Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — Q2 2021 Earnings Presentation
28 slides from Chesapeake Utilities's earnings presentation, Aug 6, 2021
Slide 1: Second Quarter 2021 Earnings Call
Exhibit 99.1 Second Quarter 2021 Earnings Call August 5, 2021Exhibit 99.1 Second Quarter 2021 Earnings Call August 5, 2021
Slide 2: Presenters
Jeff Householder President & CEO Presenters Beth Cooper Executive Vice President, CFO and Asst. Secretary Jim Moriarty Executive Vice President, General Counsel , Corporate Secretary and Chief Policy and Risk Officer 2Jeff Householder President & CEO Presenters Beth Cooper Executive Vice President,
Slide 3: Forward Looking Statements and Other Disclosures
Forward Looking Statements and Other Disclosures Safe Harbor Statement Some of the Statements in this document concerning future Company performance will be forward- looking within the meanings of the securities laws. Actual results may materially differ from those discussed in these forward-looking
Slide 4: Second Quarter 2021 Financial Performance
Second Quarter 2021 Financial Performance Continued Profitable Growth Driving Results Expansion projects, customer Increased customer Acquisitions (Elkton and growth, and pipeline replacements consumption increased Western Natural Gas) added generated $3.0 million in additional gross margin by $2.0
Slide 5: Financial Summary
Financial Summary For the quarters and six months ended June 30, 2021 and 2020 Second Quarter Year-to-Date (in thousands except per share data) 2021 2020 2021 2020 Total Gross Margin $ 84,381 $ 74,090 $ 201,271 $ 173,911 Operating Income $ 22,578 $ 17,977 $ 74,175 $ 60,111 Other Income, Net 1,456 (2
Slide 6: Financial Summary: Second Quarter Operating Results
Financial Summary Second Quarter Operating Results for 2021 and 2020 Chesapeake Utilities is committed to Gross Margin Growth through efficient operations. • Gross Margin increased $10.3M or 13.9% compared to Q2 2020 ü 16.3% Growth in Regulated ü 5.4% Growth in Unregulated • Operating income increas
Slide 7: Key Drivers of Our Performance: Quarter Ended June 30, 2021
Key Drivers of Our Performance Quarter Ended June 30, 2021 Earnings per share drivers Pre-tax Income EPS after-tax • Gross Margin $10.5M $0.44 • COVID-19 $ 1.5M $0.06 • Other/Interest $ 0..1M $0.01 • Unusual Items $ 2.0M ($0.02) • Depreciation and Amortization ($ 1.5M) ($0.06) • Operating expenses (
Slide 8: Key Drivers of Our Performance: Year-to-Date Ended June 30, 2021
Key Drivers of Our Performance Year-to-Date Ended June 30, 2021 Earnings per share drivers Pre-tax IncomeEPS after-tax • Gross Margin $26.5M $1.12 • COVID-19 Expenses $ 1.9M $0.08 • Other $ 1.7M $0.08 • Unusual Items ($ 0.6M) ($0.13) • Depreciation and Amortization ($ 3.2M) ($0.13) • Operating expen
Slide 9: Capital Expenditures Forecast
Capital Expenditures Forecast Still on Track with 2021 Initial Guidance Forecast 2021 (dollars in thousands) Low High Regulated Energy: Natural gas distribution $ 79,000 $ 85,000 Natural gas transmission 55,000 60,000 Electric distribution 9,000 13,000 Total Regulated Energy 143,000 158,000 82% 79%
Slide 10: Capital Structure Overview
Capital Structure Overview Strong Balance Sheet to Support Growth 06/30/21 12/31/2020 Long-Term Debt Stockholders‘ equity $ 741,564 $ 697,085 Avg. Interest Long-term debt, net of current maturities 498,450 508,499 Rate - 3.61% Total permanent capitalization $ 1,240,014 $ 1,205,584 Short-Term Debt Cu
Slide 11: Our Platforms for Growth
Our Platforms for Growth Organic Growth Optimize the earnings potential in our existing businesses through organic growth and business transformation. Gas Transmission Pursue intrastate and interstate gas transmission projects in selected markets. Propane Expand the propane wholesale, retail and Aut
Slide 12: Major Initiatives
Major Initiatives DELMARVA AND FLORIDA COMMUNITY GAS DISTRIBUTION SYSTEM ORGANIC GROWTH AND SYSTEM CONVERSIONS IMPROVEMENT PROJECTS PIPELINE EXPANSIONS CUSTOMER GROWTH, AUTOGAS, ACQUISITIONS RNG COLLABORATIONS SAFETY TOWN INFRASTRUCTURE STATE OF THE ART MARLIN INVESTMENT TRAINING CENTER TRANSPORT (V
Slide 13: Major Projects and Initiatives Margin Contribution
Major Projects and Initiatives Margin Contribution Gross Margin for the Period Three Months Ended Six Months Ended Year Ended Estimate for June 30, June 30, December 31, Fiscal in thousands 2021 2020 2021 2020 2020 2021 2022 Pipeline Expansions: Western Palm Beach County, Florida $ 1,172 $ 967 $ 2,3
Slide 14: Key Expansion Projects
Key Expansion Projects Pipeline Growth and Margin Contribution Annual Gross Margin Fully In-Service Capital Investment Project Estimate 2021 West Palm Beach $5.2 million $28.9 million Fourth Quarter County Del-Mar Energy Pathway 2021 $6.7 million $63.4 million (incl. distribution capital Fourth Quar
Slide 15: Winter Haven Expansion
Winter Haven Expansion New Polk County • Peninsula Pipeline will provide Chesapeake Utilities’ Central Florida Gas ( CFG ) with incremental firm service in the Winter Haven, Florida, area. • CFG is also extending its distribution system to connect to the new station. • Additional gross margin of $0.
