Essential Utilities, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Essential Utilities, Inc. (WTRG) has filed its 2023 10-K report, detailing its operations and financial standing for the fiscal year ending December 31, 2023.</b>

AI Summary

Essential Utilities, Inc. (WTRG) filed a Annual Report (10-K) with the SEC on February 29, 2024. Essential Utilities, Inc. (WTRG) filed its annual report for the fiscal year ended December 31, 2023. The company operates in the Water Supply industry, with SIC code 4941. Key former names include AQUA AMERICA INC and PHILADELPHIA SUBURBAN CORP. The filing covers operations across multiple states including Texas, Pennsylvania, Ohio, North Carolina, and Illinois. The report details various agreements and commitments, including At-Market Sales Agreements and Performance Share Units.

Why It Matters

For investors and stakeholders tracking Essential Utilities, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Essential Utilities' financial performance, operational activities, and strategic initiatives for the fiscal year 2023, offering insights into its regulated utility operations. The detailed information within the report is crucial for investors and stakeholders to assess the company's financial health, growth prospects, and potential risks in the utility sector.

Risk Assessment

Risk Level: medium — Essential Utilities, Inc. shows moderate risk based on this filing. The company operates in a regulated industry, which can lead to medium risk due to potential changes in regulations and rate-setting decisions impacting profitability.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to understand the company's performance and outlook.

Key Numbers

• 2023-12-31 — Fiscal Year End (Period covered by the 10-K filing)
• 2024-02-29 — Filing Date (Date the 10-K was filed)
• 19920703 — Date of Name Change (Previous name change date)
• 20040120 — Date of Name Change (Previous name change date)

Key Players & Entities

• Essential Utilities, Inc. (company) — Filer name
• WTRG (company) — Ticker symbol
• AQUA AMERICA INC (company) — Former company name
• PHILADELPHIA SUBURBAN CORP (company) — Former company name
• PA (company) — State of incorporation and business address
• TX (company) — State of operations
• OH (company) — State of operations
• NC (company) — State of operations

FAQ

Risk Factors

• Regulatory Environment [medium — regulatory]: Changes in regulations and rate-setting decisions by state public utility commissions can impact the company's financial performance and ability to earn a fair rate of return.
• Interest Rate Risk [medium — financial]: The company's substantial debt obligations expose it to risks associated with fluctuations in interest rates, potentially increasing financing costs.
• Infrastructure Integrity [medium — operational]: Maintaining and upgrading aging water and wastewater infrastructure is critical and requires significant ongoing capital investment to ensure reliability and compliance.

Industry Context

Essential Utilities operates within the regulated water and wastewater utility sector, providing essential services to residential, commercial, and industrial customers.

Regulatory Implications

The company is subject to extensive regulation by state public utility commissions and environmental agencies, which govern rates, service standards, and environmental compliance.

What Investors Should Do

1. Analyze the company's revenue streams and growth drivers in regulated and non-regulated segments.
2. Evaluate the company's capital expenditure plans and their impact on future earnings and debt levels.
3. Assess the company's exposure to regulatory changes and environmental compliance risks.

Year-Over-Year Comparison

This filing is the annual 10-K report for the fiscal year ended December 31, 2023, providing a comprehensive update compared to previous filings.

Key Financial Figures

• $0.50 — ch registered Common stock, par value $0.50 per share WTRG New York Stock Excha
• $39,965,000 — e Company received net cash proceeds of $39,965,000, subject to working capital and other a
• $165,000,000 — rid and distributed energy projects for $165,000,000. The sale was completed in January 2024
• $3,000,000 — idential water revenue of approximately $3,000,000, which would likely be partially offset
• $7.2 billion — Company expects to invest approximately $7.2 billion from 2024 through 2028 to meet complian

Filing Documents

• wtrg-20231231x10k.htm (10-K) — 8834KB
• wtrg-20231231xex4_271.htm (EX-4.271) — 20KB
• wtrg-20231231xex10_16.htm (EX-10.16) — 55KB
• wtrg-20231231xex21_1.htm (EX-21.1) — 12KB
• wtrg-20231231xex23_1.htm (EX-23.1) — 17KB
• wtrg-20231231xex31_1.htm (EX-31.1) — 25KB
• wtrg-20231231xex31_2.htm (EX-31.2) — 25KB
• wtrg-20231231xex32_1.htm (EX-32.1) — 15KB
• wtrg-20231231xex32_2.htm (EX-32.2) — 16KB
• 0001562762-24-000047.txt (&nbsp;) — 33417KB
• wtrg-20231231.xsd (EX-101.SCH) — 126KB
• wtrg-20231231_cal.xml (EX-101.CAL) — 115KB
• wtrg-20231231_def.xml (EX-101.DEF) — 580KB
• wtrg-20231231_lab.xml (EX-101.LAB) — 910KB
• wtrg-20231231_pre.xml (EX-101.PRE) — 948KB
• wtrg-20231231x10k_htm.xml (XML) — 8730KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 19 Item 1B. Unresolved Staff Comments 37 Item 1C. Cybersecurity 37 Item 2.

Properties

Properties 38 Item 3.

Legal Proceedings

Legal Proceedings 38 Item 4. Mine Safety Disclosures 39 Part II Item 5. Market for the Registrant's Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities 39 Item 6. Reserved 39 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 40 Item 7A

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 64 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 65 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 119 Item 9A.

Controls and Procedures

Controls and Procedures 119 Item 9B. Other Information 120 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 120 Part III Item 10. Directors, Executive Officers and Corporate Governance 120 Item 11.

Executive Compensation

Executive Compensation 122 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 122 Item 13 Certain Relationships and Related Transactions, and Director Independence 123 Item 14. Principal Accountant Fees and Services 123 Part IV Item 15. Exhibits and Financial Statement Schedules 124 Item 16. Form 10-K Summary 124 Exhibit Index 125

Signatures

Signatures 132 Schedule 1 – Condensed Parent Company Financial Statements 134 0 Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain statements in this Annual Report on Form 10-K, or this Annual Report, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are made based upon, among other things, our current assumptions, expectations, plans, and beliefs concerning future events and their potential effect on us. These forward-looking statements involve risks, uncertainties and other factors, many of which are outside our control that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. In some cases you can identify forward-looking statements 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. Please refer to the Summary in Item 1A – Risk Factors in this Annual Report for a description of the types of forward-looking statements in this Annual Report. These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results. Given these risks and uncertainties, you should not place undue reliance on any forward-looking statements. You should read this Annual Report completely and with the understanding that our actual future results, performance and achievements may be materially different from what we expect. These forward-looking statements represent assumptions, expec

Business

Business The Company Essential Utilities, Inc., referred to as "Essential Utilities", "Essential", the "Company", "we", "us", or "our", 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., or Aqua Pennsylvania, accounted for approximately 56% of operating revenues and approximately 68% of income for our Regulated Water segment in 2023. As of December 31, 2023, Aqua Pennsylvania provided water or wastewater services to approximately one-half of the total number of water and wastewater customers we serve. Aqua Pennsylvania's service territory is located in the suburban areas in counties north and west of the City of Philadelphia and in 27 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 service to approximately 744,000 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 activities, 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 opportunistically pursue growth ventures in select market-based activities, such as infrastructure opportunities that are supplementary and complementary to our regulated water utility businesses. 1 Table of Contents In December 2022, the Company signed an agreement to sell its regula

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View this 10-K filing on SEC EDGAR