Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — Sidoti & Company Small Cap Investor Conference September 2021
34 slides from Chesapeake Utilities's conference presentation, Sep 22, 2021
Slide 1: Sidoti & Company Small Cap Investor Conference
Sidoti & Company Small Cap Investor Conference September 22-23, 2021 Exhibit 99.1
Slide 2: Today's Presenters
Beth Cooper Executive Vice President, CFO and Asst. Secretary Alex Whitelam Head of Investor Relations Thomas Mahn Vice President and Treasurer Go Paperless! Please consider using this electronic version of the presentation. Receiving this document electronically reduces greenhouse gas emissions (GH
Slide 3: 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 4: Company Overview
Company Overview 160+ – Years providing energy 924 – Employees at July 2021 280,000 – Distribution customers $1.97 billion – Total Assets at June 2021 30% – Growth in Net Income from Continuing Operations (6 months ending June 2021) 22% – Growth in Net Income from Continuing Operations (12 months en
Slide 5: Business Overview: Strong Base of Regulated Utilities
Natural Gas Transmission States Served DE, MD, PA FL Natural Gas Distribution States Served DE, MD MD MD FL Electric Distribution States Served FL Business Overview Strong Base of Regulated Utilities
Slide 6: Business Overview: Growing Set of Complementary Unregulated Businesses
Propane Distribution States Served DE, MD, PA, VA, FL FL Natural Gas Pipeline System States Served OH CNG Virtual Pipeline States Served Multiple CHP Generation States Served FL RNG Opportunities States Served DE, MD, OH, FL and others Business Overview Growing Set of Complementary Unregulated Busin
Slide 7: Strong track record of growth
We have generated a strong track record of growth, whether measured over the near term or longer term. Looking Back… Strong utility foundation with above average industry growth rate driven by increased customer demand Capital investments of $1.7 Billion since 2009 Top Quartile 16%+ Total Shareholde
Slide 8: Consistently Delivering Strong Performance
Culture of Safety; Employee Engagement; Continuous Improvement Consistently Delivering Strong Performance Disciplined Investment Growth Prudent Asset Management Dividend Growth Earnings Growth & Superior ROE Total Shareholder Return Growth
Slide 9: Capital Investment Has Driven Our Earnings Growth
Capital Investment Has Driven Our Earnings Growth Historical Capital Expenditures and Acquisitions Amounts in chart reflected in thousands.
Slide 10: Solid Track Record of Return on Equity
* 10-Year Peer 75th Percentile – 10.09% * 10-Year Peer Median – 8.59% Solid Track Record of Return on Equity Consistently Exceeding Peer Median and 75th Percentile Return on Equity For the periods ending December 31, 2020 1 Year 3 Year 5 Year 10 Year CPK 11.7% 11.6% 11.7% 11.8% Peer Median 8.8% 9.4%
Slide 11: Growth in Earnings Drives Dividend Growth
Growth in Earnings Drives Dividend Growth Earnings and Dividend Performance for Periods Ended December 31st Our earnings growth drives our consistent and growing dividend 9.9% EPS GAGR 9.5% DPS GAGR * 2017 Includes TCJA Impact
Slide 12: Total Shareholder Return
Analyst Estimate - Average CPK 2019 GAAP EPS CPK Guidance – Low Range CPK Guidance – High Range Total Shareholder Return Average Annualized Shareholder Return for Periods Ended August 31, 2021 Our increased performance is driving increased value for our shareholders
Slide 13: Stock Price and Market Capitalization
Analyst Estimate - Average CPK 2019 GAAP EPS CPK Guidance – Low Range CPK Guidance – High Range Market Capitalization Stock Price and Market Capitalization
Slide 14: Platforms for Growth
Organic Growth Optimize the earnings potential of our existing businesses through organic growth and business transformation. Gas Transmission Pursue intrastate and interstate gas transmission projects in selected markets. Propane Expand the propane wholesale, retail and AutoGas businesses in the Mi
Slide 15: New Gross Margin from Expansion Projects
Increases (000’s) : 2021 $14,798 2022 $8,682 Total $23,480 New New Gross Margin for the Period Three Months Ended Six Months Ended Year Ended Estimate for June 30, June 30, December 31, Fiscal in thousands 2021 2020 2021 2020 2020 2021 2022 Pipeline Expansions: Western Palm Beach County, Florida Exp
Slide 16: Key Expansion Projects
Key Expansion Projects Pipeline Growth and Margin Contribution Project Capital Investment Fully In Service Annual Gross Margin Estimate West Palm Beach County $28.9 million 2021 Fourth Quarter $5.2 million Del-Mar Energy Pathway* $63.4 million 2021 Fourth Quarter $6.7 million Callahan Pipeline (JV)
Slide 17: Active Renewable Natural Gas Projects
Noble Road Landfill Project where Aspire Energy will construct a 17.5 mile pipeline to inject RNG developed at the landfill for distribution to its end use customers. BioEnergy Devco and CleanBay RNG source created from poultry waste. Services include the transport of RNG by Marlin Gas Services to E
Slide 18: Florida Legislative Activity
Energy Preemption Bill Renewable Energy Bill Energy Preemption Bill Florida Activity Filed by the Florida Natural Gas Association (FNGA). Cleared both chambers of the Florida legislature and was signed by the Governor in June 2021. Restricts local governments from limiting energy choice for consumer
Slide 19: Regulatory Initiatives
Regulatory Initiatives Florida GRIP Natural gas pipe replacement program approved by the Florida PSC. Since inception in August 2012, invested $178.9 million of capital expenditures to replace 333 miles of qualifying distribution mains, including $13.0 million of new pipes during the first six month
Slide 20: Regulatory Initiatives (cont.)
