Earnings call transcript Q4 2022

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Operator

Good day and welcome to the Essential Utilities Full-Year 2022 Earnings Call. This meeting is being recorded. At this time, I'd like to hand the call over to Brian Dingerdissen. Please go ahead, sir.

Brian Dingerdissen

Thank you, Serge. thank earnings joining call. and Utilities for everyone, full-year XXXX morning, you us for Essential Good I Relations Essential. and Brian Treasurer am Dingerdissen, at Vice President, Investor

If we Relations event found section the our website of copy find receive this The can by referencing of you on slides in essential.co. you webcast that it Investor be release, be our can of the visiting at did not will also press website. a the

[Technical this Difficulty] the some call description risks and involve most different reminder, As forward-looking to of statements other our recent such discussed during any be XX-Q, uncertainties. include XX-K, of the by that such SEC may a risks, future a expressed factors implied and Please matters forward-looking for that to actual or materially statements. and uncertainties, may cause refer results other results filings

to financial section included certain During reconciliation and company's of the made the Relations of in be course also non-GAAP website. to the financial may presentation of posted call, the A measures. the reference end GAAP Investor measures of non-GAAP this these at is

from CEO, is will with Chris and We'll agenda discuss for begin Here our a Chairman the the today. Franklin, company provide our call XXXX highlights update. and who

Executive Dan Next, Schuller, financial discuss our results. CFO will Vice President and

questions. summary provide Lastly, a before conclude our of and up with Chris an presentation guidance for will the update on program our the acquisition opening call

the call will to turn that, With Franklin. I over Chris

Chris Franklin

Thank you, us. for joining Brian, good Thanks and morning, everyone.

start XXXX year. with from highlights our Let's out some

X% It's X% challenges in-line year, among of of XXXX macro service-related rising another rates, and mid-point year know operational led on and all despite long-term reporting $X.XX, better to us others also per guidance. and last strong efficiency guidance, our the focus earnings and our Our you than inflation of share with interest X% priorities which is improvement to infrastructure about.

in XXXX, that infrastructure point pride We we compared have I to take my as we XXXX. the billion always CEO in I I in team guidance want in Street. met XXXX, since of accuracy. became that, Importantly, the to billion improvements, the and $X.XX our context out in to provided X.XX over invested In

across to retirement, to growth of pipeline has with investing just systems. in the XXX footprint year water, natural X.X%. our acquisitions, replacement, miles rate led over These base and wastewater, along critical gas Our infrastructure to led last investments, installation throughout our our municipal and commitment of of

strategy consistent the three over acquisitions, opportunities. customers. steady million Our continues we of $XXX municipal growth led X.X% of provide closed rate approximately and [acquisitions] for [ph] and growth base adding to organic with to regulated strong These growth acquisition segment. in and coupled customer three XXXX, water And new XX,XXX

$XXX utility acquisitions, nearly water million also over worked billion our our water the Currently, nine we the purchase a installation year. have segment agreements diligently growth of for allowed The in last thank signed year. take have municipal our first totaling success to from purchase in moment to last the our report $X SAP over regulated revenues of I has price. strategy want employees through asset for to time who in us

SAP. our that had recall may already company You gas

the here time not wouldn't which We're hard installing SAP if are and consuming, We it very of quite proud patient so audit the of our be expect conversion if complication how at the accomplishment. the clean and this for of completed a familiar financials opinion, company. works, you're we These of is with working many difficult and it. installations and were efforts an

their customers' just In weather natural extremely did remain during worked keep that our Christmas, to work warm. through homes Winter Storm important cold I late December, it's think so teams natural Finally, would to before our teams Elliott. the our gas mention flowing gas

