Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 10-Q
(Mark One)
S QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 2025
£ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from_______________ to _______________
Commission File Number 1-6659
ESSENTIAL UTILITIES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania
23-1702594
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
762 W. Lancaster Avenue, Bryn Mawr, Pennsylvania
19010 -3489
(Address of principal executive offices)
(Zip Code)
(610) 527-8000
(Registrant’s telephone number, including area code)
N/A
(Former Name, former address and former fiscal year, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes S No £
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes S No £
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12(b)-2 of the Exchange Act.:
Large Accelerated Filer S
Accelerated Filer £
Non-Accelerated Filer £
Smaller Reporting Company £
Emerging Growth Company £
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. £
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes £ No S
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, $0.50 par value
WTRG
New York Stock Exchange
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of July 28, 2025: 280,468,669
ESSENTIAL UTILITIES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Page
Part I – Financial Information
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets (unaudited) – June 30, 2025 and December 31, 2024
2
Condensed Consolidated Statements of Operations and Comprehensive Income (unaudited) – Three Months Ended June 30, 2025 and 2024
4
Condensed Consolidated Statements of Operations and Comprehensive Income (unaudited) – Six Months Ended June 30, 2025 and 2024
5
Condensed Consolidated Statements of Capitalization (unaudited) - June 30, 2025 and December 31, 2024
6
Condensed Consolidated Statements of Equity (unaudited) – Three and Six Months Ended June 30, 2025
7
Condensed Consolidated Statements of Equity (unaudited) – Three and Six Months Ended June 30, 2024
8
Condensed Consolidated Statements of Cash Flow (unaudited) – Six Months Ended June 30, 2025 and 2024
9
Notes to Condensed Consolidated Financial Statements (unaudited)
10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
29
Item 3. Quantitative and Qualitative Disclosures About Market Risk
44
Item 4. Controls and Procedures
Part II – Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 5. Other Information
Item 6. Exhibits
46
Signatures
47
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars, except per share amounts)
(UNAUDITED)
June 30,
December 31,
Assets
2025
2024
Property, plant and equipment, at cost
$
16,857,483
16,275,377
Less: accumulated depreciation
3,278,033
3,131,901
Net property, plant and equipment
13,579,450
13,143,476
Current assets:
Cash and cash equivalents
25,071
9,156
Accounts receivable, net
198,500
166,522
Unbilled revenues
82,300
142,310
Inventory - materials and supplies
51,116
48,619
Inventory - gas stored
39,376
45,311
Prepayments and other current assets
29,430
41,139
Regulatory assets
13,585
32,854
Total current assets
439,378
485,911
2,058,316
1,907,786
Deferred charges and other assets, net
103,381
112,712
Funds restricted for construction activity
1,433
1,420
Goodwill
2,340,709
2,340,713
Operating lease right-of-use assets
28,506
31,263
Intangible assets
3,112
3,273
Total assets
18,554,285
18,026,554
The accompanying notes are an integral part of these consolidated financial statements
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
Liabilities and Equity
Stockholders' equity:
Common stock at $0.50 par value, authorized 600,000,000 shares, issued 283,901,142 and 278,209,660 as of June 30, 2025 and December 31, 2024
141,951
139,105
Capital in excess of par value
4,420,240
4,199,836
Retained earnings
2,249,401
1,949,492
Treasury stock, at cost, 3,434,542 and 3,386,069 shares as of June 30, 2025 and December 31, 2024
(91,390)
(89,624)
Total stockholders' equity
6,720,202
6,198,809
Long-term debt, excluding current portion
7,669,795
7,416,289
Less: debt issuance costs and unamortized discount on debt
46,801
47,908
Long-term debt, excluding current portion, net of debt issuance costs and unamortized discount on debt
7,622,994
7,368,381
Commitments and contingencies (See Note 14)
Current liabilities:
Current portion of long-term debt
132,138
142,807
Loans payable
18,040
186,542
Accounts payable
198,132
258,615
Book overdraft
5,453
47,714
Accrued interest
72,158
72,281
Accrued taxes
24,483
38,219
Regulatory liabilities
1,709
1,770
Dividends payable
-
89,441
Other accrued liabilities
146,650
137,279
Total current liabilities
598,763
974,668
Deferred credits and other liabilities:
Deferred income taxes and investment tax credits
2,002,082
1,831,868
Customers' advances for construction
113,268
113,323
721,488
764,745
Operating lease liabilities
24,482
27,447
Pension and other postretirement benefit liabilities
36,699
33,680
Other
23,540
24,788
Total deferred credits and other liabilities
2,921,559
2,795,851
Contributions in aid of construction
690,767
688,845
Total liabilities and equity
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per share amounts)
Three Months Ended
Operating revenues
514,907
434,406
Operating expenses:
Operations and maintenance
148,510
142,512
Purchased gas
56,735
33,728
Depreciation
99,542
89,578
Amortization
3,977
1,068
Taxes other than income taxes
20,872
22,233
Total operating expenses
329,636
289,119
Operating income
185,271
145,287
Other expense (income):
Interest expense
79,809
73,045
Interest income
(301)
(276)
Allowance for funds used during construction
(7,027)
(5,229)
Gain on sale of other assets
(256)
(203)
Other, net
647
701
Income before income taxes
112,399
77,249
Income tax expense
4,572
1,864
Net income
107,827
75,385
Comprehensive income
Net income per common share:
Basic
0.38
0.28
Diluted
Average common shares outstanding during the period:
280,275
273,567
280,725
273,953
Six Months Ended
1,298,533
1,046,475
286,334
279,412
241,376
163,403
196,306
178,294
6,590
2,156
43,751
47,257
774,357
670,522
524,176
375,953
161,874
146,318
(530)
(1,265)
(12,859)
(9,910)
(493)
(91,828)
591
259
375,593
332,379
Income tax benefit
(16,023)
(8,778)
391,616
341,157
1.41
1.25
277,748
273,472
278,335
273,869
CONDENSED CONSOLIDATED STATEMENTS OF CAPITALIZATION
Treasury stock, at cost
Long-term debt of subsidiaries (substantially collateralized by utility plant):
Interest Rate Range
Maturity Date Range
0.00% to 0.99%
2028 to 2053
2,679
2,637
1.00% to 1.99%
2030 to 2046
20,667
11,732
2.00% to 2.99%
2025 to 2058
205,559
206,297
3.00% to 3.99%
2026 to 2056
1,255,225
1,258,003
4.00% to 4.99%
2025 to 2059
1,237,573
1,239,032
5.00% to 5.99%
2028 to 2061
412,260
312,260
6.00% to 6.99%
2026 to 2036
31,000
7.00% to 7.99%
2025 to 2027
12,770
27,888
8.00% to 8.99%
447
9.00% to 9.99%
2026
11,800
3,189,533
3,101,096
Notes payable to bank under revolving credit agreement, variable rate, due 2027
413,000
Unsecured notes payable:
Commercial paper program (See Note 6)
567,400
Notes at 2.40% due 2031
400,000
Notes at 2.704% due 2030
500,000
Notes ranging from 3.01% to 3.59% due 2029 through 2050
1,125,000
Notes at 4.276%, due 2049
Notes at 4.80%, due 2027
Notes at 5.30%, due 2052
Notes at 5.375%, due 2034
Notes at 5.95%, due 2033 through 2034
20,000
Total long-term debt
7,801,933
7,559,096
Total capitalization
14,343,196
13,567,190
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Capital in
Common
Excess of
Retained
Treasury
Stock
Par Value
Earnings
Total
Balance at December 31, 2024
283,789
Dividends of March 1, 2025 ($0.3255 per share)
(22)
Dividends of June 2, 2025 declared ($0.3255 per share)
(90,054)
Issuance of common stock under dividend reinvestment plan (104,369 shares)
52
3,760
3,812
Issuance of common stock from at-the-market sale agreements (1,627,009 shares)
813
62,267
63,080
Repurchase of stock (61,455 shares)
(2,234)
Equity compensation plan (155,823 shares)
78
(78)
Exercise of stock options (9,703 shares)
337
342
Stock-based compensation
2,592
(185)
2,407
(88)
250
162
Balance at March 31, 2025
140,053
4,268,626
2,143,020
(91,608)
6,460,091
Dividends of June 2, 2025 ($0.3255 per share)
(1,197)
Issuance of common stock under dividend reinvestment plan (105,842 shares)
53
3,704
3,757
Issuance of common stock from at-the-market sale agreements (3,664,762 shares)
1,833
143,663
145,496
Repurchase of stock (75 shares)
(3)
Equity compensation plan (21,857 shares)
11
(11)
Exercise of stock options (2,117 shares)
1
74
75
4,292
(249)
4,043
(108)
221
113
Balance at June 30, 2025
Balance at December 31, 2023
138,297
4,137,696
1,706,675
(86,485)
5,896,183
265,772
Dividends of March 1, 2024 ($0.3071 per share)
(1)
Dividends of June 1, 2024 declared ($0.3071 per share)
(83,998)
Issuance of common stock under dividend reinvestment plan (117,210 shares)
59
3,823
3,882
Repurchase of stock (62,872 shares)
(2,231)
Equity compensation plan (160,694 shares)
80
(80)
