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MarketScreener Homepage  >  Equities  >  Nyse  >  Chesapeake Utilities Corporation    CPK

CHESAPEAKE UTILITIES CORPORATION (CPK)
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Chesapeake Utilities Corporation : Reports Third Quarter 2018 Results

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11/08/2018 | 11:07pm CET

DOVER, Del., Nov. 8, 2018 /PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or the "Company") today announced third quarter financial results. The Company's net income for the quarter ended September 30, 2018 was $5.5 million, compared to $6.8 million for the same quarter of 2017. Earnings per share ("EPS") for the quarter ended September 30, 2018 were $0.34, compared to $0.42 per share for the same quarter of 2017 although year-to-date performance remains strong (as discussed below). During the third quarter, continued growth in the natural gas transmission operations was offset by seasonality, lower propane margins and lower operating income for PESCO.

For the nine months ended September 30, 2018, the Company reported net income of $38.8 million, or $2.36 per share. This represents an increase of $6.8 million or $0.40 per share compared to the same period in 2017.  Higher year-to-date earnings reflect continued growth and expansion in the Company's natural gas operations, as well as growth in electric and propane operations and the benefit of the lower effective federal income tax rate from the TCJA on unregulated energy earnings. The results also reflect more normal weather during the nine months ended September 30, 2018. A detailed discussion of operating results begins on page 3.

"Our strong, disciplined capital investment strategy continues to expand the safe, clean, reliable energy services we provide to our customers and produce quarterly and year-to-date earnings growth in our Regulated Energy segment and year-to-date earnings growth in our Unregulated Energy segment's propane operations and natural gas supply services," stated Michael P. McMasters, President and Chief Executive Officer.  "Our outlook for the year remains in line with our beginning of the year guidance." Mr. McMasters added. "Our significant growth in 2018 and industry-leading growth over the past ten years result directly from our employees' persistent efforts to find and develop new regulated and unregulated energy opportunities for growth."

Significant Items Impacting Earnings
Results for the three and nine months ended September 30, 2018 were impacted by the following significant items:

For the period ended September 30,

Third quarter


Year-to-date


Net Income


EPS


Net Income


EPS

(in thousands, except per share data)








Reported (GAAP) Earnings

$

5,538



$

0.34



$

38,779



$

2.36


Less: Realized Mark-to-Market ("MTM") gain





(4,008)



(0.24)


Add: Non-recurring separation expenses associated with
a former executive





1,421



0.09


Adjusted (Non-GAAP) Earnings*

$

5,538



$

0.34



$

36,192



$

2.21


Excluding both the one-time separation expenses for a former executive and the realized MTM gain recorded by the Company's natural gas marketing subsidiary, PESCO, during the first quarter, which offsets a comparable MTM loss in the fourth quarter of 2017, EPS for the nine months ended September 30, 2018 would have been $2.21, an increase of 12.8 percent over EPS of $1.96 for the nine months ended September 30, 2017.

*This press release includes references to non-Generally Accepted Accounting Principles ("GAAP") financial measures, including gross margin, adjusted earnings and Adjusted EPS.  A "non-GAAP financial measure" is generally defined as a numerical measure of a company's historical or future performance that includes or excludes amounts, or that is subject to adjustments, so as to be different from the most directly comparable measure calculated or presented in accordance with GAAP.  Our management believes certain non-GAAP financial measures, when considered together with GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period.

The Company calculates "gross margin" by deducting the cost of sales from operating revenue.  Cost of sales includes the purchased fuel cost for natural gas, electricity and propane, and the cost of labor spent on direct revenue-producing activities and excludes depreciation, amortization and accretion. Other companies may calculate gross margin in a different manner. Gross margin should not be considered an alternative to operating income or net income, both of which are determined in accordance with GAAP.  The Company believes that gross margin, although a non-GAAP measure, is useful and meaningful to investors as a basis for making investment decisions.  It provides investors with information that demonstrates the profitability achieved by the Company under its allowed rates for regulated operations and under its competitive pricing structures for unregulated businesses.  The Company's management uses gross margin in measuring its business units' performance. This press release also includes gross margin that excludes the impact of unusual items, such as the pass-through to customers of lower federal income taxes resulting from TCJA. The Company calculates "adjusted earnings" by adjusting reported (GAAP) earnings to exclude the impact of certain significant non-cash items, including the impact of realized MTM gains (losses) and one-time charges, such as severance charges, and calculates "adjusted EPS" by dividing adjusted earnings by the weighted average common shares outstanding.

Operating Results for the Quarters Ended September 30, 2018 and 2017

Consolidated Results


Three Months Ended
September 30,





(in thousands)

2018


2017


Change


Percent
Change

Gross margin before the TCJA impact

$

65,111



$

60,076



$

5,035



8.4

%

Pass-through of lower taxes to regulated energy
customers

 

(1,993)





(1,993)



N/A


Gross margin

63,118



60,076



3,042



5.1

%

Depreciation, amortization and property taxes

14,702



13,181



1,521



11.5

%

Other operating expenses

36,380



32,263



4,117



12.8

%

Operating income

$

12,036



$

14,632



$

(2,596)



(17.7)

%

Operating income during the third quarter of 2018 decreased by $2.6 million, or 17.7 percent, compared to the same period in 2017. Pass-through of lower taxes to regulated energy customers as a result of the TCJA, reduced margin and operating income by approximately $2.0 million, and were offset by an equal reduction in income taxes.  Excluding the impact of the pass-through of lower taxes, operating income decreased by $603,000, or 4.1 percent. Gross margin before the effect of TCJA, increased by $5.0 million, or 8.4 percent, while other operating expenses increased by $5.6 million.

Regulated Energy Segment


Three Months Ended
September 30,





(in thousands)

2018


2017


Change


Percent
Change

Gross margin before the TCJA impact

$

53,262



$

46,909



$

6,353



13.5

%

Pass-through of lower taxes to regulated energy customers

(1,993)





(1,993)



N/A


Gross margin

51,269



46,909



4,360



9.3

%

Depreciation, amortization and property taxes

12,085



10,782



1,303



12.1

%

Other operating expenses

23,269



20,604



2,665



12.9

%

Operating income

$

15,915



$

15,523



$

392



2.5

%

Operating income for the Regulated Energy segment increased by $392,000, or 2.5 percent, in the third quarter of 2018 compared to the same period in 2017. This increase was driven by a $6.4 million increase in gross margin, before the impact of the TCJA pass-through discussed above, offset by $4.0 million in higher depreciation and other operating expenses associated with the margin growth. Third quarter gross margin and operating income were also impacted by customer refunds of $2.0 million, due to the pass-through of lower taxes to regulated energy customers as a result of the TCJA. This decrease in margin and operating income was offset by an equal reduction in income tax expense. Excluding the estimated pass-through to customers of lower taxes, operating income increased by $2.4 million, or 15.4 percent. This increase in operating income reflects continued growth in the natural gas and electric distribution operations, expansions at Peninsula Pipeline and Eastern Shore, as well as the implementation of new rates for Eastern Shore.

