必要公用事业 (WTRG) 2026年第三季度业绩电话会：每股收益增长9%，并购按计划推进

核心要点

• Essential Utilities公布2026年第三季度GAAP每股收益（EPS）为0.36美元，较上年同期的0.33美元增长9%。剔除并购相关费用后，调整后Non-GAAP每股收益为0.38美元。
• 监管成本回收与附加费贡献了每股0.06美元，其中约65%的收益来自水务业务。供水量增加又带动每股收益增加0.01美元。
• 今年迄今资本投资额达到约11亿美元。管理层表示，公司仍有望在2026年实现创纪录的17亿美元基础设施支出。
• 管理层表示，与American Water拟议的合并交易仍有望在2027年第一季度末前完成交割。该交易已获得肯塔基州、俄亥俄州和弗吉尼亚州的批准，而在宾夕法尼亚州、北卡罗来纳州和得克萨斯州达成的和解方案仍有待最终审批。
• Essential Utilities已签署总额约2.9亿美元的给排水资产收购协议，涵盖预计为约20.8万户客户提供服务的系统。公司正在推进的收购储备管线涵盖约40万潜在新客户。
• 鉴于合并交易尚未完成以及合并后公司的融资方案尚存不确定性，公司未重申长期每股收益指引。不过，管理层维持了未来五年至少投入87亿美元资本投资的预期。

关键财务数据

业务与运营表现

运营与维护费用的下降对季度业绩形成了支撑。运维费用同比下降约0.6%，主要反映了保险理赔款项以及受监管天然气业务坏账费用的减少，但部分被并购相关费用所抵消。

包括医疗止损保险报销在内的员工福利费用减少了约350万美元。管理层表示，这笔费用的减少大部分归因于医疗止损理赔的收回。

监管审批活动仍是盈利的主要驱动力。Essential Utilities在2026年敲定了多项费率审查案或附加费方案，带来了7050万美元的年化增量营收，其中约75%来自给排水业务。

给排水业务在五个州仍有待决的调价申请或附加费审批程序，申请的年化增额超过7850万美元。其宾夕法尼亚州天然气子公司正在申请1.632亿美元的基础费率上调；行政法法官此前建议核准约1.05亿美元。

并购业务同样取得进展。10月期间，公司在得克萨斯州、北卡罗来纳州和宾夕法尼亚州完成或宣布了多笔规模较小的给排水并购交易。已签署协议总额约2.9亿美元，预计将增加覆盖约20.8万户客户的系统。

管理层业绩指引

管理层预计与American Water的合并交易将于2027年第一季度末前交割。公司预计北卡罗来纳州和得克萨斯州将在2026年年底前做出最终裁决，不过并未提供具体的时间表。

在宾夕法尼亚州，管理层预计行政法法官将于11月下旬左右提出建议裁决，随后公共事业委员会可能在2027年初后不久采取行动。新泽西州的和解商谈被评价为具有建设性，而根据伊利诺伊州的法定时间表，该州委员会的裁决预计也将很快出炉。

Essential Utilities在2026年仍有望在基础设施领域投入创纪录的17亿美元。管理层还重申，预计未来五年将至少投资87亿美元。

公司未提供长期每股收益指引。管理层表示，未来的盈利指引和融资决策将在合并完成后，由合并后的管理团队和董事会共同商定更为妥当。

风险与关注重点

• 与American Water的交易仍需获得宾夕法尼亚州、北卡罗来纳州和得克萨斯州等数个州的最终监管批准。
• 宾夕法尼亚州天然气费率申请案仍有待公共事业委员会做出最终裁决。公司申请的1.632亿美元增额高于行政法法官建议的约1.05亿美元。
• 管理层强调，需要在基础设施投资与合理回报之间，与客户的承受能力取得平衡。
• 受切斯特市破产案影响，DELCORA交易目前仍被联邦破产法官裁定暂缓执行，不过管理层表示该出售协议可由American Water承接。
• 管理层表示，公司仍在评估大选后的政治格局变化，尚未评估最新提及的涉及3M公司的PFAS人身伤害和解案所带来的潜在影响。

分析师问答亮点

分析师主要关注合并审批进展、长期指引缺失、费用趋势以及监管审批时间线。

关于合并事宜，管理层表示，北卡罗来纳州和得克萨斯州达成的和解方案可能在年底前获得最终裁决。宾夕法尼亚州预计将在2027年初左右采取行动，而新泽西州的谈判正继续朝着达成潜在和解的方向推进。

关于业绩指引，管理层解释称，鉴于合并预计将于2027年初完成交割以及合并后公司未来的融资决策，提供独立的每股收益预测已不再合适。资本投资计划则维持不变。

管理层还澄清，本季度受益于医疗止损保险报销。尽管产生了约490万美元的并购相关费用，总运维费用同比仍减少了约90万美元。

关于市政资产收购，管理层表示，选举结果并未对正在进行或潜在的交易造成实质性担忧，尤其是在宾夕法尼亚州。

业绩电话会完整纪要

完整财报电话会议逐字稿

管理层陈述

Operator

Hello, everyone. Thank you for joining us, and welcome to the Essential Third Quarter 2026 Earnings Call. [Operator Instructions]

I will now hand the conference over to Ed Vallejo, Director of Investor Relations. Ed, please go ahead.

