Page 1 of 23 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 (FEE REQUIRED) For the fiscal year ended December 31, 1995 -------------------------------------------- OR ( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from to ------------------- --------------------- Commission File Number 1-3437-2 ---------------------------------------------------- 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 PAGE 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 23 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 26, 1996 \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 Additional Information December 31, 1995 Form 11-K Page 5 Savings Plan for Employees of AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Table of Contents FINANCIAL STATEMENTS: PAGE Report of Independent Accountants 6 Statement of Net Assets Available for Benefits as of December 31, 1995 7 Statement of Net Assets Available for Benefits 9 as of December 31, 1994 Statement of Changes in Net Assets Available for Benefits, with Fund Information for the Year Ended December 31, 1995 11 Statement of Changes in Net Assets Available for Benefits, with Fund Information for the Year Ended December 31, 1994 13 Notes to Financial Statements 15 Additional Information* Schedule I- Schedule of Assets Held for Investment Purposes at December 31, 1995 21 Schedule II - Schedule of Reportable Transactions for the Year Ended December, 31, 1995 22 * Other schedules required by Section 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 June 26, 1996 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 statement of net assets available for benefits, and the related statement 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, 1995 and 1994 and the changes in net assets available for benefits for the years ended December 31, 1995 and December 31, 1994, in conformity with generally accepted accounting principles. 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 audit. We conducted our audit of these statements in accordance with generally accepted auditing standards 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 audit provides a reasonable basis for the opinion expressed above. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information included in Schedules I and II is presented for purposes of additional analysis and is not a required part of the basic financial statements but is additional information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the statement of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for benefits of each fund. Schedules I and II and the Fund Information have been subjected to the auditing procedures applied in the audit 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. /s/ Price Waterhouse - --------------------- Price Waterhouse Savings Plan for Employees of Form 11-K Page 7 AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Statement of Net Assets Available for Benefits December 31, 1995 - ------------------------------------------------------------------ Index Index Fixed Company Equity Bond Income Stock Fund Fund Fund Fund Total ---------- ---------- ---------- ---------- ---------- ASSETS Investments, at fair value: Mutual fund $6,702,120 -- -- -- $6,702,120 Collective income funds -- $1,785,259 $2,211,954 -- 3,997,213 Common stock -- -- -- $8,305,114 8,305,114 ---------- ---------- ---------- ---------- ---------- Total investments 6,702,120 1,785,259 2,211,954 8,305,114 19,004,447 Receivables: Employer's contribution -- -- -- 116,709 116,709 Participants' contributions 191,855 63,337 71,472 124,849 451,513 receivable Accrued income 35 10 11 43 99 Participants' loans receivable 38,892 17,979 16,605 29,964 103,440 Form 11-K Page 8 Index Index Fixed Company Equity Bond Income Stock Fund Fund Fund Fund Total ---------- ---------- ---------- ---------- ----------- Cash and cash equivalents to be invested 2,085 47,412 688 33,043 83,228 ---------- ---------- ---------- ---------- ----------- Total assets 6,934,987 1,913,997 2,300,730 8,609,722 19,759,436 ---------- ---------- ---------- ---------- ----------- LIABILITIES Accounts payable -- -- -- -- -- ---------- ---------- ---------- ---------- ----------- Total liabilities -- -- -- -- -- ---------- ---------- ---------- ---------- ----------- Net assets available for benefits $6,934,987 $1,913,997 $2,300,730 $8,609,722 $19,759,436 ========== ========== ========== ========== =========== The accompanying notes are an integral part of these financial statements. Savings Plan for Employees of Form 11-K Page 9 AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Statement of Net Assets Available for Benefits December 31, 1994 - -------------------------------------------------------------------- Index Index Fixed Company Equity Bond Income Stock Fund Fund Fund Fund Total ---------- ---------- ---------- ---------- ---------- ASSETS Investments, at