-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OfRJqFXNvbRDVHEca+AKLWRdMSxQyQLHp+c8Pca8PtgsdOZ5B1x1uZe7Bp1RpE1a Gws1nGJliex+USp0sF7Htw== 0000318819-00-000011.txt : 20000516 0000318819-00-000011.hdr.sgml : 20000516 ACCESSION NUMBER: 0000318819-00-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN WATER WORKS CO INC CENTRAL INDEX KEY: 0000318819 STANDARD INDUSTRIAL CLASSIFICATION: WATER SUPPLY [4941] IRS NUMBER: 510063696 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-03437 FILM NUMBER: 632119 BUSINESS ADDRESS: STREET 1: 1025 LAUREL OAK RD CITY: VOORHEES STATE: NJ ZIP: 08043 BUSINESS PHONE: 6093468200 MAIL ADDRESS: STREET 1: 1025 LAUREL OAK ROAD CITY: VOORHEES STATE: NJ ZIP: 08043 10-Q 1 FORM 10-Q Page 1 of 17 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 --------------------------------------------- OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to -------------------------- ----------------- Commission File Number 1-3437-2 -------------------------------------------------- AMERICAN WATER WORKS COMPANY, INC. - --------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 51-0063696 - ------------------------------- ----------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 1025 Laurel Oak Road, Voorhees, New Jersey 08043 - --------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (856) 346-8200 - --------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable - --------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- At May 1, 2000, the number of shares of common stock, $1.25 par value, outstanding was 97,769,949 shares. Page 2 FORM 10-Q PART I FINANCIAL INFORMATION ---------------------------- Item 1. Financial Statements ----------------------------- AMERICAN WATER WORKS COMPANY, INC. AND SUBSIDIARY COMPANIES ----------------------------------------------------------- Consolidated Statements of Income and Comprehensive Income and of Retained Earnings (Unaudited) (In thousands, except per share amounts) Three Months Ended March 31, 2000 1999 -------- -------- CONSOLIDATED INCOME AND COMPREHENSIVE INCOME Operating revenues $307,759 $277,416 -------- -------- Operating expenses Operation and maintenance 144,358 134,446 Depreciation and amortization 39,824 36,054 General taxes 33,129 31,988 -------- -------- Total operating expenses 217,311 202,488 -------- -------- Operating income 90,448 74,928 -------- -------- Other income (deductions) Interest (46,746) (43,685) Allowance for other funds used during construction 2,706 3,244 Allowance for borrowed funds used during construction 1,882 2,648 Amortization of debt expense (682) (644) Preferred dividends of subsidiaries (798) (821) Merger related costs -- (178) Other, net (1,308) (1,222) -------- -------- Total other income (deductions) (44,946) (40,658) -------- -------- Income before income taxes 45,502 34,270 Provision for income taxes 18,419 13,848 -------- -------- Net income 27,083 20,422 Dividends on preferred stocks 996 996 -------- -------- Net income to common stock 26,087 19,426 -------- -------- Other comprehensive income Unrealized gains on securities 13,181 26,781 Income taxes on other comprehensive income (5,385) (10,293) -------- -------- Other comprehensive income, net 7,796 16,488 -------- -------- Comprehensive income $ 33,883 $ 35,914 ======== ======== Page 3 FORM 10-Q Three Months Ended March 31, 2000 1999 ---------- ---------- Average shares of basic common stock outstanding 97,479 95,906 Basic and diluted earnings per common share on average shares outstanding $ 0.27 $ 0.20 ========== ========== CONSOLIDATED RETAINED EARNINGS Balance at January 1 $1,001,029 $ 945,434 Add - net income 27,083 20,422 ---------- ---------- 1,028,112 965,856 ---------- ---------- Deduct - dividends paid Preferred stock 882 882 Preference stock 114 114 Common stock - $.225 per share in 2000; $.215 per share in 1999 21,900 17,386 National Enterprises Inc. common stock -- 1,416 ---------- ---------- 22,896 19,798 ---------- ---------- Balance at March 31 $1,005,216 $ 946,058 ========== ========== The results presented in 2000 and the restated results for 1999 reflect the pooling of interests method of accounting to recognize the acquisition of National Enterprises Inc. The accompanying information and notes are an integral part of these financial statements.