Edward Vallejo

Thank you, and good morning, everybody. Thank you for joining us for our third quarter 2026 earnings call. If you did not receive a copy of our press release, you can find the release on our Investor Relations website. The earnings call slides will also be found there alongside a webcast of the event.

During this conference call, both in our prepared remarks and in answers to your questions, we may make forward-looking statements that represent our expectations regarding future events and our future financial performance. These statements are predictions based upon our expectations, estimates and assumptions. However, as these statements deal with future events, they are subject to numerous known and unknown risks and uncertainties as discussed in detail in our documents filed with the SEC, including our most recently filed Forms 10-K and 10-Q.

During this call and in our third quarter 2026 earnings press release, we refer to GAAP and non-GAAP financial measures. The non-GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles and are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. A reconciliation between the GAAP and non-GAAP financial measures is included in our third quarter 2026 earnings press release available on our Investor Relations website.

We will begin with Chris Franklin, our Chairman and CEO, who will provide an update on the company. Then Dan Schuller, our Chief Financial Officer, will provide an overview of the financial results.

And with that, I will turn it over to Chris.

Christopher Franklin

Thanks, Ed, and good morning, everyone. Let's start on Page 5 with a few corporate updates. We'll start with our pending merger with American Water. Our regulatory approval process continues to progress nicely. We've reached constructive settlement agreements in Pennsylvania, North Carolina and Texas, all of which remain subject to final approvals from the respective state public utility commissions. We've already secured regulatory approvals in Kentucky, Ohio and Virginia, which marked major milestones as we progress toward closing the merger. With all of these positive developments, we continue to expect the merger to close by the end of the first quarter in 2027.

At the same time, our integration planning is moving at a full speed. Our integration teams have been busy collaborating across everything from organizational design to operational and financial processes, to IT systems and branding. It's been incredibly gratifying to see the teams from both Essential and American Water working so collaboratively and side-by-side to shape our future of the company.

Turning now to the quarterly results. We reported GAAP earnings per share of $0.36, an increase of 9% over last year. These GAAP EPS results include about $0.02 of merger-related expenses, bringing our non-GAAP EPS to $0.38 for the quarter.

Overall, it was a solid quarter that underscores the steady, consistent growth we are driving across both our water and gas businesses, as well as responsible expense management. A key driver of that performance is our ongoing commitment to system reliability and customer service. Year-to-date, we've invested about $1.1 billion of capital, keeping us on track to invest a record $1.7 billion in needed infrastructure improvements and upgrades in 2026.

All right. Now, on the regulatory front, we currently have rate cases or infrastructure surcharges pending in Texas, Virginia, Illinois, Indiana and New Jersey, along with our natural gas rate case in Pennsylvania. We recently received a proposed decision from the ALJ in the natural gas case recommending a revenue increase of approximately $105 million.

Now we continue to engage constructively with the Pennsylvania Public Utility Commission, the Governor's office and the various stakeholders regarding the state's regulatory environment. Related to this, you may have seen that Chairman DeFrank recently established an ROE working group, and we will be meeting over the coming months to evaluate options for establishing the cost of capital used in rate cases and DSIC filings. We are optimistic that the process will yield some improvements in the regulatory process and, frankly, a greater understanding by all the parties of the capital needs and the overall focus on affordability.

And finally, reinforcing our long-standing commitment to shareholder value, on October 21, our Board of Directors declared a quarterly dividend payment on December 1, 2026, to shareholders of record on November 10, 2026. Essential Utilities has paid consecutive quarterly cash dividends for over 80 years and has increased the dividend 36x in the last 35 years, a record we are very proud of.

And, Dan, on that note, I'll hand it over to you for a deeper look at our quarterly numbers.

Daniel Schuller

Thanks, Chris, and good morning, everyone. Today, my remarks will focus on our strong financial performance and the primary drivers of our results. Let's turn to Slide 8 to review our year-over-year EPS bridge, beginning with our Q3 2025 earnings of $0.33 per share. In terms of positive drivers, earnings per share this quarter benefited from a $0.06 increase in regulatory recoveries and surcharges, with about 65% of this coming from our water segment, and $0.01 from higher water volumes. These gains were partially offset by $0.02 from increased depreciation and amortization and another $0.02 from higher interest and lower AFUDC. This brings us to GAAP earnings per share of $0.36 for the quarter.

