Exhibit 99.1
Essential Utilities Reports Solid
Q3 2026 Results
Progress
Continues on Proposed Merger with American Water
| · | GAAP
Earnings of $0.36 per share for Q3 2026 and adjusted earnings per share of $0.38 (non-GAAP),
which exclude transaction costs associated with the pending merger with American Water |
| · | Invested
$1.1 billion in infrastructure in the first nine months of the year; on track to invest $1.7 billion in 2026 |
.
BRYN MAWR, Pa. (November
3, 2026) – Essential Utilities Inc. (NYSE: WTRG) today reported results for the third quarter ended September 30, 2026.
Company Highlights
“Our
strong performance this quarter highlights the consistent earnings growth generated by both our water and natural gas divisions,”
said Essential Utilities Chairman and Chief Executive Officer Christopher Franklin. “These results demonstrate our team’s
dedication to operational excellence and strategic infrastructure investment. As we work toward closing our merger with American
Water in Q1 2027, we remain focused on the meaningful benefits our combined organization can bring to the communities we serve
and to our shareholders.” Franklin added.
Third Quarter 2026 Operating
Results
Essential
reported GAAP net income of $103.8 million and earnings per share of $0.36 for the third quarter of 2026, compared to GAAP net
income of $92.1 million and earnings per share of $0.33 for the same period in 2025.
The
Q3 2026 non-GAAP EPS of $0.38 reflects business results without the impact of merger-related expenses incurred in the quarter.
Revenues for the
quarter were $508.3 million compared to $477.0 million in the third quarter of 2025, an increase of 6.6%. Additional revenues
from regulatory recoveries and purchased gas costs were the main revenue growth drivers. Operations and maintenance expenses were
$152.2 million for the third quarter of 2026, compared to $153.1 million in the third quarter of 2025, a decrease of 0.6%, primarily
due to insurance recoveries recognized during the current quarter, as well a decrease in bad debt expense in our regulated natural
gas segment, partially offset by other expense categories. Excluding merger-related costs, O&M expenses for the quarter decreased
by $5.9 million.
Essential’s
regulated water segment reported revenues for the quarter of $380.6 million, an increase of 4.5% compared to $364.1 million in
the third quarter of 2025. Regulatory recoveries and additional revenues associated with a larger customer base were the largest
contributors to the increase in revenues for the period. Operations and maintenance expenses for Essential’s regulated water
segment decreased to $104.8 million for the third quarter of 2026 compared to $105.7 million in the third quarter of 2025, due
to a decrease in employee benefits primarily due to insurance recoveries recognized during the quarter, partially offset by additional
operating costs associated with recently acquired water and wastewater systems.
Essential’s
regulated natural gas segment reported revenues for the quarter of $122.6 million, compared to $108.5 million in the third quarter
of 2025, driven primarily by higher rates and surcharges, an increase in purchased gas costs, and an increase from volumes delivered
as a result of a favorable increase in customer usage during the quarter. Operations and maintenance expenses for Essential’s
regulated natural gas segment decreased to $43.0 million for the third quarter of 2026 compared to $47.5 million in the third
quarter of 2025 due to lower bad debt expenses and a beneficial impact from insurance recoveries.
Excluding the one-time
items and the impact of abnormal weather, operations and maintenance expenses for the full year are expected to be in line with
historic norms.
For the first nine
months of 2026, the Company reported revenues of $1,900.9 million, a 7.1% increase, primarily due to regulatory recoveries, increased
purchased gas costs, and higher volumes in the regulated natural gas segment, compared to $1,775.5 million in the first nine months
of 2025. Operations and maintenance expenses for the first nine months of 2026 totaled $481.6 million, compared to $439.4 million
in 2025, including $22.5 million of merger-related expenses through 3Q 2026. Net Income for the first nine months of 2026 totaled
$434.0 million, or $1.53 per share, compared to $483.7 million, or $1.73 per share for the same period of 2025.
For the first nine
months of 2026, diluted non-GAAP EPS of $1.58 reflects business results without the impact of merger-related expenses.
