YORK WATER CO (YORW)
SIC breadcrumb: Transportation, Communications, Electric, Gas, And Sanitary Services > Electric, Gas, And Sanitary Services > SIC 4941 Water Supply
SEC company page: https://www.sec.gov/edgar/browse/?CIK=108985. Latest filing source: 0000108985-26-000015.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 77,488,000 | USD | 2025 | 2026-03-03 |
| Net income | 20,058,000 | USD | 2025 | 2026-03-03 |
| Assets | 680,888,000 | USD | 2025 | 2026-03-03 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-03. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000108985.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 48,589,000 | 48,437,000 | 51,578,000 | 53,852,000 | 55,119,000 | 60,061,000 | 71,031,000 | 74,959,000 | 77,488,000 | |
| Net income | 11,846,000 | 12,974,000 | 13,376,000 | 14,402,000 | 16,598,000 | 16,984,000 | 19,580,000 | 23,757,000 | 20,325,000 | 20,058,000 |
| Operating income | 22,888,000 | 23,693,000 | 22,517,000 | 23,786,000 | 24,431,000 | 23,396,000 | 24,483,000 | 29,531,000 | 28,041,000 | 27,705,000 |
| Diluted EPS | 0.92 | 1.01 | 1.04 | 1.11 | 1.27 | 1.30 | 1.40 | 1.66 | 1.42 | 1.39 |
| Operating cash flow | 19,365,000 | 20,111,000 | 18,372,000 | 18,881,000 | 20,235,000 | 22,959,000 | 22,018,000 | 31,908,000 | 30,559,000 | 29,860,000 |
| Dividends paid | 7,956,000 | 8,229,000 | 8,583,000 | 8,986,000 | 9,394,000 | 9,808,000 | 10,674,000 | 11,590,000 | 12,088,000 | 12,626,000 |
| Assets | 320,494,000 | 332,030,000 | 345,140,000 | 363,529,000 | 406,957,000 | 458,853,000 | 510,595,000 | 588,205,000 | 633,473,000 | 680,888,000 |
| Stockholders' equity | 114,061,000 | 119,405,000 | 126,195,000 | 134,185,000 | 143,252,000 | 152,622,000 | 207,183,000 | 221,178,000 | 231,192,000 | 240,347,000 |
| Cash and cash equivalents | 4,209,000 | 2,000 | 2,000 | 2,000 | 2,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 |
Ratios
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | 26.70% | 27.62% | 27.92% | 30.82% | 30.81% | 32.60% | 33.45% | 27.11% | 25.89% | |
| Operating margin | 48.76% | 46.49% | 46.12% | 45.37% | 42.45% | 40.76% | 41.57% | 37.41% | 35.75% | |
| Return on equity | 10.39% | 10.87% | 10.60% | 10.73% | 11.59% | 11.13% | 9.45% | 10.74% | 8.79% | 8.35% |
| Return on assets | 3.70% | 3.91% | 3.88% | 3.96% | 4.08% | 3.70% | 3.83% | 4.04% | 3.21% | 2.95% |
| Current ratio | 1.54 | 0.94 | 0.83 | 0.62 | 1.36 | 0.56 | 0.84 | 0.86 | 0.90 | 0.67 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000108985.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-06-30 | 0.36 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | 0.40 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 0.26 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 18,767,000 | 6,524,000 | 0.45 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 18,767,000 | 7,568,000 | 0.53 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 18,096,000 | 6,012,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 17,628,000 | 4,327,000 | 0.30 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 18,750,000 | 4,993,000 | 0.35 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 19,715,000 | 5,863,000 | 0.41 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 18,866,000 | 5,142,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 18,456,000 | 3,638,000 | 0.25 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 19,199,000 | 5,052,000 | 0.35 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 20,361,000 | 6,201,000 | 0.43 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 19,472,000 | 5,167,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 20,074,000 | 4,814,000 | 0.33 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0000108985-26-000036.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (In thousands of dollars, except per share amounts) Forward-looking Statements Certain statements contained in this report on Form 10-Q constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Words such as “may,” “should,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “objective” and similar expressions are intended to identify forward-looking statements. These forward-looking statements include certain information relating to the Company’s business strategy and future prospects; including, but not limited to: • the amount and timing of rate changes and other regulatory matters including the recovery of costs recorded as regulatory assets; • expected profitability and results of operations; • trends; • goals, priorities and plans for, and cost of, growth and expansion; • strategic initiatives; • availability of water supply; • water usage by customers; and • the ability to pay dividends on our common stock and the rate of those dividends. The forward-looking statements in this report reflect what the Company currently anticipates will happen. What actually happens could differ materially from what it currently anticipates and you should not place undue reliance upon such statements, which are based only on information currently available to the Company and speak only as of the date hereof. The Company does not intend to make a public announcement when forward-looking statements in this report are no longer accurate, whether as a result of new information, what actually happens in the future or for any other reason. Important matters that may affect what will actually happen include, but are not limited to: • changes in weather or climate, including drought conditions or extended periods of heavy precipitation; • natural disasters, including pandemics and the effectiveness of the Company’s pandemic response; • levels of rate relief granted; • the level of commercial and industrial business activity within the Company’s service territory; • construction of new housing within the Company’s service territory and increases in population; • changes in government policies or regulations, including the tax code, and the impact of government shutdowns; • the ability to obtain permits for expansion projects; • material changes in demand from customers, including the impact of conservation efforts which may impact the demand of customers for water; • changes in economic and business conditions, including interest rates; • loss of customers; • changes in, or unanticipated, capital