45 unchanged sentences
The Company also owns nine wells which are capable of providing a safe yield of approximately 597,000 gallons per day to supply water to the customers of its satellite systems in Adams County.
−Removed: As of June 30, 2021, the Company's average daily availability was 35.6 million gallons, and average daily consumption was approximately 20.2 million gallons.
+Added: As of September 30, 2021, the Company's average daily availability was 35.6 million gallons, and average daily consumption was approximately 20.3 million gallons.
The Company's service territory had an estimated population of 202,000 as of December 31, 2020.
25 unchanged sentences
The Company has not experienced any material supply chain disruptions.
−Removed: The Company has been informed of longer lead times for some items, although this does not impact critical operating supplies or repair parts.
+Added: The Company has been informed of longer lead times for some items, although this does not impact daily operating supplies.
+Added: The Company maintains an adequate inventory of critical repair parts which are available as needed.
The Company continues to maintain relationships with its vendors to identify issues in a timely manner while also seeking out additional vendor relationships to diversify its supply chain.
The Company has addressed the longer lead times by placing orders proactively with its vendors to align with current lead times.
−Removed: If the delays increase materially, the Company may re-prioritize some of its capital projects or experience higher operating expenses or capital costs.
+Added: If the delays increase materially or if certain materials and supplies become unavailable, the Company may re-prioritize some of its capital projects or experience higher operating expenses or capital costs.
The Company believes it has sufficient liquidity and access to the capital markets if needed.
4 unchanged sentences
As allowed by the PPUC, the Company resumed normal shut-off procedures and began billing late payment charges for most customers in January 2021.
−Removed: Remaining PPUC required customer protections specific to the COVID-19 pandemic fully expired on April 1, 2021 with the exception of the requirement to offer extended term payment agreements to certain “protected customers” as defined by PPUC order.
+Added: Most remaining PPUC required customer protections specific to the COVID-19 pandemic fully expired on April 1, 2021 with the exception of the requirement to offer extended term payment agreements to certain “protected customers” as defined by PPUC order which expired on September 30, 2021.
Certain customers are eligible to receive utility assistance made available through federal relief funds through organizations not related to the Company.
5 unchanged sentences
Results of Operations
−Removed: Three Months Ended June 30, 2021 Compared
−Removed: With Three Months Ended June 30, 2020
−Removed: Net income for the second quarter of 2021 was $4,484, an increase of $302, or 7.2%, from net income of $4,182 for the same period of 2020.
−Removed: The primary contributing factors to the increase were higher operating revenues and lower income taxes which were partially offset by higher expenses.
−Removed: Operating revenues for the second quarter of 2021 increased $481, or 3.6%, from $13,320 for the three months ended June 30, 2020 to $13,801 for the corresponding 2021 period.
−Removed: The increase was primarily due to growth in the customer base.
+Added: Three Months Ended September 30, 2021 Compared
+Added: With Three Months Ended September 30, 2020
+Added: Net income for the third quarter of 2021 was $4,794, an increase of $90, or 1.9%, from net income of $4,704 for the same period of 2020.
+Added: The primary contributing factors to the increase were lower income taxes and higher operating revenues which were partially offset by higher expenses.
+Added: Operating revenues for the third quarter of 2021 increased $246, or 1.7%, from $14,257 for the three months ended September 30, 2020 to $14,503 for the corresponding 2021 period.
+Added: The increase was primarily due to revenues from the distribution system improvement charge, or DSIC, allowed by the PPUC of $255.
+Added: The DSIC allows the Company to add a charge to customers’ water bills for qualified replacement costs of certain infrastructure without submitting a rate filing.
+Added: Growth in the customer base also added to revenues.
The average number of water customers served in 2021 increased as compared to 2020 by 760 customers, from 68,996 to 69,756 customers.
The average number of wastewater customers served in 2021 increased as compared to 2020 by 256 customers, from 3,077 to 3,333 customers, due to acquisitions during 2020.
−Removed: Total per capita consumption for the second quarter of 2021 was approximately 5.5% higher than the same period of last year, but residential demand decreased.
