10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON DC  20549

FORM 10-Q

(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 2016

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from_______________ to _______________

Commission File Number 1-6659

AQUA AMERICA, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	23-1702594
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
762 W. Lancaster Avenue, Bryn Mawr, Pennsylvania	19010 -3489
(Address of principal executive offices)	(Zip Code)
(610) 527-8000
(Registrant’s telephone number, including area code)

(Former Name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12(b)-2 of the Exchange Act.: 

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer   ☐ (do not check if a smaller reporting company)	Smaller reporting company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes☐  No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of

October 20, 2016:  177,358,257

AQUA AMERICA, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

	Page
Part I – Financial Information
Item 1.  Financial Statements:
Consolidated Balance Sheets (unaudited) – September 30, 2016 and December 31, 2015	2
Consolidated Statements of Net Income (unaudited) – Three Months Ended September 30, 2016 and 2015	3
Consolidated Statements of Net Income (unaudited) – Nine Months Ended September 30, 2016 and 2015	4
Consolidated Statements of Comprehensive Income (unaudited) – Three and Nine Months Ended September 30, 2016 and 2015	5
Consolidated Statements of Capitalization (unaudited) – September 30, 2016 and December 31, 2015	6
Consolidated Statement of Equity (unaudited) – Nine Months Ended September 30, 2016	7
Consolidated Statements of Cash Flow (unaudited) – Nine Months Ended September 30, 2016 and 2015	8
Notes to Consolidated Financial Statements (unaudited)	9
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.  Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.  Controls and Procedures	28
Part II – Other Information
Item 1.  Legal Proceedings		28
Item 1A.  Risk Factors		28
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds		29
Item 6.  Exhibits		29
Signatures		30
Exhibit Index		31

1

AQUA AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS 

(In thousands of dollars, except per share amounts) 

(UNAUDITED)

	September 30,		December 31,
Assets	2016		2015
Property, plant and equipment, at cost	$	6,386,445	$	6,088,011
Less:  accumulated depreciation		1,484,959		1,399,086
Net property, plant and equipment		4,901,486		4,688,925
Current assets:
Cash and cash equivalents		3,712		3,229
Accounts receivable and unbilled revenues, net		109,986		99,146
Inventory, materials and supplies		12,298		12,414
Prepayments and other current assets		11,799		11,802
Assets held for sale		3,606		1,779
Total current assets		141,401		128,370
Regulatory assets		911,455		830,118
Deferred charges and other assets, net		30,903		28,878
Investment in joint venture		8,859		7,716
Goodwill		41,921		33,866
Total assets	$	6,036,025	$	5,717,873
Liabilities and Equity
Stockholders' equity:
Common stock at $.50 par value, authorized 300,000,000 shares, issued 180,268,028 and 179,363,660 as of September 30, 2016 and December 31, 2015	$	90,134	$	89,682
Capital in excess of par value		795,139		773,585
Retained earnings		1,017,261		930,061
Treasury stock, at cost, 2,912,938 and 2,819,569 shares as of September 30, 2016 and December 31, 2015		(70,990)		(68,085)
Accumulated other comprehensive income		656		687
Total stockholders' equity		1,832,200		1,725,930
Long-term debt, excluding current portion		1,748,689		1,743,612
Less:  debt issuance costs		22,196		23,165
Long-term debt, excluding current portion, net of debt issuance costs		1,726,493		1,720,447
Commitments and contingencies (See Note 13)		-		-
Current liabilities:
Current portion of long-term debt		83,777		35,593
Loans payable		47,990		16,721
Accounts payable		44,073		56,452
Accrued interest		18,236		12,651
Accrued taxes		18,475		21,887
Other accrued liabilities		39,447		49,895
Total current liabilities		251,998		193,199
Deferred credits and other liabilities:
Deferred income taxes and investment tax credits		1,236,516		1,118,923
Customers' advances for construction		93,023		86,934
Regulatory liabilities		250,108		259,507
Other		107,623		100,498
Total deferred credits and other liabilities		1,687,270		1,565,862
Contributions in aid of construction		538,064		512,435
Total liabilities and equity	$	6,036,025	$	5,717,873
See notes to consolidated financial statements beginning on page 9 of this report.

2

AQUA AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF NET INCOME

(In thousands, except per share amounts)

(UNAUDITED)

	Three Months Ended
	September 30,
	2016		2015
Operating revenues	$	226,593	$	221,051
Operating expenses:
Operations and maintenance		79,812		78,519
Depreciation		33,881		31,981
Amortization		389		816
Taxes other than income taxes		14,712		14,663
Total operating expenses		128,794		125,979
Operating income		97,799		95,072
Other expense (income):
Interest expense, net		20,168		19,239
Allowance for funds used during construction		(2,267)		(1,708)
Gain on sale of other assets		(62)		(170)
Equity (earnings) loss in joint venture		(1,621)		698
Income before income taxes		81,581		77,013
Provision for income taxes		8,411		9,584
Net income	$	73,170	$	67,429
Net income per common share:
Basic	$	0.41	$	0.38
Diluted	$	0.41	$	0.38
Average common shares outstanding during the period:
Basic		177,336		176,704
Diluted		177,817		177,495
Cash dividends declared per common share	$	0.191	$	0.178
See notes to consolidated financial statements beginning on page 9 of this report.

3

AQUA AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF NET INCOME

(In thousands, except per share amounts)

(UNAUDITED)

	Nine Months Ended
	September 30,
	2016		2015
Operating revenues	$	623,076	$	617,137
Operating expenses:
Operations and maintenance		227,347		231,454
Depreciation		97,645		93,530
Amortization		1,367		2,589
Taxes other than income taxes		43,094		43,079
Total operating expenses		369,453		370,652
Operating income		253,623		246,485
Other expense (income):
Interest expense, net		60,136		56,804
Allowance for funds used during construction		(6,446)		(3,930)
Gain on sale of other assets		(390)		(338)
Equity (earnings) loss in joint venture		(1,143)		1,496
Income before income taxes		201,466		192,453
Provision for income taxes		16,933		19,097
Net income	$	184,533	$	173,356
Net income per common share:
Basic	$	1.04	$	0.98
Diluted	$	1.04	$	0.98
Average common shares outstanding during the period:
Basic		177,243		176,891
Diluted		177,781		177,670
Cash dividends declared per common share	$	0.547	$	0.508
See notes to consolidated financial statements beginning on page 9 of this report.

4

AQUA AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 

(In thousands of dollars) 

(UNAUDITED)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net income	$	73,170	$	67,429	$	184,533	$	173,356
Other comprehensive income, net of tax:
Unrealized holding gain (loss) on investments, net of tax expense (benefit) of $11 and $(120) for the three months and $14 and $(90) for the nine months ended September 30, 2016 and 2015, respectively		20		(223)		26		(169)
Reclassification of gain on sale of investment to net income, net of tax of $30 for the nine months ended September 30, 2016 (1)		-		-		(57)		-
Comprehensive income	$	73,190	$	67,206	$	184,502	$	173,187
(1) Amount of pre-tax gain of $87 reclassified from accumulated other comprehensive income to gain on sale of other assets on the consolidated statements of net income for the nine months ended September 30, 2016.
See notes to consolidated financial statements beginning on page 9 of this report.

5

AQUA AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CAPITALIZATION

(In thousands of dollars, except per share amounts)

(UNAUDITED)

		September 30,		December 31,
		2016		2015
Stockholders' equity:
Common stock, $.50 par value		$	90,134	$	89,682
Capital in excess of par value			795,139		773,585
Retained earnings			1,017,261		930,061
Treasury stock, at cost			(70,990)		(68,085)
Accumulated other comprehensive income			656		687
Total stockholders' equity			1,832,200		1,725,930
Long-term debt of subsidiaries (substantially secured by utility plant):
Interest Rate Range	Maturity Date Range
0.00% to  0.99%	2023 to 2033		4,661		5,148
1.00% to  1.99%	2017 to 2035		15,837		20,811
2.00% to  2.99%	2024 to 2031		20,073		19,167
3.00% to  3.99%	2019 to 2047		296,622		297,275
4.00% to  4.99%	2020 to 2054		488,367		487,093
5.00% to  5.99%	2017 to 2043		213,196		221,435
6.00% to  6.99%	2017 to 2036		52,980		52,964
7.00% to  7.99%	2022 to 2027		33,243		33,762
8.00% to  8.99%	2021 to 2025		6,678		14,502
9.00% to  9.99%	2018 to 2026		26,400		27,100
10.00% to 10.99%	2018		6,000		6,000
			1,164,057		1,185,257
Notes payable to bank under revolving credit agreement, variable rate, due 2021			155,000		60,000
Unsecured notes payable:
Bank notes at 1.921% and 1.975% due 2017 and 2018			100,000		100,000
Notes at 3.57% and 3.59% due 2027 and 2030			120,000		120,000
Notes ranging from 4.62% to 4.87%, due 2017 through 2024			133,600		144,400
Notes ranging from 5.20% to 5.95%, due 2017 through 2037			159,809		169,548
Total long-term debt			1,832,466		1,779,205
Current portion of long-term debt			83,777		35,593
Long-term debt, excluding current portion			1,748,689		1,743,612
Less:  debt issuance costs			22,196		23,165
Long-term debt, excluding current portion, net of debt issuance costs			1,726,493		1,720,447
Total capitalization		$	3,558,693	$	3,446,377
See notes to consolidated financial statements beginning on page 9 of this report.

6

AQUA AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EQUITY 

(In thousands of dollars)

(UNAUDITED)

									Accumulated
			Capital in						Other
	Common		Excess of		Retained		Treasury		Comprehensive
	Stock		Par Value		Earnings		Stock		Income		Total
Balance at December 31, 2015	$	89,682	$	773,585	$	930,061	$	(68,085)	$	687	$	1,725,930
Net income		-		-		184,533		-		-		184,533
Other comprehensive loss, net of income tax benefit of $16		-		-		-		-		(31)		(31)
Dividends		-		-		(96,994)		-		-		(96,994)
Stock issued for acquisition (439,943 shares)		220		12,625		-		-		-		12,845
Sale of stock (34,699 shares)		17		1,012		-		-		-		1,029
Repurchase of stock (93,369 shares)		-		-		-		(2,905)		-		(2,905)
Equity compensation plan (225,712 shares)		113		(113)		-		-		-		-
Exercise of stock options (204,014 shares)		102		3,734		-		-		-		3,836
Stock-based compensation		-		3,642		(339)		-		-		3,303
Employee stock plan tax benefits		-		1,263		-		-		-		1,263
Other		-		(609)		-		-		-		(609)
Balance at September 30, 2016	$	90,134	$	795,139	$	1,017,261	$	(70,990)	$	656	$	1,832,200
See notes to consolidated financial statements beginning on page 9 of this report.

7

AQUA AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW

(In thousands of dollars)

(UNAUDITED)

	Nine Months Ended
	September 30,
	2016		2015
Cash flows from operating activities:
Net income	$	184,533	$	173,356
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization		99,012		96,119
Deferred income taxes		15,345		13,855
Provision for doubtful accounts		3,533		3,693
Stock-based compensation		3,642		4,728
Gain on sale of utility system and market-based business unit		(1,824)		-
Gain on sale of other assets		(390)		(338)
Net change in receivables, inventory and prepayments		(15,235)		(18,677)
Net change in payables, accrued interest, accrued taxes and other accrued liabilities		(241)		16,450
Other		(116)		(6,804)
Net cash flows from operating activities		288,259		282,382
Cash flows from investing activities:
Property, plant and equipment additions, including the debt component of allowance for funds used during construction of $1,626 and $1,015		(270,019)		(257,478)
Acquisitions of utility systems and other, net		(5,626)		(26,327)
Release of funds previously restricted for construction activity		-		47
Net proceeds from the sale of utility system and other assets		6,545		513
Other		(32)		(1,027)
Net cash flows used in investing activities		(269,132)		(284,272)
Cash flows from financing activities:
Customers' advances and contributions in aid of construction		6,006		4,286
Repayments of customers' advances		(1,882)		(2,332)
Net proceeds of short-term debt		31,269		9,632
Proceeds from long-term debt		234,288		313,440
Repayments of long-term debt		(181,359)		(203,851)
Change in cash overdraft position		(12,586)		(14,918)
Proceeds from issuing common stock		1,029		344
Proceeds from exercised stock options		3,836		4,518
Stock-based compensation windfall tax benefits		1,263		1,469
Repurchase of common stock		(2,905)		(20,268)
Dividends paid on common stock		(96,994)		(89,842)
Other		(609)		(655)
Net cash flows (used in) from financing activities		(18,644)		1,823
Net change in cash and cash equivalents		483		(67)
Cash and cash equivalents at beginning of period		3,229		4,138
Cash and cash equivalents at end of period	$	3,712	$	4,071
Non-cash investing activity:
Property, plant and equipment additions purchased at the period end, but not yet paid for	$	23,548	$	24,724
See notes to consolidated financial statements beginning on page 9 of this report.
See note 3 - Acquisitions for a description of non-cash activities.

8

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of dollars, except per share amounts)

(UNAUDITED)

Note 1 – Basis of Presentation

The accompanying consolidated balance sheets and statements of capitalization of Aqua America, Inc. and subsidiaries (the “Company”) at September 30, 2016, the consolidated statements of net income and comprehensive income for the three and nine months ended September 30, 2016 and 2015 the consolidated statements of cash flow for the nine months ended September 30, 2016 and 2015, and the consolidated statement of equity for the ninemonths ended September 30, 2016 are unaudited, but reflect all adjustments, consisting of only normal recurring accruals, which are, in the opinion of management, necessary to present fairly the consolidated financial position, the consolidated changes in equity, the consolidated results of operations, and the consolidated cash flow for the periods presented.  Because they cover interim periods, the statements and related notes to the financial statements do not include all disclosures and notes normally provided in annual financial statements and, therefore, should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.  The results of operations for interim periods may not be indicative of the results that may be expected for the entire year.  The December 31, 2015 consolidated balance sheet data presented herein was derived from the Company’s December 31, 2015 audited consolidated financial statements, but does not include all disclosures and notes normally provided in annual financial statements.Certain prior period amounts have been reclassified to conform to the current period presentation of debt issuance costs (see Note 15 - Recent Accounting Pronouncements).      

Note 2 – Goodwill

The following table summarizes the changes in the Company’s goodwill, by business segment:

	Regulated
	Segment		Other		Consolidated
Balance at December 31, 2015	$	27,246	$	6,620	$	33,866
Goodwill acquired		10,095		-		10,095
Reclassification to utility plant acquisition adjustment		(82)		-		(82)
Disposition		-		(996)		(996)
Classified as assets held for sale		-		(803)		(803)
Other		(159)		-		(159)
Balance at September 30, 2016	$	37,100	$	4,821	$	41,921

The reclassification ofgoodwill to utility plant acquisition adjustment results from a mechanism approved by the applicable utility commission.  The mechanism provides for the transfer over time, and the recovery through customer rates, of goodwill associated with someacquisitions upon achieving specificobjectives. 

Goodwill is not amortized but is tested for impairment annually, or more often, if circumstances indicate a possible impairment may exist, to determine whether it’s more likely than not that the fair value of a reporting unit is less than its carrying amount.  When testing goodwill for impairment, we may assess qualitative factors, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and entity specific events.  Alternatively, we may bypass this qualitative assessment for some of our reporting units and perform a quantitative goodwill impairment test by determining the fair value of a reporting unit based on a discounted cash flow analysis.  The Company

9

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(In thousands of dollars, except per share amounts)

(UNAUDITED)

tested the goodwill attributable for each of our reporting units for impairment as of July 31, 2016, in conjunction with the timing of our annual strategic business plan, and concluded that the estimated fair value of each reporting unit, which has goodwill recorded, exceeded the reporting unit’s carrying amount, indicating that none of the Company’s goodwill was impaired.

