What changed in CHESAPEAKE UTILITIES CORP's 10-K — 2023 vs 2024
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Paragraph-level year-over-year comparison of CHESAPEAKE UTILITIES CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.
+305 added−334 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-21)
Top changes in CHESAPEAKE UTILITIES CORP's 2024 10-K
305 paragraphs added · 334 removed · 240 edited across 1 sections
- Item 7A. Quantitative and Qualitative Disclosures About Market Risk+305 / −334 · 240 edited
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
240 edited+65 added−94 removed171 unchanged
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
240 edited+65 added−94 removed171 unchanged
2023 filing
2024 filing
Biggest changeChesapeake Utilities Corporation 2023 Form 10-K Page 61 Table of Contents Chesapeake Utilities Corporation and Subsidiaries Consolidated Statements of Stockholders' Equity 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 — — — 83,466 — — — 83,466 Other comprehensive income — — — — 4,168 — — 4,168 Dividends declared ($1.880 per share) — — — (33,363) — — — (33,363) Dividend reinvestment plan (5) 147,256 72 18,176 — — — — 18,248 Share-based compensation and tax benefit (3) (4) 46,313 22 4,504 — — — — 4,526 Treasury stock activities (2) — — — — — 1,561 (1,561) — Balance at December 31, 2021 17,655,410 8,593 371,162 393,072 1,303 7,240 (7,240) 774,130 Net Income — — — 89,796 — — — 89,796 Other comprehensive income — — — — (2,682) — — (2,682) Dividends declared ($2.085 per share) — — — (37,359) — — — (37,359) Issuance under various plans (5) 39,418 19 5,273 — — — — 5,292 Share-based compensation and tax benefit (3) (4) 46,590 23 3,601 — — — — 3,624 Treasury stock activities (2) — — — — — (180) 180 — Balances at December 31, 2022 17,741,418 8,635 380,036 445,509 (1,379) 7,060 (7,060) 832,801 Net Income — — — 87,212 — — — 87,212 Issuance of common stock in connection with acquisition of FCG 4,438,596 2,160 364,257 — — — — 366,417 Other comprehensive loss — — — — (1,359) — — (1,359) Dividends declared ($2.305 per share) — — — (44,058) — — — (44,058) Issuance under various plans (5) — — (26) — — — — (26) Share-based compensation and tax benefit (3) (4) 55,323 28 5,089 — — — — 5,117 Treasury stock activities (2) — — — — — 1,990 (1,990) — Balances at December 31, 2023 22,235,337 $ 10,823 $ 749,356 $ 488,663 $ (2,738) $ 9,050 $ (9,050) $ 1,246,104 (1) 2,000,000 shares of preferred stock at $0.01 par value per share have been authorized.
Biggest changeChesapeake Utilities Corporation 2024 Form 10-K Page 61 Table of Contents Chesapeake Utilities Corporation and Subsidiaries Consolidated Statements of Stockholders' Equity Common Stock (1) (dollars in millions, shares in thousands (except 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, 2021 17,655 $ 8.6 $ 371.2 $ 393.1 $ 1.3 $ 7.2 $ (7.2) $ 774.2 Net Income — — — 89.8 — — — 89.8 Other comprehensive income (loss) — — — — (2.7) — — (2.7) Dividends declared ($2.085 per share) — — — (37.4) — — — (37.4) Issuance under various plans (5) 39 — 5.3 — — — — 5.3 Share-based compensation and tax benefit (3) (4) 47 — 3.5 — — — — 3.5 Treasury stock activities (2) — — — — — (0.1) 0.1 — Balance at December 31, 2022 17,741 8.6 380.0 445.5 (1.4) 7.1 (7.1) 832.7 Net Income — — — 87.2 — — — 87.2 Issuance of common stock in connection with acquisition of FCG 4,439 2.2 364.3 — — — — 366.5 Other comprehensive income (loss) — — — — (1.4) — — (1.4) Dividends declared ($2.305 per share) — — — (44.0) — — — (44.0) Share-based compensation and tax benefit (3) (4) 55 — 5.1 — — — — 5.1 Treasury stock activities (2) — — — — — 2.0 (2.0) — Balances at December 31, 2023 22,235 10.8 749.4 488.7 (2.8) 9.1 (9.1) 1,246.1 Net Income — — — 118.6 — — — 118.6 Other comprehensive income (loss) — — — — 1.1 — — 1.1 Dividends declared ($2.510 per share) — — — (57.0) — — — (57.0) Issuance under various plans (5) 627 0.3 74.2 — — — — 74.5 Share-based compensation and tax benefit (3) (4) 37 — 6.9 — — — — 6.9 Treasury stock activities (2) — — — — — 0.7 (0.7) — Balances at December 31, 2024 22,899 $ 11.1 $ 830.5 $ 550.3 $ (1.7) $ 9.8 $ (9.8) $ 1,390.2 (1) 2.0 million shares of preferred stock at $0.01 par value per share have been authorized.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
Includes energy transmission, energy generation (the operations of our Eight Flags' CHP plant), propane distribution operations, mobile compressed natural gas distribution and pipeline solutions operations, and sustainable energy investments including renewable natural gas. Also included in this segment are other unregulated energy services, such as energy-related merchandise sales and heating, ventilation and air conditioning, plumbing and electrical services.
Includes energy transmission, energy generation (the operations of our Eight Flags' CHP plant), propane distribution operations, mobile compressed natural gas distribution and pipeline solutions operations, and sustainable energy investments including renewable natural gas related investments. Also included in this segment are other unregulated energy services, such as energy-related merchandise sales and heating, ventilation and air conditioning, plumbing and electrical services.
