Essential Utilities, Inc.
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
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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.
Jun 30, 2026 · Filed Aug 5, 2026
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 2026-03-31; filed 2026-05-07.
0001562762-26-000060
Forward-looking StatementsGeneral InformationLiquidity and Capital ResourcesConsolidated Results of OperationsConsolidated operations and maintenance expense increased by $37,971 or 27.6%, primarily due to:Regulated Water Segmentan increase in water and wastewater rates of $16,550;Operations and maintenance expense increased by $13,704 or 15.3% primarily due to the following:Regulated Natural Gas SegmentOperating revenues from the Regulated Natural Gas segment increased by $58,615 or by 12.5% due to:Current report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0000078128-26-000077
Forward-looking StatementsGeneral InformationLiquidity and Capital ResourcesConsolidated Results of OperationsConsolidated operations and maintenance expense increased by $5,125 or 3.5%, primarily due to:Consolidated operations and maintenance expense increased by $43,096 or 15.1%, primarily due to:Regulated Water Segmentan increase in water and wastewater rates of $15,928;Operations and maintenance expense increased by $9,205 or 9.2% primarily due to the following:an increase in water and wastewater rates of $32,478;Operations and maintenance expense increased by $22,909 or 12.1% primarily due to the following:Regulated Natural Gas SegmentOperating revenues from the Regulated Natural Gas segment decreased by $8,042 or by 4.5% due to:Operating revenues from the Regulated Natural Gas segment increased by $50,573 or by 7.8% 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 79 previous paragraphs and 129 current paragraphs.
24 unchanged; 45 reworded; 48 added; 10 removed; 0 previous and 12 current paragraphs rearranged.
Tables are not compared: 4 previous and 5 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 (48)
Current report
During the six months ended June 30, 2026, we implemented, or received approval to implement, base rate increases that result in a $37,613 increase in annual revenues, as summarized below:
Current report
On May 26, 2026, Aqua Illinois filed an application with the Illinois Commerce Commission designed to increase water and wastewater rates by $26,501 annually.
Current report
Net cash flows from operating activities were $588,980 for the first half of 2026, compared to $571,834 for the first half of 2025. Operating cash flow increased by $17,146, primarily driven by working capital changes, including the impact of new rates implemented in the current six-month period compared to the prior period.
Current report
Net cash flows used in investing activities increased by $33,135, primarily due to the Company’s continued investment in replacing aging infrastructure, contaminant mitigation and emissions reductions, among others.
Current report
On June 16, 2026, the Company entered into an amendment to its $1,000,000 unsecured long-term revolving credit facility. The amendment extended the maturity date of the facility by another year, to December 2028, and removed the second sustainability performance target applicable to interest rates and commitment fees.
Current report
On May 1, 2026, Aqua Pennsylvania and Peoples Natural Gas Companies amended their respective $100,000 and $300,000 revolving credit agreements, extending the maturity date by another 364-day period. The funds borrowed under these revolving credit agreements are classified as loans payable and are used to provide working capital.
Current report
During the three months ended June 30, 2026, we issued 264,356 shares of common stock for net proceeds of approximately $10,700 under the Company’sat-the-market equity sales program(“2024
Current report
Consolidated financial and operational highlights for the periods ended June 30, 2026 and 2025 are presented below.
Current report
an increase in employee-related costs of $5,864, primarily resulting from annual merit increases and higher medical claims;
Current report
an increase in production costs for water and wastewater operations of $2,296;
Current report
pre-merger expenses of $1,191;
Current report
additional operating costs associated with pending and newly acquired water and wastewater utility systems of $814; offset by
Current report
a decrease in customer assistance surcharge costs of $1,528 in our Regulated Natural Gas segment, which generally has an offsetting amount in revenues.
Current report
Taxes other than income taxes increased by $3,581 or 17.2%primarily due to the $2,709 favorable sales and use tax accrual adjustment recognized in the second quarter of 2025 upon the closure of certain tax audits in our Regulated Natural Gas segment, which did not recur in the current period.
