Essential Utilities, Inc.
For the period ended Sep 30, 2025. Filed Nov 5, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 5, 2025
WTRG$45.45-1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-04.
0001562762-25-000189
Forward-looking StatementsGeneral InformationLiquidity and Capital ResourcesConsolidated Results of OperationsConsolidated operations and maintenance expense increased by $5,998 or 4.2%, primarily due to:Consolidated operations and maintenance expense increased by $6,922 or 2.5%, primarily due to:Regulated Water Segmentan increase in water and wastewater rates of $30,573;Operations and maintenance expense increased by $4,574 or 4.8% primarily due to the following:an increase in water and wastewater rates of $52,909;Operations and maintenance expense increased by $3,309 or 1.8% primarily due to the following:Regulated Natural Gas SegmentOperating revenues from the Regulated Natural Gas segment increased by $49,133 or by 38.3% due to:Operating revenues from the Regulated Natural Gas segment increased by $195,599 or by 43.2% due to:Current report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0000078128-25-000007
Forward-looking StatementsGeneral InformationLiquidity and Capital ResourcesConsolidated Results of OperationsConsolidated operations and maintenance expense increased by $8,720 or 6.0%, primarily due to:Consolidated operations and maintenance expense increased by $15,642 or 3.7%, primarily due to:Regulated Water Segmentan increase in water and wastewater rates of $27,926;Operations and maintenance expense increased by $9,312 or 9.7% primarily due to the following:an increase in water and wastewater rates of $80,835;Operations and maintenance expense increased by $12,621 or 4.5% primarily due to the following:Regulated Natural Gas SegmentOperating revenues from the Regulated Natural Gas segment increased by $11,719 or by 12.1% due to:Operating revenues from the Regulated Natural Gas segment increased by $207,318 or by 37.7% due to:The baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 122 previous paragraphs and 132 current paragraphs.
22 unchanged; 73 reworded; 36 added; 24 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
Execution of Agreement and Plan of Merger with American Water
Current report
On October 26, 2025, American Water Works Company, Inc. (“American Water”), Alpha Merger Sub, Inc., a direct wholly owned subsidiary of American Water (“Merger Sub”), and the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of American Water. Subject to the terms and conditions of the Merger Agreement, at the time at which the Merger becomes effective (the “Effective Time”), each share of the Company’s common stock, par value $0.50 per share (“Essential Common Stock”), issued and outstanding immediately prior to the Effective Time, other than any shares of Essential Common Stock owned by American Water or Merger Sub or by the Company as treasury stock (in each case, other than restricted shares), will be converted into the right to receive 0.305 shares (the “Exchange Ratio”) of validly issued, fully paid and nonassessable common stock, par value $0.01 per share, of American Water (“American Water Common Stock”) (the aggregate number of such shares of American Water Common Stock to be issued in the Merger, the “Merger Consideration”).
Current report
Consummation of the Merger is subject to certain customary conditions, including, without limitation: approval by American Water’s shareholders of the issuance of the shares of American Water Common Stock to be issued as Merger Consideration in the Merger; approval of the Merger Agreement by the
Current report
Company’s shareholders; and receipt of certain governmental approvals, including (a) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and (b) the approval of certain public utility commissions, in each case on such terms and conditions that would not, individually or in the aggregate, result in a “Burdensome Effect” (as defined in the Merger Agreement). There can be no guarantee that all of the closing conditions and approvals will be satisfied, and the failure to complete the proposed merger on a timely basis or at all may adversely affect the Company’s financial condition and results of operations. The Company currently estimates that the closing of the proposed merger will occur by the end of the first quarter of 2027.
Current report
The Merger Agreement provides that American Water will retain its current name, maintain its headquarters and principal corporate office in Camden, New Jersey, and maintain substantial operations in Pennsylvania.
Current report
On August 27, 2025, the Company, through its wholly owned subsidiary, Aqua Infrastructure, entered into a convertible promissory note purchase agreement with IEP Hummingbird Energy LLC (“IEP”) whereby the Company agreed to purchase convertible notes (“Convertible Note Investment”) in the aggregate principal amount of $26,000 through January 2026. IEP, a subsidiary of International Electric Power III, LLC, shall use the proceeds forthe development of a gas-fired plant to power a data center being developed Greene County, PA (the “Project”). The Convertible Note Investment bears zero interest, includes a fixed $16,500 loan fee concurrently payable to the Company at maturity with the principal amount of the notes on September 30, 2026, and contains conversion rights into equity at any time on or after maturity or upon certain triggering events, such as a project financial closing or equity financing, as defined in the agreement. The agreement also grants the Company the right of first refusal to certain water and gas business opportunities and additional equity kickers upon the occurrence of a financing event or change of control. The Convertible Note receivable is presented within Deferred charges and other assets in the accompanying condensed consolidated balance sheets. As of September 30, 2025, the fair value of the Convertible Note receivable amounts to $22,350. The Company’s involvement in this Project underscores its commitment to innovation, sustainability and regional economic development.
