SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2001 Commission file number 0-690 THE YORK WATER COMPANY (Exact name of registrant as specified in its charter) PENNSYLVANIA 23-1242500 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 130 EAST MARKET STREET, YORK, PENNSYLVANIA 17405 (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: Name of Each Exchange on Title of Each Class Which Registered None Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, NO PAR VALUE (Title of Class) 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 X NO Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X The aggregate market value of the Common Stock, no par value, held by nonaffiliates of the registrant on March 7, 2002 was $94,756,133. As of March 7, 2002 there were 3,154,332 shares of Common Stock, no par value, outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the 2001 Annual Report to Shareholders are incorporated by reference into Part II. Portions of the Proxy Statement for the Company's 2002 Annual Meeting of Shareholders are incorporated by reference into Part III. PART I Item 1. Business. The Company is a corporation duly organized under the laws of the Commonwealth of Pennsylvania in 1816. The business of the Company is to impound, purify and distribute water. The Company operates entirely within its franchised territory located in York County, Pennsylvania. The Company is regulated by the Pennsylvania Public Utility Commission, or PPUC, in the areas of billing, payment procedures, dispute processing, terminations, service territory, and rate setting. The Company must obtain PPUC approval before changing any of the aforementioned procedures. Water service is supplied through the Company's own distribution system to the City of York, the Boroughs of North York, West York, Manchester, Mount Wolf, New Salem, Hallam, Jacobus, Loganville, Yorkana, Seven Valleys, East Prospect, Jefferson, Glen Rock, New Freedom, Railroad, and portions of the Townships of Manchester, East Manchester, West Manchester, North Codorus, Shrewsbury, North Hopewell, Hopewell, Springettsbury, Spring Garden, Conewago, Springfield, York, Hellam, Windsor, Lower Windsor, Dover and Jackson. The Company obtains its water supply from the south branch and east branch of the Codorus Creek which drains an area of approximately 117 square miles. The Company has two reservoirs, Lake Williams and Lake Redman, which together hold up to 2.75 billion gallons of water. The Company's present average daily consumption is 19,734,260 gallons, and its present safe daily yield is 23,000,000 gallons. The Company's service territory has an estimated population of 149,000. Territory expansion during 2001 included: the completion of the water main to sell bulk water to Stewartstown Borough, additional water district mains for Windsor Water District 3, Cape Horn Water District and Croll School Water District, and the start of a new water district in North Codorus Township. Industry within the Company's service territory is diversified, manufacturing such items as furniture, electrical machinery, food products, paper, ordnance, textile products, air conditioning equipment and weight training equipment. Within the area served by the Company there are no competitors. An evaluation of the need for additional sources of supply was conducted during 1998 by an engineering consulting firm retained by the Company. The analysis indicated that an additional source of supply would be needed by the year 2006. Available options were identified and analyzed by the Company and its consultants, including estimates of construction costs. The option selected was a pipeline from the Susquehanna River to Lake Redman, the Company's largest reservoir. The Company plans to build an intake and a pump station on its land in Lower Windsor Township, York County. The water would then be pumped 13 miles through a 30-inch diameter pipe and released into Lake Redman. This option has the lowest estimated cost, provides potential expandability, and has the least impact on the environment. The Company began the process of applying for permits in 2001, but expects no major expenses until after 2002. The estimated cost of the project is $18-$20 million. The project will be funded through various debt and equity issues. The Company's business is somewhat dependent on weather conditions, particularly the amount of rainfall; however, minimum customer charges are in place, and the Company expects to cover its fixed costs of operations under all likely weather conditions. On February 12, 2002, the Governor issued a drought emergency which imposes mandatory water use restrictions