requirements, including requirements relating to compliance with increasing environmental and safety regulations; • the impact of acquisitions; • changes in accounting pronouncements; • changes in the Company’s credit rating or the market price of its common stock; and • the ability to obtain financing. Table of Contents Page 17 General Information The primary business of the Company is to impound, purify to meet or exceed safe drinking water standards and distribute water. The Company also owns and operates three wastewater collection systems and thirteen wastewater collection and treatment systems. The Company operates within its franchised water and wastewater territory, which covers portions of 58 municipalities within four counties in south-central Pennsylvania. The Company is regulated by the Pennsylvania Public Utility Commission, or PPUC, for both water and wastewater in the areas of billing, payment procedures, dispute processing, terminations, service territory, debt and equity financing and rate setting. The Company must obtain PPUC approval before changing any practices associated with the aforementioned areas. Water service is supplied through the Company’s own distribution system. The Company obtains the bulk of its water supply for its primary system for York and Adams Counties from both the South Branch and East Branch of the Codorus Creek, which together have an average daily flow of approximately 73.0 million gallons from a combined watershed area of approximately 117 square miles. The Company has two reservoirs on this primary system, Lake Williams and Lake Redman, which together hold up to approximately 2.5 billion gallons of water. The Company supplements these reservoirs with a 15-mile pipeline from the Susquehanna River to Lake Redman which provides access to an additional supply of 12.0 million gallons of untreated water per day. The Company obtains its water supply for its system for Franklin County from the Roxbury Dam on the Conodoguinet Creek, which has an average daily flow of approximately 26.0 million gallons from a watershed area of approximately 33 square miles. The Company has a reservoir on this system which holds up to approximately 330 million gallons of water. The Company also owns fifteen wells which are capable of providing a safe yield of approximately 923,000 gallons per day to supply water to the customers of its groundwater satellite systems in York, Adams, and Lancaster Counties. As of March 31, 2026, the Company’s average daily availability was 41.1 million gallons, and average daily consumption was approximately 23.1 million gallons. The Company’s service territory had an estimated population of 214,000 as of December 31, 2025. Industry within the Company’s service territory is diversified, manufacturing such items as fixtures and furniture, electrical machinery, food products, paper, ordnance units, textile products, air conditioning systems, laundry detergent, barbells, and motorcycles. The Company’s water business is somewhat dependent on weather conditions, particularly the amount and timing of precipitation. Revenues are particularly vulnerable to weather conditions in the summer months. Prolonged periods of hot and dry weather generally cause increased water usage for watering lawns, washing cars, and keeping golf courses and sports fields irrigated. Conversely, prolonged periods of dry weather could lead to drought restrictions from governmental authorities. Despite the Company’s adequate water supply, customers may be required to cut back water usage under such drought restrictions which would negatively impact revenues. The Company has addressed some of this vulnerability by instituting minimum customer charges which are intended to cover fixed costs of operations under all likely weather conditions. The Company’s business does not require large amounts of working capital and is not dependent on any single customer or a very few customers for a material portion of its business. Increases in revenues are generally dependent on the Company’s ability to obtain rate increases from the PPUC in a timely manner and in adequate amounts and to increase volumes of water sold through increased consumption and increases in the number of customers served. The Company continuously looks for water and wastewater acquisition and expansion opportunities both within and outside its current service territory as well as additional opportunities to enter into bulk water contracts with municipalities and other entities to supply water. The Company has agreements with several municipalities to provide billing and collection services. The Company continues to review and consider opportunities to expand this initiative to further diversify the business. Table of Contents Page 18 Results of Operations Three Months Ended March 31, 2026 Compared With Three Months Ended March 31, 2025 Net income for the first quarter of 2026 was $4,814, an increase of $1,176, or 32.3%, from net income of $3,638 for the same period of 2025. The primary contributing factors to the increase were higher operating revenues and lower income taxes, which were partially offset by higher operating expenses and higher interest on debt. Operating revenues for the first quarter of 2026 increased $1,618, or 8.8%, from $18,456 for the three months ended March 31, 2025 to $20,074 for the corresponding 2026 period. The primary reason for the increase was a rate increase effective March 1, 2026. Growth in the customer base also added to revenues. The average number of water customers served in 2026 increased as compared to 2025 by 998 customers, from 73,186 to 74,184 customers. The average number of wastewater customers served in 2026 increased as compared to 2025 by 620 customers, from 6,712 to 7,332 customers, primarily due to acquisitions. The increased revenues were partially offset by a $107 decrease from a lower distribution system improvement charge, or DSIC, allowed by the PPUC. The DSIC reset to zero on March 1, 2026 when the rate order took effect. Total per capita consumption for 2026 was approximately 2.2% lower than the same period of last year. For the remainder of the year, the Company expects revenues to increase due to the increase in rates, higher summer demand and an increase in