In September 2023, the Delaware Division submitted the Energy Efficiency Rider application for natural gas with the Delaware PSC after obtaining an affirmative recommendation from the Delaware Energy Efficiency Advisory Council (“EEAC”).
Delaware In September 2023, the Delaware Division submitted the Energy Efficiency Rider application for natural gas with the Delaware PSC after obtaining an affirmative recommendation from the Delaware Energy Efficiency Advisory Council (“EEAC”).
Maryland Natural Gas Rate Case: In January 2024, our natural gas distribution businesses in Maryland, CUC-Maryland Division, Sandpiper Energy, Inc., and Elkton Gas Company (collectively, “Maryland natural gas distribution businesses”) filed a joint application for a natural gas rate case with the Maryland PSC.
Maryland Maryland Natural Gas Rate Case: In January 2024, our natural gas distribution businesses in Maryland, CUC-Maryland Division, Sandpiper Energy, Inc., and Elkton Gas Company (collectively, “Maryland natural gas distribution businesses”) filed a joint application for a natural gas rate case with the Maryland PSC.
Worcester Resiliency Upgrade: In August 2023, Eastern Shore filed an application with the FERC requesting authorization to construct the Worcester Resiliency Upgrade, which consists of a mixture of storage and transmission facilities in Sussex County, DE and Wicomico, Worcester, and Somerset Counties in Maryland.
Eastern Shore Worcester Resiliency Upgrade: In August 2023, Eastern Shore filed an application with the FERC requesting authorization to construct the Worcester Resiliency Upgrade, which consists of a mixture of storage and transmission facilities in Sussex County, DE and Wicomico, Worcester, and Somerset Counties in Maryland.
Chesapeake Utilities Corporation 2023 Form 10-K Page 86 Table of Contents Notes to the Consolidated Financial Statements On March 14, 2023 we issued 5.43 percent Senior Notes due March 14, 2038 in the aggregate principal amount of $80.0 million and used the proceeds received from the issuances of the Senior Notes to reduce short-term borrowings under our Revolver and to fund capital expenditures.
Chesapeake Utilities Corporation 2024 Form 10-K Page 86 Table of Contents Notes to the Consolidated Financial Statements On March 14, 2023, we issued 5.43 percent Senior Notes due in March 2038 in the aggregate principal amount of $80.0 million and used the proceeds received from the issuances of the Senior Notes to reduce short-term borrowings under our Revolver and to fund capital expenditures.
For our unregulated operations, we compute depreciation expense on a straight-line basis over the following estimated useful lives of the assets: Asset Description Useful Life Propane distribution mains 10-37 years Propane bulk plants and tanks 10-40 years Propane equipment, meters and meter installations 5-33 years Measuring and regulating station equipment 5-37 years Natural gas pipelines 45 years Natural gas right of ways Perpetual CHP plant 30 years Natural gas processing equipment 20-25 years Office furniture and equipment 3-10 years Transportation equipment 4-20 years Structures and improvements 5-45 years Other Various Chesapeake Utilities Corporation 2023 Form 10-K Page 65 Table of Contents Notes to the Consolidated Financial Statements Regulated Operations We account for our regulated operations in accordance with ASC Topic 980, Regulated Operations, which includes accounting principles for companies whose rates are determined by independent third-party regulators.
For our unregulated operations, we compute depreciation expense on a straight-line basis over the following estimated useful lives of the assets: Asset Description Useful Life Propane distribution mains 10-37 years Propane bulk plants and tanks 10-40 years Propane equipment, meters and meter installations 5-33 years Measuring and regulating station equipment 5-37 years Natural gas pipelines 45 years Natural gas right of ways Perpetual CHP plant 30 years Natural gas processing equipment 20-25 years Office furniture and equipment 3-10 years Transportation equipment 4-20 years Structures and improvements 5-45 years Other Various Chesapeake Utilities Corporation 2024 Form 10-K Page 65 Table of Contents Notes to the Consolidated Financial Statements Regulated Operations We account for our regulated operations in accordance with ASC Topic 980, Regulated Operations, which includes accounting principles for companies whose rates are determined by independent third-party regulators.
(3) The Florida PSC allowed us to recover through a surcharge, capital and other program-related-costs, inclusive of an appropriate return on investment, associated with accelerating the replacement of qualifying distribution mains and services (defined as any material other than coated steel or plastic) in FPU’s natural gas distribution, Fort Meade division and Chesapeake Utilities’ CFG division.
(3) The Florida PSC allowed us to recover through a surcharge, capital and other program-related-costs, inclusive of an appropriate return on investment, associated with accelerating the replacement of qualifying gas distribution mains and services (defined as any material other than coated steel or plastic) in FPU’s natural gas distribution operations, Fort Meade division and Chesapeake Utilities’ CFG division.
In order to earn the targeted regulatory ROE in each reporting period subject to the conditions of the effective rate agreement, RSAM is calculated using a trailing thirteen-month average of rate base and capital structure in conjunction with the trailing twelve months regulatory base net operating income, which primarily includes the base portion of rates and other revenues, net of operations and maintenance expenses, depreciation and amortization, interest and tax expenses.
In order to earn the targeted regulatory ROE in each reporting period subject to the conditions of the effective rate agreement, RSAM is calculated using a trailing thirteen-month average of rate base and capital structure in conjunction with the trailing twelve month regulatory base net operating income, which primarily includes the base portion of rates and other revenues, net of operations and maintenance expenses, depreciation and amortization, interest and tax expenses.
(3) Total operating revenues for the year ended December 31, 2023, include other revenue (revenues from sources other than contracts with customers) of $1.2 million and $0.4 million for our Regulated and Unregulated Energy segments, respectively. The sources of other revenues include revenue from alternative revenue programs related to revenue normalization for Maryland division and Sandpiper and late fees.
