Revenue Performance - Total revenue for the three months ended September 30, 2025, was $78.4 million, a decrease of 10.1% compared to $87.2 million for the same period in 2024[118] - Total revenue for the nine months ended September 30, 2025, was $227.3 million, a decrease of $14.8 million or 6.1% compared to $242.1 million for the same period in 2024[137] - Five hotels were sold during the reporting period, contributing zero revenue in 2025, which impacted overall revenue figures[117] Room Revenue - Room revenue comprised 91.7% of total revenue for the three months ended September 30, 2025, down from 92.0% in 2024[118] - Room revenue comprised 91.4% of total revenue for the nine months ended September 30, 2025, down from 91.6% in 2024[138] Operating Expenses - Hotel operating expenses decreased by $4.2 million, or 8.7%, to $44.0 million for the three months ended September 30, 2025, from $48.2 million in 2024[124] - Hotel operating expenses decreased by $7.9 million, or 5.7%, to $128.8 million for the nine months ended September 30, 2025, from $136.7 million in 2024[144] - Total property taxes, ground rent, and insurance expenses decreased from $6.5 million in 2024 to $5.3 million in 2025, attributed to hotel sales and successful property tax appeals[128] Net Income - Net income for the three months ended September 30, 2025, was $3.6 million, compared to $4.3 million for the same period in 2024, reflecting a decrease of 16.3%[135] - Net income for the nine months ended September 30, 2025, was $10.6 million, an increase of 79.7% compared to $5.9 million for the same period in 2024[156] Debt and Leverage - The leverage ratio as of September 30, 2025, was 20.6%, with total debt of $343.2 million at a weighted-average interest rate of approximately 6.29%[111] - Total debt principal and interest obligations amounted to $455.9 million as of September 30, 2025, with $21.6 million payable within the next 12 months[180] - The leverage ratio was approximately 20.6% as of September 30, 2025, with total debt of $343.2 million at an average interest rate of 6.29%[181] Interest Expense - Interest expense decreased by $3.8 million, or 16.2%, from $23.3 million for the nine months ended September 30, 2024, to $19.5 million for the same period in 2025[153] - Interest on cash and cash equivalents and other income decreased from $1.6 million for the nine months ended September 30, 2024, to $0.2 million in 2025, a decline of 87.5%[152] Cash Flow - Net cash flows provided by operating activities decreased by $9.1 million to $51.8 million for the nine months ended September 30, 2025, compared to $60.9 million in 2024[175] - Net cash flows provided by investing activities increased by $84.5 million to $32.4 million during the nine months ended September 30, 2025, compared to $(52.1) million in 2024[176] Asset Management - The company intends to acquire quality assets at attractive prices while remaining prudently leveraged, utilizing various funding sources[110] - The company expects to invest approximately $5.7 million on renovations and improvements for existing hotels during the remainder of 2025[177] - The company sold six hotels and acquired one hotel during the nine months ended September 30, 2025, impacting revenue and operating expenses significantly[136] Tax and Valuation - Income tax expense remained unchanged at zero for the nine months ended September 30, 2025, and 2024, due to cumulative three-year taxable losses[155] - The company continues to recognize a full valuation allowance equal to 100% of the gross deferred tax assets due to uncertainty in utilizing these assets[155] Market Conditions - The U.S. lodging industry RevPAR decreased by 1.4% for the three months ended September 30, 2025, indicating a slowdown in industry performance[116] - Same property RevPAR decreased 2.5% for the three months ended September 30, 2025, driven by a 0.6% decrease in occupancy and a 1.8% decrease in ADR[123] - Same property RevPAR increased by 0.2% for the nine months ended September 30, 2025, driven by a 1.0% increase in occupancy[142] Shareholder Returns - The company declared total dividends of $0.27 per common share for the nine months ended September 30, 2025, compared to $0.21 in 2024[179] - During the nine months ended September 30, 2025, the company repurchased 275,693 common shares at a weighted-average price of $7.17, totaling approximately $2.0 million[186] - As of September 30, 2025, there was approximately $49.9 million in common shares available for issuance under the Dividend Reinvestment and Stock Purchase Plan[184] Financial Estimates and Risks - Management estimates and assumptions in financial statements are based on reasonable circumstances, but actual results could differ from these estimates[195] - The company aims to limit the impact of interest rate changes on earnings and cash flows by primarily borrowing at fixed rates or the lowest variable rates available[197] - Inflation may affect the company's expenses and costs of capital investments, including construction, labor, and materials[193] - The company evaluates its estimates and judgments on an ongoing basis, with significant accounting policies disclosed in the Annual Report[195] - The company may utilize cash on hand or borrowings to cover expenses during quarters with insufficient cash flow from operations due to seasonal fluctuations[194]

