Essential Utilities, Inc. · NYSE:WTRG
Essential Utilities — Aqua America — Q1 2018 Earnings Presentation
26 slides from Essential Utilities's earnings presentation, May 9, 2018
Slide 1: Earnings Call First Quarter 2018
Earnings Call AQUA. a NYSE: WTR fea e First Quarter 2018 May 9, 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 e Christopher Franklin Chairman & Chief Executive Officer Dan Schuller Executive Vice President, Strategy and Corp. Zz Development & Deputy CFO Dave Smeltzer Executive Vice President, Chief Financial Officer Brian Dingerdissen Vice President, Chief of Staff & Investor Relations NY
Slide 4: Introduction
Introduction Christopher Franklin Chairman, Chief Executive Officer and President AQUA. ee NYSE: WTR
Slide 5: Today's Agenda
Today’s Agenda <<< < NYSE: WTR
Slide 6: Dave Smeltzer Retirement
Dave Smeltzer Retirement » 32-year career with Aqua = CFO for 19 years » Played a key role in over 300 acquisitions " Helped to pioneer regulatory mechanisms such as DSIC » Named 2009 CFO of the Year by Philadelphia Business Journal NYSE: WTR AQUA
Slide 7: Executive Team Update
Executive Team Update NYSE: WTR Dan Schuller = Appointed CFO, serving as deputy CFO until Dave Smeltzer retirement in October = Previously was EVP, Strategy and Corporate Development since 2015 = Spent 8 years with J.P. Morgan Asset Management - Infrastructure Investments Group Matthew Rhodes = Name
Slide 8: 2018 First Quarter Highlights
2018 First Quarter Highlights Acquisitions $194,347 ¢ Three water and wastewater $187,787 system acquisitions closed in Q1 including one in PA and two in Ohio Q12017 Q1 2018 EPS Growth Customer Growth a $0.29 e Added 2,259 new customers ~* * 2-3% customer growth expected for the year Q1 2017 Q12018
Slide 9: Summary of Financial Results
Summary of Financial Results Dave Smeltzer Dan Schuller Executive Vice President, Strategy and Executive Vice President and CFO Corporate Development and Deputy CFO AQUA. a NYSE: WTR
Slide 10: Favorable Change / Unfavorable Change
Favorable Change Unfavorable Change
Slide 11: Operating Revenues
Operating Revenues Q1 2018 vs. Q1 2017 $196,000 $194,000 $192,000 $190,000 $188,000 $186,000 $184,000 $182,000 $180,000 Change in Operating Revenues (Sthousands) ($641) $315 $1,634 $194,347 oo X ™ $2,687 | $187,787 L Revenue Q1 Consumption Rates & Regulated Other Market-Based Revenue Q1 2017 Surchar
Slide 12: Operations & Maintenance Expenses
Operations & Maintenance Expenses Q1 2018 vs. Q1 2017 $80,000 $75,000 $70,000 $65,000 $60,000 $55,000 $50,000 Changes in Operations & Maintenance Expenses (Sthousands) $1,662 ($1,117) $2,055 ee — ($1,746) $73,946 7 = O&M Q1 2017 = Employee Related Other Maintenance & ProductionCosts Market-Based O&M
Slide 13: Earnings per Common Share
Earnings per Common Share Q1 2018 vs. Q1 2017 Changes In Earnings Per Share $0.34 so.006 90.006 (59.028) : | $0.32 $0.01 =m $0.012 || ($0.016) $0.30 $0.019 [] $0.29 $0.28 $0.28 $0.26 $0.24 $0.22 $0.20 Netincome Ratecases Other Consumption Regulated Market-Based NetExpense Tax Repair Net income Q1201
Slide 14: Rate Activity
Rate Activity 2018 Completed Rate Cases and Surcharges ¢ Base rate cases or surcharges completed in IL, IN NJ, NC, OH, PA, and TX ¢ $23.6 million in additional annualized revenue 2018 Pending Rate Cases and Surcharges ¢ Base rate cases or surcharges in IN, NC, OH, and VA with requested annualized re
Slide 15: Signed Municipal Acquisitions
We have six municipal acquisitions that are signed and slated to close in 2018. Approx. Number of Acquisition1 Type Approx. Purchase Price ($000s) Customers System A WW 5,400 $75,100 System B WW 2,100 $29,500 System D W 600 $3,600 System E W / WW 2,987 $12,300 System F WW 3,838 $25,200 System G WW 1
Slide 16: 2018 Guidance
2018 Guidance Christopher Franklin Chairman, Chief Executive Officer and President AQUA. ee NYSE: WTR
Slide 17: 2018 Guidance
2018 Guidance Customer Growth NYSE: WTR
Slide 18: Q&A Session
Q&A Session AQUA.
Slide 19: Thank You for Attending Aqua America's First Quarter 2018 Earnings Call
Thank You for Attending Aqua America’s First Quarter 2018 Earnings Call
Slide 20: Appendix
Appendix AQUA.
Slide 21: 2018 Acquisitions
2018 Acquisitions As of May 8, 2018 Total Collective Acquisitions Total Purchase Price State Closed Customers (Sthousands) OH 2 367 $185.6 Total 3 448 $190.1 31% of Acquired Customers from Wastewater Systems 0.2% Total Customer Growth NYSE: WTR AQUA
Slide 22: Rates and Infrastructure Surcharges Completed
Rates and Infrastructure Surcharges Completed as-of May 7, 2018 Rates or Surcharges Received in 2018 Rates and Surcharges differentiated by water (w) and wastewater (ww) systems *IL Rate Case was petitioned for rehearing on 4/6/18 and denied on 4/19/18, however the other parties have 30 days to file
Slide 23: Rates and Surcharges Pending
Rates and Surcharges Pending as-of May 7, 2018 Rates Pending in 2018 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 Tax Reform. NYSE: WTR
Slide 24: State by State Comparison
State by State Comparison as of December 31, 2017 Rate Base Water Wastewater (Smillions) Connections Connections NYSE: WTR
Slide 25: Dividend History
Dividend History 7.0% Increase to Annualized Dividend Rate of $0.8188 Effective 9/1/2017 $0.85 $0.80 $0.75 $0.70 4 $0.65 $0.60 4 $0.55 $0.50 $0.45 $0.40 Dividend per Share (annualized) -o7 ae 0.8188 als 4 on . 0.7652 cpec- . -7 07120 - - - - - o 0.6600 - 4 - - - 0.6080 - 0.5600 / 2012 2013 2014 2015
Slide 26: Infrastructure Investment
Infrastructure Investment Regulated Operations NYSE: WTR Capital Investment Breakdown 2018 - 2020 Vehicles 2%_ Other 1% Meters 3% Tanks & Boosters 4% Mains & Services 56% 3 YEAR TOTAL= $1.4 billion AQUA