UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

Chesapeake Utilities Corporation

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

909 Silver Lake Boulevard, Dover, Delaware 19904

302-734-6799

Title of each class		Name of each exchange on which registered
Common Stock — par value per share $.4867		New York Stock Exchange, Inc.

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. þ

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

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o		Smaller Reporting Company o

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

The aggregate market value of the common shares held by non-affiliates of Chesapeake Utilities Corporation as of June 30, 2008, the last business day of its most recently completed second fiscal quarter, based on the last trade price on that date, as reported by the New York Stock Exchange, was approximately $168.8 million.

As of February 28, 2009, 6,833,066 shares of common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the 2009 Annual Meeting of Stockholders are incorporated by reference in Part III.

 

 

FORM 10-K

YEAR ENDED DECEMBER 31, 2008

TABLE OF CONTENTS

		Page
Part I			4
Item 1. Business			4
Item 1A. Risk Factors			12
Item 1B. Unresolved Staff Comments			19
Item 2. Properties			19
Item 3. Legal Proceedings			20
Item 4. Submission of Matters to a Vote of Security Holders			20
Item 4A. Executive Officers of the Registrant			20
Part II			22
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			22
Item 6. Selected Financial Data			25
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			29
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			56
Item 8. Financial Statements and Supplementary Data			56
Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure			99
Item 9A. Controls and Procedures			99
Item 9B. Other Information			101
Part III			101
Item 10. Directors, Executive Officers of the Registrant and Corporate Governanace			101
Item 11. Executive Compensation			101
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			101
Item 13. Certain Relationships and Related Transactions, and Director Independence			102
Item 14. Principal Accounting Fees and Services			102
Part IV			103
Item 15. Exhibits, Financial Statement Schedules			103
Signatures			108
Exhibit 3.2
Exhibit 10.5
Exhibit 10.7
Exhibit 10.9
Exhibit 10.11
Exhibit 10.13
Exhibit 10.15
Exhibit 10.26
Exhibit 10.27
Exhibit 10.28
Exhibit 12
Exhibit 14.2
Exhibit 21
Exhibit 23.1
Exhibit 23.2
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

GLOSSARY OF KEY TERMS

Frequently used abbreviations, acronyms, or terms used in this report:

Subsidiaries of Chesapeake Utilities Corporation

BravePoint		BravePoint, Inc., a wholly-owned subsidiary of Chesapeake Services Company, which is a wholly-owned subsidiary of Chesapeake Utilities Corporation
Chesapeake		The Registrant, the Registrant and its subsidiaries, or the Registrant’s subsidiaries, as appropriate in the context of the disclosure
Company		The Registrant, the Registrant and its subsidiaries or the Registrant’s subsidiaries, as appropriate in the context of the disclosure
ESNG		Eastern Shore Natural Gas Company, a wholly-owned subsidiary of Chesapeake
OnSight		Chesapeake OnSight Services, LLC, a wholly-owned subsidiary of Chesapeake
PESCO		Peninsula Energy Services Company, Inc., a wholly-owned subsidiary of Chesapeake
PIPECO		Peninsula Pipeline Company, Inc., a wholly-owned subsidiary of Chesapeake
Sharp Energy		Sharp Energy, Inc., a wholly-owned subsidiary of Chesapeake Utilities Corporation
Sharpgas		Sharpgas, Inc., a wholly-owned subsidiary of Sharp Energy, Inc.
Skipjack		Skipjack, Inc., a wholly-owned subsidiary of Chesapeake Service Company, which is a wholly-owned subsidiary of Chesapeake Utilities Corporation
Tri-County		Tri-County Gas Co., Inc. a wholly-owned subsidiary of Sharp Energy
Xeron		Xeron, Inc., a wholly-owned subsidiary of Chesapeake

Regulatory Agencies

APB		Accounting Principles Board
Delaware PSC		Delaware Public Service Commission
DOT		United States Department of Transportation
EPA		United States Environmental Protection Agency
FASB		Financial Accounting Standards Board
FERC		Federal Energy Regulatory Commission
FDEP		Florida Department of Environmental Protection
Florida PSC		Florida Public Service Commission
IRS		Internal Revenue Service
Maryland PSC		Maryland Public Service Commission
MDE		Maryland Department of Environment
SEC		Securities and Exchange Commission

Other

AOCI		Accumulated Other Comprehensive Income
AS/SVE		Air Sparging and Soil/Vapor Extraction
CGS		Community Gas Systems
Columbia		Columbia Gas Transmission Corporation
DSCP		Directors Stock Compensation Plan
Dts		Dekatherms
E3 Project		ESNG Energylink Expansion Project
ER		Environmental rider
EITF		Financial Accounting Standards Board Emerging Issues Task Force
FIN		Financial Accounting Standards Board Interpretation Number
FSP		Financial Accounting Standards Board Staff Position
GAAP		Generally Accepted Accounting Principles
GSR		Gas sales service rates

Chesapeake Utilities Corporation 2008 Form 10-K     Page 1

Gulf		Columbia Gulf Transmission Company
Gulfstream		Gulfstream Natural Gas System, LLC
HDD		Heating degree-days
MMBtus		One million (1,000,000) British Thermal Units
NYSE		New York Stock Exchange
PIP		Performance Incentive Plan
S&P 500 Index		Standard & Poor’s 500
SFAS		Statement of Financial Accounting Standards

Accounting Standards

EITF 03-6-1		EITF 03-6-1, Determining Whether instruments Granted in Share-based Payment Transactions are Participating Securities
EITF 07-05		EITF 07-05, Determining Whether an Instrument (of an Embedded Feature) is Indexed to an Entity’s Own Stock
EITF 08-03		EITF 08-03, Accounting for Maintenance Deposits Under Lease Arrangements
EITF 08-05		EITF 08-05, Issuer’s Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement
FIN 39-1		FIN 39-1, a modification to FIN 39, Offsetting of Amounts Related to Certain Contracts
FIN 47		FIN 47, Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143
FIN 48		FIN 48, Accounting for Uncertainty in Income Taxes, an interpretation of SFAS Statement No. 109
FSP APB 14-1		FSP APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlements)
FSP 142-3		FSP 142-3, Determining the Useful Life of Intangible Assets
FSP 157-3		FSP 157-3, Determining the Fair Value of a Financial Asset When the Market for that Asset is Not Active
SFAS No. 71		Statement of Financial Accounting Standards No. 71, Accounting for the Effects of Certain Types of Regulation
SFAS No. 87		Statement of Financial Accounting Standards No. 87, Employers’ Accounting for Pensions
SFAS No. 88		Statement of Financial Accounting Standards No. 88, Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits
SFAS No. 106		Statement of Financial Accounting Standards No. 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions
SFAS No. 109		Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes
SFAS No. 112		Statement of Financial Accounting Standards No. 112, Employers’ Accounting for Postemployment Benefits
SFAS No. 115		Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities
SFAS No. 123		Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation
SFAS No. 123R		Statement of Financial Accounting Standards No. 123R, Share-Based Payment
SFAS No. 128		Statement of Financial Accounting Standards No. 128, Earnings Per Share
SFAS No. 132R		Statement of Financial Accounting Standards No. 132R, Employers’ Disclosures about Pensions and Other Postretirement Benefits
SFAS No. 133		Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities

Page 2     Chesapeake Utilities Corporation 2008 Form 10-K

SFAS No. 141R		Statement of Financial Accounting Standards No. 141R, Business Combinations
SFAS No. 142		Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets
SFAS No. 143		Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations
SFAS No. 157		Statement of Financial Accounting Standards No. 157, Fair Value Measurements
SFAS No. 158		Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an Amendment of SFAS Nos. 87, 88, 106, and 132R
SFAS No. 159		Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of SFAS No. 115
SFAS No. 160		Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements, an Amendment of Accounting Research Bulletin 51
SFAS No. 161		Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an Amendment of SFAS No. 133
SFAS No. 162		Statement of Financial Accounting Standards No. 162, The Hierarchy of Generally Accepted Accounting Principles

Chesapeake Utilities Corporation 2008 Form 10-K     Page 3

Part I

References in this document to “Chesapeake,” “the Company,” “we,” “us” and “our” mean Chesapeake Utilities Corporation and/or its wholly-owned subsidiaries, as appropriate.

Safe Harbor for Forward-Looking Statements

Chesapeake Utilities Corporation has made statements in this Form 10-K that are considered to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not matters of historical fact and are typically identified by words such as, but not limited to, “believes,” “expects,” “intends,” “plans,” and similar expressions, or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.” These statements relate to matters such as customer growth, changes in revenues or gross margins, capital expenditures, environmental remediation costs, regulatory trends and decisions, market risks, the competitive position of the Company and other matters. It is important to understand that these forward-looking statements are not guarantees but are subject to certain risks and uncertainties and other important factors that could cause actual results to differ materially from those in the forward-looking statements. The factors that could cause actual results to differ materially from the Company’s expectations include, but are not limited to, those discussed in Item 1A, “Risk Factors.”

Item 1. Business.

