Page 1 of 27
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, 1998
--------------------------------------------
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
Signature 3
Report of Independent Accountants 6 to 7
Audited Plan Financial Statements and Schedules
Prepared in Accordance With The Financial Reporting
Requirements of ERISA 8 to 27
Exhibit Index 28
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 29, 1999 \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, 1998
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 6-7
Statement of Net Assets Available for Benefits,
with Fund Information as of December 31, 1998 8-9
Statement of Net Assets Available for Benefits,
with Fund Information as of December 31, 1997 10-11
Statement of Changes in Net Assets Available for
Benefits, with Fund Information for the
Year Ended December 31, 1998 12-13
Statement of Changes in Net Assets Available for
Benefits, with Fund Information for the
Year Ended December 31, 1997 14-15
Notes to Financial Statements 16-25
Additional Information:*
Schedule I- Schedule of Assets Held for Investment
Purposes as of December 31, 1998 26
Schedule II - Schedule of Reportable Transactions for
the Year Ended December, 31, 1998 27
* 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
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 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,
1998 and 1997, and the changes in net assets available for benefits for the
years then ended, 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 audits. We conducted our audits 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 audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted 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 the purpose of additional
analysis and is not a required part of the basic financial statements but
is 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. The fund information in the statements of net
assets available for benefits and the statements 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. These
Form 11-K
Page 7
supplemental schedules and fund information are the responsibility of the
Plan's management. The supplemental schedules and fund information 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.
PRICEWATERHOUSECOOPERS LLP
Philadelphia, Pennsylvania
June 21, 1999
Form 11-K
Page 8
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Statement of Net Assets Available for Benefits,
with Fund Information
December 31, 1998
- ---------------------------------------------------------------------------
Index Fixed Company Small
Index Bond Income Stock Capitalization Loan
Fund Fund Fund Fund Fund Fund Total
----------- ---------- ---------- ----------- ---------- ---------- -----------
ASSETS
Investments,
at current value:
Registered
investment companies $27,299,488 $4,617,512 $ -- $ -- $1,841,121 $ -- $33,758,121
Collective
income fund -- -- 5,664,071 -- -- -- 5,664,071
Common stock -- -- -- 35,183,052 -- -- 35,183,052
Participants' loans
receivable -- -- -- -- -- 1,481,154 1,481,154
----------- ---------- ---------- ----------- ---------- ---------- -----------
27,299,488 4,617,512 5,664,071 35,183,052 1,841,121 1,481,154 76,086,398
Employer's
contribution
receivable -- -- -- 258,972 -- -- 258,972
Participants'
contributions
receivable 362,315 87,677 104,107 256,620 59,079 -- 869,798
Accrued income 292,961 85,615 -- 208,256 147,800 -- 734,632
Form 11-K
Page 9
Index Fixed Company Small
Index Bond Income Stock Capitalization Loan
Fund Fund Fund Fund Fund Fund Total
----------- ---------- ---------- ----------- ----------- ---------- -----------
Cash and cash
equivalents
28,609 4,567 3,306 45,854 -- -- 82,336
----------- ---------- ---------- ----------- ----------- ---------- -----------
Net assets available
for benefits $27,983,373 $4,795,371 $5,771,484 $35,952,754 $ 2,048,000 $1,481,154 $78,032,136
=========== ========== ========== =========== =========== ========== ===========
The accompanying notes are an integral part of these financial statements.