Page 4 FORM 10-Q AMERICAN WATER WORKS COMPANY, INC. AND SUBSIDIARY COMPANIES ----------------------------------------------------------- Consolidated Balance Sheet (Unaudited) (In thousands) March 31 December 31 2000 1999 ----------- ----------- ASSETS Property, plant and equipment Utility plant - at original cost less accumulated depreciation $ 4,993,041 $ 4,939,408 Utility plant acquisition adjustments, net 70,723 51,697 Non-utility property, net of accumulated depreciation 37,349 36,265 Excess of cost of investments in subsidiaries over book equity at acquisition, net 56,700 57,118 ----------- ----------- Total property, plant and equipment 5,157,813 5,084,488 ----------- ----------- Current assets Cash and cash equivalents 38,407 43,100 Customer accounts receivable 83,388 91,353 Allowance for uncollectible accounts (2,611) (2,346) Unbilled revenues 78,328 78,205 Miscellaneous receivables 9,075 10,936 Materials and supplies 21,512 20,058 Deferred vacation pay 13,707 10,902 Restricted funds 9,258 14,558 Other 15,059 11,915 ----------- ----------- Total current assets 266,123 278,681 ----------- ----------- Regulatory and other long-term assets Regulatory asset - income taxes recoverable through rates 215,502 214,349 Other investments 194,899 181,579 Debt and preferred stock expense 48,981 48,289 Deferred pension expense 32,817 32,872 Deferred postretirement benefit expense 10,497 10,264 Deferred treatment plant costs 5,545 5,811 Deferred tank painting costs 14,153 14,178 Restricted funds 7,795 6,557 Other 76,613 75,138 ----------- ----------- Total regulatory and other long-term assets 606,802 589,037 ----------- ----------- TOTAL ASSETS $ 6,030,738 $ 5,952,206 =========== =========== Page 5 FORM 10-Q March 31 December 31 2000 1999 ------------ ------------ CAPITALIZATION AND LIABILITIES Capitalization Common stockholders' equity $1,657,413 $1,634,798 Preferred stocks with mandatory redemption requirements 40,000 40,000 Preferred stocks without mandatory redemption requirements 11,673 11,673 Preferred stocks of subsidiaries with mandatory redemption requirements 33,609 34,020 Preferred stocks of subsidiaries without mandatory redemption requirements 8,118 8,118 Long-term debt American Water Works Company, Inc. 211,000 211,000 Subsidiaries 2,210,236 2,182,097 ----------- ----------- Total capitalization 4,172,049 4,121,706 ----------- ----------- Current liabilities Bank debt 235,630 239,864 Current portion of long-term debt 50,737 38,355 Accounts payable 40,498 67,064 Taxes accrued, including federal income 36,832 16,030 Interest accrued 50,974 43,672 Accrued vacation pay 14,364 11,532 Other 53,497 75,191 ----------- ----------- Total current liabilities 482,532 491,708 ----------- ----------- Regulatory and other long-term liabilities Advances for construction 208,583 207,891 Deferred income taxes 632,034 610,460 Deferred investment tax credits 40,494 40,585 Accrued pension expense 64,504 63,095 Accrued postretirement benefit expense 15,335 12,471 Other 27,466 29,453 ----------- ----------- Total regulatory and other long-term liabilities 988,416 963,955 ----------- ----------- Contributions in aid of construction 387,741 374,837 ----------- ----------- Commitments and contingencies -- -- ----------- ----------- TOTAL CAPITALIZATION AND LIABILITIES $ 6,030,738 $ 5,952,206 =========== =========== The results presented in 2000 and the restated results for 1999 reflect the pooling of interests method of accounting to recognize the acquisition of National Enterprises Inc. The accompanying information and notes are an integral part of these financial statements.
