2023 Q1 Form 10-K Financial Statement

#000156276223000064 Filed on March 01, 2023

View on sec.gov

Income Statement

Concept 2023 Q1 2022 Q4 2022
Revenue $726.5M $705.4M $2.288B
YoY Change 3.89% 31.68% 21.82%
Cost Of Revenue $256.3M $247.1M $602.0M
YoY Change 12.56% 79.42% 76.92%
Gross Profit $470.1M $458.3M $1.686B
YoY Change -0.3% 15.16% 9.63%
Gross Profit Margin 64.72% 64.97% 73.69%
Selling, General & Admin $3.423M $2.932M $7.950M
YoY Change 25.29% -0.07% 11.19%
% of Gross Profit 0.73% 0.64% 0.47%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $83.79M $80.93M $321.2M
YoY Change 6.95% 6.02% 7.79%
% of Gross Profit 17.82% 17.66% 19.05%
Operating Expenses $244.7M $288.3M $1.025B
YoY Change 0.3% 11.59% 9.59%
Operating Profit $225.5M $170.0M $661.2M
YoY Change -0.95% 21.77% 9.7%
Interest Expense $72.67M -$62.18M $238.1M
YoY Change 35.48% 38.76% 14.64%
% of Operating Profit 32.23% -36.58% 36.01%
Other Income/Expense, Net $240.0K -$3.060M -$494.0K
YoY Change -85.9% -310.31% -117.35%
Pretax Income $159.8M $104.9M $450.9M
YoY Change -12.27% 8.66% 6.85%
Income Tax -$31.64M -$1.568M -$14.33M
% Of Pretax Income -19.8% -1.49% -3.18%
Net Earnings $191.4M $114.9M $465.2M
YoY Change -3.98% -1.35% 7.79%
Net Earnings / Revenue 26.35% 16.29% 20.33%
Basic Earnings Per Share $0.72 $1.77
Diluted Earnings Per Share $0.72 $0.43 $1.77
COMMON SHARES
Basic Shares Outstanding 264.1M 262.3M 262.2M
Diluted Shares Outstanding 264.8M 262.9M

Balance Sheet

Concept 2023 Q1 2022 Q4 2022
SHORT-TERM ASSETS
Cash & Short-Term Investments $20.15M $11.40M $11.40M
YoY Change -65.44% 7.86% 7.86%
Cash & Equivalents $20.15M $11.40M $11.40M
Short-Term Investments
Other Short-Term Assets $180.1M $240.7M $240.7M
YoY Change 25.45% 36.26% 36.26%
Inventory $95.91M $199.7M $199.7M
Prepaid Expenses
Receivables $213.6M $206.3M $201.5M
Other Receivables $0.00 $0.00 $4.801M
Total Short-Term Assets $509.8M $658.2M $658.2M
YoY Change 14.94% 50.33% 50.33%
LONG-TERM ASSETS
Property, Plant & Equipment $11.29B $11.13B $11.17B
YoY Change 8.66% 8.57% 8.46%
Goodwill $2.341B $2.341B
YoY Change 0.0% 0.0%
Intangibles $4.412M $4.604M
YoY Change -20.82% -20.12%
Long-Term Investments
YoY Change
Other Assets $1.628B $1.543B $1.543B
YoY Change -1.1% -1.92% -1.92%
Total Long-Term Assets $15.31B $15.06B $15.06B
YoY Change 6.06% 5.91% 5.91%
TOTAL ASSETS
Total Short-Term Assets $509.8M $658.2M $658.2M
Total Long-Term Assets $15.31B $15.06B $15.06B
Total Assets $15.82B $15.72B $15.72B
YoY Change 6.33% 7.24% 7.24%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $155.7M $238.8M $238.8M
YoY Change -3.58% 23.8% 23.8%
Accrued Expenses $114.2M $130.7M $177.7M
YoY Change -2.24% 5.26% 7.75%
Deferred Revenue
YoY Change
Short-Term Debt $22.50M $228.5M $228.5M
YoY Change -71.78% 251.54% 251.54%
Long-Term Debt Due $198.7M $199.4M $199.4M
YoY Change 50.81% 50.86% 50.86%
Total Short-Term Liabilities $803.3M $1.022B $1.022B
YoY Change 18.45% 51.37% 51.37%
LONG-TERM LIABILITIES
Long-Term Debt $6.485B $6.371B $6.371B
YoY Change 10.43% 10.24% 10.24%
Other Long-Term Liabilities $27.29M $28.56M $1.603B
YoY Change -24.2% -34.59% -0.6%
Total Long-Term Liabilities $6.512B $6.400B $7.974B
YoY Change 10.22% 9.9% 7.87%
TOTAL LIABILITIES
Total Short-Term Liabilities $803.3M $1.022B $1.022B
Total Long-Term Liabilities $6.512B $6.400B $7.974B
Total Liabilities $7.315B $7.421B $10.34B
YoY Change 11.07% 14.21% 9.16%
SHAREHOLDERS EQUITY
Retained Earnings $1.650B $1.534B
YoY Change 10.14% 6.98%
Common Stock $3.954B $3.927B
YoY Change 2.91% 2.42%
Preferred Stock
YoY Change
Treasury Stock (at cost) $87.33M $83.69M
YoY Change 3.53% 0.09%
Treasury Stock Shares $3.318M $3.236M
Shareholders Equity $5.516B $5.377B $5.377B
YoY Change
Total Liabilities & Shareholders Equity $15.82B $15.72B $15.72B
YoY Change 6.33% 7.24% 7.24%

