YORK WATER CO

Previous wording

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 June 30, 2025, the Company’s average daily availability was 41.1 million gallons, and average daily consumption was approximately 23.6 million gallons. The Company’s service territory had an estimated population of 212,000 as of December 31, 2024. 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.

Current wording

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 September 30, 2025, the Company’s average daily availability was 41.1 million gallons, and average daily consumption was approximately 24.1 million gallons. The Company’s service territory had an estimated population of 212,000 as of December 31, 2024. 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.

Previous wording

Net income for the second quarter of 2025 was $5,052, an increase of $59, or 1.2%, from net income of $4,993 for the same period of 2024. The primary contributing factors to the increase were higher operating revenues and lower income taxes, which were partially offset by higher operating expenses, higher interest on debt, and lower allowance for funds used during construction.

Current wording

Net income for the third quarter of 2025 was $6,201, an increase of $338 or 5.8%, from net income of $5,863 for the same period of 2024. The primary contributing factors to the increase were higher operating revenues and lower income taxes, which were partially offset by higher operating expenses, higher interest on debt, and a lower allowance for funds used during construction.

Previous wording

Operating revenues for the second quarter of 2025 increased $449, or 2.4%, from $18,750 for the three months ended June 30, 2024 to $19,199 for the corresponding 2025 period. The primary reason for the increase was growth in the customer base and increased revenues from the distribution system improvement charge, or DSIC, allowed by the PPUC of $497. The DSIC allows the Company to add a charge to customers’ water bills for qualified replacement costs of certain infrastructure without submitting a rate filing. The average number of water customers served in 2025 increased as compared to 2024 by 1,155 customers, from 72,304 to 73,459 customers. The average number of wastewater customers served in 2025 increased as compared to 2024 by 518 customers, from 6,499 to 7,017 customers, primarily due to acquisitions. Total per capita consumption for 2025 was approximately 2.8% lower than the same period of last year.

Current wording

Operating revenues for the third quarter of 2025 increased $646, or 3.3%, from $19,715 for the three months ended September 30, 2024 to $20,361 for the corresponding 2025 period. The primary reason for the increase was growth in the customer base and increased revenues from the distribution system improvement charge, or DSIC, allowed by the PPUC of $673. The DSIC allows the Company to add a charge to customers’ water bills for qualified replacement costs of certain infrastructure without submitting a rate filing. The average number of water customers served in 2025 increased as compared to 2024 by 1,101 customers, from 72,583 to 73,684 customers. The average number of wastewater customers served in 2025 increased as compared to 2024 by 530 customers, from 6,585 to 7,115 customers, primarily due to acquisitions. Total per capita consumption for 2025 was approximately 3.2% lower than the same period of last year.

Previous wording

Operating expenses for the second quarter of 2025 increased $425, or 3.6%, from $11,688 for the second quarter of 2024 to $12,113 for the corresponding 2025 period. The increase was primarily due to higher expenses of approximately $272 for insurance, $239 for depreciation and amortization, $155 for wages and benefits, and $114 for water treatment. Other operating expenses increased by a net of $180. The increase was partially offset by reduced expenses of $234 for distribution system maintenance, $198 for the provision for uncollectible accounts, and $103 for wastewater treatment.

Current wording

Operating expenses for the third quarter of 2025 increased $787, or 6.7%, from $11,660 for the third quarter of 2024 to $12,447 for the corresponding 2025 period. The increase was primarily due to higher expenses of approximately $351 for distribution system maintenance, $271 for depreciation and amortization, and $257 for wages and benefits. Other operating expenses increased by a net of $113. The increase was partially offset by reduced expenses of $120 for the provision for uncollectible accounts and $85 for water treatment.

Previous wording

Interest on debt for the second quarter of 2025 increased $338, or 15.5%, from $2,183 for the second quarter of 2024 to $2,521 for the corresponding 2025 period. The increase was primarily due to higher interest rates. The average debt outstanding under the line of credit was $25,762 for the second quarter of 2025 and $712 for the second quarter of 2024. The weighted average interest rate on the line of credit was 5.49% for the quarter ended June 30, 2025 and 4.50% for the quarter ended June 30, 2024.

Current wording

Interest on debt for the third quarter of 2025 increased $372, or 16.6%, from $2,243 for the third quarter of 2024 to $2,615 for the corresponding 2025 period. The increase was primarily due to an increase in long-term debt outstanding. The average debt outstanding under the line of credit was $33,331 for the third quarter of 2025 and $6,201 for the third quarter of 2024. The weighted average interest rate on the line of credit was 5.49% for the quarter ended September 30, 2025 and 6.47% for the quarter ended September 30, 2024.

