8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 18, 2017

American Water Works Company, Inc.

(Exact name of registrant as specified in its charter)

Commission File Number: 001-34028

Delaware	51-0063696
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

1025 Laurel Oak Road

Voorhees, NJ 08043

(Address of principal executive offices, including zip code)

(856) 346-8200

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 7.01.    Regulation FD.

On December 18, 2017, Pennsylvania-American Water Company (“PAWC”), a wholly owned subsidiary of American Water Works Company, Inc. (the “Company”), issued a press release announcing that PAWC has completed the acquisition (the “System Purchase”) of the wastewater assets (the “System Assets”) of The Municipal Authority of the City of McKeesport (“Seller”) from Seller and the City of McKeesport (the “City”).

A copy of the press release has been included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference in response to this Item 7.01.  A copy of an Acquisition Fact Sheet, dated December 18, 2017, to be used by the Company and PAWC in connection with discussions about the System Purchase, has been included as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference in response to this Item 7.01.

The information furnished in response to this Item 7.01, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall they be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01.    Other Events.

On December 18, 2017, PAWC completed the System Purchase pursuant to the terms and conditions of that certain Asset Purchase Agreement, dated September 9, 2016, as amended, by and among PAWC, Seller and the City (the “Asset Purchase Agreement”). The System Assets are used to provide wastewater service to approximately 22,000 customers located in the City, the City of Duquesne, Port Vue Borough and the Borough of Dravosburg, including customers in communities that are parties to certain municipal service agreements as described in the Asset Purchase Agreement.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements included in this Current Report on Form 8-K are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. In some cases, these forward-looking statements can be identified by words with prospective meanings such as “intend,” “plan,” “estimate,” “believe,” “anticipate,” “expect,” “predict,” “project,” “propose,” “assume,” “forecast,” “outlook,” “future,” “pending,” “goal,” “objective,” “potential,” “continue,” “seek to,” “may,” “can,” “will,” “should” and “could,” or the negative of such terms or other variations or similar expressions.   These forward-looking statements are predictions based on the Company’s current expectations and assumptions regarding future events.  They are not guarantees or assurances of any outcomes, performance or achievements, and readers are cautioned not to place undue reliance upon them.  The forward-looking statements are subject to a number of estimates and assumptions, and known and unknown risks, uncertainties and other factors.  Actual results may differ materially from those discussed in the forward-looking statements included in this Current Report on Form 8-K as a result of the factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission (the “SEC”) on February 21, 2017, and other filings with the SEC, and additional risks and uncertainties, including with respect to (1) the occurrence of the benefits and synergies expected or predicted to occur as a result of the completion of the System Purchase; (2) unexpected costs, liabilities or delays associated with the System Purchase or the integration of the System Assets; (3) regulatory, legislative, local or municipal actions affecting the water and wastewater industries, which could adversely affect PAWC; and (4) other economic, political, business and other factors.

These forward-looking statements are qualified by, and should be read together with, the risks and uncertainties set forth above and the risk factors included in the Company’s annual and quarterly reports as filed with the SEC, and readers should refer to such risks, uncertainties and risk factors in evaluating such forward-looking statements.  Any forward-looking statements speak only as of the date of this Current Report on Form 8-K.  The Company does not have any obligation or intention to update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as otherwise required by the federal securities laws.  New factors emerge from time to time, and it is not possible for us to predict all such factors.  Furthermore, it may not be possible to assess the impact of any such factor on the Company’s or PAWC’s business, either viewed independently or together, or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement.  The foregoing factors should not be construed as exhaustive.

Item 9.01.Financial Statements and Exhibits.

(d)    Exhibits.

The following exhibits have been furnished herewith:

Exhibit Number	Description
99.1	Press Release, dated December 18, 2017, issued by PAWC.
99.2	Acquisition Fact Sheet, dated December 18, 2017.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AMERICAN WATER WORKS COMPANY, INC.
Dated: December 18, 2017	By:	/s/ LINDA G. SULLIVAN
		Linda G. Sullivan
		Executive Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT: Gary Lobaugh

Pennsylvania American Water

T: 724-873-3674

M: 724-944-5148

Gary.lobaugh@amwater.com

PENNSYLVANIA AMERICAN WATER

CLOSES ACQUISITION OF

MCKEESPORT WASTEWATER SYSTEM

First transaction completed under commonwealth’s Fair Market Value legislation

MCKEESPORT, Pa. (December 18, 2017) –Pennsylvania American Water, a wholly owned subsidiary of American Water, announced today that it has completed the acquisition of the wastewater system assets of the Municipal Authority of the City of McKeesport (MACM). The purchase price is approximately $159 million.

The transaction marks the first acquisition completed under Pennsylvania’sAct 12 of 2016, whichallows municipalities to sell water and wastewater systems for a price based on the fair market value of the system.

“As the first finalized sale under Pennsylvania’s Fair Market Value legislation, this acquisition establishes a strong example for other communities to consider,” said Pennsylvania American Water President Jeffrey McIntyre. “Prior to the passage of Act 12, the depreciated cost of this system might have prevented the City of McKeesport from the opportunity for financial stability.”

The MACM wastewater system provides service to approximately 22,000 customers, including those served under bulk contracts, in 13 municipalities in Allegheny County.

“The crux of this transaction is bringing financial stability to the City of McKeesport and saving our taxpayers from Act 47 municipal bankruptcy,” Mayor Michael Cherepko said. “When we think about it, the privatization of local sewage services truly makes sense. The City isn’t involved in other utility businesses - gas, electric, water - and this is a final step in providing consistent, regulated utility services to our community.”