(a) General

Chesapeake is a diversified utility company engaged directly, or through subsidiaries, in natural gas distribution, transmission and marketing, propane distribution and wholesale marketing, advanced information services and other related businesses. Chesapeake is a Delaware corporation that was formed in 1947.

Chesapeake is composed of four operating segments:

•

Natural Gas. The natural gas segment includes regulated natural gas distribution and transmission operations and also a non-regulated natural gas marketing operation.

•

Propane. The propane segment includes non-regulated propane distribution and wholesale marketing operations.

•

Advanced Information Services. The advanced information services segment provides domestic and international clients with information-technology-related business services and solutions for both enterprise and e-business applications.

•

Other. The other segment consists primarily of non-regulated operations that own real estate leased to other Company subsidiaries.

(b) Financial Information About Business Segments

Our natural gas segment accounts for approximately 91 percent of Chesapeake’s consolidated operating income and approximately 87 percent of the consolidated net property plant and equipment. The following table shows the size of each of our operating segments based on operating income and net property, plant and equipment.

										Net Property, Plant
(Thousands)		Operating Income								& Equipment
Natural Gas		$	25,846				91	%		$	242,882				87	%
Propane			1,586				6	%			30,180				11	%
Advanced information services			695				2	%			915				<1	%
Other & eliminations			352				1	%			6,694				2	%
Total		$	28,479				100	%		$	280,671				100	%

Page 4     Chesapeake Utilities Corporation 2008 Form 10-K

Additional financial information by business segment is included in Item 8 under the heading “Notes to Consolidated Financial Statements — Note C.”

(c) Narrative Description of the Business

(i)(a) Natural Gas

Chesapeake’s natural gas segment provides natural gas distribution, transmission and marketing services for its customers. Chesapeake conducts its natural gas distribution operations under three divisions: Delaware, Maryland, and Florida, which are based in their respective service territories. These three divisions serve approximately 65,190 residential, commercial and industrial customers in central and southern Delaware, Maryland’s Eastern Shore and parts of Florida. The Company’s natural gas transmission subsidiary, ESNG, operates a 379-mile interstate pipeline system that transports gas from various points in Pennsylvania to the Company’s Delaware and Maryland distribution divisions, as well as to other utilities and industrial customers in southern Pennsylvania, Delaware and on the Eastern Shore of Maryland. The Company, through its subsidiary, PESCO, also provides natural gas supply and supply management services in the States of Delaware, Florida and Maryland.

Natural Gas Distribution

Chesapeake distributes natural gas to residential, commercial and industrial customers in central and southern Delaware, the Salisbury and Cambridge areas on Maryland’s Eastern Shore, and parts of Florida. These activities are conducted through three utility divisions, one in Delaware, another in Maryland and a third in Florida.

Delaware and Maryland. Chesapeake’s Delaware and Maryland distribution divisions serve approximately 50,670 customers, of which approximately 50,490 are residential and commercial customers purchasing gas primarily for heating and cooking use. The remaining 180 customers are industrial. For the year 2008, operating revenues and deliveries by customer class were as follow:

		Operating Revenues								Deliveries
		(Thousands)								(MMcf’s)
Residential		$	47,994				53	%			2,590,425				39	%
Commercial			29,480				33	%			2,312,644				34	%
Industrial			2,130				2	%			812,224				12	%
Subtotal			79,604				88	%			5,715,293				85	%
Interruptible			9,041				10	%			1,035,540				15	%
Other (1)			1,934				2	%			—				—
Total		$	90,579				100	%			6,750,833				100	%

(1)		Operating revenues from “Other” sources include unbilled revenue, rental of gas properties, and other miscellaneous charges.

Florida. The Florida division distributes natural gas to approximately 13,370 residential and 1,150 commercial and industrial customers in the 14 Counties of Polk, Osceola, Hillsborough, Gadsden, Gilchrist, Union, Holmes, Jackson, Desoto, Pasco, Suwannee, Liberty, Washington and Citrus. For the year 2008, operating revenues and deliveries by customer class were as follow:

		Operating Revenues								Deliveries
		(Thousands)								(MMcf’s)
Residential		$	3,725				28	%			321,077				2	%
Commercial			3,108				24	%			1,180,507				7	%
Industrial			4,684				36	%			14,527,786				91	%
Other (1)			1,637				12	%			—				0	%
Total		$	13,154				100	%			16,029,370				100	%

(1)		Operating revenues from “Other” sources include unbilled revenue, conservation revenue, fees for billing services provided to third-parties, and other miscellaneous charges.

Chesapeake Utilities Corporation 2008 Form 10-K     Page 5

Natural Gas Transmission

ESNG owns and operates an interstate natural gas pipeline and provides open-access transportation services for affiliated and non-affiliated local distribution companies and other customers through an integrated gas pipeline system extending from southeastern Pennsylvania through Delaware to its terminus on the Eastern Shore of Maryland. ESNG also provides swing transportation service and contract storage services. For the year 2008, operating revenues and deliveries by customer class were as follow:

		Operating Revenues								Deliveries
		(Thousands)								(MMcf’s)
Local distribution companies		$	19,280				81	%			9,720,864				44	%
Industrial			3,523				15	%			11,191,555				50	%
Commercial			968				4	%			1,299,878				6	%
Other (1)			5				<1	%			—				—
Subtotal			23,776				100	%			22,212,297				100	%
Less: affiliated local distribution companies			11,521				48	%			5,978,996				27	%
Total non-affiliated		$	12,255				52	%			16,233,301				73	%

(1)		Operating revenues from “Other” sources is from rental of gas properties.

During 2005, Chesapeake formed PIPECO to provide industrial customers in the State of Florida natural gas transportation service as an intrastate pipeline. PIPECO did not have any activity in 2006. On December 4, 2007, the Florida Public Service Commission (“Florida PSC”) approved PIPECO’s natural gas transmission pipeline tariff, which established its operating rules and regulations. PIPECO began marketing its services to potential industrial customers in 2008.

Natural Gas Marketing

PESCO competes with regulated utilities and other unregulated third-party marketers to sell natural gas supplies directly to commercial and industrial customers in the States of Delaware, Maryland, and Florida through competitively-priced contracts. PESCO does not own or operate any natural gas transmission or distribution assets. The gas that PESCO sells is delivered to retail customers through affiliated and non-affiliated local distribution company systems and transmission pipelines. PESCO bills its customers through the billing services of the regulated utilities that deliver the gas, or directly, through its own billing capabilities.

For the year 2008, PESCO’s customers, operating revenues and deliveries were as follow:

										Operating Revenues								Deliveries
State		Customers								(Thousands)								(Dts)
Florida			1,922				99	%		$	76,862				81	%			6,275,717				79	%
Delmarva			12				1	%			18,552				19	%			1,683,695				21	%
Total			1,934				100	%		$	95,414				100	%			7,959,412				100	%

Gas Supplies, Firm Transportation and Storage Capacity

The Company believes that the availability of gas supply and transportation to its Delaware, Maryland and Florida natural gas distribution operations and to ESNG and PESCO is adequate under existing arrangements to meet the anticipated needs of their customers. The following discussion provides a summary of the gas supplies and pipeline transportation and storage capacities, stated in dekatherms (“Dts”), available to each of the Company’s natural gas operations.

Page 6     Chesapeake Utilities Corporation 2008 Form 10-K

The Company’s Delaware and Maryland natural gas distribution divisions have both firm and interruptible transportation service contracts with four interstate “open access” pipelines, including ESNG. These divisions are directly interconnected with ESNG, and have contracts with interstate pipelines upstream of ESNG. These interstate pipelines include Transcontinental Gas Pipe Line Corporation (“Transco”), Columbia Gas Transmission Corporation (“Columbia”) and Columbia Gulf Transmission Company (“Gulf”). Transco and Columbia are directly interconnected with ESNG; Gulf is directly interconnected with Columbia and indirectly interconnected with ESNG. None of the upstream pipelines is an affiliate of the Company. The divisions use their firm transportation supply resources to meet a significant percentage of their projected demand requirements. In order to meet the difference between firm supply and firm demand, the divisions purchase natural gas supplies on the spot market from various suppliers. This gas is transported by the upstream pipelines and delivered to their interconnections with ESNG. The divisions also have the capability to use propane-air peak-shaving to supplement or displace the spot market purchases.

Delaware.

The following table shows the firm transportation and storage capacity that the Delaware division currently has under contract with ESNG and pipelines upstream of ESNG, including the respective contract expiration dates.

		Firm transportation
		capacity maximum				Firm storage capacity
		peak-day daily				maximum peak-day
Pipeline		deliverability (Dts)				daily withdrawal (Dts)				Expiration
Transco			21,356				6,407			Various dates between 2012 and 2028
Columbia			3,460				8,224			Various dates between 2009 and 2020
Gulf			880				—			Expires in 2009
Eastern Shore			61,637				4,146			Various dates between 2009 and 2023

The Delaware division currently has contracts with several suppliers for the purchase of firm natural gas supply in the amount of its capacity on the Transco and Columbia pipelines. The Delaware division also has contracts for firm peaking gas supplies to be delivered to its system in order to meet the differential between the Delaware division’s capacity on ESNG and capacity on pipelines upstream of ESNG. These supply contracts provide a maximum firm daily entitlement of 51,066 Dts, delivered on the Transco, Columbia, and/or Gulf systems to ESNG for redelivery to the division under firm transportation contracts. These gas supply contracts have various expiration dates, and quantities may vary from day-to-day and month-to-month.

