Schedule 1 - Condensed Parent Company Financial Statements

12 Months Ended

Dec. 31, 2022

Condensed Financial Statements, Captions [Line Items]

Schedule I - Condensed Financial Information Of Parent Company


	December 31,
		2022		2021
Assets
Current assets:
Accounts receivable, net	$	575	$	122
Accounts receivable - affiliates		1,601,064		117,504
Prepayments and other current assets		14,256		12,754
Total current assets		1,615,895		130,380

Deferred charges and other assets, net		69,455		52,512
Notes receivable - affiliates		2,276,670		2,015,570
Deferred income tax asset		42,206		1,310
Investment in subsidiaries		6,512,224		6,005,927
Total assets	$	10,516,450	$	8,205,699
Liabilities and Equity
Stockholders' equity	$	5,377,386	$	5,184,450

Long-term debt, excluding current portion, net of debt issuance costs		3,503,636		2,819,590

Current liabilities:
Current portion of long-term debt		-		20,470
Accrued interest		20,923		15,550
Accounts payable - affiliates		1,418,574		58,962
Dividends payable		75,808		-
Other accrued liabilities		21,234		16,109
Total current liabilities		1,536,539		111,091

Other liabilities		98,889		90,568
Total liabilities and equity	$	10,516,450	$	8,205,699

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


	Years ended December 31,
		2022		2021		2020
Other income	$	5,368	$	8,388	$	4,973
Operating expense and other expenses		10,724		5,821		29,483
Operating income (loss)		(5,356)		2,567		(24,510)
Interest expense		35,817		21,729		53,702
Interest income		(107)		(9)		(5,256)
Other (income) expense		893		(609)		(494)
Loss before equity in earnings of subsidiaries and income taxes		(41,959)		(18,544)		(72,462)
Equity in earnings of subsidiaries		495,556		445,951		341,653
Income before income taxes		453,597		427,407		269,191
Income tax benefit		(11,640)		(4,205)		(15,658)
Net income	$	465,237	$	431,612	$	284,849

Comprehensive income	$	465,237	$	431,612	$	284,849

Net income per common share:
Basic	$	1.77	$	1.68	$	1.14
Diluted	$	1.77	$	1.67	$	1.12

Average common shares outstanding during the period:
Basic		262,246		257,487		249,768
Diluted		262,868		258,180		254,629

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


	Years ended December 31,
		2022		2021		2020
Net cash flows used in operating activities	$	(169,778)	$	(239,320)	$	(315,329)
Cash flows from investing activities:
Acquisitions of utility systems and other, net		(116,627)		(36,237)		(34,665)
Acquisition of natural gas system and other, net		-		-		(3,465,344)
Decrease (increase) in investment in subsidiaries		(162,662)		(53,467)		6,085
Other		299		(987)		341
Net cash flows used in investing activities		(278,990)		(90,691)		(3,493,583)
Cash flows from financing activities:
Net proceeds (repayments) of short-term debt		-		-		(881)
Proceeds from long-term debt		1,522,157		995,458		3,042,274
Repayments of long-term debt		(865,469)		(725,033)		(1,607,854)
Proceeds from issuance of common stock from private placement		-		-		729,301
Proceeds from issuance of common stock from at-the market sale agreement		63,040		-		-
Proceeds from issuance of common stock under dividend reinvestment plan		16,619		16,799		16,522
Proceeds from exercised stock options		2,475		4,172		1,589
Proceeds from issuance of common stock from forward equity sale agreement		-		299,739		-
Repurchase of common stock		(1,192)		(3,291)		(4,365)
Dividends paid on common stock		(288,632)		(258,650)		(232,571)
Other		(230)		817		(96)
Net cash flows from financing activities		448,768		330,011		1,943,919
Net change in cash and cash equivalents		-		-		(1,864,993)
Cash and cash equivalents at beginning of year		-		-		1,864,993
Cash and cash equivalents at end of year	$	-	$	-	$	-

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, 2022 and 2021, the Parent had a current accounts receivable – affiliates balance of $1,601,064 and $117,504, respectively. As of December 31, 2022 and 2021, the Parent had a notes receivable – affiliates balance of $2,276,670 and $2,015,570, respectively. 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 $0, $0, and $1,050,000 were paid to the Parent by its wholly-owned subsidiaries during the years ended December 31, 2022, 2021, and 2020, respectively.

Note 3 – Long-term debt – The Parent has long-term debt under unsecured note purchase agreements with investors in addition to its $1,000,000 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
2023	$	-
2024		-
2025		-
2026		-
2027		-
Thereafter		3,025,000