−Removed: Additional billing and revenue collection services also added to revenues.
−Removed: Operating expenses for the second quarter of 2021 increased $872, or 12.4%, from $7,027 for the second quarter of 2020 to $7,899 for the corresponding 2021 period.
−Removed: The increase was primarily due to higher expenses of approximately $190 for wastewater treatment, $167 for insurance, $155 for depreciation, $138 for water treatment and distribution system maintenance, $130 for wages, and $32 for outside services.
−Removed: Other expenses increased by a net of $105.
−Removed: The increased expenses were partially offset by reduced expenses of $45 for purchased power.
−Removed: Interest on debt for the second quarter of 2021 increased $66, or 5.7%, from $1,156 for the second quarter of 2020 to $1,222 for the corresponding 2021 period.
−Removed: The increase was primarily due to an increase in long-term debt outstanding.
−Removed: The average debt outstanding under the lines of credit was $8,416 for the second quarter of 2021 and $9,149 for the second quarter of 2020.
−Removed: The weighted average interest rate on the lines of credit was 1.30% for the quarter ended June 30, 2021 and 1.73% for the quarter ended June 30, 2020.
−Removed: Allowance for funds used during construction increased $197, from $114 in the second quarter of 2020 to $311 in the corresponding 2021 period due to a higher volume of eligible construction.
−Removed: Other income (expenses), net for the second quarter of 2021 reflects decreased expenses of $77 as compared to the same period of 2020.
−Removed: Higher earnings on life insurance policies of approximately $36 and lower charitable contributions of $32 were the primary reasons for the decrease.
+Added: Total per capita consumption for the third quarter of 2021 was approximately 1.8% lower than the same period of last year.
+Added: Operating expenses for the third quarter of 2021 increased $583, or 8.1%, from $7,236 for the third quarter of 2020 to $7,819 for the corresponding 2021 period.
+Added: The increase was primarily due to higher expenses of approximately $221 for wages, $177 for depreciation, $80 for wastewater treatment, $72 for outside services, $60 for water treatment and distribution system maintenance, and $49 for insurance.
+Added: The increased expenses were partially offset by reduced expenses of $44 for a lower provision for uncollectible accounts.
Other expenses decreased by a net of $32.
−Removed: Income taxes for the second quarter of 2021 decreased $448, or 73.7%, compared to the same period of 2020 primarily due to higher deductions from the Internal Revenue Service, or IRS, tangible property regulations, or TPR.
−Removed: The Company’s effective tax rate was 3.4% for the second quarter of 2021 and 12.7% for the second quarter of 2020.
−Removed: Six Months Ended June 30, 2021 Compared
−Removed: With Six Months Ended June 30, 2020
−Removed: Net income for the first six months of 2021 was $8,189, an increase of $5, or 0.1%, from net income of $8,184 for the same period of 2020.
+Added: Interest on debt for the third quarter of 2021 increased $85, or 7.4%, from $1,152 for the third quarter of 2020 to $1,237 for the corresponding 2021 period.
+Added: The increase was primarily due to an increase in long-term debt outstanding.
+Added: The average debt outstanding under the lines of credit was $12,911 for the third quarter of 2021 and $10,595 for the third quarter of 2020.
+Added: The weighted average interest rate on the lines of credit was 1.30% for the quarter ended September 30, 2021 and 1.41% for the quarter ended September 30, 2020.
+Added: Allowance for funds used during construction increased $195, from $115 in the third quarter of 2020 to $310 in the corresponding 2021 period due to a higher volume of eligible construction.
+Added: Other income (expenses), net for the third quarter of 2021 reflects decreased expenses of $7 as compared to the same period of 2020.
+Added: Higher earnings on life insurance policies of approximately $11 were the primary reasons for the decrease.
+Added: Other expenses increased by a net of $4.
+Added: Income taxes for the third quarter of 2021 decreased $273, or 30.4%, compared to the same period of 2020 primarily due to higher deductions from the Internal Revenue Service, or IRS, tangible property regulations, or TPR.
