T h e Y o r k W a t e r C o m p a n y
2019 Annual Report
America’s Oldest Y o rk ’s f i r s t ’
Investing
in Our Community
for Years
204
Above: The York Water Company recently installed new cement-lined, ductile iron water main pipes
and reinforced water infrastructure at Pershing Avenue and Princess Street in the City of York.
Below: Lake Williams in William H. Kain Park provides the community with a safe and reliable
water supply, and is also a great recreational resource through a unique, public-private partnership
between The York Water Company and York County.
T h e Y o r k W a t e r C o m p a n y 2 0 1 9 A n nu a l Re p o r t
York’s First Water Mains
In 2019, The York Water Company Continued to Invest in Our
Community’s Infrastructure - to ensure a safe, adequate, and reliable source
of water for our customers. A transition in the leadership of our company also took
place this year. Change is inevitable and necessary - and we are committed to providing
responsible upgrades and expansions to ensure quality of product and service to our
community and our customers, just like we have for the past 204 years.
The recent discovery of a wooden pipe from 1816, found below George Street during a
construction project, is representative of The York Water Company’s long-standing
historical roots in York. During their prime, these logs
provided York City with a plentiful supply of water for
drinking and fire services. Over the years, our water
mains changed and transitioned to more durable and
safer materials. After discovering the wooden pipe
that was installed in the Company’s inaugural year,
we reflected on an important fact: The York Water
Company was here first. Our investment then, as it is
today, sustains the communities we serve. Through
periods of transition, our roots remain firm –
And Our Mission Does Not Change.
P a g e 1
T h e Y o r k W a t e r C o m p a n y 2 0 1 9 A n n u a l Re p or t
Jeffrey R. Hines, P.E.
President and
Chief Executive
Officer
March 1, 2008-
March 1, 2020
J T Hand
President and
Chief Executive
Officer
March 1, 2020-
Present
Dear Shareholders,
Welcome to the Annual Report for
America’s Oldest Public Company!
As I begin my retirement and write this Annual Report to Shareholders
for my twelfth and final year, I wanted to introduce you to the 22nd President
of America’s oldest public company: JT Hand. JT has been the Chief Operating
Officer of our company for the past 12 years. Prior to that, JT had a long and
distinguished career with the U.S. Army Corps of Engineers. JT’s professional
life has been focused on infrastructure, public health, and organizational
efficiency, which are key attributes necessary to lead a public water supplier.
I wish JT and our team of over 100 highly dedicated professionals continued
success in making this company the most efficient, well-run, and customer-
focused water utility in the nation.
I am pleased to report that 2019 continued our unsurpassed record of 204
years of service to our community.
Increased Dividends and Shareholder Value: An American Record!
Our net income increased by 7.7% to $14.4 million in 2019. Earnings per share
increased 6.7% to $1.11. Operating revenues increased 6.5% to $51.6 million
in 2019.
In line with our objective to maintain regular dividend increases, we raised
the quarterly dividend rate by 4.0% during the year. This is the 23rd consecutive
year we have raised our dividend and the 204th consecutive year of dividend
payments. We believe this to be the longest consecutive dividend record
in America.
In 2013, we initiated a share repurchase program to add value to our shareholders.
The Board of Directors authorized us to repurchase up to 1,200,000 shares of the
Company’s common stock from time to time. No shares were repurchased this
year. As of December 31, 2019, 618,004 shares remain available for repurchase.
We are only including a summary of our financial results in this annual report.
Please refer to our annual SEC 10K Report, which was delivered with this report,
or can be downloaded from the investor relations section of our website at
www.yorkwater.com for a more detailed review of our financial performance.