Previous wording

Allowance for funds used during construction decreased $156, from $347 in the second quarter of 2024 to $191 in the corresponding 2025 period due to a lower volume of eligible construction.

Current wording

Allowance for funds used during construction decreased $83, from $301 in the third quarter of 2024 to $218 in the corresponding 2025 period due to a lower volume of eligible construction.

Previous wording

Other income (expenses), net for the second quarter of 2025 reflects increased expenses of $55 as compared to the same period of 2024. The increase was primarily due to higher retirement expenses of approximately $52. Other expenses increased by a net of $3.

Current wording

Other income (expenses), net for the third quarter of 2025 reflects decreased expenses of $19 as compared to the same period of 2024. The decrease was primarily due to a net decrease in other expenses of $22 and higher earnings on life insurance policies of approximately $10, which were partially offset by higher retirement expenses of approximately $13.

Previous wording

Income tax expense for the second quarter of 2025 decreased $888 as compared to the same period of 2024 due to higher deductions for the Internal Revenue Service, or IRS, tangible property regulations, or TPR. The Company’s effective tax rate was (7.8)% for the second quarter of 2025 and 9.4% for the second quarter of 2024.

Current wording

Income tax expense for the third quarter of 2025 decreased $941 as compared to the same period of 2024 due to higher deductions for the Internal Revenue Service, or IRS, tangible property regulations, or TPR. The Company’s effective tax rate was (10.4)% for the third quarter of 2025 and 5.8% for the third quarter of 2024.

Previous wording

Net income for the first six months of 2025 was $8,690, a decrease of $630, or 6.8%, from net income of $9,320 for the same period of 2024. The primary contributing factors to the decrease were higher operating expenses, higher interest on debt, and lower allowance for funds used during construction, which were partially offset by higher operating revenues and lower income taxes.

Current wording

Net income for the first nine months of 2025 was $14,891, a decrease of $292, or 1.9%, from net income of $15,183 for the same period of 2024. The primary contributing factors to the decrease were higher operating expenses, a lower allowance for funds used during construction, and higher interest on debt, which were partially offset by higher operating revenues and lower income taxes.

Previous wording

Operating revenues for the first six months of 2025 increased $1,277, or 3.5%, from $36,378 for the six months ended June 30, 2024 to $37,655 for the corresponding 2025 period. The increase was primarily due to growth in the customer base and revenues from the DSIC of $883. The average number of water customers served in 2025 increased as compared to 2024 by 1,196 customers, from 72,126 to 73,322 customers. The average number of wastewater customers served in 2025 increased as compared to 2024 by 438 customers, from 6,427 to 6,865 customers, primarily due to acquisitions. Total per capita consumption for 2025 was the same as last year. For the remainder of the year, the Company expects revenues to show a modest increase due to the DSIC, 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.

Current wording

Operating revenues for the first nine months of 2025 increased $1,923, or 3.4%, from $56,093 for the nine months ended September 30, 2024 to $58,016 for the corresponding 2025 period. The increase was primarily due to growth in the customer base and revenues from the DSIC of $1,590. The average number of water customers served in 2025 increased as compared to 2024 by 1,165 customers, from 72,278 to 73,443 customers. The average number of wastewater customers served in 2025 increased as compared to 2024 by 469 customers, from 6,479 to 6,948 customers, primarily due to acquisitions. Total per capita consumption for 2025 was approximately 1.1% lower than the same period last year . For the remainder of the year, the Company expects revenues to show a modest increase due to the DSIC 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.

Previous wording

Operating expenses for the first six months of 2025 increased $1,185, or 5.1%, from $23,101 for the first six months of 2024 to $24,286 for the corresponding 2025 period. The increase was primarily due to higher expenses of approximately $720 for depreciation and amortization, $220 for wages and benefits, $190 for water treatment, $81 for insurance, and $81 for purchased power. Other operating expenses increased by a net of $302. The increase was partially offset by reduced expenses of $172 for the provision for uncollectible accounts, $128 for distribution system maintenance, and $109 for wastewater treatment. 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.

Current wording

Operating expenses for the first nine months of 2025 increased $1,972, or 5.7%, from $34,761 for the first nine months of 2024 to $36,733 for the corresponding 2025 period. The increase was primarily due to higher expenses of approximately $991 for depreciation and amortization, $477 for wages and benefits, $223 for distribution system maintenance, $114 for technology upgrades, $106 for purchased power, $105 for water treatment, and $62 for insurance. Other operating expenses increased by a net of $273. The increase was partially offset by reduced expenses of $292 for the provision for uncollectible accounts and $87 for wastewater treatment. 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.

Previous wording

Interest on debt for the first six months of 2025 increased $634, or 14.7%, from $4,306 for the first six months of 2024 to $4,940 for the corresponding 2025 period. 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 was $22,481 for the first six months of 2025 and $10,794 for the first six months of 2024. The weighted average interest rate on the line of credit was 5.49% for the six months ended June 30, 2025 and 4.29% for the six months ended June 30, 2024. Interest expense for the remainder of the year is expected to increase due to the increase in long-term debt outstanding.

Current wording

Interest on debt for the first nine months of 2025 increased $1,006, or 15.4%, from $6,549 for the first nine months of 2024 to $7,555 for the corresponding 2025 period. 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 was $26,137 for the first nine months of 2025 and $9,252 for the first nine months of 2024. The weighted average interest rate on the line of credit was 5.49% for the nine months ended September 30, 2025 and 5.02% for the nine months ended September 30, 2024. Interest expense for the remainder of the year is expected to increase due to the increase in long-term debt outstanding.

Previous wording

Allowance for funds used during construction decreased $1,105, from $1,481 in the first six months of 2024 to $376 in the corresponding 2025 period due to a lower volume of eligible construction. Allowance for funds used during construction for the remainder of the year is expected to remain consistent based on the projected amount of eligible construction being similar in the second half of the year to the first half of the year.

Current wording

Allowance for funds used during construction decreased $1,118, from $1,782 in the first nine months of 2024 to $594 in the corresponding 2025 period due to a lower volume of eligible construction. Allowance for funds used during construction for the remainder of the year is expected to remain consistent based on the projected amount of eligible construction.

Previous wording

Other income (expenses), net for the first six months of 2025 reflects increased expenses of $60 as compared to the same period of 2024. The increase was primarily due to higher retirement expenses of approximately $63, which were partially offset by higher earnings on life insurance policies of approximately $12. Other expenses increased by a net of $9. 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.

Current wording

Other income (expenses), net for the first nine months of 2025 reflects increased expenses of $41 as compared to the same period of 2024. The increase was primarily due to higher retirement expenses of approximately $76, which were partially offset by higher earnings on life insurance policies of approximately $22. Other expenses increased by a net of $13. 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.

Previous wording

Income tax expense for the first six months of 2025 decreased $1,018 as compared to the same period of 2025 due to higher deductions for the IRS TPR. The Company’s effective tax rate was 1.2% for the first six months of 2025 and 10.8% for the first six months of 2024. The Company’s effective tax rate for the remainder of 2025 will be largely determined by the level of eligible asset improvements expensed for tax purposes under IRS TPR each period. The Company expects the level to be lower in the remainder of the year than the first six months, increasing the effective tax rate.

Current wording

Income tax expense for the first nine months of 2025 decreased $1,959 as compared to the same period of 2025 due to higher deductions for the IRS TPR. The Company’s effective tax rate was (3.3)% for the first nine months of 2025 and 8.9% for the first nine months of 2024. The Company’s effective tax rate for the remainder of 2025 will be largely determined by the level of eligible asset improvements expensed for tax purposes under IRS TPR each period. The Company expects the level to be lower in the remainder of the year than the first nine months, increasing the effective tax rate.

Previous wording

Effective July 1, 2025, the Company’s tariff included a DSIC on revenues of 3.90%.

Current wording

Effective October 1, 2025, the Company’s tariff included a DSIC on revenues of 4.89%.

Previous wording

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 first half of 2026 at which time the Company will add approximately 100 wastewater customers.

Current wording

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.

Previous wording

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 half of 2025 at which time the Company will add approximately 140 water customers.

Current wording

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.

Previous wording

On June 27, 2024, the Company signed an agreement to purchase thewastewater collection and treatment assets of CMV Sewage Co., Inc. in Chanceford Township, York County, Pennsylvania. Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities. Closing is expected in the second half of 2025 at which time the Company will add approximately 280 wastewater customers.

Current wording

On June 27, 2024, the Company signed an agreement to purchase thewastewater collection and treatment assets of CMV Sewage Co., Inc. in Chanceford Township, York 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 280 wastewater customers.

Previous wording

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 second half of 2025 at which time the Company will add approximately 65 wastewater customers.

Current wording

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.

Previous wording

For the three months ended June 30, 2025, the Company invested $22,182 in construction expendituresfor main extensions and an upgrade to the enterprise software system, as well as various replacements and improvements to infrastructure and routine items. 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.

Current wording

For the nine months ended September 30, 2025, the Company invested $37,102 in construction expendituresfor main extensions and an upgrade to the enterprise software system, as well as various replacements and improvements to infrastructure and routine items. 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.

