Essential Utilities, Inc. · NYSE:WTRG
Essential Utilities — Q3 2024 Earnings Presentation
31 slides from Essential Utilities's earnings presentation, Nov 5, 2024
Slide 1: Third Quarter 2024
NYSE LISTED Third Quarter 2024 WTRG November 5, 2024 February 2024
Slide 2: Brian Dingerdissen, Investor Relations and Treasury
Brian Dingerdissen Vice President, Investor Relations and Treasury 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: Christopher Franklin, Chairman and CEO
Christopher Franklin Chairman and Chief Executive Officer 4
Slide 5: Highlights
Highlights $0.25 Earnings Infrastructure $93M Peoples per Share Investment of Natural Gas Rate $932.5M Case Approved Year to Date Aqua PA Rate 5-7% Multi-Year Hurricane Helene Case Update EPS Guidance Aqua North Carolina Through 2027 Delivers Excludes DELCORA Earnings 5
Slide 6: Delivered and Projected EPS Growth
Delivered and Projected EPS Growth 8% EPS Growth 5-7% 7% 6% 5% 4% 3% 2% 1% 0% 2022A 2023A 2024F 2025P 2026P 2027P 6 For 2024, the bar reflects the forecasted adjusted EPS, normalizing out the impacts of the energy project sale and the warmer-than-normal weather.
Slide 7: Hurricane Helene Response
90 of Aqua North Carolina’s systems were impacted, but Inspected 2,000+ 5 days after the linear feet of water storm, all but 6 main systems were back in service Hurricane Helene Response Aqua North Carolina coordinated with federal, state and community partners to assist in response efforts 7
Slide 8: Daniel Schuller, EVP, Chief Financial Officer
Daniel Schuller EVP, Chief Financial Officer 8
Slide 9: Q3 Financial Highlights
Q3 Financial Highlights Revenues As of September 30, 2024 • Rates and surcharges, increased water ($ in millions, except per share data) sales, an increase in the price of gas, and Q3 2023 Q3 2024 water customer growth contributed to the increase in quarterly revenues, despite the Operating Revenues
Slide 10: Operating Revenues
Operating Revenues Q3 2024 vs. Q3 2023 Change in Operating Revenues (millions) 10
Slide 11: Operations & Maintenance Expenses
Operations & Maintenance Expenses Q3 2024 vs. Q3 2023 Change in Operations & Maintenance Expense (millions) 11
Slide 12: Earnings per Common Share
Earnings per Common Share Q3 2024 vs. Q3 2023 Change in Earnings Per Share 12
Slide 13: 2024 Guidance
2024 Guidance 2024 Net Income per $1.3 to $1.4B Diluted Common Infrastructure Share Target of Investment for 2024 $1.96-$2.00 . 1) As published during YE 2023 Earnings Call in February 2024, we anticipate exceeding this 2024 guidance as a result of the gain on sale of the energy plant assets, despit
Slide 14: Peoples Natural Gas Rate Case
PA PUC Approved Case Details Filed: Revenue: Rates Effective: 12/29/2023 $93.0M, or 60% of September 27, 2024 original increase request One of the non-signatory parties to the settlement agreement has appealed the PUC’s (5-0 approval) order to the commonwealth court and has asked for a remand to the
Slide 15: Aqua Pennsylvania Rate Case
Case Details Filed: Requested Revenue: Requested Equity: 5/23/2024 $797.7M 53.95% Rates Effective: Requested Increase: Requested ROE: February 10, 2025 $126.7M, or 18.9% 10.95% Aqua A settlement has been reached for the case, pending approval by the Administrative Law Judges and the Pennsylvania Pub
Slide 16: Regulatory Activity
Regulatory Activity As of November 5, 2024 2024 COMPLETED PENDING REGULATORY REGULATORY RECOVERIES RECOVERIES Water segment base rate cases or Water segment base rate cases or surcharges in IL, NJ, OH, NC, TX, VA surcharges in IL, OH, and PA with and PA with annualized revenue requested annualized r
