What changed in CHESAPEAKE UTILITIES CORP's 10-K — 2022 vs 2023
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Paragraph-level year-over-year comparison of CHESAPEAKE UTILITIES CORP's 2022 and 2023 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 2023 report.
+346 added−316 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-22)
Top changes in CHESAPEAKE UTILITIES CORP's 2023 10-K
346 paragraphs added · 316 removed · 253 edited across 1 sections
- Item 7A. Quantitative and Qualitative Disclosures About Market Risk+346 / −316 · 253 edited
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
253 edited+93 added−63 removed159 unchanged
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
253 edited+93 added−63 removed159 unchanged
2022 filing
2023 filing
Biggest changeChesapeake Utilities Corporation 2022 Form 10-K Page 87 Table of Contents Notes to the Consolidated Financial Statements The following schedules set forth the funded status at December 31, 2022 and 2021 and the net periodic cost for the years ended December 31, 2022, 2021 and 2020 for the Chesapeake and FPU Pension Plans as well as the Chesapeake SERP: Chesapeake Pension Plan FPU Pension Plan Chesapeake SERP At December 31, 2022 2021 2022 2021 2022 2021 (in thousands) Change in benefit obligation: Benefit obligation — beginning of year $ — $ 6,146 $ 67,030 $ 70,366 $ 2,096 $ 2,212 Interest cost — 141 1,781 1,714 50 48 Actuarial (gain) loss — (371) (15,713) (1,953) (335) (12) Effect of settlement — (5,884) — — — — Benefits paid — (32) (3,157) (3,097) (152) (152) Benefit obligation — end of year — — 49,941 67,030 1,659 2,096 Change in plan assets: Fair value of plan assets — beginning of year — 4,609 58,712 55,966 — — Actual return on plan assets — (237) (9,552) 4,246 — — Employer contributions — 1,544 200 1,597 152 152 Effect of settlement — (5,884) — — — — Benefits paid — (32) (3,157) (3,097) (152) (152) Fair value of plan assets — end of year — — 46,203 58,712 — — Accrued pension cost / funded status $ — $ — $ (3,738) $ (8,318) $ (1,659) $ (2,096) Assumptions: Discount rate — % 2.50 % 5.25 % 2.75 % 5.00 % 2.50 % Expected return on plan assets — % 3.50 % 6.00 % 6.00 % — % — % Chesapeake Pension Plan FPU Pension Plan Chesapeake SERP For the Years Ended December 31, 2022 2021 2020 2022 2021 2020 2022 2021 2020 (in thousands) Components of net periodic pension cost: Interest cost $ — $ 141 $ 176 $ 1,781 $ 1,714 $ 2,085 $ 50 $ 48 $ 63 Expected return on assets — (166) (157) (3,430) (3,306) (2,967) — — — Amortization of actuarial loss — 257 243 466 612 552 28 28 20 Settlement expense — 1,810 203 — — — — — — Net periodic pension cost — 2,042 465 (1,183) (980) (330) 78 76 83 Amortization of pre-merger regulatory asset — — — — — — — — — Total periodic cost $ — $ 2,042 $ 465 $(1,183) $ (980) $ (330) $ 78 $ 76 $ 83 Assumptions: Discount rate — % 2.25 % 3.00 % 2.75 % 2.50 % 3.25 % 2.50 % 2.25 % 3.00 % Expected return on plan assets — % 3.50 % 3.50 % 6.00 % 6.00 % 6.00 % — % — % — % Our funding policy provides that payments to the trust of each qualified plan shall be equal to at least the minimum funding requirements of the Employee Retirement Income Security Act of 1974.
Biggest changeThe following schedules set forth the funded status at December 31, 2023 and 2022 and the net periodic cost (benefit) for the years ended December 31, 2023, 2022 and 2021 for the FPU Pension Plan and the Chesapeake SERP: FPU Pension Plan Chesapeake SERP At December 31, 2023 2022 2023 2022 (in thousands) Change in benefit obligation: Benefit obligation — beginning of year $ 49,941 $ 67,030 $ 1,659 $ 2,096 Interest cost 2,495 1,781 81 50 Actuarial (gain) loss 454 (15,713) 48 (335) Benefits paid (3,233) (3,157) (152) (152) Benefit obligation — end of year 49,657 49,941 1,636 1,659 Change in plan assets: Fair value of plan assets — beginning of year 46,203 58,712 — — Actual return on plan assets 6,462 (9,552) — — Employer contributions — 200 152 152 Benefits paid (3,233) (3,157) (152) (152) Fair value of plan assets — end of year 49,432 46,203 — — Accrued pension cost / funded status $ (225) $ (3,738) $ (1,636) $ (1,659) Assumptions: Discount rate 5.00 % 5.25 % 4.88 % 5.00 % Expected return on plan assets 6.00 % 6.00 % — % — % FPU Pension Plan Chesapeake SERP For the Years Ended December 31, 2023 2022 2021 2023 2022 2021 (in thousands) Components of net periodic pension cost: Interest cost $ 2,495 $ 1,781 $ 1,714 $ 81 $ 50 $ 48 Expected return on assets (2,670) (3,430) (3,306) — — — Amortization of actuarial loss 407 466 612 8 28 28 Total periodic cost $ 232 $ (1,183) $ (980) $ 89 $ 78 $ 76 Assumptions: Discount rate 5.25 % 2.75 % 2.50 % 5.00 % 2.50 % 2.25 % Expected return on plan assets 6.00 % 6.00 % 6.00 % — % — % — % Chesapeake Utilities Corporation 2023 Form 10-K Page 91 Table of Contents Notes to the Consolidated Financial Statements During the fourth quarter of 2021, we formally terminated the Chesapeake Pension Plan.
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.
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.
We believe that the provisions of ASC Topic 980, Regulated Operations, continue to apply to our regulated operations and that the recovery of our regulatory assets is probable. Revenue Recognition Revenues for our natural gas and electric distribution operations are based on rates approved by the PSC in each state in which they operate.
We believe that the provisions of ASC Topic 980 continue to apply to our regulated operations and that the recovery of our regulatory assets is probable. Revenue Recognition Revenues for our natural gas and electric distribution operations are based on rates approved by the PSC in each state in which they operate.
If we were required to terminate the application of these regulatory provisions to our regulated operations, all such deferred amounts would be recognized in the statement of income at that time, which could have a material impact on our financial position, results of operations and cash flows.
If we were required to terminate the application of these regulatory provisions to our regulated operations, all such deferred amounts would be recognized in our consolidated statement of income at that time, which could have a material impact on our financial position, results of operations and cash flows.
Impairment of Long-lived Assets We periodically evaluate whether events or circumstances have occurred, which indicate that other long-lived assets may not be fully recoverable. The determination of whether an impairment has occurred is based on an estimate of undiscounted future cash flows attributable to the asset, compared to the carrying value of the asset.
Impairment of Long-lived Assets We periodically evaluate whether events or circumstances have occurred, which indicate that long-lived assets may not be fully recoverable. The determination of whether an impairment has occurred is based on an estimate of undiscounted future cash flows attributable to the asset, compared to the carrying value of the asset.
Eastern Shore Southern Expansion Project: In January 2022, Eastern Shore submitted a prior notice filing with the FERC pursuant to blanket certificate procedures, regarding its proposal to install an additional compressor unit and related facilities at Eastern Shore's existing compressor station in Bridgeville, Sussex County, Delaware.
Eastern Shore Southern Expansion Project: In January 2022, Eastern Shore submitted a prior notice filing with the FERC pursuant to blanket certificate procedures, regarding its proposal to install an additional compressor unit and related facilities at Eastern Shore's compressor station in Bridgeville, Sussex County, Delaware.
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, 2022 and 2021, 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, 2022, 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 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").
The amounts disclosed in our consolidated balance sheet at December 31, 2022, 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, 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.
Depreciation and accretion included in operations expense consists of the accretion of the costs of removal for future retirements of utility assets, vehicle depreciation, computer software and hardware depreciation, and other minor amounts of depreciation expense.
Depreciation and accretion included in operations expenses consists of the accretion of the costs of removal for future retirements of utility assets, vehicle depreciation, computer software and hardware depreciation, and other minor amounts of depreciation expense.
We can store up to approximately 8.7 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 8.9 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.
Our energy transmission and energy delivery services business units consist of our natural gas pipelines and our mobile CNG delivery operations. The majority of customers served by these business units are regulated distribution utilities who also have the ability to recover their costs. We believe this cost recovery mechanism significantly reduces the amount of credit risk.
