News
View printer-friendly version |
<< Back |
Chesapeake Utilities Corporation Reports Record Results For Fiscal Year 2020; Updates Earnings And Capital Guidance
Fourth quarter 2020 net income was
Higher earnings for 2020 reflect increased earnings from the Hurricane Michael regulatory settlement reached with the
In
"To say that 2020 was another remarkable year of performance would be an understatement. Our employees helped the Company deliver another year of record-breaking performance, our 14th year of consecutive earnings growth, despite the many headlines and challenges that not only faced us as a company but at a personal level and also as a country – a global pandemic, social justice inequities and political turmoil. Our team rose to the challenges, working together to deliver strong performance, to capitalize on many new growth opportunities, to keep our current expansion projects on target, and to drive efficiency, increased collaboration and continuous improvement across the organization," stated
The Company has continued to review its projections and affirms its EPS guidance of
As the basis for its expanded EPS guidance, the Company's updated strategic plan supported the extension of its capital expenditure guidance. At the end of 2017, Management provided capital expenditure guidance of
*Unless otherwise noted, EPS information is presented on a diluted basis.
**This press release includes references to non-Generally Accepted Accounting Principles ("GAAP") financial measures, including gross margin. 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.
Operating Results for the Years Ended
Consolidated Results
Year Ended |
||||||||||||||
(in thousands) |
2020 |
2019 |
Change |
Percent Change |
||||||||||
Gross margin |
$ |
350,260 |
$ |
325,104 |
$ |
25,156 |
7.7 |
% |
||||||
Depreciation, amortization and property taxes |
77,913 |
63,415 |
14,498 |
22.9 |
% |
|||||||||
Other operating expenses |
159,624 |
155,404 |
4,220 |
2.7 |
% |
|||||||||
Operating income |
$ |
112,723 |
$ |
106,285 |
$ |
6,438 |
6.1 |
% |
Operating income for the year ended
Regulated Energy Segment
Year Ended |
||||||||||||||
(in thousands) |
2020 |
2019 |
Change |
Percent Change |
||||||||||
Gross margin |
$ |
260,752 |
$ |
240,203 |
$ |
20,549 |
8.6 |
% |
||||||
Depreciation, amortization and property taxes |
64,367 |
51,683 |
12,684 |
24.5 |
% |
|||||||||
Other operating expenses |
104,261 |
101,936 |
2,325 |
2.3 |
% |
|||||||||
Operating income |
$ |
92,124 |
$ |
86,584 |
$ |
5,540 |
6.4 |
% |
Operating income for the Regulated Energy segment for 2020 was
The key components of the increase in gross margin are shown below:
(in thousands) |
|||
Margin contribution from Hurricane Michael regulatory proceeding settlement |
$ |
10,864 |
|
|
8,006 |
||
Natural gas distribution customer growth (excluding service expansions) |
3,370 |
||
Margin contribution from the |
1,344 |
||
Florida GRIP |
1,239 |
||
|
1,033 |
||
Unfavorable COVID-19 impacts on gross margin |
(3,834) |
||
Decreased customer consumption - primarily weather related |
(1,340) |
||
Other |
(133) |
||
Year-over-year increase in gross margin |
$ |
20,549 |
The major components of the increase in other operating expenses are as follows:
(in thousands) |
|||
Unfavorable COVID-19 impacts (higher operating expenses) |
$ |
2,285 |
|
Insurance (non-health) expense - both insured and self-insured components |
1,442 |
||
Operating expenses from the |
651 |
||
Deferral of net expense increases of COVID-19 under PSC orders |
(1,925) |
||
Other variances |
(128) |
||
Year-over-year increase in other operating expenses |
$ |
2,325 |
Unregulated Energy Segment
Year Ended |
||||||||||||||
(in thousands) |
2020 |
2019 |
Change |
Percent Change |
||||||||||
Gross margin |
$ |
89,746 |
$ |
85,266 |
$ |
4,480 |
5.3 |
% |
||||||
Depreciation, amortization and property taxes |
13,438 |
11,598 |
1,840 |
15.9 |
% |
|||||||||
Other operating expenses |
55,644 |
53,730 |
1,914 |
3.6 |
% |
|||||||||
Operating income |
$ |
20,664 |
$ |
19,938 |
$ |
726 |
3.6 |
% |
Operating income for the Unregulated Energy segment for 2020 was
The key components of the increase in gross margin are shown below:
(in thousands) |
||||
Propane Operations |
||||
|
$ |
3,960 |
||
Increased retail propane margins per gallon driven by favorable market conditions and supply management |
1,937 |
|||
Decreased customer consumption - primarily weather related |
(2,448) |
|||
Marlin Gas Services |
||||
Increased demand for CNG services |
1,821 |
|||
Aspire Energy |
||||
Higher margins from negotiated rate increases |
1,312 |
|||
Decreased customer consumption - primarily weather related |
(517) |
|||
Unfavorable COVID-19 impacts on gross margin |
(1,457) |
|||
