Slide 1: Earnings Call Second Quarter 2018
Earnings Call Second Quarter 2018 August 2, 2018
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation contains in addition to historical information, forward looking statements based on assumptions made by management regarding future circumstances over which the company may have little or no control, that involve risks, uncertainties and other factors that
Slide 3: Today's Presenters
Today’s Presenters 000 Chris Franklin Dave Smeltzer Dan Schuller Chairman, CEO and Executive Vice President Executive Vice President, Deputy President & Chief Financial Officer CFO Matthew Rhodes Brian Dingerdissen Executive Vice President, Vice President, Chief of Staff Strategy & Corp. Development
Slide 4: Introduction
NYSE: WTR Introduction Christopher Franklin Chairman, Chief Executive Officer and President
Slide 5: Agenda
Mi Agenda AQUA Corporate Highlights Summary of Financial Results PA Rate Case Update Acquisition Update 2018 Guidance Questions NYSE: WTR 6
Slide 6: Acquisitions, Revenue Growth, Infrastructure Investment, EPS Growth
Acquisitions Revenue Growth • • Infrastructure Investment EPS Growth • •
Slide 7: Dividend Increase
Dividend Increase 7.0% Increase to Annualized Dividend Rate Effective 9/1/2018 AQUA $0.90 $0.85 $0.80 $0.75 $0.70 $0.65 $0.60 $0.55 $0.50 $0.45 $0.40 Dividend per Share (annualized) A Stock Split a 7 0.8760 - - - OJ cel of Pan 0.6188 cP - - 7 0.7652 - - - -7 0.7120 - - - ~-7 0.6600 asowo 2013 2014 2
Slide 8: Financial Results
de raty of ao Financial Results). Dave Smeltzer Dan Schuller Executive Vice President, CFO ~ : Executive Vice President, Deputy CFO
Slide 9: 2018 Second Quarter Highlights
2018 Second Quarter Highlights In millions Q22018 Q22017_—- Variance except per share Revenue $211.9 A [$2034 4.2% F. h HB Favorable Change Operations and BH Unfavorable Change Maintenance $73.5 A | $696 5.6% Expense Net Income $66.6 A $61.0 9.2% Net Income per Share $0.37 A | $0.34 8.8% AQU A NYSE:
Slide 10: Year to Date Highlights
Year to Date Highlights As of June 30, 2018 In millions except per share YTD 2018 YTD 2017 Variance Revenue $406.2 $391.2 3.8% Fi h HB Favorable Change Operations and HB Unfavorable Change Maintenance $147.5 $137.5 7.2% Expense Net Income $117.4 $110.0 6.7% Net Income $0.66 $0.62 6.5% per Share . :
Slide 11: Operating Revenues
Operating Revenues Q2 2018 vs. Q2 2017 Change in Operating Revenues (thousands) $215,000 $6,175 $1,262 $1,083 ($78) $211,860 $210,000 Le! $205,000 $203,418 [ $200,000 $195,000 $190,000 $185,000 $180,000 $175,000 $170,000 Revenue Q2 2017 Rates & Regulated Growth Other Consumption Revenue Q2 2018 Surc
Slide 12: Operations & Maintenance Expenses
Operations & Maintenance Expenses Q2 2018 vs. Q2 2017 Change in Operations & Maintenance Expenses (thousands) $75,000 $2,084 $207 $57 $73,515 | $70,000 $69,615 rd $65,000 $60,000 $55,000 $50,000 O&M Q2 2017 Employee Related Other Production Costs Regulated O&M Q2 2018 Costs Acquisitions AQUA NYSE: W
Slide 13: Earnings per Common Share
Earnings per Common Share Q2 2018 vs. Q2 2017 Change in Earnings Per Share $0.42 $0.40 $0.017 $0.005 ($0.005) (9.015) $0.38 a | | $0.36 $0.34 $0.34 $0.32 $0.30 $0.28 $0.26 $0.24 $0.22 EPS Q2 2017 Rate cases Income tax matters Regulated growth Other Net expense EPS Q2 2018 (including increase surchar
Slide 14: Completed Rate Cases and Surcharges
2018 • Completed Rate Cases and Surcharges • 2018 Pending Rate • Cases and Surcharges
Slide 15: PA Rate Case Summary
PA Rate Case Summary June 2012: January 2013: Rates went into effect DSIC Reduced to 0% @ November 2011: October 2012: Aqua PA filed its Implemented 2011 Rate Case Repair Deduction 2013 - 2016 AQUA October 2017: Re-implemented DSIC August 2018: Projected to file Rate Case 2019: Rates projected to be
Slide 16: PA Rate Case Summary
PA Rate Case Summary Timeframe: * File: Summer 2018 * Complete: Spring 2019 Case Summary/Issues: ¢ First case filed in 7 years * Consolidated Water & WW ° First filing using Fully Projected Future Test Year * Tax Act and Tax Repair AQUA Over $2 billion of capital Over 20 Acquisitions ($000’s) 2012 $
Slide 17: Acquisitions
NYSE: WTR Acquisitions Matt Rhodes Executive Vice President, Strategy & Corporate Development
Slide 18: Closed acquisitions listed in chronological order
Listed in chronological order of closing. Limerick was previously referred to as “System A” and Manteno as “System F”.
