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What changed in ARTESIAN RESOURCES CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ARTESIAN RESOURCES CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+164 added−179 removedSource: 10-K (2026-03-16) vs 10-K (2025-03-26)

Top changes in ARTESIAN RESOURCES CORP's 2025 10-K

164 paragraphs added · 179 removed · 135 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

42 edited+7 added−6 removed71 unchanged
Biggest changeIn the event that temperatures during the typically warmer months are cooler than expected, or there is more rainfall than expected, the demand for water may decrease and our revenues may be adversely affected. 8 Table of Contents Competition Our business in our franchised service areas is substantially free from direct competition with other public utilities, municipalities and other entities.
Biggest changeThroughout the year, and particularly during typically warmer months, demand for water will vary with temperature and rainfall. In the event that temperatures during the typically warmer months are cooler than expected, or there is more rainfall than expected, the demand for water may decrease and our revenues may be adversely affected.
We include our website address in this Annual Report on Form 10-K only as an inactive textual reference and do not intend it to be an active link to our website. Information contained on our website shall not be deemed incorporated into, or to be a part of, this report. 9 Table of Contents
We include our website address in this Annual Report on Form 10-K only as an inactive textual reference and do not intend it to be an active link to our website. Information contained on our website shall not be deemed incorporated into, or to be a part of, this report. 10 Table of Contents
Because of the extensive regulatory requirements relating to the withdrawal of any significant amounts of water from the aquifers, we believe that third-party usage of the aquifers within our service territory will not interfere with our ability to meet the present and future demands of our customers. 7 Table of Contents The MDE ensures that water quality and quantity at all public water systems in Maryland meet the needs of the public and are in compliance with federal and state regulations.
Because of the extensive regulatory requirements relating to the withdrawal of any significant amounts of water from the aquifers, we believe that third-party usage of the aquifers within our service territory will not interfere with our ability to meet the present and future demands of our customers. 8 Table of Contents The MDE ensures that water quality and quantity at all public water systems in Maryland meet the needs of the public and are in compliance with federal and state regulations.
Artesian Utility also offers three protection plans to customers, the Water Service Line Protection Plan, or WSLP Plan, the Sewer Service Line Protection Plan, or SSLP Plan, and the Internal Service Line Protection Plan, or ISLP Plan (collectively, SLP Plan or SLP Plans).
Artesian Utility also offers protection plans to customers, the Water Service Line Protection Plan, or WSLP Plan, the Sewer Service Line Protection Plan, or SSLP Plan, and the Internal Service Line Protection Plan, or ISLP Plan (collectively, SLP Plan or SLP Plans).
Even though our water utility was founded in 1905, the majority of our investment in infrastructure occurred in the last 40 years. 6 Table of Contents As required by the Safe Drinking Water Act, the EPA establishes maximum contaminant levels, or MCLs, for various substances found in drinking water to ensure that the water is safe for human consumption.
Even though our water utility was founded in 1905, the majority of our investment in infrastructure occurred in the last 40 years. 7 Table of Contents As required by the Safe Drinking Water Act, the EPA establishes maximum contaminant levels, or MCLs, for various substances found in drinking water to ensure that the water is safe for human consumption.
The quantity of water withdrawn from the Port Deposit surface water intake is allocated by the Susquehanna River Basin Commission, or SRBC, and the MDE. We have 14 operating wells and one surface water in-take in our Maryland systems. The PADEP administers and oversees departmental programs involving surface and groundwater quantity and quality planning and water conservation in Pennsylvania.
The quantity of water withdrawn from the Port Deposit surface water intake is allocated by the Susquehanna River Basin Commission, or SRBC, and the MDE. We have 15 operating wells and one surface water in-take in our Maryland systems. The PADEP administers and oversees departmental programs involving surface and groundwater quantity and quality planning and water conservation in Pennsylvania.
See Note 16 – Legal Proceedings. The Lead and Copper Rule, or LCR, is a federal regulation that limits the concentration of lead and copper allowed in public drinking water at the consumer's tap, in addition to limiting the permissible amount of pipe corrosion occurring due to the water itself.
See Note 15 – Legal Proceedings. The Lead and Copper Rule, or LCR, is a federal regulation that limits the concentration of lead and copper allowed in public drinking water at the consumer's tap, in addition to limiting the permissible amount of pipe corrosion occurring due to the water itself.
Where possible, we combine our smaller satellite systems with systems having elevated storage facilities. Artesian Water Maryland Artesian Water Maryland began operations in August 2007. Artesian Water Maryland distributes and sells water to residential, commercial, industrial and municipal customers in Cecil County, Maryland. Artesian Water Maryland owns and operates 10 public water systems.
Where possible, we combine our smaller satellite systems with systems having elevated storage facilities. Artesian Water Maryland Artesian Water Maryland began operations in August 2007. Artesian Water Maryland distributes and sells water to residential, commercial, industrial and municipal customers in Cecil County, Maryland. Artesian Water Maryland owns and operates 9 public water systems.
We make available free of charge through our website our Code of Ethics, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports, our Corporate Governance Guidelines, and our Board Committee Charters as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission, or the SEC.
We m ake available free of charge through our website our Code of Ethics, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports, our Corporate Governance Guidelines, and our Board Committee Charters as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission, or the SEC.
Substantial portions of Delaware, particularly outsid e of northern New Castle County, are not served by a public water or wastewater system and represent potential opportunities for Artesian Water and Artesian Wastewater to obtain new exclusive franchised service areas. We continue to focus resources on developing and serving existing service territories and obtaining new territories throughout Delaware.
Substantial portions of Delaware, particularly outside of northern New Castle County, are not served by a public water or wastewater system and represent potential opportunities for Artesian Water and Artesian Wastewater to obtain new exclusive franchised service areas. We continue to focus resources on developing and serving existing service territories and obtaining new territories throughout Delaware.
We hold Certificates of Public Convenience and Necessity, or CPCNs, for approximately 310 square miles of exclusive water service territory, most of which is in Delaware with some territory being in Maryland and Pennsylvania.
We hold Certificates of Public Convenience and Necessity, or CPCNs, for approximately 312 square miles of exclusive water service territory, most of which is in Delaware with some territory being in Maryland and Pennsylvania.
U nder Delaware state laws and regulations, we are required to file applications with DNREC for water allocation permits for each of our operating wells pumping greater than 50,000 gallons per day. For any wells in the Delaware River Basin, we must also file allocation permits with the Delaware River Basin Commission, or DRBC.
Under Delaware state laws and regulations, we are required to file applications with DNREC for water allocation permits for each of our operating wells pumping greater than 50,000 gallons per day. For any wells in the Delaware River Basin, we must also file allocation permits with the Delaware River Basin Commission, or DRBC.
We have made significant enhancements to existing facilities to effectively treat and remove compounds as required by government agencies, such as ultra violet oxidation treatment, ceramic membrane filtration and carbon filtration. We are currently in full compliance with the requirements of the Safe Drinking Water Act.
We have made significant enhancements to existing facilities to effectively treat and remove compounds as required by government agencies, such as ultraviolet oxidation treatment, ceramic membrane filtration and carbon filtration. We are currently in full compliance with the requirements of the Safe Drinking Water Act.
In Delaware, we have 24 interconnections with three neighboring water utilities and seven municipalities that provide us with the ability to purchase or sell water.
In Delaware, we have 25 interconnections with three neighboring water utilities and seven municipalities that provide us with the ability to purchase or sell water.
In Delaware in 2024, we pumped an average of 24.9 million gallons per day, or mgd, from our groundwater wells and obtained an average of approximately 0.9 mgd from interconnections. Our peak water supply capacity currently is approximately 57.7 mgd.
In Delaware in 2025, we pumped an average of 24.3 million gallons per day, or mgd, from our groundwater wells and obtained an average of approximately 0.9 mgd from interconnections. Our peak water supply capacity currently is approximately 57.7 mgd.
We believe that we have in place sufficient capacity to provide water service for the foreseeable future to all existing and new customers in all of our service territories. Most of our New Castle County, Delaware water system is interconnected.
We believe that we have in place sufficient capacity to provide water service for the foreseeable future to all existing and new customers in all of our service territories. 4 Table of Contents Most of our New Castle County, Delaware water system is interconnected.
Artesian’s capital investments in self-sufficiency of water supply facilitated a reduction in the minimum amount of water required to be purchased under the current contract compared to previous contracted requirements. As of December 31, 2024, we were serving customers through approximately 1,491 miles of transmission and distribution mains.
Artesian’s capital investments in self-sufficiency of water supply facilitated a reduction in the minimum amount of water required to be purchased under the current contract compared to previous contracted requirements. As of December 31, 2025, we were serving customers through approximately 1,515 miles of transmission and distribution mains.
Our largest connected regional water system, consisting of approximately 145 square miles and 80,100 metered customers, is located in northern New Castle County and portions of southern New Castle County, Delaware. We hold CPCNs for approximately 61 square miles of wastewater service territory located in Sussex County, Delaware.
Our largest connected regional water system, consisting of approximately 145 square miles and 81,000 metered customers, is located in northern New Castle County and portions of southern New Castle County, Delaware. We hold CPCNs for approximately 61 square miles of wastewater service territory located in Sussex County, Delaware.
Water utilities also will be required to meet the new MCLs by April 2029 and to notify the public of any violations of the MCLs as of and after that date.
At the national level, water utilities also will be required to meet the new MCLs by April 2029 and to notify the public of any violations of the MCLs as of and after that date.
The majority of the 0.1 billion gallons of water we distributed in all of our Maryland systems during 2024 came from our groundwater wells, while a portion came from treated surface water. We have ten separate water treatment facilities in our Maryland systems.
The majority of the 0.5 billion gallons of water we distributed in all of our Maryland systems during 2025 came from our groundwater wells, while a portion came from treated surface water. We have ten separate water treatment facilities in our Maryland systems.
Of these employees, 55 were officers and managers; 122 were employed as operations personnel, including engineers, technicians, draftsman, maintenance and repair persons, meter readers and utility personnel; and 36 were employed in accounting, budgeting, information systems, human resources, customer relations and public relations. The remaining 36 employees were administrative personnel.
Of these employees, 58 were officers and managers; 142 were employed as operations personnel, including engineers, technicians, draftsman, maintenance and repair persons, meter readers and utility personnel; and 38 were employed in accounting, budgeting, information systems, human resources, customer relations and public relations. The remaining 36 employees were administrative personnel.