Other variances |
(128) |
|||
Year-over-year increase in gross margin |
$ |
4,480 |
The key components of the increase in other operating expenses are as follows:
(in thousands) |
|||
Operating expenses from |
$ |
1,510 |
|
Insurance expense (non-health) - both insured and self-insured |
645 |
||
Other variances |
(241) |
||
Year-over-year increase in other operating expenses |
$ |
1,914 |
Operating Results for the Quarters Ended
Consolidated Results
Three Months Ended |
||||||||||||||
(in thousands) |
2020 |
2019 |
Change |
Percent Change |
||||||||||
Gross margin |
$ |
96,841 |
$ |
88,900 |
$ |
7,941 |
8.9 |
% |
||||||
Depreciation, amortization and property taxes |
20,810 |
16,078 |
4,732 |
29.4 |
% |
|||||||||
Other operating expenses |
40,826 |
43,181 |
(2,355) |
(5.5) |
% |
|||||||||
Operating income |
$ |
35,205 |
$ |
29,641 |
$ |
5,564 |
18.8 |
% |
Operating income during the fourth quarter of 2020 increased by
Regulated Energy Segment
Three Months Ended |
||||||||||||||
(in thousands) |
2020 |
2019 |
Change |
Percent Change |
||||||||||
Gross margin |
$ |
69,007 |
$ |
63,054 |
$ |
5,953 |
9.4 |
% |
||||||
Depreciation, amortization and property taxes |
17,223 |
12,989 |
4,234 |
32.6 |
% |
|||||||||
Other operating expenses |
26,035 |
28,791 |
(2,756) |
(9.6) |
% |
|||||||||
Operating income |
$ |
25,749 |
$ |
21,274 |
$ |
4,475 |
21.0 |
% |
Operating income for the Regulated Energy segment increased by
The key components of the increase in gross margin are shown below:
(in thousands) |
|||
Margin contribution from Hurricane Michael regulatory proceeding settlement |
$ |
2,603 |
|
|
2,529 |
||
Margin contributions from the |
986 |
||
Natural gas growth (excluding service expansions) |
873 |
||
Florida GRIP |
561 |
||
Decreased customer consumption - primarily weather related |
(657) |
||
Unfavorable COVID-19 impacts |
(1,200) |
||
Other variances |
258 |
||
Quarter-over-quarter increase in gross margin |
$ |
5,953 |
The major components of the decrease in other operating expenses are as follows:
(in thousands) |
|||
Deferral of net expense increases of COVID-19 under PSC orders |
$ |
(1,925) |
|
Facilities maintenance costs and outside services |
(1,279) |
||
Payroll, benefits and other employee-related expenses |
(552) |
||
Operating expenses from the |
540 |
||
Unfavorable COVID-19 impacts (higher operating expenses) |
342 |
||
Other variances |
118 |
||
Quarter-over-quarter decrease in other operating expenses |
$ |
(2,756) |
Unregulated Energy Segment
Three Months Ended |
||||||||||||||
(in thousands) |
2020 |
2019 |
Change |
Percent Change |
||||||||||
Gross margin |
$ |
27,864 |
$ |
25,926 |
$ |
1,938 |
7.5 |
% |
||||||
Depreciation, amortization and property taxes |
3,568 |
3,056 |
512 |
16.8 |
% |
|||||||||
Other operating expenses |
14,682 |
14,249 |
433 |
3.0 |
% |
|||||||||
Operating income |
$ |
9,614 |
$ |
8,621 |
$ |
993 |
11.5 |
% |
Operating income for the Unregulated Energy segment increased by
The major components of the increase in gross margin are shown below:
(in thousands) |
||||
Marlin Gas Services - increased gross margin from demand for CNG transportation services |
$ |
1,127 |
||
Propane Operations: |
||||
|
1,196 |
|||
Decreased customer consumption - primarily weather related |
(897) |
|||
Aspire Energy - higher margins from negotiated rate increases |
862 |
|||
Unfavorable COVID-19 impacts on gross margin |
(312) |
|||
Other variances |
(38) |
|||
Quarter-over-quarter increase in gross margin |
$ |
1,938 |
The major components of the increase in other operating expenses are as follows:
(in thousands) |
||||
Operating expenses from |
$ |
574 |
||
Depreciation, amortization and property tax costs due to new capital investments |
254 |
|||
Payroll, benefits and other employee-related expenses |
(263) |
|||
Other variances |
(132) |
|||
Quarter-over-quarter increase in other operating expenses |
$ |
433 |
Conference Call
About
Please note that
For more information, contact:
Executive Vice President, Chief Financial Officer, and Assistant Corporate Secretary
302.734.6799
Financial Summary |
|||||||||||||||
(in thousands, except per-share data) |
|||||||||||||||
Year Ended |
Quarter Ended |
||||||||||||||
|
|
||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||
Gross Margin |
|||||||||||||||
Regulated Energy segment |
$ |
260,752 |
$ |
240,203 |
$ |
69,007 |
$ |
63,054 |
|||||||
Unregulated Energy segment |
89,746 |
85,266 |
27,864 |
25,926 |
|||||||||||
Other businesses and eliminations |
(238) |
(365) |
(30) |
(80) |
|||||||||||
Total Gross Margin |
$ |
350,260 |
$ |
325,104 |
$ |
96,841 |
$ |
88,900 |
|||||||
Operating Income |
|||||||||||||||
Regulated Energy segment |
$ |
92,124 |
$ |
86,584 |
$ |
25,749 |
$ |
21,274 |
|||||||
