Segment Information

6 Months Ended

Jun. 30, 2022

Segment Information [Abstract]

Segment Information

Note 12 – Segment Information 

The Company has twelve operating segments and two reportable segments. The Regulated Water segment is comprised of eight operating segments representing its water and wastewater regulated utility companies, which are organized by the states where the Company provides water and wastewater services. The eight water and wastewater utility operating segments are aggregated into one reportable segment, because each of these operating segments has the following similarities: economic characteristics, nature of services, production processes, customers, water distribution or wastewater collection methods, and the nature of the regulatory environment. The Regulated Natural Gas segment is comprised of one operating segment representing natural gas utility companies, acquired in the Peoples Gas Acquisition, for which the Company provides natural gas distribution services.

In addition to the Company’s two reportable segments, we include three of our operating segments within the Other category below. These segments are not quantitatively significant and are comprised of our non-regulated natural gas operations, Aqua Infrastructure, and Aqua Resources. Our non-regulated natural gas operations consist of utility service line protection solutions and repair services to households and the operation of gas marketing and production entities. Prior to the October 30, 2020 sale of our investment in joint venture, Aqua Infrastructure provided non-utility raw water supply services for firms in the natural gas drilling industry. Aqua Resources offers, through a third party, water and sewer service line protection solutions and repair services to households. In addition to these segments, Other is comprised of business activities not included in the reportable segments, corporate costs that have not been allocated to the Regulated Water and Regulated Natural Gas segments, and intersegment eliminations. Corporate costs include general and administrative expenses, and interest expense. The Company reports these corporate costs within Other as they relate to corporate-focused responsibilities and decisions and are not included in internal measures of segment operating performance used by the Company to measure the underlying performance of the operating segments. The Regulated Water and Regulated Natural Gas segments report interest expense that includes long-term debt that was pushed-down to the regulated operating subsidiaries from Essential Utilities, Inc.

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

	Three Months Ended								Three Months Ended
	June 30, 2022								June 30, 2021
	Regulated Water		Regulated Natural Gas		Other		Consolidated		Regulated Water		Regulated Natural Gas		Other		Consolidated
Operating revenues	$	269,355	$	167,729	$	11,672	$	448,756	$	248,177	$	141,562	$	7,293	$	397,032
Operations and maintenance expense		92,815		44,907		(2,741)		134,981		77,801		52,334		(2,620)		127,515
Purchased gas		-		63,392		11,751		75,143		-		39,788		5,109		44,897
Depreciation and amortization		50,260		29,131		(215)		79,176		45,546		28,121		505		74,172
Taxes other than income taxes		15,562		5,614		544		21,720		16,044		4,638		438		21,120
Operating income		110,718		24,685		2,333		137,736		108,786		16,681		3,861		129,328
Interest expense, net (a)		27,604		19,171		7,622		54,397		27,122		20,422		4,154		51,698
Allowance for funds used during construction		(5,347)		(804)		-		(6,151)		(4,438)		(468)		-		(4,906)
Other		(1,728)		10		817		(901)		(1,940)		(439)		215		(2,164)
Income before income taxes		90,189		6,308		(6,106)		90,391		88,042		(2,834)		(508)		84,700
Provision for income taxes (benefit)		13,847		(5,170)		(577)		8,100		9,193		(4,739)		(668)		3,786
Net income (loss)	$	76,342	$	11,478	$	(5,529)	$	82,291	$	78,849	$	1,905	$	160	$	80,914
	Six Months Ended								Six Months Ended
	June 30, 2022								June 30, 2021
	Regulated Water		Regulated Natural Gas		Other		Consolidated		Regulated Water		Regulated Natural Gas		Other		Consolidated
Operating revenues	$	508,553	$	612,912	$	26,566	$	1,148,031	$	476,530	$	484,677	$	19,390	$	980,597
Operations and maintenance expense		178,903		104,359		(5,700)		277,562		156,148		103,660		(7,218)		252,590
Purchased gas		-		280,698		22,157		302,855		-		162,676		14,374		177,050
Depreciation and amortization		98,976		58,835		(289)		157,522		90,684		55,711		721		147,116
Taxes other than income taxes		31,453		11,805		1,469		44,727		31,465		9,085		1,611		42,161
Operating income (loss)		199,221		157,215		8,929		365,365		198,233		153,545		9,902		361,680
Interest expense, net		55,159		39,823		12,442		107,424		53,582		37,719		10,779		102,080
Allowance for funds used during construction		(10,496)		(1,493)		(1)		(11,990)		(7,685)		(155)		-		(7,840)
Other		(3,673)		(434)		1,504		(2,603)		(3,369)		(867)		(1,479)		(5,715)
Income before income taxes		158,231		119,319		(5,016)		272,534		155,705		116,848		602		273,155
Provision for income taxes (benefit)		21,346		(31,645)		1,166		(9,133)		12,826		(4,307)		33		8,552
Net income (loss)	$	136,885	$	150,964	$	(6,182)	$	281,667	$	142,879	$	121,155	$	569	$	264,603
Capital expenditures	$	216,612	$	207,394	$	639	$	424,645	$	247,911	$	156,252	$	394	$	404,557

^(a) The regulated water and regulated natural gas segments report interest expense that includes long-term debt that was pushed-down to the regulated operating subsidiaries from Essential Utilities, Inc.

	June 30,		December 31,
	2022		2021
Total assets:
Regulated water	$	8,645,314	$	8,403,586
Regulated natural gas		6,121,964		5,960,602
Other		278,886		294,090
Consolidated	$	15,046,164	$	14,658,278