Cashflow Statement

Concept 2023 Q1 2022 Q4 2022
OPERATING ACTIVITIES
Net Income $191.4M $114.9M $465.2M
YoY Change -3.98% -1.35% 7.79%
Depreciation, Depletion And Amortization $83.79M $80.93M $321.2M
YoY Change 6.95% 6.02% 7.79%
Cash From Operating Activities $401.6M $81.15M $600.3M
YoY Change 29.31% -2.03% -6.88%
INVESTING ACTIVITIES
Capital Expenditures $243.7M $343.1M $1.063B
YoY Change -232.95% -199.54% -204.14%
Acquisitions
YoY Change
Other Investing Activities -$321.0K -$12.16M -$271.0K
YoY Change 301.25% 2265.37% -126.26%
Cash From Investing Activities -$243.2M -$355.2M -$1.178B
YoY Change 4.28% 2.91% 11.58%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $1.192M
YoY Change -63.78%
Debt Paid & Issued, Net $114.9M $977.2M
YoY Change 71.42% 26.98%
Cash From Financing Activities -149.7M 262.1M 578.8M
YoY Change 404.94% -0.41% 38.77%
NET CHANGE
Cash From Operating Activities 401.6M 81.15M 600.3M
Cash From Investing Activities -243.2M -355.2M -1.178B
Cash From Financing Activities -149.7M 262.1M 578.8M
Net Change In Cash 8.751M -11.97M 831.0K
YoY Change -81.67% -1540.19% -85.52%
FREE CASH FLOW
Cash From Operating Activities $401.6M $81.15M $600.3M
Capital Expenditures $243.7M $343.1M $1.063B
Free Cash Flow $157.9M -$261.9M -$462.5M
YoY Change -68.03% -161.27% -127.77%

