QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from __________ to __________
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
|
The
|
(Title of Class)
|
(Trading Symbol)
|
(Name of Each Exchange on Which Registered)
|
⌧
|
☐ No
|
⌧
|
☐ No
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
|
Smaller reporting company
|
Emerging growth company
|
|
⌧ 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
|
as of November 7, 2024
|
Sep. 30, 2024
|
Dec. 31, 2023
|
|||||||
ASSETS
|
||||||||
UTILITY PLANT, at original cost
|
$
|
|
$
|
|
||||
Plant acquisition adjustments
|
(
|
)
|
(
|
)
|
||||
Accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Net utility plant
|
|
|
||||||
OTHER PHYSICAL PROPERTY, net of accumulated depreciation
of $
|
|
|
||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
|
|
||||||
Accounts receivable, net of reserves of $
and $
|
|
|
||||||
Unbilled revenues
|
|
|
||||||
Recoverable income taxes
|
|
|
||||||
Materials and supplies inventories, at cost
|
|
|
||||||
Prepaid expenses
|
|
|
||||||
Total current assets
|
|
|
||||||
OTHER LONG-TERM ASSETS:
|
||||||||
Prepaid pension cost
|
|
|
||||||
Note receivable
|
|
|
||||||
Deferred regulatory assets
|
|
|
||||||
Other assets
|
|
|
||||||
Total other long-term assets
|
|
|
||||||
Total Assets
|
$
|
|
$
|
|
Sep. 30, 2024
|
Dec. 31, 2023
|
|||||||
STOCKHOLDERS’ EQUITY AND LIABILITIES
|
||||||||
COMMON STOCKHOLDERS’ EQUITY:
|
||||||||
Common stock,
issued and outstanding
and
|
$
|
|
$
|
|
||||
Retained earnings
|
|
|
||||||
Total common stockholders’ equity
|
|
|
||||||
PREFERRED STOCK, authorized
|
|
|
||||||
LONG-TERM DEBT
|
|
|
||||||
COMMITMENTS
|
|
|
||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable
|
|
|
||||||
Dividends payable
|
|
|
||||||
Accrued compensation and benefits
|
|
|
||||||
Accrued income taxes | ||||||||
Accrued interest
|
|
|
||||||
Deferred regulatory liabilities
|
|
|
||||||
Other accrued expenses
|
|
|
||||||
Total current liabilities
|
|
|
||||||
DEFERRED CREDITS:
|
||||||||
Customers’ advances for construction
|
|
|
||||||
Deferred income taxes
|
|
|
||||||
Deferred employee benefits
|
|
|
||||||
Deferred regulatory liabilities
|
|
|
||||||
Other deferred credits
|
|
|
||||||
Total deferred credits
|
|
|
||||||
Contributions in aid of construction
|
|
|
||||||
Total Stockholders’ Equity and Liabilities
|
$
|
|
$
|
|
Three Months
Ended September 30
|
Nine Months
Ended September 30
|
|||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
OPERATING REVENUES:
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
OPERATING EXPENSES:
|
||||||||||||||||
Operation and maintenance
|
|
|
|
|
||||||||||||
Administrative and general
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
|
|
|
||||||||||||
Taxes other than income taxes
|
|
|
|
|
||||||||||||
|
|
|
|
|||||||||||||
Operating income
|
|
|
|
|
||||||||||||
OTHER INCOME (EXPENSES):
|
||||||||||||||||
Interest on debt
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Allowance for funds used during construction
|
|
|
|
|
||||||||||||
Other pension costs
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Other income (expenses), net
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Income before income taxes
|
|
|
|
|
||||||||||||
Income tax expense (benefit)
|
|
(
|
)
|
|
|
|||||||||||
Net Income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Basic Earnings Per Share
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted Earnings Per Share
|
$
|
|
$
|
|
$
|
|
$
|
|
Common
Stock
Shares
|
Common
Stock
Amount
|
Retained
Earnings
|
Total
|
|||||||||||||
Balance, June 30, 2024
|
$ | $ | $ | |||||||||||||
Net income
|
– | |||||||||||||||
Cash dividends declared, $
|
– | ( |
) | ( |
) | |||||||||||