Our energy transmission and energy delivery services business units consist of our natural gas pipelines and our mobile CNG delivery operations. The majority of customers served by these business units are regulated distribution utilities who also have the ability to recover their costs. We believe this cost recovery mechanism significantly reduces the amount of credit risk associated with these customers.
The following table summarized the regulatory liabilities related to accumulated deferred taxes ("ADIT") associated with TCJA for our regulated businesses as of December 31, 2022 and 2021: Amount (in thousands) Operation and Regulatory Jurisdiction December 31, 2022 December 31, 2021 Status Eastern Shore (FERC) $34,190 $34,190 Will be addressed in Eastern Shore's next rate case filing.
The following table summarized the regulatory liabilities related to accumulated deferred taxes ("ADIT") associated with TCJA for our regulated businesses as of December 31, 2023 and 2022: Amount (in thousands) Operation and Regulatory Jurisdiction December 31, 2023 December 31, 2022 Status Eastern Shore (FERC) $34,190 $34,190 Will be addressed in Eastern Shore's next rate case filing.
O THER C OMMITMENTS AND C ONTINGENCIES Natural Gas, Electric and Propane Supply In March 2020, 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, 2020 and expire in March 2023.
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.
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, 2022.
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.
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, 2022.
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.
These amounts are presented to reconcile to total pension plan assets. At December 31, 2022 and 2021, our pension plan investments were classified under the same fair value measurement hierarchy (Level 1 through Level 3) described under Note 9, Fair Value of Financial Instruments.
These amounts are presented to reconcile to total pension plan assets. At December 31, 2023 and 2022, our pension plan investments were classified under the same fair value measurement hierarchy (Level 1 through Level 3) described under Note 9, Fair Value of Financial Instruments.
(9) See Note 1 , Summary of Significant Accounting Policies, for additional information on our asset removal cost policies. (10) We recorded a regulatory liability for our regulated businesses related to the revaluation of accumulated deferred tax assets/liabilities as a result of the TCJA.
(9) See Note 2 , Summary of Significant Accounting Policies, for additional information on our asset removal cost policies. (10) We recorded a regulatory liability for our regulated businesses related to the revaluation of accumulated deferred tax assets/liabilities as a result of the TCJA.
In connection with this acquisition, we recorded $4.4 million in intangible assets associated primarily with intellectual property and non-compete agreements, $4.0 million in property plant and equipment, $1.1 million in goodwill, and $0.1 million in working capital, all of which are deductible for income tax purposes.
In connection with this acquisition, we recorded $4.4 million in intangible assets associated primarily with intellectual property and non-compete agreements, $4.0 million in property plant and equipment, $1.1 million in goodwill, and less than $0.1 million in working capital, all of which are deductible for income tax purposes.
As of December 31, 2022, 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, 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.
How the Critical Audit Matter was Addressed in the Audit The primary procedures we performed to address this critical audit matter included: • We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the reporting units within the Unregulated Energy reportable segment. • We evaluated the appropriateness of management’s valuation methodology, including testing the mathematical accuracy of the calculation. • We assessed the historical accuracy of management’s revenue and operating margin forecasts. • We compared the significant assumptions used by management to current industry and economic trends, current and historical performance of each reporting unit, and other relevant factors. • We performed sensitivity analyses of the significant assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions. • We evaluated whether the assumptions were consistent with evidence obtained in other areas of the audit, including testing the Company’s fair value of all reporting units, inclusive of the Regulated and Unregulated Energy reporting units, in relation to the market capitalization of the Company and assessed the results. /s/ Baker Tilly US, LLP We have served as the Company's auditor since 2007.
How the Critical Audit Matter was Addressed in the Audit The primary procedures we performed to address this critical audit matter included: • We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the Aspire Energy reporting unit. • We evaluated the appropriateness of management’s valuation methodology, including testing the mathematical accuracy of the calculation. • We assessed the historical accuracy of management’s revenue and operating margin forecasts. • We compared the significant assumptions used by management to current industry and economic trends, current and historical performance of the reporting unit, and other relevant factors. • We performed sensitivity analyses of the significant assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions. • We evaluated whether the assumptions were consistent with evidence obtained in other areas of the audit, including testing the Company’s fair value of all reporting units within the Company's Regulated and Unregulated Energy segments, in relation to the market capitalization of the Company and assessed the results. /s/ Baker Tilly US, LLP We have served as the Company's auditor since 2007.