Form 11-K
Page 10
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Statement of Net Assets Available for Benefits,
with Fund Information
December 31, 1997
- ---------------------------------------------------------------------------
Index Fixed Company Small
Index Bond Income Stock Capitalization Loan
Fund Fund Fund Fund Fund Fund Total
----------- ---------- ---------- ----------- ---------- ---------- -----------
ASSETS
Investments,
at current value:
Registered
investment companies $18,620,254 $3,606,747 $ -- $ -- $1,359,538 $ -- $23,586,539
Collective
income fund -- -- 4,603,248 -- -- -- 4,603,248
Common stock -- -- -- 23,966,955 -- -- 23,966,955
Participants' loans
receivable -- -- -- -- -- 950,207 950,207
----------- ---------- ---------- ----------- ---------- ---------- -----------
18,620,254 3,606,747 4,603,248 23,966,955 1,359,538 950,207 53,106,949
Employer's
contribution
receivable -- -- -- 190,074 -- -- 190,074
Participants'
contributions
receivable 294,163 71,057 87,552 193,848 46,984 -- 693,604
Accrued income 249,773 19,352 -- 161,575 76,134 -- 506,834
Form 11-K
Page 11
Index Fixed Company Small
Index Bond Income Stock Capitalization Loan
Fund Fund Fund Fund Fund Fund Total
----------- ---------- ---------- ----------- ----------- ---------- -----------
Cash and cash
equivalents
5,988 1,111 1,418 7,385 419 -- 16,321
----------- ---------- ---------- ----------- ----------- ---------- -----------
Net assets available
for benefits $19,170,178 $3,698,267 $4,692,218 $24,519,837 $ 1,483,075 $ 950,207 $54,513,782
=========== ========== ========== =========== =========== ========== ===========
The accompanying notes are an integral part of these financial statements.
Form 11-K
Page 12
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Statement of Changes in Net Assets Available for Benefits,
with Fund Information
For the Year Ended December 31, 1998
- ---------------------------------------------------------------------------
Index Fixed Company Small
Index Bond Income Stock Capitalization Loan
Fund Fund Fund Fund Fund Fund Total
----------- ---------- ---------- ---------- ----------- ---------- -----------
Additions to net assets
attributed to:
Investment income
Interest and
dividends $ 544,760 $ 269,742 $ 242 $ 780,223 $ 159,554 $ 53,042 $ 1,807,563
Net appreciation
(depreciation)in
fair value of
investments 5,355,329 66,209 302,300 6,294,787 (210,804) -- 11,807,821
----------- ---------- ---------- ---------- ----------- ---------- -----------
5,900,089 335,951 302,542 7,075,010 (51,250) 53,042 13,615,384
----------- ---------- ---------- ---------- ----------- ---------- -----------
Contributions
Employer -- -- -- 2,706,087 -- -- 2,706,087
Participants 3,868,204 897,469 1,073,570 2,552,470 642,505 -- 9,034,218
Rollovers from other
qualified plans 233,782 22,940 22,509 65,551 26,234 -- 371,016
Loan repayments
from participants 258,071 70,601 103,193 210,194 25,436 (667,495) --
----------- ---------- ---------- ---------- ----------- ---------- -----------
4,360,057 991,010 1,199,272 5,534,302 694,175 (667,495) 12,111,321
Form 11-K
Page 13
Index Fixed Company Small
Index Bond Income Stock Capitalization Loan
Fund Fund Fund Fund Fund Fund Total
----------- ---------- ---------- ----------- ----------- ---------- -----------
----------- ---------- ---------- ---------- ----------- ---------- -----------
Total additions 10,260,146 1,326,961 1,501,814 12,609,312 642,925 (614,453) 25,726,705
----------- ---------- ---------- ---------- ----------- ---------- -----------
Deductions from net
assets attributed to:
Participants' benefits 617,505 127,302 322,933 1,097,101 38,196 -- 2,203,037
Loans to participants 494,890 79,590 93,610 433,312 43,998 (1,145,400) --
Administrative expenses -- -- -- -- 5,314 -- 5,314
----------- ---------- ---------- ----------- ----------- ---------- -----------
Total deductions 1,112,395 206,892 416,543 1,530,413 87,508 (1,145,400) 2,208,351
----------- ---------- ---------- ----------- ----------- ---------- -----------
Net increase
prior to interfund
transfers 9,147,751 1,120,069 1,085,271 11,078,899 555,417 530,947 23,518,354
Interfund transfers (334,556) (22,965) (6,005) 354,018 9,508 -- --
----------- --------- --------- ---------- ----------- ---------- ----------
Net increase 8,813,195 1,097,104 1,079,266 11,432,917 564,925 530,947 23,518,354
Net assets at beginning
of year 19,170,178 3,698,267 4,692,218 24,519,837 1,483,075 950,207 54,513,782
----------- ---------- ---------- ----------- ----------- ---------- -----------
Net assets at end of
year $27,983,373 $4,795,371 $5,771,484 $35,952,754 $ 2,048,00 $ 1,481,154 $78,032,136
=========== ========== ========== =========== =========== ========== ===========
The accompanying notes are an integral part of these financial statements.