Our people job the working conditions, right our real customers Eve those company. extreme at through folks tribute Christmas unbelievable a hours long an worked for under to our and doing natural gas

move made about in commitments, year, our us Scope pipeline really X among [indiscernible] gas to this reduction of a and Earlier bit X gas the methane leak accelerated substantial I renewable am Scope greenhouse ESG progress. have Let's initiatives, slide repair, we Extensive energy year-end and the reaffirmed and next company little XXXX. our that many replacement, and and on emissions. purchases, talk detection other proud of XXXX, report as ESG to led

in the by and of As XXXX. the our track baseline emissions on year, toward remain of end XXXX of our estimating reduction we from XX% commitment reduction a are we XX%

In of and website, a refreshed eye keep fully did last going winning our ESG for report it again to we're it on it, XXXX, – the an always we fall publish good award out time it's read. was a

trillion multiyear to regulated our finished XX We served per industry-leading that ensure that water states segment. of plan the all Difficulty] [Technical by also PFOA exceed reaffirmed across parts we does not our water – our

XX per XX XX for of While to the has and set contaminant XX trillion parts XX% options wait to two PFAS our water customers parts already for their and trillion enacted trillion per And where have it's trillion noting has states or thresholds. MCL worth parts for Jersey level, we per their PFOA. of of and maximum per for Pennsylvania, EPA have PFA. are own we that continue the parts nearly located, for water set New issue PFOA in at limits limits which PFAS

Our at or these. below each commitment is of

of of that we and continue XX%. of color, Now, regarding target towards target XX% of pleased works XXXX with in diversity work our multiyear our also to commitments. and report XX% We're employee exceeded on base. connecting makeup supplier diversity our of to you these workforce [Technical and supplier XXXX to customer our one aligning leaders We we our to ended services incentive the with representing when compensation. it to comes we've spending been remind aligned are the goods metrics Difficulty] the makeup and of I'll the that our people of

of a renamed Best Media's, and received of ESG notable awards Corporate recognized Newsweek's and Diversity Responsible on XX-XX including Citizens XXXX, number list, Chamber Forum and we being XBL Champion We're Executive we also to Business Women of renamed Commerce. the to the Board, Year of Board company X-plus highlighting by were recognitions throughout renamed Companies our by of as Boards, the America's diversity County named Most Finally, as Women. of the Delaware by list, a

an strong peer in work Now, group advances this continued very we or Upgrades our CDP, to our from in [the ESG addition near ISS as to that the leader these of Folks, and and and plan proxy analytics] recognitions, is make to at Essential XXXX. MSCI, of in have industry top placed are ratings. [ph], we've continue. proud

our to Dan Now with hand me let financial over Dan? it results. that, to discuss

Dan Schuller

Thanks, good everyone. and morning, Chris,

We Let's our minutes spend few morning. time we'll of this to the with most $XXX.X fourth where the take to compared revenues fourth review quarter the a full-year, XX.X%, year. of million, of last before quarter the highlights into ended quarter moving up

water segment million, natural with segment regulated contributed regulated operations. our our coming million and XXX.X the from Our non-regulated gas balance limited contributed XXX.X

debt for segment million our in-line assistance the production costs, program, million gas and in quarter quarter, to continued of from through expenses commodity drivers costs the related to million were costs XXX.X last quarter. for fourth prior for year. year-over-year gas XXX.X the O&M by therefore, costs purchased maintenance and main and down year-over-year. up to fourth Net with bad quarter, higher water year. the quarter, expenses, EPS was prices income the natural Its increased XXX.X XXX.X $XXX.X increased employee-related customer from $X.XX natural the recoverable million million gas was GAAP the Higher

We we'll the Next, XX.X% with the full-year discuss in ended up X.XX financial revenue, year year. last from highlights. billion

above our natural This water gas is that segment is year, billion something to X.XX the $X billion, really celebrate. first which company the and pushed the growth For the contributed billion. regulated contributed segment regulated water of year our segment X.XX revenue

