Essential Utilities, Inc. · NYSE:WTRG
Essential Utilities — Q1 2022 Earnings Presentation
30 slides from Essential Utilities's earnings presentation, May 9, 2022
Slide 1: First Quarter 2022
C Essential. *- UTILITIES First Quarter 2022 May 9, 2022
Slide 2: Welcome
Welcome 4 Essential. umes Brian Dingerdissen Vice President, Chief of Staff, Investor Relations, and Communications 2
Slide 3: 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 4: mies
mies uti © = c a 7) nH uw
Slide 5: Chris Franklin
Company Update Chris Franklin Chairman, Chief Executive Officer, and President 4 Essential. umes 5
Slide 6: Earnings
5.6% Earnings Growth to $0.76 Essential Seven Pending Acquisitions © 6
Slide 7: World Water Day to Earth Day volunteer activity
From March 22, 2022 (World Water Day) through April 22, 2022 (Earth Day) Hosted 35 volunteer opportunities throughout all 10 states Nearly 500 volunteers served nearly 2,000 volunteer hours $580,000 in financial donations to 28 nonprofit organizations with environmental mandates Essential. ;
Slide 8: Financial Results
Financial Results % Essential. umes
Slide 9: Revenues and Operations and Maintenance Expense
In millions except per share Operations and Maintenance Expense a Essential. Q1 2021 25.1 Q1 2022 42.6 Revenues + Regulated water segment of $239.2M + Regulated natural gas segment of $445.2M, including gas costs of $217.3M O&M * Employee-related expenses were the main driver for the quarter * Custo
Slide 10: Operating Revenues Q1 2022 vs. Q1 2021
Operating Revenues Q1 2022 vs. Q1 2021 ange in $9,732 $8,658 $4,342 $277 $699,275 $95,559 — $2858) $5.8M related to Water and $3.9M related to Gas $583,565 Revenue Q1 2021' Purchased Gas Rates & Surcharges Volume - Gas Growth - Water Volume - Water Other Revenue Q1 2022 ° () Essential. 1 Includes $1
Slide 11: Q1 2022 Heating Degree Days
Q1 2022 Heating Degree Days Weather drives natural gas consumption and revenue is impacted by heating degree days. A heating degree day (HDD) is a measurement designed to quantify the demand for energy needed to heat a building. It is the number of degrees that a day's average temperature is below 6
Slide 12: Operations & Maintenance Expenses
Operations & Maintenance Expenses Q1 2022 vs. Q1 2021 Change in Operations & Maintenance Expense (thousands) $6,761 $2,358 $1,526 _ $1343 a $142,581 $8,448 P| ($2,930) $125,075 m7 O&M Q1 2021 Employee-Related Customer Assistance Other Production Costs- | Growth - Water Bad Debt O&M Q1 2022 Costs Pro
Slide 13: Earnings per Common Share
Earnings per Common Share Q1 2022 vs. Q1 2021 ange in Earnings Per Share $0.012 $0.008 $0.026 $0.023 es ——_ Eee [| ($0.030) EPS Q1 2021 (GAAP) Rates & Surcharges Volume - Gas Other Growth - Water Expenses EPS Q1 2022 (GAAP) (@ Essential. 8 uTLTIes
Slide 14: Earnings Weighted to 1Q, 4Q
Earnings Weighted to 1Q, 4Q Approximate Net Income By Quarter 1Q 2Q 3Q 4Q (@ Essential. 10% 10% Based on company projections, 65-75% of net income is expected to be earned in 1Q and 4Q 14
Slide 15: 2022 Completed Pending Rate Cases and Surcharges
2022 Completed Pending Rate Cases Rate Cases and and Surcharges Surcharges Gas segment base rate case No pending gas segment in KY with annualized base rate cases or revenue increase of $5.2 surcharges million Essential. s uTLTIes
Slide 16: Acquisition Update and 2022 Guidance
Acquisition Update and 2022 Guidance Chris Franklin Chairman, Chief Executive Officer, and President ( Essential. awe uTimies