Water allocation permits control the amount of water that can be drawn from water resources and are granted with specific restrictions on water level draw down limits, annual, monthly and daily pumpage limits, and well field allocation pumpage limits.
Water allocation permits control the amount of water that can be drawn from water resources and are granted with specific restrictions on water level draw down limits, annual, monthly and daily pumpage limits, and well field allocation pumpage limits. We are also subject to water allocation regulations that control the amount of water that we can draw from water sources.
Our electric costs and purchased water costs are at a fixed price under contract. Employees and Human Capital Resources As of December 31, 2024, we operated with 245 full-time and 4 part-time employees.
Our electric costs and purchased water costs are at a fixed price under contract. Employees and Human Capital Resources As of December 31, 2025, we operated with 272 full-time and 2 part-time employees.
Fifth Circuit Court of Appeals granted a temporary stay of the rules pending judicial review, in response to a petition arguing, among other things, that the rules would cause irreparable harm and exceed the SEC's authority. The Company is currently evaluating the impact of the rule changes.
Fifth Circuit Court of Appeals granted a temporary stay of the rules pending judicial review, in response to a petition arguing, among other things, that the rules would cause irreparable harm and exceed the SEC's authority.
TESI owns and operates five wastewater treatment facilities, which, combined, are permitted to treat and/or dispose of approximately 35.2 mgd. Artesian Wastewater Maryland Artesian Wastewater Maryland was incorporated on June 3, 2008 and is authorized and able to provide regulated wastewater services to customers in the State of Maryland. It is currently not providing these services.
TESI owns and operates four wastewater treatment facilities, which, combined, are permitted to treat and/or dispose of approximately 525 ,000 gallons per day. Artesian Wastewater Maryland Artesian Wastewater Maryland was incorporated on June 3, 2008 and is authorized and able to provide regulated wastewater services to customers in the State of Maryland. It is currently not providing these services.
We have 144 operating and 62 observation and monitoring wells in our Delaware systems. At December 31, 2024, we had allocation permits for 116 wells and had 25 wells that did not require a permit. Our access to aquifers within our service territory is not exclusive.
We have 154 operating and 63 observation and monitoring wells in our Delaware systems. At December 31, 2025, we had allocation permits for 124 wells, permits pending for 14 wells and 16 wells that did not require a permit. Our access to aquifers within our service territory is not exclusive.
The profitability of our utility operations is influenced, to a great extent, by the timeliness and adequacy of regulatory relief we are granted by the respective regulatory commissions or authorities in the states in which we operate. See Notes to Consolidated Financial Statements – Note 13 – Regulatory Proceedings for a full description of recent regulatory proceedings.
The profitability of our utility operations is influenced, to a great extent, by the timeliness and adequacy of regulatory relief we are granted by the respective regulatory commissions or authorities in the states in which we operate.
We use a variety of treatment methods, including aeration, pH adjustment, chlorination, fluoridation, ultra violet oxidation, arsenic removal, nitrate removal, radium removal, iron removal, and carbon adsorption to meet federal, state and local water quality standards. Additionally, a corrosion inhibitor is added to our self-supplied groundwater and to supply from interconnections.
The remaining 7% of our groundwater supply comes from wells in the Piedmont Province. We use a variety of treatment methods, including aeration, pH adjustment, chlorination, fluoridation, ultra violet oxidation, arsenic removal, nitrate removal, radium removal, iron removal, and carbon adsorption to meet federal, state and local water quality standards.
However, our ability to provide additional water and wastewater services is subject to competition from other public utilities, municipalities and other entities.
Competition Our business in our franchised service areas is substantially free from direct competition with other public utilities, municipalities and other entities. However, our ability to provide additional water and wastewater services is subject to competition from other public utilities, municipalities and other entities.
The treated surface water is blended with our groundwater supply for distribution to our customers. Nearly 95% of the overall 9.4 billion gallons of water we distributed in all of our Delaware systems during 2024 came from our groundwater wells, while the remaining 5% came from interconnections with other utilities and municipalities.
Nearly 97% of the overall 9.2 billion gallons of water we distributed in all of our Delaware systems during 2025 came from our groundwater wells, while the remaining 3% came from interconnections with other utilities and municipalities.
It provides water service to a residential community in Chester County, Pennsylvania. Artesian Wastewater Artesian Wastewater began providing wastewater services in Sussex County, Delaware in July 2005.
It provides water service to a residential community in Chester County, Pennsylvania. Artesian Wastewater Artesian Wastewater began providing wastewater services in Sussex County, Delaware in July 2005. Artesian Wastewater is a regulated entity that owns wastewater collection and treatment infrastructure and provides wastewater services to customers in Delaware as a regulated public wastewater service company.
These regulations include state commission orders, environmental protection, securities and exchange activities, including financial reporting and internal controls processes, data protection and privacy, tax compliance, health and safety, labor and employment practices, and other general business activities. 5 Table of Contents State Regulatory Commission Matters Our water and wastewater utility operations are subject to regulation by their respective state regulatory commissions, which have broad administrative power and authority to regulate rates charged for service, determine franchise areas and conditions of service, approve acquisitions, authorize the issuance of securities and the incurrence of indebtedness, and other matters.
State Regulatory Commission Matters Our water and wastewater utility operations are subject to regulation by their respective state regulatory commissions, which have broad administrative power and authority to regulate rates charged for service, determine franchise areas and conditions of service, approve acquisitions, authorize the issuance of securities and the incurrence of indebtedness, and other matters.
The office facility consists of approximately 10,000 square feet of office space along with nearly 7,000 square feet of warehouse space. Government Regulations Overview The Company is subject to federal, state and local laws and regulations in all of the jurisdictions in which it operates.
Government Regulations Overview The Company is subject to federal, state and local laws and regulations in all of the jurisdictions in which it operates.
The ISLP Plan enhances available coverage to include water and wastewater lines within customers' residences up to an annual limit.
The Company discontinued enrolling new customers in the ISLP Plan effective January 2026. For customers that were previously enrolled, the ISLP Plan enhances available coverage to include water and wastewater lines within customers' residences up to an annual limit.
Artesian Wastewater and Sussex County, a political subdivision of Delaware, provide reciprocal services to address the need of each for additional wastewater treatment and disposal capacity in certain service areas within Sussex County. Artesian Wastewater also owns and operates a disposal facility that includes a 90-million-gallon storage lagoon and spray irrigation to agricultural land.
Artesian Wastewater owns and operates four wastewater treatment facilities, which, combined, are permitted to treat and/or dispose of approximately 2.3 mgd. Artesian Wastewater and Sussex County, a political subdivision of Delaware, provide reciprocal services to address the need of each for additional wastewater treatment and disposal capacity in certain service areas within Sussex County.
This facility provides treated process wastewater disposal services for an industrial customer at a rate up to 1.5 mgd. TESI Artesian Wastewater operates as the parent holding company of TESI.
Artesian Wastewater also owns and operates a disposal facility that includes a 90-million-gallon storage lagoon and spray irrigation to agricultural land. This facility provides treated process wastewater disposal services for an industrial customer at a rate up to 1.5 mgd.
We have 62 different water treatment facilities in our Delaware systems. All water supplies that we purchase from neighboring utilities are potable. 3 Table of Contents To supplement our groundwater supply, we purchase treated surface water through interconnections only in the northern service area of our New Castle County, Delaware system.
To supplement our groundwater supply, we purchase treated surface water through interconnections only in the northern service area of our New Castle County, Delaware system. The treated surface water is blended with our groundwater supply for distribution to our customers.
Service Territory Expansion In Delaware, a CPCN grants a water or wastewater company the exclusive right to serve all existing and new customers within a designated area. The Delaware Public Service Commission, or DEPSC, has the authority to issue and revoke these CPCNs.
See Notes to Consolidated Financial Statements – Note 13 – Regulatory Proceedings for a full description of recent regulatory proceedings. 6 Table of Contents Service Territory Expansion In Delaware, a CPCN grants a water or wastewater company the exclusive right to serve all existing and new customers within a designated area.
Suppliers and Independent Contractors We are dependent upon the ability of our suppliers and independent contractors to meet performance specifications, quality standards and delivery schedules at our anticipated costs.
As the sole regional regulated wastewater utility in Sussex County, Delaware, our operational initiatives are not impacted by competing franchise applications, which ensures uninterrupted service and protection against service area encroachment. 9 Table of Contents Suppliers and Independent Contractors We are dependent upon the ability of our suppliers and independent contractors to meet performance specifications, quality standards and delivery schedules at our anticipated costs.
The Company has installed treatment for PFAS at several wellfields to date and has included installation of treatment at additional locations in 2025 in its capital budget, with any remaining necessary treatment planned to be installed before 2029.
The EPA plans to finalize this rule in the Spring of 2026. The Company has installed treatment for PFAS at several wellfields to date and plans to continue to install treatment at additional locations as necessary in future years.
Artesian Water also provides water for public and private fire protection to customers in our service territories. Artesian Water produced approximately 81.6% of our 2024 consolidated operating revenues. In May 2022, Artesian Water completed its purchase of substantially all of the water operating assets from the Town of Clayton, or Clayton, a Delaware municipality located in Kent County, Delaware.
Artesian Water also provides water for public and private fire protection to customers in our service territories. Artesian Water produced approximately 80.5% of our 2025 consolidated operating revenues. We derive about 93% of our self-supplied groundwater from wells that pump groundwater from aquifers and other formations located in the Atlantic Coastal Plain.
In March 2024, the SEC passed rule changes that will require registrants to provide certain climate-related information in their registration statements and annual reports. The new rules enhance and standardize climate-related disclosures in an effort to provide investors with more consistent, comparable and reliable information about the impact of climate-related risks on registrants.
In March 2024, the SEC passed rule changes that would have required registrants to include extensive climate-related information in their registration statements and periodic reports. Later in March 2024, the U.S.
Removed
This purchase agreement is discussed further in the “Strategic Direction and Recent Developments” section. We derive about 92% of our self-supplied groundwater from wells that pump groundwater from aquifers and other formations located in the Atlantic Coastal Plain. The remaining 8% of our groundwater supply comes from wells in the Piedmont Province.
Added
Additionally, a corrosion inhibitor is added to our self-supplied groundwater and to supply from interconnections. We have 64 different water treatment facilities in our Delaware systems. All water supplies that we purchase from neighboring utilities are potable.
