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Operator: Press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again, press star 1. I would now like to turn the conference over to Brian Dingerdissen. You may begin.

Christopher H. Franklin: Shareholder approval in record speed compared to similar deals over the years, and we are very proud of that. As we move to slide six, you can see that by year-end 2025, we completed the seven filings in the states required. This was another substantial accomplishment in an incredibly short period of time and I truly appreciate the efforts of our teams involved. At this point, we have received the initial procedural schedules in most of the states, and based on those schedules, we continue to believe that we will close the transaction in 2027. As you may recall, three states have statutory timelines, but the others do not. I may not be able to promise this regulatory approval phase will proceed in the same record speed as our shareholder approval, but I can certainly say I am proud of the constructive regulatory relationships that we have built over the years, and I firmly believe that this mutual trust that we have built will lead to a constructive outcome.

So let us turn our focus to reviewing the past year’s successes on slide seven. 2025 was truly a banner year for Essential Utilities, Inc., and I am very proud of what our team across every function has accomplished. I would like to highlight some of these as I think they speak to the drive for consistency and excellence I have emphasized in our calls over the years. Financially, we delivered 2025 earnings per share of $2.20, above our guidance range of $2.07 to $2.11. Even without some of the nonrecurring, I will call beneficial items, noted in our 10-Qs and 10-K throughout the year, we would have ended up above the guidance range. This represents our continued commitment and legacy of delivering on the guidance that we provide investors. And Dan will discuss this outperformance in more detail, but suffice it to say, we delivered another strong year of earnings.

Alongside growing earnings per share, we also increased the quarterly dividend by 5.25% in July. That is 35 increases in 34 years for anybody keeping score, and 80 consecutive years of paying dividends. I am also happy to report that this earnings per share and dividend growth was achieved while we increased capital investment for the benefit of our customers. In 2025, we invested a record $1.4 billion in regulated infrastructure, helping to improve reliability and resiliency for our communities. Operationally, 2025 saw our water business adding more municipal wastewater systems across Pennsylvania and North Carolina. We continue executing on our industry leadership on this issue. We are also pleased for our natural gas segment. I am just so proud of what the team accomplished in 2025.

Of course, both businesses have continued robust main replacement. Throughout the year and across both segments, we replaced or retired over 400 miles of main in 2025. It is really worth noting that these successes demonstrate that our work on the merger did not distract us from our core operational goals and obligations to our customers. These are fundamental to our success as a company and our fidelity to its mission. In 2025, we were also named to USA TODAY’s America’s Climate Leaders for the third consecutive year. Essential Utilities, Inc. has been named as one of Newsweek’s America’s Most Responsible Companies for the fifth consecutive year. Regarding sustainability, I have been consistent and steadfast in my message to you over the years.

Our focus on the environment, our focus on the community, and our focus on people continue to guide us through 2026. American Water shares a similar commitment, which makes our combination only more compelling. Another central area of focus for us tied to sustainability is maintaining our commitment to delivering high-quality, affordable service for our customers. Amid ongoing national and state discussions around affordability, particularly the impact on customer bills, I want to reiterate that our approach is grounded in making responsible investments in replacing aging infrastructure, sustaining high-quality water, and strengthening system reliability while carefully managing our operating costs. By balancing these priorities, we work to support customer affordability while at the same time sustaining our financial performance.

And with that, let me turn the call over to Dan to review our financials for the year.

Daniel J. Schuller: Thanks, Chris, and good morning, everyone. Let us begin on slide nine with a high-level view of the full-year results, and then we will get into the details on the waterfalls. As Chris described, our 2025 was very strong with revenues up 18.6%. Let us recall that this year-over-year GAAP EPS comparison includes previously disclosed prior-year items related to the gain on sale of the Pittsburgh-area energy project, as well as the unanticipated weather we experienced in 2024. On slide 10, we have the revenue waterfall for the year. Revenue has increased $388.5 million, or 18.6%, from about $2.1 billion a year ago to near $2.5 billion this year. Approximately $177.6 million of that increase is the result of regulatory recoveries.

Purchase gas tax repair credits to customers contributed $57.2 million, while the “other” category of $30 million consists of reduced weather normalization credits to our gas customers due to colder-than-normal weather in 2025. Next on slide 11, our O&M slide, we see O&M expenses up about $52.3 million, or 0.9% year over year, with an increase of $8.5 million in water production costs, contributing increases in power, purchased water, and chemicals. Operating expenses related to newly acquired water and wastewater systems added $1.7 million. The “other” category reduced O&M by $2.6 million, including the positive impacts of higher capitalization in the gas business, lower spending on materials and supplies, and some insurance-related benefits, offset by expenses related to the merger with American Water.

