Slide 1: Earnings Call Third Quarter 2021
(s Essential UTILITIES EARNINGS CALL Third Quarter 2021 November 1, 2021
Slide 2: Welcome
Welcome Brian Dingerdissen Vice President, Chief of Staff, Investor Relations, and Communications Essential ee umes
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: Earnings
EARNINGS Essential. . a4 Nv PRESENTATION | 4 uTLTIes
Slide 5: Chris Franklin
Company Update Chris Franklin Chairman, Chief Executive Officer, and President y 4 Essential. PRESENTATION | 5 umes EARNINGS
Slide 6: Opportunistic pursuit of large, regulated water/wastewater utilities
Opportunistic pursuit of large, (ee) R E (ee) M P ET E N Cl E S regulated water/wastewater utilities 11 ba » Target Eee! > 70/30 water to gas q rate base Infrastructure Regulatory Operational mix Investment Affairs Excellence (pipes, plants, etc.) Water = Gas Approximately 1% of net income today Foc
Slide 7: Infrastructure Investment
Infrastructure Investment of $675.8M Closed Signed Village of Agreement for Bourbonnais Beaver Falls Essential. se prices totaling$467.7M EARNINGS PRESENTATION 7
Slide 8: Pickering Water Treatment Complex
Pickering Water Treatment Complex = Located in Southeastern Pennsylvania service territory = 2 Plants: Pickering West & Pickering East = Over 55 Million Gallons Daily Capacity Combined = Serves approximately 375,000 water customers EARNINGS 6 Essential. PRESENTATION | 8 uTLTIes
Slide 9: Essential. % es ? Ss i PRESEATATION |
Essential. % es ? Ss i PRESEATATION | 9 uTLTIes
Slide 10: Financial Results
Financial Results (s Essential onesfainnS |g umes
Slide 11: Q3 2020 Q3 2021 Revenues
Q3 2020 Q3 2021 Revenues In millions except per share + Regulated water segment of $259.9M + Regulated natural gas segment of $94.8M, including gas costs of $20.4M Operations and Maintenance Expense $136.2 $139.4 O&M * Employee-related expenses were the main driver for the quarter Other + Results in
Slide 12: Operating Revenues
Operating Revenues Q3 2021 vs. Q3 2020 hange in Operating Revenues (t ands) 2,624 160 $4,080 ae s — _ —— $361,860 $8,744 ($9,590) ($996) $348,647 $6.8M related to Water 7 Revenue Q3 2020 Purchased Gas Rates & Surcharges Rate Credits Q3 2020 Growth - Water Other Volume - Water Volume - Gas Revenue Q3
Slide 13: Q3 2021 Water Usage Trends
Q3 2021 Water Usage Trends Third quarter water usage decreased 5.2% year over year. Residential usage decreased by approximately 8%, while commercial usage increased almost 3% when compared to the third quarter of 2020. 12,951 11.693 11,908 Q3 Totals (Millions of Gallons) = Q3 2019 = 19,016 million
Slide 14: Operations & Maintenance Expenses
Operations & Maintenance Expenses Q3 2021 vs. Q3 2020 Change in Operations & Maintenance Expense (thousands) 747 $3,811 oe a lL] $139,355 $136,174 ($9,387) Includes $1.7M of increased medical costs O&M Q3 2020 Employee-Related Other Growth - Water Production Costs - COVID-19 Costs O&M Q3 2021 Costs
Slide 15: Earnings per Common Share
Earnings per Common Share Q3 2021 vs. Q3 2020 ange in Earnings Per Share $0.01 80.004 a | (0.028) 7 — $0.19 ($0.026) ($0.005) ($0.003) Rates & Surcharges Growth - Water Volume - Water Volume - Gas EPS Q3 2020 (GAAP) Rate Credits Q3 2020 Expenses Other EPS Q3 2021 (GAAP) EARNINGS: (@ Essential. prEse
Slide 16: 2021 Completed and Pending Gas Rate Cases and Surcharges
2021 Completed Rate Cases and Surcharges Gas segment base rate cases or surcharges in PA and KY with annualized revenue increase of $1.3 million a Essential. uTLTIes Pending Rate Cases and Surcharges Gas segment base rate cases in KY with requested annualized revenue increase of $9.1 million EARNING
Slide 17: Rate Case Summary
Esse ntial. uTLTIes Rate Case Summary File Date: August 20, 2021 To be completed in Q2 2022 Since the last case: = $1.1 Billion in Capital Spending = 6 Acquisitions Next Key Date: November 10, 2021 for Direct Testimony EARNINGS PRESENTATION 117
Slide 18: Acquisition Update and 2021 Guidance
Acquisition Update and 2021 Guidance Chris Franklin Chairman, Chief Executive Officer, and President ( Essential. awe uTimies
Slide 19: • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • • • • • • •
Slide 20: Active Municipal Opportunities
Active Municipal Opportunities Size Range We are actively pursuing acquisition (Approx. # of opportunities in most of our states, Customers) totaling approximately 400,000 customers. While we do not expect to close all of these opportunities, this illustrates the number of municipals we are evaluati
Slide 21: Earnings, Capex, Rate Base Growth, Customer and ESG Outlook
. Customer (1) Earnings Capex Rate Base Growth ESG * Regulated infrastructure investments of approximately $1 billion in 2021, weighted towards the regulated water segment + Average annual regulated water customer (or equivalent dwelling units) growth of 2 to 3% from acquisitions and organic , custo