Current report
Other, net was an expense of $1,295 and $391 for the three months ended June 30, 2026 and 2025, respectively. The increase was primarily due to higher unrealized losses on securities held in connection with the non-qualified pension plan, partially offset by a higher non-service cost net periodic benefit credit resulting from increased amortization of actuarial gains in our other postretirement benefit plan.
Current report
Our effective income tax ratewas an expense of 3.1% and 4.1% in the second quarter of 2026 and 2025, respectively. The decrease in the income tax expense in the second quarter of 2026 is primarily attributed to the decrease in earnings and state jurisdictional mix.
Current report
an increase in production costs for water and wastewater operations of $4,122;
Current report
additional operating costs associated with pending and newly acquired water and wastewater utility systems of $1,544;
Current report
a decrease in customer assistance surcharge costs of $2,431 in our Regulated Natural Gas segment, which generally has an offsetting amount in revenues.
Current report
Interest expense, net of interest income, increased by $12,953 or 8.0%. Interest expense, net of interest income, increased by $6,260 in our Regulated Water segment and by $3,850 in our Regulated Natural Gas segment. Interest expense, net of interest income, in Other relates to our corporate operations, and this increased by $2,843 primarily due to the additional senior note borrowing in 2026.
Current report
Other, net was an expense of $1,220 and $98 for the six months ended June 30, 2026 and 2025, respectively. The increase was primarily due to higher unrealized losses on securities held in connection with the non-qualified pension plan, partially offset by a higher non-service cost net periodic benefit credit resulting from increased amortization of actuarial gains in our other postretirement benefit plan.
Current report
an increase in employee related costs of $4,127, primarily resulting from annual merit increases and higher medical claims during the second quarter of 2026;
Current report
additional operating costs associated with pending and newly acquired water and wastewater utility systems of $814.
Current report
Other, net was an income of $1,882 and expense of $17 for the three months ended June 30, 2026 and 2025, respectively. The change is primarily due to higher non-service cost net periodic benefit credit resulting from increased amortization of actuarial gains in our other postretirement benefit plan.
Current report
Our effective income tax rate for our Regulated Water Segment was an expense of 16.5% and 15.1% in the second quarter of 2026 and 2025, respectively. The increase in income tax expense in the second quarter of 2026 is primarily attributed to the decrease in tax benefits associated with the repairs tax deduction related to continued qualifying infrastructure investment.
Current report
Revenues from our Regulated Water segment increased by $47,389 or 7.5% for the first half of 2026 as compared to the same period in 2025, mainly due to the following:
Current report
an increase in production costs for water and wastewater operations of $4,122, particularly purchased water and chemical costs;
Current report
additional operating costs associated with pending and newly acquired water and wastewater utility systems of $1,544.
Current report
Interest expense, net of interest income, increased by $6,260 or 8.5% for the first half of 2026 primarily due to higher push down debt borrowings.
Current report
Other, net was an income of $1,200 and expense of $44 for the six months ended June 30, 2026 and 2025, respectively. The change is primarily due to higher net periodic benefit credit resulting from increased amortization of actuarial gains in our other postretirement benefit plan.
Current report
impact of lower volumes delivered of $9,051 due to warmer weather conditions during the second quarter of 2026 as compared to 2025; and
Current report
a decrease in customer assistance surcharge of $1,537, which generally has an offsetting amount in operations and maintenance expense; offset by
Current report
an increase in legal expenses of $1,527; offset by
Current report
a decrease in bad debt expense of $2,424; and
Current report
a decrease in customer assistance surcharge costs of $1,528, which generally has an offsetting amount in revenues.
Current report
Depreciation and amortization increased by $2,493 or 6.5% primarily due to continued capital investment.
