Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — AGA Financial Forum 2021
36 slides from Chesapeake Utilities's conference presentation, May 19, 2021
Slide 1: AGA Financial Forum May 19-20, 2021
AGA Financial Forum May 19-20, 2021 Exhibit 99.1
Slide 2: Presenters
Jeff Householder President & CEO Beth Cooper Executive Vice President, CFO and Asst. Secretary Jim Moriarty Executive Vice President, General Counsel , Corporate Secretary and Chief Policy and Risk Officer Presenters
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: Looking Back…….
Looking Back……. We have generated a strong track record of growth, whether measured over the near term or longer term. 15 years ROE 11% plus Dividend Payments: 60 years; past 14 years with increases. Five year annual average growth of 9.5% Top Quartile 16%+ Total Shareholder Returns Strong utility f
Slide 5: Consistently Delivered Strong Performance
Consistently Delivered Strong Performance. Focused on Keeping Our Track Record Going. Culture of Safety; Employee Engagement; Continuous Improvement Disciplined Investment Growth Prudent Asset Management Earnings Growth; ROE above Peers Dividend Growth Total Shareholder Return Market Valuation
Slide 6: Performance is Driving Increased Value
Analyst Estimate - Average CPK 2019 GAAP EPS CPK Guidance – Low Range CPK Guidance – High Range Market Capitalization Increased Performance is Driving Increased Value
Slide 7: Capital Investment Guidance
$250 million Mid-Point $187.5 Million Dollars in Thousands Unless Otherwise Noted Total $1 billion Total $750 million $175,000 to $200,000 $562.5 million from 2021 Mid-point Capital Investment Guidance Continued Record Investment in Our Business Growth *2021 Capital Forecast range of $175 million to
Slide 8: Strategic Growth Initiatives
Strategic Growth Initiatives Organic Growth Optimize the earnings potential in 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
Slide 9: Significant Initiatives Underway
Significant Initiatives Underway Significant Initiatives Underway Infrastructure Investment Delmarva and Florida ORGANIC GROWTH AND Pipeline Expansions Distribution System Improvement Projects Safety Town State of the Art Training Center Community Gas System Conversions Customer GROWTH, AUTOGAS, ACQ
Slide 10: Natural Gas Distribution Growth
Natural Gas Distribution Growth Above Average Customer Growth Driving Significant Margin 3.7% 3.1% 4.2%* 4.8% *Excludes 6,867 residential and commercial customers added in conjunction with the Elkton Gas acquisition in 2020.
Slide 11: 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 DelMar Energy Pathway Callahan Pipeline (JV) Guernsey Power Station 2021 Third Quarter $5.2 million 2021 Fourth Quarter $6.7 million 2020 Sec
Slide 12: Expanding Our Propane Presence
Expanding Our Propane Presence Significant Growth & Margin Contributions over the Last Five Yrs. Five Year Growth Rate 4.5% In addition to the above growth, our propane operations have continued to maximize the functionality and utilization of our storage assets to further enhance our retail propane
Slide 13: Renewable Investment Opportunities
Renewable Investment Opportunities Renewable Investment Opportunities Renewable energy projects that meet our fundamental strategic objectives and financial discipline standards (returns/risk profile). Renewable projects in states where we operate and have an understanding of the political, regulato
Slide 14: Joint Projects with Clean Bay Renewables
Joint Projects with Clean Bay Renewables CPK existing agreement to own the gas processing equipment Option to convert investment to equity in the total project Negotiating the economic and governance terms with Clean Bay and other equity investors Anticipated project in-service date of Q4 2023 Other
Slide 15: Joint Project with BioEnergy Devco
Joint Project with BioEnergy Devco On Delmarva, BioEnergy Devco is constructing a poultry waste RNG facility in Sussex County, Delaware Our investment in the project is estimated at approximately $5 million for gas transport and up to an additional $10 million under consideration for gas processing.