Slide 22: Essential Utilities
essential eae UTILITIES:
Slide 23: Thank You for Attending
Thank You for Attending Essential’s Third Quarter 2021 Conference Call = ~ Ss 4 Fourth Quarter and Full Year 2021 os Earnings Conference Call and Webcast Thursday, February 24, 2022 23
Slide 24: For more information contact
For more information contact: 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 EARNINGS: & Essential. PRESENTATION | 24 UTIL
Slide 25: Appendix
Essential. umluTes
Slide 26: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation In thousands, except per share amounts (@Esse ntial. umiumies Net income (GAAP financial measure) Adjustments: Plus: Transaction-related expenses for acquisition of Peoples Plus: Transaction-related water rate credits issued to utility customers Income tax effect of n
Slide 27: Year to Date Financial Highlights
Year to Date Financial Highlights As of September 30, 2021 In millions except per share YTD 2020* Y Revenue (GAAP) $988.7 $1,342.5 T 35.8% Operations and Maintenance Expense $371.4 $391.9 T 5.5% Net Income (GAAP) $182.1 $315.1 T 73.0% Net Income per Share (GAAP) $0.71 $1.23 T 71.9% Adjusted Income (
Slide 28: Operating Revenues YTD
Operating Revenues YTD September 30, 2021 vs. YTD September 30, 2020 ange in ing Revenues 1,300 $23,901 $10,220 $8,559 $4,080 S1, $1,342,457 sa15 30 — ($5,905) ($4,238) $988,700 Peoples Q1 2021 Revenue Purchased Gas Rate Credits Q3 2020 Volume - Gas Revenue YTD 2021 Revenue YTD 2020 Rates & Surcharg
Slide 29: Operations & Maintenance Expenses YTD
Operations & Maintenance Expenses YTD September 30, 2021 vs. YTD September 30, 2020 Change in Operations & Maintenance Expense (thousands) $42,864 $8,550 $5,475 , — s7iai5 | Peoples O&M Employee-Related Qi 2021 Costs O&M YTD 2020 Other (@ Essential. umiumies Growth - Water $286 — 397) as $391,945 '
Slide 30: Earnings per Common Share YTD
Earnings per Common Share YTD September 30, 2021 vs. YTD September 30, 2020 ange in Earnings Per Share $0.065 $0.016 $0416 ($0.044) —($0.017) (0.011) ~—(0.006) $0.082 $0.011 $0.81 $071 oo © ae ‘ a or gst oe oe se oe oot of ge sy pe) con Meat eo e os X or et “0 coe Bs ave : oo ~ “ os ‘ oe yo" os ot g
Slide 31: 2021 Water Rates and Surcharges Completed
2021 Water Rates and Surcharges Completed As of 10/31/2021 Awarded Annualized Docket Number Segment Revenue Increase ($thousands) New Jersey NWR20010056 Wastewater Rate Case $500 North Carolina W-218, Sub 497A, Water Surcharge $140 W-218, Sub 497A Wastewater Surcharge $63 Ohio 89-7028-WW-TRF Water R
Slide 32: 2021 Gas Rates and Surcharges Completed
2021 Gas Rates and Surcharges Completed As of 10/31/2021 Awarded Annualized State ket Number Ty Revenue Increase ($thousands) Pennsylvania M-2020-3023386 Gas Surcharge $317 M-2021-3024731 Gas Surcharge $276 Kentucky 2020-00346 Gas Base $747 EARNINGS (@ Essential. prEsENTATION [32 umiumies
Slide 33: Rates and Surcharges Pending
Rates and Surcharges Pending As of 10/31/2021 Requested Annualized Docket Number Segment Revenue Increase ($thousands) Ohio 21-0595-WW-AIR Water Rate Case $8,290 21-0596-ST-AIR Wastewater Rate Case $454 Pennsylvania R-2021-3027385, Water Rate Case $86,119 R-2021-3027386 Wastewater Rate Case $11,566
Slide 34: Rate Base and Customer Connections
Rate Base Water Wastewater Total Rate Base Gas ($000s) Connections Connections Customers ($000s) Connections PA $3,729,551 444,998 45,277 490,275 PA $2,367,176 699,326 IL $382,985 66,238 16,732 82,970 KY $126,567 39,285 OH $382,232 150,352 6,923 157,275 wv $29,375 12,891 TX $352,134 67,890 19,240 87
Slide 35: Capital Investment ($ in Billions)
($ in Billions) 2019A 2020A 2021E 2022E 2023E Organic Acquisitions Essential og Gas ($ in Billions) 2019A 2020A 2021E 2022E 2023E EARNINGS PRESENTATION Iss
Slide 36: Balance Sheet and Credit Metrics
g Balance Sheet: C — — Select Credit Metrics S&P Global Moopy’s (2020P 70234) Ratings \ | \ | Debt/Total issuer issuance issuer issuance Capitalization {@ Essential. A B- Baa2 Baa2 50-55% AQU A. A A+ - - FFO/Net Debt \ 12-14% @ PEOPLES A A Baa1 Baat Peer Issuer Ratings( Peer Issuer Ratings In order
Slide 37: Earnings Guidance
Earnings Guidance 2019 — 2023 Earnings Per Share 2021 annual earnings per share guidance of $1.64 to $1.69 $1.64- $1.69 $1.47 ; $1.27 2019A* 2020A* 2021E 2022E 2023E *Adjusted income per share ‘includes Peoples operating results as of the closing () Essential. date of the Peoples acquisition, March
Slide 38: Operational Excellence
Operational Excellence Continue to keep employees safe and the company strong through the pandemic Execute a $1B capital program Continue progress on ESG program File Rate Cases in multiple states Essential. EARNINGS PRESENTATION | 38 uTLTIes
Slide 39: Years as a company
135 Years as a Half a century One year as company on the NYSE Essential Utilities 1886 1971 2020 Swarthmore College Initial Public Offering +