CHESAPEAKE UTILITIES CORP [CPK] Filings

10-Q 1 cpk-20220331.htm 10-Q cpk-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM			10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-11590



CHESAPEAKE UTILITIES CORPORATION (Exact name of registrant as specified in its charter)


Delaware						51-0064146
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

500 Energy Lane, Dover, Delaware 19901

(Address of principal executive offices, including Zip Code)

(302) 734-6799

(Registrant’s telephone number, including area code)

909 Silver Lake Boulevard, Dover, Delaware 19904

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock - par value per share $0.4867	CPK	New York Stock Exchange, Inc.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Common Stock, par value $0.4867 — 17,727,326 shares outstanding as of April 29, 2022.

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PART I—FINANCIAL INFORMATION		1

ITEM 1.	FINANCIAL STATEMENTS	1

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	31

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	52

ITEM 4.	CONTROLS AND PROCEDURES	53

PART II—OTHER INFORMATION		54

ITEM 1.	LEGAL PROCEEDINGS	54

ITEM 1A.	RISK FACTORS	54

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	54

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	54

ITEM 5.	OTHER INFORMATION	54

ITEM 6.	EXHIBITS	55

SIGNATURES		56

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GLOSSARY OF DEFINITIONS

Adjusted Gross Margin: a non-GAAP measure calculated by deducting the purchased cost of natural gas, propane and electricity and the cost of labor spent on direct revenue-producing activities from operating revenues. The costs included in Adjusted Gross Margin exclude depreciation and amortization and certain costs presented in operations and maintenance expenses in accordance with regulatory requirements

Aspire Energy: Aspire Energy of Ohio, LLC, a wholly-owned subsidiary of Chesapeake Utilities

Aspire Energy Express: Aspire Energy Express, LLC, a wholly-owned subsidiary of Chesapeake Utilities

ASU: Accounting Standards Update issued by the FASB

ATM: At-the-market

CARES Act: Coronavirus Aid, Relief, and Economic Security Act

CDC: U.S. Centers for Disease Control and Prevention

CDD: Cooling Degree-Day

CFG: Central Florida Gas Company

Chesapeake or Chesapeake Utilities: Chesapeake Utilities Corporation, its divisions and subsidiaries, as appropriate in the context of the disclosure

CHP: Combined Heat and Power Plant

Company: Chesapeake Utilities Corporation, its divisions and subsidiaries, as appropriate in the context of the disclosure

COVID-19: An infectious disease caused by a recently discovered coronavirus

CNG: Compressed natural gas

Degree-day: A degree-day is the measure of the variation in the weather based on the extent to which the average daily temperature (from 10:00 am to 10:00 am) falls above (CDD) or below (HDD) 65 degrees Fahrenheit

Delmarva Peninsula: A peninsula on the east coast of the U.S. occupied by Delaware and portions of Maryland and Virginia

Diversified Energy: Diversified Energy Company an entity from whom we acquired certain propane operating assets in North Carolina, South Carolina, Virginia, and Pennsylvania

DRIP: Dividend Reinvestment and Direct Stock Purchase Plan

Dt(s): Dekatherm(s), which is a natural gas unit of measurement that includes a standard measure for heating value

Dts/d: Dekatherms per day

Eastern Shore: Eastern Shore Natural Gas Company, a wholly-owned subsidiary of Chesapeake Utilities

Eight Flags: Eight Flags Energy, LLC, a wholly-owned subsidiary of Chesapeake Utilities

Elkton Gas: Elkton Gas Company, a wholly-owned subsidiary of Chesapeake Utilities

Escambia Meter Station: A natural gas metering station owned by Peninsula Pipeline Company located in Escambia County,

Florida

ESG: Environmental, Social and Governance

FASB: Financial Accounting Standards Board

FERC: Federal Energy Regulatory Commission

FGT: Florida Gas Transmission Company

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Florida OPC: The Office of Public Counsel, an agency established by the Florida legislature who advocates on behalf of Florida's utility consumers prior to actions or rule changes