Now you'll see the details of our operations and maintenance expenses when you see our 10-Q, but let me give you some color here. O&M decreased by approximately 0.6%, or about $900,000. This decrease was primarily driven by insurance recoveries, as well as a decrease in bad debt expense in our regulated gas segment, offset by merger-related expenses.

Coming back to earnings. If we adjust our GAAP earnings per share of $0.36 to exclude the nonrecurring merger-related costs, our adjusted non-GAAP earnings per share were $0.38. A full reconciliation is available in our earnings release and in the appendix to this presentation.

Turning to Slide 9, let me provide an update on our regulatory activity. Thus far in 2026, we have finalized rate cases or surcharges representing $70.5 million in incremental annualized revenue. Approximately 75% of this total is derived from our water and wastewater operations, with the remainder coming from our gas business.

Looking ahead, our regulatory pipeline remains on track. Our water and wastewater segment currently has cases or surcharge proceedings pending in 5 states representing over $78.5 million in requested annualized increases. Our natural gas subsidiary has a base rate case pending here in Pennsylvania for $163.2 million. And as Chris mentioned, the ALJ has recommended a revenue increase of approximately $105 million.

This rate case filing is essential to supporting our long-term infrastructure improvement plan, which enhances system safety and reliability while continuing to drive emissions reductions. We expect a final order in this case in December. And as always, we manage these filings carefully to ensure we continue delivering safe, reliable service and earn a fair return on our invested capital while remaining highly sensitive to customer affordability.

And with that, I'll turn the call over to Chris. Chris?

Christopher Franklin

Well, thanks, Dan. Let's move to Slide 11, and we'll summarize our acquisition activity. Here, we show a selection of our business development opportunities, and our business development group had a very busy October. We started the month by completing the $1.1 million acquisition of Dril-Quip, a small water and wastewater system in Harris County, Texas. We also entered into an asset purchase agreement to acquire the North Carolina water and wastewater assets of Central States Water Resources. These assets serve approximately 4,100 customers, and we paid about $3.5 million.

Then on October 28, we entered into an asset purchase agreement for the acquisition of the water and wastewater assets of the Buckingham Springs system in Pennsylvania. These systems serve 1,300 customers, and we are paying $2.8 million for that acquisition. Finally, on that same day, we entered into an asset purchase agreement for the acquisition of the wastewater assets of the Hempfield Township Municipal Authority in Pennsylvania, which serves about 1,200 customers, for $2.2 million.

The company has also signed purchase agreements for additional water and wastewater systems in North Carolina and Virginia. In total, we've signed asset purchase agreements totaling approximately $290 million in purchase price, which are expected to serve approximately 208,000 customers.

Now this includes our DELCORA transaction, which remains under a stay put in place by a federal bankruptcy judge related to the bankruptcy of the city of Chester. And I'll remind you that the fully enforceable agreement of sale with DELCORA is assumable by American Water. Our active pipeline of potential water and wastewater acquisitions represents approximately 400,000 potentially new customers to the company.

And with that, I'll wrap things up and hand it back to the operator so we can take your questions.

Operator

[Operator Instructions] Your first question comes from the line of Travis Miller with Morningstar Inc.

分析师问答

Travis Miller

I'm going to intentionally leave this one a little open here, but thoughts on the election? You're obviously operating in some key states that were featured in the election yesterday. Affordability, also an issue. Municipal M&A, potentially an issue. So I would just leave this open for any of your thoughts there.

Christopher Franklin

Yes. I'll tell you, it's a lot to digest, Travis. As you might imagine, there's some pretty big changes in the states where we operate. I will say this, though, just for starters. We are a 140-year-old utility. I've been at this company for nearly 35 years. My team has been with me for over a decade plus. And we have relationships on both sides of the aisle in all of our states. We work very hard at that, not only on the regulatory side but also the legislative side.

And so we'll have to meet some new people, get to know them. We'll have to get to know what is important to them in terms of their issues and then assess our work from there. But I think we're -- like so many people today, we're just in a digestion period at the moment.

Travis Miller

Okay. That's fair. Just real quick, municipal M&A, anything you saw from the election locally that might impact that either way, either existing pending or potential?

Christopher Franklin

I don't think so. A lot of the municipal folks in Pennsylvania, where we sit today, were not up for election. So, not as much on the municipal side that we see in terms of change, positive or negative, for municipal M&A. I think the transactions we have in the works, there doesn't seem to be any particular concerns about those. So I feel like business as usual in the largest part on our relationships with potential deals.

