Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — Q1 2020 Earnings Presentation
30 slides from Chesapeake Utilities's earnings presentation, May 8, 2020
Slide 1: First Quarter 2020 Earnings Conference Call
Exhibit 99.1 Commitment Growth Leadership Safety Sustainability Solutions Driven By Energy Strength Team First Quarter 2020 Service Earnings Conference Call May 7, 2020 Performance Community ValueExhibit 99.1 Commitment Growth Leadership Safety Sustainability Solutions Driven By Energy Strength Team
Slide 2: Forward Looking Statements and Other Disclosures
Forward Looking Statements and Other Disclosures COVID-19 Impact: At this time, we cannot quantify the impact that the COVID-19 virus will have on the economy, and more particularly, on Chesapeake Utilities Corporation(“Chesapeake Utilities or the Company”). The earnings and capital estimates we hav
Slide 3: Chesapeake Utilities' Strong Performance: 1st Quarter Results
Chesapeake Utilities’ Strong Performance st 1 Quarter Results § Net Income for the quarter was $28.9 million for the first quarter of 2020 § EPS was $1.76 compared to $1.74 for the first quarter of 2019 § Key Performance Results for the quarter versus the same period in 2019 § Natural gas expansion
Slide 4: Chesapeake Utilities' COVID-19 Response
Chesapeake Utilities’ COVID-19 Response An Unwavering Commitment to the Safety of Employees, their Families, our Customers and the Communities we serve Investors/Financial Pandemic Action Plan Employees Customers Communities Community •Executed Chesapeake’s •Employee monitoring by •Our regulated and
Slide 5: State Service Territories: Current Guidance re: Stay at Home Orders
Chesapeake Utilities’ State Service Territories Current Guidance re: Stay at Home Orders State Operations Current State/Local Guidance Corporate, Natural th Delaware Stay at home order through May 15 Gas Distribution and Delaware will have limited retail Transmission, businesses starting to open thi
Slide 6: Current Regulatory Filing Strategy: COVID
Current Regulatory Filing Strategy: COVID - 19 Maryland PSC (Maryland Division and Sandpiper Energy) • On April 9, 2020, the Maryland PSC issued Order 89542 authorizing the establishment of a regulatory asset for COVID-19 related incremental costs. • Costs incurred beginning on March 16, 2020 may be
Slide 7: Key Business Factors: COVID-19 Impact
Key Business Factors: COVID–19 Impact •In March, lower margin of $400,000 was offset by lower costs of $400,000 •In April, lower C&I load has been partially offset with higher residential load driven by colder Margin weather in April •Employee/labor costs: COVID-19 related employee absences have not
Slide 8: 2020 – 2022 Strategic Growth Initiatives
Chesapeake Utilities 2020 – 2022 Strategic Growth Initiatives Complete Develop new transmission transmission projects Earnings infrastructure projects Per Share Growth DNG and FPU gas organic Expand Marlin growth CNG delivery Total Return on Dividend Shareholder Equity Growth RNG and LNG Return Elkt
Slide 9: Capital Investment Guidance
Capital Investment Guidance Continued Record Investment in Our Business to Drive Growth $350,000 $303,153 Target 2018 – 2022 : $750 million - $1 billion $300,000 $282,861 $250,000 $215,000* $250,000 Reach $1 billion $198,986 $200,000 $30,000* $150,000 $185,000* $100,000 $50,000 Reach $750 $53,153 $0
Slide 10: Reaffirm Current Earnings Guidance
Reaffirm Current Earnings Guidance 2022 EPS Target Range of $4.70 - $4.90 $5.00 $4.90 On February 26, $0.20 2020, we updated our EPS guidance $4.55 based on our $4.50 current strategic $0.35 plan planned investments and growth prospects. $4.00 $4.70 We are continuing to monitor the COVID- $4.20 19 i
Slide 11: Financial Summary
Financial Summary Income from Continuing and Discontinued Operations • EPS of $1.76 compared to $1.74 For the periods ended March 31, for the first quarter of 2019 (in thousands except per share amounts) • EPS Growth despite the impact of 2020 2019 $0.19 cent decrease in EPS due to lower customer co
Slide 12: Reconciliation of Year-to-Date Results from Continuing Operations
Reconciliation of Year-to-Date Results from Continuing Operations Key Variances for the three months ended March 31, 2019 and 2020 Pre-tax Net Earnings (in thousands, except per share data) Income Income Per Share First Quarter of 2019 Reported Results from Continuing Operations $ 38,439 $ 28,814 $
Slide 13: Reconciliation of Year-to-Date Results from Continuing Operations
Reconciliation of Year-to-Date Results from Continuing Operations Key Variances for the three months ended March 31, 2020 and 2019 Pre-tax Net Earnings Income Income Per Share (in thousands except earnings per share) Increased (Decreased) Gross Margin Margin contribution from Boulden (acquisition co
Slide 14: Capital Expenditures Estimate for 2020
Capital Expenditures Estimate for 2020 Estimate for Fiscal 2020 (dollars in thousands) Low High Regulated Energy: Natural gas distribution $ 72,000 $ 83,000 Natural gas transmission 83,000 96,000 Electric distribution 5,000 7,000 Total Regulated Energy 160,000 186,000 Unregulated Energy: Propane dis
Slide 15: Capital Capacity to Support Future Growth
