NYSE LISTED WTRG February 2024 Brian Dingerdissen Vice President Treasury, FP&A and Investor Relations 2 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 may cause actual results to be materially different from any future results expressed or implied by such f ...

Financial Performance - Essential Utilities reported a net income of $616.4 million or $2.20 per share for the full year of 2025, an increase from $595.3 million and $2.17 per share in 2024[2][5]. - Revenues for 2025 were $2,474.6 million, representing an 18.6% increase from $2,086.1 million in 2024[6]. - Operating revenues for Q4 2025 reached $699,111,000, a 15.7% increase from $604,383,000 in Q4 2024[34]. - Net income for Q4 2025 was $132,676,000, down 28.2% from $184,755,000 in Q4 2024[34]. - Basic net income per common share for Q4 2025 was $0.47, a decrease of 30% compared to $0.67 in Q4 2024[34]. - Total operating expenses for the year ended December 31, 2025, were $1,553,664,000, an increase of 16.9% from $1,328,445,000 in 2024[34]. - Operating income for the year ended December 31, 2025, was $920,951,000, up 21.5% from $757,668,000 in 2024[34]. - Long-term debt as of December 31, 2025, was $8,110,167,000, an increase from $7,368,381,000 in 2024[42]. - Total equity increased to $6,857,456,000 as of December 31, 2025, compared to $6,198,809,000 in 2024[42]. - Adjusted income for the year ended December 31, 2024, was $540,898,000, reflecting adjustments for asset sales and weather impacts[40]. Revenue Segments - The regulated water segment generated revenues of $1,326.6 million in 2025, an 8.6% increase compared to $1,221.9 million in 2024[7]. - The regulated natural gas segment reported revenues of $1,117.9 million for 2025, a 32.6% increase from $843.0 million in 2024[8]. Investments and Acquisitions - Essential invested a record $1.4 billion in infrastructure improvements during 2025[4][19]. - In 2026, regulated infrastructure investments are expected to reach $1.7 billion[26]. - Essential completed three acquisitions in 2025, adding over 12,700 new customers, and has signed agreements for additional acquisitions expected to serve over 200,000 customers[20][21]. - The company has a pipeline of potential acquisitions representing approximately 400,000 total customers[22]. Future Projections - Anticipated long-term earnings per share growth is projected at a compounded annual growth rate of 5 to 7% from the adjusted 2024 earnings per share of $1.97[26]. - The company secured shareholder approval for its merger with American Water, which is expected to close in the first quarter of 2027[3][23]. Share Information - The average diluted common shares outstanding for Q4 2025 was 283,598,000, compared to 275,161,000 in Q4 2024[34].

Core Insights - Essential Utilities reported a net income of $616.4 million or $2.20 per share for the full year 2025, an increase from $595.3 million and $2.17 per share in 2024, driven by higher rates and gas volumes [1] - The company invested a record $1.4 billion in infrastructure during 2025, focusing on improving regulated water and natural gas systems [1] - Shareholders approved the merger with American Water, positioning the company for future growth [1] Financial Performance - Full year 2025 revenues were $2,474.6 million, an 18.6% increase from $2,086.1 million in 2024, primarily due to regulatory recoveries and increased gas costs [1] - Operations and maintenance expenses rose to $639.6 million in 2025 from $587.3 million in 2024 [1] - For the fourth quarter of 2025, net income was $132.7 million or $0.47 per share, compared to $184.8 million and $0.67 per share in the same period of 2024 [1] Segment Performance - The regulated water segment generated revenues of $1,326.6 million in 2025, an 8.6% increase from $1,221.9 million in 2024, driven by rate increases [1] - The regulated natural gas segment reported revenues of $1,117.9 million in 2025, a 32.6% increase from $843.0 million in 2024, attributed to higher rates and gas volumes [1] Dividend and Financing - The board declared a quarterly cash dividend of $0.3426 per share, payable on March 2, 2026, and June 1, 2026, continuing a history of over 80 years of consecutive dividends [1] - As of December 31, 2025, the company had a weighted average cost of fixed-rate long-term debt of 4.10% and $667.5 million available on credit lines [1] Growth Strategy - Essential completed three acquisitions in 2025, adding over 12,700 new customers, and has signed agreements for additional acquisitions expected to serve over 200,000 customers [1] - The company is pursuing a pipeline of potential acquisitions representing approximately 400,000 total customers [1] Merger Progress - The merger with American Water is on track for closing in the first quarter of 2027, with regulatory approvals being sought in all applicable states [1] - Shareholders voted overwhelmingly in favor of the merger-related proposals on February 10, 2026 [1] Future Guidance - The company anticipates regulated infrastructure investments of $1.7 billion in 2026 and expects long-term earnings per share growth of 5 to 7% from the adjusted 2024 earnings per share of $1.97 [1]

Core Viewpoint - American Water Works Company, Inc. is highlighted as a top infrastructure stock following the approval of its merger with Essential Utilities, which is expected to enhance its market position and operational scale [1][2][3]. Group 1: Merger Details - The merger between American Water Works and Essential Utilities was approved with at least 99% of American Water's shares and nearly 95% of Essential Utilities' shares voting in favor [2]. - This all-stock, tax-free merger will create the largest regulated water and wastewater utility in the U.S., serving over 4.7 million connections across 17 states, with the combined entity retaining the American Water name and headquartered in Camden, New Jersey [3]. - The merger is anticipated to close by the end of Q1 2027, pending necessary regulatory approvals [3]. Group 2: Financial Outlook - BofA Securities upgraded American Water's stock rating from Underperform to Neutral and raised its price target from $117 to $139, citing the stock's undervaluation compared to electric and gas utilities [4]. - The firm believes the merger will help address customer bill burdens and support the earnings per share (EPS) expansion outlook, emphasizing the value of American Water's long-term pipeline upgrades [5]. - American Water operates over 54,500 miles of pipeline infrastructure, providing services to approximately 14 million people across 24 states [6].

