Tag Archives: economy

Bears Miss Out On Social Media Payday

Social media shares have borne the brunt of the recent market selloff but few short sellers are lining up to short the market despite its recent underperformance as tracked by the Global X Social Media ETF (NASDAQ: SOCL ). Social media companies make up half of the once hotly tipped but now largely discredited , “FANG” trade of fast growing tech companies with a global presence. The market’s recent shunning of these high flying mercurial shares, spurred on by a spate of disappointing tech earnings and wider fears surrounding the health of the global economy means that every one of the acronym’s four constituents are trading over 10% off their recent highs. The headwinds faced by the sector’s flagship stocks are reflected in the overall sector as the Global X Social Media ETF hit a two and a half year low earlier this month. While the fund has rebounded somewhat in the last 10 days, it is still down by 13% ytd which is more than twice the fall seen by the rest of the market. The headwinds felt by the sector have been relatively universal as eighty percent of the ETF’s constituents have seen their shares retreat year to date. Collapse catches short sellers out This recent collapse of the once popular trade looks to have caught short sellers out as the ETF’s constituents entered 2016 with a below average short interest. In fact, demand to borrow the fund’s constituents fell by over a third last year and short interest stood near a two year low prior to the selloff. This indifference towards social media shares runs against that seen in the rest of the market where short selling stands at multi year highs. While there has been a 7% increase in demand to borrow social media shares since the start of the year, that number also trails the increase in shorting activity seen in the S&P 500 where average short interest is up by double digits since the start of the year. Lack of appetite universal As with the fall in share prices, the lack of appetite to sell social media shares short is fairly universal as only seven of SOCL’s constituents see any material short interest as defined by having more than 3% of shares out on loan. Pandora (NYSE: P ) is the most shorted of the lot with 8% of its shares now out on loan. Its shares have fallen by a quarter as investors’ fret about the company’s prospects in an increasingly crowded streaming field. Ironically, Groupon (NASDAQ: GRPN ), which was the highest conviction short at the start of the year, has become a painful short as its shares surged following Alibaba’s (NYSE: BABA ) disclosed stake in the online discounter. Short sellers have covered 10% of their positions as their trades went against them. The only firm to see a material rise in short interest across the field since the start of the year has been LinkedIn (NYSE: LNKD ) after its shares nearly halved in the wake of a disappointing earnings update. While short interest in the professional social media firm has since quadrupled, the 2.1% of LNKD shares now out on loan is still less than that seen at the start of 2015. Investors not buying dip Investors in SOCL have shown little patience to ride out the recent volatility as over $32m of funds have flowed out of the ETF since the start of the year. These strong outflows represent over a quarter of the AUM managed by the fund at the start of the year which underscores the wave of negative sentiment felt by the sector since the start of the year.

PNM Resources’ (PNM) CEO Pat Vincent-Collawn on Q4 2015 Earnings Guidance Conference – Call Transcript

Operator Hello, and welcome to the PNM Resources Fourth Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jimmie Blotter, Director of Investor Relations. Please go ahead. Jimmie Blotter Thank you, Carrie and thank you everyone for joining us this morning for the PNM Resources fourth quarter 2015 earnings conference call. Please note that the presentation for this conference call and other supporting documents are available on our website at pnmresources.com. Joining me today are PNM Resources Chairman, President and CEO, Pat Vincent-Collawn and Chuck Eldred, our Executive Vice President and Chief Financial Officer as well as several other members of our Executive Management team. Before I turn the call over to Pat, I need to remind you that some of the information provided this morning should be considered forward-looking statements, pursuant to the Private Securities Litigation Reform Act of 1995. We caution you that all of the forward looking statements are based upon current expectations and estimates and that PNM Resources assumes no obligation to update this information. For a detailed discussion of factors affecting PNM Resources results, please refer to our current and future Annual reports on Form 10-K, Quarterly Reports on Form 10-Q, as well as other reports on Form 8-K filed with the SEC. And with that, I will turn the call over to Pat. Pat Vincent-Collawn Thank you, Jimmie. Good morning, everyone. And thank you for joining us as we close out our discussion on 2015 which is a very productive year for the company. We’ll begin the presentation today on slide four with a look at our regulatory and operational achievement over the year. 2015 was to say the least an interesting year. I am very proud that we are able to successfully over several challenges and finished the year on a strong note. Our most significant accomplishment was PNM obtaining final approval for the San Juan Generation Station BART plan. We received that approval two years from when we filed with the commission. Many things were dependant on a positive decision and we are now able to move forward with our comprehensive plan. It is the most cost effective path forward and the best option for our customers who are already seeing lower build as a result of the new core supply agreement. It will also benefit the entire state by minimizing economic impact and providing significant environmental improvements. Ultimately, the position that we and other utilities had regarding the definition of what constitutes the future test year was upheld. The commission revised its definition in a way that agrees with our understanding as the New Mexico Supreme Court has dismissed the appeal. We are also pleased that we were able to settle our first transmission formula rate case. The settlement is awaiting final approval from FERC. In Texas, TNMP successfully implemented two TCOS increases totalling $5.8 million annually. In addition, on January 8th of this year, the staff