Dividend
On October 21, 2026, Essential’s
board of directors declared a quarterly dividend of $0.3606 per share of common stock. This dividend will be payable on December
1, 2026, to shareholders of record on November 10, 2026.
Essential Utilities has
paid consecutive quarterly cash dividends for over 80 years and has increased the dividend 36 times in the last 35 years.
Financing
As of September 30, 2026,
Essential’s weighted average cost of fixed-rate long-term debt was 4.14%, and the company had $759 million available on
its credit lines.
Rate Activity
Thus far in 2026, the Company’s
regulated water segment received rate awards or infrastructure surcharges that will increase annual revenues in Pennsylvania,
Indiana, Illinois, Ohio, North Carolina, and New Jersey by $53.6 million, and its regulated natural gas segment received rate
awards or infrastructure surcharges in Pennsylvania and Kentucky of $16.9 million.
The Company currently has base rate
cases or infrastructure surcharges pending in Texas, Virginia, Illinois, Indiana, and New Jersey for its regulated water and wastewater
segment for an estimated $78.5 million in incremental annual revenues. The company currently has a base rate case pending in Pennsylvania
for its natural gas segment with a requested revenue increase of $163.2 million to support its Long-Term Infrastructure Improvement
Plan, which involves the replacement and retirement of aging gas mains and the associated reduction of greenhouse gas emissions
Capital Expenditures
Essential invested approximately
$1.1 billion in the first nine months of 2026 to improve its regulated water and natural gas infrastructure systems and to enhance
customer service across its operations. The Company continues to be a leader in the United States at replacing miles of aged underground
utility pipes and is committed to maintaining elevated levels of infrastructure investment. Essential is on track to invest $1.7
billion in needed infrastructure investments in 2026.
Water Utility Growth by
Acquisition
Essential’s continued
growth by acquisition allows the company to provide safe and reliable water and wastewater service to a larger customer base than
it could from organic customer growth alone.
Since 2015, Essential has
acquired approximately $570 million in rate base and added more than 138,000 new customers or equivalent dwelling units to
the company’s footprint.
In October 2026, the Company
completed the acquisition of Dril-Quip, Inc., a water and wastewater system located in Harris County, Texas, for approximately
$1.1 million. Additionally, on October 19, 2026, the Company entered into an asset purchase agreement to acquire the North Carolina
water and wastewater assets of Central States Water Resources, serving approximately 4,100 customers, for approximately $3.5 million.
Further, on October 28, 2026,
the Company entered into an asset purchase agreement for the acquisition of the water and wastewater assets of the Village of
Buckingham Springs in Pennsylvania, serving approximately 1,300 customers for approximately $2.8 million. On the same date, the
Company also entered into an asset purchase agreement to acquire the wastewater assets of the Hempfield Township Municipal Authority
in Pennsylvania, serving approximately 1,200 customers for approximately $2.2 million.
The Company has additionally
executed purchase agreements for water and wastewater systems in North Carolina and Virginia.
In aggregate, the Company
has signed asset purchase agreements, totaling approximately $290 million in purchase price, which are expected to serve over
208,000 customers or equivalent dwelling units. Included among these agreements is the Company’s $276.5 million agreement
to acquire the Delaware County Regional Water Quality Control Authority (DELCORA), a Pennsylvania sewer authority that serves
approximately 198,000 equivalent dwelling units in the Philadelphia suburbs, is included among these signed purchase agreements.
The pipeline of potential
municipal water and wastewater acquisitions the Company is actively pursuing represents approximately 400,000 total customers.
Merger with American Water
Works Company, Inc.
The Company is in the process
of obtaining the consents and approvals needed to successfully consummate the proposed merger with American Water. So far, the
parties have received approval of the merger from regulatory commissions in Kentucky, Ohio and Virginia.
Settlement agreements have
also been reached with the relevant regulators in Pennsylvania, North Carolina and Texas. Each settlement agreement remains subject
to review and approval by the applicable public utility commission.