Exercise of stock options (4,971 shares)
173
175
1,049
73
1,122
(51)
274
223
Balance at March 31, 2024
138,438
4,142,610
1,888,521
(88,442)
6,081,127
Dividends of June 1, 2024 ($0.3071 per share)
Issuance of common stock under dividend reinvestment plan (108,544 shares)
54
3,736
3,790
Repurchase of stock (30 shares)
Equity compensation plan (23,142 shares)
12
(12)
Exercise of stock options (7,117 shares)
244
248
2,751
(189)
2,562
(121)
245
124
Balance at June 30, 2024
138,508
4,149,208
1,963,716
(88,198)
6,163,234
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands of dollars)
Cash flows from operating activities:
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization
202,896
180,450
Deferred income taxes
(16,704)
(12,404)
Provision for doubtful accounts
8,620
13,843
6,909
3,825
Gain on sale of utility systems and other assets
Net change in receivables, deferred purchased gas costs, inventory and prepayments
35,915
21,222
Net change in payables, accrued interest, accrued taxes and other accrued liabilities
(44,062)
(24,245)
(12,863)
(5,594)
Net cash flows from operating activities
571,834
426,426
Cash flows from investing activities:
Property, plant and equipment additions, including the debt component of allowance for funds used during construction of $4,145 and $3,482
(612,629)
(548,868)
Acquisitions of utility systems, net
(20,536)
(67)
Net proceeds from the sale of utility systems and other assets
537
166,982
(201)
(158)
Net cash flows used in investing activities
(632,829)
(382,111)
Cash flows from financing activities:
Customers' advances and contributions in aid of construction
10,154
7,361
Repayments of customers' advances
(2,192)
(3,009)
Net repayments of short-term debt
(168,502)
(66,857)
Net proceeds from commercial paper program
Proceeds from other long-term debt
985,725
789,946
Repayments of other long-term debt
(1,307,301)
(597,972)
Change in cash overdraft position
(42,261)
2,143
Proceeds from issuance of common stock under dividend reinvestment plan
7,569
7,672
Proceeds from issuance of common stock from at-the-market sale agreement
208,576
Proceeds from exercised stock options
417
423
Repurchase of common stock
(2,237)
(2,232)
Dividends paid on common stock
(180,713)
(167,930)
275
347
Net cash flows from (used in) financing activities
76,910
(30,108)
Net change in cash and cash equivalents
15,915
14,207
Cash and cash equivalents at beginning of period
4,612
Cash and cash equivalents at end of period
18,819
Non-cash investing activities:
Property, plant and equipment additions purchased at the period end, but not yet paid for
123,154
131,189
Non-cash utility property contributions
9,122
18,791
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Basis of Presentation
The accompanying unaudited condensed consolidated balance sheets and statements of capitalization of Essential Utilities, Inc. and subsidiaries (collectively, the “Company”, “we”, “us” or “our”) at June 30, 2025, the unaudited condensed consolidated statements of operations and comprehensive income and of equity for the three and six months ended June 30, 2025 and 2024, and the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024, have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim reporting and the rules and regulations for reporting on Quarterly Reports on Form 10-Q. Because they cover interim periods, the statements and related notes to the financial statements do not include all disclosures and notes normally provided in annual financial statements and, therefore, should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments, consisting of only recurring accruals, which are necessary to present a fair statement of its condensed consolidated balance sheets, condensed consolidated statements of capitalization, condensed consolidated statements of equity, condensed consolidated statements of operations and comprehensive income, and condensed consolidated statements of cash flow for the periods presented, have been made.
The preparation of financial statements often requires the selection of specific accounting methods and policies. Significant estimates and judgments may be required in selecting and applying those methods and policies in the recognition of the assets and liabilities in its condensed consolidated balance sheets, the revenues and expenses in its condensed consolidated statements of operations and comprehensive income, and the information that is contained in its summary of significant accounting policies and notes to condensed consolidated financial statements. Making these estimates and judgments requires the analysis of information concerning events that may not yet be complete and of facts and circumstances that may change over time. Furthermore, we are exposed to the uncertain state of the economy and macroeconomic conditions, including inflation and volatility of interest rates. As these continue to evolve, future events and effects related to these conditions cannot be determined with precision. Accordingly, actual amounts or future results can differ materially from those estimates that the Company includes currently in its condensed consolidated financial statements, summary of significant accounting policies, and notes.
There have been no changes to the summary of significant accounting policies previously identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 2 – Revenue Recognition
The following table presents our revenues disaggregated by major source and customer class:
June 30, 2025
June 30, 2024
Water Revenues
Wastewater Revenues
Natural Gas Revenues
Other Revenues
Revenues from contracts with customers:
Residential
185,221
41,450
102,932
165,412
36,053
70,597
Commercial
52,033
10,523
20,186
45,796
8,808
14,408
Fire protection
11,875
10,742
Industrial
10,187
649
512
8,638
564
357
Gas transportation & storage
41,561
35,391
Other water
14,296
19,893
Other wastewater
3,110
2,762
Other utility
7,417
2,684
7,450
2,901
Revenues from contracts with customers
273,612
55,732
172,608
250,481
48,187
128,203
Alternative revenue program
24
230
4,713
1,024
(114)
(15)
Other and eliminations
5,304
3,739
Consolidated
273,636
55,962
177,321
7,988
251,505
48,073
128,188
6,640
349,098
79,811
405,005
317,243
71,647
277,523
97,510
19,704
81,537
87,533
17,790
56,579
23,029
21,123
19,238
1,250
1,786
16,780
1,106
1,247
138,084
105,882
31,964
35,500
6,270
6,386
18,181
5,575
10,152
5,711
520,839
107,035
644,593
478,179
96,929
451,383
(281)
(38)
3,525
1,680
(127)
1,136
17,285
11,584
520,558
106,997
648,118
22,860
479,859
96,802
452,519
17,295
Note 3 – Water and Wastewater Utility Acquisitions
Completed Acquisitions
In July 2025, the Company acquired the wastewater utility system of the City of Beaver Falls, Pennsylvania for $37,750. The system serves approximately 3,200 customers in the City of Beaver Falls and also provides bulk transmission and treatment service for approximately 3,800 equivalent dwelling units in seven nearby municipalities.
In April 2025, the Company acquired the Village of Midvale’s water system in Ohio, which serves approximately 1,000 customers for $2,950.
In January 2025, the Company acquired Greenville Sanitary Authority’s wastewater utility assets, which serve approximately 2,300 customers in Greenville, Pennsylvania for $18,000.
In October 2024, the Company acquired wastewater utility assets in Morgan County, Indiana, which serve approximately 100 customers for $500.
In May 2024, the Company acquired the wastewater utility assets of Westfield HOA, which serve approximately 200 customers within Westfield Homeowners Subdivision in Glenview, Illinois for a cash purchase price of $67.
The purchase price allocation for these acquisitions consisted primarily of property, plant and equipment.
Pending Acquisitions
In October 2024, the Company entered into a purchase agreement to acquire Integra Water Texas, LLC’s wastewater system assets in Bastrop County, Texas, which serve approximately 1,100 customers for $4,400.
In June 2024, the Company entered into a purchase agreement to acquire private water and wastewater utility assets in Harris County, Texas, which serve approximately 400 equivalent retail customers for $1,125.
In September 2023, the Company entered into a purchase agreement to acquire Greenville Municipal Water Authority’s water system in Greenville, Pennsylvania which serves approximately 3,000 customers for $18,000.
The purchase price for these pending acquisitions are subject to certain adjustments at closing, and are subject to regulatory approval, including the final determination of the fair value of the rate base acquired. We plan to finance the purchase price of these acquisitions by utilizing our commercial paper program and revolving credit facility until permanent debt and common equity are secured. These pending acquisitions are expected to close in 2025. Closings for our utility acquisitions are subject to the timing of the respective regulatory approval processes.
