Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — American Gas Association Financial Forum 2011
24 slides from Chesapeake Utilities's conference presentation, May 18, 2011
Slide 1: American Gas Association Financial Forum May 15-17, 2011
American Gas Association Financial Forum May 15-17, 2011 Rooted in Tradition. Branching to New Opportunities.
Slide 2: Forward Looking Statements and Other Disclosures
2 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 statements, and you should refer to the additi
Slide 3: Our Foundation
3 Our Foundation Our Team Management team is diverse and committed to success Employees challenge each other and work well together as a team Mixture of long-term employees with experience at other energy and utility companies Board is made up of experienced professionals with diverse backgrounds Ou
Slide 4: 2010 Financial Results
4 2010 Financial Results Delaware Beach FPU's results are not included in 2009 prior to the merger. 2010 Highlights In 2010, Chesapeake generated strong earnings growth as evidenced by record net income and earnings per share. Chesapeake's Legacy Businesses Excluding FPU and merger-related costs, ou
Slide 5: Growth in Earnings Begins with Growth in Margins
Growth in Earnings Begins with Growth in Margins In 2010, gross margin increased largely as a result of the following: Full-year of FPU results: $54.5 million Central Florida Gas rate increase: $2.2 million Delmarva natural gas distribution customer growth: $1.1 million Eastern Shore Natural Gas exp
Slide 6: Our Long-Term Performance
6 (CHART) (CHART) Our Long-Term Performance (CHART) Record EPS 2010 growth in diluted EPS of 27% Cumulative 5-year growth in diluted EPS of 51% 5 year annual compound growth rate in EPS of 8.6% Capital Expenditures We have invested more than $183 million over the last 5 years We are budgeted to inve
Slide 7: Successful Integration
Successful Integration FPU Merger has created shareholder value 7 Chesapeake completed the merger with FPU in October 2009. Our integration efforts translated into successful financial results and increased shareholder value. In addition, the Company is positioned to take advantage of future opportu
Slide 8: Delmarva Natural Gas Customer Growth
(CHART) 8 Delmarva Natural Gas Customer Growth 1"An "Equivalent Residential Customer" is defined as the number of residential customers that would have to be served to generate the same value as the commercial and industrial customers added. Delmarva Natural Gas Distribution has generated an average
Slide 9: Natural Gas Transmission Growth
9 Natural Gas Transmission Growth (CHART) Eastern Shore Natural Gas has been serving Delmarva since 1958. Owns 396 miles of natural gas pipeline - Constructed over 100 miles of natural gas pipeline infrastructure over the last 10 years Expansions over the last 10 years extended natural gas service t
Slide 10: First Quarter 2011 Financial Results
10 First Quarter 2011 Financial Results First Quarter 2011 Highlights During the First Quarter 2011, Chesapeake generated solid growth that largely offset significantly warmer weather. Net Income of $13.7 million compared to $14.0 million for 1Q2010 Earnings Per Share of $1.43 compared to $1.47 for
Slide 11: Growth in Earnings Begins with Growth in Margins
Growth in Earnings Begins with Growth in Margins Chesapeake's efforts to expand our service on the Delmarva Peninsula and in Florida enabled us to largely overcome the significant impact of warmer weather during the first quarter. Growth in Delmarva natural gas distribution and transmission business
Slide 12: Reconciliation of First Quarter Performance
12 Reconciliation of First Quarter Performance
Slide 13: Our Dividend
Chesapeake paid a dividend for 50 consecutive years We have increased our dividend over 4.5% (on an annualized basis) in each of the last two years Our earnings growth of 8.6% over the last five years has exceeded our dividend growth of 3% over the last five years 2010 dividend payout ratio was appr
Slide 14: Our Performance Relative to Our Peers
14 Peer ROE vs. Capital Expenditures Performance Quadrant 2008-2010 Data Source: Bloomberg Our Performance Relative to Our Peers (CHART) From 2008-2010, we invested more than $104 million to grow our businesses We have been able to achieve consolidated returns greater than regulatory commissions all
Slide 15: Future Delmarva Regulated Energy Opportunities
15 Extending our natural gas system to serve Lewes, Delaware Anchored by large customers, whose fuel requirements are equivalent to hundreds of residential customers Provides the foundation for future growth in this area New system expansions to serve Worcester County, Maryland Additional services a
Slide 16: Future Florida Regulated Energy Opportunities
16 Additional benefits as we leverage off of the integration activities in 2010 In discussions with several large commercial and industrial customers in Florida that would provide natural gas service in new areas of the state Building upon the reliability improvements, new rate design and quality of
Slide 17: Recovery of Acquisition Premium and Merger-Related Costs
If recovery is approved: We will be able to include the acquisition premium and merger-related costs in our cost and investment, when determining our rates for service Amortization expense will be recorded and also included in the calculation of our rates Acquisition premium amortized over 30 years
Slide 18: Future Unregulated Energy Opportunities
18 Implemented plans to expand our propane operations into Cecil County, Maryland in 2010 and expect to see growth there in 2011. Cecil County projects significant growth over the next few years as a result of the federal Base Realignment and Closure Act of 2005. Continuing to design a variety of pr
Slide 19: Delivered Results for Our Shareholders
19 Delivered Results for Our Shareholders (CHART) Our one-year return outperformed the peer group and the market. Over the long-term, our shareholders have earned over 10% annually on their Chesapeake investment. *Represents time stock has been traded on NYSE
Slide 20: Delivered Results for Our Shareholders
20 Delivered Results for Our Shareholders *Represents time stock has been traded on NYSE (CHART) If an investor made an initial investment of $10,000 in 1992, that investment would translate into a value of $78,948 today.
Slide 21: Delivering Future Results to Our Shareholders
21 Delivering Future Results to Our Shareholders Over the last ten years, we have been aggressively growing and creating shareholder value. We are continuing to see opportunities for growth and are aggressively trying to develop those opportunities. We are continuing to strengthen our team. We are c
Slide 22: Thank you. Questions?
Z| CHESAPEAKE Thank you. Questions?
Slide 23: Appendix
CHESAPEAKE UTILITIES CORPORATION APPENDIX
Slide 24: The Natural Gas Industry is Positioned for Growth
24 Natural Gas supplies nearly one-fourth* of all energy used in the U.S. Serves approximately 65 million* residential customers and over 5 million* commercial enterprises in the U.S. Cleanest fuel readily available on the market today Efficient, cost-effective and environmentally friendly Technolog
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