Unregulated Energy segment |
20,664 |
19,938 |
9,614 |
8,621 |
|||||||||||
Other businesses and eliminations |
(65) |
(237) |
(157) |
(254) |
|||||||||||
Total Operating Income |
112,723 |
106,285 |
35,206 |
29,641 |
|||||||||||
Other income (expense), net |
3,222 |
(1,847) |
224 |
(1,117) |
|||||||||||
Interest Charges |
21,765 |
22,224 |
6,313 |
5,641 |
|||||||||||
Income from Continuing Operations Before Income Taxes |
94,180 |
82,214 |
29,117 |
22,883 |
|||||||||||
Income Taxes on Continuing Operations |
23,538 |
21,114 |
7,456 |
5,760 |
|||||||||||
Income from Continuing Operations |
70,642 |
61,100 |
21,661 |
17,123 |
|||||||||||
Income (loss) from Discontinued Operations, Net of Tax |
686 |
(1,349) |
691 |
39 |
|||||||||||
Gain on sale of Discontinued Operations, Net of tax |
170 |
5,402 |
— |
5,402 |
|||||||||||
Net Income |
$ |
71,498 |
$ |
65,153 |
$ |
22,352 |
$ |
22,564 |
|||||||
Weighted Average Common Shares Outstanding: |
|||||||||||||||
Basic |
16,711,579 |
16,398,443 |
17,439,993 |
16,403,776 |
|||||||||||
Diluted |
16,770,735 |
16,448,486 |
17,505,291 |
16,461,112 |
|||||||||||
Basic Earnings Per Share of Common Stock |
|||||||||||||||
Earnings from Continuing Operations |
$ |
4.23 |
$ |
3.73 |
$ |
1.24 |
$ |
1.05 |
|||||||
Earnings from Discontinued Operations |
0.05 |
0.24 |
0.04 |
0.33 |
|||||||||||
Basic Earnings Per Share of Common Stock |
$ |
4.28 |
$ |
3.97 |
$ |
1.28 |
$ |
1.38 |
|||||||
Diluted Earnings Per Share of Common Stock |
|||||||||||||||
Earnings from Continuing Operations |
$ |
4.21 |
$ |
3.72 |
$ |
1.24 |
$ |
1.04 |
|||||||
Earnings from Discontinued Operations |
0.05 |
0.24 |
0.04 |
0.33 |
|||||||||||
Diluted Earnings Per Share of Common Stock |
$ |
4.26 |
$ |
3.96 |
$ |
1.28 |
$ |
1.37 |
Financial Summary Highlights |
||||||||||||
Key variances in continuing operations for the year ended |
||||||||||||
(in thousands, except per share data) |
Pre-tax |
Net |
Earnings |
|||||||||
Year ended |
$ |
82,214 |
$ |
61,100 |
$ |
3.72 |
||||||
Adjusting for unusual items: |
||||||||||||
Unfavorable COVID-19 impacts |
(5,864) |
(4,284) |
(0.26) |
|||||||||
Decreased customer consumption - primarily weather related |
(4,305) |
(3,145) |
(0.19) |
|||||||||
Interest expense associated with the early extinguishment of FPU mortgage bonds |
(961) |
(715) |
(0.04) |
|||||||||
Favorable income tax impact associated with the CARES Act |
— |
1,841 |
0.11 |
|||||||||
Gains from sales of assets |
3,162 |
2,317 |
0.14 |
|||||||||
Deferral of COVID expenses under PSC orders |
1,925 |
1,432 |
0.09 |
|||||||||
(6,043) |
(2,554) |
(0.15) |
||||||||||
Increased (Decreased) Gross Margins: |
||||||||||||
Hurricane Michael Settlement Margin Impact* |
10,864 |
7,936 |
0.47 |
|||||||||
Eastern Shore and Peninsula Pipeline service expansions* |
8,006 |
5,849 |
0.35 |
|||||||||
Margin from recent acquisitions* |
5,304 |
3,875 |
0.23 |
|||||||||
Natural gas growth (excluding service expansions) |
3,370 |
2,462 |
0.15 |
|||||||||
Increased retail propane margins per gallon |
1,937 |
1,415 |
0.08 |
|||||||||
Increased demand for CNG services for Marlin Gas Services* |
1,821 |
1,331 |
0.08 |
|||||||||
Aspire Energy rate increases |
1,312 |
959 |
0.06 |
|||||||||
Florida GRIP* |
1,239 |
905 |
0.05 |
|||||||||
|
1,033 |
755 |
0.05 |
|||||||||
34,886 |
25,487 |
1.52 |
||||||||||
(Increased) Decreased Other Operating Expenses (Excluding Cost of Sales): |
||||||||||||
Depreciation and amortization associated with Hurricane Michael regulatory proceeding settlement |
(7,133) |
(5,210) |
(0.31) |
|||||||||
Depreciation, amortization and property tax costs due to new capital investments |
(6,262) |
(4,575) |
(0.27) |
|||||||||
Operating expenses from recent acquisitions |
(3,269) |
(2,388) |
(0.14) |
|||||||||
Insurance |
(2,088) |
(1,525) |
(0.09) |
|||||||||
Payroll, benefits and other employee-related expenses |
716 |
523 |
0.03 |
|||||||||
(18,036) |
(13,175) |
(0.78) |
||||||||||
Interest charges(1) |
(1,232) |
(900) |
(0.05) |
|||||||||
Increased share count from 2020 equity offerings |
— |
— |
(0.08) |
|||||||||
Other income tax effects |
— |
(1,060) |
(0.06) |
|||||||||
Lower pension expense |
1,777 |
1,298 |
0.08 |
|||||||||
Net Other Changes |
614 |
446 |
0.01 |
|||||||||
Year ended |
$ |
94,180 |
$ |
70,642 |
$ |
4.21 |
* See the Major Projects and Initiatives table later in this press release. |
(1) Interest charges includes amortization of a regulatory liability of |
Key variances in continuing operations for the fourth quarter ended
(in thousands, except per share) |
Pre-tax |
Net |
Earnings |
|||||||||
Fourth Quarter 2019 Reported Results from Continuing Operations |
$ |
22,883 |
$ |
17,123 |
$ |
1.04 |
||||||
Adjusting for Unusual items: |
||||||||||||