on the Company's service territory. The drought did not have a noticeable impact on 2001 because it occurred at a time of the year in which customers were already using less water. The drought, if it continues, could have a material impact on 2002. The Company's business does not require large amounts of working capital and is not dependent on any single customer or a very few customers. Operating revenue is derived from the following sources and in the following percentages: residential, 60%; commercial and industrial, 28%; other, 12%. The Company presently has 90 employees. During the last five years ended in 2001, the Company has maintained an increasing growth in number of customers and distribution facilities as shown by the following chart: 2001 2000 1999 1998 1997 Average daily consumption (gallons per day) 19,734,260 19,541,520 20,928,000 19,488,000 19,405,000 Miles of mains at year end 717 703 696 671 655 Additional distribution mains installed (ft.) 77,923 67,072 130,262 85,431 77,274 Number of customers 50,079 49,195 48,144 47,173 46,458 Population served 149,000 146,000 144,000 142,000 140,700 During 2001, the per capita volume of water sold declined in the industrial class due to the loss of a large customer in December 2000. Per capita consumption in all other classes was consistent. The Company does not anticipate any change in the level of water usage which would have a material impact on future results of operations. Item 2. Properties. The accounting and executive offices of the Company are located in two two-story brick and masonry buildings, containing a total of approximately 21,861 square feet, at 124 and 130 East Market Street, York, Pennsylvania. The Company has two impounding dams located in York and Springfield Townships adjoining the Borough of Jacobus to the south. The lower dam is constructed of compacted earth with a concrete core wall and is 660 feet long and 50 feet high and creates a reservoir covering approximately 220 acres containing about 1,150,000,000 gallons of water. About 800 acres surrounding the reservoir are planted with more than 1,200,000 evergreen trees which the Company believes will protect the area both from pollution and also from soil erosion which might otherwise fill the reservoir with silt. The upper dam, Lake Redman, is constructed of compacted earth and is 1,000 feet long and 50 feet high and creates a reservoir covering approximately 290 acres containing about 1,600,000,000 gallons of water. About 600 acres surrounding the reservoir are planted with grass which the Company believes will protect the area both from pollution and also from soil erosion which might otherwise fill the reservoir with silt. The Company's main pumping station is located in Spring Garden Township on the south branch of the Codorus Creek about 1,500 feet upstream from its confluence with the west branch of the Codorus Creek and about four miles downstream from the Company's lower impounding dam. The pumping station presently houses pumping equipment consisting of three electrically driven centrifugal pumps and two diesel-engine driven centrifugal pumps with a combined pumping capacity of 75,000,000 gallons per day. From here, raw water is pumped approximately two miles to the filtration plant through pipes located on a right-of-way owned by the Company. The Company's filtration plant is located in Spring Garden Township about one-half mile south of the City of York. Water at this plant is filtered through 12 dual media filters having a stated capacity of 31,000,000 gallons per day and being capable of filtering 46,500,000 gallons per day for short periods if necessary. Based on an average daily consumption in 2001 of 19,734,260 gallons, the Company believes the pumping and filtering facilities are adequate to meet present and anticipated demands. Clear water reservoirs of the Company which are located in Spring Garden Township adjacent to the filtration plant are capable of storing up to 32,000,000 gallons of water, and there are standpipes located throughout the Company's service area capable of storing another 19,890,000 gallons of clear water. The Company's distribution center and material and supplies warehouse are located at 1801 Mt. Rose Avenue, Springettsbury Township. There are two one-story concrete block buildings aggregating 26,680 square feet of area. Construction of a third facility at that same location amounting to 3,764 square feet is expected to begin around mid-year 2002 and be completed by the end of the year. Estimated costs of the project are $330,300 which include renovations to one of the older buildings. The distribution system of the Company