-----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, VkXWBGGR9NQ3pUpgotasQ9mjFpGzWYn9Gd3fdksbdvdj/LDdRgZ0KL0v8KJEJaVM sejwnWZEN31biAIwPV20Ag== 0000318819-99-000017.txt : 19990629 0000318819-99-000017.hdr.sgml : 19990629 ACCESSION NUMBER: 0000318819-99-000017 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990628 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: SEC FILE NUMBER: 001-03437 FILM NUMBER: 99653312 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 Page 1 of 27 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, 1998 -------------------------------------------- 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 to 7 Audited Plan Financial Statements and Schedules Prepared in Accordance With The Financial Reporting Requirements of ERISA 8 to 27 Exhibit Index 28 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 29, 1999 \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 Additional Information December 31, 1998 Form 11-K Page 5 SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Table of Contents FINANCIAL STATEMENTS: PAGE Report of Independent Accountants 6-7 Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1998 8-9 Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1997 10-11 Statement of Changes in Net Assets Available for Benefits, with Fund Information for the Year Ended December 31, 1998 12-13 Statement of Changes in Net Assets Available for Benefits, with Fund Information for the Year Ended December 31, 1997 14-15 Notes to Financial Statements 16-25 Additional Information:* Schedule I- Schedule of Assets Held for Investment Purposes as of December 31, 1998 26 Schedule II - Schedule of Reportable Transactions for the Year Ended December, 31, 1998 27 * Other schedules required by Section 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 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, 1998 and 1997, and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. 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 generally accepted auditing standards 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 the opinion expressed above. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information included in Schedules I and II is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is 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. The fund information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for benefits of each fund. These Form 11-K Page 7 supplemental schedules and fund information are the responsibility of the Plan's management. The supplemental schedules and fund information 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. PRICEWATERHOUSECOOPERS LLP Philadelphia, Pennsylvania June 21, 1999 Form 11-K Page 8 SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Statement of Net Assets Available for Benefits, with Fund Information December 31, 1998 - --------------------------------------------------------------------------- Index Fixed Company Small Index Bond Income Stock Capitalization Loan Fund Fund Fund Fund Fund Fund Total ----------- ---------- ---------- ----------- ---------- ---------- ----------- ASSETS Investments, at current value: Registered investment companies $27,299,488 $4,617,512 $ -- $ -- $1,841,121 $ -- $33,758,121 Collective income fund -- -- 5,664,071 -- -- -- 5,664,071 Common stock -- -- -- 35,183,052 -- -- 35,183,052 Participants' loans receivable -- -- -- -- -- 1,481,154 1,481,154 ----------- ---------- ---------- ----------- ---------- ---------- ----------- 27,299,488 4,617,512 5,664,071 35,183,052 1,841,121 1,481,154 76,086,398 Employer's contribution receivable -- -- -- 258,972 -- -- 258,972 Participants' contributions receivable 362,315 87,677 104,107 256,620 59,079 -- 869,798 Accrued income 292,961 85,615 -- 208,256 147,800 -- 734,632 Form 11-K Page 9 Index Fixed Company Small Index Bond Income Stock Capitalization Loan Fund Fund Fund Fund Fund Fund Total ----------- ---------- ---------- ----------- ----------- ---------- ----------- Cash and cash equivalents 28,609 4,567 3,306 45,854 -- -- 82,336 ----------- ---------- ---------- ----------- ----------- ---------- ----------- Net assets available for benefits $27,983,373 $4,795,371 $5,771,484 $35,952,754 $ 2,048,000 $1,481,154 $78,032,136 =========== ========== ========== =========== =========== ========== =========== The accompanying notes are an integral part of these financial statements.