(2) Total operating revenues for the year ended December 31, 2023, include other revenue (revenues from sources other than contracts with customers) of $1.2 million and $0.4 million for our Regulated and Unregulated Energy segments, respectively. The sources of other revenues include revenue from alternative revenue programs related to revenue normalization for Maryland division and Sandpiper and late fees.
To mitigate the risk of propane commodity price fluctuations on the inventory valuation, we have adopted a Risk Management Policy that allows our propane distribution operation to enter into fair value hedges, cash flow hedges or other economic hedges of our inventory.
To mitigate the risk of propane commodity price fluctuations on the inventory valuation, we have a Risk Management Policy that allows our propane distribution operation to enter into fair value hedges, cash flow hedges or other economic hedges of our inventory.
Our unregulated energy businesses primarily include: (a) propane operations in the Mid-Atlantic region, North Carolina, South Carolina, and Florida; (b) our unregulated natural gas transmission/supply operation in central and eastern Ohio; (c) our CHP plant in Florida that generates electricity and steam; (d) our subsidiary, based in Florida, that provides CNG, LNG and RNG transportation and pipeline solutions, primarily to utilities and pipelines throughout the United States; and (e) sustainable energy investments including renewable natural gas.
Our unregulated energy businesses primarily include: (a) propane operations in the Mid-Atlantic region, North Carolina, South Carolina, Virginia and Florida; (b) our unregulated natural gas transmission/supply operation in central and eastern Ohio; (c) our CHP plant in Florida that generates electricity and steam; (d) our subsidiary, based in Florida, that provides CNG, LNG and RNG transportation and pipeline solutions, primarily to utilities and pipelines throughout the United States; and (e) sustainable energy investments including renewable natural gas related investments.
Chesapeake Utilities Corporation 2023 Form 10-K Page 64 Table of Contents Notes to the Consolidated Financial Statements Jointly-owned Pipelines Property, plant and equipment for our Florida natural gas transmission operation included $28.4 million of jointly owned assets at December 31, 2023, primarily comprised of the 26-mile Callahan intrastate transmission pipeline in Nassau County, Florida jointly-owned with Seacoast Gas Transmission.
Chesapeake Utilities Corporation 2024 Form 10-K Page 64 Table of Contents Notes to the Consolidated Financial Statements Jointly-owned Pipelines Property, plant and equipment for our Florida natural gas transmission operation included $28.4 million of jointly owned assets at December 31, 2024, primarily comprised of the 26-mile Callahan intrastate transmission pipeline in Nassau County, Florida jointly-owned with Seacoast Gas Transmission.
The amounts disclosed in our consolidated balance sheet at December 31, 2023, pertaining to the right-of-use assets and lease liabilities, are measured based on our current expectations of exercising our available renewal options. Our existing leases are not subject to any restrictions or covenants that would preclude our ability to pay dividends, obtain financing or enter into additional leases.
The amounts disclosed in our consolidated balance sheet at December 31, 2024, pertaining to the right-of-use assets and lease liabilities, are measured based on our current expectations of exercising our available renewal options. Our existing leases are not subject to any restrictions or covenants that would preclude our ability to pay dividends, obtain financing or enter into additional leases.
In March 2023, 2022 and 2021, upon the election by certain of our executive officers, we withheld shares with a value at least equivalent to each such executive officer’s minimum statutory obligation for applicable income and other employment taxes related to shares that vested and were paid in March 2023, 2022 and 2021 for the performance periods ended December 31, 2022, 2021, and 2020.
In March 2024, 2023 and 2022, upon the election by certain of our executive officers, we withheld shares with a value at least equivalent to each such executive officer’s minimum statutory obligation for applicable income and other employment taxes related to shares that vested and were paid in March 2024, 2023 and 2022 for the performance periods ended December 31, 2023, 2022, and 2021.
We can store up to approximately 8.9 million gallons of propane (including leased storage and rail cars) during the winter season to meet our customers’ peak requirements and to serve metered customers. Decreases in the wholesale price of propane may cause the value of stored propane to decline, particularly if we utilize fixed price forward contracts for supply.
We can store up to approximately 8.5 million gallons of propane (including leased storage and rail cars) during the winter season to meet our customers’ peak requirements and to serve metered customers. Decreases in the wholesale price of propane may cause the value of stored propane to decline, particularly if we utilize fixed price forward contracts for supply.
Our non-current contract assets are included in receivables and other deferred charges in the consolidated balance sheet and relate to operations and maintenance costs incurred by Eight Flags that have not yet been recovered through rates for the sale of electricity to our electric distribution operation pursuant to a long-term service agreement.
Our non-current contract assets are included in receivables and other deferred charges in the consolidated balance sheets and relate to operations and maintenance costs incurred by Eight Flags that have not yet been recovered through rates for the sale of electricity to our electric distribution operation pursuant to a long-term service agreement.
Investment income from our Level 3 investments is reflected in other income (expense), net in the consolidated statements of income. At December 31, 2023 and 2022, there were no non-financial assets or liabilities required to be reported at fair value. We review our non-financial assets for impairment at least on an annual basis, as required.
Investment income from our Level 3 investments is reflected in other income (expense), net in the consolidated statements of income. At December 31, 2024 and 2023, there were no non-financial assets or liabilities required to be reported at fair value. We review our non-financial assets for impairment at least on an annual basis, as required.
S EGMENT I NFORMATION We use the management approach to identify operating segments. We organize our business around differences in regulatory environment and/or products or services, and the operating results of each segment are regularly reviewed by the chief decision maker (our Chief Executive Officer, or "CEO") in order to make decisions about resources and to assess performance.