Slide 16: Beachside Pipeline Extension
Beachside Pipeline Extension New • Peninsula Pipeline to provide incremental firm service in Indian River County, Florida, to support Florida City Gas’ growth along the Indian River Shore barrier island. • Pipeline from the Sebastian, Florida, area east under the Intercoastal Waterway and southward
Slide 17: Escambia Meter Station
Escambia Meter Station New • Peninsula Pipeline purchased the Escambia Meter Station from Florida Power and Light Company and also entered into a Transportation Service Agreement to provide up to 530,000 dts/d of firm service from an interconnect with Florida Gas Transmission to Florida Power & Ligh
Slide 18: Active Renewable Natural Gas (RNG) Projects
Active Renewable Natural Gas (RNG) Projects Noble Road Landfill project where Aspire Energy will construct a 17.5 mile pipeline to inject RNG developed at the landfill for distribution to its end use customers. BioEnergy Devco and CleanBay renewable natural gas source created from the organic waste
Slide 19: Recent State Level Governmental Affairs Activities
Recent State Level Governmental Affairs Activities Florida Activity Energy Preemption Bill Renewable Energy Bill Ohio Energy Preemption Bill •Filed by Chesapeake Utilities. •Filed by the Florida Natural Gas •Ohio HB 201 Association (FNGA). •Has cleared both chambers and •State Energy preemption was
Slide 20: Regulatory Initiatives
Regulatory Initiatives Florida GRIP • Natural gas pipe replacement program approved by the Florida PSC. • Since inception in August 2012, invested $178.9 million of capital expenditures to replace 333 miles of qualifying distribution mains, including $13.0 million of new pipes during the first six m
Slide 21: Regulatory Initiatives (cont.)
Regulatory Initiatives (cont.) Elkton Gas STRIDE Plan • Settlement reached with the Maryland PSC Staff and the Maryland Office of the Peoples Counsel. • Aldyl-A pipeline replacement program and to recover the costs of the plan in the form of a fixed charge rider through a proposed 5-year surcharge.
Slide 22: ESG Stewardship
ESG Stewardship • We take seriously our responsibility to be a good, trusted and ethical corporate citizen, and doing all we can to contribute, through investment, charitable contributions and volunteerism, to greater sustainability, environmental benefits and societal advancement. • For more than 1
Slide 23: ESG Stewardship
ESG Stewardship Together, the Chesapeake Utilities Team PROUDLY DELIVERS UNINTERRUPTED ENERGY SERVICES TO OUR CUSTOMERS • We have an unwavering focus on advancing initiatives that are consistent with our long-history of growth, upper-quartile performance, and the reduction of greenhouse gas emission
Slide 24: Return on Equity Performance
Return on Equity Performance ROE 14.00% 12.7% 12.6% CPK 12.2% 12.2% 12.1% 12.0% 11.8% 11.7% 11.7% 11.6% 12.00% 11.3% 11.3% 11.3% 11.2% 11.0% 11.0% th * 10-Year Peer 75 Percentile – 10.09% 10.00% * 10-Year Peer Median – 8.59% 8.00% 6.00% CPK’s ROE Performance Driven by Customer Growth, Expansions, 4.
Slide 25: Capital Investment Guidance
Capital Investment Guidance Continued Record Investment in Our Business Growth $1,000,000 Total $900,000 $1 billion Dollars in Thousands $250 million $800,000 Unless Otherwise Noted Reach $1 billion $700,000 Total $600,000 $750 million $500,000 Reach $750 million $400,000 $562.5 $677,722 million $30
Slide 26: Diluted Earnings per Share Guidance
Diluted Earnings per Share Guidance Continuing Operations Strategic Capital Investments Continue to Drive Earnings Growth 8-Year CAGR EPS Growth 9.7% to 10.1% $6.25 $6.05 5-Year CAGR EPS Growth 10.2% - 11.1% $4.90 $4.70 $4.21 $3.72 $3.47 $2.89 * 2017* 2018 2019 2020 ---2025-- ---2022-- *2017 Adjuste
Slide 27: Investment Proposition
Investment Proposition Committed to Superior Performance We seek to identify and develop opportunities to drive our future earnings growth and increase shareholder value. § Capitalizing on new organic growth and operational Strong Foundation for Growth: efficiencies § Track Record § Investing in pip
Slide 28: Thank You
Standing Strong. Embracing Change. Shaping Our Future. Thank You 5 TR