FPU: Florida Public Utilities Company, a wholly-owned subsidiary of Chesapeake Utilities

GAAP: Generally Accepted Accounting Principles

Guernsey Power Station: Guernsey Power Station, LLC, a partner with Aspire Energy Express in the construction of a power generation facility in Ohio

GRIP: Gas Reliability Infrastructure Program

Gross Margin: a term under U.S. GAAP which is the excess of sales over costs of goods sold

Gulfstream: Gulfstream Natural Gas System, LLC, an unaffiliated pipeline network that supplies natural gas to FPU

HDD: Heating Degree-Day

LNG: Liquefied Natural Gas

Marlin Gas Services: Marlin Gas Services, LLC, a wholly-owned subsidiary of Chesapeake Utilities

MetLife: MetLife Investment Advisors, an institutional debt investment management firm, with which we have previously issued Senior Notes and which is a party to the current MetLife Shelf Agreement, as amended

MGP: Manufactured gas plant, which is a site where coal was previously used to manufacture gaseous fuel for industrial, commercial and residential use

Peninsula Pipeline: Peninsula Pipeline Company, Inc., a wholly-owned subsidiary of Chesapeake Utilities

Peoples Gas: Peoples Gas System, an Emera Incorporated subsidiary

Prudential: Prudential Investment Management Inc., an institutional investment management firm, with which Chesapeake Utilities entered into a previous Shelf Agreement and issued Shelf Notes

PSC: Public Service Commission, which is the state agency that regulates utility rates and/or services in certain of our jurisdictions

Revolver: Our $400.0 million unsecured revolving credit facility with certain lenders

RNG: Renewable natural gas

Sandpiper Energy: Sandpiper Energy, Inc., a wholly-owned subsidiary of Chesapeake Utilities

SEC: Securities and Exchange Commission

Senior Notes: Our unsecured long-term debt issued primarily to insurance companies on various dates

Sharp: Sharp Energy, Inc., a wholly-owned subsidiary of Chesapeake Utilities

Shelf Agreement: An agreement entered into by Chesapeake Utilities and a counterparty pursuant to which Chesapeake Utilities may request that the counterparty purchase our unsecured senior debt with a fixed interest rate and a maturity date not to exceed 20 years from the date of issuance

Shelf Notes: Unsecured senior promissory notes issuable under the Shelf Agreement executed with various counterparties

SICP: 2013 Stock and Incentive Compensation Plan

TCJA: Tax Cuts and Jobs Act enacted on December 22, 2017

TETLP: Texas Eastern Transmission, LP, an interstate pipeline interconnected with Eastern Shore's pipeline

Uncollateralized Senior Notes: Our unsecured long-term debt issued primarily to insurance companies on various dates

U.S.: The United States of America

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Chesapeake Utilities Corporation and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)


	Three Months Ended
	March 31,
	2022		2021
(in thousands, except shares and per share data)
Operating Revenues
Regulated Energy	$	127,891	$	121,197
Unregulated Energy and other	94,989		69,990
Total Operating Revenues	222,880		191,187
Operating Expenses
Regulated natural gas and electric costs	45,442		43,043
Unregulated propane and natural gas costs	51,738		31,254
Operations	42,794		39,437
Maintenance	4,264		4,042
Depreciation and amortization	16,977		15,365
Other taxes	6,800		6,449
Total Operating Expenses	168,015		139,590
Operating Income	54,865		51,597
Other income, net	913		375
Interest charges	5,339		5,105
Income Before Income Taxes	50,439		46,867
Income Taxes	13,506		12,401
Net Income	$	36,933	$	34,466

Weighted Average Common Shares Outstanding:
Basic	17,678,060		17,485,866
Diluted	17,761,119		17,553,167
Earnings Per Share of Common Stock:
Basic	$	2.09	$	1.97




Diluted	$	2.08	$	1.96

The accompanying notes are an integral part of these financial statements.

