ESSENTIAL UTILITIES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) (In thousands of dollars, except per share amounts)
Lease Accounting ─ The Company evaluates the contracts it enters into to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. We enter into operating lease contracts for the right to utilize certain land, office facilities, office equipment, and vehicles from third parties. For contracts that extend for a period greater than 12 months, we recognize a right of use asset and a corresponding lease liability on our consolidated balance sheet. The present value of each lease is based on the future minimum lease payments in accordance with Accounting Standards Codification (“ASC”) 842 and is determined by discounting these payments using an incremental borrowing rate or the rate implicit in the lease, if available. Recognition of Revenues ─ The Company recognizes revenue as utility services are provided to our customers, which happens over time as the services are delivered and the performance obligation is satisfied. The Company’s utility revenues recognized in an accounting period includes amounts billed to customers on a cycle basis and unbilled amounts based on estimated usage from the last billing to the end of the accounting period. Unbilled amounts are calculated by deriving estimates based on average customer usage. The Company’s actual results could differ from these estimates, which would result in operating revenues being adjusted in the period that the revision to our estimates are determined. Generally, payment is due within 30 days once a bill is issued to a customer. Sales tax and other taxes we collect on behalf of government authorities, concurrent with our revenue-producing activities, are primarily excluded from revenue. The following table presents our revenues disaggregated by major source and customer class for the years ended December 31:
Wastewater Revenues
Natural Gas Revenues
2025
Water Revenues
Other Revenues
Revenues from contracts with customers: Residential
$
731,818 $
165,257 $
708,049 $
- - - - - - -
Commercial Fire protection
208,617 46,998 41,619
41,738
141,275
-
-
Industrial
2,477
3,150
Gas transportation & storage
-
- -
242,186
Other water
62,870
- -
Other wastewater
- -
13,294
Other utility
-
29,541
10,937 10,937
Revenues from contracts with customers
1,091,922
222,766
1,124,201
Alternative revenue program
667
337
(6,326)
-
Other and eliminations
-
-
-
30,111
Consolidated
$
1,092,589 $
223,103 $ 1,117,875 $ 41,048
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