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, 2022, 2021 or 2020.
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.
The remedial actions approved by the Florida Department of Environmental Protection have been implemented on the east parcel of our West Palm Beach Florida site. Similar remedial actions have been initiated on the site's west parcel, and construction of active remedial systems are expected to be completed in 2023.
The remedial actions approved by the Florida Department of Environmental Protection have been implemented on the east parcel of our West Palm Beach Florida site. Similar remedial actions have been initiated on the site's west parcel, and construction of active remedial systems are expected to be completed in 2024.
The costs of repairs and minor replacements are charged to expense as incurred, and the costs of major renewals and betterments are capitalized. Upon retirement or disposition of property within the regulated businesses, the gain or loss, net of salvage value, is charged to accumulated depreciation.
The costs of repairs and minor replacements are charged to expense as incurred, and the costs of major renewals and improvements are capitalized. Upon retirement or disposition of property within the regulated businesses, the gain or loss, net of salvage value, is charged to accumulated depreciation.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, 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, 2023, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.
To test goodwill for impairment, the Company uses a present value technique based on discounted cash flows to estimate the fair value of its reporting units. Management’s testing of goodwill as of December 31, 2022 indicated no impairment.
To test goodwill for impairment, the Company uses a present value technique based on discounted cash flows to estimate the fair value of its reporting units. Management’s testing of goodwill as of December 31, 2023 indicated no impairment.
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.
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.
The amounts recorded under the Non-Qualified Deferred Compensation Plan totaled $7.1 million and $7.2 million at December 31, 2022 and 2021, respectively, which are also shown as a deduction against stockholders' equity in the consolidated balance sheet. 17. S HARE -B ASED C OMPENSATION P LANS Our non-employee directors and key employees have been granted share-based awards through our SICP.
The amounts recorded under the Non-Qualified Deferred Compensation Plan totaled $9.1 million and $7.1 million at December 31, 2023 and 2022, respectively, which are also shown as a deduction against stockholders' equity in the consolidated balance sheet. 17. S HARE -B ASED C OMPENSATION P LANS Our key employees and non-employee directors have been granted share-based awards through our SICP.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2022, 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, 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.
The three levels of the fair value hierarchy are the following: Fair Value Hierarchy Description of Fair Value Level Fair Value Technique Utilized Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities Investments - equity securities - The fair values of these trading securities are recorded at fair value based on unadjusted quoted prices in active markets for identical securities.
The three levels of the fair value hierarchy are as follows: Fair Value Hierarchy Description of Fair Value Level Fair Value Technique Utilized Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities Investments - equity securities - The fair values of these trading securities are recorded at fair value based on unadjusted quoted prices in active markets for identical securities.
Our President and CEO has the right to issue awards of shares of our common stock, to other officers of the Company, contingent upon various performance goals and subject to SEC transfer restrictions.
Our President and CEO has the right to issue awards of shares of our common stock, to other officers and key employees of the Company, contingent upon various performance goals and subject to SEC transfer restrictions.
As of December 31, 2022, 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, 2023, we have not entered into any leases, which have not yet commenced, that would entitle us to significant rights or create additional obligations.
The following is a summary of fair market value of financial derivatives as of December 31, 2022, by method of valuation and by maturity for each fiscal year period.
The following is a summary of fair market value of financial derivatives as of December 31, 2023, by method of valuation and by maturity for each fiscal year period.
The health care inflation rate for 2022 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 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 unfunded liability for all plans at both December 31, 2022 and 2021, is included in the other pension and benefit costs liability in our consolidated balance sheets.
The unfunded liability for all plans at both December 31, 2023 and 2022, is included in the other pension and benefit costs liability in our consolidated balance sheets.
The regulatory asset is being amortized over two years and is recovered through the Purchased Gas Adjustment and Swing Service mechanisms for our natural gas distribution businesses and through the Fuel Purchased Power Cost Recovery clause for our electric division. As of December 31, 2022 and 2021, our total COVID-19 regulatory asset balance was $1.2 million and $2.3 million, respectively.