+Added: The Company’s effective tax rate was 11.5% for the third quarter of 2021 and 16.0% for the third quarter of 2020.
+Added: Nine Months Ended September 30, 2021 Compared
+Added: With Nine Months Ended September 30, 2020
+Added: Net income for the first nine months of 2021 was $12,983, an increase of $95, or 0.7%, from net income of $12,888 for the same period of 2020.
The primary contributing factors to the increase were lower income taxes and higher operating revenues which were partially offset by higher expenses and a prior year gain on life insurance, not repeated this year.
−Removed: Operating revenues for the first six months of 2021 increased $685, or 2.6%, from $26,197 for the six months ended June 30, 2020 to $26,882 for the corresponding 2021 period.
−Removed: The increase was primarily due to growth in the customer base.
+Added: Operating revenues for the first nine months of 2021 increased $931, or 2.3%, from $40,454 for the nine months ended September 30, 2020 to $41,385 for the corresponding 2021 period.
+Added: The increase was primarily due to growth in the customer base and revenues from the DSIC of $280.
The average number of water customers served in 2021 increased as compared to 2020 by 775 customers, from 68,790 to 69,565 customers.
The average number of wastewater customers served in 2021 increased as compared to 2020 by 298 customers, from 3,018 to 3,316 customers, due to acquisitions during 2020.
−Removed: Total per capita consumption for the first six months of 2021 was approximately 2.7% higher than the same period of last year, but residential demand decreased.
+Added: Total per capita consumption for the first nine months of 2021 was approximately 1.1% higher than the same period of last year, but residential demand decreased.
Additional billing and revenue collection services also added to revenues.
−Removed: For the remainder of the year, the Company expects revenues to show a modest increase due to the distribution system improvement charge, or DSIC, allowed by the PPUC.
−Removed: The DSIC allows the Company to add a charge to customers’ water bills for qualified replacement costs of certain infrastructure without submitting a rate filing.
+Added: For the remainder of the year, the Company expects revenues to show a modest increase due to the revenues from the DSIC.
An increase in the number of water and wastewater customers from acquisitions and growth within the Company’s service territory are also expected to add to revenues.
1 unchanged sentence
Other regulatory actions and weather patterns could also impact results.
−Removed: Operating expenses for the first six months of 2021 increased $1,338, or 9.4%, from $14,288 for the first six months of 2020 to $15,626 for the corresponding 2021 period.
−Removed: The increase was primarily due to higher expenses of approximately $305 for depreciation, $285 for wastewater treatment, $234 for insurance, $217 for water treatment and distribution system maintenance, $154 for wages, $51 for billing and revenue collection services, and $49 for outside services.
+Added: Operating expenses for the first nine months of 2021 increased $1,921, or 8.9%, from $21,524 for the first nine months of 2020 to $23,445 for the corresponding 2021 period.
+Added: The increase was primarily due to higher expenses of approximately $482 for depreciation, $375 for wages, $365 for wastewater treatment, $283 for insurance, $277 for water treatment and distribution system maintenance, and $126 for outside services.
Other expenses increased by a net of $161.
−Removed: The increased expenses were partially offset by reduced expenses of $84 for purchased power.
+Added: The increased expenses were partially offset by reduced expenses of $92 for purchased power and $56 for a lower provision for uncollectible accounts.
For the remainder of the year, the Company expects depreciation expense to continue to rise due to additional investment in utility plant, and other expenses to increase at a moderate rate as costs to treat water and wastewater, and to maintain and extend the distribution system, continue to rise.
−Removed: Interest on debt for the first six months of 2021 increased $85, or 3.6%, from $2,351 for the first six months of 2020 to $2,436 for the corresponding 2021 period.
+Added: Interest on debt for the first nine months of 2021 increased $170 or 4.9%, from $3,503 for the first nine months of 2020 to $3,673 for the corresponding 2021 period.
The increase was primarily due to an increase in long-term debt outstanding.