Purchased increased X.X% Operating X% expenses income for and million was net to $X.XX, of up $X.XX year. GAAP or XX.X%, by or EPS million [XX.X%] guidance XXX.X increased [ph] the middle million XX.X million, and XXX.X XXX.X increased year. the was X.X% XXX.X gas our increased $X.XX income to to which from range million, to to to million. compared O&M costs prior XXX.X year-over-year in

through revenue. Next, full-year let's with the waterfalls beginning walk

In see, a can strong had you $XXX.X very we increased revenues million GAAP. revenue-wise. XXXX, year As on a XX.X% or

year. gas the driver, a significant been throughout the was we've million overall contributing increase. gas largest reporting purchased which notice the due the that was $XXX.X commodity natural prices, of increase You'll to This in

prices gas recent eased have though, months. in Fortunately,

rate O&M which Gas $XX volumes Over expenses. regulated for our surcharges water Regulated this $XX.X combined our given gas X:X gas is from is water mostly our due to offset portion million. related $XX [Technical our million recoveries to and customer a Difficulty]. has segment program, a to The segments in from Natural assistance added million. contributed increased attributed Increased Regulatory of recent natural

And you'll X.X% degree – to impact of during first of recall XXXX, an was in Difficulty] heating in over that in XXXX. XXXX indicator. quarters weather the resulting year. a see so [Technical monitor has normal, than XX% and And we gas days the heating days, X,XXX and the total the colder very in in on area gas closely degree consumption, that as which weather direct the Pittsburgh was we during season, consumed meaning compared heating heating X,XXX the days degree fourth

million. our on And segment contributed other growth provided of combined overall $X.X additional and on, regulated the finally, Moving revenue an $XX.X volumes million water increase. increased

contributed related on maintenance Next, higher services material insurance lower Other was million were well and items compared increase, this by applies, gas in the capitalization for expenses to $XXX.X $XX in Operations let's million and the expenses. to to million as expenses, inflation-related the $XXX.X move increases year, to O&M outside as XXXX. capitalization segment. of much and higher in and offset the

adjustments which which added for as for payments employees, increases, $XX.X program million, our through recoverable level to market revenue as million. targeted increased The included customer systems one-time well are costs non-officer gas expense and surcharge, merit $XX.X expenses, regular inflation Employee-related benefits.

expenses million] acquired an increased $X.X And and newly water to and costs [ph]. [$XX at our added regulated segment customers wastewater in water production million related additional

the see production and with costs to sludge handling for We continue in hauling. increases and year-on-year chemicals inflation-related largest increases

Next, our $X.XX. gas side and recoveries EPS with Beginning XXXX contributed on per nearly Difficulty] from of share [Technical $X.XX the added on we'll spend a segment waterfall. $X.XX, GAAP volume left earnings the natural regulated increased of minute the slide,

segment well volume our water and items, $X.XX the [ph] increased taxes, of and as regulated interest, of for which These of is $X.XX Combined, offset growth were The GAAP income other another $X.XX. result taxes [$X.XXX] by EPS than year. a depreciation, increased the as other included added from expenses.

gas natural surcharge North Difficulty], a Carolina, rate [Technical in segment to Ohio, for other XXXX, total filings case revenue on in Pennsylvania, in of our in rate and our regulated we annualized approximately cases or completed increase In matters. and regulatory $XX.X segment completed Moving we regulated water and Kentucky, combined a activity million.

[$X.X So our with far regulated and or XXXX, our water states cases three and revenue cases of Carolina, Also, [ph]. natural rate in filings filings we for total North underway Virginia we Kentucky Texas, for annualized have rate surcharge currently gas segment. surcharge in or increase completed million] our base in in Ohio, segment of water regulated regulated

established supply to I provide program an the program both to deploy equity we as business a This in October. us wanted to gives on grow through amount significant and Finally, expenditures. update a to of over issue capital capital time equity mechanism continue acquisitions the ATM

total additional shares. expenses. XXX,XXX December an of we X.XX $XX.X approximately shares issued million of million January, net had XX, of we And As issued a XXXX, for in

guidance expect securities in over metrics, the As $XXX to credit January, million slide our we close equity raise to the next while maintain municipal announced we when in in XX approximately million or we invest deck and capital $XXX indicated to equity-linked months we acquisitions.

closings to efficiently and capital evaluate timing factors. exact how acquisition dependent and execute on the continue most to raise, and this is other We amount

that, over I'll to and to it back guidance. hand discuss our Chris acquisition with And growth XXXX

Chris Franklin

little And the Thanks, let's a [ph] [transaction] about Great. municipal talk Dan. bit first. activity

which strategy, You'll investment been municipal and of slide our existing a our base through in through acquisition the that growth has long left-hand successful business. on this side complements growth of our continued infrastructure in notice acquisition component

Combined over customer XXXX, X,XXX base announced rate customer base to added brook, equivalents three our added which serves equivalents approximately Just the recently, closing growth, in our system we've billion the since we nearly and we million regulated customer of in nearly customer Oak Illinois, water XX,XXX company. X.X%. equivalents. approximately its increased XXX,XXX in and Oak $XXX water which Including closed Brook footprint rate XXXX, $X.X through the organic acquisitions in Most base acquisition to with by water company acquisitions.

here. next the On slide

signed eight have we call, asset this purchase of agreements across As systems states. four for nine

these customers we these business, $XXX will are customer nearly of where nearly in million and All in price. add totaled do purchase equivalents or XXX,XXX acquisitions states currently

mid-year our let's toward we will recent schedule XXXX. Now, settlement close PUC end continue We minute our that the take and closing path of closing year, parties. most the a last expect we the there is of a provided acquisition regulatory confident believe unlikely. about call, you the talk the status first be procedural the we to of expectations On for all DELCORA continue to also works Based that the in forward will and and this to now transaction, DELCORA. and close a and now actions that legal this of that recall is in on

All right.

opportunities on previous growth signed Currently, XXX,XXX pursuing engaged we're municipal the potential of On slide, municipalities [strong] healthy. remain next customers discussions and as wastewater and illustrated [ph] the with over pipeline to in in on for water and slide. slide, transactions this our addition the active

teams potential acquisitions to focus to XX,XXX in-state Difficulty]. X,XXX Our that continue at [Technical on have customers least

strong are make communities improvements to our a and technical, our operational considering our expertise, case including our long-term who altogether the the options. proposition, purchase to a pay believe governments to their make commitment and competitive ability spend commitment We capital compelling price, municipal to our to we serve, value

so have interest states are continue other with supply market We rising inflation, we, chain on will fair rates, faced in focus utilities where to were place. companies statutes all and On growth XXXX, eight like we in value challenges. water many

However, the the overcome provided integration, focus growth, us to and our such and operational report on of people challenges strong results ability to excellence the these opportunity year. for

expect. XXXX, customers, committed that reliability at safety, pillars to and we and look have our the come shareholders employees priorities remain the quality, we to As ensure and

followed our history, you for Now, continuously know have who Difficulty] have we our you those us, [Technical throughout of contributions. that their portfolio reviewed and

year, of sell assets, we gas recent most month. review, that Virginia and early last our result our sale a natural As West we announced decided last to

you Virginia. be for scale West oversized the of know. West of outsized and benefit for will economies provide in were very We the of that transaction our decision because stability this as an will XX,XXX it rate Virginia completion small operations or attention them that beneficial believe The eliminate also Virginia to draw stability there, We to from required. will this management customers West rate opportunity

All right.

and guidance, before we earlier want favorable guidance weather on the in I the provide we're the walk acquisition to we the on program impacts Now last our how XXXX colder-than-normal call, had revenues. provided about impact clarity through XXXX mentioned month. thinking our of a both you Dan on weather in

have it's the likely in located, will normal. a of still our while quarter. reminder, significant usage XXXX XX% region quarter as been first fourth the be for the we very for than early as a call But another warmer year-to-date segment a earnings And left for impact natural well. month next is This year, approximately topic has where weather the and first gas our quarter, in has

determine So, our on it's far the early too weather year. results to for impact the

our program, DELCORA DELCORA acquisition our cause existing a was not to included XXXX, the point want of us range recall out provided may closing in fall guidance that outside I the you guidance that XXXX. that alone for we we to in delay for but believe would do Regarding EPS

of but the confident we monitor we'll last XXXX guidance So, we acquisitions, in continue remain impacts month. to weather released and

