CONFORMED COPY
Page 1 of 18
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the fiscal year ended December 31, 2000
--------------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
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Commission File Number 1-3437-2
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A: Full title of the plan and the address of the plan, if different from
that of the issuer named below:
SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS
COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES
B: Name of issuer of the Securities held pursuant to the plan and the
address of its principal executive office:
AMERICAN WATER WORKS COMPANY, INC.
1025 LAUREL OAK ROAD
VOORHEES, NEW JERSEY 08043
Form 11-K
Page 2
INDEX
Signature 3
Report of Independent Accountants 6
Audited Plan Financial Statements and Schedules
Prepared in Accordance With The Financial Reporting
Requirements of ERISA 7 to 16
Exhibit Index 17
Form 11-K
Page 3
SIGNATURE
- ----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Retirement Plan Committee has duly caused this annual report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Date June 27, 2001 \s\ Robert D. Sievers
- ------------------ --------------------------------------
Robert D. Sievers
Member, Retirement Plan Committee
Form 11-K
Page 4
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Financial Statements
And
Supplemental Schedules
December 31, 2000 and 1999
Form 11-K
Page 5
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Index to the Financial Statements and
Supplemental Schedules
PAGE
Report of Independent Accountants 1
Statement of Net Assets Available for Benefits as
of December 31, 2000 and 1999 2
Statement of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 2000 and 1999 3
Notes to Financial Statements 4-9
Supplemental Schedules:*
Schedule of Assets Held for Investment Purposes as of
December 31, 2000 Schedule 1
Schedule of Reportable Transactions for the Year
Ended December 31, 2000 Schedule II
* Other schedules required by 29 CFR 2520.103-10 of the Department of
Labor Rules and Regulations for Reporting and Disclosure under ERISA have
been omitted because they are not applicable.
Form 11-K
Page 6
Report Of Independent Accountants
To the Participants and Administrator
of the Savings Plan for Employees of
American Water Works Company, Inc.
and Its Designated Subsidiaries
In our opinion, the accompanying statements of net assets available
for benefits and the related statements of changes in net assets
available for benefits present fairly, in all material respects, the
net assets available for benefits of the Savings Plan for Employees of
American Water Works Company, Inc. and Its Designated Subsidiaries
(the "Plan") at December 31, 2000 and 1999, and the changes in net
assets available for benefits for the years then ended in conformity
with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the
Plan's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which 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, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
schedules of Assets Held for Investment Purposes and of Reportable
Transactions are presented for the purpose of additional analysis and
are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules
are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
June 15, 2001
Form 11-K
Page 7
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Statement of Net Assets Available for Benefits
December 31,
-----------------------------
2000 1999
------------ ------------
ASSETS
Investments (See Note 3) $100,685,352 $ 79,683,534
Receivables:
Employer's contribution 272,390 263,809
Participants' contributions 1,106,424 896,367
Accrued interest and dividends 11,226 -
------------ ------------
Net assets available for benefits $102,075,392 $ 80,843,710
============ ============
The accompanying notes are an integral part of these financial statements.
Form 11-K
Page 8
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Statement of Changes in Net Assets Available for Benefits
December 31,
---------------------------
2000 1999
------------ ------------
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 2,937,004 $ 1,903,851
Net appreciation (depreciation)in fair
value of investments (See Note 3) 5,382,495 (7,309,289)
Net asset transfers in (See Note 11) 1,903,611 -
------------ -----------
$10,223,110 (5,405,438)
------------ -----------
Contributions:
Employer's 2,958,055 2,787,442
Participants' 12,718,976 9,461,131
------------ -----------
15,677,031 12,248,573
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Total additions 25,900,141 6,843,135
------------ -----------
Deductions from net assets attributed to:
Benefits paid to participants 4,668,459 4,028,260
Administrative expenses - 3,301
------------ -----------
Total deductions 4,668,459 4,031,561
------------ -----------
Net increase 21,231,682 2,811,574
Net assets at beginning of year 80,843,710 78,032,136
------------ ------------
Net assets at end of year $102,075,392 $ 80,843,710
============ ============
The accompanying notes are an integral part of these financial statements.