the number of water and wastewater customers from acquisitions and growth within the Company’s service territory. Other regulatory actions, weather patterns, and economic conditions could impact results. Operating expenses for the first quarter of 2026 increased $1,548, or 12.7%, from $12,173 for the first quarter of 2025 to $13,721 for the corresponding 2026 period. The increase was primarily due to higher expenses of approximately $398 for distribution system maintenance, $322 for wages and benefits, $198 for insurance, $185 for purchased power, $110 for the provision for uncollectible accounts, $95 for depreciation and amortization, $70 for technology upgrades, $52 for water treatment, and $50 for wastewater treatment. Other operating expenses increased by a net of $68. For the remainder of the year, the Company expects depreciation and amortization expense to continue to rise due to additional investment in utility plant, and other expenses to increase as costs to treat water and wastewater, and to maintain and extend the distribution system, continue to rise. Weather patterns could further increase operating expenses. Interest on debt for the first quarter of 2026 increased $296, or 12.2%, from $2,419 for the first quarter of 2025 to $2,715 for the corresponding 2026 period. The increase was primarily due to an increase in short-term and long-term debt outstanding. The average debt outstanding under the line of credit and short-term borrowings was $46,725 for the first quarter of 2026 and $19,163 for the first quarter of 2025. The weighted average interest rate on the line of credit and short-term borrowings was 4.89% for the quarter ended March 31, 2026 and 5.49% for the quarter ended March 31, 2025. Interest expense for the remainder of the year is expected to decrease after the line of credit was substantially repaid upon the completion of the underwritten common stock offering in April 2026. Allowance for funds used during construction increased $88, from $185 in the first quarter of 2025 to $273 in the corresponding 2026 period due to a higher volume of eligible construction. Allowance for funds used during construction for the remainder of the year is expected to increase based on a projected increase in the amount of eligible construction. Other income (expenses), net for the first quarter of 2026 was unchanged as compared to the same period of 2025. Higher charitable contributions of approximately $12 were offset by higher earnings on life insurance policies of approximately $12. For the remainder of the year, other income (expenses) will be largely determined by the change in market returns and discount rates for retirement programs and related assets. Table of Contents Page 19 Income tax expense for the first quarter of 2026 decreased $1,317 as compared to the same period [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (All dollar amounts are stated in thousands of dollars.) Overview The York Water Company (the “Company”) is the oldest investor-owned water utility in the United States, operated continuously since 1816. The Company also owns and operates three wastewater collection systems and twelve wastewater collection and treatment systems. The Company is a purely regulated water and wastewater utility. Profitability is largely dependent on water revenues. Due to the size of the Company and the limited geographic diversity of its service territory, weather conditions, particularly precipitation, economic, and market conditions can have an adverse effect on revenues. The Company experienced increased revenues in 2025 compared to 2024 primarily due to an increase in the number of customers and higher revenues from the distribution system improvement charge, or DSIC. The DSIC allows the Company to add a charge to customers’ bills for qualified replacement costs of certain infrastructure without submitting a rate filing. The Company’s business does not require large amounts of working capital and is not dependent on any single customer or a very few customers for a material portion of its business. In 2025, operating revenue was derived from the following sources and in the following percentages: residential, 64%; commercial and industrial, 29%; and other, 7%, which is primarily from the provision for fire service, but includes other water and wastewater service-related income. The diverse customer mix helps to reduce volatility in consumption. The Company seeks to grow revenues by increasing the volume of water sold and wastewater service provided through increases in the number of customers, making timely and prudent investments in infrastructure replacements, expansion and improvements, and timely filing for rate increases. The Company continuously looks for acquisition and expansion opportunities both within and outside its current service territory as well as through contractual services and bulk water supply. Table of Contents Page 13 The Company has agreements with several municipalities to provide billing and collection services. The Company continues to review and consider opportunities to expand this initiative to further diversify the business. In addition to increasing revenue, the Company consistently focuses on minimizing costs without sacrificing water quality or customer service. Paperless billing, expanding online services, negotiation of favorable electric, banking, and other costs, and reduced pension contributions are examples of the Company’s recent efforts to minimize costs. Performance Measures Company management uses financial measures including operating revenues, net income, earnings per share and return on equity to evaluate its financial performance. Additional statistical measures including number of customers, customer complaint rate, annual customer rates and the efficiency ratio are used to evaluate performance quality. These measures are calculated on a regular basis and compared with historical information, budget and the other publicly-traded water and wastewater companies. The Company’s performance in 2025 was strong under the above measures. Operating revenues increased in 2025 compared to 2024 primarily due to an increase in the number of customers and higher revenues from the DSIC. The increase in operating expenses offset the increase in operating revenues. The Company incurred higher interest expense and lower allowance for funds used during construction. The Company did benefit from a lower income taxes and a gain on life insurance. The overall effect was a decrease in net income in 2025 over 2024 of 1.3% and a return on year end common equity of 8.3%. The return on year end common equity was lower than the 2024 result and the five year historical average return on year end common equity of 10.3%. The Company’s recently implemented rate increase should increase its opportunity to earn a higher return on year end common equity in the future. The efficiency ratio, which is calculated as net income divided by revenues, is used by management to evaluate its ability to control expenses. Over the five previous years, the Company’s ratio averaged 31.0%. In 2025, the ratio was lower than the average at 25.9% due primarily to the increase in operating expenses, higher interest expense, and lower allowance for funds used during construction. Management is confident that its ratio will compare favorably to that of its peers. Management continues to look for ways to decrease expenses and increase efficiency as well as to file for rate increases promptly when needed. 2025 Compared with 2024 Net income for 2025 was $20,058, a decrease of $267, or 1.3%, from net income of $20,325 for 2024. The primary contributing factors to the decrease were higher operating expenses, higher interest on debt, and a lower allowance for funds used during construction, which were partially offset by higher operating revenues, lower income taxes, and a gain on life insurance. Operating revenues for 2025 increased $2,529, or 3.4%, from $74,959 for 2024 to $77,488 for 2025. The increase was primarily due to growth in the customer base and revenues from the DSIC of $1,986. The average number of water customers served in 2025 increased as compared to 2024 by 1,165 customers, from 72,415 to 73,580 customers. The average number of wastewater customers served in 2025 increased as compared to 2024 by 490 customers, from 6,521 to 7,011 customers, primarily due to acquisitions. Total per capita consumption for 2025 was approximately 1.6% lower than 2024. The Company expects revenues for 2026 to increase due to an increase in rates effective March 1, 2026, and the continued increase in the number of water and wastewater customers from acquisitions and growth within the Company’s service territory. Other regulatory actions, weather patterns, and economic conditions could impact results. Table of Contents Page 14 Operating expenses for 2025 increased $2,865, or 6.1%, from $46,918 for 2024 to $49,783 for 2025. The increase was primarily due to higher expenses of approximately $1,279 for depreciation and amortization, $931 for wages and benefits, $424 for distribution system maintenance, $161 for technology upgrades, $93 for reduced capitalized overhead, $89 for water treatment, and $59 for purchased power. Other operating expenses increased by a net of $358. The increase was partially offset by reduced expenses of $339 for the provision for uncollectible accounts, $118 for outside services, and $72 for wastewater treatment. In 2026, the Company expects depreciation and amortization expense to continue to rise due to additional investment in utility plant, and other expenses to increase as costs to treat water and wastewater, and to maintain and extend the distribution and collection systems, continue to rise. Weather patterns could further increase operating expenses. Interest on debt for 2025 increased $1,358, or 15.3%, from $8,904 for 2024 to $10,262 for 2025. The increase was primarily due to an increase in long-term debt outstanding and higher interest rates. The average debt outstanding under the line of credit and short-term borrowings was $29,857 for 2025 and $10,087 for 2024. The weighted average interest rate on the line of credit and short-term borrowings was 5.41% during 2025 and 5.23% during 2024. Interest expense for 2026 is expected to increase due to an increase in long-term debt outstanding. A potential equity offering to pay down the line of credit and short-term borrowings may offset the expected increase. Allowance for funds used during construction decreased $1,232, from $2,052 in 2024 to $820 in 2025 due to a lower volume of eligible construction. Allowance for funds used during construction in 2026 is expected to remain consistent based on the projected amount of eligible construction. A non-recurring gain on life insurance of $831 was recorded in 2025 as a result of death benefits from life insurance policies. No similar gains are anticipated in 2026. Other income (expenses), net for 2025 reflects increased expenses of $344 as compared to 2024. The increase was primarily due to higher retirement expenses of approximately $310 and higher charitable contributions of $114. Other expenses decreased by a net of $80. In 2026, other income (expenses) will be largely determined by the change in market returns and discount rates for retirement programs and related assets. Income tax expense for 2025 decreased $2,166 as compared to 2024 due to higher deductions for the Internal Revenue Service, or IRS, tangible property regulations, or TPR. The Company’s effective tax rate was (4.2)% for 2025 and 6.2% for 2024. The Company’s effective tax rate for 2026 will be largely determined by the level of eligible asset improvements expensed for tax purposes under IRS TPR. The Company expects the level to be lower in 2026, increasing the effective tax rate as compared to 2025. Rate Matters See Note 10 to the Company’s financial statements included herein for a discussion of its rate matters. Effective January 1, 2026, the Company’s tariff included a DSIC on revenues of 4.89%. The DSIC reset to zero when new rates took effect on March 1, 2026. Acquisitions and Growth See Note 2 to the Company’s financial statements included herein for a discussion of completed acquisitions included in financial results. On December 23, 2025, the Company signed an agreement to purchase the water assets of Lenwood Management, LLC in Southampton Township, Franklin County, Pennsylvania. Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities. Closing is expected in the fourth quarter of 2026 at which time the Company will add approximately 90 water customers. On December 11, 2025, the Company signed an agreement to purchase the water assets of Mt. Rock Manor Management, LLC in Southampton Township, Franklin County, Pennsylvania. Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities. Closing is expected in the fourth quarter of 2026 at which time the Company will add approximately 140 water customers. Table of Contents Page 15 On June 13, 2025, the Company signed an agreement to purchase the wastewater collection and treatment assets of Pine Run Retirement Community in Hamilton Township, Adams County, Pennsylvania. Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities. Closing is expected in the second quarter of 2026 at which time the Company will add approximately 100 wastewater customers. On January 24, 2025, the Company signed an agreement to purchase the water assets of Eagle View Manufactured Housing Community in Berwick Township, Adams County, Pennsylvania. Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities. Closing is expected in the second quarter of 2026 at which time the Company will add approximately 140 water customers. On February 7, 2024, the Company signed an agreement to purchase the wastewater collection assets of Margaretta Mobile Home Park in Lower Windsor Township, York County, Pennsylvania. Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities. Closing is expected in the fourth quarter of 2026 at which time the Company will add approximately 65 wastewater customers. In total, these acquisitions are expected to be immaterial to Company results. The Company is also pursuing other bulk water contracts and acquisitions in and around its service territory to help offset any potential declines in per capita water consumption and to grow its business. Capital Expenditures During 2025, the Company invested $48,725 in construction expenditures for main extensions and an upgrade to the enterprise software system, as well as various replacements and improvements to infrastructure and routine items. The Company replaced approximately 54,100 feet of water main and 1,800 feet of wastewater main in 2025. The Company was able to fund construction expenditures using internally-generated funds, line of credit borrowings, proceeds from its stock purchase plans and customer advances and contributions from developers, municipalities, customers, or builders. See Notes 1, 4 and 5 to the Company’s financial statements included herein. The Company anticipates construction and acquisition expenditures for 2026 and 2027 of approximately $48,000 in each year, exclusive of any acquisitions not yet approved. In addition to routine transmission and distribution projects, a portion of the anticipated 2026 and 2027 expenditures will be for additional main extensions, an upgrade to the enterprise software system, water treatment plant construction, water tank replacement, wastewater treatment plant construction, and various replacements of infrastructure. The Company intends to use primarily internally-generated funds for its anticipated 2026 and 2027 construction and fund the remainder through line of credit borrowings, potential debt and equity offerings, proceeds from its stock purchase plans and customer advances and contributions (see Note 1 to the Company’s financial statements included herein). Customer advances and contributions are expected to account for between 5% and 10% of funding requirements in 2026 and 2027. The Company believes it will have adequate credit facilities and access to the capital markets, if necessary, during 2026 and 2027, to fund anticipated construction and acquisition expenditures. Liquidity and Capital Resources Cash The Company manages its cash through a cash management account that is directly connected to its line of credit. Excess cash generated automatically pays down outstanding borrowings under the line of credit arrangement. If there are no outstanding borrowings, the cash is used as an earnings credit to reduce banking fees. Likewise, if additional funds are needed beyond what is generated internally for payroll, to pay suppliers, to fund capital expenditures, or to pay debt service, funds are automatically borrowed under the line of credit. As of December 31, 2025, the Company borrowed $32,290 under its line of credit and incurred a cash overdraft on its cash management account of $1,836, which was recorded in accounts payable. The cash management facility connected to the line of credit is expected to provide the necessary liquidity and funding for the Company’s operations, capital expenditures, and acquisitions for the foreseeable future. Table of Contents Page 16 Accounts Receivable The accounts receivable balance tends to follow the change in revenues but is also affected by the timeliness of payments by customers and the level of the reserve for doubtful accounts. In 2025, higher revenue levels as compared to 2024 resulted in an increase in accounts receivable – customers. A reserve is maintained at a level considered adequate to provide for expected credit losses. Expected credit losses are based on historical write-offs combined with an evaluation of current conditions and reasonable and supportable forecasts including inactive accounts with outstanding balances, the aging of balances in payment agreements, adverse situations that may affect a customer’s ability to pay, economic conditions, and other relevant factors applied to the current aging of receivables. Customer accounts are written off when collection efforts have been exhausted. If the status of the evaluated factors deteriorate, the Company may incur additional expenses for uncollectible accounts and experience a reduction in its internally-generated funds. Internally-generated Funds The amount of internally-generated funds available for operations and construction depends on the Company’s ability to obtain timely and adequate rate relief, changes in regulations, customers’ water usage, weather conditions, customer growth and controlled expenses. In 2025, the Company generated $29,860 internally as compared to $30,559 in 2024. The decrease from 2024 was primarily due to higher interest paid partially offset by increased cash receipts from customers and the timing of payments to vendors. Common Stock Common stockholders’ equity as a percent of the total capitalization was 51.7% as of December 31, 2025, compared with 52.6% as of December 31, 2024. The ratio decreased in 2025 due to higher debt primarily from capital expenditures. The Company expects to use long-term debt for its future financing needs and allow the debt percentage to trend upward until it approaches fifty percent before considering additional equity. It is the Company’s general intent to target equity between fifty and fifty-five percent of total capitalization. The Company has an effective “shelf” Registration Statement on Form S-3 on file with the Securities and Exchange Commission, pursuant to which the Company may offer an aggregate remaining amount of up to $60,000 of its common stock or debt securities subject to market conditions at the time of any such offering. Credit Line Historically, the Company has borrowed under its lines of credit before refinancing with long-term debt or equity capital. As of December 31, 2025, the Company maintained a $50,000, unsecured, committed line of credit at an interest rate of the Secured Overnight Financing Rate, or SOFR, plus 1.17% with an unused commitment fee and an interest rate floor. The Company had $32,290 in outstanding borrowings under its line of credit as of December 31, 2025. The interest rate on line of credit borrowings as of December 31, 2025 was 5.04%. In the third quarter of 2025, the Company renewed its committed line of credit and extended the maturity date to September 2027. No other terms or conditions of the line of credit agreement were modified. The Company expects to renew this line of credit as it matures under similar terms and conditions. The Company has taken steps to manage the risk of reduced credit availability. It has established a committed line of credit with a 2-year revolving maturity that cannot be called on demand. There is no guarantee that the Company will be able to obtain sufficient lines of credit with favorable terms in the future. If the Company is unable to obtain sufficient lines of credit or to refinance its line of credit borrowings with long-term debt or equity, when necessary, it may have to eliminate or postpone capital expenditures. Management believes the Company will have adequate capacity under its current line of credit to meet financing needs throughout 2026. Term Loan In December 2025, the Company entered into a $10,000 unsecured, committed term loan agreement. Interest is payable monthly at an interest rate of SOFR plus 1.35% as established on the first day of each calendar month. The principal balance can be repaid in whole or part at any time without premium. The term loan matures in December 2026. The interest rate on the term loan was 5.18% as of December 31, 2025. The Company expects to secure permanent financing in 2026 to repay this term loan. Table of Contents Page 17 Long-term Debt The Company’s loan agreements contain various covenants and restrictions. Management believes it is currently in compliance with all of these restrictions. See Note 6 to the Company’s financial statements included herein for additional information regarding these restrictions. The Company’s total long-term debt as a percentage of the total capitalization, defined as total common stockholders’ equity plus total long-term debt, was 48.3% as of December 31, 2025, compared with 47.4% as of December 31, 2024. The Company expects to use long-term debt for its future financing needs and allow the debt percentage to trend upward. A debt to total capitalization ratio between forty-five and fifty percent has historically been acceptable to the PPUC in rate filings. See Note 6 to the Company’s financial statements included herein for the details of its long-term debt outstanding as of December 31, 2025. Income Taxes, Deferred Income Taxes and Uncertain Tax Positions Under the IRS TPR, the Company is permitted to deduct the costs of certain asset improvements that were previously being capitalized and depreciated for tax purposes as an expense on its income tax return. This ongoing deduction results in a reduction in the effective income tax rate, a net reduction in income tax expense, and a reduction in the amount of income taxes currently payable. It also results in increases to deferred tax liabilities and regulatory assets representing the appropriate book and tax basis difference on capital additions. The Company expects to continue to expense these asset improvements in the future. The Company’s effective tax rate will largely be determined by income before income taxes and the level of eligible asset improvements expensed for tax purposes that would have been capitalized for tax purposes prior to the implementation of the TPR. On July 8, 2022, the Pennsylvania budget for the fiscal year ending June 30, 2023 was signed into law. A provision within the tax code bill included with the budget provides for an annual phase-down of the Pennsylvania corporate net income tax rate of one percentage point in the first year beginning January 1, 2023 from 9.99% to 8.99%, and a one-half percentage point each year thereafter until it reaches 4.99% beginning January 1, 2031. The Company has remeasured the state portion of the Company’s deferred income taxes. The effect, net of the federal benefit recognized in income for the years ended December 31, 2025 and 2024, was immaterial. Deferred income taxes for differences that are recognized for ratemaking purposes on a cash or flow-through basis were remeasured with offsetting changes to regulatory assets and liabilities on the balance sheet as of December 31, 2025 and 2024. The Company expects any savings in its Pennsylvania current income taxes to be returned to its customers through the rate making process or as a future negative surcharge on their bills. The Company has a substantial deferred income tax asset primarily due to the excess accumulated deferred income taxes on accelerated depreciation from the Tax Cuts and Jobs Act of 2017 and the differences between the book and tax balances of the customers’ advances for construction and contributions in aid of construction, and deferred compensation plans. The Company does not believe a