Segment Information

12 Months Ended

Dec. 31, 2022

Segment Information [Abstract]

Segment Information

Note 18 – Segment Information

The Company has identified twelve operating segments and has two reportable segments, the Regulated Water segment and the Regulated Natural Gas segment. 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. The operating results of Peoples are included in the consolidated financial statements for the period since the completion of its acquisition on March 16, 2020.

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

2022		Regulated Water		Regulated Natural Gas		Other and Eliminations		Consolidated
Operating revenues	$	1,082,972	$	1,143,362	$	61,698	$	2,288,032
Operations and maintenance expense	$	370,850	$	239,506	$	3,293	$	613,649
Purchased gas	$	-	$	551,009	$	50,986	$	601,995
Depreciation and amortization	$	201,392	$	118,955	$	830	$	321,177
Interest expense, net (b)	$	111,938	$	87,186	$	35,317	$	234,441
Allowance for funds used during construction	$	(20,950)	$	(2,715)	$	-	$	(23,665)
Provision for income taxes (benefit)	$	47,510	$	(61,942)	$	103	$	(14,329)
Net income (loss)	$	314,352	$	185,276	$	(34,391)	$	465,237
Capital expenditures	$	576,314	$	479,335	$	7,114	$	1,062,763
Total assets	$	8,792,633	$	6,528,654	$	397,820	$	15,719,107

2021		Regulated Water		Regulated Natural Gas		Other and Eliminations		Consolidated
Operating revenues	$	980,203	$	859,902	$	38,039	$	1,878,144
Operations and maintenance expense	$	332,598	$	226,194	$	(8,212)	$	550,580
Purchased gas	$	-	$	313,390	$	26,872	$	340,262
Depreciation and amortization	$	182,074	$	113,238	$	2,640	$	297,952
Interest expense, net (b)	$	108,356	$	75,628	$	21,341	$	205,325
Allowance for funds used during construction	$	(19,258)	$	(1,534)	$	-	$	(20,792)
Provision for income taxes (benefit)	$	26,633	$	(40,013)	$	3,768	$	(9,612)
Net income (loss)	$	293,703	$	148,193	$	(10,284)	$	431,612
Capital expenditures	$	621,595	$	397,419	$	1,505	$	1,020,519
Total assets	$	8,403,586	$	5,960,602	$	294,090	$	14,658,278

2020 (a)		Regulated Water		Regulated Natural Gas		Other and Eliminations		Consolidated
Operating revenues	$	938,540	$	506,564	$	17,594	$	1,462,698
Operations and maintenance expense	$	309,608	$	198,383	$	20,620	$	528,611
Purchased gas	$	-	$	154,103	$	11,642	$	165,745
Depreciation and amortization	$	171,152	$	84,201	$	1,706	$	257,059
Interest expense, net (b)	$	101,810	$	29,016	$	52,246	$	183,072
Allowance for funds used during construction	$	(11,231)	$	(1,456)	$	-	$	(12,687)
Provision for income taxes (benefit)	$	22,481	$	(25,133)	$	(17,226)	$	(19,878)
Net income (loss)	$	283,793	$	56,451	$	(55,395)	$	284,849
Capital expenditures	$	542,199	$	292,121	$	1,322	$	835,642
Total assets	$	7,838,034	$	5,303,507	$	563,736	$	13,705,277

^(a) Includes the operating results and capital expenditures of the Regulated Natural Gas segment for the period since the completion of the Peoples Gas Acquisition on March 16, 2020.

^(b) 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.

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