Page 6 FORM 10-Q AMERICAN WATER WORKS COMPANY, INC. AND SUBSIDIARY COMPANIES ----------------------------------------------------------- Consolidated Statement of Cash Flows (Unaudited) (In thousands) Three Months Ended March 31, 2000 1999 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 27,083 $ 20,422 Adjustments Depreciation and amortization 39,824 36,054 Provision for deferred income taxes 6,340 8,265 Provision for losses on accounts receivable 2,163 1,197 Allowance for other funds used during construction (2,706) (3,244) Employee benefit expenses greater than funding 4,579 5,100 Employee stock plan expenses 972 698 Deferred tank painting costs (118) (65) Deferred rate case expense (319) (900) Amortization of deferred charges 3,103 3,392 Other, net (6,178) (6,030) Changes in assets and liabilities,net Accounts receivable 8,288 5,323 Unbilled revenues 111 5,270 Other current assets (2,474) 162 Accounts payable (26,566) (24,607) Taxes accrued, including federal income 20,391 10,261 Interest accrued 7,302 6,512 Other current liabilities (23,645) 2,023 -------- -------- Net cash from operating activities 58,150 69,833 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Construction expenditures (67,321) (77,616) Allowance for other funds used during construction 2,706 3,244 Acquisitions (29,451) (826) Proceeds from the disposition of property, plant and equipment 400 794 Removal costs from property, plant and equipment retirements (774) (495) Restricted funds 4,062 (7,643) -------- -------- Net cash used in investing activities (90,378) (82,542) -------- -------- Page 7 FORM 10-Q Three Months Ended March 31, 2000 1999 -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term debt $ 41,945 $ 40,452 Proceeds from common stock 10,367 9,032 Purchase of common stock for treasury (704) (1,190) Net borrowings (repayments) under line-of-credit agreements (4,234) 25,467 Advances and contributions for construction, net of refunds 6,384 5,677 Debt issuance costs (1,492) (161) Repayment of long-term debt (1,424) (36,354) Redemption of preferred stocks (411) (2,434) Dividends paid (22,896) (19,798) -------- -------- Net cash from financing activities 27,535 20,691 -------- -------- Net increase (decrease) in cash and cash equivalents (4,693) 7,982 Cash and cash equivalents at January 1 43,100 39,877 -------- -------- Cash and cash equivalents at March 31 $ 38,407 $ 47,859 ======== ======== Cash paid during the period for: Interest, net of capitalized amount $ 40,552 $ 38,551 ======== ======== Income taxes $ 7,154 $ 8,413 ======== ======== Common stock issued in lieu of cash in connection with the Employees' Stock Ownership Plan, the Savings Plan for Employees and the Long-Term Performance-Based Incentive Plan totaled $1,488 in 2000 and $1,565 in 1999. Common stock placed into treasury in connection with the Employees Stock Ownership Plan and Long-Term Performance-Based Incentive Plan totaled $704 in 2000 and $3,675 in 1999. The results presented in 2000 and the restated results for 1999 reflect the pooling of interests method of accounting to recognize the acquisition of National Enterprises Inc. The accompanying information and notes are an integral part of these financial statements.