Decreased customer consumption - primarily weather related |
(1,375) |
(1,023) |
(0.06) |
|||||||||
Unfavorable COVID-19 impacts |
(1,040) |
(774) |
(0.04) |
|||||||||
Interest expense associated with the early extinguishment of FPU mortgage bonds |
(961) |
(715) |
(0.04) |
|||||||||
Favorable income tax impact associated with the CARES Act |
— |
172 |
0.01 |
|||||||||
Deferral of COVID-19 expenses under PSC orders |
1,925 |
1,432 |
0.08 |
|||||||||
(1,451) |
(908) |
(0.05) |
||||||||||
Increased (Decreased) Gross Margins: |
||||||||||||
Hurricane Michael Settlement Margin Impact* |
2,603 |
1,942 |
0.11 |
|||||||||
|
2,529 |
1,881 |
0.11 |
|||||||||
Margin from recent acquisitions* |
2,182 |
1,623 |
0.09 |
|||||||||
Increased demand for CNG services for Marlin Gas Services* |
1,127 |
839 |
0.05 |
|||||||||
Aspire Energy rate increases |
862 |
641 |
0.04 |
|||||||||
Natural gas growth (excluding service expansions) |
873 |
650 |
0.04 |
|||||||||
Florida GRIP* |
561 |
417 |
0.02 |
|||||||||
10,737 |
7,993 |
0.46 |
||||||||||
(Increased) Decreased Other Operating Expenses (Excluding Cost of Sales): |
||||||||||||
Depreciation, amortization and property tax costs due to new capital investments |
(2,530) |
(1,882) |
(0.11) |
|||||||||
Hurricane Michael settlement agreement - depreciation and amortization impact |
(1,778) |
(1,326) |
(0.08) |
|||||||||
Operating expenses from recent acquisitions |
(1,369) |
(1,018) |
(0.06) |
|||||||||
Facilities maintenance costs and outside services |
1,302 |
968 |
0.06 |
|||||||||
Payroll, benefits and other employee-related expenses |
938 |
698 |
0.04 |
|||||||||
(3,437) |
(2,560) |
(0.15) |
||||||||||
Interest Charges(1) |
(349) |
(260) |
(0.01) |
|||||||||
Increased share count from 2020 equity offerings |
— |
— |
(0.06) |
|||||||||
Other income tax effects |
— |
(272) |
(0.02) |
|||||||||
Lower pension expense |
646 |
481 |
0.03 |
|||||||||
Net Other Changes |
88 |
64 |
— |
|||||||||
Fourth Quarter 2020 Reported Results from Continuing Operations |
$ |
29,117 |
$ |
21,661 |
$ |
1.24 |
* See the Major Projects and Initiatives table later in this press release. |
(1) Interest charges includes amortization of a regulatory liability of |
The following information highlights certain key factors contributing to the Company's results for the year ended
Recently Completed and Ongoing Major Projects and Initiatives
The Company constantly pursues and develops additional projects and initiatives to serve existing and new customers, and to further grow its businesses and earnings, with the intention of increasing shareholder value. The following represent the major projects/initiatives recently completed and currently underway. In the future, the Company will add new projects and initiatives to this table once substantially finalized and the associated earnings can be estimated.
Gross Margin for the Period |
||||||||||||||||
Year Ended |
Estimate for Fiscal |
|||||||||||||||
(in thousands) |
2019 |
2020 |
2021 |
2022 |
||||||||||||
Pipeline Expansions: |
||||||||||||||||
|
$ |
2,139 |
$ |
4,167 |
$ |
4,984 |
$ |
5,227 |
||||||||
Del-Mar Energy Pathway (1) (2) |
731 |
2,462 |
4,385 |
6,708 |
||||||||||||
|
283 |
679 |
679 |
679 |
||||||||||||
Callahan Intrastate Pipeline (2) |
— |
3,851 |
7,564 |
7,564 |
||||||||||||
|
— |
— |
514 |
1,486 |
||||||||||||
Total Pipeline Expansions |
3,153 |
11,159 |
18,126 |
21,664 |
||||||||||||
CNG Transportation |
5,410 |
7,231 |
7,900 |
8,500 |
||||||||||||
RNG Transportation |
— |
— |
1,000 |
1,000 |
||||||||||||
Acquisitions: |
||||||||||||||||
|
329 |
3,900 |
4,200 |
4,409 |
||||||||||||
|
— |
1,344 |
3,992 |
4,200 |
||||||||||||
|
— |
389 |
1,800 |
1,854 |
||||||||||||
Total Acquisitions |
329 |
5,633 |
9,992 |
10,463 |
||||||||||||
Regulatory Initiatives: |
||||||||||||||||
Florida GRIP |
13,939 |
15,178 |
16,739 |
17,712 |
||||||||||||
Hurricane Michael regulatory proceeding |
— |
10,864 |
11,014 |
11,014 |
||||||||||||
Capital Cost Surcharge Programs |
— |
— |
1,500 |
3,000 |
||||||||||||
Total Regulatory Initiatives |
13,939 |
26,042 |
29,253 |
31,726 |
||||||||||||
Total |
$ |
22,831 |
$ |
50,065 |
$ |
66,271 |
$ |
73,353 |
(1) Includes gross margin generated from interim services. |
(2) Includes gross margin from natural gas distribution services. |
Detailed Discussion of Major Projects and Initiatives
Pipeline Expansions
Peninsula Pipeline is constructing four transmission lines to bring additional natural gas to the Company's distribution system in
Del-Mar Energy Pathway
In
In
Callahan Intrastate Pipeline
In
CNG Transportation
Marlin Gas Services provides CNG temporary hold services, contracted pipeline integrity services, emergency services for damaged pipelines and specialized gas services for customers who have unique requirements. For the year ended