has approximately 717 miles of main water lines. All of the Company's properties described above are held in fee by the Company. There are no material encumbrances on such properties. In addition, the Company has entered into a "Joint Use and Park Management Agreement" dated December 29, 1976, with the County of York, Pennsylvania, whereby the Company has licensed its present reservoir lands and waters, comprised of approximately 1,175 acres and including two lakes, to the County of York for fifty (50) years for county park purposes. Item 3. Legal Proceedings. There are no material legal proceedings involving the Company. Item 4. Submission of Matters to a Vote of Security Holders. No matter was submitted to a vote of the security holders during the fourth quarter of the fiscal year covered by this report. PART II Item 5. Market for the Registrant's Common Stock and Related Security Holder Matters. The information set forth under the caption "Market for Common Stock and Dividends" on page 7 of the 2001 Annual Report to Shareholders is incorporated herein by reference. Item 6. Selected Financial Data. The information set forth under the caption "Highlights of Our 186th Year" of the 2001 Annual Report to Shareholders is incorporated herein by reference. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. The information set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the 2001 Annual Report to Shareholders is incorporated herein by reference. This annual report on Form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements made with respect to the results of operations and businesses of the Company. Words such as "may," "should," "believe," "anticipate," "estimate," "expect," "intend," "plan" and similar expressions are intended to identify forward-looking statements. Forward-looking statements include certain information relating to the Company's business strategy, including the markets in which it operates, the services it provides, its plans for construction, its expansion of its service territories, water usage by its customers and its plans to invest in new technologies. These forward-looking statements are based upon management's current plans, expectations, estimates and assumptions and are subject to a number of risks and uncertainties that could significantly affect current plans, anticipated actions and the Company's financial condition and results of operations. Factors that may cause actual results to differ materially from those discussed in such forward-looking statements include, among others, the following possibilities: (i) weather conditions, particularly the amount of rainfall; (ii) the level of commercial and industrial business activity within the Company's service territory; (iii) construction of new housing within the Company's service territory; (iv) governmental regulations affecting the Company's rates and service obligations; and (v) general economic and business conditions, including interest rates, which are less favorable than expected. The Company does not intend to update these cautionary statements. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. The Company is not aware of demands, events or uncertainties that will result in a decrease of liquidity or in a material change in the mix and relative cost of capital resources. The Company does not use off-balance sheet arrangements such as securitization of receivables or unconsolidated entities. The Company has no lease obligations, does not engage in trading or risk management activities, and does not have material transactions involving related parties. The Company does not use derivative financial instruments for speculative trading purposes. The Company's operations are exposed to market risks primarily as a result of changes in interest rates and foreign currency exchange rates. This exposure to these market risks relates to the Company's debt obligations under its lines of credit. Loans granted under these lines bear interest based upon the prime or LIBOR rate plus 1 to 1.5 percent. The Company has not entered into financial instruments such as interest rate swaps or interest rate lock agreements. The Company's 4.40% Industrial Development Authority Revenue Refunding Bonds Series 1994 have a mandatory tender date of May 15, 2004. The 6% Series 1995 bonds have a mandatory tender date of June 1, 2005. The Company is required to purchase any unremarketed 1994 and 1995 bonds, despite the rate. Item 8. Financial Statements and Supplementary Data. The following financial statements set forth in the 2001 Annual Report to Shareholders are incorporated herein by reference: Balance Sheets as of December 