Segment Information

6 Months Ended

Jun. 30, 2020

We use the management approach to identify operating segments. We organize our business around differences in regulatory environment 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 the new mobile compressed natural gas distribution 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						Six Months Ended
	June 30,						June 30,
	2020			2019			2020		2019
(in thousands)
Operating Revenues, Unaffiliated Customers
Regulated Energy	$	73,043		$	72,880		$	175,536	$	175,951
Unregulated Energy	24,008			21,662			74,205		79,054
Total operating revenues, unaffiliated customers	$	97,051		$	94,542		$	249,741	$	255,005
Intersegment Revenues ⁽¹⁾
Regulated Energy	$	475		$	523		$	937	$	1,070
Unregulated Energy	3,733			3,963			7,548		7,650
Other businesses	132			132			264		264
Total intersegment revenues	$	4,340		$	4,618		$	8,749	$	8,984
Operating Income
Regulated Energy	$	18,006		$	18,028		$	45,894	$	47,769
Unregulated Energy	281			(771		)	14,142		14,486
Other businesses and eliminations	(310		)	908			75		32
Operating income	17,977			18,165			60,111		62,287
Other income (expense), net	(279		)	(320		)	3,039		(380		)
Interest charges	5,054			5,552			10,868		11,180
Income from Continuing Operations before Income Taxes	12,644			12,293			52,282		50,727
Income Taxes on Continuing Operations	1,983			3,379			12,580		13,002
Income from Continuing Operations	10,661			8,914			39,702		37,725
Income (loss) from Discontinued Operations, Net of Tax	295			(610		)	184		(757		)
Net Income	$	10,956		$	8,304		$	39,886	$	36,968

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



(in thousands)	June 30, 2020		December 31, 2019
Identifiable Assets
Regulated Energy segment	$	1,477,616	$	1,434,066
Unregulated Energy segment	296,140		296,810
Other businesses and eliminations	48,419		52,322
Total identifiable assets	$	1,822,175	$	1,783,198