Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — AGA Financial Forum 2010
31 slides from Chesapeake Utilities's conference presentation, May 18, 2010
Slide 1: Chesapeake Utilities Corporation AGA Financial Forum May 17-18, 2010
Chesapeake Utilities Corporation AGA Financial ForumMay 17-18, 2010
Slide 2: Forward Looking Statements
2 Forward Looking Statements Safe Harbor StatementSome 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 s
Slide 3: Generating Solid Results... Delivering Superior Value
3 Generating Solid Results... Delivering Superior Value Organic GrowthExpand our natural gas and electric distribution and transmission services into new geographic areas within our current service territories and beyondExpand our propane distribution business by leveraging our community gas system
Slide 4: 2009 Net Income and Earnings Per Share Growth
4 2009 Net Income and Earnings Per Share Growth Record Net IncomeOne-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 Diluted EPS Diluted EPS Reported $2.15 Excluding Merger Costs
Slide 5: First Quarter 2010 versus 2009 Earnings
5 First Quarter 2010 versus 2009 Earnings Record Net Income and EPS growth of 63% and 18.5%, respectivelyChesapeake's standalone earnings and EPS grew 11% and 9%, respectively, over 2009 For the quarter ended March 31, (in thousands except per share amounts) 2010 2009 Change Operating Income Regulat
Slide 6: Our Profile
6 Our Profile (CHART) (CHART) Note: Customer data reflects 3 months ended March 31, 2010. (CHART)
Slide 7: Increased Scale and Scope
7 Increased Scale and Scope Increased Scale and Scope
Slide 8: Business Structure
8 Business Structure Electric DistributionFlorida Public Utilities Company Regulated, 89% Unregulated, 9%
Slide 9: Natural Gas Distribution Delmarva Customer Growth
Natural Gas Distribution Delmarva Customer Growth 9 2009 Industrial Customer Additions Delaware Technical and Community College Campus Local Hospital Various Manufacturing Plants
Slide 10: Natural Gas Distribution Delmarva Recent Developments
10 Natural Gas Distribution Delmarva Recent Developments On March 15, 2010, Delmarva Natural Gas operation signed an agreement with MountaireProvides natural gas service to a poultry processing plant in Millsboro, DEAnticipated annual margin to equate to approximately 850 average residential custome
Slide 11: Natural Gas Distribution Florida Accomplishments
11 Natural Gas Distribution Florida Accomplishments Successfully settled two rate casesCFG received approval for $2.5 million in new revenueFPU received approval for an $8 million increaseCFG completed a 10-mile distribution system expansion in Citrus and Hernando Counties CFG received FPSC approval
Slide 12: Natural Gas Transmission Growth
Natural Gas Transmission Growth *Represents annualized revenues. 12 137% increase 2009 Accomplishments 2010 Opportunities 2009 expansion completed 2010 expansion project Contracts with Valero executed Interconnection with Texas Eastern
Slide 13: Propane Distribution and Marketing - Executing in all three areas
13 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 Continued to grow our CGS Systems 390 CGS customers added in 2010 Successful marketing p
Slide 14: Natural Gas Marketing - Building on its foundation
14 Natural Gas Marketing - Building on its foundation Key 2009 Accomplishments Growth on the Delmarva PeninsulaService to the Valero refineryAutomation of manual processes
Slide 15: Advanced Information Services
15 Advanced Information Services Key 2009 AccomplishmentsLooking for recurring revenue opportunitiesImplemented cost containment practicesStreamlined existing processesEnhanced employees' technical skills
Slide 16: Status of the Merger Integration
16 Status of the Merger Integration Status of the Merger Integration
Slide 17: Return on Equity
17 Return on Equity Our returns have been impressive despite pressure on the regulated side to reduce allowable returns.
Slide 18: Capital Expenditures
(in thousands) Capital Expenditures 18 We have invested $170 million in capital expenditures over the last five years and are projected to invest an additional $53.9 million in capital expenditures in 2010.
Slide 19: Total Capitalization
Total Capitalization 19 Equity/Permanent Capitalization 57.0% 58.5% 62.8% 56.9% 61.0% Equity/Total Capitalization 46.0% 51.1% 50.6% 49.4% 56.1% We are strongly capitalized and not highly leveraged, enabling us to make the capital investments to continue to capture new growth.
Slide 20: Balance Sheet Strength
20 Balance Sheet Strength Committed to:Solid equity capitalizationTarget is 50-60%; we are on target.Strong liquidityTotal short-term debt capacity of approximately $130 million at competitively priced rates; $100 million availableRedeemed two of five FPU series of first mortgage bonds at more attra
Slide 21: Competitive and Consistent Dividend
Competitive and Consistent Dividend 21 Future dividends are at the discretion of the Board and are based upon achieved and expected earnings growth
Slide 22: Generating Increased Shareholder Value
22 Generating Increased Shareholder Value Our shareholders have experienced solid returns on their Chesapeake investmentsThe strategic combination of Chesapeake and Florida Public Utilities Company adds value for our shareholders and increases opportunities for our customers, employees and the commu
Slide 23: Demonstrated Results - Increased Shareholder Value
Demonstrated Results - Increased Shareholder Value 23 Over the last ten years, our market capitalization has grown by over 200 percent. Most recently, our merger with FPU increased our market capitalization by $76 million.
Slide 24: Opportunity for Increased Shareholder Value
Opportunity for Increased Shareholder Value Diluted ee Per Share a 2004 2005 2006 2007 2008 2009 For the most recent three years, Chesapeake’s, ‘compound annual growth rate was 9.01% versus the adjusted peer group's compound annual growth rate of 3.50%. Despite the economic slowdown, we have capture
Slide 25: Future Growth Drivers
25 Future Growth Drivers Sustain above average residential customer growth on Delmarva Pursue opportunities to add new commercial and industrial customers that enhance growth Implement approved natural gas rate cases Possible ESNG system expansions to meet customer growth Execution of Community Gas
Slide 26: Organic Growth. Right on Target.
Organic Growth. Right on Target. Acquisitions. Performance Improvements. Efficiencies. Increased Shareholder Value. Enhanced Earnings.
Slide 27: Chesapeake Utilities Corporation Appendices
Chesapeake Utilities Corporation Appendices
Slide 28: Chesapeake Historical & Pro Forma Quarterly Information
28 Chesapeake Historical & Pro Forma Quarterly Information Please see footnotes to Historical Quarterly & Pro-Forma Quarterly information on page 30.
Slide 29: FPU Historical & Pro Forma Quarterly Information
29 FPU Historical & Pro Forma Quarterly Information Please see footnotes to Historical Quarterly & Pro-Forma Quarterly information on page 30.
Slide 30: Footnotes to Historical & Pro Forma Quarterly Data
30 Footnotes to Historical & Pro Forma Quarterly Data Certain net income and earnings per share information is presented, which excludes for comparison purposes, the following items: Certain net income and earnings per share information is presented, which excludes for comparison purposes, the follo
Slide 31: Regulatory Oversight
_ Reg ulatory Oversight equator Jutascton: _Oeinwae PSC Ronda PSC Randa PSC Randa PEC __ Mantas PSC rere ose Rate Proceng ss2sc00 —sasuo300——s7o0m000 3.86200 se1n000 $1,108,000