Essential Utilities, Inc.

Previous wording

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). On February 10, 2026, at the respective special shareholder meetings of the Company and American Water, each company’s shareholders approved the merger-related proposals, satisfying certain of the conditions to closing.

Current wording

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). On February 10, 2026, at the respective special shareholder meetings of the Company and American Water, each company’s shareholders approved the merger-related proposals, satisfying certain of the conditions to closing. On August 14, 2026, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 expired, satisfying an additional condition for closing.

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). 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.

Current wording

Consummation of the Merger is subject to certain remaining customary conditions, including the receipt of certain governmentaland public utility commission approvals, 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 settlement agreements have been reached in Texas, Pennsylvania, and North Carolina. 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 nine months ended September 30, 2026, the Company incurred pre-merger related expenses of $4,934 and $22,455, respectively, which are included in operations and maintenance expense in the condensed consolidated statements of operations and comprehensive income.

Previous wording

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 wording

During the nine months ended September 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:

Previous 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.

Current wording

During the nine months ended September 30, 2026, the Company implemented infrastructure rehabilitation surcharges designed to increase total operating revenues on an annual basis by $12,276 in its water and wastewater utility operating divisions in Pennsylvania, by $2,610 in its water and wastewater utility operating divisions in Illinois, by $1,120 in its water and wastewater utility operating divisions in New Jersey, by $13,972 in its natural gas operating division in Pennsylvania, and by $2,892 in its natural gas operating division in Kentucky.

Previous wording

On March 27, 2026, the Company’s natural gas operating subsidiary in Pennsylvania filed an application with the Pennsylvania Public Utility Commission toincrease operating revenues for its natural gas distribution service by approximately $163,000 annually.

Current wording

On March 27, 2026, the Company’s natural gas operating subsidiary in Pennsylvania filed an application with the Pennsylvania Public Utility Commission toincrease operating revenues for its natural gas distribution service by approximately $163,000 annually. On October 2, 2026, the Company received a recommended decision from the administrative law judge. The Company anticipates a final order to be issued in December 2026.

Previous wording

On January 30, 2026, the Company’s regulated water and wastewater operating subsidiary in New Jersey, Aqua New Jersey, filed an application with the New Jersey Board of Public Utilities designed to increase revenues by $7,886 annually.

Current wording

On January 30, 2026, the Company’s regulated water and wastewater operating subsidiary in New Jersey, Aqua New Jersey, filed an application with the New Jersey Board of Public Utilities designed to increase revenues by $7,886 annually. The Company anticipates a final order to be issued in the fourth quarter of 2026.

Previous wording

On July 30, 2025, the Company’s regulated water and wastewater operating subsidiary in Virginia, Aqua Virginia, filed an application with the State Corporation Commission designed to increase revenues by $7,927 annually. Interim rates were implemented on January 26, 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 July 30, 2025, the Company’s regulated water and wastewater operating subsidiary in Virginia, Aqua Virginia, filed an application with the State Corporation Commission (“SCC”) designed to increase revenues by $7,927 annually. Interim rates were implemented on January 26, 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. On April 24, 2026, the Company reached a settlement in principle with the SCC. On August 26, 2026, the Company received the Hearing Examiner’s Report. The Company anticipates a final order to be issued in the fourth quarter of 2026.

Previous wording

On June 20, 2025, the Company’s regulated water and wastewater operating subsidiary in Texas, Aqua Texas, filed an application with the Public Utility Commission of Texas designed to increase rates by $29,149. Interim rates were implemented on March 9, 2026, with the difference between interim and final approved rates subject to refund to customers based on an estimate of the final outcome of the order.

Current wording

On June 20, 2025, the Company’s regulated water and wastewater operating subsidiary in Texas, Aqua Texas, filed an application with the Public Utility Commission of Texas designed to increase rates by $29,149. Interim rates were implemented on March 9, 2026, with the difference between interim and final approved rates subject to refund to customers based on an estimate of the final outcome of the order. On July 21, 2026, the Company received a recommended decision from the administrative law judge. The Company anticipates a final order to be issued in the fourth quarter of 2026.