Form 11-K
Page 9
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Notes to Financial Statements
NOTE 1 - DESCRIPTION OF PLAN
- ----------------------------
The following description of the Savings Plan for Employees of American
Water Works Company, Inc. and Its Designated Subsidiaries (the "Plan")
provides only general information. Participants should refer to the Plan
document for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution 401(k) savings plan covering most full
and part-time employees of American Water Works Company, Inc. and its
designated subsidiary companies (the "Company"). Eligible participants who
are not included in a bargaining unit may enroll as soon as administratively
possible. Effective July 1, 2001, eligible participants who are included in
a bargaining unit may enroll as soon as administratively possible. The Plan
is subject to the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA").
Contributions
Participants could contribute up to 15% and 10% of their annual
compensation during 2000 and 1999, respectively. The Company matched 50% of
the first 4% of participant contributions during 2000 and 1999. All Company
matching contributions are invested in American Water Works Company, Inc.
common stock. Contributions are subject to certain limitations. Effective
July 1, 2001, the Company will match 50% of the first 5% of participant
contributions and the maximum contribution rate allowed will increase to 20%.
Participant Accounts
With the exception of the Company's contributions to the Plan, each
participant may elect to have their contributions invested in any of the
investment options offered by the Plan in multiples of 1%. The Plan provides
for a diversification option that permits participants at age 50 to move
assets attributable to Company matching contributions to any of the Plan's
investment options. Each participant's account is credited with the
participant's contributions and an allocation of the Company's contributions
and Plan earnings. Allocations are based on participant contributions or
account balances, as defined in the Plan. Benefits to which a participant is
entitled are the benefits that can be provided from the participant's vested
account.
Form 11-K
Page 10
Vesting
The Plan allows for immediate 100% vesting of participant and Company
contributions and earnings thereon, of all participants who are not included
in a bargaining unit. Effective July 1, 2001, the Plan allows for immediate
100% vesting of the account balances of all participants' who are included
in a bargaining unit.
Payment of Benefits
Participants may, upon attaining 591/2 years of age, elect to withdraw all
or a portion of the value of their account. Upon termination of service for
any reason, participants may elect to withdraw the value of their account,
roll that account value over into a qualified plan or individual retirement
account, or defer this distribution until age 65. In all cases, unless
earlier withdrawn, participants will receive the balance in their account
upon the earlier of attaining age 65 if not then working for the Company,
retirement after reaching age 65, death or total disability. Participants
hired before July 1, 1999 may elect to receive a lump sum amount equal to
the value of their account, an annuity, or a combination of both.
Participants hired, (or employed via a future acquisition and not covered by
a prorated optional form of benefit), on or after July 1, 1999 may only
receive a lump sum distribution. The Plan permits withdrawals on after-tax
and rollover contributions at any time without restrictions.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Basis and Presentation
- ----------------------
The Plan's financial statements are presented on the accrual basis of
accounting.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect amounts reported in
the financial statements. Actual results could differ from those estimates.
Valuation of Investments
- ------------------------
Plan investments are stated at fair value. The Company stock is valued
at its quoted market price on the valuation date. Shares of registered
investment companies are valued at quoted market prices which represent the
net asset value of shares held by the Plan at year-end. Collective income
funds are valued by the fund sponsor based on quoted market prices of the
underlying investments.
Form 11-K
Page 11
Purchases and sales of securities are recorded on a trade date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
Contributions
- -------------
Participant contributions are recorded in the period during which the
Company makes payroll deductions from the Plan participants' earnings.
Matching Company contributions are recorded in the same period.
Payment of Benefits
- -------------------
Participants' benefits are recognized in the Plan financial statements
when paid.
Reclassification
- ----------------
Certain reclassifications have been made to conform previously reported
data to the current presentation.
The following presents investments that represent 5 percent or more of the
Plan's net assets.