The regulatory asset is being amortized over two years and is recovered through the Purchased Gas Adjustment and Swing Service mechanisms for our natural gas distribution businesses and through the Fuel Purchased Power Cost Recovery clause for our electric division. As of December 31, 2023 and 2022, our total COVID-19 regulatory asset balance was $0.2 million and $1.2 million, respectively.
Chesapeake Utilities Corporation 2022 Form 10-K Page 72 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 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.
Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2022.
Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2023.
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.
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.
The SPPCR rules allow the utility to file for recovery of associated costs related to its SPP. Our Florida electric distribution operations' SPP and SPPCRC were filed d uring the first quarter of 2022 and approved in the fourth quarter of 2022 with modifications, by the Florida PSC. Rates associated with this initiative were effective in January 2023.
The SPPCRC rules allow the utility to file for recovery of associated costs for the SPP. Our Florida electric distribution operations' SPP was filed d uring the first quarter of 2022 and approved in the fourth quarter of 2022, with modifications, by the Florida PSC. Rates associated with this initiative were effective in January 2023.
As of December 31, 2022 and 2021, our natural gas and electric distribution operations did not have any outstanding derivative contracts.
As of December 31, 2023 and 2022, our natural gas and electric distribution operations did not have any outstanding derivative contracts.
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 322,509 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 to be issued at the end of the service period. We have 561,115 shares of common stock reserved for issuance under the SICP.
Chesapeake Utilities Corporation 2022 Form 10-K Page 58 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.
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.
Chesapeake Utilities Corporation 2022 Form 10-K Page 71 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 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.
Assets held in the Rabbi Trust, recorded as Investments on the consolidated balance sheet, had a fair value of $10.6 million and $12.1 million at December 31, 2022 and 2021, respectively. The assets of the Rabbi Trust are at all times subject to the claims of our general creditors.
Assets held in the Rabbi Trust, recorded as Investments on the consolidated balance sheet, had a fair value of $12.3 million and $10.6 million at December 31, 2023 and 2022, respectively. The assets of the Rabbi Trust are at all times subject to the claims of our general creditors.
Chesapeake Utilities Corporation 2022 Form 10-K Page 98 Table of Contents Notes to the Consolidated Financial Statements 19. E NVIRONMENTAL C OMMITMENTS AND C ONTINGENCIES We are subject to federal, state and local laws and regulations governing environmental quality and pollution control.
Chesapeake Utilities Corporation 2023 Form 10-K Page 101 Table of Contents Notes to the Consolidated Financial Statements 19. E NVIRONMENTAL C OMMITMENTS AND C ONTINGENCIES We are subject to federal, state and local laws and regulations governing environmental quality and pollution control.
We have received approval for recovery of clean-up costs in rates for sites located in Salisbury, Maryland; Seaford, Delaware; and Winter Haven, Key West, Pensacola, Sanford and West Palm Beach, Florida. As of December 31, 2022 and 2021, we had approximately $4.3 million and $5.2 million, respectively, in environmental liabilities, related to the former MGP sites.
We have received approval for recovery of clean-up costs in rates for sites located in Salisbury, Maryland; Seaford, Delaware; and Winter Haven, Key West, Pensacola, Sanford and West Palm Beach, Florida. As of December 31, 2023 and 2022, we had approximately $3.6 million and $4.3 million, respectively, in environmental liabilities, related to the former MGP sites.
The additional operating expenses we incurred support the ongoing delivery of our essential services during these unprecedented times. In April and May 2020, we were authorized by the Maryland and Delaware PSCs, respectively, to record regulatory assets for COVID-19 related costs which offered us the ability to seek recovery of those costs.
The additional operating expenses we incurred support the ongoing delivery of our essential services during the height of the pandemic. In April and May 2020, we were authorized by the Maryland and Delaware PSCs, respectively, to record regulatory assets for COVID-19 related costs which offered us the ability to seek recovery of those costs.
In the fourth quarter of 2020, we entered into additional interest rate swaps with notional amounts totaling $60.0 million through December 2021 with pricing of 0.20 percent and 0.205 percent for the period associated with our outstanding borrowing under the Revolver.