Merger and Acquisition - Berry Corp. entered into a Merger Agreement with California Resources Corporation, with an exchange ratio of 0.0718 shares of CRC for each share of Berry Corp. common stock[22] - The Merger is expected to close in the first quarter of 2026, pending shareholder and regulatory approvals[22] - Berry Corp. incurred approximately $3 million in transaction costs related to the Merger for the three and nine months ended September 30, 2025[23] Debt and Liquidity - As of September 30, 2025, Berry Corp. had approximately $416 million of borrowings outstanding under the 2024 Term Loan[44] - The 2024 Term Loan has an initial principal amount of $450 million, with a maturity date of December 24, 2027[36] - The interest rate for the 2024 Term Loan is either a base rate plus an applicable margin of 6.50% or a term SOFR reference rate plus an applicable margin of 7.50%[39] - Berry Corp. is required to maintain a minimum liquidity of $25 million and a total net leverage ratio not exceeding 2.5 to 1.0 under the 2024 Term Loan[40] - The 2024 Revolver provides a revolving credit facility of up to $500 million, with a borrowing base of $95 million as of September 30, 2025[45] - As of September 30, 2025, the company had no outstanding borrowings, $14 million in letters of credit, and approximately $49 million of available borrowing capacity under the 2024 Revolver[54] - The 2024 Revolver includes financial covenants such as a minimum liquidity requirement of $25 million and a total net leverage ratio not exceeding 2.5 to 1.0[49] - The company must ensure that the Consolidated Cash Balance does not exceed $35 million when borrowing[50] - The 2024 Revolver is secured by a first lien on substantially all assets of the company and its wholly owned material subsidiaries[53] Commodity Hedging - The company is required to maintain commodity hedges covering at least 75% of projected crude oil production from PDP reserves for the first 24 months following December 24, 2024[56] - The weighted-average price for crude oil production hedges in Q4 2025 is $74.69 per barrel, with a hedged volume of 1,610,000 barrels[67] - The company has added collars for 2025 to 2028, with calls ranging from $68.75 to $70.96 per barrel and a floor of $60.00 per barrel[68] - As of September 30, 2025, the total net fair value of commodity derivatives presented in the balance sheet was $44,585,000, compared to $8,520,000 as of December 31, 2024[69] - Realized gains on oil sales derivatives for the three months ended September 30, 2025, were $10,282,000, while realized losses on natural gas purchase derivatives were $6,200,000, resulting in total realized gains of $4,082,000[71] - Unrealized losses on oil sales derivatives for the three months ended September 30, 2025, amounted to $14,948,000, leading to total unrealized losses of $24,797,000 for the same period[71] Financial Performance - For the three months ended September 30, 2025, total revenues were $151.1 million, a decrease of 42.3% compared to $261.7 million for the same period in 2024[112] - Oil sales for the three months ended September 30, 2025, were $124.9 million, down 17.7% from $151.7 million in the prior year[112] - The company reported a net loss of $26.0 million for the three months ended September 30, 2025, compared to a net income of $69.9 million for the same period in 2024[108] - Basic loss per share for the three months ended September 30, 2025, was $(0.34), compared to earnings per share of $0.91 in the same period of 2024[108] - For the nine months ended September 30, 2025, total revenues were $543,871,000, compared to $1,000,000,000 in the same period of 2024, indicating a decrease of approximately 45.6%[132][134] - The company reported a loss before income taxes of $124,057,000 for the nine months ended September 30, 2025[134] - The company experienced a segment loss of $21,088,000 for the nine months ended September 30, 2025, compared to a profit in the same period of 2024[134] Capital Expenditures and Investments - Capital expenditures for the three months ended September 30, 2025, totaled $17,021,000, compared to $25,874,000 in 2024, a reduction of about 34.1%[126][130] - The company executed a farm-in agreement for a 30% working interest in a horizontal well in the Uinta Basin, with expected capital expenditures of approximately $3 million[101] - Capital expenditures for the nine months were $85,135,000, with $81,945,000 allocated to E&P and $2,298,000 to Well Servicing[138] Shareholder Returns - The company declared cash dividends of $0.03 per share in March, May, August, and November 2025, with total dividends expected to be paid in December 2025[82] - As of September 30, 2025, the company had a remaining total share repurchase authority of $190 million, with no shares repurchased during the nine months ended September 30, 2025[84] Legal and Regulatory Matters - The company is currently unable to estimate the probability of outcomes related to pending legal proceedings and the range of reasonably possible losses[80] - The company has limited its exposure to any single counterparty in derivative instruments to minimize credit risk[70] Market Conditions and Expectations - The company expects the adoption of new accounting standards to impact disclosures but not results of operations or cash flows[27][28] - The One Big Beautiful Bill Act is expected to result in increased tax deductions and credits for Berry Corp.[30] - Management expects energy prices to remain unpredictable and potentially volatile, impacting revenues and cash flows[368]

