Financial Analysis

8. Commitments Based on its capital budget, the Company anticipates construction and acquisition expenditures for 2026 and 2027 of approximately $48,000 in each year, exclusive of any acquisitions not yet approved. The Company plans to finance ongoing capital expenditures with internally-generated funds, borrowings against the Companys line of credit, proceeds from the issuance of common stock under its dividend reinvestment and direct stock purchase and sale plan and ESPP, potential common stock or debt issues and customer advances and contributions. The Company was granted approval by the PPUC to modify its tariff to include the cost of the annual replacement of up to 400 lead customer-owned service lines over nine years from the date of the agreement. The tariff modification allows the Company to replace customer-owned service lines at its own initial cost. The Company will record the costs as a regulatory asset to be recovered in future base rates to customers, over a four-year period. The cost for the customer-owned lead service line replacements was approximately $2,087 and $1,961 through December 31, 2025 and 2024, respectively, and is included as a regulatory asset. Based on its experience, the Company estimates that lead customer-owned service lines replacements will cost $2,100. This estimate is subject to adjustment as more facts become available. This tariff modification will expire on March 8, 2026 unless extended by the PPUC. As of December 31, 2025, approximate …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

6. Long-Term Debt and Short-Term Borrowings Long-term debt as of December 31, 2025 and 2024 is summarized in the following table: 2025 2024 Variable Rate Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029 $ 12,000 $ 12,000 3.00 % Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series A of 2019, due 2036 10,500 10,500 3.10 % Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series B of 2019, due 2038 14,870 14,870 3.23 % Senior Notes, due 2040 15,000 15,000 4.00 % - 4.50 % York County Industrial Development Authority Exempt Facilities Revenue Bonds, Series 2015, due 2029 - 2045 10,000 10,000 4.54 % Senior Notes, due 2049 20,000 20,000 3.24 % Senior Notes, due 2050 30,000 30,000 5.50% Senior Notes, due 2053 40,000 40,000 5.67% Senior Notes, due 2054 40,000 40,000 Committed Line of Credit, due September 2027 32,290 15,808 Total long-term debt 224,660 208,178 Less discount on issuance of long-term debt (124 ) (136 ) Less unamortized debt issuance costs (2,306 ) (2,481 ) Less current maturities (330 ) Long-term portion $ 221,900 $ 205,561 Payments due by year as of December 31, 2025: 2026 2027 2028 2029 2030 $330 $44,630 $355 $370 $385 Payments due in 2027 include payback of the committed line of credit. The committed line of credit is reviewed annually, and upon favorable outcome, would likely be extended for another …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table shows the Companys operating revenues disaggregated by service and customer type. 2025 2024 Water utility service: Residential $ 42,976 $ 41,496 Commercial and industrial 20,970 20,484 Fire protection 4,915 4,559 Wastewater utility service: Residential 6,579 6,113 Commercial and industrial 1,385 1,299 Billing and revenue collection services 79 494 Collection services 60 34 Other revenue 57 26 Total Revenue from Contracts with Customers 77,021 74,505 Rents from regulated property 467 454 Total Operating Revenue $ 77,488 $ 74,959 …

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12. Stock-Based Compensation The Company has a Long-Term Incentive Plan, or LTIP. The LTIP was approved by the Companys shareholders to provide the incentive of long-term stock-based awards to officers, directors, and key employees. The LTIP provides for the granting of nonqualified stock options, incentive stock options, stock appreciation rights, performance restricted stock grants and units, restricted stock grants and units, and unrestricted stock grants. The maximum number of shares of common stock subject to awards that may be granted to any participant in any one calendar year is 10,000. Shares of common stock issued under the LTIP may be treasury shares or authorized but unissued shares. The LTIP will be administered by the Compensation and Human Capital Committee of the Board, or the full Board, provided that the full Board will administer the LTIP as it relates to awards to non-employee directors of the Company. The LTIP was originally effective on July 1, 2016 (2016 LTIP), and was amended, restated, and renamed the 2025 LTIP effective on May 6, 2025 (2025 LTIP). The Company filed a registration statement with the Securities and Exchange Commission on May 6, 2025 covering the offering of stock under the 2025 LTIP. The registration statement added 150,000 shares to the unissued shares from the 2016 LTIP, which may be issued under the 2025 LTIP over ten years. On May 3, 2021, the Board awarded stock to non-employee directors effective May 3, 2021. This stock award ves …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