Current report
A number of the Company’s water and wastewater subsidiaries are parties to a multi-district litigation (the “MDL”) lawsuit in the United States District Court for the District of South Carolina against manufacturers of certain per- and polyfluoroalkyl substances or compounds (“PFAS”) for damages, contribution and reimbursement of costs incurred and continuing to be incurred to address the presence of such PFAS in public water supply systems. During the third quarter of 2025, the Company received $39,844 representing a portion of its share of the settlement reached with 3M, net of legal fees and settlement costs. The Company recorded $8,776 of the proceeds allocated to its North Carolina and Virginia water and wastewater subsidiaries as a regulatory liability, pursuant to regulatory orders issued by the public utility commissions from such states regarding the treatment of PFAS settlement costs. The remaining proceeds received that were allocated to the Company’s other water and wastewater subsidiaries totaling $31,068 were recorded within Deferred Credits and Other Non-current liabilities in the accompanying condensed consolidated balance sheet, pending recommendation or order from the respective public utility commissions on treatment of the amounts. The Company anticipates receiving additional settlement payments from the MDL lawsuit defendants.
Current report
The Company expects insurance and claims expenses to continue to be volatile over the long term. In order to mitigate a portion of increased insurance costs, on October 1, 2025, the Company established a wholly-owned captive insurance company, Utility Insurance LLC, incorporated in the State of Utah, whose principal activity at this time is to provide insurance and reinsurance coverage for a portion of the Company’s general liability, property, workers compensation, auto liability, cyber and management liability risks.
Current report
On August 7, 2025, the Company issued $500,000 of senior notes, less expenses of $1,220, due on August 15, 2035 with an interest rate of 5.25%. The Company used the proceeds from the issuance of senior notes to repay a portion of its commercial paper borrowings and for general corporate purposes.
Current report
an increase in bad debt expense of $4,208, of which $3,100 represents a favorable adjustment made during the third quarter of 2024 related to our Pennsylvania water customer assistance program;
Current report
an increase in production costs for water and wastewater operations of $2,437;
Current report
an increase in customer assistance surcharge costs of $589 in our Regulated Natural Gas segment, which generally has an offsetting amount in revenues; offset by
Current report
a decrease in materials and supplies of $1,469
Current report
Allowance for funds used during construction (“AFUDC”) increased by $587 or 10.5% primarily due to the increase in the average balance of utility plant construction work in progress, to which AFUDC is applied.
Current report
an increase in customer assistance surcharge costs of 9,839 in our Regulated Natural Gas segment, which generally has an offsetting amount in revenues; and
Current report
an increase in production costs for water and wastewater operations of $5,497; offset by
Current report
a decrease in materials and supplies of $2,431; and
Current report
an increase in capitalization in our Regulated Natural Gas segment of $7,814 in the current period as compared with the prior period due to higher capital spend and increasing pool of eligible capitalizable costs.
Current report
an increase in employee related costs of $2,705;
Current report
an increase in bad debt expense of $3,508, of which $3,100 represents a favorable adjustment made during the third quarter of 2024 related to our Pennsylvania water customer assistance program; and
Current report
an increase in production costs for water and wastewater operations of $2,437.
Current report
Allowance for funds used during construction (“AFUDC”) increased by $200 or 4.6% primarily due to the increase in the average balance of utility plant construction work in progress, to which AFUDC is applied.
Current report
Our effective income tax rate for our Regulated Water Segment was an expense of 13.6% and 14.7% in the third quarter of 2025 and 2024, respectively. The decrease in the effective tax rate is primarily the result of increase in the income tax benefit associated with the tax deduction for qualifying infrastructure.
Current report
an increase in employee related costs of $5,153;
Current report
an increase in production costs for water and wastewater operations of $5,497; and
Current report
Allowance for funds used during construction (“AFUDC”) increased by $2,904 or 24.2% primarily due to the increase in the average balance of utility plant construction work in progress, to which AFUDC is applied.
Current report
the impact of lower volumes delivered of $389.
Current report
an increase in bad debt expense of $700; and
Current report
a decrease in materials and supplies of $1,321; and
Current report
an increase in customer assistance surcharge costs of $9,839, which generally has an offsetting amount in revenues;
Current report
an increase in bad debt expense of $1,526; offset by
Current report
a decrease in materials and supplies of $2,882; and
Current report
an increase in capitalization in our Regulated Natural Gas segment of $7,814 in the current period as compared with the prior period due to higher capital spend and increasing pool of eligible capitalizable costs.
Removed paragraphs (24)
Previous report
an increase in bad debt expense of $2,175;
Previous report
an increase in materials and supplies of $1,027;
Previous report
an increase in customer assistance surcharge costs of $786 in our Regulated Natural Gas segment, which has an equivalent offsetting amount in revenues;
Previous report
an increase in production costs for water and wastewater operations of $376; and
Previous report
an increase in customer assistance surcharge costs of $9,250 in our Regulated Natural Gas segment, which has an equivalent offsetting amount in revenues;
Previous report
an increase in production costs for water and wastewater operations of $3,060; and
Previous report
a decrease in materials and supplies in our Regulated Natural Gas segment of $1,561; and
Previous report
a decrease in outside services and other expenses in our Regulated Natural Gas segment due to higher capitalization in the current period compared to the prior period.
Previous report
Taxes other than income taxes decreased by 3,506 or 7.4% during the six months ended June 30, 2025 as compared to the prior period largely due to a decrease in our Illinois subsidiary’s invested capital tax and lower sales and use tax and property taxes in our Regulated Natural Gas segment.
Previous report
Allowance for funds used during construction (“AFUDC”) increased by $2,949 or by 29.8% primarily due to the increase in the average balance of utility plant construction work in progress, to which AFUDC is applied, in our Regulated Water segment.
