SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission file number 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 17405
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (717) 845-3601
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $10 PER SHARE
(Title of Class)
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
The aggregate market value of the Common Stock, par value $10 per
share, held by nonaffiliates of the registrant (based on the bid
price of such stock) on March 3, 1997 was $50,215,114.
As of March 3, 1997 there were 725,128 shares of Common Stock, par
value $10 per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1996 Annual Report to Shareholders are incorporated
by reference into Part II.
Portions of the Proxy Statement for the Company's 1997 Annual
Meeting of Shareholders are incorporated by reference into Part
III.
<PAGE>
PART I
Item 1. Business.
(a) General development of business.
The Company is a corporation duly organized under the laws of the
Commonwealth of Pennsylvania in 1816.
(b) Financial information about industry segments.
The Company operates in only one segment, the impounding,
purification and distribution of water.
(c) Narrative description of business.
The business of the Company is to impound, purify and distribute
water. The Company operates entirely within its franchised
territory located in York County, Pennsylvania. The Company is
regulated by the Pennsylvania Public Utility Commission (PPUC).
Water service is supplied through the Company's own distribution
system to the City of York, the Boroughs of North York, East
Prospect, West York, Manchester, Mount Wolf, Jacobus, Loganville,
Yorkana, New Salem, Hallam, Seven Valleys, Jefferson, and portions
of the Townships of Manchester, East Manchester, West Manchester,
Springettsbury, Spring Garden, Springfield, York, North Codorus,
Hellam, Windsor, Lower Windsor, Codorus, and Jackson. The Company
obtains its water supply from the south branch and east branch of
the Codorus Creek which drains an area of approximately 117 square
miles. The Company's present average daily consumption is
18,593,000 gallons, and its present safe daily yield is 29,900,000
gallons.
The Company's service territory has an estimated population of
143,000. Industry of the area served is diversified, manufacturing
such items as fixtures and furniture, electrical machinery, food
products, paper, ordnance, textile products, air conditioning,
barbells, etc. In the area served by the Company under the
supervision of the PPUC there are no competitors.
The Company's business does not require large amounts of working
capital and is not dependent upon any single customer or a very few
customers. Operating revenue is derived from the following sources
and in the following percentages: residential, 59%; commercial and
industrial, 31%; other, 10%. The Company presently has 92
employees.
During the last five years ended in 1996, the Company has
maintained an increasing growth in number of customers and
distribution facilities as shown by the following chart:
1996 1995 1994 1993 1992
Average daily
consumption
(gallons
per day) 18,593,00019,657,000 19,660,00019,380,000 18,453,000
Miles of mains
at year end 641 622 597 580 570
Distribution
mains
installed
(ft.) 78,619 84,515 91,087 58,414 41,771
Number of
customers 45,800 44,879 43,830 42,844 42,198
Population
served 143,000 140,000 136,000 134,000 133,000
During 1996, the per capita volume of water sold did not
significantly change compared to 1995. The Company does not
anticipate any change in the level of water usage which would have
a material impact on future results of operations.<PAGE>
Item 2. Properties.
The accounting and executive offices of the Company are located in
two two-story brick and masonry buildings, containing approximately
21,861 square feet of floor space, at 124 and 130 East Market
Street, York, Pennsylvania.
The Company has two impounding dams located in York and Springfield
Townships adjoining the Borough of Jacobus to the south. The lower
dam is constructed of compacted earth with a concrete core wall and
is 660 feet long and 50 feet high and creates a reservoir covering
approximately 220 acres containing about 1,150,000,000 gallons of
water. About 800 acres surrounding the reservoir are planted with
more than 1,200,000 evergreen trees to protect the area both from
pollution and also from soil erosion which might otherwise fill the
reservoir with silt. The upper dam is constructed of compacted
earth and is 1,000 feet long and 50 feet high and creates a
reservoir covering approximately 290 acres containing about
1,600,000,000 gallons of water. About 600 acres surrounding the
reservoir are planted with grass to protect the area both from
pollution and also from soil erosion which might otherwise fill the
reservoir with silt.
The Company's main pumping station is located in Spring Garden
Township on the south branch of the Codorus Creek about 1,500 feet
upstream from its confluence with the west branch of the Codorus
Creek and about four miles downstream from the Company's lower
impounding dam. The pumping station presently houses pumping
equipment consisting of three electrically driven centrifugal pumps
and two diesel-engine driven centrifugal pumps with a combined
pumping capacity of 75,000,000 gallons per day. From here, raw
water is pumped approximately two miles to the filtration plant
through pipes located on a right-of-way owned by the Company.
The Company's filtration plant is located in Spring Garden Township
about one-half mile south of the City of York. Water at this plant
is filtered through 12 dual media filters having a stated capacity
of 31,000,000 gallons per day and being capable of filtering
46,500,000 gallons per day for short periods if necessary. Since
the average daily consumption in 1996 was 18,593,000 gallons, it
can readily be seen that the present pumping and filtering
facilities are adequate to meet the present demands.
Clear water reservoirs of the Company which are located in Spring
Garden Township adjacent to the filtration plant are capable of
storing up to 32,000,000 gallons of water, and there are standpipes
located throughout the Company's service area capable of storing
another 15,140,000 gallons of clear water.
The Company's distribution center and material and supplies
warehouse are located at 1801 Mt. Rose Avenue, Springettsbury
Township. There are two one-story concrete block buildings having
26,680 square feet of area.
The distribution system of the Company has approximately 641 miles
of main water lines.
All of the Company's properties listed above are held in fee by the
Company. There are no encumbrances.
In addition, the Company has entered into a "Joint Use and Park
Management Agreement" dated December 29, 1976, and executed by The
York Water Company and the County of York, Pennsylvania, whereby
the Company has licensed to the County of York for fifty (50) years
for county park purposes for the benefit of the general public in
York County the Company's present reservoir lands and waters
referred to in the Agreement as approximately 1,175 acres including
two lakes, all in Springfield and York Townships, York County,
Pennsylvania.
<PAGE>
York County has in return agreed thereby not to erect a dam
upstream on the east branch of the Codorus Creek and to waive flood
damages to the County's Spring Valley Tract of park lands if, as
planned, the Company builds a third dam around the year 2020. The
Company and its customers are thereby assured of a future reservoir
site at reasonable expense.
Item 3. Legal Proceedings.
There are no material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of the security holders during
the fourth quarter of the fiscal year covered by this report.
PART II
Item 5. Market for the Registrant's Common Stock and Related
Security Holder Matters.
The information set forth under the caption "Security Market and
Dividends" of the 1996 Annual Report to Shareholders is
incorporated herein by reference.
Item 6. Selected Financial Data.
The information set forth under the caption "Highlights of Our
181st Year" of the 1996 Annual Report to Shareholders is
incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The information set forth under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" of the 1996 Annual Report to Shareholders is
incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
The following financial statements set forth in the 1996 Annual
Report to Shareholders are incorporated herein by reference:
Balance Sheets as of December 31, 1996 and 1995 Page 5
Statements of Income for Years Ended December 31,
1996, 1995 and 1994 Page 6
Statements of Shareholders' Investment for Years
Ended December 31, 1996, 1995 and 1994 Page 6
Statements of Cash Flows for Years Ended
December 31, 1996, 1995 and 1994 Page 7
Notes to Financial Statements Page 8
Independent Auditors' Report Page 12
Except for the above financial data and the information specified
under Items 5, 6 and 7 of this report, the 1996 Annual Report to
Shareholders is not deemed to be filed as part of this report.
Selected quarterly financial data are not presented because the
Company does not meet the tests set forth in Item 302 (a)(5) of
Regulation S-K.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
There were no changes in or disagreements with accountants on
accounting and financial disclosure.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information set forth under the caption "Election of Directors"
of the Proxy Statement issued pursuant to Regulation 14A for the
Company's 1997 Annual Meeting of Shareholders to be held May 5,
1997 is incorporated herein by reference.
Item 11. Executive Compensation.
The information set forth under the caption "Compensation of
Directors and Executive Officers" of the Proxy Statement issued
pursuant to Regulation 14A for the Company's 1997 Annual Meeting of
Shareholders to be held May 5, 1997 is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The information set forth under the caption "Voting Securities and
Principal Holders Thereof" of the Proxy Statement issued pursuant
to Regulation 14A for the Company's 1997 Annual Meeting of
Shareholders to be held May 5, 1997 is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions.
The information set forth under the caption "Compensation Committee
Interlocks and Insider Participation" of the Proxy Statement issued
pursuant to Regulation 14A for the Company's 1997 Annual Meeting of
Shareholders to be held May 5, 1997 is incorporated herein by
reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
(a) Certain documents filed as a part of the Form 10-K.
