Segment Information

3 Months Ended

Mar. 31, 2020

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, the natural gas marketing and related services subsidiary (PESCO), previously reported in the Unregulated Energy segment, are reflected in discontinued operations. See Note 3, Acquisitions and Divestitures for additional details of the sale of PESCO.

The remainder of our operations are 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,
	2020			2019
(in thousands)
Operating Revenues, Unaffiliated Customers
Regulated Energy	$	102,494		$	103,071
Unregulated Energy	50,216			57,393
Total operating revenues, unaffiliated customers	$	152,710		$	160,464
Intersegment Revenues ⁽¹⁾
Regulated Energy	$	461		$	547
Unregulated Energy	3,815			3,687
Other businesses	132			132
Total intersegment revenues	$	4,408		$	4,366
Operating Income
Regulated Energy	$	27,888		$	29,741
Unregulated Energy	13,841			15,258
Other businesses and eliminations	384			(875		)
Operating income	42,113			44,124
Other income (expense), net	3,318			(57		)
Interest charges	5,814			5,628
Income from Continuing Operations before Income Taxes	39,617			38,439
Income Taxes on Continuing Operations	10,591			9,625
Income from Continuing Operations	29,026			28,814
Loss from Discontinued Operations, net of tax	(96		)	(150		)
Net Income	$	28,930		$	28,664

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



(in thousands)	March 31, 2020		December 31, 2019
Identifiable Assets
Regulated Energy segment	$	1,448,114	$	1,434,066
Unregulated Energy segment	295,470		296,810
Other businesses and eliminations	44,635		52,322
Total identifiable assets	$	1,788,219	$	1,783,198