East Whiteland Purchase Agreement
On July 29, 2022, the Pennsylvania Public Utility Commission issued an order (the “PUC Order”) approving the Company’s acquisition of the municipal wastewater assets of East Whiteland Township, Chester County, Pennsylvania, which serves 4,018 customers (the “East Whiteland Wastewater Assets”). On August 12, 2022, the Company acquired the East Whiteland Wastewater Assets for a cash purchase price of $54,374. Subsequently on August 25, 2022, the Office of Consumer Advocate (“OCA”) filed an appeal of the PUC Order to the Pennsylvania Commonwealth Court. On July 31, 2023, a decision was issued by the Pennsylvania Commonwealth Court, in which the Pennsylvania Commonwealth Court agreed with the OCA and reversed the PUC order which approved the acquisition. On September 26, 2023, the Pennsylvania Commonwealth Court denied our motion for reargument. On October 26, 2023, the Company, the Pennsylvania Public Utility Commission, and East Whiteland Township filed an appeal to the Pennsylvania Supreme Court. East Whiteland Township filed to Supplement its Petition for Allowance of Appeal on January 2, 2024. On January 16, 2024, the Company, the OCA and the PUC filed Answers to East Whiteland Township’s Petition. On June 14,
2024, the Pennsylvania Supreme Court granted the Petitions for Allowance of Appeal of the Pennsylvania Public Utility Commission, the Company, and East Whiteland Township. The Company, the Pennsylvania Public Utility Commission, East Whiteland Township, and several Amicus Curiae filed Initial Briefs on September 26, 2024. The OCA submitted its Brief on December 10, 2024 and the Company, the Pennsylvania Public Utility Commission, and East Whiteland Township submitted Reply Briefs. Oral arguments before the Pennsylvania Supreme Court took place on May 14, 2025. The Company is currently awaiting a decision from the Pennsylvania Supreme Court. Management believes the final resolution of this matter will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
DELCORA Purchase Agreement
In 2019, the Company entered into a purchase agreement to acquire the wastewater utility system assets of the Delaware County Regional Water Quality Control Authority (“DELCORA”), which consist of approximately 16,000 customers, or the equivalent of 198,000 retail customers, in 42 municipalities in Southeast Pennsylvania for $276,500. There are several legal proceedings involving the Company as a result of the purchase agreement that are on-going. The purchase price for this pending acquisition is subject to certain adjustments at closing, and is subject to regulatory approval, including the final determination of the fair value of the rate base acquired. We plan to finance the purchase price of this acquisition with a mix of equity and debt financing, utilizing our commercial paper program and revolving credit facility until permanent debt is secured. Closing of our acquisition of DELCORA is subject to regulatory approval and on-going litigation.
Note 4 – Dispositions
In October 2023, the Company entered into an agreement to sell its interest in three non-utility local microgrid and distributed energy projects for $165,000. The sale was completed in January 2024, and the Company recognized a gain of $91,236 during the first quarter of 2024, which is included in other expense (income) in the accompanying condensed consolidated statement of operations.
Note 5 – Goodwill
The following table summarizes the changes in the Company’s goodwill, by business segment:
Regulated Water
Regulated Natural Gas
58,425
2,277,447
4,841
Reclassification to utility plant acquisition adjustment
(4)
58,421
One of our subsidiaries in the Regulated Water segment has a mechanism that allows the reclassification of goodwill to utility plant acquisition adjustment. The mechanism provides for the transfer over time, and the recovery through customer rates, of goodwill associated with some acquisitions upon achieving specific objectives.
Note 6 – Capitalization
At-the-Market Offering
On August 13, 2024, the Company established a new at-the-market equity sales program (“ATM”), under which it may issue and sell shares of its common stock up to an aggregate offering price of $1,000,000 (“2024 ATM”). During the three months ended June 30, 2025, we issued 3,664,762 shares of common stock for net proceeds of approximately $145,500 under the 2024 ATM. During the six months ended June 30, 2025, we issued 5,291,771 shares of common stock for net proceeds of approximately $208,600 under the 2024 ATM. As of June 30, 2025, the 2024 ATM had approximately $753,000 of equity available for issuance. The Company used the net proceeds from the sales of shares through the 2024 ATM for working capital, capital expenditures, water and wastewater utility acquisitions, and repaying a portion of outstanding indebtedness.
Commercial Paper Program
On March 19, 2025, the Company established 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. Maturities of CP Notes may vary, but cannot exceed 364 days from the date of issue. Amounts available under the Program may be borrowed, repaid, and re-borrowed from time to time. The CP Program is reinforced by the Company’s revolving credit facility, as amounts undrawn under the Company’s revolving credit facility are available to repay the CP Notes. Notes issued under the CP Program rank equally with the Company’s present and future unsecured indebtedness. The Company utilizes the proceeds from the sale of the CP Notes for general corporate purposes, which may include working capital, capital expenditures, water and wastewater utility acquisitions, and repaying outstanding indebtedness, including under the Company’s revolving credit facility or the revolving credit facilities of its subsidiaries.
As of June 30, 2025, outstanding borrowings under the Company’s commercial paper program were $566,543, net of unamortized discount on issuance of $857, with a weighted average interest rate of 4.69% and weighted average remaining term of 13 days. Outstanding CP Notes are classified as long-term debt in the accompanying condensed consolidated balance sheets and condensed consolidated statements of capitalization since the Company has the intent and ability to refinance the CP Notes on a long-term basis using the Company’s revolving credit facility. The carrying value of CP Notes approximates their fair value, primarily due to their market interest rates, and are classified as Level 2 in the fair value hierarchy (see Note 7).
Long-term and Short-Term Debt
The condensed consolidated statements of capitalization provide a summary of the Company’s long-term and short-term debt as of June 30, 2025 and December 31 2024.
On June 3, 2025, Aqua Pennsylvania and PNG Companies, LLC amended and restated their respective $100,000 and $300,000 revolving credit agreements extending the maturity date by another 364-day period. The funds borrowed under these agreements are classified as loans payable and are used to provide working capital.
On May 29, 2025, the Company’s subsidiary, Aqua Pennsylvania, issued $100,000 in aggregate principal amount of first mortgage bonds. The bonds consisted of $75,000 of 5.38% first mortgage bonds due in 2035, and $25,000 of 5.63% first mortgage bonds due in 2040. The proceeds from these bonds were used to repay existing indebtedness and for general corporate purposes.
The Company is obligated to comply with covenants under some of its loan and debt agreements. These covenants contain a number of restrictive financial covenants, which among other things limit, subject to specific exceptions, the Company’s ratio of consolidated total indebtedness to consolidated total capitalization, and require a minimum level of earnings coverage over interest expense. The Company was in compliance with its debt covenants under its loan and debt agreements as of June 30, 2025. Failure to comply with the Company’s debt covenants could result in an event of default, which could result in the Company being required to repay or finance its borrowings before their due date, possibly limiting the Company’s future borrowings, and increasing its borrowing costs.
Note 7 – Financial Instruments
Financial instruments are recorded at carrying value in the financial statements and approximate fair value as of the dates presented. The fair value of these instruments is disclosed below in accordance with current accounting guidance related to financial instruments. There have been no changes in the valuation techniques used to measure fair value, or asset or liability transfers between the levels of the fair value hierarchy for the six months ended June 30, 2025.
The fair value of loans payable is determined based on its carrying amount and utilizing Level 1 methods and assumptions. As of June 30, 2025 and December 31, 2024, the carrying amount of the Company’s loans payable was $18,040 and $186,542, respectively, which equates to their estimated fair value. The fair value of cash and cash equivalents is determined based on Level 1 methods and assumptions. As of June 30, 2025 and December 31, 2024, the carrying amounts of the Company's cash and cash equivalents was $25,071 and $9,156, respectively, which equates to their fair value. The Company’s assets underlying the deferred compensation and non-qualified pension plans are determined by the fair value of mutual funds, which are based on quoted market prices from active markets utilizing Level 1 methods and assumptions. As of June 30, 2025 and December 31, 2024, the carrying amount of these securities was $31,262 and $31,324, respectively, which equates to their fair value, and is reported in the condensed consolidated balance sheet in deferred charges and other assets.
Unrealized gain and loss on equity securities held in conjunction with our non-qualified pension plan is as follows:
Net gain/(loss) recognized during the period on equity securities
(29)
197
622
618
Less: net gain recognized during the period on equity securities sold during the period
Unrealized gain/(loss) recognized during the reporting period on equity securities still held at the reporting date
The net gain/(loss) recognized on equity securities is presented on the condensed consolidated statements of operations and comprehensive income on the line item “Other, net”.
The carrying amounts and estimated fair values of the Company’s long-term debt (which includes CP Notes) is as follows:
December 31, 2024
Carrying amount
Estimated fair value
6,802,766
6,431,777
The fair value of long-term debt has been determined by discounting the future cash flows using current market interest rates for similar financial instruments of the same duration utilizing Level 2 methods and assumptions.