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Chesapeake Utilities Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)


	Three Months Ended
	March 31,
	2022		2021
(in thousands)
Net Income	$	36,933	$	34,466
Other Comprehensive Income (Loss), net of tax:
Employee Benefits, net of tax:
Amortization of prior service cost, net of tax of $(5) and $(5), respectively	(14)		(14)
Net gain, net of tax of $11 and $27, respectively	32		77
Cash Flow Hedges, net of tax:
Unrealized gain on commodity contract cash flow hedges, net of tax of $185 and $63, respectively	529		166
Unrealized loss on interest rate swap cash flow hedges, net of tax of $(1)	—		(2)
Total Other Comprehensive Income, net of tax	547		227
Comprehensive Income	$	37,480	$	34,693

The accompanying notes are an integral part of these financial statements.

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Chesapeake Utilities Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)


Assets	March 31, 2022		December 31, 2021
(in thousands, except shares and per share data)
Property, Plant and Equipment
Regulated Energy	$	1,741,731	$	1,720,287
Unregulated Energy	376,468		357,259
Other businesses and eliminations	34,692		35,418
Total property, plant and equipment	2,152,891		2,112,964
Less: Accumulated depreciation and amortization	(427,998)		(417,479)
Plus: Construction work in progress	30,487		49,393
Net property, plant and equipment	1,755,380		1,744,878
Current Assets
Cash and cash equivalents	5,208		4,976
Trade and other receivables	54,683		61,623
Less: Allowance for credit losses	(2,842)		(3,141)
Trade and other receivables, net	51,841		58,482
Accrued revenue	21,532		22,513
Propane inventory, at average cost	9,772		11,644
Other inventory, at average cost	10,228		9,345
Regulatory assets	20,438		19,794
Storage gas prepayments	650		3,691
Income taxes receivable	11,326		17,460
Prepaid expenses	13,754		17,121
Derivative assets, at fair value	7,516		7,076
Other current assets	703		1,033
Total current assets	152,968		173,135
Deferred Charges and Other Assets
Goodwill	44,708		44,708
Other intangible assets, net	12,832		13,192
Investments, at fair value	11,561		12,095
Operating lease right-of-use assets	16,231		10,139
Regulatory assets	101,611		104,173
Receivables and other deferred charges	14,338		12,549
Total deferred charges and other assets	201,281		196,856
Total Assets	$	2,109,629	$	2,114,869

The accompanying notes are an integral part of these financial statements.

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Chesapeake Utilities Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)


Capitalization and Liabilities	March 31, 2022		December 31, 2021
(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)	8,624		8,593
Additional paid-in capital	373,694		371,162
Retained earnings	421,344		393,072
Accumulated other comprehensive income	1,850		1,303
Deferred compensation obligation	6,477		7,240
Treasury stock	(6,477)		(7,240)
Total stockholders’ equity	805,512		774,130
Long-term debt, net of current maturities	597,878		549,903
Total capitalization	1,403,390		1,324,033
Current Liabilities
Current portion of long-term debt	19,717		17,962
Short-term borrowing	140,865		221,634
Accounts payable	30,259		52,628
Customer deposits and refunds	33,374		36,488
Accrued interest	4,950		2,775
Dividends payable	8,504		8,466
Accrued compensation	9,270		15,505
Regulatory liabilities	9,427		2,312
Derivative liabilities, at fair value	484		743
Other accrued liabilities	22,863		17,920
Total current liabilities	279,713		376,433
Deferred Credits and Other Liabilities
Deferred income taxes	241,132		233,550
Regulatory liabilities	142,807		142,488
Environmental liabilities	3,271		3,538
Other pension and benefit costs	23,073		24,120
Operating lease - liabilities	14,161		8,571
Deferred investment tax credits and other liabilities	2,082		2,136
Total deferred credits and other liabilities	426,526		414,403
Environmental and other commitments and contingencies (Notes 6 and 7)
Total Capitalization and Liabilities	$	2,109,629	$	2,114,869

The accompanying notes are an integral part of these financial statements.

