Slide 1: Full Year 2023 Earnings Call
NYSE LISTED Full Year 2023 WTRG Earnings Call February 23rd, 2024 February 2024
Slide 2: Brian Dingerdissen
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
Christopher Franklin Chairman and Chief Executive Officer 4
Slide 5: Corporate Updates
Corporate Updates $1.86 Earnings 2023 Infrastructure Pending Acquisition of Per Share for 2023 Investment of $1.19B Six Systems(1) Completed Sale of West Virginia Gas Acquired Seven Utility Assets and Three Systems(2) District Energy Projects 5 1) Purchase prices totaling over $380M. 2) Purchase pri
Slide 6: Operational Achievements
Replaced over 300 >99.9% Miles of Pipe Water in 2023(1) Compliance Operational Achievements Decreased Gas Leaks Outstanding Need picture at Year End over 80% since 2019 6 1) Excludes abandoned miles.
Slide 7: Keeping Our Promise with PFAS Mitigation
Keeping Our Promise Essential remains with PFAS Mitigation committed to complying with current and future regulatory requirements Over 300 Sites that Require Remediation $450M+ Capital Investment Other (1) Other (1) NJ NJ NC Majority of sites Although NC has affected by PFAS the highest located in
Slide 8: Daniel Schuller
Daniel Schuller EVP, Chief Financial Officer 8
Slide 9: Q4 Financial Highlights
Q4 Financial Highlights As of December 31, 2023 ($ in millions, except per share data) Q4 2022 Q4 2023 Revenues • Lower purchased gas costs, decreased Operating Revenues $705.4 $479.4 volume in the regulated natural gas segment and the regulated water segment, Purchased Gas $247.1 $37.5 and other it
Slide 10: Full Year 2023 Financial Highlights
Full Year 2023 Financial Highlights As of December 31, 2023 ($ in millions, except per share data) FY 2022 FY 2023 Percent Change Operating Revenues $2,288.0 $2,053.8 (10.2%) Purchased Gas $602.0 $352.3 (41.5%) Operations and Maintenance Expense $613.6 $575.5 (6.2%) Operating Income $661.2 $692.1 4.
Slide 11: Operating Revenues
Operating Revenues FY 2023 vs. FY 2022 Change in Operating Revenues (millions) (1) (2) 11 1) Includes $602.0 of purchased gas. 2) Includes $352.3 of purchased gas.
Slide 12: Operations & Maintenance Expenses
Operations & Maintenance Expenses FY 2023 vs. FY 2022 Change in Operations & Maintenance Expense (millions) 12
Slide 13: Earnings per Common Share
Earnings per Common Share FY 2023 vs. FY 2022 Change in Earnings Per Share 13
Slide 14: Regulatory Activity
Regulatory Activity As of February 22, 2024 2023 COMPLETED 2024 COMPLETED PENDING REGULATORY REGULATORY RECOVERIES REGULATORY RECOVERIES RECOVERIES Water segment base rate cases or Water segment base rate cases or Water segment base rate cases or surcharges in IL, IN, NJ, NC, OH, PA, surcharges in I
Slide 15: Peoples Natural Gas
Case Details Filed: Revenue: Equity: 12/29/2023 $671.5M 54.67% Rates Expected: Increase: ROE: October 2024 $156.0M, or 18.7% 11.75% Peoples Rate Base through the FPFTY as of 9/30/2025: $4.2B up from $2.1B in last case Natural Gas Overview of Pennsylvania Significant Benefits Delivered Since Last Rat
Slide 16: Christopher Franklin
Christopher Franklin Chairman and Chief Executive Officer 16
Slide 17: Continued Water and Wastewater Acquisition Success
Continued Water and Wastewater Acquisition Success Cumulative Additions of Customers 2023 Acquisitions Through Acquisitions Since 2015 PA OH PA NORTH HEIDELBERG UNION ROME SHENANDOAH 140,000 Nearly 129,000 (1) • Wastewater • 275 customers • Wastewater • 5,300 customers(1) • Water • 3,000 customers W
Slide 18: Pending Municipal Transactions
