Segment Information

12 Months Ended

Dec. 31, 2012

Segment Information

5. 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 of three operating segments:

• Regulated Energy. The regulated energy segment includes natural gas distribution, natural gas transmission operations and electric distribution operations. All operations in this segment are regulated, as to their rates and services, by the PSCs 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.

• Other. The “Other” segment consists primarily of the advanced information services subsidiary, unregulated subsidiaries that own real estate leased to Chesapeake and certain corporate costs not allocated to other operations.

The following table presents information about our reportable segments.

For the Years Ended December 31,	2012		2011		2010
(in thousands)
Operating Revenues, Unaffiliated Customers
Regulated Energy	$	245,042	$	255,405	$	268,830
Unregulated Energy		130,020		149,586		146,430
Other		17,440		13,036		12,286
Total operating revenues, unaffiliated customers	$	392,502	$	418,027	$	427,546
Intersegment Revenues (1)
Regulated Energy	$	1,166	$	1,368	$	1,104
Unregulated Energy		3,029		—		363
Other		917		793		856
Total intersegment revenues	$	5,112	$	2,161	$	2,323
Operating Income
Regulated Energy	$	46,999	$	43,911	$	43,267
Unregulated Energy		8,355		9,619		8,150
Other		1,281		175		513
Operating Income		56,635		53,705		51,930
Other income		271		906		195
Interest charges		8,747		9,000		9,146
Income Before Income taxes		48,159		45,611		42,979
Income taxes		19,296		17,989		16,923
Net Income	$	28,863	$	27,622	$	26,056
Depreciation and Amortization
Regulated Energy	$	18,653	$	16,512	$	14,680
Unregulated Energy		3,420		3,229		3,569
Other and eliminations		437		412		287
Total depreciation and amortization	$	22,510	$	20,153	$	18,536
Capital Expenditures
Regulated Energy	$	69,056	$	37,104	$	41,898
Unregulated Energy		3,969		2,432		2,764
Other		5,185		4,895		2,293
Total capital expenditures	$	78,210	$	44,431	$	46,955

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

At December 31,	2012		2011
Identifiable Assets
Regulated Energy	$	615,438	$	565,563
Unregulated Energy		79,287		107,916
Other		39,021		35,587
Total identifiable assets	$	733,746	$	709,066

Our operations are almost entirely domestic. Our advanced information services subsidiary, BravePoint, has infrequent transactions with foreign companies, located primarily in Canada. These transactions, which are denominated and paid in U.S. dollars, are immaterial to the consolidated revenues.