Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — Non-Deal Roadshow (January 2020)
29 slides from Chesapeake Utilities's roadshow presentation, Jan 30, 2020
Slide 1: Mid-Atlantic Road Show Sponsored by Sidoti & Company
Mid-Atlantic Road Show Sponsored by Sidoti & Company, LLC January 30, 2020 Exhibit 99.1
Slide 2: 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 3: Investor Overview and Key Projects Driving Growth
Investor Overview Key Projects Driving Growth ESG Sustainability Initiatives Organic Natural Gas Growth Pipeline Expansions Marlin Gas Services Boulden Propane Acquisition Elkton Gas Acquisition 3
Slide 4: Business Overview
Business Overview Diversified Energy Delivery Business Natural Gas Distribution Delaware, Maryland, Florida Electric Distribution Florida Propane Distribution and AutoGas Delaware, Maryland, Pennsylvania, Virginia, Florida Natural Gas Transmission Delaware, Maryland, Pennsylvania, Florida Mobile CNG
Slide 5: Commitment to Sustainability and ESG
Commitment to Sustainability and ESG Corporate Governance is the foundation of our processes and decision making - Recently Honored by Corporate Secretary as “Governance Team of the Year” among small and mid-cap companies - Honored as “2018 Best North American Utility for Corporate Governance” Conne
Slide 6: Del-Mar Energy Pathway Project
Del-Mar Energy Pathway Project Under Development Strategic Growth Initiative 6 Provides additional natural gas transmission pipeline infrastructure in Eastern Sussex County, Delaware and expands service into Somerset County, Maryland; serves four large anchor customers Estimated Project Cost: $ 37 M
Slide 7: West Palm Beach Expansion
West Palm Beach Expansion Enhances Reliability and Provides Additional Customer Growth 7 $5.2MM annual margin $2.3MM in margin in 2019 $30MM total capital invested Q4 - 2018 initial service; fully in-service Q1 - 2020 Four PPC projects to serve FPU’s natural gas distribution systems expansions in Pa
Slide 8: Callahan Pipeline, Nassau County, Florida
Callahan Pipeline Nassau County, Florida 8 Peninsula Pipeline announced in May 2019 plans to construct a jointly owned 26 mile pipeline serving Nassau and Duval counties in Florida; Project will be jointly owned and built with Seacoast Gas Transmission (affiliate of Emera) Estimated Project Cost: $
Slide 9: Marlin Gas Services – Engine for Growth and Customer Service
Marlin Gas Services – Engine for Growth and Customer Service Exceeding Initial Margin Projections Year-to-Date Financial Performance Marlin generated $4.4 million of gross margin and $1.5 million in operating income during the first nine months of 2019. Based on results to date and the outlook going
Slide 10: Aspire Energy – Natural Gas Pipeline Project
Aspire Energy – Natural Gas Pipeline Project Guernsey Power Station In December 2017, Aspire executed a binding precedent agreement with Guernsey Power Station, LLC (GPS) providing for the relocation of an existing 6” steel Aspire pipeline (completed March 2018). Aspire received the exclusive rights
Slide 11: Propane Growth Initiatives
Propane Growth Initiatives Maintain and develop residential builder relationships via dedicated staff to capitalize on new development opportunities and for seamless implementation These relationships are translating into new CGS in non-core markets AutoGas Fueling Stations Strategic partners have b
Slide 12: Benefits of Boulden Acquisition
Benefits of Boulden Acquisition 25 12 Ohl Acquisition December 2018 Added approximately 5,200 customers in five counties in Delaware, Maryland and Pennsylvania effective 12/16/19 Overlays nicely with Elkton Gas acquisition to establish a strong unified energy delivery platform in Cecil County Solid
Slide 13: Elkton Gas Company Strategic Acquisition for Delmarva Natural Gas
Elkton Gas Company Strategic Acquisition for Delmarva Natural Gas Summary of Transaction: On December 5, 2019, Chesapeake Utilities and South Jersey Industries entered into an agreement under which Chesapeake will acquire Elkton Gas Company for approximately $15 million The transaction is expected t
Slide 14: Existing Cecil County Operations
Existing Cecil County Operations Elkton Gas and Chesapeake Utilities Current SJI – Elkton Cecil County Operations Leased Administrative Office Space Owned Operations Facilities Nine Local Employees 7,000 Customers, Primarily Residential Current CPK - Cecil County Operations No Office or Operations F
