11-K 1 k11.txt CONFORMED COPY Page 1 of 18 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, 2000 -------------------------------------------- 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 Audited Plan Financial Statements and Schedules Prepared in Accordance With The Financial Reporting Requirements of ERISA 7 to 16 Exhibit Index 17 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 27, 2001 \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 Supplemental Schedules December 31, 2000 and 1999 Form 11-K Page 5 SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Index to the Financial Statements and Supplemental Schedules PAGE Report of Independent Accountants 1 Statement of Net Assets Available for Benefits as of December 31, 2000 and 1999 2 Statement of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2000 and 1999 3 Notes to Financial Statements 4-9 Supplemental Schedules:* Schedule of Assets Held for Investment Purposes as of December 31, 2000 Schedule 1 Schedule of Reportable Transactions for the Year Ended December 31, 2000 Schedule II * Other schedules required by 29 CFR 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 statements 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, 2000 and 1999, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America. 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 auditing standards generally accepted in the United States of America, 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 our opinion. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of Assets Held for Investment Purposes and of Reportable Transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are 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. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules 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. June 15, 2001 Form 11-K Page 7 SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Statement of Net Assets Available for Benefits December 31, ----------------------------- 2000 1999 ------------ ------------ ASSETS Investments (See Note 3) $100,685,352 $ 79,683,534 Receivables: Employer's contribution 272,390 263,809 Participants' contributions 1,106,424 896,367 Accrued interest and dividends 11,226 - ------------ ------------ Net assets available for benefits $102,075,392 $ 80,843,710 ============ ============ The accompanying notes are an integral part of these financial statements.
Form 11-K Page 8 SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Statement of Changes in Net Assets Available for Benefits December 31, --------------------------- 2000 1999 ------------ ------------ Additions to net assets attributed to: Investment income: Interest and dividends $ 2,937,004 $ 1,903,851 Net appreciation (depreciation)in fair value of investments (See Note 3) 5,382,495 (7,309,289) Net asset transfers in (See Note 11) 1,903,611 - ------------ ----------- $10,223,110 (5,405,438) ------------ ----------- Contributions: Employer's 2,958,055 2,787,442 Participants' 12,718,976 9,461,131 ------------ ----------- 15,677,031 12,248,573 ----------- ----------- Total additions 25,900,141 6,843,135 ------------ ----------- Deductions from net assets attributed to: Benefits paid to participants 4,668,459 4,028,260 Administrative expenses - 3,301 ------------ ----------- Total deductions 4,668,459 4,031,561 ------------ ----------- Net increase 21,231,682 2,811,574 Net assets at beginning of year 80,843,710 78,032,136 ------------ ------------ Net assets at end of year $102,075,392 $ 80,843,710 ============ ============ The accompanying notes are an integral part of these financial statements.
