The York Water(YORW) - 2025 Q1 - Quarterly Report

Financial Performance - Net income for Q1 2025 was $3,638, a decrease of $689, or 15.9%, from $4,327 in Q1 2024[76] - Operating revenues increased by $828, or 4.7%, from $17,628 in Q1 2024 to $18,456 in Q1 2025, driven by a growth in the customer base[77] - Operating expenses rose by $760, or 6.7%, from $11,413 in Q1 2024 to $12,173 in Q1 2025, primarily due to higher depreciation and maintenance costs[78] - Internally-generated funds from operations in Q1 2025 were $6,005, a decrease from $6,138 in Q1 2024, mainly due to higher interest and income taxes[95] Customer Base and Growth - The average number of water customers served increased by 1,238, from 71,948 in 2024 to 73,186 in 2025[77] - The Company signed agreements to acquire water and wastewater assets, expected to add approximately 485 customers upon completion[86][87][88] Debt and Financing - Interest on debt increased by $296, or 13.9%, from $2,123 in Q1 2024 to $2,419 in Q1 2025, attributed to higher interest rates[79] - Common stockholders' equity as a percent of total capitalization was 52.0% as of March 31, 2025, down from 52.6% as of December 31, 2024[96] - The Company's total long-term debt as a percentage of total capitalization was 48.0% as of March 31, 2025, compared to 47.4% as of December 31, 2024[101] - The Company maintained an unsecured line of credit of $50,000 with $21,843 in borrowings as of March 31, 2025, at an interest rate of 5.49%[98] - The Company has established a committed line of credit with a 2-year revolving maturity to manage the risk of reduced credit availability[99] Taxation - The effective tax rate for Q1 2025 was 11.5%, down from 12.2% in Q1 2024, with expectations for a lower rate for the remainder of the year[82] - The Company's effective tax rate will be influenced by income before income taxes and the level of eligible asset improvements expensed for tax purposes[103] - The Company has a substantial deferred income tax asset primarily due to accelerated depreciation from the Tax Cuts and Jobs Act of 2017[104] Future Expectations and Plans - The Company expects construction expenditures for the remainder of 2025 to be approximately $36,700, excluding any potential acquisitions[91] - The Company plans to file a rate increase request in 2025[85] - The Company expects to replace up to 400 lead customer-owned service lines at an estimated cost of $2,100, with costs recorded as a regulatory asset[113] External Factors - Pennsylvania state officials maintained a drought watch on April 2, 2025, calling for a voluntary reduction in nonessential water use of 5 to 10 percent, which could impact future revenues[114] Credit Rating - Standard & Poor's affirmed the Company's credit rating at A- with a stable outlook on August 6, 2024[107] Off-Balance Sheet Transactions - The Company does not engage in off-balance sheet transactions that may materially affect its financial condition[116]