7. Fair Value of Financial Instruments The accounting standards regarding fair value measurements establish a fair value hierarchy which indicates the extent to which inputs used in measuring fair value are observable in the market. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include managements own judgments about the assumptions market participants would use in pricing the asset or liability. The Company has recorded its interest rate swap liability at fair value in accordance with the standards. The liability is recorded under the caption Other deferred credits on the balance sheets. The table below illustrates the fair value of the interest rate swap as of the end of the reporting period. Description December 31, 2025 Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2) Interest Rate Swap $479 $479 Fair values are measured as the present value of all expected future cash flows based on the swap yield curve as of the date of the valuation. These inputs to this calculation are deemed to be Level 2 inputs. The balance sheet carrying value reflects the Companys credit quality as of December 31, 2025. The rate used in discounting all prospective cash flows anticipated to be made under this swap reflects a …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

14. Income Taxes Income before income taxes by jurisdiction consists of: 2025 2024 Domestic $ 19,242 $ 21,675 Foreign Total income before income taxes $ 19,242 $ 21,675 The provisions for income taxes consist of: 2025 2024 Federal current $ 3 $ 728 State current (105 ) 147 Foreign current Federal deferred (381 ) 409 State deferred (295 ) 102 Foreign deferred Federal investment tax credit, net of current utilization (38 ) (36 ) Total income tax expense (benefit) $ (816 ) $ 1,350 The Company paid (received) cash income taxes as follows: 2025 2024 Federal income taxes paid $ 380 $ 943 Pennsylvania income taxes paid (refunded) (16 ) Total income taxes paid $ 364 $ 943 A reconciliation of the statutory Federal tax provision to the total provision follows: 2025 2024 Statutory Federal tax provision $ 4,041 21.0 % $ 4,552 21.0 % State and local income taxes, net of Federal benefit (267 ) (1.4 )% 244 1.1 % Foreign taxes 0.0 % 0.0 % IRS TPR deduction (4,183 ) (21.7 )% (3,315 ) (15.3 )% Tax-exempt interest (41 ) (0.2 )% (33 ) (0.1 )% Amortization of investment tax credit (38 ) (0.2 )% (36 ) (0.2 )% Amortization of excess accumulated deferred income taxes on accelerated depreciation (183 ) (1.0 )% (196 ) (0.9 )% Life insurance (197 ) (1.0 )% (19 ) (0.1 )% Change in enacted state tax rate 20 0.1 % 21 0.1 % Effect of cross-border tax laws 0.0 % 0.0 % Change in valuation allowance 0.0 % 0.0 % Change in unrecognized tax benefits 0.0 % 0.0 % Other nondeductible items, net 32 0.2 % 132 0.6 % T …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

11. Employee Benefit Plans Pensions The Company maintains a general and administrative and a union-represented defined benefit pension plan covering all of its employees hired prior to May 1, 2010. Employees hired after May 1, 2010 are eligible for an enhanced 401(k) plan rather than a defined benefit plan. The benefits under the defined benefit plans are based upon years of service and compensation near retirement. The Company amended its defined benefit pension plans in 2014, generally limiting the years of eligible service under the plans to 30 years. The Companys funding policy is to contribute annually the amount permitted by the PPUC to be collected from customers in rates, but in no case less than the minimum Employee Retirement Income Security Act (ERISA) required contribution. The following table sets forth the plans funded status as of December 31, 2025 and 2024. The measurement of assets and obligations of the plans is as of December 31, 2025 and 2024. Obligations and Funded Status At December 31 2025 2024 Change in Benefit Obligation Pension benefit obligation at beginning of year $ 37,556 $ 40,198 Service cost 530 635 Interest cost 1,981 1,855 Actuarial (gain) loss 623 (2,997 ) Benefit payments (2,209 ) (2,135 ) Pension benefit obligation at end of year 38,481 37,556 Change in Plan Assets Fair value of plan assets at beginning of year 62,565 63,578 Actual return on plan assets 6,094 1,011 Employer contributions 111 Benefits paid (2,209 ) (2,135 ) Fair value of pl …

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9. Revenue Recognition The following table shows the Companys operating revenues disaggregated by service and customer type. 2025 2024 Water utility service: Residential $ 42,976 $ 41,496 Commercial and industrial 20,970 20,484 Fire protection 4,915 4,559 Wastewater utility service: Residential 6,579 6,113 Commercial and industrial 1,385 1,299 Billing and revenue collection services 79 494 Collection services 60 34 Other revenue 57 26 Total Revenue from Contracts with Customers 77,021 74,505 Rents from regulated property 467 454 Total Operating Revenue $ 77,488 $ 74,959 Utility Service The Company provides utility service as a distinct and single performance obligation to each of its water and wastewater customers. The transaction price is detailed in the tariff pursuant to an order by the PPUC and made publicly available. There is no variable consideration and no free service, special rates, or subnormal charges to any customer. Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price. The performance obligation is satisfied over time through the continuous provision of utility service through a stand-ready obligation to perform and the transfer of water or the collection of wastewater through a series of distinct transactions that are identical in nature and have the same pattern of transfer to the customer. The Company uses an output method to recognize the utility service revenue over time. The s …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