Current report
Taxes other than income taxes increased $2,995, or 120.2%, compared to the same period in the prior year, primarily due to the absence of a $2,709 favorable true-up adjustment to sales and use tax accruals recorded in the Regulated Natural Gas segment during the second quarter of 2025 for resolved sales and use tax audit periods.
Current report
Our income tax benefit for our Regulated Natural Gas segment decreased by $6,890 in the second quarter of 2026 compared to second quarter of 2025. The decrease in the income tax benefit is primarily attributed to the decrease in tax benefits associated with the repairs tax deduction related to continued qualifying infrastructure investment.
Showing the first 40 of 48 passages. Open the source sections for the rest.
Removed paragraphs (10)
Previous report
On June 30, 2025, the Company’s regulated water and wastewater operating subsidiaries in Ohio, Aqua Ohio and Aqua Ohio Wastewater, filed applications with the Public Utilities Commission of Ohio designed to increase rates in total by $14,653.
Previous report
Net cash flows from operating activities were $265,405 for the first three months of 2026, compared to $299,517 for the first three months of 2025. Operating cash flow decreased by $34,112 during the three months ended March 31, 2026 compared to the same period in the prior year primarily due to the timing of vendor payments and an increase in operations and maintenance expense.
Previous report
Net cash flows used in investing activities decreased by $20,419 primarily due to the $20,000 return of a portion of the Company’s convertible note investment in January 2026. During the first three months of 2026, we incurred $269,249 of capital expenditures. The capital expenditures were related to new and replacement water, wastewater, and natural gas mains, improvements to treatment plants, including additional treatment processes to remove PFAS compounds, tanks, hydrants, and service lines, well and booster improvements, information technology improvements, and other enhancements and improvements.
Previous report
an increase in production costs for water and wastewater operations of $1,826;
Previous report
additional operating costs associated with acquired and pending acquisitions of water and wastewater utility systems of $730; offset by
Previous report
a decrease in customer assistance surcharge costs of $903 in our Regulated Natural Gas segment, which generally has an offsetting amount in revenues.
Previous report
additional operating costs associated with acquired and pending acquisitions of water and wastewater utility systems of $730.
Previous report
a decrease in bad debt expense of $2,029; and
Previous report
a decrease in customer assistance surcharge costs of $903, which generally has an offsetting amount in revenues.
Previous report
Depreciation and amortization increased by $2,241 or 5.8% primarily due to continued capital investment, and the implementation of new depreciation rates following a recently completed rate case.
Reworded paragraphs (45)
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; 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, our ability to control operating expenses 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, 2025 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; an event, change or other circumstance that could give rise to the termination of the merger agreement; a delay in the timing to consummate the proposed merger; each party’s ability to obtain required governmental and regulatory approvals required for the proposed merger (and/or that such approvals may result in the imposition of burdensome or commercially undesirable conditions, including required dispositions, that could adversely affect the combined company or the expected…
Excerpt shortened here; the source contains the full paragraph.
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 Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and 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, our ability to control operating expenses 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, 2025 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; an event, change or other circumstance that could give rise to the termination of the merger agreement; a delay in the timing to consummate the proposed merger; each party’s ability to obtain required governmental and regulatory approvals required for the proposed merger (and/or that such approvals may result in the imposition of burdensome or commerciall…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Consummation of the Merger is subject to certain remaining customary conditions, including the 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. During the three months ended March 31, 2026, the Company incurred $16,300 of pre-merger related expenses which is presented within operations and maintenance expense in the condensed consolidated statements of operations and comprehensive income.
Current wording
Consummation of the Merger is subject to certain remaining customary conditions, including the 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). As of the date of this report, public utility commission approvals have been received in Kentucky, Virginia, and Ohio, and a settlement in principle has been reached in Texas. 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. During the three and six months ended June 30, 2026, the Company incurred pre-merger related expenses of $1,191 and $17,521, respectively, which are included in operations and maintenance expense in the condensed consolidated statements of operations and comprehensive income.
Previous wording
During the three months ended March 31, 2026, two of the Company’s water and wastewater utility operating divisions in Ohio and two of the Company’s wastewater utility operating divisions in Indiana implemented approved base rate increases designed to increase total operating revenues on an annual basis by $1,834 and by $1,003, respectively. Further, during the three months ended March 31, 2026, the Company implemented infrastructure rehabilitation surcharges designed to increase total operating revenues on an annual basis by $301 in its water and wastewater utility operating divisions in Pennsylvania, by $2,610 in its water and wastewater utility operating divisions in Illinois, by $6,557 in its natural gas operating division in Pennsylvania, and by $2,819 in its natural gas operating division in Kentucky.
Current wording
During the six months ended June 30, 2026, the Company implemented infrastructure rehabilitation surcharges designed to increase total operating revenues on an annual basis by $3,653 in its water and wastewater utility operating divisions in Pennsylvania, by $2,610 in its water and wastewater utility operating divisions in Illinois, by $9,804 in its natural gas operating division in Pennsylvania, and by $2,892 in its natural gas operating division in Kentucky.
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, which was updated on August 18, 2025. The updated rate case filing requests an increase in rates of $30,154 in the first year of new rates being implemented, then by an additional $6,014 and $6,074 in the second and third years, respectively. Interim rates were implemented on January 1, 2026, based on an estimate of the final outcome of the order, with the difference between interim and final approved rates subject to refund to customers.
Current wording
On June 12, 2026, the Company’s regulated water and wastewater subsidiary in Indiana filed an application with the Indiana Utility Regulatory Commission designed to increase rates by $4,813 in the first year of new rates being implemented, then by an additional $1,960 and $308 in the second and third years, respectively.
Previous wording
In March 2026, the Company acquired Greenville Municipal Water Authority’s water utility system in Greenville, Pennsylvania which serves approximately 3,000 customers for $18,000. As of March 31, 2026, the Company had four signed purchase agreements for additional water and wastewater systems that are expected to serve approximately 201,000 equivalent retail customers or equivalent dwelling units and total approximately $286,000 in purchase price in three 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.
Current wording
In May 2026, the Company acquired Integra Water Texas, LLC’s wastewater system assets in Bastrop County, Texas, which serves approximately 1,100 equivalent dwelling units for $4,877. In March 2026, the Company acquired Greenville Municipal Water Authority’s water utility system in Greenville, Pennsylvania which serves approximately 3,000 customers for $18,000. As of June 30, 2026, the Company had three signed purchase agreements for additional water and wastewater systems that are expected to serve approximately 200,000 equivalent retail customers or equivalent dwelling units and total approximately $282,000 in purchase price in three 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 three-month period ended March 31, 2026, we invested $269,249 to improve our regulated water and natural gas infrastructure system and to enhance customer service. From 2026 through 2030, the Company plans to invest approximately $8,700,000 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 six-month period ended June 30, 2026, we invested $662,167 to improve our regulated water and natural gas infrastructure system and to enhance customer service. From 2026 through 2030, the Company plans to invest approximately $8,700,000 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
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. In 2024, the MDL court granted approval of the DuPont, 3M, Tyco Fire Products LP, and BASF Corp class action settlements. The total amount of recovery by the Company is uncertain. During the three months ended March 31, 2026, the Company received an additional $252 from DuPont. As of March 31, 2026, the Company presented $9,972 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 $36,446 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. In April 2026, the Company received a portion of the Tyco settlement, net of legal fees and settlement costs, amounting to $7,260. The Company anticipates receiving additional settlement payments from the MDL lawsuit defendants over the next ten years.