The transaction’s closing follows a regulatory review and approval process by the U.S. Environmental Protection Agency (EPA), Pennsylvania Department of Environmental Protection (DEP), the Pennsylvania Public Utility Commission (PUC) and Allegheny County Health Department.

The PUC recognized Pennsylvania American Water’s ability to provide much needed investment in the system, enhanced customer service and assistance program for low-income customers when the commission approved the acquisition on October 26, 2017.

-more-

PRESS RELEASE     www.amwater.com

McIntyre added that long-term rate stability is one of the most important benefits for these wastewater customers. Under the purchase agreement, Pennsylvania American Water will not increase base wastewater rates any earlier than one calendar year after the closing. The company’s rates are regulated by the PUC and any future rate changes would have to be reviewed and approved by the PUC.

He also pointed out that low-income wastewater customers in McKeesport are eligible to apply for assistance through Pennsylvania American Water’s H2O Help to Others Program, which offers grants and discounts on bills for those customers who qualify.

All MACM workers who operate the wastewater system have been offered employment, subject to standard pre-employment screening. The employees gain immediate access to the training, development and career opportunities in any of the operations of Pennsylvania American Water or its parent company.

This acquisition adds to the company’s series of municipal wastewater transactions. In 2016, Pennsylvania American Water acquired the wastewater assets of the Scranton Sewer Authority in Lackawanna County and the Borough of New Cumberland in Cumberland County.

Pennsylvania American Water now operates wastewater systems in Adams, Allegheny, Beaver, Chester, Clarion, Cumberland, Lackawanna, Monroe, Northumberland, Pike, Washington and York counties.

Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK), is the largest water utility in the state, providing high-quality and reliable water and/or wastewater services to approximately 2.3 million people. Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. Marking its 130th anniversary this year, the company employs more than 6,700 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to an estimated 15 million people in 47 states and Ontario, Canada. More information can be found at www.amwater.com.

# # #

2

EX-99.2

Exhibit 99.2

ACQUISITION FACT SHEET

December 18, 2017

AMERICAN WATER: ACQUISITION OF McKEESPORT (PA) WASTEWATER SYSTEM

Acquisition Overview

• First acquisition utilizing Act 12 to close in Pennsylvania; consistent with state policy to promote use of fair market value for water and wastewater system acquisitions. Approved by PUC following stipulated settlement by all parties.

• Acquisition consistent with American Water's strategy to grow its regulated business by acquiring wastewater customers in areas where it already provides water services to customers.

• Purchase price of $159 million with approved rate base of $158M.

• Acquisition consistent with intent of Pennsylvania Act 11 legislation (facilitates needed investment in wastewater systems)

• Transaction expected to be EPS accretive in the first year after close (2018); with additional EPS growth expected.

• Recently completed $62 million expansion and upgrade project for the main treatment plant and related infrastructure to comply with more stringent state and federal wastewater treatment guidelines and to accommodate growth.

• American Water expects to finance this acquisition with debt allocated to Pennsylvania American Water.

• Will operate as a part of Pennsylvania American Water; all 44 Authority employees were offered employment

KEY FACTS

Customers (including those served under bulk contracts) 22,000

Miles of collection & interceptor sewers 144

Treatment Plant Capacity (MGD) 62.5 (peak)

Employees 47

Acquisition Financing

• American Water has sufficient financing capacity to fund the transaction

Acquisition Strategy

• McKeesport transaction strengthens the company's position in wastewater sector and further demonstrates its capabilities

• Acquisition of customers adjacent to existing water footprint allows Pennsylvania American Water to achieve operating efficiencies

• As the largest regulated water and wastewater utility in the United States and Pennsylvania, this acquisition further increases scale, demonstrating American Water as the preferred partner for water and wastewater acquisitions.

Service Area

• Expands PAWC service area in Southwestern part of the state

• MACM is adjacent to PAWC Mon- Valley operations, with some overlap in customer base

• Additional growth opportunity through regionalization of nearby systems and bulk treatment contracts

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this Acquisition Fact Sheet are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, the source of financing for the

acquisition; the determination of the final purchase price; the ability to achieve certain benefits relating to the transaction and the operations acquired; Pennsylvania American Water's ability to retain the employees of the acquired system; unexpected costs, liabilities or delays associated

with the acquisition or the integration of the acquired assets; regulatory, legislative, local or municipal actions affecting the water and wastewater industries, which could adversely affect PAWC; and other economic, political, business and other factors. These statements are based on the

current expectations of management of Pennsylvania American Water. There are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements, which are disclosed in Pennsylvania American Water's press release dated

December 18, 2017 and American Water's filings with the Securities and Exchange Commission (the "SEC"). Forward-looking statements are not guarantees or assurances of future performance or results, and American Water and Pennsylvania American Water do not undertake any duty

to update any forward-looking statement. A reconciliation of 2016 Adjusted EPS to 2016 GAAP EPS and other related information may be found in American Water's Current Report on Form 8-K, as filed with the SEC on December 11, 2017.

Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. Marking its 130th anniversary this year, the company employs more than 6,700 dedicated professionals who provide regulated and market-based drinking water, wastewater and

other related services to an estimated 15 million people in 47 states and Ontario, Canada. More information can be found at www.amwater.com

The Municipal Authority of the City of McKeesport was established in 1949 to provide wastewater treatment to the City. The Authority provided wastewater treatment for 8 surrounding municipalities under bulk contracts, resulting in service to a population of 64,000 people.

The Authority will be dissolved as a result of this transaction.

"The crux of this transaction is bringing financial stability to the City of McKeesport and saving our taxpayers from Act 47 municipal bankruptcy. When we think about it, the privatization of local sewage services truly makes sense. The City isn't involved in other utility businesses - gas,

electric, water - and this is a final step in providing consistent, regulated utility services to our community." - Michael Cherepko, McKeesport Mayor