Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — Shareholder Meeting (May 2006)
26 slides from Chesapeake Utilities's shareholder meeting presentation, May 2, 2006
Slide 1: Chesapeake Utilities Corporation Annual Meeting of Stockholders
Chesapeake Utilities Corporation Annual Meeting of Stockholders May 2, 2006
Slide 2: 2005 Results
2005 Results Operating revenues $229,629,736 Operating income $21,530,499 Net income $10,467,614 Weather normalized Net income $10,251,848 Earnings per share (EPS) - Diluted $1.77 Weather normalized EPS - Diluted $1.71 Dividends declared per share $1.14 Dividend payout ratio 64% Gross plant $280,344
Slide 3: 2005 Results: Diluted EPS and Stock Price
2005 Results Diluted Earnings Per Share $2.00 • Diluted earnings per share $1.76 $1.77 $1.80 $1.64 $1.60 $1.40 $1.35 $1.37 of $1.77 -- highest in the $1.20 Company’s history $1.00 $0.80 $0.60 2001 2002 2003 2004 2005 Stock Price Range $40.00 $35.00 • Stock price appreciation $30.00 resulting in incr
Slide 4: 2005 Results: Operating Income and Shareholder Return
2005 Results 2005 Operating Income 2004 Operating Income Natural Gas Natural Gas Propane Propane $3,209 AIS AIS $2,364 $1,197 $17,091 $387 Other Other $17,235 ($111) $95 Shareholder Return 600.00% 500.00% 400.00% 300.00% 200.00% 100.00% 0.00% 1 Year 3 Years 5 Years 10 Years 20 Years -100.00% Chesape
Slide 5: Natural Gas Distribution Delmarva Customer Growth
Natural Gas Distribution Delmarva Customer Growth Open Lot Growth • Number 1 organic customer 12,000 growth in the country in 2005 9,000 • Over the last five years, our 6,000 3,000 average annual customer 0 growth was 6.4% 2001 2002 2003 2004 2005 Services Installed Open Lots Customer Growth 6.4% 50
Slide 6: Natural Gas Distribution Delmarva Main Growth
Natural Gas Distribution Delmarva Main Growth • Added 76 miles of distribution mains in 2005 • In past 5 years and 10 years, we’ve added 186 and 341 miles of distribution mains, respectively Distribution Main 341 2005 growth represents: 350 300 • 41% of 5-year growth 250 Miles 186 200 • 22% of 10-ye
Slide 7: Natural Gas Distribution Delmarva New Developments
Natural Gas Distribution Delmarva New Developments • From 2002-2004, we expanded service into 52 new residential developments • In 2005 alone, we expanded Number of Developments 100 service into 41 new residential 80 2002-2004 56% developments 60 52 40 • Within those 41, we have the 20 41 41 2005 44
Slide 8: Growing Delaware Service Territory
Natural Gas Distribution Growing Delaware Service Territory Towns Served Current Growth in Delaware: Areas in Delaware: • Middletown • Woodside • Milton • Odessa • Felton • Frederica • Townsend • Milford • Clayton • Harrington • Smyrna • Greenwood • Cheswold • Bridgeville • Dover • Seaford • Camden
Slide 9: Natural Gas Transmission Record 2005 Results
Natural Gas Transmission Record 2005 Results • Strong growth in 2005, generating $7.4 million of operating income • Increased peak day capacity by 55 percent over the last five years • Five consecutive years of growth in pipeline capacity ESNG Year-End Pipeline Capacity 132,301 150,000 122,925 113,9
Slide 10: Natural Gas Transmission Service Territory
Natural Gas Transmission Service Territory • In January 2006, completed final phase of three-phase expansion project • 24 new miles of transmission pipeline • 10 miles of expansion related to extension to Milton, DE • Largest single expansion in Eastern Shore’s history 10
Slide 11: Natural Gas Transmission Continued Growth
Natural Gas Transmission Continued Growth ESNG Pending Projects Before and After Proposed Pipeline Capacity Additions 2006 - 2008 Expansion Project 26,200 179,651 30,000 190,000 27,000 132,301 Dekatherms 24,000 150,000 Dekatherms 21,000 18,000 110,000 15,000 10,300 10,850 12,000 70,000 9,000 6,000 3
Slide 12: Natural Gas Transmission Completed Projects