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Chesapeake Utilities Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)


	Three Months Ended
	March 31,
	2022		2021
(in thousands)
Operating Activities
Net income	$	36,933	$	34,466
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	16,977		15,365
Depreciation and accretion included in other costs	2,744		2,568
Deferred income taxes	7,398		6,334

Realized gain on commodity contracts and sale of assets	(4,274)		(3,514)
Unrealized loss (gain) on investments/commodity contracts	541		(389)
Employee benefits and compensation	(260)		(173)
Share-based compensation	2,213		1,876

Changes in assets and liabilities:
Accounts receivable and accrued revenue	7,532		(484)
Propane inventory, storage gas and other inventory	4,031		1,371
Regulatory assets/liabilities, net	5,774		14,123
Prepaid expenses and other current assets	6,626		4,171
Accounts payable and other accrued liabilities	(12,918)		766
Income taxes (payable) receivable	6,134		6,093
Customer deposits and refunds	(3,114)		(847)
Accrued compensation	(6,392)		(5,105)
Other assets and liabilities, net	(825)		3,761
Net cash provided by operating activities	69,120		80,382
Investing Activities
Property, plant and equipment expenditures	(29,887)		(51,994)
Proceeds from sale of assets	219		394


Environmental expenditures	(267)		(247)
Net cash used in investing activities	(29,935)		(51,847)
Financing Activities
Common stock dividends	(8,274)		(7,513)
Issuance of stock under the Dividend Reinvestment Plan, net of offering fees	3,242		2,053
Tax withholding payments related to net settled stock compensation	(2,838)		(1,478)
Change in cash overdrafts due to outstanding checks	1,223		7
Net advances (repayments) under line of credit agreements	(82,008)		(19,528)
Proceeds from long-term debt, net of offering fees	49,915		—
Repayment of long-term debt	(213)		—
Net cash used in financing activities	(38,953)		(26,459)
Net Increase in Cash and Cash Equivalents	232		2,076
Cash and Cash Equivalents—Beginning of Period	4,976		3,499
Cash and Cash Equivalents—End of Period	$	5,208	$	5,575

The accompanying notes are an integral part of these financial statements.

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Chesapeake Utilities Corporation and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)


	Common Stock (1)
(in thousands, except shares and per share data)	Number of Shares(2)	Par Value		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Deferred Compensation		Treasury Stock		Total









Balance at December 31, 2020	17,461,841	$	8,499	$	348,482	$	342,969	$	(2,865)	$	5,679	$	(5,679)	$	697,085
Net income	—	—		—		34,466		—		—		—		34,466
Other comprehensive income	—	—		—		—		227		—		—		227
Dividends declared ($0.440 per share)	—	—		—		(7,812)		—		—		—		(7,812)
Dividend reinvestment plan	20,511	10		2,204		—		—		—		—		2,214
Share-based compensation and tax benefit (3) (4)	39,141	19		189		—		—		—		—		208
Treasury stock activities	—	—		—		—		—		1,313		(1,313)		—

Balance at March 31, 2021	17,521,493	$	8,528	$	350,875	$	369,623	$	(2,638)	$	6,992	$	(6,992)	$	726,388










Balance at December 31, 2021	17,655,410	$	8,593	$	371,162	$	393,072	$	1,303	$	7,240	$	(7,240)	$	774,130
Net income	—	—		—		36,933		—		—		—		36,933
Other comprehensive income	—	—		—		—		547		—		—		547
Dividends declared ($0.480 per share)	—	—		—		(8,661)		—		—		—		(8,661)

Issuance under various plans (5)	24,960	12		3,410		—		—		—		—		3,422
Share-based compensation and tax benefit (3) (4)	39,018	19		(878)		—		—		—		—		(859)
Treasury stock activities	—	—		—		—		—		(763)		763		—
Balance at March 31, 2022	17,719,388	$	8,624	$	373,694	$	421,344	$	1,850	$	6,477	$	(6,477)	$	805,512

(1)2,000,000 shares of preferred stock at $0.01 par value have been authorized. No shares have been issued or are outstanding; accordingly, no information has been included in the statements of stockholders’ equity.