Operator

Your next question comes from the line of Paul Zimbardo with Jefferies.

Paul Zimbardo

Just one first for me. Just on the -- I noticed that long-term guidance was not included in the new press release. Just -- is it a change in the outlook? Or just could you give any color on why not reaffirm the plan with the update today?

Christopher Franklin

I think as we look forward, the reality is that -- and I think we've communicated this as best we could over the last year here, that we -- to give earnings per share guidance just doesn't make a whole lot of sense. We feel very confident that the transaction will close early in the new year. And how the business is financed will be largely up to the combined team, the combined Board and management team. So I think we decided here that earnings guidance going forward is best described by our -- the successor team here.

I will say this, though, Paul. We continue to feel strongly that we're going to invest capital. We've said we're going to be over at least $8.7 billion over the next 5 years in capital spend invested in our systems. So I don't think you should expect a great variation from the work we've been doing over the last decade plus.

Paul Zimbardo

Okay. Understood. And then one small one. Could you quantify what that insurance recovery item was during the quarter?

Daniel Schuller

Yes, Paul, I think you'll see this in the 10-Q that comes out. The insurance recovery is really tied to stop-loss insurance. So you think about health insurance cases that are significant claims. Last quarter, we noted that those claims were high because we hadn't yet had the stop-loss reimbursement. But this quarter, we're seeing that reimbursement come back through the income statement and sort of bringing those employee-related costs down. So you'll see in the Q that employee benefits, including that medical claim stop-loss reimbursement, decreased thus by about $3.5 million, most of that really being driven by that stop-loss recovery.

Paul Zimbardo

Okay. Got it. So the $3.5 million is net of the recoveries. Got it.

Daniel Schuller

Yes. So I think it's important to say in terms of the quarter, we had the positive benefit there. We had the benefit in terms of lower bad debt. But we also had about $4.9 million of merger-related expenses. And you'll see in the Q that O&M is still down by about $900,000. So even with the merger-related expenses, other costs came in, in line or lower than sort of typical or lower than we had last year. So very strong quarter from an O&M perspective here at the company.

Operator

Your next question comes from the line of Gregg Orrill with UBS.

Gregg Orrill

Two questions there. First, what are your expectations around converting the Texas and North Carolina settlements to final approvals? When does that occur, and what's involved there?

And secondly, I guess there was a significant PFAS settlement yesterday around personal injury in 3M. And just wondering if there are any implications for the company?

Christopher Franklin

Yes. Let's take the first one. So North Carolina and Texas, we believe those are on track. As you know, we have settlements in each of our states. And although it's not a defined schedule, we would expect that we would see adjudication in both states before the end of the year. So I think we feel comfortable with that.

On the PFAS, listen, I'm happy to get back to you on that. I'm not sure we're -- we have any thoughts on any new news from yesterday yet, but happy to reconnect with you on that, Gregg.

Operator

Your next question comes from the line of Davis Sunderland with Baird.

Davis Sunderland

Congrats. I'm sure it's been a very long process getting to where you are in the merger, and 2027 is right around the corner. So congrats on everything you guys have accomplished so far.

Most of my questions have been taken. I guess maybe I'll just round out Gregg's question. Obviously, you touched, Chris, on North Carolina, on Texas. If you could also just address Pennsylvania and New Jersey and the time lines and what to expect before year-end? Or even if things, I guess, carry into Q1, what your guys' latest expectations are and how that may have accelerated or pushed out from what you guys thought a quarter ago?

Christopher Franklin

Sure, sure. Yes. So in Pennsylvania, we're waiting for the administrative law judge to come across with the recommended decision. We'd expect that could be before Thanksgiving, could be a little after, but that's a reasonable time frame. And then it would go to the Public Utility Commission for their action. And as we've said, I think, all along, we'd expect that sometime probably right after the first of the year.

New Jersey, always good discussions there. And I would hope we'd have some news there to share soon. But discussions toward a settlement are, I think, constructive and in a good place. So hopefully, we'll be able to share some news on that one soon. And as I said in my earlier comments, really feel good about a first quarter close here.

Daniel Schuller

And then maybe the one we didn't cover, Davis, was Illinois. And in Illinois, we have a statutory time frame there. So in that statutory time frame, we would expect to hear something quite soon in Illinois in terms of a commission order.

Operator

There are no further questions at this time. I will now turn the call back to Chris Franklin, CEO, for closing remarks.

Christopher Franklin

Thanks again, everyone, for joining us. As always, we stand ready to answer your questions. Feel free to follow up with Dan, myself or Ed, and you have a wonderful day. Thank you.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.