31, 2001 and 2000 Page 11 Statements of Income for Years Ended December 31, 2001, 2000 and 1999 Page 12 Statements of Shareholders' Investment for Years Ended December 31, 2001, 2000 and 1999 Page 12 Statements of Cash Flows for Years Ended December 31, 2001, 2000 and 1999 Page 13 Notes to Financial Statements Page 14 Independent Auditors' Report Page 20 Except for the above financial data and the information specified under Items 5, 6 and 7 of this report, the 2001 Annual Report to Shareholders is not deemed to be filed as part of this report. Selected Quarterly Financial Data (Unaudited) 2001 First Second Third Fourth Year Water operating revenue $4,495,450 $4,763,382 $5,110,284 $5,033,426 $19,402,542 Utility operating income 1,937,388 2,003,759 2,934,894 2,058,596 8,934,637 Net income 802,200 856,689 1,363,695 983,483 4,006,067 Basic earnings per share .26 .28 .45 .31 1.30 Dividends per share .25 .25 .25 .26 1.01 2000 Water operating revenue $4,501,175 $4,608,768 $4,746,370 $4,624,850 $18,481,163 Utility operating income 1,903,345 2,072,436 2,504,577 1,992,181 8,472,539 Net income 803,283 934,892 1,141,769 877,843 3,757,787 Basic earnings per share .27 .31 .38 .29 1.25 Dividends per share .24 .24 .25 .25 .98 Per share data does not reflect the impact of the proposed stock split. See Note 12 to the financial statements. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. There were no changes in or disagreements with accountants on accounting and financial disclosure. PART III Item 10. Directors and Executive Officers of the Registrant. The information set forth under the captions "Election of Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance" of the Proxy Statement issued pursuant to Regulation 14A for the Company's 2002 Annual Meeting of Shareholders to be held May 6, 2002 is incorporated herein by reference. Item 11. Executive Compensation. The information set forth under the caption "Compensation of Directors and Executive Officers" of the Proxy Statement issued pursuant to Regulation 14A for the Company's 2002 Annual Meeting of Shareholders to be held May 6, 2002 is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management. The information set forth under the caption "Voting Securities and Principal Holders Thereof" of the Proxy Statement issued pursuant to Regulation 14A for the Company's 2002 Annual Meeting of Shareholders to be held May 6, 2002 is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions. The information set forth under the caption "Compensation Committee Interlocks and Insider Participation" of the Proxy Statement issued pursuant to Regulation 14A for the Company's 2002 Annual Meeting of Shareholders to be held May 6, 2002 is incorporated herein by reference. PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K. (a)(1) Certain documents filed as a part of the Form 10-K. The financial statements set forth under Item 8 of this Form 10-K. (a)(2) Financial Statement schedules. Schedule Schedule Page Number Description Number II Valuation and Qualifying Accounts 9 The report of the Company's independent auditors with respect to the financial statement schedule appears on page 7. All other financial statements and schedules not listed have been omitted since the required information is included in the financial statements or the notes thereto, or is not applicable or required. The exhibits are set forth in the Index to Exhibits shown on pages 11, 12 and 13. (b) Reports on Form 8-k There were no Form 8-k's filed during the fourth quarter 2001. The Company filed a Form 8-k on February 21, 2002 announcing that its Board of Directors had unanimously approved a two-for-one split of the Company's common stock, subject to approval by the Pennsylvania Public Utility Commission. INDEPENDENT AUDITORS' REPORT To the Shareholders and Board of Directors of The York Water Company: Under date of February 26, 2002, we reported on the balance sheets of The York Water Company as of December 31, 2001 and 2000 and the related statements of income, shareholders' investment, and cash flows for the years then ended as contained in the 2001 annual report to shareholders. The financial statements of The York Water Company as of December 31, 1999 were audited by other auditors whose report was dated February 25, 2000. These financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year 2001. In connection with our audit of the aforementioned financial statements, we also audited the related financial statement schedule as of December 31, 2001, as listed in Item 14(a)(2). This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on the 2001 financial statement schedule based upon our audit. In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. February 26, 2002 Stambaugh Ness, PC York, Pennsylvania Independent Auditors' Report To The Shareholders and Board of Directors of The York Water Company: We have audited the accompanying statements of income, shareholders' investment, and cash flows of The York Water Company for the year ended December 31, 1999. In connection with our audit of the financial statements, we have also audited the financial statement schedule as listed in Item 14(a)(2)for the year ended December 31, 1999. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is express an opinion on these financial statements and financial statement schedule based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the results of The York Water Company's operations and its cash flows for the year ended December 31, 1999, in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedule when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Baltimore, Maryland KPMG LLP February 25, 2000 THE YORK WATER COMPANY SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS FOR THE THREE YEARS ENDED DECEMBER 31, 2001 Additions Charged to Balance at Costs Balance Beginning and Recov- Deduc- At End Of Year Expenses eries tions Of Year FOR THE YEAR ENDED DECEMBER 31, 2001: Reserve for uncollectible accounts $130,000 $ 89,265 $11,098 $100,363 $130,000 FOR THE YEAR ENDED DECEMBER 31, 2000: Reserve for uncollectible accounts $120,000 $ 85,356 $19,193 $ 94,549 $130,000 FOR THE YEAR ENDED DECEMBER 31, 1999: Reserve for uncollectible accounts $120,000 $ 87,795 $12,992 $100,787 $120,000 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THE YORK WATER COMPANY (Registrant) Dated: March 25, 2002 By: /s/ W. T. Morris William T. Morris Chairman, President and CEO Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ W. T. Morris By: /s/ Jeffrey S. Osman William T. Morris Jeffrey S. Osman (Principal Executive and (Principal Accounting Officer) Financial Officer and Director) Dated: March 25, 2002 Dated: March 25, 2002 Directors: Date By: /s/ Irvin S. Naylor March 25, 2002 Irvin S. Naylor By: /s/ Chloe Eichelberger March 25, 2002 Chloe Eichelberger By: /s/ John L. Finlayson March 25, 2002 John L. Finlayson By: /s/ George Hay Kain, III March 25, 2002 George Hay Kain, III By: /s/ Michael W. Gang March 25, 2002 Michael W. Gang By: /s/ George W. Hodges March 25, 2002 George W. Hodges By: /s/ Thomas C. Norris March 25, 2002 Thomas C. Norris By: /s/ Jeffrey S. Osman March 25, 2002 Jeffrey S. Osman INDEX TO EXHIBITS Page Number of Exhibit Exhibit Incorporation Number Description By Reference 3 Amended and Restated Incorporated herein by Articles of Incorporation reference. Filed previously with the Securities and Exchange Commission as Exhibit 4.1 to Amendment No. 1 to Form S-3 dated June 12, 1997 (File No. 33-81246). 3.1 By-Laws Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 4.2 to Form S-3 dated July 1, 1996 (File No. 333-7307). 4.1 Optional Dividend Incorporated herein by Reinvestment Plan reference. Filed previously with the Securities and Exchange Commission as the Prospectus included in Amendment No. 1 to Form S-3 dated June 12, 1997 (File No. 33-81246). 4.2 Loan Agreement between Incorporated herein by The York Water Company reference. Filed previously and the Pennsylvania with the Securities and Infrastructure Invest- Exchange Commission as Exhibit ment Authority for 4.2 to the Company's 2000 $800,000 at 1.00% Form 10K. dated August 24, 1999 4.6 Note Agreement Relative Incorporated herein by to the $6,000,000 10.17% reference. Filed previously Senior Notes, Series A with the Securities and and $5,000,000 9.60% Exchange Commission as Exhibit Senior Notes, Series B 4.5 to the Company's 1989 dated January 2, 1989 Form 10-K. 4.8 Note Agreement Relative Incorporated herein by to the $6,500,000 10.05% reference. Filed previously Senior Notes, Series C with the Securities and dated August 15, 1990 Exchange Commission as Exhibit 4.6 to the Company's 1990 Form 10-K. 4.11 Note Agreement Relative Incorporated herein by to the $7,500,000 8.43% reference. Filed previously Senior Notes, Series D with the Securities and dated December 15, 1992 Exchange Commission as Exhibit 4.7 to the Company's 1992 Form 10-K. 4.12 Fourth Supplemental Incorporated herein by Acquisition, Financing reference. Filed previously and Sale Agreement with the Securities and Relative to the Exchange Commission as Exhibit $2,700,000 4.75% Water 4.8 to the Company's Quarterly Facilities Revenue Report Form 10-Q for the Refunding Bonds dated quarter ended June 30, 1994. February 1, 1994 4.13 Fifth Supplemental Incorporated herein by Acquisition, Financing reference. Filed previously and Sale Agreement with the Securities and Relative to the Exchange Commission as Exhibit $4,300,000 5% Water 4.9 to the Company's Quarterly Facilities Revenue Report Form 10-Q for the Refunding Bonds dated quarter ended September 30, October 1, 1995 1995. 