Page 8 FORM 10-Q AMERICAN WATER WORKS COMPANY, INC. AND SUBSIDIARY COMPANIES ----------------------------------------------------------- Information Accompanying Financial Statements (Unaudited) (In thousands, except share and per share amounts) March 31 December 31 2000 1999 ---------- ----------- Preferred stocks with mandatory redemption requirements Cumulative preferred stock - $25 par value Authorized - 1,770,000 shares 8.50% series (non-voting) - 1,600,000 shares outstanding $ 40,000 $ 40,000 ========== =========== Preferred stocks without mandatory redemption requirements Cumulative preferred stock - $25 par value 5% series (one-tenth of a vote per share) - 101,777 shares outstanding $ 2,544 $ 2,544 Cumulative preference stock - $25 par value Authorized - 750,000 shares 5% series (non-voting) - 365,158 shares outstanding 9,129 9,129 Cumulative preferential stock - $35 par value Authorized - 3,000,000 shares (one-tenth of a vote per share) -- -- ---------- ----------- $ 11,673 $ 11,673 ========== =========== The terms of the 8.50% preferred stock provide that all shares of the series shall be redeemed on December 1, 2000. Common stockholders' equity Common stock - $1.25 par value Authorized - 300,000,000 shares Issued - 97,864,797 shares in 2000; 97,303,759 shares in 1999 $ 122,331 $ 121,630 Paid-in capital 435,851 424,434 Retained earnings 1,005,216 1,001,029 Accumulated other comprehensive income 100,257 92,461 Unearned compensation (1,838) (1,056) Treasury stock at cost - 142,223 shares in 2000; 109,675 shares in 1999 (4,404) (3,700) ---------- ----------- $1,657,413 $ 1,634,798 ========== =========== At March 31, 2000, common shares authorized but not issued, reserved for issuance in connection with the Company's stock plans were 80,865,863 shares for the Stockholder Rights Plan, 3,751,444 shares for the Dividend Reinvestment and Stock Purchase Plan, 565,493 shares for the Employees' Stock Ownership Plan, 532,381 shares for the Savings Plan for Employees and 296,347 shares for the Long-Term Performance-Based Incentive Plan. The results presented in 2000 and the restated results for 1999 reflect the pooling of interests method of accounting to recognize the acquisition of National Enterprises Inc. Page 9 FORM 10-Q AMERICAN WATER WORKS COMPANY, INC. AND SUBSIDIARY COMPANIES ----------------------------------------------------------- Notes to Consolidated Financial Statements (Unaudited) NOTE 1 -- Financial Statement Presentation The information presented in this Form 10-Q is unaudited. In the opinion of management the information reported reflects all adjustments, consisting of normal recurring adjustments, which were necessary to a fair statement of the results for the periods reported. Certain reclassifications have been made to conform previously reported data to the current presentation. The results presented in 2000 and the restated results for 1999 reflect the pooling of interests method of accounting to recognize the acquisition of National Enterprises Inc.(NEI). NOTE 2 -- Acquisitions NATIONAL ENTERPRISES INC. On June 25, 1999, the Company completed the acquisition of National Enterprises Inc. (NEI), a privately owned company, in a transaction valued at $700 million. The transaction was accomplished through a tax free exchange of 14,937,000 shares of the Company's stock for all of the outstanding shares of NEI and the assumption of $241 million of debt. Subsidiaries of NEI provided water service to approximately 504,000 customers in Missouri, Illinois, Indiana and New York. NEI also had passive investments in the telecommunications industry owning 4,000,000 shares of ITC Deltacom and 600,000 shares of Powertel, as well as an interest in privately held ITC Holdings. This business combination has been accounted for as a pooling of interests and, accordingly, the consolidated financial statements for periods prior to the combination have been restated to include the accounts and results of operations of NEI. During the first quarter of 1999 the Company recorded a charge of $178 thousand, reflecting the one-time costs incurred in connection with the merger. The merger related costs consist primarily of professional fees. The merger related costs have been reported on a separate line in the consolidated statement of income and comprehensive income. The results of operations previously reported by the Company and the combined amounts presented in the accompanying consolidated financial statements are summarized in the following table: Three Months Ended March 30, 1999 ------------------ Operating revenues Company $237,002 NEI 40,414 -------- Combined $277,416 ======== Net income Company $ 19,685 NEI 737 -------- Combined $ 20,422 ========
