Rgc Resources Inc. · NASDAQ:RGCO
Rgc Resources — 2024 AGA Financial Forum
30 slides from Rgc Resources's conference presentation, May 21, 2024
Slide 1: 2024 AGA Financial Forum
FS FA 5 J Co fj. 4: 2024 AGA Financial Forum 9/4328
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
Slide 3: Agenda
Agenda Q Who is RGC Q What is new with MVP Q How Roanoke Gas delivers Q Where are RGC’s metrics Q When we deploy capital 1 Why invest in RGC
Slide 4: Organizational Structure
Organizational Structure NASDAQ: RGCO Regulated Non-Utility Roanoke Gas C1 Local Distribution Company (LDC), O Partner in Mountain Valley Pipeline located in Roanoke, VA (MVP) —less than 1% OQ Founded in 1883 QO Partner in proposed MVP Southgate (0.51%)
Slide 5: Roanoke Gas Service Territory
Roanoke Gas Service Territory Q_ Serve more than 63,700 natural gas customers 1 Customer count breakdown: > Residential 91% > C&l 9% Q_ Volume breakdown: 5y » Residential
Slide 6: Roanoke Gas
Roanoke Gas Regulated ity Q VA State Corporation Commission (SCC) QO) 9.44% authorized ROE Highly Stable O Alternative Cost Recovery Mechanisms » Weather Normalization » Revenue Sharing » Purchase Gas Adjustment (quarterly) > Infrastructure Riders = SAVE = RNG Business Model
Slide 7: Mountain Valley Pipeline
Mountain Valley Pipeline The Difference of a Year RGC Midstream Effect QO) Fiscal Responsibility Act QO) Ownership diluted » Declares MVP in national interest » Regulatory and judicial impediments cleared QO Construction (nearly) finished » Applied for FERC approval for in service May 2023 » Shipper
Slide 8: MVP In-service
MVP In-service Targeting June 1, 2024 Two Interconnects to Roanoke Gas Will enable Roanoke Gas to serve Franklin County Annual EBITDA to RGC Midstream: ~3.0 to 3.4M
Slide 9: LaFayette Gate Station
LaFayette Gate Station
Slide 10: Roanoke Gas Top Customers
Roanoke Gas Top Customers Building Materials Manufacturing ara > stee! dynamics: SS General Shale BIMBO) (RO Metalsa Healthcare che 7) BlAtec ° LewisGale Medical Center Higher Education Transportation Municipal = | =i ROANOKE ROANOKE ‘OUN
Slide 11: 2023 Rate Case and SAVE Rider
2023 Rate Case and SAVE Rider O 2023 Rate Case $7.45M effective January 1, 2023 O SAVE Rate effective October 1, 2023 (FY 2024) 5-Year Authorized SAVE Spending
Slide 12: Roanoke Gas RNG Facility
Roanoke Gas RNG Facility Q In service March 2023 Q Co-located at water authority site Q Generating RIN credits Q Customer billing
Slide 13: Pending Rate Case
Pending Rate Case Q $4.33M additional revenue beginning July, subject to refund Q Proposed 10.35% ROE, witha 59% equity ratio Q SAVE and RNG Riders remain Q Expect resolution Q2 2025
Slide 14: Regulated Utility Growth: Customers
Regulated Utility Growth: Customers Average Customers (twelve-months ended March 31) 2020 2021 2022 2023 2024
Slide 15: YTD Gas Volumes
YTD Gas Volumes DTHs Delivered WYTD Q22024 = BYTD Q2 2023, Thousands x 000 2,500 1,500 1,000 500 Residential ‘Commercial Industrial Q2 2024 vs Q2 2023 Total Volumes 1% Commercial & Industrial Volumes 2% Heating Degree Days (3%)
Slide 16: Net Income by Year
Net Income by Year $15 $10 : [. I. | lt = $0 2019 2020 2021 2023 foo -$10 Midstream loss, including $42.2 million impairment Roanoke Gas #™ Midstream
