SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1995 Commission File No. 0-690
THE YORK WATER COMPANY
(Exact name of Registrant as specified in its Charter)
PENNSYLVANIA 23-1242500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
130 East Market Street, York, Pennsylvania 17401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including Area Code 717-845-3601
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. YES X NO
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common stock, $10 par value 633,498 Shares outstanding
as of June 30, 1995<PAGE>
THE YORK WATER COMPANY
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet
(Unaudited)
As Of As of
June 30,1995 Dec. 31, 1994
UTILITY PLANT, at original cost $85,837,539 $83,642,650
Less-Reserve for depreciation 11,250,086 10,535,512
74,587,453 73,107,138
OTHER PHYSICAL PROPERTY:
Less-Reserve for depreciation of
$52,648 in 1995 and $50,312 in 1994 427,827 430,162
CURRENT ASSETS:
Receivables, less reserves of $90,000
in 1995 and in 1994 2,214,631 2,211,288
Materials and supplies, at cost
(first-in, first-out) 263,629 298,356
Prepaid expenses 123,147 111,278
Deferred income taxes 61,377 64,877
2,662,784 2,685,799
OTHER LONG-TERM ASSETS:
Prepaid pension cost 1,466,590 1,402,946
Deferred debt expense 418,045 445,713
Deferred rate case expense 91,182 139,864
Notes receivable 1,120,863 1,155,753
Deferred regulatory assets 6,643,407 6,885,508
Other 736,129 714,447
10,476,216 10,744,231
$88,154,280 $86,967,330
<PAGE>
THE YORK WATER COMPANY
Balance Sheet
(Unaudited)
As Of As Of
June 30,1995 Dec. 31, 1994
CAPITALIZATION
Common stock $ 6,334,977 $ 6,296,836
Capital surplus 13,345,155 13,146,153
Earnings retained in the business 1,809,699 1,808,925
21,489,831 21,251,914
LONG-TERM DEBT
6.25% Ind. Dev. Auth. Rev. Refund
Bonds, due 2000 4,300,000 4,300,000
10.05% Senior Notes, Series C,
due 2020 6,500,000 6,500,000
10.17% Senior Notes, Series A,
due 2019 6,000,000 6,000,000
9.6% Senior Notes, Series B,due 2019 5,000,000 5,000,000
8.43% Senior Notes,Series D,due 2022 7,500,000 7,500,000
4.75% Ind. Dev. Auth. Rev.
Refunding Bonds, due 2009 2,700,000 2,700,000
32,000,000 32,000,000
CURRENT LIABILITIES
Short-term borrowings 2,128,000 1,302,000
Accounts payable 490,192 891,034
Dividends payable 466,429 464,295
Accrued taxes - 331,847
Advance water revenues 188,853 169,110
Accrued interest 680,240 680,240
Other accrued expenses 1,245,861 991,079
5,199,575 4,829,605
DEFERRED CREDITS
Customers' advances for construction15,867,883 15,037,501
Contributions in aid of construction 4,375,345 4,375,345
Deferred income taxes 7,777,952 7,969,029
Deferred regulatory liabilities 1,443,694 1,503,936
29,464,874 28,885,811
$88,154,280 $86,967,330<PAGE>
<TABLE> THE YORK WATER COMPANY
Statements of Income
<CAPTION> (Unaudited) (Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
<S> 1995 1994 1995 1994
WATER OPERATING REVENUES <C> <C> <C> <C>
Residential $2,187,996 $2,044,380 $4,283,683 $4,029,118
Commercial and industrial 1,336,808 1,339,638 2,627,088 2,532,806
Other 312,509 288,051 621,550 570,320
3,837,313 3,672,069 7,532,321 7,132,244
OPERATING EXPENSES
Operation and maintenance 827,523 768,933 1,581,643 1,555,014
Administrative and general 833,521 804,994 1,672,330 1,661,745
1,661,044 1,573,927 3,253,973 3,216,759
Depreciation 377,479 385,393 754,959 717,477
Taxes other than income taxes 232,556 226,439 482,093 469,561
Federal and state income taxes 300,254 237,841 629,908 502,556
2,571,333 2,423,600 5,120,933 4,906,353
Operating Income 1,265,980 1,248,469 2,411,388 2,225,891
INTEREST EXPENSE AND
OTHER EXPENSE/(INCOME)
Interest on long-term debt 693,175 712,300 1,386,350 1,446,537
Interest on short-term debt 37,361 1,154 64,412 3,096
Allowance for funds used during
construction (6,128) (15,292) (85,385) (23,710)