15. Subsequent Event On January 28, 2026, the Company completed the acquisition of the wastewater collection and treatment assets of CMV Sewage Co., Inc. in Chanceford Township, York County, Pennsylvania. The Company began operating the existing wastewater collection and treatment assets on February 2, 2026. The acquisition resulted in the addition of approximately 280 wastewater customers with purchase price and acquisition costs of approximately $395. This acquisition is immaterial to Company results.

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7. Commitments The Company was granted approval by the Pennsylvania Public Utility Commission, or PPUC, to modify its tariff to include the cost of the annual replacement of up to 400 lead customer-owned service lines over nine years from the date of the agreement. The tariff modification allows the Company to replace customer-owned service lines at its own initial cost. The Company will record the costs as a regulatory asset to be recovered in future base rates to customers, over a four-year period. The cost for the customer-owned lead service line replacements was approximately $2,058 and $1,961 through September 30, 2025 and December 31, 2024, respectively, and is included as a regulatory asset. Based on its experience, the Company estimates that lead customer-owned service lines replacements will cost $2,100. This estimate is subject to adjustment as more facts become available.

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4. Debt As of Sep. 30, 2025 As of Dec. 31, 2024 Variable Rate Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029 $ 12,000 $ 12,000 3.00 % Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series A of 2019, due 2036 10,500 10,500 3.10 % Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series B of 2019, due 2038 14,870 14,870 3.23 % Senior Notes, due 2040 15,000 15,000 4.00 % - 4.50 % York County Industrial Development Authority Exempt Facilities Revenue Bonds, Series 2015, due 2029 2045 10,000 10,000 4.54 % Senior Notes, due 2049 20,000 20,000 3.24% Senior Notes, due 2050 30,000 30,000 5.50% Senior Notes, due 2053 40,000 40,000 5.67% Senior Notes, due 2054 40,000 40,000 Committed Line of Credit, due September 2027 37,430 15,808 Total long-term debt 229,800 208,178 Less discount on issuance of long-term debt (127 ) (136 ) Less unamortized debt issuance costs (2,350 ) (2,481 ) Less current maturities (330 ) Long-term portion $ 226,993 $ 205,561 In the third quarter of 2025, the Company renewed its committed line of credit and extended the maturity date to September 2027. No other terms or conditions of the line of credit agreement were modified. …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table shows the Companys operating revenues disaggregated by service and customer type. Three Months Ended September 30 Nine Months Ended September 30 2025 2024 2025 2024 Water utility service: Residential $ 11,343 $ 10,887 $ 32,219 $ 31,153 Commercial and industrial 5,592 5,527 15,742 15,292 Fire protection 1,240 1,156 3,644 3,360 Wastewater utility service: Residential 1,695 1,578 4,891 4,554 Commercial and industrial 334 301 1,028 969 Billing and revenue collection services 18 121 61 373 Collection services 9 25 42 28 Other revenue 15 6 44 22 Total Revenue from Contracts with Customers 20,246 19,601 57,671 55,751 Rents from regulated property 115 114 345 342 Total Operating Revenue $ 20,361 $ 19,715 $ 58,016 $ 56,093 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

11. Stock-Based Compensation The Company has a Long-Term Incentive Plan, or LTIP. The LTIP was approved by the Companys shareholders to provide the incentive of long-term stock-based awards to officers, directors, and key employees. The LTIP provides for the granting of nonqualified stock options, incentive stock options, stock appreciation rights, performance restricted stock grants and units, restricted stock grants and units, and unrestricted stock grants. The maximum number of shares of common stock subject to awards that may be granted to any participant in any one calendar year is 10,000. Shares of common stock issued under the LTIP may be treasury shares or authorized but unissued shares. The LTIP will be administered by the Compensation and Human Capital Committee of the Board, or the full Board, provided that the full Board will administer the LTIP as it relates to awards to non-employee directors of the Company. The LTIP was originally effective on July 1, 2016 (2016 LTIP), and was amended, restated, and renamed the 2025 LTIP effective on May 6, 2025 (2025 LTIP). The Company filed a registration statement with the Securities and Exchange Commission on May 6, 2025 covering the offering of stock under the 2025 LTIP. The registration statement added 150,000 shares to the unissued shares from the 2016 LTIP, which may be issued under the 2025 LTIP over ten years. On November 25, 2024, the Board awarded stock to an officer effective January 1, 2025. This stock award veste …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