of the Public Utility Commission of Texas recommended that the Commission approve without changes TNMPs filing for reconciliation regarding its AMS deployment. We anticipate the commission to rule at its open meeting on March 24. We turn to our operational highlights. You always hear me talk about reliability being our customer’s number one priority. I am proud to say that in 2015 PNM delivered strong reliability and was recognized with a ReliabilityOne award for outstanding Midesize Utility. TNMP also continued to deliver excellent reliability despite extreme weathers throughout the year in Texas. As a result of PNMs excellent reliability and focus on customers, in 2015 we continued to improve our J.D. Power customer service ratings. In July and August, PNM achieved its highest scores ever. At the same time, the number of merited complaints with the New Mexico Commission remained at the lowest level in the past five years. That’s especially significant during the rate case year. In 2015, PNM stayed on track with plans to increase generation capacity. We added four new solar facilities totaling 40 megawatts, and the new La Luz 40 megawatt gas peaker is also now online. We are also proud of the fact that once again TNMP received Energy Star’s Market Leader Award for its energy efficiency programs. That’s the 11th consecutive year that TNMP has earned that honour. We continue to move forward with the AMS roll out at TNMP. We’re now at 91% completion. In conjunction with the AMS deployment, we’ve implemented a new outage management system. This will be an important tool in improving response time, reducing outage time and increasing both reliability and customer satisfaction. Let’s now go to slide five for a snapshot of fourth quarter and year end results. As you can see there is a significant difference between our GAAP and ongoing earnings, which is primarily due to a GAAP write off related to the shutdown of units 2 and 3 at the San Juan Generating Station. Our GAAP EPS for fourth quarter 2015 was a loss of $1.15 compared to earnings of $0.24 in the fourth quarter of last year. For the year, GAAP earnings per share were $0.20 compared to $1.45 in 2014. For the fourth quarter, ongoing earnings per share were $0.23 compared to $0.24 from the fourth quarter last year. For the year, ongoing earnings totaled $1.64 up $0.15 from 2014. We are also affirming our 2016 guidance range of $1.55 to $1.76. Couple of quick regulatory updates. We are moving forward with the implementation of our BART plan at San Juan. The SNCR and Balanced Draft equipment are now in full operation on units 1 and 4 and savings from the new coal supply and restructuring agreements are now flowing to our customers and the 40 megawatts of solar that was in our replacement plan is now online. We are also on track with the rate case we filed last August. PNM and the interveners filed Rebuttal testimony this past Monday and the hearing is currently scheduled to run from March 14 to March 25. On January 29, TNMP made its latest TCOS filing requesting an annual increase of $4.3 million. We expect that these rates will go into effect in March. This reflects a $25.8 million increase in transmission rate base over our last filing. I’ll now turn it over to our Chief Financial Officer, Chuck Eldred for a more comprehensive look at the numbers. Chuck Eldred Thank you, Pat and good morning everyone. We continue to make progress towards achieving our goal. The Westmoreland coal contract that became effective February the 1st brings substantial savings to customers. We received approval on the BART and resolution of the future test year definitions under New Mexico Commission in December. We also ended 2015 with an improvement in earnings compared to our revised guidance range. So beginning on slide seven, let’s start by reviewing load of both PNM and TNMP. Both were within the guidance ranges that we had for the year. At PNM, 2015 was down 1.4% compared to 2014. I want to point out the residential loan was flat both for the fourth quarter and for the entire year. Customer growth came in higher than our expectations at 0.8% for fourth quarter and 0.7% for the year. The economy in New Mexico continues to have mixed indicators. The employment growth recently in Albuquerque Metro area has been strong and you can see that even on a 12-month rolling average its moving up with the strongest numbers we have seen in three years. The state overall is not faring as well though. That softness is driven primarily by the low oil and natural gas prices. While we do not serve the regions of the state that produce oil and gas, we do expect the impacts of layoffs and the decrease in state royalty revenues will somewhat soften the economies in our service territory, particularly in Albuquerque metro area in Santa Fe as the state deals with budget shortfalls. We continue to expect 2016 load to be flat to down 2% for the year. Moving to TNMP, load for 2015 was up 2.6% compared to 2014. Customer growth was higher than forecast at 1.5% for Q4 and for the year. The Texas economy continues to be strong but the Houston area in particular is feeling the impact of low oil and natural gas prices. While Houston property is suffering, we are not seeing the economy in our service territory softened. This is because of a couple of factors. We serve many refiners and petrochemical manufacturers who continued to have strong production. Additionally, we see some production movements into the smaller communities outside the Houston Metro area, population movements into the smaller communities outside the Houston area. TNMP serves some of those areas and therefore, we are actually seeing customer increases rather than decreases. For 2016, we continue to expect load to be up 2% to 3%, as refiners and petrochemical manufacturers continue strong production and our service territories near Dallas and Forth Worth continues to have a strong economy. On slide 8, as I said before, we ended the year exceeding the upper end of 2015 guidance range, with the $1.64 consolidated ongoing earnings. All of our segments performed well during the year. PNM came in $0.02 higher than guidance. TNMP at the upper end of the guidance range and Corporate and Other was also $0.01 better than guidance. Now moving to slide 9. Ongoing earnings came in at $0.23 for fourth quarter compared to $0.24 in the fourth quarter 2014. PNM was down $0.03 and TNMP was flat. Corporate and other came in $0.02 better than last year, driven by improvements in interest expense related to the repayment of the $119 million and a 0.0025% debt in May of 2015. On slide 10, let’s look at the drivers for PNM and TNMP. Beginning with PNM, AFUDC improved $0.03 compared to the fourth quarter of 2014. This was caused by higher capital spending and higher quid balances, including the SNCR and balanced draft equipment in San Juan, the construction of the 40 megawatt La Luz gas peaker and 40 megawatts of solar. As we’ve seen through 2015, the half price of the Palo Verde Unit 1 leases contributed $0.03. Weather was an improvement of $0.02 between the quarters, as weather reduced fourth quarter 2014 earnings by $0.01 and improved fourth quarter 2015 by $0.01. The heating degree days for fourth quarter 2015 were not the driver for weather, as they were only 8% higher than last year but 2% below normal. Instead it was our cooling season that extended into October, with temperatures that were warmer than normal and warmer than 2014. We have been migrating to the Palo Verde Unit 3 Nuclear Decommissioning Trust from a shareholder asset to a regulated asset. This involves rebalancing the portfolio to reduce the percentages held in equity investments to better match the regulated assets. As we do this, we have opportunistically captured gains. In addition to that, we change some of our managers which resulted in further rebalancing of the investment portfolios. Together these actions resulted in higher gains of $0.02 compared to fourth quarter 2014. Renewable also improved results by $0.01. We had higher O&M expenses of $0.03 in the quarter, which brings our year-to-date expenses in line with our guidance range. Outage costs were $0.02 higher. This was caused largely by the San Juan Unit 4 outages and saw SNCR and balanced draft equipment. We took $0.02 write-off in fourth quarter 2015 for items on our balance sheet related to the exploration of alternative fuel supply contracts for San Juan. With the completion of the Westmoreland contract, we determine that it was appropriate to write-off these assets. Interest expense was $0.02 higher related to the additional debt that PNM entered into August of 2015. Load was down a $0.01. Transition margins were down a $0.01, compared to fourth quarter 2014. We had two long-term point-to-point contracts expired during the year, which is the primary cause of this change. We also had higher depreciation and property tax expense of $0.01. Finally, we capitalized ANG load on capital projects as lower than it was last year. This is primarily relating to the timing of capital projects At TNMP, rate relief from TCOS filings was up one penny compared to fourth quarter 2014. Weather was down $0.01. Heating degree days were 28% lower than fourth quarter of 2014 and 27% lower than normal. Depreciation and property taxes were also higher by a $0.01. Now turning to slide 11. Before we review the 2016 forecast, I want to mention how the five-year bonus depreciation extension affects us. As you are aware, we have an NOL at PNM for income tax purposes that have been expected to be fully utilized in 2018. The extension of bonus depreciation will cost the NOL to last for a longer period of time, now carrying us into 2019. While the additional deferred tax from bonus depreciation decreases rate base, the NOL increases rate base. As a result, we do not expect to see significant change in our rate base. Looking at 2016, bonus depreciation does not impact our ongoing earnings guidance. We have included our rate base projection on this slide for the expected impact of bonus depreciation and the extension of the NOL. The impact of bonus depreciation does not change our 2016 rate case numbers except the TNMP, which does not have an NOL. However, regardless of rate base change, our EPS expectations for 2016 are ineffective. As a reminder, we expect to update guidance in middle of this year after we resolve the ongoing rate case at PNM. In the appendix to today’s presentation, you will find the 2017 to 2019 potential earnings power slide. This is also been updated for bonus depreciation. As for 2016, PNM does not have a significant change and TNMP’s rate base is reduced from our prior presentation by approximately $50 million in each period. Overall, the changes are not as significant earnings driver for the company. Since the NOL’s expected to be utilized in 2019, bonus depreciation will have an impact in our 2020 rate case. We are currently viewing the capital projections and identifying which projects should be funded. We will provide those updates later this year. Finally on slide 12, we are focused on achieving our strategic goals. We expect to continue delivering above industry average earnings and dividend growth, which is displayed to the potential earnings power of the business and supports our 7% to 9% growth rate. As I wrap up today, I want to express that 2015 ended with good results. We are optimistic about 2016 and we recognize the importance of PNM’s rate case on this year’s financial results and the need to bring it to a good resolution. We also expect to file our 2018 rate case in December of this year. That filing will include the major elements of the BART case. The abandonment of San Juan’s Unit 2 and 3, additional megawatts in San Juan Unit 4 and the inclusion of Palo Verde Unit 3 rates. The rate base valuations for each of these items have already been set for the BART process. Pat, I will turn the call back over to you. Pat Vincent-Collawn Thanks, Chuck. As Chuck said, we are very proud of what we accomplished in 2015. We reached positive conclusions on key regulatory filings. The company delivered another solid financial performance and most importantly, we continued to focus on serving our customers with reliable, affordable and environmentally responsible electricity. Given the challenges and oppositions we faced through this year and continue to face, these achievements confirm that our strategy is sound and our hard work is creating positive results. Going forward, we plan to stay the course and continue to work in the best interest of our customers, the communities we serve, our employees and our shareholders. One more note about our rate case. No one likes rate increases. We understand that and we take it very seriously. This request is driven primarily by capital improvements to our system designed to ensure continued reliability for our customers. As filed, the rate case would increase rates by 14%, but when you consider the customer benefits from the Westmoreland coal contract and other items, the total increase is about 5%. That’s an average of about 1% a