Previous 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.

Current wording

In October 2026, the Company acquired private water and wastewater utility assets in Harris County, Texas, which serve approximately 400 equivalent retail customers for $1,125. 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 September 30, 2026, the Company had two 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 $281,000 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 4 – Water and Wastewater Acquisitions for further discussion. On October 19, 2026, the Company entered into an asset purchase agreement for the acquisition of the water and wastewater utility system assets of Central States Water Resources, serving approximately 4,100 customers in North Carolina for $3,500, subject to final adjustment pursuant to the purchase agreement. On October 28, 2026, the Company entered into asset purchase agreements to acquire the water and wastewater assets of the Village of Buckingham Springs in Pennsylvania, which serve approximately 1,300 customers, for $2,800, and the wastewater assets of the Hempfield Township Municipal Authority in Pennsylvania, which serve approximately 1,200 customers, for $2,200.

Previous 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.

Current wording

During the nine-month period ended September 30, 2026, we invested $1,097,778 to improve our regulated water and natural gas infrastructure system and to enhance customer service. 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 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.

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. During the three and nine months ended September 30, 2026, the Company received $10,542 and $21,028, respectively, from Tyco, BASF, 3M, and Dupont, net of legal fees and settlement costs. As of September 30, 2026, the Company presented total net settlement proceeds allocated to its North Carolina and Virginia water and wastewater subsidiaries of $6,197 and $8,385 as a regulatory liability and contributions in aid of construction, respectively, pursuant to regulatory orders issued by the public utility commissions from such states regarding the treatment of PFAS settlement proceeds. The remaining net proceeds received that were allocated to the Company’s other water and wastewater subsidiaries totaling $52,818 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.

Previous wording

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 wording

Net cash flows from operating activities were $818,229 for the first nine months of 2026, compared to $804,347 for the first nine months of 2025. Operating cash flow increased by $13,882, primarily driven by working capital changes, including the impact of new rates implemented in the current nine-month period compared to the prior period.

Previous wording

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 wording

Net cash flows used in investing activities increased by $40,638, primarily due to the Company’s continued investment in replacing aging infrastructure, contaminant mitigation and emissions reductions, among others.

Previous 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.

Current wording

Net cash flows from financing activities increased by $4,057 during the nine months ended September 30, 2026, compared to the prior period, primarily due to increased debt issuances, partially offset by higher dividend payments and lower equity issuances.

Previous wording

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 wording

On June 16, 2026, the Company amended its $1,000,000 unsecured long-term revolving credit facility to extend the maturity date of the facility by another year, to December 2028, and eliminate one of its sustainability performance targets applicable to interest rates and commitment fees. On October 16, 2026, the Company further amended the facility to waive the change in control provision in connection with the merger with American Water and eliminate remaining sustainability targets. All other terms of the facility remained unchanged.

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 5.125%. 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.

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 nine months ended September 30, 2026, the Company’s regulated water subsidiaries obtained in the aggregate $35,180 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

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.

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 September 30, 2026, outstanding borrowings under the Company’s CP Program were $487,000, net of unamortized discount on issuance of $511, with a weighted average interest rate of 4.14%and weighted average remaining term of 10 days.

Previous 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.

Current wording

During the three months ended September 30, 2026, we issued 2,479,036 shares of common stock for net proceeds of approximately $101,300 under the Company’sat-the-market equity sales program(“2024 ATM”). During the nine months ended September 30, 2026, we issued 2,787,692 shares of common stock for net proceeds of approximately $113,800 under the 2024 ATM. As of September 30, 2026, the 2024 ATM had approximately $546,000 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 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.

Current wording

At September 30, 2026, we had $9,320 of cash and cash equivalents compared to $34,778 at December 31, 2025. During the first nine 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 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.