We continue to expect the merger
to close in the first quarter of 2027.
3Q
2026 Earnings Call Information
Date: November 4th, 2026
Time: 11 a.m. EDT (please dial in
by 10:45 a.m.)
Webcast and slide presentation link:
https://www.essential.co/events-and-presentations/events-calendar
The call and presentation will be
webcast live so interested parties may listen over the internet by logging on to Essential.co and following the link for Investors.
The conference call will be archived in the Investor Relations section of the company’s website following the call.
About Essential
Essential
Utilities, Inc. (NYSE: WTRG) delivers safe, clean, reliable services that improve quality of life for individuals, families, and
entire communities. With a focus on water, wastewater, and natural gas, Essential is committed
to sustainable growth, operational excellence, a superior customer experience, and premier employer status. We are advocates for
the communities we serve and are dedicated stewards of natural lands, protecting thousands
of acres of forests and other habitats throughout our footprint.
Operating as the Aqua and
Peoples brands, Essential serves approximately 5.5 million people across nine states. Essential is one
of the most significant publicly traded water, wastewater service and natural gas providers in the U.S. Learn more at www.essential.co.
Forward-Looking Statements
This release
contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which generally
include words such as “believes,” “expects,” “intends,” “anticipates,” “estimates,”
and similar expressions. The Company can give no assurance that any actual or future results or events discussed in these statements
will be achieved. Any forward-looking statements represent its views only as of today and should not be relied upon as representing
its views as of any subsequent date. Readers are cautioned that such forward-looking statements are subject to a variety of risks
and uncertainties that could cause the company’s actual results to differ materially from the statements contained in this
release. Such forward-looking statements include, among others: the anticipated receipt of
regulatory approvals for, and closing of the company’s proposed merger with American Water; and the
anticipated amount of infrastructure investment. There are important factors that could cause actual results to differ materially
from those expressed or implied by such forward-looking statements including: the expected timing and likelihood of completion
of our proposed merger with American Water; changes in the EPAs regulations; changes in the United States’ governmental
policies, including those from the Executive Branch; disruptions in the global economy; potential disruptions in the supply chain
for raw and finished materials; the continuation of the company’s growth-through-acquisition program; general economic business
conditions; the company’s ability to successfully execute any equity or debt financing transactions, including on an as
needed basis; housing and customer growth trends; unfavorable weather conditions; the success of certain cost-containment initiatives;
changes in regulations or regulatory treatment; the company’s ability to successfully close municipally owned systems presently
under agreement and successfully complete other acquisitions and dispositions; and other factors discussed in our Annual Report
on Form 10-K and our Quarterly Reports on Form 10-Q, which are filed with the Securities and Exchange Commission. For more information
regarding risks and uncertainties associated with Essential’s business, please refer to Essential’s annual, quarterly, and other
SEC filings. Essential is not under any obligation - and expressly disclaims any such obligation - to update or alter its forward-looking
statements whether as a result of new information, future events, or otherwise.