Form 11-K
Page 14
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Statement of Changes in Net Assets Available for Benefits,
with Fund Information
For the Year Ended December 31, 1997
- ---------------------------------------------------------------------------
Index Fixed Company Small
Index Bond Income Stock Capitalization Loan
Fund Fund Fund Fund Fund Fund Total
----------- ---------- ---------- ----------- ---------- ---------- -----------
Additions to net assets
attributed to:
Investment income
Interest and
dividends $ 422,817 $ 208,598 $ 288 $ 590,769 $ 78,636 $ -- $ 1,301,108
Net appreciation
in fair value of
investments 3,863,183 81,414 243,894 5,468,016 141,690 -- 9,798,197
----------- ---------- ---------- ---------- ----------- ---------- -----------
4,286,000 290,012 244,182 6,058,785 220,326 -- 11,099,305
----------- ---------- ---------- ---------- ----------- ---------- -----------
Contributions
Employer -- -- -- 2,313,138 -- -- 2,313,138
Employer
reimbursements
of administrative
expenses -- -- 40,023 -- 8,075 -- 48,098
Participants 3,479,157 878,177 1,106,647 2,393,302 513,185 -- 8,370,468
Rollovers from other
qualified plans 23,358 5,274 20,890 100,046 18,714 -- 168,282
Loan repayments
from participants 148,425 40,172 56,432 123,388 12,212 (380,629) --
----------- ---------- ---------- ---------- ----------- ---------- -----------
3,650,940 923,623 1,223,992 4,929,874 552,186 (380,629) 10,899,986
Form 11-K
Page 15
Index Fixed Company Small
Index Bond Income Stock Capitalization Loan
Fund Fund Fund Fund Fund Fund Total
----------- ---------- ---------- ----------- ---------- ---------- -----------
----------- ---------- ---------- ---------- ----------- ---------- -----------
Total additions 7,936,940 1,213,635 1,468,174 10,988,659 772,512 (380,629) 21,999,291
----------- ---------- ---------- ---------- ----------- ---------- -----------
Deductions from net
assets attributed to:
Participants' benefits 617,952 127,637 200,149 629,559 37,088 -- 1,612,385
Loans to participants 390,317 93,314 170,794 322,108 25,347 (1,001,880) --
Administrative expenses -- -- 36,313 -- 7,094 -- 43,407
----------- ---------- ---------- ----------- ----------- ---------- -----------
Total deductions 1,008,269 220,951 407,256 951,667 69,529 (1,001,880) 1,655,792
----------- ---------- ---------- ----------- ----------- ---------- -----------
Net increase prior to
interfund transfers 6,928,671 992,684 1,060,918 10,036,992 702,983 621,251 20,343,499
Interfund transfers 162,000 (169,114) (59,647) (48,259) 115,020 -- --
----------- ---------- ---------- ----------- ----------- ---------- -----------
Net increase 7,090,671 823,570 1,001,271 9,988,733 818,003 621,251 20,343,499
Net assets at beginning
of year 12,079,507 2,874,697 3,690,947 14,531,104 665,072 328,956 34,170,283
----------- ---------- ---------- ----------- ----------- ---------- -----------
Net assets at end of
year $19,170,178 $3,698,267 $4,692,218 $24,519,837 $ 1,483,075 $ 950,207 $54,513,782
=========== ========== ========== =========== =========== ========== ===========
The accompanying notes are an integral part of these financial statements.
Form 11-K
Page 16
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
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 employees of American Water Works Company, Inc. and its
subsidiary companies ("the Company")(except those hired on a temporary
basis)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 10% of their annual compensation up
to $160,000 for the years ended December 31, 1998 and 1997, as defined in
the Plan. Effective January 1, 1998, the Company began matching 50% of the
first 4% of participant contributions. For the year ended December 31,
1997, the Company matched 45% of the first 4% of participant contributions.
All matching contributions are invested in American Water Works Company,
Inc. 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.