In the fourth quarter of 2020, we entered into interest rate swaps with notional amounts totaling $60.0 million through December 2021 with pricing of approximately 0.20 percent for the period associated with our outstanding borrowing under the Revolver.
The participants are credited with gains or losses on those investments. Deferred stock compensation may not be diversified. The participants are credited with dividends on our common stock in the same amount that is received by all other stockholders. Such dividends are reinvested into our common stock.
The participants are credited with gains or losses on those investments. Deferred stock compensation may not be diversified. The participants are credited with dividends on their deferred common stock units in the same amount that is received by all other stockholders. Such dividends are reinvested into additional deferred common stock units.
Chesapeake Utilities Corporation 2022 Form 10-K Page 100 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 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 2022 Form 10-K Page 60 Table of Contents Notes to the Consolidated Financial Statements Jointly-owned Pipelines Property, plant and equipment for our Florida natural gas transmission operation included $28.3 million of jointly owned assets at December 31, 2022, primarily comprised of the 26-mile Callahan intrastate transmission pipeline in Nassau County, Florida jointly-owned with Seacoast Gas Transmission.
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.
No shares have been issued or are outstanding; accordingly, no information has been included in the Consolidated Statements of Stockholders’ Equity. (2) Includes 108,143, 116,238 and 105,087 shares at December 31, 2022, 2021 and 2020, respectively, held in a Rabbi Trust related to our Non-Qualified Deferred Compensation Plan. (3) Includes amounts for shares issued for directors’ compensation.
No shares have been issued or are outstanding; accordingly, no information has been included in the Consolidated Statements of Stockholders’ Equity. (2) Includes 107,623, 108,143 and 116,238 shares at December 31, 2023, 2022 and 2021, respectively, held in a Rabbi Trust related to our Non-Qualified Deferred Compensation Plan. (3) Includes amounts for shares issued for directors’ compensation.
As of December 31, 2022 and 2021, the non-refundable contributions totaled $7.6 million and $6.3 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, 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.
For the years ended December 31, 2022, 2021 and 2020, we reported $11.0 million, $10.2 million and $9.6 million, respectively, of depreciation and accretion in operations expenses.
For the years ended December 31, 2023, 2022 and 2021, we reported $11.9 million, $11.0 million and $10.2 million, respectively, of depreciation and accretion in operations expenses.
Natural Gas, Electric and Propane Costs Chesapeake Utilities Corporation 2022 Form 10-K Page 62 Table of Contents Notes to the Consolidated Financial Statements Natural gas, electric and propane costs include the direct costs attributable to the products sold or services provided to our customers.
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.
The following table presents information related to our total lease cost included in our consolidated statements of income: Year Ended December 31, (in thousands) Classification 2022 2021 Operating lease cost (1) Operations expense $ 2,883 $ 2,064 (1) Includes short-term leases and variable lease costs, which are immaterial.
The following table presents information related to our total lease cost included in our consolidated statements of income: Year Ended December 31, (in thousands) Classification 2023 2022 Operating lease cost (1) Operations expense $ 3,040 $ 2,883 (1) Includes short-term leases and variable lease costs, which are immaterial.
Financial liabilities with carrying values approximating fair value include accounts payable, other accrued liabilities and short-term debt. The fair value of cash and cash equivalents is measured using the comparable value in the active market and approximates its carrying value (Level 1 measurement).
Other Financial Assets and Liabilities Financial assets with carrying values approximating fair value include cash and cash equivalents and accounts receivable. Financial liabilities with carrying values approximating fair value include accounts payable, other accrued liabilities and short-term debt. The fair value of cash and cash equivalents is measured using the comparable value in the active market (Level 1 measurement).
We also have audited the Company’s internal control over financial reporting as of December 31, 2022, 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, 2023, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
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. The financial results associated with this acquisition will be included within the Company's propane distribution operations within its Unregulated Energy segment.
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. The financial results associated with this acquisition are included within our propane distribution operations within our Unregulated Energy segment.
The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.
The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
S UMMARY OF S IGNIFICANT A CCOUNTING P OLICIES Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates in measuring assets and liabilities and related revenues and expenses.
S UMMARY OF S IGNIFICANT A CCOUNTING P OLICIES Use of Estimates Preparing the consolidated financial statements to conform with GAAP requires management to make estimates in measuring assets and liabilities and related revenues and expenses.
