Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — Investor Presentation (March 2012)
37 slides from Chesapeake Utilities's investor presentation, Mar 29, 2012
Slide 1: Financial Community Meetings, St. Louis
Exhibit 99.1 St. Louis March 29,Financial 2012 Community Meetings
Slide 2: Forward-looking statements and non-GAAP disclosures
Forward Safe those SEC REG Gross 2of Chesapeake’s labor Harbor and Gdiscussed Margin: Disclosure: spent Looking ourStatement: other on Gross inperformance, different Statements these SEC Today’s Margin Some filings forward-looking revenue-producing discussion is and of Chesapeake concerning determin
Slide 3: Business Overview
Business Investment Other, 2011 Unregulated Regulated 17.4% The 82.3% 3businesses largest Margin Operating 2.3% Overview Energy, has by portion as Energy, Other, bySegment enhanced of Income Segment 12/31/11 87.1% 75.2% of 0.3% 10.6% 21.7% our by our Energy, Other, operations Segment earnings 3.1%ar
Slide 4: Energy Investment Diversity
Energy Investment as 2011 Electric, 19.3% 10.3% Propane, 12.6% Natural Our 482.1% opportunities. ofnatural 12/31/11 Margin 66.9% Other, Diversity Gas, Natural Other, 2011 by gas 79.7% by0.9% Other, Energy Operating operations 3.5% Energy Gas, Electric, 2.3% Served Served Income represent Propane, 4.
Slide 5: Sustained Long-term Performance
Long-term We 1Compound 10 *For $3.50 $3.00 EPS 10.0% $2.50 12.0% 8.0% $0.50 4.0% $1.00 6.0% $- 2002 5Diluted Year Years: 0.0% Years: have $2.00 the 2003 ROE 16.0% 14.0% 2.0% : EPS $1.50 5.1% 11.6% 10.8% 11.4% periods been 7.8% 12.0% 2004 Sustained Average ROE achieving Average 2005 ended Annual Perf
Slide 6: Delmarva Natural Gas Distribution Overview
2011 Serve Maryland conversions Operating $9,606 2006 $6,246 $8,027 Capital (in $9,468 $11,891 $16,998 62007 thousands) Delmarva 2007 2008 nearly $9,356 $8,720 Expenditures Division Income 2008 2009 and 54,000 Growth $9,962 $9,241 Natural supplemented 2009 2010 operates customers $10,649 2010 $10,06
Slide 7: Delmarva Customer Growth
2011 52,863 60,000 50,000 51,889 Count 5,002 5,093 Customer 43,485 02Average 10,000 •Residential 71”An 007 Annualized Average Additional The Margin Delmarva Residential Signed Delmarva 2008 expansion “Equivalent 40,000 53,948 48,487 45,570 20,000 agreements growth annual 30,000 2009 Commercial Natur
Slide 8: Eastern Shore Natural Gas Transmission
2011 Eastern •Peninsula Year-End (dekatherms 205.0 221.8 166.8 158.5 Operating $11,743 $14,211 2006 $8,721 $10,367 Capital (in $7,906 $13,114 $19,661 $40,316 82007 Expansions New Owns thousands) Natural 2007 2008 206.4 172.9 expansion $10,461 Expenditures and Shore $12,449 Pipeline Pipeline Income 2
Slide 9: Future Regulated Energy Opportunities
Future “Reaching •New Finalizing 9Center Anchored Annual Extension Service Natural Provides system Delmarva Dover gross tothe gasthe by complete two expansions distribution LLC Delaware foundation Beach”; two margin new Regulated large (“NRG”) facilities inequivalent natural December alternative to
Slide 10: Florida Natural Gas and Electric Overview
2011 Natural •Electric Average 13,636 100,000 40,000 60,000 80,000 20,000 0212,663 Residential Operating $21,063 $3,626 2006 Capital (in $12,953 $18,566 $5,458 2007 $3,289 10006 Acquired Includes Serves thousands) Florida 2007 2008 13,690 83,374 1,067 13,267 $3,415 $5,343 Expenditures Gas Distributi
Slide 11: Florida Future Growth Opportunities
2011 •Future FLORIDA ELETRIC NATURAL 11 $771,000 $377,000 New Natural Expansion Small Proposed Florida Results commercial Growth industrial gas NATURAL bare inGAS ofof Regulated expansion additional the Opportunities steel AND based natural andpipeline industrial GAS ELECTRIC Energy to electric gros
Slide 12: Unregulated Energy Executing Growth
Unregulated Executing Organic Efficiencies Acquisitions Successful Growth Purchased 380 New Migrating 12 customers propane in Growth to in our the propane and Energy one all manager operating CGS inthree Performance billing thestart-ups systems Overview Vero areas hired system assets Beach, –inImpro
Slide 13: Strong Propane Operating Performance
Strong Operating $5,563 $6,767 $2,534 $4,498 (in 39,807 29,785 24,243 Propane 48,680 33,282 2006 13 thousands) 2007 performance $5,584 $1,840 37,387 27,956 48,100 34,143 Distribution Income 2008 Growth 32,546 48,824 34,981 2009from and Gallons Customers 2010 – 167% Marketing all2011 three Sold busin