RNG Transportation
In
Bioenergy Devco
In
The renewable natural gas resource created from organic material at BDC's anaerobic digestion facilities in
In
At the present time, the Company expects to generate
Acquisitions
In
In
In
Regulatory Initiatives
Florida GRIP
Florida GRIP is a natural gas pipe replacement program approved by the Florida PSC that allows automatic recovery, through rates, of costs associated with the replacement of mains and services. Since the program's inception in
Hurricane Michael
In
In
In
In
For the Year Ended |
||||
(in thousands) |
|
|||
Gross Margin |
$ |
10,864 |
||
Depreciation |
(1,184) |
|||
Amortization of regulatory assets |
8,317 |
|||
Operating income |
3,731 |
|||
Amortization of liability associated with interest expense |
(1,475) |
|||
Pre-tax income |
5,206 |
|||
Income tax expense |
1,403 |
|||
Net income |
$ |
3,803 |
||
Capital Cost Surcharge Programs
In
Other Major Factors Influencing Gross Margin
Weather and Consumption
Weather conditions accounted for decreased gross margin of
HDD and CDD Information
For the Years Ended |
For the Quarters Ended |
||||||||||||||||
2020 |
2019 |
Variance |
2020 |
2019 |
Variance |
||||||||||||
Delmarva |
|||||||||||||||||
Actual HDD |
3,716 |
4,089 |
(373) |
1,300 |
1,513 |
(213) |
|||||||||||
10-Year Average HDD ("Normal") |
4,294 |
4,379 |
(85) |
1,497 |
1,533 |
(36) |
|||||||||||
Variance from Normal |
(578) |
(290) |
(197) |
(20) |
|||||||||||||
|
|||||||||||||||||
Actual HDD |
647 |
619 |
28 |
304 |
240 |
64 |
|||||||||||
10-Year Average HDD ("Normal") |
763 |
792 |
(29) |
255 |
260 |
(5) |
|||||||||||
Variance from Normal |
(116) |
(173) |
49 |
(20) |
|||||||||||||
|
|||||||||||||||||
Actual HDD |
5,218 |
5,500 |
(282) |
1,835 |
1,967 |
(132) |
|||||||||||
10-Year Average HDD ("Normal") |
5,701 |
5,983 |
(282) |
2,010 |
2,133 |
(123) |
|||||||||||
Variance from Normal |
(483) |
(483) |
(175) |
(166) |
|||||||||||||
|
|||||||||||||||||
Actual CDD |
2,775 |
3,200 |
(425) |
363 |
360 |
3 |
|||||||||||
10-Year Average CDD ("Normal") |
2,982 |
2,939 |
43 |
316 |
314 |
2 |
|||||||||||
Variance from Normal |
(207) |
261 |
47 |
46 |
Natural Gas Distribution Growth
Customer growth for the Company's natural gas distribution operations, as a result of the addition of new customers (excluding acquisitions) and the conversion of customers from alternative fuel sources to natural gas service, generated
Gross Margin Increase |
|||||||
For the Year Ended |
|||||||
(in thousands) |
|
|
|||||
Customer growth: |
|||||||
Residential |
$ |
1,516 |
$ |
807 |
|||
Commercial and industrial |
380 |
667 |
|||||
Total customer growth |
$ |
1,896 |
$ |
1,474 |
Capital Investment Growth and Associated Financing Plans
The Company's capital expenditures were
For the Year Ended |
||||
(dollars in thousands) |
|
|||
Regulated Energy: |
||||
Natural gas distribution |
$ |
85,257 |
||
Natural gas transmission |
58,609 |
|||
Electric distribution |
3,234 |
|||
Total Regulated Energy |
147,100 |
|||
Unregulated Energy: |
||||
Propane distribution |
15,455 |
|||
Energy transmission |
19,398 |
|||
Other unregulated energy |
11,442 |
|||
Total Unregulated Energy |
46,295 |
|||
Other: |
||||
Corporate and other businesses |
2,480 |
|||
Total 2020 Capital Expenditures |
$ |
195,875 |
The Company's actual 2020 capital expenditures fell in the range of investment guidance provided in
The following table shows a range of the forecasted 2021 capital expenditures by segment and by business line:
Estimate for Fiscal 2021 |
|||||||
(dollars in thousands) |
Low |
High |
|||||
Regulated Energy: |
|||||||
Natural gas distribution |
$ |
79,000 |
$ |
85,000 |
|||
Natural gas transmission |
55,000 |
60,000 |
|||||
Electric distribution |
9,000 |
13,000 |
|||||
Total Regulated Energy |
143,000 |
158,000 |
|||||
Unregulated Energy: |
|||||||
Propane distribution |
9,000 |
12,000 |
|||||
Energy transmission |
14,000 |
15,000 |
|||||
Other unregulated energy |
8,000 |
12,000 |
|||||
Total Unregulated Energy |
31,000 |
39,000 |
|||||
Other: |
|||||||
Corporate and other businesses |
1,000 |
3,000 |
|||||
Total 2021 Forecasted Capital Expenditures |
$ |
175,000 |
$ |
200,000 |
The capital expenditure projection is subject to continuous review and modification. Actual capital requirements may vary from the above estimates due to a number of factors, including changing economic conditions, capital delays because of COVID-19 that are greater than currently anticipated, customer growth in existing areas, regulation, new growth or acquisition opportunities and availability of capital. Historically, actual capital expenditures have typically lagged behind the forecasted amounts.