Essential Utilities, Inc. and Subsidiaries
Consolidated Statement of Income
(In thousands, except per share amounts)
(Unaudited)
| | |
Quarter Ended | | |
Nine Months Ended | |
| | |
September 30, | | |
September 30, | |
| | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| Operating revenues | |
$ | 508,257 | | |
$ | 476,971 | | |
$ | 1,900,870 | | |
$ | 1,775,504 | |
| | |
| | | |
| | | |
| | | |
| | |
| Cost & expenses: | |
| | | |
| | | |
| | | |
| | |
| Operations and maintenance | |
| 152,157 | | |
| 153,088 | | |
| 481,587 | | |
| 439,422 | |
| Purchased gas | |
| 25,382 | | |
| 22,506 | | |
| 310,198 | | |
| 263,882 | |
| Depreciation | |
| 110,599 | | |
| 103,322 | | |
| 327,286 | | |
| 299,628 | |
| Amortization | |
| 3,712 | | |
| 3,744 | | |
| 11,046 | | |
| 10,334 | |
| Taxes other than income taxes | |
| 23,708 | | |
| 24,540 | | |
| 74,141 | | |
| 68,291 | |
| Total | |
| 315,558 | | |
| 307,200 | | |
| 1,204,258 | | |
| 1,081,557 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating income | |
| 192,699 | | |
| 169,771 | | |
| 696,612 | | |
| 693,947 | |
| | |
| | | |
| | | |
| | | |
| | |
| Other expense (income): | |
| | | |
| | | |
| | | |
| | |
| Interest expense | |
| 91,319 | | |
| 82,269 | | |
| 267,737 | | |
| 244,143 | |
| Interest income | |
| (894 | ) | |
| (1,079 | ) | |
| (3,015 | ) | |
| (1,609 | ) |
| Allowance for funds used during construction | |
| (6,061 | ) | |
| (6,180 | ) | |
| (17,560 | ) | |
| (19,039 | ) |
| Other, net | |
| (2,136 | ) | |
| (1,615 | ) | |
| (916 | ) | |
| (1,517 | ) |
| Income before income taxes | |
| 110,471 | | |
| 96,376 | | |
| 450,366 | | |
| 471,969 | |
| Income tax expense (benefit) | |
| 6,636 | | |
| 4,299 | | |
| 16,414 | | |
| (11,724 | ) |
| Net income | |
$ | 103,835 | | |
$ | 92,077 | | |
$ | 433,952 | | |
$ | 483,693 | |
| | |
| | | |
| | | |
| | | |
| | |
| Net income per common share: | |
| | | |
| | | |
| | | |
| | |
| Basic | |
$ | 0.37 | | |
$ | 0.33 | | |
$ | 1.5292 | | |
$ | 1.7335 | |
| Diluted | |
$ | 0.36 | | |
$ | 0.33 | | |
$ | 1.5259 | | |
$ | 1.7302 | |
| | |
| | | |
| | | |
| | | |
| | |
| Average common shares outstanding: | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 284,466 | | |
| 281,784 | | |
| 283,772 | | |
| 279,027 | |
| Diluted | |
| 285,021 | | |
| 282,298 | | |
| 284,395 | | |
| 279,560 | |
Essential Utilities, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands of dollars)
(Unaudited)
| | |
September 30, | | |
December 31, | |
| | |
2026 | | |
2025 | |
| | |
| | |
| |
| Net property, plant and equipment | |
| 15,082,322 | | |
| 14,263,682 | |
| Current assets | |
| 485,837 | | |
| 610,396 | |
| Regulatory assets and other assets | |
| 4,726,439 | | |
| 4,590,767 | |
| | |
| 20,294,598 | | |
| 19,464,845 | |
| | |
| | | |
| | |
| Total equity | |
| 7,127,920 | | |
| 6,857,456 | |
| Long-term debt, excluding current portion, net of debt issuance costs and unamortized discount on debt | |
| 8,030,165 | | |
| 8,110,167 | |
| Current portion of long-term debt and loans payable | |
| 670,328 | | |
| 171,961 | |
| Other current liabilities | |
| 544,389 | | |
| 592,522 | |
| Deferred credits and other liabilities | |
| 3,921,796 | | |
| 3,732,739 | |
| | |
| 20,294,598 | | |
| 19,464,845 | |
Essential Utilities, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)
The
Company is providing disclosure of the reconciliation of adjusted earnings per share, a non-GAAP financial measures referenced
in this release, to the most comparable GAAP financial measure. Adjusted earnings per share does not comply with U.S. generally
accepted accounting principles (GAAP), and is thus considered to be a “non-GAAP financial measures” under applicable
SEC regulations.