Slide 14: Natural Gas Marketing Key Accomplishments
Natural Building Key Achieved Growth •Successfully Sales 1,236,079 11,324,032 14 2011 2010 Currently Organic Initiated 2009: 2010: 2011: 2011 Volumes customers: $51,000—0.096% $362,000—0.630% $118,000—0.212% Gas inon on Growth Accomplishments 24 service ,Florida: Delmarva: supply ,10% its Marketing
Slide 15: Future Expanding Unregulated Footprint
Future Expanding Continued Continuing potential Sharp 6,000 8,000 usands 5,800 02Tho 2,000 Active Expansion Propane District 15 0064,200 2011 6,800 Energy Unregulated Completed, 4,000 Officers Service projects growth into Our to 6,700 CGS design Poconos Cecil Footprint Territory involving via Under
Slide 16: Advanced Information Services
Advanced 2011 Core •TM -$Total Jul-09 Sep-09 Mar-10 May-10 Sep-10 Nov-10 Operating $2,000,000(in $1,000,000 $1,500,000 $0 $500,000 2007 -$500,000 16 Three Two $Other Managed BI Opportunities Evolution™ $$(229,321) 20,000 $Practice Accomplishments is $investment 2008 other Monthly $Services Nov-09 St
Slide 17: Our Capital Expenditures Drive Returns vs. Peers
Ourwill Peer 2009-2011 High 18% ROE CPK 14% 16% Average hted Weig Low 2% 4% 0% Capital Data From The We Budgeted Expansion 17 2% returns Performance 8% ROE Returns/Low Source: Returns/Low 12% 6% 2008-2011, Expenditures/Total 4% continue 10% $88.5 vs. projects (1/1/09 6% earned Bloomberg Capital 8% m
Slide 18: Growth in Net Income and Earnings Per Share
Growth Long-term For (in 2011 Operating Regulated Unregulated Total Other Interest Income Net Diluted Business •Chesapeake 18 Net Earnings Growth Continued Natural Higher Non-recurring thousands the Income Financial 2010 Operating Income 175 Income twelve Taxes Charges Before Earnings isretail Highl
Slide 19: Reconciliation of 2010 to 2011 Earnings
Reconciliation (in Pre-tax Income 2010 Delmarva Propane Lower 2,700 Eastern Increased Additional (2,793)(1,677) Unusual Florida Sales Proceeds Gain Severance BravePoint’s Absence 2,565 Net Subtotal Tax Weighted Based 2011 Diluted Less: Transition/Transaction Adjusted 19 thousands, other rate from Re
Slide 20: Consistent Earnings Growth and Returns
Our $90,000 $60,000 $70,000 $80,000 Thousands $40,000 $- $10,000 $20,000 $30,000 Natural Capital Consistent $2.73 $2.15 $1.76 $13,218 $15,897 2006 $10,748 Net •Record 15% 9% 11% 13% 2007 1% 3% 5% 7% 20 While We 2011 5Cumulative year 11.5% Income Long-Term Return are target have 2007 2008 $2.87 $27,6
Slide 21: Strongly Capitalized
Total We Shareholders’ (in $350,000 $34,707 $400,000 $300,000 $134,113 $200,000 $33,000 $250,000 $150,000 $93,078 $226,239 $100,000 $50,000 2007 $0 Equity/Permanent Equity/Total *$29.1 21 thousands) are 2008 Capitalization million strongly $119,576 $98,858 $30,023 $118,841 $45,664 $70,912 $240,780 $
Slide 22: Our Dividend Growth
Our Chesapeake Over 5We 2011 2010 2009 2008 2007 2006 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.38 $1.32 $1.26 $1.22 $1.18 $1.16 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Dividend *Annualized 22year Future have are Dividend dividend the CAGR committed dividends increased last Payout Divid
Slide 23: Delivered Long-term Shareholder Results
Delivered Over Average (Investment 11.26% 12.71% 115.43% 7.91% *Represents 23Yearthe 311.94% Annual Years long-term, Results of time 5$10,000 Shareholder Years stock forour Our 10has at shareholders Years the Shareholders been Return beginning 19 traded Years* have on of earned NYSE the period) over
Slide 24: Delivered Total Shareholder Return Results
Delivered If Total (Investment $27,918 $58,371 3$15,476 Industry *Represents 24Years an investor Shareholder 5$15,378 $33,085 Peer Years Results of time made Group $10,000 10$16,105 stock Return for Years an Median Our initial has at19 $17,046 the Shareholders been Years* CPK investment beginning tr
Slide 25: Continuing Our Track Record
Continuing OUR Over have growing shareholder ENGAGEMENT We employee, community 25 larger. have are been the TRACK continuing and delivered last aggressively customer to engagement. value. creating ten drive RECORD years STRATEGIC to opportunities. results shareholder and focus trying we for strategi
Slide 26: Thank you. Questions?