Note 8 – Net Income per Common Share
Basic net income per common share is based on the weighted average number of common shares outstanding and the weighted average minimum number of shares issued upon settlement of the stock purchase contracts issued under the tangible equity units. Diluted net income per common share is based on the weighted average number of common shares outstanding and potentially dilutive shares. The dilutive effect of employee stock-based compensation is included in the computation of diluted net income per common share. The dilutive effect of stock-based compensation is calculated using the treasury stock method and expected proceeds upon exercise of the stock-based compensation. The treasury stock method assumes that the proceeds from stock-based compensation is used to purchase the Company’s common stock at the average market price during the period. The following table summarizes the shares, in thousands, used in computing basic and diluted net income per common share:
Average common shares outstanding during the period for basic computation
Effect of dilutive securities:
Employee stock-based compensation
450
386
587
397
Average common shares outstanding during the period for diluted computation
The number of outstanding employee stock options, in thousands, that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive was: 441 for the three and six months ended June 30, 2025; and 265 for the three and six months ended June 30, 2024. Additionally, the dilutive effect of performance share units and restricted share units granted are included in the Company’s calculation of diluted net income per share.
Note 9 – Stock-based Compensation
Under the Company’s Amended and Restated Equity Compensation Plan (the “Plan”), stock options, stock units, stock awards, stock appreciation rights, dividend equivalents, and other stock-based awards may be granted to employees, non-employee directors, and consultants and advisors. At June 30, 2025, 694,331 shares were still available for issuance under the Plan.
Performance Share Units – A performance share unit (“PSU”) represents the right to receive a share of the Company’s common stock if specified performance goals are met over the three year performance period specified in the grant, subject to exceptions through the respective vesting period, which is generally three years. Each grantee is granted a target award of PSUs and may earn between 0% and 200% of the target amount depending on the Company’s performance against the performance goals.
The performance goals of the 2025 grants consisted of the following metrics:
Metric 1 – Company’s total shareholder return (“TSR”) compared to the TSR for a specific peer group of investor-owned utilities (a market-based condition)
40.00%
Metric 2 – Achievement of a three-year average return on equity target (a performance-based condition)
30.00%
Metric 3 – Achievement of a consolidated operations and maintenance expense target over a three-year measurement period (a performance-based condition)
The following were the assumptions used in the pricing model for the 2025 grants:
Expected term (years)
3
Risk-free interest rate
4.19%
Expected volatility
23.20%
The following table provides compensation expense for PSUs:
Stock-based compensation within operations and maintenance expenses
1,831
1,082
3,247
1,188
463
271
821
297
The following table summarizes the PSU transactions for the six months ended June 30, 2025:
Number
Weighted
of
Average
Share Units
Fair Value
Nonvested share units at beginning of period
563,656
38.61
Granted
195,300
34.25
Performance criteria adjustment
(58,379)
36.22
Share units issued
(103,775)
42.77
Forfeited
(5,494)
38.00
Nonvested share units at end of period
591,308
36.68
The per unit weighted-average fair value at the date of grant for PSUs granted during the six months ended June 30, 2025 and 2024 was $34.25 and $38.10, respectively.
Restricted Stock Units – A restricted stock unit (“RSU”) represents the right to receive a share of the Company’s common stock. In prior years, RSUs were eligible to be earned at the end of a specified restricted period, which is generally three years, beginning on the date of grant. RSUs granted in 2025 vest 33% each year. The following table provides the compensation expense and income tax benefit for RSUs:
1,621
724
2,528
1,570
410
182
639
393
The following table summarizes the RSU transactions for the six months ended June 30, 2025:
Stock Units
Nonvested stock units at beginning of period
210,249
41.40
156,225
35.54
Stock units vested
(54,145)
44.84
(2,184)
38.27
Nonvested stock units at end of period
310,145
37.54
The per unit weighted-average fair value at the date of grant for RSUs granted during the six months ended June 30, 2025 and 2024 was $35.54 and $36.61, respectively.
Stock Options – A stock option represents the option to purchase a number of shares of common stock of the Company as specified in the stock option grant agreement at the exercise price per share as determined by the closing market price of our common stock on the grant date. Stock options are exercisable in installments of 33% annually, starting one year from the grant date and expire 10 years from the grant date, subject to satisfaction of designated performance goals. The following table provides the compensation cost and income tax benefit for stock-based compensation related to stock options:
840
71
1,109
202
211
17
279
50
The fair value of options was estimated at the grant date using the Black-Scholes option-pricing model. The following assumptions were used in the application of this valuation model for the 2025 grant:
5.54
4.22%
28.50%
Dividend yield
3.69%
Grant date fair value per option
7.95
The following table summarizes stock option transactions for the six months ended June 30, 2025:
Aggregate
Exercise
Remaining
Intrinsic
Shares
Price
Life (years)
Value
Outstanding at beginning of period
906,902
36.87
197,684
35.33
Exercised
(11,820)
35.31
Outstanding at end of period
1,092,766
36.61
5.5
1,682
Exercisable at end of period
800,993
36.76
4.1
1,226
Restricted Stock – Restricted stock awards provide the grantee with the rights of a shareholder, including the right to receive dividends and to vote such shares, but not the right to sell or otherwise transfer the shares during the restriction period. Nonvested shares of restricted stock were 1,268 as of June 30, 2025 and December 31, 2024. There were no restricted stock awards granted and vested during the first half of 2025. The following table provides the compensation cost and income tax benefit for stock-based compensation related to restricted stock:
Stock Awards – Stock awards represent the issuance of the Company’s common stock, without restriction. The issuance of stock awards results in compensation expense that is equal to the fair market value of the stock on the grant date and is expensed immediately upon grant. The following table provides the compensation cost and income tax benefit for stock-based compensation related to stock awards:
233
Note 10 – Pension Plans and Other Postretirement Benefits
The Company maintains a qualified defined benefit pension plan (the “Pension Plan”), a nonqualified pension plan, and other postretirement benefit plans for certain of its employees.
The following tables provide the components of net periodic benefit cost for the Company’s pension and other postretirement benefit plans:
Pension Benefits
Service cost
304
608
714
Interest cost
3,991
3,908
7,982
7,816
Expected return on plan assets
(4,266)
(4,696)
(8,532)
(9,392)
Amortization of prior service cost
81
156
Amortization of actuarial loss
833
751
1,666
1,502
Net periodic benefit cost
940
401
1,880
802
Postretirement Benefits
372
363
744
726
1,132
1,112
2,264
2,224
(1,071)
(1,105)
(2,142)
(2,210)
Amortization of actuarial gain
(401)
(267)
(802)
(534)
32
103
64
206
The net periodic benefit cost is based on estimated values and an extensive use of assumptions about the discount rate, expected return on plan assets, the rate of future compensation increases received by the Company’s employees, mortality, turnover, and medical costs. The Company presents the components of net periodic benefit cost other than service cost in the condensed consolidated statements of operations and comprehensive income on the line item “Other”.
The Company did not make cash contributions to its Pension Plan during the first half of 2025 and intends to make cash contributions of $3,945 later in the year.
Note 11 – Rate Activity
Completed Rate Case Proceedings
On July 1, 2025, the Company’s natural gas operating subsidiary in Kentucky received an order from the Kentucky Public Service Commission approving the settlement agreement that allowed base rate increases designed to increase total annual operating revenue by $7,700 or 11.2%. New rates went into effect on July 1, 2025.
On February 7, 2025, the Pennsylvania Public Utility Commission (“PAPUC”) issued an order approving, with certain minor modifications, the joint petition for non-unanimous partial settlement filed by Aqua Pennsylvania, Office of Consumer Advocate, and other groups, that allowed a base rate increase designed to increase total annual operating revenues by $73,000. New rates went into effect on February 22, 2025. At the time the rate order was received, the rates in effect also included $37,940 in Distribution System Improvement Charges (“DSIC”), which was 6.73% above prior base rates. Consequently, the aggregate annual base rates increased by $110,940 since the last base rate increase and DSIC was reset to zero.
During the first six months of 2025, two of the Company’s water utility operating divisions in Ohio and its water and wastewater utility operating divisions in North Carolina also implemented approved base rate increases designed to increase total operating revenues on an annual basis by $5,820. Further, during the first six months of 2025, the Company implemented infrastructure rehabilitation surcharges designed to increase total operating revenues on an annual basis by $10,808 in its water and wastewater utility operating divisions in Pennsylvania and Ohio, by $2,468 in its water utility operating division in New Jersey, and by $542 in its natural gas operating division in Kentucky.
On November 21, 2024, Aqua Illinois received an order from the Illinois Commerce Commission designed to provide an increase in revenues of $11,632 or 11.4% on an annual basis. New rates went into effect on December 5, 2024.
On October 9, 2024, Aqua New Jersey received an order from the New Jersey Board of Public Utilities that was designed to provide an increase in water rates of $2,250 on an annual basis. The order also approved the recovery of customer-side lead service line replacement costs of $11,535, that have been deferred from April 2021 through June 2024, through the use of a customer surcharge over a three-year period. New rates went into effect on October 15, 2024.