Gain on sale of land - - - (215,417)
Other income, net (32,264) 41,532 (89,899) (97,120)
692,144 739,694 1,275,478 1,113,386
Net Income $ 573,836 $ 508,775 $1,135,910 $1,112,505
Earnings Per Share $0.91 $0.81 $1.80 $1.78
Cash Dividends Per Share $0.90 $0.90 $1.80 $1.80
/TABLE
<PAGE>
<TABLE> THE YORK WATER COMPANY
Statements of Cash Flows
<CAPTION> (Unaudited) (Unaudited)
Six Months Six Months
Ended Ended
June 30, 1995 June 30, 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,135,910 $ 1,112,505
Adjustments to reconcile net income to
net cash provided by operating activities
Gain on sale of land - (215,417)
Depreciation 754,959 717,477
Provision for losses on accounts receivable 45,000 45,000
(Decrease) increase in deferred income taxes
(including regulatory assets and liabilities) (5,718) 311,107
Changes in assets and liabilities:
Increase in accounts receivable (48,343) (95,498)
Increase in recoverable income taxes - (256,244)
Decrease in materials and supplies 34,727 45,344
Increase in prepaid expenses (75,513) (102,371)
Decrease in accounts payable, accrued expenses
and other liabilities (124,183) (417,528)
Decrease in accrued interest and taxes (331,847) (418,475)
Decrease (increase) in other assets 98,534 (19,550)
Net cash provided by operating activities 1,483,526 706,350
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of temporary investments - (10,111)
Maturities of temporary investments - 2,007,935
Proceeds from the sale of land - 249,000
Costs incurred relating to the sale of land - (33,583)
Construction expenditures (2,276,805) (1,659,157)
Customers' advances for construction and
contributions in aid of construction 830,382 274,377
Net cash provided by investing activities (1,446,423) 828,461
<PAGE>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under line-of-credit agreements 826,000 (452,000)
Issuance of common stock under dividend
reinvestment plan 202,454 196,328
Issuance of common stock under employee stock
purchase plan 34,689 30,491
Dividends paid (1,135,136) (1,121,064)
Decrease in notes receivable 34,890 24,989
Net cash (used in) financing activities (37,103) (1,321,256)
Net increase in cash and cash equivalents - 213,555
Cash and cash equivalents at beginning of period - 42,634
Cash and cash equivalents at end of period $ - $ 256,189
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest, net of amounts capitalized $ 1,307,093 $ 1,375,210
Income taxes 808,465 475,463
/TABLE
<PAGE>
THE YORK WATER COMPANY
Notes to Interim Financial Statements
1. Interim Financial Information
The interim financial statements are unaudited but, in the
opinion of management, reflect all adjustments necessary for a
fair presentation of results for such periods. These financial
statements should be read in conjunction with the financial
statements and notes thereto contained in the Company's Annual
Report to Shareholders for the year ended 1994.
2. Earnings Per Share
Earnings per share for the three months ended March 31, 1995 and
1994 were based on weighted average shares outstanding of
632,090 and 624,338, respectively.
<PAGE>
THE YORK WATER COMPANY
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
Three Months Ended June 30, 1995 Compared
with Three Months Ended June 30, 1994
Net income for the three months ended June 30, 1995 was $573,836,
an increase of $65,061 compared to the three months ended June 30,
1994.
Operating revenues for the three months ended June 30, 1995
increased $165,244 (4.5%) compared to the three months ended June
30, 1994. The revenue increase resulted primarily from an increase
in rates of 3.7% approved by the Pennsylvania Public Utility
Commission (PPUC) effective September 23, 1994 and an increase in
the volume of water sold as a result of adding 1,209 customers
since June 30, 1994.
