York Water Co 10-K for FY2022

York Water Co (YORW)

10-K 2023-03-07 For: 2022-12-31

Added on April 12, 2026

About this 10-K

York Water Co filed this 10-K on March 7, 2023, covering the fiscal year ended December 31, 2022 (FY2022).

Headline figures

Fiscal year ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $60.06M; up 9.0% from $55.12M a year earlier
Net income: $19.58M; up 15.3% from net income of $16.98M a year earlier
Diluted EPS: $1.40; up 7.7% from $1.30 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2022
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from __________ to __________

Commission file number 001-34245
THE YORK WATER COMPANY
(Exact name of registrant as specified in its charter)

Pennsylvania		23-1242500
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer 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

Common Stock, No par value	YORW	The NASDAQ Global Select Market
(Title of Class)	(Trading Symbol)	(Name of Each Exchange on Which Registered)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
				☐ Yes ⌧ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
				☐ Yes ⌧ No
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 ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
				⌧ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act
Large accelerated filer ☐	Accelerated filer ☐		Non-accelerated filer ⌧

Smaller reporting company ☒		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark if the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
	☐ Yes ⌧ No

Forward-Looking Statements		3

PART I
Item 1.	Business	4
Item 1A.	Risk Factors	7
Item 1B.	Unresolved Staff Comments	7
Item 2.	Properties	8
Item 3.	Legal Proceedings	9
Item 4.	Mine Safety Disclosures	9

PART II
Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	10
Item 6.	Reserved	10
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	10
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 8.	Financial Statements	19
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	49
Item 9A.	Controls and Procedures	49
Item 9B.	Other Information	50
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	50

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	50
Item 11.	Executive Compensation	51
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	51
Item 13.	Certain Relationships and Related Transactions, and Director Independence	51
Item 14.	Principal Accounting Fees and Services	51

PART IV
Item 15.	Exhibits and Financial Statement Schedules	52
Item 16.	Form 10-K Summary	56

Signatures		58

Securities registered pursuant to Section 12(g) of the Act:		None
		(Title of Each Class)

•	the amount and timing of rate increases and other regulatory matters including the recovery of costs recorded as regulatory assets;
•	expected profitability and results of operations;
•	trends;
•	goals, priorities and plans for, and cost of, growth and expansion;
•	strategic initiatives;
•	availability of water supply;
•	water usage by customers; and
•	the ability to pay dividends on common stock and the rate of those dividends.

•	changes in weather, including drought conditions or extended periods of heavy precipitation;
•	natural disasters, including pandemics such as the current outbreak of the novel strain of coronavirus known as “COVID-19” and its variants and the effectiveness of the Company’s pandemic plans;
•	levels of rate relief granted;
•	the level of commercial and industrial business activity within the Company’s service territory;
•	construction of new housing within the Company’s service territory and increases in population;
•	changes in government policies or regulations, including the tax code;
•	the ability to obtain permits for expansion projects;
•	material changes in demand from customers, including the impact of conservation efforts which may impact the demand of customers for water;
•	changes in economic and business conditions, including interest rates;
•	loss of customers;
•	changes in, or unanticipated, capital requirements;
•	the impact of acquisitions;
•	changes in accounting pronouncements;
•	changes in the Company’s credit rating or the market price of its common stock; and
•	the ability to obtain financing.

Molly E. Houck	The York Water Company	(717) 718-2942
Investor Relations &	130 East Market Street	(800) 750-5561
Communications Administrator	York, PA 17401	mollyh@yorkwater.com

Item 8.	Financial Statements.
		Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 23)		20
Balance Sheets		21
Statements of Income		23
Statements of Common Stockholders’ Equity		24
Statements of Cash Flows		25
Notes to Financial Statements		26

	Dec. 31, 2022			Dec. 31, 2021
ASSETS
UTILITY PLANT, at original cost	$	549,141		$	485,750
Plant acquisition adjustments		(9,178	)		(3,637	)
Accumulated depreciation		(108,758	)		(99,204	)
Net utility plant		431,205			382,909

OTHER PHYSICAL PROPERTY, net of accumulated depreciation of $463 in 2022 and $483 in 2021		696			717

CURRENT ASSETS:
Cash and cash equivalents		1			1
Accounts receivable, net of reserves of $855 in 2022 and $855 in 2021		6,701			4,634
Unbilled revenues		3,290			2,784
Recoverable income taxes		882			894
Materials and supplies inventories, at cost		2,335			1,917
Prepaid expenses		1,025			1,032
Total current assets		14,234			11,262

OTHER LONG-TERM ASSETS:
Prepaid pension cost		17,090			14,054
Note receivable		255			255
Deferred regulatory assets		42,545			45,280
Other assets		4,570			4,376
Total other long-term assets		64,460			63,965

Total Assets	$	510,595		$	458,853

	Dec. 31, 2022		Dec. 31, 2021
STOCKHOLDERS’ EQUITY AND LIABILITIES
COMMON STOCKHOLDERS’ EQUITY:
Common stock, no par value, authorized 46,500,000 shares, issued and outstanding 14,285,584 shares in 2022 and 13,112,948 shares in 2021	$	134,220	$	88,230
Retained earnings		72,963		64,392
Total common stockholders’ equity		207,183		152,622

PREFERRED STOCK, authorized 500,000 shares, no shares issued		–		–

LONG-TERM DEBT, excluding current portion		139,465		138,869

COMMITMENTS		–		–

CURRENT LIABILITIES:
Current portion of long-term debt		–		7,500
Accounts payable		10,766		6,712
Dividends payable		2,628		2,293
Accrued compensation and benefits		1,541		1,575
Accrued interest		965		959
Deferred regulatory liabilities		593		607
Other accrued expenses		488		440
Total current liabilities		16,981		20,086

DEFERRED CREDITS:
Customers’ advances for construction		14,911		12,820
Deferred income taxes		47,901		49,590
Deferred employee benefits		3,725		4,530
Deferred regulatory liabilities		37,448		36,374
Other deferred credits		680		2,086
Total deferred credits		104,665		105,400

Contributions in aid of construction		42,301		41,876

Total Stockholders’ Equity and Liabilities	$	510,595	$	458,853

	Year Ended December 31
	2022			2021

OPERATING REVENUES	$	60,061		$	55,119

OPERATING EXPENSES:
Operation and maintenance		14,133			11,822
Administrative and general		9,926			9,754
Depreciation and amortization		10,139			8,859
Taxes other than income taxes		1,380			1,288
		35,578			31,723

Operating income		24,483			23,396

OTHER INCOME (EXPENSES):
Interest on debt		(5,114	)		(4,926	)
Allowance for funds used during construction		1,501			1,221
Other pension costs		(1,275	)		(1,214	)
Other income (expenses), net		–			(373	)
		(4,888	)		(5,292	)

Income before income taxes		19,595			18,104

Income taxes		15			1,120

Net Income	$	19,580		$	16,984

Basic Earnings Per Share	$	1.40		$	1.30

Diluted Earnings Per Share	$	1.40		$	1.30

	Common Stock Shares		Common Stock Amount		Retained Earnings			Total

Balance, December 31, 2020		13,060,817	$	85,935	$	57,317		$	143,252
Net income		–		–		16,984			16,984
Cash dividends declared, $0.7571 per share		–		–		(9,909	)		(9,909	)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		45,961		2,082		–			2,082
Stock-based compensation		6,170		213		–			213
Balance, December 31, 2021		13,112,948		88,230		64,392			152,622
Net income		–		–		19,580			19,580
Cash dividends declared, $0.7874 per share		–		–		(11,009	)		(11,009	)
Issuance of common stock		1,121,940		43,970		–			43,970
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		42,739		1,741		–			1,741
Stock-based compensation		7,957		279		–			279
Balance, December 31, 2022		14,285,584	$	134,220	$	72,963		$	207,183

	December 31				Approximate range
Utility Plant Asset Category	2022		2021		of remaining lives
Mains and accessories	$	265,033	$	242,160	12 – 86 years
Services, meters, and hydrants		92,818		87,164	14 – 47 years
Operations structures, reservoirs, and water tanks		87,218		73,462	10 – 56 years
Pumping and treatment equipment		40,038		37,209	5 – 34 years
Office, transportation, and operating equipment		18,128		16,856	2 – 21 years
Land and other non-depreciable assets		3,938		3,714		–
Utility plant in service		507,173		460,565
Construction work in progress		41,968		25,185		–
Total Utility Plant	$	549,141	$	485,750