Adjusted earnings per share is one of the primary metrics used by management to evaluate the Company’s
financial performance and compare it to that of its peers, evaluate the effectiveness of the Company’s business strategies,
and in connection with executive compensation decisions. This measure is also frequently used by analysts, investors, and others
to evaluate industry peers. Further, the Company believes adjusted earnings per share is helpful in highlighting trends in the
Company’s results because it allows for more consistent comparisons of performance between periods by excluding gains and
losses that are non-operational in nature or outside the control of management. The Company further believes that this non-GAAP
financial measure is useful to investors as a more meaningful way to compare the Company’s operating performance against
its guidance. This non-GAAP measure does, however, have certain limitations and should not be considered as an alternative to
earnings per share or any other performance.
Adjusted earnings per share adjusts for the following items:
| (1) | costs associated with the
pending merger with American Water; and |
| (2) | the income tax impact of
the non-GAAP adjustment described above. |
| | |
Three Months Ended | |
| | |
September 30, 2026 | |
| Net income (GAAP financial measure) | |
$ | 103,835 | |
| Adjustments: | |
| | |
| (1) Costs associated with the pending merger with American Water | |
| 4,934 | |
| (2) The income tax impact of the non-GAAP adjustment described above | |
| (1,328 | ) |
| Adjusted income (Non-GAAP financial measure) | |
$ | 107,441 | |
| | |
| | |
| Net income per common share (GAAP financial measure): | |
| | |
| Basic | |
$ | 0.37 | |
| Diluted | |
$ | 0.36 | |
| | |
| | |
| Adjusted income per common share (Non-GAAP financial measure): | |
| | |
| Basic | |
$ | 0.38 | |
| Diluted | |
$ | 0.38 | |
| | |
| | |
| Average common shares outstanding: | |
| | |
| Basic | |
| 284,466 | |
| Diluted | |
| 285,021 | |
| | |
| | |
Essential Utilities, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)
The Company is providing disclosure of the reconciliation of adjusted earnings per share, a non-GAAP financial measures referenced in this release, to the most comparable GAAP financial measure. Adjusted earnings per share does not comply with U.S. generally accepted accounting principles (GAAP), and is thus considered to be a “non- GAAP financial measures” under applicable SEC regulations.
Adjusted earnings per share is one of the primary metrics used by management to evaluate the Company’s financial performance and compare it to that of its peers, evaluate the effectiveness of the Company’s business strategies, and in connection with executive compensation decisions. This measure is also frequently used by analysts, investors, and others to evaluate industry peers. Further, the Company believes adjusted earnings per share is helpful in highlighting trends in the Company’s results because it allows for more consistent comparisons of performance between periods by excluding gains and losses that are non-operational in nature or outside the control of management. The Company further believes that this non-GAAP financial measure is useful to investors as a more meaningful way to compare the Company’s operating performance against its guidance. This non-GAAP measure does, however, have certain limitations and should not be considered as an alternative to earnings per share or any other performance.
Adjusted earnings per share adjusts for the following items:
| (1) | costs associated with the pending merger with American
Water; and |
| (2) | the income tax impact of the non-GAAP adjustment described
above. |
| | |
Nine Months Ended | |
| | |
September 30, 2026 | |
| Net income (GAAP financial measure) | |
$ | 433,952 | |
| Adjustments: | |
| | |
| (1) Costs associated with the pending merger with American Water | |
| 22,455 | |
| (2) The income tax impact of the non-GAAP adjustment described above | |
| (6,045 | ) |
| Adjusted income (Non-GAAP financial measure) | |
$ | 450,362 | |
| | |
| | |
| Net income per common share (GAAP financial measure): | |
| | |
| Basic | |
$ | 1.53 | |
| Diluted | |
$ | 1.53 | |
| | |
| | |
| Adjusted income per common share (Non-GAAP financial measure): | |
| | |
| Basic | |
$ | 1.59 | |
| Diluted | |
$ | 1.58 | |
| | |
| | |
| Average common shares outstanding: | |
| | |
| Basic | |
| 283,772 | |
| Diluted | |
| 284,395 | |
Media Contact:
David Kralle
Vice President, Public Affairs
Media Hotline: 1.877.325.3477
Media@Essential.co
Investor Contact:
Ed Vallejo
Director – Investor Relations
O: 610.645.1191
Edvallejo@essential.co