In light of the 2021 capital expenditure projection, the Company expects to reach the low end of the current capital expenditures guidance range of
The Company's target ratio of equity to total capitalization, including short-term borrowings, is between 50 and 60 percent. The Company's equity to total capitalization ratio, including short-term borrowings, was 50 percent as of
The Company may utilize more temporary short-term debt, when the financing cost is attractive, as a bridge to the permanent long-term financing, or if the equity markets are more volatile. In
In terms of equity capital, the Company also maintains an effective shelf registration statement with the
Depending on the Company's capital needs and subject to market conditions, in addition to other debt and equity offerings, the Company may consider, as necessary in the future, issuing additional shares under the direct stock purchase component of the DRIP, the ATM program, or pursuant to its shelf registration statement.
|
||||||||||||||||
Condensed Consolidated Statements of Income (Unaudited) |
||||||||||||||||
For the Periods Ended |
||||||||||||||||
(in thousands, except shares and per share data) |
||||||||||||||||
Year Ended |
Fourth Quarter |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Operating Revenues |
||||||||||||||||
Regulated Energy |
$ |
352,746 |
$ |
343,006 |
$ |
93,511 |
$ |
91,405 |
||||||||
Unregulated Energy |
152,526 |
154,151 |
48,060 |
45,166 |
||||||||||||
Other businesses and eliminations |
(17,074) |
(17,552) |
(4,533) |
(4,597) |
||||||||||||
Total Operating Revenues |
488,198 |
479,605 |
137,038 |
131,974 |
||||||||||||
Operating Expenses |
||||||||||||||||
Regulated energy cost of sales |
91,994 |
102,803 |
24,504 |
28,351 |
||||||||||||
Unregulated energy and other cost of sales |
45,944 |
51,698 |
15,691 |
14,723 |
||||||||||||
Operations |
142,055 |
137,845 |
36,540 |
38,285 |
||||||||||||
Maintenance |
15,587 |
15,679 |
3,892 |
4,479 |
||||||||||||
Gain from a settlement |
(130) |
(130) |
— |
— |
||||||||||||
Depreciation and amortization |
58,117 |
45,424 |
15,324 |
11,812 |
||||||||||||
Other taxes |
21,908 |
20,001 |
5,881 |
4,683 |
||||||||||||
Total operating expenses |
375,475 |
373,320 |
101,832 |
102,333 |
||||||||||||
Operating Income |
112,723 |
106,285 |
35,206 |
29,641 |
||||||||||||
Other income (expense), net |
3,222 |
(1,847) |
224 |
(1,117) |
||||||||||||
Interest charges |
21,765 |
22,224 |
6,313 |
5,641 |
||||||||||||
Income from Continuing Operations Before Income Taxes |
94,180 |
82,214 |
29,117 |
22,883 |
||||||||||||
Income Taxes on Continuing Operations |
23,538 |
21,114 |
7,456 |
5,760 |
||||||||||||
Income from Continuing Operations |
70,642 |
61,100 |
21,661 |
17,123 |
||||||||||||
Income/(Loss) from Discontinued Operations, Net of tax |
686 |
(1,349) |
691 |
39 |
||||||||||||
Gain on sale of Discontinued Operations, Net of tax |
170 |
5,402 |
— |
5,402 |
||||||||||||
Net Income |
$ |
71,498 |
$ |
65,153 |
$ |
22,352 |
$ |
22,564 |
||||||||
Weighted Average Common Shares Outstanding: |
||||||||||||||||
Basic |
16,711,579 |
16,398,443 |
17,439,993 |
16,403,776 |
||||||||||||
Diluted |
16,770,735 |
16,448,486 |
17,505,291 |
16,461,112 |
||||||||||||
Basic Earnings Per Share of Common Stock: |
||||||||||||||||
Earnings Per Share from Continuing Operations |
$ |
4.23 |
$ |
3.73 |
$ |
1.24 |
$ |
1.05 |
||||||||
Earnings from Discontinued Operations |
0.05 |
0.24 |
0.04 |
0.33 |
||||||||||||
Basic Earnings per Share of Common Stock |
$ |
4.28 |
$ |
3.97 |
$ |
1.28 |
$ |
1.38 |
||||||||
Diluted Earnings Per Share of Common Stock: |
||||||||||||||||
Earnings Per Share from Continuing Operations |
$ |
4.21 |
$ |
3.72 |
$ |
1.24 |
$ |
1.04 |
||||||||
Earnings/(Loss) Per Share from Discontinued Operations |
0.05 |
0.24 |
0.04 |
0.33 |
||||||||||||
Diluted Earnings Per Share of Common Stock |
$ |
4.26 |
$ |
3.96 |
$ |
1.28 |
$ |
1.37 |
|
||||||||
Consolidated Balance Sheets (Unaudited) |
||||||||
As of |
||||||||
Assets |
2020 |
2019 |
||||||
(in thousands, except shares and per share data) |
||||||||
Property, Plant and Equipment |
||||||||
Regulated energy |
$ |
1,577,576 |