Slide 16: Joint Project with Fortistar & Rumpke Waste & Recycling
Joint Project with Fortistar & Rumpke Waste & Recycling Project Developers: Fortistar and Rumpke Waste & Recycling Project Description:Construction of the Noble Road Landfill Renewable Natural Gas (RNG) Project, a $33 million transportation decarbonization project in Shiloh, Ohio. Waste methane from
Slide 17: Marlin Gas Services Recent and Planned CNG Opportunities
Marlin Gas Services Recent and Planned CNG Opportunities Miami CNG Transit Bus Fleet Finishing an eight month deployment to service the City of Miami transit bus fleet. At peak, Marlin was fueling 160 CNG buses a day before the permanent pipeline and CNG fueling facilities were in place. Marlin’s CN
Slide 18: Marlin Gas Services Building for the Future
Marlin Gas Services Building for the Future Advanced Compression Facilities Took delivery of its new ANSI 4-stage compressor unit Enables Marlin to offer a methane capture service to pipelines and utilities that need to remove a pipeline segment from service to provide maintenance or integrity work
Slide 19: Strategic Capital Investments Continue to Drive Earnings Growth
2017* 2018 2019 2020 ---2025-- ---2021-- Previous CPK High Range Previous CPK Low Range CPK Low Range CPK High Range 8-Year CAGR EPS Growth 9.7% to 10.1% Strategic Capital Investments Continue to Drive Earnings Growth Diluted Earnings per Share Guidance Continuing Operations *2017 Adjusted for TCJA
Slide 20: Recent Regulatory Initiatives
Recent Regulatory Initiatives ESNG Capital Cost Surcharge Programs to recover highway or railroad relocation projects to produce gross margin of $1.4 million in 2021 and $2.4 million in 2022 Florida GRIP Replaced 333 miles of main Invested $174 million since 2012 Hurricane Michael Refund the over-co
Slide 21: Recent State Level Governmental Affairs Activities
Recent State Level Governmental Affairs Activities Florida Activity We continue to monitor other states’ activities in regards to energy preemption and renewable energy opportunities. Energy Preemption Bill Filed by the Florida Natural Gas Association (FNGA). Renewable Energy Bill Filed by Chesapeak
Slide 22: ESG Stewardship
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 y
Slide 23: ESG Stewardship
ESG Stewardship 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.
Slide 24: Corporate Culture
Corporate Culture 29 safety achievement awards Chesapeake Utilities for Best Company Over 50 People Through our 10-year Aspiring Scholars Program, 111 Chesapeake children of Company employees were selected to receive scholarship funds toward their studies at an accredited college, university or post
Slide 25: Looking Forward…….
Looking Forward……. We are committed to pursuing top quartile performance while meeting customer demand and ensuring a more sustainable future. Extended and expanded EPS guidance of $6.05-$6.25 for 2025 Continue dividend growth supported by earnings growth Target top quartile shareholder return $750M
Slide 26: Thank You
Standing Strong. Embracing Change. Shaping Our Future. Thank You > SHESAPEAKE
Slide 27: Appendix Business Overview and Financial Results
Appendix Business Overview and Financial Results
Slide 28: 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 Marlin Mobile CNG and RNG Utility Services (Virtual Pipeline) Eig
Slide 29: Capital Investment Has Driven Our Earnings Growth
Capital Investment Has Driven Our Earnings Growth Historical Cap Ex & Acquisitions (In Millions) FPU DelMar Energy Pathway Project Somerset County, MD Expansion (Currently Underway) Photo Courtesy Tom Mahn
Slide 30: Solid Track Record of Return on Equity
Solid Track Record of Return on Equity (ROE) Consistently Exceeding the Peer Median and 75th Percentile * 10-Year Peer 75th Percentile – 10.09% * 10-Year Peer Median – 8.59% 1 Year 3 Year 5 Year 10 Year CPK 11.71% 11.61% 11.74% 11.80% Peer Median 8.76% 9.36% 9.02% 8.59% Peer 75th Percentile 9.85% 9.
Slide 31: Earnings Growth Drives Dividend Growth
Diluted Earnings per Share Annualized Dividends 9.5% Five Year Growth - 2021 Growth in Earnings Drives Dividend Growth For Periods Ended December 31st $0.08 $0.18 $0.14 $0.14 $0.16 $0.30 $0.51 ($0.10) TCJA $0.69 $0.14 9.4% Five Year Growth - 2020
Slide 32: First Quarter Financial Summary
First Quarter Financial Summary For the quarters ended March 31, 2021 and 2020 17.1% 22.5% 18.7% 10.7%
Slide 33: First Quarter 2021 Key Highlights
First Quarter 2021 Key Highlights Expansion projects, customer growth, and pipeline replacements generated $4.1 million in additional gross margin Return to more normal weather and customer consumption for the quarter increased gross margin by $6.4 million Higher retail propane margins per gallon ge
Slide 34: Major Projects and Initiatives Margin Contribution
Major Projects and Initiatives Margin Contribution Increases (000’s) $8,336 $14,132 $7,508 Note: Auburndale Pipeline ($679K) and Boulden Acquisition ($3,909K) fully in service in 2020 so have been removed from this Key Projects Table.
Slide 35: Capital Expenditures Forecast
Capital Expenditures Forecast Still on Track with 2021 Initial Guidance 2021 Key Projects: Delmarva Natural Gas Distribution - Somerset County, Eastern Shore's Del-Mar Energy Pathway, Florida's Western Palm Beach County, Florida GRIP, natural gas distribution and transmission systems, natural gas an
Slide 36: Capital Structure Overview
Capital Structure Overview Strong Balance Sheet to Support Growth Within our target equity range Stockholders’ Equity increased $29.3 million during the first quarter of 2021 primarily driven by: Retained Earnings increased $26.6 million Dividend Reinvestment and Stock Compensation Plans increased $