Slide 17: • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • • • • •
Slide 18: Active Municipal Opportunities
Active Municipal Opportunities Size Range We are actively pursuing acquisition (Approx. # of opportunities in most of our states, Customers) totaling approximately415,000 customers. While we do not expect to close all of these opportunities, this illustrates the number of municipals we are evaluatin
Slide 19: Earnings Capex, Rate Base and Customer Growth
Earnings Capex * Regulated infrastructure investments of approximately $1 billion annually through 2024, weighted towards the regulated water segment Essential. Representsrate base growth excluding acquis uTLTIes Rate Base “) Customer Growth ESG + Average annual regulated water customer (or equivale
Slide 20: Essential Utilities
% Essential. SS 20 UTILITIES:
Slide 21: Thank You for Attending
Thank You for Attending Essential’s First Quarter 2022 Conference Call » Second Quarter 2022 Earnings on ~e Conference Call and Webcast “I M Thursday, August 4, 2022 21
Slide 22: For more information contact
For more information contact: 4 , Brian Renee Dingerdissen Marquis Vice President, Chief of Staff, Director, Investor Relations Investor Relations and Communications (610)645-1191 \ ae (610)645-1021 BJDingerdissen@Essential.co A’ {Wa RTMarquis@Essential.co essential _ UTILITIES:
Slide 23: Essential Utilities
Essential. umluTes
Slide 24: 2022 Rates and Surcharges Completed
2022 Rates and Surcharges Completed As of 05/08/2022 Requested Annualized Docket Number Segment Revenue Increase ($thousands) Ohio Water Rate Case $1,378 Pennsylvania M-2021-3030074 Water Surcharge $4,016 M-2021-3030128 Wastewater Surcharge $349 M-2022-3031515 Wastewater Surcharge $21 North Carolina
Slide 25: Rates and Surcharges Pending
Rates and Surcharges Pending As of 05/08/2022 Docket Number Segment Ohio 21-0595-WW-AIR Water 21-0596-ST-AIR Wastewater Pennsylvania R-2021-3027385, Water R-2021-3027386 Wastewater (@ Essential. umiumies Requested Annualized Revenue Increase ($thousands) Rate Case $8,290 Rate Case $454 Rate Case $86
Slide 26: Rate Base and Customer Connections by State
Rate Base Water Wastewater Total Rate Base Gas ($000s) Connections Connections Customers ($000s) Connections PA $3,936,496 447,726 45,572 493,298 PA $2,540,494 699,949 IL $437,697 66,670 23,578 90,248 KY $133,246 40,378 OH $430,046 151,221 6,950 158,171 wv $31,069 12,917 TX $420,570 71,029 20,632 91
Slide 27: Maximizing Rate Base Growth Potential
Maximizing Rate Base Growth Potential Water Gas ($ in Billions) ($ in Billions) —$01- 2021A 2022E 2023E 2024E 2021A 2022E 2023E 2024E Organic HE Acquisitions ¢ Essential. +A" denotes Actual » umiumies “E" denotes Estimate
Slide 28: Balance Sheet: Credit Ratings and Metrics
g Balance Sheet: C S&P Global ) Select Credit Metrics S&P Global — Moopy S (2021A - 2024E) Ratings Issuer Issuance Issuer —_ Issuance ae {@ Essential. A A Baa2 Baa2 50-55% AQU A. A A+ - - FFO/Net Debt A 12-14% @ PEOPLES A A Baa1 Baat Peer Issuer Ratings( Peer Issuer Ratings In order to maintain our
Slide 29: Earnings Guidance
Earnings Guidance 2021 - 2024 Earnings Per Share 2022 annual earnings per share guidance of $1.75 to $1.80 $1.75 - $1.80 $1.67 2021A 2022E 2023E 2024E ‘A" denotes Actual ¢ Essential. t* denotes Estimate 39 uTLTIes
Slide 30: Dividends Per Share (Annualized)
Dividends Per Share (Annualized) 2016 2017 2018 2019 2020 2021 Essential RK lo $1.0728 $1.0028 $0.9372 $0.8760 $0.8188 - . J 30