(2)Includes 107,518, 116,238, 116,751, and 105,087 shares at March 31, 2022, December 31, 2021, March 31, 2021 and December 31, 2020, respectively, held in a Rabbi Trust related to our Non-Qualified Deferred Compensation Plan.

(3)Includes amounts for shares issued for directors’ compensation.

(4)The shares issued under the SICP are net of shares withheld for employee taxes. For the three months ended March 31, 2022 and 2021, we withheld 21,832 and 14,020 shares, respectively, for employee taxes.

(5)Includes the Retirement Savings Plan, DRIP and ATM equity issuances.

The accompanying notes are an integral part of these financial statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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1. Summary of Accounting Policies

Basis of Presentation

References in this document to the “Company,” “Chesapeake Utilities,” “we,” “us” and “our” are intended to mean Chesapeake Utilities Corporation, its divisions and/or its subsidiaries, as appropriate in the context of the disclosure.

The accompanying unaudited condensed consolidated financial statements have been prepared in compliance with the rules and regulations of the SEC and GAAP. In accordance with these rules and regulations, certain information and disclosures normally required for audited financial statements have been condensed or omitted. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto, included in our latest Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, these financial statements reflect all adjustments that are necessary for a fair presentation of our results of operations, financial position and cash flows for the interim periods presented.

Where necessary to improve comparability, prior period amounts have been changed to conform to current period presentation.

Due to the seasonality of our business, results for interim periods are not necessarily indicative of results for the entire fiscal year. Revenue and earnings are typically greater during the first and fourth quarters, when consumption of energy is highest due to colder temperatures.

Effects of COVID-19

In March 2020, the CDC declared a national emergency due to the rapidly growing outbreak of COVID-19. In response to this declaration and the rapid spread of COVID-19 within the United States, federal, state and local governments throughout the country imposed varying degrees of restrictions on social and commercial activity to promote social distancing in an effort to slow the spread of the illness. These restrictions significantly impacted economic conditions in the United States beginning in 2020 and to a lesser extent have continued into 2022. Chesapeake Utilities is considered an “essential business,” which allowed us to continue operational activities and construction projects while social distancing restrictions were in place. At this time, restrictions have predominantly been lifted as vaccines have become widely available in the United States. Previously existing states of emergency in all of our service territories expired during the second and third quarters of 2021 eliminating a majority of restrictions initially implemented to slow the spread of the virus. The expiration of the states of emergency along with the settlement of our limited proceeding in Florida, has concluded our ability to defer incremental pandemic related costs for consideration through the applicable regulatory process. We have adjusted our operating practices accordingly to ensure the safety of our operations and will take the necessary actions to comply with the CDC, and the Occupational and Safety and Health Administration, as new developments occur.

Refer to Note 5, Rates and Other Regulatory Activities, for further information on the regulated assets established as a result of the incremental expenses associated with COVID-19.

Recent Accounting Standards Yet to be Adopted

Reference Rate Reform - (ASC 848) - In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which was subsequently amended by ASU 2021-01. The standard provides relief for companies preparing for the discontinuation of interest rates, such as LIBOR, and allows optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. The amendments included in this ASU are to be applied prospectively, and are not expected to have a material impact on our financial position or results of operations.