The key components of the increase in gross margin are shown below:

(in thousands)

Margin Impact

Eastern Shore and Peninsula Pipeline service expansions

$

3,616

Implementation of Eastern Shore settled rates

1,161

Natural gas growth (including customer and consumption growth, but excluding service expansions)

734

Florida electric reliability/modernization program

464

Gas Reliability and Infrastructure Program ("GRIP") in Florida

329

Other

49

Total

6,353

Less: Pass-through to regulated energy customers of lower taxes resulting from TCJA*

(1,993)

Quarter over quarter increase in gross margin

$

4,360


*As a result of the TCJA and ensuing directives by federal and state regulatory commissions, the Company reserved or refunded to customers of its regulated businesses an estimated $2.0 million during the third quarter of 2018. In some jurisdictions, refunds have been made to customers, while in other jurisdictions, the Company has established reserves until final agreements are approved and permanent changes are made to customer rates.  The reserves and lower customer rates are equal to the estimated reduction in federal income taxes due to the TCJA and have no material impact on after-tax earnings from the Regulated Energy segment.

The major components of the increase in other operating expenses are as follows:

(in thousands)

Other Operating Expenses

Outside services, facilities and maintenance costs to maintain system integrity and support growth

 

$

1,195


Depreciation, amortization and property taxes associated with recent capital projects

1,303


Benefits and other employee-related expenses(1)

530


Payroll expense (increased staffing and annual salary increases)

446


Early termination of facility lease due to consolidation of operations facilities

323


Other

171


Quarter over quarter increase in other operating expenses

$

3,968



(1) Since the Company self-insures for healthcare costs, benefits costs fluctuate depending upon filed claims.

As previously disclosed, the Company expects the current expense run rate to continue for the remainder of the year, with the exception of the early lease termination.  This expense reflects the payment of all remaining costs for one of the Company's former operations facilities, which has been replaced by the new Energy Lane Service Center, which opened during the third quarter of 2018.

Unregulated Energy Segment


Three Months Ended
September 30,





(in thousands)

2018


2017


Change


Percent
Change

Gross margin

$

11,933



$

13,272



$

(1,339)



(10.1)

%

Depreciation, amortization and property taxes

2,578



2,360



218



9.2

%

Other operating expenses

13,288



11,863



1,425



12.0

%

Operating income

$

(3,933)



$

(951)



$

(2,982)



(313.6)

%

Given the imbalance adjustments in the third quarter of 2018 and the increased infrastructure built for PESCO to support its growth and to ensure continued risk management, the Company is presenting PESCO's results separate from the rest of its Unregulated Energy segment:

(in thousands)

Unregulated Segment excluding PESCO

Three Months Ended September 30,

2018


2017


Change


Percent
Change

Gross margin

$

11,202



$

11,912



$

(710)



(6.0)

%

Depreciation, amortization and property taxes

2,424



2,281



143



6.3

%

Other operating expenses

11,567



10,519



1,048



10.0

%

Operating loss

$

(2,789)



$

(888)



$

(1,901)



(214.1)

%

Excluding PESCO, operating loss for the Unregulated Energy segment increased by $1.9 million for the three months ended September 30, 2018, compared to the same period in 2017. The increased operating loss was driven by a $710,000 decrease in gross margin, accompanied by $1.2 million in higher operating expenses. The reduction in margin is largely as a result of lower margins per gallon and the timing of deliveries for the Florida propane distribution operations as a result of accelerated deliveries of propane attributable to Hurricane Irma in the third quarter of 2017 and lower margins per gallon for the Mid-Atlantic propane distribution operations.

The major components of the decrease in gross margin (excluding PESCO results) are shown below:

(in thousands)

Margin Impact

Propane retail operations - decreased margins driven by lower prices per gallon

$

(469)


Unregulated Energy customer consumption decrease

(374)


Other

133


Quarter over quarter decrease in gross margin

$

(710)


Operating expenses were higher because of additional personnel, systems and outside services to support growth in these businesses, as well as higher incentive compensation associated with accruals for the year-to-date performance.

The major components of the increase in other operating expenses are as follows:

(in thousands)

Other Operating Expenses

Payroll expense (increased staffing and annual salary increases)

$

308


Outside services to support growth and facilities and maintenance costs as a result of ongoing compliance activities

275


Benefits and other employee-related expenses(1)

228


Incentive compensation costs (based on period-over-period results)

176


Depreciation, amortization and property tax costs due to new capital investments

144


Other

60


Quarter over quarter increase in other operating expenses

$

1,191



(1) Since the Company self-insures for healthcare costs, benefits costs fluctuate depending upon filed claims.

Many of the increased expenses highlighted above are fixed and; since third quarter margins are typically lower due to the seasonal nature of the Company's businesses, the increases have a more significant impact on quarterly operating losses. The Company expects the current expense run rate to continue for the remainder of the year.

PESCO results


Three Months Ended
September 30,





(in thousands)

2018


2017


Change


Percent
Change

Gross margin

$

731



$

1,360



$

(629)



(46.3)

%

Depreciation, amortization and property taxes

154



79



75



94.9

%

Other operating expenses

1,721



1,344



377



28.1

%

Operating loss

$

(1,144)



$

(63)



$

(1,081)



(1,715.9)

%

For the three months ended September 30, 2018, PESCO's gross margin was lower by $629,000 compared to the same period in 2017. The decreased margin reflected the impact of the timing and true-up of various imbalance positions with pipelines.  The increased operating expenses reflected additional planned expenses incurred to build out the staff, infrastructure and risk management systems as PESCO executes its growth strategy.

