Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — Northeast Financial Community Meetings 2011
29 slides from Chesapeake Utilities's conference presentation, Nov 15, 2011
Slide 1: Rooted in Tradition, Branching to New Opportunities
Rooted in TraditionBranching to New Opportunities November 15-16, 2011 Northeast Financial Community Meetings
Slide 2: Forward Looking Statements and 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-looking statements, and you should refer to the additi
Slide 3: Business Structure
Business Structure Electric DistributionFlorida Public Utilities Company (CHART) 3
Slide 4: Geography Diversity
Geography Diversity (CHART) (CHART) (CHART) 4 We have sizable operations in two different geographic areas - on the Delmarva Peninsula and in Florida. This has created weather, customer, and regulatory diversification.
Slide 5: Energy Diversity
Energy Diversity (CHART) (CHART) (CHART) 5 Our natural gas operations represent the largest portion of our business. Our propane and electric businesses expand our energy footprint and provide potential future natural gas expansion and other growth opportunities.
Slide 6: Long-term Sustained Performance
We have been achieving continued earnings growth over the last ten years as we have been making new investments, primarily utility investments.Our ROEs have become more stable as a result of these incremental investments.Our ROEs have also slightly exceeded the allowed returns because of our unregul
Slide 7: Our Foundation
7 Our Foundation Our TeamManagement team is diverse and committed to successEmployees challenge each other, work well together as a team and care about each other, our customers and the communities we serveMixture of long-term employees and employees with experience at other energy and utility compa
Slide 8: Our Strategic Planning Process
8 Our Strategic Planning Process Strategic Plan Components
Slide 9: Delmarva Natural Gas Customer Growth
(CHART) Delmarva Natural Gas Customer Growth 1"An "Equivalent Residential Customer" is defined as the number of residential customers that would have to be served to generate the same margin value as the commercial and industrial customers added. Delmarva Natural Gas Distribution has generated an av
Slide 10: Natural Gas Transmission Growth
10 Natural Gas Transmission Growth (CHART) Eastern Shore Natural Gas has been serving Delmarva since 1958.Owns and operates 398 miles of natural gas pipelineConstructed over 100 miles of natural gas pipeline infrastructure over the last 10 yearsExpansions over the last 10 years extended natural gas
Slide 11: ESNG Rate Case Status
11 ESNG Rate Case Status Key EventsEastern Shore filed a base rate case with the FERC on December 30, 2010The parties have reached an agreement in principle related to the settlement of the rate caseEastern Shore filed the settlement agreement with the FERC on November 7, 2011FERC to make a final de
Slide 12: Extending our natural gas system to serve Lewes, Delaware
Extending our natural gas system to serve Lewes, DelawareExtension to be complete by year end 2011Anchored by two large customers, whose fuel requirements are equivalent to 1,000 residential customersIn addition to generating immediate results, this provides the foundation for future growth in this
Slide 13: 2011 Florida Accomplishments
2011 Florida Accomplishments Customer Experience initiative setting service quality standards: 70% reduction in pre-merger PSC complaintsCustomer satisfaction ratings are above industry norm and improvingProcess re-engineering is on-goingSynergies to support the come-back filing have been achieved;
Slide 14: Florida Regulated Energy Opportunities
14 Positive Florida PSC staff recommendation for approval of the acquisition premium and merger related costsNatural gas expansion to serve new areas of the stateProposed bare steel pipeline replacement program - including return on investmentElectric purchase power rate reductions that support econ
Slide 15: Recovery of Acquisition Premium and Merger-Related Costs
