Artesian Resources Corporation
Annual Report 2020

Plain-text annual report

On the Cover (top to bottom) Our customer service department is available in person to assist customers while implementing proper protocols and ensuring the safety of our customers and employees. Our crews work around- the-clock to ensure reliable service to our customers, regularly visiting our 72 treatment facilities and performing necessary maintenance. Pictured Above: Continued growth in the areas we serve and our commitment to reliable, high- quality water service includes the need to install new water main, and the renewal and rehabilitation of existing mains. In the past year alone, we renewed 2.3 miles of main. Our IT team (top picture), our 24/7 dispatch center (middle), and our field employees (bottom picture), as well as our many other employees not shown, are all dedicated to providing reliable, high-quality service so essential to our customers. T A B L E O F C O N T E N T S Artesian, as an essential business, upheld its core Company Overview Page 4 Company Highlights Page 5 mission throughout the COVID-19 Jennifer L. Finch Page 6 pandemic to provide uninterrupted critical ser vices to our customers. While Artesian continues to Financial Highlights Page 6 Letter to Our Shareholders Page 8 remain focused on our strategic Rodney Wyatt mission of investing in Water Service Facts Page 16 Page 19 infrastructure and growth, Jeff Price & Rob Penman Page 19 our essential employees demonstrated Artesian’s commitment to provide water and waste- Officers 2021 Annual Meeting Directors water ser vices 24/7, Investor Information Artesian Subsidiaries Financial Data maintaining a record safety rating while water demands hit an all-time high in 2020. Page 20 Page 21 Page 22 Page 23 Page 24 10-K FOR MORE INFORMATION ABOUT ARTESIAN RESOURCES CORPORATION, PLEASE VISIT US: a r t e s i a n r e s o u r c e s . c o m 3 C O M P A N Y O V E R V I E W It all started in 1905 when Aaron K. Taylor began to supply a new housing development in New Castle County, Delaware with water that ran directly into homes; and so Artesian Water Company was formed. From small beginnings as a local water company to today as a total water resource management company, Artesian has flourished and is now the largest regulated investor owned water utility on the Delmarva Peninsula and the ninth largest in the nation. Since 1905 we have expanded our territory and now provide water and wastewater solutions to the state of Delaware and water supply to nearby Cecil County, Maryland. We are engaged in a wide variety of activities from identifying new sources of supply to developing wells, treatment plants and delivery systems, and to planning, building and managing responsible wastewater treatment systems. We not only serve our customers but we serve our communities as well through our employee involvement with various charities throughout our service area. We are dedicated to our mission to provide our customers with the very best service possible. 4 C O M P A N Y H I G H L I G H T S • Completed the acquisition of the town of Frankfordʼs water system as part of Artesianʼs growth strategy in Sussex County. • Completed the acquisition of the water system of Delaware City after an 18-year-long operations partnership. • Increased water service customer base by 2.8%. • Increased wastewater customer base by almost 14.9%, outpacing 2019ʼs historic growth rate. • Renewed over 2.3 miles of main and 35 services, and replaced nine fire hydrants, as part of the Companyʼs plan for replacing older transmission and distribution systems that are reaching the end of their useful lives. • Installed an interconnection to supply water to the town of Dagsboro in Sussex County once Artesian completes construction of a new 2.0-million-gallon-per-day (mgd) water treatment plant in 2021. • Increased available water capacity by 2.5 mgd upon completion of construction of the Hyetts Corner and Riverside water treatment plants. • Installed an interconnection with the town of North East, Maryland to provide water supply in the growth corridor of Cecil County, Maryland. 