$ |
1,441,473 |
||||
Unregulated energy |
300,647 |
265,209 |
||||||
Other |
30,769 |
39,850 |
||||||
Total property, plant and equipment |
1,908,992 |
1,746,532 |
||||||
Less: Accumulated depreciation and amortization |
(368,743) |
(336,876) |
||||||
Plus: Construction work in progress |
60,929 |
54,141 |
||||||
Net property, plant and equipment |
1,601,178 |
1,463,797 |
||||||
Current Assets |
||||||||
Cash and cash equivalents |
3,499 |
6,985 |
||||||
Trade and other receivables |
61,675 |
50,899 |
||||||
Less: Allowance for credit losses |
(4,785) |
(1,337) |
||||||
Trade receivables, net |
56,890 |
49,562 |
||||||
Accrued revenue |
21,527 |
20,846 |
||||||
Propane inventory, at average cost |
5,906 |
5,824 |
||||||
Other inventory, at average cost |
5,539 |
6,067 |
||||||
Regulatory assets |
10,786 |
5,144 |
||||||
Storage gas prepayments |
2,455 |
3,541 |
||||||
Income taxes receivable |
12,885 |
20,050 |
||||||
Prepaid expenses |
13,239 |
13,928 |
||||||
Derivative assets, at fair value |
3,269 |
— |
||||||
Other current assets |
436 |
2,879 |
||||||
Total current assets |
136,431 |
134,826 |
||||||
Deferred Charges and Other Assets |
||||||||
|
38,731 |
32,668 |
||||||
Other intangible assets, net |
8,292 |
8,129 |
||||||
Investments, at fair value |
10,776 |
9,229 |
||||||
Operating lease right-of-use assets |
11,194 |
11,563 |
||||||
Regulatory assets |
113,806 |
73,407 |
||||||
Receivables and other deferred charges |
12,079 |
49,579 |
||||||
Total deferred charges and other assets |
194,878 |
184,575 |
||||||
Total Assets |
$ |
1,932,487 |
$ |
1,783,198 |
|
||||||||
Consolidated Balance Sheets (Unaudited) |
||||||||
As of |
||||||||
Capitalization and Liabilities |
2020 |
2019 |
||||||
(in thousands, except shares and per share data) |
||||||||
Capitalization |
||||||||
Stockholders' equity |
||||||||
Preferred stock, par value |
$ |
— |
$ |
— |
||||
Common stock, par value |
8,499 |
7,984 |
||||||
Additional paid-in capital |
348,482 |
259,253 |
||||||
Retained earnings |
342,969 |
300,607 |
||||||
Accumulated other comprehensive loss |
(2,865) |
(6,267) |
||||||
Deferred compensation obligation |
5,679 |
4,543 |
||||||
|
(5,679) |
(4,543) |
||||||
Total stockholders' equity |
697,085 |
561,577 |
||||||
Long-term debt, net of current maturities |
508,499 |
440,168 |
||||||
Total capitalization |
1,205,584 |
1,001,745 |
||||||
Current Liabilities |
||||||||
Current portion of long-term debt |
13,600 |
45,600 |
||||||
Short-term borrowing |
175,644 |
247,371 |
||||||
Accounts payable |
60,253 |
54,068 |
||||||
Customer deposits and refunds |
33,302 |
30,939 |
||||||
Accrued interest |
2,905 |
2,554 |
||||||
Dividends payable |
7,683 |
6,644 |
||||||
Accrued compensation |
13,994 |
16,236 |
||||||
Regulatory liabilities |
6,284 |
5,991 |
||||||
Derivative liabilities, at fair value |
127 |
1,844 |
||||||
Other accrued liabilities |
15,240 |
12,077 |
||||||
Total current liabilities |
329,032 |
423,324 |
||||||
Deferred Credits and Other Liabilities |
||||||||
Deferred income taxes |
205,388 |
180,656 |
||||||
Regulatory liabilities |
142,736 |
127,744 |
||||||
Environmental liabilities |
4,299 |
6,468 |
||||||
Other pension and benefit costs |
30,673 |
30,569 |
||||||
Operating lease - liabilities |
9,872 |
9,896 |
||||||
Deferred investment tax credits and other liabilities |
4,903 |
2,796 |
||||||
Total deferred credits and other liabilities |
397,871 |
358,129 |
||||||
Environmental and other commitments and contingencies (1) |
||||||||
Total Capitalization and Liabilities |
$ |
1,932,487 |
$ |
1,783,198 |
(1)Refer to Note 20 and 21 in the Company's Annual Report on Form 10-K for further information. |
|
||||||||||||||||||||||||||||||||
Distribution Utility Statistical Data (Unaudited) |
||||||||||||||||||||||||||||||||
For the Three Months Ended |
For the Three Months Ended |
|||||||||||||||||||||||||||||||
Delmarva NG Distribution(2) |
Chesapeake |
FPU NG |
|
Delmarva |
Chesapeake |
FPU NG |
|
|||||||||||||||||||||||||
Operating Revenues (in thousands) |
||||||||||||||||||||||||||||||||
Residential |
$ |
15,167 |
$ |
1,655 |
$ |
8,690 |
$ |
10,401 |
$ |
15,569 |
$ |
1,587 |
$ |
8,169 |