S EGMENT I NFORMATION We use the management approach to identify operating segments. We organize our business around differences in regulatory environment and/or products or services, and the operating results of each segment are regularly reviewed by the chief operating decision maker, our President and Chief Executive Officer, in order to make decisions about resources and to assess performance.
We generally use a present value technique based on discounted cash flows to estimate the fair value of our reporting units. An impairment charge is recognized if the carrying value of a reporting unit’s goodwill exceeds its fair value. There were no goodwill impairments recognized during the years ended December 31, 2023, 2022 and 2021.
We generally use a present value technique based on discounted cash flows to estimate the fair value of our reporting units. An impairment charge is recognized if the carrying value of a reporting unit’s goodwill exceeds its fair value. There were no goodwill impairments recognized during the years ended December 31, 2024, 2023 and 2022.
Storm Protection Plan: In 2020, the Florida PSC implemented the Storm Protection Plan ("SPP") and Storm Protection Plan Cost Recovery Clause ("SPPCRC") rules, which require electric utilities to petition the Florida PSC for approval of a Transmission and Distribution Storm Protection Plan that covers the utility’s immediate 10-year planning period with updates to the plan at least every 3 years.
Storm Protection Plan: In 2020, the Florida PSC implemented the Storm Protection Plan ("SPP") and Storm Protection Plan Cost Recovery Clause ("SPPCRC") rules, which requires electric utilities to petition the Florida PSC for approval of a Transmission and Distribution Storm Protection Plan that covers the utility’s immediate 10-year planning period with updates to the plan at least every 3 years.
State income tax returns are filed on a separate company basis in most states where we have operations and/or are required to file. Our state returns for tax years after 2017 are subject to examination. At December 31, 2023, the 2015 through 2019 federal income tax returns are no longer under examination.
State income tax returns are filed on a separate company basis in most states where we have operations and/or are required to file. Our state returns for tax years after 2017 are subject to examination. At December 31, 2024, the 2015 through 2019 federal income tax returns are no longer under examination.
The agreement will enable us to construct the project during the build-out of the community, and charge the reservation rate as each phase of the project goes into service. Construction of the pipeline facilities will occur in two separate phases. Phase one consists of three extensions with associated facilities, and a gas injection interconnect with associated facilities.
The agreement enables us to construct the project during the build-out of the community and charge the reservation rate as each phase of the project goes into service. Construction of the pipeline facilities will occur in two separate phases. Phase one consists of three extensions with associated facilities and a gas injection interconnect with associated facilities.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES Our Chief Executive Officer and Chief Financial Officer, with the participation of other Company officials, have evaluated our “disclosure controls and procedures” (as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of December 31, 2023.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES Our Chief Executive Officer and Chief Financial Officer, with the participation of other Company officials, have evaluated our “disclosure controls and procedures” (as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of December 31, 2024.
CEO AND CFO CERTIFICATIONS Our Chief Executive Officer and Chief Financial Officer have filed with the SEC the certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 as Exhibits 31.1 and 31.2 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
CEO AND CFO CERTIFICATIONS Our Chief Executive Officer and Chief Financial Officer have filed with the SEC the certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 as Exhibits 31.1 and 31.2 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
We record a deferred expense equal to the fair value of the shares issued and amortize the expense equally over a service period of one year or less. Our directors receive an annual retainer of shares of common stock under the SICP for services rendered through the subsequent Annual Meeting of Shareholders.
We record a deferred expense equal to the fair value of the shares issued and amortize the expense equally over a service period of one year or less. Our directors receive an annual retainer of shares of common stock under the SICP for services rendered through the subsequent Annual Meeting of Stockholders.
If market prices drop below cost, inventory balances that are subject to price risk are adjusted to their net realizable value. There were no lower-of-cost-or-net realizable value adjustment for the years ended December 31, 2023, 2022 or 2021.
If market prices drop below cost, inventory balances that are subject to price risk are adjusted to their net realizable value. There were no lower-of-cost-or-net realizable value adjustment for the years ended December 31, 2024, 2023 or 2022.
These letters of credit have various expiration dates through October 2024 and to date, none have been used. We do not anticipate that the counterparties will draw upon these letters of credit, and we expect that they will be renewed to the extent necessary in the future.
These letters of credit have various expiration dates through October 2025 and to date, none have been used. We do not anticipate that the counterparties will draw upon these letters of credit, and we expect that they will be renewed to the extent necessary in the future.
Chesapeake Utilities Corporation 2023 Form 10-K Page 66 Table of Contents Notes to the Consolidated Financial Statements Natural Gas, Electric and Propane Costs Natural gas, electric and propane costs include the direct costs attributable to the products sold or services provided to our customers.
Chesapeake Utilities Corporation 2024 Form 10-K Page 66 Table of Contents Notes to the Consolidated Financial Statements Natural Gas, Electric and Propane Costs Natural gas, electric and propane costs include the direct costs attributable to the products sold or services provided to our customers.
Our independent registered public accounting firm, Baker Tilly US, LLP, has audited the effectiveness of our internal control over financial reporting as of December 31, 2023, as stated in its attestation report which appears under Part II,
Our independent registered public accounting firm, Baker Tilly US, LLP, has audited the effectiveness of our internal control over financial reporting as of December 31, 2024, as stated in its attestation report which appears under Part II,
We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
This expense will be recognized over the remaining service period ending in May 2024. Chesapeake Utilities Corporation 2023 Form 10-K Page 96 Table of Contents Notes to the Consolidated Financial Statements 18.
This expense will be recognized over the remaining service period ending in May 2025. Chesapeake Utilities Corporation 2024 Form 10-K Page 96 Table of Contents Notes to the Consolidated Financial Statements 18.