Operation and maintenance expenses for the three months ended June
30, 1995 increased $58,590 (7.6%) compared to the three months
ended March 31, 1994 primarily due to increased repair expenses
associated with electric pumping equipment.
Administrative and general expenses for the three months ended June
30, 1995 increased $28,527 (3.5%) compared to the three months
ended June 30, 1994 primarily due to an increase in regulatory
commission expenses.
Federal and state income taxes for the three months ended June 30,
1995 increased $62,413 when compared to the three months ended June
30, 1994 principally as a result of an increase in taxable net
income.
Interest on short-term debt for the three months ended June 30,
1995 increased $36,207 when compared to the three months ended June
30, 1994. The increase is due primarily to an increase in short-
term debt outstanding during the three months ended June 30, 1995.
Six Months Ended June 30, 1995 Compared
with Six Months Ended June 30, 1994
Net income for the six months ended June 30, 1995 was $1,135,910,
an increase of $23,405 (2.1%) compared to the six months ended June
30, 1994.
Operating revenues for the six months ended June 30, 1995 increased
$400,077 (5.6%) compared to the six months ended June 30, 1994.
The revenue increase resulted primarily from an increase in rates
of 3.7% approved by the PPUC effective September 23, 1994 and an
increase in the volume of water sold as a result of adding 1,209
customers since June 30, 1994.
Depreciation expense for the six months ended June 30, 1995
increased $37,482 (5.2%) compared to the six months ended June 30,
1994 as a result of increased plant investment.
Federal and state income taxes for the six months ended June 30,
1995 increased $127,352 when compared to the six months ended June
30, 1994 principally as a result of an increase in taxable net
income.
Interest on long-term debt for the six months ended June 30, 1995
decreased $60,187 (4.2%) compared to the six months ended June 30,
1994. The decrease in interest on long-term debt is primarily
related to the issuance of $2,700,000 4.75% Revenue Refunding Bonds
to replace a like amount of bonds with an interest rate of 7.0%
in March of 1994.
Interest on short-term debt for the six months ended June 30, 1995
increased $61,316 when compared to the six months ended June 30,
1994. The increase is due primarily to an increase in short-term
debt outstanding during the six months ended June 30, 1995.
Allowance for funds used during construction for the six months
ended June 30, 1995 increased $61,675 when compared to the six
months ended June 30, 1994. The increase was due to an increase in
the Company's plant investment under construction during the six
months ended June 30, 1995.
During the six months ended June 30, 1994, the Company had a gain
on the sale of one parcel of land of $215,417 ($124,759 after tax).
Rate Developments
Within the last several years the Company has filed written
applications for rate increases with the PPUC and has been granted
rate relief as a result of such requests. The most recent formal
rate request was filed by the Company on April 29, 1994 seeking a
$999,725 increase in annual revenues. Effective September 23,
1994, the PPUC authorized an increase in rates designed to produce
approximately $550,000 in additional annual revenues, an increase
of 3.7%.
Liquidity and Capital Resources
During the first six months of 1995, the per capita volume of water
sold did not significantly change compared to the first six months
of 1994. The Company does not anticipate any change in the level
of water usage which would have a material impact on future results
of operations.
During the six months ended June 30, 1995, the Company had
$2,276,805 of construction expenditures. The Company financed such
expenditures through internally generated funds, customers'
advances, proceeds from the issuance of common stock under its
dividend reinvestment plan (stock issued in lieu of cash dividends)
and employee stock purchase plan and short-term borrowings.
The Company anticipates annual construction expenditures for 1995
and 1996 of approximately $4,491,000 and $3,645,000, respectively.
The Company plans to finance such expenditures with internally
generated funds, customers' advances short-term borrowings and
proceeds from the issuance of common stock under its dividend
reinvestment plan (stock issued in lieu of cash dividends) and
employee stock purchase plan.
The Company anticipates that it will submit an application in the
future with the PPUC proposing increases in rates to provide a fair
rates of return on the capital expenditures associated with its
1995 and 1996 construction projects.
