What changed in this filing

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Item 1A. Risk Factors

2025-03-26 compared with 2024-03-18 · 88 added, 49 removed, 245 unchanged (36% of the section changed)

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suppliers or independent contractors to meet commitments could adversely affect construction and maintenance schedules and our results of operations and financial condition.

We have been affected and could continue to be affected by supplier delays

and increased costs, due to the impacts of inflation, 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.

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 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.

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.

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financial condition.

We also require pre-treatment by various industrial customers prior to receiving their wastewater for further treatment and disposal.

If those pre-treatment systems operated by others fail, or do not operate properly, they can

impact our downstream facilities’ ability to meet their permit limitations.

If we fail to meet our permit limitations, we could be fined or otherwise sanctioned by regulators and our operations could be curtailed or shut down.

Aging infrastructure may lead to service disruptions, property damage and increased capital expenditures and operation and management costs, all of which

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To the extent that any increased costs or expenditures are not fully recovered in rates, our results of operations, liquidity and cash flows could be negatively impacted.

Potential terrorist attacks or sabotage may disrupt our operations and adversely affect our business, operating results and financial condition.

We are subject to possible sabotage of our water and wastewater systems, including vandalism causing an interruption in water supply and a reduction in water

quality, and terrorism causing contamination of the water supply and a reduction in water quality.

We have security measures in place at our facilities to reduce the possibility of occurrences of sabotage, vandalism, or terrorism and to secure our

water and wastewater systems.

These security measures address water collection, pretreatment, treatment, distribution, storage, wastewater disposal, electronic or automated systems, and the use, handling, delivery, and storage of all chemicals.

also have programs in place to ensure employee awareness of potential threats.

We have and will continue to bear any increase in costs, most of which have been recoverable under state regulatory policies, for security precautions to protect our

facilities, operations and supplies.

Potential terrorist attacks, sabotage, or accidental damage by outside parties may disrupt our operations and adversely affect our business, operating

results and financial condition.

We are subject to disruption of our water and wastewater systems, including as a result of vandalism, terrorism, sabotage and/or accidental damage by outside

parties, any of which could cause an interruption in or contamination of water supply, and a reduction in water quality.

We have security measures in place at our facilities to reduce the possibility of occurrences of sabotage, vandalism, or terrorism

and to secure our water and wastewater systems.

These security measures address water collection, pre-treatment, treatment, distribution, storage, wastewater disposal, electronic or automated systems, and the use, handling, delivery, and storage of

all chemicals.

We also have programs in place to ensure employee awareness of potential threats.

We have and will continue to bear any increase in costs, most of which have been recoverable under state regulatory policies, for security precautions to

protect our facilities, operations and supplies.

While the costs of increases in security, including capital expenditures, may be significant, we expect these costs to continue to be recoverable in water and wastewater rates.

Despite our security measures, we

may not be in a position to control the outcome of terrorist events, sabotage or other attacks on our water systems, should they occur.

Despite our security

measures, we may not be in a position to control the outcome of terrorist events, sabotage or other attacks on our water systems, should they occur.

Our water and wastewater systems are also subject to accidental damage from work being completed by outside parties not under the supervision or control of

Construction activities in the vicinities of our pipelines and other infrastructure can lead to damage which results in inadvertent discharge onto nearby properties, or into nearby streams and rivers, causing damage to persons or

property, injury to wildlife and economic damages.

We could also incur repair and remediation costs, which may not be reimbursed or recoverable in water and wastewater rates.

We depend on the availability of capital for expansion, construction and maintenance.

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Our ability to continue our expansion efforts and fund our utility construction and maintenance program depends on the availability of adequate capital.

There is no guarantee that we will be able to obtain sufficient capital in the future on favorable terms and conditions, such as changes in market conditions and events beyond our control, most recently increases to interest rates, for expansion,

construction and maintenance.

There is no guarantee that we will be able to obtain sufficient capital in the future on favorable terms and conditions for expansion, construction and maintenance, as general macroeconomic conditions impacting the capital markets, including interest

rates, are beyond our control.

In the event our lines of credit are not extended or we are unable to refinance our first mortgage bonds when due and the borrowings are called for payment, we will have to seek alternative financing sources, although

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affect our future results of operations.

We may be adversely affected by the

implementation of new regulations, the reinterpretation or recission of existing regulations, or regulatory uncertainty.

Changes in local, state or federal policy or administrative priorities could adversely affect our business.

As a regulated utility, we are subject to regulation at the federal, state and local level.

We have made significant capital expenditures to adhere to

regulations imposed by such authorities and expect to continue to make capital expenditures in the future to adhere to such regulations.

Changes in local, state or federal administrative policy or priorities could affect the possible interpretation of

existing regulations or such authorities may impose new rules and regulatory requirements.

New administrations could also eliminate proposed rules and reverse final policies of prior administrations, which could lead to conflict between federal and

state regulations and regulatory uncertainty, which could cause us to reevaluate our strategic priorities and capital expenditures or otherwise impact our business operations.

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.

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of them to the extent they may arise.

In addition, the SEC has proposed extensive climate-related disclosure rules, which, if adopted, would likely result in increased compliance costs and capital expenditures.

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.

Risks Related to Governmental Laws and Regulations

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and a lower natural customer growth rate may result as compared to what had been experienced before due to a decline in new housing starts or a decline in the number of active customers due to housing vacancies or abandonments.