year since our last increase. I want to emphasize that it is of great importance that we achieved timely rate recovery in this proceeding and we are confident that we have strong justification for the revenue requirement. As we have been saying all along, given the number of interveners in this case, it is likely that the best way to achieve this will be through litigation. And in closing, I cannot say enough about the tremendous effort of our employees. They are responsible for our ongoing success and progress and they make us proud every day. Operator, let’s now open it up for questions. Question-and-Answer Session Operator We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Anthony Crowdell of Jefferies. Please go ahead. Anthony Crowdell Good morning. Pat Vincent-Collawn Good morning, Anthony. Anthony Crowdell I have a couple questions. One is I wanted to know, what’s left on your Palo Verde leases after you file for the rate case at the end of this year for new rates in 2018? Chuck Eldred Yeah. Anthony, the leases about 114 megawatts and still remain, but actually extend on half price as a path through to O&M through 2022, 2023. Anthony Crowdell Okay. Great. Since I guess the BART filing in December or maybe even the third quarter call, you had given this, I don’t want to use the word guidance but maybe a rough estimate of the potential loss to the unregulated portion of the San Juan plant would be. Power prices have since maybe taken another downturn. Could you give us an update on what your estimate would be for the unregulated portion of power of San Juan? Chuck Eldred Yeah. Anthony as you know, the 65 megawatts actually doesn’t affect us until the BART implementation in 2018 when we taken on the 65 megawatts. And as you recall in our projections, we use spot prices, real-time prices of the markets. So you are right, prices have decreased considerably since we’ve last talked about it. I think we are around of $0.03 losses and with the additional lower prices, which are close to little less than $30 a megawatt hour is a breakeven in the mid $40 a megawatt. For San Juan 65 megawatt, we are probably additional $0.03 or $0.04. But let me just also comment that as you are aware, with the Westmoreland contract, the financing that we have done through Westmoreland to support the closing of the purchase of the mine that there are some additional earnings that begin to reflect as a result of the financing and the basis spreads between what we were able to financed at PNM versus PNM Resources versus what Westmoreland was charged to reflect more of their credits. That benefit, if you will is roughly around $0.04 or so because it would offset the losses that we would have at the 65 megawatts I just referred to. So, we remain kind of neutral that overall we are on the course that we said we’d be on and we are not really receiving an impact even with the lower prices at the 65. Anthony Crowdell Okay. And just lastly, Pat, I know you had said you think the best way of achieving what you’ve requested in the rate proceeding given the large number of interveners, it looks like you went to dug in their positions was through a litigated decision. Would you comment at all, if there is even a potential for a settlement or it just seems like it’s not really going to happen here? Pat Vincent-Collawn There is always a potential but I think in this case, litigation is probably the best path forward because it’s the most expeditious and the quickest path forward. Anthony Crowdell Great. Thanks for taking my questions. Pat Vincent-Collawn Thank you. Chuck Eldred Thanks. Pat Vincent-Collawn Thanks, Anthony. Operator Our next question comes from Brian Russo of Ladenburg. Please go ahead. Brian Russo Hi. Good morning. Pat Vincent-Collawn Good morning, Brian. Brian Russo You mentioned that when the NOLs runoff at the end of 2019, there will be an impact to your rate base for bonus depreciation in 2020, can you quantify that? Chuck Eldred Yeah. We actually haven’t put out the 2020 rate base at this point. But it pretty much keeps the rate base slightly lower than what we have through 2019, but we haven’t quantified at this point, Brian. So, I’d rather wait till we really run through the numbers and look to see if there is some additional capital funding that we can benefit from the bonus depreciation and additional cash flow and then we will update the number and provide them to you. Brian Russo Well. Maybe I will ask in a different way. In 2016 rate base, hypothetically, if you didn’t have the NOL, what would the impact to your rate base be, if you can answer that? Chuck Eldred 2016? Brian Russo Or 2015. Chuck Eldred I don’t know I have 2015. Let me get — we will just have to get back with you on that. I have got the numbers of 2016. I don’t have 2015 with me. Brian Russo Okay. So could you share with us for the 2016? Chuck Eldred Yeah. 2016, if you would, roughly with the effects, without NOL, the net effect of that looks like it would be about 2.6 to 2.4 about $200 million net. Brian Russo Okay. Thank you very much. Operator [Operator Instructions] Our next question comes from John Allie [ph] of Castleton. Please go ahead. Unidentified Analyst Good morning, guys. Pat Vincent-Collawn Good morning, John. Unidentified Analyst Just two quick questions. You said the litigation is the quickest route, what’s the timeline you guys are thinking for that? And then secondly, do you have any thoughts on the formation of the REIT for your taxes as such? Pat Vincent-Collawn I’ll take the first one and let Chuck take the second one. The hearings John start on the 14th of March and go till the 25th of March. We would hope that the effective date would be close to the beginning of Q3. I think you will know that Q3 is our largest quarter, so therefore having the rates in place early in that quarter makes a big impact which is why we want timely rate increase. So that’s probably the schedule we are looking at. Chuck Eldred Yes John in regards to — we’re watching as everyone else to see what the commission ultimately does with the on proposal reactions relative to how they pursue that going forward. And whether they actually allow that to be approved in the regions formed and with Encore. So we’ll monitor that and if we feel that that decision is made as I’m sure all the AT&T companies in Texas will do the rigor and analysis necessary to see if it makes any sense for our structures to consider that as well. So at this point we’re just on the sideline keeping a close eye on it. Unidentified Analyst All right. Thank you. Chuck Eldred Okay. Operator And this concludes our question and answer session. I would now like to turn the conference back over to Pat Vincent-Collawn for any closing remarks. Pat Vincent-Collawn Thank you. And again thank you all for joining us this morning. We appreciate you joining us on this call to hear about our very successful 2015 and our plans for going forward and we look forward to speaking with you and seeing you all throughout the year. Have a great weekend. Operator The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines. Have a great day. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) 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Chesapeake Utilities’ (CPK) CEO Mike McMasters on Q4 2015 Results – Earnings Call Transcript

Operator Good morning. My name is Nicole and I will be your conference operator today. At this time, I would like to welcome everyone to the Chesapeake Utilities 2015 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Beth Cooper, Senior Vice President and Chief Financial Officer, you may begin your conference. Beth Cooper Thank you, Nicole, and good morning, everyone. We appreciate you joining us today to review our fourth quarter and 2015 annual results. Joining me on the call today is Mike McMasters, President and CEO. In addition to Mike, we also have several members of our management team here with us to answer questions. The presentation to accompany our discussion can be accessed on our website under the Investor section and Events and Webcasts subsection or via our IR app. Moving to Slide 2, before we begin, let me remind you that matters discussed in this conference call may include forward-looking statements that involve risks and uncertainties. These forward-looking statements and projections could differ materially from our actual results. The safe harbor for forward-looking statements section of the company’s 2015 Annual Report on Form 10-K will provide further information on the factors that could cause of such statements to differ from our actual results. I would like to begin today’s presentation by highlighting the company’s record performance. As shown on Slide 3, the year 2015 culminated in the ninth consecutive year of record earnings generated by the company, both in terms of net income and earnings per share. In addition, as the slide highlights, Chesapeake has generated very strong returns on equity ranging from 11% to 12.2% over this nine-year period. These results have been driven by our successful capital investments in organic growth opportunities and acquisitions like FPU, Sandpiper Energy, and Aspire Energy of Ohio. The returns that we have generated on these investments have resulted in a compound annual growth rate of 9.8% in earnings-per-share over the nine-year period. Moving to Slide 4, yesterday, we reported results for both the year and the fourth quarter ended December 31, 2015. Net income for the year was $41.1 million, or $2.72 per share, which represents an increase of $5 million, or $0.25 per share, compared to 2014. Year-over-year earnings per share grew by 10.1%. For the fourth quarter of 2015, the company reported net income of $8.6 million, or $0.56 per share. This represents a decrease of $1.5 million, or $0.13 per share, compared to the same quarter in 2014. The decline in the quarter-over-quarter results was caused by lower energy consumption due to warmer temperatures that reduced earnings by $2.5 million, or $0.17 per share. The fourth quarter of 2015 was the warmest fourth quarter in the past 30 years in our operating territories. As you know, gas consumption is impacted by the variability in heating degree days in the winter months. I will now highlight the accomplishments and results for the two business segments for the year. Detailed discussions of our results for the quarter and year ended December 31, 2015 are provided in our press release, which was filed yesterday and will be included in our Annual Report on Form 10-K, which will be filed Monday. Turning to Slide 5, Chesapeake’s regulated energy businesses, which include our natural gas distribution and transmission and electric distribution operations generated operating income of $61 million in 2015, compared to $50.5 million for 2014. The increase in regulated energy operating income was generated from strong growth in the regulated energy businesses. The impact of several nonrecurring items also enhanced 2015’s results. Gross margin increased by $13.2 million as a result of service expansions, the Florida Gas Reliability Infrastructure Program, or GRIP, as we refer to it, natural gas customer growth and the Florida electric rate case. The higher gross margin was partially offset by lower margin as a result of warmer weather and an increase in other operating expenses reflecting the incremental cost of service, ultimately resulting in an increase of $2.6 million in 2015 operating income. The nonrecurring items included non-cash pretax impairment charges recorded in 2014 in the aggregate amount of $6.4 million and a gain from a customer billing system settlement of $1.5 million recorded in 2015. The impact of these nonrecurring items resulted in additional operating income of $7.9 million in 2015, compared to 2014. As shown on Slide 6, the unregulated energy segment reported operating income of $16.4 million, compared to $11.7 million for 2014. Operating income excluding a $432,000 nonrecurring charge in 2014 increased by $4.2 million. Higher retail propane margins and margin generated by Aspire Energy were the largest drivers of the $12.4 million increase in gross margin generated by the segment. The increased gross margin was partially offset by the warmer weather, lower results for Xeron, operating expenses from the addition of Aspire Energy and additional expenses as a result of the year’s strong performance. The key variances in terms of net income and earnings per share contribution between 2015 and 2014 are highlighted on Slide 7. This table is a summarized version of what is included in our filings and provided in the appendix. For 2015, as mentioned previously, earnings per share increased $0.25, or 10.1%, to $2.72 per share. Gross margin increased $0.95 per share, higher operating expenses largely to support growth offset the gross margin increase by $0.48 per share. Unusual items resulted in a $0.13 decrease in earnings per share for 2015, the largest component of which was the warmer weather in 2015, compared to 2014. While approximating normal weather, 2015 was significantly warmer than 2014, which impacted results year-over-year by $0.18 per share. In our regulated energy segment, an increase in gross margin of $0.65 per share was generated from natural gas customer growth, service expansions in the natural gas transmission businesses, continued investment in the Florida GRIP to enhance infrastructure reliability and safety and the full-year impact of the 2014 electric rate case. In the unregulated energy segment, gross margin increased $0.30 per share largely due to higher retail propane margins, which added $0.37 per share partially offset by lower contribution from propane wholesale marketing and sales. The inclusion of nine months for Aspire Energy lowered Chesapeake’s earnings per share by $0.06, including the impact of issuing approximately 593,000 shares for the acquisition. Finally, interest and other changes reduced year-to-date net earnings per share by $0.03. Slide 8 shows our history of capital expenditures as a percentage of total capitalization. For 2015, we invested 28.3% of total capitalization, 20.7% of which came from organic growth capital investments and 7.6%, which related to the purchase of Aspire Energy. Since 2011, we have made capital investments of $545 million, including acquisitions, which equates to an average 21% of capital expenditures to total capitalization annually. In terms of the dollars invested during 2015, we invested $142.7 million in our existing businesses, including $98 million in our regulated energy segment. Adding in the Gatherco acquisition that was completed in 2015 for $52.5 million, this increases our total capital expenditures for the year to a record of $195.2 million. The execution of our strategic plan continues to generate significant opportunities for profitable capital investment. The current capital budget for 2016 projects investments of $179 million to support and grow our existing businesses. We are pursuing several other projects, which could further increase our level of capital spending. Of the total capital budget for 2016, approximately $30 million represents capital expenditures that are in early project development stage. We are excited about these investments, but recognize that the review and approval process by the regulatory bodies may take longer then we experienced in our previous applications. Slide 10 highlights the company’s commitment to maintaining a strong balance sheet, which should facilitate access to competitively priced capital to fund our growth initiatives. Our equity to permanent capitalization and equity to total capitalization, including short-term borrowings, was 70.6%, and 51.9%, respectively, as of December 31, 2015. We target to maintain a ratio of equity to total capitalization, including short-term borrowings of 50% to 60%. As of December 31, 2015, our short-term debt, including the current portion of long-term debt, was $183 million, which also includes $35 million borrowed under our $150 million revolving credit agreement. Available for five years, we can utilize this facility to bridge financing to long-term debt. Given the level of capital expenditures in 2015 along with the 2016 capital budget, we anticipate securing longer-term permanent capital to maintain our targeted equity to total capitalization ratio and will seek to align such financing with the earnings generated from the larger projects. In this regard, on Slide 10, we have highlighted one possible means of securing new long-term debt capital, a Shelf Facility with executed with Prudential Investment Management in late 2015 also for $150 million. In May of 2015, the Board of Directors increased our annualized dividend by $0.07, or 6.5%, to result in an annualized dividend of $1.15 per share as shown on slide 11. We are firmly committed to dividend growth supported by earnings growth. Chesapeake Utilities has paid a dividend continuously for 55 years. Our Board of Directors will be revisiting the dividend level again in May 2016. Given broad market uncertainty and investors current expectations for income and security, we understand the desire for reliable dividends. We expect a significant growth potential in our businesses to continue to provide potential for superior dividend growth in the future, just as it has in the past. Before I dig into the details regarding the gross margin growth we achieved in 2015 as well as our estimates for future margin growth, I would like to spend just a few moments highlighting the overall key financial accomplishments for the year. We have highlighted many of these accomplishments on Slide 12. First, as we mentioned earlier, we increased earnings per share by 10.1%, achieving record earnings for the ninth consecutive year. Our capital expenditures, including the Gatherco acquisition, were $195.2 million, the largest level of annual capital expenditures in our history. This level of investment fostered growth in our overall asset base, which surpassed $1 billion for the first time in 2015. Achieving record earnings enabled us to generate a solid return on equity of 12.1%. We are proud of the growth in our businesses and the returns we have generated for shareholders, which Mike will elaborate on later including a 16.7% total shareholder return for 2015 that included a 6.5% dividend increase. Finally, at year-end, our market capitalization had grown to approximately $867 million. As recently as yesterday, this had escalated further as we closed at a market capitalization of approximately $975 million. Slide 13 shows a snapshot of the consolidated gross margin impact of major projects and initiatives completed since 2014, as well as major projects and initiatives announced and underway. As you can see, these projects and initiatives add a gross margin of $18.2 million in 2015 and are expected to add incremental gross margins of $19.1 million in 2016 and $10.3 million in 2017. We have included a slide in the appendix that provides the detail for the completed projects and their margin contribution for 2014, to 2017. We have a number of other projects and initiatives in place to expand margins in 2017 and beyond and as their timing related to in service is solidify, we will update our projections accordingly. Slide 14 provides detail on projects and initiatives underway as referenced on the previous slide. These investments will be completed over the next year and are expected to produce gross margin of approximately $7.2 million, in 2016 and $18.2 million, in 2017. As our results over the past nine years demonstrate, our team is relentless in identifying and pursuing opportunities to enhance our growth and further increase our gross margin. As always, thank you for your support and interest in our growing company. These continue to be very exciting times for Chesapeake Utilities, as exemplified through our strong financial results. Now I will turn the call over to Mike, who will expand on our strategic growth initiatives, long-term performance results and commitment to continued growth for shareholders. Mike McMasters Thanks, Beth. Good morning everyone. Slide 15 illustrates how we approach achieving sustainable growth. Chesapeake Utilities’ success story starts with engaged, dedicated, and capable employees who are committed to expanding our infrastructure, to meet the energy needs of our customers and communities. Our employees continually seek opportunities to further engagement with the local communities. They construct and operate safe, reliable energy delivery systems whether they are pipelines, wires or trucks. Our employees do a remarkable job of identifying, developing, and transforming opportunities into profitable earnings growth. Finally, we employ a disciplined capital allocation process to produce superior returns to shareholders. Turning to Slide 16, our success in delivering returns is due to the hard work of our employees, our strategic planning process, and discipline in executing our strategic plan. Strategic planning is a continuous process for our company. We update our strategic plan every year and we ask our business unit leaders and our strategic business develop team, to take a new look at market conditions and the new opportunities are evolving in the market. Then we challenge our teams to identify ways to grow at rates faster than they could if they simply continue doing what they are doing today. This keeps our thinking fresh and our focus on generating sustainable long-term growth. Turning to Slide 17, the performance quadrant is one of the ways that we monitor the results of our strategic plan and its execution. We believe that one of the keys to our success is our ability to deploy significant amounts of capital with attractive returns on investment. Chesapeake continues to rank in the upper quartile of gas distribution, electric, and combination utility companies in terms of capital invested and return on capital over the past three years. Our ability to achieve higher than industry average returns, while investing higher levels of capital relative to our size is result of our ability to identify and develop profitable growth opportunities, maintain our disciplined capital investment decision-making process, execute on our growth opportunities and achieve our targeted financial results. Turning to Slide 18, the environmental and economic advantages of natural gas and propane provide opportunities for expanded use in our service territories and across the United States. Natural gas is abundant, clean, efficient, domestic and affordable. The abundance of clean natural gas in the United States continues to provide security of supply, energy reliability, and stable prices to Americans every day. As shown on Slide 18, natural gas and propane continue to have price stability, compared to oil and are expected to maintain this advantage for the foreseeable future. This price stability creates opportunities to satisfy new customer demand at affordable prices. And has helped to create opportunities that our team has developed to drive growth in margins, earnings, and ultimately dividends. Turning to Slide 19, one such opportunity is the White Oak expansion project to increase mainline capacity to serve Calpine’s new power plant in Dover, Delaware. Eastern Shore plans to invest between $32 million and $35 million, which could be used to build 7.2 miles of pipeline looping an additional compression facilities to provide natural gas to the power plant. The estimated annual gross margin resulting from this project, under the 20 year service agreement will be approximately $5.8 million. In 2016, we expect to generate approximately $5 million of incremental margin. As part of our ongoing commitment and efforts to provide reliable service to our customers, Eastern Shore has proposed a $32 million reliability project that is highlighted on Slide 20. The project includes the installation of one compressor and 10.1 miles of 16-inch pipeline looping. These facilities are necessary to provide optimal system reliability and design. FERC issued a scheduling notice to establish a deadline of April, 2016 for the environmental assessment and July 2016 for all other federal agency decisions. The project will be included in the Eastern Shore’s upcoming 2017 rate chase filing. Once the cost is included in our rates, the estimated annual margin associated with this project will be approximately $4.5 million. As a company, we are committed to offering our customers supply, diversification opportunities and access to the lowest cost of natural gas. One such example is highlighted on Slide 21. Eastern Shore is moving forward with making certain modifications to its interconnect with Texas Eastern transmission, TETCO, that will increase the availability of natural gas at the interconnect point by 53,000 dekatherms a day. FERC’s approval to move forward with these modifications was granted in December 2015. These modifications, which are scheduled to be completed and in service during March 2016, will allow customers to have access to additional TETCO supply and the opportunity to secure lower cost natural gas. This 53,000 dekatherms equates to $2.8 million, in incremental annual margin for Eastern Shore. Turning to Slide 22, safety is a top priority for our company. Our Florida GRIP pipeline replacement program is an example of one of our initiatives designed to increase service reliability and operation safety for the communities we serve. The GRIP program enables the company to accelerate the replacement of cast-iron and bare steel mains, and service lines. GRIP also authorizes a company to accelerate the recovery of pipeline replacement investments including a return on those investments, as well as the recovery of certain program related costs. Our GRIP investments totaled $32.8 million, in 2015, and are approaching $80 million, since the program’s inception. To date, we have replaced 162 miles of pipeline and over 4,300 service lines. The gross margin generated from these investments was $7.5 million at 2015 and is projected to be $11.4 million, in 2016. Turning to Slide 23, our Eight Flags Energy subsidiary is constructing a combined heat and power