Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — Non-Deal Roadshow (February 2019)
32 slides from Chesapeake Utilities's roadshow presentation, Feb 11, 2019
Slide 1: Midwest Roadshow Maxim Group LLC
Midwest Roadshow Maxim Group LLC February 11 and 12, 2019 energized … 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: Overview
Overview > CHESAPEAKE
Slide 4: Chesapeake's Existing Service Areas
Chesapeake's Existing Service Areas Delaware and Maryland Natural Gas Transmission, Distribution and Marketing Propane Distribution, Sharp Autogas Florida Natural Gas Transmission, Distribution, and Marketing Mobile CNG Temporary Solutions Electricity Distribution CHP Plant (Electric Generation and
Slide 5: Continuing to Build for the Future
Continuing to Build for the Future Capital Expenditures We have invested $1.36 billion in capital expenditures from 2008 to 2018 which has propelled our growth. Capital expenditures for 2019 currently budgeted at $167MM. *Excluding Hurricane Michael restoration cost which will be allocated between c
Slide 6: Delivering Consistent and Higher Returns
Delivering Consistent and Higher Returns Return on Equity Historical ROE 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 - Before Tax Reform & MTM 2017 - After Tax Reform & MTM 2018* Regulated Energy 11.40% 10.17% 11.16% 10.73% 10.47% 10.48% 9.09% 10.62% 10.96% 9.66% 9.98% 10.76% Unregulated Energ
Slide 7: Capital Discipline and Efficiency: Peer ROE vs. Capital Expenditures
Chesapeake CPK Performance Peer Group Electric & Combination Groups Median 9.14% Median 12.63% Capital Discipline and Efficiency Peer ROE vs. Capital Expenditures (October 2015 – September 2018)
Slide 8: Superior Earnings per Share Growth
Superior Earnings per Share Growth Eleven Years of Record Growth Affirm previous year end guidance for forecasted earnings per share growth of 17% plus in 2018 including tax reform and key projects (based upon 2017 Adjusted EPS of $2.89) 11 years of strong growth track record Reported Earnings 5-yea
Slide 9: Above Average Dividend Growth Continues
Above Average Dividend Growth Continues Dividend Growth Driven by Earnings Growth 5-year annualized dividend growth rate is 7.6 percent – in line with our 5-year CAGR in earnings through 2017 of 7.7 percent. 5-year average dividend payout is 43 percent. Our goal remains to provide above average grow
Slide 10: Relentlessly Executing Our Strategy with Financial Discipline
Seek new development projects to serve new customers, provide new services and expand into new service areas. Invest in pipeline systems that provide natural gas service to downstream customers such as LDCs, cooperatives, municipalities, industrial end-users and power plants. Pursue expansion projec
Slide 11: Cultivating Profitable Growth
Cultivating Profitable Growth
Slide 12: Natural Gas Transmission and Distribution: Delmarva Growth and Expansion
Natural Gas Transmission and Distribution Delmarva Natural Gas Distribution Growth and Expansion Past Organic growth focused on Kent/New Castle Counties, DE Present Growth into eastern Sussex County, DE and Cecil County, MD Conversion of existing propane customers in Worcester County, MD Future Cont
Slide 13: Natural Gas Transmission Growth
Natural Gas Transmission Growth Current Eastern Shore Natural Gas Large Projects Miles of Pipeline/ Compression ~23 miles of pipeline looping in PA, MD and DE ~17 miles of new mainline extension and two pressure control stations in Sussex County, DE Other Facilities Upgrades to the TETCO interconnec
Slide 14: Florida Growth and Expansion
Florida Growth and Expansion Looking Back and Looking Forward 2012 2019 Past Growth focused on existing service territory for Natural Gas and Propane Focus on reliability projects for Electric Pipeline projects to serve affiliate distribution companies Pipeline project to serve customers outside of
Slide 15: Gas Reliability Infrastructure Program (GRIP)
Gas Reliability Infrastructure Program (GRIP) Investment Spending and Timeline We have been proactive in upgrading our Florida systems in support of our focus on safety and reliability. Less than 25% of the combined system is in the queue for replacement.