We could be adversely impacted by inflation.

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.

If inflation increases significantly, we may seek to increase our rates charged to customers.

We can provide no assurances that any future rate increase request will be approved by the applicable

regulatory authority, and if approved, we cannot guarantee that any rate increase will be granted in a timely manner and/or will be sufficient in amount to cover costs for which we initially sought the rate increase.

The impact of inflation could

adversely affect our results of operations, financial position or cash flows.

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.

We can provide no

assurances that any future rate increase request will be approved by the applicable regulatory authority, and if approved, we cannot guarantee that any rate increase will be granted in a timely manner and/or will be sufficient in amount to cover costs

for which we initially sought the rate increase.

The impact of such inflationary pressure could adversely affect our results of operations, financial position or cash flows.

We may be required to record impairments of goodwill, or otherwise change the fair value of certain assets, in the future that could have a material

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We rely on our information technology systems to manage operation of our business.

Specifically, our business relies on the following technology systems,

among others:

customer information system, financial reporting system, asset tracking system, remote monitoring system for some of our treatment, storage and pumping facilities, human resources management system, inventory management system, and

accounts receivable collection management system.

Such systems require periodic modifications, upgrades or replacement that subject us to inherent costs and risks, including substantial capital expenditures, additional administration and operating

expenses, and other risks and costs of delays in transitioning to new systems or of integrating new systems into our current systems.

Our computer and communications systems and operations could be damaged or interrupted by natural disasters, power

loss, telecommunications failures or acts of war or terrorism, sabotage, theft or similar events or disruptions.

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.

To date, there have been no risks identified from cybersecurity threats or previous cybersecurity incidents that have materially affected or are reasonably

likely to materially affect the company.

Despite our efforts, a cyberattack, if it occurred, could cause water or wastewater system operational complications, disrupt

service to our customers, compromise important data or systems or result in an unintended release of customer or other confidential information.

Possible impacts associated with a cyberattack could also include remediation costs related to lost,

stolen, or compromised data, repairs to information technology and data processing systems, increased cyber security protection costs, adverse effects on our compliance with regulatory and environmental laws and regulations, including standards for

water and wastewater utility providers, and litigation.

Specifically, our business relies on various technology systems,

including but not limited to those associated with customer information, financial reporting, asset and inventory management, facility operations and monitoring , human resources and accounts receivable.

Such systems require periodic modifications,

upgrades or replacement that subject us to inherent costs and risks, including substantial capital expenditures, additional administration and operating expenses, and other risks and costs of delays in transitioning to new systems or of integrating

new systems into our current systems.

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.

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.

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.

To date, there have been no risks identified from cybersecurity threats or previous cybersecurity incidents that have materially affected or are reasonably likely to materially affect the company.

Despite our efforts, a cyberattack, if it occurred, could cause water or wastewater system operational complications, disrupt service to our customers, compromise important data

or systems or result in an unintended release of customer or other confidential information.

Possible impacts associated with a cyberattack could also include remediation costs related to lost, stolen, or compromised data, repairs to information

technology and data processing systems, increased cyber security protection costs, adverse effects on our compliance with regulatory and environmental laws and regulations, including standards for water and wastewater utility providers, and

We feel we have adequate cybersecurity insurance coverage to mitigate the cost of any such cyberattack;

however, a possible cyberattack could affect our operations and have a material adverse

effect on our business and results of operations.

however, a possible cyberattack could affect our operations and have a material adverse effect on our business and results of

We have implemented, and will continue to internally monitor and manage, business processes to support our cybersecurity program.

For additional information concerning the Company’s cybersecurity

program, see Item 1C - Cybersecurity.

Risk Associated with Management

For additional information concerning the Company’s cybersecurity program, see Item 1C - Cybersecurity.

Risk Associated with Managing our Business, Including Employees and Our Reputation

Turnover in our management team could have an adverse impact on our business or the financial market’s perception of our ability to continue to grow.

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to continue to grow.

We depend on our ability to attract and retain qualified, skilled employees and independent contractors.

We depend on our ability to attract and retain qualified talent, including full-time and part-time employees, managers, management team, and independent

If we are unable to attract and retain such individuals, we may be unable to maintain our ability to meet performance targets, customer demands and expectations or successfully expand and grow our business.

Changes in the job market may

increase labor costs and could adversely affect our business, results of operations, cash flows and financial condition.

Employee and independent contractor misconduct could harm us by subjecting us to legal liability and reputational harm.

There is a risk that our employees or independent contractors engage in misconduct that adversely affects our business.

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.

Such misconduct could negatively harm our reputation or impair our ability to attract and retain qualified, skilled employees.

If our employees engage in misconduct, our

business could be materially adversely affected.

Risks Related to Our Common Stock

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As a result, holders of Class A Non-Voting Common Stock will not have any ability to

influence stockholder decisions.

influence stockholder decisions and the principal holders of Class B Common Stock have significant control over the outcome of most fundamental corporate matters.

We have two classes of common stock, Class A Non-Voting Common Stock and Class B Common Stock.

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of stockholders, including with respect to the election of directors and other matters voted upon by stockholders, except as required by the Delaware General Corporation Law.

The principal stockholders have significant control over the outcome of most

fundamental corporate matters.

As a result, the principal stockholders of Class B Common Stock have

significant control over the outcome of most fundamental corporate matters.

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.

The price of our common stock may be volatile and may be affected by market conditions beyond our control.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors