Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — Q1 2013 Earnings Presentation
24 slides from Chesapeake Utilities's earnings presentation, May 6, 2013
Slide 1: First Quarter 2013 Earnings Conference Call
First Quarter 2013 Earnings Conference Call Friday, May 3, 2013 10:30 AM ET
Slide 2: Forward Looking Statements and Other Disclosures
Forward Looking StatementsAnd Other Disclosures 2 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-lookin
Slide 3: Year to Date Financial Results Highlights
3 Year to Date Financial Results Highlights39% increase in net income and earnings per shareKey Drivers of increased gross margin:Weather returning to normal ($3.2 million)Strong retail propane margins per gallon ($2.1 million)Growth in natural gas businesses ($1.6 million) First Quarter 2013 Perfor
Slide 4: Regulated Energy Segment Results Highlights
4 Regulated Energy Segment Results Highlights17% increase in operating income$3.3 million increase in gross margin due to:More normal temperatures ($1.2 million)Organic customer growth on both the Delmarva Peninsula and in Florida ($801,000)Expansion initiatives in Delaware, Maryland and Florida com
Slide 5: Unregulated Energy Segment Results Highlights
5 Unregulated Energy Segment Results Highlights82% increase in operating income41% increase in gross margin due to:Return to normal temperatures/timing of deliveries ($2.5 million)Strong retail propane margins per gallon ($2.1 million)Increased operating income as a result of the Glades Gas propane
Slide 6: Other Segment Results Highlights
6 Other Segment Results HighlightsOperating loss of $125,000 compared to operating income of $121,000 for 1st Quarter 2012 Consistent quarter-over- quarter gross margin at BravePoint$273,000 increase in other operating expenses at BravePoint primarily due to higher payroll and related costs First Qu
Slide 7: Reconciliation of EPS for Three Months Ended March 31, 2013
Reconciliation of EPS For the Three Months Ended March 31, 2013 7 Return to normal winter weather in 2013 provided $1.9 million or $0.20 per share favorable impact in the first quarter of 2013 compared to the same period last yearNatural gas and propane businesses added increased margins of $2.7 mil
Slide 8: Building for the Future
Building for the Future 8 We make investments that are projected to achieve their return on capital.We have invested approximately $227 million over the last 5 years.Capital expenditures for 2013 are budgeted to be $112 million, which represents the largest capital budget in our history.Historically
Slide 9: Total Capitalization
Equity/Permanent Capitalization 56.9% 61.0% 69.6% 67.0% 70.0% 70.9% Equity/Total Capitalization 49.4% 56.1% 58.2% 61.1% 60.0% 62.9% Total Capitalization For the Years Ended December 31, and Quarter Ended March 31, 2013 Chesapeake has provided 9.0 percent earnings and 4.5 percent dividend growth sinc
Slide 10: Earnings and Dividend Growth
10 Earnings and Dividend Growth Our Commitment to Dividend Growth Supported by Earnings Growth Chesapeake has paid a consecutive dividend for 52 years.Chesapeake has paid an increasing dividend for the last 10 years.In 2013, the annualized dividend was increased by $0.08 per share, or approximately
Slide 11: Natural Gas Expected to Have a Sustained Price Advantage
Natural Gas Expected to Have a Sustained Price Advantage(CHART) 11
Slide 12: Delmarva Growth Opportunities
12 Delmarva Growth Opportunities New Service in Delaware and Maryland2011 - 2012 ProjectsNatural gas expansion for southeastern DE (Nov - Dec 2011)Annualized gross margin - $1.3 million (Distribution - $391k and Transmission - $935k)Natural gas expansion to serve two new facilities in Eastern Sussex
Slide 13: Florida Growth Opportunities
13 Florida Growth Opportunities 2 1 3 New Service in Florida2012 ProjectsNatural gas expansion to Nassau County, FL (April 2012)Annualized gross margin - $1.3 million2013 Projects2. Natural gas expansion to an unaffiliated Florida utility (June 2013)Estimated annualized gross margin - $840,000Acquis
Slide 14: 2013 Focus and Beyond
2013 Focus and Beyond * Announced expansions to meet customer demand = NRG plant, Delaware City refinery expansion, service to an unaffiliated Florida utility New expansions — both interstate and intrastate - to meet customer demand and serve new markets ‘+ New services to existing customers —interr
Slide 15: 2013 Focus and Beyond
2013 Focus and Beyond * Completion of the Eastern Shore Gas Company acquisition * Growth through our community gas system strategy * Customer growth via new start-ups in Pennsylvania and Cecil County, MD + Small propane acquisitions that expand our footprint - Glades ‘Alternative fuel vehicle opport
Slide 16: Our Goals
Our Goals Continue to operate in a cost effective, safe mannerCreatively develop new growth opportunities and convert into valuable services for our current and new customersFurther invest in our people and processes to set the stage for future growth We take our responsibility to our investors very
Slide 17: Q & A Thank you!
Q & A Thank you! Michael P. McMasters, President & CEO302.734.6799; mmcmasters@chpk.com Beth W. Cooper, Senior Vice President & CFO302.734.6022; bcooper@chpk.com
Slide 18: Appendices
Appendices
Slide 19: First Quarter Gross Margin and Operating Income Contribution
First Quarter Gross Margin and Operating Income Contribution Gross Margin Operating Income A-1 (CHART) 68% 29% 3% (CHART) 65% 35% < 1%
Slide 20: Major Expansion Initiatives That Have Already Commenced
Major Expansion Initiatives That Have Already Commenced - 2013 and Annualized Financial Impact A-2 These services generated $16,000 in gross margin in the first quarter of 2012. (2) These services generated $4,000 in gross margin in the first quarter of 2012.
Slide 21: Upcoming Major Expansion Initiatives with Executed Contracts
Upcoming Major Expansion Initiatives with Executed Contracts - Annualized Financial Impact A-3
Slide 22: Regulatory Snapshot
Regulatory Snapshot Naturales Naturals ‘Natural cas Beetie Natwraicas Natural cas Distribution —_— Distribution —=—istibetion «tribution —=—~stbuton Transmission Delaware CenralRorida Gas PU Pu Maryland FERC Paine Ful.Time Ful.Time Ful.Time Ful.Time Ful-Time CGubematorial Gubematoal Gubernatorial -—
Slide 23: Strategic Regulatory Initiatives and Benefits
Strategic Regulatory Initiatives and Benefits A-5
Slide 24: Strategic Regulatory Initiatives and Benefits (con't)
A-6 Strategic Regulatory Initiatives and Benefits (con't)