Maryland.

The following table shows the firm transportation and storage capacity that the Maryland division currently has under contract with ESNG and pipelines upstream of ESNG, including the respective contract expiration dates.

		Firm transportation
		capacity maximum				Firm storage capacity
		peak-day daily				maximum peak-day
Pipeline		deliverability (Dts)				daily withdrawal (Dts)				Expiration
Trancso			5,866				2,456			Various dates between 2012 and 2013
Columbia			1,700				3,663			Various dates between 2014 and 2018
Gulf			590				—			Expires in 2009
Eastern Shore			20,528				2,306			Various dates between 2009 and 2023

Chesapeake Utilities Corporation 2008 Form 10-K     Page 7

The Maryland division currently has contracts with several suppliers for the purchase of firm natural gas supply in the amount of its capacity on the Transco and Columbia pipelines. The Maryland division also has contracts for firm peaking gas supplies to be delivered to its system in order to meet the differential between the Maryland division’s capacity on ESNG and capacity on pipelines upstream of ESNG. These supply contracts provide a maximum firm daily entitlement of 16,316 Dts, delivered on the Transco, Columbia, and/or Gulf systems to ESNG for redelivery to the division under firm transportation contracts. These gas supply contracts have various expiration dates, and quantities may vary from day-to-day and month-to-month.

Florida.

The Florida natural gas distribution division has firm transportation service contracts with Florida Gas Transmission Company and Gulfstream Natural Gas System, LLC. Pursuant to a program approved by the Florida PSC, all of the capacity under these agreements has been released to various third parties, including PESCO. Under the terms of these capacity release agreements, Chesapeake is contingently liable to Florida Gas Transmission Company and Gulfstream Natural Gas System, LLC. should any party that acquired the capacity through release fail to pay for the service.

Chesapeake’s contracts with Florida Gas Transmission Company include: (a) a contract, which expires in 2010, for daily firm transportation capacity of 23,519 Dts for the months of November through April, capacity of 20,123 Dts for the months of May through September, and capacity of 22,105 Dts for October; and (b) a contract for daily firm transportation capacity of 1,000 Dts daily, which expires in 2015. Chesapeake’s contract with Gulfstream Natural Gas System, LLC. is for daily firm transportation capacity of 10,000 Dts and expires in 2022.

ESNG.

ESNG has three contracts with Transco for a total of 7,292 Dts of firm peak day storage entitlements and total storage capacity of 288,003 Dts, which expire in 2013. ESNG has retained these firm storage services in order to provide swing transportation service and firm storage service to those customers that have requested such service.

PESCO.

PESCO currently has contracts with ConocoPhillips, British Petroleum Company, and Eagle Energy Partners, LLP for the purchase of firm natural gas supplies. The ConocoPhillips contract, which provides a maximum firm daily entitlement of 15,000 MMBtus, the British Petroleum Company contract, which provides a maximum firm daily entitlement of 10,000 MMBtus, and the Eagles Energy Partners, LLP contract, which provides for a maximum firm daily entitlement of 10,000 MMBtus expire in May 2009. PESCO is currently in the process of obtaining and reviewing supply proposals from suppliers and anticipates executing agreements prior to the expiration of the existing contracts.

Competition

See discussion of competition in Item 7 under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Competition.”

Rates and Regulation

Chesapeake’s natural gas distribution divisions are subject to regulation by the Delaware, Maryland and Florida PSCs with respect to various aspects of their business, including the rates for sales and transportation to all customers in each respective jurisdiction. All of Chesapeake’s firm distribution sales rates are subject to gas cost recovery mechanisms, which match revenues with gas supply and transportation costs and normally allow full recovery of such costs. Adjustments under these mechanisms, which are limited to such costs, require periodic filings and hearings with the state regulatory authority having jurisdiction.

Page 8     Chesapeake Utilities Corporation 2008 Form 10-K

ESNG is subject to regulation as an interstate pipeline by the Federal Energy Regulatory Commission (“FERC”), which regulates the terms and conditions of service and the rates ESNG can charge for its transportation and storage services.

Management monitors the achieved rates of return of its distribution divisions and ESNG in order to ensure timely filing of rate cases.

Regulatory Proceedings

See discussion of regulatory activities in Item 7 under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Regulatory Activities.”

Seasonality of Natural Gas Revenues

Revenues from the Company’s residential and commercial natural gas distribution activities are affected by seasonal variations in weather conditions, which directly influence the volume of natural gas sold and delivered. Specifically, customer demand substantially increases during the winter months, when natural gas is used for heating. Accordingly, the volumes sold for this purpose are directly affected by the severity of winter weather and can vary substantially from year to year. Sustained warmer-than-normal temperatures will tend to result in reduced use of natural gas, while sustained colder-than-normal temperatures will tend to result in greater use. The Company measures the relative impact of weather by using an accepted degree-day methodology. Degree-day data is used to estimate amounts of energy required to maintain comfortable indoor temperature levels based on each day’s average temperature. A degree-day is the measure of the variation in the weather based on the extent to which the average daily temperature (from 10:00 am to 10:00 am) falls below 65 degrees Fahrenheit. Each degree of temperature below 65 degrees Fahrenheit is counted as one heating degree-day. Normal heating degree-days are based on the most recent 10-year average.

In efforts to stabilize the level of net revenues collected from customers, the Company received approval from the Maryland Public Service Commission (“Maryland PSC”) on September 26, 2006 to implement a weather normalization adjustment for its residential heating and smaller commercial heating customers. A weather normalization adjustment is a billing adjustment mechanism that is designed to eliminate the effect of deviations from average seasonal temperatures on utility net revenues.

(i)(b) Propane

Propane is a form of liquefied petroleum gas, which is typically extracted from natural gas or separated during the crude oil refining process. Although propane is a gas at normal pressure, it is easily compressed into liquid form for storage and transportation. Propane is a clean-burning fuel, gaining increased recognition for its environmental superiority, safety, efficiency, transportability and ease of use relative to alternative forms of fossil fuels. Propane is sold primarily in suburban and rural areas, which are not served by natural gas distributors.

Chesapeake’s retail propane distribution group consists of: (1) Sharp Energy, Inc., (2) Sharpgas, Inc., and (3) Tri-County Gas Co., Inc. The propane wholesale marketing operation consists of Xeron, Inc.

Propane Distribution.

During 2008, our propane distribution operations served approximately 35,170 customers throughout Delaware, the Eastern Shore of Maryland and Virginia, southeastern Pennsylvania and parts of Florida and delivered approximately 27.9 million retail and wholesale gallons of propane. The propane distribution business is affected by many factors, such as seasonality, the absence of price regulation, and competition among local providers.

Chesapeake Utilities Corporation 2008 Form 10-K     Page 9

For the year 2008, operating revenues, total gallons sold and number of customers for our Delmarva and Florida propane distribution operations were as follow:

		Operating Revenues								Total Gallons Sold								Average No. of
		(Thousands)								(Thousands)								Customers
Delmarva		$	59,173				95	%			26,765				96	%			32,889				94	%
Florida			3,412				5	%			1,182				4	%			2,280				6	%
Total		$	62,585				100	%			27,947				100	%			35,169				100	%

The Company’s propane distribution operations purchase propane primarily from suppliers, including major oil companies, independent producers of natural gas liquids and from Xeron. Supplies of propane from these and other sources are readily available for purchase by the Company.

The Company’s propane distribution operations use trucks and railroad cars to transport propane from refineries, natural gas processing plants or pipeline terminals to its bulk storage facilities. The Company’s Delmarva-based propane distribution operation owns bulk propane storage facilities with an aggregate capacity of approximately 2.4 million gallons at 42 plant facilities in Delaware, Maryland, Pennsylvania and Virginia, located on real estate that is either owned or leased. The Company’s Florida-based propane distribution operation owns three bulk propane storage facilities with a total capacity of 66,000 gallons. From these storage facilities, propane is delivered primarily by “bobtail” trucks, owned and operated by the Company, to tanks located at the customers’ premises.

Propane Wholesale Marketing.

In May 1998, Chesapeake acquired Xeron, a natural gas liquids trading company located in Houston, Texas. Xeron markets propane to large, independent petrochemical companies, resellers and retail propane companies in the southeastern United States. For 2008, Xeron had operating revenues totaling approximately $3.3 million. The propane wholesale marketing business is affected by wholesale price volatility and supply levels. Additional information on Xeron’s trading and wholesale marketing activities, market risks and the controls that limit and monitor Xeron’s risks is included in Item 7 under the heading “Management’s Discussion and Analysis — Market Risk.”

Xeron does not own physical storage facilities or equipment to transport propane; however, it contracts for storage and pipeline capacity to facilitate the sale of propane on a wholesale basis.