December 31,
-------------------------
2000 1999
------------ ------------
Registered investment companies:
PIMCO Total Return Fund, 723,016 and
531,021 shares, respectively $ 7,512,135 $ 5,257,104
Franklin Small Cap Growth Fund-Class A,
92,122 shares - 4,065,318
Collective income funds:
Merrill Lynch Equity Index Trust, 358,520
and 357,435 shares, respectively 32,901,349 36,172,426
Merrill Lynch Retirement Preservation
Trust, 7,617,869 and 4,231,996 shares,
respectively 7,617,869 4,231,996
Common stock:
American Water Works Company, Inc.
(Nonparticipant-directed), 1,393,217 and
1,214,053 shares, respectively 40,925,756 25,798,617
Form 11-K
Page 12
NOTE 3 - INVESTMENTS
- --------------------
During 2000 and 1999, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the years)
appreciated (depreciated) in value as follows:
Year Ended
December 31,
--------------------------
2000 1999
----------- ----------
Registered investment companies $(2,074,633) $ 3,029,688
Collective income funds (3,380,179) 4,186,951
Common stock 10,837,307 (14,525,928)
----------- -----------
Net appreciation (depreciation) in fair value $ 5,382,495 $(7,309,289)
=========== ===========
NOTE 4 - NONPARTICIPANT-DIRECTED INVESTMENTS
- ---------------------------------------------
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments is
as follows:
December 31,
----------------------------
2000 1999
------------ ------------
Net Assets:
Investment in American Water Works
Company, Inc. common stock $ 40,925,756 $ 25,798,617
Employer's contribution receivable 272,390 263,809
Participants' contributions receivable 224,060 233,225
------------ ------------
Net assets available for benefits $ 41,422,206 $ 26,295,651
============ ============
Form 11-K
Page 13
Year Ended December 31,
----------------------------
2000 1999
------------ ------------
Changes in Net Assets:
Dividend income $ 1,221,297 $ 963,103
Net appreciation (depreciation)
in fair value of investments 10,837,307 (14,525,928)
Employer contributions 2,958,055 2,787,442
Participants' contributions 2,546,969 2,686,419
Loan repayments from participants 249,662 265,759
------------ ------------
Total additions 17,813,290 (7,823,205)
------------ ------------
Benefit payments to participants 1,780,369 1,648,155
Loans to participants 441,856 341,781
------------ ------------
Total deductions 2,222,225 1,989,936
Interfund transfers (464,510) 156,038
------------ ------------
Net increase (decrease) 15,126,555 (9,657,103)
Net assets at beginning of year 26,295,651 35,952,754
------------ ------------
Net asset at end of year $ 41,422,206 $ 26,295,651
============ ============
NOTE 5 - PARTICIPANT LOANS
- -----------------------------
Under the terms of the Plan, participants may borrow from their accounts a
minimum of $1,000 up to a maximum of the lesser of $50,000 or 50% of their
contributions to the Plan including earnings thereon. Loans are generally
for a period not to exceed five years, payable in equal monthly installments,
secured by the balance in the participant's account, and bear interest at a
rate of prime plus 1%. Interest rates on loans outstanding ranged from 8.25%
to 10.75% and 8% to 12.50% for the years ended December 31, 2000 and 1999,
respectively. The maximum personal residence loan term is fifteen years for
new loans, and prepayment of loans is permitted. Principal and interest is
paid ratably through payroll deductions.
NOTE 6 - HARDSHIP WITHDRAWALS
- -----------------------------
Participants under age 591/2 may withdraw all or part of their pre-tax
contributions (excluding earnings) only under certain hardship conditions.
A hardship withdrawal can only be requested after withdrawal of all rollover
contributions and any loans available under the Plan have been obtained.
Hardship withdrawals cannot be returned to the Plan and contributions cannot
be made to the Plan for 12 months after a hardship withdrawal has been made.
Form 11-K
Page 14
The Plan permits withdrawals on after-tax and rollover contributions at
any time without restrictions.