4.14 Shareholder Rights Incorporated herein by Agreement reference. Filed previously with the Securities and Exchange Commission as Exhibit 1 to Form 8-A dated January 26, 1999. 10.1 Articles of Agreement Incorporated herein by Between The York Water reference. Filed previously Company and Springetts- with the Securities and bury Township Relative Exchange Commission as Exhibit to Extension of Water 10.1 to the Company's 1989 Mains dated April 17, Form 10-K. 1985 10.2 Articles of Agreement Incorporated herein by Between The York Water reference. Filed previously Company and Windsor with the Securities and Township Relative to Exchange Commission as Exhibit Extension of Water Mains 10.2 to the Company's 1989 dated February 9, 1989 Form 10-K. 10.3 Articles of Agreement Incorporated herein by Between The York Water reference. Filed previously Company and Windsor with the Securities and Township, Yorkana Exchange Commission as Exhibit Borough, Modern Trash 10.3 to the Company's 1989 Removal of York, Inc. and Form 10-K. Lower Windsor Township Relative to Extension of Water Mains dated July 18, 1989 10.4 Articles of Agreement Incorporated herein by Between The York Water reference. Filed previously Company and North Codorus with the Securities and Township Relative to Exchange Commission as Exhibit Extension of Water Mains 10.4 to the Company's 1990 dated September 20, 1989 Form 10-K. 10.5 Articles of Agreement Incorporated herein by Between The York Water reference. Filed previously Company and York Township with the Securities and Relative to Extension of Exchange Commission as Exhibit Water Mains dated 10.5 to the Company's 1990 December 29, 1989 Form 10-K. 11 Common Shares Used in Filed herewith. Computing Earnings Per Share 13 2001 Annual Report to Filed herewith. Shareholders 23 Consent of Independent Filed herewith. Auditors Stambaugh Ness, PC 23.1 Consent of Independent Filed herewith. Auditors KPMG LLP EXHIBIT 11 THE YORK WATER COMPANY COMMON SHARES USED IN COMPUTING EARNINGS PER SHARE 2001 2000 1999 1998 1997 Common shares outstanding, beginning of the year 3,042,733 2,989,091 2,979,722 2,934,782 2,900,524 Weighted average shares issued in connection with 2001 stock subscription 19,601 - - - - Weighted average shares repurchased in 1999 - - (7,392) - - Weighted average shares issued in connection with the Employee Stock Purchase Plan 1,325 2,156 1,701 1,565 1,569 Weighted average shares issued in connection with the Optional Dividend Reinvest- ment Plan 12,966 19,428 16,236 14,938 10,376 3,076,625 3,010,675 2,990,267 2,951,285 2,912,469 EXHIBIT 13 THE YORK WATER COMPANY 2001 ANNUAL REPORT TO SHAREHOLDERS The York Water Company's 2001 Annual Report to Shareholders is attached hereto. EXHIBIT 23 CONSENT OF INDEPENDENT AUDITORS To the Shareholders and Board of Directors of The York Water Company: We consent to the incorporation by reference in the registration statements No. 2-80547 on Form S-3, No. 33-81246 on Form S-3 as amended, and No. 33-26180 on Form S-8, as amended, of The York Water Company of our report dated February 26, 2002, relating to the balance sheet of The York Water Company as of December 31, 2001, and the related statements of income, shareholders' investment, and cash flows for the year then ended, which report appears in the 2001 annual report to shareholders and is incorporated by reference in the annual report on Form 10-K of The York Water Company. We also consent to incorporation by reference in the registration statements No. 2-80547 on Form S-3, No. 33-81246 on Form S-3, as amended, and No. 33-26180 on Form S-8, as amended, of The York Water Company of our report dated February 26, 2002 relating to the financial statement schedule as listed in Item 14(a) (2) for the year ended December 31, 2001, which is a part of the Company's December 31, 2001 annual report on Form 10-K, which report appears in such annual report on Form 10-K. Stambaugh Ness, PC York, Pennsylvania March 26, 2002 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS To the Shareholders and Board of Directors of The York Water Company: We consent to incorporation by reference in the registration statements No. 2-80547 on Form S-3, No. 33-81246 on Form S-3 as amended, and No. 33-26180 on Form S-8, as amended, of The York Water Company of our report included herein. Baltimore, Maryland KPMG LLP March 25, 2002