Form 11-K Page 10 SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Statement of Net Assets Available for Benefits, with Fund Information December 31, 1997 - --------------------------------------------------------------------------- Index Fixed Company Small Index Bond Income Stock Capitalization Loan Fund Fund Fund Fund Fund Fund Total ----------- ---------- ---------- ----------- ---------- ---------- ----------- ASSETS Investments, at current value: Registered investment companies $18,620,254 $3,606,747 $ -- $ -- $1,359,538 $ -- $23,586,539 Collective income fund -- -- 4,603,248 -- -- -- 4,603,248 Common stock -- -- -- 23,966,955 -- -- 23,966,955 Participants' loans receivable -- -- -- -- -- 950,207 950,207 ----------- ---------- ---------- ----------- ---------- ---------- ----------- 18,620,254 3,606,747 4,603,248 23,966,955 1,359,538 950,207 53,106,949 Employer's contribution receivable -- -- -- 190,074 -- -- 190,074 Participants' contributions receivable 294,163 71,057 87,552 193,848 46,984 -- 693,604 Accrued income 249,773 19,352 -- 161,575 76,134 -- 506,834 Form 11-K Page 11 Index Fixed Company Small Index Bond Income Stock Capitalization Loan Fund Fund Fund Fund Fund Fund Total ----------- ---------- ---------- ----------- ----------- ---------- ----------- Cash and cash equivalents 5,988 1,111 1,418 7,385 419 -- 16,321 ----------- ---------- ---------- ----------- ----------- ---------- ----------- Net assets available for benefits $19,170,178 $3,698,267 $4,692,218 $24,519,837 $ 1,483,075 $ 950,207 $54,513,782 =========== ========== ========== =========== =========== ========== =========== The accompanying notes are an integral part of these financial statements.
Form 11-K Page 12 SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Statement of Changes in Net Assets Available for Benefits, with Fund Information For the Year Ended December 31, 1998 - --------------------------------------------------------------------------- Index Fixed Company Small Index Bond Income Stock Capitalization Loan Fund Fund Fund Fund Fund Fund Total ----------- ---------- ---------- ---------- ----------- ---------- ----------- Additions to net assets attributed to: Investment income Interest and dividends $ 544,760 $ 269,742 $ 242 $ 780,223 $ 159,554 $ 53,042 $ 1,807,563 Net appreciation (depreciation)in fair value of investments 5,355,329 66,209 302,300 6,294,787 (210,804) -- 11,807,821 ----------- ---------- ---------- ---------- ----------- ---------- ----------- 5,900,089 335,951 302,542 7,075,010 (51,250) 53,042 13,615,384 ----------- ---------- ---------- ---------- ----------- ---------- ----------- Contributions Employer -- -- -- 2,706,087 -- -- 2,706,087 Participants 3,868,204 897,469 1,073,570 2,552,470 642,505 -- 9,034,218 Rollovers from other qualified plans 233,782 22,940 22,509 65,551 26,234 -- 371,016 Loan repayments from participants 258,071 70,601 103,193 210,194 25,436 (667,495) -- ----------- ---------- ---------- ---------- ----------- ---------- ----------- 4,360,057 991,010 1,199,272 5,534,302 694,175 (667,495) 12,111,321 Form 11-K Page 13 Index Fixed Company Small Index Bond Income Stock Capitalization Loan Fund Fund Fund Fund Fund Fund Total ----------- ---------- ---------- ----------- ----------- ---------- ----------- ----------- ---------- ---------- ---------- ----------- ---------- ----------- Total additions 10,260,146 1,326,961 1,501,814 12,609,312 642,925 (614,453) 25,726,705 ----------- ---------- ---------- ---------- ----------- ---------- ----------- Deductions from net assets attributed to: Participants' benefits 617,505 127,302 322,933 1,097,101 38,196 -- 2,203,037 Loans to participants 494,890 79,590 93,610 433,312 43,998 (1,145,400) -- Administrative expenses -- -- -- -- 5,314 -- 5,314 ----------- ---------- ---------- ----------- ----------- ---------- ----------- Total deductions 1,112,395 206,892 416,543 1,530,413 87,508 (1,145,400) 2,208,351 ----------- ---------- ---------- ----------- ----------- ---------- ----------- Net increase prior to interfund transfers 9,147,751 1,120,069 1,085,271 11,078,899 555,417 530,947 23,518,354 Interfund transfers (334,556) (22,965) (6,005) 354,018 9,508 -- -- ----------- --------- --------- ---------- ----------- ---------- ---------- Net increase 8,813,195 1,097,104 1,079,266 11,432,917 564,925 530,947 23,518,354 Net assets at beginning of year 19,170,178 3,698,267 4,692,218 24,519,837 1,483,075 950,207 54,513,782 ----------- ---------- ---------- ----------- ----------- ---------- ----------- Net assets at end of year $27,983,373 $4,795,371 $5,771,484 $35,952,754 $ 2,048,00 $ 1,481,154 $78,032,136 =========== ========== ========== =========== =========== ========== =========== The accompanying notes are an integral part of these financial statements.