Regulatory Initiatives (cont.) Elkton Gas STRIDE Plan Settlement reached with the Maryland PSC Staff and the Maryland Office of the Peoples Counsel. Aldyl-A pipeline replacement program which enables recovery of the capital investment in the form of a fixed charge rider through a proposed 5-year sur
Slide 21: ESG Stewardship
We take seriously our responsibility to be a good, trusted and ethical corporate citizen, and doing all we can to contribute, through investment, charitable contributions and volunteerism, to greater sustainability, environmental benefits and societal advancement. For more than 160 years, we have de
Slide 22: ESG Stewardship (cont.)
Together, the Chesapeake Utilities Team PROUDLY DELIVERS UNINTERRUPTED ENERGY SERVICES TO OUR CUSTOMERS We have an unwavering focus on advancing initiatives that are consistent with our long-history of growth, upper-quartile performance, and the reduction of greenhouse gas emissions. Our inaugural C
Slide 23: Corporate Culture
Corporate Culture Internal Employee Resource Groups Recent Awards and Recognitions Chesapeake Cares Named Top Work Place in US for 2021, Top Work Place in Delaware for 10 Years in a Row Three CPK Business Received Industry Leader Accident Prevention Awards for 2020 More than 100 local charities supp
Slide 24: Capital Investment Guidance
$175 million to $200 million 5-year capital expenditure guidance 2021 thru 2025 up to $1 billion. Capital Investment Guidance Continued Record Investment in Our Business Growth 2021 Capital Forecast range of $175 million to $200 million remains on track Total $750 million to $1.0 billion Amounts in
Slide 25: Diluted Earnings per Share Guidance
Strategic capital investments continue to drive earnings growth. 9-Year CAGR EPS Growth 9.1% to 9.5% Diluted Earnings per Share Guidance Continuing Operations Diluted Earnings Per Share from Continuing Operations Guidance through 2025 CPK Guidance – High Range * 2017 Includes TCJA Impact CPK Guidanc
Slide 26: Investment Proposition
Investment Proposition Committed to Superior Performance We seek to identify and develop opportunities to drive our future earnings growth and increase shareholder value. Capitalizing on new organic growth and operational efficiencies Investing in pipeline systems that provide natural gas service to
Slide 27: Thank You
Standing Strong. Embracing Change. Shaping Our Future. Thank You > SHESAPEAKE
Slide 28: Appendix
Standing Strong. Embracing Change. Shaping Our Future. Appendix > SHESAPEAKE
Slide 29: Financial results for the quarters and six months ended June 30, 2021
Financial results for the quarters and six months ended June 30, 2021 and 2020 Strong Performance driven by over $27 million in additional gross margin for the first half of 2021. The year-to-date timing impact of Hurricane Michael impact will reverse in the third quarter as the regulatory proceedin
Slide 30: Winter Haven Expansion
Peninsula Pipeline will provide Chesapeake Utilities’ Central Florida Gas ("CFG") with incremental firm service in the Winter Haven, Florida, area. CFG is also extending its distribution system to connect to the new station. Estimated capital investment of $3.5 million. Additional gross margin of $0
Slide 31: Beachside Pipeline Expansion
Peninsula Pipeline to provide incremental firm service in Indian River County, Florida, to support Florida City Gas’ growth along the Indian River Shore barrier island. Pipeline from the Sebastian, Florida, area east under the Intercoastal Waterway and southward on the barrier island. Estimated capi
Slide 32: Escambia Meter Station
Peninsula Pipeline purchased the Escambia Meter Station from Florida Power and Light Company and also entered into a Transportation Service Agreement to provide up to 530,000 dts/d of firm service from an interconnect with Florida Gas Transmission to Florida Power & Light’s Crist Lateral pipeline. P
Slide 33: Capital Expenditures Forecast
Year-to-date through June 30, 2021 Capital expenditures were $107.8 million 2021 Key Projects: Del-Mar Energy Pathway Florida's Western Palm Beach County Expansion Florida GRIP Natural gas distribution and transmission system expansions including several newly announced projects Natural gas and elec
Slide 34: Capital Structure Overview
Within our target equity range Short-Term Debt $400 million Facility LIBOR + 0.70 bps Long-Term Debt Avg. Interest Rate - 3.61% $50 Million - 2.49% Funding 1/25/2022 Stockholders’ Equity increased $44.5 million during the first half of 2021 primarily driven by: Strong Net Income driving an increase
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