Essential Utilities(US:WTRG)2022-11-09 20:06Financial Performance - Operating revenues for the nine months ended September 30, 2022, increased to $1,582,649, a rise of 17.8% compared to $1,342,457 for the same period in 2021[122] - Net income for the nine months ended September 30, 2022, was $350,305, reflecting an increase of 11.2% from $315,106 in the prior year[122] - Consolidated operating revenues increased by $240,192 or 17.9% for the nine months ended September 30, 2022, compared to the same period in 2021, driven by increases in the Regulated Water segment ($73,499), Regulated Natural Gas segment ($152,468), and Other business segment ($14,225) [129] - Revenues from the Regulated Water segment increased by $73,499 or 10.0% for the first nine months of 2022 compared to the same period in 2021 [143] - Operating revenues for the Regulated Natural Gas segment increased by $24,233 or 25.6% for the three months ended September 30, 2022, compared to the same period in 2021[151] - Net income for the three months ended September 30, 2022, was $(17,133), an improvement from $(28,292) in the same period of 2021[149] Expenses and Costs - Capital expenditures during the first nine months of 2022 totaled $719,688, with $104,383 allocated for the acquisition of wastewater utility systems[111] - The average gas commodity prices increased by 119.9% in Q3 2022 compared to the same period in the previous year, leading to a 104.2% rise in purchased gas expenses[124] - Operations and maintenance expenses for the nine months ended September 30, 2022, were $428,923, an increase of 9.4% from $391,945 in 2021[122] - Depreciation and amortization expense increased by $18,629 or 8.4% due to continued capital expenditures and acquisitions of new utility systems [132] - Interest expense, net of interest income, increased by $12,755 or 8.3% for the quarter, primarily due to higher average borrowings and interest rates on revolving lines of credit [133] - Purchased gas expense increased by $152,358 or 75.2%, primarily due to a 109.7% increase in average gas commodity prices during the first nine months of 2022 compared to the prior year [131] - Operations and maintenance expense increased by $36,978 or 9.4%, driven by higher employee-related costs ($14,185) and production costs for water and wastewater operations ($6,812) [130] - Purchased gas expenses rose by $20,738 or 101.7% due to a 119.9% increase in average gas commodity prices in Q3 2022 compared to the prior period[153] - Operations and maintenance expenses decreased by $2,104 or 3.9% for the three months ended September 30, 2022[151] Taxation - The effective tax rate for the nine months ended September 30, 2022, was 6.5%, compared to 3.2% in the previous year[122] - The effective income tax rate for the third quarter of 2022 was 6.5%, up from 3.4% in the same quarter of 2021, attributed to increased pretax income [128] - Effective income tax rate was a benefit of 42.6% in Q3 2022, compared to a benefit of 19.4% in Q3 2021[155] Financing Activities - The company issued $500,000 of long-term debt in May 2022, with a 5.30% interest rate, to repay existing borrowings and for general corporate purposes[114] - The company entered into at-the-market sales agreements for up to $500,000 in common stock to fund working capital and acquisitions[112] - As of September 30, 2022, the company had $23,366 in cash and cash equivalents, up from $10,567 at December 31, 2021[117] - Interest expense, net, increased by $4,021 or 7.2% due to additional borrowings and higher interest rates on the revolving line of credit[159] Other Income and Adjustments - Other income, including gain on sale of assets, increased by $1,327 or 65.8% compared to the same period in the prior year [134] - The increase in customer assistance surcharge costs in the Regulated Natural Gas segment was $8,668, which has an equivalent offsetting amount in revenues [130] - Gross margin (non-GAAP) for the three months ended September 30, 2022, was $77,861, compared to $74,366 in the same period of 2021[150] Regulatory and Legislative Impact - The company continues to assess the impact of the Inflation Reduction Act of 2022 on its financial statements and operations, particularly regarding methane emissions charges[108]