So, call reviewing up the guidance. I'll by wrap that

on in $X.XX increase be per regulated XXXX, [Technical is million to between to We're X% an $X.XX annually last growth investing over earnings $XXX X% plan. infrastructure, we'll through approximately We of share confident three-year year's of Difficulty] be about the expect and which per share. and earnings

gas and We X% West the for gas. continue to growth obviously be other as Virginia just our natural X% growth stable and will and X% for between water Difficulty] expect for rate properties and base between X% water than be will between And I natural for sale and [Technical of mentioned. XX% X%

the Utilities want is at in the So, in I team the management among believe closing, to Essential best I that mention industry.

customers continues This and team continuously seamlessly an and of once led or the operational standards already in to interest stakeholders the lifetime industry-leading despite major the Our rates, excellence, nearly acquired of all challenges team unprecedented inflation, a all pandemic, system, installation integrating while numerous soaring on meeting this while our SAP. that exceeding expect.

to million. in would time. experienced together, our the reflect the on Regulated dramatic leadership growth say now I And has revenues And It's team company incredible $XXX [indiscernible] our truly for was revenue amazing billion the XXXX. XXXX, over the Water segment XXXX, $X X.X past years. were over came about it's when In current just the first

nearly a time. that same grown to Our CapEx year over billion $X annual $XXX has from in million now

possible of All really that could with incredibly professionals without of day. not this proud the team have dedicated been over every X,XXX to I work am

So, on want that call questions. up to I Operator? conclude our the remarks for open and formal note,

Operator

first Please [Operator Connors question you. Research. ahead. Instructions] comes from North Ryan The Coast Thank from go

Ryan Connors

Question. the onetime level? picture I so elevated inflation employee-related and big for of mentioned kind given jump that from obviously, Chris. But a headwind should of A inflation moderate increase XXXX and continue run that's or you the to, in on XXXX? that But couple we waterfall, mean, XX Dan, from not at kind the financials do to expect rate Is of shocking forth. housekeeping that then costs, million and of question you a expect

Dan Schuller

for so level. payment few non-officer are think an the in in that I XXXX, in that our base, broad was we one there think did Ryan, There that moderate I XXXX I like, script noted will So in inflation-related things employee and XXXX. a

expect in would which we XXXX, not XXXX. do in was that we to So did something

at feel market you adjustments point that I market got select think wise some us. we've did compensation this adjustments behind also We those

merit So, costs would expect forward. sort and we in moderate to that normal, more to benefit increases of going increases

Ryan Connors

give you did a that one-time, you kind us of payment inflation disclose able are – to no? And Okay. or on amount specific

Dan Schuller

Yes.

we it's, base an employee $X what Ryan, of is, kind across call million, so did people. it, And $X,XXX of there, X,XXX

So was our that thought to to grocery for year. that, something was bit. help we gas We paying that's out burden groceries little last to just pump to that help about on the just what gas Ryan, a it were able number was rough this employees company that. employees store, thought the And do as ease

Ryan Connors

Got it.

Okay.

variable Obviously, one rates was given in jump, a been surprising was rate of aspects forward? parent or of quick certain on there otherwise expense. But to are of which terms is interest headed. The a be or kind company it in we related that isn't our maybe going all aware other aren't things there pass-through? And of where also, have as should pass-through people anything that

Dan Schuller

variable way I only revolving is is Ryan, debt The rate of Yes. have place that, really think would we our credit the facilities.

subsidiaries. gas that's a [ph], so we've where costs. we the cost. got we're But purchase in revolver] [essential pickup use side, And at revolvers it and got seeing financing we've Gas for the bigger

that LIBOR-based a X%. only were of quite LIBOR And ago, a was think points of but you year of sulfur-based and low. If number, can XX it's we or year, change, above – the as something [ph] we because think this [sulfur] pick basis

