Business Context and Reporting Period
Company: The York Water Company
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 1997
Business Overview: The Company is a regulated utility operating in a single segment: the impounding, purification, and distribution of water. It serves a franchised territory in York County, Pennsylvania, with no competitors in the area. The service territory has an estimated population of 140,700. Revenue sources are diversified: 59% residential, 31% commercial and industrial, and 10% other.
Key Financial Metrics and Operational Data
Note: Specific revenue, profit, cash flow, and debt figures are incorporated by reference from the 1997 Annual Report to Shareholders and are not explicitly detailed in the provided text.
- Operational Volume: Average daily consumption was 19,405,000 gallons in 1997. Safe daily yield capacity is 29,900,000 gallons.
- Infrastructure: The distribution system includes 655 miles of mains. The Company owns two impounding dams with a combined capacity of approximately 2.75 billion gallons.
- Customer Base: Total customers increased to 46,458 in 1997 (up from 45,800 in 1996).
- Equity: As of February 6, 1998, there were 2,934,782 shares of Common Stock outstanding. The aggregate market value held by nonaffiliates was $57,595,097.
- Allowance for Doubtful Accounts: The reserve for uncollectible accounts ended 1997 at $110,000, with additions of $97,923 charged to costs and expenses.
Material Changes Versus Prior Period
- Customer Growth: The number of customers increased by 658 (from 45,800 in 1996 to 46,458 in 1997), continuing a five-year trend of growth.
- Infrastructure Expansion: Miles of mains increased by 14 (from 641 in 1996 to 655 in 1997).
- Consumption Trends: Average daily consumption decreased slightly to 19,405,000 gallons in 1997 compared to 19,657,000 gallons in 1995, but remained relatively stable compared to 1996 (18,593,000 gallons). Per capita volume did not significantly change.
- Population Served: The estimated population served decreased slightly to 140,700 in 1997 from 143,000 in 1996.
Guidance, Outlook, Risks, and Contingencies
- Outlook: Management does not anticipate any change in water usage levels that would materially impact future results of operations.
- Year 2000 Compliance: The Company is assessing key financial and operational systems for Year 2000 compliance. Detailed plans are being developed with a target completion date of December 31, 1999. The financial impact is not expected to be material.
- Future Capital Projects: The Company plans to build a third dam around the year 2020. A 1976 agreement with York County ensures a future reservoir site at reasonable expense and waives flood damages to county park lands.
- Risks: Forward-looking statements are subject to risks including water demand and supply fluctuations, economic conditions, interest-rate movements, technological difficulties, and changes in governmental regulations by the Pennsylvania Public Utilities Commission (PPUC).
- Legal Proceedings: There are no material legal proceedings.
Investor Verification Checklist
- Verify specific revenue, net income, and cash flow figures in the 1997 Annual Report to Shareholders, as these are incorporated by reference and not listed in the 10-K text.
- Review the detailed debt structure and interest rates associated with Senior Notes (Series A, B, C, D) and Revenue Refunding Bonds referenced in the exhibits.
- Confirm the status of Year 2000 compliance implementation and any associated costs closer to the December 1999 deadline.
- Monitor regulatory actions by the Pennsylvania Public Utility Commission (PPUC) regarding rate adjustments or operational requirements.
- Assess the impact of the slight decline in population served (1996 to 1997) on long-term revenue stability despite the increase in customer count.