Previous report
an increase in employee related costs of $1,561;
Previous report
an increase in bad debt expense of $344; and
Previous report
an increase in production costs for water and wastewater operations of $376.
Previous report
Allowance for funds used during construction (“AFUDC”) increased by $1,660 or by 41.9% primarily due to the increase in the average balance of utility plant construction work in progress, to which AFUDC is applied.
Previous report
Our effective income tax rate for our Regulated Water Segment was an expense of 15.1% and 14.2% in the second quarter of 2025 and 2024, respectively. The increase in income tax expense in the second quarter of 2025 is primarily attributed to an increase in earnings.
Previous report
an increase in employee related costs of $2,448;
Previous report
an increase in production costs for water and wastewater operations of $3,060;
Previous report
an increase in insurance expense of $682; offset by
Previous report
Allowance for funds used during construction (“AFUDC”) increased by $2,704 or by 35.3% primarily due to the increase in the average balance of utility plant construction work in progress, to which AFUDC is applied.
Previous report
an increase in bad debt expense of $1,832; and
Previous report
Taxes other than income taxes decreased by $2,612 or 51.2% largely due to a favorable adjustment on sales and use tax accruals as a result of the closure of a sales and use tax audit during the second quarter to 2025.
Previous report
an increase in customer assistance surcharge costs of $9,250, which has an equivalent offsetting amount in revenues;
Previous report
an increase in bad debt expense of $826; offset by
Previous report
a decrease in materials and supplies of $1,561; and
Reworded paragraphs (73)
Previous wording
This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report contain, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements address, among other things: the expected timing of closing of our acquisitions; the projected impact of various legal proceedings; the projected effects of recent accounting pronouncements; prospects, plans, objectives, expectations and beliefs of management, as well as information contained in this report where statements are preceded by, followed by or include the words “believes,” “expects,” “estimates,” “anticipates,” “plans,” “future,” “potential,” “probably,” “predictions,” “intends,” “will,” “continue,” “in the event” or the negative of such terms or similar expressions. Forward-looking statements are based on a number of assumptions concerning future events, and are subject to a number of risks, uncertainties and other factors, many of which are outside our control, which could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, among others, the effects of regulation, abnormal weather, geopolitical forces, the impact of inflation and supply chain pressures, including those resulting from changes in government fiscal policies and regulations, the imposition of tariffs, the threat of cyber-attacks and data breaches, changes in capital requirements and funding, the success of growth initiatives, including pending acquisitions, changes to the capital markets, impact of public health threats, and our ability to assimilate acquired operations, as well as those risks, uncertainties and other factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in such reports. As a result, readers are cautioned not to place undue reliance on any forward-looking statements. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.
Current wording
This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report contain, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements address, among other things: the expected timing of closing of our acquisitions; the projected impact of various legal proceedings; the projected effects of recent accounting pronouncements; the proposed merger with American Water Works Company, Inc. (“American Water”); prospects, plans, objectives, expectations and beliefs of management, as well as information contained in this report where statements are preceded by, followed by or include the words “believes,” “expects,” “estimates,” “anticipates,” “plans,” “future,” “potential,” “probably,” “predictions,” “intends,” “will,” “continue,” “in the event” or the negative of such terms or similar expressions. Forward-looking statements are based on a number of assumptions concerning future events, and are subject to a number of risks, uncertainties and other factors, many of which are outside our control, which could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, among others, the effects of regulation, abnormal weather, geopolitical forces, the impact of inflation and supply chain pressures, including those resulting from changes in government fiscal policies and regulations, the imposition of tariffs, the threat of cyber-attacks and data breaches, changes in capital requirements and funding, the success of growth initiatives, including pending acquisitions, changes to the capital markets, impact of public health threats, and our ability to assimilate acquired operations, as well as those risks, uncertainties and other factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in such reports. In addition to the foregoing, there are various risks and other uncertainties associated with the Company’s proposed merger with American Water, including a fixed exchange ratio that will not adjust or account for fluctuations in American Water’s or the Company’s stock price; limitations on the parties’ ability to pursue alternatives to the proposed merger; financial impacts of the proposed merger on the Company and the combined company’s earnings, earnings per share, financial condition, results of operations, cash flows and share price, and any related accounting impacts; any impact of the proposed merger on the Company’s ability to declare and pay quarterly dividends on its common stock; the amount and nature of incurred transaction costs associated with the proposed merger; as well as those risks, uncertainties and other factors disc…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
During the first half of 2025, we implemented, or received approval to implement, base rate increases that result in a $86,520 increase in annual revenues as summarized below.
Current wording
During the first nine months of 2025, we implemented, or received approval to implement, base rate increases that result in a $87,071 increase in annual revenues as summarized below.
Previous wording
On April 30, 2025, the Company’s regulated water and wastewater operating subsidiary in North Carolina, Aqua North Carolina, filed an application with the North Carolina Utilities Commission designed to increase rates by $29,857 in the first year of new rates being implemented, then an additional $5,956 and $6,025 in the second and third years, respectively.
Current wording
On April 30, 2025, the Company’s regulated water and wastewater operating subsidiary in North Carolina, Aqua North Carolina, filed an application with the North Carolina Utilities Commission designed to increase rates by $32,847 in the first year of new rates being implemented, then an additional $5,915 and $6,000 in the second and third years, respectively.