Slide 17: Consolidated Financial Results
Consolidated Financial Results For the periods ended March 31, (Presented in thousands, except per share data) [__ Three Months Ended Year to Date [— 2024 T2023 2024 | 2023 Operating revenues $ 32,660 $ 38,030]$ 57079 $ 71,312 Operating expenses 24,030 28,438 41,797 56,176 Operating income 8,630 9,5
Slide 18: CapEx History
CapEx History $25.5 $253 250 22.9 $21.9 = ' ' 2019 2020 aa oe 2023 MRNG mCustomerGrowth m™ Utility Maintenance im SAVE 5 year cumulative totals: SAVE $50.1 Customer Growth & System Expansion $36.3 Utility Maintenance $20.6 RNG $8.6 Total $115.6
Slide 19: Shareholder Return: Dividend
Shareholder Return: Dividend $0.95 90.0% O 321 consecutive TTM March 31, quarterly 80.0% dividends -_ 70.8% 70.0% $0.85 mae O Dividend increase prey ea 20 consecutive 50.0% years $0.75 40.0% 30.0% ce 20.0% 10.0% $0.55 0.0% 2020 2021 2022 2023 2024 WB Annual Dividend/Share —Payout Ratio * Based on un
Slide 20: Equity and Debt Profile
Equity and Debt Profile Top shareholders: a vVvvVY Anita G. Zucker 14% Gabelli Funds 5% Vanguard Group 4% Blackrock 4% Q. 6.0% insider ownership OQ Remaining $120M on private shelf facilities Up to $25M availability on LOC facility Q Q Q $210M Market Capitalization Common shares issued and outstandi
Slide 21: Outlook
Outlook CapEx Growth Strategy EPS
Slide 22: CapEx Forecast
CapEx Forecast ; " . ' . $10.0 2024 2025 ee 2026 2027 2028 tomer Growth mUtility Maintenance ™ MVP Growth mSAVE mC Forecast totals through 2028: SAVE $49.5 Customer Growth & System Expansion $26.9 Utility Maintenance $20.2 MVP Growth $13.7 $110.3 Total
Slide 23: Growth Strategy
Growth Strategy QO) Regulated Utility » Rate case » CapEx » Other RNG opportunities O) Ongoing Regulated Utility Growth » Franklin County expansion » Volumes delivered » Customer growth CQ) mMvpP » Expansion (compression on existing pipe) » Southgate Q) Strategic Opportunities
Slide 24: Earnings Per Share 2024
Earnings Per Share 2024 $1.20 $1.16 $1.14 1.14 : Dividend Payout Ratio: $1.08 = 69% $1.02 73% $0.96 $0.90 2023 Actual 2024 Forecast @eEPS @ Range
Slide 25: Earnings Per Share 2025
Earnings Per Share 2025 UO Favorable EPS Impact O Unfavorable EPS Impact > Roanoke Gas > Midstream » Rate case revenue » Absence of AFUDC » Rate case ROE » Lower ownership stake > Customer growth / Franklin County » Roanoke Gas » Inflation QO Uncertain EPS Impact > Interest rates > MVP project finan
Slide 26: as |
as |
Slide 27: Consolidated Financial Results
Consolidated Financial Results For the periods ended September 30, (Presented in thousands, except per share data) [ Fourth Quarter Fiscal 2023 2022 2023 | 2022 Operating revenues S$ 12468 $ 14113]$ 97,440 $ 84,165 Operating expenses. 11,723 13,658 79,761 69,249 Operating income 745, 455, 17,679 14,
Slide 28: Appendix: MVP Route
Slide 29: Zn Wy
Zn Wy ni ee ston
Slide 30: Appendix: Southgate Evolution
Appendix: Southgate Evolution O) Original Scope » 24” pipe to Dan River dogleg left 16” pipe to Haw River OU) New Scope » 30” pipe to below Dan nit River dogleg left PSNC e - 4 runs local pipe to Haw ~ River OQ Advantages ©... \\\ = > Larger gas volume au. » PSNC and Duke support » Addresses many of