Form 11-K Page 14 SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Statement of Changes in Net Assets Available for Benefits, with Fund Information For the Year Ended December 31, 1997 - --------------------------------------------------------------------------- Index Fixed Company Small Index Bond Income Stock Capitalization Loan Fund Fund Fund Fund Fund Fund Total ----------- ---------- ---------- ----------- ---------- ---------- ----------- Additions to net assets attributed to: Investment income Interest and dividends $ 422,817 $ 208,598 $ 288 $ 590,769 $ 78,636 $ -- $ 1,301,108 Net appreciation in fair value of investments 3,863,183 81,414 243,894 5,468,016 141,690 -- 9,798,197 ----------- ---------- ---------- ---------- ----------- ---------- ----------- 4,286,000 290,012 244,182 6,058,785 220,326 -- 11,099,305 ----------- ---------- ---------- ---------- ----------- ---------- ----------- Contributions Employer -- -- -- 2,313,138 -- -- 2,313,138 Employer reimbursements of administrative expenses -- -- 40,023 -- 8,075 -- 48,098 Participants 3,479,157 878,177 1,106,647 2,393,302 513,185 -- 8,370,468 Rollovers from other qualified plans 23,358 5,274 20,890 100,046 18,714 -- 168,282 Loan repayments from participants 148,425 40,172 56,432 123,388 12,212 (380,629) -- ----------- ---------- ---------- ---------- ----------- ---------- ----------- 3,650,940 923,623 1,223,992 4,929,874 552,186 (380,629) 10,899,986 Form 11-K Page 15 Index Fixed Company Small Index Bond Income Stock Capitalization Loan Fund Fund Fund Fund Fund Fund Total ----------- ---------- ---------- ----------- ---------- ---------- ----------- ----------- ---------- ---------- ---------- ----------- ---------- ----------- Total additions 7,936,940 1,213,635 1,468,174 10,988,659 772,512 (380,629) 21,999,291 ----------- ---------- ---------- ---------- ----------- ---------- ----------- Deductions from net assets attributed to: Participants' benefits 617,952 127,637 200,149 629,559 37,088 -- 1,612,385 Loans to participants 390,317 93,314 170,794 322,108 25,347 (1,001,880) -- Administrative expenses -- -- 36,313 -- 7,094 -- 43,407 ----------- ---------- ---------- ----------- ----------- ---------- ----------- Total deductions 1,008,269 220,951 407,256 951,667 69,529 (1,001,880) 1,655,792 ----------- ---------- ---------- ----------- ----------- ---------- ----------- Net increase prior to interfund transfers 6,928,671 992,684 1,060,918 10,036,992 702,983 621,251 20,343,499 Interfund transfers 162,000 (169,114) (59,647) (48,259) 115,020 -- -- ----------- ---------- ---------- ----------- ----------- ---------- ----------- Net increase 7,090,671 823,570 1,001,271 9,988,733 818,003 621,251 20,343,499 Net assets at beginning of year 12,079,507 2,874,697 3,690,947 14,531,104 665,072 328,956 34,170,283 ----------- ---------- ---------- ----------- ----------- ---------- ----------- Net assets at end of year $19,170,178 $3,698,267 $4,692,218 $24,519,837 $ 1,483,075 $ 950,207 $54,513,782 =========== ========== ========== =========== =========== ========== =========== The accompanying notes are an integral part of these financial statements.