Form 11-K
Page 17
Participant Accounts
- --------------------
With the exception of the Company's contributions to the Plan, each
participant may elect to have their contributions invested in any
combination of five investment options in multiples of 1% up to a maximum
of 10%. Each participant's account is credited with their 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. Benefits to which a participant is entitled are the benefits
that can be provided from the participant's vested account.
Vesting
- -------
Participants are immediately vested in their voluntary contributions
plus earnings thereon. Vesting of Company contributions plus actual
earnings thereon is based on years of continuous service. A participant is
fully vested in Company contributions and earnings thereon after five years
of credited service. Prior to five years of service a participant shall
have no vested balance in such Company contributions and earnings thereon,
except in the case of a participant's death, total disability, or
attainment of age 65, at which point a participant becomes fully vested.
Investment Options
- -------------------
Participants may direct their contributions among any of the following
investment options:
1. Index Fund - Vanguard Institutional Index Fund, invests primarily in
common stocks.
2. Index Bond Fund - Vanguard Bond Index Fund, invests in high grade
corporate and/or government bonds of varying
maturities.
3. Fixed Income Fund - American Express Trust Income Fund III, invests in
a diversified pool of insurance and bank
investment contracts. The Fund also invests in
short-term investments.
Form 11-K
Page 18
4. Company Stock Fund - American Water Works Company, Inc. Stock,funds are
invested in common stock of American Water Works
Company, Inc.
5. Small Capitalization Fund - Vanguard Index Trust Small Capitalization
Stock Fund,invests primarily in common
stocks of small domestic companies.
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, 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 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.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect amounts reported in the financial statements.
Actual results could differ from those estimates.
Form 11-K
Page 19
Risks and Uncertainties
- -----------------------
The Plan provides for investment options in mutual funds, a collective
income fund, and Company common stock. Investment securities are exposed
to various risks, such as interest rate, market and credit risks. Due to
the level of risk associated with certain investment securities and the
level of uncertainty related to changes in the value of investment
securities, it is at least reasonably possible that changes in these risks
in the near term could materially affect participants' account balances and
the amounts reported in the statement of net assets available for benefits
and the statement of changes in net assets available for benefits.
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.
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
- -------------
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.
Form 11-K
Page 20
Payment of Benefits
- -------------------
Participants' benefits are recognized in the Plan financial statements
when paid.
Benefit Obligations
- -------------------
Benefit obligations for persons who have withdrawn from participation
in the Plan but have not been paid are $3,422,828 at December 31, 1998 and
$2,020,427 at December 31,1997.
Forfeitures
- -----------
If a terminated participant does not receive a distribution upon
termination, that portion of a terminated participant's account balance
which has not achieved full vesting will represent a forfeiture on the
terminee's account.
Plan policy allows for terminated participants to return to employment
with the Company within five years of their termination date without
forfeiture of their nonvested account balance. Total nonvested accounts
amounted to 4,191 and 3,535 shares of Company common stock at December 31,
1998 and 1997, respectively. The market value of these nonvested shares
was $141,446 and $96,541 at December 31, 1998 and 1997, respectively.
Total forfeitures amounted to 22 and 0 shares of Company common stock for
1998 and 1997, respectively. Forfeitures are used to reduce future Company
contributions to the Plan.
Reclassification
- ----------------
Certain reclassifications have been made to conform previously
reported data to the current presentation.
Form 11-K
Page 21
NOTE 3 - INVESTMENTS
- --------------------
The Plan's investments are held in trust by Investors Bank and Trust
Company. The following table presents the Plan's investment at
December 31, 1998 and 1997.
Form 11-K
Page 22
December 31, 1998 December 31, 1997
--------------------------- ---------------------------
Shares/units Value Shares/units Value
------------ ------------ ------------ ------------
Investments at current value based on
quoted market price
Registered investment companies:
Vanguard Index Trust Small
Capitalization Stock Fund 86,456 $1,841,121 57,586 $1,359,538
Vanguard Bond Index Fund 453,991 4,617,512* 357,458 3,606,747*
Vanguard Institutional Index Fund 241,853 27,299,488* 207,908 18,620,254*
Collective income fund:
American Express Trust Income
Fund III 414,586 5,664,071* 357,784 4,603,248*
Common stock:
American Water Works Company, Inc. 1,042,095 35,183,052* 877,509 23,966,955*
Participants' loans receivable 1,481,154 950,207
----------- -----------
Total investments $76,086,398 $53,106,949
=========== ===========
*Represent investments that are greater than 5% of Plan net assets.