In general, the net impact of these income statement line items is adjusted, in part, by RSAM or its reversal to earn the targeted regulatory ROE. For the year ended December 31, 2023, the Company recorded decreases to asset removal costs and depreciation expense of $5.1 million as a result of the RSAM adjustment.
In general, the net impact of these income statement line items is adjusted, in part, by RSAM or its reversal to earn the targeted regulatory ROE. For the year ended December 31, 2024 and 2023, the Company recorded decreases to asset removal costs and depreciation expense of $15.5 million and $5.1 million, respectively, as a result of the RSAM adjustment.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.
In addition, interest charges include $4.1 million related to fees and expenses associated with the Bridge Facility, which was terminated without any funds drawn, for the year ended December 31, 2023.
In addition, interest charges included $4.1 million related to fees and expenses associated with the Bridge Facility, which was terminated without any funds drawn, for the year ended December 31, 2023.
Chesapeake Utilities Corporation 2023 Form 10-K Page 77 Table of Contents Notes to the Consolidated Financial Statements The remainder of our operations are presented as “Other businesses and eliminations,” which consists of unregulated subsidiaries that own real estate leased to Chesapeake Utilities, as well as certain corporate costs not allocated to other operations.
Chesapeake Utilities Corporation 2024 Form 10-K Page 77 Table of Contents Notes to the Consolidated Financial Statements The remainder of our operations are presented as “Other businesses and eliminations,” which consists of unregulated subsidiaries that own real estate leased to the Company, as well as certain corporate costs not allocated to other operations.
Basis for Opinion The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for their assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting.
Basis for Opinion The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.
Chesapeake Utilities Corporation 2023 Form 10-K Page 82 Table of Contents Notes to the Consolidated Financial Statements At December 31, 2023, long-term debt, which includes the current maturities but excludes debt issuance cost, had a carrying value of $1.2 billion, compared to the estimated fair value of $1.2 billion.
Chesapeake Utilities Corporation 2024 Form 10-K Page 82 Table of Contents Notes to the Consolidated Financial Statements At December 31, 2024, long-term debt, which includes the current maturities but excludes debt issuance cost, had a carrying value of $1.3 billion, compared to the estimated fair value of $1.2 billion.
The following tables present the changes in the balances of accumulated other comprehensive income (loss) components for the years ended December 31, 2023 and 2022. All amounts in the following tables are presented net of tax.
The following tables present the changes in the balances of accumulated other comprehensive income (loss) components for the years ended December 31, 2024 and 2023. All amounts in the following tables are presented net of tax.
O THER C OMMITMENTS AND C ONTINGENCIES Natural Gas, Electric and Propane Supply In March 2023, our Delmarva Peninsula natural gas distribution operations entered into asset management agreements with a third party to manage their natural gas transportation and storage capacity. The agreements were effective as of April 1, 2023 and expire in March 2026.
O THER C OMMITMENTS AND C ONTINGENCIES Natural Gas, Electric and Propane Supply In March 2023, our Delmarva Peninsula natural gas distribution operations entered into asset management agreements with a third party to manage their natural gas transportation and storage capacity. The agreements were effective in April 2023 and expire in March 2026.
R EPORT OF I NDEPENDENT R EGISTERED P UBLIC A CCOUNTING F IRM To the Board of Directors and Stockholders of Chesapeake Utilities Corporation Opinions on the Consolidated Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Chesapeake Utilities Corporation and Subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows, for each of the years in the three-year period ended December 31, 2023, and the related notes and financial statement schedule listed in Item 15(a)2 (collectively referred to as the "consolidated financial statements").
R EPORT OF I NDEPENDENT R EGISTERED P UBLIC A CCOUNTING F IRM To the Board of Directors and Stockholders of Chesapeake Utilities Corporation Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Chesapeake Utilities Corporation and Subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedules listed in Item 15(a)2 (collectively referred to as the "consolidated financial statements").
As of December 31, 2023, we have not entered into any leases, which have not yet commenced, that would entitle us to significant rights or create additional obligations.
As of December 31, 2024, we have not entered into any leases, which have not yet commenced, that would entitle us to significant rights or create additional obligations.
The health care inflation rate for 2023 used to calculate the benefit obligation is 5 percent for medical and 6 percent for prescription drugs for the Chesapeake Postretirement Plan; and 5 percent for both medical and prescription drugs for the FPU Medical Plan.
The health care inflation rate for 2024 used to calculate the benefit obligation is 5 percent for medical and 6 percent for prescription drugs for the Chesapeake Postretirement Plan; and 5 percent for both medical and prescription drugs for the FPU Medical Plan.
Newberry Expansion : In April 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreement with FPU for an additional 8,000 Dt/d of firm service in the Newberry, Florida area. The petition was approved by the Florida PSC in the third quarter of 2023.
The Florida PSC approved the modifications in September 2024. Newberry Expansion : In April 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreement with FPU for an additional 8,000 Dt/d of firm service in the Newberry, Florida area. The petition was approved by the Florida PSC in the third quarter of 2023.
Amortization expense of intangible assets is expected to be $1.8 million for the years 2024 through 2025, $1.6 million for 2026, $1.5 million for 2027 and $1.3 million for 2028. 11. I NCOME T AXES We file a consolidated federal income tax return. Income tax expense allocated to our subsidiaries is based upon their respective taxable incomes and tax credits.
Amortization expense of intangible assets is expected to be $1.8 million for 2025, $1.6 million for 2026, $1.5 million for 2027 and $1.3 million for 2028 through 2029. 11. I NCOME T AXES We file a consolidated federal income tax return. Income tax expense allocated to our subsidiaries is based upon their respective taxable incomes and tax credits.
