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						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
(in thousands)
Operating Revenues, Unaffiliated Customers
Regulated Energy segment	$	69,697		$	67,257		$	243,382		$	232,519
Unregulated Energy segment and other businesses	70,582			59,679			272,917			204,661
Total operating revenues, unaffiliated customers	$	140,279		$	126,936		$	516,299		$	437,180
Intersegment Revenues ⁽¹⁾
Regulated Energy segment	$	3,073		$	2,446		$	9,285		$	5,834
Unregulated Energy segment	5,460			5,009			24,837			15,801
Other businesses	135			194			521			581
Total intersegment revenues	$	8,668		$	7,649		$	34,643		$	22,216
Operating Income
Regulated Energy segment	$	15,915		$	15,523		$	56,930		$	53,004
Unregulated Energy segment	(3,933		)	(951		)	10,241			10,626
Other businesses and eliminations	54			60			(1,481		)	162
Total operating income	12,036			14,632			65,690			63,792
Other expense, net	(11		)	(154		)	(204		)	(1,855		)
Interest charges	4,430			3,321			11,976			9,133
Income before Income Taxes	7,595			11,157			53,510			52,804
Income taxes	2,057			4,324			14,731			20,781
Net Income	$	5,538		$	6,833		$	38,779		$	32,023


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



(in thousands)	September 30, 2018		December 31, 2017
Identifiable Assets
Regulated Energy segment	$	1,223,537	$	1,121,673
Unregulated Energy segment	244,390		259,041
Other businesses and eliminations	37,629		34,220
Total identifiable assets	$	1,505,556	$	1,414,934

Our operations are entirely domestic.