Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — 2020 Wells Fargo Virtual Midstream and Utility Symposium
31 slides from Chesapeake Utilities's conference presentation, Dec 7, 2020
Slide 1: 2020 Wells Fargo Virtual Midstream and Utility Symposium
Commitment Growth Leadership Safety Sustainability Solutions Driven ByEnergy Strength Team Service 2020 Wells Fargo Virtual Midstream and Utility Symposium December 8, 2020 Performance Community Value Chesapeake Utilities Corporation Exhibit 99.1
Slide 2: 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 3: Financial Performance
Financial Performance HN git i
Slide 4: Business Overview
Business Overview Diversified Energy Delivery Business Natural Gas Distribution Delaware, Maryland, Florida Electric Distribution Florida Propane Distribution and AutoGas Delaware, Maryland, Pennsylvania, Virginia, Florida Natural Gas Transmission Delaware, Maryland, Pennsylvania, Florida Marlin Mob
Slide 5: Driven by Energy. Delivering Energy. Five Year Performance
Driven by Energy. Delivering Energy. Financial Discipline Driving Growth and Performance Five Year Performance thru September 30, 2020 Cap Ex/Total Capitalization EPS Growth Dividend Growth Earnings Retention Return on Equity Annual Shareholder Return 20.9% 8.7% 8.9% 57.5% 11.6% 11.7%
Slide 6: Growth in Earnings Drives Dividends Growth
Growth in Earnings Drives Dividends Growth For Periods Ended December 31st Basic GAAP Earnings per Share Annualized Dividends We have generated strong earnings growth, which has enabled us to grow our recent dividends faster than our peers. Sixty Consecutive Years of Dividend Payments!! 7.2% Ten Yea
Slide 7: Return on Equity
Return on Equity Chesapeake ROE Consistently Exceeds the Peer Median and 75th Percentile * 10-Year Peer 75th Percentile – 10.08% * 10-Year Peer Median – 8.86% 1 Year 3 Year 5 Year 10 Year CPK 12.01% 11.89% 11.84% 11.83% Peer Median 8.90% 10.04% 8.59% 8.86% Peer 75th Percentile 10.44% 10.63% 10.32% 1
Slide 8: Increased Performance is Driving Increased Value: Total Shareholder Return
Analyst Estimate - Average CPK 2019 GAAP EPS CPK Guidance – Low Range CPK Guidance – High Range Total Shareholder Return Increased Performance is Driving Increased Value
Slide 9: Increased Performance is Driving Increased Value: Financial Metrics
9 Analyst Estimate - Average CPK 2019 GAAP EPS CPK Guidance – Low Range CPK Guidance – High Range Financial Metrics Performance Increased Performance is Driving Increased Value Source: Bloomberg Note: NJR performance as of 9/30/20 not yet posted in Bloomberg
Slide 10: Increased Performance is Driving Increased Value: Market Capitalization
Analyst Estimate - Average CPK 2019 GAAP EPS CPK Guidance – Low Range CPK Guidance – High Range Market Capitalization Increased Performance is Driving Increased Value
Slide 11: Strategic Vision
Strategic Vision
Slide 12: Our Corporate Culture
Our Corporate Culture Our successful track record of performance is driven by the entrepreneurial spirit of our employees as we consistently deliver safe, secure, reliable and efficient services and energy solutions that are economically smart. Engaged employees contributing every day Focused on cre
Slide 13: ESG Stewardship
ESG Stewardship We are a responsible company that promotes integrity, accountability and reliability, with the safety of those we serve as our highest priority. The key to our success is our strong culture that fully engages all of our team members across the organization. Our Equity, Diversity and
Slide 14: ESG At Our Core
ESG At Our Core CHESAPEAKE UTILITIES CORPORATION PARTNERS WITH ATLANTA GAS LIGHT TO BUILD CNG FILLING STATION AT PORT OF SAVANNAH The station aligns with our ongoing commitment to environmental responsibility by supplying clean-burning natural gas to fuel vehicles and making it available to customer
Slide 15: Culture of Sustainability
Culture of Sustainability Conservation program to help customers reduce energy costs and receive energy-saving products and programs Modern pipeline infrastructure with zero miles of cast iron Invested $144 million in Gas Reliability and Infrastructure Project Own and operate Eight Flags, one of the
Slide 16: Strategic Plan 2021 – 2025 Platforms for Growth
Strategic Plan 2021 – 2025 Platforms for Growth 1. Optimize the earnings growth in our existing business Pursue organic growth, territory expansions, and new products and services, as well drive increased opportunities for collaboration and efficiencies 2. Pursue interstate and intrastate transmissi