So credit significant the facility. borrowing sits on that for increase in that anything cost revolving

of year. how The rest just tends debt, out, XXXX, classic to financing. we that to utility debt So be right, do we facility every our fixed to of terming about do that in like think about us long-range think leads sort rate tend

Ryan Connors

it. Got

much of in emerging passed issue, away we I that's that seeing multiyear that we fact, my start just we've it get is, one-off? is – of looks And seems expect way board? is things, all the years. be in increase one North the is expect Okay. something becoming bigger affordability side, more the rate on picture should It a Carolina right North structured, of more – so instead your and Carolina a was, to then staggered the increases rate heard Or over several getting the across like especially you request guess, the in about that to question and bigger water

Dan Schuller

Carolina, a this ago North So, of allows multiyear a couple there for change years rate was that making.

And a I [indiscernible] or one or to been think case time two advantage Pennsylvania one we that our the by and increase any this – used places. could proposed, It year propose have this only new large, ratemaking, are taking think could of I years, but would say, first water for one we're in a ability of fully is other great. states allows we're that alternative but are all saw historic any future that the where which company on effectively We a an hasn't was test test either based projected those so multiyear construct. at point. future multiyear.

Chris Franklin

But not our with only though, PFOS, to focus you're work we're say why customers, theme the of payers, right a on affordability for focused a shareholders. there passed program would the our across boardroom. continue We It's of [indiscernible] space everything our is for in service theme affordability. That's to were in customers. I even all about first states. We're we not rate to affordability obviously at utility directly think our on some then doing, and our very grants about to only it's Ryan, out on And we that currently that's why mitigation else. which ask PFOA in get Pennsylvania. universal

I So, I This for important think, will the And big had that topic. in on tough focus a These especially little is think And times industry. affordability less. maybe those economic remain generally. are that true. an

So, companies at and regulatory try affordable. say, will themes you'll schemes, probably should the continually different all being that see attempt more of I

Ryan Connors

Got your it. for Thanks time.

Operator

go Morningstar. from next from ahead. our Please comes Miller And question Travis

Travis Miller

terms you annual of [Technical versus take follow-up make versus, rate Does when you. in to think, base of and the you your sense I Good an the charge base you do really on idea run you in do of the how morning. what adjustments cases, cases? Difficulty] about what a balance to rate add whatever that Quick I to kind base that the about case. think, just cadence question annual currently? rate of, Thank – for think rate, think And get terms

Chris Franklin

varies a recoverability the good. bit mix. The is Pennsylvania you like in state-by-state, Dan, the states but mix little pretty know

Dan Schuller

we think we state. we Yes. depends as it, I mean – – by probably about it state

structures. increased DSIC to for [SIC] X.X% rates the water [ph] on or up between different cases have Pennsylvania rate based We DSIC.

I think Illinois models in period. of any the sort X.X% two-year

Chris Franklin

North one. Carolina has

Dan Schuller

North here. your maybe Carolina one. of get to, is Travis, has But think, question I to kind what

years we could three that to what or something year we about, shorten terms rate could we X% As is, we total, And every of have proposed the achieve what say, a between rate think case, X% a Pennsylvania, thinking think combination. in case in that that that the of order I DSIC over year, in rate per rate in expect a we're and cadence little to and in what a bit but on run But we a shorter. mean per case period. case that's

Travis Miller

makes that I that's what sense. Yes, Okay. asking. No, was

that few Municipal but over Is higher-level run the It Or rate what's excluding of and DELCORA the so is you'd either number and a me seems environment pipeline then accelerate? something okay. takes kind quarters if it like? the could few the rate a of puts this is like expect? over there or back pipeline been wrong, XXX,XXX the last run in that's look macro holding pipeline, you've then So, quarters, Great. I'm somewhere wrong, the correct And have last question. growth. and you the XXX,XXX when

Chris Franklin

Yes.

our pipeline think strong. We about customers is the talked pipeline. in XXX,XXX I

politics the macroeconomics, very not rates, really near-term, optimistic about chunky. privatization. I that There everything than So are so terms and many but it, words, chunky, interest encouraging, from local discussions other slower piece at In is have but of been one municipal it currently all. a into long-term would that little it's the say, other has are having generally in big it and we'll only of Travis year factors, drivers. that we're But always to the go and strong, the a activity, we're

Travis Miller

Great. Okay. I the so appreciate Thanks much. thought.