Chesapeake Utilities Corporation 2023 Form 10-K Page 54 Table of Contents I TEM 8. F INANCIAL S TATEMENTS AND S UPPLEMENTARY D ATA .
Chesapeake Utilities Corporation 2024 Form 10-K Page 54 Table of Contents I TEM 8. F INANCIAL S TATEMENTS AND S UPPLEMENTARY D ATA .
Its natural gas system includes approximately 3,800 miles of distribution main and 80 miles of transmission pipe. The purchase price of the acquisition was funded with $366.4 million of net proceeds from the issuance of 4.4 million shares of our common stock, the issuance of approximately $550.0 million principal amount of uncollateralized senior notes, and borrowings under the Company's Revolver.
Its natural gas system includes approximately 3,982 miles of distribution mains and 80 miles of transmission pipe. The purchase price of the acquisition was funded with $366.4 million of net proceeds from the issuance of 4.4 million shares of our common stock, the issuance of approximately $550.0 million principal amount of uncollateralized senior notes, and borrowings under the Company's Revolver.
The customer relationships, non-compete agreements, patents and other intangible assets acquired in the purchases of the operating assets of several companies are being amortized over a weighted average of 14 years. Amortization expense of intangible assets for the year ended December 31, 2023, 2022 and 2021 w as $1.8 million, $1.5 million and $1.3 million , respectively.
The customer relationships, non-compete agreements, patents and other intangible assets acquired in the purchases of the operating assets of several companies are being amortized over a weighted average of 14 years. Amortization expense of intangible assets for the year ended December 31, 2024, 2023 and 2022 w as $1.9 million, $1.8 million and $1.5 million , respectively.
Certain investments that were measured at net asset value per share have not been classified in the fair value hierarchy and are presented in the table above to reconcile to total pension plan assets. The changes in the fair value within our pension assets for Level 3 investments for the years ended December 31, 2023 and 2022 were immaterial.
Certain investments that were measured at net asset value per share have not been classified in the fair value hierarchy and are presented in the table above to reconcile to total pension plan assets. The changes in the fair value within our pension assets for Level 3 investments for the years ended December 31, 2024 and 2023 were not material.
The following tables provide: (a) the components of income tax expense in 2023, 2022, and 2021; (b) the reconciliation between the statutory federal income tax rate and the effective income tax rate for 2023, 2022, and 2021; and (c) the components of accumulated deferred income tax assets and liabilities at December 31, 2023 and 2022.
The following tables provide: (a) the components of income tax expense in 2024, 2023, and 2022; (b) the reconciliation between the statutory federal income tax rate and the Company's effective income tax rate for 2024, 2023, and 2022; and (c) the components of accumulated deferred income tax assets and liabilities at December 31, 2024 and 2023.
The Commission also approved FCG's proposed RSAM with a $25.0 million reserve amount, continuation and expansion of the capital SAFE program, implementation of an automated metering infrastructure pilot, and continuation of the storm damage reserve with a target reserve of $0.8 million.
The Florida PSC also approved FCG's proposed RSAM with a $25.0 million reserve amount, continuation and expansion of the capital SAFE program, implementation of an automated metering infrastructure pilot, and continuation of the storm damage reserve with a target reserve of $0.8 million.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
We recognize revenues based on capacity used or reserved and the fixed monthly charge. Peninsula Pipeline is engaged in natural gas intrastate transmission to third-party customers and certain affiliates in the State of Florida. Our performance obligation is satisfied over time as the natural gas is transported to customers.
Our performance obligation is satisfied over time as we deliver natural gas to the customers' locations. We recognize revenues based on capacity used or reserved and the fixed monthly charge. Peninsula Pipeline is engaged in natural gas intrastate transmission to third-party customers and certain affiliates in the State of Florida.
Borrowings under both tranches of the Revolver are subject to a pricing grid, including the commitment fee and the interest rate charged based upon our total indebtedness to total capitalization ratio for the prior quarter.
Borrowings under both tranches of the Revolver continue to be subject to a pricing grid, including the commitment fee and the interest rate charged based upon our total indebtedness to total capitalization ratio for the prior quarter.
As of December 31, 2023 and 2022, our natural gas and electric distribution operations did not have any outstanding derivative contracts.
As of December 31, 2024 and 2023, our natural gas and electric distribution operations did not have any outstanding derivative contracts.
Chesapeake Utilities Corporation 2023 Form 10-K Page 76 Table of Contents Notes to the Consolidated Financial Statements Contract balances The timing of revenue recognition, customer billings and cash collections results in trade receivables, unbilled receivables (contract assets), and customer advances (contract liabilities) in our consolidated balance sheets.
Chesapeake Utilities Corporation 2024 Form 10-K Page 76 Table of Contents Notes to the Consolidated Financial Statements Contract balances The timing of revenue recognition, customer billings and cash collections results in trade receivables and customer advances (contract liabilities) in our consolidated balance sheets.
Chesapeake Utilities Corporation 2023 Form 10-K Page 103 Table of Contents I TEM 9. C HANGES I N AND D ISAGREEMENTS W ITH A CCOUNTANTS ON A CCOUNTING AND F INANCIAL D ISCLOSURE . None. I TEM 9A. C ONTROLS AND P ROCEDURES .
Chesapeake Utilities Corporation 2024 Form 10-K Page 103 Table of Content I TEM 9. C HANGES I N AND D ISAGREEMENTS W ITH A CCOUNTANTS ON A CCOUNTING AND F INANCIAL D ISCLOSURE . None. I TEM 9A. C ONTROLS AND P ROCEDURES .