Form 11-K Page 9 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 document for a more complete description of the Plan's provisions. General The Plan is a defined contribution 401(k) savings plan covering most full and part-time employees of American Water Works Company, Inc. and its designated subsidiary companies (the "Company"). Eligible participants who are not included in a bargaining unit may enroll as soon as administratively possible. Effective July 1, 2001, eligible participants who are included in a bargaining unit may enroll as soon as administratively possible. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Contributions Participants could contribute up to 15% and 10% of their annual compensation during 2000 and 1999, respectively. The Company matched 50% of the first 4% of participant contributions during 2000 and 1999. All Company matching contributions are invested in American Water Works Company, Inc. common stock. Contributions are subject to certain limitations. Effective July 1, 2001, the Company will match 50% of the first 5% of participant contributions and the maximum contribution rate allowed will increase to 20%. Participant Accounts With the exception of the Company's contributions to the Plan, each participant may elect to have their contributions invested in any of the investment options offered by the Plan in multiples of 1%. The Plan provides for a diversification option that permits participants at age 50 to move assets attributable to Company matching contributions to any of the Plan's investment options. Each participant's account is credited with the participant's contributions and an allocation of the Company's contributions 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. Form 11-K Page 10 Vesting The Plan allows for immediate 100% vesting of participant and Company contributions and earnings thereon, of all participants who are not included in a bargaining unit. Effective July 1, 2001, the Plan allows for immediate 100% vesting of the account balances of all participants' who are included in a bargaining unit. Payment of Benefits Participants may, upon attaining 591/2 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 hired before July 1, 1999 may elect to receive a lump sum amount equal to the value of their account, an annuity, or a combination of both. Participants hired, (or employed via a future acquisition and not covered by a prorated optional form of benefit), on or after July 1, 1999 may only receive a lump sum distribution. The Plan permits withdrawals on after-tax and rollover contributions at any time without restrictions. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --------------------------------------------------- Basis and Presentation ---------------------- The Plan's financial statements are presented on the accrual basis of accounting. Use of Estimates ---------------- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported in the financial statements. Actual results could differ from those estimates. 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. Form 11-K Page 11 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 ------------- Participant 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. Payment of Benefits ------------------- Participants' benefits are recognized in the Plan financial statements when paid. Reclassification ---------------- Certain reclassifications have been made to conform previously reported data to the current presentation. The following presents investments that represent 5 percent or more of the Plan's net assets. December 31, ------------------------- 2000 1999 ------------ ------------ Registered investment companies: PIMCO Total Return Fund, 723,016 and 531,021 shares, respectively $ 7,512,135 $ 5,257,104 Franklin Small Cap Growth Fund-Class A, 92,122 shares - 4,065,318 Collective income funds: Merrill Lynch Equity Index Trust, 358,520 and 357,435 shares, respectively 32,901,349 36,172,426 Merrill Lynch Retirement Preservation Trust, 7,617,869 and 4,231,996 shares, respectively 7,617,869 4,231,996 Common stock: American Water Works Company, Inc. (Nonparticipant-directed), 1,393,217 and 1,214,053 shares, respectively 40,925,756 25,798,617
Form 11-K Page 12 NOTE 3 - INVESTMENTS -------------------- During 2000 and 1999, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the years) appreciated (depreciated) in value as follows: Year Ended December 31, -------------------------- 2000 1999 ----------- ---------- Registered investment companies $(2,074,633) $ 3,029,688 Collective income funds (3,380,179) 4,186,951 Common stock 10,837,307 (14,525,928) ----------- ----------- Net appreciation (depreciation) in fair value $ 5,382,495 $(7,309,289) =========== ===========