Operating Results for the Nine Months Ended September 30, 2018 and 2017

Consolidated Results


Nine Months Ended
September 30,





(in thousands)

2018


2017


Change


Percent
Change

Gross margin before the TCJA impact

$

229,208



$

204,649



$

24,559



12.0

%

Pass-through of lower taxes to regulated energy customers

(7,530)





(7,530)



N/A


Gross margin

221,678



204,649



17,029



8.3

%

Depreciation, amortization and property taxes

42,149



38,416



3,733



9.7

%

Non-recurring executive separation expenses

1,548





1,548



N/A


Other operating expenses

112,291



102,441



9,850



9.6

%

Operating income

$

65,690



$

63,792



$

1,898



3.0

%

Operating income, for the nine months ended September 30, 2018, increased by $1.9 million, or 3.0 percent, compared to the same period in 2017.  This increase was driven by a $24.6 million, or 12.0 percent, increase in gross margin, which was partially offset by a $3.7 million increase in depreciation, amortization and property taxes, a $9.9 million increase in other operating expenses and a $7.5 million pass-through to regulated energy customers of lower taxes associated with the TCJA, which were offset by an equivalent reduction in income tax expenses for the Regulated Energy segment. Excluding the estimated pass-through of lower taxes to customers, operating income increased by $9.4 million, or 14.8 percent.

Regulated Energy Segment


Nine Months Ended
September 30,





(in thousands)

2018


2017


Change


Percent
Change

Gross margin before the TCJA impact

$

170,456



$

151,147



$

19,309



12.8

%

Pass-through of lower taxes to regulated energy customers

(7,530)





(7,530)



N/A


Gross margin

162,926



151,147



11,779



7.8

%

Depreciation, amortization and property taxes

34,402



31,411



2,991



9.5

%

Other operating expenses

71,594



66,732



4,862



7.3

%

Operating income

$

56,930



$

53,004



$

3,926



7.4

%

Operating income for the Regulated Energy segment increased by $3.9 million, or 7.4 percent, for the nine months ended September 30, 2018 compared to the same period in 2017. This increase was driven by a $19.3 million increase in gross margin before the impact of the TCJA discussed above, which was partially offset by $7.9 million in higher depreciation and other operating expenses associated with gross margin growth.  Excluding the estimated pass-through of lower taxes to customers, operating income increased by $11.4 million, or 21.6 percent. This increase in operating income was generated from continued growth in the natural gas and electric distribution operations, expansions at Peninsula Pipeline and Eastern Shore, as well as the implementation of new rates for Eastern Shore and more normal weather conditions.

The key components of the increase in gross margin are shown below:

(in thousands)

Margin Impact

Implementation of Eastern Shore settled rates

$

6,256


Eastern Shore and Peninsula Pipeline service expansions

5,966


Natural gas growth (including customer and consumption growth but excluding service
expansions)

4,098


Return to more normal weather

1,498


Florida electric reliability/modernization program

1,231


Florida GRIP

931


Other

(671)


Total

19,309


Less: Pass-through of lower taxes to regulated energy customers*

(7,530)


Period-over-period increase in gross margin

$

11,779



*As a result of the TCJA and ensuing directives by federal and state regulatory commissions, the Company reserved or refunded to customers of its regulated businesses an estimated $7.5 million during the first nine months of 2018.  In some jurisdictions, refunds have been made to customers, while in other jurisdictions, the Company has established reserves until agreements are approved and permanent changes are made to customer rates.  The reserves and lower customer rates are equal to the estimated reduction in federal income taxes due to the TCJA and have no material impact on after-tax earnings from the Regulated Energy segment.

The major components of the increase in other operating expenses are as follows:

(in thousands)

Other Operating Expenses

Depreciation, amortization and property taxes associated with recent capital projects

$

2,991


Payroll expense (increased staffing and annual salary increases)

1,857


Facilities and maintenance costs to maintain system integrity

1,507


Regulatory expenses

 

(536)


Incentive compensation costs (based on period-over-period results)

401


Other operating expenses including vehicle, credit collections, other taxes, sales and advertising costs

356


Early termination of facility lease due to consolidation of operations facilities

323


Benefits and other employee-related expenses(1)

307


Other

647


Period-over-period increase in other operating expenses

$

7,853



(1) Since the Company self-insures for healthcare costs, benefits costs fluctuate depending upon filed claims.

Unregulated Energy Segment


Nine Months Ended
September 30,





(in thousands)

2018


2017


Change


Percent
Change

Gross margin

$

59,149



$

53,827



$

5,322



9.9

%

Depreciation, amortization and property taxes

7,637



6,884



753



10.9

%

Other operating expenses

41,271



36,317



4,954



13.6

%

Operating income

$

10,241



$

10,626



$

(385)



(3.6)

%

Given the impact of the MTM gain recorded by PESCO in the first quarter of 2018 and the increased infrastructure the Company has built for PESCO to support its growth and to ensure appropriate risk management, the Company is also presenting PESCO's year-to-date results separate from the rest of its Unregulated Energy segment:

(in thousands)

Unregulated Segment excluding PESCO

Nine Months Ended September 30,

2018


2017


Change


Percent
Change

Gross margin

$

54,637



$

48,078



$

6,559



13.6

%

Depreciation, amortization and property taxes

7,181



6,773



408



6.0

%

Other operating expenses

35,995



32,862



3,133



9.5

%

Operating income

$

11,461



$

8,443



$

3,018



35.7

%

Excluding PESCO, operating income for the Unregulated Energy segment increased by $3.0 million for the nine months ended September 30, 2018, compared to the same period in 2017. Gross margin increased by $6.6 million, or 13.6 percent, due primarily to more normal weather, improved margins and growth in the Company's propane operations and at Aspire Energy. This was offset by $3.1 million in higher operating expenses to support growth.

The major components of the increase in gross margin (excluding PESCO results) are shown below:

(in thousands)

Margin Impact

Propane delivery operations - additional customer consumption - (weather)

$

2,923


Propane delivery operations - increased margin driven by growth and other factors

1,552


Aspire Energy - customer consumption - (weather)

921


Aspire Energy - increased margin driven by growth and other factors

592


Growth in wholesale propane margins and sales

255


Other

316


Period-over-period increase in gross margin

$

6,559


The key components of the increase in other operating expenses (excluding PESCO expenses) are as follows:

(in thousands)

Other
Operating
Expenses

Payroll expense (increased staffing and annual salary increases)

$

1,430


Absence of Xeron Inc. ("Xeron") 2017 wind-down costs

(829)


Facilities and maintenance costs as a result of ongoing compliance activities

706


Other operating expenses including vehicle, credit collections, other taxes, sales and advertising
costs

654


Incentive compensation costs (based on period-over-period results)

645


Benefits and employee-related costs(1)

442


Depreciation, amortization and property taxes associated with recent capital investments

410


Other

(325)


