-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AgVA0vYOV3N1Bm0GJkMg/UDvrXr6nDRXM3voq01JzPC4E29Q4AiAN5dlu9lACuXH f1D14h6usCZSrq+55bpD8A== 0000108985-98-000006.txt : 19980511 0000108985-98-000006.hdr.sgml : 19980511 ACCESSION NUMBER: 0000108985-98-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980508 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: YORK WATER CO CENTRAL INDEX KEY: 0000108985 STANDARD INDUSTRIAL CLASSIFICATION: WATER SUPPLY [4941] IRS NUMBER: 231242500 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-00690 FILM NUMBER: 98613230 BUSINESS ADDRESS: STREET 1: 130 E MARKET ST CITY: YORK STATE: PA ZIP: 17405 BUSINESS PHONE: 7178453601 MAIL ADDRESS: STREET 1: PO BOX 15089 10-Q 1 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 March 31, 1998 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, No par value 2,944,706 Shares outstanding as of March 31, 1998 THE YORK WATER COMPANY PART I - FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets (Unaudited) As Of As of Mar.31, 1998 Dec. 31, 1997 UTILITY PLANT, at original cost $98,406,183 $97,487,926 Less-Reserve for depreciation 14,761,294 14,332,890 83,644,889 83,155,036 OTHER PHYSICAL PROPERTY: Less-Reserve for depreciation of $66,193 in 1998 and $65,193 in 1997 497,600 498,859 CURRENT ASSETS: Cash and Cash Equivalents - Receivables, less reserves of $102,000 in 1998 and $90,000 in 1997 2,433,323 2,540,075 Recoverable income taxes 444,661 547,182 Materials and supplies, at cost 338,629 337,837 Prepaid expenses 138,543 190,314 Deferred income taxes 75,017 75,017 3,703,860 3,690,425 OTHER LONG-TERM ASSETS: Prepaid pension cost 1,769,906 1,732,394 Deferred debt expense 431,691 440,163 Deferred rate case expense 35,660 57,055 Notes receivable 886,789 913,934 Deferred regulatory assets 7,287,800 7,287,799 Other 1,144,580 1,078,409 11,556,426 11,509,754 $99,402,775 $98,854,074 THE YORK WATER COMPANY Balance Sheets (Unaudited) As Of As Of Mar.31, 1998 Dec. 31, 1997 CAPITALIZATION Common stock, no par value, authorized 6,000,000 shares in 1998 and in 1997, outstanding 2,944,706 shares in 1998 and 2,934,782 shares in 1997 $26,659,170 $26,453,873 Earnings retained in the business 2,721,119 2,696,913 29,380,289 29,150,786 LONG-TERM DEBT 5.0% Ind. Dev. Auth. Rev. Refund Bonds, due 2010 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 700,000 843,000 Accounts payable 325,906 551,402 Dividends payable 488,330 488,483 Accrued taxes 226,871 115,073 Advance water revenues 189,094 182,118 Accrued interest 483,774 675,761 Other accrued expenses 344,036 345,939 2,758,011 3,201,776 DEFERRED CREDITS Customers' advances for construction 16,690,900 16,219,638 Contributions in aid of construction 5,861,487 5,861,487 Deferred income taxes 10,034,014 9,807,788 Deferred regulatory liabilities 1,572,985 1,572,985 Deferred employee benefits 1,105,089 1,039,614 32,264,475 34,501,512 $99,402,775 $98,854,074 THE YORK WATER COMPANY Statements of Income (Unaudited) (Unaudited) Three Months Three Months Ended Ended Mar. 31, 1998 Mar. 31, 1997 WATER OPERATING REVENUES Residential $2,348,525 $2,351,598 Commercial and industrial 1,227,561 1,252,868 Other 441,482 402,410 4,017,568 4,006,876 OPERATING EXPENSES Operation and maintenance 892,827 796,010 Administrative and general 726,760 702,284 1,619,587 1,498,294 Depreciation 409,144 388,084 Taxes other than income taxes 271,687 263,297 Federal and state income taxes 358,112 402,096 2,658,530 2,551,771 Operating Income 1,359,038 1,455,105 INTEREST EXPENSE AND OTHER EXPENSE/(INCOME) Interest on long-term debt 679,738 679,738 Interest on interim bank loans 15,324 16,351 Allowance for funds used during construction (26,506) (3,225) Other income, net (8,723) (3,958) 659,833 688,906 Net Income $ 699,205 $ 766,199 Basic Earnings Per Share $0.24 $0.26 Cash Dividends Per Share $0.23 $0.23 THE YORK WATER COMPANY Statements of Cash Flows
(Unaudited) (Unaudited) Three Months Three Months Ended Ended March 31, 1998 March 31, 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 699,205 $ 766,199 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 409,144 388,084 Provision for losses on accounts receivable 25,500 22,500 Increase (decrease) in deferred income taxes (including regulatory assets and liabilities) 226,225 (145,842) Changes in assets and liabilities: Decrease in accounts receivable 81,252 21,850 Decrease in recoverable income taxes 102,521 59,203 Increase in materials and supplies (792) (835) Decrease in prepaid expenses and prepaid pension costs 14,259 52,881 Decrease in accounts payable, accrued expenses, other liabilities and deferred employee benefits (155,101) (145,834) (Decrease) increase in accrued interest and taxes (80,189) 260,498 Increase in other assets (9,404) (12,915) Net cash provided by operating activities 1,312,620 1,365,789 CASH FLOWS FROM INVESTING ACTIVITIES: Construction expenditures (924,638) (617,423) Customers' advances for construction and contributions in aid of construction 471,262 133,175 Net cash used in investing activities (453,376) (484,248) CASH FLOWS FROM FINANCING ACTIVITIES: Net repayments under line-of- credit agreements (143,000) (637,000) Issuance of common stock under dividend reinvestment plan 186,221 119,587 Issuance of common stock under employee stock purchase plan 19,076 18,533 Dividends paid (674,999) (652,616) Decrease in notes receivable 27,145 41,264 Net cash used in financing activities (585,557) (1,110,232) Net increase (decrease) in cash and cash equivalents 273,687 (228,691) Cash and cash equivalents at beginning of period - 694,491 Cash and cash equivalents at end of period $ 273,687 $ 465,800 Supplemental disclosures of cash flow information: Cash paid during the year for: Interest, net of amounts capitalized $ 860,542 $ 884,852 Income taxes 29,365 60,614 /TABLE 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 1997. 