Net losses of $10.8 million and $1.2 million attributable to the FPU Pension Plan and Chesapeake Postretirement Plan, respectively, comprised most of this amount with $3.2 million recorded in accumulated other comprehensive income (loss) and $8.7 million recorded as a regulatory asset at December 31, 2023.
Net losses of $7.1 million and $1.3 million attributable to the FPU Pension Plan and Chesapeake Postretirement Plan, respectively, comprised most of this amount with $2.6 million recorded in accumulated other comprehensive income (loss) and $5.8 million recorded as a regulatory asset at December 31, 2024.
The compensation cost is based primarily on the fair value of the shares awarded, using the estimated fair value of each share on the date it was granted, and the number of shares to be issued at the end of the service period. We have 561,115 shares of common stock reserved for issuance under the SICP.
The compensation cost is based primarily on the fair value of the shares awarded, using the estimated fair value of each share on the date it was granted, and the number of shares expected to be issued at the end of the service period. We have 524,579 shares of common stock reserved for issuance under the SICP.
Peninsula Pipeline's ownership is 50 percent. Direct expenses for the jointly-owned pipeline are included in operating expenses within our consolidated statements of income. Accumulated depreciation for this pipeline totaled $2.2 million and $1.5 million at December 31, 2023 and 2022, respectively.
Peninsula Pipeline's ownership is 50 percent. Direct expenses for the jointly-owned pipeline are included in operating expenses within our consolidated statements of income. Accumulated depreciation for this pipeline totaled $2.8 million and $2.2 million at December 31, 2024 and 2023, respectively.
Senior Notes On November 20, 2023, we issued Senior Notes in the aggregate principal amount of $550.0 million at an average interest rate of 6.54 percent that were used to partially finance our acquisition of FCG which closed during the fourth quarter of 2023.
On November 20, 2023, we issued Senior Notes in the aggregate principal amount of $550.0 million at an average interest rate of 6.54 percent that were used to partially finance our acquisition of FCG.
As of December 31, 2023 and 2022, the non-refundable contributions totaled $4.2 million and $7.6 million, respectively. AFUDC Some of the additions to our regulated property, plant and equipment include AFUDC, which represents the estimated cost of funds, from both debt and equity sources, used to finance the construction of major projects.
As of December 31, 2024 and 2023, the non-refundable contributions totaled $5.9 million and $4.2 million, respectively. AFUDC Some of the additions to our regulated property, plant and equipment include AFUDC, which represents the estimated cost of funds, from both debt and equity sources, used to finance the construction of major projects.
The projects are driven by the need for increased supply to coastal portions of the state that have experienced an increase in population growth. Peninsula Pipeline will construct several pipeline extensions which will support FPU’s distribution system in the areas of Boynton Beach and New Smyrna Beach with an additional 15,000 Dts/day and 3,400 Dts/day, respectively.
The projects are driven by the need for increased supply to coastal portions of the state that are experiencing significant population growth. Peninsula Pipeline will construct several pipeline extensions which will support FPU’s distribution system in the areas of Boynton Beach and New Smyrna Beach with an additional 15,000 Dts/d and 3,400 Dts/d, respectively.
A company's internal control over financial reporting includes those policies and procedures Chesapeake Utilities Corporation 2023 Form 10-K Page 55 Table of Contents that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.
We received net proceeds of $366.4 million which were used to partially finance the acquisition. We maintain an effective shelf registration statement with the SEC for the issuance of shares under our DRIP and our previous ATM programs.
We received net proceeds of $366.4 million which were used to partially finance the acquisition. We maintain an effective shelf registration statement with the SEC for the issuance of shares under our DRIP and other plans.
Upon retirement or disposition of property owned by the unregulated businesses, the gain or loss, net of salvage value, is charged to income.
Upon retirement or disposition of property within the unregulated businesses, the gain or loss, net of salvage value, is charged to income.
Depending on our capital needs and subject to market conditions, in addition to other possible debt and equity offerings, we may issue additional shares under the direct stock purchase component of the DRIP. There were no issuances under the DRIP in 2023.
Depending on our capital needs and subject to market conditions, we may issue additional shares under the direct stock purchase component of the DRIP in addition to other possible debt and equity offerings.
The following schedule summarizes the assets of the FPU Pension Plan, by investment type, at December 31, 2023, 2022 and 2021: FPU Pension Plan At December 31, 2023 2022 2021 Asset Category Equity securities 50 % 53 % 52 % Debt securities 49 % 38 % 38 % Other 1 % 9 % 10 % Total 100 % 100 % 100 % The investment policy of the FPU Pension Plan is designed to provide the capital assets necessary to meet the financial obligations of the plan.
The following schedule summarizes the allocation of assets of the FPU Pension Plan, by investment type, at December 31, 2024, 2023 and 2022: FPU Pension Plan At December 31, 2024 2023 2022 Asset Category Equity securities 31 % 50 % 53 % Debt securities 67 49 38 Other 2 1 9 Total 100 % 100 % 100 % The investment policy of the FPU Pension Plan is designed to provide the capital assets necessary to meet the financial obligations of the plan.
The shares granted are multi-year awards that will vest no later than the three-year service period ending December 31, 2025. The aggregate intrinsic value of the SICP awards granted was $22.5 million, $24.1 million, and $28.8 million at December 31, 2023, 2022 and 2021, respectively.
The shares granted are multi-year awards that will vest no later than the three-year service period ending December 31, 2026. The aggregate intrinsic value of the SICP awards granted was $30.8 million, $22.5 million, and $24.1 million at December 31, 2024, 2023 and 2022, respectively.
Accordingly, our directors that served on the Board as of May 2023 and 2022 each received 765 and 652 shares of common stock, respectively, with a weighted average fair value of $124.12 and $130.36 per share, respectively. At December 31, 2023, there was $0.3 million of unrecognized compensation expense related to shares granted to non-employee directors.