P a g e 2
Operating Revenues
(millions)
$ 58
$ 53
$ 48
$ 43
$ 38
$ 33
$ 28
$ 23
$ 18
2015 2016 2017 2018 2019
Net Income
(millions)
$ 14.0
$ 13.0
$ 12.0
$ 11.0
$ 10.0
$ 9.0
$ 8.0
$ 7.0
$ 6.0
$ 5.0
2015 2016 2017 2018 2019
Water & Wastewater Customers
72,000
70,000
68,000
66,000
64,000
62,000
60,000
58,000
56,000
54,000
2015 2016 2017 2018 2019
T h e Y o r k W a t e r C o m p a n y 2 0 1 9 A n n u a l R e p o r t
Continued Growth, Acquisitions,
and Expansion
The number of customers we
served at the end of 2019 grew
to 71,411 water and wastewater
customers. This was an increase
of 1,148 new customers, or about
1.6% customer growth in 2019.
The Company is now authorized
to serve in 48 municipalities in
Adams and York Counties, and
our population served grew in
2019 to over 200,000 people.
In September 2019, The York Water Company acquired
the Jacobus Borough Sewer System.
Rate Case Increases and Tax Act Reductions
On May 30, 2018, York Water sought an annual increase in water rates of $6.4 million
and an annual increase in wastewater rates of $289,000. This was the first rate
increase for our customers in five years. Effective March 1, 2019, the Pennsylvania
Public Utility Commission (PPUC) authorized an increase in water rates designed to
produce approximately $3.4 million in additional annual revenues and an increase
in wastewater rates designed to produce approximately $289,000 in additional
annual revenues. It is expected that the approved rates will add about $1.00 per
month, or a 2.5% increase, for the average residential water customer. However,
due to the reduction in taxes from the 2017 Tax Act, water customers, on average,
actually saw an $0.80 per month decrease in their water bills for the first year.
Water Still Costs About One Cent per Gallon: Delivered right where you need
it, when you need it!
Our customer complaint rate and water rates remain among the lowest of the
regulated utilities in the state, while still providing world-class service to our
customers. In addition to great customer service, these measurements help us to
maintain a productive relationship with our regulators, which is paramount to
running a successful company.
Increasing Efficiency While Maintaining Personal Contact
Although we are a 204-year-old company, we continue to make technological
advances to assist our customers while still providing that personal touch. When you
call our office, one of our locally-based and friendly customer service representatives
will answer the phone and assist you. We continue to expand our initiatives in
online applications and scheduling, paperless billing, and electronic bill pay. We
also continue to deploy a state-of-the-art radio frequency drive-by and fixed meter
reading system. Of course, our historic office in downtown York remains open for
walk-in or phone-in customer support.
System Improvements for a Sustainable Future
We continue to replace almost 1% of our existing water pipe each year. This equates
to over 50,000 feet of pipe replacement, or almost 10 miles! This reduces main
breaks, water leakage, potential property damage, and reduces costs. York Water
continues to work with local governments and other utilities to coordinate water
main replacements prior to road resurfacing projects. This saves our customers money
and provides the motoring public with a new road and equally new utilities below.
P a g e 3
Earnings Per Share
$ 1.20
$ 1.10
$ 1.00
$ 0.90
$ 0.80
$ 0.70
$ 0.60
$ 0.50
2015 2016
2017
2018
2019
Common Stock Dividends
(per share)
$ 0.70
$ 0.65
$ 0.60
$ 0.55
$ 0.50
$ 0.45
$ 0.40
2015 2016
2017
2018
2019
Customers/Employee
700
650
600
550
500
450
400
1979
1989
1999 2019 Natl
Goal
York Water
York Water 2019
National Goal
T h e Y o r k W a t e r C o m p a n y 2 0 1 9 A n n u a l R e p o r t
Average Annual Cost for Water
(Residential) 4,000 gals/month
In 2016, the American Water Works Association recommended that all water
systems should have a goal of eliminating lead service lines. Since 2017,
York Water has replaced all of the over 1,600 known company-owned lead
service lines. Through a unique approval by the Pennsylvania Public Utility
Commission, the Company is also committed to replacing all customer-owned
lead services, currently at no cost to the customer, with a goal of the complete
elimination of all lead service lines from our community.
Lake Williams Dam Improvement
Projects
In 2019, we drained Lake Williams and
installed a 48” valve on the outlet pipe.