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<span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: italic;font-weight: bold;margin: 0;padding: 0;">Nature of Operations</span><span style="white-space:pre-wrap; font-family: 'Garamond', 'serif';font-size: 10pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;"> </span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: italic;font-weight: bold;margin: 0;padding: 0;">─</span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;"> Essential Utilities, Inc. (“Essential Utilities,” the “Company,” “we,” “our”, or “us”) is the holding company for regulated utilities providing water, wastewater, or natural gas services concentrated in Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, Virginia, West Virginia, and Kentucky under the Aqua and Peoples brands. One of our largest operating subsidiaries is Aqua Pennsylvania, Inc., which accounted for approximately </span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;">56</span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;">% of our Regulated Water segment’s operating revenues and approximately </span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;">73</span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;">% of our Regulated Water segment’s income for 2022. As of December 31, 2022, Aqua Pennsylvania provided water or wastewater services to approximately one-half of the total number of Regulated Water customers we serve. Aqua Pennsylvania’s service territory is located in the suburban areas north and west of the City of Philadelphia and in </span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;">27</span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;"> other counties in Pennsylvania. The Company’s other regulated water or wastewater utility subsidiaries provide similar services in </span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;">seven</span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;"> additional states. Additionally, commencing on March 16, 2020 with the completion of the Peoples Gas Acquisition, the Company began to provide natural gas distribution services to customers in western Pennsylvania, Kentucky, and West Virginia. Approximately </span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;">93</span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;">% of the total number of natural gas utility customers we serve are in western Pennsylvania. In December 2022, the Company entered into a definitive agreement to sell its regulated natural gas utility assets in West Virginia, which serve approximately 13,000 customers. This sale is conditioned on regulatory approval and is expected to close in mid-2023. The completion of this transaction will conclude our regulated utility operations in West Virginia</span><span style="white-space:pre-wrap; font-family: 'Garamond', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;">. </span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;">Lastly, the Company’s market-based activities are conducted through Aqua Infrastructure LLC, and Aqua Resources, Inc., and certain other non-regulated subsidiaries of Peoples. Prior to our October 2020 sale of our investment in a joint venture, Aqua Infrastructure provided non-utility raw water supply services for firms in the natural gas drilling industry. Aqua Resources offers, through a third-party, water and sewer line protection solutions and repair services to households. Other non-regulated subsidiaries of Peoples provide utility service line protection services to households and operate gas marketing and production businesses. </span><p dir="ltr" style="font-family: 'Times New Roman', 'serif';font-size: 11pt;line-height: 108%;margin-bottom: 0;margin-left: 0;margin-right: 0;margin-top: 0;"><span style="white-space:pre-wrap; font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;"> </span></p>
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6076000
CY2021Q4 us-gaap Public Utilities Property Plant And Equipment Amount Of Acquisition Adjustments1
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9055000
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2788000
CY2021 wtrg Public Utilities Property Plant And Equipment Amortization Of Acquisition Adjustments
PublicUtilitiesPropertyPlantAndEquipmentAmortizationOfAcquisitionAdjustments
2842000
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2895000
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1635000
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41400000
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PropertyPlantAndEquipmentImpairment
<span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: italic;font-weight: bold;margin: 0;padding: 0;">Impairment of Long-Lived Assets</span><span style="white-space:pre-wrap; font-family: 'Garamond', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;"> -</span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;"> Long-lived assets of the Company, which consist primarily of utility plant in service, operating lease right-of-use assets and intangible assets, are reviewed for impairment when changes in circumstances or events occur. These circumstances or events could include a decline in the market value or physical condition of a long-lived asset, an adverse change in the manner in which long-lived assets are used or planned to be used, a change in historical trends, operating cash flows associated with the long-lived assets, changes in macroeconomic conditions, industry and market conditions, or overall financial performance. When these circumstances or events occur, the Company determines whether it is more likely than not that the fair value of those assets is less than their carrying </span><p dir="ltr" style="font-family: 'Times New Roman', 'serif';font-size: 11pt;line-height: 108%;margin-bottom: 0;margin-left: 0;margin-right: 0;margin-top: 0;"><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;">amount. If the Company determines that it is more likely than not (that is, the likelihood of more than 50 percent), the Company would recognize an impairment charge if it is determined that the carrying amount of an asset exceeds the sum of the undiscounted estimated cash flows. In this circumstance, the Company would recognize an impairment charge equal to the difference between the carrying amount and the fair value of the asset. Fair value is estimated to be the present value of future net cash flows associated with the asset, discounted using a discount rate commensurate with the risk and remaining life of the asset. During the years ended December 31, 2022 and 2021, the Company recorded an impairment loss to write down a portion of the operating lease right-of-use asset for office space not used in operations to fair value. Refer to Note 10 – </span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: italic;font-weight: normal;margin: 0;padding: 0;">Leases</span><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;">, for further details. </span></p><p dir="ltr" style="font-family: 'Times New Roman', 'serif';font-size: 11pt;line-height: 108%;margin-bottom: 0;margin-left: 0;margin-right: 0;margin-top: 0;"><span style="white-space:pre-wrap; font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;"> </span></p><span style="white-space:pre-wrap; font-family: 'Times New Roman', 'serif';font-size: 11pt;font-style: normal;font-weight: normal;margin: 0;padding: 0;">Regulatory assets are reviewed for the continued application of the FASB accounting guidance for regulated operations. The Company’s review determines whether there have been changes in circumstances or events, such as regulatory disallowances, or abandonments, that have occurred that require adjustments to the carrying value of these assets. Adjustments to the carrying value of these assets would be made in instances where their inclusion in the rate-making process is unlikely. For utility plant in service, we would recognize an impairment loss for any amount disallowed by the respective utility commission. </span>