Page 10 FORM 10-Q CONTRACT MANAGEMENT BUSINESS On December 31, 1999, the Company finalized the purchase of its joint venture partner Anglian Water's interest in AmericanAnglian Environmental Technologies for $32 million. This business, which now operates as American Water Services (AWS), manages and operates 175 water and wastewater facilities in seven states. Effective January 1, 2000 the results of operations of AWS are being reported on a consolidated basis. Previously, the results of the joint venture were being accounted for under the equity method. Note 3 -- Pending Acquisitions WATER AND WASTEWATER ASSETS OF CITIZENS UTILITIES On October 18, 1999, the Company announced it had agreed to purchase the water and wastewater utility assets of Citizens Utilities Company (NYSE:CZN) for $835 million in cash and debt. Citizens Utilities provides water and wastewater service to 305,000 customers in Arizona, California, Illinois, Indiana, Ohio and Pennsylvania. For the latest fiscal year ended December 31, 1999, the operations being acquired had revenues of $102 million. It is anticipated that the transaction will be completed in the second half of 2000, following regulatory approvals and completion of other requirements. SJW CORP. On October 29, 1999, the Company announced an agreement had been reached to acquire all the common stock of SJW Corp. (SJW) for approximately $390 million in cash, or $128 per share, and the assumption of $90 million in debt. SJW is a publicly traded holding company (AMEX:SJW) headquartered in San Jose, California. SJW, through its subsidiary San Jose Water Company, provides water service to 216,000 customers in San Jose and nearby communities. SJW also owns 1,100,000 shares of California Water Service Group (NYSE:CWT) and SJW Land Company, which owns a parking facility, commercial property and undeveloped real estate in San Jose. For the latest fiscal year ended December 31, 1999, SJW had revenues of $117 million, net income of $16 million and total assets of $372 million. It is expected that the transaction, which will be accounted for as a purchase, will be completed in the second half of 2000, following regulatory approvals and completion of other requirements. WATER UTILITY SUBSIDIARIES OF UNITED WATER RESOURCES INC. On July 13, 1999, the Company announced it had agreed to acquire from United Water Resources Inc. five water utilities in Missouri, Indiana, Illinois and Virginia for approximately $49 million in cash. These water utilities provide service to 35,000 customers. As of May 1, 2000 the acquisition of four of these utilities were completed, and the remaining acquisition is expected to be completed in the second quarter of 2000 upon the receipt of regulatory approvals. CITY OF COATESVILLE PENNSYLVANIA WATER AND WASTEWATER SYSTEMS On February 15, 2000 the Company agreed to purchase the City of Coatesville Authority's water and wastewater utility systems for $48 million. These systems provide water service to more then 8,000 customers and wastewater service to more than 4,000 customers. It is expected that the transaction will be completed in the fourth quarter of 2000, following regulatory approvals and completion of other requirements. PAGE> Page 11 FORM 10-Q NOTE 4 -- New Accounting Standard In 2001, the Company will adopt Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133). This statement establishes accounting and reporting standards for derivative instruments and hedging activities. SFAS 133 was issued by the Financial Accounting Standards Board in June of 1998 and requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. SFAS 133, as amended by SFAS 137 "Accounting for Derivative Instruments and Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133," requires adoption on January 1, 2001. This new accounting standard is not expected to have any effect on the Company's financial position or results of operations as the Company has no significant derivative instruments or hedging activities. Page 12 FORM 10-Q PART I - FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - -------------------------------------------------------------------------- Results of Operations - --------------------- First quarter revenues increased 11% percent from $277.4 million in 1999 to $307.8 million this year. The increase in revenues reflects a 2% increase in water sales volume and rate increases authorized for various subsidiaries during the last 12 months. In addition, the management fees from the contract management business that are included in the consolidated results in 2000 increased revenues by 4%. During the first three months of 2000, two utility subsidiaries received rate orders which are expected to provide $1.8 million in additional annual revenues. Six subsidiaries have rate increase applications on file before regulatory agencies which, if granted in full, would provide approximately $24.3 million in additional annual revenues. The largest of these, the Company's