Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — New York Financial Community Meetings 2012
25 slides from Chesapeake Utilities's conference presentation, Dec 7, 2012
Slide 1: New York Financial Community Meetings December 5, 2012
New York Financial Community Meetings December 5, 2012
Slide 2: Forward Looking Statements and Other Disclosures
2 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-looki
Slide 3: Investing in Growth
3 Investing in Growth Capital Expenditures as Percentage of Total Capitalization **Includes FPU acquisition. **Includes FPU acquisition. We are aggressively seeking opportunities to invest capital to generate value for our customers and shareholders. *Named Peer Group Includes the following companie
Slide 4: Generating Growth, Stable Returns and Superior EPS Growth
(CHART) Record EPS for 5th Consecutive Year Cumulative 5-year growth in diluted EPS of 63.1% 5 year compound annual growth rate in EPS of more than 10% Consistent Returns over the last five years While making investments including acquiring FPU, we have maintained ROEs between 11.2% and 11.6% Genera
Slide 5: Year to Date 2012 Financial Results
Earlier this year lower customer energy consumption directly attributable to warmer weather reduced gross margin by $4.0 million. Warmer weather resulted in lower EPS year-over-year of $0.25/ share during the first quarter. By the end of the 3rd Quarter, growth had offset the weather challenge and l
Slide 6: Reconciliation of EPS for Year to Date September 30, 2011 to 2012
Reconciliation of EPS for Year to Date September 30, 2011 to 2012 6 Based upon adjusted normalized EPS, year-to-date earnings growth is 15.6%
Slide 7: Delmarva Natural Gas Distribution Track Record of Success
Major Theme: Growth fueled by expansions to new areas to serve commercial and industrial customers position us for further growth by converting smaller residential and commercials customers. New Service Areas Large commercial and industrial customer conversions that have significant energy require-
Slide 8: Florida Regulated Energy Distribution Track Record of Success
Major Themes: Increased presence in Florida as a result of Chesapeake's Florida division, acquisition of Florida Public Utilities in 2009, and acquisition of Indiantown in 2010. Distribution service to new areas - Nassau County, Florida Continued commercial and industrial customer growth Recent appr
Slide 9: Natural Gas Transmission Track Record of Success
Major Themes: Expansions to serve new commercial and industrial customers Existing customers growth provides opportunities for increased services New Service Areas New pipeline expansions to bring natural gas to: Sussex County, Delaware Worcester County, Maryland Nassau County, Florida Existing Serv
Slide 10: Unregulated Energy Track Record of Success
Efficiencies and Performance Improvements New propane manager hired in Florida Migrating to one billing system for all propane operations Routing efficiencies Acquisitions Announced acquisition of Eastern Shore Gas - approximately 11,000 customers in Maryland Closing expected to occur in 2013 Purcha
Slide 11: New Service to Southern Delaware and Maryland
New Service to Southern Delaware and Maryland Natural gas expansion to Lewes, DE (November - December 2011) Annualized gross margin - $1.3 million (Distribution - $391k and Transmission - $935k) Natural gas expansion to serve two new facilities in Eastern Sussex County (March - August 2012) Annualiz
Slide 12: Major Expansion Initiatives That Have Already Commenced
Major Expansion Initiative That Have Already Commenced (dollars in thousands) 12 These services generated $156,000 in gross margin in 2011 (all in the fourth quarter). These services generated $1,000 in gross margin in 2011 (all in the fourth quarter). Peninsula Pipeline commence service in April 20
Slide 13: Upcoming Major Expansion Initiatives with Executed Contracts
Upcoming Major Expansion Initiatives with Executed Contracts (dollars in thousands) A precedent agreement has been executed among the parties for these services. The figures provided represent the estimated margin pursuant to the precedent agreement. A firm transportation service agreement will be e
Slide 14: Florida Regulated Energy Opportunities
New commercial and industrial customers Natural gas expansion to new areas of the state Nassau County represents one such opportunity Annual transportation margin of $1.3 million Additional margin from new natural gas distribution customers Small industrial based electric generation opportunities Ap
Slide 15: Total Capitalization
Total Capitalization 15 We are strongly capitalized, positioning us to make the capital investments to continue to capture new growth. Equity/Permanent Capitalization 62.8% 56.9% 61.0% 69.6% 67.0% 68.2% Equity/Total Capitalization 50.6% 49.4% 56.1% 58.2% 61.1% 62.9% *$29.1 million of FPU's long-term
Slide 16: Capital Expenditures
We make investments that are projected to achieve their return on capital. We have invested approximately $179 million over the last 5 years The capital expenditures projection is $80.0-$90.5 million for 2012. Spending carryover on some projects will be in 2013 based on project timelines. Capital Ex
Slide 17: Performance Relative to Our Peers
17 Performance Relative to Our Peers Peer ROE vs. Capital Expenditures Performance Quadrant (7/1/09 - 6/30/12) Our Disciplined Approach, Every Day. The returns earned in our unregulated businesses coupled with our returns achieved in our regulated businesses has enabled us to achieve consolidated re
Slide 18: Continuous Dividend Growth
We are committed to dividend growth that is supported by earnings growth. The Board increased the annualized dividend by $0.08 per share or 5.8% in May 2012. Our earnings growth has enabled strong dividend growth, while also enabling us to reinvest earnings in the company to generate additional earn
Slide 19: Delivered Results for Our Shareholders
Delivered Results for Our Shareholders 19 If an investor made an initial investment of $10,000 in 1993, that investment would represent a value of over $95,000 today. Our shareholders have earned 11% and greater on their Chesapeake investment annually. They have benefitted from strong short-term and
Slide 20: Thank you!
Thank you! 20 Michael P. McMasters, President & CEO 302.734.6799; mmcmasters@chpk.com Beth W. Cooper, Senior Vice President & CFO 302.734.6022; bcooper@chpk.com
Slide 21: Appendices
Appendices
Slide 22: Who We Are: Business Structure
Electric Distribution Florida Public Utilities Company Who We Are Business Structure 22
Slide 23: Who We Are: Business Diversity
Who We Are Business Diversity 23 The core of our business is regulated energy. In addition to growth in this area, we also continue to explore ways to increase our earnings through unregulated energy and other areas - the areas that provide opportunities to achieve returns greater than those of a tr
Slide 24: Who We Are: Energy Diversity
Who We Are Energy Diversity 24 Investment by Energy Served as of 12/31/11 2011 Margin by Energy Served 2011 Operating Income by Energy Served Our natural gas operations represent the largest portion of our business. Our propane and electric businesses expand our energy footprint and they provide the
Slide 25: Who We Are: Geographic Diversity
Who We Are Geographic Diversity 25 Investment by Region as of 12/31/11 2011 Margin by Region 2011 Operating Income by Region We have sizable operations in two different geographic areas - on the Delmarva Peninsula and in Florida. Having multiple geographic areas has benefited the Company through wea
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