Rgc Resources Inc. · NASDAQ:RGCO

Rgc Resources — Investor Presentation (September 2024)

39 slides from Rgc Resources's investor presentation, Sep 16, 2024

1. Slide 1: Investor Update

   Investor Update September 16, 2024 Roanoke, Virginia

2. Slide 2: Forward-Looking Statements

   Forward-Looking Statements The statements in this presentation by RGC Resources, Inc. (the "Company") that are not historical facts constitute “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and uncert

3. Slide 3: Safety Moment

   Safety Moment  Meter should be visible  Use a broom to gently clear snow  Don’t shovel snow onto meter  If your meter is completely encased in ice, or if you think there is a potential problem with the piping or equipment, call Roanoke Gas 2

4. Slide 4: Agenda

   Agenda  Operational and Financial Highlights  RGC Midstream  Roanoke Gas  Outlook  Questions 3

5. Slide 5: RGC Midstream

   GC Midstream

6. Slide 6: Mountain Valley Pipeline

   Mountain Valley Pipeline  In service June 14  Two Roanoke Gas interconnects on-line  System stability  Capacity improves region’s attractiveness for existing and new employers 5

7. Slide 7: Lafayette Gate

   Lafayette Gate ' vA : en come . : sta el a ee oe en oe & r

8. Slide 8: Franklin County

   Franklin County  Summit View Business Park  Stik-Pak  Near Residential  Rocky Mount 7

9. Slide 9: Summit View Gate

   Summit View Gate 8

10. Slide 10: Rocky Mount

    Rocky Mount 9

11. Slide 11: MVP by the Numbers

    MVP by the Numbers 2015 TODAY Cash Cost $3.5B ≈ $8.0B Completion / December 2018 June 2024 In Service Investment $ / $35M / 1% ≈ $58M* / 0.73% Ownership % * RGC recorded 80% impairment in 2022 10

12. Slide 12: MVP Operational Accounting

    MVP Operational Accounting  Record 0.73% of MVP’s results  Amortize basis difference between underlying ownership and our investment RGC Midstream – Annual Impact (in millions) MVP Operating Results $ 2.0 Amortization 1.2 Total Equity in Earnings $ 3.2  Cash distributions approximate equity in ea

13. Slide 13: RGC Midstream Debt

    RGC Midstream Debt June 30, 2024 (in millions) Revolver1 (SOFR + 1.75% due Dec. 31, 2025) $ 24.115 Revolver2 (SOFR + 2.215% due May 2, 2026) 9.000 Note (swapped rate 3.24% due June 12, 2026) 14.000 Note (swapped rate 2.443% / SOFR + 1.26448% due Jan. 1, 2028) 3 6.400 Total $ 53.515 1 Maximum borrowi

14. Slide 14: Next for MVP

    Next for MVP  Expansion  Additional compression  Increase capacity by 0.5B Dth/day to 2.5B Dth/day  Increased capacity at higher projected rates  Southgate  New pipeline from Station 165 into North Carolina  550M Dth/day proposed capacity  In design / permitting phase  RGC Midstream contrib

15. Slide 15: Q&A

    Q&A 14

16. Slide 16: Roanoke Gas

    Roanoke Gas

17. Slide 17: Roanoke Gas Top Customers

    Roanoke Gas Top Customers Building Materials Manufacturing Healthcare Higher Education Transportation Municipal 16

18. Slide 18: Customer Growth

    Customer Growth 64,000 63,000 62,000 61,000 60,000 59,000 58,000 57,000 56,000 55,000 54,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024F 17

19. Slide 19: Volumes & Heating Degree Days

    Volumes & Heating Degree Days 12 3,500 3,000 10 2,500 8 2,000 Millions 6 1,500 4 1,000 2 500 - - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024F Total Volumes (Dth) Dth per HDD 18

20. Slide 20: Capital Investment

    Capital Investment $30 New five-year SAVE Low pressure, program approved cast iron and $25 bare steel replacement $20 complete Millions $15 $10 $5 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024F SAVE Cap Ex 19

21. Slide 21: Rate Base

    Rate Base $250 $200 $150 Millions $100 $50 $- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024F 20