−Removed: The average debt outstanding under the lines of credit was $7,623 for the first six months of 2021 and $8,804 for the first six months of 2020.
−Removed: The weighted average interest rate on the lines of credit was 1.30% for the six months ended June 30, 2021 and 2.28% for the six months ended June 30, 2020.
+Added: The average debt outstanding under the lines of credit was $9,405 for both the first nine months of 2021 and the first nine months of 2020.
+Added: The weighted average interest rate on the lines of credit was 1.30% for the nine months ended September 30, 2021 and 1.99% for the nine months ended September 30, 2020.
Interest expense for the remainder of the year is expected to be slightly higher due to continued borrowings under the line of credit.
−Removed: Allowance for funds used during construction increased $358, from $215 in the first six months of 2020 to $573 in the corresponding 2021 period due to a higher volume of eligible construction.
+Added: Allowance for funds used during construction increased $553, from $330 in the first nine months of 2020 to $883 in the corresponding 2021 period due to a higher volume of eligible construction.
Allowance for funds used during construction for the remainder of the year is expected to increase based on a projected increase in the amount of eligible construction.
−Removed: A non-recurring gain on life insurance of $515 was recorded in the first six months of 2020 as a result of a death benefit from a life insurance policy.
+Added: A non-recurring gain on life insurance of $515 was recorded in the first nine months of 2020 as a result of a death benefit from a life insurance policy.
No similar gains are anticipated at this time.
−Removed: Other income (expenses), net for the first six months of 2021 reflects decreased expenses of $101 as compared to the same period of 2020.
+Added: Other income (expenses), net for the first nine months of 2021 reflects decreased expenses of $108 as compared to the same period of 2020.
Higher earnings on life insurance policies of approximately $71 and lower charitable contributions of $34 were the primary reasons for the decrease.
1 unchanged sentence
For the remainder of the year, other income (expenses) will be largely determined by the change in market returns and discount rates for retirement programs and related assets.
−Removed: Income taxes for the first six months of 2021 decreased $725, or 61.6%, compared to the same period of 2020 primarily due to higher deductions from the IRS TPR.
−Removed: The Company’s effective tax rate was 5.2% for the first six months of 2021 and 12.6% for the first six months of 2020.
+Added: Income taxes for the first nine months of 2021 decreased $998, or 48.1%, compared to the same period of 2020 primarily due to higher deductions from the IRS TPR.
+Added: The Company’s effective tax rate was 7.7% for the first nine months of 2021 and 13.9% for the first nine months of 2020.
The Company's effective tax rate for the remainder of 2021 will largely be determined by the level of eligible asset improvements expensed for tax purposes under TPR each period.
See Note 9 to the financial statements included herein for a discussion of rate matters.
−Removed: Effective July 1, 2021, the Company's tariff included a distribution system improvement charge on revenues of 1.67%.
−Removed: A partial month of this surcharge is included in results of operations for the three and six months ended June 30, 2021 for bills rendered after July 1, 2021 that included June consumption.
+Added: Effective October 1, 2021, the Company's tariff included a distribution system improvement charge on revenues of 2.60%.
The Company does not expect to file a rate increase request in 2021.
Acquisitions and Growth
+Added: On July 30, 2021, the Company signed an agreement to purchase the water assets of Scott Water Company in Greene Township, Franklin County, Pennsylvania.
+Added: Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities.
+Added: Closing is expected in the third quarter of 2022 at which time the Company will add approximately 25 water customers.
On April 22, 2021, the Company signed an agreement to purchase the water assets and wastewater collection and treatment assets jointly owned by Letterkenny Industrial Development Authority and Franklin County General Authority in Letterkenny and Greene Townships, Franklin County, Pennsylvania.
Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities.
−Removed: Closing is expected in the first quarter of 2022 at which time the Company will add approximately 90 water and wastewater customers.
+Added: Closing is expected in the second quarter of 2022 at which time the Company will add approximately 90 water and wastewater customers.
