Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — Midwest Financial Community Meetings November 18-19, 2010
28 slides from Chesapeake Utilities's conference presentation, Nov 18, 2010
Slide 1: Midwest Financial Community Meetings November 18-19, 2010
Midwest Financial Community Meetings November 18-19, 2010
Slide 2: Forward Looking Statements and Other Disclosures
2 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-lookin
Slide 3: Generating Solid Results... Delivering Superior Value
3 Generating Solid Results... Delivering Superior Value Organic Growth Expand our natural gas and electric distribution and transmission services into new geographic areas within our current service territories and beyond Expand our propane distribution business by leveraging our community gas syste
Slide 4: Sustainable Growth is Dependent upon our Disciplined Financial Strategy
4 Sustainable Growth is Dependent upon our Disciplined Financial Strategy Sustainable Growth Return on Equity - Book Yield = Retained Earnings Return on Equity on Reinvested Capital x Retained Earnings = Fundamental EPS Growth Fundamental EPS = Sustainable Growth Our Culture of Disciplined Growth is
Slide 5: Performance Quadrant Peer ROE vs. Capital Expenditures
5 Performance Quadrant Peer ROE vs. Capital Expenditures - 2007-2009 Utility (Highly Regulated) Slightly Diversified Diversified Source: Bloomberg
Slide 6: 2009 Net Income and Earnings Per Share Growth
6 2009 Net Income and Earnings Per Share Growth Record Net Income One-year growth rate of 16.8% (19.8% excluding merger costs) Five-year growth rate (annual compound growth rate) of 10.4% (12.1% excluding merger costs) 5.6% EPS and 10.4% NI Record Earnings Per Share One-year growth rate of 8.6% (11.
Slide 7: Nine Months 2010 versus 2009 Earnings
7 Nine Months 2010 versus 2009 Earnings Net Income and EPS growth of 95% and 41%, respectively Chesapeake's standalone earnings and EPS grew 20% and 17%, respectively, over 2009 * Does not include FPU's results for October 2009, nor the impact of the shares issued prior to the merger (October 28, 20
Slide 8: Natural Gas Distribution Delmarva Customer Growth
Natural Gas Distribution Delmarva Customer Growth 8 2009 Large Commercial/ Industrial Customer Additions Delaware Technical and Community College Campus Local Hospital Various Manufacturing Plants 2010 Large Commercial/ Industrial Customer Additions Mountaire Farms Other various customers 42,009 45,
Slide 9: Natural Gas Distribution Delmarva Recent Developments
9 Natural Gas Distribution Delmarva Recent Developments On March 15, 2010, our Delmarva Natural Gas operation signed an agreement with Mountaire Farms Natural gas service to their poultry processing plant in Millsboro, DE Construction completed in May, 2010 with service beginning in June, 2010 Estim
Slide 10: 2010 Natural Gas Distribution Florida Accomplishments
10 2010 Natural Gas Distribution Florida Accomplishments Implemented merger related synergies and savings Customer Billing System Conversion - CFG Customers moved to E-CIS Consolidated Citrus County and South Florida Operations Consolidated Safety, Sales & Marketing, Engineering areas Consolidated C
Slide 11: Natural Gas Distribution Florida - Regulatory Plan
11 Natural Gas Distribution Florida - Regulatory Plan Status of recovery of the Premium (Acquisition Adjustment) Florida PSC has a proactive philosophy as it relates to regulatory recovery of an acquisition premium Generally speaking, the Florida PSC allows recovery if the company can demonstrate im
Slide 12: Natural Gas Transmission Growth
Natural Gas Transmission Growth 12 139% increase 2010 Accomplishments 2011 Opportunities 2010 expansion completed Expanded footprint in Maryland Interconnection with Texas Eastern is slated to be completed by January 2011 ESNG Rate Case $25,645 $2,883 $10,954 $6,979 $21,773 $68,234 $0 $10,000 $20,00
Slide 13: 2010 Electric Distribution Accomplishments
13 2010 Electric Distribution Accomplishments Renegotiating Purchase Power Agreement with Gulf Power - enabling Time-of-Use and Interruptible rates to meet requirements of City of Marianna franchise agreement Approval of 2010 through 2012 Storm Hardening Plan by PSC Performing a system-wide study of
