Slide 1: Second Quarter 2022 Earnings Conference Call
Second Quarter 2022 Earnings Conference Call August 4, 2022
Slide 2: Today's Presenters
Today’s Presenters Jeff Householder President, Chief Executive Officer Beth Cooper Executive Vice President, Chief Financial Officer, Treasurer and Assistant Corporate Secretary Jim Moriarty Executive Vice President, General Counsel, Corporate Secretary and Chief Policy and Risk Officer Alex Whitela
Slide 3: Forward Looking Statements and Other Statements
Forward Looking Statements and Other Statements 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 s
Slide 4: New Board Directors
New Board Directors Sheree M. Petrone Stephanie N. Gary Fmr. Executive Vice President, Vice President of Finance Head of Retail Electricity TidalHealth Dynegy, Inc. 4
Slide 5: Financial Highlights
Financial Highlights • Increased Diluted EPS by $0.29 and $0.18 compared to the 2021 year-to-date and quarterly periods, respectively • Continued real estate rationalization, which resulted in a one-time $1.9 million or $0.08 EPS gain in the quarter • Drove $8.0 million in adjusted gross margin grow
Slide 6: Growth Platform Focus
Growth Platform Focus • 5.7% residential customer growth on Delmarva Organic Growth: • 4.1% residential customer growth in Florida • $1.9 million gain from real estate rationalization • Continuing with Beachside, Winter Haven and Southern expansion projects Gas Transmission: • Margin from Escambia M
Slide 7: Second Quarter 2022 Financial Performance
Second Quarter 2022 Financial Performance Solid Growth Despite Inflationary Pressures Diluted Earnings Per Share Key Drivers of Year-to-Date Earnings Performance $3.04 $5.9M $4.7M $2.0M $2.75 Contributions Pipeline Regulated from Expansion and Infrastructure Acquisitions Natural Gas Programs Organic
Slide 8: Second Quarter 2022 Financial Summary
Second Quarter 2022 Financial Summary Consolidated Second Quarter Change Year to Date Change (in thousands except per share data) 2022 2021 $ % 2022 2021 $ % Total Adjusted Gross Margin 1 $ 92,354 $ 84,381 $ 7,973 9.4% $218,053 $201,271 $ 16,782 8.3% Operating Income $ 26,469 $ 22,578 $ 3,891 17.2%
Slide 9: Key Drivers of Our Performance
Key Drivers of Our Performance Quarter Ended June 30, 2022 Q2 2021 Diluted Earnings Per Share $0.78 A Gain from sale of assets $0.08 B Contributions from recent acquisitions $0.07 C Core business growth $0.24 Operating expenses tied to recent D -$0.09 acquisitions Operating expenses tied to core E $
Slide 10: Key Drivers of Our Performance
Key Drivers of Our Performance Year-to-date Ended June 30, 2022 YTD 2021 Diluted Earnings Per Share $2.75 A Gain from sale of assets $0.08 B Contributions from recent acquisitions $0.24 C Core business growth $0.44 Operating expenses tied to recent D -$0.19 acquisitions Operating expenses tied to co
Slide 11: Regulated Energy Segment
Regulated Energy Segment Financial Summary Chesapeake Utilities’ Regulated Energy Segment Drives Sustained Growth Regulated Energy Segment Second Quarter Change Year to Date Change (in thousands except per share data) 2022 2021 $ % 2022 2021 $ % 1 Adjusted Gross Margin $ 70,620 $ 66,463 $ 4,157 6.3%
Slide 12: Unregulated Energy Segment
Unregulated Energy Segment Financial Summary Chesapeake Utilities’ Driving Higher Returns With Complementary Unregulated Energy Segment Unregulated Energy Segment Second Quarter Change Year to Date Change (in thousands except per share data) 2022 2021 $ % 2022 2021 $ % 1 Adjusted Gross Margin $ 21,7
Slide 13: Capital Structure Overview
Capital Structure Overview Strong Balance Sheet to Support Growth 6/30/2022 12/31/2021 Long-Term Debt Stockholders‘ equity $ 815,701 $ 774,130 Avg. Interest Rate: 3.38% $50M: 2.95% issued in Long-term debt, net of current maturities 585,805 549,903 March 2022 Total permanent capitalization $ 1,401,5
Slide 14: Major Projects and Initiatives
Major Projects and Initiatives Key Projects Driving Adjusted Gross Margin Adjusted Gross Margin Three Months Ended Six Months Ended Year Ended Estimate for Project/Initiative June 30, June 30, December 31, Fiscal in thousands 2022 2021 2022 2021 2021 2022 2023 Pipeline Expansions: Western Palm Beach