Form 11-K Page 16 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 agreement for a more complete description of the Plan's provisions. General - ------- The Plan is a defined contribution 401(k) savings plan covering substantially all employees of American Water Works Company, Inc. and its subsidiary companies ("the Company")(except those hired on a temporary basis)who have completed six months of service and are age eighteen or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Contributions - ------------- Participants may contribute up to 10% of their annual compensation up to $160,000 for the years ended December 31, 1998 and 1997, as defined in the Plan. Effective January 1, 1998, the Company began matching 50% of the first 4% of participant contributions. For the year ended December 31, 1997, the Company matched 45% of the first 4% of participant contributions. All matching contributions are invested in American Water Works Company, Inc. common stock. In the event of certain circumstances, the Company may contribute additional amounts. Forfeitures, if any, are used to reduce the Company's future contributions to the Plan. Form 11-K Page 17 Participant Accounts - -------------------- With the exception of the Company's contributions to the Plan, each participant may elect to have their contributions invested in any combination of five investment options in multiples of 1% up to a maximum of 10%. Each participant's account is credited with their contributions and an allocation of the Company's contribution 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. Vesting - ------- Participants are immediately vested in their voluntary contributions plus earnings thereon. Vesting of Company contributions plus actual earnings thereon is based on years of continuous service. A participant is fully vested in Company contributions and earnings thereon after five years of credited service. Prior to five years of service a participant shall have no vested balance in such Company contributions and earnings thereon, except in the case of a participant's death, total disability, or attainment of age 65, at which point a participant becomes fully vested. Investment Options - ------------------- Participants may direct their contributions among any of the following investment options: 1. Index Fund - Vanguard Institutional Index Fund, invests primarily in common stocks. 2. Index Bond Fund - Vanguard Bond Index Fund, invests in high grade corporate and/or government bonds of varying maturities. 3. Fixed Income Fund - American Express Trust Income Fund III, invests in a diversified pool of insurance and bank investment contracts. The Fund also invests in short-term investments. Form 11-K Page 18 4. Company Stock Fund - American Water Works Company, Inc. Stock,funds are invested in common stock of American Water Works Company, Inc. 5. Small Capitalization Fund - Vanguard Index Trust Small Capitalization Stock Fund,invests primarily in common stocks of small domestic companies. Payment of Benefits - ------------------- Participants may, upon attaining 59 1/2 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 may elect to receive a lump sum amount equal to the value of their account, an annuity, or a combination of both. NOTE 2 - SUMMARY OF ACCOUNTING POLICIES - --------------------------------------- Basis and Presentation - ---------------------- The financial statements are presented on the accrual basis of accounting. Use of Estimates - ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect amounts reported in the financial statements. Actual results could differ from those estimates. Form 11-K Page 19 Risks and Uncertainties - ----------------------- The Plan provides for investment options in mutual funds, a collective income fund, and Company common stock. Investment securities are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in these risks in the near term could materially affect participants' account balances and the amounts reported in the statement of net assets available for benefits and the statement of changes in net assets available for benefits. 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 - ------------- Employee 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. Form 11-K Page 20 Payment of Benefits - ------------------- Participants' benefits are recognized in the Plan financial statements when paid. Benefit Obligations - ------------------- Benefit obligations for persons who have withdrawn from participation in the Plan but have not been paid are $3,422,828 at December 31, 1998 and $2,020,427 at December 31,1997. Forfeitures - ----------- If a terminated participant does not receive a distribution upon termination, that portion of a terminated participant's account balance which has not achieved full vesting will represent a forfeiture on the terminee's account. Plan policy allows for terminated participants to return to employment with the Company within five years of their termination date without forfeiture of their nonvested account balance. Total nonvested accounts amounted to 4,191 and 3,535 shares of Company common stock at December 31, 1998 and 1997, respectively. The market value of these nonvested shares was $141,446 and $96,541 at December 31, 1998 and 1997, respectively. Total forfeitures amounted to 22 and 0 shares of Company common stock for 1998 and 1997, respectively. Forfeitures are used to reduce future Company contributions to the Plan. Reclassification - ---------------- Certain reclassifications have been made to conform previously reported data to the current presentation. Form 11-K Page 21 NOTE 3 - INVESTMENTS - -------------------- The Plan's investments are held in trust by Investors Bank and Trust Company. The following table presents the Plan's investment at December 31, 1998 and 1997. Form 11-K Page 22 December 31, 1998 December 31, 1997 --------------------------- --------------------------- Shares/units Value Shares/units Value ------------ ------------ ------------ ------------ Investments at current value based on quoted market price Registered investment companies: Vanguard Index Trust Small Capitalization Stock Fund 86,456 $1,841,121 57,586 $1,359,538 Vanguard Bond Index Fund 453,991 4,617,512* 357,458 3,606,747* Vanguard Institutional Index Fund 241,853 27,299,488* 207,908 18,620,254* Collective income fund: American Express Trust Income Fund III 414,586 5,664,071* 357,784 4,603,248* Common stock: American Water Works Company, Inc. 1,042,095 35,183,052* 877,509 23,966,955* Participants' loans receivable 1,481,154 950,207 ----------- ----------- Total investments $76,086,398 $53,106,949 =========== =========== *Represent investments that are greater than 5% of Plan net assets.