Financial Performance - Total revenues for the quarter ended September 30, 2025, were $700.8 million, an increase of 9.4% compared to $640.2 million for the same quarter in 2024[15] - Subscription revenues reached $494.6 million for the quarter, up 9.1% from $453.3 million in the prior year[15] - Net income for the quarter was $81.6 million, representing a 27.4% increase from $64.1 million in the same quarter last year[15] - Operating profit for the nine months ended September 30, 2025, was $270.0 million, compared to $204.5 million for the same period in 2024, reflecting a 32% increase[15] - Total revenues for the nine months ended September 30, 2025, reached $2,022,604 thousand, up from $1,859,290 thousand in 2024, indicating a year-over-year increase of about 8.8%[38] - Adjusted operating profit for the third quarter of 2025 was $131.4 million, compared to $104.2 million in Q3 2024, reflecting a 26.1% increase[90] Cash and Assets - Cash and cash equivalents increased to $249.3 million as of September 30, 2025, from $199.4 million at the end of 2024[9] - Total assets as of September 30, 2025, were $2.89 billion, up from $2.84 billion at the end of 2024[12] - Cash, cash equivalents, and restricted cash at the end of the period increased to $264,209,000 from $218,863,000, marking a rise of 20.8%[27] - Long-term marketable securities increased to $479.4 million as of September 30, 2025, from $345.9 million at the end of 2024[9] - Total stockholders' equity rose to $1.98 billion as of September 30, 2025, compared to $1.93 billion at the end of 2024[12] Dividends and Share Repurchases - The company declared dividends of $0.18 per share for the quarter, compared to $0.13 per share in the same quarter last year[15] - Dividends paid increased to $89,146,000 in 2025 from $64,962,000 in 2024, indicating a rise of 37.2%[25][27] - The company repurchased 2,123,155 Class A shares for $110,506,000 during the nine months ended September 30, 2025[27] - Share repurchases during the nine months ended September 30, 2025, amounted to approximately $109.8 million, with $405.6 million remaining authorized for future repurchases[84] Revenue Breakdown - Total revenue from subscriptions and advertising is the primary source of income, with subscription revenues including digital and print products[34][35] - Digital-only subscription revenue was $367.4 million, accounting for 74.3% of total subscription revenue, up from $322.2 million and 71.1% in the same quarter of 2024[39] - Advertising revenue for the quarter was $132.3 million, a 11.8% increase from $118.4 million in the same quarter of 2024[40] - Digital advertising revenue was $98.1 million, representing 74.2% of total advertising revenue, compared to $81.6 million and 68.9% in the prior year[40] Operating Costs and Expenses - Operating costs for Q3 2025 totaled $596,033,000, a 5.8% increase from $563,451,000 in Q3 2024[15] - The company reported a depreciation and amortization expense of $64,115,000 for the nine months ended September 30, 2025, compared to $61,865,000 in 2024[27] - Stock-based compensation expense for the nine months ended September 30, 2025, totaled $53.7 million, up from $49.9 million in the same period of 2024[87] Tax and Pension - The income tax expense for the third quarter of 2025 was $26.4 million, an increase from $20.9 million in the same quarter of 2024[76] - The effective tax rates for the third quarter and first nine months of 2025 were 24.4% and 24.5%, respectively, compared to 24.6% and 25.3% for the same periods in 2024[76] - The net periodic pension cost for the first nine months of 2025 was $18,234,000, compared to $6,357,000 for the same period in 2024[72] - The company made pension contributions of $9.4 million in the first nine months of 2025, with expected contributions of approximately $13 million for the full year[72] Legal Proceedings - The company is involved in ongoing legal proceedings, including a lawsuit against Microsoft and OpenAI for copyright infringement[92] Other Comprehensive Income - The company reported a net current-period other comprehensive income of $9.0 million for the nine months ended September 30, 2025[85] - The accumulated other comprehensive income (AOCI) balance as of September 30, 2025, was $(356.8) million, reflecting a decrease from $(365.8) million at the end of 2024[85]