Current wording

At September 30, 2026, our $1,000,000 unsecured revolving credit facility had $498,697 available for borrowing (net of $487,000 of capacity designated for outstanding principal borrowings under our commercial paper program and $14,303 letter of credit usage). Additionally, at September 30, 2026, we had short-term lines of credit of $400,000, primarily used for working capital, of which $260,400 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

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 wording

Consolidated operating revenues increased by $31,286 or 6.6% as compared to the same period in 2025. Revenues from our Regulated Water, Regulated Natural Gas, and Other segments increased by $16,561, $14,105, and $620, 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

a decrease in bad debt of expense of $4,453 in our Regulated Natural Gas segment; and

Current wording

a decrease in bad debt of expense of $1,281 in our Regulated Natural Gas segment; offset by

Previous 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.

Current wording

Purchased gas increased by $2,876 or 12.8%. 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 $77 and higher gas usage of $2,799 during the third quarter of 2026.

Previous 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.

Current wording

Depreciation and amortization expense increased by $7,245 or 6.8% 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 $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.

Current wording

Interest expense, net of interest income, increased by $9,235 or 11.4%. Interest expense, net of interest income, increased by $2,666 in our Regulated Water segment and by $2,275 in our Regulated Natural Gas segment. Interest expense, net of interest income, in Other relates to our corporate operations, and this increased by $4,294 primarily due to the additional senior note borrowing in 2026.

Previous wording

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 wording

Our effective income tax ratewas an expense of 6.0% and 4.5% in the third quarter of 2026 and 2025, respectively. The increase in income tax expense in the third quarter of 2026 is primarily attributed to the increase in earnings, state jurisdictional mix, and change in flow-through and other permanent items.

Previous 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.

Current wording

Consolidated operating revenues increased by $125,366 or 7.1% as compared to the same period in 2025. Revenues from our Regulated Water and Regulated Natural Gas segments increased by $63,950 and $64,678, respectively, while our Other segment decreased by $3,262. 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 $17,521, consisting of financial advisor fees, legal expenses, communications and other professional fees, during the first half of 2026;

Current wording

pre-merger expenses of $22,455, consisting of $3,041 of accruals for retention awards and $19,414 of financial advisor fees, professional fees and filing fees incurred during the first nine months of 2026;

Previous 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;

Current wording

an increase in employee-related costs of $6,720, primarily resulting from annual merit increases, higher incentive bonuses, and increase in overtime pay due to higher weather-related main break activity in 2026, partially offset by a lower stock- based compensation expense;

Previous 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;

Current wording

an increase in bad debt expense of $5,071 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 $2,698 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;

Current wording

an increase in contractor services of $3,194 in our Regulated Water segment, primarily due to higher main break activity, frozen service lines, and increased buildings and grounds maintenance costs during the first nine months of 2026;

Previous 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

Current wording

an increase in insurance expense of $1,435, 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

a decrease in bad debt of expense of $2,424 in our Regulated Natural Gas segment; and

Current wording

a decrease in bad debt of expense of $5,734 in our Regulated Natural Gas segment; and

Previous wording

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 wording

Purchased gas increased by $46,316 or 17.6%. 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 $64,390, offset by lower gas usage of $18,074 during the first nine months of 2026.

Previous wording

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 wording

Depreciation and amortization expense increased by $28,370 or 9.2% 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

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.

Current wording

Taxes other than income taxes increased by $5,850 or 8.6% primarily due to a prior year sales and use tax accrual benefit in our Regulated Natural Gas 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

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 wording

Interest expense, net of interest income, increased by $22,188 or 9.1%. Interest expense, net of interest income, increased by $8,926 in our Regulated Water segment and by $6,125 in our Regulated Natural Gas segment. Interest expense, net of interest income, in Other relates to our corporate operations, and this increased by $7,137 primarily due to the additional senior note borrowing in 2026.

Previous 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.

Current wording

Our effective income tax rate was an expense of 3.6% in the first nine months of 2026, compared to a benefit of 2.5% in the first nine months 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 $25,262 or 7.6% for the second 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 $16,561 or 4.5% for the third quarter of 2026 as compared to the same period in 2025, mainly due to the following:

Previous wording

additional water and wastewater revenues of $4,730 associated with a larger customer base due to utility acquisitions and organic growth.

Current wording

additional water and wastewater revenues of $1,203 associated with a larger customer base due to utility acquisitions and organic growth; offset by