	December 31				Remaining Recovery
	2022		2021		Periods
Assets
Income taxes	$	29,779	$	33,255	Various
Unrealized swap losses		674		2,054	1 – 7 years
Utility plant retirement costs		9,060		7,245	5 years
Customer-owned lead service line replacements		1,260		1,161	Various
Income taxes on customers’ advances for construction and contributions in aid of construction		1,353		1,545	Various
Service life study expenses		24		3	5 years
Rate case filing expenses		395		17	4 years
	$	42,545	$	45,280
Liabilities
Excess accumulated deferred income taxes on accelerated depreciation	$	13,483	$	13,644	Various
Postretirement benefits		14,906		11,870	Not yet known
Income taxes		6,758		8,314	Various
IRS TPR catch-up deduction		2,894		3,153	11 years
	$	38,041	$	36,981

	2022		2021
Weighted average common shares, basic		13,957,788		13,076,263
Effect of dilutive securities:
Employee stock-based compensation		1,127		1,027
Weighted average common shares, diluted		13,958,915		13,077,290

	2022			2021

8.43% Senior Notes, Series D, due 2022	$	–		$	7,500
Variable Rate Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029		12,000			12,000
3.00% Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series A of 2019, due 2036		10,500			10,500
3.10% Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series B of 2019, due 2038		14,870			14,870
3.23% Senior Notes, due 2040		15,000			15,000
4.00% - 4.50% York County Industrial Development Authority Exempt Facilities Revenue Bonds, Series 2015, due 2029 - 2045		10,000			10,000
4.54% Senior Notes, due 2049		20,000			20,000
3.24% Senior Notes, due 2050		30,000			30,000
Committed Line of Credit, due 2024		29,740			29,320
Total long-term debt		142,110			149,190
Less discount on issuance of long-term debt		(158	)		(169	)
Less unamortized debt issuance costs		(2,487	)		(2,652	)
Less current maturities		–			(7,500	)
Long-term portion	$	139,465		$	138,869

2023			2024			2025			2026			2027
$	–		$	41,740		$	–		$	330		$	340

	As of			As of
	Dec. 31, 2022			Dec. 31, 2021			Change

Accounts receivable – customers	$	7,069		$	5,034		$	2,035
Other receivables		487			455			32
		7,556			5,489			2,067
Less: allowance for doubtful accounts		(855	)		(855	)		–
Accounts receivable, net	$	6,701		$	4,634		$	2,067

Unbilled revenue	$	3,290		$	2,784		$	506

	2022		2021
Note receivable, including interest	$	255	$	255
Customers’ advances for construction		243		284

Description		December 31, 2022		Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap		$680		$680

Description		December 31, 2021		Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap		$2,086		$2,086

	2022		2021
Water utility service:
Residential	$	35,382	$	33,986
Commercial and industrial		15,704		14,575
Fire protection		3,449		3,247
Wastewater utility service:
Residential		3,814		1,899
Commercial and industrial		551		317
Billing and revenue collection services		481		481
Collection services		157		26
Other revenue		28		37
Total Revenue from Contracts with Customers		59,566		54,568
Rents from regulated property		495		551
Total Operating Revenue	$	60,061	$	55,119

Obligations and Funded Status At December 31	2022			2021

Change in Benefit Obligation
Pension benefit obligation beginning of year	$	51,530		$	54,106
Service cost		1,025			1,086
Interest cost		1,336			1,209
Actuarial gain		(13,431	)		(3,045	)
Benefit payments		(1,743	)		(1,826	)
Pension benefit obligation end of year		38,717			51,530

Change in Plan Assets
Fair value of plan assets beginning of year		65,584			56,315
Actual return on plan assets		(10,334	)		8,795
Employer contributions		2,300			2,300
Benefits paid		(1,743	)		(1,826	)
Fair value of plan assets end of year		55,807			65,584

Funded Status of Plans at End of Year	$	17,090		$	14,054

	2022		2021
Net gain (loss) arising during the year	$	1,121	$	(8,189	)
Recognized net actuarial loss		–		(483	)
Recognized prior service credit		13		13
Total changes in regulatory asset during the year	$	1,134	$	(8,659	)

	2022			2021
Net loss	$	2,946		$	1,825
Prior service credit		(37	)		(50	)
Regulatory asset	$	2,909		$	1,775