On September 12, 2024, the PAPUC issued an order approving the settlement agreement to the general rate case filed by the Company’s regulated natural gas operating subsidiary, Peoples Natural Gas, that allowed base rate increases designed to increase total annual operating revenues by $93,000 or 11.1%. At the time the rate order was received, the rates in effect included various surcharges and credits, such as the DSIC and Tax Cuts and Jobs Act (“TCJA”) amortization credits totaling approximately $21,000 on an annual basis. The order also provided an annualized change in gathering and other operating revenues of approximately $3,000. Consequently, the aggregate annual base rates increased approximately $111,000 as the DSIC was reset to zero, and the TCJA amortization credit, other surcharges and other operating revenues were adjusted. New rates went into effect on September 27, 2024. The order also approved the implementation of a weather normalization adjustment mechanism (WNA), which is applied to customer bills during the heating season of October through May each year. The weather normalization adjustment mechanism is designed to stabilize our residential and commercial customers’ distribution charges by adjusting billings based on temperature variances from average weather, which effectively decreases rates when the weather is colder than average, and increases rates when the weather is warmer than average. The Company expects the weather normalization adjustment mechanism to result in reduced earnings volatility during the heating season. On October 11, 2024, the Pennsylvania Office of Consumer Advocate appealed this rate case to the Commonwealth Court. On February 12, 2025, the Pennsylvania Office of Consumer Advocate discontinued its appeal on all but one non-revenue matter which can potentially be resolved through settlement.
On September 12, 2024, the Company’s regulated water and wastewater operating subsidiary in Virginia, Aqua Virginia, received an order from the State Corporation Commission approving an increase in revenues by $5,490 or 23.8% on an annual basis. The Company implemented interim rates in February 2024 and refunded to customers the difference between interim and final approved rates in December 2024.
Pending Base Rate Cases
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.
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.
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.
On April 30, 2025, the Company’s regulated water and wastewater operating subsidiary in North Carolina, Aqua North Carolina, filed an application with the North Carolina Utilities Commission designed to increase rates by $32,847 in the first year of new rates being implemented, then an additional $5,915 and $6,000 in the second and third years, respectively.
Note 12 – Taxes Other than Income Taxes
The following table provides the components of taxes other than income taxes:
Property
9,085
8,535
18,156
17,411
Gross receipts, excise and franchise
4,600
4,297
7,486
8,600
Payroll
5,405
5,009
12,366
12,520
Regulatory assessments
2,017
1,925
4,052
Pumping fees
1,964
1,882
3,304
3,377
(2,199)
585
(1,613)
1,524
Total taxes other than income
Note 13 – Segment Information
The Company identifies a business as an operating segment if: i) it engages in business activities from which it may earn revenues and incur expenses; ii) its operating results are regularly reviewed by the chief operating decision maker (“CODM”), who is the Company’s Chief Executive Officer, to make decisions about resources to be allocated to the segment and assess its performance; and iii) it has available discrete financial information. The CODM reviews financial information, such as budget-to-actual variances and comparisons against prior period, at the operating segment level, and uses that information when making decisions about the allocation of operating and capital resources to each segment. The CODM evaluates the performance of the Company’s reportable segments based on a number of factors, the primary measure being the net income (loss) of each segment.
The Company has eleven operating segments and two reportable segments. The Regulated Water segment is comprised of eight operating segments representing its water and wastewater regulated utility companies, which are organized by the states where the Company provides water and wastewater services. The eight water and wastewater utility operating segments are aggregated into one reportable segment, because each of these operating segments has the following similarities: economic characteristics, nature of services, production processes, customers, water distribution or wastewater collection methods, and the nature of the regulatory environment. The Regulated Natural Gas segment
is comprised of one operating segment representing the Company’s natural gas utility companies, which provide natural gas distribution to retail, commercial, and industrial customers.
In addition to the Company’s two reportable segments, the Company includes two operating segments within the Other category below. These segments are not quantitatively significant and are comprised of its non-regulated natural gas operations and Aqua Resources. In addition to these segments, Other is comprised of business activities not included in the reportable segments, corporate costs that have not been allocated to the Regulated Water and Regulated Natural Gas segments, and intersegment eliminations. Corporate costs include general and administrative expenses, and interest expense. The Company reports these corporate costs within Other as they relate to corporate-focused responsibilities and decisions and are not included in internal measures of segment operating performance used by the Company to measure the underlying performance of the operating segments.
The following table presents information about the Company’s reportable segments and reconciliations to consolidated amounts. Asset information by segment is not utilized for purposes of assessing performance or allocating resources, and, as a result, such information is not presented.
Total Reportable Segments
Other and Elims
Revenues from external customers
332,282
176,761
509,043
5,864
302,479
127,801
430,280
4,126
Intersegment revenues
560
(560)
387
(387)
Total operating revenues
509,603
430,667
Operations and maintenance expense
100,149
49,786
149,935
(1,425)
95,575
49,709
145,284
(2,772)
53,532
3,203
32,680
1,048
64,731
38,299
103,030
489
103,519
57,625
32,632
90,257
389
90,646
17,655
2,491
20,146
16,425
5,103
21,528
705
Interest expense, net
37,032
25,833
62,865
16,643
79,508
34,450
20,869
55,319
17,450
72,769
(5,622)
(1,405)
(3,962)
(1,267)
(197)
(6)
Other segment items (b)
273
146
501
379
388
313
Provision for income taxes (benefit)
17,840
(8,604)
9,236
(4,664)
14,505
(9,830)
4,675
(2,811)
Net income (loss)
100,480
17,516
117,996
(10,169)
87,679
(1,717)
85,962
(10,577)
633,130
646,212
1,279,342
19,191
582,372
451,133
1,033,505
12,970
1,906
(1,906)
1,386
(1,386)
1,281,248
1,034,891
189,567
105,461
295,028
(8,694)
186,258
95,626
281,884
(2,472)
230,491
10,885
158,222
5,181
125,360
76,638
201,998
898
114,819
65,043
179,862
588
33,247
8,245
41,492
2,259
32,749
12,323
45,072
2,185
73,595
51,973
125,568
35,776
161,344
69,240
46,225
115,465
29,588
145,053
(10,354)
(2,505)
(7,650)
(2,260)
Gain on sale of other assets (a)
(241)
(91,581)
(91,822)
(254)
283
308
299
(322)
(23)
282
13,269
(28,952)
(15,683)
(340)
35,315
(38,980)
(3,665)
(5,113)
208,402
207,021
415,423
(23,807)
151,583
208,223
359,806
(18,649)
Capital expenditures
316,378
296,251
612,629
302,085
246,783
548,868
(a) Refer to Note 4 – Dispositions for additional information.
(b) Other segment items mainly consists of the non-service cost component of pension and other postretirement benefits for our regulated segments.
Note 14 – Commitments and Contingencies
The Company is routinely involved in various disputes, claims, lawsuits and other regulatory and legal matters, including both asserted and unasserted legal claims, in the ordinary course of business. The status of each such matter, referred to herein as a loss contingency, is reviewed and assessed in accordance with applicable accounting rules regarding the nature of the matter, the likelihood that a loss will be incurred, and the amounts involved. As of June 30, 2025, the aggregate amount of $22,630 is accrued for loss contingencies and is reported in the Company’s condensed consolidated balance sheet as other accrued liabilities and other liabilities. These accruals represent management’s best estimate of probable loss (as defined in the accounting guidance) for loss contingencies or the low end of a range of losses if no single probable loss can be estimated. For some loss contingencies, the Company is unable to estimate the amount of the probable loss or range of probable losses. Further, Essential Utilities has insurance coverage for certain of these loss contingencies, and as of June 30, 2025, estimates that approximately $769 of the amount accrued for these matters are probable of recovery through insurance, which amount is also reported in the Company’s condensed consolidated balance sheet as deferred charges and other assets, net.
During a portion of 2019, the Company initiated a do not consume advisory for some of its customers in one division served by the Company’s Illinois subsidiary. The do not consume advisory was lifted in 2019 and, in 2022, the water system was determined to be in compliance with the federal Lead and Copper Rule. The Company has accrued for the penalty and other fees that will be paid as a result of a settlement that was reached with the state and local regulators and approved by the Illinois court with jurisdiction over this matter in July 2024. In addition, on September 3, 2019, two individuals, on behalf of themselves and those similarly situated, commenced an action against the Company’s Illinois subsidiary in the State court in Will County, Illinois related to this do not consume advisory. The complaint seeks class action certification, attorney’s fees, and “damages, including, but not limited to, out of pocket damages, and discomfort, aggravation, and annoyance” based upon the water provided by the Company’s subsidiary to a discrete service area in University Park, Illinois. The complaint contains allegations of damages as a result of supplied water. In December, 2024, the State court in Will County, Illinois dismissed the case against the Company, and plaintiffs have filed an appeal of that decision. In addition, plaintiffs commenced similar actions in federal court and in front of two state agencies. The Company has an accrual for the amount of loss asserted in the complaint that we determined to be probable and estimable of being incurred. The Company is vigorously defending against this claim. While the final outcome of this claim cannot be predicted with certainty, and unfavorable outcomes could negatively impact the Company, at this time in the opinion of management, the final resolution of this matter is not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flows. Further, the Company submitted a claim for the expenses incurred to its insurance carrier for potential recovery of a portion of these costs and is currently in litigation with one of its carriers seeking to enforce its claims, and recently prevailed in the Third Circuit Court of Appeals which held that the insurance carrier possessed a duty to defend. In February 2025, the Company received $5,602 in related insurance proceeds for a portion of expenses incurred by the Company. The Company continues to assess the potential loss contingency on this matter.