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2. Calculation of Earnings Per Share


	Three Months Ended
	March 31,
	2022		2021
(in thousands, except shares and per share data)
Calculation of Basic Earnings Per Share:


Net Income	$	36,933	$	34,466
Weighted average shares outstanding	17,678,060		17,485,866


Basic Earnings Per Share	$	2.09	$	1.97

Calculation of Diluted Earnings Per Share:
Net Income	$	36,933	$	34,466
Reconciliation of Denominator:
Weighted shares outstanding—Basic	17,678,060		17,485,866
Effect of dilutive securities—Share-based compensation	83,059		67,301
Adjusted denominator—Diluted	17,761,119		17,553,167


Diluted Earnings Per Share	$	2.08	$	1.96

3. Acquisitions

Acquisition of Diversified Energy

On December 15, 2021, Sharp acquired the propane operating assets of Diversified Energy for approximately $37.5 million, net of cash acquired. In connection with this acquisition, we recorded a $2.1 million liability which is subject to the seller's adherence to various provisions contained in the purchase agreement through the first anniversary of the transaction closing. Included with the acquisition, was approximately $1.7 million of working capital from the Seller consisting predominantly of accounts receivable and propane inventory. We accounted for this acquisition as a business combination within our Unregulated Energy Segment beginning in the fourth quarter of 2021. In January 2022, we recorded a post-closing true-up of $0.8 million related to the provision for working capital valuation at the time of closing. There were multiple strategic benefits to this acquisition including it: (i) expands our propane service territory into North Carolina and South Carolina (ii) builds upon our existing propane presence in Virginia and Pennsylvania, and (iii) includes an established customer base with opportunities for future growth. Through this acquisition, the Company added approximately 19,000 residential, commercial and agricultural customers, along with expected distribution of approximately 10.0 million gallons of propane annually. In connection with this acquisition, we recorded $23.1 million in property plant and equipment, $6.2 million in intangible assets associated with customer relationships and non-compete agreements and $5.9 million in goodwill, all of which is deductible for income tax purposes. The amounts recorded in conjunction with the acquisition are preliminary, and subject to adjustment based on contractual provisions and finalization prior to the first anniversary of the transaction closing.

For the three months ended March 31, 2022, Diversified Energy generated operating revenue and operating income of $10.4 million and $1.5 million, respectively.

4. Revenue Recognition

We recognize revenue when our performance obligations under contracts with customers have been satisfied, which generally occurs when our businesses have delivered or transported natural gas, electricity or propane to customers. We exclude sales taxes and other similar taxes from the transaction price. Typically, our customers pay for the goods and/or services we provide in the month following the satisfaction of our performance obligation. The following table displays our revenue by major source based on product and service type for the three months ended March 31, 2022 and 2021:

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	Three months ended March 31, 2022								Three months ended March 31, 2021
(in thousands)	Regulated Energy		Unregulated Energy		Other and Eliminations		Total		Regulated Energy		Unregulated Energy		Other and Eliminations		Total
Energy distribution
Delaware natural gas division	$	34,481	$	—	$	—	$	34,481	$	33,272	$	—	$	—	$	33,272
Florida natural gas division	10,266		—		—		10,266		8,956		—		—		8,956
FPU electric distribution	19,089		—		—		19,089		18,551		—		—		18,551
FPU natural gas distribution	30,020		—		—		30,020		26,861		—		—		26,861
Maryland natural gas division	10,464		—		—		10,464		10,466		—		—		10,466
Sandpiper natural gas/propane operations	7,636		—		—		7,636		8,071		—		—		8,071
Elkton Gas	3,366		—		—		3,366		2,635		—		—		2,635
Total energy distribution	115,322		—		—		115,322		108,812		—		—		108,812
Energy transmission
Aspire Energy	—		18,036		—		18,036		—		12,905		—		12,905
Aspire Energy Express	263		—		—		263		47		—		—		47
Eastern Shore	20,321		—		—		20,321		19,972		—		—		19,972
Peninsula Pipeline	6,772		—		—		6,772		6,467		—		—		6,467
Total energy transmission	27,356		18,036		—		45,392		26,486		12,905		—		39,391
Energy generation
Eight Flags	—		5,539		—		5,539		—		4,329		—		4,329
Propane operations
Propane delivery operations	—		75,606		—		75,606		—		55,264		—