Accordingly, our directors that served on the Board as of May 2024 and 2023 each received 995 and 765 shares of common stock, respectively, with a weighted average fair value of $110.53 and $124.12 per share, respectively. At December 31, 2024, there was $0.3 million of unrecognized compensation expense related to shares granted to non-employee directors.
Other transaction costs of $15.9 million related primarily to the debt and equity financings executed in connection with the acquisition have been deferred on the consolidated balance sheet or recorded in equity as an offset to proceeds received, as appropriate.
Other transaction costs of $15.9 million related primarily to the debt and equity financings executed in connection with the acquisition, were deferred on the consolidated balance sheet or recorded in equity as an offset to proceeds received, as appropriate, as of December 31, 2023.
We expect to reclassify approximately $0.3 million of unrealized losses from accumulated other comprehensive income (loss) to earnings during the next 12-month period. Interest Rate Swap Activities We manage interest rate risk by entering into derivative contracts to hedge the variability in cash flows attributable to changes in the short-term borrowing rates.
We expect to reclassify approximately $0.5 million of unrealized gains related to our propane derivatives from accumulated other comprehensive income (loss) to earnings during the next 12-month period. Interest Rate Swap Activities We manage interest rate risk by entering into derivative contracts to hedge the variability in cash flows attributable to changes in the short-term borrowing rates.
As of December 31, 2023, there were 798,586 shares of our common stock reserved to fund future contributions to the Retirement Savings Plan. Non-Qualified Deferred Compensation Plan Members of our Board of Directors and officers of the Company are eligible to participate in the Non-Qualified Deferred Compensation Plan.
As of December 31, 2024, there were 788,495 shares of our common stock reserved to fund future contributions to the Retirement Savings Plan. Non-Qualified Deferred Compensation Plan Members of our Board of Directors and officers of the Company are eligible to participate in the Non-Qualified Deferred Compensation Plan.
Volume of Derivative Activity As of December 31, 2023, the volume of our open commodity derivative contracts were as follows: Business unit Commodity Contract Type Quantity hedged (in millions) Designation Longest expiration date of hedge Sharp Propane (gallons) Purchases 18.1 Cash flow hedges June 2026 Sharp Propane (gallons) Sales 3.2 Cash flow hedges March 2024 Sharp entered into futures and swap agreements to mitigate the risk of fluctuations in wholesale propane index prices associated with the propane volumes expected to be purchased and/or sold during the heating season.
Volume of Derivative Activity As of December 31, 2024, the volume of our open commodity derivative contracts were as follows: Business unit Commodity Contract Type Quantity hedged (in millions) Designation Longest expiration date of hedge Sharp Propane (gallons) Purchases 10.8 Cash flow hedges March 2027 Sharp entered into futures and swap agreements to mitigate the risk of fluctuations in wholesale propane index prices associated with the propane volumes expected to be purchased and/or sold during the heating season.
Chesapeake Utilities Corporation 2023 Form 10-K Page 62 Table of Contents Notes to the Consolidated Financial Statements 1. O RGANIZATION AND B ASIS OF P RESENTATION Chesapeake Utilities, incorporated in 1947 in Delaware, is a diversified energy company engaged in regulated and unregulated energy businesses.
The accompanying notes are an integral part of the financial statements. Chesapeake Utilities Corporation 2024 Form 10-K Page 62 Table of Contents Notes to the Consolidated Financial Statements 1. O RGANIZATION AND B ASIS OF P RESENTATION Chesapeake Utilities, incorporated in 1947 in Delaware, is a diversified energy company engaged in regulated and unregulated energy businesses.
We currently serve the Guernsey power plant and our performance obligation is satisfied over time as the natural gas is transported to the plant. We recognize revenue based on rates approved by the Ohio PSC and the capacity used or reserved. We accrue unbilled revenues for transportation services provided and not yet billed at the end of an accounting period.
Our performance obligation is satisfied over time as the natural gas is transported to customers. We recognize revenue based on rates approved by the Florida PSC and the capacity used or reserved. We accrue unbilled revenues for transportation services provided and not yet billed at the end of an accounting period.
Our performance obligation is satisfied over the term of the respective retail offering plan on a ratable basis. For the years ended December 31, 2023 and 2022, the amounts recognized in revenue were not material.
Our performance obligation is satisfied over the term of the respective retail offering plan on a ratable basis. For the years ended December 31, 2024 and 2023, the amount of contract liabilities recognized in revenue were not material.
Additionally, the amendment for borrowings under the 364-day tranche shall now bear interest (i) based upon the SOFR, plus a 10-basis point credit spread adjustment, and an applicable margin of 1.05 percent or less, with such margin based on total indebtedness as a percentage of total capitalization or (ii) the base rate, solely at our discretion.
The 364-day tranche continues to bear interest (i) based upon the SOFR, plus a 10-basis point credit spread adjustment, and an applicable margin of 1.05 percent or less, with such margin based on total indebtedness as a percentage of total capitalization or (ii) the base rate, solely at our discretion.
Under the futures and swap agreements, Sharp will receive or pay the difference between (i) the index prices (Mont Belvieu prices in December 2023 through June 2026) and (ii) the per gallon propane contracted prices, to the extent the index prices deviate from the contracted prices. We designated and accounted for the propane swaps as cash flows hedges.
Under the futures and swap agreements, Sharp will receive or pay the difference between (i) the index prices (Mont Belvieu prices in December 2024 through March 2027) and (ii) the per gallon propane contracted prices, to the extent the index prices deviate from the contracted prices. We designated and accounted for the propane swaps as cash flow hedges.
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