Slide 15: Key Expansion Projects
Key Expansion Projects Pipeline Growth Contribution Capital Fully Annual Adjusted Gross Project Investment In Service Margin Estimate Del-Mar Energy Pathway* $60.1 million Q4 2021 $7.0 million West Palm Beach County* $28.9 million Q4 2021 $5.2 million Guernsey Power Station $6.5 million Q4 2021 $1.5
Slide 16: Regulatory Initiatives
Regulatory Initiatives Florida Natural Gas Base Rate Proceeding • Florida natural gas distribution businesses jointly filed a consolidated natural gas base rate proceeding on May 24, 2022 • The Company is seeking approval for approximately $24.1 million in permanent relief • $7.7 million (annualized
Slide 17: Regulatory Initiatives (continued)
Regulatory Initiatives (continued) Elkton Gas STRIDE Plan • Settlement reached with the Maryland PSC Staff and the Maryland Office of the Peoples Counsel. • Aldyl-A pipeline replacement program which enables recovery of the capital investment in the form of a fixed charge rider through a proposed 5-
Slide 18: Corporate Culture
Corporate Culture Internal Employee Resource Groups Recent Awards and Recognitions Named Top Work Place in US for 2022, Top Work Place in Delaware for 10 Years in a Row Best Corporate Governance in the U.S. for 2022 World News Media Ltd.’s World Finance Magazine Aspire Energy and Eastern Shore Natur
Slide 19: Guidance Update
Guidance Update Diluted Earnings Per Share from Continuing Operations Capital Expenditures Guidance through 2025 Guidance through 2025 and for 2022 $750 million to $1.0 billion $6.05 $6.25 CPK Guidance – High Range CPK Guidance – Low Range $4.73 $4.21 $3.68 $3.47 $3.72 $2.77 $140 million to $175 mil
Slide 20: Investment Proposition
Investment Proposition Committed to Superior Performance We seek to identify and develop opportunities to drive our future earnings growth and increase shareholder value. • Capitalizing on new organic growth and continuing our Business Transformation initiatives Track Record Energized Team • Investi
Slide 21: Appendix
> CHESAPEAKE ORATION Appendix
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Consolidated Results Consolidated Results Second Quarter Change Year-to-Date Change (in thousands except per share data) 2022 2021 $ % 2022 2021 $ % Operating Revenues $ 139,470 $ 111,082 $ 28,388 25.6% $ 362,350 $ 302,268 $ 60,082 19.9% Cost of Sales: Natural gas, pr
Slide 23: GAAP to Non-GAAP Reconciliation: Regulated Energy Segment
GAAP to Non-GAAP Reconciliation Regulated Energy Segment Regulated Energy Segment Second Quarter Change Year-to-Date Change (in thousands except per share data) 2022 2021 $ % 2022 2021 $ % Operating Revenues $ 92,193 $ 80,910 $ 11,283 13.9% $ 220,084 $ 202,107 $ 17,977 8.9% Cost of Sales: Natural ga
Slide 24: GAAP to Non-GAAP Reconciliation: Unregulated Energy Segment
GAAP to Non-GAAP Reconciliation Unregulated Energy Segment Unregulated Energy Segment Second Quarter Change Year-to-Date Change (in thousands except per share data) 2022 2021 $ % 2022 2021 $ % Operating Revenues $ 53,463 $ 34,773 $ 18,690 53.7% $ 154,754 $ 109,532 $ 45,222 41.3% Cost of Sales: Natur
Slide 25: Capital Investment Has Driven Our Earnings Growth
Capital Investment Has Driven Our Earnings Growth Historical Capital Expenditures and Acquisitions Last 10 Years: $1.75 Billion Since FPU Acquisition: $1.99 Billion $283 $228 $195 $192 $199 $196 $169 $154 $108 $98 $78 $49 $44 Cap Ex Acquisitions Hurricane Michael 25 Amounts in chart reflected in mil
Slide 26: Solid Track Record of Return on Equity
Solid Track Record of Return on Equity Consistently exceeding peer median and 75th percentile 14% Return on Equity 13% 12.7% 12.6% 12.2% 12.2% 12.1% 12.0% 11.8% 11.7% 11.7% 12% 11.6% 11.3% 11.3% 11.3% 11.2% 11.3% 11.0% 11.0% 11% * 10-Year Peer 75th Percentile – 9.9% 10% 9% * 10-Year Peer Median – 8.
Slide 27: Mission, Vision and Values
Mission, Vision and Values OUR Mission We deliver energy that makes life better for the people and communities we serve. OUR Vision We will be a leader in delivering energy that contributes to a sustainable future. OUR Values Care Integrity Excellence We put people first. We tell the truth. We achie