NOTE 4 - NONPARTICIPANT-DIRECTED INVESTMENTS --------------------------------------------- Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investments is as follows: December 31, ---------------------------- 2000 1999 ------------ ------------ Net Assets: Investment in American Water Works Company, Inc. common stock $ 40,925,756 $ 25,798,617 Employer's contribution receivable 272,390 263,809 Participants' contributions receivable 224,060 233,225 ------------ ------------ Net assets available for benefits $ 41,422,206 $ 26,295,651 ============ ============ Form 11-K Page 13 Year Ended December 31, ---------------------------- 2000 1999 ------------ ------------ Changes in Net Assets: Dividend income $ 1,221,297 $ 963,103 Net appreciation (depreciation) in fair value of investments 10,837,307 (14,525,928) Employer contributions 2,958,055 2,787,442 Participants' contributions 2,546,969 2,686,419 Loan repayments from participants 249,662 265,759 ------------ ------------ Total additions 17,813,290 (7,823,205) ------------ ------------ Benefit payments to participants 1,780,369 1,648,155 Loans to participants 441,856 341,781 ------------ ------------ Total deductions 2,222,225 1,989,936 Interfund transfers (464,510) 156,038 ------------ ------------ Net increase (decrease) 15,126,555 (9,657,103) Net assets at beginning of year 26,295,651 35,952,754 ------------ ------------ Net asset at end of year $ 41,422,206 $ 26,295,651 ============ ============
NOTE 5 - 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 ranged from 8.25% to 10.75% and 8% to 12.50% for the years ended December 31, 2000 and 1999, respectively. The maximum personal residence loan term is fifteen years for new loans, and prepayment of loans is permitted. Principal and interest is paid ratably through payroll deductions. NOTE 6 - HARDSHIP WITHDRAWALS ----------------------------- Participants under age 591/2 may withdraw all or part of their pre-tax 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. Form 11-K Page 14 The Plan permits withdrawals on after-tax and rollover contributions at any time without restrictions. NOTE 7 - ADMINISTRATIVE EXPENSES -------------------------------- Although it has no obligation to do so, the Company paid substantially all administrative expenses of the Plan. NOTE 8 - PLAN TERMINATION ------------------------- Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. NOTE 9 - 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 believes 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. NOTE 10 - RELATED PARTY TRANSACTIONS ------------------------ Certain Plan investments are shares of mutual funds and units of collective income funds managed by Merrill Lynch Trust Company. Merrill Lynch Trust Company is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. The Plan is interpreted and administered by a Retirement Plan Committee comprised of five members of management of American Water Works Company. NOTE 11 - NET ASSET TRANSFERS IN ----------------------------------- On September 29, 2000, net assets of $1,903,611 from the Continental Water Company Group Employee Savings Plan for Northwest Indiana Water Company and Northern Illinois Water Company merged with and into the Plan. Form 11-K Page 15 Schedule I SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Form 5500 - Schedule of Assets Held for Investment Purposes December 31, 2000 ----------------------------------------------------------------------------- Current Shares/Units Issue Cost Value ------------ -------- ------------ ----------- 9,154 Cash and cash equivalents $ 9,154 $ 9,154 Registered investment companies: 723,016 PIMCO Total Return Fund 7,208,302 7,512,135 121,124 Franklin Small Cap Growth Fund-Class A 4,315,683 4,763,826 53,144 Van Kampen Emerging Growth Fund 4,887,327 3,336,394 90,052 Merrill Lynch International Index Fund* 1,224,111 1,022,086 Collective income funds: 358,520 Merrill Lynch Equity Index Trust* 32,968,223 32,901,349 7,617,869 Merrill Lynch Retirement Preservation Trust* 7,617,869 7,617,869 Common Stock: 1,393,217 American Water Works Company, Inc.* 31,476,809 40,925,756 Participants' loans receivable 2,593,783 2,596,783 ------------ ------------ $ 92,301,261 $100,685,352 ============ ============ *Represents "party-in-interest" for the purposes of Form 5500.
Form 11-K Page 16 Schedule II SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Form 5500 - Schedule of Reportable Transactions For the Year Ended December 31, 2000 (Individual or series of transactions in one issue aggregating 5% or more of the value of Plan assets as of January 1, 2000)* --------------------------------------------------------------------------- Identity Current Value of Party Purchase Sales Cost of on Transaction Net Involved Description Price Proceeds Assets Date Gain/(Loss) -------- --------------- ------------ ---------- ---------- ---------- -------------- American American Water $ 8,220,575 - - $ 8,220,575 - Water Works Company, Works Inc. Common - $3,477,147 $3,394,863 3,477,147 $ 82,284 Company, Stock Inc. *Other investment fund transactions are participant-directed, and therefore do not need to be considered for purposes of preparing this supplemental schedule.
Form 11-K Page 17 EXHIBIT INDEX Exhibit Number Description ------- ---------------------------------- 23 Consent of Independent Accountants Exhibit 23 Consent of Independent Accountants We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-52309) of American Water Works Company, Inc. of our report dated June 15, 2001 relating to the financial statements of the Savings Plan for Employees of American Water Works Company, Inc. and Its Designated Subsidiaries, which appears in this Form 11-K. PRICEWATERHOUSECOOPERS LLP Philadelphia, Pennsylvania June 27, 2001