The financial statements set forth under Item 8 of this Form 10-K.
Schedule Schedule Page
Number Description Number
II Valuation and Qualifying Accounts 7
The report of the Company's independent auditors with respect to
the financial statement schedule appears on page 6.
All other financial statements and schedules not listed have been
omitted since the required information is included in the financial
statements or the notes thereto, or is not applicable or required.
The exhibits are set forth in the Index to Exhibits shown on pages
9, 10 and 11.
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the last quarter of
the period covered by this report.
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of
The York Water Company:
Under date of February 21, 1997, we reported on the balance sheets
of The York Water Company as of December 31, 1996 and 1995, and the
related statements of income, shareholders' investment, and cash
flows for each of the years in the three-year period ended December
31, 1996, as contained in the 1996 annual report to shareholders.
These financial statements and our report thereon are incorporated
by reference in the annual report on Form 10-K for the year 1996.
In connection with our audits of the aforementioned financial
statements, we also audited the related financial statement
schedule as listed in Item 14(a). This financial statement
schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement
schedule based on our audits.
In our opinion, such financial statement schedule, when considered
in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information set
forth therein.
KPMG Peat Marwick LLP
Harrisburg, Pennsylvania
February 21, 1997
<PAGE>
THE YORK WATER COMPANY
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Additions Charged to
Balance at Balance
Beginning Costs and Other at End
Description of Year Expenses Accounts Deductions of Year
<S> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED DECEMBER 31, 1996:
Reserve for uncollectible $90,000 $73,201 $ - $73,201 $90,000
accounts
FOR THE YEAR ENDED DECEMBER 31, 1995:
Reserve for uncollectible $90,000 $67,319 $ - $67,319 $90,000
accounts
FOR THE YEAR ENDED DECEMBER 31, 1994:
Reserve for uncollectible $90,000 $61,154 $ - $61,154 $90,000
accounts
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
THE YORK WATER COMPANY
(Registrant)
Dated: By: /s/ William T. Morris
William T. Morris
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates
indicated.
By:/s/ William T. Morris By: /s/ Jeffrey S. Osman
William T. Morris Jeffrey S. Osman
(Principal Executive and (Principal Accounting Officer)
Financial Officer and Director)
Dated: Dated:
Directors: Date
By: /s/ Irvin S. Naylor
Irvin S. Naylor
(Chairman)
By: /s/ Horace Keesey III
Horace Keesey III
By: /s/ Chloe Eichelberger
Chloe Eichelberger
By: /s/ Paul W. Ware
Paul W. Ware
By: /s/ John L. Finlayson
John L. Finlayson
By: /s/
Frank Motter
By: /s/
George Hay Kain, III
By: /s/ Michael W. Gang
Michael W. Gang
<PAGE>
INDEX TO EXHIBITS
3<PAGE>
Articles of Incorporation Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as an exhibit to the
Company's Form S-3
dated July 1, 1996.
<PAGE>
3.1 By-Laws Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as an ex-hibit to
the Company's Form
S-3 dated July 1,
1996.<PAGE>
4.1<PAGE>
Optional Dividend Reinvestment
Plan<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as the Com-pany's
Form S-3 dated July
7, 1994.<PAGE>
4.4 1986 Public Offering of Common
Stock<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as the Company's
Form S-2 dated
October 28, 1986.<PAGE>
4.5<PAGE>
Employees' Stock Purchase Plan
Dated November 28, 1988<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as an ex-hibit to
the Company's
Registration
Statement Form S-9
dated December 1988.<PAGE>
4.6<PAGE>
Note Agreement Relative to the
$6,000,000 10.17% Senior
Notes, Series A and $5,000,000
9.60% Senior Notes, Series B
dated January 2, 1989<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as an ex-hibit to
the Company's 1989
Form 10-K.<PAGE>
4.8<PAGE>
Note Agreement Relative to the
$6,500,000 10.05% Senior
Notes, Series C dated August
15, 1990<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as an ex-hibit to
the Company's 1990
Form 10-K.<PAGE>
4.10<PAGE>
1992 Public Offering of Common
Stock<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as the Company's
Form S-3 dated April
15, 1992.<PAGE>
4.11<PAGE>
Note Agreement Relative to the
$7,500,000 8.43% Senior Notes,
Series D dated December 15,
1992<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as an exhibit to the
Company's 1992 Form
10-K.<PAGE>
4.12<PAGE>
Fourth Supplemental
Acquisition, Financing and
Sale Agreement Relative to the
$2,700,000 4.75% Water
Facilities Revenue Refunding
Bonds dated February 1, 1994<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange commission
as an ex-hibit to
the Company's
Quarterly Report
Form 10-Q for the
quarter ended June
30, 1994.
<PAGE>
4.13 Fifth Supplemental
Acquisition, Financing and
Sale Agreement Relative to the
$4,300,000 5% Water Facilities
Revenue Refunding Bonds dated
October 1, 1995<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as an exhibit to the
Company's Quarterly
Report Form 10-Q for
the quarter ended
September 30, 1995.<PAGE>
4.14<PAGE>
Public Offering of Common
Stock<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as the Company's
Form S-3 dated July
1, 1996.<PAGE>
10.1<PAGE>
Articles of Agreement Between
The York Water Company and
Springetts-bury Township
Relative to Extension of Water
Mains dated April 17, 1985<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as an ex-hibit to
the Company's 1989
Form 10-K.<PAGE>
10.2<PAGE>
Articles of Agreement Between
The York Water Company and
Windsor Township Relative to
Extension of Water Mains dated
February 9, 1989<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as an ex-hibit to
the Company's 1989
Form 10-K.<PAGE>
10.3<PAGE>
Articles of Agreement Between
The York Water Company and
Windsor Township, Yorkana
Borough, Modern Trash Removal
of York, Inc. and Lower
Windsor Township Relative to
Extension of Water Mains dated
July 18, 1989<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as an ex-hibit to
the Company's 1989
Form 10-K.<PAGE>
10.4<PAGE>
Articles of Agreement Between
The York Water Company and
North Codorus Township
Relative to Extension of Water
Mains dated September 20, 1989<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as an ex-hibit to
the Company's 1990
Form 10-K.<PAGE>
10.5<PAGE>
Articles of Agreement Between
The York Water Company and
York Township Relative to
Extension of Water Mains dated
December 29, 1989<PAGE>
Incorporated herein
by reference. Filed
previously with the
Securities and
Exchange Commission
as an ex-hibit to
the Company's 1990
Form 10-K.<PAGE>
11<PAGE>
Common Shares Used in
Computing Earnings Per Share<PAGE>
Page 29<PAGE>
13<PAGE>
1996 Annual Report to
Shareholders<PAGE>
Page 30<PAGE>
23<PAGE>
Consent of Independent
Auditors<PAGE>
Page 31<PAGE>
28.1<PAGE>
Undertakings Incorporated by
Reference into Registration
Statement Form S-8 Dated
December, 1988<PAGE>
Page 32<PAGE>
<PAGE>
EXHIBIT 3
THE YORK WATER COMPANY
ARTICLES OF INCORPORATION
The Articles of Incorporation of the Company have been filed
previously with the Securities and Exchange Commission as an
exhibit to the Company's Form S-3 dated July 1, 1996 and are hereby
incorporated by reference.
EXHIBIT 3.1
THE YORK WATER COMPANY
BY-LAWS
The By-Laws of the company have been filed previously with the
Securities and Exchange Commission as an exhibit to the Company's
Form S-3 dated July 1, 1996 and are hereby incorporated by
reference.
EXHIBIT 4.1
THE YORK WATER COMPANY
OPTIONAL DIVIDEND REINVESTMENT PLAN
The Optional Dividend Reinvestment Plan has been filed previously
with the Securities and Exchange Commission on Form S-3,
Registration Statement Under the Securities Act of 1933, dated July
7, 1994 and is hereby incorporated by reference.
<PAGE>
EXHIBIT 4.4
THE YORK WATER COMPANY
1986 PUBLIC OFFERING OF COMMON ST0CK
The 1986 Public Offering of Common Stock has been filed previously
with the Securities and Exchange Commission as the Company's Form
S-2 dated October 28, 1986 and is hereby incorporated by reference.
EXHIBIT 4.5
THE YORK WATER COMPANY
EMPLOYEES' STOCK PURCHASE PLAN
The Employees' Stock Purchase Plan dated November 28, 1988 has been
filed previously with the Securities and Exchange Commission as an
exhibit to the Company's Registration Stateent Form S-8 dated
December, 1988 and is hereby incorporated by reference.
