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 (the operations of our Eight Flags' CHP plant), propane operations, the new mobile compressed natural gas utility 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 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,
	2019			2018
(in thousands)
Operating Revenues, Unaffiliated Customers
Regulated Energy	$	100,739		$	105,954
Unregulated Energy	126,877			133,402
Total operating revenues, unaffiliated customers	$	227,616		$	239,356
Intersegment Revenues ⁽¹⁾
Regulated Energy	$	2,879		$	3,439
Unregulated Energy	11,225			11,965
Other businesses	132			194
Total intersegment revenues	$	14,236		$	15,598
Operating Income
Regulated Energy	$	29,741		$	26,711
Unregulated Energy	15,127			13,684
Other businesses and eliminations	(875		)	11
Operating income	43,993			40,406
Other income (expense), net	(45		)	68
Interest charges	5,710			3,664
Income before Income Taxes	38,238			36,810
Income taxes	9,574			9,955
Net Income	$	28,664		$	26,855

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



(in thousands)	March 31, 2019		December 31, 2018
Identifiable Assets
Regulated Energy segment	$	1,343,061	$	1,345,805
Unregulated Energy segment	296,836		306,045
Other businesses and eliminations	42,900		41,821
Total identifiable assets	$	1,682,797	$	1,693,671

Our operations are entirely domestic.