Thank you. Michael Questions? Senior President Vice P.and McMasters President Chief Executive and Beth Chief W.Officer CooperFinancial Officer
Slide 27: Appendices
A-1 Appendices
Slide 28: Business Structure
Business Regulated Chesapeake Electric Unregulated Sharp Florida Flo-Gas Propane Xeron, Natural Peninsula Advanced Other BravePoint, Intercompany Skipjack, Eastern A-2 Energy, Inc. Public Gas Shore Distribution Corporation Wholesale Structure Inc. Energy Information Energy Inc. Utilities Transmissio
Slide 29: Geographic Diversity
Geography as 41.6% 2011 55.5% Other, Florida, 48.3% We Peninsula A-3ofhave 12/31/11 Investment Margin 4.0% Delmarva, 47.7% Delmarva, sizable and Diversity by in Other, Region operations Florida. by Region 2.9%This in two has created differentweather, geographic customer, areas –economic on the Delma
Slide 30: Management Team and Financial Discipline
We •Our A-4 We Targeted Management Employees Mixture Board Integrated Pursuit Establishment Diligent Risk are Team Foundation Strategic Financial look management continuing isofof capital 5made hard capital goals process years long-term challenge Planning Discipline team atand up investment that how
Slide 31: Leadership and Strategic Planning Process
Our Leadership & Empowering Connecting Engaging Long-Term Strategic A-5Engaging Strategic Plan our Vision Sustainable with our Planning Communities Components Team our & Customers Branding Process Growth & Government
Slide 32: ESNG Key Events and Rate Case Settlement
ESNG •Key Net Revenue Annual July 15,000 Receipt 11-01-2011 5,000 $4.3816 1. 11-01-2012 2. A-6 The Eastern FERC The Chesapeake Impact Events 2011 parties dts proposed Rate dts Point approved Impact Shore of Rate of of Case Receipt reached Receipt Rate the previously Increase filed rate Settlement Se
Slide 33: Expanded Delmarva Natural Gas Service Map
Expanded Delmarva Natural Gas Service Map A-77
Slide 34: Cecil County Expansion
EASTERN SHORE NATURAL GAS SYSTEM MAP EASTERN SHORE NATURAL GAS SYSTEM MAP-NORTH CHESTER COUNTY oxy uavns
Slide 35: Worchester County Expansion
Worchester County Expansion A-9
Slide 36: Chesapeake Service Acquisition Premium Recovery
Approval Chesapeake Service Acquisition •Amortization Longer-term, earnings No A-10 Amortization We $2.4 $2.3 $1.8 recovery will million Commission and be of premium requested Recovery able would cash the expense annually ($1.4 ($1.1 expense inclusion toflows have million, include approved amortized
Slide 37: 2011 Florida Customer Synergies
2011 Florida Customer Synergies planning propane FLORIDA ELECTRIC NATURAL A-11 margins process Experience toNATURAL GAS support Merger is ANDharvesting the Benefits initiative GAS ELECTRIC come-back &new ELECTRIC setting growth filing service were opportunities, PRESENCE quality achieved; standards:
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