Slide 17: 2020 – 2022 Strategic Growth Initiatives
Chesapeake Utilities 2020 – 2022 Strategic Growth Initiatives Develop new transmission infrastructure projects Expand Marlin CNG delivery RNG and LNG transport services and RNG processing Combined Heat and Power Projects DNG and FPU gas organic growth Elkton Gas acquisition Propane business growth v
Slide 18: Recent and Current Business Expansions
Recent and Current Business Expansions Business Development Continues to Identify New Opportunities Recently Completed Projects Underway Northwest Florida Expansion ESNG 2017 System Expansion Project (Delmarva Peninsula) Boulden Acquisition Propane Auburndale (FL) Pipeline Elkton Gas Acquisition LDC
Slide 19: Key Expansion Projects
Key Expansion Projects Pipeline Growth Project Capital Investment Fully In-Service Annual Gross Margin Estimate West Palm Beach County Del-Mar Energy Pathway Auburndale Project Callahan Pipeline Guernsey Power Station ESNG 2017 Pipeline Expansion 2021 Second Quarter $5.0 million 2021 Fourth Quarter
Slide 20: Renewable Natural Gas
Renewable Natural Gas Waste products are converted to Biogas in an anaerobic digester. The raw Biogas does not meet gas pipeline quality standards. An upgrading (clean-up) process, similar to the gas processing CPK currently operates in Ohio, is required to produce Biomethane, typically referred to
Slide 21: CPK's Renewable Natural Gas Proposition Presents Multiple Investment Opportunities
As a result of the Bioenergy DevCo .., CleanBay and Fortistar projects, the Company expects to generate $1.0 million in incremental margin in 2021 from renewable gas transportation. These projects provide the opportunity for the Company to utilize renewable natural gas, and play an active role in th
Slide 22: Major Projects and Initiatives
Major Projects and Initiatives Gross Margin Contributions New Gross Margin Initiatives
Slide 23: Capital Expenditures Forecast
Capital Expenditures Forecast UPDATED Estimate for 2020 The Company's capital expenditures were $143.9 million for the nine months ended September 30, 2020. We will continue to update this forecast as we move through the year, including any unexpected capital delays resulting from COVID-19. Increase
Slide 24: Capital Investment Guidance
Capital Investment Guidance Continued Record Investment in Our Business to Drive Growth Target Cap Exp. 2018 – 2022 : Up to $1 billion $303,153 $250,000 *2020 Lower Capital Forecast range updated from $185 million to $195 million We will continue to update this forecast as we move through the year,
Slide 25: GAAP Earnings per Share Guidance
GAAP Earnings per Share Guidance Analyst Estimate CPK 2019 GAAP EPS CPK Guidance – Low Range CPK Guidance – High Range 2019 *Note: 2019 GAAP Diluted EPS ($3.96) – Diluted EPS from Continuing Operations ($3.72) 2021
Slide 26: Chesapeake Utilities Investment Proposition
Chesapeake Utilities Investment Proposition Committed to Superior Performance We seek to identify and develop opportunities to drive our future earnings growth and increase shareholder value Executing on Our Strategy: Pursue new organic growth and seek development projects to serve new customers, pr
Slide 27: Appendix Financial Results
Commitment Growth Leadership Safety Sustainability Solutions Driven ByEnergy Strength Team Service Performance Community Value Appendix Financial Results
Slide 28: Financial Summary
Financial Summary GAAP Income and Income from Continuing Operations 28
Slide 29: Key Business Factors: COVID–19 Impact
Key Business Factors: COVID–19 Impact Chesapeake Utilities is an “essential business” to our customers and communities. As such, our operational activities and construction projects continue; all the while, we are adhering to safety guidelines and social distancing. The Company’s pandemic response p
Slide 30: Key Regulatory Initiatives
Key Regulatory Initiatives Hurricane Michael Limited Proceeding In September 2020, the Florida Public Service Commission approved a settlement agreement regarding the final cost recovery and rates associated with Hurricane Michael. The settlement of the Hurricane Michael proceeding improved operatin
Slide 31: Key Drivers of Our Performance
Key Drivers of Our Performance Third Quarter of 2020 Compared to Third Quarter of 2019 Gross Margin increased $8.2 million Margin contributions from Hurricane Michael proceeding $2.8 million Eastern Shore and Peninsula Pipeline service expansions $2.7 million Natural gas growth (excluding expansions
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