| Capitalization | Note 6 – Capitalization Private Placement On March 29, 2019, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Canada Pension Plan Investment Board (the “Investor”), pursuant to which the Company has agreed to issue and sell to the Investor in a private placement (the “Private Placement”) 21,661,095 newly issued shares of common stock, par value $ 0.50 per share (the “Common Stock”). The gross proceeds of the Private Placement are expected to amount to approximately $ 750,000 , less estimated expenses of $ 21,560 . The shares issued and sold to the Investor pursuant to the Private Placement were to be priced at the lower of (1) $ 34.62 , which represents a 4.5 % discount to the trailing 20 consecutive trading day volume weighted average price of the Common Stock ending on, and including, March 28, 2019, and (2) the volume weighted average price per share in the Company’s subsequent public offering of Common Stock to fund a portion of the Peoples Gas Acquisition. Based on the common stock offering noted below, the Private Placement was priced at $ 34.62 per share. The closing of the Private Placement is expected to occur concurrently with the closing of the Peoples Gas Acquisition, subject to certain closing conditions, including the closing of the Peoples Gas Acquisition, and the execution and delivery of a shareholder agreement between the Investor and the Company. The Investor has agreed to certain transfer restrictions for a period of 15 months from the closing date of the Peoples Gas Acquisition. The Stock Purchase Agreement contains customary representations, warranties and covenants of the Company and the Investor, and the parties have agreed to indemnify each other for losses related to breaches of their respective representations and warranties. Upon closing of the Private Placement, the Company has agreed to reimburse the Investor for reasonable out-of-pocket diligence expenses of up to $ 4,000 , subject to certain exceptions. Common Stock / Tangible Equity Unit Issuances On April 23, 2019, the Company issued $ 1,293,750 , less expenses of $ 29,625 , of its common stock and $ 690,000 , less expenses of $ 15,830 , of its tangible equity units (the “Units”), with a stated amount of $ 50 per unit. These issuances were part of the permanent financing to close the planned Peoples Gas Acquisition. The common stock was issued at $ 34.62 per share and thus the Private Placement noted above was priced at $ 34.62 per share. Each Unit consists of a prepaid stock purchase contract and an amortizing note due April 30, 2022, each issued by the Company. Unless earlier settled or redeemed, each stock purchase contract will automatically settle on April 30, 2022 (subject to postponement in limited circumstances) for between 1.1790 and 1.4442 shares of the Company’s common stock, subject to adjustment, based upon the applicable market value of the common stock, as described in the final prospectus supplement relating to the Units. The amortizing notes have an initial principal amount of $ 8.62909 , or $ 119,081 in aggregate, and bear interest at a rate of 3.00 % per year, and pay equal quarterly cash installments of $ 0.75000 per amortizing note (except for the July 30, 2019 installment payment, which was $ 0.80833 per amortizing note), that will constitute a payment of interest and a partial repayment of principal, and which cash payment in the aggregate will be equivalent to 6.00 % per year with respect to each $ 50 stated amount of the Units. The amortizing notes represent unsecured senior obligations of the Company. The issuance of the common stock and the Units (including the component stock purchase contracts and amortizing notes) were separate public issuances made by means of separate prospectus supplements pursuant to the Company’s universal “pay as you go” shelf registration statement, filed with the SEC in February 2018, which allows for the potential future offer and sale by us, from time to time, in one or more public offerings, of an indeterminate amount of the Company’s common stock, preferred stock, debt securities, and other securities specified therein at indeterminate prices. The Company recorded the issuance of the purchase contract portion of the Units as additional paid-in-capital of $ 570,919 , less allocable issuance costs of $ 13,082 , in our financial statements. The Company recorded the amortizing notes portion of the Units of $ 119,081 as long-term debt and recorded allocable issuance costs of $ 2,748 as debt issuance costs. Long-term Debt On April 26, 2019, the Company issued $ 900,000 of long-term debt (the “Senior Notes”), less expenses of $ 7,324 , of which $ 400,000 is due in 2029 , and $ 500,000 is due in 2049 with interest rates of 3.566 % and 4.276 %, respectively. The issuance of the Senior Notes was not conditioned upon the consummation of the Peoples Gas Acquisition; however, if (1) the Peoples Gas Acquisition has not been consummated on or prior to April 22, 2020, (2) on or prior to the April 22, 2020 and prior to the consummation of the Peoples Gas Acquisition, the Acquisition Agreement is terminated or (3) prior to the consummation of the Peoples Gas Acquisition, the Company otherwise publicly announces that the acquisition will not be consummated, then the Company will be required to redeem all outstanding Senior Notes on a special mandatory redemption date at a special mandatory redemption price equal to 101 % of the aggregate principal amount of the notes, plus accrued and unpaid interest thereon, if any, to, but excluding, the special mandatory redemption date. The Company used the net proceeds from the issuance of Senior Notes, together with the net proceeds from the common stock offering and tangible equity unit offering noted above, as well as the proceeds from the Private Placement of common stock noted above, to (1) secure funding for the planned Peoples Gas Acquisition, (2) complete the redemption of $ 313,500 aggregate principal amount of certain of the Company’s outstanding notes noted below, (3) pay related costs and expenses, and (4) for general corporate purposes. Upon consummation of the Private Placement, the permanent financing for the Peoples Gas Acquisition will be complete. On May 18, 2019, the Company redeemed $ 313,500 of the Company’s outstanding notes (the “Company Debt Refinancing”) that had maturities ranging from 2019 - 2037 and interest rates ranging from 3.57 - 5.83 %. Additionally, the Company Debt Refinancing was subject to a make whole payment of $ 25,237 . During the second quarter of 2019, $ 18,935 of this payment was expensed and is presented in the consolidated statements of operations on the line item “loss on debt extinguishment.” The balance of the payment, or $ 6,302 , was deferred as it represents an amount by which the Company expects to receive prospective rate recovery. If for any reason the Peoples Gas Acquisition is not consummated, the Company intends to use the net proceeds from these financings, after the special mandatory redemption noted above, for general corporate purposes, which may include the redemption of certain of the Company’s outstanding notes, repurchases of the Company’s common stock, debt repayment, capital expenditures, and investments. In May 2019, Aqua Pennsylvania issued $ 125,000 of first mortgage bonds, of which $ 75,000 is due in 2049 , $ 25,000 is due in 2054 , and $ 25,000 is due in 2059 with interest rates of 4.02 %, 4.07 %, and 4.12 %, respectively. The proceeds from these bonds were used to repay existing indebtedness and for general corporate purposes. Additionally, Aqua Pennsylvania committed to the issuance of $ 175,000 of first mortgage bonds, contingent upon receiving approval from the Pennsylvania Public Utility Commission, of which $ 50,000 is due in 2054 , $ 75,000 is due in 2058 , and $ 50,000 is due in 2059 with interest rates of 4.09 %, 4.13 %, and 4.14 %, respectively, that will be issued in September 2019. |