A number of the Company’s subsidiaries are parties to several lawsuits 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 owned and operated by these utility subsidiaries throughout its service area. One such suit to which the Company is a party is a multi-district litigation (the “MDL”) lawsuit which commenced on December 7, 2018, in the United States District Court for the District of South Carolina. Several defendants in such lawsuit have agreed to settle. In 2024, the MDL court granted approval of the DuPont, 3M, Tyco Fire Products LP, and BASF Corp class action settlements. The Company submitted the phase one public water system claims requirements, and will submit other requirements within the time period provided by the MDL court. The total amount of recovery by the Company is uncertain. In July 2025, the Company received $7,125, representing its initial share of the settlement reached with 3M, net of legal fees and settlement costs. The Company anticipates receiving additional settlement payments from the MDL lawsuit defendants.
Although the results of legal proceedings cannot be predicted with certainty, other than disclosed above, there are no pending legal proceedings to which the Company or any of its subsidiaries is a party or to which any of its properties is the subject that are material or are expected to have a material effect on the Company’s financial position, results of operations, or cash flows.
In addition to the aforementioned loss contingencies, the Company self-insures a portion of its employee medical benefit program, and maintains stop-loss coverage to limit the exposure arising from these claims. The Company’s reserve for these claims totaled $4,545 at June 30, 2025 and represents a reserve for unpaid claim costs, including an estimate for the cost of incurred but not reported claims.
Note 15 – Income Taxes
The statutory Federal tax rate is 21.0% for the six months ended June 30, 2025 and 2024. For states with a corporate net income tax, the state corporate net income tax rates range from 2.25% to 9.50% for all periods presented. Our effective tax rate differs from the federal statutory tax rate primarily due to
flow-through tax, the amortization of deferred benefit from repair method changes, state income taxes, and other permanent book-to-tax differences.
On July 4, 2025, H.R.1 – One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA includes significant provisions such as the permanent extension of certain expiring provisions of the 2017 Tax Cuts and Jobs Act. We do not anticipate the OBBBA to have a significant impact to our consolidated financial statements and will continue to evaluate the impact as additional guidance becomes available.
Note 16 – Recent Accounting Pronouncements and Disclosure Rules
Pronouncements to be adopted upon the effective date:
In November 2024, the FASB issued ASU 2024-03, “Income Statement Reporting–Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses”. The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, and amortization) included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The standard updates are to be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of adoption of the standard update on its financial statement disclosures.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The ASU enhances the transparency and decision usefulness of income tax disclosures and is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Company plans to adopt the standard in its annual report on Form 10-K for the year ending December 31, 2025. The Company does not expect this ASU to have a significant impact to its current disclosures.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report contain, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements address, among other things: the expected timing of closing of our acquisitions; the projected impact of various legal proceedings; the projected effects of recent accounting pronouncements; prospects, plans, objectives, expectations and beliefs of management, as well as information contained in this report where statements are preceded by, followed by or include the words “believes,” “expects,” “estimates,” “anticipates,” “plans,” “future,” “potential,” “probably,” “predictions,” “intends,” “will,” “continue,” “in the event” or the negative of such terms or similar expressions. Forward-looking statements are based on a number of assumptions concerning future events, and are subject to a number of risks, uncertainties and other factors, many of which are outside our control, which could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, among others, the effects of regulation, abnormal weather, geopolitical forces, the impact of inflation and supply chain pressures, including those resulting from changes in government fiscal policies and regulations, the imposition of tariffs, the threat of cyber-attacks and data breaches, changes in capital requirements and funding, the success of growth initiatives, including pending acquisitions, changes to the capital markets, impact of public health threats, and our ability to assimilate acquired operations, as well as those risks, uncertainties and other factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in such reports. As a result, readers are cautioned not to place undue reliance on any forward-looking statements. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.
Essential Utilities, Inc. (“we”, “us”, “our” or the “Company”), a Pennsylvania corporation, is the holding company for regulated utilities providing water, wastewater, or natural gas services to an estimated 5.5 million people in Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, Virginia, and Kentucky under the Aqua and Peoples brands. One of our largest operating subsidiaries, Aqua Pennsylvania, Inc. (“Aqua Pennsylvania”), provides water or wastewater services to approximately one-half of the total number of water or wastewater customers we serve, who are located in the suburban areas in counties north and west of the City of Philadelphia and in 28 other counties in Pennsylvania. Our other regulated water or wastewater utility subsidiaries provide similar services in seven additional states. Our Peoples subsidiaries provide natural gas distribution services to customers in western Pennsylvania and Kentucky. Approximately 95% of the total number of natural gas utility customers we serve are in western Pennsylvania. The Company also operates market-based businesses, conducted through its non-regulated subsidiaries, that provide utility service line protection solutions and repair services to households and gas marketing and production activities. Currently, the Company seeks to acquire businesses in the U.S. regulated sector, focusing on water and wastewater utilities and to
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
opportunistically pursue growth ventures in select market-based activities, such as infrastructure opportunities that are supplementary and complementary to our regulated water utility businesses.
In January 2024, the Company completed the sale of its interest in three non-utility local microgrid and distributed energy projects for $165,000, which resulted in a gain on sale of $91,236. The sale is consistent with the Company’s long-term strategy of focusing on its core business and will allow the Company to prioritize the growth of its utilities in states where it has scale. The Company used the proceeds from the sale to finance its capital expenditures and water and wastewater acquisitions, in place of external funding from equity and debt issuances.
The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes.
Recent Developments
Macroeconomic Factors
Our business is subject to various economic factors that affect our customers and our industry. The recent changes in government fiscal policies and regulations introduced by the new administration have resulted in heightened uncertainty for businesses and consumers, as well as volatility in financial markets. We will continue to evaluate the evolving macroeconomic environment, including those impacts resulting from the recent imposition, or proposed imposition, of tariffs and potential changes to environmental regulations, and to take action to mitigate the impact on our business, consolidated results of operations, and financial condition. Timely and adequate rate relief is important to our continued profitability and in providing a fair return to our shareholders. We continue to pursue enhancements to our regulatory practices to facilitate the efficient recovery of the increased cost of providing services and infrastructure improvements in our rates and mitigate the inherent regulatory lag associated with traditional rate making processes.
Regulatory Developments
During the first half of 2025, we implemented, or received approval to implement, base rate increases that result in a $86,520 increase in annual revenues as summarized below.
State
Segment
Effective Date
Annualized Revenue Increase
Kentucky
Natural Gas
7/1/2025
7,700
Water
2/22/2025
58,400
Wastewater
14,600
North Carolina*
1/1/2025
2,820
1,310
Ohio
1,690
Total Base Rate Case Authorizations in 2025
86,520
* Base rate case - step increase for Year 3
On April 30, 2025, the Company’s regulated water and wastewater operating subsidiary in North Carolina, Aqua North Carolina, filed an application with the North Carolina Utilities Commission designed to increase rates by $29,857 in the first year of new rates being implemented, then an additional $5,956 and $6,025 in the second and third years, respectively.
Growth Through Acquisitions and Capital Investment
In January 2025, the Company acquired Greenville Sanitary Authority’s wastewater utility assets, which serves approximately 2,300 customers in Greenville, Pennsylvania for $18,000. In April 2025, the Company closed on its acquisition of the Village of Midvale’s water system in Ohio, which serves approximately 1,000 customers for $2,950. As of June 30, 2025, the Company had five signed purchase agreements for additional water and wastewater systems that are expected to serve approximately 210,000 equivalent retail customers or equivalent dwelling units and total approximately $338,000 in purchase price in two of our existing states. This includes the Company’s agreement to acquire the Delaware County Regional Water Quality Control Authority (DELCORA) for $276,500. DELCORA, a Pennsylvania sewer authority, serves approximately 198,000 equivalent dwelling units in the Philadelphia suburbs. In July 2025, the Company acquired the wastewater utility system of the City of Beaver Falls, Pennsylvania for $37,750. The system serves approximately 3,200 customers in the City of Beaver Falls and also provides bulk transmission and treatment service for approximately 3,800 equivalent dwelling units in seven nearby municipalities. Refer to Note 3 – Water and Wastewater Acquisitions for further discussion.