plant located in our electric and natural gas distribution territory on Amelia Island, Florida. The plant will produce approximately 20 megawatts of base load power to be sold to our electric distribution system on the island. Steam from the plant will be sold to Rayonier’s Advanced Materials paper mill. The combined heat and power plant and the related facilities will cost approximately $40 million to construct. Site construction is moving forward on schedule. In terms of timing, the project is expected to be online in the third quarter of 2016. In addition to generating approximately $7.3 million in incremental annual gross margin, the electric output from the plant is excited to generate savings for our electric customers of approximately $3 million to $4 million annually. As shown on slide 24, the Eight Flags project is an example of the diverse capabilities that we have to provide value-added service to our customers and the communities we serve. In this case, our financial pipeline company transports the natural gas to FPU’s natural gas distribution system. FPU in turn delivers that gas to the Eight Flags CHP plant. Eight Flags then generates the power for delivery to FPU’s electric distribution system and the steam for delivery to Rayonier Advanced Materials plans. When all of this is said and done, we save Rayonier Advanced Materials money, save our electric customers on the island money and returns on capital for investors. Slide 25 illustrates the aspired energy of Ohio business model, which operates over 2500 miles of pipelines pipeline in the areas in and around the Utica Shale, and Eastern and Central Ohio. We operate 16 gathering systems for conventional producers in the area. Over 80% of Aspire’s margin is derived from the sale of natural gas, to two local distribution companies that are connected to our gathering system and serve more than 20,000 end use customers. The addition of new producers to our system presents an opportunity for increased reliability for our local distribution customers and increased margins for the company. Finally, we also own rights-of-way that we expect will present additional opportunities for growth over the long-term. Over the last 10 months, since April 1, there has been a significant progress and success with integrating Aspire Energy into the Chesapeake family of companies. Our management team lead with focus and drive to strategically develop, Aspire Energy organization and align the business with the vision, strategies and cultural of our parent company. The team has maintained the momentum of operating the existing business and customer needs, while also focusing on the future growth of the business. Our Aspire Energy employees are actively engaged in developing a strategic growth plan and have already begun to successfully identify and develop new growth opportunities. As a result of our team’s efforts, Aspire energy generated $6.3 million in gross margins since April 1 and is expected to generate approximately $13 million in gross margin in 2016. We continue to be excited about the opportunities presented by the latest addition to the Chesapeake family and continue to expect the Aspire Energy to be accretive to earnings in the first full year of operations. Turning to Slide 26, in 2014, we found a rate increase for our electric operations in Florida which increased rates by approximately $3.7 million annually. As the rate case was approved last year, 2015’s results include a full-year impact of the new rates. On December 1, 2015, we found a rate increase application for $1 million, to increase our Sandpiper subsidiaries operating – returns in Worcester County, Maryland. The following was required as part of the Maryland PSC’s approval of the Sandpiper acquisition and regulatory plan. A decision on the application is expected during the second quarter of this year. We found a $4.7 million rate case in Delaware in December 21, 2015 included in our application, our new service offerings to promote growth and a revenue decoupling mechanism for residential and small commercial customers. The decision on the application is expected during the third quarter of 2016. Pending the decision, the Delaware division implemented an interim rate increase of $2.5 million, on February 19, 2016. Our last rate case in Delaware dates back to 2007. Finally, our Eastern Shore natural gas subsidiary will follow a rate case with the FERC new rates effective February 1, 2017. The filing is required as part of a settlement of our last rate case. Our application will be submitted by the end of 2016. As the chart on Slide 27 shows, Chesapeake provide a total shareholder return of 17%, for 2015. For each of the five periods shown, Chesapeake shareholders have earned more than 14% returns on a compound annual basis. In addition, before the five periods shown, the Chesapeake’s performance exceeded the 75th percentile of the peer group. Slide 28 shows our financial performance of the past one, three, and five years. I am proud to say that our employees have delivered top quartile performance in 18 of the 20 categories. Further, our 10 and 20 year compound annual total shareholder returns of 14.4% and 14% respectively, ranked first amongst our peers. In fact, when you compare our the shareholder returns to the broader market, you could evaluate our performance relative to this larger group. As Slide 29 shows, when you compare us to more than 2,200 companies listed on the New York Stock Exchange, our performance exceeds 84th percentile. Similarly, as shown on Slide 30, when we compare performance to the company’s comprising S&P 500, for all periods shown, our returns range from the 703rd, to the 81st percentile. We are very pleased with our strong performance after the broad market as measured by either of these two larger groups. In closing, our employees’ determination for excellence and consistently high performance, enables us to deliver clean, liable, low-cost energy solutions to our customers while achieving strong growth and earnings and return to shareholders equity, and therefore delivering superior shareholder value. We will now be happy to take questions. Question-and-Answer Session Operator Mike McMasters Well I just want to thank everyone for joining us on our call today and for your interest in Chesapeake Utilities. We’re proud of what our team has accomplished for shareholders in the past and remain committed to working hard to deliver superior shareholder returns in the future. Thank you. 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