Revenue Performance - GCI Liberty reported a 2% decline in total revenue to $257 million for Q3 2025, with consumer revenue down 4% and business revenue flat year-over-year[3]. - GCI Liberty reported a revenue of $257 million for Q3 2025, a decrease from $262 million in Q3 2024[36]. Operating Loss and Impairment - The company incurred an operating loss of $488 million, primarily due to a $525 million non-cash impairment charge related to intangible assets and goodwill[6]. - The operating loss for Q3 2025 was $(488) million, compared to an operating income of $41 million in Q3 2024[36]. - The company recorded an impairment of goodwill and intangible assets amounting to $525 million in Q3 2025[36]. Adjusted OIBDA - Adjusted OIBDA decreased by 8% to $92 million, with an Adjusted OIBDA margin of 35.8%, down 240 basis points from the previous year[7]. - Adjusted OIBDA for Q3 2025 was $92 million, down from $100 million in Q3 2024[34]. Cash Flow and Financial Position - GCI generated net cash provided by operating activities of $357 million and free cash flow of $155 million over the trailing twelve months ended September 30, 2025[12]. - Free cash flow for the twelve months ended September 30, 2025, was $155 million, with net cash provided by operating activities at $357 million[34]. - GCI's cash, cash equivalents, and restricted cash increased by $20 million in Q3 2025, primarily due to cash from operations[25]. - Total current assets increased to $405 million as of September 30, 2025, from $319 million at the end of 2024[35]. - Total liabilities decreased to $1,621 million as of September 30, 2025, from $1,953 million at the end of 2024[35]. - Cash and cash equivalents rose to $124 million as of September 30, 2025, compared to $74 million at the end of 2024[35]. - GCI Liberty's long-term debt decreased to $981 million as of September 30, 2025, from $1,066 million at the end of 2024[35]. Subscriber Metrics - Consumer cable modem subscribers decreased by 3% to 153,100, while consumer wireless lines in service increased by 2% to 207,500[3]. Strategic Initiatives - GCI Liberty announced a $300 million rights offering to all stockholders, expected to commence before year-end[3]. - Capital expenditures for the full year 2025 are projected to be between $225 million and $250 million, primarily for improvements to wireless and data networks in rural Alaska[11]. Business Focus - The company has exited the video business as of September 30, 2025, focusing solely on broadband connectivity services[2]. Net Loss - The net loss for Q3 2025 was $(387) million, contrasting with a net income of $21 million in Q3 2024[36].

Financial Performance - GCI Liberty reported a 2% decline in total revenue to $257 million for Q3 2025, with consumer revenue down 4% and business revenue flat year-over-year [3]. - The company incurred an operating loss of $488 million, primarily due to a $525 million non-cash impairment charge related to intangible assets and goodwill [6]. - Adjusted OIBDA decreased 8% to $92 million, with an Adjusted OIBDA margin of 35.8%, down 240 basis points from the previous year [7]. - GCI Liberty reported a revenue of $257 million for Q3 2025, a decrease from $262 million in Q3 2024 [36]. - The operating loss for Q3 2025 was $(488) million, compared to an operating income of $41 million in Q3 2024 [36]. - Adjusted OIBDA for Q3 2025 was $92 million, down from $100 million in Q3 2024 [34]. - The net loss for Q3 2025 was $(387) million, contrasting with a net income of $21 million in Q3 2024 [36]. Cash Flow and Liquidity - GCI generated net cash provided by operating activities of $357 million and free cash flow of $155 million over the trailing twelve months ended September 30, 2025 [12]. - Free cash flow for the twelve months ended September 30, 2025, was $155 million, with net cash provided by operating activities at $357 million [34]. - GCI's cash, cash equivalents, and restricted cash increased by $20 million in Q3 2025, primarily due to cash from operations [25]. - Cash and cash equivalents rose to $124 million as of September 30, 2025, compared to $74 million at the end of 2024 [35]. Debt and Assets - GCI's total debt remained flat at $1,045 million as of September 30, 2025, with a leverage ratio of 2.3x [26]. - Total current assets increased to $405 million as of September 30, 2025, from $319 million at the end of 2024 [35]. - Total liabilities decreased to $1,621 million as of September 30, 2025, from $1,953 million at the end of 2024 [35]. - GCI Liberty's total assets decreased to $3,011 million as of September 30, 2025, from $3,382 million at the end of 2024 [35]. Subscriber Metrics - Consumer cable modem subscribers declined 3% to 153,100, while consumer wireless lines in service increased 2% to 207,500 [3]. - GCI's wireless revenue increased by 11% to $52 million, driven by an increase in federal wireless subsidies [17]. Capital Expenditures and Future Plans - Capital expenditures for the full year 2025 are projected to be between $225 million and $250 million, primarily for improvements to wireless and data networks in rural Alaska [11]. - GCI Liberty announced a $300 million rights offering to all stockholders, expected to commence before year-end [3].

Revenue Growth - For the three months ended September 30, 2025, revenue from Real Estate Management Services was $4,982.4 million, an increase from $4,520.5 million in the same period of 2024, representing a growth of 10.2%[43] - Leasing Advisory revenue for the three months ended September 30, 2025, was $741.9 million, up from $691.5 million in the same period of 2024, reflecting an increase of 7.3%[44] - The company’s Workplace Management revenue for the nine months ended September 30, 2025, was $10,036.3 million, up from $9,057.4 million in the same period of 2024, a growth of 10.8%[43] - The total revenue for the nine months ended September 30, 2025, was $14,445.8 million, compared to $12,959.6 million in the same period of 2024, representing an increase of 11.5%[43] - Total revenue for the three months ended September 30, 2025, was $6,510.4 million, an increase of 10.9% compared to $5,868.8 million in the same period of 2024[48] Adjusted EBITDA - Adjusted EBITDA for Real Estate Management Services was $102.2 million for the three months ended September 30, 2025, compared to $94.5 million in the same period of 2024, indicating a growth of 8.0%[43] - Adjusted EBITDA for the three months ended September 30, 2025, was $347.3 million, up from $298.1 million in the same period of 2024, reflecting a growth of 16.5%[49] - Adjusted EBITDA for Capital Markets Services reached $89.9 million for the three months ended September 30, 2025, compared to $65.7 million in 2024, a growth of 36.7%[49] Contract Assets and Liabilities - The company reported contract assets, net of allowance, of $380.3 million as of September 30, 2025, slightly down from $384.4 million as of December 31, 2024[30] - Contract liabilities increased to $165.6 million as of September 30, 2025, compared to $154.7 million as of December 31, 2024[30] Investment Management - Total investment balances increased to $895.1 million as of September 30, 2025, up from $812.7 million as of December 31, 2024, primarily driven by a rise in Investment Management co-investments to $502.4 million[62] - The company reported maximum potential unfunded commitments of $210.1 million for Investment Management and $7.7 million for Proptech Investments as of September 30, 2025[63] Goodwill and Impairments - Goodwill as of September 30, 2025, was $4,705.5 million, reflecting an increase due to foreign currency exchange movements and adjustments[54] - The company recognized an investment-level impairment charge of $2.2 million in June 2025, with no other significant impairments reported for 2025[64] - The company recognized an investment-level impairment charge during the nine months ended September 30, 2025, but did not report significant impairment losses in the same period of 2024[93] Debt and Financing - As of September 30, 2025, total debt increased to $1,512.6 million from $1,198.4 million as of December 31, 2024, reflecting a significant rise in short-term and long-term obligations[95] - Average outstanding borrowings for the nine months ended September 30, 2025, were $1,243.7 million, with an average effective interest rate of 5.0%[100] - The commercial paper program allows the company to issue up to $2.5 billion in short-term notes, with proceeds intended for general corporate purposes[96] - The company maintained compliance with all financial covenants related to its credit facilities as of September 30, 2025[102] Foreign Exchange and Revenue Exposure - Revenue exposed to foreign exchange rates was 37% for the nine months ended September 30, 2025, down from 39% in 2024[227] - The total revenue for the nine months ended September 30, 2025, was 100% comprised of U.S. dollars and other currencies, with the U.S. dollar accounting for 63%[227] Acquisitions and Charges - Total payments for business acquisitions in the nine months ended September 30, 2025, amounted to $22.4 million, down from $45.9 million in the same period of 2024[51] - Restructuring and acquisition charges for the three months ended September 30, 2025, totaled $11.7 million, compared to a negative $8.8 million for the same period in 2024[119] - For the nine months ended September 30, 2025, severance and other employment-related charges amounted to $30.8 million, significantly higher than $17.8 million for the same period in 2024[119] Other Financial Metrics - The company reported net income attributable to common shareholders of $222.8 million for the three months ended September 30, 2025, compared to $155.1 million in 2024, an increase of 43.5%[49] - The company is evaluating the impact of new accounting standards issued by the FASB, including ASU 2025-05 and ASU 2025-06, which may affect future financial statements[25][26] - Effective January 1, 2026, the Software & Technology Solutions segment will merge into Real Estate Management Services, with revenues reported as a subsegment[39]

Financial Performance - Net income for Q3 2025 was $20.8 million, up from $8.7 million in Q3 2024, with basic earnings per share increasing to $1.75 from $0.74[120] - For the nine months ended September 30, 2025, net income reached $57.8 million, compared to $31.0 million for the same period in 2024, with basic earnings per share rising to $4.87 from $2.63[120] - Non-interest income for the nine months ended September 30, 2025, was $32.0 million, up from $30.6 million in the same period in 2024[125] Return Ratios - Return on average assets and return on average equity for Q3 2025 were 1.48% and 13.82%, respectively, compared to 0.64% and 6.39% in Q3 2024[120] - Return on average assets for Q3 2025 was 1.48%, compared to 0.64% in Q3 2024, while return on average equity improved to 13.82% from 6.39%[120] Interest Income - Net interest income for Q3 2025 increased by $7.4 million to $54.6 million, with a net interest margin of 4.25%, up from 3.78% in Q3 2024[123] - Net interest income increased by $7.4 million to $54.6 million for the three months ended September 30, 2025, with a net interest margin of 4.25%, a 12.42% increase year-over-year[123] - The net interest margin for the nine months ended September 30, 2025 was 4.17%, an increase from 3.63% in the same period of 2024[123] Credit Quality - Non-performing loans rose to $19.3 million at September 30, 2025, a 36.3% increase from $14.1 million in September 2024[129] - The provision for credit losses for Q3 2025 was $2.0 million, down from $9.4 million in Q3 2024, with net charge-offs decreasing to $1.6 million from $4.6 million[127] - The non-performing asset ratio is 0.39% of total assets, with net charge-offs at 0.17% to average loans and leases, indicating strong credit performance[122] Expenses - Non-interest expenses for Q3 2025 were $38.0 million, a slight decrease from $38.6 million in Q3 2024, while total non-interest expenses for the nine months increased to $113.1 million[126] - Non-interest expenses for the quarter ended September 30, 2025, were $38.0 million, a decrease from $38.6 million in the same period in 2024[126] Liquidity and Capital - Liquidity remains strong, with cash and available-for-sale securities representing approximately 22.5% of total assets as of September 30, 2025[121] - The Corporation has $203.1 million of unused borrowing capacity available with the Federal Home Loan Bank of Indianapolis, ensuring adequate liquidity[137] - The Corporation's total capital ratios as of September 30, 2025, were 14.15% for total risk-based capital and 13.12% for common equity tier 1 capital, both exceeding regulatory requirements[144] - The Corporation's total risk-based capital ratio was 14.15% as of September 30, 2025, up from 13.46% at December 31, 2024[144] Allowance for Credit Losses - The allowance for credit losses was $47.4 million as of September 30, 2025, compared to $46.7 million at December 31, 2024[117] - The allowance for credit losses was $47.4 million as of September 30, 2025, compared to $46.7 million at December 31, 2024[117] Loans and Deposits - Loans net of deferred loan costs increased by $130 million to $4.0 billion compared to December 31, 2024[138] - Deposits decreased by 2.2% to $4.6 billion as of September 30, 2025, compared to December 31, 2024[138]

Company Operations and Services - The company serves approximately 5.5 million people across multiple states, with Aqua Pennsylvania providing services to about half of the total water or wastewater customers[112]. - The company plans to pursue growth ventures in regulated water and wastewater utilities and infrastructure opportunities[113]. Financial Performance - Operating revenues for the nine months ended September 30, 2025, increased by $293,774 or 19.8% compared to the same period in 2024, driven by increases in Regulated Water and Regulated Natural Gas segments[156]. - Consolidated net income for the nine months ended September 30, 2025, was $483,693, compared to $410,559 for the same period in 2024, reflecting a year-over-year increase of 17.7%[147]. - Net cash flows from operating activities were $804,347 for the first nine months of 2025, up from $622,510 in the same period of 2024, reflecting an increase of $181,837 due to higher operating income and gas volumes delivered[133]. Capital Investments and Expenditures - The company invested $983,089 in infrastructure improvements during the nine-month period ended September 30, 2025, with plans to invest approximately $7,800,000 from 2025 to 2029[126]. - Capital expenditures for the first nine months of 2025 totaled $983,089, with significant investments in water, wastewater, and natural gas infrastructure improvements[134]. Mergers and Acquisitions - The company expects to close the merger with American Water by the end of Q1 2027, with an exchange ratio of 0.305 shares of American Water stock for each share of the company's common stock[117]. - The merger will convert each share of Essential Common Stock into 0.305 shares of American Water Common Stock, with no adjustments for market price fluctuations[195]. - The merger agreement includes a termination fee of $370 million payable by Essential Utilities if the agreement is terminated under certain conditions[200]. - The companies expect to incur substantial non-recurring expenses associated with completing the merger, which may include unexpected transaction fees and merger-related costs[207]. Revenue and Cost Analysis - The company implemented base rate increases resulting in an annual revenue increase of $87,071 across various states[120]. - Purchased gas costs increased by $81,384 or 44.6% during the first nine months of 2025, attributed to a rise in average gas costs and higher gas usage[158]. - Operations and maintenance expense rose by $8,286 or 5.7%, driven by increased customer assistance surcharge costs and labor expenses[184]. Tax and Regulatory Matters - The effective income tax rate for the third quarter of 2025 was 4.5%, a decrease from 18.6% in the same quarter of 2024, primarily due to tax benefits from qualifying infrastructure investments[155]. - The effective income tax rate for the Regulated Water segment decreased to 9.0% in the first nine months of 2025 from 17.1% in 2024, attributed to the release of $22,575 of income tax reserve regulatory liability[175]. - The effective income tax rate for the Regulated Natural Gas segment was a benefit of 23.4% for the first nine months of 2025, down from 27.9% in 2024[188]. Segment Performance - Revenues from the Regulated Water segment increased by $80,335 or 8.8% for the first nine months of 2025, driven by a $27,926 increase in water and wastewater rates and additional revenues from a larger customer base[171]. - Operating revenues from the Regulated Natural Gas segment increased by $207,318 or 37.7% for the nine months ended September 30, 2025, compared to the same period in 2024[183]. - The Regulated Natural Gas segment recognized a segment net income of $182,190 for the first nine months of 2025, compared to $177,563 in the same period of 2024[178]. Risks and Challenges - There are risks related to integrating the two companies, including potential disruptions to ongoing businesses and management distractions[205]. - The merger may impair relationships with employees and partners due to the integration of new management personnel[205]. - The combined company may face difficulties in establishing uniform standards and controls across both entities[205]. - Government regulations may affect the business operations of the combined company, particularly in jurisdictions where American Water's regulated businesses do not currently operate[205].

Merger and Acquisition - The company entered into a definitive merger agreement to acquire MRC Global for approximately $1.5 billion, expected to close in Q4 2025[80]. - The company is facing challenges in successfully integrating its business with MRC Global, which may hinder the realization of anticipated revenue opportunities and cost savings from the merger[151]. - There are complexities in managing the combined businesses, including operational differences and integration of complex systems, which could negatively impact customers and other stakeholders[151]. - The company may incur significant costs related to the merger, including up to $8.5 million in expenses to MRC Global or a termination fee of $45.5 million if the merger agreement is terminated[152]. - The company has temporarily suspended its share repurchase program, which was authorized for up to $160 million, until the merger with MRC Global is completed[154]. Financial Performance - For the three months ended September 30, 2025, the Company generated net income of $25 million on revenue of $634 million, representing a 4.6% increase in revenue compared to the same period in 2024[97]. - The operating profit for the three months ended September 30, 2025, was $33 million, an increase of $10 million or 43.5% compared to $23 million in the same period of 2024[98]. - Revenue from the United States for the three months ended September 30, 2025, was $527 million, a 9.3% increase from $482 million in the same period of 2024[102]. - Canada experienced a revenue decrease of 18.5% to $53 million for the three months ended September 30, 2025, compared to $65 million in the same period of 2024[104]. - The International segment reported a revenue decrease of 8.5% to $54 million for the three months ended September 30, 2025, compared to $59 million in the same period of 2024[106]. - The effective tax rate for the three months ended September 30, 2025, was 21.9%, significantly lower than 40.9% for the same period in 2024[112]. - EBITDA excluding other costs for the three months ended September 30, 2025, was $51 million, representing 8.0% of revenue, compared to $42 million or 6.9% of revenue in the same period of 2024[114]. Cash Flow and Financing - The Company had cash and cash equivalents of $266 million as of September 30, 2025, an increase from $256 million as of December 31, 2024[119]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $72 million, a decrease of $104 million compared to $176 million in the same period of 2024[124]. - Net cash used in investing activities was $19 million for the nine months ended September 30, 2025, significantly lower than $190 million in the corresponding period of 2024[125]. - Net cash used in financing activities increased to $45 million for the nine months ended September 30, 2025, compared to $25 million in the same period of 2024[126]. - The company has received committed debt financing of up to an incremental $250 million, increasing total potential borrowing capacity to $750 million[121]. - The company maintains a $500 million five-year senior secured revolving credit facility with 99% excess availability as of September 30, 2025[120]. Market and Operational Insights - Active U.S. rigs decreased by 7.8% year-over-year to 540 in Q3 2025, while Canadian rigs fell by 15.3% to 177[89]. - The average price of West Texas Intermediate crude oil was $65.74 per barrel in Q3 2025, down 13.8% from $76.24 in Q3 2024[89]. - Natural gas prices increased by 43.6% year-over-year to $3.03 per MMBtu in Q3 2025[89]. - U.S. wells completed decreased by 7.9% year-over-year to 2,807 in Q3 2025[89]. - The average price of hot-rolled coil steel increased by 24.8% year-over-year to $842.60 per short ton in Q3 2025[89]. - The company operates approximately 155 locations globally, employing around 2,500 people[73]. - The company provides a range of products including pipe, valves, and automation equipment, supporting various sectors including oil and gas and renewable energy[75]. - The company has a supplier network of thousands of vendors across approximately 30 countries, serving customers in about 70 countries[78]. Strategic Plans - The Company plans to continue supporting customers and optimizing operations amid economic uncertainties and commodity price volatility[99]. - The Company aims to expand revenues by targeting new customers in non-oil and gas markets while supporting existing customers in energy evolution projects[100]. Foreign Currency and Risks - The company is exposed to foreign currency exchange rate risks, with approximately one-fifth of net sales for the nine months ended September 30, 2025, generated outside the U.S.[134]. - The average foreign exchange rate for the first nine months of 2025 decreased by approximately 2% compared to the same period in 2024[138]. - The company reported a net foreign currency translation gain of $8 million for the nine months ended September 30, 2025[135]. Shareholder Actions - A new share repurchase program was authorized to purchase up to $160 million of outstanding common stock, with $133 million remaining under the program as of September 30, 2025[129]. - No insider trading arrangements were adopted or terminated by directors or officers during the three months ended September 30, 2025[155].