5 Jennifer L. Finch, CPA, was named Corporate Treasurer and Senior Vice President of Finance of Artesian Resources Corporation and subsidiaries by the Board of Directors in 2020. Jennifer has had over 30 years of accounting, auditing and tax experience in both public practice and private industry. She has been with Artesian for 12 years. Her promotion is a testament to her outstanding contributions in financial management, planning and performance. Jennifer’s expanded role will position her to play an integral part in corporate strategic planning with respect to financial projections, funding and investments, and risk management. 6 F I N A N C I A L H I G H L I G H T S 9 1.7 $ 0 1.6 $ 4 1.5 $ 1 1.5 $ 1 1.4 6 $ 1.2 $ 3 1.1 $ 7 1.0 4 $ 0.9 $ 3 0.8 $ 2 6.8 1 $ 3 4.9 1 $ 8 4.2 1 $ 8 3.9 1 $ 5 2.9 1 $ 1 1.3 1 $ 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 5 1 0 2 6 1 0 2 7 1 0 2 8 1 0 2 9 1 0 2 0 2 0 2 EEaarrnniinnggss PPeerr CCoommmmoonn SShhaarree (at December 31st) 5 9.8 $ 1 9.5 0 $ 8.3 $ 5 6.7 $ 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 5 1 0 2 6 1 0 2 7 1 0 2 8 1 0 2 9 1 0 2 0 0 2 2 0 0 2 2 NNeett IInnccoommee (in millions) 3 9 . 4 1 $ 8 2 . 4 1 $ 8 9 . 3 1 $ 5 9 . 2 1 $ 1 3 . 1 1 $ 1 5 . 9 $ 5 8 . 9 $ 0 3 . 8 $ 2 6 . 7 $ 5 7 . 6 $ 0 1 0 2 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 5 1 0 2 6 1 0 2 7 1 0 2 8 1 0 2 9 1 0 2 1 0 Y E A R S U M M A R Y O F F I N A N C I A L H I G H L I G H T S For the year ended December 31, per share amounts 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Operating Revenues Operating Expenses $ 88.14 $ 65.85 $ 83.60 $ 80.41 $ 82.24 $ 79.09 $ 77.02 $ 72.47 $ 69.07 $ 70.56 $65.07 63.67 61.46 62.64 60.27 59.44 56.42 54.59 54.71 51.33 Operating Income $ 22.30 19.93 18.96 19.60 18.82 17.58 16.05 14.48 15.85 13.74 Net Income $ 16.82 14.93 14.28 13.98 12.95 11.31 9.51 8.30 9.85 6.75 Net Income Per Common Share - Diluted $$ 11..7799 1.60 1.54 1.51 1.41 1.26 1.07 0.94 1.13 0.83 Cash Dividend Per Common Share $ 1.01 0 .98 0.95 0.93 0.90 0.87 0.85 0.82 0.79 0.76 Rate Base $ 315.71 $267.55 $258.56 $249.00 $240.39 $233.46 $235.69 $225.10 $220.05 $214.42 4 8.1 8 $ 4 2.2 8 $ 1 0.4 8 $ 9 9.0 7 $ 0 3.6 8 $ 2 7.0 7 7 $ 2.4 7 $ 6 0.5 7 7 $ 5.0 6 $ 7 9.0 6 $ 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 5 1 0 2 6 1 0 2 7 1 0 2 8 1 0 2 9 1 0 2 0 2 0 2 OOppeerraattiinngg RReevveennuuee (in millions) 7 0 7 $ 7 6 6 $ 5 2 6 $ 7 7 5 $ 5 3 5 0 $ 1 5 2 $ 9 4 8 $ 6 4 $ 0 5 4 0 $ 3 4 $ 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 5 1 0 2 6 1 0 2 7 1 0 2 8 1 0 2 9 1 0 2 0 2 0 02 2 0 2 UUttiilliittyy PPllaanntt aatt CCoosstt (in millions) 8 4.3 $ 8 4.1 $ 6 3.8 $ 9 3.9 $ 0 3.6 $ 7 3.3 $ 6 3.0 2 $ 2.7 $ 5 2.4 3 $ 2.1 $ 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 5 1 0 2 6 1 0 2 7 1 0 2 8 1 0 2 9 1 0 2 0 0 2 2 0 0 2 2 SSeerrvviiccee LLiinnee PPrrootteeccttiioonn PPllaann RReevveennuuee (in millions) 7 D E A R S H A R E H O L D E R Every year presents unexpected difficulties, but for many of us, 2020 was more challenging than any other year in memory. As the COVID-19 pandemic spread across our communities, we experienced tremendous upheaval in our working and personal lives. Through all of it, however, the employees of our water and wastewater companies performed admirably, providing critical services to ensure that our customers could maintain a clean and safe environment in their homes and businesses. Moreover, not only did we carry out our core mission of providing essential services to customers throughout the Delmarva Peninsula, but we also continued Dian C. Taylor Chair, President and CEO to focus on strategic initiatives to grow our water and wastewater business. The result was a record year for earnings. 4 0.8 $ 1 0.8 $0.77 $ 3 1.0 0 $ 1.0 7 $ 0.9 4 $ 0.9 1 $ 0.9 9 $ 0.8 6 $ 0.8 $ 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 5 1 0 2 6 1 0 2 7 1 0 2 8 1 0 2 9 1 0 2 0 2 0 2 Annualized Dividend Per Common Share (at December 31st) 8 D E A R S H A R E H O L D E R favorable results was increased water demand from our existing residential customers who, It is my pleasure now to review the because of the pandemic, were working from progress we have made and our path home rather than in an office located elsewhere. to continued success. Pursuant to our strategic plan for growing We reported $88.1 million in revenues our business, we completed the acquisition in 