(4) The shares issued under the SICP are net of shares withheld for employee taxes. For 2022, 2021 and 2020, we withheld 21,832, 14,020 and 10,319 shares, respectively, for taxes. (5) Includes shares issued under the Retirement Savings Plan, DRIP and/or ATM equity issuances, as applicable. The accompanying notes are an integral part of the financial statements.
(4) The shares issued under the SICP are net of shares withheld for employee taxes. For 2023, 2022 and 2021, we withheld 19,859, 21,832 and 14,020 shares, respectively, for taxes. (5) Includes shares issued under the Retirement Savings Plan, DRIP and/or ATM equity issuances, as applicable. The accompanying notes are an integral part of the financial statements.
As of December 31, 2022, we have issued letters of credit totaling approximately $5.8 million related to the electric transmission services for FPU's electric division, the firm transportation service agreement between TETLP and our Delaware and Maryland divisions, the capacity agreement between NEXUS and Aspire, and our current and previous primary insurance carriers.
As of December 31, 2023, we have issued letters of credit totaling approximately $7.0 million related to the electric transmission services for FPU's electric division, the firm transportation service agreement between TETLP and our Delaware and Maryland divisions, the capacity agreement between NEXUS and Aspire, and our current and previous primary insurance carriers.
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) project development activities related to our sustainable energy initiatives.
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.
Under the futures and swap agreements, Sharp will receive or pay the difference between (i) the index prices (Mont Belvieu prices in December 2022 through August 2025) 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 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.
At December 31, 2022 and 2021, the assets of the FPU Pension Plan were comprised of the following investments: Chesapeake Utilities Corporation 2022 Form 10-K Page 89 Table of Contents Notes to the Consolidated Financial Statements Fair Value Measurement Hierarchy For the Years Ended December 31, 2022 2021 Asset Category Total Total (in thousands) Mutual Funds - Equity securities U.S.
At December 31, 2023 and 2022, the assets of the FPU Pension Plan were comprised of the following investments: Chesapeake Utilities Corporation 2023 Form 10-K Page 92 Table of Contents Notes to the Consolidated Financial Statements Fair Value Measurement Hierarchy For Year Ended December 31, Asset Category 2023 2022 (in thousands) Mutual Funds - Equity securities U.S.
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.
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.
Peninsula Pipeline's ownership is 50 percent. Direct expenses for the jointly-owned pipeline are included in operating expenses of our consolidated statements of income. Accumulated depreciation for this pipeline totaled $1.5 million and $0.9 million at December 31, 2022 and 2021, 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 $2.2 million and $1.5 million at December 31, 2023 and 2022, respectively.
Derivative Liabilities Fair Value as of (in thousands) Balance Sheet Location December 31, 2022 December 31, 2021 Derivatives designated as cash flow hedges Propane swap agreements Derivative liabilities, at fair value (1) $ 1,810 $ 743 Interest rate swap agreements Derivative liabilities, at fair value (1) 405 — Total Derivative Liabilities $ 2,215 $ 743 (1) Derivative liabilities, at fair value include $0.6 million and $0.7 million in current liabilities in the consolidated balance sheet at December 31, 2022 and 2021, respectively, with the remainder of the balance classified as long-term.
Derivative Liabilities Fair Value as of (in thousands) Balance Sheet Location December 31, 2023 December 31, 2022 Derivatives designated as cash flow hedges Propane swap agreements Derivative liabilities, at fair value (1) $ 1,078 $ 1,810 Interest rate swap agreements Derivative liabilities, at fair value (1) 203 405 Total Derivative Liabilities $ 1,281 $ 2,215 (1) Derivative liabilities, at fair value include $0.4 million and $0.6 million in current liabilities in the consolidated balance sheet at December 31, 2023 and 2022, respectively, with the remainder of the balance classified as long-term.
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.
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.
Chesapeake Utilities Corporation 2022 Form 10-K Page 50 Table of Contents I TEM 8. F INANCIAL S TATEMENTS AND S UPPLEMENTARY D ATA .
Chesapeake Utilities Corporation 2023 Form 10-K Page 54 Table of Contents I TEM 8. F INANCIAL S TATEMENTS AND S UPPLEMENTARY D ATA .
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 project development activities related to our sustainable energy initiatives. 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. 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.
