Segment Information

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Information

Segment Information

We use the management approach to identify operating segments. We organize our business around differences in regulatory environment and/or products or services, and the operating results of each segment are regularly reviewed by the chief operating decision maker (our Chief Executive Officer) in order to make decisions about resources and to assess performance. The segments are evaluated based on their pre-tax operating income. Our operations comprise two reportable segments:

• Regulated Energy. The Regulated Energy segment includes natural gas distribution, natural gas transmission and electric distribution operations. All operations in this segment are regulated, as to their rates and services, by the PSC having jurisdiction in each operating territory or by the FERC in the case of Eastern Shore.

• Unregulated Energy. The Unregulated Energy segment includes propane distribution and wholesale marketing operations, and natural gas marketing operations, which are unregulated as to their rates and services. Effective April 1, 2015, this segment includes Aspire Energy, whose services include natural gas gathering, processing, transportation and supply (See Note 3, Acquisitions, regarding the merger with Gatherco). Effective June 2016, this segment includes electricity and steam generation through Eight Flags' CHP plant. Also included in this segment are other unregulated energy services, such as energy-related merchandise sales and heating, ventilation and air conditioning, plumbing and electrical services.

The remainder of our operations is presented as “Other businesses and eliminations”, which consists of unregulated subsidiaries that own real estate leased to Chesapeake Utilities, as well as certain corporate costs not allocated to other operations.

The following table presents financial information about our reportable segments:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
(in thousands)
Operating Revenues, Unaffiliated Customers
Regulated Energy segment	$	68,899		$	63,526		$	224,382		$	234,608
Unregulated Energy segment	39,449			28,387			132,604			120,068
Total operating revenues, unaffiliated customers	$	108,348		$	91,913		$	356,986		$	354,676
Intersegment Revenues (1)
Regulated Energy segment	$	1,120		$	270		$	2,248		$	830
Unregulated Energy segment	2,593			1,222			3,759			3,095
Other businesses	240			220			705			660
Total intersegment revenues	$	3,953		$	1,712		$	6,712		$	4,585
Operating Income
Regulated Energy segment	$	13,115		$	11,828		$	52,660		$	47,616
Unregulated Energy segment	(3,080		)	(1,022		)	9,267			13,666
Other businesses and eliminations	121			103			350			305
Total operating income	10,156			10,909			62,277			61,587
Other (expense) income, net	(28		)	36			(68		)	(3		)
Interest	2,722			2,492			7,996			7,425
Income before Income Taxes	7,406			8,453			54,213			54,159
Income taxes	2,990			3,334			21,401			21,638
Net Income	$	4,416		$	5,119		$	32,812		$	32,521

⁽¹⁾  All significant intersegment revenues are billed at market rates and have been eliminated from consolidated operating revenues.

(in thousands)	September 30, 2016		December 31, 2015
Identifiable Assets
Regulated Energy segment	$	921,682	$	872,065
Unregulated Energy segment	207,083		171,840
Other businesses and eliminations	11,745		23,516
Total identifiable assets	$	1,140,510	$	1,067,421

Our operations are entirely domestic.