2020, an increase of 5.4% over 2019. of two municipal water systems in Delaware Our net income increased 12.7% to $16.8 during 2020. These two purchases were million. Diluted earnings per share increased Artesianʼs sixth and seventh over the past by 11.9%, to $1.79. In recognition of the three years, the Company having previously Companyʼs sustained growth and record acquired the water systems of Slaughter annual earnings, the Board approved a 3.0% Beach, High Point, Cantwell, Odessa and increase in dividends paid to shareholders, historic Fort DuPont. raising the annualized dividend per share to $1.0284 in November 2020. On April 2, 2020, we acquired the water system of the town of Frankford, in Sussex A key contributor to our strong financial County. The town, which neighbors Delawareʼs results in 2020 was the continued addition of rapidly developing beach communities, is water and wastewater customers served. adjacent to Artesianʼs South Bethany water We saw customer growth in our water busi- system and the soon-to be-interconnected ness of 2.8%, and customer growth in our town of Dagsboro. To ensure continued wastewater business of 14.9%. The added reliability of service for this rapidly expanding customers included people who relocated area, Artesian will install over 7 miles of new to our service areas, particularly those close water main and install 45 fire hydrants in 2021. to Delawareʼs beaches, from nearby urban This project will complete the regionalization centers. Also contributing to last yearʼs of our water system in southeastern 9 Sussex County. This newly regionalized with the water system for neighboring service area will cover over 20 square miles Fort DuPont, which is currently being and serve nearly 6,000 existing customers redeveloped and revitalized. Our investments and future growth. In addition, Artesianʼs in Delaware Cityʼs system will not only Dagsboro Water Treatment Plant, enhance water pressure and reliability, but currently under construction, will provide its interconnection with Fort DuPont will also an additional supply of 2.0 million gallons provide the two communities with a stronger per day (mgd) to the region. foundation for future economic development. 17 Our second acquisition in 2020, which we During 2020, we invested over $40.0 million completed on August 3, was the water system in critical infrastructure to ensure that our of Delaware City, in New Castle County. That customers continue to enjoy safe, secure and acquisition was the culmination of our 18 year high-quality utility service. These investments operating partnership with the city. Artesian included our new Hyetts Corner Water Treat- will invest over $2.3 million to renew aging ment Plant, located just below the C&D Canal water mains, upgrade treatment technologies in New Castle County. The plant is capable and enhance pumping efficiencies. The of providing 2 mgd of water to over 33,000 Delaware City water system will be interconnected residents in the fast-growing Middletown- 10 Pictured top to bottom: On April 2, 2020, Artesian acquired the town of Frankford's water system. This system will be interconnected with the town of Dagsboro and neighboring beach communities, serving an area of over 20 square miles. Artesian's Dagsboro Water Treatment Plant, currently under construction, will provide an additional supply of 2.0 million gallons per day to the expanding regional system. As we continue to expand, Artesian's Southern Maintenance Center in Dagsboro will provide an efficient location for storage and maintenance of equipment. 11 Pictured top to bottom: Artesian completed the construction of the Riverside Water Treatment Plant in Kent County, Delaware. Reflecting our commitment as an environmental steward, Artesian doubled its solar system footprint at the new Hyetts Corner Water Treatment Plant. Inside the Hyetts Water Treatment Plant are the workings of the electrical, chemical and pipeline components that deliver reliable, safe, high-quality water to our customers. 