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): March 29, 2016

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))

Item 7.01.Regulation FD. 

On March 30, 2016, Pennsylvania-American Water Company, a wholly owned subsidiary of American Water Works Company, Inc. (the “Company”), issued a press release announcing that it has entered into an Asset Purchase Agreement, dated as of March 29, 2016, with The Sewer Authority of the City of Scranton (the “SSA”).  Additional information on the Asset Purchase Agreement and the transactions contemplated thereby is included in response to Item 8.01 to this Current Report on Form 8-K.  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 March 30, 2016, to be used by the Company in connection with discussions about the Asset Purchase Agreement and the System Purchase (as defined below), 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 March 29, 2016, Pennsylvania American Water entered into an Asset Purchase Agreement with the SSA whereby Pennsylvania American Water is to acquire substantially all of the wastewater collection and treatment system assets of the SSA (the “System Assets”) for a total transaction value of approximately $195.0 million, subject to certain adjustments as provided in the Asset Purchase Agreement (the “System Purchase”).  The SSA currently uses the System Assets to service approximately 31,000 wastewater customers in the City of Scranton and Dunmore Borough, Pennsylvania.

Pennsylvania American Water is seeking to close the System Purchase by September 30, 2016.  If the closing does not occur on or before October 15, 2016 (the “Termination Date”), either party may terminate the Asset Purchase Agreement so long as the terminating party is not in breach or default of its obligations thereunder. Each party has the right, subject to certain conditions, to extend the Termination Date to a date that is not later than December 31, 2016, and if any of the regulatory conditions specified in the Asset Purchase Agreement have not been satisfied as of the extended Termination Date, each party would have the right to extend the Termination Date again to a date that is not later than March 31, 2017. The Asset Purchase Agreement may also be terminated under specified conditions, including, without limitation, with respect to:  a material adverse effect (as defined in the Asset Purchase Agreement) involving the SSA or its wastewater system; a condemnation or casualty involving the SSA’s real property or the System Assets; the inability of the SSA to comply with specified covenants with respect to title to properties and occupancy agreements; and the inability to obtain a required governmental approval or consent, or the conditioning of such a consent or approval in a manner that is deemed unacceptable to the parties.

The SSA is currently subject to a Consent Decree with the U.S. Environmental Protection Agency (the “EPA”) and the Pennsylvania Department of Environmental Protection (“PaDEP”), which requires the SSA to complete significant upgrades to its sewer system at an estimated cost of $140 million.  As a part of the System Purchase, Pennsylvania American Water will be required to cause the Consent Decree to be amended to allow it to assume the obligations and liabilities of the SSA thereunder.  The closing of the System Purchase is subject to the approval of the Pennsylvania Public Utility Commission, and, with respect to the amendment of the Consent Decree, the consent of the EPA, PaDEP, the U.S. Department of Justice and the U.S. District Court for the Middle District of Pennsylvania.  The closing of the System Purchase is also subject to the compliance of the parties with various interim affirmative and negative covenants, as well as the satisfaction of various required and customary conditions to closing.

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,” “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.  Forward-looking statements relate to, among other things, the ability to complete the closing of the System Purchase and the anticipated closing date; the ability of the parties to

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satisfy closing and other conditions related to the System Purchase; and the ability of the parties to obtain regulatory and other approvals and consents.  These forward-looking statements are predictions based on American Water’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, 2015, as filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2016, and other filings with the SEC, and additional risks and uncertainties, including with respect to (1) obtaining the regulatory and other approvals and consents required to complete the System Purchase; (2) satisfying other conditions to the closing of the System Purchase; (3) the occurrence of the benefits and synergies expected or predicted to occur as a result of the completion of the System Purchase; (4) unexpected costs, liabilities or delays associated with the System Purchase or the integration of the System Assets; (5) regulatory, legislative, local or municipal actions affecting the water and wastewater industries, which could adversely affect Pennsylvania American Water; (6) the ability of Pennsylvania American Water and/or the Company to finance the System Purchase from cash flows from operations and existing sources of liquidity; (7) Pennsylvania American Water’s ability to comply with the terms and conditions of the Consent Decree after the closing of the System Purchase; and (8) other economic, 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 Pennsylvania American Water’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.

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Item 9.01.Financial Statements and Exhibits. 