2. Basic Earnings Per Share Basic earnings per share for the three months ended March 31, 1998 and 1997 were based on weighted average shares outstanding of 2,942,258 and 2,906,787, respectively. THE YORK WATER COMPANY Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Three Months Ended March 31, 1998 Compared with Three Months Ended March 31, 1997 Water operating revenues for the three months ended March 31, 1998 increased $10,692 or .3% compared to the three months ended March 31, 1997. Residential consumption declined slightly, while commercial consumption increased, but was offset by lower industrial consumption. Other revenues, primarily public consumption, increased. Operating expenses, exclusive of depreciation and taxes, for the three months ended March 31, 1998 increased $121,293 or 8.1% compared to the three months ended March 31, 1997. Maintenance expenses associated with mains, services, hydrants, and filter plant structures and equipment were the main causes of the increase. Higher supplemental retirement and deferred compensation costs added to the increase. A workers compensation credit received in March 1998 for the 1997 policy year and a 1997 accrual for postretirement health insurance benefits partially offset the increase. Depreciation expense for the three months ended March 31, 1998 increased $21,060 or 5.4% compared to the three months ended March 31, 1997 due to increased plant investment. Federal and state income taxes for the three months ended March 31, 1998 decreased $43,984 or 10.9% when compared to the same period in 1997 principally as a result of a decrease in taxable income. The effective tax rates for the quarters ended March 31, 1998 and 1997 were 33.8 and 34.4, respectively. Allowance for funds used during construction for the first three months of 1998 increased $23,281 when compared to the same period in 1997. The two main projects that caused the variance were the Southern York County main extension and the Hametown Booster Station. 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 revenues, an increase of approximately 6.0%. The Company does not expect to file another application for a rate increase until after 1998. Liquidity and Capital Resources During the first three months of 1998, the per capita volume of water sold did not significantly change compared to the first three months of 1997. 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 first quarter of 1998, the Company had $924,638 of construction expenditures. The Company financed such expenditures through 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. During the first quarter of 1998, net cash provided by operating activities exceeded net cash used in investing and financing activities. The Company anticipates that during the remainder of 1998 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 expected to be used to satisfy the need for additional cash. As of March 31, 1998, current assets exceeded current liabilities by $945,849. Short-term borrowings from lines of credit as of March 31, 1998 were $700,000. The Company maintains lines of credit aggregating $20,000,000. 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. Certain statements contained herein and elsewhere in this Form 10-Q which are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward- looking statements address activities or events which the Company expects will or may occur in the future. The Company cautions that a number of important factors could cause the actual results to differ materially from those expressed in any forward-looking statements made on behalf of the Company. Recently Issued Accounting Standards In January 1997, the Securities and Exchange Commission amended regulations and forms, including regulations S-X and S-K, to clarify and expand existing disclosure requirements about accounting policies for certain derivative instruments, and to add new disclosure requirements about the risk of loss from changes in market rates or prices which are inherent in derivatives. Adoption by the Company of the disclosure requirements relating to risk of loss, which requirements are effective for fiscal years ending after June 15, 1998, did not have a material effect on the Company's financial statements. In June 1997, the Financial Accounting Standards Board (FASB) issued Statements of Financial Accounting Standards No. 130, "Reporting Comprehensive Income," and No. 131, "Disclosure about Segments of an Enterprise and Related Information." These statements establish standards for reporting and display of comprehensive income and its components and for reporting information about business segments and products in financial statements, and are effective for years beginning after December 15, 1997. Adoption of these statements did not have a material effect on the Company's financial statements. In February 1998, the FASB issued Statement of Financial Accounting Standards No. 132, "Employers' Disclosures about Pensions and Others Postretirement Benefits" (SFAS 132) which amends the disclosure requirements of Statements No. 87, "Employers' Accounting for Pensions" (SFAS 87), No. 88, "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits" (SFAS 88), and No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions (SFAS 106). The statement is effective for fiscal years beginning after December 15, 1997. Adoption of this statement did not have a material impact on the Company's financial position, results of operations, or liquidity as of March 31, 1998. 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 /s/ William T. Morris William T. Morris Principal Executive Officer Date: May 8, 1998 /s/ Jeffrey S. Osman Jeffrey S. Osman Principal Financial and Accounting Officer Date: May 8, 1998 EX-27 2
UT 0000108985 YORK WATER CO 3-MOS DEC-31-1998 MAR-31-1998 PER-BOOK 83644889 497600 3703860 7755151 3801275 99402775 26659170 0 2721119 29380289 0 0 32000000 700000 0 0 0 0 0 0 37322486 99402775 4017568 358112 2300418 2658530 1359038 8723 1367761 668556 699205 0 699205 674999 871725 1312620 .24 .24
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