Issuance of common stock under
dividend reinvestment, direct stock and
employee stock purchase plans
|
||||||||||||||||
Stock-based compensation
|
||||||||||||||||
Balance, September 30, 2024
|
$ | $ | $ | |||||||||||||
Balance, December 31, 2023
|
$ | $ | $ | |||||||||||||
Net income
|
– | |||||||||||||||
Cash dividends declared, $
|
– | ( |
) | ( |
) | |||||||||||
Issuance of common stock under
dividend reinvestment, direct stock and
employee stock purchase plans
|
||||||||||||||||
Stock-based compensation
|
||||||||||||||||
Balance, September 30, 2024
|
$ | $ | $ |
Common
Stock
Shares
|
Common
Stock
Amount
|
Retained
Earnings
|
Total
|
|||||||||||||
Balance, June 30, 2023
|
$ | $ | $ | |||||||||||||
Net income
|
– | |||||||||||||||
Cash dividends declared, $
|
– | ( |
) | ( |
) | |||||||||||
Issuance of common stock under
dividend reinvestment, direct stock and
employee stock purchase plans
|
||||||||||||||||
Stock-based compensation
|
||||||||||||||||
Balance, September 30, 2023
|
$ | $ | $ | |||||||||||||
Balance, December 31, 2022
|
$ | $ | $ | |||||||||||||
Net income
|
– | |||||||||||||||
Cash dividends declared, $
|
– | ( |
) | ( |
) | |||||||||||
Issuance of common stock under
dividend reinvestment, direct stock and
employee stock purchase plans
|
||||||||||||||||
Stock-based compensation
|
||||||||||||||||
Balance, September 30, 2023
|
$ | $ | $ |
Nine Months
Ended September 30
|
||||||||
2024
|
2023
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Stock-based compensation
|
|
|
||||||
Increase in deferred income taxes
|
|
|
||||||
Other
|
|
(
|
)
|
|||||
Changes in assets and liabilities:
|
||||||||
Increase in accounts receivable and unbilled revenues
|
(
|
)
|
(
|
)
|
||||
Decrease in recoverable income taxes
|
|
|
||||||
Increase in materials and supplies, prepaid expenses, prepaid pension cost,
regulatory and other assets
|
(
|
)
|
(
|
)
|
||||
Increase in accounts payable, accrued compensation and benefits, accrued
expenses, deferred employee benefits, regulatory liabilities, and other deferred credits
|
|
|
||||||
Increase (decrease) in accrued interest and taxes
|
(
|
)
|
|
|||||
Net cash provided by operating activities
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Utility plant additions, including debt portion of allowance for funds used during
construction of $
|
(
|
)
|
(
|
)
|
||||
Acquisitions of water and wastewater systems
|
( |
) | ( |
) | ||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Customers’ advances for construction and contributions in aid of construction
|
|
|
||||||
Repayments of customer advances
|
(
|
)
|
(
|
)
|
||||
Proceeds of long-term debt issues
|
|
|
||||||
Debt issuance costs | ( |
) | ( |
) | ||||
Repayments of long-term debt
|
(
|
)
|
(
|
)
|
||||
Changes in cash overdraft position
|
(
|
)
|
(
|
)
|
||||
Issuance of common stock
|
|
|
||||||
Dividends paid
|
(
|
)
|
(
|
)
|
||||
Net cash provided by financing activities
|
|
|
||||||
Net change in cash and cash equivalents
|
|
|
||||||
Cash and cash equivalents at beginning of period
|
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
|
$
|
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest, net of amounts capitalized
|
$
|
|
$
|
|
||||
Income taxes
|
||||||||
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||
Accounts payable includes $
|
||||||||
Contributions in aid of construction includes $
|
As of | As of | |||||||||||
Sep. 30, 2024
|
Dec. 31, 2023
|
Change
|
||||||||||
Accounts receivable – customers
|
$
|
|
$
|
|
$
|
|
||||||
Other receivables
|
|
|
(
|
)
|
||||||||
|
|
|
||||||||||
Less: allowance for doubtful accounts
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Accounts receivable, net
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||