Previous wording
In January 2025, the Company acquired Greenville Sanitary Authority’s wastewater utility assets, which serves approximately 2,300 customers in Greenville, Pennsylvania for $18,000. In April 2025, the Company closed on its acquisition of the Village of Midvale’s water system in Ohio, which serves approximately 1,000 customers for $2,950. As of June 30, 2025, the Company had five signed purchase agreements for additional water and wastewater systems that are expected to serve approximately 210,000 equivalent retail customers or equivalent dwelling units and total approximately $338,000 in purchase price in two of our existing states. This includes the Company’s agreement to acquire the Delaware County Regional Water Quality Control Authority (DELCORA) for $276,500. DELCORA, a Pennsylvania sewer authority, serves approximately 198,000 equivalent dwelling units in the Philadelphia suburbs. In July 2025, the Company acquired the wastewater utility system of the City of Beaver Falls, Pennsylvania for $37,750. The system serves approximately 3,200 customers in the City of Beaver Falls and also provides bulk transmission and treatment service for approximately 3,800 equivalent dwelling units in seven nearby municipalities. Refer to Note 3 –Water and Wastewater Acquisitions for further discussion.
Current wording
In January 2025, the Company acquired Greenville Sanitary Authority’s wastewater utility assets, which serves approximately 2,300 customers in Greenville, Pennsylvania for $18,000. In April 2025, the Company closed on its acquisition of the Village of Midvale’s water system in Ohio, which serves approximately 1,000 customers for $2,950. In July 2025, the Company acquired the wastewater utility system of the City of Beaver Falls, Pennsylvania for $37,750. The system serves approximately 3,200 customers in the City of Beaver Falls and also provides bulk transmission and treatment service for approximately 3,800 equivalent dwelling units in seven nearby municipalities. As of September 30, 2025, the Company had four signed purchase agreements for additional water and wastewater systems that are expected to serve approximately 203,000 equivalent retail customers or equivalent dwelling units and total approximately $300,000 in purchase price in two of our existing states. This includes the Company’s agreement to acquire the Delaware County Regional Water Quality Control Authority (DELCORA) for $276,500. DELCORA, a Pennsylvania sewer authority, serves approximately 198,000 equivalent dwelling units in the Philadelphia suburbs. Refer to Note 3 –Water and Wastewater Acquisitions for further discussion.
Previous wording
During the six-month period ended June 30, 2025, we invested $612,629 to improve our regulated water and natural gas infrastructure system and to enhance customer service. From 2025 through 2029, the Company plans to invest approximately $7,800,000 to improve water and natural gas systems and better serve customers through improved information technology. The capital investments made to rehabilitate and expand the infrastructure of the communities the Company serves are critical to its mission of safely and reliably delivering Earth’s most essential resources.
Current wording
During the nine-month period ended September 30, 2025, we invested $983,089 to improve our regulated water and natural gas infrastructure system and to enhance customer service. From 2025 through 2029, the Company plans to invest approximately $7,800,000 to improve water and natural gas systems and better serve customers through improved information technology. The capital investments made to rehabilitate and expand the infrastructure of the communities the Company serves are critical to its mission of safely and reliably delivering Earth’s most essential resources.
Previous wording
Net cash flows from operating activities were $571,834 for the first half of 2025, compared to $426,426 for the first half of 2024. Operating cash flow increased by $145,408 primarily due to an increase in operating income in 2025 resulting from additional revenues from regulatory recoveries, and an increase in gas volumes delivered due to colder weather conditions during the first quarter of 2025 as compared to 2024.
Current wording
Net cash flows from operating activities were $804,347 for the first nine months of 2025, compared to $622,510 for the first nine months of 2024. Operating cash flow increased by $181,837 primarily due to an increase in operating income in 2025 resulting from additional revenues from regulatory recoveries, and an increase in gas volumes delivered due to colder weather conditions during the first quarter of 2025 as compared to 2024.
Previous wording
During the first six months of 2025, we incurred $612,629 of capital expenditures, obtained $876,525 of proceeds from borrowings and made $1,290,000 of repayments to our long-term revolving credit facility, obtained net proceeds of $567,400 from our commercial paper program (the “CP Program”), obtained proceeds of $109,200 and repaid $17,301 of long-term subsidiary debt, and made short-term debt net repayments of $168,502. The capital expenditures were related to new and replacement water, wastewater, and natural gas mains, improvements to treatment plants, tanks, hydrants, and service lines, well and booster improvements, information technology improvements, and other enhancements and improvements. Cash inflows from financing activities were higher during the first six months of 2025 compared to 2024, primarily due to the issuance of common stock from the Company’s at-the-market equity sales program (“ATM”) and net increase in borrowings during the period.
Current wording
During the first nine months of 2025, we incurred $983,089 of capital expenditures, obtained net proceeds of $152,525 from our commercial paper program (the “CP Program”), issued long-term debt of $1,312,446, and repaid short-term debt and other long-term debt in aggregate of $1,236,664. The capital expenditures were related to new and replacement water, wastewater, and natural gas mains, improvements to treatment plants, tanks, hydrants, and service lines, well and booster improvements, information technology improvements, and other enhancements and improvements. Cash inflows from financing activities were higher during the first nine months of 2025 compared to 2024, primarily due to the issuance of common stock from the Company’s at-the-market equity sales program (“ATM”), partially offset by greater repayments of long-term debt.
Previous wording
On March 19, 2025, the Company established the CP Program that allows it to issue, through private placement, short-term, unsecured commercial paper notes (the “CP Notes”) in an aggregate principal amount not to exceed $1,000,000. Maturities of CP Notes may vary, but cannot exceed 364 days from the date of issue. Amounts available under the CP Program may be borrowed, repaid, and re-borrowed from time to time. The CP Program is reinforced by the Company’s revolving credit facility, as amounts undrawn under the Company’s revolving credit facility are available to repay the CP Notes. Notes issued under the CP Program rank equally with the Company’s present and future unsecured indebtedness. The Company utilizes the proceeds from the sale of the CP Notes for general corporate purposes, which may include working capital, capital expenditures, water and wastewater utility acquisitions, and repaying outstanding indebtedness, including under the Company’s revolving credit facility or the revolving credit facilities of its subsidiaries. As of June 30, 2025, outstanding borrowings under the Company’s CP Program were $566,543, net of unamortized discount on issuance of $857.
Current wording
On March 19, 2025, the Company established the CP Program that allows it to issue, through private placement, short-term, unsecured commercial paper notes (the “CP Notes”) in an aggregate principal amount not to exceed $1,000,000. Maturities of CP Notes may vary, but cannot exceed 364 days from the date of issue. Amounts available under the CP Program may be borrowed, repaid, and re-borrowed from time to time. The CP Program is reinforced by the Company’s revolving credit facility, as amounts undrawn under the Company’s revolving credit facility are available to repay the CP Notes. Notes issued under the CP Program rank equally with the Company’s present and future unsecured indebtedness. The Company utilizes the proceeds from the sale of the CP Notes for general corporate purposes, which may include working capital, capital expenditures, water and wastewater utility acquisitions, and repaying outstanding indebtedness, including under the Company’s revolving credit facility or the revolving credit facilities of its subsidiaries. As of September 30, 2025, outstanding borrowings under the Company’s CP Program were $152,982, net of unamortized discount on issuance of $18.
Previous wording
On August 13, 2024, the Company established an ATM, under which we may issueand sell shares of our common stock up to an aggregate offering price of $1,000,000 (“2024 ATM”). During the three months ended June 30, 2025, we issued 3,664,762 shares of common stock for net proceeds of approximately $145,500 under the 2024 ATM. During the six months ended June 30, 2025, we issued 5,291,771 shares of common stock for net proceeds of approximately $208,600 under the 2024 ATM. As of June 30, 2025, the 2024 ATM had approximately $753,000 of equity available for issuance. The Company used the net proceeds from the sales of shares through the 2024 ATM for working capital, capital expenditures, water and wastewater utility acquisitions, and repaying a portion of outstanding indebtedness.
Current wording
On August 13, 2024, the Company established an ATM, under which we may issueand sell shares of our common stock up to an aggregate offering price of $1,000,000 (“2024 ATM”). During the three months ended September 30, 2025, we issued 2,379,579 shares of common stock for net proceeds of approximately $91,500 under the 2024 ATM. During the nine months ended September 30, 2025, we issued 7,671,350 shares of common stock for net proceeds of approximately $300,100 under the 2024 ATM. As of September 30, 2025, the 2024 ATM had approximately $660,700 of equity available for issuance. The Company used the net proceeds from the sales of shares through the 2024 ATM for working capital, capital expenditures, water and wastewater utility acquisitions, and repaying a portion of outstanding indebtedness.
Previous wording
At June 30, 2025, we had $25,071 of cash and cash equivalents compared to $9,156 at December 31, 2024. During the first six months of 2025, we used the proceeds from long-term debt, the proceeds from the issuance of commercial paper, and the proceeds from issuance of common stock, as well as internally generated funds, for capital expenditures, repayment of existing indebtedness, payment of dividends, and general corporate purposes.
Current wording
At September 30, 2025, we had $6,397 of cash and cash equivalents compared to $9,156 at December 31, 2024. During the first nine months of 2025, we used the proceeds from long-term debt, the proceeds from the issuance of commercial paper, and the proceeds from issuance of common stock, as well as internally generated funds, for capital expenditures, repayment of existing indebtedness, payment of dividends, and general corporate purposes.
Previous wording
At June 30, 2025, our $1,000,000 unsecured revolving credit facility, which expires in December 2027, had $420,033 available for borrowing (net of $567,400 of capacity designated for outstanding principal borrowings under our commercial paper program and $12,567 letter of credit usage). Additionally, at June 30, 2025, we had short-term lines of credit of $400,000, primarily used for working capital, of which $381,960 was available for borrowing. Although we believe we will be able to renew these facilities, there is no assurance that they will be renewed, or what the terms of any such renewal will be.
Current wording
At September 30, 2025, our $1,000,000 unsecured revolving credit facility, which expires in December 2027, had $834,433 available for borrowing (net of $153,000 of capacity designated for outstanding principal borrowings under our commercial paper program and $12,567 letter of credit usage). Additionally, at September 30, 2025, we had short-term lines of credit of $400,000, primarily used for working capital, of which $303,635 was available for borrowing. Although we believe we will be able to renew these facilities, there is no assurance that they will be renewed, or what the terms of any such renewal will be.
