Slide 1: Earnings Call Full Year 2021
(s Essential © UTILITIES EARNINGS CALL Full Year 2021 February 24, 2022
Slide 2: Welcome
Welcome Brian Dingerdissen Vice President, Chief of Staff, Investor Relations, and Communications Essential ee umumies
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. . 4 Nv PRESENTATION | 4 UTLTIes
Slide 5: Chris Franklin
Company Update Chris Franklin Chairman, Chief Executive Officer, and President y 4 Essential. PRESENTATION | 5 umumies EARNINGS
Slide 6: Earnings Per Share for 2021
$1.67 Earnings Per Share for 2021 2 8 Closed Pending Acquisitions Acquisitions” Essential.
Slide 7: Bridge Collapse in Pittsburgh
Bridge Collapse in Pittsburgh Even with an overwhelming infrastructure failure from roadway collapses, bridge collapses or landslides, this incident demonstrated how natural gas pipelines can be rapidly and safely isolated, and how gas can be rerouted to serve customers. Essential. EARNINGS PRESENTA
Slide 8: Responsibility to quickly and significantly reduce emissions
Responsibility to quickly and significantly reduce emissions Miles Pipe Rehab/Replaced \ 473 470 470 470 2021A 2022E 2023E 2024E {)) Water {) Gas Essential. uTLTIes "A" denotes Actual "E" denotes Estimate Replacing approximately 1, 400 miles ; of pipeline over the next 3 years INVESTOR PRESENTATION
Slide 9: ESG Progress and Recognition
ESG Progress and Recognition 2021 Progress v_ Reached 15% people of colorin our employee base towards our multi-year target of 17%. ESG Ratings v MSClupgraded from BBBtoA v_ Purchased nearly 11% of goods and services from diverse suppliers towards our multi- Y . . year target of 15%. Sustainalytics
Slide 10: Financial Results
Financial Results (s Essential onesEAiNNSS |g umumies
Slide 11: Fourth Quarter Results Summary
In millions except per share Operations Adjusted Income (non-GAAP)* Maintenance Expense Adjusted Income per Share (non-GAAP)* Essential Q4 2020 $157.2 Q4 2021 $158.6 Revenues + Regulated water segment of $243.8M + Regulated natural gas segment of $280.5M, including gas costs of $130.3M + $18.9M in r
Slide 12: Full Year 2021 Financial Highlights
Full Year 2021 Financial Highlights As of December 31, 2021 In millions except per share YTD 2020* Y Revenue $1,462.7 $1,878.1 T 28.4% Operations and Maintenance Expense $528.6 $550.6 T 4.2% Net Income (GAAP) $284.8 $431.6 T 51.5% Net Income per Share (GAAP) $1.12 $1.67 T 49.1% Adjusted Income (non-
Slide 13: Operating Revenues FY 2021 vs. FY 2020
Operating Revenues FY 2021 vs. FY 2020 hange in Operating Revenues (t ands) $55,134 $25,768 $23,004 $11,596 $1,878,144 $315,840 — — ($12,243) ($2,374) ($1,279) $1,462,698 1 Peoples Q1 2021 Revenue Rates & Surcharges Growth - Water Volume - Water Revenue FY 20217 Revenue FY 2020 Purchased Gas Rate Cr
Slide 14: 2021 Water Usage Trends
2021 Water Usage Trends 2021 water usage was neutral year-over-year. Residential usage decreased by 2.1%, while commercial usage increased almost 6% when compared to 2020. 43,071 49 166 Annual Totals (Millions of Gallons) 40,707 = 2019 = 66,596 million gallons 2020 = 67,156 million gallons = 2021 =
Slide 15: 2021 Heating Degree Days
