UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐	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

Securities registered pursuant to Section 12(b) of the Act:

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 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 whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes		⌧ 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	14,246,394 Shares outstanding as of May 3, 2022

TABLE OF CONTENTS

PART I	Financial Information

Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25

PART II	Other Information

Item 6.	Exhibits	26

Signatures		27

Page 2

THE YORK WATER COMPANY

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements.

Balance Sheets (Unaudited)

(In thousands of dollars, except per share amounts)

	Mar. 31, 2022			Dec. 31, 2021
ASSETS
UTILITY PLANT, at original cost	$	494,500		$	485,750
Plant acquisition adjustments		(3,620	)		(3,637	)
Accumulated depreciation		(101,000	)		(99,204	)
Net utility plant		389,880			382,909

OTHER PHYSICAL PROPERTY, net of accumulated depreciation of $489 in 2022 and $483 in 2021		717			717

CURRENT ASSETS:
Cash and cash equivalents		1			1
Accounts receivable, net of reserves of $852 in 2022 and $855 in 2021		4,434			4,634
Unbilled revenues		3,044			2,784
Recoverable income taxes		895			894
Materials and supplies inventories, at cost		2,107			1,917
Prepaid expenses		1,513			1,032
Total current assets		11,994			11,262

OTHER LONG-TERM ASSETS:
Prepaid pension cost		15,097			14,054
Note receivable		255			255
Deferred regulatory assets		46,308			45,280
Other assets		4,661			4,376
Total other long-term assets		66,321			63,965

Total Assets	$	468,912		$	458,853

The accompanying notes are an integral part of these statements.

	Mar. 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 13,123,619 shares in 2022 and 13,112,948 shares in 2021	$	88,725	$	88,230
Retained earnings		65,695		64,392
Total common stockholders' equity		154,420		152,622

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

LONG-TERM DEBT, excluding current portion		143,999		138,869

COMMITMENTS		–		–

CURRENT LIABILITIES:
Current portion of long-term debt		7,500		7,500
Accounts payable		7,580		6,712
Dividends payable		2,298		2,293
Accrued compensation and benefits		1,506		1,575
Accrued interest		1,071		959
Deferred regulatory liabilities		605		607
Other accrued expenses		536		440
Total current liabilities		21,096		20,086

DEFERRED CREDITS:
Customers' advances for construction		13,161		12,820
Deferred income taxes		51,133		49,590
Deferred employee benefits		4,557		4,530
Deferred regulatory liabilities		37,172		36,374
Other deferred credits		1,500		2,086
Total deferred credits		107,523		105,400

Contributions in aid of construction		41,874		41,876

Total Stockholders' Equity and Liabilities	$	468,912	$	458,853

	Three Months Ended March 31
	2022			2021

OPERATING REVENUES	$	14,240		$	13,081

OPERATING EXPENSES:
Operation and maintenance		3,451			2,806
Administrative and general		2,657			2,411
Depreciation and amortization		2,480			2,174
Taxes other than income taxes		354			336
		8,942			7,727

Operating income		5,298			5,354

OTHER INCOME (EXPENSES):
Interest on debt		(1,297	)		(1,214	)
Allowance for funds used during construction		295			262
Other pension costs		(319	)		(304	)
Other income (expenses), net		(349	)		(101	)
		(1,670	)		(1,357	)

Income before income taxes		3,628			3,997

Income tax (benefit) expense		(231	)		292

Net Income	$	3,859		$	3,705

Basic Earnings Per Share	$	0.29		$	0.28

Diluted Earnings Per Share	$	0.29		$	0.28

	Common Stock Shares		Common Stock Amount		Retained Earnings			Total

Balance, December 31, 2021		13,112,948	$	88,230	$	64,392		$	152,622
Net income		–		–		3,859			3,859
Cash dividends declared, $0.1949 per share		–		–		(2,556	)		(2,556	)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		10,671		450		–			450
Stock-based compensation		–		45		–			45
Balance, March 31, 2022		13,123,619	$	88,725	$	65,695		$	154,420

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

Accounts receivable – customers	$	4,829		$	5,034		$	(205	)
Other receivables		457			455			2
		5,286			5,489			(203	)
Less: allowance for doubtful accounts		(852	)		(855	)		3
Accounts receivable, net	$	4,434		$	4,634		$	(200	)

Unbilled revenue	$	3,044		$	2,784		$	260

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

8.43% Senior Notes, Series D, due 2022	$	7,500		$	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 September 2023		34,406			29,320
Total long-term debt		154,276			149,190
Less discount on issuance of long-term debt		(167	)		(169	)
Less unamortized debt issuance costs		(2,610	)		(2,652	)
Less current maturities		(7,500	)		(7,500	)
Long-term portion	$	143,999		$	138,869

Description		March 31, 2022		Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap		$1,500		$1,500

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

•	the amount and timing of rate changes 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 rainfall;
•	natural disasters, including pandemics such as the current outbreak of the novel strain of coronavirus known as “COVID-19” 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 reduce 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.

Exhibit No.		Description

3		Amended and Restated Articles of Incorporation. Incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 4, 2010.

3.1		Amended and Restated By-Laws. Incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 26, 2012.

31.1		Certification of Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934.

31.2		Certification of Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934.

32.1		Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

101.SCH		Inline XBRL Taxonomy Extension Schema.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase.

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

	Three Months Ended March 31
	2022		2021

Weighted average common shares, basic		13,105,674		13,055,871
Effect of dilutive securities:
Employee stock-based compensation		2,756		2,690
Weighted average common shares, diluted		13,108,430		13,058,561

	Three Months Ended March 31
	2022		2021
Water utility service:
Residential	$	8,447	$	8,145
Commercial and industrial		3,588		3,310
Fire protection		836		806
Wastewater utility service:
Residential		929		471
Commercial and industrial		109		79
Billing and revenue collection services		130		119
Collection services		59		–
Other revenue		14		10
Total Revenue from Contracts with Customers		14,112		12,940
Rents from regulated property		128		141
Total Operating Revenue	$	14,240	$	13,081

	Three Months Ended March 31
	2022			2021

Service cost	$	256		$	271
Interest cost		334			302
Expected return on plan assets		(1,055	)		(913	)
Amortization of actuarial loss		–			121
Amortization of prior service cost		(3	)		(3	)
Rate-regulated adjustment		1,043			797
Net periodic pension expense	$	575		$	575

	THE YORK WATER COMPANY


	/s/ Joseph T. Hand
Date: May 3, 2022	Joseph T. Hand Principal Executive Officer



	/s/ Matthew E. Poff
Date: May 3, 2022	Matthew E. Poff Principal Financial and Accounting Officer

SEC Form 10-Q filed by York Water Company