Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — East Coast Financial Community Meetings November 2010
27 slides from Chesapeake Utilities's conference presentation, Nov 12, 2010
Slide 1: East Coast Financial Community Meetings November 9-10, 2010
East Coast Financial Community MeetingsNovember 9-10, 2010
Slide 2: Forward Looking Statements and Other Disclosures
2 Forward Looking Statements and Other Disclosures Safe Harbor StatementSome 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: Generating Solid Results... Delivering Superior Value
3 Generating Solid Results... Delivering Superior Value Organic GrowthExpand our natural gas and electric distribution and transmission services into new geographic areas within our current service territories and beyondExpand our propane distribution business by leveraging our community gas system
Slide 4: Sustainable Growth is Dependent upon our Disciplined Financial Strategy
4 Sustainable Growth is Dependent upon our Disciplined Financial Strategy Sustainable GrowthReturn on Equity - Book Yield = Retained EarningsReturn on Equity on Reinvested Capital x Retained Earnings = Fundamental EPS GrowthFundamental EPS = Sustainable Growth Our Culture of Disciplined Growth is th
Slide 5: Performance Quadrant: Peer ROE vs. Capital Expenditures
5 Performance Quadrant Peer ROE vs. Capital Expenditures - 2007-2009 Utility (Highly Regulated) Slightly Diversified Diversified Source: Bloomberg
Slide 6: 2009 Net Income and Earnings Per Share Growth
6 2009 Net Income and Earnings Per Share Growth Record Net IncomeOne-year growth rate of 16.8% (19.8% excluding merger costs)Five-year growth rate (annual compound growth rate) of 10.4% (12.1% excluding merger costs) 5.6% EPS and 10.4% NI Diluted EPS Diluted EPS Reported $2.15 Excluding Merger Costs
Slide 7: Nine Months 2010 versus 2009 Earnings
7 Nine Months 2010 versus 2009 Earnings Net Income and EPS growth of 95% and 41%, respectively Chesapeake's standalone earnings and EPS grew 20% and 17%, respectively, over 2009 Diluted EPS Diluted EPS 9 mos. ended9/30/10 $1.98 3 mos. ended9/30/10 $0.17 * Does not include FPU's results for October 2
Slide 8: Our Profile in Terms of Margin
8 Our Profile in Terms of Margin (in millions) Note: Customer data reflects 9 months ended September 30, 2010.
Slide 9: Increased Scale and Scope
9 Increased Scale and Scope Increased Scale and Scope
Slide 10: Business Structure
10 Business Structure Electric DistributionFlorida Public Utilities Company Regulated Energy, 89% Unregulated Energy, 9%
Slide 11: Natural Gas Distribution Delmarva Customer Growth
Natural Gas Distribution Delmarva Customer Growth 11 2009 Large Commercial/ Industrial Customer Additions Delaware Technical and Community College Campus Local Hospital Various Manufacturing Plants 2010 Large Commercial/ Industrial Customer Additions Mountaire Farms Other various customers 42,009 45
Slide 12: Natural Gas Distribution Delmarva Recent Developments
12 Natural Gas Distribution Delmarva Recent Developments On March 15, 2010, our Delmarva Natural Gas operation signed an agreement with Mountaire FarmsNatural gas service to their poultry processing plant in Millsboro, DEConstruction completed in May, 2010 with service beginning in June, 2010Estimat
Slide 13: 2010 Natural Gas Distribution Florida Accomplishments
13 2010 Natural Gas Distribution Florida Accomplishments Implemented merger related synergies and savingsCustomer Billing System Conversion - CFG Customers moved to E-CISConsolidated Citrus County and South Florida OperationsConsolidated Safety, Sales & Marketing, Engineering areasConsolidated Corpo
Slide 14: Natural Gas Distribution Florida - Regulatory Plan
14 Natural Gas Distribution Florida - Regulatory Plan Status of recovery of the Premium (Acquisition Adjustment)Florida PSC has a proactive philosophy as it relates to regulatory recovery of an acquisition premiumGenerally speaking, the Florida PSC allows recovery if the company can demonstrate impr