Financial Performance - Net income for Q3 2025 was $150 million, a 36.36% increase from $110 million in Q3 2024[10] - Net income for the nine months ended September 30, 2025, increased to $397 million, up from $355 million in 2024, representing a growth of 11.9%[14] - Earnings per common share for Q3 2025 were $0.41, up from $0.30 in Q3 2024, representing a 36.67% increase[10] - Basic earnings per common share for the nine months ended September 30, 2025, was $1.10, compared to $0.97 for the same period in 2024[148] Income and Expenses - Total interest income for Q3 2025 reached $596 million, up from $583 million in Q3 2024, reflecting a 2.23% increase[10] - Net interest income after provision for credit losses was $335 million for Q3 2025, compared to $300 million in Q3 2024, marking an 11.67% increase[10] - Non-interest income totaled $98 million in Q3 2025, an increase from $89 million in Q3 2024, representing a 10.11% growth[10] - Total non-interest expense decreased to $243 million in Q3 2025 from $249 million in Q3 2024, a reduction of 2.41%[10] Assets and Liabilities - The total assets of the company increased to $6.636 billion by the end of Q3 2025, up from $6.524 billion at the end of Q3 2024[12] - Total assets as of September 30, 2025, were $49,889 million, compared to $47,976 million as of September 30, 2024, showing an increase of 4%[156] - Total liabilities measured at fair value on a recurring basis were $218 million, all classified under Level 2[159] Credit Losses and Provisions - The provision for credit losses was $24 million in Q3 2025, slightly higher than $23 million in Q3 2024, reflecting a 4.35% increase[10] - The total provision for credit losses for the three months ended September 30, 2025, was $24.0 million, compared to $23.5 million for the same period in 2024[77] - The allowance for credit losses (ACL) on loans and leases was $437.3 million as of September 30, 2025, reflecting an increase of $14.5 million, or 3.4%, from December 31, 2024[77] Loans and Leases - Total loans and leases, net of unearned income, increased to $34,957 million as of September 30, 2025, from $33,939 million on December 31, 2024, representing a growth of 3.0%[44] - Total commercial loans and leases amounted to $21,140 million, slightly down from $21,164 million at the end of 2024, indicating a decrease of 0.1%[44] - Total consumer loans increased to $13,817 million, up from $12,775 million, marking a growth of 8.2%[44] Non-Performing Loans - Non-performing loans and leases decreased to $125 million as of September 30, 2025, down from $159 million at December 31, 2024, reflecting a reduction of 21.4%[58] - The ratio of non-performing loans and leases to total loans and leases improved to 0.36% in September 2025, compared to 0.47% in December 2024[58] Market and Economic Conditions - The macroeconomic variables used for ACL modeling included a projected 3.4% increase in the Housing Price Index and a 4.0% decrease in the Commercial Real Estate Price Index over the forecast period[76] - The company continues to analyze payment and volume activity, FICO scores, and Debt-to-Income (DTI) scores monthly to assess consumer loan performance[54] Capital and Borrowings - Total short-term borrowings increased to $1,905 million as of September 30, 2025, compared to $1,256 million as of December 31, 2024, representing a 51.6% increase[102] - Long-term borrowings decreased to $2,099 million as of September 30, 2025, down from $3,012 million as of December 31, 2024, a decline of 30.4%[103] Tax and Regulatory - Total income taxes for the nine months ended September 30, 2025, amounted to $107 million, up from $98 million in 2024[142] - The effective tax rate for the nine months ended September 30, 2025, was 21.2%, compared to 21.5% for the same period in 2024[142] Stock and Compensation - The company issued 1,413,805 restricted stock units during the nine months ended September 30, 2025, compared to 1,271,502 units in the same period of 2024[137] - Stock-based compensation expense for the nine months ended September 30, 2025, was $15 million, compared to $16 million for the same period in 2024[140]