(d) Exhibits

The following exhibits have been furnished herewith:

Exhibit No.	Description of Exhibit
99.1	Press Release, dated March 30, 2016, issued by Pennsylvania American Water.
99.2	Acquisition Fact Sheet, dated March 30, 2016.

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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: March 30, 2016	By:	/s/ MICHAEL A. SGRO
		Michael A. Sgro
		Executive Vice President, General Counsel and Secretary

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EXHIBIT INDEX

Exhibit	Description
99.1*	Press Release, dated March 30, 2016, issued by Pennsylvania American Water.
99.2*	Acquisition Fact Sheet, dated March 30, 2016.

*Furnished herewith.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE CONTACT: Susan Turcmanovich Pennsylvania American Water T: 570-351-0120 Pager: 888-441-2138 susan.turcmanovich@amwater.com

Pennsylvania American Water Announces Agreement to Acquire Scranton Sewer System

SCRANTON, Pa., March 30, 2016 – Pennsylvania American Water, announced today that it has signed an agreement to acquire the wastewater assets of the Scranton Sewer Authority (SSA). The total value of the transaction is approximately $195 million.

Pennsylvania American Water and the SSA will seek approval of the acquisition from the U.S. Environmental Protection Agency, Pennsylvania Department of Environmental Protection, and Pennsylvania Public Utility Commission. The signing of the purchase agreement is the culmination of negotiations between Pennsylvania American Water and SSA officials after the parties signed a Memorandum of Understanding last December. Pennsylvania American Water originally submitted its bid on May 1, 2015, as part of SSA’s extensive request for proposals process.

"Our company and our employees have been the water service provider for this community for decades, and we are excited for the opportunity to be the future provider of wastewater service to our Scranton and Dunmore customers," said Pennsylvania American Water President Kathy L. Pape. "Once the transaction is closed, we can ensure long-term rate stabilization for customers while providing the expertise and financial resources needed to address the significant environmental compliance challenges facing the sewer system.”

The SSA, which serves approximately 31,000 customers, is under an EPA Consent Decree that mandates significant upgrades to the sewer system totaling an estimated $140 million. After the transaction closes, Pennsylvania American Water will build on the progress already made by the SSA and will manage the Consent Decree process to complete all system improvements according to the mandated timelines.

PRESS RELEASE www.amwater.com

Pennsylvania American Water Announces Agreement to

Acquire Scranton Sewer System

Pape said long-term rate stability is one of the most important benefits for wastewater customers. “The rates under this agreement are considerably lower than those projected under the status quo, according to the independent rates study prepared for the SSA. In fact, the cumulative savings in customers’ sewer bills would total more than $350 million over next 30 years, which translates to approximately $7,600 per residential customer,” she said.

Pennsylvania American Water’s purchase of the sewer system will enable SSA to pay off its existing debt, which is estimated at approximately $70 million. After SSA repays the debt and debt defeasance costs and other required closing costs, the City of Scranton and Dunmore Borough will split the net proceeds 80 percent to 20 percent, respectively.

Scranton Mayor William L. Courtright said, “Since the beginning of my Administration, we have been working with the Authority to develop a deal that we believe could provide for the absolute greatest public benefit to ratepayers and taxpayers in Scranton and Dunmore. This deal means significant long- term rate mitigation, a more thorough and complete program of environmental stewardship, increased efficiency and customer service, and it keeps the Authority’s jobs intact while adding 100 new ones in Scranton by 2020. Finally, this deal offers us the financial resources we need to deliver the City’s most pressing long-term obligations, allowing us to meet the goals of our recovery strategy outlined two years ago and make a compelling case for an exit from Act 47’s financial oversight.”

Pape also noted, “Upon closing the acquisition, we look forward to welcoming SSA employees to the Pennsylvania American Water team.” Under the purchase agreement, all active SSA employees will be offered jobs, subject to standard pre-employment screening. The employees would also gain immediate access to the training, development and career opportunities in any of the operations of Pennsylvania American Water or its parent company, American Water.  

Under the agreement, American Water committed to bring 100 new jobs to Scranton by 2020. "These will be important jobs as American Water continues to grow in Scranton, throughout Pennsylvania, and across our national footprint," said Walter Lynch, Chief Operating Officer, American Water. “We believe these new jobs will have a very positive economic impact not only through the payroll generated, but they will also stimulate additional business activity in Scranton."