fair value: Mutual fund $3,088,159 -- -- -- $3,088,159 Collective income funds -- $ 974,753 $1,313,018 -- 2,287,771 Common stock -- -- -- $3,008,477 3,008,477 ---------- ---------- ---------- ---------- ---------- Total investments 3,088,159 974,753 1,313,018 3,008,477 8,384,407 Receivables: Employer's contribution -- -- -- 117,356 117,356 Participants' contributions 183,636 64,903 71,978 123,968 444,485 Accrued income 133 241 118 303 795 Participants' loans 4,224 1,300 673 3,161 9,358 Form 11-K Page 10 Index Index Fixed Company Equity Bond Income Stock Fund Fund Fund Fund Total ---------- ---------- ---------- ---------- ---------- Cash and cash equivalents to be invested 1,286 60,562 1,614 17,872 81,334 ---------- --------- ---------- ---------- ---------- Total assets 3,277,438 1,101,759 1,387,401 3,271,137 9,037,735 ---------- ---------- ---------- ---------- ---------- LIABILITIES Accounts payable 7,166 2,190 26,313 9,129 44,798 ---------- ---------- ---------- ---------- ---------- Total liabilities 7,166 2,190 26,313 9,129 44,798 ---------- ---------- ---------- ---------- ---------- Net assets available for benefits $3,270,272 $1,099,569 $1,361,088 $3,262,008 $8,992,937 ========== ========== ========== ========== ========== The accompanying notes are an integral part of these financial statements. Savings Plan for Employees of Form 11-K Page 11 AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 1995 - ----------------------------------------------------------------- Index Index Fixed Company Equity Bond Income Stock Fund Fund Fund Fund Total ---------- ---------- ---------- ---------- ----------- Additions to net assets attributed to: Investment income Interest and dividends $ 127,985 $ 3,472 $ 486 $ 206,064 $ 338,007 Net appreciation in fair value of investments 1,414,428 167,494 117,450 2,264,864 3,964,236 ---------- ---------- ---------- ---------- ----------- 1,542,413 170,966 117,936 2,470,928 4,302,243 ---------- ---------- ---------- ---------- ----------- Contributions Employer -- -- -- 1,429,529 1,429,529 Participants 2,283,634 709,134 907,409 1,581,318 5,481,495 Rollovers 14,847 11,414 5,230 18,749 50,240 ---------- ---------- ---------- ---------- ----------- 2,298,481 720,548 912,639 3,029,596 6,961,264 ---------- ---------- ---------- ---------- ----------- Total additions 3,840,894 891,514 1,030,575 5,500,524 11,263,507 ---------- ---------- ---------- ---------- ----------- Deductions from net assets attributed to: Participants' benefits 141,500 57,527 74,997 125,714 399,738 Form 11-K Page 12 Index Index Fixed Company Equity Bond Income Stock Fund Fund Fund Fund Total ---------- ---------- ---------- ---------- ----------- Net depreciation in fair value of investments -- -- -- -- -- Net Loans 34,668 16,679 15,931 26,804 94,082 Administrative expenses 11 2,880 5 292 3,188 ---------- ---------- ---------- ---------- ----------- Total deductions 176,179 77,086 90,933 152,810 497,008 ---------- ---------- ---------- ---------- ----------- Net increase 3,664,715 814,428 939,642 5,347,714 10,766,499 Net assets at beginning of year 3,270,272 1,099,569 1,361,088 3,262,008 8,992,937 ---------- ---------- ---------- ---------- ----------- Net assets at end of year $6,934,987 $1,913,997 $2,300,730 $8,609,722 $19,759,436 ========== ========== ========== ========== =========== The accompanying notes are an integral part of these financial statements. Savings Plan for Employees of Form 11-K Page 13 AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 1994 - --------------------------------------------------------------- Index Index Fixed Company Equity Bond Income Stock Fund Fund Fund Fund Total ---------- ---------- ---------- ---------- ---------- Additions to net assets attributed to: Investment income Interest and dividends $ 69,651 $ 3,776 $ 2,050 $ 66,895 $ 142,372 Net appreciation in fair value of investments -- -- 51,246 -- 51,246 ---------- ---------- ---------- ---------- ---------- 69,651 3,776 53,296 66,895 193,618 ---------- ---------- ---------- ---------- ---------- Contributions Employer -- -- -- 998,984 998,984 Participants 2,134,904 738,618 806,178 1,430,509 5,110,209 Rollovers 34,494 4,506 49,814 31,551 120,365 ---------- ---------- ---------- ---------- ---------- 2,169,398 743,124 855,992 2,461,044 6,229,558 ---------- ---------- ---------- ---------- ---------- Total additions 2,239,049 746,900 909,288 2,527,939 6,423,176 ---------- ---------- ---------- ---------- ---------- Deductions from net assets attributed to: Participants' benefits 45,607 11,786 54,712 29,672 141,777 Form 11-K Page 14 Index Index Fixed Company Equity Bond Income Stock Fund Fund Fund Fund Total ---------- ---------- ---------- ---------- ---------- Net depreciation in fair value of investments 23,894 15,037 -- 162,882 201,813 Net loans 4,224 1,300 673 3,161 9,358 Administrative expenses 60 2,072 31 49 2,212 ---------- ---------- ---------- ---------- ---------- Total deductions 73,785 30,195 55,416 195,764 355,160 ---------- ---------- ---------- ---------- ---------- Net increase 2,165,264 716,705 853,872 2,332,175 6,068,016 Net assets at 1,105,008 382,864 507,216 929,833 2,924,921 beginning of period ---------- ---------- ---------- ---------- ---------- Net assets at end of period $3,270,272 $1,099,569 $1,361,088 $3,262,008 $8,992,937 ========== ========== ========== ========== ========== The accompanying notes are an integral part of these financial statements. Form 11-K Page 15 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 American Water Works Company, Inc. (the ``Company'') 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 agreement for a more complete description of the Plan's provisions. General - ------- The Plan is a defined contribution 401(k) savings plan covering substantially all full-time employees of the Company who have completed six months of service and are age eighteen or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (``ERISA''). Contributions - ------------- Participants may contribute up to 6% of their annual compensation up to $150,000 for the year ended December 31, 1995 as defined in the Plan. For the period August 1, 1994 until December 31, 1995, the Company matched 40% of the first 3% of participant contributions. Previously, the Company matched 30% of the first 2% of participant contributions. All matching contributions are invested in Company common stock. In the event of certain circumstances, the Company may contribute additional amounts. Forfeitures, if any, are used to reduce the Company's future contributions to the Plan. Participant Accounts - -------------------- With the exception of the Company's contributions to the Plan, each participant may elect to have his contributions invested in any combination of four investment options in multiples of 25%. Each participant's accounts are credited with his contributions and an allocation of the Company's contribution and Plan earnings. Allocations are based on participant contributions or account balances, as defined in the Plan. The Company's contributions to the Plan are invested in the Company Stock Fund. Form 11-K Page 16 Vesting - ------- Participants are immediately vested in their voluntary contributions plus earnings thereon. Vesting of Company contributions is based on years of continuous service. A participant is fully vested after five years of credited service. Payment of Benefits - ------------------- Participants may, upon attaining 59 1/2 years of age, elect to withdraw all or a portion of the value of their account. Upon termination of service for any reason, a participant 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, a participant 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, except that in all cases such distribution will be made upon attainment of age 70 1/2 for participants who are still working for the Company. Participants may elect to receive a lump sum amount equal to the value of their account, an annuity, or a combination of both. NOTE 2 - SUMMARY OF ACCOUNTING POLICIES - --------------------------------------- Basis and Presentation - ---------------------- The financial statements are presented on the accrual basis of accounting. Valuation of Investments - ------------------------ Plan investments are stated at fair value. The Company stock is valued at the latest closing price on the valuation date. Mutual fund investments are valued at the latest closing net asset value on the valuation date representing the value at which shares of the fund may be purchased or redeemed. Collective income funds are valued by the Fund sponsor. Contributions - ------------- Employee 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. Benefit Obligations - ------------------- Benefit obligations for persons who have withdrawn from participation in the Plan are $46,908 at December 31, 1995 and $922 at December 31, 1994 and will be recognized in the Plan financial statements when paid. Form 11-K Page 17 NOTE 3 - INVESTMENTS - -------------------- The Plan's investments are held in trust by The First National Bank of Boston. The following table presents the Plan's investments at December 31, 1995 and 1994. December 31, 1995 December 31, 1994 -------------------------- --------------------------- Shares/units Value Shares/units Value ------------ ----------- ------------- ---------- Investments at fair value based on quoted market price Mutual fund: Vanguard Index Trust 116,356 $ 6,702,120 71,868 $3,088,159 Collective funds: EB MBA Composite Bond Index 5,114 1,785,259 3,156 974,753 American Express Trust Income Fund I 55,774 2,211,954 35,136 1,313,018 Common Stock: American Water Works Company, Inc. 213,636 8,305,114 111,425 3,008,477 ----------- --------- Total investments $19,004,447 $8,384,407 =========== ========= Form 11-K