Period over period increase in other operating expenses

$

3,133



(1) Since the Company self-insures for healthcare costs, benefits costs fluctuate depending upon filed claims

PESCO results

(in thousands)

PESCO

Nine Months Ended September 30,

2018


2017


Change


Percent
Change

Gross margin

$

4,512



$

5,748



$

(1,236)



(21.5)

%

Depreciation, amortization and property taxes

456



111



345



310.8

%

Other operating expenses

5,276



3,453



1,823



52.8

%

Operating (loss) income

$

(1,220)



$

2,184



$

(3,404)



(155.9)

%

For the nine months ended September 30, 2018, PESCO's gross margin was lower by $1.2 million compared to the same period in 2017. The decreased margin reflected the impact of imbalance adjustments, the change in margin contribution from various asset management contracts, and MTM adjustments primarily during the first quarter of 2018 which largely offset the extraordinary costs of meeting demand requirements in the Mid-Atlantic region due to pipeline capacity constraints associated with the 2018 Bomb Cyclone and other market conditions.  For the nine months ended September 30, 2018, PESCO's operating expenses increased by $1.8 million compared to the same period in 2017 including increased planned expenses to build out its staff, infrastructure and risk management systems to keep pace with its growth strategy and $596,000 in additional expenses related to its August 2017 acquisition of certain assets of ARM Energy Management, LLC ("ARM"), a natural gas supply and supply management company servicing customers in Western Pennsylvania.

Matters discussed in this release may include forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements. Please refer to the Safe Harbor for Forward-Looking Statements in the Company's 2017 Annual Report on Form 10-K for further information on the risks and uncertainties related to the Company's forward-looking statements.

Unless otherwise noted, earnings per share are presented on a diluted basis.

Conference Call

Chesapeake Utilities will host a conference call on Monday, November 12, 2018 at 10:30 a.m. Eastern Time to discuss the Company's financial results for the quarter and nine months ended September 30, 2018.  To participate in this call, dial 855.801.6270 and reference Chesapeake Utilities' 2018 Third Quarter Results Conference Call.  To access the replay recording of this call, the accompanying transcript, and other pertinent quarterly information, use the link CPK - Conference Call Audio Replay, or visit the Investors/Events and Presentations section of Company's website at www.chpk.com/.

About Chesapeake Utilities Corporation

Chesapeake Utilities is a diversified energy company engaged in natural gas distribution, transmission, gathering and processing, and marketing; electricity generation and distribution; propane gas distribution; and other businesses. Information about Chesapeake Utilities and its family of businesses is available at www.chpk.com or through its Investor Relations (IR) App.

Please note that Chesapeake Utilities Corporation is not affiliated with Chesapeake Energy, an oil and natural gas exploration company headquartered in Oklahoma City, Oklahoma.

For more information, contact:

Beth W. Cooper
Senior Vice President and Chief Financial Officer
302.734.6799

Financial Summary
(in thousands, except per share data)



Three Months Ended


Nine Months Ended


September 30,


September 30,


2018


2017


2018


2017

Gross Margin








  Regulated Energy segment

$

51,269



$

46,909



$

162,926



$

151,147


  Unregulated Energy segment

11,933



13,272



59,149



53,827


  Other businesses and eliminations

(84)



(105)



(397)



(325)


 Total Gross Margin

$

63,118



$

60,076



$

221,678



$

204,649










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


Pre-tax Income

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










Earnings Per Share of Common Stock








Basic

$

0.34



$

0.42



$

2.37



$

1.96


Diluted

$

0.34



$

0.42



$

2.36



$

1.96


 

Financial Summary Highlights

Key variances, between the three months ended September 30, 2017 and 2018, included:

(in thousands, except per share data)


Pre-tax
Income


Net
Income


Earnings
Per Share

Third Quarter of 2017 Reported Results


$

11,157



$

6,833



$

0.42









Increased (Decreased) Gross Margins:







Eastern Shore and Peninsula Pipeline service expansions*


3,616



2,636



0.16


Pass-through of lower taxes to regulated energy customers(1)


(1,993)



(1,454)



(0.09)


Implementation of Eastern Shore settled rates* (2)


1,161



847



0.05


Natural gas growth (excluding service expansions)


734



535



0.03


PESCO results (decrease primarily due to imbalance adjustments)


(629)



(459)



(0.03)


Retail margins per gallon


(469)



(342)



(0.02)


Florida electric reliability/modernization program*


464



339



0.02


Unregulated energy customer consumption


(374)



(273)



(0.02)


GRIP*


329



240



0.01




2,839



2,069



0.11









 Decreased (Increased) Other Operating Expenses:







Outside services and facilities maintenance costs (3)


(1,532)



(1,117)



(0.07)


Depreciation, asset removal and property tax costs due to new capital investments (3)


(1,447)



(1,055)



(0.06)


Benefits and other employee-related expenses (3)


(758)



(553)



(0.03)


Payroll expense (increased staffing and annual salary increases) (3)


(754)



(550)



(0.03)


Operating expenses to increase staffing, infrastructure and risk management systems
necessary to support growth for PESCO


(452)



(330)



(0.02)


Early termination of facility lease due to consolidation of operations facilities(3)


(423)



(309)



(0.02)




(5,366)



(3,914)



(0.23)









Interest charges


(1,109)



(809)



(0.04)


Income taxes - including TCJA impact - decreased effective tax rate for regulated energy




1,454



0.09


Income taxes  - including TCJA impact - change in effective tax rate for unregulated
energy and other operations




(151)



(0.01)


Net other changes


74



56






(1,035)



550



0.04









Third Quarter of 2018 Reported Results


$

7,595



$

5,538



$

0.34



 (1) "Pass-through of lower taxes to regulated energy customers" represents the amounts that have already been refunded to customers or reserves established for future refunds and/or lower rates to customers in 2018 as a result of lower taxes due to the TCJA, which are offset by the corresponding decrease in federal income taxes and are expected to have no impact on net income.


(2) Excluding pass-through of lower taxes to regulated energy customers associated with the TCJA, which are broken out separately and discussed in footnote 1.


(3) Excluding incremental operating expenses for PESCO.

*See the Major Projects and Initiatives table later in this press release.