Operator

comes from Please next Gregg ahead. go question from The Orrill UBS.

Gregg Orrill

sort wondering there? Good on if of outlook morning. just I Pennsylvania, just order and the Thanks. you. what's DELCORA the Thank to stay could, in was review you process speak

Chris Franklin

Yes. Sure.

there just of is here. we really play are clarity, So, Remember, bankruptcy. stay really for Chester. serves, the the one between, stays is about DELCORA The talk are in city regarding Chester two City that that

City their an right? assets or the And to they has the – So reversionary, And DELCORA. automatic XXXX, so have proceeding. the sold on in bankruptcy stay Chester basically currently, contributed DELCORA

Now, the in court, relief today, automatic stay. to we're get bankruptcy trying with court from that

Hopefully, So, that's the one moved stay. courts Usually some reaction pretty bankruptcy judge. quickly. see from we'll

answer be that may So, who judge the a knows quick fairly from there.

is The second stay law Utility Commission. Public from the administrative judge the at

so And court county the on terms municipal has in what has Delaware DELCORA based is stay filed that a County case clarification in the of – for seeking on items. two

asks or vote relieve the the the have Now, an interlocutory to to then five stay ability stay. basically which the commissioners ALJ we action, file stay, at the to uphold

currently parts, today, I know there. that's see in lot clear And that a you. about bankruptcy we stays there's and we place. the then court it's want And to those from of but moving are so, two are – thinking goes are how first options. the look to Clearly, our we'll hopefully But

Gregg Orrill

Appreciate Thank you. it.

Operator

Baird. And our next Sunderland go comes question from Davis Please ahead. from

Davis Sunderland

Hey my guys. Congrats on a taking quarter and question. good for thanks

inflationary you. investment? per difficulties guess Just Thank to as you're capital to And investments plan quickly then ask $XXX I increase Do million part acceleration your growth pressures? of with year. seeing that follow-up an to of about we just it your anything guidance being or a about previous be think related would wanted extra an supply to chain for this on

Chris Franklin

to want take supply chain Dan? you the Do first, one

Dan Schuller

throughout chain, supply to pending been in the of the, we kind been chain pandemic need. I things supply and able that constraints, say terms post mean there Sure. Yes. I we've generally would that have where obtain of

larger items, large valves large Some more diameter diameter diameter and have such pipes, been fittings and things, delayed.

And to had so, that. projects we've like plan ahead on

up we've place got so is where that things with see some work starting we're [indiscernible] couple to some to are been last But a chain to have years nothing of we've able open specifically but we have there. some meters these not there constraints bit. one related to continue challenges, related that that that during The we there. Microchip been delays see our supply through

and a on point, but And $X a increase we to average, to guess, billion invest to then up. the change to your kind about continue of opportunity a think year that capital bit, $X.X you're costs seeing I rate capital the year billion from, are thus

well. into factored that's as objective dollar that So, total

Chris Franklin

over add so. almost that just the cost or I'd year last even the double pipe of is

so, conceptually, We're the you same we done as get can, And as for to done. but you dollar. trying be get less less efficient possibly

And would not category identify this pipe course, then, needs acceleration, increases. And the of price away we're in those. to the those in And water gas. we but as especially don't to we're replacement needs, trying pace an through capital both stay more of so, working I with opportunities, infrastructure in and natural continue go the our of the despite consider needs,

Davis Sunderland

much. so Thanks

Operator

ahead. from Fargo. Please comes Instructions] next go [Operator Reeder question Our Wells Jonathan from