EXHIBIT 4.6
THE YORK WATER COMPANY
SENIOR NOTES, SERIES A AND SERIES B NOTE AGREEMENT
The Note Agreement relative to the $6,000,000 10.17% Senior Notes,
Series A and $5,000,000 Adjusted Rate Senior Notes, Series B dated
January 2, 1989 has been filed previously with the Securities and
Exchange Commission on Form 10-K dated March 26, 1990, and is
hereby incorporated by reference.
EXHIBIT 4.8
THE YORK WATER COMPANY
SENIOR NOTES, SERIES C NOTE AGREEMENT
The Note Agreement relative to the $6,500,000 10.05% Senior Notes,
Series C dated August 15, 1990 has been filed previously with the
Securities and Exchange Commission on Form 10-K dated March 25,
1991, and is hereby incorporated by reference.
EXHIBIT 4.10
THE YORK WATER COMPANY
1992 PUBLIC OFFERING OF COMMON STOCK
The 1992 Public Offering of Common Stock has been filed previously
with the Securities and Exchange Commission as the Company's Form
S-3 dated April 15, 1992 and is hereby incorporated by reference.
EXHIBIT 4.11
THE YORK WATER COMPANY
SENIOR NOTES, SERIES D NOTE AGREEMENT
The Note Agreement relative to the $7,500,000 8.43% Senior Notes,
Series D dated December 18, 1992 has been filed previously with the
Securities and Exchange Commission on Form 10-K, dated March 29,
1993 and is hereby incorporated by reference.
EXHIBIT 4.12
THE YORK WATER COMPANY
4.75% WATER FACILITIES REVENUE REFUNDING BONDS AGREEMENT
The Fourth Supplemental Acquisition, Financing and Sale Agreement
relative to the $2,700,000 4.75% Water Facilities Revenue Refunding
Bonds dated February 1, 1994 has been filed previously with the
Securities and Exchange Commission on Form 10-Q, dated July 27,
1994, and is hereby incorporated by reference.
EXHIBIT 4.13
THE YORK WATER COMPANY
5% WATER FACILITIES REVENUE REFUNDING BONDS AGREEMENT
The Fifth Supplemental Acquisition, Financing and Sale Agreement
relative to the $4,300,000 5% Water Facilities Revenue Refunding
Bonds dated October 1, 1995 is attached hereto.
EXHIBIT 4.14
THE YORK WATER COMPANY
1996 PUBLIC OFFERING OF COMMON STOCK
The 1996 Public Offering of Common Stock has been filed previously
with the Securities and Exchange Commission as the Company's Form
S-3 dated July 1, 1996 and is hereby incorporated by reference.
EXHIBIT 10.1
THE YORK WATER COMPANY
SPRINGETTSBURY TOWNSHIP ARTICLES OF AGREEMENT
The Articles of Agreement between The York Water Company and
Springettsbury Township relative to extension of water mains dated
April 17, 1985 has been filed previously with the Securities and
Exchange Commission on Form 10-K, dated March 26, 1990 and is
hereby incorporated by reference.
EXHIBIT 10.2
THE YORK WATER COMPANY
WINDSOR TOWNSHIP ARTICLES OF AGREEMENT
The Articles of Agreement between The York Water Company and
Windsor Township relative to extension of water mains dated
February 9, 1989 has been filed previously with the Securities and
Exchange Commission on Form 10-K, dated March 26, 1990 and is
hereby incorporated by reference.
EXHIBIT 10.3
THE YORK WATER COMPANY
WINDSOR TOWNSHIP, YORKANA BOROUGH, MODERN TRASH REMOVAL, INC.
AND LOWER WINDSOR TOWNSHIP ARTICLES OF AGREEMENT
The Articles of Agreement between The York Water Company and
Windsor Township, Yorkana Borough, Modern Trash Removal, Inc. and
Lower Windsor Township relative to extension of water mains dated
July 18, 1989 has been filed previously with the Securities and
Exchange Commission on Form 10-K, dated March 26, 1990 and is
hereby incorporated by reference.
EXHIBIT 10.4
THE YORK WATER COMPANY
NORTH CODORUS TOWNSHIP ARTICLES OF AGREEMENT
The Articles of Agreement between The York Water Company and North
Codorus Township relative to extension of water mains dated
September 20, 1989 has been filed previously with the Securities
and Exchange Commission on Form 10-K, dated March 25, 1991 and is
hereby incorporated by reference.
EXHIBIT 10.5
THE YORK WATER COMPANY
YORK TOWNSHIP ARTICLES OF AGREEMENT
The Articles of Agreement between The York Water Company and York
Township relative to extension of water mains dated December 29,
1989 has been filed previously with the Securities and Exchange
Commission on Form 10-K, dated March 25, 1991 and is hereby
incorporated by reference.
<PAGE>
EXHIBIT 11
THE YORK WATER COMPANY
COMMON SHARES USED IN
COMPUTING EARNINGS
PER SHARE
1996 1995 1994 1993 1992
Common shares
outstanding,
beginning of
the year 637,374 629,684 621,817 613,889 551,243
Weighted average
shares issued in
connection with 1996
stock subscription 16,608 - - - -
Weighted average
shares issued in
connection with 1992
stock subscription - - - - 29,774
Weighted average
shares issued in
connection with the
Employee Stock
Purchase Plan 436 430 406 398 399
Weighted average
shares issued in
connection with the
Optional Dividend
Reinvestment Plan 2,473 2,481 2,620 2,617 2,526
656,891 632,595 624,843 616,904 583,942
<PAGE>
EXHIBIT 13
THE YORK WATER COMPANY
1996 ANNUAL REPORT TO SHAREHOLDERS
The York Water Company's 1996 Annual Report to Shareholders is
attached hereto.
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Directors of
The York Water Company:
We consent to incorporation by reference in the registration
statements No. 2-80547 on Form S-3 (Optional Dividend Reinvestment
Plan) and No. 33-26180 on Form S-8 (Employees' Stock Purchase Plan)
of The York Water Company of our report dated February 21, 1997,
relating to the balance sheets of The York Water Company as of
December 31, 1996 and 1995, and the related statements of income,
shareholders' investment, and cash flows for each of the years in
the three-year period ended December 31, 1996, and related
schedule, which report appears in the December 31, 1996 annual
report to shareholders and is incorporated by reference in the annual
report on Form 10-K of The York Water Company.
We also consent to incorporation by reference in the registration state-
ments No. 2-80547 on Form S-3 (Optional Dividend Reinvestment Plan) and
No. 33-26180 on Form S-8 (Employees' Stock Purchase Plan) of The York
Water Company of our report dated February 21, 1997, relating to the
financial statement schedule as listed in Item 14(a) of the Company's
December 31, 1996 annual report on Form 10-K, which report appears in such
annual report on Form 10-K.
KPMG Peat Marwick LLP
Harrisburg, Pennsylvania
March 31, 1997
EXHIBIT 28.1
THE YORK WATER COMPANY
UNDERTAKINGS INCORPORATED BY REFERENCE INTO REGISTRATION
STATEMENT FORM S-8 DATED DECEMBER, 1988
The undertaking set forth below is filed for purposes of
incorporation by reference into Part II of the registration
statements on Form S-8, File No. 33.
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
Insofar as indemnification for liabilities
rising under the Securities Act of 1933 (the
"Securities Act") may be permitted to
directors, officers or persons controlling the
registrant pursuant to the provisions
described in this registration statement, or
otherwise, The York Water Company (the
"Company") has been advised that in the
opinion of the Commission such indemnification
is against public policy as expressed in the
Securities Act and is therefore unenforceable.
In the event that a claim for indemnification
against such liabilities (other than the
payment by the Company of expenses incurred or
paid by a director, officer or controlling
person of the Company in the successful
defense of any action, suit or proceeding) is
asserted by such director, officer or
controlling person in connection with the
securities being registered, the Company will,
unless in the opinion of its counsel the
matter has been settled by controlling
precedent, submit to a court of appropriate
jurisdiction the question whether such
indemnification by it is against public policy
as expressed in the Securities Act and will be
governed by the final adjudication of such
issue.
