Segment Information

6 Months Ended

Jun. 30, 2019

We use the management approach to identify operating segments. We organize our business around differences in regulatory environment 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.

Our operations are entirely domestic and are comprised of two reportable segments:


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

•

Unregulated Energy. Includes energy transmission, energy generation (the operations of our Eight Flags' CHP plant), propane operations, the new mobile compressed natural gas distribution and pipeline solutions subsidiary, and other energy services (natural gas marketing and related services). These operations are unregulated as to their rates and services. 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 are 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						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
(in thousands)
Operating Revenues, Unaffiliated Customers
Regulated Energy	$	70,719		$	67,731		$	171,458		$	173,685
Unregulated Energy	60,184			68,933			187,061			202,335
Total operating revenues, unaffiliated customers	$	130,903		$	136,664		$	358,519		$	376,020
Intersegment Revenues ⁽¹⁾
Regulated Energy	$	2,684		$	2,773		$	5,563		$	6,212
Unregulated Energy	6,720			7,412			17,946			19,377
Other businesses	132			194			264			387
Total intersegment revenues	$	9,536		$	10,379		$	23,773		$	25,976
Operating Income
Regulated Energy	$	18,752		$	14,304		$	47,769		$	41,015
Unregulated Energy	(1,348		)	490			13,628			14,174
Other businesses and eliminations	32			(1,546		)	32			(1,535		)
Operating income	17,436			13,248			61,429			53,654
Other expense, net	(316		)	(262		)	(361		)	(194		)
Interest charges	5,655			3,881			11,365			7,545
Income before Income Taxes	11,465			9,105			49,703			45,915
Income taxes	3,161			2,718			12,735			12,674
Net Income	$	8,304		$	6,387		$	36,968		$	33,241

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



(in thousands)	June 30, 2019		December 31, 2018
Identifiable Assets
Regulated Energy segment	$	1,349,422	$	1,345,805
Unregulated Energy segment	284,888		306,045
Other businesses and eliminations	46,732		41,821
Total identifiable assets	$	1,681,042	$	1,693,671