Note 3 – Acquisitions

Pursuant to our strategy to grow through acquisitions, in January 2016, the Company acquired Superior Water Company, Inc., which provides public water service to approximately 3,900 customers in portions of Berks, Chester, and Montgomery counties in Pennsylvania.  The total purchase price for the utility system was $16,750, which consisted of the issuance of 439,943 shares of the Company’s common stock and $3,905 in cash. The purchase price allocation for this acquisition consisted primarily of acquired property, plant and equipment of $25,167, contributions in aid of construction of $16,565, and goodwill of $8,622.Additionally, during 2016, the Company completed nine acquisitions of water and wastewater utility systems in various states.  The total purchase price of these utility systems consisted of $1,721 in cash, and there was no goodwill recorded.  In 2016, the Company recorded goodwill of $1,473 for an acquisition that was completed in a prior period.  The pro forma effect of the businesses acquired is not material either individually or collectively to the Company’s results of operations. 

In April 2015, the Company acquired the water and wastewater utility system assets of North MaineUtilities located in the Village of Glenview, Illinois serving approximately 7,400 customers.  The total purchase price consisted of $23,079 in cash.  The purchase price allocation for this acquisition consistedprimarily of acquired property, plant and equipment.  Additionally, in 2015, the Company completed 14 acquisitions of water and wastewater utility systems in various states.  The total purchase price of these utility systems consisted of $5,210 in cash.

Note 4 –  Assets Held for Sale

In December 2015, the Company decided to sell a business unit which provides liquid waste hauling and disposal services.  This business unit was reported within the Company’s market-based subsidiary, Aqua Resources, and was reported as assets held for sale in the Company’s December 31, 2015 consolidated balance sheet included in this report.During the second quarter of 2016, this business unit was sold for $3,400 in cash and resulted in a gain on sale of $537.  The gain on sale is reported as a reduction to operations and maintenance expense in the consolidated statements of net income.  This business unit was included in “Other” in the Company’s segment information.

In the second quarter of 2016, the Company decided to market for sale business units which install and test devices that prevent the contamination of potable water and repair water and wastewater systems.  Further, in the third quarter of 2016, the Company decided to market for sale a business unit which inspects, cleans and repairs storm and sanitary wastewater lines.  These business units are reported within the Company’s market-based subsidiary, Aqua Resources.  These business units are reported as assets held for sale in the Company’s consolidated balance sheets included in this report, and are included in “Other” in the Company’s segment information.   

]

10

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(In thousands of dollars, except per share amounts)

(UNAUDITED)

Note 5 – Capitalization

In February 2016, the Company amended its unsecured revolving credit facility to extend the expiration from March 2017 to February 2021, to increase the facility from $200,000 to $250,000, and to add a fourth bank to the lending group.  Funds borrowed under this facility are classified as long-term debt and are used to provide working capital as well as support for letters of credit for insurance policies and other financing arrangements.  Interest under this facility is based at the Company’s option, on the prime rate, an adjusted Euro-Rate, an adjusted federal funds rate or at rates offered by the banks.  A facility fee is charged on the total commitment amount of the agreement. 

Note 6 – Fair Value of Financial Instruments

The Company follows the Financial Accounting Standards Board’s (“FASB”) accounting guidance for fair value measurements and disclosures, which defines fair value and establishes a framework for using fair value to measure assets and liabilities.  That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy are as follows:

· Level 1:  unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access;

· Level 2:  inputs other than Level 1 that are observable, either directly or indirectly, such as quoted market prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in non-active markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

· Level 3:  inputs that are unobservable and significant to the fair value measurement.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.  There have been no changes in the valuation techniques used to measure fair value or asset or liability transfers between the levels of the fair value hierarchy for the quarter ended September 30, 2016. 

Financial instruments are recorded at carrying value in the financial statements and approximate fair value as of the dates presented.  The fair value of these instruments is disclosed below in accordance with current accounting guidance related to financial instruments. 

The fair value of loans payable isdetermined based on itscarrying amount and utilizing Level 1 methods and assumptions.As of September 30, 2016 and December 31, 2015, the carrying amount of the Company’s loans payable was $47,990 and $16,721, respectively, which equates to their estimated fair value.  The fair value of cash and cash equivalents, which is comprised of a money market fund, is determined based on the net asset value per unit utilizing Level 2 methods and assumptions.  As of

11

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(In thousands of dollars, except per share amounts)

(UNAUDITED)

September 30, 2016 and December 31, 2015, the carrying amounts of the Company's cash and cash equivalents was $3,712 and $3,229, respectively, which equates to their fair value.   

The carrying amounts and estimated fair values of the Company’s long-term debt is as follows:

	September 30,		December 31,
	2016		2015
Carrying Amount	$	1,832,466	$	1,779,205
Estimated Fair Value		2,130,383		1,905,393

The fair value of long-term debt has been determined by discounting the future cash flows using current market interest rates for similar financial instruments of the same duration utilizing Level 2 methods and assumptions.  The Company’s customers’ advances for construction have a carrying value of $93,023as of September 30, 2016, and $86,934 as of December 31, 2015.  Their relative fair values cannot be accurately estimated because future refund payments depend on several variables, including new customer connections, customer consumption levels, and future rate increases.  Portions of these non-interest bearing instruments are payable annually through 2026and amounts not paid by the respective contract expiration dates become non-refundable.  The fair value of these amounts would, however, be less than their carrying value due to the non-interest bearing feature.

Note 7 – Net Income per Common Share

Basic net income per common share is based on the weighted average number of common shares outstanding.  Diluted net income per common share is based on the weighted average number of common shares outstanding and potentially dilutive shares.  The dilutive effect of employee stock-based compensation is included in the computation of diluted net income per common share.  The dilutive effect of stock-based compensation is calculated using the treasury stock method and expected proceeds upon exercise or issuance of the stock-based compensation.  The treasury stock method assumes that the proceeds from stock-based compensation are used to purchase the Company’s common stock at the average market price during the period.  The following table summarizes the shares, in thousands, used in computing basic and diluted net income per common share:

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2016	2015	2016	2015
Average common shares outstanding during the period for basic computation	177,336	176,704	177,243	176,891
Dilutive effect of employee stock-based compensation	481	791	538	779
Average common shares outstanding during the period for diluted computation	177,817	177,495	177,781	177,670

For the three and ninemonths ended September 30,  2016 and 2015, all of the Company’s employee stock options were included in the calculations of diluted net income per share as the calculated cost to exercise

12

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(In thousands of dollars, except per share amounts)

(UNAUDITED)

the stock options was less than the average market price of the Company’s common stock during these periods.  

Note 8 – Stock-based Compensation

Under the Company’s 2009 Omnibus Equity Compensation Plan, as amended as of February 27, 2014 (the “2009 Plan”), as approved by the Company’s shareholders to replace the 2004 Equity Compensation Plan (the “2004 Plan”), stock options, stock units, stock awards, stock appreciation rights, dividend equivalents, and other stock-based awards may be granted to employees, non-employee directors, and consultants and advisors.  The 2009 Plan authorizes 6,250,000 shares for issuance under the plan.  A maximum of 3,125,000 shares under the 2009 Plan may be issued pursuant to stock awards, stock units and other stock-based awards, subject to adjustment as provided in the 2009 Plan.  During any calendar year, no individual may be granted (i) stock options and stock appreciation rights under the 2009 Plan for more than 500,000 shares of Company stock in the aggregate or (ii) stock awards, stock units or other stock-based awards under the 2009 Plan for more than 500,000 shares of Company stock in the aggregate, subject to adjustment as provided in the 2009 Plan.  Awards to employees and consultants under the 2009 Plan are made by a committee of the Board of Directors of the Company, except that with respect to awards to the Chief Executive Officer, the committee recommends those awards for approval by the non-employee directors of the Board of Directors.  In the case of awards to non-employee directors, the Board of Directors makes such awards.  At September 30, 2016,  3,982,401 shares were still available for issuanceunder the 2009 Plan.No further grants may be made under the 2004 Plan.

Performance Share Units– A performance share unit (“PSU”) represents the right to receive a share of the Company’s common stock if specified performance goals are met over the three-year performance period specified in the grant, subject to exceptions through the respective vesting period, generally three years.  Each grantee is granted a target award of PSUs, and may earn between 0% and 200% of the target amount depending on the Company’s performance against the performance goals.  The following table provides compensation costs for stock-based compensation related to PSUs: 

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Stock-based compensation within operations and maintenance expenses	$	1,012	$	836	$	2,504	$	3,475
Income tax benefit		411		339		1,013		1,414

13

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(In thousands of dollars, except per share amounts)

(UNAUDITED)

The following table summarizes thePSU transactions for the ninemonths ended September 30, 2016:

	Number	Weighted
	of	Average
	Share Units	Fair Value
Nonvested share units at December 31, 2015	424,858	$	25.78
Granted	152,533		28.89
Performance criteria adjustment	37,551		26.18
Forfeited	(17,661)		26.79
Share units vested in prior period and issued in current period	44,625		26.88
Share units issued	(189,885)		23.25
Nonvested share units at September 30, 2016	452,021	$	27.99

A portion of the fair value of PSUs was estimated at the grant date based on the probability of satisfying the market-based conditions using the Monte Carlo valuation method, which assesses probabilities of various outcomes of market conditions.  The other portion of the fair value of the PSUs is based on the fair market value of the Company’s stock at the grant date, regardless of whether the market-based condition is satisfied.  The per unit weighted-average fair value at the date of grant for PSUs granted during the ninemonths ended September 30, 2016 and 2015 was $28.89 and $26.45, respectively.  The fair value of each PSU grant is amortized monthly into compensation expense on a straight-line basis over their respective vesting periods, generally 36 months.  The accrual of compensation costs is based on our estimate of the final expected value of the award, and is adjusted as required for the portion based on the performance-based condition.  The Company assumes that forfeitures will be minimal, and recognizes forfeitures as they occur, which results in a reduction in compensation expense.  As the payout of the PSUs includes dividend equivalents, no separate dividend yield assumption is required in calculating the fair value of the PSUs.  The recording of compensation expense for PSUs has no impact on net cash flows.   

Restricted Stock Units – A restricted stock unit (“RSU”) represents the right to receive a share of the Company’s common stock.  RSUs are eligible to be earned at the end of a specified restricted period, generally three years, beginning on the date of grant.  The Company assumes that forfeitures will be minimal, and recognizes forfeitures as they occur, which results in a reduction in compensation expense.  As the payout of the RSUs includes dividend equivalents, no separate dividend yield assumption is required in calculating the fair value of the RSUs.  The following table provides compensation costs for stock-based compensation related to RSUs:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Stock-based compensation within operations and maintenance expenses	$	299	$	209	$	763	$	888
Income tax benefit		124		86		315		367

14

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(In thousands of dollars, except per share amounts)

(UNAUDITED)

The following table summarizes theRSU transactions for the ninemonths ended September 30, 2016: 

	Number	Weighted
	of	Average
	Stock Units	Fair Value
Nonvested stock units at December 31, 2015	88,353	$	24.94
Granted	50,324		32.09
Stock units vested and issued	(24,318)		23.37
Forfeited	(3,952)		27.81
Nonvested stock units at September 30, 2016	110,407	$	28.44

The per unit weighted-average fair value at the date of grant for RSUs granted during the ninemonths ended September 30, 2016 and 2015 was $32.09 and $25.97, respectively.

Stock Options –The following table provides the income tax benefit for stock-based compensation related to stock options granted in prior periods:

	Three Months Ended				Nine Months Ended
	September 30,					September 30,
	2016		2015		2016		2015
Income tax benefit	$	15	$	28	$	249	$	143

For the nine months ended September 30, 2016 and 2015, there were no compensation costs for stock-based compensation related to stock options, as stock options were fully amortized in 2013.  Additionally, there were no stock options granted during the ninemonths ended September 30, 2016 or 2015. 

The following table summarizes stock option transactions for the ninemonths ended September 30, 2016:

1
		Weighted		Weighted
		Average		Average	Aggregate
		Exercise		Remaining	Intrinsic
	Shares	Price		Life (years)	Value
Outstanding at December 31, 2015	659,533	$	16.62
Forfeited	-		-
Expired / Cancelled	(3,436)		16.15
Exercised	(204,014)		18.80
Outstanding and exercisable at September 30, 2016	452,083	$	15.64	2.1	$	6,709

15

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(In thousands of dollars, except per share amounts)

(UNAUDITED)

Stock Awards –    The following table provides compensation costs for stock-based compensation related to stock awards:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Stock-based compensation within operations and maintenance expenses	$	131	$	-	$	375	$	365
Income tax benefit		54		-		155		151

The following table summarizes stock award transactions for the nine months ended September 30, 2016:

	Number	Weighted
	of	Average
	Stock Awards	Fair Value
Nonvested stock awards at December 31, 2015	-	$	-
Granted	11,509		32.57
Vested	(11,509)		32.57
Nonvested stock awards at September 30, 2016	-	$	-

The per unit weighted-average fair value at the date of grant for stock awards granted during the ninemonths ended September 30, 2016 and 2015 was $32.57 and $26.44, respectively.

16

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(In thousands of dollars, except per share amounts)

(UNAUDITED)

Note 9 – Pension Plans and Other Postretirement Benefits

The Company maintains a qualified defined benefit pension plan (the “Pension Plan”), a nonqualified pension plan and other postretirement benefit plans for certain of its employees.  The net periodic benefit cost is based on estimated values and an extensive use of assumptions about the discount rate, expected return on plan assets, the rate of future compensation increases received by the Company’s employees, mortality, turnover, and medical costs.  The following tables provide the components of net periodic benefit cost:

	Pension Benefits
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Service cost	$	784	$	750	$	2,394	$	2,600
Interest cost		3,251		3,255		9,787		9,699
Expected return on plan assets		(4,215)		(4,677)		(12,696)		(14,025)
Amortization of prior service cost		145		44		435		130
Amortization of actuarial loss		1,797		1,465		5,354		4,529
Settlement charge		-		-		3,028		-
Special termination benefit charge		-		-		302		-
Net periodic benefit cost	$	1,762	$	837	$	8,604	$	2,933
	Other
	Postretirement Benefits
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	2016		2015		2016		2015
Service cost	$	253	$	273	$	761	$	952
Interest cost		726		681		2,202		2,120
Expected return on plan assets		(645)		(731)		(2,001)		(2,192)
Amortization of prior service cost		(137)		(211)		(411)		(476)
Amortization of actuarial loss		220		309		707		972
Net periodic benefit cost	$	417	$	321	$	1,258	$	1,376

Effective July 1, 2015, the Company added a permanent lump sum option to the form of benefit payments offered to participants of the qualified defined benefit pension plan and non-qualified retirement plans upon retirement or termination.  During the first quarter of 2016, the lump sum payments paid to participants who elected this option for payments from the non-qualified retirement plans resulted in a settlement charge.  The Company made cash contributions of $8,145 to its Pension Plan during the first ninemonths of 2016,  which completed the Company’s 2016 cash contributions. 

17

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(In thousands of dollars, except per share amounts)

(UNAUDITED)

Note 10 – Water and Wastewater Rates

During the first ninemonths of 2016, the Company’s operating divisions in Ohio, Texas, Virginia, and New Jerseywere granted base rate increases designed to increase total operating revenues on an annual basis by $3,434.  Further, during the first ninemonths of 2016, the Company’s operating divisions in Illinois,Pennsylvania (wastewater), and North Carolina received approval to bill infrastructure rehabilitation surcharges designed to increase total operating revenues on an annual basis by $2,062.

