-----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, QZg6420eLbRswIZFs1keyS5DHKhH/kRVLCNx8BRFKxapfjAO71YZZEIieq6w9TON 6N2jVzWaVufgRFcuADaHPw== 0000318819-02-000007.txt : 20020628 0000318819-02-000007.hdr.sgml : 20020628 20020628131536 ACCESSION NUMBER: 0000318819-02-000007 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020628 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: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03437 FILM NUMBER: 02690829 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 11-K 1 k112002.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, 2001 -------------------------------------------- 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 17 Exhibit Index 18 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, 2002 \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, 2001 and 2000 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, 2001 and 2000 2 Statement of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2001 and 2000 3 Notes to Financial Statements 4-9 Supplemental Schedules:* Schedule of Assets (Held at End of Year) Schedule I Schedule of Reportable Transactions for the Year Ended December 31, 2001 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 statement of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Savings Plan for Employees of American Water Works Company, Inc. and Its Designated Subsidiaries (the "Plan") at December 31, 2001 and 2000, 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 at End of Year) 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 14, 2002 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, ----------------------------- 2001 2000 ------------ ------------ Assets Investments (See Note 3) $134,730,781 $100,685,352 Receivables: Employer's contribution 285,478 272,390 Participants' contributions 1,058,847 1,106,424 Accrued interest and dividends 15,570 11,226 ------------ ------------ Net assets available for benefits $136,090,676 $102,075,392 ============ ============ 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, --------------------------- 2001 2000 ------------ ------------ Additions to net assets attributed to: Investment income: Interest and dividends $ 2,910,669 $ 2,937,004 Net appreciation in fair value of investments (See Note 3) 12,242,528 5,382,495 Net asset transfers in (See Note 11) 6,885,016 1,903,611 ------------ ----------- $22,038,213 $10,223,110 ------------ ----------- Contributions: Employer's 3,410,856 2,958,055 Participants' 13,269,495 12,718,976 ------------ ----------- 16,680,351 15,677,031 ------------ ----------- Total additions 38,718,564 25,900,141 ------------ ----------- Deductions from net assets attributed to: Benefits paid to participants 4,703,280 4,668,459 ------------ ----------- Total deductions 4,703,280 4,668,459 ------------ ----------- Net increase 34,015,284 21,231,682 Net assets at beginning of year 102,075,392 80,843,710 ------------ ------------ Net assets at end of year $136,090,676 $102,075,392 ============ ============ 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 During 2000 and through June 30, 2001, participants could contribute 15% of their annual compensation. The Company matched 50% of the first 4% of these contributions. Effective July 1, 2001, the maximum contribution rate was increased to 20%, and the Company began matching 50% of the first 5% of participant contributions. All Company matching contributions are invested in American Water Works Company, Inc. common stock. Contributions are subject to certain limitations. 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 Prior to July 1, 2001, the Plan allowed 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. Forfeitures Upon termination of employment, any unvested portion of an employee's account shall be placed in a suspense account for a period of five years, at which time amounts held in suspense are forfeited. Forfeitures are used to reduce employer contributions. Amounts held in suspense for the year ended December 31, 2001 were $5,624. 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 Form 11-K Page 11 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. 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. NOTE 3 - INVESTMENTS - -------------------- The following presents investments that represent 5 percent or more of the Plan's net assets. Form 11-K Page 12 December 31, ------------------------- 2001 2000 ------------ ------------ Registered investment companies: PIMCO Total Return Fund, 1,044,650 and 723,016 shares, respectively $10,927,036 $ 7,512,135 Collective income funds: Merrill Lynch Equity Index Trust, 430,963 and 358,520 shares, respectively 34,735,623 32,901,349 Merrill Lynch Retirement Preservation Trust, 9,926,533 and 7,617,869 shares, respectively 9,926,533 7,617,869 Common stock: American Water Works Company, Inc. (Nonparticipant-directed), 1,583,801 and 1,393,217 shares, respectively 66,123,703 40,925,756