Form 11-K
Page 23
During 1998 and 1997, the Plan's investments (including investments
bought, sold and held during the years then ended) appreciated in value by
$11,807,821 and $9,798,197 as follows:
Year Ended Year Ended
December 31, 1998 December 31, 1997
----------------- -----------------
Registered investment
companies $ 5,210,734 $4,086,287
Collective income fund 302,300 243,894
Common stock 6,294,787 5,468,016
----------- ----------
Net appreciation in fair value $11,807,821 $9,798,197
=========== ==========
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, secured by the balance in the participant's account,
and bear interest at a rate of prime plus 1%. Interest rates on loans
outstanding at December 31, 1998 range from 8% to 12.5%. If the
participant uses the proceeds to acquire their primary personal residence,
the loan may be for a period not to exceed thirty years. Principal and
interest is paid ratably through payroll deductions. Participant loans
withdrawn from the Plan totaled $1,145,400 and $1,001,880 in 1998 and 1997
respectively. Repayments of loans to the Plan totaled $667,495 and
$380,629 in 1998 and 1997, respectively.
Form 11-K
Page 24
NOTE 5 - HARDSHIP WITHDRAWALS
- -----------------------------
Participants under age 59 1/2 may withdraw all or part of their
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.
NOTE 6 - ADMINISTRATIVE EXPENSES
- --------------------------------
Although it has no obligation to do so, the Company pays substantially
all administrative expenses of the Plan.
NOTE 7 - 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 fully vested in their accounts.
NOTE 8 - 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 and the Plan's tax counsel believe
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.
Form 11-K
Page 25
NOTE 9 - SUBSEQUENT EVENT
- ------------------------
On or about September 20, 1999, the plan intends to transfer all of
its net assets available for benefits into investment options maintained by
Merrill Lynch, which will become the Company's new Plan recordkeeper and
trustee.
Form 11-K
Page 26
SCHEDULE I
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Item 27(a)Form 5500 - Schedule of Assets
Held for Investment Purposes
December 31, 1998
- ---------------------------------------------------------------------------
Shares/Units Issue Cost Value
- ------------ -------- ----------- -----------
Registered investment companies:
Vanguard Index Trust Small
86,456 Capitalization Stock Fund $1,924,377 $1,841,121
453,991 Vanguard Bond Index Fund 4,510,566 4,617,512
241,853 Vanguard Institutional Index Fund 16,689,223 27,299,488
Collective income fund:
American Express Trust
414,586 Income Fund III 4,945,062 5,664,071
Common stock:
1,042,095 American Water Works Company,Inc.* 21,482,765 35,183,052
Participants' loans receivable -- 1,481,154
----------- -----------
$49,551,993 $76,086,398
=========== ===========
*Party-In-Interest
Form 11-K
Page 27
SCHEDULE II
SAVINGS PLAN FOR EMPLOYEES OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
Line 27(d) Form 5500 - Schedule of Reportable Transactions
For the Year Ended December 31, 1998
(Individual or series of transactions in one issue aggregating 5% or
more of the value of Plan assets as of January 1, 1998)
- -------------------------------------------------------------------------
Identity Current Value
of Party Number of Purchase Sales Cost of on Transaction Net
Involved Description Transactions Price Proceeds Assets Date Gain/(Loss)
- -------- --------------- ------------ ---------- ---------- ---------- -------------- -----------
American American Water 76 $7,049,133 $ -- $ -- $7,049,133 $ --
Water Works Company,
Works Inc. Common 53 -- 1,710,423 1,582,873 -- 127,550
Company, Stock
Inc.
The Vanguard
Vanguard Institutional
Group Index Fund 58 6,373,098 -- -- 6,373,098 --
55 -- 2,772,351 2,498,219 -- 274,132
Form 11-K
Page 28
EXHIBIT INDEX
Exhibit
Number Description
- ------- ----------------------------------
23 Consent of Independent Accountants