Slide 15: Elkton Gas Company Strategic Fit
Elkton Gas Company Strategic Fit Elkton Gas gives CPK an operational platform in Cecil County including personnel, a contractor pool and an operations center which will enable Chesapeake to more quickly expand our footprint in Cecil County Additional growth is expected in the area, due to its proxim
Slide 16: Financial Update
Financial Update 16
Slide 17: Market Capitalization Increased
Market Capitalization Increased Performance is Driving Increased Value
Slide 18: Long-term Earnings Track Record
Long-term Earnings Track Record Positioned for Growth and Total Return 18 $4.20 $4.55 ¹ 2017 GAAP $3.55; Adjusted $2.89; ² 2018 GAAP $3.45; Adjusted $3.31 Outlook for earnings growth within the range of previous guidance remains strong Commitment to achieve the target range is demonstrated by our lo
Slide 19: Continuing to Build for the Future
Continuing to Build for the Future Organic Growth Opportunities, Supplemented with Targeted Acquisitions Five-Year Cap Ex Plan Historical Cap Ex & Acquisitions In Millions Our 5-year CapEx plan includes $750 million to $1 billion of capital expenditures, predominantly into our utility & pipeline bus
Slide 20: Dividend Increased 9.5% in May 2019
Dividend Increased 9.5% in May 2019 Superior Dividend Growth with Retention to Support Future Earnings and Dividend Growth CPK’s one-year and five-year dividend growth of 9.5% and 8.4%, respectively, leads our peer group. Strong EPS Growth drives Dividend Growth and Dividend payout allows for reinve
Slide 21: Return on Equity
Return on Equity Delivering Consistent, High Returns 21 Chesapeake Utilities has delivered top quartile ROEs over the long-term. Our return on equity has been driven by our (i) innovative approach to cultivate, develop and consummate growth projects and initiatives, and (ii) generating higher return
Slide 22: Committed to Superior Performance
Chesapeake Utilities Corporation Committed to Superior Performance We seek to identify and develop opportunities to drive our future earnings growth and increase shareholder value. Executing on Our Strategy: Seek development projects to serve new customers, provide new services and expand into new s
Slide 23: Thank You!
Thank You! Beth Cooper Executive Vice President, CFO and Asst. Secretary bcooper@chpk.com Any Questions? Thomas E. Mahn Vice President and Treasurer tmahn@chpk.com
Slide 24: Appendices
Appendices
Slide 25: Continued Strong Performance
Continued Strong Performance Success in 2019 and Exciting Future Outlook Operations Significant gross margin growth for the quarter and year-to-date. Margins are driving strong operating income and EPS growth Financial New projects Several new projects close to finalization Strategic Customer demand
Slide 26: Successful Regulatory Initiatives
Successful Regulatory Initiatives 26 Florida PSC approved retention of a portion of TCJA tax savings for the Company’s Florida natural gas operations: $1.3 million gain on reversal of 2018 tax reserves $1.1 million in first nine months of 2019 Florida PSC approved storm recovery fund surcharge assoc
Slide 27: Major Projects and Initiatives
Major Projects and Initiatives Increasing Shareholder Value by Continuously Seeking and Developing Projects and Initiatives 27 $10.5 MM increase from new pipeline projects thru 9/30 ($12.5 MM increase expected for full year) Recent acquisitions added $5.0MM thru 9/30 ($6.7MM projected for full year)
Slide 28: Strategic Exit of Natural Gas Marketing Business (PESCO)
Strategic Exit of Natural Gas Marketing Business (PESCO) 28 Strategic Review The business was not aligned with our long term growth strategy; exceeded our risk tolerance and would have required significant additional investment to ensure profitability. Florida retail operations sold to Gas South LLC
Slide 29: Capital Capacity to Support Future Growth
Capital Capacity to Support Future Growth Total Capitalization has More Than Doubled in Less Than Five Years 29 Equity/Permanent Capitalization 65.5% 70.6% 76.5% 71.1% 62.1% 59.2% 52.3% Equity/Total Capitalization 54.0% 51.9% 55.4% 51.5% 45.4% 44.6% 44.6% $556,148 $689,692 $805,010 $944,079 $1,220,8
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