Key variances, between the nine months ended September 30, 2017 and 2018, included:

(in thousands, except per share data)


Pre-tax
Income


Net
Income


Earnings
Per Share

Nine Months Ended September 30, 2017 Reported Results


$

52,804



$

32,023



$

1.96


Adjusting for unusual items:







One-time separation expenses associated with a former executive


(1,548)



(1,421)



(0.09)


Absence of Xeron expenses, including 2017 wind-down expenses


829



601



0.04




(719)



(820)



(0.05)


Increased (Decreased) Gross Margins:







Pass-through of lower taxes to regulated energy customers(1)


(7,530)



(5,457)



(0.33)


Implementation of Eastern Shore settled rates* (2)


6,256



4,534



0.28


Eastern Shore and Peninsula Pipeline service expansions*


5,966



4,323



0.26


Return to normal weather


5,342



3,872



0.24


Natural gas growth (including customer and consumption growth, but excluding
service expansions)


4,098



2,970



0.18


Unregulated energy growth excluding PESCO


1,704



1,234



0.08


Florida electric reliability/modernization program*


1,231



892



0.05


GRIP*


931



675



0.04


Non-recurring margin decrease at PESCO


(863)



(626)



(0.04)


Margin from PESCO operations


(373)



(271)



(0.02)




16,762



12,146



0.74


 Decreased (Increased) Other Operating Expenses:







Depreciation, asset removal and property tax costs due to new capital investments (3)


(3,401)



(2,465)



(0.15)


Payroll expense (increased staffing and annual salary increases)(3)


(3,287)



(2,382)



(0.15)


Facilities maintenance costs (3)


(2,275)



(1,649)



(0.10)


Operating expenses to increase staffing, infrastructure and risk management systems
necessary to support growth for PESCO


(2,167)



(1,571)



(0.10)


Incentive compensation costs (based on period-over-period results)(3)


(1,046)



(758)



(0.05)


Vehicle, credit collections, other taxes, sales and advertising costs (3)


(1,010)



(732)



(0.04)


Benefits and other employee-related expenses (3)


(749)



(543)



(0.03)


Regulatory costs (3)


536



389



0.02


Early termination of facility lease due to consolidation of operations facilities(3)


(423)



(306)



(0.02)




(13,822)



(10,017)



(0.62)









Interest charges


(2,843)



(2,060)



(0.13)


Income taxes - including TCJA impact - decreased effective tax rate for regulated energy




5,457



0.33


Income taxes - including TCJA impact - decreased effective tax rate for unregulated
energy and other operations




1,087



0.07


Net other changes


1,328



963



0.06




(1,515)



5,447



0.33









Nine Months Ended September 30, 2018 Reported Results


$

53,510



$

38,779



$

2.36



(1) "Pass-through of lower taxes to regulated energy customers" represents amounts that have already been refunded to customers or reserves established for future refunds and/or lower rates to customers in 2018 as a result of lower taxes due to the TCJA, which are offset by the corresponding decrease in federal income taxes and are expected to have no impact on net income.


(2) Excluding pass-through of lower taxes to regulated energy customers associated with the TCJA, which are broken out separately and discussed in footnote 1


(3) Excluding incremental operating expenses for PESCO.

*See the Major Projects and Initiatives table later in this press release.

Recently Completed and Ongoing Major Projects and Initiatives
The Company constantly seeks and develops additional projects and initiatives in order to further increase shareholder value and serve its customers. The following represent the major projects recently completed and currently underway. In the future, the Company will add new projects to this table as such projects are initiated.


Gross Margin for the Period


Three Months Ended


Nine Months Ended


Year Ended


Estimate for


September 30,


September 30,


December 31,


Fiscal

in thousands

2018


2017


2018


2017


2017


2018


2019

Florida GRIP

$

3,722



$

3,393



$

10,933



$

10,002



$

13,454



$

14,287



$

14,370


Eastern Shore Rate Case (1)

2,181



1,020



7,276



1,020



3,693



9,800



9,800


Florida Electric Reliability/Modernization Pilot Program (1)

464





1,231





94



1,558



1,558


New Smyrna Beach, Florida Project (1)

352





1,056





235



1,409



1,409


2017 Eastern Shore System Expansion Project - 
including interim services (1)

2,409





4,439





433



8,009



15,773


Northwest Florida Expansion Project (1)

1,307





2,177







3,484



6,500


(Palm Beach County) Belvedere, Florida Project (1)













2,023


Total

$

10,435



$

4,413



$

27,112



$

11,022



$

17,909



$

38,547



$

51,433



(1) Gross margin amounts included in this table have not been adjusted to reflect the impact of the TCJA.  Any refunds and/or rate reductions implemented in the Company's regulated businesses were or will be offset by lower federal income taxes due to the TCJA.

Ongoing Growth Initiatives

GRIP
GRIP is a natural gas pipe replacement program approved by the Florida Public Service Commission ("PSC") that allows automatic recovery in rates of capital related costs and a return on investment, associated with the replacement of mains and services. Since the program's inception in August 2012, we have invested $123.4 million to replace 261 miles of qualifying distribution mains, including $9.5 million during the first nine months of 2018. GRIP generated additional gross margin of $329,000 and $931,000 for the three and nine months ended September 30, 2018, respectively, compared to the same periods in 2017.

Regulatory Proceedings

Eastern Shore Rate Case/Settled Rates
Eastern Shore's rate case settlement agreement became final in April 2018, with settlement rates effective January 1, 2018. The final agreement increases Eastern Shore's annual operating income by $6.6 million, representing $9.8 million from increased rates, offset by $3.2 million in lower federal income taxes. For the three and nine months ended September 30, 2018, Eastern Shore recognized incremental gross margin of approximately $1.2 million and $6.3 million, respectively.  As of September 30, 2018, Eastern Shore refunded its customers a total of $2.5 million related to the decrease in federal income taxes as a result of the TCJA.

Florida Electric Reliability/Modernization Program
In December 2017, the Florida PSC approved a $1.6 million annualized rate increase, effective January 2018, for the recovery of a limited number of investments and costs related to reliability, safety and modernization for the Florida Public Utilities Company ("FPU") electric distribution system. This increase will continue through at least the last billing cycle of December 2019. For the three and nine months ended September 30, 2018, additional margin of $464,000 and $1.2 million, respectively, was generated.

Major Projects and Initiatives Currently Underway

New Smyrna Beach, Florida Project
In the fourth quarter of 2017, the Company commenced construction of a 14-mile gas transmission pipeline to provide additional capacity to serve current and planned customer growth in the Company's New Smyrna Beach service area. The project was partially placed into service at the end of 2017 and is expected to be fully in service during the fourth quarter of 2018.  For the three and nine months ended September 30, 2018, the project generated incremental gross margin of approximately $352,000 and $1.1 million, respectively, and is expected to generate $1.4 million annually.