Previous wording
As of June 30, 2025, our credit ratings remained at investment grade levels. On March 19, 2024, S&P lowered its credit rating for the Company, Aqua Pennsylvania, and Peoples Natural Gas Companies from A to A-, citing weakening financial measures as a result of inflationary pressures and our significant capital spending; and revised its outlook from negative to stable for the companies. However, as can be noted in their report, S&P continues to assess our business risk profile as excellent, considering our low-risk and rate-regulated water and gas distribution operations in credit-supportive regulatory environments, our geographic and regulatory diversity, our large and stable residential and commercial customer base, and our solid and reliable operations. On October 3, 2024, Moody’s Investors Service (“Moody’s”) affirmed the Company’s senior unsecured notes rating of Baa2 and changed its outlook from stable to negative; and, changed Peoples Natural Gas Companies’ senior secured notes rating from Baa1 to Baa2 and maintained a negative outlook. The Company’s ability to maintain its credit rating depends, among other things, on adequate and timely rate relief, its ability to fund capital expenditures in a balanced manner using both debt and equity, and its ability to generate cash flow. A material downgrade of our credit rating may result in the imposition of additional financial and/or other covenants, impact the market prices of equity and debt securities, increase our borrowing costs, and adversely affect our liquidity, among other things. Management continues to enhance our regulatory practices to address regulatory lag and recover capital project costs and increases in operating costs efficiently and timely through various rate-making mechanisms.
Current wording
As of September 30, 2025, our credit ratings remained at investment grade levels. During the nine months ended September 30, 2025, S&P Global Ratings (“S&P”) reaffirmed the Company, Aqua Pennsylvania, and Peoples Natural Gas Companies’ A- long-term issuer credit rating with a stable outlook. As can be noted in their report, S&P continues to assess our business risk profile as excellent, considering our low-risk and rate-regulated water and gas distribution operations in credit-supportive regulatory environments, our geographic and regulatory diversity, our large and stable residential and commercial customer base, and our solid and reliable operations. On August 27, 2025, Moody's Investors Service ("Moody's") reaffirmed the Company's senior secured notes and Peoples Natural Gas companies’ senior unsecured notes’ Baa2 credit rating with negative outlook. The Company’s ability to maintain its credit rating depends, among other things, on adequate and timely rate relief, its ability to fund capital expenditures in a balanced manner using both debt and equity, and its ability to generate cash flow. A material downgrade of our credit rating may result in the imposition of additional financial and/or other covenants, impact the market prices of equity and debt securities, increase our borrowing costs, and adversely affect our liquidity, among other things. Management continues to enhance our regulatory practices to address regulatory lag and recover capital project costs and increases in operating costs efficiently and timely through various rate-making mechanisms.
Previous wording
Consolidated operating revenues increased by $80,501 or 18.5% as compared to the same period in 2024. Revenues from our Regulated Water, Regulated Natural Gas, and Other segments increased by $29,803, $49,133, and $1,565, respectively. A detailed discussion of the factors contributing to the changes in segment revenue is included below under the section, Segment Results of Operations.
Current wording
Consolidated operating revenues increased by $41,716 or 9.6% as compared to the same period in 2024. Revenues from our Regulated Water, Regulated Natural Gas, and Other segments increased by $29,578, $11,719, and $419, respectively. A detailed discussion of the factors contributing to the changes in segment revenue is included below under the section, Segment Results of Operations.
Previous wording
an increase in employee-related costs of $6,129, primarily resulting from annual merit increases, increases in employee medical costs, and higher performance-based compensation expense compared to prior period;
Current wording
an increase in employee-related costs of $7,213, primarily resulting from annual merit increases, increases in employee medical costs, and higher stock-based compensation expense compared to prior period;
Previous wording
an increase in legal expense of $802; offset by
Current wording
a decrease in legal expense of $1,397; and
Previous wording
a decrease in outside services and other expenses in our Regulated Natural Gas segment due to higher capitalization in the current period compared to the prior period.
Current wording
a decrease in outside services and higher capitalization in the current period compared to the prior period in our Regulated Natural Gas segment.
Previous wording
Purchased gas increased by $23,007 or 68.2%. Purchased gas represents the cost of gas sold by the Company, which for the regulated natural gas business has a corresponding offset in revenue. The increase is the result of an increase in the average cost of gas of $18,854 and higher gas usage of $4,153 during the second quarter of 2025.
Current wording
Purchased gas increased by $3,411 or 17.9%. Purchased gas represents the cost of gas sold by the Company, which for the regulated natural gas business has a corresponding offset in revenue. The increase is the result of an increase in the average cost of gas of $4,496 and lower gas usage of $1,085 during the third quarter of 2025.
Previous wording
Depreciation and amortization expense increased by $12,873 or 14.2% principally due to continued capital expenditures to expand and improve our utility facilities, our acquisitions of new water and wastewater utility systems, and the implementation of new depreciation rates.
Current wording
Depreciation and amortization expense increased by $14,465 or 15.6% principally due to continued capital expenditures to expand and improve our utility facilities, our acquisitions of new water and wastewater utility systems, and the implementation of new depreciation rates.
Previous wording
Interest expense, net of interest income, increased by $6,739 or 9.3%. Interest expense, net of interest income, increased by $2,582 in our Regulated Water segment and by $4,964 in our Regulated Natural Gas segment. Interest expense, net of interest income, in Other relates to our corporate operations, and this decreased by $807 primarily due to our revolving credit facility borrowings being replaced by commercial paper issuances at a lower interest rate, during the second quarter of 2025.