12 Odessa-Townsend area. Additionally, reflecting Sussex County to provide water service our commitment to environmental responsibility, to the underserved community of Ellendale we doubled our solar power footprint at the and to manage the regionʼs wastewater in the Hyetts Corner facility. We also completed and placed in service the Riverside Water Treatment Plant in Kent County, providing additional supply to the area. Moreover, throughout 2020, we continued our proactive water main replacement program, renewing over 2.3 miles of main and 35 services, and replacing nine fire hydrants. Preparing for Future Growth Opportunities most efficient and environmentally responsible manner possible. Through this partnership, Artesian is providing customers with environmentally sound, reliable and cost- effective service. Cecil County, Maryland-located at the top of the Chesapeake Bay and close to big-city amenities-is one of the most desirable areas in the country in which to live, work and play. And Artesianʼs ability to reliably deliver high- As part of our planning for the future, we quality water in Cecil County is continuing have forged strong relationships throughout to play a critical role in the areaʼs economic the state of Delaware. In Yorklyn, in northern development. As one example, Clene New Castle County, we have partnered with Nanomedicine announced its intent in late the state to provide water service to a 119- acre area known as Auburn Valley that is poised for redevelopment. We are also en- gaged in three other active projects in northern New Castle County that will provide water service to planned logistics facilities that will total more than 5 million square feet and are expected to employ more than 3,000 people. In addition, Artesian has partnered with 2020 to fast-track construction of a 102,600- square-foot pharmaceutical manufacturing facility in the Principio Business Park. Clene is on the cutting edge of its industry, developing a new class of drugs called bioen- ergetic nanotherapeutics aimed at addressing neurodegenerative diseases such as ALS, Parkinsonʼs and multiple sclerosis. In November, 13 Maryland Governor Larry Hogan recognized a firm that specializes in industrial real Clene as one of Marylandʼs Future 20, estate development is planning to proceed innovative start-ups likely to be the stateʼs next major successful businesses. Although Cleneʼs corporate offices are in Utah, about three-fourths of its employees are in Maryland, where Clene conducts all of its R&D, manu- this year with construction of two buildings in Port Deposit at the site of the former Bainbridge Naval Training Center. The two buildings will total about 2 million square feet. Phase 1 of this construction will kick off with the development of about 420 acres of the facturing and commercialization activities. 1,200-acre Bainbridge site. All of this development activity in Cecil County is supported by our ongoing program to add additional sources of water supply. We are drilling new wells in the area of Princi- pio Business Park, and we expect to put a second interconnection with the town of North East into service in 2021 to tie into our Route 40 service area between North East and Elkton. Elkton recently approved a transformational master development project on 630 acres, which is expected to break ground within the next year. The mixed-use project will include both residential and light-industrial construction. Nor is Cleneʼs facility the only new building on the fast track for construction in the Principio Business Park. Interest in locating logistics operations in Cecil County remains high given We continue to provide 250,000 gallons per its location in the I-95 mid-Atlantic corridor. day of water to the town of Elkton, and As a result, two new warehouse facilities 113,000 gallons per day to the town of totaling 500,000 square feet are expected to Chesapeake City through interconnections be started in 2021 at Principio. In addition, with each town. 14 Artesian has remained focused on expansion opportunities and relationships in Cecil County, Maryland by providing additional sources of water supply and establishing interconnections with neighboring systems. North East, at the head of the Chesapeake Bay, is equidistant from Baltimore and Philadelphia. This ideal location is poised for substantial residential and commercial development. Elkton has a population of over 15,000 people and is fast becoming one of the most desirable places