Missouri-American subsidiary's rate case, has been filed requesting $16.4 million in additional annual revenues. Operating expenses were up 7 percent to $217.3 million in 2000 from $202.5 million in the first quarter of 1999. Excluding the expenses of the contract management business, operation and maintenance expenses in the first three months of 2000 were equal to those in the first three months of 1999. The increases in depreciation expense and general taxes were related to the Company's ongoing program of utility plant construction. Interest expense rose by 7% to $46.7 million in the first quarter of 2000 compared to the first quarter of 1999, due to an increase in total debt to fund construction of new water service assets. The total allowance for funds used (equity and borrowed) during construction ("AFUDC") recorded in the first quarter of 2000 was $4.6 million, compared to $5.9 million in the first quarter of 1999. The utility subsidiaries record AFUDC to the extent permitted by the regulatory authorities. Income taxes increased in the first three months of 2000 when compared to the first three months in 1999, as a result of increased earnings. Net income to common stock was $26.1 million for the first quarter of 2000 compared with $19.4 million for the same period in 1999. Other comprehensive income was $7.8 million in the first quarter of 2000 compared to $16.5 million in the same period in 1999. The Company's other comprehensive income represents the after tax unrealized gain on passive investments in two publicly traded telecommunications firms, ITC Deltacom and Powertel. Capital Resources and Liquidity - ------------------------------- During the first three months of 2000, 463,360 shares of common stock were issued in connection with the Dividend Reinvestment and Stock Purchase Plan, 32,134 shares were issued in connection with the Employees' Stock Ownership Plan and 65,544 shares were issued in connection with the Savings Plan for Employees. Page 13 FORM 10-Q During the balance of 2000, the Company plans to issue shares of common stock through its Dividend Reinvestment and Stock Purchase Plan, the Employees' Stock Ownership Plan, the Savings Plan for Employees and the Long-Term Performance-Based Incentive Plan. Proceeds from the issuance of common stock will fund additional equity investments in subsidiaries. The Company placed 32,548 shares of common stock into treasury in the first three months of 2000. Six subsidiaries issued $41.9 million of long-term debt during the first three months of 2000. In the first three months of 2000, the Company invested $39.9 million in the common stock of five subsidiaries. It is anticipated that some subsidiaries will sell long-term debt to institutional investors and common stock to the Company during the remainder of 2000, with the proceeds used to fund construction programs, continue acquisitions and repay bank loans. The Company and its subsidiaries are currently evaluating alternatives to expand access to the capital markets. By aggregating the financing needs of the Company and its subsidiaries into larger offerings, we will look to access the public markets in addition to the traditional private market. This should offer the prospect for more efficient execution in the capital markets as well as the opportunity to achieve a lower cost of capital on future financings. The Company and its subsidiaries plan to fund construction programs, continue acquisitions and repay bank borrowings and maturing bonds with the issuance of approximately $160 million of long-term debt in 2000. In addition, during 2000 the Company will arrange acquisition financing of approximately $1.2 billion to fund the closing of the SJW and Citizens water and wastewater sector acquisitions. Management intends to fund these transactions permanently through a combination of long-term debt and preferred equity securities. Excluding any short-term borrowings incurred in connection with these pending transactions, the combined amount of bank borrowings and bonds maturing within one year is expected to remain at approximately the current level in 2000. New Accounting Standards - ------------------------ In 2001, the Company will adopt Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133). This statement establishes accounting and reporting standards for derivative instruments and hedging activities. SFAS 133 was issued by the Financial Accounting Standards Board in June of 1998 and requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. SFAS 133, as amended by SFAS 137 "Accounting for Derivative Instruments and Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133," requires adoption on January 1, 2001. This new accounting standard is not expected to have any effect on the Company's financial position or results of operations as the Company has no significant