Removed
Artesian Wastewater is a regulated entity that owns wastewater collection and treatment infrastructure and provides wastewater services to customers in Delaware as a regulated public wastewater service company. 4 Table of Contents Artesian Wastewater owns and operates four wastewater treatment facilities, which, combined, are permitted to treat and/or dispose of approximately 2.3 mgd.
Added
In early 2026, a new treatment facility was completed that provides 625,000 gallon per day treated process wastewater disposal services for residential and small commercial customers. 5 Table of Contents TESI Artesian Wastewater operates as the parent holding company of TESI.
Removed
We are also subject to water allocation reg ulations that control the amount of water that we can draw from water sources.
Added
These regulations include state commission orders, environmental protection, securities and exchange activities, including financial reporting and internal controls processes, data protection and privacy, tax compliance, health and safety, labor and employment practices, and other general business activities.
Removed
The rules require disclosure of greenhouse gas (GHG) emissions in annual reports and registration statements. Additionally, all registrants would be required to provide numerous climate-related disclosures within their financial statements and elsewhere in their filings.
Added
The Delaware Public Service Commission, or DEPSC, has the authority to issue and revoke these CPCNs.
Removed
The new rules apply to companies on a phased-in basis, with the first compliance deadline for large accelerated filers required for fiscal year 2025 annual reports filed in 2026. The next compliance deadline for accelerated filers is required for fiscal year 2026 annual reports filed in 2027. Also in March 2024, the U.S.
Added
Delaware water utilities are required to notify the public of any violations of the MCLs beginning January 15, 2026.To allow drinking water systems more time to develop plans for addressing PFAS where they are found and implement solutions, the EPA plans to develop a rulemaking to provide additional time for compliance, including a proposal to extend the compliance date to 2031.
Removed
Throughout the year, and particularly during typically warmer months, demand for water will vary with temperature and rainfall.
Added
In March 2025, the SEC announced that it had voted to end its defense of the final rules on the enhancement and standardization of climate-related disclosures.
Added
While climate-related risk and emissions disclosure requirements continue to evolve at the state level, the future of the SEC’s climate-related disclosure rules remains uncertain, and it is unlikely that public companies will need to make disclosures under the SEC’s climate rules.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

25 edited+4 added−3 removed87 unchanged
Biggest changeAlthough some or all potential expenditures and costs with respect to our regulated businesses could be recovered through rates we charge to our customers, there can be no assurance that the applicable regulatory authority would authorize recovery of such costs, in whole or in part, for any of these impacts. 11 Table of Contents Though we have not as of the date of this report identified or experienced any particular material impact, whether singular or in combination, to our consolidated financial statements from climate change or the associated regulatory, physical, and other risks discussed above, we cannot provide any assurance that we have or can successfully prepare for, or are or will be able to reduce or manage any of them to the extent they may arise.
Biggest changeThough we have not as of the date of this report identified or experienced any particular material impact, whether singular or in combination, to our consolidated financial statements from climate change or the associated regulatory, physical, and other risks discussed above, we cannot provide any assurance that we have or can successfully prepare for, or are or will be able to reduce or manage any of them to the extent they may arise.
In addition, future acquisitions or expansion of our service areas by us could result in: 13 Table of Contents - Dilutive issuance of our equity securities; - Incurrence of debt and contingent liabilities; - Difficulties in integrating the operations and personnel of the acquired organization; - Diversion of our management’s attention from ongoing business concerns; - Failure to have effective internal control over financial reporting; - Overload of human capital resources; and - Other acquisition-related expense.
In addition, future acquisitions or expansion of our service areas by us could result in: 14 Table of Contents Dilutive issuance of our equity securities; Incurrence of debt and contingent liabilities; Difficulties in integrating the operations and personnel of the acquired organization; Diversion of our management’s attention from ongoing business concerns; Failure to have effective internal control over financial reporting; Overload of human capital resources; and Other acquisition-related expense.
We could also incur repair and remediation costs, which may not be reimbursed or recoverable in water and wastewater rates. 10 Table of Contents We depend on the availability of capital for expansion, construction and maintenance. Weaknesses in capital and credit markets or increased interest rates may limit our access to capital.
We could also incur repair and remediation costs, which may not be reimbursed or recoverable in water and wastewater rates. 11 Table of Contents We depend on the availability of capital for expansion, construction and maintenance. Weaknesses in capital and credit markets or increased interest rates may limit our access to capital.
Potential climate variability challenges include the following: increased frequency and duration of droughts, increased precipitation and flooding, increased frequency and severity of storms and other weather events, potential degradation of water quality, unexpected changes in temperature, increases in ocean levels, disruptions in water or wastewater services to our customers, decreases in available water supply, extreme changes in water usage patterns, increases in expenditures to repair any damages, increases in costs to reduce risks associated with significant weather events or natural disasters, and increases in costs to improve the reliability of our water and wastewater systems and facilities.
Potential climate variability challenges include the following: increased frequency and duration of droughts, increased precipitation and flooding, increased frequency and severity of storms and other weather events, potential degradation of water quality, unexpected changes in temperature, possible increases in ocean levels, disruptions in water or wastewater services to our customers, decreases in available water supply, extreme changes in water usage patterns and related revenue, increases in expenditures to repair any damages, increases in costs to reduce risks associated with significant weather events or natural disasters, and increases in costs to improve the reliability of our water and wastewater systems and facilities.
Our Company from time to time could be parties to or our operations targets of, lawsuits, claims, investigations and proceedings, including system failure, injury, contract, environmental, health and safety and employment matters, which are handled and defended in the ordinary course of business.
Our Company from time to time could be party to or our operations targets of, lawsuits, claims, investigations and proceedings, including system failure, injury, contract, environmental, health and safety and employment matters, which are handled and defended in the ordinary course of business.
This may adversely affect our revenues and earnings. Moreover, governmental restrictions on water usage during drought conditions may result in a decreased demand for water, which may adversely affect our revenue and earnings. General economic conditions may materially and adversely affect our financial condition and results of operations.
Moreover, governmental restrictions on water usage during drought conditions may result in a decreased demand for water, which may adversely affect our revenue and earnings. General economic conditions may materially and adversely affect our financial condition and results of operations.
Additionally, if interest rates rise above the dividend yield offered by our common stock, demand for our stock and its trading price may also decrease. Risk Related to Pandemics Our business, results of operations, financial condition, cash flows and stock price may be adversely affected by pandemics, epidemics or other public health emergencies.
Additionally, if interest rates rise above the dividend yield offered by our common stock, demand for our stock and its trading price may also decrease. 16 Table of Contents Risk Related to Pandemics Our business, results of operations, financial condition, cash flows and stock price may be adversely affected by pandemics, epidemics or other public health emergencies.
Our computer and communications systems and operations could be damaged or interrupted by natural disasters, power loss, telecommunications failures, human error or acts of war or terrorism, sabotage, theft or similar events or disruptions.
Our computer and communications systems and operations could be damaged or interrupted by natural disasters, power loss, telecommunications failures, human error, acts of war, terrorism, international conflict, sabotage, theft or similar events or disruptions.
The timeliness and outcome of those state public utilities commissions could hinder future acquisitions and any failure to complete a pending transaction would prevent us from realizing the anticipated benefits. We would also remain liable for significant transaction costs, including legal and accounting fees, whether or not the transaction is completed.
The timeliness and outcome of those state public utilities commissions' decisions could hinder future acquisitions and any failure to complete a pending transaction would prevent us from realizing the anticipated benefits. We would also remain liable for significant transaction costs, including legal and accounting fees, whether or not the transaction is completed.
Misconduct could subject us to regulatory investigations, legal liabilities or penalties and we could suffer harm to our reputation, financial position, and the trading price of our common stock. We also face the risk that our employees engage in work place misconduct, despite our implementation of policies and training to prevent and detect misconduct.
Misconduct could subject us to regulatory investigations, legal liabilities or penalties and we could suffer harm to our reputation, financial position, and the trading price of our common stock. We also face the risk that our employees engage in workplace misconduct, despite our implementation of policies and training to prevent and detect misconduct.
We may experience substantial negative impacts to our business if an unexpectedly severe weather event or natural disaster damages our facilities and/or operations or those of our suppliers or independent contractors in our service areas, or from the unintended consequences of regulatory changes that directly or indirectly impose substantial restrictions on our activities or adaptation requirements.
Climate variability may cause negative impacts to our business if an unexpectedly severe weather event or natural disaster damages our facilities and/or operations or those of our suppliers or independent contractors in our service areas, or from the unintended consequences of regulatory changes that directly or indirectly impose substantial restrictions on our activities or adaptation requirements.
If inflation increases significantly, as a result of increased interest rates, tariffs, trade wars, or otherwise, we may seek to increase our rates charged to customers.
If inflation increases significantly, as a result of increased interest rates, tariffs, trade wars, wars and international conflicts, or otherwise, we may seek to increase our rates charged to customers.
Our water and wastewater services are governed by various federal and state environmental protection and health and safety laws and regulations, including, among others, the federal Safe Drinking Water Act, the Clean Water Act, the LCR and other federal and state laws. These federal and state regulations are issued by the EPA and state environmental regulatory agencies.
Our water and wastewater services are governed by various federal and state environmental protection and health and safety laws and regulations, including, among others, the federal Safe Drinking Water Act, the Clean Water Act, the Lead and Copper Rule and other federal and state laws. These federal and state regulations are issued by the EPA and state environmental regulatory agencies.
We believe we will continue to operate our business consistent with any federal guidelines or state and local orders, however, the outbreak of pandemics, epidemics or other public health emergencies and any preventive or protective actions taken by governmental authorities may have an adverse effect on our operations.
We believe we will continue to operate our business consistent with any federal guidelines or state and local orders, however, the outbreak of pandemics, epidemics or other public health emergencies and any preventive or protective actions taken by governmental authorities may have an adverse effect on our operations. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
The trading price of our common stock may fluctuate in the future based on a variety of factors, many of which are beyond our control and unrelated to our financial results.
The price of our common stock may be volatile and may be affected by market conditions beyond our control. The trading price of our common stock may fluctuate in the future based on a variety of factors, many of which are beyond our control and unrelated to our financial results.