Competition

See discussion of competition in Item 7 under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Competition.”

Rates and Regulation

The propane distribution and wholesale marketing activities are not subject to any federal or state pricing regulation. Transport operations are subject to regulations concerning the transportation of hazardous materials promulgated by the Federal Motor Carrier Safety Administration within the United States Department of Transportation (“DOT”) and enforced by the various states in which such operations take place. Propane distribution operations are also subject to state safety regulations relating to “hook-up” and placement of propane tanks.

The Company’s propane operations are subject to operating hazards normally associated with the handling, storage and transportation of combustible liquids, such as the risk of personal injury and property damage caused by fire. The Company carries general liability insurance in the amount of $35 million, but there is no assurance that such insurance will be adequate to cover all potential liabilities.

Seasonality of Propane Revenues

Revenues from the Company’s propane distribution sales activities are affected by seasonal variations in weather conditions. Weather conditions directly influence the volume of propane sold and delivered to customers; specifically, customers’ demand substantially increases during the winter months when propane is used for heating. Accordingly, the propane volumes sold for this purpose are directly affected by the severity of winter weather and can vary substantially from year to year. Sustained warmer-than-normal temperatures will tend to result in reduced propane use, while sustained colder-than-normal temperatures will tend to result in greater use.

Page 10     Chesapeake Utilities Corporation 2008 Form 10-K

(i)(c) Advanced Information Services

Chesapeake’s advanced information services segment consists of BravePoint, Inc. headquartered in Norcross, Georgia, which provides domestic and international clients with information-technology-related business services and solutions for both enterprise and e-business applications.

Competition

See discussion of competition in Item 7 under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Competition.”

(i)(d) Other Subsidiaries

Skipjack and Eastern Shore Real Estate, Inc. own and lease office buildings in Delaware and Maryland to affiliates of Chesapeake. Chesapeake Investment Company is an affiliated investment company registered in Delaware. During the quarter ended September 30, 2007, Chesapeake decided to close its distributed energy services subsidiary, OnSight.

(ii) Capital Budget

A discussion of capital expenditures by business segment and capital expenditures for environmental remediation facilities is included in Item 7 under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

(iii) Employees

As of December 31, 2008, Chesapeake had 448 employees, including 180 in natural gas, 132 in propane and 93 in advanced information services. The remaining 43 employees are considered general and administrative and include officers of the Company, treasury, accounting, internal audit, information technology, human resources and other administrative personnel.

(iv) Financial Information about Geographic Areas

All of the Company’s material operations, customers, and assets occur and are located in the United States.

(d) Available Information

As a public company, Chesapeake files annual, quarterly and other reports, as well as its annual proxy statement and other information, with the Securities and Exchange Commission (“SEC”). The public may read and copy any materials that the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549-5546; the public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

The SEC also maintains an Internet site that contains reports, proxy and information statements and other information regarding the Company. The address of the SEC’s Internet website is www.sec.gov. Chesapeake makes available, free of charge, on the Company’s Internet website, its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports, as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC. The address of Chesapeake’s Internet website is www.chpk.com. The content of this website is not part of this report.

Chesapeake has a Business Code of Ethics and Conduct applicable to all employees, officers and directors and a Code of Ethics for Financial Officers. Copies of the Business Code of Ethics and Conduct and the Financial Officer Code of Ethics are available on our internet website. Chesapeake also adopted Corporate Governance Guidelines and Charters for the Audit Committee, Compensation Committee, and Corporate Governance Committee of the Board of Directors, each of which satisfies the regulatory requirements established by the SEC and the New York Stock Exchange (“NYSE”). The Board of Directors has also adopted Corporate Governance Guidelines on Director Independence, which conform to the NYSE listing standards on director independence. Each of these documents also is available on Chesapeake’s Internet website or may be obtained by writing to: Corporate Secretary; c/o Chesapeake Utilities Corporation; 909 Silver Lake Blvd.; Dover, DE 19904.

Chesapeake Utilities Corporation 2008 Form 10-K     Page 11

If Chesapeake makes any amendment to, or grants a waiver of, any provision of the Business Code of Ethics and Conduct or the Code of Ethics for Financial Officers applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, the amendment or waiver will be disclosed within five business days on the Company’s Internet website.

Our Chief Executive Officer certified to the NYSE on May 20, 2008 that, as of that date, he was unaware of any violation by Chesapeake Utilities Corporation of the NYSE’s corporate governance listing standards.

Item 1A. Risk Factors.

The following is a discussion of the primary financial, operational, regulatory and legal, and environmental risk factors that may affect the operations and/or financial performance of the regulated and unregulated businesses of Chesapeake. Refer to the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Item 7 of this report for an additional discussion of these and other related factors that affect the Company’s operations and/or financial performance.

Financial Risks

Instability and volatility in the financial markets could have a negative impact on our growth strategy.

Our business strategy includes the continued pursuit of growth, both organically and through acquisitions. To the extent that we do not generate sufficient cash from operations, we may incur additional indebtedness to finance our growth. The turmoil experienced in the credit markets during 2008 and its potential impact on the liquidity of major financial institutions may have an adverse effect on our ability to fund our business strategy through borrowings, under either existing or newly created arrangements in the public or private markets on terms we believe to be reasonable. Specifically, we rely on access to both short-term and longer-term capital markets as a significant source of liquidity for capital requirements not satisfied by the cash flow from our operations. Currently, $45 million of the total $100 million of short-term lines of credit utilized to satisfy our short-term financing requirements are discretionary, uncommitted lines of credit. We utilize discretionary lines of credit to reduce the cost associated with these short-term financing requirements. We are committed to maintaining a sound capital structure and strong credit ratings to provide the financial flexibility needed to access the capital markets when required. However, if we are not able to access capital at competitive rates, our ability to implement our strategic plan, undertake improvements and make other investments required for our future growth may be limited.

Current levels of market volatility are unprecedented.

The capital and credit markets have been experiencing extreme volatility and disruption for more than twelve months. In recent weeks, the volatility and disruption have reached unprecedented levels. In some cases, the markets have exerted downward pressure on stock prices and credit capacity for certain issuers. There is no assurance that recent government intervention to help stabilize credit markets and financial institutions and restore liquidity will have beneficial effects in the credit markets, will address credit or liquidity issues of companies that participate in the programs or will reduce volatility or uncertainty in the financial markets. If current levels of market disruption and volatility continue or worsen, we would seek to meet our liquidity needs by drawing upon contractually committed lending agreements primarily provided by banks and/or by seeking other funding sources. Under such extreme market conditions, however, there can be no assurance that such agreements and other funding sources would be available or sufficient.

Page 12     Chesapeake Utilities Corporation 2008 Form 10-K

Difficult conditions in the financial services markets have materially and adversely affected the business and results of operations of many financial institutions, and we do not know when and if these conditions may improve in the near future.

Dramatic declines in the housing market during the past year, with falling home prices and increasing foreclosures and unemployment, have resulted in significant write-downs of asset values by financial institutions, including government-sponsored entities and major commercial and investment banks. These write-downs, initially representing mortgage-backed securities but more recently including credit default swaps and other derivative securities, have caused many financial institutions to seek additional capital, to merge with larger and stronger institutions and, in some cases, to fail. Many lenders and institutional investors have reduced and, in some cases, ceased to provide funding to borrowers, including other financial institutions. This market turmoil and tightening of credit have led to an increased level of commercial and consumer delinquencies, lack of consumer confidence, increased market volatility and widespread reduction of business activity generally.

The unsoundness of financial institutions could adversely affect the Company.

The Company has exposure to different industries and counterparties, and may periodically execute transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks and other institutional clients. These transactions may expose the Company to credit risk in the event of default of a counterparty or client. There can be no assurance that any such losses or impairments would not materially and adversely affect the Company’s business and results of operations.

A downgrade in our credit rating could adversely affect our access to capital markets.

Our ability to obtain adequate and cost-effective capital depends on our credit ratings, which are greatly affected by our financial performance and the liquidity of financial markets. A downgrade in our current credit ratings could adversely affect our access to capital markets, as well as our cost of capital.

Debt covenant obligations, if triggered, may affect our financial condition.

Our long-term debt obligations and committed short-term lines of credit contain financial covenants related to debt-to-capital ratios and interest-coverage ratios. Failure to comply with any of these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of outstanding debt obligations or the inability to borrow under certain credit agreements. Any such acceleration would cause a material adverse change in Chesapeake’s financial condition.

The continuation of recent economic conditions could adversely affect our customers and negatively impact our financial results.

The slowdown in the U.S. economy, together with increased unemployment, mortgage and other credit defaults and significant decreases in the values of homes and investment assets, have adversely affected the financial resources of many domestic households. It is unclear whether governmental responses to these conditions will be successful in lessening the severity or duration of the current recession. As a result, our customers may use less gas or propane and/or it may become more difficult for them to pay their gas or propane bills. This may slow collections and lead to higher than normal levels of accounts receivable, which in turn, could increase our financing requirements and result in higher bad debt expense.