On May 27, 2020, the Company signed an agreement to purchase the water assets and wastewater collection and treatment assets of Country View Manor Community, LLC in Washington Township, York County, Pennsylvania.
Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities.
−Removed: Closing is expected in the first quarter of 2022 at which time the Company will add approximately 50 water and wastewater customers.
+Added: Closing is expected in the second quarter of 2022 at which time the Company will add approximately 50 water and wastewater customers.
On March 4, 2019, the Company signed an agreement to purchase the wastewater collection assets of West Manheim Township in York County, Pennsylvania.
8 unchanged sentences
Completion of the acquisitions is contingent upon receiving approval from all required regulatory authorities.
−Removed: Closing is expected in the first quarter of 2022, at which time the Company will add approximately 90 combined wastewater customers and approximately 60 water customers through an interconnection with its current water distribution system.
+Added: Closing is expected in the second quarter of 2022, at which time the Company will add approximately 90 combined wastewater customers and approximately 60 water customers t hrough an interconnection with its current water distribution system.
The wastewater customers of the Albright Trailer Park are currently served by SYC WWTP, L.P.
6 unchanged sentences
Capital Expenditures
−Removed: For the six months ended June 30, 2021, the Company invested $16,043 in construction expenditures for routine items and an upgrade to the enterprise software system as well as various replacements and improvements to infrastructure.
+Added: For the nine months ended September 30, 2021, the Company invested $27,434 in construction expenditures for routine items and an upgrade to the enterprise software system as well as various replacements and improvements to infrastructure.
The Company was able to fund construction expenditures using internally-generated funds, line of credit borrowings, proceeds from its stock purchase plans and customer advances and contributions from developers, municipalities, customers, or builders.
3 unchanged sentences
Customer advances and contributions are expected to account for between 5% and 10% of funding requirements during the remainder of 2021.
−Removed: The Company believes it will have adequate credit facilities and access to the capital markets, if necessary, to meet its anticipated capital needs in the remainder of 2021.
+Added: The Company believes it will have adequate credit facilities and access to the capital markets, if necessary, to meet its anticipated capital needs in the remainder of 2021 and 2022.
Liquidity and Capital Resources
3 unchanged sentences
Likewise, if additional funds are needed beyond what is generated internally for payroll, to pay suppliers, to fund capital expenditures, or to pay debt service, funds are automatically borrowed under the line of credit.
−Removed: As of June 30, 2021, the Company borrowed $10,035 on its line of credit and had a cash balance of $6.
+Added: As of September 30, 2021, the Company borrowed $15,192 on its line of credit and incurred a cash overdraft on its cash management account of $1,277.
The cash and the cash management facility connected to the line of credit are expected to provide the necessary liquidity and funding for the Company's operations, capital expenditures, acquisitions, and potential buybacks of stock for the foreseeable future.
1 unchanged sentence
The accounts receivable balance tends to follow the change in revenues but is also affected by the timeliness of payments by customers and the level of the reserve for doubtful accounts.
−Removed: For the three months ended June 30, 2021, a strengthening in the timeliness of payments, compared to the end of 2020, resulted in a decrease in accounts receivable – customers.
+Added: For the three months ended September 30, 2021, a strengthening in the timeliness of payments, compared to the end of 2020, resulted in a decrease in accounts receivable – customers.
A reserve is maintained at a level considered adequate to provide for losses that can be reasonably anticipated based on inactive accounts with outstanding balances.
4 unchanged sentences
The amount of internally-generated funds available for operations and construction depends on the Company’s ability to obtain timely and adequate rate relief, changes in regulations including taxes, customers’ water usage, weather conditions, customer growth and controlled expenses.
−Removed: During the first six months of 2021, the Company generated $12,102 internally from operations as compared to the $9,747 it generated during the first six months of 2020, primarily due to higher net income when adjusted for the non-cash gain on life insurance in 2020 and a decrease in accounts receivable – customers due to a strengthening in the timeliness of payments.