The impact of any regulatory requirement changes are unpredictable, and could materially and adversely affect our business, financial position and results of operations. We may be adversely affected by global climate change or by regulatory, legal or market responses to such change. The issue of climate variability is receiving increasing attention nationally and worldwide.
The impact of any regulatory requirement changes is unpredictable, and could materially and adversely affect our business, financial position and results of operations. We may be adversely affected by climate variability or by regulatory, legal or market responses to such change.
We have been affected and could continue to be further affected, by supplier delays and increased costs, due to the impacts of inflation, tariffs, recession, and/or other macroeconomic factors, which are outside of our control and could affect our results of operations. We are also dependent on the availability of electricity and purchased water at affordable prices.
We have been affected and could continue to be further affected, by supplier delays and increased costs, due to the impacts of inflation, tariffs, recession, wars and international conflicts, and/or other macroeconomic factors, which are outside of our control and could affect our results of operations.
There are no agreements among the holders of Class B Common Stock or with the Company that restrict the transfer of shares of Class B Common Stock which could result in significant ownership of shares of Class B Common Stock being held by others who are not currently principal holders. 15 Table of Contents The price of our common stock may be volatile and may be affected by market conditions beyond our control.
There are no agreements among the holders of Class B Common Stock or with the Company that restrict the transfer of shares of Class B Common Stock which could result in significant ownership of shares of Class B Common Stock being held by others who are not currently principal holders.
A loss of these systems or major problems with the operation of these systems could affect our operations and have a material adverse effect on our business and results of operations. 14 Table of Contents Cyberattacks on utility companies have been increasing in recent years, with recent reports that at least one U.S. water utility has experienced widespread outages as a result of such an attack.
A loss of these systems or major problems with the operation of these systems could affect our operations and have a material adverse effect on our business and results of operations. 15 Table of Contents Cyberattacks on utility companies have been increasing in recent years.
We could be adversely impacted by macroeconomic factors outside of our control, including but not limited to inflation, interest rates, tariffs, trade wars and/or recession. We have been affected and could continue to be affected by increased costs for items such as, among others, materials for capital expenditures, fuel, and treatment chemicals, due to the impacts of inflation.
We have been affected and could continue to be affected by increased costs for items such as, among others, materials for capital expenditures, fuel, and treatment chemicals, due to the impacts of inflation.
While our electricity costs and purchased water costs are at fixed prices under contracts, after the expiration of these contracts, we may be required to pay higher electricity costs and purchased water costs. We are subject to risks associated with the collection, treatment and disposal of wastewater. Wastewater collection, treatment and disposal involve various unique risks.
We are also dependent on the availability of electricity and purchased water at affordable prices. While our electricity costs and purchased water costs are at fixed prices under contracts, after the expiration of these contracts, we may be required to pay higher electricity costs and purchased water costs.
Risks Related to Governmental Laws and Regulations We rely on governmental approvals in the States of Delaware and Maryland and the Commonwealth of Pennsylvania, as well as approvals from the Delaware River Basin Commission and Susquehanna River Basin Commission for applicable water allocation, water appropriation and water capacity permits.
Although these rules are currently stayed, if adopted in the future, such rules would likely result in increased compliance costs and capital expenditures. 12 Table of Contents Risks Related to Governmental Laws and Regulations We rely on governmental approvals in the States of Delaware and Maryland and the Commonwealth of Pennsylvania, such as approvals from the Delaware River Basin Commission and Susquehanna River Basin Commission for applicable water allocation, water appropriation and water capacity permits.
We believe that we have in place sufficient capacity to provide water service for the foreseeable future to all existing and new customers in all of our service territories. However, severe drought conditions could interfere with our sources of water supply and could adversely affect our ability to supply water in sufficient quantities to our existing and future customers.
However, severe drought conditions could interfere with our sources of water supply and could adversely affect our ability to supply water in sufficient quantities to our existing and future customers. This may adversely affect our revenues and earnings.
In the event that temperatures during typically warmer months are cooler than normal, or rainfall is more than normal, the demand for our water may decrease and adversely affect our revenues. 12 Table of Contents Drought conditions and government-imposed water use restrictions may impact our ability to serve our current and future customers, and may impact our customers’ use of our water, which may adversely affect our financial condition and results of operations.
In the event that temperatures during typically warmer months are cooler than normal, or rainfall is more than normal, the demand for our water may decrease and adversely affect our revenues.
In addition, the SEC has previously issued extensive climate-related disclosure rules. Although these rules are currently stayed, if adopted in the future, such rules would likely result in increased compliance costs and capital expenditures.
In addition, the SEC has previously issued extensive climate-related disclosure rules.
Removed
Climate change is an intrinsically complex global phenomenon with inherent residual risks across its physical and regulatory dimensions that cannot be mitigated given their wide-ranging, interdependent and largely unpredictable potential scope, nature, timing or duration.
Added
We are subject to risks associated with the collection, treatment and disposal of wastewater. Wastewater collection, treatment and disposal involve various unique risks.
Removed
Some climate researchers believe that there will be worsening of weather volatility in the future associated with climate variability, which presents several potential challenges to water and wastewater utilities.
Added
Although some or all potential expenditures and costs with respect to our regulated businesses could be recovered through rates we charge to our customers, there can be no assurance that the applicable regulatory authority would authorize recovery of such costs, in whole or in part, for any of these impacts.
Removed
Severe weather, climate variability patterns and natural or other events may cause weather volatility in the future and may impact water usage and related revenue, or may require additional expenditures, all of which may not be fully recoverable in rates or otherwise.
Added
Drought conditions and government-imposed water use restrictions may impact our ability to serve our current and future customers, and may impact our customers’ use of our water, which may adversely affect our financial condition and results of operations. 13 Table of Contents We believe that we have in place sufficient capacity to provide water service for the foreseeable future to all existing and new customers in all of our service territories.
Added
We could be adversely impacted by macroeconomic factors outside of our control, including but not limited to inflation, interest rates, tariffs, trade wars, wars and international conflicts, and/or recession.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−1 removed13 unchanged
Biggest changeHowever, despite all of the above aforementioned efforts, a cyberattack, if it occurred, could cause water or wastewater system operational problems, disrupt service to our customers, compromise important data or systems or result in an unintended release of customer or other confidential information. See “Item 1A.
Biggest changeHowever, despite all the aforementioned efforts, a cyberattack, if it occurred, could cause water or wastewater system operational problems, disrupt service to our customers, compromise important data or systems or result in an unintended release of customer or other confidential information. See “Item 1A. Risk Factors—Risks Related to Cybersecurity and Technology” for additional discussion of cybersecurity risks impacting our Company.
Should there be an incident which does not rise to the level of being material, such incident would, at minimum, be included in the subsequent IT reports to both the management executive committee and the Board of Directors. We believe we are appropriately staffed to support a healthy cybersecurity posture.
Should there be an incident which does not rise to the level of being material, such incident would, at minimum, be included in the subsequent IT reports to both the management executive committee and the Board of Directors. 17 Table of Contents We believe we are appropriately staffed to support a healthy cybersecurity posture.
Should a cyber event occur, depending on the severity of an event, our cyber incident reporting process includes informing, as early as practicable, our senior corporate management. 16 Table of Contents Governance The Audit Committee of the Board of Directors, as overseen by the full Board of Directors, is responsible for oversight of cybersecurity risk.
Should a cyber event occur, depending on the severity of an event, our cyber incident reporting process includes informing, as early as practicable, our senior corporate management. Governance The Audit Committee of the Board of Directors, as overseen by the full Board of Directors, is responsible for oversight of cybersecurity risk.
Removed
Risk Factors—Risks Related to Cybersecurity and Technology” for additional discussion of cybersecurity risks impacting our Company.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed2 unchanged
Biggest changeUtility plant comprises : In thousands Estimated Useful Life (In Years) Effective June 12, 2024 December 31, 2024 Utility plant at original cost Utility plant in service-Water Intangible plant --- $ 140 Source of supply plant 45-85 30,320 Pumping and water treatment plant 15-64 130,226 Transmission and distribution plant Mains 73-81 390,741 Services 39-58 63,613 Storage tanks 70-76 39,760 Meters 16-26 30,223 Hydrants 60-68 20,158 General plant 5-81 59,634 Utility plant in service-Wastewater Intangible plant --- 116 Treatment and disposal plant 20-81 71,332 Collection mains and lift stations 70-81 57,084 General plant 5-31 2,632 Property held for future use --- 3,742 Construction work in progress --- 39,718 939,439 Less – accumulated depreciation 192,253 $ 747,186 17 Table of Contents Substantially all of Artesian Water's utility plant, except the utility plant in the town of Townsend, Delaware, is pledged as security for our First Mortgage Bonds.
Biggest changeUtility plant comprises : In thousands Estimated Useful Life (In Years) Effective June 12, 2024 December 31,2025 Utility plant at original cost Utility plant in service-Water Intangible plant --- $ 140 Source of supply plant 45-85 33,507 Pumping and water treatment plant 15-64 137,543 Transmission and distribution plant Mains 73-81 416,690 Services 39-58 67,999 Storage tanks 70-76 42,995 Meters 16-26 28,921 Hydrants 60-68 21,738 General plant 5-81 61,191 Utility plant in service-Wastewater Intangible plant --- 116 Treatment and disposal plant 20-81 76,509 Collection mains and lift stations 70-81 62,909 General plant 5-31 3,041 Property held for future use --- 4,805 Construction work in progress --- 45,667 1,003,771 Less – accumulated depreciation 202,077 $ 801,694 Substantially all of Artesian Water's utility plant, except the utility plant in the town of Townsend, Delaware, is pledged as security for our First Mortgage Bonds.
We believe that all of our existing facilities adequately meet current necessary production capacities and current levels of utilization.
We believe that all our existing facilities adequately meet current necessary production capacities and current levels of utilization.
The Company owns land, rights-of-way, easements, transmission and distribution mains, collection mains, pump facilities, treatment plants, lift stations, treatment/disposal facilities, storage tanks, meters, vehicles and related equipment and facilities. The following table indicates our utility plant as of December 31, 2024.
The Company owns land, rights-of-way, easements, transmission and distribution mains, collection mains, pump facilities, treatment plants, lift stations, treatment/disposal facilities, storage tanks, meters, vehicles and related equipment and facilities. The following table indicates our utility plant as of December 31, 2025.