Previous wording

The Company anticipates construction expenditures for the remainder of 2025 of approximately $23,800 exclusive of any potential acquisitions not yet approved. In addition to routine transmission and distribution projects, a portion of the anticipated expenditures will be for additional main extensions, wastewater treatment plant construction, and an upgrade to the enterprise software system, as well as various replacements and improvements to infrastructure and routine items. The Company intends to use primarily internally-generated funds for its anticipated construction and fund the remainder through line of credit borrowings, proceeds from its stock purchase plans and customer advances and contributions. Customer advances and contributions are expected to account for between 5% and 10% of funding requirements during the remainder of 2025. The Company believes it will have adequate credit facilities and access to the capital markets, if necessary, during 2025 and 2026, to fund anticipated construction and acquisition expenditures.

Current wording

The Company anticipates construction expenditures for the remainder of 2025 of approximately $10,000 exclusive of any potential acquisitions not yet approved. In addition to routine transmission and distribution projects, a portion of the anticipated expenditures will be for additional main extensions and an upgrade to the enterprise software system, as well as various replacements and improvements to infrastructure and routine items. The Company intends to use primarily internally-generated funds for its anticipated construction and fund the remainder through line of credit borrowings, proceeds from its stock purchase plans and customer advances and contributions. Customer advances and contributions are expected to account for between 5% and 10% of funding requirements during the remainder of 2025. The Company believes it will have adequate credit facilities and access to the capital markets, if necessary, during 2025 and 2026, to fund anticipated construction and acquisition expenditures.

Previous wording

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 June 30, 2025, the Company borrowed $28,539 on its line of credit and incurred a cash overdraft on its cash management account of $1,035. 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.

Current wording

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 September 30, 2025, the Company borrowed $37,430 on its line of credit and incurred a cash overdraft on its cash management account of $1,298. 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.

Previous wording

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 including taxes, customers’ water usage, weather conditions, customer growth and controlled expenses. During the first six months of 2025, the Company generated $13,603 internally from operations as compared to the $12,841 it generated during the first six months of 2024. The increase was primarily due to increased cash receipts from customers and the timing of payments to vendors partially offset by higher interest paid.

Current wording

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 including taxes, customers’ water usage, weather conditions, customer growth and controlled expenses. During the first nine months of 2025, the Company generated $21,432 internally from operations as compared to the $20,391 it generated during the first nine months of 2024. The increase was primarily due to increased cash receipts from customers and the timing of payments to vendors partially offset by higher interest paid.

Previous wording

Common stockholders’ equity as a percent of the total capitalization was 51.5% as of June 30, 2025, compared with 52.6% 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 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.

Current wording

Common stockholders’ equity as a percent of the total capitalization was 50.9% as of September 30, 2025, compared with 52.6% 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 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.

Previous wording

Historically, the Company has borrowed under its line of credit before refinancing with long-term debt or equity capital. As of June 30, 2025, the Company maintained an unsecured line of credit in the amount of $50,000 at an interest rate of the Secured Overnight Financing Rate plus 1.17% with an unused commitment fee and an interest rate floor. The Company had $28,539 in borrowings under its line of credit as of June 30, 2025. The interest rate on the line of credit borrowing as of June 30, 2025 was 5.49%. The Company expects to extend the maturity for this line of credit into 2027 under similar terms and conditions.

Current wording

Historically, the Company has borrowed under its line of credit before refinancing with long-term debt or equity capital. As of September 30, 2025, the Company maintained an unsecured line of credit in the amount of $50,000 at an interest rate of the Secured Overnight Financing Rate plus 1.17% with an unused commitment fee and an interest rate floor. The Company had $37,430 in borrowings under its line of credit as of September 30, 2025. The interest rate on the line of credit borrowing as of September 30, 2025 was 5.45%. 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.

Previous wording

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 48.5% as of June 30, 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.

Current wording

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 49.1% as of September 30, 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.

Previous wording

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 $2,018 and $1,961 through June 30, 2025 and December 31, 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.

Current wording

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 $2,058 and $1,961 through September 30, 2025 and December 31, 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.

Previous wording

On June 9, 2025, Pennsylvania state officials returned Adams, York, and Lancaster Counties to normal status and on July 2, 2025, Pennsylvania state officials returned Franklin County to normal status. Measures taken during a drought could potentially impact future revenues, operating expenses, and net income depending on the length and severity of the dry conditions.

Current wording

On June 9, 2025, Pennsylvania state officials returned Adams, York, and Lancaster Counties to normal status and on July 2, 2025, Pennsylvania state officials returned Franklin County to normal status.