to work and live. Artesian provides 250,000 gallons of water per day to the town of Elkton and 113,000 gallons a day to the town of Chesapeake City through interconnections. Phase 1 commercial development on 420 of the 1,200 acres at the Bainbridge Naval Training Center in Port Deposit will begin in 2021. Clene Nanomedicine (Clene) announced in 2020 its intent to fast-track construction of a 102,600 square foot pharmaceutical manufacturing facility in the Principio Business Park. 15 In February 2021, Rodney Wyatt was appointed Vice President of Artesian Wastewater Management, Inc. Rodney joined Artesian in 2005 with over 40 years of professional engineering and operations management experience in the water and wastewater fields. In his new role, Rodney will be responsible for managing Artesian’s water recharge program, which provides the best possible treatment and disposal of waste- water in a safe, environmentally beneficial manner. He will also have a key role in planning, engineering and construction, as well as in the regionalization of smaller systems and implementation of new systems. The effluent from Artesianʼs lagoon systems is treated to land application standards for spray irrigation, while retaining its high-nutrient content. Page 17 (left to right) Artesian ensures the wastewater process is environmentally beneficial and done safely. From our proper collection, treatment and disposal, to the spray irrigation that recharges our ground water. Rodney Wyatt was appointed Vice President of Artesian Wastewater Management, Inc. 16 Our wastewater subsidiary increased its The culmination of this project will be the customer base by 14.9% last year, outpacing construction of a new 625,000-gallon-per-day its historic 2019 growth rate. The subsidiary wastewater treatment facility at our Sussex added three new developments and nine new phases of existing developments to its service area in Sussex County. We have made signif- icant efforts over the last few years to inter- connect our wastewater treatment plants to create a regional system that will let us add customers throughout our service territory without having to construct expensive smaller systems. An interconnected system will also allow for more efficient and cost-effective Regional Recharge Facility on the northern side of our service territory. The new facility will incorporate a 3.0 million-gallon equaliza- tion and diversion lagoon to provide peak- day storage. Once the facility is completed, anticipated in 2022, we will be able to utilize the full capabilities of an interconnected system, which will let us shift wastewater flow to different treatment facilities based on real-time conditions. The new facility will also give us the additional capacity necessary treatment of effluent. One of the steps we to implement an enhanced preventative took toward this goal was the installation of over maintenance program to ensure long-term 4.5 miles of force main to enable us to serve a uninterrupted service throughout our service growth corridor along Delaware Route 1 and territory. The interconnected system covers other major access roads in Sussex County. over 94 square miles of service territory. 17 Being a Good Neighbor Artesian has long believed in being involved as a good neighbor in the communities it serves. Artesianʼs management team holds leadership positions in numerous local community organizations, including the Delaware Business Roundtable, Delaware Prosperity Partnership, Delaware Nature services when needed most, efficiently utilizing our Personal Protective Equipment, distancing our core groups of employees, quickly transitioning to remote work when possible, and communicating with our customers throughout this trying time. With our Emergency Response Plan and Safety program in place, we were able not only to maintain our life-sustaining services Society, Easterseals Delaware and Marylandʼs throughout 2020 but also to continue Eastern Shore, Delaware State Chamber of executing our growth strategy. Commerce and Junior Achievement of Delaware, to name a few. As many of these nonprofit organizations struggled throughout 2020, Artesian remained consistently dedicated to helping our communities while focusing on future economic