As of December 31, 2024, no other water utility plant has been pledged as security for loans. Two parcels of land held by Artesian Wastewater are pledged as security for a loan. We believe that our properties are generally maintained in good condition and in accordance with current standards of good water and wastewater industry practice.
As of December 31, 2025, no other water utility plant has been pledged as security for loans. Two parcels of land held by Artesian Wastewater are pledged as security for a loan. 18 Table of Contents We believe that our properties are generally maintained in good condition and in accordance with current standards of good water and wastewater industry practice.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph covers the period from December 2019 (assuming a $100 investment on December 31, 2019, and the reinvestment of any dividends) through December 2024: INDEXED RETURNS Base Period Years Ending December 31 Company Name / Index 2019 2020 2021 2022 2023 2024 Artesian Resources Corporation 100 102.47 131.39 169.87 122.94 96.87 S&P 500 Index 100 118.40 152.39 124.79 157.69 197.02 Peer Group 100 115.32 142.97 122.40 105.25 100.73 The Peer Group includes American States Water Company, American Water Works Company, Inc., Essential Utilities, Inc., California Water Service Group, Middlesex Water Company, SJW Group and York Water Company. 19 Table of Contents
Biggest changeThe graph covers the period from December 2020 (assuming a $100 investment on December 31, 2020, and the reinvestment of any dividends) through December 2025: 19 Table of Contents INDEXED RETURNS Base Period Years Ending December 31 Company Name / Index 2020 2021 2022 2023 2024 2025 Artesian Resources Corporation 100 128.22 165.77 119.97 94.54 98.16 S&P 500 Index 100 128.71 105.40 133.10 166.40 196.16 Peer Group 100 123.98 106.13 91.26 87.34 92.61 The Peer Group includes American States Water Company, American Water Works Company, Inc., Essential Utilities, Inc., H2O Water, California Water Service Group, Middlesex Water Company, SJW Group and York Water Company. 20 Table of Contents ITEM 6.
Shares of Class B Stock are paid the same dividend as the shares of the Class A Non-Voting Stock. Recent Sales of Unregistered Securities During the year ended December 31, 2024 we did not issue any unregistered shares of our Class A Non-Voting Stock or Class B Stock.
Shares of Class B Stock are paid the same dividend as the shares of the Class A Non-Voting Stock. Recent Sales of Unregistered Securities During the year ended December 31, 2025, we did not issue any unregistered shares of our Class A Non-Voting Stock or Class B Stock.
The following graph compares the percentage change in cumulative shareholder return on the Company’s Class A Non-Voting Stock with the Standard & Poor’s 500 Stock Index and a Peer Group of water utility companies.
The following graph compares the yearly change in the cumulative shareholder return on the Company’s Class A Non-Voting Stock with the Standard & Poor’s 500 Stock Index and a Peer Group of water utility companies.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information for the Company’s Common Equity Artesian Resources' Class A Non-Voting Common Stock, or Class A Non-Voting Stock, is listed on the Nasdaq Global Select Market and trades under the symbol "ARTNA." On March 20, 2025, the last closing sale price as reported by the Nasdaq Global Select Market was $31.36 per share.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information for the Company’s Common Equity Artesian Resources' Class A Non-Voting Common Stock, or Class A Non-Voting Stock, is listed on the Nasdaq Global Select Market and trades under the symbol "ARTNA." On March 10, 2026, the last closing sale price as reported by the Nasdaq Global Select Market was $32.56 per share.
As of March 20, 2025 there were 480 holders of record of the Class A Non-Voting Stock. The stockholders of Class A Non-Voting Stock are entitled to receive dividends when they are declared by the Board of Directors.
As of March 10, 2026 there were 452 holders of record of the Class A Non-Voting Stock. The stockholders of Class A Non-Voting Stock are entitled to receive dividends when they are declared by the Board of Directors.
The intraday high and low Nasdaq Global Select Market prices on the Class A Non-Voting Stock for each quarter during the past two years were: Stock Price High Low 2024 First Quarter $ 41.73 $ 33.84 Second Quarter $ 41.29 $ 33.34 Third Quarter $ 41.29 $ 34.96 Fourth Quarter $ 37.35 $ 30.99 2023 First Quarter $ 63.00 $ 51.30 Second Quarter $ 58.41 $ 46.37 Third Quarter $ 49.73 $ 41.26 Fourth Quarter $ 44.78 $ 38.76 18 Table of Contents Our Class B Common Stock, or Class B Stock, is quoted on the OTC Bulletin Board under the symbol "ARTNB." There has been a limited and sporadic public trading market for the Class B Stock.
The intraday high and low Nasdaq Global Select Market prices on the Class A Non-Voting Stock for each quarter during the past two years were: Stock Price High Low 2025 First Quarter $ 33.14 $ 32.41 Second Quarter $ 33.97 $ 33.30 Third Quarter $ 32.86 $ 32.37 Fourth Quarter $ 31.83 $ 31.33 2024 First Quarter $ 41.73 $ 33.84 Second Quarter $ 41.29 $ 33.34 Third Quarter $ 41.29 $ 34.96 Fourth Quarter $ 37.35 $ 30.99 Our Class B Common Stock, or Class B Stock, is quoted on the OTC Bulletin Board under the symbol "ARTNB." There has been a limited and sporadic public trading market for the Class B Stock.
As of March 20, 2025, the last reported trade of the Class B Stock on the OTC Bulletin Board was at a price of $31.61 per share on March 19, 2025. As of March 20, 2025, there were 134 holders of record of the Class B Stock.
As of March 10, 2026, the last reported trade of the Class B Stock on the OTC Bulletin Board was at a price of $33.51 per share on January 16, 2026. As of March 10, 2026, there were 133 holders of record of the Class B Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

53 edited+18 added−34 removed30 unchanged
Biggest changeThe increase in utility operating expenses consists of a $1.1 million increase in supply and treatment costs, a $0.9 million increase in payroll and employee benefits costs, a $0.5 million increase in each of transmission, distribution and collection system costs and administrative costs, a $0.3 million increase in purchased power costs and a $0.2 million increase in purchased water costs. 23 Table of Contents Non-utility operating expenses increased $0.3 million, or 7.1%, primarily due to an increase in plumbing repair costs associated with the SLP Plans and an increase in payroll and employee benefits costs.
Biggest changeThe increase in utility operating expenses consists of a $0.9 million increase in payroll and employee benefit costs, a $0.8 million increase in administrative costs, a $0.4 million increase in purchased power costs, a $0.4 million increase in supply and treatment costs, and a $0.3 million increase in transmission, distribution and collection system costs.
Through Artesian Utility, we will seek to expand our contract design, engineering and construction services of water and wastewater facilities for developers, municipalities and other utilities. We also anticipate continued growth due to our water, sewer and internal SLP Plans.
Through Artesian Utility, we will seek to expand our contract design, engineering and construction services of water and wastewater facilities for developers, municipalities and other utilities. We also anticipate continued growth due to our water and sewer SLP Plans.
As of December 31, 2024, we were in compliance with these covenants. Long-term debt obligations reflect the maturities of certain series of our first mortgage bonds, which we intend to refinance when due if not refinanced earlier. One first mortgage bond is subject to redemption in a principal amount equal to $150,000 plus interest per calendar quarter.
As of December 31, 2025, we were in compliance with these covenants. Long-term debt obligations reflect the maturities of certain series of our first mortgage bonds, which we intend to refinance when due if not refinanced earlier. One first mortgage bond is subject to redemption in a principal amount equal to $150,000 plus interest per calendar quarter.
As of December 31, 2024, there was $20.0 million of available funds under this line of credit. The interest rate for borrowings under this line is either a daily SOFR rate plus 1.45% option or a term SOFR rate plus 1.45% option that is locked in for either one or three months.
As of December 31, 2025, there was $20.0 million of available funds under this line of credit. The interest rate for borrowings under this line is either a daily SOFR rate plus 1.45% option or a term SOFR rate plus 1.45% option that is locked in for either one or three months.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 Annual Report on Form 10-K includes a comparative discussion of the years ended December 31, 2023 and 2022 and is incorporated herein by reference.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report on Form 10-K includes a comparative discussion of the years ended December 31, 2024 and 2023 and is incorporated herein by reference.
At December 31, 2024, Artesian Water had a $20 million line of credit with CoBank, ACB, or CoBank, that allows for the financing of operations for Artesian Water, with up to $10 million of this line available for the operations of Artesian Water Maryland.
At December 31, 2025, Artesian Water had a $20 million line of credit with CoBank, ACB, or CoBank, that allows for the financing of operations for Artesian Water, with up to $10 million of this line available for the operations of Artesian Water Maryland.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS See Note 18 (Impact of Recent Accounting Pronouncements) to our Consolidated Financial Statements for a full description of the impact of recent accounting pronouncements.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS See Note 17 (Impact of Recent Accounting Pronouncements) to our Consolidated Financial Statements for a full description of the impact of recent accounting pronouncements.
For the year ended December 31, 2024, approximately 9.4 billion gallons of water were distributed in our Delaware systems and approximately 106.7 million gallons of water were distributed in our Maryland systems. Regulated Wastewater Subsidiaries Artesian Wastewater and TESI own wastewater collection and treatment infrastructure and provide regulated wastewater services to customers in Sussex County, Delaware.
For the year ended December 31, 2025, approximately 9.4 billion gallons of water were distributed in our Delaware systems and approximately 103.7 million gallons of water were distributed in our Maryland systems. Regulated Wastewater Subsidiaries Artesian Wastewater and TESI own wastewater collection and treatment infrastructure and provide regulated wastewater services to customers in Sussex County, Delaware.
The DEPSC and MDPSC have generally recognized the operating and capital costs associated with these improvements in setting water and wastewater rates for current customers and capacity charges for new customers. 21 Table of Contents In our non-utility subsidiaries, we continue pursuing opportunities to expand our contract operations.
The DEPSC and MDPSC have generally recognized the operating and capital costs associated with these improvements in setting water and wastewater rates for current customers and capacity charges for new customers. In our non-utility subsidiaries, we continue pursuing opportunities to expand our contract operations.
The Company believes the net investment in utility plant will continue to be recovered through rates charged to customers. 25 Table of Contents Financing Activities For the year ended December 31, 2024, cash flows provided by financing activities were $7.1 million, compared to $31.4 million for the year ended December 31, 2023.