Note 11 – Taxes Other than Income Taxes

The following table provides the components of taxes other than income taxes:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Property	$	7,007	$	6,945	$	20,119	$	20,776
Capital stock		430		538		1,287		1,619
Gross receipts, excise and franchise		2,979		2,859		8,181		7,855
Payroll		2,140		2,072		7,775		7,425
Regulatory assessments		639		693		1,991		2,033
Other		1,517		1,556		3,741		3,371
Total taxes other than income	$	14,712	$	14,663	$	43,094	$	43,079

Note 12 – Segment Information

The Company has identified ten operating segments and has one reportable segment named the “Regulated” segment.  The reportable segment is comprised of eight operating segments for the Company’s water and wastewater regulated utility companies which are organized by the states where we provide these services.  In addition, two segments are not quantitatively significant to be reportable and are comprised of the Company’s market-based activities:  Aqua Resources, Inc.and Aqua Infrastructure, LLC.  Aqua Resources provides water and wastewater service through operating and maintenance contracts with municipal authorities and other parties in close proximity to our utility companies’ service territories;and offers, through a third party, water and wastewater line repair service and protection solutions to households.  In addition, Aqua Resources provided liquid waste hauling and disposal services in a business unit that the Company sold in the second quarter of 2016,and that was reported as assets held for sale in the Company’s consolidated balance sheets included in this report.  Additionally, Aqua Resources installs and tests devices that prevent the contamination of potable water; designs and builds water and wastewater systems; and provides other market-based water and wastewater services in business units that,  in the second quarter of 2016, the Company decided to market for sale.  Further, in the third quarter of 2016, the Company decided to market for sale a business unit within Aqua Resources, which inspects, cleans and repairs storm and sanitary wastewater lines.  These business units are reported as assets held for sale in the Company’s consolidated balance sheets included in this report.  Aqua Infrastructure provides non-utility raw water supply services for firms in the natural gas drilling industry.  These two segments are included as

18

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(In thousands of dollars, except per share amounts)

(UNAUDITED)

a component of “Other” in the tables below.  Also included in “Other” are corporate costs that have not been allocated to the Regulated segment and intersegment eliminations.  Corporate costs include general and administrative expense, and interest expense. 

The following table presents information about the Company’s reportable segment:

	Three Months Ended						Three Months Ended
	September 30, 2016						September 30, 2015
	Regulated		Other		Consolidated		Regulated		Other		Consolidated
Operating revenues	$	222,231	$	4,362	$	226,593	$	213,023	$	8,028	$	221,051
Operations and maintenance expense		73,013		6,799		79,812		72,373		6,146		78,519
Depreciation		34,025		(144)		33,881		31,890		91		31,981
Operating income (loss)		100,563		(2,764)		97,799		93,828		1,244		95,072
Interest expense, net		19,167		1,001		20,168		18,169		1,070		19,239
Allowance for funds used during construction		2,267		-		2,267		1,708		-		1,708
Income tax expense (benefit)		9,027		(616)		8,411		9,883		(299)		9,584
Net income (loss)		74,681		(1,511)		73,170		67,654		(225)		67,429
	Nine Months Ended						Nine Months Ended
	September 30, 2016						September 30, 2015
	Regulated		Other		Consolidated		Regulated		Other		Consolidated
Operating revenues	$	606,323	$	16,753	$	623,076	$	590,519	$	26,618	$	617,137
Operations and maintenance expense		210,014		17,333		227,347		210,639		20,815		231,454
Depreciation		98,445		(800)		97,645		93,276		254		93,530
Operating income (loss)		255,431		(1,808)		253,623		243,101		3,384		246,485
Interest expense, net		57,061		3,075		60,136		54,015		2,789		56,804
Allowance for funds used during construction		6,446		-		6,446		3,930		-		3,930
Income tax expense (benefit)		18,610		(1,677)		16,933		19,679		(582)		19,097
Net income (loss)		186,579		(2,046)		184,533		173,670		(314)		173,356
Capital expenditures		269,046		973		270,019		256,924		554		257,478

	September 30,		December 31,
	2016		2015
Total assets:
Regulated	$	5,853,618	$	5,541,335
Other		182,407		176,538
Consolidated	$	6,036,025	$	5,717,873

Note 13 – Commitments and Contingencies

The Company is routinely involved in various disputes, claims, lawsuits and other regulatory and legal matters, including both asserted and unasserted legal claims, in the ordinary course of business.  The status of each such matter, referred to herein as a loss contingency, is reviewed and assessed in accordance with applicable accounting rules regarding the nature of the matter, the likelihood that a loss will be incurred, and the amounts involved.  As of September 30, 2016, the aggregate amount of $14,804 is accrued for loss contingencies and is reported in the Company’s consolidated balance sheet as other accrued liabilities and other liabilities.  These accruals represent management’s best estimate of probable loss (as defined in the accounting guidance) for loss contingencies or the low end of a range of losses if

19

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(In thousands of dollars, except per share amounts)

(UNAUDITED)

no single probable loss can be estimated.  For some loss contingencies, the Company is unable to estimate the amount of the probable loss or range of probable losses.  While the final outcome of these loss contingencies cannot be predicted with certainty, and unfavorable outcomes could negatively impact the Company, at this time in the opinion of management, the final resolution of these matters are not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.  Further, the Company has insurance coverage for certain of these loss contingencies, and as of September 30, 2016, estimates that approximately $1,366of the amount accrued for these matters are probable of recovery through insurance, which amount is also reported in the Company’s consolidated balance sheet as deferred charges and other assets, net.

In addition to the aforementioned loss contingencies, the Company self-insures its employee medical benefit program, and maintains stop-loss coverage to limit the exposure arising from these claims.  The Company’s reserve for these claims totaled $1,770 at September 30, 2016 and represents a reserve for unpaid claim costs, including an estimate for the cost of incurred but not reported claims.  

Note 14 – Income Taxes

During the ninemonths ended September 30, 2016, the Company utilized $45,412of its Federal net operating loss (“NOL”) carryforward.  In addition, during the ninemonths ended September 30, 2016, the Company’s state NOL carryforward increased by$298.  As of September 30, 2016, the balance of the Company’s Federal NOL was $112,864.  The Company believes its Federal NOL carryforward is more likely than not to be recovered and requires no valuation allowance.  As of September 30, 2016, the balance of the Company’s gross state NOL was $563,999, a portion of which is offset by a valuation allowance because the Company does not believe the NOLs are more likely than not to be realized.  The Company’s Federal and state NOL carryforwards begin to expire in 2032 and 2023, respectively.The Company’s Federal and state NOL carryforwards are reduced by an unrecognized tax position, on a gross basis, of $64,424 and $89,364, respectively.  The amounts of the Company’s Federal and state NOL carryforwards prior to being reduced by the unrecognized tax positions were $177,288 and $653,364 respectively.  The Company records its unrecognized tax benefit as a reduction to its deferred income tax liability. 

In accordance with a 2012 settlement agreement with the Pennsylvania Public Utility Commission, Aqua Pennsylvania expenses, for tax purposes, qualifying utility asset improvement costs, which results in a substantial reduction in income tax expense and greater net income and cash flows.  The Company’s effective income tax rate for the thirdquarter of 2016 and 2015 was 10.3% and 12.4%, respectively, and for the first nine months of 2016 and 2015 was 8.4% and 9.9%, respectively. 

As of September 30, 2016, the total gross unrecognized tax benefit was $28,735, of which $20,673, if recognized, would affect the Company’s effective tax rate as a result of the regulatory treatment afforded for qualifying infrastructure improvements in Pennsylvania.  At December 31, 2015, the Company had unrecognized tax benefits of $28,016. 

Accounting rules for uncertain tax positions specify that tax positions for which the timing of resolution is uncertain should be classified as long-term liabilities.  Judgment is required in evaluating the Company’s uncertain tax positions and determining the provision for income taxes.  Management

20

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(In thousands of dollars, except per share amounts)

(UNAUDITED)

believes that an adequate provision has been made for any adjustments that may result from tax examinations.  Although the timing of income tax audit resolutions and negotiations with taxing authorities is highly uncertain, the Company does not anticipate a significant change to the total amount of unrecognized income tax benefits within the next 12 months.

Note 15 – Recent Accounting Pronouncements

In August 2016, the FASB issued updated accounting guidance on the classification of certain cash receipts and cash payments in the statement of cash flows, which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows.  This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted.  The Company is currently evaluating the impact of this new standard on its consolidated cash flow statement. 

In March 2016, the FASB issued updated accounting guidance on simplifying the accounting for share-based payments, which includes several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  The updated guidance is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption available.  The Company has evaluated the requirements of the updated guidance and has determinedthat upon adoption,on January 1, 2017, the Company will recognize a previously unrecognized windfall tax benefitfor stock-based compensation of $2,805 ($1,823 after-tax), associated with the Company’s 2012 Federal net operating loss, which will be recorded as an adjustment to retained earnings.  Additionally, once adopted, income tax benefits in excess of compensation costs or tax deficiencies for share-based compensation will be recorded to our income tax provision, instead of historically to stockholder’s equity, which will impact our effective tax rate.  Lastly, all tax-related cash flows resulting from share-based payments will be reported as operating activities on the statement of cash flows, a change from the historical requirement to present tax benefits as an inflow from financing activities and an outflow from operating activities. 

In February 2016, the FASB issued updated accounting guidance on accounting for leases, which requires lessees to establish a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months.  For income statement purposes, leases will be classified as either operating or finance.  Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern.  The updated accounting guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption available.  The Company is evaluating the requirements of the updated guidance to determine the impact of adoption.

In September 2015, the FASB issued updated accounting guidance on simplifying measurement-period adjustment in business combinations, which eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively.  Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment.  The Company adopted the provisions of this accounting standard,  as required on January 1, 2016, and it did not have an impact on its results of operations or financial position.  

21

AQUA AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(In thousands of dollars, except per share amounts)

(UNAUDITED)

In April 2015, the FASB issued updated accounting guidance on simplifying the presentation of debt issuance costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability.  Previously, debt issuance costs were presented in the balance sheet as a deferred charge.    The Company adopted the provisions of this accounting standardas required on January 1, 2016. The adoption of this standard was applied retrospectively and resulted in the reclassification of $23,165 from deferred charges and other assets, net to debt issuance costs, which is reported as a reduction to long-term debt,in the December 31, 2015 consolidated balance sheet.  

In August 2014, the FASB issued an accounting standard that will require management to assess an entity’s ability to continue as a going concern for each annual and interim reporting period and to provide related footnote disclosures in circumstances in which substantial doubt exists.  The accounting standard is effective in the first annual reporting period ending after December 15, 2016.  The Company does not expect the provisions of this accounting standard to have an impact on its results of operations or financial position.

In May 2014, the FASB issued updated accounting guidance on recognizing revenue from contracts with customers, which outlines a single comprehensive model that an entity will apply to determine the measurement of revenue and timing of when it is recognized.  The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services.  The updated guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract.  In July 2015, the FASB approved a one year deferral to the original effective date of this guidance.  The updated guidance is effective for reporting periods beginning after December 15, 2017, and will be applied retrospectively.  The Company is evaluating the requirements of the updated guidance to determine the impact of adoption.   

22

AQUA AMERICA, INC. AND SUBSIDIARIES

 MANAGEMENT’S DISCUSSION AND ANALYSIS OF 

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(In thousands of dollars, except per share amounts)

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-looking Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operationsand other sections of this Quarterly Report contain, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements address, among other things: the projected impact of various legal proceedings; the projected effects of recent accounting pronouncements; prospects, plans, objectives, expectations and beliefs of management, as well as information contained in this report where statements are preceded by, followed by or include the words “believes,” “expects,” “anticipates,” “plans,”  “future,” “potential,” “probably,” “predictions,” “intends,” “will,” “continue,” “in the event” or the negative of such terms or similar expressions.  Forward-looking statements are based on a number of assumptions concerning future events, and are subject to a number of risks, uncertainties and other factors, many of which are outside our control, which could causeactual results to differ materially from those expressed or implied by such statements.  These risks and uncertainties include, among others: the effects of regulation, abnormal weather, changes in capital requirements and funding, acquisitions, changes to the capital markets, and our ability to assimilate acquired operations, as well as those risks, uncertainties and other factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in such report.  As a result, readers are cautioned not to place undue reliance on any forward-looking statements.  We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.   

General Information

Aqua America, Inc. (“we”,  “us”, “our” or the “Company”), a Pennsylvania corporation, is the holding company for regulated utilities providing water or wastewater services to what we estimate to be almostthree million people in Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, and Virginia.  Our largest operating subsidiary, Aqua Pennsylvania,  provides water or wastewater services to approximately one-half of the total number of people we serve, who are located in the suburban areas in counties north and west of the City of Philadelphia and in 27 other counties in Pennsylvania.  Our other regulated utility subsidiaries provide similar services in seven other states.  In addition, the Company’s market-based activities are conducted through Aqua Resources, Inc. and Aqua Infrastructure, LLC.  Aqua Resources provides water and wastewater service through operating and maintenance contracts with municipal authorities and other parties close to our utility companies’ service territories; and offers, through a third party, water and wastewater line repair service and protection solutions to households.  In addition, Aqua Resources provided liquid waste hauling and disposal services in a business unit that the Company sold in the second quarter of 2016, and that was reported as assets held for sale in the Company’s consolidated balance sheets included in this report.  Additionally, a business unit of Aqua Resources installs and tests

23

AQUA AMERICA, INC. AND SUBSIDIARIES

 MANAGEMENT’S DISCUSSION AND ANALYSIS OF 

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

(In thousands of dollars, except per share amounts)

devices that prevent the contamination of potable water andrepairs water and wastewater systems, which in the second quarter of 2016, the Company decided to market for sale.  Further, in the third quarter of 2016, the Company decided to market for sale a business unit within Aqua Resources, which inspects, cleans and repairs storm and sanitary wastewater lines. These business units are reported as assets held for sale in the Company’s consolidated balance sheets included in this report.  Aqua Infrastructure provides non-utility raw water supply services for firms in the natural gas drilling industry.

Aqua America, Inc., which prior to its name change in 2004 was known as Philadelphia Suburban Corporation, was formed in 1968 as a holding company for its primary subsidiary, Aqua Pennsylvania, formerly known as Philadelphia Suburban Water Company.  In the early 1990s, we embarked on a growth-through-acquisition strategy focused on water and wastewater operations.  Our most significant transactions to date have been the merger with Consumers Water Company in 1999, the acquisition of the regulated water and wastewater operations of AquaSource, Inc. in 2003, the acquisition of Heater Utilities, Inc. in 2004, and the acquisition of American Water Works Company, Inc.’s regulated operations in Ohio in 2012.  Since the early 1990s, our business strategy has been primarily directed toward the regulated water and wastewater utility industry, where we have more than quadrupled the number of regulated customers we serve, and has extended our regulated operations from southeastern Pennsylvania to include operations in seven other states.  Currently, the Company seeks to acquire businesses in the U.S. regulated sector, which includes water and wastewater utilities and other regulated utilities, and to pursue growth ventures in market-based activities, such as infrastructure opportunities that are supplementary and complementary to our regulated businesses.

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes.

Financial Condition

During the first nine months of 2016, we had $270,019 of capital expenditures, expended $5,626 for the acquisition of water and wastewater utility systems, issued $234,288 of long-term debt, and repaid debt and made sinking fund contributions and other loan repayments of $181,359. The capital expenditures were related to new and replacement water mains, improvements to treatment plants, tanks, hydrants, and service lines, well and booster improvements, and other enhancements and improvements.  The issuance of long-term debt was comprised principally of the funds borrowed under our revolving credit facility.  In addition, we issued 439,943 shares of the Company’s common stock,and paid $3,905 in cash for the acquisition of Superior Water Company, Inc. as described in Note 3 – Acquisitions.         

AtSeptember 30, 2016, we had $3,712 of cash and cash equivalents compared to $3,229 at December 31, 2015.  During the first nine months of 2016, we used the proceeds from the issuance of long-term debt and internally generated funds to fund the cash requirements discussed above and to pay dividends.   

At September 30, 2016, our $250,000 unsecured revolving credit facility, which was amended and now expires in February 2021, had $72,034 available for borrowing.  At September 30, 2016, we had short-term lines of credit of $135,500, of which $87,510 was available for borrowing.  One of our short-term

24

AQUA AMERICA, INC. AND SUBSIDIARIES

 MANAGEMENT’S DISCUSSION AND ANALYSIS OF 

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

(In thousands of dollars, except per share amounts)

lines of credit is an Aqua Pennsylvania $100,000 364-day unsecured revolving credit facility with four banks, which is used to provide working capital, and as of September 30, 2016, $53,000 was available for borrowing. 