valuation allowance is required due to the expected generation of future taxable income during the periods in which those temporary differences become deductible. The Company has seen an increase in its deferred income tax liability amounts primarily as a result of the accelerated depreciation deduction available for federal tax purposes which creates differences between book and tax depreciation expense. The Company expects this trend to continue as it makes significant investments in capital expenditures subject to accelerated depreciation or TPR. The Company has determined there are no uncertain tax positions that require recognition as of December 31, 2025. See Note 14 to the Company’s financial statements included herein for additional details regarding income taxes. Table of Contents Page 18 Credit Rating On July 30, 2025, Standard & Poor’s affirmed the Company’s credit rating at A-, with a stable outlook and adequate liquidity. The Company’s ability to maintain its credit rating depends, among other things, on adequate and timely rate relief, which it has been successful in obtaining, its ability to fund capital expenditures in a balanced manner using both debt and equity and its ability to generate cash flow. In 2026, the Company’s objectives are to continue to maximize its funds provided by operations and maintain a strong capital structure in order to be able to attract capital. Physical and Cyber Security The Company maintains security measures at its facilities, and collaborates with federal, state, and local authorities, and industry trade associations regarding information on possible threats and security measures for water and wastewater utility operations. The costs incurred are expected to be recoverable in water and wastewater rates and are not expected to have a material impact on its business, financial condition, or results of operations. The Company relies on information technology systems in connection with the operation of the business, especially with respect to customer service, billing, accounting, and in some cases, the monitoring and operation of treatment, storage, and pumping facilities. In addition, the Company relies on these systems to track utility assets and to manage maintenance and construction projects, materials and supplies, and human resource functions. The information technology systems may be vulnerable to damage or interruption from cyber security attacks or other cyber-related events, including, but not limited to, power loss, computer systems failures, internet, telecommunications or data network failures, physical and electronic loss of data, computer viruses, intentional security breaches, hacking, denial of service actions, misappropriation of data, and similar events. In some cases, administration of certain functions may be outsourced to third-party service providers that could also be targets of cyber security attacks. A loss of these systems, or major problems with the operation of these systems, could harm the business, financial condition, and results of operations of the Company through the loss or compromise of customer, financial, employee, or operational data, disruption of billing, collections or normal field service activities, disruption of electronic monitoring and control of operational systems, and delays in financial reporting and other normal management functions. Possible impacts associated with a cyber security attack or other events may include remediation costs related to lost, stolen, or compromised data, repairs to data processing systems, increased cyber security protection costs, adverse effects on the Company’s compliance with regulatory and environmental laws and regulation, including standards for drinking water, litigation, and reputational damage. The Company has implemented processes, procedures, and controls to prevent or limit the effect of these possible events and maintains insurance to help defray costs associated with cyber security attacks. The Company has not experienced a material impact on business or operations from these attacks. Although the Company does not believe its systems are at a materially greater risk of cyber security attacks than other similar organizations and despite the implementation of robust security measures, the Company cannot provide assurance that the insurance will fully cover the costs of a cyber security event, and its robust security measures do not guarantee that reputation and financial results will not be adversely affected by such an incident. Environmental Matters The Company was granted approval by the PPUC to modify its tariff to include the cost of the annual replacement of up to 400 lead customer-owned service lines over nine years from the date of the agreement. The tariff modification allows the Company to replace customer-owned service lines at its own initial cost. The Company will record the costs as a regulatory asset to be recovered in future base rates to customers, over a four-year period. The cost for the customer-owned lead service line replacements was approximately $2,087 and $1,961 through December 31, 2025 and 2024, respectively, and is included as a regulatory asset. Based on its experience, the Company estimates that lead customer-owned service lines replacements will cost $2,100. This estimate is subject to adjustment as more facts become available. This tariff modification will expire on March 8, 2026 unless extended by the PPUC. Table of Contents Page 19 Drought As of February 18, 2026, Pennsylvania state officials declared a drought watch for 34 counties in Pennsylvania, including York County within the Company’s service territory, and a drought warning for 17 counties in Pennsylvania, including Adams, Franklin, and Lancaster Counties within the Company’s service territory. The watch calls for a voluntary reduction in nonessential water use of 5 to 10 percent and the warning calls for a voluntary reduction in nonessential water use of 10 to 15 percent. These measures could potentially impact future revenues, operating expenses, and net income depending on the length and severity of the dry conditions. Dividends During 2025, the Company’s dividend payout ratios relative to net income and net cash provided by operating activities were 63.7% and 