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.

Our operations 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, propane delivery, and other energy services (propane distribution, the operations of our Eight Flags' CHP plant, as well as natural gas marketing, gathering, processing, transportation and supply). These operations are unregulated as to their rates and services. Through March 2017, this segment also included the operations of Xeron, our propane and crude oil trading subsidiary that wound down its operations shortly after the first quarter of 2017. 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
	March 31,
	2018		2017
(in thousands)
Operating Revenues, Unaffiliated Customers
Regulated Energy segment	$	105,954	$	96,446
Unregulated Energy segment and other businesses	133,402		88,714
Total operating revenues, unaffiliated customers	$	239,356	$	185,160
Intersegment Revenues ⁽¹⁾
Regulated Energy segment	$	3,439	$	1,208
Unregulated Energy segment	11,965		4,011
Other businesses	194		228
Total intersegment revenues	$	15,598	$	5,447
Operating Income
Regulated Energy segment	$	26,711	$	23,395
Unregulated Energy segment	13,684		11,575
Other businesses and eliminations	11		129
Total operating income	40,406		35,099
Other income (expense), net	68		(700		)
Interest charges	3,664		2,739
Income before Income Taxes	36,810		31,660
Income taxes	9,955		12,516
Net Income	$	26,855	$	19,144


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



(in thousands)	March 31, 2018		December 31, 2017
Identifiable Assets
Regulated Energy segment	$	1,148,635	$	1,121,673
Unregulated Energy segment	246,230		261,541
Other businesses and eliminations	32,585		34,220
Total identifiable assets	$	1,427,450	$	1,417,434

Our operations are entirely domestic.