+Added: During the first nine months of 2021, the Company generated $18,476 internally from operations as compared to the $16,306 it generated during the first nine months of 2020, primarily due to lower income taxes paid and a decrease in accounts receivable – customers due to a strengthening in the timeliness of payments.
Historically, the Company has borrowed $15,000 to $20,000 under its lines of credit before refinancing with long-term debt or equity capital.
−Removed: As of June 30, 2021, the Company maintained an unsecured line of credit in the amount of $50,000 at an interest rate of LIBOR plus 1.05% with an unused commitment fee and an interest rate floor.
−Removed: The Company had $10,035 in outstanding borrowings under its line of credit as of June 30, 2021.
−Removed: The interest rate on the line of credit borrowings as of June 30, 2021 was 1.30%.
−Removed: Subsequent to June 30, 2021, the Company renewed its committed line of credit and extended the maturity date to September 2023.
+Added: As of September 30, 2021, the Company maintained an unsecured line of credit in the amount of $50,000 at an interest rate of LIBOR plus 1.05% with an unused commitment fee and an interest rate floor.
+Added: The Company had $15,192 in outstanding borrowings under its line of credit as of September 30, 2021.
+Added: The interest rate on the line of credit borrowings as of September 30, 2021 was 1.30%.
+Added: In the third quarter, the Company renewed its committed line of credit and extended the maturity date to September 2023.
The Company has taken steps to manage the risk of reduced credit availability.
7 unchanged sentences
See Note 6 to the financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 for additional information regarding these restrictions.
−Removed: The Company’s total long-term debt as a percentage of the total capitalization, defined as total common stockholders’ equity plus total long-term debt, was 46.8% as of June 30, 2021, compared with 46.9% as of December 31, 2020.
+Added: The Company’s total long-term debt as a percentage of the total capitalization, defined as total common stockholders’ equity plus total long-term debt, was 47.3% as of September 30, 2021, compared with 46.9% as of December 31, 2020.
The Company expects to allow the debt percentage to trend upward until it approaches fifty percent before considering additional equity.
18 unchanged sentences
The Company expects this trend to continue as it makes significant investments in capital expenditures subject to accelerated depreciation or TPR.
−Removed: The Company has determined there are no uncertain tax positions that require recognition as of June 30, 2021.
−Removed: Common stockholders’ equity as a percent of the total capitalization was 53.2% as of June 30, 2021, compared with 53.1% as of December 31, 2020.
+Added: The Company has determined there are no uncertain tax positions that require recognition as of September 30, 2021.
+Added: Common stockholders’ equity as a percent of the total capitalization was 52.7% as of September 30, 2021, compared with 53.1% as of December 31, 2020.
The volume of share repurchases and higher debt from capital expenditures, among other things, could reduce this percentage in the future.
It is the Company’s general intent to target a ratio between fifty and fifty-four percent.
+Added: The Company has an effective “shelf” Registration Statement on Form S-3 on file with the Securities and Exchange Commission, pursuant to which the Company may offer an aggregate remaining amount of up to $50,000 of its common stock or debt securities subject to market conditions at the time of any such offering.
Credit Rating
23 unchanged sentences
The Company will record the costs as a regulatory asset to be recovered in future base rates to customers, over a four-year period.
−Removed: The cost for the customer-owned lead service line replacements was approximately $1,258 and $1,204 through June 30, 2021 and December 31, 2020, respectively, and is included as a regulatory asset.
+Added: The cost for the customer-owned lead service line replacements was approximately $1,307 and $1,204 through September 30, 2021 and December 31, 2020, respectively, and is included as a regulatory asset.
Based on its experience, the Company estimates that lead customer-owned service lines replacements will cost $1,500.
4 unchanged sentences
The Company’s most critical accounting estimates include regulatory assets and liabilities, revenue recognition, accounting for its pension plans, and income taxes.
−Removed: There has been no significant change in accounting estimates or the method of estimation during the quarter ended June 30, 2021.
+Added: There has been no significant change in accounting estimates or the method of estimation during the quarter ended September 30, 2021.
Off-Balance Sheet Arrangements
6 unchanged sentences
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.