Current wording
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. In 2024, the MDL court granted approval of the DuPont, 3M, Tyco Fire Products LP, and BASF Corp class action settlements. The total amount of recovery by the Company is uncertain. During the three and six months ended June 30, 2026, the Company received an additional $10,234 and 10,486, respectively, from Tyco, BASF and Dupont, net of legal fees and settlement costs. As of June 30, 2026, the Company presented $12,259 of the total settlement 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 $44,581 are included in 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 over the next ten years. On July 6, 2026, in conjunction with an approved rate order, the North Carolina Utilities Commission authorized the Company to treat $8,385 of settlement proceeds, previously recorded as a regulatory liability, as contributions in aid of construction, which will be amortized over the same period as the related PFAS mitigation plan. On July 30, 2026, the Company received another portion of the 3M settlement, net of legal fees and settlement costs, amounting to $10,542.
Previous wording
Net cash inflows from financing activities increased by $43,213 primarily due to lower debt repayments during the first three months of 2026 compared to the same period in 2025.
Current wording
Net cash flows from financing activities decreased by $26,070 during the six months ended June 30, 2026, compared to the prior period, primarily due to lower equity issuances and higher dividend payments, partially offset by increased net debt issuances.
Previous wording
On March 9, 2026, the Company issued $500,000 of senior notes, less expenses of $5,140, due on March 15, 2036, with an interest rate of 5.13%. The Company used the proceeds from the issuance of the senior notes to repay a portion of its commercial paper borrowings and for general corporate purposes. In addition to the senior notes issued by the Company, during the three months ended March 31, 2026, the Company’s regulated water subsidiaries obtained in the aggregate $15,187 of low-interest government loans to fund capital projects, with interest rates ranging from 0.46% to 1.743% and maturity dates ranging from 2030 to 2049.
Current wording
On March 9, 2026, the Company issued $500,000 of senior notes, less expenses of $5,140, due on March 15, 2036, with an interest rate of 5.125%. The Company used the proceeds from the issuance of the senior notes to repay a portion of its commercial paper borrowings and for general corporate purposes. In addition to the senior notes issued by the Company, during the six months ended June 30, 2026, the Company’s regulated water subsidiaries obtained in the aggregate $27,100 of low-interest government loans to fund capital projects, with interest rates ranging from 0.00% to 1.743% and maturity dates ranging from 2030 to 2049.
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 March 31, 2026, outstanding borrowings under the Company’s CP Program were $314,463, net of unamortized discount on issuance of $537, with a weighted average interest rate of 4.16%and weighted average remaining term of 16 days.
Current wording
The Company has a commercial paper program (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. 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, 2026, outstanding borrowings under the Company’s CP Program were $384,723, net of unamortized discount on issuance of $455, with a weighted average interest rate of 4.07%and weighted average remaining term of 11 days.
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 March 31, 2026, we issued 44,300 shares of common stock for net proceeds of approximately $1,800 under the 2024 ATM. As of March 31, 2026, the 2024 ATM had approximately $658,900 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
ATM”). During the six months ended June 30, 2026, we issued 308,656 shares of common stock for net proceeds of approximately $12,500 under the 2024 ATM. As of June 30, 2026, the 2024 ATM had approximately $648,000 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.
Previous wording
At March 31, 2026, we had $75,926 of cash and cash equivalents compared to $34,778 at December 31, 2025. During the first three months of 2026, 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 June 30, 2026, we had $8,634 of cash and cash equivalents compared to $34,778 at December 31, 2025. During the first six months of 2026, 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 March 31, 2026, our $1,000,000 unsecured revolving credit facility, which expires in December 2027, had $670,632 available for borrowing (net of $315,000 of capacity designated for outstanding principal borrowings under our commercial paper program and $14,368 letter of credit usage). Additionally, at March 31, 2026, we had short-term lines of credit of $400,000, primarily used for working capital, of which $364,447 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 June 30, 2026, our $1,000,000 unsecured revolving credit facility had $600,974 available for borrowing (net of $384,723 of capacity designated for outstanding principal borrowings under our commercial paper program and $14,303 letter of credit usage). Additionally, at June 30, 2026, we had short-term lines of credit of $400,000, primarily used for working capital, of which $359,000 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
a decrease in bad debt of expense of $2,029 in our Regulated Natural Gas segment; and
Current wording
a decrease in bad debt of expense of $2,424 in our Regulated Natural Gas segment; and
Previous wording
Purchased gas increased by $53,974 or 29.2%. 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 $67,160 and lower gas usage of $13,186 during the first quarter of 2026.
Current wording
Purchased gas decreased by $10,534 or 18.6%. 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 decrease is the result of a decrease in the average cost of gas of $2,847 and lower gas usage of $7,687 during the second quarter of 2026.
Previous wording
Depreciation and amortization expense increased by $11,352 or 11.4% 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 $9,773 or 9.4% principally due to continued capital expenditures to expand and improve our utility facilities and our acquisitions of new water and wastewater utility systems.
Previous wording
Interest expense, net of interest income, increased by $3,860 or 4.7%. Interest expense, net of interest income, increased by $3,318 in our Regulated Water segment and by $1,605 in our Regulated Natural Gas segment. Interest expense, net of interest income, in Other relates to our corporate operations, and this decreased by $1,063 primarily due to our revolving credit facility borrowings being replaced by commercial paper issuances at a lower interest rate, beginning the second quarter of 2025.
Current wording
Interest expense, net of interest income, increased by $9,093 or 11.4%. Interest expense, net of interest income, increased by $2,942 in our Regulated Water segment and by $2,245 in our Regulated Natural Gas segment. Interest expense, net of interest income, in Other relates to our corporate operations, and this increased by $3,906 primarily due to the additional senior note borrowing in 2026.
Previous wording
Consolidated operating revenues increased by $78,133 or 10.0% as compared to the same period in 2025. Revenues from our Regulated Water and Regulated Natural Gas segments increased by $22,127 and $58,615, respectively, while our Other segment decreased by $2,609. 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 $94,080 or 7.2% as compared to the same period in 2025. Revenues from our Regulated Water and Regulated Natural Gas segments increased by $47,389 and $50,573, respectively, while our Other segment decreased by $3,882. 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
pre-merger expenses of $16,300 consisting of financial advisor fees, legal expenses, communications and other professional fees during the first quarter of 2026;
Current wording
pre-merger expenses of $17,521, consisting of financial advisor fees, legal expenses, communications and other professional fees, during the first half of 2026;
Previous wording
an increase in employee-related costs of $4,319, primarily resulting from annual merit increases, higher incentive bonuses, and increase in overtime pay in our Regulated Water Segment due to higher weather-related main break activity during the first quarter of 2026;
Current wording
an increase in employee-related costs of $10,183, primarily resulting from annual merit increases, higher incentive bonuses, higher medical claims, and increase in overtime pay due to higher weather-related main break activity during the first half of 2026;
Previous wording
an increase in bad debt expense of $5,450 in our Regulated Water segment, of which $5,889 relates to a favorable regulatory asset adjustment in the first quarter of 2025;
Current wording
an increase in bad debt expense of $4,980 in our Regulated Water segment, of which $5,889 relates to a favorable regulatory asset adjustment in the first quarter of 2025;
Previous wording
an increase in contractor services of $2,135 in our Regulated Water segment, primarily due to higher main break activity, frozen service lines, and snow removal costs during the first quarter of 2026;
Current wording
an increase in contractor services of $2,698 in our Regulated Water segment, primarily due to higher main break activity, frozen service lines, and snow removal costs during the first half of 2026;
Previous wording
an increase in insurance expense of $6,344, of which $5,602 relates to an insurance recovery in the first quarter of 2025 of costs associated with remediating an advisory for some of our Illinois water utility customers;
Current wording
an increase in insurance expense of $1,417, which is net of insurance recoveries of $5,602 in the first quarter of 2025 and $6,750 in the second quarter of 2026 of costs associated with remediating an advisory for some of our Illinois water utility customers; offset by
Previous wording
Taxes other than income taxes increased by $3,101 or 13.6% primarily due to an increase in our Illinois subsidiary’s invested capital tax expense and an increase in payroll taxes as a result of higher employee compensation expense.