If recovery is approved:We will be able to include the acquisition premium and merger-related costs in our cost and investment, when determining our rates for serviceAmortization expense will be recorded and also included in the calculation of our ratesAcquisition premium amortized over 30 yearsMerg
Slide 16: Propane Distribution and Marketing
Propane Distribution and Marketing - Executing in all three areas Executing in all three areas Executing in all three areas Growth in our CGS Systems Propane start-ups in new territories in Maryland and Pennsylvania Successful marketing programs 283 CGS customers added year to date as of 9/30/11 Com
Slide 17: Natural Gas Marketing
Natural Gas Marketing - Building on its foundation Key YTD 2011 AccomplishmentsGrowth in Florida (FPU):Organic GrowthCurrently supply three of the largest customers on FPU's system, 3.0 million therms annuallyGrowth on Delmarva:Organic Growth Control (Bad Debt Expense):2009: $362,000 - 0.630% of rev
Slide 18: Advanced Information Services
Advanced Information Services Core is Strong; TM Launch Successfully Underway Key YTD 2011 AccomplishmentsCoreManaged services continues to growBI Practice also continues to growOpportunities for Application Evolution(tm) continue to surfaceThree implementations completeTwo other executed contracts
Slide 19: Future Unregulated Energy Opportunities
19 Implemented plans to expand our propane operations into Cecil County, Maryland and Poconos, Pennsylvania in 2011. Cecil County projects significant growth over the next few years as a result of the federal Base Realignment and Closure Act of 2005. Continuing to design a variety of programs based
Slide 20: Our Performance Relative to Our Peers
Peer ROE vs. Capital ExpendituresPerformance Quadrant2008-2010 Data Source: Bloomberg Our Performance Relative to Our Peers (CHART) From 2008-2010, we invested more than $104 million to grow our businessesWe have been able to achieve consolidated returns greater than regulatory commissions allowWe w
Slide 21: Year-to-Date 2011 Financial Results
21 Year-to-Date 2011 Financial ResultsGrowth is Driving Our Performance Business HighlightsChesapeake generated strong earnings growth that offset warmer weather. Net Income of $19.7 million compared to $18.9 millionEarnings Per Share of $2.04 compared to $1.98Increased margins in the Delmarva energ
Slide 22: Reconciliation of YTD 9/30/2011 Performance Sustainability
22 Reconciliation of YTD 9/30/2011 Performance Sustainability Based upon adjusted EPS, year-to- date earnings growth is 6.3%.
Slide 23: Our Long-Term Performance
23 (CHART) (CHART) Our Long-Term Performance (CHART) Record EPS2010 growth in diluted EPS of 27%Cumulative 5-year growth in diluted EPS of 51%5 year annual compound growth rate in EPS of 8.6% Capital ExpendituresWe have invested more than $183 million over the last 5 yearsWe are projected to invest
Slide 24: Total Capitalization
Total Capitalization Equity/Permanent Capitalization 58.5% 62.8% 56.9% 61.0% 69.6% 65.3% Equity/Total Capitalization 51.1% 50.6% 49.4% 56.1% 58.2% 60.8% We are strongly capitalized, enabling us to make the capital investments to continue to capture new growth. *$29.1 million of FPU's long-term debt
Slide 25: Our Dividend
Chesapeake paid a dividend for 50 consecutive yearsWe have increased our dividend over 4.5% (on an annualized basis) in each of the last two years Our earnings growth of 8.6% over the last five years has exceeded our dividend growth of 3% over the last five years 2010 dividend payout ratio was appro
Slide 26: Delivered Results for Our Shareholders
26 Delivered Results for Our Shareholders (CHART) Over the long-term, our shareholders have earned over 10% annually on their Chesapeake investment. *Represents time stock has been traded on NYSE
Slide 27: Delivered Results for Our Shareholders
27 Delivered Results for Our Shareholders *Represents time stock has been traded on NYSE (CHART) If an investor made an initial investment of $10,000 in 1992, that investment would represent a value of $75,158 today.
Slide 28: Delivering Future Results to Our Shareholders
28 Delivering Future Results to Our Shareholders
Slide 29: Thank you. Questions?
| * V/ CHESAPEAKE Thank you. Questions? o \ xt : CHESAPEAKE
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