	2022		2021
Projected benefit obligation	$	38,717	$	51,530
Fair value of plan assets		55,807		65,584

	2022		2021
Accumulated benefit obligation	$	37,040	$	48,464
Fair value of plan assets		55,807		65,584

	2022	2021
Discount rate	5.00%	2.65%
Rate of compensation increase	2.50% – 3.00%	2.50% – 3.00%

	Total Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)
Asset Category	2022		2021		2022		2021		2022		2021
Cash and Money Market Funds (a)	$	6,108	$	671	$	6,108	$	671	$	–	$	–
Equity Securities:
Common Equity Securities (b)		17,792		–		17,792		–		–		–
Equity Mutual Funds (c)		13,542		43,178		13,542		43,178		–		–
Fixed Income Securities:
U.S. Treasury Obligations		–		621		–		–		–		621
Corporate and Foreign Bonds (d)		–		4,580		–		–		–		4,580
Fixed Income Mutual Funds (e)		18,365		16,534		18,365		16,534		–		–
Total Plan Assets	$	55,807	$	65,584	$	55,807	$	60,383	$	–	$	5,201

	Number of Shares			Grant Date Weighted Average Fair Value
Nonvested at beginning of the year 2021		6,682		$39.30
Granted		6,170		$51.40
Vested		(4,048	)	$41.19
Forfeited		–		–
Nonvested at end of the year 2021		8,804		$46.91
Granted		8,457		$39.01
Vested		(5,996	)	$42.55
Forfeited		(500	)	$44.61
Nonvested at the end of the year 2022		10,765		$43.24


	2022		2021
Regulatory Assessment	$	347	$	332
Property		415		377
Payroll, net of amounts capitalized		614		575
Other		4		4
Total taxes other than income taxes	$	1,380	$	1,288


	2022			2021
Federal current	$	11		$	710
State current		–			246
Federal deferred		370			311
State deferred		(331	)		(109	)
Federal investment tax credit, net of current utilization		(35	)		(38	)
Total income taxes	$	15		$	1,120


	2022			2021
Statutory Federal tax provision	$	4,115		$	3,802
State income taxes, net of Federal benefit		(196	)		177
IRS TPR deduction		(3,675	)		(2,620	)
Tax-exempt interest		(41	)		(34	)
Amortization of investment tax credit		(35	)		(38	)
Cash value of life insurance		13			(17	)
Amortization of excess accumulated deferred income taxes on accelerated depreciation		(160	)		(182	)
Change in enacted state tax rate		3			–
Other, net		(9	)		32
Total income taxes	$	15		$	1,120

	2022		2021
Deferred tax assets:
Reserve for doubtful accounts	$	240	$	247
Compensated absences		172		176
Deferred compensation		1,052		1,376
Excess accumulated deferred income taxes on accelerated depreciation		3,385		3,942
Deferred taxes associated with the gross-up of revenues necessary to return, in rates, the effect of temporary differences		1,700		2,348
Customers’ advances for construction and contributions in aid of construction		1,260		1,545
Tax effect of pension regulatory liability		3,717		3,429
Tax loss carryover		839		–
Contribution carryover		140		–
Other costs deducted for book, not for tax		58		74
Total deferred tax assets		12,563		13,137

Deferred tax liabilities:
Accelerated depreciation		28,772		30,953
Basis differences from IRS TPR		18,713		16,912
Investment tax credit		316		329
Deferred taxes associated with the gross-up of revenues necessary to recover, in rates, the effect of temporary differences		7,439		9,553
Pensions		4,262		4,060
Unamortized debt issuance costs		393		469
Other costs deducted for tax, not for book		569		451
Total deferred tax liabilities		60,464		62,727

Net deferred tax liability	$	47,901	$	49,590

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)	(c)
Equity compensation plans approved by security holders*	-	-	67,600

Equity compensation plans not approved by security holders	-	-	0

Schedule	Schedule	Page
Number	Description	Number

II	Valuation and Qualifying Accounts	57
	for the years ended December 31, 2022 and 2021

Exhibit Number	Exhibit Description	Page Number of Incorporation By Reference

3	Amended and Restated Articles of Incorporation	Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 3.1 to Form 8-K dated May 4, 2010.
3.1	Amended and Restated By-Laws	Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 3.1 to Form 8-K dated January 26, 2012.