Form 11-K Page 23 During 1998 and 1997, the Plan's investments (including investments bought, sold and held during the years then ended) appreciated in value by $11,807,821 and $9,798,197 as follows: Year Ended Year Ended December 31, 1998 December 31, 1997 ----------------- ----------------- Registered investment companies $ 5,210,734 $4,086,287 Collective income fund 302,300 243,894 Common stock 6,294,787 5,468,016 ----------- ---------- Net appreciation in fair value $11,807,821 $9,798,197 =========== ==========
NOTE 4 - 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 at December 31, 1998 range from 8% to 12.5%. If the participant uses the proceeds to acquire their primary personal residence, the loan may be for a period not to exceed thirty years. Principal and interest is paid ratably through payroll deductions. Participant loans withdrawn from the Plan totaled $1,145,400 and $1,001,880 in 1998 and 1997 respectively. Repayments of loans to the Plan totaled $667,495 and $380,629 in 1998 and 1997, respectively. Form 11-K Page 24 NOTE 5 - HARDSHIP WITHDRAWALS - ----------------------------- Participants under age 59 1/2 may withdraw all or part of their 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. NOTE 6 - ADMINISTRATIVE EXPENSES - -------------------------------- Although it has no obligation to do so, the Company pays substantially all administrative expenses of the Plan. NOTE 7 - 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. In the event of Plan termination, participants will become fully vested in their accounts. NOTE 8 - 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 and the Plan's tax counsel believe 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. Form 11-K Page 25 NOTE 9 - SUBSEQUENT EVENT - ------------------------ On or about September 20, 1999, the plan intends to transfer all of its net assets available for benefits into investment options maintained by Merrill Lynch, which will become the Company's new Plan recordkeeper and trustee. Form 11-K Page 26 SCHEDULE I SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Item 27(a)Form 5500 - Schedule of Assets Held for Investment Purposes December 31, 1998 - --------------------------------------------------------------------------- Shares/Units Issue Cost Value - ------------ -------- ----------- ----------- Registered investment companies: Vanguard Index Trust Small 86,456 Capitalization Stock Fund $1,924,377 $1,841,121 453,991 Vanguard Bond Index Fund 4,510,566 4,617,512 241,853 Vanguard Institutional Index Fund 16,689,223 27,299,488 Collective income fund: American Express Trust 414,586 Income Fund III 4,945,062 5,664,071 Common stock: 1,042,095 American Water Works Company,Inc.* 21,482,765 35,183,052 Participants' loans receivable -- 1,481,154 ----------- ----------- $49,551,993 $76,086,398 =========== =========== *Party-In-Interest Form 11-K Page 27 SCHEDULE II SAVINGS PLAN FOR EMPLOYEES OF AMERICAN WATER WORKS COMPANY, INC. AND ITS DESIGNATED SUBSIDIARIES Line 27(d) Form 5500 - Schedule of Reportable Transactions For the Year Ended December 31, 1998 (Individual or series of transactions in one issue aggregating 5% or more of the value of Plan assets as of January 1, 1998) - -------------------------------------------------------------------------
Identity Current Value of Party Number of Purchase Sales Cost of on Transaction Net Involved Description Transactions Price Proceeds Assets Date Gain/(Loss) - -------- --------------- ------------ ---------- ---------- ---------- -------------- ----------- American American Water 76 $7,049,133 $ -- $ -- $7,049,133 $ -- Water Works Company, Works Inc. Common 53 -- 1,710,423 1,582,873 -- 127,550 Company, Stock Inc. The Vanguard Vanguard Institutional Group Index Fund 58 6,373,098 -- -- 6,373,098 -- 55 -- 2,772,351 2,498,219 -- 274,132
Form 11-K Page 28 EXHIBIT INDEX Exhibit Number Description - ------- ---------------------------------- 23 Consent of Independent Accountants EX-23 2 EXHIBIT 23 Consent of Independent Accountants We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-62438) of American Water Works Company, Inc. of our report dated June 21, 1999 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 21, 1999 -----END PRIVACY-ENHANCED MESSAGE-----