PRESS RELEASE www.amwater.com

Pennsylvania American Water Announces Agreement to

Acquire Scranton Sewer System

The agreement is subject to the review and approval from the U.S. Environmental Protection Agency, U.S. Department of Justice, Pennsylvania Department of Environmental Protection and Pennsylvania Public Utility Commission, as well as the satisfaction of other closing conditions that are provided in the final purchase agreement. The company expects to close the transaction by September 30, 2016.

Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in Pennsylvania, 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.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this press release are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to, among other things, the ability to complete the proposed acquisition and the timing thereof; the ability to satisfy closing and other conditions related to the proposed transaction, including obtaining regulatory and other approvals and consents; anticipated capital investments; the ability of Pennsylvania American Water to comply with the Consent Decree after completion of the proposed acquisition, and the ability to achieve certain benefits, synergies and goals relating to the transaction and the operations to be acquired.  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, including with respect to (1) obtaining the regulatory and other approvals and consents required for the acquisition; (2) satisfying other conditions to the closing of the acquisition; (3) the occurrence of the benefits and synergies expected or predicted to occur as a result of the acquisition; (4) unexpected costs, liabilities or delays associated with the acquisition or the integration of the acquired business; (5) regulatory, legislative, local or municipal actions affecting the water and wastewater industries, which could adversely affect Pennsylvania American Water; (6) Pennsylvania American Water’s ongoing compliance with the Consent Decree after completion of the acquisition; and (7) other economic, business and other factors.  Forward-looking statements are not guarantees or assurances of future performance or results, and Pennsylvania American Water and its affiliates do not undertake any duty to update any forward-looking statement.

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PRESS RELEASE www.amwater.com

EX-99.2

Exhibit 99.2

ACQUISITION FACT SHEET MARCH 30, 2016
AMERICAN WATER:  ACQUISITION OF SCRANTON SEWER AUTHORITY ASSETS			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.
Acquisition Overview
·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. ·Acquisition consistent with intent of Pennsylvania Act 11 legislation to facilitate needed investment in wastewater systems. ·Purchase price of $195 million, subject to purchase price adjustments. ·Transaction expected to be EPS accretive in the first year after close (2017); with additional EPS growth expected. ·The Sewer Authority has identified capital investment needs of $140 million over next 25 years to comply with the Consent Decree agreed to with the U.S. Environmental Protection Agency and others. ·American Water expects to finance this acquisition with cash flow from operations and debt. ·Will operate as a part of Pennsylvania American Water; will offer employment to all Sewer Authority employees, and will bring 100 new jobs to the community.
KEY FACTS			The Scranton Sewer Authority was established in 1968 to implement plans for a wastewater treatment plant and interceptor sewers.  Today, the Sewer Authority provides wastewater services to 31,000 customers in the City of Scranton and the Borough of Dunmore.
Customers		31,000
Miles of collection & interceptor sewers		275+
Treatment Plant Capacity (MGD)		20
Booster Stations		7
Acquisition Financing
·American Water has sufficient financing capacity to fund the transaction.
Acquisition Strategy
·Proposed acquisition strengthens the company's position in wastewater sector. ·Acquisition of wastewater customers in existing water footprint allows Pennsylvania American Water to achieve operating efficiencies. ·As the largest regulated water & wastewater utility in the United States & Pennsylvania, this acquisition further increases scale, demonstrating American Water as the preferred partner for water & wastewater acquisitions.
Acquisition is Within Pennsylvania American's Existing Water Footprint
			"This deal means significant long- term rate mitigation, a more thorough and complete program of environmental stewardship, increased efficiency and customer service, and it keeps the Authority's jobs intact while adding 100 new ones in Scranton by 2020." - William L. Courtright, Mayor of Scranton
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 ability to complete the proposed acquisition and the timing thereof; the ability to obtain regulatory and other approvals and consents required to complete the proposed transaction; satisfying other closing conditions; anticipated capital investments; the ability to achieve certain benefits, synergies and goals relating to the transaction and the operations to be acquired; and the ability to comply with the Consent Decree.  These statements are based on the current expectations of management of American Water and 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 American Water's Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 30, 2016. 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.