During 2001 and 2000, 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, -------------------------- 2001 2000 ----------- ---------- Registered investment companies $(2,574,158) $(2,074,633) Collective income funds (3,738,745) (3,380,179) Common stock 18,555,431 10,837,307 ----------- ----------- Net appreciation in fair value $12,242,528 $ 5,382,495 =========== ===========
Form 11-K Page 13 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, ---------------------------- 2001 2000 ------------ ------------ Net Assets: Investment in American Water Works Company, Inc. common stock $ 66,123,703 $ 40,925,756 Employer's contribution receivable 285,478 272,390 Participants' contributions receivable 275,922 224,060 ------------ ------------ Net assets available for benefits $ 66,685,103 $ 41,422,206 ============ ============ Changes in Net Assets: Dividend income $ 1,453,172 $ 1,221,297 Net appreciation in fair value of investments 18,555,431 10,837,307 Employer contributions 3,410,856 2,958,055 Participants' contributions 3,000,092 2,546,969 Loan repayments from participants 343,854 249,662 ------------ ------------ Total additions 26,763,405 17,813,290 ------------ ------------ Benefit payments to participants 1,934,013 1,780,369 Loans to participants 529,685 441,856 ------------ ------------ Total deductions 2,463,698 2,222,225 Interfund transfers 963,190 (464,510) ------------ ------------ Net increase 25,262,897 15,126,555 Net assets at beginning of year 41,422,206 26,295,651 ------------ ------------ Net assets at end of year $ 66,685,103 $ 41,422,206 ============ ============
Form 11-K Page 14 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 6% to 10.5% and 8.25% to 10.75% for the years ended December 31, 2001 and 2000, 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 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. 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 March 14, 2002, 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 Form 11-K Page 15 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. On October 1, 2001, net assets of $6,885,016 from the Continental Water Company Group Employee Savings Plan for Long Island Water Company and St. Louis County Water Company Employee Savings Plan merged with and into the Plan. Form 11-K Page 16 Schedule I SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Schedule of Assets (Held at End of Year) December 31, 2001 ----------------------------------------------------------------------------- Current Shares/Units Issue Cost Value - ------------ -------- ------------ ------------ N/A Cash and cash equivalents $ 32,417 $ 32,417 Registered investment companies: 1,044,650 PIMCO Total Return Fund 10,714,958 10,927,036 157,363 Franklin Small Cap Growth Fund-Class A 5,361,827 4,905,039 78,459 Van Kampen Emerging Growth Fund 5,510,027 3,320,391 172,821 Merrill Lynch International Index Fund* 1,922,577 1,489,716 Collective income funds: 430,963 Merrill Lynch Equity Index Trust* 38,079,607 34,735,623 9,926,533 Merrill Lynch Retirement Preservation Trust* 9,926,533 9,926,533 Common Stock: 1,583,801 American Water Works Company, Inc.* 39,091,502 66,123,703 Interest Rate - ------------- 6% to 10.5% Participants' loans receivable - 3,270,323 ------------ ------------ $110,639,448 $134,730,781 ============ ============ *Represents "party-in-interest" for the purposes of Form 5500.
Form 11-K Page 17 Schedule II SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Schedule of Reportable Transactions For the Year Ended December 31, 2001 (Individual or series of transactions in one issue aggregating 5% or more of the value of Plan assets as of January 1, 2001)* - --------------------------------------------------------------------------- Identity Number Current Value of Party of Purchase Sales Cost of on Transaction Net Involved Description Transactions Price Proceeds Assets Date Gain/(Loss) - -------- --------------- ------------ ---------- ---------- ---------- -------------- ---------- American American Water 144 $11,561,578 - - $11,561,578 - Water Works Company, Works Inc. Company, Common Stock 283 - $8,287,675 $8,021,411 8,287,675 $266,264 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 18 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 14, 2002 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, 2002 -----END PRIVACY-ENHANCED MESSAGE-----