development in our other organizations. I would be remiss if I did not take a moment to note our pride in the election of Delawareʼs own Joseph Biden as President of the United States, making him the first President from the First State (Delaware) in our nationʼs history. For his and our countryʼs benefit, we wish him much success in meeting The safety of our employees and customers every challenge. remains a high priority. We maintain our own safety program, which includes extensive training and inspections. With this proactive approach, we were able to record no work- place injuries last year and decreased our workersʼ compensation insurance premium by 23.8%. Our diligence, moreover, positioned us to be well prepared to respond to the In closing, I would like to thank you, our shareholders, for your investment in our company and for your continuing confidence in our long-term success. COVID-19 pandemic. As an essential Dian C. Taylor business, we continued to provide our critical Chair, President and CEO 18 The Chesapeake Section of the American Water Works Association (CSAWWA) presented its Operator of the Year Award to Jeff Price, Manager of Artesian’s Southern Delaware Water Operations. Jeff was the fourth Artesian employee in the past eight Jeff Price (left) Operator of the Year and Rob Penman (right) past chair of Chesapeake years to receive this prestigious award. Section AWWA W A T E R S E R V I C E F A C T S Population served ....................... approximately 301,000 Metered customers .................................. 92,900 Annual production ....................... 8.3 billion gallons Presenting the award to Jeff was fellow Artesian employee Rob Penman, Director of Operations Administra- tion for Artesian. Rob served as Chair of the Chesapeake section of AWWA until officially passing the gavel on October 1, 2020. Additionally, Rob was a past recipient of the Carl John Lauter Award, another prominent award bestowed by the CSAWWA to a distinguished member to acknowledge outstanding work Miles of main.........................................1,368 as a water works professional. Active wells ......................................... 205 Treatment facilities ............................ 72 Storage capacity .........174 million gallons Water service territory ....................... 298 sq. miles Wastewater service territory ....... 30 sq. miles Average cost per day for residential water service ........ $1.69 Rob Penman (left), past chair of the Chesapeake Section of the AWWA and Jeff Price (right), Operator of the Year 19 O F F I C E R S Top to Bottom, Left to Right Dian C. Taylor President and Chief Executive Officer Artesian Resources Corporation & Subsidiaries Joseph A. DiNunzio, CPA, CGMA President of Artesian Water Maryland Executive Vice President and Corporate Secretary Artesian Resources Corporation & Subsidiaries Nicholle R. Taylor Chief Operating Officer of Artesian Water Company, Senior Vice President Artesian Resources Corporation & Subsidiaries Jennifer L. Finch, CPA Corporate Treasurer and Senior Vice President of Finance Artesian Resources Corporation & Subsidiaries David B. Spacht President of Artesian Wastewater Management Chief Financial Officer Artesian Resources Corporation & Subsidiaries John M. Thaeder Senior Vice President Artesian Resources Corporation & Subsidiaries Pierre A. Anderson Vice President, Information Technology Artesian Resources Corporation & Subsidiaries Karl G. Randall General Counsel and Assistant Secretary Artesian Resources Corporation & Subsidiaries 20 ART ES IAN RESOU RCES CORP ORATION SHAREH OLDE RS ANN UAL MEE TI N G To receive information Wednesday, on virtually attending the Shareholders Annual Meeting, contact Laura Slayman: 2021annualmeeting@artesianwater.com May 5, 2021 1:30 PM 21 D I R E C T O R S Top to Bottom, Left to Right Dian C. Taylor Chair of the Board, President & Chief Executive Officer, Artesian Resources Corporation & Subsidiaries Kenneth R. Biederman, Ph.D. Professor (Ret.), Department of Finance, Lerner College of Business and Economics, University of Delaware John R. Eisenbrey, Jr. Owner & President, Bear Industries, Inc. Nicholle R. Taylor Chief Operating Officer of Artesian Water Company, Senior Vice President Artesian Resources Corporation & Subsidiaries Michael Houghton Partner, Morris Nichols Arsht & Tunnel William C. Wyer Business Consultant Wyer Group, Inc. 22 I N V E S T O R I N F O R M A T I O N SHAREHOLDER INQUIRIES Shareholder inquiries regarding Class A Non-Voting Common Stock and Class B Common Stock accounts, including transfer requirements, lost certificates and dividend payments, should be directed to: Computershare Investor Services P.O. Box 505000 Louisville, KY 40233-5000 800. 