During the six-month period ended June 30, 2025, we invested $612,629 to improve our regulated water and natural gas infrastructure system and to enhance customer service. From 2025 through 2029, the Company plans to invest approximately $7,800,000 to improve water and natural gas systems and better serve customers through improved information technology. The capital investments made to rehabilitate and expand the infrastructure of the communities the Company serves are critical to its mission of safely and reliably delivering Earth’s most essential resources.
Our regulated water and gas business is capital intensive and requires a significant level of capital spending. The liquidity required to fund our working capital, capital expenditures and other cash needs is provided from a combination of internally generated cash flows and external debt and equity financing. The Company’s condensed consolidated balance sheet historically has had a negative working capital position whereby our current liabilities routinely exceed our current assets. Management believes that internally generated funds along with existing credit facilities, and the proceeds from the issuance of commercial paper notes, long-term debt and equity will be adequate to provide sufficient working capital to maintain normal operations and to meet our financing requirements for at least the next twelve months.
Net cash flows from operating activities were $571,834 for the first half of 2025, compared to $426,426 for the first half of 2024. Operating cash flow increased by $145,408 primarily due to an increase in operating income in 2025 resulting from additional revenues from regulatory recoveries, and an increase in gas volumes delivered due to colder weather conditions during the first quarter of 2025 as compared to 2024.
During the first six months of 2025, we incurred $612,629 of capital expenditures, obtained $876,525 of proceeds from borrowings and made $1,290,000 of repayments to our long-term revolving credit facility, obtained net proceeds of $567,400 from our commercial paper program (the “CP Program”), obtained proceeds of $109,200 and repaid $17,301 of long-term subsidiary debt, and made short-term debt net repayments of $168,502. The capital expenditures were related to new and replacement water, wastewater, and natural gas mains, improvements to treatment plants, tanks, hydrants, and service lines, well and booster improvements, information technology improvements, and other enhancements and improvements. Cash inflows from financing activities were higher during the first six months of 2025 compared to 2024, primarily due to the issuance of common stock from the Company’s at-the-market equity sales program (“ATM”) and net increase in borrowings during the period.
On June 3, 2025, Aqua Pennsylvania and Peoples Natural Gas Companies amended and restated 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.
On May 29, 2025, the Company’s subsidiary, Aqua Pennsylvania, issued $100,000 in aggregate principal amount of first mortgage bonds. The bonds consisted of $75,000 of 5.38% first mortgage bonds due in 2035; and $25,000 of 5.63% first mortgage bonds due in 2040. The proceeds from these bonds were used to repay existing indebtedness and for general corporate purposes.
On March 19, 2025, the Company established the CP Program that allows it to issue, through private placement, short-term, unsecured commercial paper notes (the “CP Notes”) in an aggregate principal amount not to exceed $1,000,000. Maturities of CP Notes may vary, but cannot exceed 364 days from the date of issue. Amounts available under the CP Program may be borrowed, repaid, and re-borrowed from time to time. The CP Program is reinforced by the Company’s revolving credit facility, as amounts
undrawn under the Company’s revolving credit facility are available to repay the CP Notes. Notes issued under the CP Program rank equally with the Company’s present and future unsecured indebtedness. The Company utilizes the proceeds from the sale of the CP Notes for general corporate purposes, which may include working capital, capital expenditures, water and wastewater utility acquisitions, and repaying outstanding indebtedness, including under the Company’s revolving credit facility or the revolving credit facilities of its subsidiaries. As of June 30, 2025, outstanding borrowings under the Company’s CP Program were $566,543, net of unamortized discount on issuance of $857.
On August 13, 2024, the Company established an ATM, under which we may issue and sell shares of our common stock up to an aggregate offering price of $1,000,000 (“2024 ATM”). During the three months ended June 30, 2025, we issued 3,664,762 shares of common stock for net proceeds of approximately $145,500 under the 2024 ATM. During the six months ended June 30, 2025, we issued 5,291,771 shares of common stock for net proceeds of approximately $208,600 under the 2024 ATM. As of June 30, 2025, the 2024 ATM had approximately $753,000 of equity available for issuance. The Company used the net proceeds from the sales of shares through the 2024 ATM for working capital, capital expenditures, water and wastewater utility acquisitions, and repaying a portion of outstanding indebtedness.
At June 30, 2025, we had $25,071 of cash and cash equivalents compared to $9,156 at December 31, 2024. During the first six months of 2025, we used the proceeds from long-term debt, the proceeds from the issuance of commercial paper, and the proceeds from issuance of common stock, as well as internally generated funds, for capital expenditures, repayment of existing indebtedness, payment of dividends, and general corporate purposes.
At June 30, 2025, our $1,000,000 unsecured revolving credit facility, which expires in December 2027, had $420,033 available for borrowing (net of $567,400 of capacity designated for outstanding principal borrowings under our commercial paper program and $12,567 letter of credit usage). Additionally, at June 30, 2025, we had short-term lines of credit of $400,000, primarily used for working capital, of which $381,960 was available for borrowing. Although we believe we will be able to renew these facilities, there is no assurance that they will be renewed, or what the terms of any such renewal will be.
As of June 30, 2025, our credit ratings remained at investment grade levels. On March 19, 2024, S&P lowered its credit rating for the Company, Aqua Pennsylvania, and Peoples Natural Gas Companies from A to A-, citing weakening financial measures as a result of inflationary pressures and our significant capital spending; and revised its outlook from negative to stable for the companies. However, as can be noted in their report, S&P continues to assess our business risk profile as excellent, considering our low-risk and rate-regulated water and gas distribution operations in credit-supportive regulatory environments, our geographic and regulatory diversity, our large and stable residential and commercial customer base, and our solid and reliable operations. On October 3, 2024, Moody’s Investors Service (“Moody’s”) affirmed the Company’s senior unsecured notes rating of Baa2 and changed its outlook from stable to negative; and, changed Peoples Natural Gas Companies’ senior secured notes rating from Baa1 to Baa2 and maintained a negative outlook. The Company’s ability to maintain its credit rating depends, among other things, on adequate and timely rate relief, its ability to fund capital expenditures in a balanced manner using both debt and equity, and its ability to generate cash flow. A
material downgrade of our credit rating may result in the imposition of additional financial and/or other covenants, impact the market prices of equity and debt securities, increase our borrowing costs, and adversely affect our liquidity, among other things. Management continues to enhance our regulatory practices to address regulatory lag and recover capital project costs and increases in operating costs efficiently and timely through various rate-making mechanisms.
Three Months Ended June 30,
Six Months Ended June 30,
Operating Statistics
Selected operating results as a percentage of operating revenues:
28.8%
32.8%
22.1%
26.7%
11.0%
7.8%
18.6%
15.6%
20.1%
20.9%
17.2%
4.1%
5.1%
3.4%
4.5%
Interest expense, net of interest income
15.4%
16.8%
12.4%
13.9%
17.4%
30.2%
32.6%
Effective tax rate
2.4%
-4.3%
-2.6%
an increase in employee-related costs of $6,129, primarily resulting from annual merit increases, increases in employee medical costs, and higher performance-based compensation expense compared to prior period;
an increase in bad debt expense of $2,175;
an increase in materials and supplies of $1,027;
an increase in customer assistance surcharge costs of $786 in our Regulated Natural Gas segment, which has an equivalent offsetting amount in revenues;
an increase in production costs for water and wastewater operations of $376; and
an increase in legal expense of $802; offset by
a decrease in outside services and other expenses in our Regulated Natural Gas segment due to higher capitalization in the current period compared to the prior period.
Depreciation and amortization expense increased by $12,873 or 14.2% principally due to continued capital expenditures to expand and improve our utility facilities, our acquisitions of new water and wastewater utility systems, and the implementation of new depreciation rates.
Interest expense, net of interest income, increased by $6,739 or 9.3%. Interest expense, net of interest income, increased by $2,582 in our Regulated Water segment and by $4,964 in our Regulated Natural Gas segment. Interest expense, net of interest income, in Other relates to our corporate operations, and this decreased by $807 primarily due to our revolving credit facility borrowings being replaced by commercial paper issuances at a lower interest rate, during the second quarter of 2025.
an increase in employee-related costs of $11,012, primarily resulting from annual merit increases, increases in overtime pay due to outages from extreme cold weather conditions during the first quarter of 2025, increases in employee medical costs, and higher performance-based compensation expense compared to prior period;
an increase in customer assistance surcharge costs of $9,250 in our Regulated Natural Gas segment, which has an equivalent offsetting amount in revenues;
an increase in production costs for water and wastewater operations of $3,060; and
an increase in legal expense of $2,991; offset by
an insurance recovery of $5,602 during the first quarter of 2025 for a portion of expenses incurred by the Company associated with remediating an advisory for some of our Illinois water utility customers;
a decrease in bad debt expense of $5,223, of which $5,889 relates to a favorable regulatory asset adjustment in our Regulated Water segment in the first quarter of 2025;
a decrease in materials and supplies in our Regulated Natural Gas segment of $1,561; and
Depreciation and amortization expense increased by $22,446 or 12.4% principally due to continued capital expenditures to expand and improve our utility facilities, our acquisitions of new water and wastewater utility systems, and the implementation of new depreciation rates.