This is one part of a multi-year project
which will include replacement of the
spillway and armoring of the dam. One
of our objectives during these projects
is to minimize disruption to our water
supplies and to maximize recreational
access to the lake.
This transition in leadership from
Jeff Hines to JT Hand will continue
our commitment to investing in
our community.
Dedicated and Experienced Employees
York Water’s talented employees have
an average of 14 years at the Company,
which is indicative of the rewarding environment and collaborative corporate
culture of The York Water Company. A company that continues to thrive,
grow, and improve service to its customers for 204 years can only be possible
due to the dedication, loyalty, and hard work of its employees. We thank all of
the York Water family for their commitment to make this company the most
efficient and customer-focused water utility in the nation.
Jeff Hines, President and Chief Executive Officer, retires after 30 years
of service
As mentioned previously, Jeff retired on March 1, 2020, after 12 years as CEO
and 30 years with the Company. Jeff started in 1990 as Engineering Manager
and worked his way up to President in 2008. Over the past 12 years, Jeff has
presided over 48 dividend declarations,
203 board and committee meetings,
numerous rate proceedings, debt and
equity offerings, and 12 annual meetings
of shareholders. Jeff has mentioned that
his greatest honor has been to serve this
company over the past 30 years, and
perhaps his greatest achievement has been
to lead America’s oldest public company
with a team of over 100 dedicated
employees, with no major accidents,
while providing an uninterrupted supply
of water for drinking, domestic use, and
fire protection for our community. The
Company will continue to benefit from
Jeff’s experience as he will remain active
on the Board of Directors.
At The York Water Company, we not only
invest in infrastructure; we also invest
in people like Assistant Superintendent
Jeff Green.
P a g e 4
$ 800
$ 700
$ 600
$ 500
$ 400
$ 300
York Water
Average PA Regulated Water
Main Breaks
Per 100 Miles of Pipe
30
25
20
15
10
5
0
York Water (5-Year Average)
National Average
Justified Complaint Rate
Per 1000 Customers
0.20
0.15
0.10
0.05
0.00
York Water
Other Major Pennsylvania
Water Utilities
Efficiency Compared to Other
Publicly Traded Water Utilities
in America
30%
20%
10%
York Water
Est. Avg. of Other Water Utilities
Note: Efficiency ratio as measured by
net income as a percent of revenue.
The Lake Williams Dam was built in 1912 and expanded in 1954, increasing the storage capacity
from 600 million gallons to 800 million gallons.
In 2019, we completed upgrades at Lake Williams Dam. The next phase of upgrades will take place
on the Lake Williams spillway. This multi-year /multi-million-dollar investment in our infrastructure
aligns with our standards of efficiency and sustainability.
P a g e 5
T h e Y o r k W a t e r C o m p a n y 2 0 1 9 A n n u a l R e p o r t
Highlights of Our 204th Year
(In thousands of dollars, except per share amounts)
Summary of Operations
For The Year
2019
2018
2017
2016 2015
Operating revenues .......................... $
51,578
$
48,437
$
48,589
$ 47,584
$
47,089
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . .
27,792
Operating income.............................
23,786
Interest expense................................
4,758
Gain on sale of land..........................
-
25,920
22,517
5,280
-
24,896
23,414
23,693
24,170
4,484
5,037
23,294
23,795
4,976
-
36 -
Other income (expenses), net ............
(2,386)
(1,370)
(1,692)
(1,914)
(1,590)
Income before income taxes ..............
16,642
Income taxes ....................................
2,240
15,867
2,491
17,517
17,255
4,543
5,409
17,229
4,740
Net income ...................................... $
14,402
$
13,376
$
12,974
$ 11,846
$
12,489
Per Share of Common Stock
Book value ....................................... $
10.31
$
9.75
$
9.28
$
8.87
$
8.51
Earnings per share:
Basic ...........................................
1.11
1.04
1.01
Diluted........................................
1.11
1.04
1.01
0.92
0.92
0.97
0.97
Weighted average number of shares
outstanding during the year:
Basic ...........................................