22. Slide 22: System Growth

    System Growth  Blue Ridge and new housing  Carilion, VTC, FBRI Medical Corridor  Industrial and commercial Main miles: ≈ 140 Services: ≈ 6,000 21

23. Slide 23: Modernization

    Modernization  6 Gate stations  Automated Meter Reading LNG Plant Main miles: ≈ 100  Boil-off compressor  Two boilers Services: ≈ 7,700  1MW natural gas generator  Turbine controls  Tank repainted 22

24. Slide 24: Renewable Natural Gas

    Renewable Natural Gas  Co-located at WVWA  In service March 2023  Reducing emissions by 13,700 metric tons annually  Generating RIN credits, shared with WVWA 23

25. Slide 25: Human Capital

    Human Capital Goals:  Strengthen safety culture Improved Job Completion  Develop opportunities Rate  Align rewards Increased training hours Operational  Hire and retain Improved Excellence response time  Organization wide development planning Decreased OSHA Recordables  Investing in technology

26. Slide 26: Operations Training Center

    Operations Training Center is iB Regulator Pit Phase Il indoor Leak Investigations ut st 11 Simulated houses Confined Space Tapping/ Blocking (Air) Med Pressure Main (Plastic) High Pressure Service (steel) Regulation Training Skid

27. Slide 27: Outlook

    Outlook

28. Slide 28: Natural Gas: Going or Coming?

    Natural Gas: Going or Coming? 27

29. Slide 29: Natural Gas: Record Consumption

    Natural Gas: Record Consumption 28

30. Slide 30: Natural Gas: Consumers say “Yes”

    Natural Gas: Consumers say “Yes” 650,000 new natural gas consumers in 2022 29

31. Slide 31: Natural Gas: Fueling Electricity

    Natural Gas: Fueling Electricity 30

32. Slide 32: 2025 Drivers

    2025 Drivers  Rate case outcome  Capital plan similar to 2024  Expense management  Interest rates trending favorably  RGC Midstream contribution to EPS modest  Consistent dividend payout ratio 31

33. Slide 33: Regulatory Update

    Regulatory Update Rate Case  $4.33M additional revenue (annual) began in July, subject to refund  Proposed 10.35% ROE, 59% equity ratio  5-year depreciation study complete  Expect resolution in Q2 of fiscal 2025 Riders  RNG Rider – Final Order issued September 4  SAVE Rider – Expect Final Orde

34. Slide 34: 2025 Capital Forecast

    2025 Capital Forecast 25% SAVE & Renewals $ 9.7 Utility Upgrades 3.7 45% 13% Customer Growth & 5.5 System Expansion 17% MVP Growth 2.8 Total $ 21.7 33

35. Slide 35: Earnings Per Share

    Earnings Per Share $1.30 $1.24 $1.24 $1.18 $1.16 $1.14 $1.12 $1.16 $1.06 $1.12 $1.00 2023 Actual 2024 Forecast 2025 Preliminary Guidance EPS Range 34

36. Slide 36: Stock Price and Dividends Per Share

    Stock Price and Dividends Per Share $33.00 $0.85 $31.00 $0.80 $29.00 $27.00 $0.75 $25.00 Dividends per share $0.70 $23.00 Stock price $21.00 $0.65 $19.00 $0.60 $17.00 $0.55 $15.00 $13.00 $0.50 $11.00 Share Price Dividends/ share $0.45 $9.00 $7.00 $0.40 Data through August 30, 2024 35

37. Slide 37: Why Buy RGCO?

    Why Buy RGCO? Demonstrated Track • Total Shareholder return of 236% since 2009 Record of Delivering • 80+ years of consecutive dividend payments • 20+ years of consecutive dividend increases Shareholder Value Highly Stable • Consistent regulatory environment • Prospective cost recovery mechanisms Bu

38. Slide 38: Resources

    Go CSOUrCES i (

39. Slide 39: Consolidated Financial Results

    Appendix Consolidated Financial Results For the periods ended June 30, (Presented in thousands, except per share data) Three Months Ended Year to Date 2024 2023 2024 2023 Operating revenues $ 14,458 $ 13,660 $ 71,537 $ 84,972 Operating expenses 12,901 11,862 54,698 68,038 Operating income 1,557 1,79

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