2021 Heating Degree Days Weather drives natural gas consumption and revenue is impacted by heating degree days. A heating degree day (HDD) is a measurement designed to quantify the demand for energy needed to heat a building. It is the number of degrees that a day's average temperature is below 65 d
Slide 16: Operations & Maintenance Expenses FY 2021 vs. FY 2020
Operations & Maintenance Expenses FY 2021 vs. FY 2020 Change in Operations & Maintenance Expense (thousands) $14,279 $5,008 $2,505 $1,381 $42,864 —a a — $550,580 $528,611 | ee (825397) (518,044) ($627) Peoples O&M Employee-Related Production Costs - COVID-19 Costs O&M FY 2021 Qi 2021 Costs Water O&M
Slide 17: Earnings per Common Share FY 2021 vs. FY 2020
Earnings per Common Share FY 2021 vs. FY 2020 ange in Earnings Per Share 0.071 $0.024 $0.414 wo = ($0.053) (§0.033) (0.008) ($0,006) $0.063 $1.27 $0.082 $1.12 oe oo op ‘ o® we got os SP yt oe oe we Sse s ste - on R90) wo se oe oo yo" oe ww wo # oe OF stole st eo Oo "ot oo ye® 4 Essential. uTiumes EA
Slide 18: 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 EARNINGS PRESENTATION 18
Slide 19: Completed and Pending Rate Cases and Surcharges
2021 Completed 2022 Completed Pending Rate Cases Rate Cases and Rate Cases and and Surcharges Surcharges Surcharges EARNINGS Essential. presewrarion [19
Slide 20: Acquisition Update and 2022 Guidance
Acquisition Update and 2022 Guidance Chris Franklin Chairman, Chief Executive Officer, and President ( Essential. ae Ties
Slide 21: Cumulative Additions of 2021 Closed Acquisitions
Cumulative Additions of 2021 Closed Acquisitions Customers Through Acquisitions ($000s) Customers 100,000 q Commons Water?) Bourbonnais Closed August 2, 2021 Closed August 31, 2021 + Water * Wastewater 80,000 * 1,000 customers * 6,700 customers + $4.0M purchase price + $32.1M purchase price + $4.0M
Slide 22: Pending Acquisitions
Essential. UTLTIes DELCORA + Wastewater * 198,000 customers?) + $276.5M purchase price Oak Brook + Water + 4,000 customers?) + $12.5M purchase price Lower Makefield East Whiteland - Wastewater * 8175 customers?) * $54.9M purchase price * Wastewater 11,000 customers + $53.0M purchase price Shenandoah
Slide 23: Active Municipal Opportunities
Active Municipal Opportunities Size Range We are actively pursuing acquisition (Approx. # of opportunities in most of our states, Customers) totaling approximately415,000 customers. While we do not expect to close all of these opportunities, this illustrates the number of municipals we are evaluatin
Slide 24: 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 commitments Resolve Aqua Pennsylvania Rate Case Essential. EARNINGS PRESENTATION | 24 UTLTIes
Slide 25: Customer Growth, Capex and Rate Base Outlook
Customer Growth ESG Earnings Capex Rate Base * Regulated infrastructure investments of approximately $1 billion annually through 2024, weighted towards the regulated water segment + Average annual regulated water customer (or equivalent dwelling units) growth of 2 to 3% from acquisitions and organic
Slide 26: Essential Utilities
essential ele UTILITIES:
Slide 27: Thank You for Attending
Thank You for Attending Essential’s Full Year 2021 Conference Call Conference Call and Webcast = * SS First Quarter 2022 Earnings Thursday, May 9, 2022 27
Slide 28: 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 | 28 UTIL
Slide 29: Essential.