The Company believes the net investment in utility plant will continue to be recovered through rates charged to customers. 25 Table of Contents Financing Activities For the year ended December 31, 2025, cash flows provided by financing activities were $17.3 million, compared to $7.1 million for the year ended December 31, 2024.
The term of this line of credit expires on October 31, 2025. Artesian Water expects to renew this line of credit.
The term of this line of credit expires on October 31, 2026. Artesian Water expects to renew this line of credit.
Material Cash Requirements Lines of Credit and Long-Term Debt At December 31, 2024, Artesian Resources had a $40 million line of credit with Citizens Bank, or Citizens, which is available to all subsidiaries of Artesian Resources. As of December 31, 2024, there was $40.0 million of available funds under this line of credit.
Material Cash Requirements Lines of Credit and Long-Term Debt At December 31, 2025, Artesian Resources had a $40 million line of credit with Citizens Bank, or Citizens, which is available to all subsidiaries of Artesian Resources. As of December 31, 2025, there was $34.3 million of available funds under this line of credit.
In addition, Artesian’s Delaware wastewater subsidiaries are the sole regional regulated wastewater utilities in Delaware, which we believe will enable us to increase efficiencies in the treatment and disposal of wastewater and provide additional opportunities to expand our wastewater operations.
In addition, Artesian’s Delaware wastewater subsidiaries are the sole regional regulated wastewater utilities in Delaware, which we believe will enable us to continue to increase efficiencies in the treatment and disposal of wastewater and expand our wastewater operations.
Percentage of Operating and Maintenance Expenses 2024 2023 2022 Payroll and Associated Expenses 47.7 % 49.5 % 47.5 % Administrative 16.7 16.9 15.3 Supply and Treatment 13.3 11.9 10.8 Purchased Power 5.8 5.7 5.2 Transmission, Distribution and Collection 5.1 4.6 4.1 Purchased Water 2.8 2.7 3.6 Non-utility Operating 8.6 8.7 13.5 Total 100.0 % 100.0 % 100.0 % The ratio of operating expense, excluding depreciation and income taxes, to total revenue was 56.4% for the year ended December 31, 2024, compared to 57.4% for the year ended December 31, 2023.
Percentage of utility and non-utility operating expenses 2025 2024 2023 Payroll and Associated Expenses 47.0 % 47.7 % 49.5 % Administrative 17.4 16.7 16.9 Supply and Treatment 13.3 13.3 11.9 Purchased Power 6.3 5.8 5.7 Transmission, Distribution and Collection 5.3 5.1 4.6 Purchased Water 2.4 2.8 2.7 Non-utility Operating 8.3 8.6 8.7 Total 100.0 % 100.0 % 100.0 % The ratio of operating expense, excluding depreciation and amortization and income taxes, to total revenue was 56.2% for the year ended December 31, 2025, compared to 56.4% for the year ended December 31, 2024 .
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Our profitability is primarily attributable to the sale of water and wastewater services in our regulated utility business. Our regulated utility segment comprised 93.5% o f total operating revenues for the year ended December 31, 2024 and 93.1% for the year ended December 31, 2023.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Our profitability is primarily attributable to the sale of water and wastewater services in our regulated utility business. Our regulated utility segment comprised 93.2% of total operating revenues for the year ended December 31, 2025 and 93.5% for the year ended December 31, 2024.
We expect to fund our activities for the next twelve months using our projected cash generated from operations, bank credit lines, and capital market financing as needed to provide sufficient working capital to maintain normal operations, to meet our financing requirements and to expand through strategic acquisitions.
We expect to fund our activities for the next twelve months using our projected cash generated from operations, bank credit lines, contributions from developers and settlement funds, government grants and capital market financing as needed to provide sufficient working capital to maintain normal operations, to meet our financing requirements and to expand through strategic acquisitions .
Under its previous permit, SRRF provided solely land disposal services for a single commercial processing and treatment plant. Under its new permit, SRRF will continue providing those disposal services alongside the new treatment plant. The new treatment facility will provide service for Artesian Wastewater’s regional system comprised primarily of residential and small commercial customers.
Under its new permit, SRRF will continue providing those disposal services alongside the new treatment plant. The new treatment facility will provide service for Artesian Wastewater’s regional system comprised primarily of residential and small commercial customers.
Our total obligations related to interest and principal payments on indebtedness, rental payments, elevated storage tank agreements and water service interconnection agreements for 2025 are anticipated to be approximately $11.6 million.
Our total obligations related to interest and principal payments on indebtedness, rental payments, elevated storage tank agreements and water service interconnection agreements for 2026 are anticipated to be approximately $17.9 million.
Operating Activities One of our primary sources of liquidity for the year ended December 31, 2024 was $36.8 million provided by cash flow from operating activities, compared to $31.9 million for the year ended December 31, 2023. The increase in cash flows from operating activities is primarily due to changes in net income, materials and supplies, and income tax receivable.
Operating Activities One of our primary sources of liquidity for the year ended December 31, 2025 was $40.3 million provided by cash flow from operating activities, compared to $36.8 million for the year ended December 31, 2024. The increase in cash flows from operating activities is primarily due to changes in net income, accounts receivable, and accounts payable.
We depend on the availability of capital for expansion, construction and maintenance. We rely on our sources of liquidity for investments in our utility plant and to meet our various payment obligations. 24 Table of Contents We expect that our net investments in utility plant in 2025 will be approximately $46.4 million.
We depend on the availability of capital for expansion, construction and maintenance. We rely on our sources of liquidity for investments in our utility plant and to meet our various payment obligations. We expect that our net investments in utility plant in 2026 will be approximately $64.3 million.
As of December 31, 2024, the number of metered water customers in Delaware increased approximately 1.6% compared to December 31, 2023. The number of metered water customers in Maryland increased approximately 2.3% compared to December 31, 2023. The number of metered water customers in Pennsylvania remained consistent compared to December 31, 2023.
As of December 31, 2025, the number of metered water customers in Delaware increased approximately 1.8% compared to December 31, 2024. The number of metered water customers in Maryland increased approximately 1.8% compared to December 31, 2024. The number of metered water customers in Pennsylvania remained consistent compared to December 31, 2024.
The construction will also include the primary receiving facility for untreated effluent, sized to allow for the expansion of the regional treatment system planned for the site. The new treatment facility will utilize the existing disposal infrastructure and is expected to be completed by the third quarter of 2025.
The construction will also include the primary receiving facility for untreated effluent, sized to allow for the expansion of the regional treatment system planned for the site. The new treatment facility will utilize the existing disposal infrastructure and was completed in the first quarter of 2026.
Investment Activities The primary focus of our investment in 2024 was to continue to provide high quality, reliable service to our growing service territory. Capital expenditures during 2024 were $45.9 million compared to $62.2 million invested during the same period in 2023.
Investment Activities The primary focus of our investment in 2025 was to continue to provide high quality, reliable service to customers and to grow service territory. Capital expenditures during 2025 were $58.8 million compared to $45.9 million invested during the same period in 2024.
During 2024, these investments include relocation of facilities as a result of government mandates, renewals associated with the rehabilitation of aging infrastructure, installation of new mains, upgrading elevated storage tanks, purchase of new transportation equipment, upgrading and replacing our meter reading equipment, construction of a new wastewater treatment plant and upgrading existing pumping stations to better serve our customers .
During 2025, these investments include renewals associated with the rehabilitation of aging infrastructure, installation of new mains, construction of a new wastewater treatment plant, upgrading elevated storage tanks, upgrading and replacing our meter reading equipment, and upgrading existing pumping and treatment stations, including PFAS treatment upgrades, to better serve our customers.
Liquidity and Capital Resources Overview The Company’s primary sources of liquidity for the year ended December 31, 2024 were $36.8 million of cash provided by operating activities and $20.4 million in net contributions and advances from developers. Funds from these liquidity sources were used to invest $45.9 million in capital expenditures and to pay dividends of approximately $12.2 million.
Liquidity and Capital Resources Overview The Company’s primary sources of liquidity for the year ended December 31, 2025 were $40.3 million of cash provided by operating activities and $26.1 million in net contributions and advances from developers. Funds from these liquidity sources were used to invest $58.8 million in capital expenditures and to pay dividends of approximately $12.7 million.
The majority of our residential and commercial wastewater customers are billed a flat monthly fee, and our large industrial wastewater customer is billed monthly based on wastewater flow, which contributes to providing a revenue stream unaffected by weather. As of December 31, 2024, the number of Delaware wastewater customers increased approximately 6.5% compared to December 31, 2023.
The majority of our residential and commercial wastewater customers are billed a flat monthly fee, and our large industrial wastewater customer is billed monthly based on wastewater flow, which contributes to providing a revenue stream unaffected by weather.
Results of Operations 2024 Compared to 2023 Operating Revenues Revenues totaled $108.0 million for the year ended December 31, 2024, an increase of $9.1 million, or 9.2%, over the revenues for the year ended December 31, 2023 .
Results of Operations 2025 Compared to 2024 Operating Revenues Revenues totaled $112.9 million for the year ended December 31, 2025, an increase of $5.0 million, or 4.6%, over the revenues for the year ended December 31, 2024.
In April 2021, Artesian Water entered into a 3-year agreement with Worldwide Industries Corporation effective July 1, 2021 to paint elevated water storage tanks. Pursuant to the agreement, the total expenditure for the three years was $1.2 million.
In August 2025, Artesian Water entered into a new, three-year agreement with Worldwide Industries Corporation, effective September 1, 2025, to paint elevated water storage tanks. Pursuant to the agreement, the expected total expenditure for the three years is $2.5 million.
By providing water and wastewater services, we believe we are positioned as the primary resource for developers and communities throughout the Delmarva Peninsula seeking to fill both needs simultaneously.
Our strategy has included a focus on building strategic partnerships with county governments, municipalities and developers. By providing water and wastewater services, we believe we are positioned as the primary resource for developers and communities throughout the Delmarva Peninsula seeking to fill both needs simultaneously.
Depreciation and amortization expense increased $0.3 million, or 2.2%, primarily due to continued investment in utility plant providing supply, treatment, storage and distribution of water to customers and service to our wastewater customers.
Depreciation and amortization expense increased $0.2 million, or 1.3%, primarily due to additional depreciation from continued investment in utility plant related to providing supply, treatment, storage and distribution of water to customers and service to our wastewater customers, partially offset by a decrease in depreciation expense related to an increase in utility plant funded by Contributions in Aid of Construction, or CIAC.
