Essential Utilities(US:WTRG)2026-02-26 17:00Financial Data and Key Metrics Changes - The company reported earnings per share (EPS) of $2.20 for 2025, exceeding the guidance range of $2.07-$2.11, and representing significant growth from the previous year's non-GAAP EPS of $1.97 [6][12][18] - Revenues increased by 18.6%, rising from approximately $2.1 billion in 2024 to nearly $2.5 billion in 2025, with regulatory recoveries contributing $177.6 million to this increase [12][13] - Operating and maintenance (O&M) expenses rose by 8.9% year-over-year, totaling an increase of $52.3 million, driven by higher employee-related costs and increased production costs [14] Business Line Data and Key Metrics Changes - The water business executed a $450 million PFAS capital plan, deploying over 50 advanced treatment systems across Pennsylvania and North Carolina [9] - The natural gas segment achieved the installation of its 100,000th Intelis meter in 2025, contributing to operational efficiency [9] - The company completed three municipal acquisitions in 2025, adding over 12,700 new customers and showcasing its growth strategy [21] Market Data and Key Metrics Changes - The company experienced customer growth that added $5.6 million in revenue, although lower water volumes due to wetter weather offset this growth by $8.6 million [13] - Regulatory recoveries totaled $101.5 million in 2025, with $92.6 million related to the water and wastewater business [20] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet, improving cash flow, and delivering consistent dividend growth while keeping the payout ratio between 60% and 65% [24] - The merger with American Water is expected to close in the first quarter of 2027, with the company optimistic about leveraging combined resources for business development [5][21] - The company reaffirmed its long-term goal of delivering 5%-7% EPS growth from 2024 through 2027, excluding non-recurring items [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the regulatory relationships built over the years, which are expected to facilitate a constructive outcome for the merger [5] - The company emphasized its commitment to sustainability and affordability, balancing investments in infrastructure with customer bill impacts [11][25] - Management highlighted the importance of maintaining high-quality service while managing operating costs amid national discussions on affordability [11] Other Important Information - The company was recognized as one of Newsweek's America's Most Responsible Companies for the fifth consecutive year and named to USA Today's America's Climate Leaders for the third consecutive year [10] - The company plans to invest $1.7 billion in regulated infrastructure in 2026, reflecting its commitment to enhancing service reliability [25] Q&A Session Summary Question: What would the non-GAAP 2025 be with adjustments? - Management did not specify the exact number but indicated that the results remained favorable to the guidance range [30][31] Question: Timing for the next round of Pennsylvania rate cases? - Management suggested that filings would occur relatively quickly, following a historical two-year cadence [32] Question: Could regulatory activity be combined with merger sign-off? - Management clarified that rate cases and regulatory activities are considered separate dockets and will be adjudicated separately [40][41] Question: Options for the bankruptcy exit for Chester? - Management discussed the implications of the Supreme Court ruling and potential negotiations regarding assets related to the Chester Water Authority [44][46]