If we normalize out the merger expenses, insurance proceeds, and growth, we get to a year-over-year increase more in line with historic norms. Moving to slide 12, our earnings per share waterfall. We begin with 2024 GAAP EPS of $2.17. As a reminder, we made a few adjustments to arrive at a non-GAAP income per share of $1.97 for 2024. These adjustments included the removal of the one-time gain from sale of the Pittsburgh-area energy project, and adjustments for unanticipated weather along with the associated tax impact. You will find the reconciliation in the investors section of our website and as an appendix to this deck. In 2025, we picked up $0.46 from regulatory recoveries, an additional $0.15 from higher gas volumes, and an incremental $0.01 from water growth.

These are partially offset by $0.02 from lower water volume, $0.09 from higher expenses, and $0.48 from “other.” Now, “other” includes $0.24 from the prior-year gain on sale from the energy project, as well as increased depreciation, amortization, interest, and taxes. As we have discussed in the last couple of earnings calls, in 2025, our expectation was that we would achieve GAAP earnings per share above our guidance range of $2.07 to $2.11 due to nonrecurring benefits, and indeed, we finished the year with full-year GAAP EPS of $2.20. Let me point out a few nonrecurring items from our 10-Qs and the upcoming 2025 10-K that contributed to this favorability. We had the release of an income tax reserve regulatory liability based on the February 2025 Aqua Pennsylvania rate order, and we had a favorable regulatory asset adjustment based on the February 2025 Aqua Pennsylvania rate order.

We had the closure of the P&G sales and use tax audit. And then in the second quarter, we had a benefit related to decreased bad debt expense. A second of those was actually tied to a COVID-related reserve. And in the first quarter, we had a benefit from insurance proceeds. These were partially offset by merger-related expenses for banking, legal, and other matters. However, even excluding these one-time items, both good and bad, we still had strong financial performance that would have exceeded our range. We remain committed to our long-term goal of delivering 5% to 7% EPS growth for the three-year period of 2024 through 2027. Given the impact of one-time items in the 2025 results, for a better sense of 2026, I would use that long-term CAGR of 5% to 7% off the non-GAAP income per share of $1.97 in 2024.

I will conclude my remarks on slide 13 with a discussion on regulatory activity. In 2025, Essential Utilities, Inc. completed regulatory recoveries that total $101.5 million of incremental annualized revenue, with $92.6 million of this related to our water and wastewater business, and the remainder to our gas business. Thus far in 2026, Essential Utilities, Inc. has completed regulatory recoveries that total $12.4 million across our water, wastewater, and natural gas businesses. Looking ahead now, our water and wastewater segment has filed for regulatory recoveries with a requested annualized revenue increase totaling $101.9 million. We continue to manage our regulatory activity to minimize regulatory lag, maintain safe and reliable service, and earn an appropriate return on the capital we invest, while always considering affordability for our customers.

This will, in a similar manner to the past, continue throughout 2026 as we approach our anticipated combination with American Water. And with that, I will turn it back over to Chris.

Christopher H. Franklin: Alright. Thanks, Dan. Let us move to slide 15 to recap our water and wastewater acquisitions for the year and take a look forward. During 2025, Essential Utilities, Inc. completed three acquisitions of water and wastewater systems for approximately $58 million, which represent over 12,700 new customers. I want to touch on some recent news you may have heard regarding the city of Chester and the Chester Water Authority. We respect the court’s ruling. The Supreme Court in Pennsylvania communicated its decision regarding the city of Chester and the Chester Water Authority. We stand ready to participate in any process where our company can be part of an overall solution that assists the city of Chester to exit bankruptcy and ensure utility customers in the region receive quality water at affordable rates.

Now looking forward, we have three signed purchase agreements for systems in Pennsylvania and Texas, which we expect to close in 2026. Notably, last month, the Pennsylvania Public Utility Commission approved Aqua Pennsylvania’s acquisition of the assets of the Greenville Municipal Water Authority without modification. I will remind you that progress on our DELCORA transaction, the fourth pending item listed here, continues to be stalled by a stay put in place by a federal bankruptcy court judge related to the bankruptcy of the city of Chester. As we noted in November on our third quarter 2025 earnings call, we remain optimistic about the consolidation of water and wastewater systems in the United States, and look forward to leveraging the combined resources of Essential Utilities, Inc.

and American Water to accelerate our business development work through 2027. Hopefully, we will see some movement on DELCORA now that the Supreme Court has ruled. All right. Let me conclude my remarks on slide 16. We are reaffirming our 5% to 7% multiyear earnings per share guidance. As Dan noted earlier, this 5% to 7% CAGR should be applied to our 2024 non-GAAP income per share of $1.97 as this strips out the favorability of nonrecurring items in 2025. This includes acquisitions expected to close in 2026 but excludes DELCORA. We also remain committed to maintaining a strong balance sheet, improving cash flow and debt metrics, and delivering consistent dividend growth, while keeping our payout ratio between 60–65%. In 2026, regulated infrastructure investments are expected to be $1.7 billion.