Total revenue increased $9.1 million and interest charges decreased $0.4 million, offset by a $5.4 million increase in total operating expenses and $0.4 million decrease in other income. Part I, Item 7.
Net Income Our net income applicable to common stock increased $2.4 million, or 11.9%. Total revenue increased $5.0 million, other income increased $0.7 million, and interest charges decreased $0.1 million, offset by a $3.4 million increase in total operating expenses. 24 Table of Contents Part I, Item 7.
In April 2024, Artesian Wastewater received a permit from the Delaware Department of Natural Resources and Environmental Control for construction of a 625,000 gallon per day regional wastewater treatment facility, including a primary receiving headworks at its Sussex Regional Recharge Facility, or SRRF.
In April 2024, Artesian Wastewater received a permit from DNREC for construction of a 625,000 gallon per day regional wastewater treatment facility, including a primary receiving headworks at its Sussex Regional Recharge Facility, or SRRF. Under its previous permit, SRRF provided solely land disposal services for a single commercial processing and treatment plant.
Note 1 (Summary of Significant Accounting Policies) to the Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of the consolidated financial statements. The following provides an overview of the accounting policies that are particularly important to the results of operations and financial condition of the Company.
Note 1 (Summary of Significant Accounting Policies) to the Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of the consolidated financial statements.
The Company’s material cash requirements include the following lines of credit commitments and contractual obligations: Material Cash Requirements Payments Due by Period In thousands Less than 1 Year 1-3 Years 4-5 Years After 5 Years Total First mortgage bonds (principal and interest) $ 7,870 $ 15,659 $ 39,045 $ 198,313 $ 260,887 State revolving fund loans (principal and interest) 1,144 2,130 2,130 9,662 15,066 Promissory note (principal and interest) 962 1,924 1,925 8,689 13,500 Asset purchase contractual obligation (principal and interest) 333 647 --- --- 980 Lines of credit --- --- --- --- --- Operating leases 28 56 42 1,321 1,447 Operating agreements 38 31 4 --- 73 Unconditional purchase obligations 928 1,000 114 260 2,302 Tank painting contractual obligation 313 --- --- --- 313 Total contractual cash obligations $ 11,616 $ 21,447 $ 43,260 $ 218,245 $ 294,568 Artesian’s long-term debt agreements and revolving lines of credit contain customary affirmative and negative covenants that are binding on us (which are in some cases subject to certain exceptions), including, but not limited to, restrictions on our ability to make certain loans and investments, guarantee certain obligations, enter into, or undertake, certain mergers, consolidations or acquisitions, transfer certain assets or change our business.
The Company’s material cash requirements include the following lines of credit commitments and contractual obligations: Material Cash Requirements Payments Due by Period Less than 1-3 4-5 After 5 In thousands 1 Year Years Years Years Total First mortgage bonds (principal and interest) $ 7,843 $ 40,610 $ 12,476 $ 192,089 $ 253,018 State revolving fund loans (principal and interest) 1,065 2,130 2,130 8,597 13,922 Promissory note (principal and interest) 962 1,924 1,927 7,725 12,538 Asset purchase contractual obligation (principal and interest) 326 320 --- --- 646 Lines of credit 5,719 --- --- --- 5,719 Operating leases 29 52 42 1,337 1,460 Operating agreements 38 19 -- --- 57 Unconditional purchase obligations 1,031 114 114 198 1,457 Tank painting contractual obligation 849 1,273 --- --- 2,122 Total contractual cash obligations $ 17,862 $ 46,442 $ 16,689 $ 209,946 $ 290,939 Artesian’s long-term debt agreements and revolving lines of credit contain customary affirmative and negative covenants that are binding on us (which are in some cases subject to certain exceptions), including, but not limited to, restrictions on our ability to make certain loans and investments, guarantee certain obligations, enter into, or undertake, certain mergers, consolidations or acquisitions, transfer certain assets or change our business.
This is a demand line of credit and therefore the financial institution may demand payment for any outstanding amounts at any time. The term of this line of credit expires on the earlier of May 19, 2025 or any date on which Citizens demands payment. The Company expects to renew this line of credit.
The term of this line of credit expires on the earlier of May 18, 2026 or any date on which Citizens demands payment. The Company expects to renew this line of credit.
We have not experienced conditions that would result in our default under these agreements. 26 Table of Contents The asset purchase contractual obligation is related to the purchase of substantially all of the water operating assets from the Town of Clayton in May 2022, by Artesian Water. The total purchase price was $5.0 million.
The asset purchase contractual obligation is related to the purchase of substantially all of the water operating assets from the Town of Clayton in May 2022, by Artesian Water. The total purchase price was $5.0 million. At closing, Artesian Water paid approximately $3.4 million.
The general need for increased capital investment in our water and wastewater systems is due to a combination of population growth, more protective water quality standards, aging infrastructure and acquisitions.
In February 2026, Artesian Wastewater received a permit from DNREC for construction of the next phase of an additional 625,000 gallon per day regional wastewater treatment facility. 22 Table of Contents The general need for increased capital investment in our water and wastewater systems is due to a combination of population growth, more protective water quality standards, aging infrastructure and acquisitions.
The interest rate is a one-month Daily Secured Overnight Financing Rate, or SOFR, plus 10 basis points, or Term SOFR, plus an applicable margin of 0.85%, which was increased to 1.10% effective August 3, 2023. Term SOFR cannot be less than 0.00%.
The interest rate is a one-month Daily Secured Overnight Financing Rate, or SOFR, plus 10 basis points, or Term SOFR, plus an applicable margin of 1.10%. Term SOFR cannot be less than 0.00%. This is a demand line of credit and therefore the financial institution may demand payment for any outstanding amounts at any time.
Other Income Other income decreased $0.4 million, primarily due to a decrease in allowance for funds used during construction, or AFUDC, as a result of lower long-term construction activity subject to AFUDC for the twelve months ended December 31, 2024 compared to the same period in 2023.
Other Income Other income increased $0.7 million, primarily due to an increase in allowance for funds used during construction, or AFUDC, as a result of higher long-term construction activity subject to AFUDC. Interest Charges Interest charges decreased $0.1 million, primarily due to a decrease in long-term debt interest related to lower borrowing levels.
We estimate that future investments will be financed by our operations and external sources.
We have several sources of liquidity to finance our investment in utility plant and other fixed assets. We estimate that future investments will be financed by our operations and external sources.
Artesian Development owns two nine-acre parcels of land, located in Sussex County, Delaware, which allows for construction of a water treatment facility and wastewater treatment facility. CRITICAL ACCOUNTING ESTIMATES Critical accounting estimates are those we believe are most important to portraying the financial condition and results of operations and also require significant estimates, assumptions or other judgments by management.
Artesian Development owns two nine-acre parcels of land, located in Sussex County, Delaware, which allows for construction of a water treatment facility and wastewater treatment facility. CRITICAL ACCOUNTING ESTIMATES Management has reviewed our financial policies and determined that there are no critical accounting estimates requiring disclosure.
At closing, Artesian Water paid approximately $3.4 million. The balance is payable in five equal annual installments on the anniversary date of the closing date. Each annual installment is payable with interest at an annual rate of 2.0%.
The balance is payable in five equal annual installments on the anniversary date of the closing date. Each annual installment is payable with interest at an annual rate of 2.0%. Payments for unconditional purchase obligations reflect minimum water purchase obligations based on rates that are subject to change under an interconnection agreement with the Chester Water Authority.
This increase is primarily due to an increase in wastewater revenue associated with an increase in the number of customers served. 22 Table of Contents Non-utility operating revenue increased approximately $0.1 million, or 1.7%, for the year ended December 31, 2024 compared to the same period in 2023, primarily due to an increase in SLP Plan revenue, partially offset by a decrease in contract service revenue related to a contract for the design and construction of wastewater infrastructure that was mostly completed in prior years.
Non-utility operating revenue increased approximately $0.7 million, or 10.2%, for the year ended December 31, 2025 compared to the same period in 2024, primarily due to an increase in SLP Plan revenue, primarily the result of an increase in rates that were placed into effect on December 1, 2024 and increase in the number of customers participating in the SLP Plans.
Water sales revenue increased $8.0 million, or 10.1%, for the year ended December 31, 2024 from the corresponding period in 2023, primarily as a result of a temporary rate increase of 14.6% of gross water sales placed into effect on November 28, 2023, as permitted under Delaware law.
Water sales revenue increased $2.8 million, or 3.2%, for the year ended December 31, 2025 from the corresponding period in 2024, primarily the result of two temporary rate increases as permitted under Delaware law, until permanent rates are determined by the DEPSC, as well as an increase in the number of customers served and DSIC revenue.
Federal and state income tax expense increased $1.0 million, or 15.2%, primarily due to higher pre-tax income, lower state net operating loss valuation allowance, and higher regulatory deferred income tax amortization in 2024 compared to 2023.
Artesian Water offsets depreciation recorded on utility plant by depreciation on utility property funded by CIAC . Federal and state income tax expense increased $0.5 million, or 7.1%, primarily due to higher pre-tax income, partially offset by higher regulatory deferred income tax amortization in 2025 compared to 2024 .
The fixed rate was lowered 5.6% starting in May 2021. In February 2022, Artesian Water Maryland entered into an electric supply agreement with Constellation NewEnergy, Inc., effective from May 2022 through November 2025.
In April 2025, Artesian Water Maryland entered into an electric supply agreement with WGL Energy that is effective from November 2025 through November 2029 for Maryland operations. The fixed rate was increased 5.5% starting in November 2025. These fixed rate electric supply contracts are for normal purchases and are not derivative instruments.
Property and other taxes increased $0.2 million, or 3.6%, primarily due to an increase in New Castle County, Delaware tax rates on utility plant, an increase in utility plant subject to taxation and an increase in payroll taxes. Property taxes are assessed on land, buildings and certain utility plant, which include the footage and size of pipe, hydrants and wells.
Property taxes are assessed on land, buildings and certain utility plant, which include the footage and size of pipe, and hydrants.
Non-Utility Subsidiaries Artesian Utility provides contract water and wastewater operation services to private, municipal, and governmental institutions. Artesian Utility also offers three protection plans to customers: the WSLP Plan, the SSLP Plan, and the ISLP Plan. SLP Plan customers are billed a flat monthly or quarterly rate, which contributes to providing a revenue stream unaffected by weather.
As of December 31, 2025, the number of Delaware wastewater customers increased approximately 6.5% compared to December 31, 2024. 21 Table of Contents Non-Utility Subsidiaries Artesian Utility provides contract water and wastewater operation services to private, municipal, and governmental institutions. Artesian Utility also offers protection plans to customers: the WSLP Plan, the SSLP Plan, and the ISLP Plan.
As of December 31, 2024, the eligible customers enrolled in the WSLP Plan, the SSLP Plan and the ISLP Plan increased 3.1%, 4.0% and 2.2%, respectively, compared to December 31, 2023. 20 Table of Contents Strategic Direction and Recent Developments Our strategy is to increase customer growth, revenues, earnings and dividends by expanding our water, wastewater and SLP Plan services across the Delmarva Peninsula.
Strategic Direction and Recent Developments Our strategy is to increase customer growth, revenues, earnings and dividends by expanding our water, wastewater and SLP Plan services across the Delmarva Peninsula. We remain focused on providing superior service to our customers and continuously seek ways to improve our efficiency and performance.
Our projected capital expenditures and other investments are subject to periodic review, and revision to reflect changes in economic conditions and other factors. The Company's investment for 2025 is expected to be offset by contributions in aid of construction of $16.2 million for a net investment of $46.4 million in 2025.
The actual amount and timing of our projected capital expenditures and other investments are subject to periodic review, and revision to reflect changes in economic conditions, project scheduling, continued refinement of project scope and costs and other factors.
We realized 81.6% and 81.0% of our total operating revenue for the years ended December 31, 2024 and December 31, 2023, respectively, from the sale of water. Other utility operating revenue increased approximately $0.9 million, or 7.7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
A portion of the revenue from the November 6, 2025 temporary rate increase was recorded as a reserve for refund and is not reflected in income. We realized 80.5% and 81.6% of our total operating revenue for the years ended December 31, 2025 and December 31, 2024, respectively, from the sale of water.
This increase is primarily due to an increase in wastewater revenue associated with an increase in the number of customers served. Non-Utility Operating Revenue Non-utility operating revenue, derived from non-regulated water and wastewater operations, increased by 1.7%, to $6.7 million in 2024 from $6.6 million in 2023.
Other utility operating revenue increased approximately $1.5 million, or 11.2%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. This increase is primarily due to an increase in wastewater revenue associated with customer growth.
Cash flows provided by financing activities decreased due to the net proceeds from the issuance of Class A Non-Voting Stock in May 2023 and June 2023 as well as decreased contributions in aid of construction and borrowings on lines of credit. We have several sources of liquidity to finance our investment in utility plant and other fixed assets.
Our primary source of liquidity from financing activities was $26.1 million in net contributions and advances from developers and $5.7 million in lines of credit borrowings. Cash flows provided by financing activities increased due to higher contributions in aid of construction and borrowings on lines of credit.
Removed
There has been consistent customer growth over the years.
Added
SLP Plan customers are billed a flat monthly or quarterly rate, which contributes to providing a revenue stream unaffected by weather. There has been consistent customer growth over the years.
Removed
We remain focused on providing superior service to our customers and continuously seek ways to improve our efficiency and performance. Our strategy has included a focus on building strategic partnerships with county governments, municipalities and developers.
Added
As of December 31, 2025, the eligible customers enrolled in the WSLP Plan, the SSLP Plan and the ISLP Plan increased 4.1%, 2.0% and 5.7%, respectively, compared to December 31, 2024. The Company discontinued enrolling new customers in the ISLP Plan, effective January 2026.
Removed
Changes in the estimates, assumptions or other judgments included within these accounting policies could result in a significant change to the financial statements in any quarterly or annual period. We consider the following policies to be the most critical in understanding the judgment that is involved in preparing our Consolidated Financial Statements.
Added
Our accounting policies do not require management to make difficult, subjective, or complex judgments about matters that are highly uncertain, and therefore, no significant estimates are deemed critical to the portrayal of our financial condition or results of operations.
Removed
Senior management has discussed the selection and development of our critical accounting estimates with the Audit Committee of the Board of Directors. Revenues We record water service revenue, including amounts billed to customers, on a cycle basis and unbilled amounts based upon estimated usage from the date of the last meter reading to the end of the accounting period.
Added
The first temporary rate increase of 2.88% was placed into effect on June 3, 2025 at which time the DSIC rate of 1.66% was set to zero. The second temporary rate increase of 6.82% was placed into effect on November 6, 2025.
Removed
As actual usage amounts are received, adjustments are made to the unbilled estimates in the next billing cycle based on the actual results. Estimates are made on an individual customer basis, using one of three methods: the previous year’s consumption in the same period, the previous billing period’s consumption, or averaging.
Added
Operating Revenues in thousands 2025 2024 2023 Water Sales Residential $ 61,821 54.8 % $ 60,390 55.9 % $ 55,062 55.8 % Non-residential 26,461 23.4 25,149 23.3 22,773 23.0 Resale 2,625 2.3 2,540 2.4 2,198 2.2 Other utility operating revenues 14,599 12.9 13,129 12.2 12,195 12.3 Non-utility operating revenues 7,435 6.6 6,744 6.2 6,633 6.7 Total $ 112,941 100.0 % $ 107,952 100.0 % $ 98,861 100.0 % 23 Table of Contents Operating Expenses Operating expenses, excluding depreciation and amortization and income taxes, increased $2.7 million, or 4.4%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Removed
While actual usage for individual customers may differ from the estimate, we believe the overall total estimate of consumption and revenue for the fiscal period will not differ materially from actual billed consumption.
Added
Utility operating expenses increased $2.6 million, or 5.3%.
Removed
Deferred income taxes Deferred income taxes are provided in accordance with FASB ASC Topic 740 on all differences between the tax basis of assets and liabilities and the amounts at which they are carried in the consolidated financial statements based on the enacted tax rates expected to be in effect when such temporary differences are expected to reverse.
Added
The increase in utility operating expenses is partially offset by a $0.1 million decrease in purchased water costs. Property and other taxes in creased $0.1 million, or 1.2%, primarily due to a reassessment and tax rate changes in New Castle County, Delaware partially offset by an increase in utility plant subject to taxation.
Removed
The Company’s rate regulated subsidiaries recognize regulatory liabilities, to the extent considered in ratemaking, for deferred taxes provided in excess of the current statutory tax rate and regulatory assets for deferred taxes provided at rates less than the current statutory rate.
Added
The following chart summarizes our investment in plant and systems over the past three fiscal years as well as our projected capital expenditures for the year 2026.
Removed
Such tax-related regulatory assets and liabilities are reported at the revenue requirement level and amortized to income as the related temporary differences reverse, generally over the lives of the related properties.
Added
In thousands Projected 2026 2025 2024 2023 Supply and treatment $ 33,000 $ 15,802 $ 12,576 $ 17,454 Transmission, distribution and collection 45,176 40,592 32,226 41,389 General plant 7,350 4,091 2,275 4,577 AFUDC, equity portion (971 ) (1,640 ) (1,135 ) (1,243 ) Gross investment in plant $ 84,555 $ 58,845 $ 45,942 $ 62,177 Net contributions in aid of construction (20,274 ) (26,087 ) (20,436 ) (22,519 ) Net investment in plant $ 64,281 $ 32,758 $ 25,506 $ 39,658 Supply and treatment includes investments to construct, upgrade, and replace infrastructure for water and wastewater treatment plants, pump stations, disposal equipment and wells.
Removed
These temporary rates were replaced with the final approved rates pursuant to a DEPSC order that authorized a total increase of approximately 15.2%, which went into effect on June 12, 2024.
Added
Transmission, distribution and collection includes investments to extend new infrastructure, renew aging infrastructure, and increase storage capacity to deliver water to customers and collect wastewater as well as relocate infrastructure due to government mandates. General plant includes investments for transportation, construction, communications and lab testing equipment, as well as computer hardware and software and building renovations .
Removed
The increase in both temporary rates and final approved customer base rates was partially offset by the Company’s DSIC rate of 7.50% resetting to zero upon implementation of the temporary rate increase.
Added
These investments are intended to improve efficiency, upgrade aging systems, accommodate growing populations, upgrade treatment capacity, apply advanced technologies, address environmental challenges and enhance resiliency.
Removed
In addition, there was an increase in overall water consumption due to drier weather experienced during the year ended December 31, 2024 compared to the same period in 2023 and an increase in the number of customers served.
Added
We have not experienced conditions that would result in our default under these agreements. 26 Table of Contents On March 13, 2026, Artesian Water Maryland and CoBank entered into a Master Loan Agreement, or the MLA, and supplement to the MLA, in which CoBank will make a single loan to Artesian Water Maryland in a principal amount not to exceed $10 million.
Removed
Percentage of Operating Revenues 2024 2023 2022 Water Sales Residential 50.1 % 50.1 % 48.7 % Commercial 18.0 17.9 17.6 Government and Other 13.5 13.0 12.9 Other utility operating revenues 12.1 12.3 11.6 Non-utility operating revenues 6.3 6.7 9.2 Total 100.0 % 100.0 % 100.0 % Residential Residential water service revenues in 2024 amounted to $53.9 million, an increase of $4.4 million, or 8.8%, above the $49.6 million recorded in 2023, primarily due to a rate increase placed into effect on November 28, 2023 and an increase in overall water consumption.
Added
Artesian Water Maryland agrees to pay interest on the unpaid principal balance of the loans at 6.14% per annum. Interest shall be calculated and paid quarterly in arrears on the thirtieth (30th) day of each of March, June, September and December.
Removed
The volume of water sold to residential customers increased to 4,522 million gallons in 2024 compared to 4,340 million gallons in 2023, a 4.2% increase. The number of residenti al customers served increased by approximately 1,500, or 1.7%, in 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed7 unchanged
Biggest changeIn addition, the Company has interest rate exposure on $60 million of variable rate lines of credit with two banks. As of December 31, 2024, there were no outstanding balances on the lines of credit. Increases in variable interest rates result in an increase in the cost of borrowing on these variable rate lines of credit.
Biggest changeIn addition, the Company has interest rate exposure on $60 million of variable rate lines of credit with two banks. As of December 31, 2025, there was approximately $5.7 million outstanding on the lines of credit. Increases in variable interest rates result in an increase in the cost of borrowing on these variable rate lines of credit.

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