Pending Municipal Transactions ~$380M of Pending Rate Base is Expected to Generate ~$19M of Incremental Annual Earnings Potential(1) Over 215,000 (2) Total Customers PA PA PA DELCORA BEAVER FALLS GREENVILLE • Wastewater • Wastewater • Wastewater ~$380.0M • 198,000 customers(2) • 7,600 customers(2) •
Slide 19: Robust Capital Allocation Program Drives Value for All Stakeholders
INFRASTRUCTURE • Driving rate base growth in the near term 01 INVESTMENTS • Weighted towards regulated water segment RETURN CASH TO • Consistent record of dividend increases Robust Capital 02 SHAREHOLDERS 33 times in the last 32 years Allocation Program Drives • Fueling long-term rate base growth Va
Slide 20: 2024 Priorities
2024 Priorities Operational Excellence Growth Regulatory • Provide tangible improvement in the • Execute our capital program of between • Completion of the first base rate case service we provide our customers $1.3 to $1.4 billion for over 5,000 projects under our ownership for our largest • Build o
Slide 21: Guidance Outlook
Guidance Outlook FY 2024 net Infrastructure Regulated $1.3 to $1.4B income per diluted investments of utility rate base infrastructure Growth Targets common share CAGR of 8% investment for ~$7.2B,weighted target of towards regulated through 2028 2024 $1.96 - $2.00 water through 2028 Segment rate bas
Slide 22: Questions
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Slide 23: For More Information Contact
For More Information Contact: Brian Dingerdissen Renee Marquis Vice President, Director, Investor Relations and Treasury Investor Relations (610) 645-1191 (610) 645-1021 BJDingerdissen@Essential.co RTMarquis@Essential.co 23
Slide 24: Appendix
Wessentia 24
Slide 25: Operating Revenues
Operating Revenues Q4 2023 vs. Q4 2022 Change in Operating Revenues (millions) (1) (2) 25 1) Includes $247.1 of purchased gas. 2) Includes $37.5 of purchased gas.
Slide 26: Operations & Maintenance Expenses
Operations & Maintenance Expenses Q4 2023 vs. Q4 2022 Change in Operations & Maintenance Expense (millions) 26
Slide 27: Earnings per Common Share
Earnings per Common Share Q4 2023 vs. Q4 2022 Change in Earnings Per Share 27
Slide 28: Regulatory Activity Completed 2023
Requested Annualized State Docket Number Segment Type Revenue Increase ($thousands) Water Rate Case $1,569 Ohio 22-1094-WW-AIR Water Rate Case $4,498 22-1096-ST-AIR Wastewater Rate Case $352 Indiana Wastewater Rate Case $134 Water Surcharge $1,352 Illinois Wastewater Surcharge $567 2023 Virginia PUR
Slide 29: Regulatory Activity Completed 2024
Requested Annualized 2024 State Docket Number Segment Type Revenue Increase ($thousands) Regulatory Ohio Pennsylvania M-2023-3045036 Water Water Rate Case Surcharge $1,627 $5,189 Activity M-2023-3045037 Wastewater Gas Surcharge Surcharge $192 $20,887 Completed Illinois Water Wastewater Surcharge Sur
Slide 30: Regulatory Activity Pending
Requested Annualized State Docket Number Segment Type Revenue Increase ($thousands) 22-0044 Water Rate Case $10,741 Illinois 22-0044 Wastewater Rate Case $8,455 Regulatory PUR-2023-00073 Water Rate Case $5,215 Activity Virginia PUR-2023-00073 Wastewater Rate Case $1,696 Pending New Jersey Water Rate
Slide 31: 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 32: Healthy Balance Sheet Supports Equity Requirements
Healthy Balance Sheet Supports Equity Requirements STABLE CREDIT SELECT CREDIT RAISING EQUITY RATINGS TARGETS TO SUPPORT LONG-TERM GOALS DEBT-TO-CAPITAL RATIO 50-55% To support long-term Baa2 Baa2 targets, Essential Issuer Issuance DIVIDEND PAYOUT RATIO expects to raise 60-65% $250M through an ATM p