Slide 17: Christopher Franklin, Chairman and CEO
Christopher Franklin Chairman and Chief Executive Officer 17
Slide 18: Pending Transactions
Pending Transactions ~$362.3M of Pending Rate Base is Expected to Generate ~$18M of Over 213,000 (2) Incremental Annual Earnings Potential(1) Total Customers PA PA PA PA ~$362.3M Total Purchase Price DELCORA BEAVER FALLS GREENVILLE GREENVILLE • Wastewater • Wastewater • Wastewater • Water • 198,000
Slide 19: Guidance Outlook
Guidance Outlook1 2025 net income Regulated utility $X.XX to $1.4 to $1.5B Between 2024 Through 2027, 2025-2029 per diluted rate base growth $X.XXB infrastructure and 2025 we EPS will grow at Infrastructure Growth Targets common share target of a CAGR of of 8% through 2029 investment infrastructure
Slide 20: Questions
m) c 2) r~] rm ® =) Oo 20 Wessentia
Slide 21: For More Information Contact
For More Information Contact: Brian Dingerdissen Hayley Diminick Vice President, Director, Investor Relations and Treasury Investor Relations (610) 645-1191 (610) 645-1196 BJDingerdissen@Essential.co HMDiminick@Essential.co 21
Slide 22: Appendix
Wessentia. 22
Slide 23: Year to Date Financial Highlights
Year to Date Revenues Financial Highlights • Operating revenues for gas decreased due to a decrease in purchased gas costs, and As of September 30, 2024 lower gas usage from warmer than normal weather, which were offset from an increase in higher rates and surcharges. On the ($ in millions, except p
Slide 24: Operating Revenues
Operating Revenues YTD September 30, 2024 vs. September 30, 2023 Change in Operating Revenues (millions) 24
Slide 25: Operations & Maintenance Expenses
Operations & Maintenance Expenses YTD September 30, 2024 vs. YTD September 30, 2023 Change in Operations & Maintenance Expense (millions) 25
Slide 26: Earnings per Common Share
Earnings per Common Share YTD September 30, 2024 vs. YTD September 30, 2023 Change in Earnings Per Share 26
Slide 27: Regulatory Activity Completed
Annualized State Docket Number Segment Type Revenue Increase ($thousands) 24-0188 Water Surcharge $1,497 24-0188 Wastewater Surcharge $567 Illinois 24-0188 Water Surcharge $1,823 2024 24-0188 Wastewater Surcharge $693 N/A Water Rate Case $10 Regulatory Ohio N/A Water Rate Case $1,627 Activity N/A Wa
Slide 28: Regulatory Activity Completed (cont.)
Annualized State Docket Number Segment Type Revenue Increase ($thousands) 2023-00343 Gas Surcharge $1,220 Kentucky 2024-00078 Gas Surcharge $(50) New Jersey WR24010057 Water Rate Case $2,250 2024 M-2023-3039145 Gas Surcharge $20,887 Regulatory M-2024-3047760 Gas Surcharge $(256) R-2023-3044549 Gas R
Slide 29: Regulatory Activity Pending
Requested Annualized Docket State Segment Type Revenue Filed Date Number Increase ($thousands) Illinois 24-0044 Water Rate Case $10,741 1/2/2024 Regulatory Illinois 24-0044 Wastewater Rate Case $8,455 1/2/2024 Activity Ohio 24-910-WW-SIC Water Surcharge $3,237 9/23/2024 Pending Ohio 24-911-ST-SIC Wa
Slide 30: State by State Comparison of Services
Rate Base Water Wastewater Total State ($000s) Connections Connections Customers PA $4,401,939 456,018 62,161 518,179 IL $529,015 69,722 24,408 94,130 OH $520,738 152,788 11,306 164,094 TX $558,134 74,088 23,454 97,542 NC $363,285 86,504 22,869 109,373 State by State NJ $259,339 55,775 6,779 62,554
Slide 31: Healthy Balance Sheet Supports Equity Requirements
Healthy Balance Sheet Supports Equity Requirements INVESTMENT GRADE SELECT CREDIT LONG-TERM CREDIT RATINGS TARGETS EQUITY NEEDS DEBT-TO-CAPITAL RATIO 50-55% $350M Baa2 Baa2 between 2024 and 2025 Issuer Issuance DIVIDEND PAYOUT RATIO 60-65% FFO/NET DEBT RATIO A- BBB+ 12-14% Issuer Issuance 31