Our short-term lines of credit of $135,500 are subject to renewal on an annual basis.  Although we believe we will be able to renew these facilities, there is no assurance that they will be renewed, or what the terms of any such renewal will be.     

The Company’s consolidated balance sheet historically has had a negative working capital position whereby routinely our current liabilities exceed our current assets.  Management believes that internally generated funds along with existing credit facilities and the proceeds from the issuance of long-term debt will be adequate to provide sufficient working capital to maintain normal operations and to meet our financing requirements for at least the next twelve months. 

Results of Operations

Analysis of Third Quarter of 2016 Compared to Third Quarter of 2015 

Revenues increasedby $5,542 or 2.5%, primarily due to anincrease in customer water consumption,  additional water and wastewater revenues of $1,337 associated with a larger customer base due to utility acquisitions, an increase in water rates of $1,234, and an increase in infrastructure rehabilitation surcharges of $1,120, offset by a decrease in market-based activities revenue of $3,668.  The market-based activities revenues decreased due to a reduction in revenues associated with the inspection, cleaning and repairing of storm and sanitary wastewater lines, and the second quarter of 2016 sale of a business unit that provided liquid waste hauling and disposal services.

Operations and maintenance expenses increased by $1,293 or 1.6%, primarily due toan increase in postretirement benefits expense of $1,491, an asset impairment of $970 associated with the planned disposition of a business unit within Aqua Resources,and additional operating costs associated with acquired utility systems of $413, offset by the effect of the recording of a legal contingency reserve of $1,580 in the third quarter of 2015, and a reduction in operating expenses for Aqua Resources of $602 associated with the disposition of business units.   

Depreciation expense increased by $1,900 or 5.9%, primarily due totheutility plant placed in service since September 30, 2015. 

Interest expense increased by $929 or 4.8%, primarily due to an increase in average borrowings, offset by a decrease in our effective interest rate. 

Allowance for funds used during construction (“AFUDC”) increased by $559, due to an increase in the average balance of utility plant construction work in progress, to which AFUDC is applied. 

25

AQUA AMERICA, INC. AND SUBSIDIARIES

 MANAGEMENT’S DISCUSSION AND ANALYSIS OF 

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

(In thousands of dollars, except per share amounts)

Equity earnings in joint venture increased by $2,319 primarily due to the recognition of a connection fee earned by the joint venture in the third quarter of 2016 for which our share was $1,831 and a reduction in depreciation expense resulting from the noncash impairment charge recognized by the joint venture on its long-lived assets in the fourth quarter of 2015.

Our effective income tax rate was 10.3% in the thirdquarter of 2016 and 12.4% in the thirdquarter of 2015.  The effective income tax rate decreased due to the effect of additional tax deductions recognized in the third quarter of 2016 for certain qualifying infrastructure improvements for Aqua Pennsylvania.     

Net income increased by $5,741 or 8.5%, primarily as a result of the factors described above. 

Analysis of First Nine Months of 2016 Compared to First Nine Months of 2015 

Revenues increased by $5,939or 1.0%, primarily due to additional water and wastewater revenues of $6,966 associated with a larger customer base due to utility acquisitions, an increase in infrastructure rehabilitation surcharges of $3,536, and an increase in water and wastewater rates of $3,195, offset by a decrease in market-based activities revenues of $9,873.  The market-based activities revenues decreased due to a reduction in revenues associated with the inspection, cleaning and repairing of storm and sanitary wastewater lines, and the second quarter of 2016 sale of a business unit that provided liquid waste hauling and disposal services.

Operations and maintenance expenses decreased by $4,107 or 1.8%, primarily due tothe effects of the recognition in 2015 of the following three events:  $2,329 for leadership transition expenses; operating costs of $1,862 for the recording of a reserve for water rights held for future use; and the recording of a legal contingency reserve of $1,580, as well as decreases in market-based activities expenses of $3,810,  a decrease in water production costs of $2,182,  a reversal of a reserve for a legal contingency of $1,580, a gain of $1,135 that was recognized for the buyout of an operating contract, and lower fuel costs of $1,016, offset byincreases in operating costs associated with acquired utility systems of $4,038, postretirement benefits expense of $4,021,  the Company’s self-insured employee medical benefit program expense of $1,271, and an asset impairment of $970 associated with the disposition of a business unit within Aqua Resources.   

Depreciation expense increased by $4,115 or 4.4%, primarily due totheutility plant placed in service since September 30, 2015. 

Interest expense increased by $3,332 or 5.9%, primarily due to an increase in average borrowings, offset by a decrease in our effective interest rate. 

AFUDC increased by $2,516, due to an increase in the average balance of utility plant construction work in progress, to which AFUDC is applied. 

Equity earnings in joint venture increased by $2,639 primarily due to the recognition of a connection fee earned by the joint venture in the third quarter of 2016 for which our share was $1,831 and a reduction in

26

AQUA AMERICA, INC. AND SUBSIDIARIES

 MANAGEMENT’S DISCUSSION AND ANALYSIS OF 

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

(In thousands of dollars, except per share amounts)

depreciation expense resulting from the noncash impairment charge recognized by the joint venture on its long-lived assets in the fourth quarter of 2015.

Our effective income tax rate was 8.4% in the first nine months of 2016 and 9.9% in the first nine months of 2015.  The effective income tax rate decreased due to the effect of additional tax deductions recognized in 2016 for certain qualifying infrastructure improvements for Aqua Pennsylvania.     

Net income increased by $11,177 or 6.4%, primarily as a result of the factors described above. 

Impact of Recent Accounting Pronouncements

We describe the impact of recent accounting pronouncements in Note 15,  Recent Accounting Pronouncements, of the consolidated financial statements in this report.  

Recent Events

In October 2016, a subset of our customer base in North Carolina experienced a loss of water service for approximately two days as a result of Hurricane Matthew.  We incurred additional operations and maintenance expenses and capital expenditures, for which the amount is still being determined, to restore water service or provide alternative services until restoration was completed to these customers.  This event is not expected to have a material impact on the Company’s fourth quarter 2016 results of operations or financial position.  Additionally, a portion of the capital expenditures and lost revenue may be covered by the Company’s insurance. 

27

Item 3  –Quantitative and Qualitative Disclosures About Market Risk

We are subject to market risks in the normal course of business, including changes in interest rates and equity prices.  There have been no significant changes in our exposure to market risks since December 31, 2015.  Refer to Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015for additional information.

Item 4  –Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report.  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report are effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. 

(b) Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II.  Other Information

Item 1 – Legal Proceedings

We are party to various legal proceedings.  Although the results of legal proceedings cannot be predicted with certainty,there are no pending legal proceedings to which we or any of our subsidiaries is a party or to which any of our properties is the subject that we believe are material or are expected to have a material adverse effect on our financial position, results of operations or cash flows. 

Item 1A –Risk Factors

There have been no material changes to the risks disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015 under “Part 1, Item 1A – Risk Factors.”

28

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes the Company’s purchases of its common stock for the quarter ended September 30, 2016:

	Issuer Purchases of Equity Securities
				Total	Maximum
				Number of	Number of
				Shares	Shares
				Purchased	that May
				as Part of	Yet be
	Total			Publicly	Purchased
	Number	Average		Announced	Under the
	of Shares	Price Paid		Plans or	Plan or
Period	Purchased (1)	per Share		Programs	Programs (2)
July 1-31, 2016	1,314	$	35.48	-	720,348
August 1-31, 2016	-		-	-	720,348
September 1-30, 2016	-		-	-	720,348
Total	1,314	$	35.48	-	720,348

(1) These amounts include shares we acquired from our employees who elected to pay the exercise price of their stock options (and then hold shares of the stock), upon exercise,by delivering to us shares of our common stock in accordance with the terms of our equity compensation plan that were previously approved by our shareholders and disclosed in our proxy statements.  Thisfeature of our equity compensation plan isavailable to all employees who receive stock-based compensation under the plan.  We purchased these shares at their fair market value, as determined by reference to the closing price of our common stock on the day prior to the option exercise.     

(2) In December 2014, our Board of Directors authorized a share buyback program of up to 1,000,000 shares to minimize share dilution through timely and orderly share repurchases.  In December 2015, our Board of Directors added 400,000 shares to this program.  This program expires on the earliest of December 31, 2016 or when all authorized repurchases have been made.   

Item 6 –Exhibits

The information required by this Item is set forth in the Exhibit Index hereto which is incorporated herein by reference.

29

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be executed on its behalf by the undersigned thereunto duly authorized.

November 2, 2016

Aqua America, Inc.                  

Registrant

/s/ Christopher H. Franklin

Christopher H. Franklin

President and

Chief Executive Officer

/s/ David P. Smeltzer

David P. Smeltzer

Executive Vice President and

Chief Financial Officer 

30

EXHIBIT INDEX

Exhibit No.	Description
31.1	Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) under the Securities and Exchange Act of 1934.
31.2	Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) under the Securities and Exchange Act of 1934.
32.1	Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350.
32.2	Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRES	XBRL Taxonomy Extension Presentation Linkbase Document

31

EX-31.1

Exhibit 31.1 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER, PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES AND EXCHANGE ACT OF 1934 

I, Christopher H. Franklin, certify that: 

1. I have reviewed this quarterly report on Form 10-Q of Aqua America, Inc.; 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting, and 

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): 

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and 

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 

/s/ Christopher H. Franklin 

Christopher H. Franklin 

President and Chief Executive Officer 

November 2, 2016 

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER, PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES AND EXCHANGE ACT OF 1934  

I, David P. Smeltzer, certify that: 

1. I have reviewed this quarterly report on Form 10-Q of Aqua America, Inc.; 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;  

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting, and 

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): 

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and 

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 

/s/ David P. Smeltzer

David P. Smeltzer 

Executive Vice President and Chief Financial Officer 

November 2, 2016

EX-32.1

Exhibit 32.1 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 

18 U.S.C. SECTION 1350 

In connection with the Quarterly Report on Form 10-Q for the period ended September 30, 2016 of Aqua America, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher H. Franklin, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m or Section 78o); and 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 

/s/ Christopher H. Franklin

Christopher H. Franklin

President and Chief Executive Officer 

November 2, 2016

EX-32.2

Exhibit 32.2 

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 

18 U.S.C. SECTION 1350 

In connection with the Quarterly Report on Form 10-Q for the period ended September 30, 2016 of Aqua America, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David P. Smeltzer, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m or Section 78o); and 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 

/s/ David P. Smeltzer

David P. Smeltzer 

Executive Vice President and Chief Financial Officer 

November 2, 2016

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 20, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Entity Registrant Name	AQUA AMERICA INC
Entity Central Index Key	0000078128
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		177,358,257

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Assets
Property, plant and equipment, at cost	$ 6,386,445	$ 6,088,011
Less: accumulated depreciation	1,484,959	1,399,086
Net property, plant and equipment	4,901,486	4,688,925
Current assets:
Cash and cash equivalents	3,712	3,229
Accounts receivable and unbilled revenues, net	109,986	99,146
Inventory, materials and supplies	12,298	12,414
Prepayments and other current assets	11,799	11,802
Assets held for sale	3,606	1,779
Total current assets	141,401	128,370
Regulatory assets	911,455	830,118
Deferred charges and other assets, net	30,903	28,878
Investment in joint venture	8,859	7,716
Goodwill	41,921	33,866
Total assets	6,036,025	5,717,873
Stockholders' equity:
Common stock at $.50 par value, authorized 300,000,000 shares, issued 180,268,028 and 179,363,660 as of September 30, 2016 and December 31, 2015	90,134	89,682
Capital in excess of par value	795,139	773,585
Retained earnings	1,017,261	930,061
Treasury stock, at cost, 2,912,938 and 2,819,569 shares as of September 30, 2016 and December 31, 2015	(70,990)	(68,085)
Accumulated other comprehensive income	656	687
Total stockholders' equity	1,832,200	1,725,930
Long-term debt, excluding current portion	1,748,689	1,743,612
Less: debt issuance costs	22,196	23,165
Long-term debt, excluding current portion, net of debt issuance costs	1,726,493	1,720,447
Commitments and contingencies (See Note 13)
Current liabilities:
Current portion of long-term debt	83,777	35,593
Loans payable	47,990	16,721
Accounts payable	44,073	56,452
Accrued interest	18,236	12,651
Accrued taxes	18,475	21,887
Other accrued liabilities	39,447	49,895
Total current liabilities	251,998	193,199
Deferred credits and other liabilities:
Deferred income taxes and investment tax credits	1,236,516	1,118,923
Customers' advances for construction	93,023	86,934
Regulatory liabilities	250,108	259,507
Other	107,623	100,498
Total deferred credits and other liabilities	1,687,270	1,565,862
Contributions in aid of construction	538,064	512,435
Total liabilities and equity	$ 6,036,025	$ 5,717,873

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Consolidated Balance Sheets [Abstract]
Common stock, par value	$ 0.50	$ 0.50
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	180,268,028	179,363,660
Treasury stock, shares	2,912,938	2,819,569

XML

Consolidated Statements Of Net Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Consolidated Statements Of Net Income [Abstract]
Operating revenues	$ 226,593	$ 221,051	$ 623,076	$ 617,137
Operating expenses:
Operations and maintenance	79,812	78,519	227,347	231,454
Depreciation	33,881	31,981	97,645	93,530
Amortization	389	816	1,367	2,589
Taxes other than income taxes	14,712	14,663	43,094	43,079
Total operating expenses	128,794	125,979	369,453	370,652
Operating income	97,799	95,072	253,623	246,485
Other expense (income):
Interest expense, net	20,168	19,239	60,136	56,804
Allowance for funds used during construction	(2,267)	(1,708)	(6,446)	(3,930)
Gain on sale of other assets	(62)	(170)	(390)	(338)
Equity (earnings) loss in joint venture	(1,621)	698	(1,143)	1,496
Income before income taxes	81,581	77,013	201,466	192,453
Provision for income taxes	8,411	9,584	16,933	19,097
Net income	$ 73,170	$ 67,429	$ 184,533	$ 173,356
Net income per common share:
Basic	$ 0.41	$ 0.38	$ 1.04	$ 0.98
Diluted	$ 0.41	$ 0.38	$ 1.04	$ 0.98
Average common shares outstanding during the period:
Basic	177,336	176,704	177,243	176,891
Diluted	177,817	177,495	177,781	177,670
Cash dividends declared per common share	$ 0.191	$ 0.178	$ 0.547	$ 0.508

XML

Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Consolidated Statements Of Comprehensive Income [Abstract]
Net income		$ 73,170	$ 67,429	$ 184,533	$ 173,356
Other comprehensive income, net of tax:
Unrealized holding gain (loss) on investments, net of tax expense (benefit) of $11 and $(120) for the three months and $14 and $(90) for the nine months ended September 30, 2016 and 2015, respectively		20	(223)	26	(169)
Reclassification of gain on sale of investment to net income, net of tax of $30 for the nine months ended September 30, 2016	[1]			(57)
Comprehensive income		$ 73,190	$ 67,206	$ 184,502	$ 173,187

[1] Amount of pre-tax gain of $87 reclassified from accumulated other comprehensive income to gain on sale of other assets on the consolidated statements of net income for the nine months ended September 30, 2016.