2017 Eastern Shore System Expansion Project
In November 2017, Eastern Shore began construction of a $117.0 million system expansion that will increase its capacity by 26 percent once completed. The Company has invested $103.3 million through September 30, 2018 and expects to substantially complete the project during the remainder of 2018. The first phase of the project was placed into service in December 2017. Additional segments of the project were placed into service over the first nine months of 2018. The project generated $2.4 million and $4.4 million in incremental gross margin, including margin from interim services, during the three and nine months ended September 30, 2018, respectively.  The project is expected to produce approximately $15.8 million annually in gross margin once complete through 2022, and $13.2 million in annual gross margin thereafter.

Northwest Florida Expansion Project
In the Company's first expansion of natural gas service into Northwest Florida, Peninsula Pipeline has completed construction of transmission lines, and the Company's Florida natural gas division has completed construction of lateral distribution lines to serve several industrial customers. The project was placed into service in May 2018 and generated incremental gross margin of $1.3 million and $2.2 million for the three and nine months ended September 30, 2018, respectively.  The estimated annual gross margin from this project is $6.5 million.

(Palm Beach County) Belvedere, Florida Project
Peninsula Pipeline is constructing a transmission line to deliver natural gas to the Company's natural gas distribution system in West Palm Beach. The Company expects to complete this project by mid-2019 and estimates that the project will generate $2.0 million in annual gross margin.

Impact of Hurricane Michael
In October 2018, Hurricane Michael passed through the Company's electric distribution operation service territory in Northwest Florida. The hurricane caused widespread and severe damage to the Company's infrastructure resulting in 100% of its customers losing electrical service. The Company has restored power to those customers who are able to accept power following Hurricane Michael. Efforts to restore the severely damaged infrastructure will continue into the foreseeable future and the Company estimates that it will spend over $50.0 million towards these restoration and reliability efforts.  Consistent with past practices, at the appropriate time, FPU will seek a recovery of the associated storm related costs.  The Company has developed a preliminary range of the negative earnings impact on 2018's results, which is estimated at $0.01-$0.03 per share.

Future Projects not included in the Table above

Del-Mar Energy Pathway Project
In September 2018, Eastern Shore filed with the Federal Energy Regulatory Commission, an application to construct the Del-Mar Energy Pathway project.  The proposed project will provide an additional 14,300 dekatherms per day of capacity to four customers.  The benefits of this project include additional natural gas transmission pipeline infrastructure in eastern Sussex County, Delaware, and the initial extension of Eastern Shore's pipeline system into Somerset County, Maryland.  The estimated annual gross margin from this project is $5.1 million.

Other major factors influencing gross margin

Weather and Consumption
Weather did not materially impact results for the three months ended September 30, 2018.  For the nine months ended September 30, 2018, colder temperatures, as compared to the prior year period contributed $5.3 million in incremental gross margin. While temperatures during the first nine months of 2018 were colder than the same period in 2017, temperatures were still warmer than normal, as shown in the table below. The Company estimates that it would have generated an additional $2.2 million in gross margin if temperatures for the nine months ended September 30, 2018 had been normal.  The following table summarizes heating degree-days ("HDD") and cooling degree-days ("CDD") variances from the 10-year average HDD/CDD ("Normal") for the three and nine months ended September 30, 2018 and 2017.

HDD and CDD Information


Three Months Ended




Nine Months Ended




September 30,




September 30,




2018


2017


Variance


2018


2017


Variance

Delmarva












Actual HDD

10



16



(6)



2,729



2,262



467


10-Year Average HDD ("Delmarva Normal")

61



61





2,846



2,850



(4)


Variance from Delmarva Normal

(51)



(45)





(117)



(588)




Florida












Actual HDD







507



298



209


10-Year Average HDD ("Florida Normal")







533



555



(22)


Variance from Florida Normal







(26)



(257)




Ohio












Actual HDD

55



80



(25)



3,707



3,070



637


10-Year Average HDD ("Ohio Normal")

91



92



(1)



3,774



3,866



(92)


Variance from Ohio Normal

(36)



(12)





(67)



(796)




Florida












Actual CDD

1,613



1,526



87



2,704



2,606



98


10-Year Average CDD ("Florida CDD Normal")

1,535



1,542



(7)



2,593



2,579



14


Variance from Florida CDD Normal

78



(16)





111



27




Natural Gas Distribution Customer and Consumption Growth
The Company's natural gas distribution operations generated $734,000 and $4.1 million of additional margin for the three and nine months ended September 30, 2018, respectively.  The breakdown of the increased margin is as follows:



Three Months Ended


Nine Months Ended

(in thousands)


September 30, 2018


September 30, 2018

Customer growth:





Residential


$

309



$

1,171


Commercial and industrial, excluding new service in Northwest Florida


283



927


New service in Northwest Florida


305



652


Total customer growth


897



2,750







Volume growth:





Residential


(239)



613


Commercial and industrial


57



1,030


Other  - including unbilled revenue


19



(295)


Total volume growth


(163)



1,348







Total natural gas distribution growth


$

734



$

4,098


Customer growth for the Company's natural gas distribution operations generated $897,000 and $2.8 million in additional gross margin for the three and nine months ended September 30, 2018, respectively, compared to the same periods in 2017.  The additional margin was generated from an increase of approximately 3.9 percent in the average number of residential customers served, growth in volumes delivered to commercial and industrial customers on the Delmarva Peninsula and in Florida, and new service initiated to customers in Northwest Florida.

Lower consumption by natural gas distribution customers reduced margin by $163,000 during the third quarter of 2018 compared to the same period in 2017. The lower consumption was due primarily to a decline in residential consumption in Florida, as compared to the increased customer consumption due to Hurricane Irma in the prior year period. These businesses generated $1.3 million in additional gross margin for the nine months ended September 30, 2018, compared to the same period in 2017, from higher consumption by residential and commercial customers.

Propane Operations

Gross margin generated by the Company's propane operations decreased by $834,000 during the three months ended September 30, 2018, compared to the same period in 2017, as a result of lower retail margins per gallon and the timing of propane deliveries to customers. Customer consumption for the Company's Florida propane operations was higher during the third quarter of 2017 due to the impact of Hurricane Irma.

For the nine months ended September 30, 2018, the Company's propane operations generated $4.9 million in incremental margin compared to the same period in 2017. More normal temperatures accounted for $2.9 million of the margin increase during the nine months ended September 30, 2018.  The balance of the increase reflected increased customer growth, continued expansion of Alliance AutoGas through the addition of new customers, higher sales and revenues from service contracts and increased wholesale sales activities.

