Artesian Resources(ARTNA) - 2024 Q4 - Annual Report

Revenue and Customer Growth - Total operating revenues for the year ended December 31, 2024, were $108.0 million, an increase of $9.1 million, or 9.2%, compared to 2023[161]. - Water sales revenue increased by $8.0 million, or 10.1%, primarily due to a temporary rate increase of 14.6% implemented on November 28, 2023, and a final approved rate increase of approximately 15.2% effective June 12, 2024[162]. - The number of metered water customers in Delaware increased by approximately 1.6% and in Maryland by approximately 2.3% compared to December 31, 2023[147]. - The number of Delaware wastewater customers increased by approximately 6.5% compared to December 31, 2023[148]. - Residential water service revenues amounted to $53.9 million, an increase of $4.4 million, or 8.8%, primarily due to a rate increase and increased consumption[166]. - Commercial water service revenues reached $19.4 million, an increase of $1.8 million, or 10.1%, driven by a rate increase[167]. - Government and other water service revenues increased to $14.7 million, up $1.9 million, or 14.8%, primarily due to a rate increase and increased consumption[168]. - Other utility operating revenue increased by 7.7% to $13.1 million in 2024 from $12.2 million in 2023, primarily due to an increase in the number of customers served[169]. Operating Expenses and Financial Performance - Operating expenses, excluding depreciation and income taxes, increased by $4.1 million, or 7.3%, for the year ended December 31, 2024 compared to 2023[171]. - Net income applicable to common stock increased by $3.7 million, or 22.1%, with total revenue rising by $9.1 million[179]. - Cash flow from operating activities was $36.8 million for the year ended December 31, 2024, compared to $31.9 million in 2023, reflecting improved financial performance[183]. Capital Expenditures and Future Investments - Capital expenditures in 2024 were $45.9 million, a decrease from $62.2 million in 2023, focusing on infrastructure upgrades and new facilities[184]. - Projected capital expenditures for 2025 are expected to be approximately $46.4 million, with significant investments in PFAS treatment equipment and infrastructure rehabilitation[182]. Financing and Cash Flow - Cash flows provided by financing activities decreased to $7.1 million in 2024 from $31.4 million in 2023, primarily due to reduced contributions in aid of construction[187]. - The company has a $40 million line of credit with Citizens Bank, fully available as of December 31, 2024, with an interest rate linked to SOFR[188]. - Total contractual cash obligations amount to $294.6 million, with significant payments due in the next five years[190]. - Artesian Water Company entered into a Financing Agreement for up to $901,170 to replace a water transmission main in New Castle County, Delaware[194]. Risk Management and Contracts - The fixed rate for the electric supply contract with MidAmerican was lowered by 5.6% starting in May 2021, while a new contract with WGL Energy will see a 44.4% increase starting December 2024[195]. - The company has a minimum water purchase obligation of 0.5 million gallons per day under an interconnection agreement with Chester Water Authority, effective until December 31, 2026[196]. - Total expenditure for the elevated water storage tank painting agreement was amended to $2.2 million over four years[197]. - The company manages interest rate risk through fixed rate long-term debt with rates ranging from 4.24% to 5.96%, maturing between 2028 and 2049[200]. - Artesian Water has $60 million in variable rate lines of credit, with no outstanding balances as of December 31, 2024[200]. - The company mitigates risks from commodity price increases by recovering costs through rate increases to customers[200].