XML

Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Consolidated Statements Of Comprehensive Income [Abstract]
Income taxes arising from net unrealized holding gain on investments	$ 11	$ (120)	$ 14	$ (90)
Income tax benefit arising from reclassification adjustment for loss reported in net income			30
Pre-tax loss of reclassification adjustment for loss reported in net income			$ 87

XML

Consolidated Statements Of Capitalization - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Stockholders' equity:
Common stock, $.50 par value	$ 90,134	$ 89,682
Capital in excess of par value	795,139	773,585
Retained earnings	1,017,261	930,061
Treasury stock, at cost	(70,990)	(68,085)
Accumulated other comprehensive income	656	687
Total stockholders' equity	1,832,200	1,725,930
Long-term debt:
Long-term debt of subsidiaries	1,164,057	1,185,257
Total long-term debt	1,832,466	1,779,205
Current portion of long-term debt	83,777	35,593
Long-term debt, excluding current portion	1,748,689	1,743,612
Less: debt issuance costs	22,196	23,165
Long-term debt, excluding current portion, net of debt issuance costs	1,726,493	1,720,447
Total capitalization	3,558,693	3,446,377
Long-Term Debt Of Subsidiaries 0.00% To 0.99% [Member]
Long-term debt:
Long-term debt of subsidiaries	4,661	5,148
Long-Term Debt Of Subsidiaries 1.00% To 1.99% [Member]
Long-term debt:
Long-term debt of subsidiaries	15,837	20,811
Long-Term Debt Of Subsidiaries 2.00% To 2.99% [Member]
Long-term debt:
Long-term debt of subsidiaries	20,073	19,167
Long-Term Debt Of Subsidiaries 3.00% To 3.99% [Member]
Long-term debt:
Long-term debt of subsidiaries	296,622	297,275
Long-Term Debt Of Subsidiaries 4.00% To 4.99% [Member]
Long-term debt:
Long-term debt of subsidiaries	488,367	487,093
Long-Term Debt Of Subsidiaries 5.00% To 5.99% [Member]
Long-term debt:
Long-term debt of subsidiaries	213,196	221,435
Long-Term Debt Of Subsidiaries 6.00% To 6.99% [Member]
Long-term debt:
Long-term debt of subsidiaries	52,980	52,964
Long-Term Debt Of Subsidiaries 7.00% To 7.99% [Member]
Long-term debt:
Long-term debt of subsidiaries	33,243	33,762
Long-Term Debt Of Subsidiaries 8.00% To 8.99% [Member]
Long-term debt:
Long-term debt of subsidiaries	6,678	14,502
Long-Term Debt Of Subsidiaries 9.00% To 9.99% [Member]
Long-term debt:
Long-term debt of subsidiaries	26,400	27,100
Long-Term Debt Of Subsidiaries 10.00% To 10.99% [Member]
Long-term debt:
Long-term debt of subsidiaries	6,000	6,000
Revolving Credit Agreement, Due 2021 [Member]
Long-term debt:
Notes payable to bank under revolving credit agreement, variable rate, due 2017	155,000	60,000
Bank notes at 1.921% and 1.975% due 2017 and 2018 [Member]
Long-term debt:
Unsecured notes payable	100,000	100,000
Notes at 3.57% and 3.59% due 2027 and 2030 [Member]
Long-term debt:
Unsecured notes payable	120,000	120,000
Notes Ranging From 4.62% To 4.87%, due 2017 through 2024 [Member]
Long-term debt:
Unsecured notes payable	133,600	144,400
Notes Ranging From 5.20% To 5.95%, due 2017 through 2037 [Member]
Long-term debt:
Unsecured notes payable	$ 159,809	$ 169,548

XML

Consolidated Statements Of Capitalization (Parenthetical) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Common stock, par value	$ 0.50	$ 0.50
Long-Term Debt Of Subsidiaries 10.00% To 10.99% [Member]
Maturity date	2018	2018
Revolving Credit Agreement, Due 2021 [Member]
Maturity date	2021	2021
Bank notes at 1.921% due 2017 [Member]
Interest rate	1.921%	1.921%
Maturity date	2017	2017
Bank notes at 1.975% due 2018 [Member]
Interest rate	1.975%	1.975%
Maturity date	2018	2018
Notes at 3.57% due 2027 [Member]
Interest rate	3.57%	3.57%
Maturity date	2027	2027
Notes at 3.59% due 2030 [Member]
Interest rate	3.59%	3.59%
Maturity date	2030	2030
Minimum [Member] | Long-Term Debt Of Subsidiaries 0.00% To 0.99% [Member]
Interest rate	0.00%	0.00%
Maturity date	2023	2023
Minimum [Member] | Long-Term Debt Of Subsidiaries 1.00% To 1.99% [Member]
Interest rate	1.00%	1.00%
Maturity date	2017	2017
Minimum [Member] | Long-Term Debt Of Subsidiaries 2.00% To 2.99% [Member]
Interest rate	2.00%	2.00%
Maturity date	2024	2024
Minimum [Member] | Long-Term Debt Of Subsidiaries 3.00% To 3.99% [Member]
Interest rate	3.00%	3.00%
Maturity date	2019	2019
Minimum [Member] | Long-Term Debt Of Subsidiaries 4.00% To 4.99% [Member]
Interest rate	4.00%	4.00%
Maturity date	2020	2020
Minimum [Member] | Long-Term Debt Of Subsidiaries 5.00% To 5.99% [Member]
Interest rate	5.00%	5.00%
Maturity date	2017	2017
Minimum [Member] | Long-Term Debt Of Subsidiaries 6.00% To 6.99% [Member]
Interest rate	6.00%	6.00%
Maturity date	2017	2017
Minimum [Member] | Long-Term Debt Of Subsidiaries 7.00% To 7.99% [Member]
Interest rate	7.00%	7.00%
Maturity date	2022	2022
Minimum [Member] | Long-Term Debt Of Subsidiaries 8.00% To 8.99% [Member]
Interest rate	8.00%	8.00%
Maturity date	2021	2021
Minimum [Member] | Long-Term Debt Of Subsidiaries 9.00% To 9.99% [Member]
Interest rate	9.00%	9.00%
Maturity date	2018	2018
Minimum [Member] | Long-Term Debt Of Subsidiaries 10.00% To 10.99% [Member]
Interest rate	10.00%	10.00%
Minimum [Member] | Notes Ranging From 4.62% To 4.87%, due 2017 through 2024 [Member]
Interest rate	4.62%	4.62%
Maturity date	2017	2017
Minimum [Member] | Notes Ranging From 5.20% To 5.95%, due 2017 through 2037 [Member]
Interest rate	5.20%	5.20%
Maturity date	2017	2017
Maximum [Member] | Long-Term Debt Of Subsidiaries 0.00% To 0.99% [Member]
Interest rate	0.99%	0.99%
Maturity date	2033	2033
Maximum [Member] | Long-Term Debt Of Subsidiaries 1.00% To 1.99% [Member]
Interest rate	1.99%	1.99%
Maturity date	2035	2035
Maximum [Member] | Long-Term Debt Of Subsidiaries 2.00% To 2.99% [Member]
Interest rate	2.99%	2.99%
Maturity date	2031	2031
Maximum [Member] | Long-Term Debt Of Subsidiaries 3.00% To 3.99% [Member]
Interest rate	3.99%	3.99%
Maturity date	2047	2047
Maximum [Member] | Long-Term Debt Of Subsidiaries 4.00% To 4.99% [Member]
Interest rate	4.99%	4.99%
Maturity date	2054	2054
Maximum [Member] | Long-Term Debt Of Subsidiaries 5.00% To 5.99% [Member]
Interest rate	5.99%	5.99%
Maturity date	2043	2043
Maximum [Member] | Long-Term Debt Of Subsidiaries 6.00% To 6.99% [Member]
Interest rate	6.99%	6.99%
Maturity date	2036	2036
Maximum [Member] | Long-Term Debt Of Subsidiaries 7.00% To 7.99% [Member]
Interest rate	7.99%	7.99%
Maturity date	2027	2027
Maximum [Member] | Long-Term Debt Of Subsidiaries 8.00% To 8.99% [Member]
Interest rate	8.99%	8.99%
Maturity date	2025	2025
Maximum [Member] | Long-Term Debt Of Subsidiaries 9.00% To 9.99% [Member]
Interest rate	9.99%	9.99%
Maturity date	2026	2026
Maximum [Member] | Long-Term Debt Of Subsidiaries 10.00% To 10.99% [Member]
Interest rate	10.99%	10.99%
Maximum [Member] | Notes Ranging From 4.62% To 4.87%, due 2017 through 2024 [Member]
Interest rate	4.87%	4.87%
Maturity date	2024	2024
Maximum [Member] | Notes Ranging From 5.20% To 5.95%, due 2017 through 2037 [Member]
Interest rate	5.95%	5.95%
Maturity date	2037	2037

XML

Consolidated Statement Of Equity - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands	Common Stock [Member]	Capital In Excess Of Par Value [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income [Member]	Total
Balance at Dec. 31, 2015	$ 89,682	$ 773,585	$ 930,061	$ (68,085)	$ 687	$ 1,725,930
Net income			184,533			184,533
Other comprehensive loss, net of income tax benefit of $16					(31)	(31)
Dividends			(96,994)			(96,994)
Stock issued for acquisition (439,943 shares)	220	12,625				12,845
Sale of stock (34,699 shares)	17	1,012				1,029
Repurchase of stock (93,369 shares)				(2,905)		(2,905)
Equity compensation plan (225,712 shares)	113	(113)
Exercise of stock options (204,014 shares)	102	3,734				3,836
Stock-based compensation		3,642	(339)			3,303
Employee stock plan tax benefits		1,263				1,263
Other		(609)				(609)
Balance at Sep. 30, 2016	$ 90,134	$ 795,139	$ 1,017,261	$ (70,990)	$ 656	$ 1,832,200

XML

Consolidated Statement Of Equity (Parenthetical) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) shares
Consolidated Statement Of Equity (Parenthetical) [Abstract]
Other Comprehensive loss, net of income tax | $	$ 16
Stock issued for acquisition, shares	439,943
Sale of stock, shares	34,699
Repurchase of stock, shares	93,369
Equity compensation plan, shares	225,712
Exercise of stock options, shares	204,014

XML

Consolidated Statements Of Cash Flow - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income	$ 184,533	$ 173,356
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	99,012	96,119
Deferred income taxes	15,345	13,855
Provision for doubtful accounts	3,533	3,693
Stock-based compensation	3,642	4,728
Gain on sale of utility system and market-based business unit	(1,824)
Gain on sale of other assets	(390)	(338)
Net change in receivables, inventory and prepayments	(15,235)	(18,677)
Net change in payables, accrued interest, accrued taxes and other accrued liabilities	(241)	16,450
Other	(116)	(6,804)
Net cash flows from operating activities	288,259	282,382
Cash flows from investing activities:
Property, plant and equipment additions, including the debt component of allowance for funds used during construction of $1,626 and $1,015	(270,019)	(257,478)
Acquisitions of utility systems and other, net	(5,626)	(26,327)
Release of funds previously restricted for construction activity		47
Net proceeds from the sale of utility system and other assets	6,545	513
Other	(32)	(1,027)
Net cash flows used in investing activities	(269,132)	(284,272)
Cash flows from financing activities:
Customers' advances and contributions in aid of construction	6,006	4,286
Repayments of customers' advances	(1,882)	(2,332)
Net proceeds of short-term debt	31,269	9,632
Proceeds from long-term debt	234,288	313,440
Repayments of long-term debt	(181,359)	(203,851)
Change in cash overdraft position	(12,586)	(14,918)
Proceeds from issuing common stock	1,029	344
Proceeds from exercised stock options	3,836	4,518
Stock-based compensation windfall tax benefits	1,263	1,469
Repurchase of common stock	(2,905)	(20,268)
Dividends paid on common stock	(96,994)	(89,842)
Other	(609)	(655)
Net cash flows (used in) from financing activities	(18,644)	1,823
Net change in cash and cash equivalents	483	(67)
Cash and cash equivalents at beginning of period	3,229	4,138
Cash and cash equivalents at end of period	3,712	4,071
Non-cash investing activity:
Property, plant and equipment additions purchased at the period end, but not yet paid for	$ 23,548	$ 24,724

XML

Consolidated Statements Of Cash Flow (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Consolidated Statements Of Cash Flow [Abstract]
Debt component of allowance for funds used during construction	$ 1,626	$ 1,015

XML

Basis Of Presentation

9 Months Ended

Sep. 30, 2016

Basis Of Presentation [Abstract]

Basis Of Presentation

Note 1 – Basis of Presentation

The accompanying consolidated balance sheets and statements of capitalization of Aqua America, Inc. and subsidiaries (the “Company”) at September 30, 2016, the consolidated statements of net income and comprehensive income for the three and nine months ended September 30, 2016 and 2015the consolidated statements of cash flow for the nine months ended September 30, 2016 and 2015, and the consolidated statement of equity for the nine months ended September 30, 2016 are unaudited, but reflect all adjustments, consisting of only normal recurring accruals, which are, in the opinion of management, necessary to present fairly the consolidated financial position, the consolidated changes in equity, the consolidated results of operations, and the consolidated cash flow for the periods presented.  Because they cover interim periods, the statements and related notes to the financial statements do not include all disclosures and notes normally provided in annual financial statements and, therefore, should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.  The results of operations for interim periods may not be indicative of the results that may be expected for the entire year.  TheDecember 31, 2015 consolidated balance sheet data presented herein was derived from the Company’sDecember 31, 2015 audited consolidated financial statements, but does not include all disclosures and notes normally provided in annual financial statements.  Certain prior period amounts have been reclassified to conform to the current period presentation of debt issuance costs (see Note 15 - Recent Accounting Pronouncements).        

XML

Goodwill

9 Months Ended

Sep. 30, 2016

Goodwill [Abstract]

Goodwill

Note 2 – Goodwill

The following table summarizes the changes in the Company’s goodwill, by business segment:

	Regulated
	Segment		Other		Consolidated
Balance at December 31, 2015	$	27,246	$	6,620	$	33,866
Goodwill acquired		10,095		-		10,095
Reclassification to utility plant acquisition adjustment		(82)		-		(82)
Disposition		-		(996)		(996)
Classified as assets held for sale		-		(803)		(803)
Other		(159)		-		(159)
Balance at September 30, 2016	$	37,100	$	4,821	$	41,921

The reclassification of goodwill to utility plant acquisition adjustment results from a mechanism approved by the applicable utility commission.  The mechanism provides for the transfer over time, and the recovery through customer rates, of goodwill associated with some acquisitions upon achieving specific objectives. 

Goodwill is not amortized but is tested for impairment annually, or more often, if circumstances indicate a possible impairment may exist, to determine whether it’s more likely than not that the fair value of a reporting unit is less than its carrying amount.  When testing goodwill for impairment, we may assess qualitative factors, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and entity specific events.  Alternatively, we may bypass this qualitative assessment for some of our reporting units and perform a quantitative goodwill impairment test by determining the fair value of a reporting unit based on a discounted cash flow analysis.  The Company

tested the goodwill attributable for each of our reporting units for impairment as of July 31, 2016, in conjunction with the timing of our annual strategic business plan, and concluded that the estimated fair value of each reporting unit, which has goodwill recorded, exceeded the reporting unit’s carrying amount, indicating that none of the Company’s goodwill was impaired.

XML

Acquisitions

9 Months Ended

Sep. 30, 2016

Acquisitions [Abstract]

Acquisitions

Note 3 – Acquisitions

Pursuant to our strategy to grow through acquisitions, in January 2016, the Company acquired Superior Water Company, Inc., which provides public water service to approximately 3,900 customers in portions of Berks, Chester, and Montgomery counties in Pennsylvania.  The total purchase price for the utility system was $16,750, which consisted of the issuance of 439,943 shares of the Company’s common stock and $3,905 in cash. The purchase price allocation for this acquisition consisted primarily of acquired property, plant and equipment of $25,167, contributions in aid of construction of $16,565, and goodwill of $8,622.  Additionally, during 2016, the Company completed nine acquisitions of water and wastewater utility systems in various states.  The total purchase price of these utility systems consisted of $1,721 in cash, and there was no goodwill recorded.  In 2016, the Company recorded goodwill of $1,473 for an acquisition that was completed in a prior period.  The pro forma effect of the businesses acquired is not material either individually or collectively to the Company’s results of operations.    

In April 2015, the Company acquired the water and wastewater utility system assets of North MaineUtilities located in the Village of Glenview, Illinois serving approximately 7,400 customers.  The total purchase price consisted of $23,079 in cash.  The purchase price allocation for this acquisition consisted primarily of acquired property, plant and equipment.  Additionally, in 2015, the Company completed 14 acquisitions of water and wastewater utility systems in various states.  The total purchase price of these utility systems consisted of $5,210 in cash.

XML

Assets Held For Sale

9 Months Ended

Sep. 30, 2016

Assets Held For Sale [Abstract]

Assets Held For Sale

Note 4 –  Assets Held for Sale

In December 2015, the Company decided to sell a business unit which provides liquid waste hauling and disposal services.  This business unit was reported within the Company’s market-based subsidiary, Aqua Resources, and was reported as assets held for sale in the Company’s December 31, 2015 consolidated balance sheet included in this report.  During the second quarter of 2016, this business unit was sold for $3,400 in cash and resulted in a gain on sale of $537.  The gain on sale is reported as a reduction to operations and maintenance expense in the consolidated statements of net income.  This business unit was included in “Other” in the Company’s segment information. 

In the second quarter of 2016, the Company decided to market for sale business units which install and test devices that prevent the contamination of potable water and repair water and wastewater systems.    Further, in the third quarter of 2016, the Company decided to market for sale a business unit which inspects, cleans and repairs storm and sanitary wastewater lines.  These business units are reported within the Company’s market-based subsidiary, Aqua Resources.  These business units are reported as assets held for sale in the Company’s consolidated balance sheets included in this report, and are included in “Other” in the Company’s segment information.         

XML

Capitalization

9 Months Ended

Sep. 30, 2016

Capitalization [Abstract]

Capitalization

Note 5 – Capitalization

In February 2016, the Company amended its unsecured revolving credit facility to extend the expiration from March 2017 to February 2021, to increase the facility from $200,000 to $250,000, and to add a fourth bank to the lending group.  Funds borrowed under this facility are classified as long-term debt and are used to provide working capital as well as support for letters of credit for insurance policies and other financing arrangements.  Interest under this facility is based at the Company’s option, on the prime rate, an adjusted Euro-Rate, an adjusted federal funds rate or at rates offered by the banks.  A facility fee is charged on the total commitment amount of the agreement. 

XML

Fair Value Of Financial Instruments

9 Months Ended

Sep. 30, 2016

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

Note 6 – Fair Value of Financial Instruments

The Company follows the Financial Accounting Standards Board’s (“FASB”) accounting guidance for fair value measurements and disclosures, which defines fair value and establishes a framework for using fair value to measure assets and liabilities.  That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy are as follows:

· Level 1:  unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access;

· Level 2:  inputs other than Level 1 that are observable, either directly or indirectly, such as quoted market prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in non-active markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

· Level 3:  inputs that are unobservable and significant to the fair value measurement.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.  There have been no changes in the valuation techniques used to measure fair value or asset or liability transfers between the levels of the fair value hierarchy for the quarter ended September 30, 2016. 

Financial instruments are recorded at carrying value in the financial statements and approximate fair value as of the dates presented.  The fair value of these instruments is disclosed below in accordance with current accounting guidance related to financial instruments. 

The fair value of loans payable is determined based on its carrying amount and utilizing Level 1 methods and assumptions.As of September 30, 2016 and December 31, 2015, the carrying amount of the Company’s loans payable was $47,990 and $16,721, respectively, which equates to their estimated fair value.  The fair value of cash and cash equivalents, which is comprised of a money market fund, is determined based on the net asset value per unit utilizing Level 2 methods and assumptions.  As of September 30, 2016 and December 31, 2015, the carrying amounts of the Company's cash and cash equivalents was $3,712 and $3,229, respectively, which equates to their fair value.   

The carrying amounts and estimated fair values of the Company’s long-term debt is as follows:

	September 30,		December 31,
	2016		2015
Carrying Amount	$	1,832,466	$	1,779,205
Estimated Fair Value		2,130,383		1,905,393

The fair value of long-term debt has been determined by discounting the future cash flows using current market interest rates for similar financial instruments of the same duration utilizing Level 2 methods and assumptions.  The Company’s customers’ advances for construction have a carrying value of $93,023as of September 30, 2016, and $86,934 as of December 31, 2015.  Their relative fair values cannot be accurately estimated because future refund payments depend on several variables, including new customer connections, customer consumption levels, and future rate increases.  Portions of these non-interest bearing instruments are payable annually through 2026 and amounts not paid by the respective contract expiration dates become non-refundable.  The fair value of these amounts would, however, be less than their carrying value due to the non-interest bearing feature.

XML

Net Income Per Common Share

9 Months Ended

Sep. 30, 2016

Net Income Per Common Share [Abstract]

Net Income Per Common Share

Note 7 – Net Income per Common Share

Basic net income per common share is based on the weighted average number of common shares outstanding.  Diluted net income per common share is based on the weighted average number of common shares outstanding and potentially dilutive shares.  The dilutive effect of employee stock-based compensation is included in the computation of diluted net income per common share.  The dilutive effect of stock-based compensation is calculated using the treasury stock method and expected proceeds upon exercise or issuance of the stock-based compensation.  The treasury stock method assumes that the proceeds from stock-based compensation are used to purchase the Company’s common stock at the average market price during the period.  The following table summarizes the shares, in thousands, used in computing basic and diluted net income per common share:

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2016	2015	2016	2015
Average common shares outstanding during the period for basic computation	177,336	176,704	177,243	176,891
Dilutive effect of employee stock-based compensation	481	791	538	779
Average common shares outstanding during the period for diluted computation	177,817	177,495	177,781	177,670

For the three and nine months ended September 30, 2016 and 2015, all of the Company’s employee stock options were included in the calculations of diluted net income per share as the calculated cost to exercise the stock options was less than the average market price of the Company’s common stock during these periods.  

XML

Stock-Based Compensation

9 Months Ended

Sep. 30, 2016

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 8 – Stock-based Compensation

Under the Company’s 2009 Omnibus Equity Compensation Plan, as amended as of February 27, 2014 (the “2009 Plan”), as approved by the Company’s shareholders to replace the 2004 Equity Compensation Plan (the “2004 Plan”), stock options, stock units, stock awards, stock appreciation rights, dividend equivalents, and other stock-based awards may be granted to employees, non-employee directors, and consultants and advisors.  The 2009 Plan authorizes 6,250,000 shares for issuance under the plan.  A maximum of 3,125,000 shares under the 2009 Plan may be issued pursuant to stock awards, stock units and other stock-based awards, subject to adjustment as provided in the 2009 Plan.  During any calendar year, no individual may be granted (i) stock options and stock appreciation rights under the 2009 Plan for more than 500,000 shares of Company stock in the aggregate or (ii) stock awards, stock units or other stock-based awards under the 2009 Plan for more than 500,000 shares of Company stock in the aggregate, subject to adjustment as provided in the 2009 Plan.  Awards to employees and consultants under the 2009 Plan are made by a committee of the Board of Directors of the Company, except that with respect to awards to the Chief Executive Officer, the committee recommends those awards for approval by the non-employee directors of the Board of Directors.  In the case of awards to non-employee directors, the Board of Directors makes such awards.  At September 30, 2016,  3,982,401 shares were still available for issuance under the 2009 Plan.No further grants may be made under the 2004 Plan.

Performance Share Units– A performance share unit (“PSU”) represents the right to receive a share of the Company’s common stock if specified performance goals are met over the three-year performance period specified in the grant, subject to exceptions through the respective vesting period, generally three years.  Each grantee is granted a target award of PSUs, and may earn between 0% and 200% of the target amount depending on the Company’s performance against the performance goals.  The following table provides compensation costs for stock-based compensation related to PSUs: 

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Stock-based compensation within operations and maintenance expenses	$	1,012	$	836	$	2,504	$	3,475
Income tax benefit		411		339		1,013		1,414

The following table summarizes the PSU transactions for the nine months ended September 30, 2016:

	Number	Weighted
	of	Average
	Share Units	Fair Value
Nonvested share units at December 31, 2015	424,858	$	25.78
Granted	152,533		28.89
Performance criteria adjustment	37,551		26.18
Forfeited	(17,661)		26.79
Share units vested in prior period and issued in current period	44,625		26.88
Share units issued	(189,885)		23.25
Nonvested share units at September 30, 2016	452,021	$	27.99

A portion of the fair value of PSUs was estimated at the grant date based on the probability of satisfying the market-based conditions using the Monte Carlo valuation method, which assesses probabilities of various outcomes of market conditions.  The other portion of the fair value of the PSUs is based on the fair market value of the Company’s stock at the grant date, regardless of whether the market-based condition is satisfied.  The per unit weighted-average fair value at the date of grant for PSUs granted during the nine months ended September 30, 2016 and 2015 was $28.89 and $26.45, respectively.  The fair value of each PSU grant is amortized monthly into compensation expense on a straight-line basis over their respective vesting periods, generally 36 months.  The accrual of compensation costs is based on our estimate of the final expected value of the award, and is adjusted as required for the portion based on the performance-based condition.  The Company assumes that forfeitures will be minimal, and recognizes forfeitures as they occur, which results in a reduction in compensation expense.  As the payout of the PSUs includes dividend equivalents, no separate dividend yield assumption is required in calculating the fair value of the PSUs.  The recording of compensation expense for PSUs has no impact on net cash flows.   

Restricted Stock Units – A restricted stock unit (“RSU”) represents the right to receive a share of the Company’s common stock.  RSUs are eligible to be earned at the end of a specified restricted period, generally three years, beginning on the date of grant.  The Company assumes that forfeitures will be minimal, and recognizes forfeitures as they occur, which results in a reduction in compensation expense.  As the payout of the RSUs includes dividend equivalents, no separate dividend yield assumption is required in calculating the fair value of the RSUs.  The following table provides compensation costs for stock-based compensation related to RSUs:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Stock-based compensation within operations and maintenance expenses	$	299	$	209	$	763	$	888
Income tax benefit		124		86		315		367

The following table summarizes the RSU transactions for the nine months ended September 30, 2016: 

	Number	Weighted
	of	Average
	Stock Units	Fair Value
Nonvested stock units at December 31, 2015	88,353	$	24.94
Granted	50,324		32.09
Stock units vested and issued	(24,318)		23.37
Forfeited	(3,952)		27.81
Nonvested stock units at September 30, 2016	110,407	$	28.44

The per unit weighted-average fair value at the date of grant for RSUs granted during the nine months ended September 30, 2016 and 2015 was $32.09 and $25.97, respectively.

Stock Options –The following table provides the income tax benefit for stock-based compensation related to stock options granted in prior periods:

	Three Months Ended				Nine Months Ended
	September 30,					September 30,
	2016		2015		2016		2015
Income tax benefit	$	15	$	28	$	249	$	143

For the nine months ended September 30, 2016 and 2015, there were no compensation costs for stock-based compensation related to stock options, as stock options were fully amortized in 2013.  Additionally, there were no stock options granted during the nine months ended September 30, 2016 or 2015. 

The following table summarizes stock option transactions for the nine months ended September 30, 2016:

1
		Weighted		Weighted
		Average		Average	Aggregate
		Exercise		Remaining	Intrinsic
	Shares	Price		Life (years)	Value
Outstanding at December 31, 2015	659,533	$	16.62
Forfeited	-		-
Expired / Cancelled	(3,436)		16.15
Exercised	(204,014)		18.80
Outstanding and exercisable at September 30, 2016	452,083	$	15.64	2.1	$	6,709

Stock Awards –   The following table provides compensation costs for stock-based compensation related to stock awards:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Stock-based compensation within operations and maintenance expenses	$	131	$	-	$	375	$	365
Income tax benefit		54		-		155		151

The following table summarizes stock award transactions for the nine months ended September 30, 2016:

	Number	Weighted
	of	Average
	Stock Awards	Fair Value
Nonvested stock awards at December 31, 2015	-	$	-
Granted	11,509		32.57
Vested	(11,509)		32.57
Nonvested stock awards at September 30, 2016	-	$	-

The per unit weighted-average fair value at the date of grant for stock awards granted during the nine months ended September 30, 2016 and 2015 was $32.57 and $26.44, respectively.

XML

Pension Plans And Other Postretirement Benefits

9 Months Ended

Sep. 30, 2016

Pension Plans And Other Postretirement Benefits [Abstract]

Pension Plans And Other Postretirement Benefits

Note 9 – Pension Plans and Other Postretirement Benefits

The Company maintains a qualified defined benefit pension plan (the “Pension Plan”), a nonqualified pension plan and other postretirement benefit plans for certain of its employees.  The net periodic benefit cost is based on estimated values and an extensive use of assumptions about the discount rate, expected return on plan assets, the rate of future compensation increases received by the Company’s employees, mortality, turnover, and medical costs.  The following tables provide the components of net periodic benefit cost:

	Pension Benefits
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Service cost	$	784	$	750	$	2,394	$	2,600
Interest cost		3,251		3,255		9,787		9,699
Expected return on plan assets		(4,215)		(4,677)		(12,696)		(14,025)
Amortization of prior service cost		145		44		435		130
Amortization of actuarial loss		1,797		1,465		5,354		4,529
Settlement charge		-		-		3,028		-
Special termination benefit charge		-		-		302		-
Net periodic benefit cost	$	1,762	$	837	$	8,604	$	2,933
	Other
	Postretirement Benefits
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	2016		2015		2016		2015
Service cost	$	253	$	273	$	761	$	952
Interest cost		726		681		2,202		2,120
Expected return on plan assets		(645)		(731)		(2,001)		(2,192)
Amortization of prior service cost		(137)		(211)		(411)		(476)
Amortization of actuarial loss		220		309		707		972
Net periodic benefit cost	$	417	$	321	$	1,258	$	1,376

Effective July 1, 2015, the Company added a permanent lump sum option to the form of benefit payments offered to participants of the qualified defined benefit pension plan and non-qualified retirement plans upon retirement or termination.  During the first quarter of 2016, the lump sum payments paid to participants who elected this option for payments from the non-qualified retirement plans resulted in a settlement charge.  The Company made cash contributions of $8,145 to its Pension Plan during the first nine months of 2016,  which completed the Company’s 2016 cash contributions. 

XML

Water And Wastewater Rates

9 Months Ended

Sep. 30, 2016

Water And Wastewater Rates [Abstract]

Water And Wastewater Rates

Note 10 – Water and Wastewater Rates

During the first nine months of 2016, the Company’s operating divisions in Ohio, Texas, Virginia, and New Jersey were granted base rate increases designed to increase total operating revenues on an annual basis by $3,434.  Further, during the first nine months of 2016, the Company’s operating divisions in Illinois, Pennsylvania (wastewater), and North Carolina received approval to bill infrastructure rehabilitation surcharges designed to increase total operating revenues on an annual basis by $2,062.

XML

Taxes Other Than Income Taxes

9 Months Ended

Sep. 30, 2016

Taxes Other Than Income Taxes [Abstract]

Taxes Other Than Income Taxes

Note 11 – Taxes Other than Income Taxes

The following table provides the components of taxes other than income taxes:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Property	$	7,007	$	6,945	$	20,119	$	20,776
Capital stock		430		538		1,287		1,619
Gross receipts, excise and franchise		2,979		2,859		8,181		7,855
Payroll		2,140		2,072		7,775		7,425
Regulatory assessments		639		693		1,991		2,033
Other		1,517		1,556		3,741		3,371
Total taxes other than income	$	14,712	$	14,663	$	43,094	$	43,079

XML

Segment Information

9 Months Ended

Sep. 30, 2016

Segment Information [Abstract]

Segment Information

Note 12 – Segment Information

The Company has identified ten operating segments and has one reportable segment named the “Regulated” segment.  The reportable segment is comprised of eight operating segments for the Company’s water and wastewater regulated utility companies which are organized by the states where we provide these services.  In addition, two segments are not quantitatively significant to be reportable and are comprised of the Company’s market-based activities:  Aqua Resources, Inc.and Aqua Infrastructure, LLC.  Aqua Resources provides water and wastewater service through operating and maintenance contracts with municipal authorities and other parties in close proximity to our utility companies’ service territories;and offers, through a third party, water and wastewater line repair service and protection solutions to households.  In addition, Aqua Resources provided liquid waste hauling and disposal services in a business unit that the Company sold in the second quarter of 2016, and that was reported as assets held for sale in the Company’s consolidated balance sheets included in this report.  Additionally, Aqua Resources installs and tests devices that prevent the contamination of potable water; designs and builds water and wastewater systems; and provides other market-based water and wastewater services in business units that, in the second quarter of 2016, the Company decided to market for sale.  Further, in the third quarter of 2016, the Company decided to market for sale a business unit within Aqua Resources, which inspects, cleans and repairs storm and sanitary wastewater lines.  These business units are reported as assets held for sale in the Company’s consolidated balance sheets included in this report.  Aqua Infrastructure provides non-utility raw water supply services for firms in the natural gas drilling industry.  These two segments are included as a component of “Other” in the tables below.  Also included in “Other” are corporate costs that have not been allocated to the Regulated segment and intersegment eliminations.  Corporate costs include general and administrative expense, and interest expense. 