$ |
10,618 |
||||||||||||||||
Commercial |
7,598 |
1,706 |
6,436 |
8,778 |
8,087 |
1,622 |
6,784 |
9,416 |
||||||||||||||||||||||||
Industrial |
2,693 |
3,302 |
6,676 |
380 |
2,300 |
3,232 |
6,753 |
511 |
||||||||||||||||||||||||
Other (1) |
4,825 |
1,169 |
3,470 |
(1,668) |
5,425 |
419 |
356 |
(2,145) |
||||||||||||||||||||||||
Total Operating Revenues |
$ |
30,283 |
$ |
7,832 |
$ |
25,272 |
$ |
17,891 |
$ |
31,381 |
$ |
6,860 |
$ |
22,062 |
$ |
18,400 |
||||||||||||||||
Volumes (in Dts for natural gas and KWHs for electric) |
||||||||||||||||||||||||||||||||
Residential |
829,951 |
94,775 |
396,777 |
69,737 |
918,892 |
92,584 |
355,510 |
71,039 |
||||||||||||||||||||||||
Commercial |
940,837 |
1,153,767 |
378,371 |
73,024 |
977,449 |
1,157,869 |
439,246 |
76,916 |
||||||||||||||||||||||||
Industrial |
1,568,322 |
6,546,177 |
1,187,577 |
828 |
1,410,990 |
7,095,966 |
1,280,375 |
9,546 |
||||||||||||||||||||||||
Other |
73,937 |
— |
899,896 |
— |
82,532 |
— |
802,196 |
— |
||||||||||||||||||||||||
Total |
3,413,047 |
7,794,719 |
2,862,621 |
143,589 |
3,389,863 |
8,346,419 |
2,877,327 |
157,501 |
||||||||||||||||||||||||
Average Customers |
||||||||||||||||||||||||||||||||
Residential |
85,434 |
18,325 |
61,151 |
25,229 |
74,884 |
17,511 |
58,280 |
24,759 |
||||||||||||||||||||||||
Commercial |
7,790 |
1,591 |
4,014 |
7,315 |
7,112 |
1,556 |
3,959 |
7,271 |
||||||||||||||||||||||||
Industrial |
196 |
16 |
2,521 |
2 |
169 |
16 |
2,455 |
2 |
||||||||||||||||||||||||
Other |
9 |
— |
15 |
— |
19 |
— |
12 |
— |
||||||||||||||||||||||||
Total |
93,429 |
19,932 |
67,701 |
32,546 |
82,184 |
19,083 |
64,706 |
32,032 |
||||||||||||||||||||||||
For the Year Ended |
For the Year Ended |
|||||||||||||||||||||||||||||||
Delmarva NG Distribution(2) |
Chesapeake |
FPU NG |
|
Delmarva |
Chesapeake Florida NG |
FPU NG |
Distribution |
|||||||||||||||||||||||||
Operating Revenues (in thousands) |
||||||||||||||||||||||||||||||||
Residential |
$ |
64,640 |
$ |
6,428 |
$ |
32,547 |
$ |
45,550 |
$ |
62,708 |
$ |
6,232 |
$ |
32,016 |
$ |
45,738 |
||||||||||||||||
Commercial |
30,788 |
6,498 |
24,247 |
34,494 |
33,070 |
6,418 |
26,708 |
38,254 |
||||||||||||||||||||||||
Industrial |
9,138 |
13,055 |
25,999 |
1,336 |
8,314 |
12,682 |
24,520 |
2,128 |
||||||||||||||||||||||||
Other (1) |
290 |
4,869 |
7,356 |
(4,517) |
152 |
3,153 |
(826) |
(8,704) |
||||||||||||||||||||||||
Total Operating Revenues |
$ |
104,856 |
$ |
30,850 |
$ |
90,149 |
$ |
76,863 |
$ |
104,244 |
$ |
28,485 |
$ |
82,418 |
$ |
77,416 |
||||||||||||||||
Volumes (in Dts for natural gas and KWHs for electric) |
||||||||||||||||||||||||||||||||
Residential |
3,697,300 |
364,048 |
1,533,316 |
305,020 |
3,871,032 |
352,104 |
1,392,382 |
306,445 |
||||||||||||||||||||||||
Commercial |
3,671,768 |
4,424,053 |
1,497,452 |
293,262 |
3,776,388 |
4,475,776 |
1,714,574 |
310,856 |
||||||||||||||||||||||||
Industrial |
5,236,104 |
27,562,112 |
4,653,692 |
14,806 |
5,358,474 |
27,768,125 |
4,968,745 |
27,929 |
||||||||||||||||||||||||
Other |
270,013 |
— |
2,900,247 |
— |
220,541 |
— |
2,574,925 |
— |
||||||||||||||||||||||||
Total |
12,875,185 |
32,350,213 |
10,584,707 |
613,088 |
13,226,435 |
32,596,005 |
10,650,626 |
645,230 |
||||||||||||||||||||||||
Average Customers |
||||||||||||||||||||||||||||||||
Residential |
84,191 |
17,920 |
60,016 |
25,044 |
73,995 |
17,262 |
57,653 |
24,573 |
||||||||||||||||||||||||
Commercial |
7,764 |
1,584 |
3,990 |
7,280 |
7,097 |
1,546 |
3,932 |
7,243 |
||||||||||||||||||||||||
Industrial |
195 |
16 |
2,514 |
2 |
169 |
17 |
2,436 |
2 |
||||||||||||||||||||||||
Other |
16 |
— |
14 |
— |
15 |
— |
12 |
— |
||||||||||||||||||||||||
Total |
92,166 |
19,520 |
66,534 |
32,326 |
81,276 |
18,825 |
64,033 |
31,818 |
||||||||||||||||||||||||
(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 for pass-through taxes. |
(2) Operating revenues, volumes and average customers for the Delmarva natural gas distribution operations includes those for |
View original content:http://www.prnewswire.com/news-releases/chesapeake-utilities-corporation-reports-record-results-for-fiscal-year-2020-updates-earnings-and-capital-guidance-301235043.html
SOURCE