Capital Capacity to Support Future Growth Available Financing Capacity (in thousands) • $370 million bank lines of credit through Stockholders' Equity Long-Term Debt Short-Term Debt * * October 2020 $1,294,251 $1,294,716 • $95 million incremental liquidity for $1,140,852 2020 capital if needed $269,
Slide 16: Return on Equity
Return on Equity th Chesapeake ROE Consistently Exceeds the Peer Median and 75 Percentile ROE 14.00% 12.74% 12.56% 12.24% 12.21% 12.10% 12.01% 11.82% 11.67% 11.57% 11.32% 11.28% 11.27% 12.00% 11.19% 11.03% 11.01% 10.00% th * 10-Year Peer 75 Percentile – 10.08% * 10-Year Peer Median – 8.86% 8.00% Ret
Slide 17: Major Projects and Initiatives
Major Projects and Initiatives Increasing Shareholder Value by Continuously Seeking and Developing Projects and Initiatives We continue to pursue Gross Margin for the Period projects that will further Three Months Ended Year Ended Estimated for March 31, December 31, Fiscal enhance our margin in tho
Slide 18: Delmarva Natural Gas Distribution Growth
Delmarva Natural Gas Distribution Growth Converted Sandpiper Customers from Propane to Natural Gas 2017 Announcing that natural gas is available in • Final segment in Ocean City, Ocean City, MD MD converted to natural gas in April 2020 • Approximately 10,000 customers have been converted (Berlin, We
Slide 19: Natural Gas Distribution Growth: Acquisition of Propane Distribution Systems
Natural Gas Distribution Growth Acquisition of Propane Distribution Systems • Application was filed with the Delaware PSC seeking approval for regulatory accounting treatment and valuation methodology for the acquisition of propane CGS owned by our affiliate, Sharp, and the conversion of the CGS to
Slide 20: Elkton Gas Company Strategic Fit
Elkton Gas Company Strategic Fit • Elkton Gas gives CPK an operational platform in Cecil County including personnel, a contractor pool and an operations center which will enable Chesapeake to more quickly expand our footprint in Cecil County • Additional growth is expected in the area, due to its pr
Slide 21: ESG Stewardship
ESG Stewardship • We remain steadfast in our commitment to environmental, social and governance stewardship, even through challenging times. • The key to our success is our strong culture that fully engages all of our team members across the organization. • We are a responsible company that promotes
Slide 22: Our Culture of Sustainability
Our Culture of Sustainability 29 American Gas Named 2019 Recognized Association Safety Governance Team of as a Top Workplace Achievement Awards the Year by Corporate for 8 Consecutive Earned Over the Past Secretary magazine Years 17 Years 525+ Safety Training $144 Million invested, and Outreach Even
Slide 23: A Responsible Company
A Responsible Company At Chesapeake Utilities, we draw upon our legacy of expertise to conduct business with environmental responsibility. We are strongly committed to operating in an ecologically-aware manner while increasing environmental benefits in our communities. Autogas CHP CNG Solar* Marlin
Slide 24: Strong Track Record of Dividend Growth Driven by Earnings Growth
Strong Track Record of Dividend Growth Driven by Earnings Growth $2.00 $1.76 $1.80 $1.62 $1.60 $1.48 $1.40 $1.30 $1.22 $1.15 $1.20 $1.08 $1.03 $0.97 $1.00 $0.92 $0.88 $0.80 $0.60 $0.40 $0.20 $- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 On May 7, 2020, the Board of Directors increased th
Slide 25: Thank You!
Thank You! Jeff Householder Beth Cooper Jim Moriarty President & CEO Executive Vice President, Executive Vice President, General jhouseholder@chpk.com CFO and Asst. Secretary Counsel and Corporate Secretary bcooper@chpk.com jmoriarty@chpk.comThank You! Jeff Householder Beth Cooper Jim Moriarty Presi
Slide 26: Appendix: Business Development Projects Driving Growth
Appendix Business Development Projects Driving GrowthAppendix Business Development Projects Driving Growth
Slide 27: Del-Mar Pathway Project Under Development
Del-Mar Pathway Project Under Development Strategic Growth Initiative Provides additional natural gas transmission pipeline infrastructure in Eastern Sussex County, Delaware and expands service into Somerset County, Maryland; serves four large anchor customers • Estimated Project Cost: $ 37 million
Slide 28: West Palm Beach County, Florida Expansion
West Palm Beach County, Florida Expansion Enhances Reliability and Provides Additional Customer Growth • $33 million capital investment • $1.0 million margin in Q1 2020 • $5.2 million margin in 2020 and beyond • Fully in-service Q3 – 2020 • Pipeline construction 80% complete • Four PPC projects to s
Slide 29: Callahan Pipeline, Nassau County, Florida
Callahan Pipeline Nassau County, Florida Peninsula Pipeline is constructing a jointly owned 26 mile pipeline serving Nassau and Duval counties in Florida; Project will be jointly owned and built with Seacoast Gas Transmission (affiliate of Emera) • Initial capacity 148,000 DTs/d • Total project cost
Slide 30: Aspire Energy – Natural Gas Pipeline Project, Guernsey Power Station, Ohio
Aspire Energy – Natural Gas Pipeline Project Guernsey Power Station, Ohio • In December 2017, Aspire executed a binding precedent agreement with Guernsey Power Station, LLC (GPS) providing for the relocation of an existing 6” steel Aspire pipeline (completed March 2018). • Aspire received the exclus