Chesapeake Utilities Corporation 2008 Form 10-K     Page 13

Further changes in economic conditions and interest rates may adversely affect our results of operations and cash flows.

A continued downturn in the economies of the regions in which we operate might adversely affect our ability to increase our customer base and cash flows at historical rates. Further, an increase in interest rates, without the recovery of the higher cost of debt in the sales and/or transportation rates we charge our utility customers, could adversely affect future earnings. An increase in short-term interest rates would negatively affect our results of operations, which depend on short-term lines of credit to finance accounts receivable and storage gas inventories, and to temporarily finance capital expenditures.

Inflation may impact our results of operations, cash flows and financial position.

Inflation affects the cost of supply, labor, products and services required for operations, maintenance and capital improvements. To help cope with the effects of inflation on our capital investments and returns, we seek rate relief from regulatory commissions for regulated operations and closely monitor the returns of our unregulated business operations. There can be no assurance that we will be able to obtain adequate and timely rate relief to offset the effects of inflation. To compensate for fluctuations in propane gas prices, we adjust our propane selling prices to the extent allowed by the market. There can be no assurance, however, that we will be able to increase propane sales prices sufficiently to compensate fully for such fluctuations in the cost of propane gas to us.

Current market conditions have had a negative impact on the return on plan assets for our pension plan, which may require additional funding and negatively affect our cash flows.

We have a pension plan that has been closed to new employees since January 1, 1999. The costs of providing benefits and related funding requirements of this plan are subject to changes in the market value of the assets that fund the plan. As a result of the extreme volatility and disruption in the domestic and international equity and bond markets, our pension plan experienced a decline of $4.3 million in its asset values during the year. The funded status of the plan and the related costs reflected in our financial statements are affected by various factors that are subject to an inherent degree of uncertainty, particularly in the current economic environment. Under the Pension Protection Act of 2006, continued losses of asset values may necessitate accelerated funding of the plan in the future to meet minimum federal government requirements. Continued downward pressure on the asset values of the plan may require us to fund obligations earlier than it had originally planned, which would have a negative impact on our cash flows from operations, decrease borrowing capacity and increase interest expense.

Our operations are exposed to market risks, beyond our control, which could adversely affect our financial results and capital requirements.

Our PESCO and Xeron operations are subject to market risks beyond our control, including market liquidity and commodity price volatility. Although we maintain a risk management policy, we may not be able to offset completely the price risk associated with volatile commodity prices, which could lead to volatility in our earnings. Physical trading also has price risk on any net open positions at the end of each trading day, as well as volatility resulting from: (i) intra-day fluctuations of gas and/or propane prices, and (ii) daily price movements between the time natural gas and/or propane is purchased or sold for future delivery and the time the related purchase or sale is hedged. The determination of our net open position at the end of any trading day requires us to make assumptions as to future circumstances, including the use of gas and/or propane by our customers in relation to our anticipated market positions. Because the price risk associated with any net open position at the end of such day may increase if the assumptions are not realized, we review these assumptions daily. Net open positions may increase volatility in our financial condition or results of operations if market prices move in a significantly favorable or unfavorable manner, because the timing of the recognition of profits or losses on the hedges for financial accounting purposes usually does not match up with the timing of the economic profits or losses on the item being hedged. This volatility may occur, with a resulting increase or decrease in earnings or losses, even though the expected profit margin is essentially unchanged from the date the transactions were consummated.

Page 14     Chesapeake Utilities Corporation 2008 Form 10-K

Operational Risks

Fluctuations in weather may adversely affect our results of operations, cash flows and financial condition.

Our natural gas and propane distribution operations are sensitive to fluctuations in weather conditions, which directly influence the volume of natural gas and propane sold and delivered. A significant portion of our natural gas and propane distribution revenues is derived from the sales and deliveries of natural gas and propane to residential and commercial heating customers during the five-month peak heating season (November through March). If the weather is warmer than normal, we sell and deliver less natural gas and propane to customers, and earn less revenue. In addition, hurricanes or other extreme weather conditions could damage production or transportation facilities, which could result in decreased supplies of natural gas and propane, increased supply costs and higher prices for customers.

The amount and availability of natural gas and propane supplies are difficult to predict; a substantial reduction in available supplies could reduce our earnings in those segments.

Natural gas and propane production can be affected by factors beyond our control, such as weather and refinery closings. If we are unable to obtain sufficient natural gas and propane supplies to meet demand, results in those segments may be adversely affected.

We rely on having access to interstate natural gas pipelines’ transportation and storage capacity; a substantial disruption or lack of growth in these services may impair our ability to meet customers’ existing and future requirements.

In order to meet existing and future customer demands for natural gas, we must acquire both sufficient natural gas supplies and interstate pipeline and storage capacity to serve such requirements. We must contract for reliable and adequate delivery capacity for our distribution systems while considering the dynamics of the interstate pipeline and storage capacity market, our own on-system resources, as well as the characteristics of our markets. Chesapeake, along with other local natural gas distribution companies and other participants in the industry, has voiced concern regarding the future availability of additional upstream interstate pipeline and storage capacity. This is a business issue which we must continue to manage as our customer base grows.

Natural gas and propane commodity price changes may affect the operating costs and competitive positions of our natural gas and propane distribution operations, which may adversely affect our results of operations, cash flows and financial condition.

Natural Gas. Higher natural gas prices can significantly increase the cost of gas billed to our customers. Such cost increases generally have no immediate effect on our revenues and net income because of our regulated gas recovery mechanisms. Our net income, however, may be reduced by higher expenses that we may incur for uncollectible customer accounts and by lower volumes of natural gas deliveries when customers reduce their consumption. Therefore, increases in the price of natural gas can affect our operating cash flows and the competitiveness of natural gas as an energy source.

Propane. Propane costs are subject to volatile changes as a result of product supply or other market conditions, including economic and political factors affecting crude oil and natural gas supply or pricing. Such cost changes can occur rapidly and can affect profitability. There is no assurance that we will be able to pass on propane cost increases fully or immediately, particularly when propane costs increase rapidly. Therefore, average retail sales prices can vary significantly from year-to-year as product costs fluctuate in response to propane, fuel oil, crude oil and natural gas commodity market conditions. In addition, in periods of sustained higher commodity prices, declines in retail sales volumes due to reduced consumption and increased amounts of uncollectible accounts may adversely affect net income.

Our propane inventory is subject to inventory risk, which may adversely affect our results of operations and financial condition.

The Company’s propane distribution operations own bulk propane storage facilities, with an aggregate capacity of approximately 2.5 million gallons. We purchase and store propane based on several factors, including inventory levels and the price outlook. We may purchase large volumes of propane at current market prices during periods of low demand and low prices, which generally occur during the summer months. Propane is a commodity, and, as such, its unit price is subject to volatile fluctuations in response to changes in supply or other market conditions. We have no control over these market conditions. Consequently, the unit price of the propane that we purchase can change rapidly over a short period of time. The market price for propane could fall below the price at which we made the purchases, which would adversely affect our profits or cause sales from that inventory to be unprofitable. In addition, falling propane prices may result in inventory write-downs as required by Generally Accepted Accounting Principles (“GAAP”) if the market price of propane falls below our weighted average cost of inventory, and therefore, could adversely affect net income.

Chesapeake Utilities Corporation 2008 Form 10-K     Page 15

Operating events affecting public safety and the reliability of Chesapeake’s natural gas distribution system could adversely affect the results of operations, financial condition and cash flows.

Chesapeake’s business is exposed to operational events, such as major leaks, mechanical problems and accidents, that could affect the public safety and reliability of its natural gas distribution systems, significantly increase costs and cause loss of customer confidence. The occurrence of any such operational events could adversely affect the results of operations, financial condition and cash flows. If Chesapeake is unable to recover from customers, through the regulatory process, all or some of these costs and its authorized rate of return on these costs, this also could adversely affect the results of operations, financial condition and cash flows.

Because we operate in a competitive environment, we may lose customers to competitors.

PESCO competes with third-party suppliers to sell gas to commercial and industrial customers. In our gas transportation and distribution operations, our competitors include interstate pipelines, when our transmission and/or distribution customers are located close enough to a competing pipeline to make direct connections economically feasible.

Our propane distribution operations compete with several other propane distributors, primarily on the basis of service and price, emphasizing reliability of service and responsiveness. Some of our competitors have significantly greater resources. The retail propane industry is mature, and we foresee modest growth in total demand. Given this limited growth, we expect that year-to-year industry volumes will be principally affected by weather patterns. Therefore, our ability to grow the propane distribution business is contingent upon continued execution of our community gas systems strategy to capture additional market share, successful penetration of new service territories, and successful utilization of pricing programs that retain and grow our customer base. Failure to retain and grow our customer base would have an adverse effect on our results.

Xeron competes against various marketers, many of which have significantly greater resources and are able to obtain price or volumetric advantages.

BravePoint faces significant competition from a number of larger competitors having substantially greater resources available to them to compete on the basis of technological expertise, reputation and price.

Changes in technology may adversely affect our advanced information services segment’s results of operations, cash flows and financial condition.