12,964,080
12,903,568
12,849,123
12,845,955
12,831,687
Diluted........................................
12,966,292
12,903,836
12,849,171
12,845,973
12,831,687
Cash dividends declared per share .... 0.7001 0.6731
0.6472
0 .6267
0 .6040
Utility Plant
Original cost,
net of acquisition adjustments ......... $ 398,065
$ 377,676
$ 362,533
$ 339,745
$ 325,691
Construction expenditures ................
18,425
16,882
24,602
13,158
13,844
Other
Total assets ...................................... $ 363,529
$
345,140
$ 332,030
$ 320,494
$ 310,533
Long-term debt including current
portion...........................................
101,035
93,358
90,142
84,653
84,562
For Management’s Discussion and Analysis of Financial Condition and Results of Operations, please refer to Item 7 in the
Company’s Annual Report on Form 10-K.
P a g e 6
T h e Y o r k W a t e r C o m p a n y 2 0 1 9 A n n u a l R e p o r t
Shareholder Information
Market Information
The common stock of The York Water Company is traded on the NASDAQ Global Select Market under the symbol YORW.
Shareholders of record (excluding individual participants in securities positions listings) as of December 31, 2019 numbered
approximately 1,998.
Financial Reports and Investor Relations
The Company makes available free of charge, on or through its website (www.yorkwater.com), its annual report on Form
10-K, its quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after the Company electronically files
such material with, or furnishes it to, the Securities and Exchange Commission, or SEC. The SEC also maintains a website at
www.sec.gov that contains reports, proxy statements, and other information about SEC registrants, including the Company.
Shareholders may request, without charge, copies of the Company’s financial reports. Such requests, as well as other
investor relations inquiries, should be addressed to:
Molly E. Norton
Investor Relations and
Communications Administrator
The York Water Company
130 East Market Street
York, PA 17401
(717) 718-2942
(800) 750-5561
mollyn@yorkwater.com
Stock Exchange
Listing
The Company’s common
shares trade on the NASDAQ
Global Select Market.
The trading symbol is YORW.
Independent
Auditors
Baker Tilly Virchow Krause LLP
Suite 200
221 West Philadelphia Street
York, PA 17401
Transfer Agent
& Registrar
Broadridge Corporate Issuer
Solutions, Inc.
P.O. Box 1342
Brentwood, NY 11717
(844) 317-3311 (toll free)
Internet:
http://shareholder.broadridge.com/YORW
Annual Meeting
Information
Monday, May 4, 2020
1:00 p.m.-Virtual Annual Meeting
In response to COVID-19, we are working
through the logistics of holding our
Annual Meeting virtually to ensure the
health and safety of our shareholders.
Details on how to access the Virtual
Annual Meeting will be provided in
advance of Monday, May 4, 2020.
P a g e 7
T h e Y o r k W a t e r C o m p a n y 2 0 1 9 A n n u a l R e p o r t
Supplemental Information (Unaudited)
(In thousands of dollars, except per share amounts)
Year Ended December 31
Selected Financial Data
Income
2019
2018
2017
Operating Revenues ..............................................................................................
$51,578
Operating Expenses .............................................................................................. $27,792
Operating Income ..................................................................................................
Interest Expense .....................................................................................................
Net Income .............................................................................................................
Percent Change in Net Income Compared to Prior Year ................................
Common Stock Dividends ...................................................................................
Dividend Payout Ratio .........................................................................................
$23,786
$4,758
$14,402
7.7%
$9,083
63.1%
$48,437
$25,920
$22,517
$5,280
$13,376
3.1%
$8,690
65.0%
$48,589
$24,896
$23,693
$4,484
$12,974
9.5%
$8,318
64.1%
Weighted Average Common Shares Outstanding, Basic ...............................
12,964,080
12,903,568
12,849,123
Basic & Diluted Earnings Per Weighted Average Common Share ...............
$1.11
$1.04
$1.01
Number of Common Shares Outstanding ........................................................
13,014,898
12,943,536
12,872,742
ROE on Year End Common Equity ....................................................................