6. Fair Value of Financial Instruments The accounting standards regarding fair value measurements establish a fair value hierarchy which indicates the extent to which inputs used in measuring fair value are observable in the market. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include managements own judgments about the assumptions market participants would use in pricing the asset or liability. The Company has recorded its interest rate swap liability at fair value in accordance with the standards. The liability is recorded under the caption Other deferred credits on the balance sheet. The table below illustrates the fair value of the interest rate swap as of the end of the reporting period. Description September 30, 2025 Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2) Interest Rate Swap $510 $510 Fair values are measured as the present value of all expected future cash flows based on the swap yield curve as of the date of the valuation. These inputs to this calculation are deemed to be Level 2 inputs. The balance sheet carrying value reflects the Companys credit quality as of September 30, 2025. The rate used in discounting all prospective cash flows anticipated to be made under this swap reflects …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

12. Income Taxes Under the Internal Revenue Service tangible property regulations, or TPR, the Company is permitted to deduct the costs of certain asset improvements that were previously being capitalized and depreciated for tax purposes as an expense on its income tax return. This ongoing deduction results in a reduction in the effective income tax rate, a net reduction in income tax expense, and a reduction in the amount of income taxes currently payable. It also results in increases to deferred tax liabilities and regulatory assets representing the appropriate book and tax basis difference on capital additions. The Companys effective tax rate was (10.4)% and 5.8% for the three months ended September 30, 2025 and 2024 , respectively, and (3.3)% and 8.9% for the nine months ended September 30, 2025 and 2024 , respectively. The lower effective tax rates are primarily due to higher deductions from the TPR. The effective tax rate will vary depending on income before income taxes and the level of eligible asset improvements expensed for tax purposes under TPR each period. On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was signed into law. The Company is currently reviewing the provisions of the OBBBA but does not expect the impact to be material as most of the provisions applicable to the Company from the Tax Cuts and Jobs Act of 2017 were not changed in the OBBBA and new provisions do not apply to the Company. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

10. Pensions Components of Net Periodic Pension Cost Three Months Ended September 30 Nine Months Ended September 30 2025 2024 2025 2024 Service cost $ 133 $ 159 $ 398 $ 476 Interest cost 495 464 1,486 1,392 Expected return on plan assets (767 ) (791 ) (2,301 ) (2,374 ) Amortization of prior service cost (4 ) (4 ) (10 ) (10 ) Rate-regulated adjustment 143 172 427 627 Net periodic pension cost $ $ $ $ 111 Pension service cost is recorded in operating expenses. All other components of net periodic pension cost are recorded as other pension costs in other income (expenses). Employer Contributions The Company previously disclosed in its financial statements for the year ended December 31, 2024 that it did not expect to contribute to its pension plans in 2025. For the nine months ended September 30, 2025, no contributions have been made. The Company does not expect to contribute any amounts in the final quarter of 2025. …

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8. Revenue The following table shows the Companys operating revenues disaggregated by service and customer type. Three Months Ended September 30 Nine Months Ended September 30 2025 2024 2025 2024 Water utility service: Residential $ 11,343 $ 10,887 $ 32,219 $ 31,153 Commercial and industrial 5,592 5,527 15,742 15,292 Fire protection 1,240 1,156 3,644 3,360 Wastewater utility service: Residential 1,695 1,578 4,891 4,554 Commercial and industrial 334 301 1,028 969 Billing and revenue collection services 18 121 61 373 Collection services 9 25 42 28 Other revenue 15 6 44 22 Total Revenue from Contracts with Customers 20,246 19,601 57,671 55,751 Rents from regulated property 115 114 345 342 Total Operating Revenue $ 20,361 $ 19,715 $ 58,016 $ 56,093 Utility Service The Company provides utility service as a distinct and single performance obligation to each of its water and wastewater customers. The transaction price is detailed in the tariff pursuant to an order by the PPUC and made publicly available. There is no variable consideration and no free service, special rates, or subnormal charges to any customer. Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price. The performance obligation is satisfied over time through the continuous provision of utility service through a stand-ready obligation to perform and the transfer of water or the collection of wastewater through a series of distinct transactio …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing