Segment Information

12 Months Ended

Dec. 31, 2019

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 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, and our mobile compressed natural gas and pipeline solutions subsidiary. 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. These operations are unregulated as to their rates and services. Effective in the third quarter of 2019, PESCO's results, previously reported in the Unregulated Energy segment, are reflected in discontinued operations. See Note 4, Acquisitions and Divestitures for additional details regarding the divestiture of PESCO.

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 information about our reportable segments.



	For the Year Ended December 31,
	2019			2018			2017
(in thousands)
Operating Revenues, Unaffiliated Customers
Regulated Energy	$	340,857		$	343,313		$	323,972
Unregulated Energy	138,747			147,003			125,674
Total operating revenues, unaffiliated customers	$	479,604		$	490,316		$	449,646
Intersegment Revenues ⁽¹⁾
Regulated Energy	$	2,149		$	1,968		$	2,338
Unregulated Energy	15,403			14,902			14,402
Other businesses	528			652			774
Total intersegment revenues	$	18,080		$	17,522		$	17,514
Operating Income
Regulated Energy	$	86,584		$	79,215		$	74,584
Unregulated Energy	19,939			17,124			14,941
Other businesses and eliminations	(236		)	(1,496		)	205
Operating Income	106,287			94,843			89,730
Other expense, net	(1,830		)	(603		)	(2,204		)
Interest charges	22,224			16,146			12,530
Income from Continuing Operations before Income Taxes	$	82,233		$	78,094		$	74,996
Income Taxes on Continuing Operations	21,091			21,232			14,670
Income from Continuing Operations	61,142			56,862			60,326
Loss from Discontinued Operations, Net of tax	(1,391		)	(282		)	(2,202		)
Gain on sale of Discontinued Operations, Net of tax	5,402			—			—
Net Income	$	65,153		$	56,580		$	58,124
Depreciation and Amortization
Regulated Energy	$	35,227		$	31,876		$	28,554
Unregulated Energy	10,129			8,263			7,741
Other businesses and eliminations	67			81			91
Total depreciation and amortization	$	45,423		$	40,220		$	36,386
Capital Expenditures
Regulated Energy	$	130,604		$	235,912		$	159,011
Unregulated Energy	60,034			38,585			14,424
Other businesses	8,348			8,364			5,902
Total capital expenditures	$	198,986		$	282,861		$	179,337

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



	As of December 31,
	2019		2018
Identifiable Assets⁽¹⁾
Regulated Energy segment	$	1,434,066	$	1,345,805
Unregulated Energy segment⁽¹⁾	296,810		245,702
Other businesses and eliminations	52,322		41,821
Total identifiable assets⁽¹⁾	$	1,783,198	$	1,633,328

⁽¹⁾ 2018 balance excludes assets held for sale related to the sale of assets and contracts for PESCO.