BravePoint participates in a market that is characterized by rapidly changing technology and accelerating product introduction cycles. The success of our advanced information services segment depends upon our ability to address the rapidly changing needs of our customers by developing and supplying high-quality, cost-effective products, product enhancements and services, on a timely basis, and by keeping pace with technological developments and emerging industry standards. There is no assurance that we will be able to keep up with technological advancements necessary to keep our products and services competitive.

Our energy marketing subsidiaries have credit risk and credit requirements that may adversely affect our results of operations, cash flows and financial condition.

Xeron and PESCO extend credit to counter-parties. While we believe Xeron and PESCO utilize prudent credit policies, each of these subsidiaries is exposed to the risk that it may not be able to collect amounts owed to it. If the counter-party to such a transaction fails to perform, and any underlying collateral is inadequate, we could experience financial losses.

Page 16     Chesapeake Utilities Corporation 2008 Form 10-K

Xeron and PESCO are also dependent upon the availability of credit to buy propane and natural gas for resale or to trade. If financial market conditions decline generally, or the financial condition of these subsidiaries or of the Company, declines, then the cost of credit available to these subsidiaries could increase. If credit is not available, or if credit is more costly, our results of operations, cash flows and financial condition may be adversely affected.

Our use of derivative instruments may adversely affect our results of operations.

Fluctuating commodity prices may affect our earnings and financing costs because our propane distribution and wholesale marketing segments use derivative instruments, including forwards, swaps and puts, to hedge price risk. In addition, we have utilized in the past, and may decide, after further evaluation, to continue to utilize derivative instruments to hedge price risk for our Delaware and Maryland natural gas distribution divisions, as well as PESCO. While we have a risk management policy and operating procedures in place to control our exposure to risk, if we purchase derivative instruments that are not properly matched to our exposure, our results of operations, cash flows, and financial conditions may be adversely affected.

Changes in customer growth may affect earnings and cash flows.

Chesapeake’s ability to increase gross margins in its regulated and propane businesses is dependent upon the residential construction market, adding new commercial and industrial customers and conversion of customers to natural gas or propane from other fuel sources. Slowdowns in these markets could adversely affect the Company’s gross margin in its regulated or propane businesses, its earnings and cash flows.

Chesapeake’s businesses are capital intensive, and the costs of capital projects may be significant.

Chesapeake’s businesses are capital intensive and require significant investments in internal infrastructure projects. Our results of operations and financial condition could be adversely affected if we are unable to manage such capital projects effectively or if we do not receive full recovery of such capital costs in future regulatory proceedings.

Chesapeake’s facilities and operations could be targets of acts of terrorism.

Chesapeake’s natural gas distribution, natural gas transmission and propane storage facilities may be targets of terrorist activities that could result in a disruption of our ability to meet customer requirements. Terrorist attacks may also disrupt capital markets and Chesapeake’s ability to raise capital. A terrorist attack on Chesapeake’s facilities, or those of its suppliers or customers, could result in a significant decrease in revenues or a significant increase in repair costs, which could adversely affect our results of operations, financial position and cash flows.

The risk of terrorism and political unrest and the current hostilities in the Middle East may adversely affect the economy and the price and availability of propane, refined fuels and natural gas.

Terrorist attacks, political unrest and the current hostilities in the Middle East may adversely affect the price and availability of propane, refined fuels and natural gas, as well as our results of operations, our ability to raise capital and our future growth. The impact that the foregoing may have on our industry in general, and on us in particular, is not known at this time. An act of terror could result in disruptions of crude oil or natural gas supplies and markets (the sources of propane), and our infrastructure facilities could be direct or indirect targets. Terrorist activity may also hinder our ability to transport propane and natural gas if our means of supply transportation, such as rail or pipeline, become damaged as a result of an attack. A lower level of economic activity could result in a decline in energy consumption, which could adversely affect our revenues or restrict our future growth. Instability in the financial markets as a result of terrorism could also affect our ability to raise capital. Terrorist activity and hostilities in the Middle East could likely lead to increased volatility in prices for propane, refined fuels and natural gas. We maintain insurance policies with insurers in such amounts and with such coverage and deductibles as we believe are reasonable and prudent. There can be no assurance, however, that such insurance will be adequate to protect us from all material expenses related to potential future claims for personal injury and property damage or that such levels of insurance will be available in the future at economical prices.

Chesapeake Utilities Corporation 2008 Form 10-K     Page 17

Operational interruptions to our gas transmission and distribution activities, caused by accidents, malfunctions, severe weather (such as a major hurricane), a pandemic or acts of terrorism, could adversely impact earnings.

Inherent in our gas transmission and distribution activities are a variety of hazards and operational risks, such as leaks, ruptures and mechanical problems. If they are severe enough or if they lead to operational interruptions, they could cause substantial financial losses. In addition, these risks could result in loss of human life, significant damage to property, environmental damage, impairment of our operations and substantial loss to us. The location of pipeline and storage facilities near populated areas, including residential areas, commercial business centers, industrial sites and other public gathering places, could increase the level of damages resulting from these risks. The occurrence of any of these events could adversely affect our financial position, results of operations and cash flows.

Unionization campaigns could adversely affect our results of operations.

The Company may become a target of unionization campaigns. Unions may attempt to pressure Chesapeake’s employees to choose union representation. Such campaigns could be materially disruptive to our business and could have an adverse effect on our results of operations.

Regulatory and Legal Risks

Regulation of the Company, including changes in the regulatory environment, may adversely affect our results of operations, cash flows and financial condition.

The Delaware, Maryland and Florida PSCs regulate our natural gas distribution operations in those States; ESNG is regulated by the FERC. These commissions set the rates that we can charge customers for services subject to their regulatory jurisdiction. Our ability to obtain timely future rate increases and rate supplements to maintain current rates of return depends on regulatory approvals, and there can be no assurance that our regulated operations will be able to obtain such approvals or maintain currently authorized rates of return.

We are dependent upon construction of new facilities to support future growth in earnings in our natural gas distribution and interstate pipeline operations.

Construction of new facilities required to support future growth is subject to various regulatory and developmental risks, including but not limited to: (a) our ability to obtain necessary approvals and permits by regulatory agencies on a timely basis and on terms that are acceptable to us; (b) potential changes in federal, state and local statutes and regulations, including environmental requirements, that prevent a project from proceeding or increase the anticipated cost of the project; (c) inability to acquire rights-of-way or land rights on a timely basis on terms that are acceptable to us; (d) lack of anticipated future growth in available natural gas supply; and (e) insufficient customer throughput commitments.

We are subject to operating and litigation risks that may not be fully covered by insurance.

Our operations are subject to the operating hazards and risks normally incidental to handling, storing, transporting and delivering natural gas and propane to end users. As a result, we are sometimes a defendant in legal proceedings arising in the ordinary course of business. We maintain insurance policies with insurers in such amounts and with such coverages and deductibles as we believe are reasonable and prudent. There can be no assurance, however, that such insurance will be adequate to protect us from all material expenses related to potential future claims for personal injury and property damage or that such levels of insurance will be available in the future at economical prices.

Environmental Risks

Costs of compliance with environmental laws may be significant.

We are subject to federal, state and local laws and regulations governing environmental quality and pollution control. These evolving laws and regulations may require expenditures over a long period of time to control environmental effects at current and former operating sites, including former manufactured gas plant sites that we have acquired from third parties. Compliance with these legal obligations requires us to commit capital. If we fail to comply with environmental laws and regulations, even if such failure is caused by factors beyond our control, we may be assessed civil or criminal penalties and fines.

Page 18     Chesapeake Utilities Corporation 2008 Form 10-K

To date, we have been able to recover, through regulatory rate mechanisms, the costs associated with the remediation of former manufactured gas plant sites. However, there is no guarantee that we will be able to recover future remediation costs in the same manner or at all. A change in our approved rate mechanisms for recovery of environmental remediation costs at former manufactured gas plant sites could adversely affect our results of operations, cash flows and financial condition.

Further, existing environmental laws and regulations may be revised, or new laws and regulations seeking to protect the environment may be adopted and be applicable to us. Revised or additional laws and regulations could result in additional operating restrictions on our facilities or increased compliance costs, which may not be fully recoverable.

We may be exposed to certain regulatory and financial risks related to climate change.

Climate change is receiving ever increasing attention from scientists and legislators alike. The debate is ongoing as to the extent to which our climate is changing, the potential causes of this change and its potential impacts. Some attribute global warming to increased levels of greenhouse gases, including carbon dioxide, which has led to significant legislative and regulatory efforts to limit greenhouse gas emissions.

There are a number of legislative and regulatory proposals to address greenhouse gas emissions, which are in various phases of discussion or implementation. The outcome of federal and state actions to address global climate change could result in a variety of regulatory programs, including potential new regulations, additional charges to fund energy efficiency activities, or other regulatory actions. These actions could:

•

result in increased costs associated with our operations;

•

increase other costs to our business;

•

affect the demand for natural gas and propane; and

•

impact the prices we charge our customers.