derivative instruments or hedging activities. PAGE> Page 14 FORM 10-Q Forward Looking Information - --------------------------- Forward looking statements in this report, including, without limitation, statements relating to the Company's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. These factors include, among others, the following: general economic and business conditions; competition; success of operating initiatives, advertising and promotional efforts; existence of adverse publicity or litigation; changes in business strategy or plans; quality of management; availability, terms and development of capital; business abilities and judgment of personnel; changes in, or the failure to comply with governmental regulations; and other factors described in filings of the Company with the SEC. The Company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise. Page 15 FORM 10-Q PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders ------------------------------------------------------------- (a) The Company held its annual meeting of shareholders on May 4, 2000. (c) Class I Directors (with a term expiring in 2003) were elected by a vote of: For Withheld --- -------- William O. Albertini 87,937,642 574,272 Rhoda W. Cobb 87,942,968 574,272 Ray J. Groves 87,890,107 574,272 Ross A. Webber 87,896,074 574,272 Horace Wilkins, Jr. 87,882,557 574,272 The proposed 2000 Stock Award and Incentive Plan ("the Plan") was approved by a vote of 77,672,467 for the proposal and 9,676,400 against, with 1,136,617 abstentions. The Plan, which became effective May 4, 2000, is contained in Appendix A of the definitive Proxy Statement relating to the Registrant's Annual Meeting of Shareholders on May 4, 2000, which was filed by the Registrant with the Commission pursuant to Section 14(a) of the 1934 Act, and is hereby specifically incorporated by reference thereto. The appointment of PricewaterhouseCoopers LLP as the Company's independent accountants for the year ending December 2000 was approved by a vote of 87,868,735 for the appointment and 375,606 against, with 241,142 abstentions. Page 16 FORM 10-Q PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K ----------------------------------------- A. Exhibits -------- Exhibit Number Description - -------------- ----------- 10 Material Contracts (a) 2000 Stock Award and Incentive Plan of the Registrant is incorporated by reference as Appendix A of the definitive Proxy Statement relating to the Registrant's Annual Meeting of Shareholders on May 4, 2000. (b) Amendment dated May 4, 2000 to Consulting Agreement between Registrant and Anthony P. Terracciano, is filed herewith. 27 Financial Data Schedule Financial Data Schedule, is filed herewith electronically. B. Reports on Form 8-K ------------------- No report on Form 8-K was filed by the registrant during the quarter ended March 31, 2000. Page 17 FORM 10-Q 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 thereunto duly authorized. AMERICAN WATER WORKS COMPANY, INC. Date May 15, 2000 \s\Ellen C. Wolf - ---------------------- ------------------------------------------ Vice President and Chief Financial Officer (Authorized Officer) Date May 15, 2000 \s\Robert D. Sievers - ---------------------- ------------------------------------------ Comptroller (Chief Accounting Officer) EX-27 2
OPUR1 0000318819 R. D. SIEVERS 3-MOS DEC-31-2000 MAR-31-2000 PER-BOOK 4,993,041 164,772 266,123 335,290 271,512 6,030,738 117,927 434,013 1,005,216 1,657,413 73,609 19,791 2,421,236 235,630 0 0 50,737 0 0 0 1,572,322 6,030,738 307,759 18,419 217,311 235,730 72,029 1,800 73,829 46,746 27,083 996 26,087 21,900 43,529 58,150 0.27 0.27
EX-10 3 FOURTH AMENDMENT TO CONSULTING AGREEMENT This is the Fourth Amendment to the Consulting Agreement dated May 7, 1998 by and between Anthony P. Terracciano, an individual whose mailing address is 1123 3rd Avenue, Spring Lake, New Jersey 07762 ("Consultant") and American Water Works Company, Inc. (the "Company"), a Delaware corporation. BACKGROUND Consultant and the Company entered into a consulting agreement dated May 7, 1998. Consultant has provided the consulting and advisory services requested to date by the Company. Consultant and the Company have agreed to extend the term of the consulting agreement. NOW, THEREFORE, intending to be legally bound hereby, the parties agree to amend Section 2 of the Agreement in its entirety as follows: 2. Term. The term of this Agreement shall commence on May 7, 1998 and shall continue for a period of 36 months. The term of this Agreement may be extended thereafter by mutual agreement of Consultant and the Board. IN WITNESS WHEREOF, the undersigned have executed this Amendment. AMERICAN WATER WORKS COMPANY, INC. By: Marilyn Ware Chairman of the Board of Directors CONSULTANT: Anthony P. Terracciano May 4, 2000 -----END PRIVACY-ENHANCED MESSAGE-----