Natural Gas Transmission Completed Projects Completed Projects: Facilities Actual Capacity Project In-Service Cost Increase dt/d Description Nov.'97 $ 9,895,711 5,718 Compression Nov.'98 $ 889,329 2,516 Looping Nov.'99 $ 7,231,679 16,540 Looping / Compression Nov.'00 $ 5,504,147 7,065 Looping / Milf
Slide 13: Florida Natural Gas Distribution Customer Growth
Florida Natural Gas Distribution Customer Growth 2005 Margin Mix $467,138 • 1,240 new residential $3,247,369 customers added in the past five years $7,445,469 Customer Growth 5.1% Residential Commercial & Industrial 15,000 6.47% 6.57% Other 4.37% 4.13% 12,500 3.96% 10,000 7,500 5,000 2,500 2001 2002
Slide 14: Florida Natural Gas Distribution Expanding to New Areas
Florida Natural Gas Distribution Expanding to New Areas Number of 2005 Margin Year County Customers Today Contribution 1999 Citrus 1,112 residential & commercial $703,322 (6.3%) 2000 Holmes 2 industrial $88,319 (0.7%) Gilchrist 2001 Jackson 3 industrial $290,121 (3%) Union DeSoto 2002 Suwannee 1 ind
Slide 15: Propane Segment Community Gas System Success
Propane Segment Community Gas System Success • At year-end, Sharp provided gas to 3,400 community gas 8,000 systems customers 7,000 6,000 • Potential 1,500 customers in 5,000 developments under contract 4,000 3,000 • Potential 5,600 customers in 2,000 1,000 developments under 0 construction Active •
Slide 16: Propane Segment Expansion into New Markets
Propane Segment Expansion into New Markets • Second start-up in Pennsylvania (Allentown) • Expanding further into Pennsylvania with opportunity to expand community gas systems • Hired experienced manager to oversee supply and growth in wholesale division 16
Slide 17: Other Businesses' Accomplishments
Other Businesses’ Accomplishments Xeron, Inc.: • 30 years of consecutive profitability; profitable since inception • New trader joined the organization who has experience in additional markets BravePoint, Inc.: • 15 years of consecutive profitability • Sale of LAMPS™ 17
Slide 18: 2003-2005 Total Capital Expenditures to Total Capitalization
2003 –2005 Total Capital Expenditures to Total Capitalization 20% 15% 12.73% 10% 5% 0% I SI N Y LG R I K S N GL I X O G C UG CO SJ KM PN SE NJ CP GA NW SW EN AT AT CG W RG CA Turner Peer Group (LDC's only) 18
Slide 19: Dividend History
Dividend History $1.25 $1.00 $0.75 $0.50 $0.86 $0.86 $0.86 $0.88 $0.90 $0.93 $0.97 $1.00 $1.03 $1.07 $1.10 $1.10 $1.10 $1.12 $1.14 $0.25 1991 1992 1993 1995 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 19
Slide 20: Chesapeake University
Chesapeake University • Began CU in 2004 as a Company-wide management development program • CU 101: Training in a variety of subjects from corporate governance to leadership • CU 201: Working with peers on selected business unit issues • Currently developing CU 301 • 45 participants to date 20
Slide 21: Significant Accomplishments of Tomorrow's Leaders
Significant Accomplishments of Tomorrow’s Leaders Natural Gas Community Customer Gas Systems Service Milton Growth Enhancements Expansion Sarbanes- Oxley Act ESNG Expansion 21
Slide 22: Pipelines of Opportunity
Natural Gas Natural Gas Distribution Transmission We are creating PIPELINES OF OPPORTUNITY Propane Distribution and Wholesale Marketing Other Other Related Services Related Businesses 22
Slide 23: The End Result
The End Result Record net income + Stock price appreciation + Record customer growth + Record capital investments that generate target returns + Consecutive dividends = Maximizing Shareholder Value 23
Slide 24: Shareholder Value
Record Stock Price Net Income Appreciation We are creating SHAREHOLDER VALUE Record Capital Investments Consecutive Record Dividends Customer Growth 24
Slide 25: Thank You to Our Stockholders
Thank You to Our Stockholders
Slide 26: Safe Harbor Disclosure
Safe Harbor Disclosure Statements made herein and elsewhere in this presentation which are not historical fact are forward looking statements. In connection with the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company is providing the following cautionary st
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