The following table presents information about the Company’s reportable segment:

	Three Months Ended						Three Months Ended
	September 30, 2016						September 30, 2015
	Regulated		Other		Consolidated		Regulated		Other		Consolidated
Operating revenues	$	222,231	$	4,362	$	226,593	$	213,023	$	8,028	$	221,051
Operations and maintenance expense		73,013		6,799		79,812		72,373		6,146		78,519
Depreciation		34,025		(144)		33,881		31,890		91		31,981
Operating income (loss)		100,563		(2,764)		97,799		93,828		1,244		95,072
Interest expense, net		19,167		1,001		20,168		18,169		1,070		19,239
Allowance for funds used during construction		2,267		-		2,267		1,708		-		1,708
Income tax expense (benefit)		9,027		(616)		8,411		9,883		(299)		9,584
Net income (loss)		74,681		(1,511)		73,170		67,654		(225)		67,429
	Nine Months Ended						Nine Months Ended
	September 30, 2016						September 30, 2015
	Regulated		Other		Consolidated		Regulated		Other		Consolidated
Operating revenues	$	606,323	$	16,753	$	623,076	$	590,519	$	26,618	$	617,137
Operations and maintenance expense		210,014		17,333		227,347		210,639		20,815		231,454
Depreciation		98,445		(800)		97,645		93,276		254		93,530
Operating income (loss)		255,431		(1,808)		253,623		243,101		3,384		246,485
Interest expense, net		57,061		3,075		60,136		54,015		2,789		56,804
Allowance for funds used during construction		6,446		-		6,446		3,930		-		3,930
Income tax expense (benefit)		18,610		(1,677)		16,933		19,679		(582)		19,097
Net income (loss)		186,579		(2,046)		184,533		173,670		(314)		173,356
Capital expenditures		269,046		973		270,019		256,924		554		257,478

	September 30,		December 31,
	2016		2015
Total assets:
Regulated	$	5,853,618	$	5,541,335
Other		182,407		176,538
Consolidated	$	6,036,025	$	5,717,873

XML

Commitments And Contingencies

9 Months Ended

Sep. 30, 2016

Commitments And Contingencies [Abstract]

Commitments And Contingencies

Note 13 – Commitments and Contingencies

The Company is routinely involved in various disputes, claims, lawsuits and other regulatory and legal matters, including both asserted and unasserted legal claims, in the ordinary course of business.  The status of each such matter, referred to herein as a loss contingency, is reviewed and assessed in accordance with applicable accounting rules regarding the nature of the matter, the likelihood that a loss will be incurred, and the amounts involved.  As of September 30, 2016, the aggregate amount of $14,804 is accrued for loss contingencies and is reported in the Company’s consolidated balance sheet as other accrued liabilities and other liabilities.  These accruals represent management’s best estimate of probable loss (as defined in the accounting guidance) for loss contingencies or the low end of a range of losses if no single probable loss can be estimated.  For some loss contingencies, the Company is unable to estimate the amount of the probable loss or range of probable losses.  While the final outcome of these loss contingencies cannot be predicted with certainty, and unfavorable outcomes could negatively impact the Company, at this time in the opinion of management, the final resolution of these matters are not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.  Further, the Company has insurance coverage for certain of these loss contingencies, and as of September 30, 2016, estimates that approximately $1,366 of the amount accrued for these matters are probable of recovery through insurance, which amount is also reported in the Company’s consolidated balance sheet as deferred charges and other assets, net.

In addition to the aforementioned loss contingencies, the Company self-insures its employee medical benefit program, and maintains stop-loss coverage to limit the exposure arising from these claims.  The Company’s reserve for these claims totaled $1,770 at September 30, 2016 and represents a reserve for unpaid claim costs, including an estimate for the cost of incurred but not reported claims.  

XML

Income Taxes

9 Months Ended

Sep. 30, 2016

Income Taxes [Abstract]

Income Taxes

Note 14 – Income Taxes

During the nine months ended September 30, 2016, the Company utilized $45,412 of its Federal net operating loss (“NOL”) carryforward.  In addition, during the nine months ended September 30, 2016, the Company’s state NOL carryforward increased by$298.  As of September 30, 2016, the balance of the Company’s Federal NOL was $112,864.  The Company believes its Federal NOL carryforward is more likely than not to be recovered and requires no valuation allowance.  As of September 30, 2016, the balance of the Company’s gross state NOL was $563,999, a portion of which is offset by a valuation allowance because the Company does not believe the NOLs are more likely than not to be realized.  The Company’s Federal and state NOL carryforwards begin to expire in 2032 and 2023, respectively.The Company’s Federal and state NOL carryforwards are reduced by an unrecognized tax position, on a gross basis, of $64,424 and $89,364, respectively.  The amounts of the Company’s Federal and state NOL carryforwards prior to being reduced by the unrecognized tax positions were $177,288 and $653,364 respectively.  The Company records its unrecognized tax benefit as a reduction to its deferred income tax liability. 

In accordance with a 2012 settlement agreement with the Pennsylvania Public Utility Commission, Aqua Pennsylvania expenses, for tax purposes, qualifying utility asset improvement costs, which results in a substantial reduction in income tax expense and greater net income and cash flows.  The Company’s effective income tax rate for the third quarter of 2016 and 2015 was 10.3% and 12.4%, respectively, and for the first nine months of 2016 and 2015 was 8.4% and 9.9%, respectively. 

As of September 30, 2016, the total gross unrecognized tax benefit was $28,735, of which $20,673, if recognized, would affect the Company’s effective tax rate as a result of the regulatory treatment afforded for qualifying infrastructure improvements in Pennsylvania.  At December 31, 2015, the Company had unrecognized tax benefits of $28,016. 

Accounting rules for uncertain tax positions specify that tax positions for which the timing of resolution is uncertain should be classified as long-term liabilities.  Judgment is required in evaluating the Company’s uncertain tax positions and determining the provision for income taxes.  Management believes that an adequate provision has been made for any adjustments that may result from tax examinations.  Although the timing of income tax audit resolutions and negotiations with taxing authorities is highly uncertain, the Company does not anticipate a significant change to the total amount of unrecognized income tax benefits within the next 12 months.

XML

Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2016

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

Note 15 – Recent Accounting Pronouncements

In August 2016, the FASB issued updated accounting guidance on the classification of certain cash receipts and cash payments in the statement of cash flows, which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows.  This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted.  The Company is currently evaluating the impact of this new standard on its consolidated cash flow statement. 

In March 2016, the FASB issued updated accounting guidance on simplifying the accounting for share-based payments, which includes several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.   The updated guidance is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption available.  The Company has evaluated the requirements of the updated guidance and has determined that upon adoption, on January 1, 2017, the Company will recognize a previously unrecognized windfall tax benefit for stock-based compensation of $2,805  ($1,823 after-tax), associated with the Company’s 2012 Federal net operating loss, which will be recorded as an adjustment to retained earnings.  Additionally, once adopted, income tax benefits in excess of compensation costs or tax deficiencies for share-based compensation will be recorded to our income tax provision, instead of historically to stockholder’s equity, which will impact our effective tax rate.  Lastly, all tax-related cash flows resulting from share-based payments will be reported as operating activities on the statement of cash flows, a change from the historical requirement to present tax benefits as an inflow from financing activities and an outflow from operating activities.     

In February 2016, the FASB issued updated accounting guidance on accounting for leases, which requires lessees to establish a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months.  For income statement purposes, leases will be classified as either operating or finance.  Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern.  The updated accounting guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption available.  The Company is evaluating the requirements of the updated guidance to determine the impact of adoption.

In September 2015, the FASB issued updated accounting guidance on simplifying measurement-period adjustment in business combinations, which eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively.  Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment.  The Company adopted the provisions of this accounting standard, as required on January 1, 2016, and it did not have an impact on its results of operations or financial position.  

In April 2015, the FASB issued updated accounting guidance on simplifying the presentation of debt issuance costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability.  Previously, debt issuance costs were presented in the balance sheet as a deferred charge.    The Company adopted the provisions of this accounting standard as required on January 1, 2016. The adoption of this standard was applied retrospectively and resulted in the reclassification of $23,165 from deferred charges and other assets, net to debt issuance costs, which is reported as a reduction to long-term debt,in the December 31, 2015 consolidated balance sheet.  

In August 2014, the FASB issued an accounting standard that will require management to assess an entity’s ability to continue as a going concern for each annual and interim reporting period and to provide related footnote disclosures in circumstances in which substantial doubt exists.  The accounting standard is effective in the first annual reporting period ending after December 15, 2016.  The Company does not expect the provisions of this accounting standard to have an impact on its results of operations or financial position.

In May 2014, the FASB issued updated accounting guidance on recognizing revenue from contracts with customers, which outlines a single comprehensive model that an entity will apply to determine the measurement of revenue and timing of when it is recognized.  The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services.  The updated guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract.  In July 2015, the FASB approved a one year deferral to the original effective date of this guidance.  The updated guidance is effective for reporting periods beginning after December 15, 2017, and will be applied retrospectively.  The Company is evaluating the requirements of the updated guidance to determine the impact of adoption.   

XML

Goodwill (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill [Abstract]

Schedule Of Goodwill

	Regulated
	Segment		Other		Consolidated
Balance at December 31, 2015	$	27,246	$	6,620	$	33,866
Goodwill acquired		10,095		-		10,095
Reclassification to utility plant acquisition adjustment		(82)		-		(82)
Disposition		-		(996)		(996)
Classified as assets held for sale		-		(803)		(803)
Other		(159)		-		(159)
Balance at September 30, 2016	$	37,100	$	4,821	$	41,921

XML

Fair Value Of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Of Financial Instruments [Abstract]

Schedule Of Carrying Amounts And Estimated Fair Values Of Long-Term Debt

	September 30,		December 31,
	2016		2015
Carrying Amount	$	1,832,466	$	1,779,205
Estimated Fair Value		2,130,383		1,905,393

XML

Net Income Per Common Share (Tables)

9 Months Ended

Sep. 30, 2016

Net Income Per Common Share [Abstract]

Schedule Of Earnings Per Share

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2016	2015	2016	2015
Average common shares outstanding during the period for basic computation	177,336	176,704	177,243	176,891
Dilutive effect of employee stock-based compensation	481	791	538	779
Average common shares outstanding during the period for diluted computation	177,817	177,495	177,781	177,670

XML

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary Of PSU Transactions

	Number	Weighted
	of	Average
	Share Units	Fair Value
Nonvested share units at December 31, 2015	424,858	$	25.78
Granted	152,533		28.89
Performance criteria adjustment	37,551		26.18
Forfeited	(17,661)		26.79
Share units vested in prior period and issued in current period	44,625		26.88
Share units issued	(189,885)		23.25
Nonvested share units at September 30, 2016	452,021	$	27.99

Summary Of RSU Transactions

	Number	Weighted
	of	Average
	Stock Units	Fair Value
Nonvested stock units at December 31, 2015	88,353	$	24.94
Granted	50,324		32.09
Stock units vested and issued	(24,318)		23.37
Forfeited	(3,952)		27.81
Nonvested stock units at September 30, 2016	110,407	$	28.44

Summary Of Stock Option Transactions

1
		Weighted		Weighted
		Average		Average	Aggregate
		Exercise		Remaining	Intrinsic
	Shares	Price		Life (years)	Value
Outstanding at December 31, 2015	659,533	$	16.62
Forfeited	-		-
Expired / Cancelled	(3,436)		16.15
Exercised	(204,014)		18.80
Outstanding and exercisable at September 30, 2016	452,083	$	15.64	2.1	$	6,709

Performance Share Units [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary Of Compensation Costs

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Stock-based compensation within operations and maintenance expenses	$	1,012	$	836	$	2,504	$	3,475
Income tax benefit		411		339		1,013		1,414

Restricted Stock Units [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary Of Compensation Costs

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Stock-based compensation within operations and maintenance expenses	$	299	$	209	$	763	$	888
Income tax benefit		124		86		315		367

Stock Options [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary Of Compensation Costs

	Three Months Ended				Nine Months Ended
	September 30,					September 30,
	2016		2015		2016		2015
Income tax benefit	$	15	$	28	$	249	$	143

Stock Compensation Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary Of Compensation Costs

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Stock-based compensation within operations and maintenance expenses	$	131	$	-	$	375	$	365
Income tax benefit		54		-		155		151

Summary Of Nonvested Share Activity

	Number	Weighted
	of	Average
	Stock Awards	Fair Value
Nonvested stock awards at December 31, 2015	-	$	-
Granted	11,509		32.57
Vested	(11,509)		32.57
Nonvested stock awards at September 30, 2016	-	$	-

XML

Pension Plans And Other Postretirement Benefits (Tables)

9 Months Ended

Sep. 30, 2016

Pension Plans And Other Postretirement Benefits [Abstract]

Components Of Net Periodic Benefit Costs

	Pension Benefits
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Service cost	$	784	$	750	$	2,394	$	2,600
Interest cost		3,251		3,255		9,787		9,699
Expected return on plan assets		(4,215)		(4,677)		(12,696)		(14,025)
Amortization of prior service cost		145		44		435		130
Amortization of actuarial loss		1,797		1,465		5,354		4,529
Settlement charge		-		-		3,028		-
Special termination benefit charge		-		-		302		-
Net periodic benefit cost	$	1,762	$	837	$	8,604	$	2,933
	Other
	Postretirement Benefits
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	2016		2015		2016		2015
Service cost	$	253	$	273	$	761	$	952
Interest cost		726		681		2,202		2,120
Expected return on plan assets		(645)		(731)		(2,001)		(2,192)
Amortization of prior service cost		(137)		(211)		(411)		(476)
Amortization of actuarial loss		220		309		707		972
Net periodic benefit cost	$	417	$	321	$	1,258	$	1,376

XML

Taxes Other Than Income Taxes (Tables)

9 Months Ended

Sep. 30, 2016

Taxes Other Than Income Taxes [Abstract]

Components Of Taxes Other Than Income Taxes

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Property	$	7,007	$	6,945	$	20,119	$	20,776
Capital stock		430		538		1,287		1,619
Gross receipts, excise and franchise		2,979		2,859		8,181		7,855
Payroll		2,140		2,072		7,775		7,425
Regulatory assessments		639		693		1,991		2,033
Other		1,517		1,556		3,741		3,371
Total taxes other than income	$	14,712	$	14,663	$	43,094	$	43,079

XML

Segment Information (Tables)

9 Months Ended

Sep. 30, 2016

Segment Information [Abstract]