Essential. umluTes
Slide 30: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation In thousands, except per share amounts iarter ended Dec. 31, Year ended Dec. 31, a Net income (GAAP financial measure) $ 116506 $ 102,707 $ 431,612 $ 284,849 Adjustments: Plus: Transaction-related expenses for acquisition of Peoples - - - 25,573 Plus: Transaction-rela
Slide 31: Fourth Quarter Financial Highlights
Fourth Quarter Financial Highlights As of December 31, 2021 Inm ns except per share Q4 2020 a2 | Percent Change Revenue $474.0 $535.7 T 13.0% Operations and Maintenance Expense $157.2 $158.6 T 0.9% Net Income (GAAP) $102.7 $116.5 T 13.4% Net Income per Share (GAAP) $0.40 $0.44 T 10.0% Adjusted Incom
Slide 32: Operating Revenues Q4 2021 vs. Q4 2020
Operating Revenues Q4 2021 vs. Q4 2020 hange in Operating Revenues (t ands) $18,924 $3,037 $1,866 $1,864 — $535,687 ; | ($6,338) ($2,577) $473,998 i Revenue Q4 2020 Purchased Gas Rate Credits Q4 2020 Growth - Water Rates & Surcharges Volume - Water Volume - Gas Other Revenue Q4 2021 1 Includes $87,5
Slide 33: Operations & Maintenance Expenses Q4
Operations & Maintenance Expenses Q4 2021 vs. Q4 2020 Change in Operations & Maintenance Expense (thousands) $2,929 $1,500 $1,000 , — _—_— | $158,635 $157,196 id a , ($4,034) ($446) O&M Q4 2020 Employee-Related Other Production Costs - COVID-19 Costs Growth - Water O&M 04 2021 Costs Water (@ Essenti
Slide 34: Earnings per Common Share Q4
Earnings per Common Share Q4 2021 vs. Q4 2020 ange in Earnings Per Share $0.005 $0.050 $0.009 $0.005 0.01 Leer ee || (0.017) ($0.017) ($0.002) Rate Credits Q4 2020 Volume - Water Volume - Gas Expenses EPS Q4 2020 (GAAP) Growth - Water Rates & Surcharges Other EPS Q4 2021 (GAAP) EARNINGS: (@ Essentia
Slide 35: 2021 Water Rates and Surcharges Completed
2021 Water Rates and Surcharges Completed As of 2/23/2022 Awarded Annualized Docket Number Segment Revenue Increase ($thousands) New Jersey NWR20010056 Wastewater Rate Case $500 North Carolina W-218, Sub 497A Water Surcharge $140 W-218, Sub 497A Wastewater Surcharge $63 W-218, Sub 526A Water Surchar
Slide 36: 2021 Gas Rates and Surcharges Completed
2021 Gas Rates and Surcharges Completed As of 2/23/2022 Awarded Annualized State Docket Number Ty Revenue Increase ($thousands) Pennsylvania M-2020-3023386 Gas Surcharge $317 M-2021-3024731 Gas Surcharge $276 Kentucky 2020-00346 Gas Base $747 EARNINGS (@ Essential. PRESENTATION [36 uTiumes
Slide 37: 2022 Rates and Surcharges Completed
2022 Rates and Surcharges Completed As of 2/23/2022 Requested Annualized Docket Number Segment Revenue Increase ($thousands) Ohio Water Rate Case Wastewater Rate Case Pennsylvania M-2021-3030074 Water Surcharge M-2021-3030128 Wastewater Surcharge North Carolina W-218, Sub 526A Water Surcharge W-218,
Slide 38: Rates and Surcharges Pending
Rates and Surcharges Pending As of 2/23/2022 Docket Number Segment Ohio 21-0595-WW-AIR Water 21-0596-ST-AIR Wastewater Pennsylvania R-2021-3027385, Water R-2021-3027386 Wastewater (@ Essential. uTiumes Requested Annualized Revenue Increase ($thousands) Rate Case $8,290 Rate Case $454 Rate Case $86,1
Slide 39: Rate Base and Connections by State
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 $420,570 71,029 20,632 91
Slide 40: Maximizing Rate Base Growth Potential
Maximizing Rate Base Growth Potential Water Gas ($ in Billions) ($ in Billions) —$01- $2.7 2021A 2022E 2023E 2024E 2021A 2022E 2023E 2024E Organic HE Acquisitions EARNINGS: () Essential. “A" denotes Actual PRESENTATION | 40 uTiumes “E" denotes Estimate
Slide 41: Balance Sheet: Credit Ratings and Metrics
g Balance Sheet: C S&P Global Select Credit Metrics S&P Global — Moopy S (2021A - 2024E) Ratings Issuer Issuance Issuer —_ Issuance ae ‘@ Essential. A A Baa2 Baa2 50-55% AQU A. A A+ - _ FFO/Net Debt A 12-14% @ PEOPLES A A Baa1 Baat Peer Issuer Ratings Peer Issuer Ratings In order to maintain our cre
Slide 42: 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 EARNINGS ¢ Essential. E> denotes Estimate presentarion [a2 UTLTIes
Slide 43: Dividends Per Share (Annualized)
Dividends Per Share (Annualized) 2016 2017 2018 2019 2020 2021 Essential RK lo $1.0728 $1.0028 $0.9372 $0.8760 $0.8188 - . J EARNINGS PRESENTATION | 43