Slide 16: Florida Natural Gas Transmission and Distribution: Three Significant Expansions
Florida Natural Gas Transmission and Distribution Three Significant Expansions PPC - 12” transmission pipeline to expand distribution service to Escambia County, Florida Anchor loads - City of Pensacola and Ascend Performance Materials Capacity-115,500 dts/day; Contracted-105,500 dts/day Opportunity
Slide 17: Marlin CNG Capabilities
Marlin CNG Capabilities One of the largest fleets of tube trailers dedicated to transportation of compressed natural gas (“CNG”) Nationwide service with primary focus on Gulf Coast Over 7 billion cubic feet of natural gas transported Provides temporary and emergency natural gas services Marlin provi
Slide 18: Unregulated Energy Growth: Aspire Energy Growth Initiatives
Unregulated Energy Growth Aspire Energy – Growth Initiatives Consumers Gas Cooperative Focus on agricultural sector primarily in Western Ohio which is home to the largest corn production in the state. Areas also have large poultry facilities with year-round usage. Pursue commercial loads and other l
Slide 19: Sharp Energy Growth Story and Geographic Focus
Sharp Energy Growth Story and Geographic Focus Sharp continues to grow organically within existing territories as well as expand geographically, with a focus on markets on the western shore of MD (Anne Arundel County and Baltimore County) and Wilmington, DE (Autogas and commercial focus) Expanding i
Slide 20: Sharp Energy Growth Initiatives beyond Organic Growth
Sharp Energy Growth Initiatives beyond Organic Growth Timely execution and communication have been our core attributes Maintain and develop builder relationships via dedicated staff to ensure seamless implementation Additional opportunities for temp heat and bulk residential gallon sales Autogas Str
Slide 21: Financial Review
Financial Review > CHESAPEAKE
Slide 22: 2018 Noteworthy Events
Chesapeake Utilities Corporation 2018 Noteworthy Events Continue to generate superior growth in earnings per share Affirm previous guidance of 17% plus growth in 2018 over adjusted 2017 EPS 5-year compound annual growth in earnings per share would be 8.4% Provided superior dividend growth with reten
Slide 23: Earnings for the First Nine Months of 2018 up 21% over 2017
Earnings for the First Nine Months of 2018 up 21% over 2017 Key Drivers of Growth Year-to-Date: Regulated Energy Net Income Up $7.5MM, or approximately 29% year-to-date Eastern Shore Rate Case and 2017 System Expansion Project Northwest Pipeline Project and other Peninsula Pipeline Expansion Project
Slide 24: Status of Tax Rate Reserves for Refunds to Rate Payers
FERC (ESNG) Delaware (DE - DNG) Maryland (DNG- Sandpiper) Florida (FPU / CFG) Regulatory Liabilities related to Excess ADIT $13.2M, DPSC is reviewing Filing and Rates; Hearing Date 1/29/2019 Customer Rate reduction related to 35% to 21% Rate Change TCJA Impact YTD Refunded $902K, Rates Adjusted Apri
Slide 25: Strong Balance Sheet to Support Future Growth
Strong Balance Sheet to Support Future Growth Total Capitalization has Nearly Doubled in Five Years Equity/Permanent Capitalization 70.3% 65.5% 70.6% 76.5% 71.1% 67.8% Equity/Total Capitalization 54.3% 54.0% 51.9% 55.4% 51.5% 49.5% * Short-Term Debt includes Current Portion of Long-Term Debt $1,027,
Slide 26: Looking Forward
Looking Forward > CHESAPEAKE
Slide 27: Major Projects and Initiatives Expected to Produce $40.3 Million in Incremental Margin
Major Projects and Initiatives Expected to Produce $40.3 Million in Incremental Margin (2017 vs. 2019) $21,095 $19,173 (1) Gross margin amounts included in this table have been adjusted to exclude the impact of TCJA. The refunds and rate reductions implemented were or will be offset by lower Federal
Slide 28: Capital Spending Forecast
Capital Spending Forecast Five year projection of up to $1B We now expect to invest $750MM-$1B over 5 years New projection has same $1B top range, however due to recent investments we are raising the low range from $600MM to $750MM
Slide 29: Earnings Outlook: Expect Growth Well Above Industry
*Based on 2017 Adjusted Earnings per Share Key Assumptions: Capital Expenditures total target approximately $750MM-$1B Normal weather conditions Maintain target equity to total capitalization ratio of 50% to 60% Dividend Payout Ratio approximates 45% Dividend per share growth supported by earnings p
Slide 30: Total Shareholder Return (TSR) Comparison
Total Shareholder Return (TSR) Comparison to Broader Market – S&P 500 Companies and Peer Group Chesapeake’s compound annual return has exceeded 14% for the past 3, 5, 10 and 20 years (through December 31, 2018) Source: Bloomberg
Slide 31: Investment Proposition
$1.4 billion in assets (also market capitalization): 84% regulated and 16% in unregulated complementary businesses Strong balance sheet and high retention rate for reinvestment CAGR in EPS of 8.4% (5 years) and 9.9% (10 years) Opportunity for continued growth at this level going forward Total return
Slide 32: Thank You
Thank You Thomas E. Mahn Vice President & Treasurer tmahn@chpk.com 302.736.7656 Beth Cooper Senior Vice President & CFO bcooper@chpk.com 302.734.6022
Chesapeake Utilities — Non-Deal Roadshow (February 2019) on 6ix