Slide 14: Propane Distribution and Marketing - Executing in all three areas
14 Propane Distribution and Marketing - Executing in all three areas Propane Distribution and Marketing - Executing in all three areas Successful Acquisition of Virginia LP Gas resulting in 1,000 customers added Growth in our CGS Systems Propane start-up in new territory in Maryland Successful marke
Slide 15: Natural Gas Marketing - Building on its foundation
15 Natural Gas Marketing - Building on its foundation Key YTD 2010 Accomplishments Growth in Florida (FPU): Organic Growth Currently supply two of the largest customers on FPU's system, 1.1 million therms annually Growth on Delmarva: Organic Growth Control (Bad Debt Expense): 2009: $362,000 - 0.630%
Slide 16: Advanced Information Services
16 Advanced Information Services Key YTD 2010 Accomplishments Nine-percent increase in billable consulting hours Higher revenue from professional database monitoring and support solutions services TMhas been finished and is in beta phase internally Lower operating expenses from cost containment acti
Slide 17: Status of the Merger Integration
17 Status of the Merger Integration Status of the Merger Integration
Slide 18: Return on Equity
18 Return on Equity Our returns have been impressive despite pressure on the regulated side to reduce allowable returns.
Slide 19: Capital Expenditures
(in thousands) Capital Expenditures 19 We have invested $170 million in capital expenditures over the last five years and are projected to invest an additional $54.8 million in capital expenditures in 2010. Of the $54.8 million capital budget, $12 million is targeted for FPU capital expenditures. $0
Slide 20: Total Capitalization
Total Capitalization 20 We are strongly capitalized and not highly leveraged, enabling us to make the capital investments to continue to capture new growth. $29.1 million of FPU's long-term debt was redeemed and was refinanced with short-term debt. This short-term debt is expected to be refinanced w
Slide 21: Balance Sheet Strength
21 Balance Sheet Strength Strong equity capitalization, liquidity and access to capital support our growth strategy Discipline to make solid financial investments Exceeding our cost of capital Committed to: Solid equity capitalization Target is 50-60%; we are on target. Strong liquidity Total short-
Slide 22: Competitive and Consistent Dividend
Competitive and Consistent Dividend 22 Future dividends are at the discretion of the Board and are based upon achieved and expected earnings growth Our current dividend represents 4.8% growth over the prior dividend. We are committed to dividend growth that can be supported by earnings growth. This
Slide 23: Generating Increased Shareholder Value
23 Generating Increased Shareholder Value Our shareholders have experienced solid returns on their Chesapeake investments The strategic combination of Chesapeake and Florida Public Utilities Company adds value for our shareholders and increases opportunities for our customers, employees and the comm
Slide 24: Organic Growth. Performance Improvements. Efficiencies. Acquisitions.
Organic Growth. Performance Improvements. Efficiencies. Acquisitions. Enhanced Earnings. Increased Shareholder Value. Right on Target.
Slide 25: Appendices
Appendices
Slide 26: Business Structure
26 Business Structure Electric Distribution Florida Public Utilities Company Regulated Energy, 89% Unregulated Energy, 9%
Slide 27: Increased Scale and Scope
27 Increased Scale and Scope For the Year Ended December 31, 2009 CPK FPU Combined Company Average Customers: Natural Gas Propane Electric 70,377 34,940 0 52,071 13,741 30,916 122,448 48,681 30,916 Total Customers 105,317 96,728 202,045 Employees 425 332 757 Net Plant $241 million $194 million $435
Slide 28: Our Profile in Terms of Margin
28 Our Profile in Terms of Margin (in millions) Note: Customer data reflects 9 months ended September 30, 2010.
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