Core Viewpoint - Essential Utilities Inc. has declared a quarterly cash dividend of $0.3426 per share, payable on June 1, 2026, to shareholders of record on May 12, 2026, continuing its long-standing tradition of dividend payments [1][1]. Company Overview - Essential Utilities, Inc. (NYSE: WTRG) provides safe, clean, and reliable services, focusing on water, wastewater, and natural gas, serving approximately 5.5 million people across nine states [1][1]. - The company has paid consecutive quarterly cash dividends for 80 years and has increased its dividend 35 times in the last 34 years, indicating a strong commitment to returning value to shareholders [1][1]. Recent Developments - Essential Utilities is set to report its financial results for the full year 2025 on February 25, 2026, with a conference call scheduled for February 26, 2026, at 11 a.m. Eastern Time [1][1]. - The company has appointed Alexis Rodriguez as Vice President of Strategy and Corporate Development, who will lead the execution of strategic initiatives and growth opportunities for Aqua [1][1].

Core Viewpoint - American Water Works Company, Inc. and Essential Utilities, Inc. have received overwhelming shareholder approval for their proposed merger, with approximately 99% of American Water's shares and nearly 95% of Essential Utilities' shares voting in favor of the transaction [1]. Company Overview - American Water is the largest regulated water and wastewater utility company in the U.S., serving over 14 million people across 14 states and 18 military installations [1]. - Essential Utilities provides water, wastewater, and natural gas services to approximately 5.5 million people across nine states, focusing on sustainable growth and operational excellence [1]. Merger Details - The merger is expected to close by the end of the first quarter of 2027, pending customary closing conditions and regulatory approvals [1]. - The merger will enhance the combined company's ability to deliver reliable services and improve operational efficiencies [1]. Shareholder Support - Shareholders of both companies expressed strong confidence in the merger, indicating a positive outlook for the transaction [1].

Summary of Essential Utilities Special Meeting Company Overview - **Company**: Essential Utilities, Inc. (NYSE: WTRG) - **Meeting Date**: February 10, 2026 - **Participants**: Chairman, President, and CEO Christopher H. Franklin, along with other board members and executives Key Points Meeting Structure and Procedures - The meeting was conducted in a structured manner to ensure fairness and order among shareholders [2][3] - The notice of the special meeting was distributed on December 31, 2025, to shareholders of record as of December 29, 2025 [4] - A quorum was established with 215,733,938 shares represented, which is a majority of the 283,082,809 shares entitled to vote [6] Proposals Discussed 1. **Merger Agreement Proposal**: Approval of the merger agreement and related transactions [8] 2. **Merger-Related Compensation Proposal**: Non-binding advisory vote on compensation for named executive officers related to the merger [8] 3. **Adjournment Proposal**: Approval to adjourn the meeting if necessary to solicit additional proxies [9] Voting Results - **Merger Agreement Proposal**: Approved with approximately 203,644,509 shares voting in favor, representing about 94.8% of votes cast [12] - **Merger-Related Compensation Proposal**: Approved with approximately 181,618,535 shares voting in favor, representing about 84.18% of votes cast [12][13] - The Adjournment Proposal was not presented as the merger agreement was approved [13] Final Remarks - The final results of the meeting will be reported on a Form 8-K filed with the SEC within four business days [14] - The meeting concluded with thanks to shareholders for their support of the merger and the company [14][15] Additional Important Information - The meeting adhered to Pennsylvania law and the company's bylaws regarding shareholder voting and quorum requirements [5][6] - The presence of the Inspector of Elections ensured the integrity of the voting process [4][12]

Group 1 - The article discusses the profitability of regulated utilities, highlighting that while they do not grow quickly or attract significant media attention, they tend to be highly profitable businesses [1] - Essential Utilities (WTRG) is specifically mentioned as an example of a company in this sector, reinforcing the notion that "boring" businesses can yield substantial returns [1] Group 2 - The author emphasizes the importance of data-driven insights in maximizing profitability, indicating a trend towards analytical approaches in financial decision-making [1]

Core Viewpoint - Essential Utilities (NYSE: WTRG) is set to report its earnings for the full year 2025 on February 25, 2026, after market close [1] Group 1 - The company's conference call with financial analysts is scheduled for February 26, 2026, at 11 a.m. Eastern Time [1] - The conference call and presentation will be available for live streaming on the company's website [1] - An archive of the conference call will be accessible in the Investor Relations section [1]

Core Viewpoint - The article emphasizes the appeal of Dividend Champions, which are companies with at least 25 consecutive years of dividend growth, especially when they are trading at a discount [1]. Group 1 - The author has been involved in dividend investing since 2009 and has documented their journey towards financial independence through a blog focused on dividend growth investing [1]. - The author expresses a personal connection to the Seeking Alpha community and highlights their role as an analyst [1]. Group 2 - The article does not provide specific financial data or performance metrics related to the companies mentioned [2].