The York Water Company
Highlights of Our 181st Year
<TABLE>
<CAPTION>
Summary of Operations For The Year 1996 1995 1994
<S> <C> <C> <C>
Water operating revenue $15,721,462 $15,449,296 $14,755,707
Operating expenses 9,223,227 9,119,832 8,881,499
Income taxes 1,258,704 1,419,907 1,055,448
Operating income 5,239,531 4,909,557 4,818,760
Interest expense 2,893,123 2,738,846 2,720,535
Gain on sale of land 134,117 - 215,417
Other income, net 279,231 141,536 131,036
Net income 2,759,756 2,312,247 2,444,678
Summary of Operations For The Year 1993 1992
<C> <C>
Water operating revenue $14,201,756 $13,216,692
Operating expenses 8,591,315 7,932,765
Income taxes 1,285,799 765,278
Operating income 4,324,642 4,518,649
Interest expense 3,045,872 2,609,708
Gain on sale of land 842,002 -
Other income, net 430,111 259,177
Net income 2,550,883 2,168,118
Per Share of Common Stock 1996 1995 1994
Book value $38.62 $34.16 $33.75
Net income 4.20 3.66 3.91
Dividends <F1> 3.60 3.60 3.60
Number of shares outstanding
at year-end 725,131 637,374 629,684
Per Share of Common Stock 1993 1992
Book value $33.12 $32.31
Net income 4.13 3.71
Dividends <F1> 3.60 3.68
Number of shares outstanding
at year-end 621,817 613,889
Utility Plant 1996 1995 1994
Original cost $93,492,775 $88,710,279 $83,642,650
Construction expenditures 4,936,816 5,256,959 6,629,903
Utility Plant 1993 1992
Original cost $77,241,368 $71,624,043
Construction expenditures 6,040,584 2,777,903
Other 1996 1995 1994
Total assets $96,736,434 $90,459,706 $86,967,330
Long-term debt 32,000,000 32,000,000 32,000,000
Other 1993 1992
Total assets $84,738,162 $80,330,004
Long-term debt 32,000,000 34,966,327
</TABLE>
<F1> Cash dividends per share reflect dividends declared on shares
outstanding at each dividend date.
For Management's Discussion and Analysis of Financial Condition and
Results of Operations, Please Refer to Page 3.<PAGE>
To Our Shareholders:
I very much appreciate the vote of confidence you, our
shareholders, demonstrated by the successful stock subscription
that took place in September 1996. As a result of the stock
subscription, we issued 79,981 additional shares which raised
$5,331,919 of equity capital.
Operating revenues for 1996 increased $272,166 or 1.8% over 1995.
The operating revenue increase resulted primarily from an
increase in rates of 6.0% approved by the Pennsylvania Public
Utility Commission effective September 5, 1996. The rate
increase was offset by lower consumption during 1996, primarily
in the commercial and industrial sectors. The reduced
consumption is attributable, in large part, to the greater than
normal precipitation experienced throughout the year. The 58.87
inches of precipitation for 1996 was the second highest in our
recorded history and compares with an average precipitation of
40.57 inches.
In 1996, the Company's major activities included: the
acquisition of the Jefferson Borough water system which added 253
customers and a one million gallon tank to the Company's system;
the occupancy of 124 East Market Street by the Company's
Accounting and Personnel Departments; the installation of
approximately 10,000 feet of water main from Loganville to the
vicinity of Glen Rock to facilitate bulk water sales to Glen
Rock; the upgrade of the Loganville and Haines Acres booster
stations; and repairs to the Lake Williams Dam spillway.
Although the Company's portion of the project is complete, the
sale of bulk water to Glen Rock is not expected to begin until
April 1997, when Glen Rock will have completed the work for which
they were responsible.
The Company's 1997 planned activities include: possible expansion
into the Shrewsbury Township area of southern York County; a test
program to evaluate replacement meter interface units for the
Company's meter reading program involving the Cable TV system;
and a new tank in the New Salem system.
The theme of this Annual Report, "The York Water Company At
Work," is a tribute to the men and women who work together to
provide "That Good York Water" to our 45,800 customers. These
candid photos reflect all aspects of our business and demonstrate
the variety of tasks necessary to accomplish our mission.
The Company experienced its second Director retirement in as many
years with the retirement of Josephine S. Appell on October 28,
1996. Mrs. Appell was an active participant in the major
discussions and decisions reached by the Board during her 17-year
tenure. At one time or another she served on all the Board's
committees, including the Executive Committee. Her wise counsel
will be missed.
As in the past, we will continue to strive to meet our stated
objectives of high service to our customers and adequate returns
to our shareholders through the efforts of our dedicated,
hardworking and knowledgeable employees and managers.
Submitted for the Board of Directors,
William T. Morris, P.E.
President and Chief Executive Officer<PAGE>
The York Water Company
Description of Business
The business of The York Water Company is to impound, purify
and distribute water. The Company operates entirely within its
franchised territory located in York County, Pennsylvania, and
is subject to regulation by the Pennsylvania Public Utility
Commission (PPUC). Water service is supplied through the
Company's own distribution system to the City of York, the
Boroughs of North York, West York, Manchester, Mount Wolf, New
Salem, Hallam, Jacobus, Loganville, Yorkana, Seven Valleys, East
Prospect, Jefferson and portions of the Townships of Manchester,
East Manchester, West Manchester, North Codorus, Springettsbury,
Spring Garden, Springfield, York, Hellam, Windsor, Lower Windsor,
Codorus and Jackson. The Company's service territory has an
estimated population of 143,000. Industry of the area served is
diversified, manufacturing such items as fixtures and furniture,
electrical machinery, food products, paper, ordnance, textile
products, air conditioning, barbells, etc. The Company's present
average daily consumption is 18,593,000 gallons, and its present
safe daily yield is 29,900,000 gallons.
In the area served by the Company under the supervision of the
PPUC there are no competitors. During the five years ended in
1996, the Company has maintained an increasing growth in number
of customers and distribution facilities as shown by the
following chart:
<TABLE>
<CAPTION> 1996 1995 1994 1993 1992
<S>
Average daily <C> <C> <C> <C> <C>
consumption (gallons
per day) 18,593,000 19,657,000 19,660,000 19,380,000 18,453,000
Miles of mains at
year-end 641 622 597 580 570
Distribution mains
installed (ft.) 78,619 84,515 91,087 58,414 41,771
Number of customers 45,800 44,879 43,830 42,844 42,198
Population served 143,000 140,000 136,000 134,000 133,000
</TABLE>
Operating revenue in 1996 is derived from the following sources
and in the following percentages: Residential 59%; Commercial
and Industrial, 31%; Other, 10%.
Security Market and Dividends
Securities of The York Water Company are traded over-the-counter.
Quarterly price ranges and cash dividends per share for the last
two years follow:
<TABLE>
<CAPTION> 1996 1995
HIGH LOW DIVIDEND<F1> HIGH LOW DIVIDEND<F1>
<S> <C> <C> <C> <C> <C> <C>
1st Quarter $69 $67.875 $.90 $64.75 $63 $.90
2nd Quarter 71.75 69 .90 64.75 64.25 .90
3rd Quarter 70 68.75 .90 65.25 64.25 .90
4th Quarter 69.50 67.25 .90 67.75 64.25 .90
</TABLE>
<F1> Cash dividends per share reflect dividends declared on
shares actually outstanding at each dividend date.
(Refer to Note 4 to the Financial Statements for a description of
the restriction on the declaration and payment of cash
dividends.)
Prices are bid prices quoted from local newspapers.
Shareholders of record as of December 31, 1996 were 1,281.
THE COMPANY WILL PROVIDE TO SHAREHOLDERS OF RECORD, AND/OR
BENEFICIAL OWNERS, UPON WRITTEN REQUEST, WITHOUT CHARGE, A COPY
OF FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
FOR THE YEAR 1996.
Requests Should Be Made To:
LOIS L. SHULTZ - ASSISTANT SECRETARY
THE YORK WATER COMPANY
BOX 15089, YORK, PA 17405<PAGE>
The York Water Company
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
1996 Compared with 1995
Water operating revenues for 1996 increased $272,166 or 1.8%
over 1995. The increase resulted primarily from an increase in
rates of 6.0% approved by the Pennsylvania Public Utility
Commission (PPUC) effective September 5, 1996. While residential
revenues were up 4.2%, commercial and industrial revenues
declined 6.9% from 1995 to 1996.
Operating expenses, exclusive of depreciation and taxes, for
1996 increased $196,945 or 3.0%. The expense increase was
generally due to increases in pension fees, maintenance of
structures and equipment, legal fees, and power expenses. Lower
cable meter reading fees partially offset the increase.
Depreciation expense for 1996 decreased $139,465 or 9.2%
since 1995 as a result of a reevaluation of plant assets
resulting in longer useful lives, and therefore, lower
depreciation rates.
Federal and state income taxes for 1996 decreased $161,203 or
11.4% when compared to 1995 principally as a result of an
increase in deferred income tax expense in 1995 resulting from a
reduction in deferred tax assets by recognizing a 2% decline in
the state income tax rates.
Interest on long-term debt for 1996 decreased $70,771 or
2.5%. The decrease was related to the issuance of $4,300,000 5%
Revenue Refunding Bonds to replace a like amount of bonds with an
interest rate of 6.25% during the fourth quarter of 1995.
Interest on short-term debt for 1996 increased $110,898 when
compared to 1995. The increase is due primarily to an increase
in short-term debt outstanding during 1996. The average short-
term debt outstanding in 1996 and 1995 was $3,628,378 and
$2,312,964, respectively. The increase in short-term debt was
used to fund construction expenditures.
Allowance for funds used during construction for 1996
decreased $114,150 or 50.4% when compared to 1995. The decrease
was due to a decrease in the Company's plant investment under
construction during 1996.
During 1996, the Company had a gain on sale of one parcel of
land of $134,117 ($79,674 after tax).
Other income, net for 1996 increased $137,695 or 97.3% when
compared to 1995. The increase was due to the recognition of
additional income on water district notes as a result of
additional customers in those districts.
1995 Compared with 1994
Water operating revenues for 1995 increased $693,589 or 4.7%
over 1994. The increase resulted primarily from an increase in
rates of 3.7% approved by the Pennsylvania Public Utility
Commission (PPUC) effective September 23, 1994.
Operating expenses, exclusive of depreciation and taxes, for
1995 increased $126,231 or 1.9%. The expense increase was
generally due to increases in maintenance of utility plant.
Depreciation expense for 1995 increased $78,575 or 5.5% over
1994 as a result of increased plant investment.
Federal and state income taxes for 1995 increased $364,459 or
34.5% when compared to 1994 principally as a result of an
increase in taxable income and an increase in deferred income tax
expense resulting from a reduction in deferred tax assets by
recognizing a 2% decline in the state income tax rate.
Interest on long-term debt for 1995 decreased $43,166 or
1.5%. The decrease was 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% during the first quarter of 1994
and the issuance of $4,300,000 5% Revenue Refunding Bonds to
replace a like amount of bonds with an interest rate of 6.25%
during the fourth quarter of 1995.
Interest on short-term debt for 1995 increased $153,498 when
compared to 1994. The increase is due primarily to an increase
in short-term debt outstanding during 1995. The average short-
term debt outstanding in 1995 and 1994 was $2,312,964 and
$312,304, respectively. The increase in short-term debt was used
to fund construction expenditures.
Allowance for funds used during construction for 1995
increased $92,021 or 68.5% when compared to 1994. The increase
was due to an increase in the Company's plant investment under
construction during 1995.
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 May 9,
1996, seeking a 9.6% increase in annual revenues. Effective
September 5, 1996, the PPUC authorized an increase in rates
designed to produce approximately $960,000 in additional annual
operating revenues, an increase of 6.0%.
Liquidity and Capital Resources
During 1996, the per capita volume of water sold did not
significantly change compared to 1995. 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 1996, the Company had $4,936,816 of construction
expenditures. The Company financed such expenditures through
internally generated funds, customers' advances, short-term
borrowings, proceeds from the issuance of common stock under its
dividend reinvestment plan (stock issued in lieu of cash
dividends), employee stock purchase plan, and an offer to holders
of its common stock non-transferable subscription rights to
purchase common stock. Shareholders were granted one
subscription right for every 4 shares of common stock held of
record as of August 1, 1996. On September 16, 1996, subscription
rights to purchase 79,981 shares were exercised. Proceeds of the
subscription rights offering amounted to $5,331,919.
The Company anticipates construction expenditures for 1997
and 1998 of approximately $4,108,000 and $4,210,000,
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 rate of return on the capital expenditures associated with
its 1997 and 1998 construction projects.
During 1996, net cash provided by operating activities
exceeded cash used in investing and financing activities. The
Company anticipates that during 1997 net cash used in investing
and financing activities will exceed net cash provided by
operating activities. Borrowings against the Company's lines of
credit, 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 customers'
advances are used to satisfy the need for additional cash.
As of December 31, 1996, current assets exceeded current
liabilities by $468,190. As of December 31, 1995, current
liabilities exceeded current assets by $3,215,630. Short-term
borrowings from lines of credit as of December 31, 1996 and 1995
were $1,237,000 and $4,164,000, respectively. The Company
maintains lines of credit aggregating $12,000,000. Loans granted
under these lines of credit bear interest based on the prime or
LIBOR rates plus basis points, as defined. The Company is not
required to maintain compensating balances on its lines of
credit.
During 1996, the Company's dividend payout ratios relative
to net income and cash provided by operating activities were
86.1% and 55.1%, respectively. The Company believes that these
payout ratios are appropriate.
Shareholders' investment as a percent of total
capitalization was 46.7% as of December 31, 1996 compared with
40.5% as of December 31, 1995. This increase was the result of
an increase in the amount of shareholder equity, which resulted
from the stock subscription of September 16, 1996 in which 79,981
shares were issued at a rate of $67.45 per share.
The Company, like all other businesses, is affected by
inflation, most notably by the continually increasing costs
incurred to maintain and expand its service capacity. The
cumulative effect of inflation results in significantly higher
facility replacement costs which must be recovered from future
cash flows. The ability of the Company to recover this increased
investment in facilities is dependent upon future revenue
increases, which are subject to approval by the PPUC.
Impact of Recent Accounting Pronouncements
In October 1996, the American Institute of Certified Public
Accountants issued Statement of Position ("SOP") 96-1,
Environmental Remediation Liabilities. SOP 96-1 requires, among
other things, environmental remediation liabilities to be accrued
when the criteria of SFAS No. 5, Accounting for Contingencies,
have been met. The SOP also provides guidance with respect to
the measurement of the remediation liabilities. Such accounting
is consistent with the Company's current method of accounting for
environmental remediation costs, and, therefore, adoption of this
new Statement in 1997 will not have a material impact on the
Company's financial position, results of operations, or
liquidity.
In June 1996, the Financial Accounting Standards Board
issued SFAS No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities. Management
of the Company does not expect that adoption of SFAS No. 125 will
have a material impact on the Company's financial position,
results of operations, or liquidity.
Balance Sheets
December 31
Assets 1996 1995
UTILITY PLANT, at original cost. . . .$93,492,775 $88,710,279
Less-Reserve for depreciation. . . . . 13,158,637 11,890,730
80,334,138 76,819,549
OTHER PHYSICAL PROPERTY:
Less-Reserve for depreciation of
$60,326 in 1996 and $55,291 in 1995. . 421,145 426,180
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . 694,491 -
Receivables, less reserves of
$90,000 in 1996 and in 1995 . . . . . 2,523,510 2,443,129
Recoverable income taxes . . . . . . . 159,203 96,123
Materials and supplies, at cost . . . 302,821 299,637
Prepaid expenses . . . . . . . . . . . 221,402 115,392
Deferred income taxes (Note 3) . . . . 61,377 61,377
3,962,804 3,015,658
OTHER LONG-TERM ASSETS:
Prepaid pension cost (Note 6). . . . . 1,680,286 1,530,238
Deferred debt expense. . . . . . . . . 474,049 495,594
Deferred rate case expense . . . . . . 142,385 42,499
Notes receivable (Note 7). . . . . . . 990,448 1,046,118
Deferred regulatory assets (Note 1). . 7,827,988 6,302,127
Other. . . . . . . . . . . . . . . . . 903,191 781,743
12,018,347 10,198,319
$96,736,434 $90,459,706
Capitalization and Liabilities
CAPITALIZATION:
Common stock, par value $10 per share,
authorized 1,200,000 shares in 1996
and 1,000,000 shares in 1995,
outstanding 725,131 shares in 1996
and 637,374 shares in 1995 (Note 5) .$ 7,251,308 $ 6,373,743
Capital surplus. . . . . . . . . . . . 18,524,331 13,554,042
Earnings retained in the business. . . 2,227,118 1,843,982
28,002,757 21,771,767
Long-term debt (Note 4). . . . . . . . 32,000,000 32,000,000
60,002,757 53,771,767
CURRENT LIABILITIES:
Short-term borrowings (Note 4) . . . . 1,237,000 4,164,000
Accounts payable.. . . . . . . . . . . 376,469 342,610
Dividends payable. . . . . . . . . . . 531,977 468,053
Accrued taxes. . . . . . . . . . . . . 117,668 34,833
Advance water revenues . . . . . . . . 164,256 183,398
Accrued interest . . . . . . . . . . . 675,761 697,261
Other accrued expenses . . . . . . . . 391,483 341,133
3,494,614 6,231,288
DEFERRED CREDITS:
Customers' advances for construction
(Note 7). . . . . . . . . . . . . . . 15,471,245 15,913,616
Contributions in aid of construction . 5,606,358 4,576,923
Deferred income taxes (Note 3) . . . . 9,744,675 7,753,441
Deferred regulatory liabilities
(Note 1). . . . . . . . . . . . . . . 1,528,582 1,441,398
Deferred employee benefits . . . . . . 888,203 771,273
33,239,063 30,456,651
$96,736,434 $90,459,706
The accompanying notes are an integral part of these statements.
<PAGE>
<TABLE>
<CAPTION>Statements of Income Year Ended December 31
<S> 1996 1995 1994
WATER OPERATING REVENUES: <C> <C> <C>
Residential $ 9,273,216 $ 8,895,601 $ 8,271,510
Commercial and industrial 4,925,781 5,292,109 5,313,765
Other 1,522,465 1,261,586 1,170,432
15,721,462 15,449,296 14,755,707
OPERATING EXPENSES:
Operation and maintenance. 3,616,765 3,467,540 3,277,641
Administrative and general 3,235,491 3,187,771 3,251,439
6,852,256 6,655,311 6,529,080
Depreciation 1,370,453 1,509,918 1,431,343
Taxes other than income tax 1,000,518 954,603 921,076
Federal and state income taxes 1,258,704 1,419,907 1,055,448
(Note 3) 10,481,931 10,539,739 9,936,947
Operating income 5,239,531 4,909,557 4,818,760
INTEREST EXPENSE AND OTHER INCOME:
Interest on long-term debt(Note 4) 2,718,950 2,789,721 2,832,887
Interest on short-term debt(Note 4) 286,322 175,424 21,926
Allowance for funds used during (112,149) (226,299) (134,278)
construction
Gain on sale of land (134,117) - (215,417)
Other income, net (279,231) (141,536) (131,036)
2,479,775 2,597,310 2,374,082
Net income $ 2,759,756 $ 2,312,247 $ 2,444,678
Earnings per share (Note 5) $4.20 $3.66 $3.91
Statements of Shareholders' Investment
Earnings
Retained
Common Capital In The
Stock Surplus Business
Balance, January 31, 1994 6,218,171 12,765,743 1,613,526
Net income - - 2,444,678
Cash dividends ($3.60 per share) - - (2,249,279)
Issuance of common stock under dividend
reinvestment plan 67,965 328,644 -
Issuance of common stock under employee
stock purchase plan 10,700 51,766 -
Balance, December 31, 1994 6,296,836 13,146,153 1,808,925
Net income - - 2,312,247
Cash dividends ($3.60 per share) - - (2,277,190)
Issuance of common stock under dividend
reinvestment plan 64,927 344,255 -
Issuance of common stock under employee
stock purchase plan 11,980 63,634
Balance, December 31, 1995 6,373,743 13,554,042 1,843,982
Net income - - 2,759,756
Cash dividends ($3.60 per share) - - (2,376,620)
Issuance of common stock under dividend
reinvestment plan 65,785 370,648 -
Issuance of common stock under employee
stock purchase plan 11,970 67,532 -
Issuance of 79,981 shares of common
stock (Note 5) 799,810 4,532,109 -
Balance, December 31, 1996 $7,251,308 $18,524,331 $2,227,118
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Cash Flows
Year Ended December 31
<S> 1996 1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES: <C> <C> <C>
Net income . . . . . . . . . . . . .. $ 2,759,756 $ 2,312,247 $ 2,444,678
Adjustments to reconcile net income to
net cash provided by operating activities:
Gain on sale of land . . . . . . . . (134,117) - (215,417)
Depreciation . . . . . . . . . . . . 1,370,453 1,509,918 1,431,343
Provision for losses on accounts . . 73,201 67,319 61,154
receivable
Increase in deferred income taxes (including
regulatory assets and liabilities) . 552,557 308,755 8,171
Changes in assets and liabilities:
Increase in accounts receivable.. . (153,582) (299,160) (113,019)
Increase in recoverable income taxes (63,080) (96,123) -
Increase in materials and supplies . (3,184) (1,281) (38,220)
Increase in prepaid expenses and prepaid
pension costs . . . . . . . . . . . (256,058) (131,406) (116,466)
Increase (decrease) in accounts payable,
accrued expenses, other liabilities and
deferred employee benefits. . . . 245,921 (409,051) 384,364
Increase (decrease) in accrued interest
and taxes . . . . . . . . . . . . 61,335 (279,993) 34,818
(Increase) decrease in other assets (142,980) 18,800 (127,204)
Net Cash Provided by Operating . . 4,310,222 3,000,025 3,754,202
Activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of temporary investments. (101,000) - (10,111)
Maturities of temporary investments. . 101,000 - 2,007,935
Proceeds from the sale of land . . . . 191,700 - 249,000
Costs incurred related to the sale of (57,583) - (33,583)
land
Construction expenditures. . . . . . (4,936,816) (5,256,959) (6,629,903)
Customers' advances for construction and
contributions in aid of construction 587,064 1,077,693 1,436,122
Net Cash Used in Investing Activities(4,215,635) (4,179,266) (2,980,540)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings under
line-of-credit agreements . . . . . (2,927,000) 2,862,000 850,000
Issuance of 79,981 shares of common . 5,331,919 - -
stock
Issuance of common stock under dividend
reinvestment plan . . . . . . . . . . 436,433 409,182 396,609
Issuance of common stock under employee
stock purchase plan . . . . . . . . 79,502 75,614 62,466
Dividends paid . . . . . . . . . . . (2,376,620) (2,277,190) (2,249,279)
Decrease in notes receivable . . . . 55,670 109,635 123,908
Net Cash Provided by (Used in)
Financing Activities . . . . . . . 599,904 1,179,241 (816,296)
Net increase (decrease) in cash and cash
equivalents . . . . . . . . . . . . 694,491 - (42,634)
Cash and cash equivalents at beginning
of year - - 42,634
Cash and cash equivalents at end of $ 694,491 $ - $ -
year
Supplemental disclosures of cash flow
information:
Cash paid during the year for:
Interest, net of amounts capitalized $2,934,054 $2,552,529 $2,662,806
Income taxes . . . . . . . . . . .. 874,388 1,488,488 979,366
Supplemental disclosure of non-cash investing
and financing activities:
In 1994, the Company offset notes receivable
in the amount of $1,395,776 against the
related advances for construction. See Note 7.
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
Notes to Financial Statements
l. Accounting Policies
The business of The York Water Company is to impound, purify
and distribute water. The Company operates entirely within its
franchised territory located in York County, Pennsylvania, and is
subject to regulation by the PPUC.
The following summarizes the significant accounting policies
employed by The York Water Company.
Depreciation, Amortization, Maintenance and Repairs-
The straight-line remaining life method is used to compute
depreciation on utility plant cost. The effective rate of
depreciation was 1.99% in 1996, 2.42% in 1995 and 2.45% in 1994
on average utility plant, net of customers' advances and
contributions. Larger depreciation provisions are deducted for
tax purposes.
During the second quarter of 1996, the Company revised its
estimates of remaining useful lives of the utility plant based on
an external engineering study. The effect of applying these new
lives was to reduce depreciation expense by approximately
$283,000, increase operating income and net income by
approximately $187,000 and net income per share by approximately
$.28.
Annual provisions for depreciation of transportation and
mechanical equipment included in utility plant are computed on a
straight-line basis over the estimated service lives. Such
provisions are charged to clearing accounts and apportioned
therefrom to operating expenses and other accounts in accordance
with the Uniform System of Accounts as prescribed by the PPUC.
The Company charges to maintenance expense the cost of
repairs and replacements and renewals of less than units of
property. Maintenance of transportation equipment is charged to
clearing accounts and apportioned therefrom in a manner similar
to depreciation. The cost of replacements, renewals and
betterments of units of property is capitalized to the utility
plant accounts.
Upon normal retirement of depreciable property, the estimated
or actual cost of the asset is credited to the utility plant
account, and such amounts, together with the cost of removal less
salvage, is charged to the reserve for depreciation. Gains or
losses from abnormal retirements are reflected in income
currently.
Deferred Charges-
Deferred debt expense is amortized on a straight-line basis
over the term of the related debt.
Deferred rate case expense is amortized over two years as
specified by the PPUC for rate-making purposes.
Revenues-
Revenues include amounts billed to customers on a cycle basis
and unbilled amounts based on estimated usage from the latest
meter reading to the end of the accounting period.
Customers' Advances for Construction-
Advances are received from customers for construction of
utility plant and are refundable as operating revenues are earned
and any notes receivable have been paid after the completion of
construction (see also Note 7). After all refunds to which the
customer is entitled are made, any remaining balance is
transferred to contributions in aid of construction.
Contributions in Aid of Construction-
Contributions in aid of construction include direct
contributions and the portion of customers' advances for
construction which become nonrefundable. Transfers to other
accounts may not be made without approval of the PPUC.
Income Taxes-
Certain income and expense items are accounted for in
different time periods for financial reporting than for income
tax reporting purposes.
Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and
tax credit carryforwards. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.
The Company is also required to recognize regulatory assets
and liabilities for the effect on revenues expected to be
realized as the tax effects of temporary differences previously
flowed through to customers reverse.
Investment tax credits have been deferred and are being
amortized to income over the average estimated service lives of
the related assets.
Notes Receivable-
Notes receivable are recorded at cost, less the related
allowance for impaired notes receivable. Management, considering
current information and events regarding the borrowers' ability
to repay their obligations, considers a note to be impaired when
it is probable that the Company will be unable to collect all
amounts due according to the contractual terms of the note
agreement. When a loan is considered to be impaired, the amount
of the impairment is measured based on the present value of
expected future cash flows discounted at the note's effective
interest rate.
Pension Plans-
The Company has a defined benefit pension plan covering
substantially all of its employees. The benefits are based on
years of service and the employee's compensation before
retirement.
Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed Of-
The Company adopted the provisions of SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of, on January 1, 1996. This
Statement requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of the
carrying amount of an asset to future net cash flows expected to
be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the assets exceed the fair
value of the assets. Assets to be disposed of are reported at
the lower of the carrying amount or fair value less costs to
sell. Adoption of this Statement did not have a material impact
on the Company's financial position, results of operations, or
liquidity.
Allowance for Funds Used During Construction-
Allowance for funds used during construction (AFUDC)
represents the cost of funds used for construction purposes
during the period of construction. These costs are reflected as
non-cash income during the construction period and as an addition
to the cost of plant constructed. The AFUDC rate was 10.04% for
1996, 1995, and 1994.
Statements of Cash Flows-
For the purposes of the statements of cash flows, the Company
considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents except
for those instruments earmarked to fund construction expenditures
or repay long-term debt.
Use of Estimates in the Preparation of Financial Statements-
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
2. Rate Increases
The Company has increased rates as approved by the PPUC in
September 1996 (6.0%). The Compay has increased rates as
approved by the PPUC in September 1994 (3.7%).
<PAGE>
Notes to Financial Statements (Continued)
3. Income Taxes
The provisions for income taxes consist of:
1996 1995 1994
Federal current $ 570,390 $ 805,004 $ 780,009
State current 111,026 254,807 267,268
Federal deferred 523,452 279,490 359,714
State deferred 50,834 117,915 (314,477)
Federal investment tax
credit, net of current
utilization........... 3,002 (37,309) (37,066)
Total income
taxes................. $1,258,704 $1,419,907 $1,055,448
A reconciliation of the statutory Federal tax provision (34%) to
the total provision follows:
1996 1995 1994
Statutory Federal
tax provision $1,360,298 $1,268,932 $1,190,043
Reversal of
taxes related to
rate cases........... (33,961) 33,104 (3,484)
Tax-exempt
interest............. (53,421) (27,674) (18,043)
Effect of
depreciation
flowed through (54,906) (58,448) (43,405)
Effect of cost of
removal flowed
through.............. (19,603) (24,163) (41,052)
Amortization of
investment tax
credit............... (38,495) (38,108) (38,090)
State income
taxes, net of
Federal benefit...... 106,828 245,997 (31,158)
Other, net............. (8,036) 20,267 40,637
Total income
taxes................ $1,258,704 $1,419,907 $1,055,448
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax
liabilities as of December 31, 1996 and 1995 are summarized in
the following table:
1996 1995
Deferred tax assets:
Allowance for doubtful accounts $ 61,377 $ 61,377
Deferred compensation 496,637 411,476
Customers' advances
and contributions 4,612,474 4,654,942
Alternative minimum tax
credit carryforward 748,514 474,809
Total gross deferred tax assets 5,919,002 5,602,604
Less valuation allowance - -
Total deferred tax assets 5,919,002 5,602,604
Deferred tax liabilities:
Accelerated depreciation 12,195,132 10,340,217
Investment tax credit 452,652 451,673
Depreciation on customers'
advance assets 924,318 760,234
Pension income 917,584 815,255
Cost of removal 357,089 317,769
Tank painting 276,997 276,997
Other 478,528 332,523
Total deferred tax liabilities 15,602,300 13,294,668
Net deferred tax liability $9,683,298 $7,692,064
Reflected on balance sheets as:
Current deferred asset $ 61,377 $ 61,377
Noncurrent deferred liability (9,744,675) (7,753,441)
Net deferred tax liability $(9,683,298)$(7,692,064)
No valuation allowance is required for deferred tax assets as
of December 31, 1996 and 1995. In assessing the realizability of
deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future
taxable income during the periods in which those temporary
differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future
taxable income, and tax planning strategies in making this
assessment. Based upon the level of historical taxable income
and the current regulatory environment, management believes it is
more likely than not the Company will realize the benefits of
these deductible differences.
During 1996, the Company recorded a gain on sale of land of
$134,117. Federal and state income taxes relative to the gain
amounted to $54,443.
During 1994, the Company recorded a gain on sale of land of
$215,417. Federal and state income taxes relative to the gain
amounted to $90,289.
<PAGE>
4. Borrowings
Long-term debt as of December 31, 1996 and 1995 is summarized
in the following table:
1996 1995
10.17% Senior Notes,
Series A, due 2019.............. $ 6,000,000 $ 6,000,000
9.60% Senior Notes,
Series B, due 2019.............. 5,000,000 5,000,000
10.05% Senior Notes,
Series C, due 2020.............. 6,500,000 6,500,000
8.43% Senior Notes,
Series D, due 2022.............. 7,500,000 7,500,000
4.75% Industrial Development
Authority Revenue Refunding
Bonds, Series 1994, due 2009.... 2,700,000 2,700,000
5% Industrial Development
Authority Revenue Refunding
Bonds, Series 1995 due 2010..... 4,300,000 4,300,000
$32,000,000 $32,000,000
In October 1995, the Company issued $4,300,000 of 5%
Industrial Development Authority Revenue Refunding Bonds, Series
1995, due 2010. Proceeds of these Bonds were used to redeem the
outstanding amount of 6.25% Industrial Development Authority
Revenue Refunding Bonds. These Bonds have mandatory tender dates
of June 1, 2000 and June 1, 2005.
In March 1994, the Company issued $2,700,000 of 4.75%
Industrial Development Authority Revenue Refunding Bonds, Series
1994, due 2009. Proceeds of these Bonds were used to redeem the
outstanding amount of 7% Industrial Development Authority Revenue
Refunding Bonds, Series 1989. These bonds have mandatory tender
dates of May 15, 1999 and May 15, 2004.
The Company maintains lines of credit aggregating $12,000,000.
Loans granted under these lines as of December 31, 1996 bear
interest based on the prime or LIBOR rate plus basis points, as
defined. Short-term borrowings amounted to $1,237,000 as of
December 31, 1996 and $4,164,000 as of December 31, 1995. The
weighted average interest rate on short-term borrowings
outstanding as of December 31, 1996 and 1995 is 7.12% and 7.19%,
respectively. The Company is not required to maintain
compensating balances on its lines of credit.
Long-term debt maturing in the next five years is as follows:
1999 $2,700,000
2000 4,300,000
The terms of the debenture agreements limit in some cases the
Company's ability to prepay its borrowings and include certain
restrictions with respect to declaration and payment of cash
dividends and acquisition of the Company's stock. Under the
terms of the most restrictive agreements, cumulative payments for
dividends and acquisition of stock since December 31, 1982 may
not exceed $1,500,000 plus net income since that date. As of
December 31, 1996, none of the earnings retained in the business
are restricted under these provisions.
5. Common Stock and Earnings Per Share
Earnings per share are based upon the weighted average number
of shares outstanding of 656,891 in 1996; 632,595 in 1995; and
624,823 in 1994.
On August 8, 1996, the Company offered to holders of its
common stock non-transferable subscription rights to purchase up
to an aggregate of 80,000 shares of common stock. All
shareholders were granted one subscription right for every 4
shares of common stock held of record as of August 1, 1996. Each
subscription right entitled the holder to purchase one share at a
purchase price of $67.45 per share. On September 16, 1996,
subscription rights to purchase 79,981 shares were exercised.
Under the employee stock purchase plan, all full-time
employees who have been employed at least six consecutive months
may purchase shares of the Company's common stock through payroll
deductions limited to 10% of gross compensation. The purchase
price is 95% of the fair market value (as defined). Ten thousand
shares of common stock have been authorized to be offered under
the plan, of which 8,946 shares have been issued as of December
31, 1996.
Under the optional dividend reinvestment plan, holders of the
Company's stock may purchase additional shares subject to an
annual maximum of $1,500. The purchase price is 95% of the fair
market value (as defined). One hundred and twenty thousand
shares of common stock have been authorized to be offered under
the plan, of which 77,759 shares have been issued as of December
31, 1996. During 1994, the Company's Board of Directors approved
an increase in the number of authorized shares of common stock
offered under the plan.
6. Employee Benefit Plans
The Company maintains two defined benefit pension plans
covering substantially all of its employees. The benefits are
based upon years of service times the sum of $16.50 plus 1.5% of
final average monthly earnings in excess of $400. The Company's
funding policy is to contribute annually the maximum amount
permitted by the Employee Retirement Income Security Act of 1974.
The following table sets forth the plans' funded status and
amounts recognized in the Company's balance sheets as of December
31, 1996 and 1995. The measurement of assets and obligations of
the plans is as of December 31, 1996 and 1995.
1996 1995
Actuarial present value
of benefit obligations:
Accumulated benefit
obligation, including
vested benefits of
$6,211,500 in 1996 and
$5,908,800 in 1995........ $(6,521,300) $(6,220,600)
Projected benefit
obligation for service
rendered to date $(7,805,600) $(7,558,300)
Plan assets at fair value,
primarily common trust
stock and bond funds....... 11,163,660 10,293,050
Plan assets in excess of
projected benefit
obligation........................ 3,358,060 2,734,750
Unrecognized prior service
cost.............................. 182,671 202,010
Unrecognized net gain.............. (794,117) (134,189)
Unrecognized net transition
asset as of December 31, 1996
and 1995 being recognized
over 15 years..................... (1,066,328) (1,272,333)
Prepaid pension cost as of
of December 31, 1996 and
1995.............................. $ 1,680,286 $ 1,530,238
Net pension income for 1996, 1995 and 1994 included the following
components:
1996 1995 1994
Service cost-benefits
earned during the
period $ 247,100 $ 215,700 $ 283,100
Interest cost on
projected benefit
obligation 500,970 469,119 444,317
Actual return on plan
assets (1,139,905) (1,459,203) 156,727
Net amortization and
deferral 241,787 647,092 (997,522)
Net periodic pension
income $(150,048) $(127,292) $(113,378)
The weighted average discount rate used in determining the
actuarial present value of the projected benefit obligation was
6.75% in 1996 and 6.5% in 1995. The rate of increase in future
compensation levels was 4%. The expected long-term rate of
return on assets was 7%.
Beginning in 1994, the Company adopted a savings plan pursuant
to the provisions of section 401(k) of the Internal Revenue Code.
The plan provides for elective employee contributions of up to
15% of compensation and Company matching contributions of 50% of
the participant's contribution, up to a maximum annual Company
contribution of $500 for the union represented employees and
$1,000 for the general and administrative employees.
Contributions to the plan amounted to $28,210 in 1996 and $22,125
in 1995.
7. Notes Receivable
The Company has entered into agreements with municipalities to
extend water service into newly-formed water districts. The
Company loaned funds to the municipalities to cover the costs
related to the projects. The municipalities concurrently
advanced these funds to the Company in the form of customers'
advances for construction. The municipalities are required to
charge application fees and water revenue surcharges (fees) to
customers connected to the system which are remitted to the
Company. The principal and the related customer advance are
reduced periodically as operating revenues are earned by the
Company from customers connected to the system and refunds of
advances are made. There is no due date for the notes nor
expiration date for the advances.
In 1994, the Company offset notes receivable in the amount of
$1,395,776 against the related advances for construction based on
its determination that the principal recoverable from noteholders
was less than the recorded amount, and the fact that advances are
not fully refundable to the extent that payments are not received
on the notes.
The Company has recorded interest income of $152,979 in 1996,
$61,322 in 1995 and $32,628 in 1994 on these notes.
Included in the accompanying balance sheets at December 31,
1996 and 1995 were the following amounts related to these
projects.
1996 1995
Notes receivable, including
interest $ 785,696 $ 823,969
Customers' advances for
construction 2,465,620 2,486,522
8. Capital Commitments
The estimated funds needed for the Company's construction
program for 1997 are $4,108,000. 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.
9. Commitments and Contingent Liabilities
The Company purchases meter interface units under a
noncancellable purchase agreement expiring October 31, 1997.
Payments relating to this purchase amounted to $46,341 in 1996,
$53,400 in 1995 and $45,187 in 1994. Such payments will amount
to $19,053 in 1997.
The Company is involved in certain legal and administrative
proceedings before various courts and governmental agencies
concerning rates and other matters. The Company expects that the
ultimate disposition of these proceedings will not have a
material effect on the Company's financial position or results of
operations.
10. Fair Value of Financial Instruments
The estimated fair value of financial instruments has been
determined based on available market information and appropriate
valuation methodologies. However, considerable judgment is
necessarily required in interpreting market data to develop the
estimates of fair value. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts that the
Company might realize in a current market exchange. The use of
different market assumptions and/or estimation methodologies may
have a material effect on the estimated fair value.
The carrying amount of current assets and liabilities that are
considered financial instruments approximates their fair value as
of the dates presented. The Company's long-term debt, with a
carrying value of $32,000,000 at December 31, 1996, had an
estimated fair value of approximately $33,000,000.00.
The Company's customers' advances for construction and notes
receivable have carrying values at December 31, 1996 of
$15,471,245 and $990,448, respectively. The relative fair values
of these amounts cannot be accurately estimated since future
payment streams are dependent upon several factors, including new
customer connections, customer consumption levels and future rate
increases.
Independent Auditors' Report
To the Shareholders and Board of Directors of The York Water
Company:
We have audited the accompanying balance sheets of The York
Water Company as of December 31, 1996 and 1995 and the related
statements of income, shareholders' investment, and cash flows
for each of the years in the three-year period ended December 31,
1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of The York Water Company at December 31, 1996 and 1995 and the
results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 1996, in
conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Harrisburg, PA
February 21, 1997
Directors, Officers and Key Employees
Irvin S. Naylor<F1>
Chairman of the Board
Vice Chairman of Board
Cor-Box, Incorporated
William T. Morris, P.E.<F1>
President and
Chief Executive Officer
The York Water Company
Horace Keesey III<F1>
Vice Chairman of the Board
Consultant
George Hay Kain, III
Attorney at Law
Frank Motter<F1>
President
Motter Printing Press Co.
Chloe Eichelberger
President/Chief Executive
Officer
Chloe Eichelberger Textiles,
Inc.
Paul W. Ware<F1>
Chairman
Penn Fuel Gas, Inc.
John L. Finlayson<F2>
Vice President-Finance and
Administration
Susquehanna Pfaltzgraff Co.
Michael W. Gang<F2>
Partner
Morgan, Lewis & Bockius LLP
Directors Emeriti
William H. Kain
Robert E. Skold
Josephine S. Appell
<F1>Members of the
Executive Committee
<F2>Alternate Members of
the Executive Committee
Staff
William T. Morris, P.E.
President and
Chief Executive Officer
Jeffrey S. Osman
Vice President-Finance
Secretary-Treasurer
Duane R. Close
Vice President-Operations
Jeffrey R. Hines, P.E.
Vice President-Engineering
Bruce C. McIntosh
Human Resources Director
Lois L. Shultz
Customer Service Manager
Assistant Secretary/
Assistant Treasurer
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000108985
<NAME> YORK WATER CO.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 80334138
<OTHER-PROPERTY-AND-INVEST> 421145
<TOTAL-CURRENT-ASSETS> 3962804
<TOTAL-DEFERRED-CHARGES> 8444422
<OTHER-ASSETS> 3573925
<TOTAL-ASSETS> 96736434
<COMMON> 7251308
<CAPITAL-SURPLUS-PAID-IN> 18524331
<RETAINED-EARNINGS> 2227118
<TOTAL-COMMON-STOCKHOLDERS-EQ> 28002757
0
0
<LONG-TERM-DEBT-NET> 32000000
<SHORT-TERM-NOTES> 1237000
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0
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<EARNINGS-AVAILABLE-FOR-COMM> 2759756
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