NOTE 7 - ADMINISTRATIVE EXPENSES
- --------------------------------
Although it has no obligation to do so, the Company paid substantially all
administrative expenses of the Plan.
NOTE 8 - PLAN TERMINATION
- -------------------------
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
NOTE 9 - FEDERAL INCOME TAX STATUS
- ----------------------------------
The Internal Revenue Service has determined and informed the Company by a
letter dated April 15, 1995, that the Plan and related trusts are designed in
accordance with applicable sections of the Internal Revenue Code ("IRC") and
are, therefore, not subject to tax under present income tax law. The Plan
has been amended since receipt of the determination letter. However, the
Plan administrator believes that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC. In
addition, management is not aware of any course of action or series of events
that have occurred that might adversely affect the Plan's qualified status.
NOTE 10 - RELATED PARTY TRANSACTIONS
- ------------------------
Certain Plan investments are shares of mutual funds and units of
collective income funds managed by Merrill Lynch Trust Company. Merrill
Lynch Trust Company is the trustee as defined by the Plan and, therefore,
these transactions qualify as party-in-interest transactions.
The Plan is interpreted and administered by a Retirement Plan Committee
comprised of five members of management of American Water Works Company.
NOTE 11 - NET ASSET TRANSFERS IN
- -----------------------------------
On September 29, 2000, net assets of $1,903,611 from the Continental Water
Company Group Employee Savings Plan for Northwest Indiana Water Company and
Northern Illinois Water Company merged with and into the Plan.
Form 11-K
Page 15
Schedule I
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Form 5500 - Schedule of Assets
Held for Investment Purposes
December 31, 2000
-----------------------------------------------------------------------------
Current
Shares/Units Issue Cost Value
- ------------ -------- ------------ -----------
9,154 Cash and cash equivalents $ 9,154 $ 9,154
Registered investment companies:
723,016 PIMCO Total Return Fund 7,208,302 7,512,135
121,124 Franklin Small Cap Growth Fund-Class A 4,315,683 4,763,826
53,144 Van Kampen Emerging Growth Fund 4,887,327 3,336,394
90,052 Merrill Lynch International
Index Fund* 1,224,111 1,022,086
Collective income funds:
358,520 Merrill Lynch Equity Index Trust* 32,968,223 32,901,349
7,617,869 Merrill Lynch Retirement Preservation
Trust* 7,617,869 7,617,869
Common Stock:
1,393,217 American Water Works Company, Inc.* 31,476,809 40,925,756
Participants' loans receivable 2,593,783 2,596,783
------------ ------------
$ 92,301,261 $100,685,352
============ ============
*Represents "party-in-interest" for the purposes of Form 5500.
Form 11-K
Page 16
Schedule II
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Form 5500 - Schedule of Reportable Transactions
For the Year Ended December 31, 2000
(Individual or series of transactions in one issue aggregating 5%
or more of the value of Plan assets as of January 1, 2000)*
- ---------------------------------------------------------------------------
Identity Current Value
of Party Purchase Sales Cost of on Transaction Net
Involved Description Price Proceeds Assets Date Gain/(Loss)
- -------- --------------- ------------ ---------- ---------- ---------- --------------
American American Water $ 8,220,575 - - $ 8,220,575 -
Water Works Company,
Works Inc. Common - $3,477,147 $3,394,863 3,477,147 $ 82,284
Company, Stock
Inc.
*Other investment fund transactions are participant-directed, and therefore do not need to
be considered for purposes of preparing this supplemental schedule.
Form 11-K
Page 17
EXHIBIT INDEX
Exhibit
Number Description
- ------- ----------------------------------
23 Consent of Independent Accountants
Exhibit 23 Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-52309) of American Water Works Company, Inc.
of our report dated June 15, 2001 relating to the financial statements of the
Savings Plan for Employees of American Water Works Company, Inc. and
Its Designated Subsidiaries, which appears in this Form 11-K.
PRICEWATERHOUSECOOPERS LLP
Philadelphia, Pennsylvania
June 27, 2001