During the six months ended June 30, 1995, net cash used in investing
and financing activities exceeded net cash provided by operating
activities. The Company anticipates that during the remainder of
1995 net cash used in investing and financing activities will again
exceed net cash provided by operating activities. Customers'
advances, borrowings against the Company's lines of credit and
proceeds from the issuance of common stock under its dividend
reinvestment plan (stock issued in lieu of cash dividends) and
employee stock purchase plan are used to satisfy the need for
additional cash.
As of June 30, 1995, current liabilities exceeded current assets by
$2,536,791. As of December 31, 1994, current liabilities exceeded
current assets by $2,143,806. Generally, the Company finances a
portion of its construction expenditures with borrowings against
its lines of credit until such borrowings reach an amount which
would justify issuing long-term debt. Accordingly, current
liabilities frequently exceed current assets on the Company's
balance sheets. Short-term borrowings from lines of credit as of
June 30, 1995 were $2,128,000. The Company maintains lines of
credit aggregating $10,000,000.
<PAGE>
THE YORK WATER COMPANY
Part II - Other Information
Item 4. Results of Votes of Security Holders
The Annual Meeting of the Shareholders of The York Water Company
was convened May 1, 1995 at the office of the Company, 130 East
Market Street, in the City of York, Pennsylvania, at 1:00 P.M. for
the purpose of taking action upon the following proposals:
(1) To elect three (3) Directors to three-year terms of office.
The actions taken by the Shareholders concerning the election of
Directors are as follows:
Irvin S. Naylor William T. Morris Horace Keesey III
For election 457,856.898 456,363.050 457,636.951
Shares withheld 1,405.258 2,072.157 1,348.890
The following Directors' terms of office continued after the Annual
Meeting.
Robert E. Skold Josephine S. Appell
Paul W. Ware Frank Motter
John L. Finlayson George Hay Kain, III
(2) To appoint KPMG Peat Marwick as independent accountants to
audit the books and accounts of the Company for the year
1995.
The actions taken by the Shareholders concerning the appointment of
KPMG Peat Marwick as independent accountants are as follows:
For Approval 457,176.539
Against Approval 1,341.475
Abstaining From Voting 1,143.344
<PAGE>
THE YORK WATER COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of the
registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
THE YORK WATER COMPANY
William T. Morris
Principal Executive
Officer
Date: July 26, 1995
Jeffrey S. Osman
Principal Financial and
Accounting Officer
Date: July 26, 1995
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000108985
<NAME> YORK WATER COMPANY
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 74,587,453
<OTHER-PROPERTY-AND-INVEST> 427,827
<TOTAL-CURRENT-ASSETS> 2,662,784
<TOTAL-DEFERRED-CHARGES> 7,152,634
<OTHER-ASSETS> 3,323,942
<TOTAL-ASSETS> 88,154,280
<COMMON> 6,334,977
<CAPITAL-SURPLUS-PAID-IN> 13,345,155
<RETAINED-EARNINGS> 1,809,699
<TOTAL-COMMON-STOCKHOLDERS-EQ> 21,489,831
0
0
<LONG-TERM-DEBT-NET> 32,000,000
<SHORT-TERM-NOTES> 2,128,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 32,536,449
<TOT-CAPITALIZATION-AND-LIAB> 88,154,280
<GROSS-OPERATING-REVENUE> 7,532,321
<INCOME-TAX-EXPENSE> 629,908
<OTHER-OPERATING-EXPENSES> 4,491,025
<TOTAL-OPERATING-EXPENSES> 5,120,933
<OPERATING-INCOME-LOSS> 2,411,388
<OTHER-INCOME-NET> 89,899
<INCOME-BEFORE-INTEREST-EXPEN> 2,501,287
<TOTAL-INTEREST-EXPENSE> 1,365,377
<NET-INCOME> 1,135,910
0
<EARNINGS-AVAILABLE-FOR-COMM> 1,135,910
<COMMON-STOCK-DIVIDENDS> 1,135,136
<TOTAL-INTEREST-ON-BONDS> 198,500
<CASH-FLOW-OPERATIONS> 1,483,526
<EPS-PRIMARY> 1.80
<EPS-DILUTED> 1.80
</TABLE>