Any adoption by federal or state governments mandating a substantial reduction in greenhouse gas emissions could have far-reaching and significant impacts on the energy industry. We cannot predict the potential impact of such laws or regulations on our future consolidated financial condition, results of operations or cash flows.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

(a) General

The Company owns offices and operates facilities in the following locations: Pocomoke, Salisbury, Cambridge and Princess Anne, Maryland; Dover, Seaford, Laurel and Georgetown, Delaware; Lecato, Virginia; and Winter Haven, Florida. The Company rents office space in Dover, Ocean View, and South Bethany, Delaware; Jupiter and Lecanto, Florida; Chincoteague and Belle Haven, Virginia; Easton, Maryland; Honey Brook and Allentown, Pennsylvania; Houston, Texas; and Norcross, Georgia. In general, the Company believes that its offices and facilities are adequate for the uses for which they are employed.

(b) Natural Gas Distribution

The Company owns over 1,076 miles of natural gas distribution mains (together with related service lines, meters and regulators) located in its Delaware and Maryland service areas and 754 miles of natural gas distribution mains (and related equipment) in its Florida service areas. The Company also owns facilities in Delaware and Maryland, which it uses for propane-air injection during periods of peak demand.

Chesapeake Utilities Corporation 2008 Form 10-K     Page 19

(c) Natural Gas Transmission

ESNG owns and operates approximately 379 miles of transmission pipelines, extending from supply interconnects at Parkesburg, Pennsylvania; Daleville, Pennsylvania; and Hockessin, Delaware, to approximately 81 delivery points in southeastern Pennsylvania, Delaware and the Eastern Shore of Maryland.

(d) Propane Distribution and Wholesale Marketing

The Company’s Delmarva-based propane distribution operation owns bulk propane storage facilities, with an aggregate capacity of approximately 2.4 million gallons, at 42 plant facilities in Delaware, Maryland, Pennsylvania and Virginia, located on real estate that is either owned or leased. The Company’s Florida-based propane distribution operation owns three bulk propane storage facilities with a total capacity of 66,000 gallons. Xeron does not own physical storage facilities or equipment to transport propane; however, it leases propane storage and pipeline capacity.

Item 3. Legal Proceedings.

(a) General

The Company and its subsidiaries are currently involved in various legal actions and claims arising in the normal course of business. The Company is also involved in certain administrative proceedings before various governmental agencies concerning rates. In the opinion of management, the ultimate disposition of these current proceedings will not have a material effect on the Company’s consolidated financial position.

(b) Environmental

See discussion of environmental commitments and contingencies in Item 8 under the heading “Notes to Consolidated Financial Statements — Note N.”

Item 4. Submission of Matters to a Vote of Security Holders.

None

Item 4A. Executive Officers of the Registrant.

Set forth below are the names, ages, and positions of executive officers of the registrant at December 31, 2008, with their recent business experience. The age of each officer is as of the filing date of this report.

Name		Age				Position
John R. Schimkaitis			61			President and Chief Executive Officer
Michael P. McMasters			50			Executive Vice President and Chief Operating Officer
Beth W. Cooper			42			Senior Vice President and Chief Financial Officer
Stephen C. Thompson			48			Senior Vice President and President, ESNG
S. Robert Zola			56			President, Sharp Energy

John R. Schimkaitis is President and Chief Executive Officer of Chesapeake and its subsidiaries. Mr. Schimkaitis assumed the role of Chief Executive Officer on January 1, 1999. He has served as President since 1997. Mr. Schimkaitis previously served as Chief Operating Officer, Executive Vice President, Senior Vice President, Chief Financial Officer, Vice President, Treasurer, Assistant Treasurer and Assistant Secretary of Chesapeake.

Michael P. McMasters was appointed as Executive Vice President and Chief Operating Officer in September of 2008. Prior to this appointment, Mr. McMasters served as Senior Vice President since 2004 and Chief Financial Officer of the Company since 1996. He has previously held the positions of Vice President, Treasurer, Director of Accounting and Rates, and Controller. From 1992 to May 1994, Mr. McMasters was employed as Director of Operations Planning for Equitable Gas Company.

Page 20     Chesapeake Utilities Corporation 2008 Form 10-K

Beth W. Cooper was appointed as Senior Vice President and Chief Financial Officer in September of 2008 in addition to her duties as Treasurer and Corporate Secretary. Prior to this appointment, Ms. Cooper served as Vice President and Corporate Secretary of Chesapeake Utilities Corporation since July 2005. She has served as Treasurer of the Company since 2003. She previously served as Assistant Treasurer and Assistant Secretary, Director of Internal Audit, Director of Strategic Planning, Planning Consultant, Accounting Manager for Non-regulated Operations and Treasury Analyst. Prior to joining Chesapeake, she was employed as an auditor with Ernst & Young’s Entrepreneurial Services Group.

Stephen C. Thompson is Senior Vice President of Chesapeake Utilities Corporation and President of ESNG. Prior to becoming Senior Vice President in 2004, he served as Vice President of Chesapeake. He has also served as Vice President, Director of Gas Supply and Marketing, Superintendent of ESNG and Regional Manager for the Florida distribution operations.

S. Robert Zola joined Sharp Energy in August 2002 as President. Prior to joining Sharp Energy, Mr. Zola most recently served as Northeast Regional Manager of Synergy Gas, now Cornerstone MLP, in Philadelphia, PA. During his 27-year career in the propane industry, Mr. Zola also started and successfully developed Bluestreak Propane, in Phoenix, AZ, which was ultimately sold to Ferrellgas.

Chesapeake Utilities Corporation 2008 Form 10-K     Page 21

Part II

Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

(a) Common Stock Price Ranges, Common Stock Dividends and Shareholder Information:

The Company’s common stock is listed on the NYSE under the symbol “CPK.” The high, low and closing prices of the Company’s common stock and dividends declared per share for each calendar quarter during the years 2008 and 2007 were as follows:

																Dividends
																Declared
Quarter Ended				High				Low				Close				Per Share
2008
		March 31		$	33.60			$	27.21			$	29.64			$	0.295
		June 30			31.88				25.02				25.72				0.305
		September 30			34.84				24.65				33.21				0.305
		December 31			34.66				21.93				31.48				0.305
2007
		March 31		$	31.10			$	28.85			$	30.94			$	0.290
		June 30			35.58				29.92				34.24				0.295
		September 30			37.25				28.00				33.94				0.295
		December 31			36.38				29.59				31.85				0.295

Holders

At December 31, 2008, there were 1,914 holders of record of Chesapeake Utilities Corporation common stock.

Dividends

Chesapeake has paid a cash dividend to common stock shareholders for forty-eight consecutive years. Dividends are payable at the discretion of our Board of Directors. Future payment of dividends, and the amount of these dividends, will depend on our financial condition, results of operations, capital requirements, and other factors. We sold no securities during the year 2008 that were not registered under the Securities Act of 1933, as amended.

Indentures to the long-term debt of the Company contain various restrictions. In terms of restrictions which limit the payment of dividends by the Company, each of the Company’s Unsecured Senior Notes contains a “Restricted Payments” covenant. The most restrictive covenants of this type are included within the 7.83% Senior Notes, due January 1, 2015. The covenant provides that the Company cannot pay or declare any dividends or make any other Restricted Payments (such as dividends) in excess of the sum of $10.0 million plus consolidated net income of the Company accrued on and after January 1, 2001. As of December 31, 2008, the Company’s cumulative consolidated net income base was $86.9 million, offset by Restricted Payments of $54.4 million, leaving $32.5 million of cumulative net income free of restrictions.

Page 22     Chesapeake Utilities Corporation 2008 Form 10-K

(b) Purchases of Equity Securities by the Issuer

The following table sets forth information on purchases by or on behalf of Chesapeake of shares of its common stock during the quarter ended December 31, 2008.

		Total								Total Number of Shares				Maximum Number of
		Number of				Average				Purchased as Part of				Shares That May Yet Be
		Shares				Price Paid				Publicly Announced Plans				Purchased Under the
Period		Purchased				Per Share				or Programs (2)				Plans or Programs (2)
October 1, 2008 through October 31, 2008 (1)			594			$	31.62				0				0
November 1, 2008 through November 30, 2008			0			$	0.00				0				0
December 1, 2008 through December 31, 2008			0			$	0.00				0				0
Total			594			$	31.62				0				0

Discussion of compensation plans of Chesapeake and its subsidiaries, for which shares of Chesapeake common stock are authorized for issuance, included in the portion of the Proxy Statement captioned “Equity Compensation Plan Information” to be filed not later than March 31, 2009, in connection with the Company’s Annual Meeting to be held on May 6, 2009, is incorporated herein by reference.

(c) Chesapeake Utilities Corporation Common Stock Performance Graph

The following stock Performance Graph compares cumulative total shareholder return on a hypothetical investment in the Company’s common stock during the five fiscal years ended December 31, 2008, with the cumulative total shareholder return on a hypothetical investment in both (i) the Standard & Poor’s 500 (“S&P 500 Index”), and (ii) an industry index consisting of 13 companies in the Edward Jones Natural Gas Distribution Group, a published listing of selected gas distribution utilities’ results. The Company’s Performance Graph for the previous year included all but one of these same companies. The Company’s Compensation Committee utilizes the Edward Jones Natural Gas Distribution Group as its peer group to which the Company’s performance is compared for purposes of determining the level of long-term performance awards earned by the Company’s named executives.