Current wording
Taxes other than income taxes increased by $6,682 or 15.3% primarily due to a prior year sales and use tax accrual benefit in our Regulated Natural segment, increase in our Illinois subsidiary’s invested capital tax expense, and an increase in payroll taxes as a result of higher employee compensation expense.
Previous wording
Our effective income tax rate was an expense of 2.8% in the first quarter of 2026, compared to a benefit of 7.8% in the first quarter of 2025. The increase in the income tax expense is primarily attributed to last year’s 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 not recurring in the current year.
Current wording
Our effective income tax rate was an expense of 2.9% in the first half of 2026, compared to a benefit of 4.3% in the first half of 2025. The increase in the income tax expense is primarily attributed to last year’s 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 not recurring in the current year.
Previous wording
Revenues from our Regulated Water segment increased by $22,127 or 7.4% for the first quarter of 2026 as compared to the same period in 2025, mainly due to the following:
Current wording
Revenues from our Regulated Water segment increased by $25,262 or 7.6% for the second quarter of 2026 as compared to the same period in 2025, mainly due to the following:
Previous wording
an increase in volume of $3,369; and
Current wording
an increase in volume of $6,116; and
Previous wording
additional water and wastewater revenues of $2,402 associated with a larger customer base due to utility acquisitions and organic growth.
Current wording
additional water and wastewater revenues of $2,328 associated with a larger customer base due to utility acquisitions and organic growth.
Previous wording
an increase in production costs for water and wastewater operations of $1,826, particularly purchased power and chemical costs; and
Current wording
an increase in production costs for water and wastewater operations of $2,296, particularly purchased power and chemical costs; and
Previous wording
Depreciation and amortization increased by $9,062 or 14.9% primarily due to continued capital investmentto 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 $7,296 or 11.3% primarily due to continued capital investmentto 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 $3,318 or 9.1% 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 $2,942 or 7.9% for the quarter primarily due to higher push down debt borrowings.
Previous wording
an increase in employee related costs of $1,811, primarily resulting from annual merit increases, higher incentive bonuses, and increase in overtime pay in our Regulated Water Segment due to higher weather-related main break activity during the first quarter of 2026;
Current wording
an increase in employee related costs of $5,938, primarily resulting from higher medical claims, annual merit increases, and increase in overtime pay due to higher weather-related main break activity during the first half of 2026;
Previous wording
an increase in bad debt expense of $5,450, of which $5,889 relates to a favorable regulatory asset adjustment in the first quarter of 2025;
Current wording
an increase in bad debt expense of $4,980, of which $5,889 relates to a favorable regulatory asset adjustment in the prior year;
Previous wording
an increase in contractor services of $2,135, primarily due to higher main break activity, frozen service lines, and snow removal costs during the first quarter of 2026;
Current wording
an increase in contractor services of $2,698, primarily due to higher main break activity, frozen service lines, and snow removal costs during the first quarter of 2026; and
Previous wording
Taxes other than income taxes went up by $2,694 or 17.3% primarily due to an increase in our Illinois subsidiary’s invested capital tax expense and an increase in payroll taxes as a result of higher employee compensation expense.
Current wording
Taxes other than income taxes went up by $3,298 or 9.9% primarily due to an increase in our Illinois subsidiary’s invested capital tax expense and an increase in payroll taxes as a result of higher employee compensation expense in the first quarter of 2026.
Previous wording
Our effective income tax rate for our Regulated Water Segment was an expense of 15.3% in the first quarter of 2026, compared to a benefit of 4.4% in the first quarter of 2025. The increase in the effective tax rate is primarily attributed to last year’s 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 not recurring in the current year.
Current wording
Our effective income tax rate for our Regulated Water Segment was an expense of 16.0% and 6.0% in the first half of 2026 and 2025, respectively. The increase in income tax expense is primarily attributed to last year’s 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 not recurring in the current year.
Previous wording
Operations and maintenance expense for the three months ended March 31, 2026 increased by $558 or 1.0% primarily due to the following:
Current wording
Operations and maintenance expense for the three months ended June 30, 2026 increased by $158 or 0.3% primarily due to the following:
Previous wording
an increase in labor and employee benefits of $2,521; offset by
Current wording
an increase in labor and employee benefits of $2,731 primarily due to annual merit increases and higher medical claims;
Previous wording
Interest expense, net, increased by $1,605 or 6.1% due to higher push down debt borrowings of the Regulated Natural Gas segment from Essential Utilities, Inc, which is primarily used to fund capital projects.
Current wording
Interest expense, net, increased by $2,245 or 8.7% due to higher push down debt borrowings of the Regulated Natural Gas segment from Essential Utilities, Inc, which is primarily used to fund capital projects.
Previous wording
an increase in purchased gas costs of $56,343; refer to purchased gas costs discussion below for further information;
Current wording
an increase in purchased gas costs of $47,149; refer to purchased gas costs discussion below for further information;
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (12)
Current report — wording carried from elsewhere
Consolidated operating revenues increased by $15,947 or 3.1% as compared to the same period in 2025. Revenues from our Regulated Water segment increased by $25,262, while revenues from our Regulated Natural Gas and Other segments decreased by $8,042 and $1,273, 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 report — wording carried from elsewhere
a decrease in insurance expense of $4,926, primarily due to an insurance recovery of $6,750 in the second quarter to 2026 for costs associated with remediating an advisory for some of our Illinois water utility customers;
Current report — wording carried from elsewhere
a decrease in bad debt of expense of $4,453 in our Regulated Natural Gas segment; and
Current report — wording carried from elsewhere
Purchased gas increased by $43,440 or 18.0%. 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 $64,313, offset by lower gas usage of $20,873 resulting from a slight shift in customer usage pattern during the first six months of 2026.
Current report — wording carried from elsewhere
Depreciation and amortization expense increased by $21,125 or 10.4% principally due to continued capital expenditures to expand and improve our utility facilities and our acquisitions of new water and wastewater utility systems.
Current report — wording carried from elsewhere
an increase in volume of $9,485; and
Current report — wording carried from elsewhere
additional water and wastewater revenues of $4,730 associated with a larger customer base due to utility acquisitions and organic growth.
Current report — wording carried from elsewhere
Depreciation and amortization increased by $16,358 or 13.0% primarily due to continued capital investmentto 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 report — wording carried from elsewhere
a decrease in purchased gas costs of $9,194; refer to purchased gas costs discussion below for further information;
Current report — wording carried from elsewhere
an increase of $11,816 due to higher rates and other surcharges.
Current report — wording carried from elsewhere
Our Regulated Natural Gas segment is affected by the cost of natural gas, which is passed through to customers using a purchased gas adjustment clause and includes commodity price, transportation and storage costs. These costs are reflected in the condensed consolidated statement of operations and comprehensive income as purchased gas expenses. Fluctuations in the cost of purchased gas impact operating revenues on a dollar-for-dollar basis. Purchased gas decreased by $9,194 or 17.2% largely due to a decrease in the average cost of gas of $3,317 and lower gas usage of $5,877 resulting from a slight shift in customer usage pattern and warmer weather during the second quarter of 2026. During the quarter ended June 30, 2026, we experienced 485 actual heating degree days (HDDs), which was warmer by 6% than prior year’s 514 HDDs for Pittsburgh, Pennsylvania, which we use as a proxy for our western Pennsylvania service territory. HDDs are used in the natural gas industry to measure the relative coldness of weather and to estimate the demand for natural gas.
Current report — wording carried from elsewhere
Interest expense, net, increased by $3,850 or 7.4% due to higher push down debt borrowings of the Regulated Natural Gas segment from Essential Utilities, Inc, which is primarily used to fund capital projects.