Slide 19: Pending acquisitions listed in chronological order of signing
Listed in chronological order of signing. New Garden was previously referred to as “System B” and East Bradford as “System G”. Tobyhanna known as “System C” closed in 2017.
Slide 20: Water & Wastewater Regulatory Trends
Water & Wastewater Regulatory Trends 4/30/13 TANS 7. IN Forward 13. IN DSIC Increase to 10% Test Year e 2/14/12 6/6/13 7/10/18 1. PA WW DSIC 8.NC W&WW 3/22/16 2. Forward Test Year DSIC 14. IN Expands FMV 3. WW Consolidation 2/5/15 11. NJ Fair 6/13/16 Market 15. PA Fair Value Market Value 6/29/16 7/2
Slide 21: Guidance
bs Guidance Aqua America
Slide 22: 2018 Guidance
2018 Guidance Rate Activity Customer Growth
Slide 23: Q&A Session
O&A Session Aqua America
Slide 24: Thank You for Attending Aqua America's Second Quarter 2018 Conference Call
Thank You for Attending Aqua America’s Second Quarter 2018 Conference Call Third Quarter 2018 Earnings Conference Call and Webcast Tuesday, November 6, 2018 For more information contact: Brian Dingerdissen Vice President, Chief of Staff and Investor Relations 610.645.1191 BJDingerdissen@AquaAmerica.
Slide 25: Aqua America
NYSE: WTR . ; _ Aqua America » , > r Abe.
Slide 26: 2018 Closed Acquisitions
2018 Closed Acquisitions As of August 1, 2018 Acquisition State Transaction Type umber of aa ee Sun Valley PA Private Ww 81 $5 Firestone Trace OH Private Ww 229 $124 Firestone Trace OH Private ww 138 $61 Limerick PA Municipal Www 5,434 $75,100 Manteno IL Municipal Www 3,838 $25,000 9,720 $100,290 AQ
Slide 27: Rates and Surcharges Completed
Rates and Surcharges Completed As of August 1, 2018 Awarded Annualized Revenue Increase (Sthousands) Docket Number Illinois 17-0259 Rate Case (w) $6,549 17-0259 Rate Case (ww) $758 Indiana 50137, 50144, 50143, 50141 Tax Compliance Filing ($788) New Jersey WR16010090 Surcharge (w) (S39) WR18030237 Ta
Slide 28: Rates and Surcharges Pending
Rates and Surcharges Pending As of August 1, 2018 Awarded Annualized Revenue Docket Number Increase (Sthousands) Rates and Surcharges differentiated by water (w) and wastewater (ww) systems *VA Interim Rates were reduced for water, and eliminated for wastewater in response to the Tax Cuts and Jobs A
Slide 29: Operating Revenues YTD
Operating Revenues YTD June 30, 2018 vs. YTD June 30, 2017 Change in Operating Revenues (thousands) $2,896 $2,609 $757 $406,207 $420,000 $400,000 $391,205 | $380,000 $360,000 $340,000 $320,000 $300,000 Revenue YTD 2017 Rates & Surcharges Regulated Growth Consumption Other Revenue YTD 2018 AQUA NYSE:
Slide 30: Operations & Maintenance Expenses YTD
Operations & Maintenance Expenses YTD June 30, 2018 vs. YTD June 30, 2017 Change in Operations & Maintenance Expenses (thousands) $170,000 $147,461 $150,000 $6,095 $4,629 $142 , $137,505 ($910) " a Pe $130,000 $110,000 $90,000 $70,000 $50,000 O&M YTD 2017 Production Costs Employee Related Other Regu
Slide 31: Earnings per Common Share YTD
Earnings per Common Share YTD June 30, 2018 vs. YTD June 30, 2017 Change in Earnings Per Share $0.82 $0.010 0.013) ($0.043) $072 $0.026 $0.011 ($ ) $0.050 —x — — $0.66 $0.62 — || $0.62 7 $0.52 $0.42 $0.32 $0.22 EPS YTD 2017 Rate cases Income tax Regulated Consumption Other Net expense EPS YTD 2018 (
Slide 32: State by State Rate Base Comparison
Sta te by Rate Base Water Wastewater State (Smillions) Connections | Connections Com a rison PA $2,831 437,985 21,306 Pp OH 287 145,000 6,719 As of December 31, 2017 IL 276 63,699 9,821 TX 241 63,046 16,869 NJ 172 53,115 6,125 NC 165 79,906 18,293 IN 74 1,169 26,371 VA 77 25,676 7,749 Total $4,123 8
Slide 33: Infrastructure Capital Investment Breakdown 2018 - 2020
| nfra st ru ctu re Capital Investment Breakdown 2018 - 2020 Investment othe Meter 1% ~ Regulated Operations Vehicles 2% Tanks & Boosters 4% Mains & Services Source Treatment & 56% Facilities 28% 3 Year Total = $1.4 billion AQU A. NYSE: WTR 4