Jonathan Reeder

potential settlement addressed the on Can the process getting Public latest appreciate for Utilities the to more schedule, indicate this Commission. a challenges DELCORA. out rely just [indiscernible] year-end? resuming fully kind is expectations of those I towards or to the litigated say now at legal close ability you on your reach that on playing whether Do in based

Chris Franklin

once dates. February, lifted. need XX XX, are I is to a mean, have We still in combination, evidentiary to Jonathan. We're go full to think the to right? we the original going and Yes. PUC now expected have were through think, about it. I We'll hearings pushed through I would process, how Those off. here's go those a the still stay probably say were

And you or to continue – full will it it be would be – but while so, say fully a litigated – I a process. whether call

Certainly, reach then we a for relieves settlement, if any could one delays additional appeals. the and – opportunity

mischaracterize I And say remain I about closing want and and a about so, think a this conversations I to optimal conversations, constructive they're settlement that's discussions, settlement. for I why those is would optimistic don't but ongoing year.

Jonathan Reeder

Okay.

So, conversations still are occurring.

and still get to are they constructive think hopeful You there.

Okay.

Chris Franklin

Yes.

Jonathan Reeder

a ranges in guidance and impact? ship the delivered plan you weather question, if might comments levers offsets respect to then pull And weather but I obviously, delay know I always made call headwind in the cost be have you that team temporary has offset XXXX, later and needed? perhaps could the do running pretty Okay. and some a mean how of with that reputation DELCORA, second if you the already, year-to-date the opened other essentially the to needed later you the on there to as noting can lean pull implement

Chris Franklin

answer short I think the yes. is,

Dan Schuller

Ryan, Probably we're mean Yes. some now Jonathan, – sorry. that – evaluating things, is I

XXXX. I do of think is need cetera? What remains I the part strong culture is optimal I before a in this? you may critical quantity be we of expenses, about progresses we're a the now really always, point, that, here spend. that really need? to Do et What price, say So, your of at that and the able but look certainly, encouraging people it had that more cost today we've sort idea as So, have here, really to ensuring we're evaluating culture, strong our

Jonathan Reeder

Right.

Okay. to Great. the it's No. hard mean control I weather.

luck offsetting to, forward. DELCORA good that if hopefully, can and need be move looking forward So,

taking for So, questions. my thanks

Dan Schuller

care, Take Jonathan.

Operator

a question we you. go Ryan from Please follow-up have for Research. And Thank ahead. Northcoast

is open. line Your

Ryan Connors

Just a quick follow-up, Yes, could. thanks Chris. if I

on issues? proceeding Chester all given Just fiscal that's they chance DELCORA, – whether how it choose should that and – think talking Authority of for how but thanks Water itself – how you move the us updates – in then about update the we and about their to that context the we as the bankruptcy through the reemerges [indiscernible] of on any bankruptcy solve we're can

Chris Franklin

would deep a sense short Ryan. The debt don't But is that – massive it that bail-out just option They The is the my asset. federal including state sell other option. another is to have they this be point, two asset. have, restructuring, there's speculation from Yes. of no Listen, or at government. all only

final still says still it's if tied in and that determination Remember, up. even Court asset, Now owns that fact, that the that be receiver Supreme the to city, sell would have asset. the moved there's decision a ahead, then

together for progresses have be say things. [ph] – we'll other see improving the to And I and as [conditions] certainly, interest work become some all front-burner city. engaged issue there. in that for the in So, today and city, utility exciting DELCORA making not us. great would we that, is we'll a But that be We continue the inside

Ryan Connors

Thanks color. again. helpful That’s

Operator

Thank you.

queue. Chris. back hand for questions his Over to further are Franklin [ph] I'd call to like there in remarks. your Christopher the over As no the to [closing]

Chris Franklin

us. Thank you I all Dan, for again your Thank always we're available Obviously, time and available anytime. and you for joining us today. follow-up for Brian, for are joining questions.

Operator

Ladies concludes for now you you conference your may gentlemen, and today's participation. Thank you. disconnect. call. Thank This

Essential Utilities (WTRG) 27 Feb 232022 Q4 Earnings call transcript