PESCO

PESCO's gross margin for the three and nine months ended September 30, 2018 decreased by $629,000 and $1.2 million, respectively, compared to the same periods in 2017. The following table summarizes the changes in PESCO'S year-over-year margin for the three and nine months ended September 30, 2018:


Three Months Ended


Nine Months Ended


September 30, 2018


September 30, 2018

(in thousands)




2017 Gross margin

$

1,360



$

5,749


Imbalance positions and true up

(493)



(493)


Margin changes from growth and the acquisition of certain assets from
ARM in 2017

(136)



119


Non-recurring margin factors - change in gross margin contribution
from various asset management agreements, MTM impact, Bomb
Cyclone impact and other adjustments

 



(863)


2018 Gross margin

$

731



$

4,512


PESCO generated an operating loss of $1.1 million for the three months ended September 30, 2018, compared to a loss of $63,000 during the prior year period.  The quarter-over-quarter decreased results reflect lower gross margin growth accompanied by a $452,000 increase in planned operating expenses as a result of increased staffing, infrastructure and risk management system costs as PESCO executes its growth strategy.

For the nine months ended September 30, 2018, PESCO reported an operating loss of $1.2 million, compared to operating income of $2.2 million during the prior year period. The year-over-year operating loss primarily reflects increased expenses incurred for the reasons discussed in the paragraph above, $596,000 in additional expenses related to the acquisition of certain assets from ARM, as well as the impact of several non-recurring margin adjustments, largely during the first quarter of 2018.

Xeron

Xeron's operations were wound down during the second quarter of 2017.  Operating income for the Company's Unregulated Energy Segment for the nine months ended September 30, 2018, improved by $829,000, compared to the prior year period due to the absence of Xeron's 2017 wind-down expenses and operating losses.

Capital Investment Growth and Financing Plan

Capital expenditures totaled $176.1 million for the nine months ended September 30, 2018. The Company currently projects capital expenditures of approximately $216.4 million for 2018.  Forecasted capital expenditures by segment and business line are shown below:


2018

(dollars in thousands)


Regulated Energy:


Natural gas distribution

$

65,594


Natural gas transmission

110,813


Electric distribution

8,930


Total Regulated Energy

185,337


Unregulated Energy:


Propane distribution

13,359


Other unregulated energy

7,413


Total Unregulated Energy

20,772


Other:


Corporate and other businesses

10,289


Total Other

10,289


Total 2018 Forecasted Capital Expenditures

$

216,398


The Company's target equity to total capitalization ratio, including short-term borrowings, is between 50 and 60 percent. Over the past several years, the Company has been deploying increased amounts of capital on new projects, many of which have longer construction periods.  The Company seeks to align the permanent financing of these capital projects with their in-service dates to the extent feasible.

In 2017, the Company refinanced $70.0 million of short-term debt as 3.25 percent senior notes.  The Company previously executed a shelf agreement with New York Life Investors LLC, subsequently issued $50.0 million of unsecured senior notes in May 2018 and will issue an additional tranche by November 2018 at an average interest rate of 3.53 percent for 20 years.

In September 2018, the Company amended the shelf agreement with PGIM, Inc., formerly known as Prudential Investment Management Inc. ("Prudential"), pursuant to which the Company may request that Prudential purchase up to $150.0 million of the Company's unsecured debt over a three year period which expires in August 2021.  Following this amendment, in September 2018, Prudential accepted the Company's request to purchase $100.0 million of notes on or before August 20, 2019. The new notes will bear interest at the rate of 3.98% and have a maturity date not to exceed 20 years from the date of issuance.  The Company expects to access additional permanent capital to align the financing with new investments and to maintain a solid balance sheet to support future capital deployment.


Chesapeake Utilities Corporation and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

(in thousands, except shares and per share data)



Three Months Ended


Nine Months Ended


September 30,


September 30,


2018


2017


2018


2017

Operating Revenues








Regulated Energy

$

72,770



$

69,703



$

252,667



$

238,353


Unregulated Energy and other

67,509



57,233



263,632



198,827


Total Operating Revenues

140,279



126,936



516,299



437,180


Operating Expenses








Regulated Energy cost of sales

21,501



22,794



89,741



87,206


Unregulated Energy and other cost of sales

55,660



44,066



204,880



145,325


Operations

32,821



29,274



101,804



91,778


Maintenance

3,208



2,737



10,419



9,370


Gain from a settlement





(130)



(130)


Depreciation and amortization

10,633



9,362



30,176



27,267


Other taxes

4,420



4,071



13,719



12,572


Total operating expenses

128,243



112,304



450,609



373,388


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


Weighted Average Common Shares Outstanding:








Basic

16,378,545



16,344,442



16,366,608



16,334,210


Diluted

16,428,439



16,389,635



16,416,255



16,378,633


Earnings Per Share of Common Stock:








Basic

$

0.34



$

0.42



$

2.37



$

1.96


Diluted

$

0.34



$

0.42



$

2.36



$

1.96


 

Chesapeake Utilities Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

 

Assets


September 30, 2018


December 31, 2017

(in thousands, except shares and per share data)





 Property, Plant and Equipment





Regulated Energy


$

1,242,840



$

1,073,736


Unregulated Energy


220,721



210,682


Other businesses and eliminations


34,975



27,699


 Total property, plant and equipment


1,498,536



1,312,117


 Less:  Accumulated depreciation and amortization


(295,449)



(270,599)


 Plus:  Construction work in progress


60,243



84,509


 Net property, plant and equipment


1,263,330



1,126,027


 Current Assets





Cash and cash equivalents


6,215



5,614


Trade and other receivables (less allowance for uncollectible accounts of $987
and $936, respectively)


52,660



77,223


Accrued revenue


12,352



22,279


Propane inventory, at average cost


7,444



8,324


Other inventory, at average cost


4,786



12,022


Regulatory assets


6,891



10,930


Storage gas prepayments


6,989



5,250


Income taxes receivable


8,725



14,778


Prepaid expenses


9,775



13,621


Derivative assets, at fair value


10,568



1,286


Other current assets


2,557



7,260


 Total current assets


128,962



178,587


 Deferred Charges and Other Assets





Goodwill


19,604



19,604


Other intangible assets, net


4,073



4,686


Investments, at fair value


7,951



6,756


Regulatory assets


76,343



75,575


Other assets


5,293



3,699


 Total deferred charges and other assets


113,264



110,320


Total Assets


$

1,505,556



$

1,414,934


 