Page 18 During 1995 and 1994, the Plan's investments (including investments bought, sold and held during the years then ended) appreciated (depreciated) in value by $3,964,236 and ($150,567) as follows: Year Ended Year Ended December 31, 1995 December 31, 1994 ----------------- ----------------- Mutual fund $1,414,428 $ (23,894) Collective funds 284,944 36,209 Common stock 2,264,864 (162,882) ---------- ---------- Net change in fair value $3,964,236 $(150,567) ========== ========== Form 11-K Page 19 NOTE 4 - 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, are secured by the balance in the participant's account and bear interest at a rate commensurate with local market rates for similar loans. If the participant uses the proceeds to acquire their primary personal residence, the loan may be for a period not to exceed thirty years. Participant loans withdrawn from the Plan totaled $120,204 and $10,116 in 1995 and 1994, respectively. Repayments of participant loans to the Plan totaled $26,122 and $758 in 1995 and 1994, respectively. NOTE 5 - HARDSHIP WITHDRAWALS - ----------------------------- Participants under age 59 1/2 may withdraw all or part of their contributions (excluding earnings) only under certain conditions of hardship. 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. NOTE 6 - ADMINISTRATIVE EXPENSES - -------------------------------- Although it has no obligation to do so, the Company pays substantially all administrative expenses of the Plan. NOTE 7 - ROLLOVER - ----------------- During 1995 and 1994, participants transferred account balances totaling $50,240 and $120,365, respectively, from other qualified plans into 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. In the event of Plan termination, participants will become 100 percent vested in their accounts. Form 11-K Page 20 NOTE 9 - 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. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. 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 - SUBSEQUENT EVENTS - --------------------------- Beginning January 1, 1996, the Company will match 45% of the first 4% of participant contributions. For participant contributions received after January 1, 1998, the Company will match 50% of the first 4% of participant contributions. Also effective in 1996, the basis upon which participants can contribute has increased to a maximum of 10% of base compensation not to exceed the Internal Revenue Code's limit. In 1996, a fifth investment option, the Vanguard Small Capital Investment Fund, will be added for participants' contributions to the Plan. Participant contributions will also be able to be invested in any combination of the five investment options in multiples of 1%. Form 11-K Page 21 SCHEDULE I Savings Plan for Employees of AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Item 27a Form 5500 - Schedule of Assets Held for Investment Purposes December 31, 1995 - --------------------------------------------------------------------------- Shares/Units Issue Cost Value - ------------ -------- --------- ------- Mutual Fund: 116,356 Vanguard Index Trust $ 5,353,394 $6,702,120 Collective Funds: 5,114 EB MBA Composite Bond Index 1,634,582 1,785,259 American Express Trust 55,774 Income Fund I 2,110,371 2,211,954 Common Stock: 213,636 American Water Works Company, Inc. 6,077,884 8,305,114 ----------- ----------- $15,176,231 $19,004,447 =========== =========== SCHEDULE II Form 11-K Page 22 Savings Plan for Employees of AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Line 27d Form 5500 - Schedule of Reportable Transactions (Individual or series of transactions in one issue aggregating 5% or more of the value of Plan assets as of December 31, 1994.) For the Year Ended December 31, 1995 - ------------------------------------------------------------------------- Identity Current Value of Party Number of Purchase Sales Cost of on Transaction Net Involved Description Transactions Price Proceeds Assets Date Gain/Loss - -------- --------------- ------------ ---------- ---------- ---------- -------------- --------- Dreyfus Dreyfus Funds Government Cash Management 184 $ 9,437,171 Dreyfus Dreyfus Funds Government Cash Management 142 $9,455,835 $9,455,835 $9,455,835 American Water American Water Works Works Company, Inc. Co. Inc. Common Stock 69 3,275,879 The Vanguard Vanguard Index Group Trust 11 2,034,956 Form 11-K Page 23 Identity Current Value of Party Number of Purchase Sales Cost of on Transaction Net Involved Description Transactions Price Proceeds Assets Date Gain/Loss - -------- --------------- ------------ ---------- ---------- ---------- -------------- --------- American Express Trust American Express Company Trust Income Fund I 15 852,189 Mellon EB Temporary Bank Investment Fund 24 605,181 Mellon EB Temporary Bank Investment Fund 15 660,892 660,892 660,892 Mellon EB MDA Composite Bank Bond Index 12 658,819