Slide 15: Natural Gas Transmission Growth
Natural Gas Transmission Growth 15 139% increase 2010 Accomplishments 2011 Opportunities 2010 expansion completed Expanded footprint in Maryland Interconnection with Texas Eastern is slated to be completed by January 2011 ESNG Rate Case $25,645 $2,883 $10,954 $6,979 $21,773 $68,234 $0 $10,000 $20,00
Slide 16: 2010 Electric Distribution Accomplishments
16 2010 Electric Distribution Accomplishments Renegotiating Purchase Power Agreement with Gulf Power - enabling Time-of-Use and Interruptible rates to meet requirements of City of Marianna franchise agreement Approval of 2010 through 2012 Storm Hardening Plan by PSC Performing a system-wide study of
Slide 17: Propane Distribution and Marketing - Executing in all three areas
17 Propane Distribution and Marketing - Executing in all three areas Propane Distribution and Marketing - Executing in all three areas Successful Acquisition of Virginia LP Gas resulting in 1,000 customers added Growth in our CGS Systems Propane start-up in new territory in Maryland Successful marke
Slide 18: Natural Gas Marketing - Building on its foundation
18 Natural Gas Marketing - Building on its foundation Key YTD 2010 AccomplishmentsGrowth in Florida (FPU):Organic GrowthCurrently supply two of the largest customers on FPU's system, 1.1 million therms annuallyGrowth on Delmarva:Organic GrowthControl (Bad Debt Expense):2009: $362,000 - 0.630% of rev
Slide 19: Advanced Information Services
19 Advanced Information Services Key YTD 2010 AccomplishmentsNine-percent increase in billable consulting hours Higher revenue from professional database monitoring and support solutions services TMhas been finished and is in beta phase internallyLower operating expenses from cost containment action
Slide 20: Status of the Merger Integration
20 Status of the Merger Integration Status of the Merger Integration
Slide 21: Return on Equity
21 Return on Equity Our returns have been impressive despite pressure on the regulated side to reduce allowable returns.
Slide 22: Capital Expenditures
(in thousands) Capital Expenditures 22 We have invested $170 million in capital expenditures over the last five years and are projected to invest an additional $54.8 million in capital expenditures in 2010. Of the $54.8 million capital budget, $12 million is targeted for FPU capital expenditures. $0
Slide 23: Total Capitalization
Total Capitalization 23 Equity/Permanent Capitalization 57.0% 58.5% 62.8% 56.9% 61.0% 62.4% Equity/Total Capitalization 46.0% 51.1% 50.6% 49.4% 56.1% 60.0% We are strongly capitalized and not highly leveraged, enabling us to make the capital investments to continue to capture new growth. $29.1 milli
Slide 24: Balance Sheet Strength
24 Balance Sheet Strength Strong equity capitalization, liquidity and access to capital support our growth strategyDiscipline to make solid financial investmentsExceeding our cost of capitalCommitted to:Solid equity capitalizationTarget is 50-60%; we are on target.Strong liquidityTotal short-term de
Slide 25: Competitive and Consistent Dividend
Competitive and Consistent Dividend 25 Future dividends are at the discretion of the Board and are based upon achieved and expected earnings growth Our current dividend represents 4.8% growth over the prior dividend. We are committed to dividend growth that can be supported by earnings growth. This
Slide 26: Generating Increased Shareholder Value
26 Generating Increased Shareholder Value Our shareholders have experienced solid returns on their Chesapeake investmentsThe strategic combination of Chesapeake and Florida Public Utilities Company adds value for our shareholders and increases opportunities for our customers, employees and the commu
Slide 27: Organic Growth. Right on Target.
Organic Growth. Right on Target. Performance Improvements. Efficiencies. Acquisitions. Increased Shareholder Value. Enhanced Earnings.
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