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16282000
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8253000
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0
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0
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CY2021Q4 wtrg Accrued Interest Uncertain Tax Positions
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502000
CY2022Q4 wtrg Deferred Tax Assets Customers Advances For Construction
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27009000
CY2021Q4 wtrg Deferred Tax Assets Customers Advances For Construction
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28845000
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CY2021Q4 wtrg Deferred Tax Assets Costs Expensed For Book Not Deducted For Tax Principally Accrued Expenses
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26453000
CY2021Q4 wtrg Deferred Tax Assets Tax Effect Of Regulatory Asset For Postretirement Benefits
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CY2021Q4 us-gaap Deferred Tax Assets Other
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CY2021Q4 us-gaap Deferred Tax Assets Gross
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CY2021Q4 us-gaap Deferred Tax Assets Valuation Allowance
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CY2021Q4 wtrg Deferred Tax Liabilities Utility Plant Principally Due To Depreciation And Differences In Basis Of Fixed Assets Due To Variation In Tax And Book Accounting
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1120000
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1111000
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1208000
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CY2021 wtrg Long Term Purchase Agreement
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5867000
CY2020 wtrg Long Term Purchase Agreement
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1017000
CY2020 wtrg Purchased Water Under Long Term Agreements
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1006000
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CY2021 wtrg Water Treatment Expense Under Contractual Agreement
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340262000
CY2020 wtrg Water Treatment Expense Under Contractual Agreement
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1530000
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2470000
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CY2022Q4 us-gaap Operating Lease Liability
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CY2021Q4 us-gaap Operating Lease Liability
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CY2022Q4 us-gaap Lessee Operating Lease Liability Payments Due
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CY2022Q4 us-gaap Lessee Operating Lease Liability Payments Due
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10567000
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492000
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CY2021Q4 us-gaap Shares Outstanding
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CY2020Q4 us-gaap Shares Outstanding
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CY2022Q4 us-gaap Treasury Stock Shares
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CY2021Q4 us-gaap Treasury Stock Shares
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CY2020Q4 us-gaap Treasury Stock Shares
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CY2020Q3 wtrg Available For Sale Securities Equity Shares
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CY2020Q3 us-gaap Equity Fair Value Disclosure
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CY2021Q3 wtrg Stock Purchase Contracts Settled Issuance Of Common Shares
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CY2022 wtrg Stock Purchase Contracts
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CY2022 wtrg Stock Purchase Contracts Settled
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CY2022Q2 wtrg Stock Purchase Contracts
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CY2022Q2 wtrg Stock Purchase Contracts Settled
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CY2020 us-gaap Stock Issued During Period Shares Dividend Reinvestment Plan
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CY2020 us-gaap Stock Issued During Period Value Dividend Reinvestment Plan
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CY2021 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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CY2020 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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CY2022Q4 wtrg Distribution System Improvement Charges Reset Level Upon New Base Rates
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7571000
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26902000
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33771000
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UtilitiesOperatingExpenseMaintenanceAndOperations
550580000
CY2021 us-gaap Utilities Operating Expense Gas And Petroleum Purchased
UtilitiesOperatingExpenseGasAndPetroleumPurchased
340262000
CY2021 us-gaap Depreciation Depletion And Amortization
DepreciationDepletionAndAmortization
297952000
CY2021 wtrg Interest Expense Net Of Afudc
InterestExpenseNetOfAfudc
205325000
CY2021 us-gaap Public Utilities Allowance For Funds Used During Construction Additions
PublicUtilitiesAllowanceForFundsUsedDuringConstructionAdditions
20792000
CY2021 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
-9612000
CY2021 us-gaap Net Income Loss
NetIncomeLoss
431612000
CY2021 us-gaap Payments To Acquire Buildings
PaymentsToAcquireBuildings
1020519000
CY2021Q4 us-gaap Assets
Assets
14658278000
CY2020 us-gaap Revenues
Revenues
1462698000
CY2020 us-gaap Utilities Operating Expense Maintenance And Operations
UtilitiesOperatingExpenseMaintenanceAndOperations
528611000
CY2020 us-gaap Utilities Operating Expense Gas And Petroleum Purchased
UtilitiesOperatingExpenseGasAndPetroleumPurchased
165745000
CY2020 us-gaap Depreciation Depletion And Amortization
DepreciationDepletionAndAmortization
257059000
CY2020 wtrg Interest Expense Net Of Afudc
InterestExpenseNetOfAfudc
183072000
CY2020 us-gaap Public Utilities Allowance For Funds Used During Construction Additions
PublicUtilitiesAllowanceForFundsUsedDuringConstructionAdditions
12687000
CY2020 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
-19878000
CY2020 us-gaap Net Income Loss
NetIncomeLoss
284849000
CY2020 us-gaap Payments To Acquire Buildings
PaymentsToAcquireBuildings
835642000
CY2020Q4 us-gaap Assets
Assets
13705277000

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