For the six months ended June 30, 2025 and 2024, gain on sale of other assets totaled $493 and $91,828, respectively. During the first quarter of 2024, the Company completed the sale of its interest in three non-utility local microgrid and distributed energy projects and recognized a gain of $91,236 in its Regulated Natural Gas segment.
Our effective income tax rate was a benefit of 4.3% and 2.6% in the first six months of 2025 and 2024, respectively. The increase in income tax benefit during the first six months of 2025 is attributed to the release of $22,575 of income tax reserve regulatory liability in the Regulated Water segment based on the rate order received by Aqua Pennsylvania in February 2025, offset by the decreases in both the state tax benefit and amortization of tax repairs surcredit in the Regulated Natural Gas segment based on a rate order received in September 2024.
The following tables present selected operating results and statistics for our Regulated Water segment for the periods ended June 30, 2025 and 2024:
Segment net income
30.1%
31.6%
29.9%
32.0%
19.5%
19.1%
19.8%
19.7%
5.3%
5.4%
5.6%
11.1%
11.4%
11.6%
11.9%
29.0%
32.9%
26.0%
15.1%
14.2%
6.0%
18.9%
additional water and wastewater revenues of $2,056 associated with a larger customer base due to utility acquisitions and organic growth; offset by
a decrease in volume consumption of $2,637 primarily due to increased rainfall during the months of May and June 2025.
an increase in employee related costs of $1,561;
an increase in bad debt expense of $344; and
an increase in production costs for water and wastewater operations of $376.
additional water and wastewater revenues of $3,554 associated with a larger customer base due to utility acquisitions and organic growth; offset by
a decrease in volume consumption of $5,631.
an increase in employee related costs of $2,448;
an increase in production costs for water and wastewater operations of $3,060;
an increase in management fees of $1,810; and
an increase in insurance expense of $682; offset by
a decrease in bad debt expense of $6,022, of which $5,889 relates to a favorable regulatory asset adjustment during the first quarter of 2025.
The following tables present selected operating results and statistics for our Regulated Natural Gas segment, for the periods ended June 30, 2025 and 2024:
Segment net income (loss)
28.1%
38.8%
16.3%
21.1%
25.5%
35.6%
35.0%
21.6%
11.8%
14.4%
1.4%
4.0%
1.3%
2.7%
14.6%
8.0%
10.2%
9.9%
-1.3%
31.9%
46.0%
-96.5%
85.1%
-16.3%
-23.0%
an increase in purchased gas costs of $20,852; refer to purchased gas costs discussion below for further information;
an increase of $12,885 due to higher rates and other surcharges;
impact of higher volumes delivered of $5,179 due to colder weather conditions during the second quarter of 2025 as compared to 2024;
an increase of $4,091 due to lower tax repair surcredit;
an increase in customer assistance surcharge of $786, which has an equivalent offsetting amount in operations and maintenance expense; and
a weather normalization adjustment of $4,551 in Pennsylvania, which had the effect of increasing revenues for the quarter ended June 30, 2025.
an increase in labor and employee benefits of $1,801;
an increase in bad debt expense of $1,832; and
an increase in customer assistance surcharge costs of $786, which has an equivalent offsetting amount in revenues; offset by
a decrease in outside services and other expenses due to higher capitalization as a result of greater capital expenditures in the current period compared to the prior period.
Interest expense, net, increased by $4,964 or 23.8% 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.
an increase in purchased gas costs of $72,269; refer to purchased gas costs discussion below for further information;
an increase of $60,034 due to higher rates and other surcharges;
impact of higher volumes delivered of $34,700 due to colder weather conditions during the second half of 2025 as compared to 2024;
an increase of $15,096 due to lower tax repair surcredit; and
an increase in customer assistance surcharge of $9,250, which has an equivalent offsetting amount in operations and maintenance expense; offset by
a weather normalization adjustment of $2,562 in Pennsylvania, which had the effect of increasing revenues for the six months ended June 30, 2025.
an increase in customer assistance surcharge costs of $9,250, which has an equivalent offsetting amount in revenues;
an increase in labor and employee benefits of $4,503;
an increase in legal expenses of $2,163; and
an increase in bad debt expense of $826; offset by
a decrease in materials and supplies of $1,561; and
Purchased gas increased by $72,269 or 45.7% due to an increase in the average cost of gas of $45,856 and higher gas usage of $26,799 due to colder weather conditions during the first half of 2025, offset by a decrease of $386 from the sale of our interest in three non-utility local microgrid and distributed energy projects in January 2024. During the six months ended June 30, 2025, we experienced 3,244 actual HDDs, which was colder by 24% than prior year’s 2,616 HDDs for Pittsburgh, Pennsylvania, which we use as a proxy for our western Pennsylvania service territory.
Interest expense, net, increased by $5,748 or 12.4% primarily 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.
Gain on sale of assets was $0 and $91,581 for the six-month period ended June 30, 2025 and 2024, respectively. During the first quarter of 2024, the Company completed the sale of its interest in three non-utility local microgrid and distributed energy projects and recognized a gain of $91,236.
Impact of Recent Accounting Pronouncements
We describe the impact of recent accounting pronouncements in Note 16, Recent Accounting Pronouncements, to the condensed consolidated financial statements in this report.
Item 3 – Quantitative and Qualitative Disclosures About Market Risk
We are subject to market risks in the normal course of business, including changes in interest rates and equity prices. Refer to Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed February 27, 2025, for additional information on market risks.
Item 4 – Controls and Procedures
(a)Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report are effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.
(b)Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting occurred during the quarter ended June 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Part II. Other Information
Item 1 – Legal Proceedings
For a discussion of the Company’s legal proceedings, see Part I – Item I – Note 14 to the Company’s condensed consolidated financial statements.
Item 1A – Risk Factors
Please review the risks disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, under “Part 1, Item 1A – Risk Factors”.
Item 5 - Other Information
a.Chief Accounting Officer Retirement and Appointment
On July 31, 2025, Robert A. Rubin retired as Senior Vice President, Chief Accounting Officer. Bradley J. Palmer was promoted to Vice President, Chief Accounting Officer upon Mr. Rubin’s retirement. Mr. Palmer, age 43, has served as Vice President, Deputy Chief Accounting Officer since November 1, 2024, and previously was Controller of Aqua Pennsylvania, Inc. from June 2021 to October 2024. Mr. Palmer is a Certified Public Accountant and, prior to joining the Company, was a Senior Manager with Deloitte, where he practiced primarily in the power & utilities sector from January 2018 to June 2021. Prior to this role, Mr. Palmer worked as an Accounting Manager for two large publicly traded utilities, and he also held previous roles with PricewaterhouseCoopers, LLP.
There is no arrangement or understanding between Mr. Palmer and any other person pursuant to which Mr. Palmer was selected as an officer, no family relationships between Mr. Palmer and any of the Company’s directors or executive officers, and no transactions involving Mr. Palmer or a member of his immediate family that would require disclosure under Item 404(a) of Regulation S-K.
b. Security Trading Plans of Directors and Executive Officers
During the quarter ended June 30, 2025, none of the Company’s directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement”.
Item 6 – Exhibits
Exhibit No.
Description
10.1*
Second Amended and Restated Revolving Credit Agreement, dated June 3, 2025, by and between Aqua Pennsylvania and PNC Bank, National Association, TD Bank, N.A., Citizens Bank of Pennsylvania, and Huntington National Bank
10.2*
Amended and Restated Credit Agreement, dated June 3, 2025, by and between PNG Companies, LLC and PNC Bank, National Association and TD Bank, N.A.
10.3*
Bond Purchase Agreement, dated May 29, 2025, by and between Aqua Pennsylvania and The Bank of New York Mellon Trust Company, N.A.
31.1*
Certification of Chief Executive Officer, filed pursuant to Rule 13a-14(a) under the Securities and Exchange Act of 1934
31.2*
Certification of Chief Financial Officer, filed pursuant to Rule 13a-14(a) under the Securities and Exchange Act of 1934
32.1*
Certification of Chief Executive Officer, furnished pursuant to 18 U.S.C. Section 1350
32.2*
Certification of Chief Financial Officer, furnished pursuant to 18 U.S.C. Section 1350
101.INS
Inline XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRES
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline XBRL (included in Exhibit 101)
*Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be executed on its behalf by the undersigned thereunto duly authorized.
August 4, 2025
Essential Utilities, Inc.
Registrant
/s/ Christopher H. Franklin
Christopher H. Franklin
Chairman, President and
Chief Executive Officer
/s/ Daniel J. Schuller
Daniel J. Schuller
Executive Vice President and
Chief Financial Officer