S HORT - TERM B ORROWINGS We are authorized by our Board of Directors to borrow up to $400.0 million of short-term debt, as required. At December 31, 2022 and 2021, we had $202.2 million and $221.6 million, respectively, of short-term borrowings outstanding at a weighted average interest rate of 5.04 percent and 0.83 percent, respectively.
S HORT - TERM B ORROWINGS We are authorized by our Board of Directors to borrow up to $375.0 million of short-term debt, as required. At December 31, 2023 and 2022, we had $179.9 million and $202.2 million, respectively, of short-term borrowings outstanding at a weighted average interest rate of 5.83 percent and 5.04 percent, respectively.
Accumulated Other Comprehensive Income (Loss) Defined benefit pension and postretirement plan items, unrealized gains (losses) of our propane swap agreements and natural gas swaps and futures contracts, designated as commodity contracts cash flow hedges, and the unrealized gains (losses) of our interest rate swap agreements, designated as cash flow hedges, are the components of our accumulated other comprehensive loss.
Accumulated Other Comprehensive Income (Loss) Defined benefit pension and postretirement plan items, unrealized gains (losses) of our propane swap agreements designated as commodity contract cash flow hedges, and the unrealized gains (losses) of our interest rate swap agreements designated as cash flow hedges are the components of our accumulated other comprehensive income (loss).
The application included a request for the following: (i) permanent rate relief of approximately $24.1 million, effective January 1, 2023, (ii) a depreciation study also submitted with the filing; (iii) authorization to make certain changes to tariffs to include the consolidation of rates and rate structure across the businesses and to unify the Florida natural gas distribution businesses under FPU; (iv) authorization to retain the acquisition adjustment recorded at the time of the FPU merger in our revenue requirement; and (v) authorization to establish an environmental remediation surcharge for the purposes of addressing future expected remediation costs for FPU MGP sites.
The application included a request for the following: (i) permanent rate relief of approximately $24.1 million, effective January 1, 2023, (ii) a depreciation study also submitted with the filing; (iii) authorization to make certain changes to tariffs to include the consolidation of rates and rate structure across the businesses and to unify the Florida Natural Gas distribution businesses under FPU; (iv) authorization to retain the acquisition adjustment Chesapeake Utilities Corporation 2023 Form 10-K Page 97 Table of Contents Notes to the Consolidated Financial Statements recorded at the time of the FPU merger in our revenue requirement; and (v) authorization to establish an environmental remediation surcharge for the purposes of addressing future expected remediation costs for FPU MGP sites.
FPU natural gas distribution operations and Eight Flags have separate asset management agreements with Emera Energy Services, Inc. to manage their natural gas transportation capacity. These agreements commenced in November 2020 and expire in March 2029. Chesapeake Utilities' Florida Division has firm transportation service contracts with FGT and Gulfstream.
FPU natural gas distribution operations and Eight Flags have separate asset management agreements with Emera Energy Services, Inc. to manage their natural gas transportation capacity. These agreements commenced in November 2020 and expire in October 2030. Florida Natural Gas has firm transportation service contracts with FGT and Gulfstream.
We expect to reclassify approximately $0.8 million of unrealized gain from accumulated other comprehensive income to earnings during the next 12-month period ending December 31, 2023. 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 $0.3 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.
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 o f 14 years. Amortization expense of intangible assets for the year ended December 31, 2022, 2021 and 2020 was $1.5 million , $1.3 million and $1.2 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, 2023, 2022 and 2021 w as $1.8 million, $1.5 million and $1.3 million , respectively.
At the date of enactment in 2017, we re-measured deferred income taxes based upon the new corporate tax rate. See Note 18, Rates and Other Regulatory Activities, for further discussion of the TCJA's impact on our regulated businesses.
During 2018, we completed the assessment of the impact of accounting for certain effects of the TCJA. At the date of enactment in 2017, we re-measured deferred income taxes based upon the new corporate tax rate. See Note 18, Rates and Other Regulatory Activities, for further discussion of the TCJA's impact on our regulated businesses.
Volume of Derivative Activity As of December 31, 2022, 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 20.0 Cash flow hedges August, 2025 Sharp Propane (gallons) Sales 5.0 Cash flow hedges December, 2023 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, 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.
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