Company's Segment Information, Continuing Operations

	Three Months Ended						Three Months Ended
	September 30, 2016						September 30, 2015
	Regulated		Other		Consolidated		Regulated		Other		Consolidated
Operating revenues	$	222,231	$	4,362	$	226,593	$	213,023	$	8,028	$	221,051
Operations and maintenance expense		73,013		6,799		79,812		72,373		6,146		78,519
Depreciation		34,025		(144)		33,881		31,890		91		31,981
Operating income (loss)		100,563		(2,764)		97,799		93,828		1,244		95,072
Interest expense, net		19,167		1,001		20,168		18,169		1,070		19,239
Allowance for funds used during construction		2,267		-		2,267		1,708		-		1,708
Income tax expense (benefit)		9,027		(616)		8,411		9,883		(299)		9,584
Net income (loss)		74,681		(1,511)		73,170		67,654		(225)		67,429
	Nine Months Ended						Nine Months Ended
	September 30, 2016						September 30, 2015
	Regulated		Other		Consolidated		Regulated		Other		Consolidated
Operating revenues	$	606,323	$	16,753	$	623,076	$	590,519	$	26,618	$	617,137
Operations and maintenance expense		210,014		17,333		227,347		210,639		20,815		231,454
Depreciation		98,445		(800)		97,645		93,276		254		93,530
Operating income (loss)		255,431		(1,808)		253,623		243,101		3,384		246,485
Interest expense, net		57,061		3,075		60,136		54,015		2,789		56,804
Allowance for funds used during construction		6,446		-		6,446		3,930		-		3,930
Income tax expense (benefit)		18,610		(1,677)		16,933		19,679		(582)		19,097
Net income (loss)		186,579		(2,046)		184,533		173,670		(314)		173,356
Capital expenditures		269,046		973		270,019		256,924		554		257,478

Company's Segment Information, Assets

	September 30,		December 31,
	2016		2015
Total assets:
Regulated	$	5,853,618	$	5,541,335
Other		182,407		176,538
Consolidated	$	6,036,025	$	5,717,873

XML

Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Goodwill [Line Items]
Balance	$ 33,866
Goodwill acquired	10,095
Reclassification to utility plant acquisition adjustment	(82)
Disposition	(996)
Classified as assets held for sale	(803)
Other	(159)
Balance	41,921
Regulated [Member]
Goodwill [Line Items]
Balance	27,246
Goodwill acquired	10,095
Reclassification to utility plant acquisition adjustment	(82)
Other	(159)
Balance	37,100
Other [Member]
Goodwill [Line Items]
Balance	6,620
Goodwill acquired
Reclassification to utility plant acquisition adjustment
Disposition	(996)
Classified as assets held for sale	(803)
Other
Balance	$ 4,821

XML

Acquisitions (Details) $ in Thousands	1 Months Ended		9 Months Ended	12 Months Ended
	Jan. 31, 2016 USD ($) customer shares	Apr. 30, 2015 USD ($) customer	Sep. 30, 2016 USD ($) item	Dec. 31, 2015 USD ($) item
Business Acquisition [Line Items]
Goodwill			$ 41,921	$ 33,866
North Main Utilities [Member]
Business Acquisition [Line Items]
Number of customers | customer		7,400
Cash Paid		$ 23,079
Superior Water Company, Inc. [Member]
Business Acquisition [Line Items]
Number of customers | customer	3,900
Total purchase price	$ 16,750
Shares issued for acquisition | shares	439,943
Cash Paid	$ 3,905
Acquired property, plant and equipment			25,167
Contributions in aid of construction			16,565
Goodwill	$ 8,622
Wastewater Utility Systems In Various States [Member]
Business Acquisition [Line Items]
Cash Paid			1,721	$ 5,210
Goodwill			$ 1,473
Number of acquisitions | item			9	14

XML

Assets Held For Sale (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2016	Sep. 30, 2016	Sep. 30, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on sale of business unit		$ 1,824
Aqua Resources [Member] | Disposal Group, Not Discontinued Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration for sale of business unit	$ 3,400
Gain on sale of business unit	$ 537

XML

Capitalization (Details)	1 Months Ended
	Feb. 29, 2016 USD ($)
Unsecured Revolving Credit Facility Due March 2017 [Member]
Debt Instrument [Line Items]
Face Amount	$ 200,000,000
Maturity Year	2017-03
Unsecured Revolving Credit Facility Due February 2021 [Member]
Debt Instrument [Line Items]
Face Amount	$ 250,000,000
Maturity Year	2021-02

XML

Fair Value Of Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Fair Value Of Financial Instruments [Abstract]
Loans payable	$ 47,990	$ 16,721
Cash and cash equivalents	3,712	3,229	$ 4,071	$ 4,138
Customers' advances for construction	$ 93,023	$ 86,934

XML

Fair Value Of Financial Instruments (Schedule Of Carrying Amounts And Estimated Fair Values Of Long-Term Debt) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	$ 1,832,466	$ 1,779,205
Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	$ 2,130,383	$ 1,905,393

XML

Net Income Per Common Share (Schedule Of Earnings Per Share) (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net Income Per Common Share [Abstract]
Average common shares outstanding during the period for basic computation	177,336	176,704	177,243	176,891
Dilutive effect of employee stock-based compensation	481	791	538	779
Average common shares outstanding during the period for diluted computation	177,817	177,495	177,781	177,670

XML

Stock-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	225,712
Share Based Compensation	$ 3,642	$ 4,728
2004 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for issuance	0
2009 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for issuance	6,250,000
Maximum number of shares may be issued pursuant to stock awards, stock units and other stock-based awards	3,125,000
Maximum number of shares subject to grants to any one individual in any one year	500,000
Underlying stock option and restricted stock awards available for grant	3,982,401
Performance Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period, in years	3 years
Weighted average fair value of stock awards granted	$ 28.89	$ 26.45
Amortization period of fair value of shares, in months	36 months
Granted	152,533
Performance Share Units [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of target award amount the grantee may earn	0.00%
Performance Share Units [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of target award amount the grantee may earn	200.00%
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted period	3 years
Weighted average fair value of stock awards granted	$ 32.09	$ 25.97
Granted	50,324
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	0	0
Stock Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average fair value of stock awards granted	$ 32.570	$ 26.44
Granted	11,509

XML

Stock-Based Compensation (Summary Of PSU Transactions) (Details) - $ / shares	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Number of Share Units	225,712
Performance Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested stock units at beginning of period, Number of Share Units	424,858
Granted, Number of Share Units	152,533
Performance criteria adjustment, Number of Share Units	37,551
Forfeited, Number of Share Units	(17,661)
Share units vested in prior period and issued in current period, Number of Share Units	44,625
Share unit awards issued, Number of Share Units	(189,885)
Nonvested stock units at end of period, Number of Share Units	452,021
Nonvested stock units at beginning of period, Weighted Average Fair Value	$ 25.78
Granted, Weighted Average Fair Value	28.89	$ 26.45
Performance criteria adjustment, Weighted Average Fair Value	26.18
Forfeited, Weighted Average Fair Value	26.79
Stock units vested and issued, Weighted Average Fair Value	26.88
Share unit awards issued, Weighted Average Fair Value	23.25
Nonvested stock units at end of period, Weighted Average Fair Value	$ 27.99

XML

Stock-Based Compensation (Summary Of RSU Transactions) (Details) - $ / shares	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Number of Share Units	225,712
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested stock units at beginning of period, Number of Share Units	88,353
Granted, Number of Share Units	50,324
Stock units vested and issued, Number of Share Units	(24,318)
Forfeited, Number of Share Units	(3,952)
Nonvested stock units at end of period, Number of Share Units	110,407
Nonvested stock units at beginning of period, Weighted Average Fair Value	$ 24.94
Granted, Weighted Average Fair Value	32.09	$ 25.97
Stock units vested and issued, Weighted Average Fair Value	23.37
Forfeited, Weighted Average Fair Value	27.81
Nonvested stock units at end of period, Weighted Average Fair Value	$ 28.44

XML

Stock-Based Compensation (Summary Of Compensation Costs) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation within operations and maintenance expense			$ 0	$ 0
Income tax benefit	$ 15,000	$ 28,000	249,000	143,000
Performance Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation within operations and maintenance expense	1,012,000	836,000	2,504,000	3,475,000
Income tax benefit	411,000	339,000	1,013,000	1,414,000
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation within operations and maintenance expense	299,000	209,000	763,000	888,000
Income tax benefit	124,000	$ 86,000	315,000	367,000
Stock Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation within operations and maintenance expense	131,000		375,000	365,000
Income tax benefit	$ 54,000		$ 155,000	$ 151,000

XML

Stock-Based Compensation (Summary Of Stock Option Transactions) (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercised, Shares	(204,014)
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at beginning of period, Shares	659,533
Forfeited, Shares
Expired / Canelled, Shares	(3,436)
Exercised, Shares	(204,014)
Outstanding at end of period, Shares	452,083
Outstanding at beginning of period, Weighted Average Exercise Price | $ / shares	$ 16.62
Forfeited, Weighted Average Exercise Price | $ / shares
Expired / Canelled, Weighted Average Exercise Price | $ / shares	16.15
Exercised, Weighted Average Exercise Price | $ / shares	18.80
Outstanding at end of period, Weighted Average Exercise Price | $ / shares	$ 15.64
Outstanding at end of period, Weighted Average Remaining Life (years)	2 years 1 month 6 days
Outstanding at end of period, Aggregate Intrinsic Value | $	$ 6,709

XML

Stock-Based Compensation (Summary Of Nonvested Share Activity – Restricted Stock) (Details) - $ / shares	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Number of Share Units	225,712
Stock Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested stock units at beginning of period, Number of Share Units
Granted, Number of Share Units	11,509
Stock units vested and issued, Number of Share Units	(11,509)
Nonvested stock units at end of period, Number of Share Units
Nonvested stock units at beginning of period, Weighted Average Fair Value
Granted, Weighted Average Fair Value	32.570	$ 26.44
Stock units vested and issued, Weighted Average Fair Value	32.570
Nonvested stock units at end of period, Weighted Average Fair Value

XML

Pension Plans And Other Postretirement Benefits (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Cash contributions made by the Company	$ 8,145

XML

Pension Plans And Other Postretirement Benefits (Components Of Net Periodic Benefit Costs) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 784	$ 750	$ 2,394	$ 2,600
Interest cost	3,251	3,255	9,787	9,699
Expected return on plan assets	(4,215)	(4,677)	(12,696)	(14,025)
Amortization of prior service cost	145	44	435	130
Amortization of actuarial loss	1,797	1,465	5,354	4,529
Settlement charge			3,028
Special termination benefit charge			302
Net periodic benefit cost	1,762	837	8,604	2,933
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	253	273	761	952
Interest cost	726	681	2,202	2,120
Expected return on plan assets	(645)	(731)	(2,001)	(2,192)
Amortization of prior service cost	(137)	(211)	(411)	(476)
Amortization of actuarial loss	220	309	707	972
Net periodic benefit cost	$ 417	$ 321	$ 1,258	$ 1,376

XML

Water And Wastewater Rates (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Ohio, Texas, Virginia, And New Jersey [Member]
Water And Wastewater Rates [Line Items]
Base rate increase designed to increase total operating revenues on an annual basis	$ 3,434
Illinois, Pennsylvania, and North Carolina [Member]
Water And Wastewater Rates [Line Items]
Infrastructure rehabilitation surcharges	$ 2,062

XML

Taxes Other Than Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Taxes Other Than Income [Line Items]
Total taxes other than income	$ 14,712	$ 14,663	$ 43,094	$ 43,079
Property [Member]
Taxes Other Than Income [Line Items]
Total taxes other than income	7,007	6,945	20,119	20,776
Capital Stock [Member]
Taxes Other Than Income [Line Items]
Total taxes other than income	430	538	1,287	1,619
Gross Receipts, Excise And Franchise [Member]
Taxes Other Than Income [Line Items]
Total taxes other than income	2,979	2,859	8,181	7,855
Payroll [Member]
Taxes Other Than Income [Line Items]
Total taxes other than income	2,140	2,072	7,775	7,425
Regulatory Assessments [Member]
Taxes Other Than Income [Line Items]
Total taxes other than income	639	693	1,991	2,033
Other [Member]
Taxes Other Than Income [Line Items]
Total taxes other than income	$ 1,517	$ 1,556	$ 3,741	$ 3,371

XML

Segment Information (Narrative) (Details)	9 Months Ended
	Sep. 30, 2016 segment
Segment Reporting Information [Line Items]
Operating Segments	10
Reportable Segments	1
Reportable Segment [Member]
Segment Reporting Information [Line Items]
Operating Segments	8
Not Quantitatively Significant [Member]
Segment Reporting Information [Line Items]
Operating Segments	2

XML

Segment Information (Company's Segment Information, Continuing Operations) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Segment Reporting Information [Line Items]
Operating revenues	$ 226,593	$ 221,051	$ 623,076	$ 617,137
Operations and maintenance expense	79,812	78,519	227,347	231,454
Depreciation	33,881	31,981	97,645	93,530
Operating income (loss)	97,799	95,072	253,623	246,485
Interest expense, net	20,168	19,239	60,136	56,804
Allowance for funds used during construction	2,267	1,708	6,446	3,930
Income tax expense (benefit)	8,411	9,584	16,933	19,097
Net income (loss)	73,170	67,429	184,533	173,356
Capital expenditures			270,019	257,478
Regulated [Member]
Segment Reporting Information [Line Items]
Operating revenues	222,231	213,023	606,323	590,519
Operations and maintenance expense	73,013	72,373	210,014	210,639
Depreciation	34,025	31,890	98,445	93,276
Operating income (loss)	100,563	93,828	255,431	243,101
Interest expense, net	19,167	18,169	57,061	54,015
Allowance for funds used during construction	2,267	1,708	6,446	3,930
Income tax expense (benefit)	9,027	9,883	18,610	19,679
Net income (loss)	74,681	67,654	186,579	173,670
Capital expenditures			269,046	256,924
Other [Member]
Segment Reporting Information [Line Items]
Operating revenues	4,362	8,028	16,753	26,618
Operations and maintenance expense	6,799	6,146	17,333	20,815
Depreciation	(144)	91	(800)	254
Operating income (loss)	(2,764)	1,244	(1,808)	3,384
Interest expense, net	1,001	1,070	3,075	2,789
Allowance for funds used during construction
Income tax expense (benefit)	(616)	(299)	(1,677)	(582)
Net income (loss)	$ (1,511)	$ (225)	(2,046)	(314)
Capital expenditures			$ 973	$ 554

XML

Segment Information (Company's Segment Information, Assets) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Total assets	$ 6,036,025	$ 5,717,873
Other [Member]
Segment Reporting Information [Line Items]
Total assets	182,407	176,538
Regulated [Member]
Segment Reporting Information [Line Items]
Total assets	$ 5,853,618	$ 5,541,335

XML

Commitments And Contingencies (Details) $ in Thousands	Sep. 30, 2016 USD ($)
Commitments And Contingencies [Abstract]
Aggregate amount accrued for loss contingencies	$ 14,804
Amount probable of recovery through insurance	1,366
Insurance reserve for employee medical benefit program	$ 1,770

XML

Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Income Taxes [Line Items]
Unrecognized tax benefits	$ 28,735,000		$ 28,735,000		$ 28,016,000
Effective income tax rate	10.30%	12.40%	8.40%	9.90%
Unrecognized tax benefits that would impact effective tax rate	$ 20,673,000		$ 20,673,000
Federal [Member]
Income Taxes [Line Items]
Change in operating loss carryforward			(45,412,000)
Operating loss carryforwards	112,864,000		112,864,000
Operating loss carryforwards, valuation allowance	0		$ 0
Operating loss carryforwards, expiration beginning dates			Jan. 01, 2032
Unrecognized tax benefits	64,424,000		$ 64,424,000
Deferred tax assets, operating loss carryforwards	177,288,000		177,288,000
State [Member]
Income Taxes [Line Items]
Change in operating loss carryforward			298,000
Operating loss carryforwards	563,999,000		$ 563,999,000
Operating loss carryforwards, expiration beginning dates			Jan. 01, 2023
Unrecognized tax benefits	89,364,000		$ 89,364,000
Deferred tax assets, operating loss carryforwards	$ 653,364,000		$ 653,364,000

XML

Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands	Jan. 01, 2017	Dec. 31, 2015
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reclassification of deferred charges and other assets to debt issuance costs		$ 23,165
Scenario, Forecast [Member] | Adjustments for New Accounting Principle, Early Adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Adjustment to retained earnings, before tax	$ 2,805
Adjustment to retained earnings, after tax	$ 1,823