The thirteen companies in the Edward Jones Natural Gas Distribution Group industry index include: AGL Resources, Inc., Atmos Energy Corporation, Chesapeake Utilities Corporation, Corning Natural Gas Corporation, Delta Natural Gas Company, Inc., Energy West, Inc., The Laclede Group, Inc., New Jersey Resources Corporation, Northwest Natural Gas Company, Piedmont Natural Gas Co., Inc., RGC Resources, Inc., South Jersey Industries, Inc., and WGL Holdings, Inc. The Company excluded EnergySouth, Inc. from its comparison due to its recent acquisition by Sempra Energy.

The comparison assumes $100 was invested on December 31, 2003 in the Company’s common stock and in each of the foregoing indices and assumes reinvested dividends. The comparisons in the graph below are based on historical data and are not intended to forecast the possible future performance of the Company’s common stock.

Chesapeake Utilities Corporation 2008 Form 10-K     Page 23

		2003				2004				2005				2006				2007				2008
Chesapeake		$	100			$	107			$	128			$	133			$	143			$	147
Industry Index		$	100			$	117			$	123			$	147			$	152			$	163
S&P 500 Index		$	100			$	111			$	116			$	135			$	142			$	90

Page 24     Chesapeake Utilities Corporation 2008 Form 10-K

Item 6. Selected Financial Data

For the Years Ended December 31,		2008				2007				2006 (3)
Operating (in thousands of dollars) (1)
Revenues
Natural gas		$	211,402			$	181,202			$	170,374
Propane			65,877				62,838				48,576
Advanced informations systems			14,720				15,099				12,568
Other and eliminations			(556	)			(853	)			(318	)
Total revenues		$	291,443			$	258,286			$	231,200
Operating income
Natural gas		$	25,846			$	22,485			$	19,733
Propane			1,586				4,498				2,534
Advanced informations systems			695				836				767
Other and eliminations			352				295				298
Total operating income		$	28,479			$	28,114			$	23,332
Net income from continuing operations		$	13,607			$	13,218			$	10,748
Assets (in thousands of dollars)
Gross property, plant and equipment		$	381,688			$	352,838			$	325,836
Net property, plant and equipment (2)		$	280,671			$	260,423			$	240,825
Total assets (2)		$	385,795			$	381,557			$	325,585
Capital expenditures (1)		$	30,844			$	30,142			$	49,154
Capitalization (in thousands of dollars)
Stockholders’ equity		$	123,073			$	119,576			$	111,152
Long-term debt, net of current maturities			86,422				63,256				71,050
Total capitalization		$	209,495			$	182,832			$	182,202
Current portion of long-term debt			6,657				7,656				7,656
Short-term debt			33,000				45,664				27,554
Total capitalization and short-term financing		$	249,152			$	236,152			$	217,412

Chesapeake Utilities Corporation 2008 Form 10-K     Page 25

		2005				2004				2003				2002				2001				2000				1999
		$	166,582			$	124,246			$	110,247			$	93,588			$	107,418			$	101,138			$	75,637
			48,976				41,500				41,029				29,238				35,742				31,780				25,199
			14,140				12,427				12,578				12,764				14,104				12,390				13,531
			(213	)			(218	)			(286	)			(334	)			(113	)			(131	)			(14	)
		$	229,485			$	177,955			$	163,568			$	135,256			$	157,151			$	145,177			$	114,353
		$	17,236			$	17,091			$	16,653			$	14,973			$	14,405			$	12,798			$	10,388
			3,209				2,364				3,875				1,052				913				2,135				2,622
			1,197				387				692				343				517				336				1,470
			279				335				359				237				386				816				495
		$	21,921			$	20,177			$	21,579			$	16,605			$	16,221			$	16,085			$	14,975
		$	10,699			$	9,686			$	10,079			$	7,535			$	7,341			$	7,665			$	8,372
		$	280,345			$	250,267			$	234,919			$	229,128			$	216,903			$	192,925			$	172,068
		$	201,504			$	177,053			$	167,872			$	166,846			$	161,014			$	131,466			$	117,663
		$	295,980			$	241,938			$	222,058			$	223,721			$	222,229			$	211,764			$	166,958
		$	33,423			$	17,830			$	11,822			$	13,836			$	26,293			$	22,057			$	21,365
		$	84,757			$	77,962			$	72,939			$	67,350			$	67,517			$	64,669			$	60,714
			58,991				66,190				69,416				73,408				48,409				50,921				33,777
		$	143,748			$	144,152			$	142,355			$	140,758			$	115,926			$	115,590			$	94,491
			4,929				2,909				3,665				3,938				2,686				2,665				2,665
			35,482				5,002				3,515				10,900				42,100				25,400				23,000
		$	184,159			$	152,063			$	149,535			$	155,596			$	160,712			$	143,655			$	120,156

Page 26     Chesapeake Utilities Corporation 2008 Form 10-K

Item 6. Selected Financial Data

For the Years Ended December 31,		2008				2007				2006 (3)
Common Stock Data and Ratios
Basic earnings per share from continuing operations (1)		$	2.00			$	1.96			$	1.78
Diluted earnings per share from continuing operations (1)		$	1.98			$	1.94			$	1.76
Return on average equity from continuing operations (1)			11.2	%			11.5	%			11.0	%
Common equity / total capitalization			58.7	%			65.4	%			61.0	%
Common equity / total capitalization and short-term financing			49.4	%			50.6	%			51.1	%
Book value per share		$	18.03			$	17.64			$	16.62
Market price:
High		$	34.840			$	37.250			$	35.650
Low		$	21.930			$	28.000			$	27.900
Close		$	31.480			$	31.850			$	30.650
Average number of shares outstanding			6,811,848				6,743,041				6,032,462
Shares outstanding at year-end			6,827,121				6,777,410				6,688,084
Registered common shareholders			1,914				1,920				1,978
Cash dividends declared per share		$	1.21			$	1.18			$	1.16
Dividend yield (annualized) (2)			3.9	%			3.7	%			3.8	%
Payout ratio from continuing operations (1) (4)			60.5	%			60.2	%			65.2	%
Additional Data
Customers
Natural gas distribution and transmission			65,201				62,884				59,132
Propane distribution			34,981				34,143				33,282
Volumes
Natural gas deliveries (in MMCF)			39,778				34,820				34,321
Propane distribution (in thousands of gallons)			27,956				29,785				24,243
Heating degree-days (Delmarva Peninsula)
Actual HDD			4,431				4,504				3,931
10 -year average HDD (normal)			4,401				4,376				4,372
Propane bulk storage capacity (in thousands of gallons)			2,471				2,441				2,315
Total employees (1)			448				445				437

Chesapeake Utilities Corporation 2008 Form 10-K     Page 27

		2005				2004				2003				2002				2001				2000				1999
		$	1.83			$	1.68			$	1.80			$	1.37			$	1.37			$	1.46			$	1.63
		$	1.81			$	1.64			$	1.76			$	1.37			$	1.35			$	1.43			$	1.59
			13.2	%			12.8	%			14.4	%			11.2	%			11.1	%			12.2	%			14.3	%
			59.0	%			54.1	%			51.2	%			47.8	%			58.2	%			55.9	%			64.3	%
			46.0	%			51.3	%			48.8	%			43.3	%			42.0	%			45.0	%			50.5	%
		$	14.41			$	13.49			$	12.89			$	12.16			$	12.45			$	12.21			$	11.71
		$	35.780			$	27.550			$	26.700			$	21.990			$	19.900			$	18.875			$	19.813
		$	23.600			$	20.420			$	18.400			$	16.500			$	17.375			$	16.250			$	14.875
		$	30.800			$	26.700			$	26.050			$	18.300			$	19.800			$	18.625			$	18.375
			5,836,463				5,735,405				5,610,592				5,489,424				5,367,433				5,249,439				5,144,449
			5,883,099				5,778,976				5,660,594				5,537,710				5,424,962				5,297,443				5,186,546
			2,026				2,026				2,069				2,130				2,171				2,166				2,212
		$	1.14			$	1.12			$	1.10			$	1.10			$	1.10			$	1.07			$	1.03
			3.7	%			4.2	%			4.2	%			6.0	%			5.6	%			5.8	%			5.7	%
			62.3	%			66.7	%			61.1	%			80.3	%			80.3	%			73.3	%			63.2	%
			54,786				50,878				47,649				45,133				42,741				40,854				39,029
			32,117				34,888				34,894				34,566				35,530				35,563				35,267
			34,981				31,430				29,375				27,935				27,264				30,830				27,383
			26,178				24,979				25,147				21,185				23,080				28,469				27,788
			4,792				4,553				4,715				4,161				4,368				4,730				4,082
			4,436				4,389				4,409				4,393				4,446				4,356				4,409
			2,315				2,045				2,195				2,151				1,958				1,928				1,926
			423				426				439				455				458				471				466