Chesapeake Utilities Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)


Capitalization and Liabilities


September 30, 2018


December 31, 2017

(in thousands, except shares and per share data)





 Capitalization





 Stockholders' equity





Preferred stock, par value $0.01 per share (authorized 2,000,000 shares), no
shares issued and outstanding


$



$


Common stock, par value $0.4867 per share (authorized 50,000,000 shares)


7,971



7,955


 Additional paid-in capital


255,509



253,470


 Retained earnings


249,805



229,141


 Accumulated other comprehensive loss


(4,987)



(4,272)


 Deferred compensation obligation


3,818



3,395


 Treasury stock


(3,818)



(3,395)


 Total stockholders' equity


508,298



486,294


 Long-term debt, net of current maturities


241,597



197,395


 Total capitalization


749,895



683,689


 Current Liabilities





Current portion of long-term debt


9,613



9,421


Short-term borrowing


268,293



250,969


Accounts payable


60,228



74,688


Customer deposits and refunds


34,887



34,751


Accrued interest


3,969



1,742


Dividends payable


6,060



5,312


Accrued compensation


10,396



13,112


Regulatory liabilities


9,099



6,485


Derivative liabilities, at fair value


9,774



6,247


Other accrued liabilities


14,819



10,273


 Total current liabilities


427,138



413,000


 Deferred Credits and Other Liabilities





Deferred income taxes


146,814



135,850


Regulatory liabilities


141,840



140,978


Environmental liabilities


7,941



8,263


Other pension and benefit costs


28,839



29,699


Deferred investment tax credits and other liabilities


3,089



3,455


 Total deferred credits and other liabilities


328,523



318,245


Total Capitalization and Liabilities


$

1,505,556



$

1,414,934


 


Chesapeake Utilities Corporation and Subsidiaries

Distribution Utility Statistical Data (Unaudited)




For the Three Months Ended September 30, 2018


For the Three Months Ended September 30, 2017



Delmarva NG
Distribution


Chesapeake
Utilities Florida
NG Division


FPU NG
Distribution


FPU Electric
Distribution


Delmarva NG
Distribution


Chesapeake
Utilities Florida
NG Division


FPU NG
Distribution


FPU Electric
Distribution

Operating Revenues

(in thousands)















  Residential


$

5,497



$

1,290



$

5,601



$

13,991



$

5,705



$

1,247



$

6,544



$

14,112


  Commercial


4,961



1,424



5,354



11,245



5,888



1,344



6,070



11,701


  Industrial


1,722



3,068



4,723



361



1,700



1,524



5,025



748


  Other (1)


854



500



1,712



(1,767)



92



954



(854)



(2,481)


Total Operating Revenues


$

13,034



$

6,282



$

17,390



$

23,830



$

13,385



$

5,069



$

16,785



$

24,080



















Volume (in Dts for natural gas and MWHs for electric)













  Residential


180,396



53,051



214,213



96,218



184,993



53,228



247,118



93,889


  Commercial


427,173



1,158,545



337,091



92,416



449,543



1,172,625



366,318



88,917


  Industrial


1,213,527



6,511,997



1,130,299



3,180



1,169,465



2,393,709



1,082,701



4,340


  Other


26,648





434,976



1,913



35,519





334,882



1,880


Total


1,847,744



7,723,593



2,116,579



193,727



1,839,520



3,619,562



2,031,019



189,026



















Average Customers















  Residential


70,795



16,484



55,763



24,811



68,118



15,782



54,543



24,628


  Commercial(2)


6,907



1,509



3,912



7,507



6,782



1,425



4,007



7,455


  Industrial(2)


161



17



2,329



2



145



78



2,132



2


  Other


5





12





3








Total


77,868



18,010



62,016



32,320



75,048



17,285



60,682



32,085



















 

Chesapeake Utilities Corporation and Subsidiaries

Distribution Utility Statistical Data (Unaudited)




For the Nine Months Ended September 30, 2018


For the Nine Months Ended September 30, 2017



Delmarva NG
Distribution


Chesapeake
Utilities Florida
NG Division


FPU NG
Distribution


FPU Electric
Distribution


Delmarva NG
Distribution


Chesapeake
Utilities Florida
NG Division


FPU NG
Distribution


FPU Electric
Distribution

Operating Revenues

(in thousands)















  Residential


$

54,819



$

4,510



$

24,488



$

35,338



$

42,511



$

4,165



$

24,945



$

33,915


  Commercial


28,655



4,669



20,489



28,879



23,724



4,262



23,114



31,190


  Industrial


6,015



7,794



16,314



1,131



5,383



4,860



15,727



1,952


  Other (1)


(4,498)



1,489



(2,406)



(4,415)



(1,586)



2,819



(4,909)



(4,277)


Total Operating Revenues


$

84,991



$

18,462



$

58,885



$

60,933



$

70,032



$

16,106



$

58,877



$

62,780



















Volume (in Dts for natural gas and MWHs for electric)













  Residential


3,180,160



278,976



1,066,559



241,428



2,576,001



253,888



1,022,598



224,513


  Commercial


2,844,296



3,526,943



1,304,827



233,223



2,445,262



3,991,244



1,426,875



229,545


  Industrial


4,030,716



13,278,643



3,680,779



11,810



3,749,961



8,519,221



3,372,394



12,250


  Other


56,941





1,419,623



5,716



66,273





1,281,993



5,627


Total


10,112,113



17,084,562



7,471,788



492,177



8,837,497



12,764,353



7,103,860



471,935



















Average Customers















  Residential


71,022



16,366



55,541



24,723



68,419



15,739



54,312



24,549


  Commercial(2)


6,975



1,509



3,923



7,494



6,843



1,417



4,084



7,443


  Industrial(2)


155



16



2,289



2



145



78



2,042



2


  Other


5





11





6








Total


78,157



17,891



61,764



32,219



75,413



17,234



60,438



31,994





















(1)

Operating Revenues from "Other" sources include unbilled revenue, under (over) recoveries of fuel cost, conservation revenue, other miscellaneous charges, fees for billing services provided to third parties, and adjustments or changes in taxes, such as the TCJA, which are passed through to customers. This amount also includes the reserve for estimated customer refunds associated with the TCJA.

(2)

Certain volumes and customers have been reclassified when compared to the prior year for consistency with current year presentation.

 

Cision View original content:http://www.prnewswire.com/news-releases/chesapeake-utilities-corporation-reports-third-quarter-2018-results-300747168.html

SOURCE Chesapeake Utilities Corporation


© PRNewswire 2018
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