And finally, I want to reaffirm our PFAS commitments. We are continuing to execute our multiyear plan to ensure that finished water does not exceed the federal maximum contaminant level of EPA-regulated PFAS chemicals as we embark on EPA timelines and our anticipated merger with American Water. Listen. All in all, I commend the 2025 performance of the entire Essential Utilities, Inc. team for an excellent year, and I reiterate our company’s commitments to all its stakeholders as we embark on what I anticipate will be another strong year and a productive lead-up to our anticipated merger with American Water. I am going to conclude the formal remarks for the day, and we will open it up for questions.

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Operator: We will now open for questions. If you have dialed in and would like to ask a question, please press 1 on your telephone keypad to raise your hand and join the queue. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking a question. Our first question comes from Paul Zimbardo with Jefferies. Please go ahead.

Paul Zimbardo: Hi. Good morning, team. Hi. Good morning. How are you? I am good. I am good. Thank you for taking the questions. The first was, and I apologize I have missed it, did you quantify what the non-GAAP 2025 would be if you made those adjustments, both sort of positive items, and then we noted the transaction costs as well?

Daniel J. Schuller: No. We did not say it specifically. We just gave you the nonrecurring items there. You can find all those numbers in the Qs and then in the 10-K that will be released later today. You will see that we still sit favorable to our guidance range, really, as we have projected throughout the course of the year.

Paul Zimbardo: Okay. Understood on that. And broadly, on the regulatory strategy, could you describe what is the timing for the next round of Pennsylvania rate cases?

Daniel J. Schuller: Yeah. So the way I think about it, we have not announced it officially. But for both PNG and Aqua Pennsylvania, we have been on a two-year cadence historically. So I would use that same cadence. That would have us filing relatively quickly here.

Paul Zimbardo: Okay. Okay. Then the last one I had was just I noticed that the small tweak on the language on the credit metrics is 12% plus versus the prior range. Anything to read into or things that you are trying to communicate from that?

Daniel J. Schuller: I guess all we would probably say is, as we finished out the year and concluded our financial reports, it looks like we are in a nice position there in terms of FFO to debt. We should be above that 12% threshold for Moody’s and for S&P. So we feel good about those credit metrics.

Paul Zimbardo: Thank you very much, team.

Operator: Our next question comes from Travis Miller with Morningstar. Please go ahead.

Travis Miller: Thank you. Hi, everyone. With some of your plans for regulatory activity with the merger, is there any chance that you could combine regulatory sign-off for the merger? Or would those be two separate filings in any of the states? You are about rate cases? Rate cases or surcharges, any kind of rate-related type of regulatory activity? Is that something you could combine somehow, either settlement or through the proceedings? Or are they all considered separate?

Daniel J. Schuller: They are separate dockets and will be adjudicated separately in each case. I do not see those being combined, Travis.

Travis Miller: Okay. Just thought I would check there. And then when you talk about the participate in along those lines? Take me through what might develop or what you could participate in along those lines?

Christopher H. Franklin: It is such a great question. Now that the Supreme Court has ruled and said that the water authority, the Chester Water Authority, is actually owned by itself, right? The city argued that it should be owned by the city. And in that case, the city could sell the asset and exit bankruptcy with the proceeds. Now that the city does not have an asset to sell, somebody has to figure out—obviously, the receiver in this case along with the bankruptcy court judge—how they are going to exit bankruptcy or declare bankruptcy. And I think that is what is happening in the background. Where I think it is important for us is for DELCORA. You will remember that there is a small reversionary stub piece, if you will, of the contract that says if DELCORA sold, in this case to us, that the city assets, the Chester city assets, that were subject in place in 1972 when this addendum was put together, would revert to the city.

I think there is an opportunity here for us to pay something for those assets. It is not going to nearly cover bankruptcy. We are talking maybe a little bit above our current purchase price at rate base. It is a minor amount in comparison to the almost $350 million they owe. But it could be a help in some way. At this point, what we would like to see is the bankruptcy judge allow the PUC proceeding to take place on DELCORA, and then we can begin this negotiation on the reversionary portion of the contract. Is that clear? As clear as I suppose it could be. It is a fun type of option for all of us.

Travis Miller: Yep. No. That is all I had.

Operator: This concludes the question-and-answer session. I would now like to turn the call back over to Chris for closing remarks.

Christopher H. Franklin: Thank you.

Operator: Thank you. You may now disconnect. This concludes the call. Thank you for joining.

Brian Dingerdissen: Thanks for joining. As always, we are available for follow-up questions that you might have. Have a great day. Thanks for being with us.

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