Slide 1: Earnings Call Second Quarter 2022
UTILITIES EARNINGS CALL | Second Quarter 2022 August 4, 2022
Slide 2: Welcome
Welcome 4 Essential. umes Brian Dingerdissen Vice President, Investor Relations and Treasurer 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
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Slide 5: Chris Franklin
Company Update Chris Franklin Chairman, Chief Executive Officer, and President 4 Essential. umes 5
Slide 6: Net Income
ai) Net Income Growth of Infrastructure Investment Essential 6
Slide 7: Valley Forge National Park
Valley Forge National Park Transmission Main Replacement Pennsylvania $4.4M project installing 9,100 linear feet to replace 98-year-old cast iron main Essential. Ashtabula Water Treatment Plant Ohio $14M water treatment plant upgrade resulting in cost reductions and compliance risk reductions Kankak
Slide 8: Fern Hollow Bridge
Fern Hollow Bridge Pittsburgh, PA $5.5M project installing 4,400 feet including replacing 95-year-old cast iron pipe Essential. Fort Pitt Blvd Pittsburgh, PA $3.4M project installing 2,210 feet and replacing bare steel pipe from 1936 and 1939 8
Slide 9: SASB and ESG Metrics Index
SASB and ESG Metrics Index Key ESG metrics updated for 2021 TCFD Report Abbreviated climate change reporting Essential. uTLTIes Progress on Commitments Through 6/30/2022 ARN oe a4 ) GHG Emissions Reduction: By 2035, Essential will achieve a 60% Scope 1 and 2 greenhouse gas emissions reduction, froma
Slide 10: Financial Results
Financial Results % Essential. umes
Slide 11: Q2 2021 vs Q2 2022 Financial Results
Q2 2021 Q2 2022 In millions except per share Revenues + Higher purchased gas costs, additional revenues from rates and surcharges, customer growth and increased volume from our water segment, and increased gas volumes were the main drivers for the quarter O&M 37.7 * Recently added acquisitions, incr
Slide 12: Operating Revenues
Operating Revenues Q2 2022 vs. Q2 2021 hange in Operating Revenues (t ands) $2,332 $11,271 $6,215 $3,869 $30,246 eee ——oe 83.869 a aa $397,032 | $10.0M related to Water and Due toa $1.2M intros in related to purchased Gas gas costs Revenue Q2 2021' Purchased Gas Rates & Surcharges Growth - Water Vol
Slide 13: Operations & Maintenance Expenses
Operations & Maintenance Expenses Q2 2022 vs. Q2 2021 Change in Operations & Maintenance Expense (thousands) $3,462 $2,239 $1,475 $554 $524 $127,515 oe — =) O&M Q2 2021 Other Growth- Water Production Costs Employee-Related Customer Assistance Bad Debt 08M Q2 2022 - Water Costs Program - Gas (@ Essen
Slide 14: Earnings per Common Share
Earnings per Common Share Q2 2022 vs. Q2 2021 Change in Earnings Per Share 2 = = [el (0.017) EPS Q2 2021 Rates & Surcharges Growth - Water Volume - Water Volume - Gas Other Expenses EPS Q2 2022 (@ Essential. 14 umiumies
Slide 15: 2022 Completed Pending Rate Cases
2022 Completed Pending Rate Cases Rate Cases and and Surcharges Surcharges Gas segment base rate case No pending gas segment in KY with annualized base rate cases or revenue increase of $5.5 surcharges million Essential. s uTLTIes
Slide 16: Acquisition Update
Acquisition Update Matt Rhodes Executive Vice President, Strategy and Corporate Development unum 16
Slide 17: • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • • • • • • •
Slide 18: Exclusive Discussions with Bucks County Water and Sewer Authority
Exclusive Discussions with Bucks County Water and Sewer Authority BCWSA Board finds terms of Aqua’s proposal to be in the best interest of its customers, taxpayers and the county compared to other offers received Transaction Overview | Retail Sewer + Aqua Pennsylvania offered ~$1.1 billion for BCWSA
Slide 19: Active Municipal Opportunities
Active Municipal Opportunities Size Range We are actively pursuing acquisition (Approx. # of opportunities in most of our states, Customers) totaling approximately410,000 customers. While we do not expect to close all of these opportunities, this illustrates the number of municipals we are evaluatin
Slide 20: 2022 Guidance
2022 Guidance Chris Franklin Chairman, Chief Executive Officer, and President 4 Essential. 20 umes
Slide 21: Dividends Per Share (Annualized)
Dividends Per Share (Annualized) RK 0 $1.1480 $1.0728 $1.0028 $0.9372 $0.8760 $0.8188 2017 2018 2019 2020 2021 2022 Essential 21
Slide 22: Earnings Capex
Earnings Capex * Regulated infrastructure investments of approximately $1 billion annually through 2024, weighted towards the regulated water segment Essential. Representsrate base growth excluding acquis uTLTIes Rate Base “) Customer Growth ESG + Average annual regulated water customer (or equivale
Slide 23: Essential Utilities
% Essential. SS 23 UTILITIES:
Slide 24: Thank You for Attending
Thank You for Attending Essential’s Second Quarter 2022 Conference Call Conference Call and Webcast = wee * s Third Quarter 2022 Earnings Thursday, November 3, 2022 24
Slide 25: For more information contact
For more information contact: f Brian Renee Dingerdissen Marquis Vice President, Director, Investor Relations Investor Relations and Treasurer (610)645-1191 (ae (610)645-1021 BJDingerdissen@Essential.co f' Wa RTMarquis@Essential.co essential 5 UTILITIES:
Slide 26: Essential.
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Slide 27: Year to Date Financial Highlights
Year to Date Financial Highlights As of June 30, 2022 In millions except per share YTD 2021 YTD 2022 Operating Revenues (GAAP) $980.6 $1,148.0 T 17.1% Purchased Gas $177.1 $302.9 T 71.1% Gross Margin (non-GAAP) $803.5 $845.2 T 5.2% Operations and Maintenance Expense $252.6 $277.6 T 9.9% Operating In
Slide 28: Operating Revenues YTD
Operating Revenues YTD June 30, 2022 vs. YTD June 30, 2021 ange in Opera evenues (t $21,004 $10,990 $10,557 $4,146 $1,148,031 $125,805 as —_ ($5,068) $980,597 |] Revenue YTD 2021 Purchased Gas Rates & Surcharges Volume - Gas Growth - Water Volume - Water Other Revenue YTD 2022 (@ Essential. 28 umium
Slide 29: Operations & Maintenance Expenses YTD
Operations & Maintenance Expenses YTD June 30, 2022 vs. YTD June 30, 2021 Change in Operations & Maintenance Expense (thousands) $7,285 $5,820 $3,582 $3,001 $277,562 $9,002 — —— ($3,718) a O&M YTD 2021 —_ Employee-Related Customer Assistance Other Growth - Water Production Costs Bad Debt O&M YTD 202
Slide 30: Earnings per Common Share YTD
Earnings per Common Share YTD June 30, 2022 vs. YTD June 30, 2021 ange in Earnings Per Share $0.019 $0.011 0.056 a — — a | ($0.047) ($0.03) EPS YTD 2021 Rates & Surcharges Volume - Gas Growth - Water Volume - Water Expenses Other EPS YTD 2022 (@ Essential. 30 umiumies
Slide 31: 2022 Rates and Surcharges Completed
2022 Rates and Surcharges Completed As of 08/03/2022 Ohio Pennsylvania North Carolina Kentucky Illinois (@ Essential. umiumies Docket Number M-2021-3030074 M-2021-3030128 M-2022-3031515 R-2021-3027385 R-2021-3027386 W-218, Sub 526A W-218, Sub 526A 2021-00185 N/A NA Segment Water Water Wastewater Was
Slide 32: Rates and Surcharges Pending
Rates and Surcharges Pending As of 08/03/2022 Requested Annualized Docket Number Segment Revenue Increase ($thousands) Ohio 21-0595-WW-AIR Water Rate Case $8,290 21-0596-ST-AIR Wastewater Rate Case $454 North Carolina W-218, Sub 573 Water Rate Case— Year 1 $12,704 W-218, Sub 573 Wastewater Rate Case
Slide 33: Rate Base and Customer Connections
Rate Base Water Wastewater Total Rate Base Gas ($000s) Connections Connections Customers ($000s) Connections PA $3,936,496 447,726 45,572 493,298 PA $2,540,494 699,949 IL $437,697 66,670 23,578 90,248 KY $133,246 40,378 OH $430,046 151,221 6,950 158,171 wv $31,069 12,917 TX $420,570 71,029 20,632 91
Slide 34: Maximizing Rate Base Growth Potential
Maximizing Rate Base Growth Potential Water Gas ($ in Billions) ($ in Billions) —$01- 2021A 2022E 2023E 2024E 2021A 2022E 2023E 2024E Organic HE Acquisitions ¢ Essential. +A" denotes Actual ul umiumies “E" denotes Estimate
Slide 35: Balance Sheet: Credit Ratings and Metrics
g Balance Sheet: C S&P Global 5 Select Credit Metrics S&P Global — Moopy S (2021A - 2024E) Ratings Issuer Issuance Issuer —_ Issuance ae {@ Essential. A A Baa2 Baa2 50-55% AQUA. A A+ - - FFO/Net Debt \ — 12-14% é PEOPLES A A Baa1 Baat Peer Issuer Ratings( Peer Issuer Ratings In order to maintain our
Slide 36: Earnings Guidance
Earnings Guidance 2021 - 2024 Earnings Per Share 2022 annual earnings per share guidance of $1.75 to $1.80 $1.75 - $1.80 $1.67 2021A 2022E 2023E 2024E ‘A" denotes Actual ¢ Essential. t* denotes Estimate 36 uTLTIes
Slide 37: Earnings Weighted to 1Q, 4Q
Earnings Weighted to 1Q, 4Q Approximate Net Income By Quarter 1Q 2Q 3Q 4Q (@ Essential. 10% 10% Based on company projections, 65-75% of net income is expected to be earned in 1Q and 4Q 37