42.3%, respectively. During 2024, the Company’s dividend payout ratios relative to net income and net cash provided by operating activities were 60.2% and 39.6%, respectively. During the fourth quarter of 2025, the Board increased the dividend by 4.0% from $0.2192 per share to $0.2280 per share per quarter. The Company’s Board declared a dividend in the amount of $0.2280 per share at its January 2026 meeting. The dividend is payable on April 15, 2026 to shareholders of record as of February 27, 2026. While the Company expects to maintain this dividend amount in 2026, future dividends will be dependent upon the Company’s earnings, financial condition, capital demands and other factors and will be determined by the Company’s Board. See Note 6 to the Company’s financial statements included herein for restrictions on dividend payments. Inflation The Company is affected by inflation, most notably by the continually increasing costs incurred to maintain and expand its service capacity. The cumulative effect of inflation results in significantly higher facility replacement costs which must be recovered from future cash flows. The ability of the Company to recover this increased investment in facilities is dependent upon future rate increases, which are subject to approval by the PPUC. The Company can provide no assurances that its rate increases will be approved by the PPUC; and, if approved, the Company cannot guarantee that these rate increases will be granted in a timely or sufficient manner to cover the investments and expenses for which the rate increase was sought. Critical Accounting Estimates The methods, estimates, and judgments the Company used in applying its accounting policies have a significant impact on the results reported in its financial statements. The Company’s accounting policies require management to make subjective judgments because of the need to make estimates of matters that are inherently uncertain. The Company’s most critical accounting estimates include accounting for its pension plans. Pension Accounting Accounting for defined benefit pension plans requires estimates of future compensation increases, mortality, the discount rate, and expected return on plan assets as well as other variables. These variables are reviewed annually with the Company’s pension actuary. The Company used compensation increases of 2.5% to 3.0% in 2024 and 2025. The Company adopted the Pri-2012 mortality table, using the white collar table for the administrative and general plan and the blue collar table for the union plan. In 2021, the Company adopted the MP-2021 mortality improvement scale, which slightly increased the life expectancy of pension plan participants, resulting in a slight increase to the pension benefit obligation, and ultimately, a decrease in the Company’s funded status of the plans. The Company selected its December 31, 2025 and 2024 discount rates based on the FTSE Pension Liability Index. This index uses spot rates for durations out to 30 years and matches them to expected disbursements from the plan over the long term. The Company believes this index most appropriately matches its pension obligations. The present values of the Company’s future pension obligations were determined using a discount rate of 5.30% at December 31, 2025 and 5.45% at December 31, 2024. Table of Contents Page 20 Adopting a new mortality table that represents a change in life expectancy and choosing a different discount rate normally changes the amount of pension expense and the corresponding liability. In the case of the Company, these items change its liability, but do not have an impact on its pension expense. The PPUC, in a previous rate settlement, agreed to grant recovery of the Company’s contribution to the pension plans in customer rates. As a result, under the accounting standards regarding rate-regulated activities, expense in excess of the Company’s pension plan contribution can be deferred as a regulatory asset and expensed as contributions are made to the plans and are recovered in customer rates. Therefore, these changes affect regulatory assets rather than pension expense. The Company’s estimate of the expected return on plan assets is primarily based on the historic returns and projected future returns of the asset classes represented in its plans. The target allocation of pension assets is 70% to 90% fixed income securities, 10% to 30% equity securities, and 0% to 10% cash reserves. The Company used 5.00% as its expected rate of return in 2024 and 2025. A decrease in the expected pension return would normally cause an increase in pension expense; however due to the aforementioned rate settlement, the Company’s expense would continue to be equal to its contributions to the plans. The change would instead be recorded in regulatory assets. Lower discount rates and underperformance of assets could cause future required contributions and expense to increase substantially. If this were to happen, the Company would have to consider changes to its pension plan benefits and possibly request additional recovery of expenses through increased rates charged to customers. See Note 11 to the Company’s financial statements included herein for additional details regarding the pension plans. Off-Balance Sheet Transactions The Company does not use off-balance sheet transactions, arrangements or obligations that may have a material current or future effect on financial condition, results of operations, liquidity, capital expenditures, capital resources or significant components of revenues or expenses. The Company does not use securitization of receivables or unconsolidated entities. For risk management purposes, the Company uses a derivative financial instrument, an interest rate swap agreement discussed in Note 7 to the financial statements included herein. The Company does not engage in trading or other risk management activities, does not use other derivative financial instruments for any purpose, has no material lease obligations, no guarantees and does not have material transactions involving related parties. Impact of Recent Accounting Pronouncements There are currently no recent accounting pronouncements that are expected to have a material impact to the Company’s financial statements.