Schedule 1 - Condensed Parent Company Financial Statements

12 Months Ended

Dec. 31, 2019

Condensed Financial Statements, Captions [Line Items]

Schedule I - Condensed Financial Information Of Parent Company


	December 31,
		2019		2018
Assets
Current assets:
Cash and cash equivalents	$	1,864,993	$	-
Accounts receivable, net		442		38
Accounts receivable - affiliates		134,779		104,494
Prepayments and other current assets		4,661		14,321
Total current assets		2,004,875		118,853

Deferred charges and other assets, net		33,627		29,247
Notes receivable - affiliates		411,985		369,740
Deferred income tax asset		32,925		35,696
Investment in subsidiaries		2,697,504		2,510,120
Total assets	$	5,180,916	$	3,063,656
Liabilities and Equity
Stockholders' equity	$	3,880,860	$	2,009,364

Long-term debt, excluding current portion, net of debt issuance costs		1,081,507		758,206

Current liabilities:
Current portion of long-term debt		38,854		50,000
Accrued interest		7,054		3,236
Accounts payable - affiliates		32,350		39,879
Interest rate swap agreements		-		59,779
Other accrued liabilities		10,632		11,582
Total current liabilities		88,890		164,476

Other liabilities		129,659		131,610
Total liabilities and equity	$	5,180,916	$	3,063,656

The accompanying condensed notes are an integral part of these condensed financial statements.


	Years ended December 31,
		2019		2018		2017
Other income	$	1,596	$	894	$	1,629
Operating expense and other expenses		23,760		19,728		53
Operating (loss) income		(22,164)		(18,834)		1,576
Interest expense		45,759		9,426		5,211
Interest income		(25,327)		(5)		-
Change in fair value of interest rate swap agreements		23,741		59,779		-
Other (income) expense		(294)		93		(1)
Loss before equity in earnings of subsidiaries and income taxes		(66,043)		(88,127)		(3,634)
Equity in earnings of subsidiaries		276,556		261,700		244,327
Income before income taxes		210,513		173,573		240,693
Provision for income taxes (benefit)		(14,030)		(18,415)		955
Net income	$	224,543	$	191,988	$	239,738

Comprehensive income	$	224,543	$	191,988	$	239,929

Net income per common share:
Basic	$	1.04	$	1.08	$	1.35
Diluted	$	1.04	$	1.08	$	1.35

Average common shares outstanding during the period:
Basic		215,550		177,904		177,612
Diluted		215,931		178,399		178,175

The accompanying condensed notes are an integral part of these condensed financial statements.


	Years ended December 31,
		2019		2018		2017
Net cash flows (used in) from operating activities	$	(54,496)	$	(12,930)	$	98,821
Cash flows from investing activities:
Acquisitions of utility systems and other, net		(6,385)		(103,364)		(220)
Decrease (increase) in investment of subsidiary		6,068		(13,258)		20,021
Other		235		241		1,811
Net cash flows (used in) from investing activities		(82)		(116,381)		21,612
Cash flows from financing activities:
Proceeds from long-term debt		1,009,992		1,107,600		286,969
Repayments of long-term debt		(821,226)		(830,900)		(268,050)
Extinguishment of long-term debt		(25,237)		-		-
Proceeds from stock issued to finance pending acquisition		1,263,099		-		-
Proceeds from equity unit issuance		673,642		-		-
Proceeds from issuing common stock		8,959		5,163		1,453
Proceeds from exercised stock options		1,898		1,459		2,873
Repurchase of common stock		(1,867)		(2,555)		(2,167)
Dividends paid on common stock		(188,512)		(150,736)		(140,660)
Other		(1,177)		(720)		(851)
Net cash flows from (used in) financing activities		1,919,571		129,311		(120,433)
Net change in cash and cash equivalents		1,864,993		-		-
Cash and cash equivalents at beginning of year		-		-		-
Cash and cash equivalents at end of year	$	1,864,993	$	-	$	-

See Note 1 - Basis of Presentation

The accompanying condensed notes are an integral part of these condensed financial statements.

Note 1 – Basis of Presentation – The accompanying condensed financial statements of Essential Utilities, Inc. (the “Parent”) should be read in conjunction with the consolidated financial statements and notes thereto of Essential Utilities, Inc. and subsidiaries (collectively, the “Registrant”) included in Part II, Item 8 of the Annual Report. The Parent’s significant accounting policies are consistent with those of the Registrant.

The Parent borrows from third parties and provides funds to its subsidiaries, in support of their operations. Amounts owed to the Parent for borrowings under this facility are reflected as inter-company receivables on the condensed balance sheets. The interest rate charged to the subsidiaries is sufficient to cover the Parent’s interest costs under its associated borrowings.

As of December 31, 2019 and 2018, the Parent had a current accounts receivable – affiliates balance of $134,779 and $104,494. As of December 31, 2019 and 2018, the Parent had a notes receivable – affiliates balance of $411,985 and $369,740. The changes in these balances represent non-cash adjustments that are recorded through the Parent’s investment in subsidiaries.

In the ordinary course of business, the Parent indemnifies a third-party for surety bonds issued on behalf of subsidiary companies, guarantees the performance of one of its regulated utilities in a jurisdiction that requires such guarantees, and guarantees several projects associated with the treatment of water in a jurisdiction.

Note 2 – Dividends from subsidiaries – Dividends in the amount of $101,625, $81,250, and $51,100 were paid to the Parent by its wholly-owned subsidiaries during the years ended December 31, 2019, 2018, and 2017, respectively.

Note 3 – Long-term debt – the Parent has long-term debt under unsecured note purchase agreements with investors in addition to its $550,000 revolving credit agreement. Excluding amounts due under the revolving credit agreement, the debt maturities of the Parent’s long-term debt are as follows:


Year		Debt Maturity
2020	$	38,854
2021		38,564
2022		21,938
2023		-
2024		-
Thereafter		1,025,000