,029,165
|
|
|
5,890
|
|
Other
|
|
35,519
|
|
|
—
|
|
|
(46,834)
|
|
|
1,880
|
|
|
28,208
|
|
|
—
|
|
|
601
|
|
|
1,979
|
|
Total
|
|
1,839,520
|
|
|
3,619,562
|
|
|
1,649,303
|
|
|
189,026
|
|
|
1,810,092
|
|
|
3,675,013
|
|
|
1,635,752
|
|
|
197,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
68,118
|
|
|
15,782
|
|
|
54,543
|
|
|
24,628
|
|
|
65,663
|
|
|
15,337
|
|
|
53,314
|
|
|
24,367
|
|
Commercial
|
|
6,782
|
|
|
1,425
|
|
|
4,007
|
|
|
7,455
|
|
|
6,695
|
|
|
1,408
|
|
|
4,216
|
|
|
7,401
|
|
Industrial
|
|
145
|
|
|
78
|
|
|
2,132
|
|
|
2
|
|
|
125
|
|
|
74
|
|
|
1,814
|
|
|
2
|
|
Other
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
75,048
|
|
|
17,285
|
|
|
60,682
|
|
|
32,085
|
|
|
72,489
|
|
|
16,819
|
|
|
59,344
|
|
|
31,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chesapeake
Utilities Corporation and Subsidiaries
Distribution
Utility Statistical Data (Unaudited)
|
|
|
For the Nine
Months Ended September 30, 2017
|
|
For the Nine
Months Ended September 30, 2016
|
|
|
Delmarva NG
Distribution
|
|
Chesapeake
Utilities Florida
NG Division
|
|
FPU NG
Distribution
|
|
FPU Electric
Distribution
|
|
Delmarva NG
Distribution
|
|
Chesapeake
Utilities Florida
NG Division
|
|
FPU NG
Distribution
|
|
FPU Electric
Distribution
|
Operating
Revenues
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
$
|
42,511
|
|
|
$
|
4,165
|
|
|
$
|
24,945
|
|
|
$
|
33,915
|
|
|
$
|
37,074
|
|
|
$
|
3,977
|
|
|
$
|
20,597
|
|
|
$
|
36,911
|
|
Commercial
|
|
23,724
|
|
|
4,262
|
|
|
23,114
|
|
|
31,190
|
|
|
20,576
|
|
|
3,847
|
|
|
20,912
|
|
|
31,814
|
|
Industrial
|
|
5,383
|
|
|
4,860
|
|
|
15,727
|
|
|
1,952
|
|
|
5,274
|
|
|
4,808
|
|
|
15,399
|
|
|
2,154
|
|
Other
(1)
|
|
(1,586)
|
|
|
2,819
|
|
|
(4,909)
|
|
|
(4,277)
|
|
|
(1,164)
|
|
|
2,665
|
|
|
(2,615)
|
|
|
(5,410)
|
|
Total
Operating
Revenues
|
|
$
|
70,032
|
|
|
$
|
16,106
|
|
|
$
|
58,877
|
|
|
$
|
62,780
|
|
|
$
|
61,760
|
|
|
$
|
15,297
|
|
|
$
|
54,293
|
|
|
$
|
65,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (in
Dts/MWHs)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
2,576,001
|
|
|
253,888
|
|
|
1,022,598
|
|
|
224,513
|
|
|
2,495,103
|
|
|
260,404
|
|
|
993,917
|
|
|
241,691
|
|
Commercial
|
|
2,445,262
|
|
|
3,991,244
|
|
|
1,426,875
|
|
|
229,545
|
|
|
2,539,404
|
|
|
4,118,131
|
|
|
1,633,920
|
|
|
233,199
|
|
Industrial
|
|
3,749,961
|
|
|
8,519,221
|
|
|
3,372,394
|
|
|
12,250
|
|
|
3,680,383
|
|
|
8,405,424
|
|
|
3,188,556
|
|
|
17,470
|
|
Other
|
|
66,273
|
|
|
—
|
|
|
(62,710)
|
|
|
5,627
|
|
|
68,293
|
|
|
—
|
|
|
(4,723)
|
|
|
6,577
|
|
Total
|
|
8,837,497
|
|
|
12,764,353
|
|
|
5,759,157
|
|
|
471,935
|
|
|
8,783,183
|
|
|
12,783,959
|
|
|
5,811,670
|
|
|
498,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
68,419
|
|
|
15,739
|
|
|
54,312
|
|
|
24,549
|
|
|
65,943
|
|
|
15,303
|
|
|
53,215
|
|
|
24,268
|
|
Commercial
|
|
6,843
|
|
|
1,417
|
|
|
4,084
|
|
|
7,443
|
|
|
6,745
|
|
|
1,391
|
|
|
4,247
|
|
|
7,399
|
|
Industrial
|
|
145
|
|
|
78
|
|
|
2,042
|
|
|
2
|
|
|
123
|
|
|
72
|
|
|
1,760
|
|
|
2
|
|
Other
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
75,413
|
|
|
17,234
|
|
|
60,438
|
|
|
31,994
|
|
|
72,816
|
|
|
16,766
|
|
|
59,222
|
|
|
31,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
View original
content:http://www.prnewswire.com/news-releases/chesapeake-utilities-corporation-reports-third-quarter-results-300552517.html
SOURCE Chesapeake Utilities Corporation