Common Stock Dividends Per Share .................................................................
Net Cash Flows From Operating Activities ......................................................
10.7%
$0.7001
$18,881
Balance Sheet
Common Stockholders’ Equity ...........................................................................
$134,185
Long-Term Debt Including Current Maturities................................................
$101,035
Total Capitalization ...............................................................................................
$235,220
Percent Common Stockholders’ Equity .............................................................
Percent Long-Term Debt ......................................................................................
57%
43%
10.6%
$0.6731
$18,372
$126,195
$93,358
$219,553
57%
43%
10.9%
$0.6472
$20,111
$119,405
$90,142
$209,547
57%
43%
Net Utility Plant.....................................................................................................
$313,224
$299,157
$288,787
Operating Data
Revenue Class
Residential ..............................................................................................................
Commercial and Industrial ..................................................................................
Other ........................................................................................................................
Total Operating Revenues ...................................................................................
$33,409
$14,441
$3,728
$51,578
$31,281
$13,578
$3,578
$48,437
$31,257
$13,729
$3,603
$48,589
Construction Expenditures ..........................................................................
$18,425
$16,882
$24,602
Other Operating Data
Number of Customers ..........................................................................................
Number of Employees ..........................................................................................
Common Shareholders .........................................................................................
Book Value Per Common Share ..........................................................................
Market Value at Year End ....................................................................................
Market Value to Book Value ...............................................................................
P/E Ratio ................................................................................................................
71,411
106
1,998
$10.31
$46.11
447%
41.5
70,263
109
1,999
$9.75
$32.06
329%
30.8
69,604
102
2,011
$9.28
$33.90
365%
33.6
P a g e 8
T h e Y o r k W a t e r C o m p a n y 2 0 1 9 A n n u a l R e p o r t
Supplemental Information (Unaudited)
(In thousands of dollars, except per share amounts)
2016
2015
2014
2013
2012
2011
2010
2009
$47,584
$23,414
$24,170
$5,037
$11,846
-5.1%
$8,051
68.0%
$47,089
$23,294
$23,795
$4,976
$12,489
8.8%
$7,743
62.0%
$45,900
$22,593
$23,307
$4,996
$11,484
19.0%
$7,443
64.8%
$42,383
$21,217
$21,166
$5,267
$9,654
3.8%
$7,214
74.7%
$41,447
$20,331
$21,116
$5,249
$9,303
2.4%
$6,929
74.5%
$40,629
$20,091
$39,005
$18,735
$37,043
$19,065
$20,538
$5,260
$9,084
1.7%
$6,708
73.8%
$20,270
$17,978
$4,894
$8,929
18.9%
$6,506
72.9%
$4,896
$7,512
16.8%
$6,050
80.5%
12,845,955
12,831,687
12,879,912
12,928,040
12,847,160
12,734,420
12,626,660
11,695,155
$0.92
$0.97
$0.89
$0.75
$0.72
$0.71
$0.71
$0.64
12,852,295
12,812,377
12,830,521
12,979,281
12,918,633
12,791,671
12,692,054
12,558,724
10.4%
$0.6267
$19,365
11.5%
$0.6040
$20,710