Unbilled revenue
|
$
|
|
$
|
|
$
|
|
Three Months
Ended September 30
|
Nine Months
Ended September 30
|
|||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
Weighted average common shares, basic
|
|
|
|
|
||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Employee stock-based compensation
|
|
|
|
|
||||||||||||
Weighted average common shares, diluted
|
|
|
|
|
As of
Sep. 30, 2024
|
As of
Dec. 31, 2023
|
|||||||
Variable Rate Pennsylvania Economic Development Financing Authority
Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029
|
$ |
|
$ |
|
||||
Facilities Revenue Refunding Bonds, Series A of 2019, due 2036
|
|
|
||||||
Facilities Revenue Refunding Bonds, Series B of 2019, due 2038
|
|
|
||||||
|
|
|
||||||
Facilities Revenue Bonds, Series 2015, due 2029 – 2045
|
|
|
||||||
|
|
|
||||||
|
|
|
||||||
|
||||||||
Committed Line of Credit, due September 2026
|
|
|
||||||
Total long-term debt
|
|
|
||||||
Less discount on issuance of long-term debt
|
(
|
)
|
(
|
)
|
||||
Less unamortized debt issuance costs | ( |
) | ( |
) | ||||
Long-term portion
|
$
|
|
$
|
|
Description
|
September 30, 2024
|
Fair Value Measurements
at Reporting Date Using
Significant Other Observable Inputs (Level 2)
|
||
Interest Rate Swap
|
$
|
$
|
Description
|
December 31, 2023
|
Fair Value Measurements
at Reporting Date Using
Significant Other Observable Inputs (Level 2)
|
||
Interest Rate Swap
|
$
|
$
|
Three Months
Ended September 30
|
Nine Months
Ended September 30
|
|||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
Water utility service:
|
||||||||||||||||
Residential
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Commercial and industrial
|
|
|
|
|
||||||||||||
Fire protection
|
|
|
|
|
||||||||||||
Wastewater utility service:
|
||||||||||||||||
Residential
|
|
|
|
|
||||||||||||
Commercial and industrial
|
|
|
|
|
||||||||||||
Billing and revenue collection services
|
|
|
|
|
||||||||||||
Collection services
|
|
|
|
|
||||||||||||
Other revenue
|
|
|
|
|
||||||||||||
Total Revenue from Contracts with Customers
|
|
|
|
|
||||||||||||
Rents from regulated property
|
|
|
|
|
||||||||||||
Total Operating Revenue
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months
Ended September 30
|
Nine Months
Ended September 30
|
|||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
Service cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Interest cost
|
|
|
|
|
||||||||||||
Expected return on plan assets
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Amortization of prior service cost
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Rate-regulated adjustment
|
|
|
|
|
||||||||||||
Net periodic pension cost
|
$
|
|
$
|
|
$
|
|
$
|
|
Number of Shares
|
Grant Date Weighted
Average Fair Value
|
||||
Nonvested at beginning of the period
|
|
$
|
|||
Granted
|
|
$
|
|||
Vested
|
(
|
)
|
$
|
||
Forfeited
|
(
|
)
|
$
|
||
Nonvested at end of the period
|
|
$
|
Item 2.
|
Management’s Discussion and Analysis of
Financial Condition and Results of Operations.
(In thousands of dollars, except per share amounts)
|
•
|
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 or climate, including drought conditions or extended periods of heavy precipitation;
|
•
|
natural disasters, including pandemics such as the 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.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 5.
|
Other Information.
|
Item 6. |
Exhibits.
|
Exhibit No.
|
Description
|
|
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).
|
THE YORK WATER COMPANY
|
|
/s/ Joseph T. Hand
|
|
Date: November 7, 2024
|
Joseph T. Hand
Principal Executive Officer
|
/s/ Matthew E. Poff
|
|
Date: November 7, 2024
|
Matthew E. Poff
Principal Financial and Accounting Officer
|