36 8.5 94 8 Private Couriers/Registered Mail: Computershare Investor Services 462 South 4th Street, Suite 1600 Louisville, KY 40202 computershare.com/investor PROJECTED 2021 DIVIDEND DATES (Subject to the approval of the Artesian Resources Corporation Board of Directors) QQuuaarrtteerr RReeccoorrdd DDaattee PPaayymmeenntt DDaattee 11sstt FFeebbrruuaarryy 88,, 22002211 FFeebbrruuaarryy 2222,, 22002211 22nndd MMaayy 77,, 22002211 MMaayy 2211,, 22002211 33rrdd 44tthh AAuugguusstt 99,, 22002211 AAuugguusstt 2200,, 22002211 NNoovveemmbbeerr 88,, 22002211 NNoovveemmbbeerr 1199,, 22002211 Shareholder inquiries and requests for investment materials, should be directed to: CCAAUUTTIIOONNAARRYY NNOOTTEE OONN FFOORRWWAARRDD--LLOOOOKKIINNGG SSTTAATTEEMMEENNTTSS Nicholle R. Taylor, Senior Vice President Artesian Resources Corporation P.O. Box 15004 Wilmington, Delaware 19850 302.453.6900 800.332.5114 n t a y l o r @ a r t e s i a n w a t e r. c o m DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN The holders of record of the Companyʼs Class A Non-Voting Common Stock are eligible to participate in the Dividend Reinvestment Plan. The plan provides for the direct purchase of Class A Non-Voting Common Stock through reinvestment of dividends and/or optional cash payments. To obtain a copy of the plan prospectus, contact either Computershare or Artesian directly. All statements other than historical facts are forward-looking and actual results may differ materially from those projected, anticipated or implied. Please refer to “Item 1A-Risk Factors” of the Company's Annual Report on Form 10-K for the year ended December 31, 2020, for a description of the substantial risks and uncertainties related to the forward looking statements included in this Annual Report. Past performance of Artesian’s Common Stock is not predictive of future returns. 23 ARTESIAN RESOURCES CORPORATION & SUBSIDIARIES Artesian Resources Corporation operates as the holding company of our wholly-owned subsidiaries. Artesian Water Company, Inc. is our principal subsidiary. It is the oldest and largest investor-owned regulated public water utility on the Delmarva Peninsula and has been providing water service since 1905. Artesian Water distributes and sells water to residential, commercial, industrial, governmental and utility customers throughout Delaware. It also provides private and municipal utilities with billing services and operational management services. Artesian Water Maryland, Inc. is a regulated public water utility providing services to customers in Cecil County, Maryland. Artesian Maryland is an important part of our strategy to be the preeminent provider of public water utility services on the Delmarva Peninsula. Artesian Water Pennsylvania, Inc. is a regulated public water utility providing services to customers in southeastern Pennsylvania. Artesian Wastewater Management, Inc. is a regulated entity that owns and operates wastewater facilities and provides public wastewater services to customers throughout Delaware. Artesian Utility Development, Inc. is a non-regulated operating company that designs and builds water and wastewater infrastructure and provides contract water and wastewater services on the Delmarva Peninsula. In addition, Artesian Utility offers three protection plans; the Water Service Line Protection Plan, the Sewer Service Line Protection Plan and the Internal Service Line Protection Plan. Artesian Development Corporation is the non-regulated real estate holding company of Artesian Resources. This Report is printed using petroleum-free ink. To view this report online, visit our website: a r t e s i a n r e s o u r c e s . c o m 664 Churchmans Road, Newark, DE 19702 3 0 2 . 4 5 3 . 6 9 0 0 

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