11.0%
$0.5788
$18,766
9.3%
$0.5580
$18,438
9.3%
$0.5391
$16,422
9.5%
$0.5266
$17,474
9.8%
$0.5150
$14,755
8.6%
$0.5060
$15,801
$114,061
$109,070
$84,653
$84,562
$198,714
$193,632
57%
43%
56%
44%
$104,563
$82,312
$186,875
56%
44%
$103,511
$82,741
$99,825
$82,684
$95,265
$82,621
$91,257
$82,672
$86,922
$75,662
$186,252
$182,509
$177,886
$173,929
$162,584
56%
44%
55%
45%
54%
46%
52%
48%
53%
47%
$270,907
$261,420
$253,194
$244,237
$239,539
$232,277
$227,677
$221,475
$30,218
$13,760
$3,606
$47,584
$29,761
$13,822
$3,506
$47,089
$29,165
$13,267
$3,468
$45,900
$26,873
$12,299
$3,211
$42,383
$26,192
$12,114
$3,141
$41,447
$25,750
$11,820
$3,059
$40,629
$24,550
$11,440
$3,015
$39,005
$23,368
$10,734
$2,941
$37,043
$13,158
$13,844
$14,139
$9,852
$11,543
$9,472
$10,541
$12,535
67,052
103
2,052
$8.87
$38.20
431%
41.5
66,087
107
2,007
$8.51
$24.94
293%
25.7
65,102
107
2,002
$8.15
$23.21
285%
26.1
64,118
63,779
62,738
62,505
62,186
104
2,023
$7.98
$20.93
262%
27.9
105
1,786
$7.73
$17.57
227%
24.4
106
1,658
$7.45
$17.64
237%
24.8
111
1,649
$7.19
$17.29
240%
24.4
111
1,516
$6.92
$14.51
210%
22.7
P a g e 9
T h e Y o r k W a t e r C o m p a n y 2 0 1 9 A n n u a l R e p o r t
Directors, Officers, & Key Employees
Board of Directors
James H. Cawley (1) (3)
Age 74
Director Since 2016
Cynthia A. Dotzel (1)
Age 65
Director Since 2019
Michael W. Gang, Esq. (1)
Age 69
Director Since 1996
Joseph T. Hand
Age 57
Director Since 2020
Jeffrey R. Hines, P.E. (1)
Age 58
Director Since 2008
George W. Hodges (1)
Age 69
Chairman
Director Since 2000
George Hay Kain, III (3)
Age 71
Director Since 1986
Jody L. Keller (4)
Age 66
Director Since 2015
Erin C. McGlaughlin (2) (4)
Age 46
Director Since 2016
Robert P. Newcomer (1) (2) (4)
Age 71
Director Since 2013
Steven R. Rasmussen,
CPA (2) (3)
Age 47
Director Since 2011
Ernest J. Waters (1) (2) (3)
Age 70
Director Since 2007
Directors Emeriti
Josephine S. Appell
Chloe R. Eichelberger
John L. Finlayson
William T. Morris
Irvin S. Naylor
Thomas C. Norris
Jeffrey S. Osman
Key
(1) Executive Committee
(2) Audit Committee
(3) Nomination and Corporate
Governance Committee
(4) Compensation Committee
P a g e 1 0
T h e Y o r k W a t e r C o m p a n y 2 0 1 9 A n n u a l R e p o r t
During the Fall of 2018, Lake Williams was drained for infrastructure upgrades, including lining the outlet pipe and installing
new sluice gates. The first phase of upgrades at Lake Williams was completed in 2019, and the Lake is full once again.
Even when Lake Williams was empty, not one customer went without water service.
P a g e 1
1
T h e Y o r k W a t e r C o m p a n y 2 0 1 9 A n n u a l R e p o r t
Directors, Officers, & Key Employees
Officers & Key Employees
Vernon L. Bracey
Age 58
Vice President-
Customer Service
Natalee Colón, SHRM-CP
Age 32
Vice President-
Human Resources
Joseph T. Hand
Age 57
President and
Chief Executive Officer
Mark J. Hardman
Age 47
Vice President-Technology
Matthew E. Poff, CPA
Age 48
Chief Financial Officer
and Treasurer
Mark S. Snyder, P.E.
Age 49
Vice President-Engineering
Martin L. Strine
Age 59
Operations Manager
Mark A. Wheeler
Age 52
Chief Operating Officer
and Secretary
Molly E. Norton
Age 27
Investor Relations and
Communications
Administrator
P a g e 1 2
T h e Y o r k W a t e r C o m p a n y 2 0 1 9 A n n u a l R e p o r t
Chartered Territory Distribution and Supply System
Our Filter Plant purifies and distributes 20 million gallons of “that good York Water” to our customers 24 hours a day,
365 days a year, with no interruptions.
The York Water Company
130 East Market Street
York, Pennsylvania 17401
717-845-3601
www.yorkwater.com