Current wording
Interest expense, net of interest income, increased by $5,738 or 7.6%. Interest expense, net of interest income, increased by $3,139 in our Regulated Water segment and by $4,076 in our Regulated Natural Gas segment. Interest expense, net of interest income, in Other relates to our corporate operations, and this decreased by $1,477 primarily due to our revolving credit facility borrowings being replaced by commercial paper issuances at a lower interest rate, during the third quarter of 2025.
Previous wording
Our effective income tax rate was an expense of 4.1% and 2.4% in the second quarter of 2025 and 2024, respectively. The increase in the income tax expense in the second quarter of 2025 is primarily attributed to the increase in earnings and decreases in both in the state tax benefit and amortization of tax repairs surcredit in the Regulated Natural Gas segment based on a rate order received in September 2024.
Current wording
Our effective income tax rate was an expense of 4.5% and 18.6% in the third quarter of 2025 and 2024, respectively. The decrease in income tax expense in the third quarter of 2025 is primarily attributed to the net increase in tax benefit associated with the tax deduction for continued qualifying infrastructure investment, offset by decreases in both the state tax benefit and amortization of tax repairs surcredit in the Regulated Natural Gas segment based on a rate order received in September 2024.
Previous wording
Consolidated operating revenues increased by $252,058 or 24.1% as compared to the same period in 2024. Revenues from our Regulated Water, Regulated Natural Gas, and Other segments increased by $50,758, $195,599, and $5,701, respectively. A detailed discussion of the factors contributing to the changes in segment revenue is included below under the section, Segment Results of Operations.
Current wording
Consolidated operating revenues increased by $293,774 or 19.8% as compared to the same period in 2024. Revenues from our Regulated Water, Regulated Natural Gas, and Other segments increased by $80,335, $207,318, and $6,121, respectively. A detailed discussion of the factors contributing to the changes in segment revenue is included below under the section, Segment Results of Operations.
Previous wording
an increase in employee-related costs of $11,012, primarily resulting from annual merit increases, increases in overtime pay due to outages from extreme cold weather conditions during the first quarter of 2025, increases in employee medical costs, and higher performance-based compensation expense compared to prior period;
Current wording
an increase in employee-related costs of $18,225, primarily resulting from annual merit increases, increases in overtime pay due to outages from extreme cold weather conditions during the first quarter of 2025, increases in employee medical costs, and higher stock-based compensation expense compared to prior period;
Previous wording
an insurance recovery of $5,602 during the first quarter of 2025 for a portion of expenses incurred by the Company associated with remediating an advisory for some of our Illinois water utility customers;
Current wording
a decrease in insurance expense of $3,652, primarily due to an insurance recovery of $5,602 during the first quarter of 2025 for a portion of expenses incurred by the Company associated with remediating an advisory for some of our Illinois water utility customers;
Previous wording
a decrease in bad debt expense of $5,223, of which $5,889 relates to a favorable regulatory asset adjustment in our Regulated Water segment in the first quarter of 2025;
Current wording
a decrease in bad debt expense of $1,015, of which $5,889 relates to a favorable regulatory asset adjustment in our Regulated Water segment in the first quarter of 2025;
Previous wording
Purchased gas increased by $77,973 or 47.7%. Purchased gas represents the cost of gas sold by the Company, which for the regulated natural gas business has a corresponding offset in revenue. The increase is the result of an increase in the average cost of gas of $45,879 and higher gas usage of $32,480 during the first half of 2025, offset by a decrease of $386 from the sale of our interest in three non-utility local microgrid and distributed energy projects in January 2024.
Current wording
Purchased gas increased by $81,384 or 44.6%. Purchased gas represents the cost of gas sold by the Company, which for the regulated natural gas business has a corresponding offset in revenue. The increase is the result of an increase in the average cost of gas of $50,375 and higher gas usage of $31,395 during the first nine months of 2025, offset by a decrease of $386 from the sale of our interest in three non-utility local microgrid and distributed energy projects in January 2024.
Previous wording
Depreciation and amortization expense increased by $22,446 or 12.4% principally due to continued capital expenditures to expand and improve our utility facilities, our acquisitions of new water and wastewater utility systems, and the implementation of new depreciation rates.
Current wording
Depreciation and amortization expense increased by $36,911 or 13.5% principally due to continued capital expenditures to expand and improve our utility facilities, our acquisitions of new water and wastewater utility systems, and the implementation of new depreciation rates.
Previous wording
Taxes other than income taxes decreased by $1,361 or 6.1% during the three months ended June 30, 2025 as compared to the prior period largely due to a favorable adjustment on sales and use tax accruals of our Regulated Natural Gas segment as a result of the closure of a sales and use tax audit during the second quarter of 2025.
Current wording
Taxes other than income taxes decreased by $3,068 or 4.3% during the nine months ended September 30, 2025 as compared to the prior period largely due to a favorable adjustment on sales and use tax accruals of our Regulated Natural Gas segment as a result of the closure of a sales and use tax audit during the second quarter of 2025.
Previous wording
Interest expense, net of interest income, increased by $16,291 or 11.2%. Interest expense, net of interest income, increased by $4,355 in our Regulated Water segment and by $5,748 in our Regulated Natural Gas segment. Interest expense, net of interest income, in Other relates to our corporate operations, and this increased by $6,188 primarily due to increased borrowings from the Company’s revolving credit facility and commercial paper issuances during the first half of 2025 as compared to the prior period.
Current wording
Interest expense, net of interest income, increased by $22,029 or 10.0%. Interest expense, net of interest income, increased by $7,494 in our Regulated Water segment and by $9,824 in our Regulated Natural Gas segment. Interest expense, net of interest income, in Other relates to our corporate operations, and this increased by $4,711 primarily due to increased borrowings from the Company’s revolving credit facility and commercial paper issuances during the first nine months of 2025 as compared to the prior period.
Previous wording
Allowance for funds used during construction (“AFUDC”) increased by $1,798 or by 34.4% primarily due to the increase in the average balance of utility plant construction work in progress, to which AFUDC is applied, in our Regulated Water segment.
Current wording
Allowance for funds used during construction (“AFUDC”) increased by $3,536 or 22.8% primarily due to the increase in the average balance of utility plant construction work in progress, to which AFUDC is applied, in our Regulated Water segment.
Previous wording
For the six months ended June 30, 2025 and 2024, gain on sale of other assets totaled $493 and $91,828, respectively. During the first quarter of 2024, the Company completed the sale of its interest in three non-utility local microgrid and distributed energy projects and recognized a gain of $91,236 in its Regulated Natural Gas segment.
Current wording
For the nine months ended September 30, 2025 and 2024, gain on sale of other assets totaled $669 and $92,067, respectively. During the first quarter of 2024, the Company completed the sale of its interest in three non-utility local microgrid and distributed energy projects and recognized a gain of $91,236 in its Regulated Natural Gas segment.
Previous wording
Our effective income tax ratewas a benefit of 4.3% and 2.6% in the first six months of 2025 and 2024, respectively. The increase in income tax benefit during the first six months of 2025 is attributed to the release of $22,575 of income tax reserve regulatory liability in the Regulated Water segment based on the rate order received by Aqua Pennsylvania in February 2025, offset by the decreases in both the state tax benefit and amortization of tax repairs surcredit in the Regulated Natural Gas segment based on a rate order received in September 2024.
Current wording
Our effective income tax ratewas a benefit of 2.5% and an expense of 1.7% in the first nine months of 2025 and 2024, respectively. The increase in income tax benefit during the first nine months of 2025 is attributed to the release of $22,575 of income tax reserve regulatory liability in the Regulated Water segment based on the rate order received by Aqua Pennsylvania in February 2025, offset by the decreases in both the state tax benefit and amortization of tax repairs surcredit in the Regulated Natural Gas segment based on a rate order received in September 2024.
Previous wording
Revenues from our Regulated Water segment increased by $29,803 or 9.9% for the second quarter of 2025 as compared to the same period in 2024, mainly due to the following:
Current wording
Revenues from our Regulated Water segment increased by $29,578 or 8.8% for the third quarter of 2025 as compared to the same period in 2024, mainly due to the following:
Previous wording
additional water and wastewater revenues of $3,554 associated with a larger customer base due to utility acquisitions and organic growth; offset by
Current wording
additional water and wastewater revenues of $1,370 associated with a larger customer base due to utility acquisitions and organic growth; and
Previous wording
a decrease in volume consumption of $2,637 primarily due to increased rainfall during the months of May and June 2025.
Current wording
an increase in volume consumption of $288.
Previous wording
Depreciation and amortization increased by $7,106 or 12.3% primarily due to continued capital investment to expand and improve our utility facilities, the implementation of new depreciation rates in connection with recently completed rate cases, and our acquisitions of new utility systems.
Current wording
Depreciation and amortization increased by $7,318 or 12.6% primarily due to continued capital investment to expand and improve our utility facilities, the implementation of new depreciation rates in connection with recently completed rate cases, and our acquisitions of new utility systems.
Previous wording
Interest expense, net of interest income, increased by $2,582 or 7.5% for the quarter primarily due to higher push down debt borrowings and operating company debt issuances for the Regulated Water segment.
Current wording
Interest expense, net of interest income, increased by $3,139 or 8.9% for the quarter primarily due to higher push down debt borrowings and operating company debt issuances for the Regulated Water segment.
Previous wording
Revenues from our Regulated Water segment increased by $50,758 or 8.7% for the first six months of 2025 as compared to the same period in 2024, mainly due to the following:
Current wording
Revenues from our Regulated Water segment increased by $80,335 or 8.8% for the first nine months of 2025 as compared to the same period in 2024, mainly due to the following:
Previous wording
additional water and wastewater revenues of $2,056 associated with a larger customer base due to utility acquisitions and organic growth; offset by
Current wording
additional water and wastewater revenues of $4,924 associated with a larger customer base due to utility acquisitions and organic growth; offset by
Previous wording
a decrease in volume consumption of $5,631.
Current wording
a decrease in volume consumption of $5,343.
Previous wording
an increase in management fees of $1,810; and
Current wording
an increase in management fees of $3,492; offset by
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
a decrease in legal expenses of $815;
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
an increase in legal expense of $2,991; offset by
Previous report — wording carried elsewhere
impact of higher volumes delivered of $34,700 due to colder weather conditions during the second half of 2025 as compared to 2024;
Previous report — wording carried elsewhere
a decrease in outside services and other expenses due to higher capitalization as a result of greater capital expenditures in the current period compared to the prior period.