DEFA14A 1 sch14a.txt SCHEDULE 14A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Definitive Proxy Statement [ ] Definitive Additional Materials [X] Soliciting Material Pursuant to Section 240.14a-12 Filing by: AMERICAN WATER WORKS COMPANY, INC. ------------------------------------------------------------------------------ (Name of each Registrant as Specified in its Charter) ------------------------------------------------------------------------------ (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: __________________________________________________________________ 2) Aggregate number of securities to which transaction applies: __________________________________________________________________ 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): __________________________________________________________________ 4) Proposed maximum aggregate value of transaction: __________________________________________________________________ 5) Total fee paid: __________________________________________________________________ [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount previously paid: __________________________________________________________________ 2) Form, Schedule or Registration Statement No.: __________________________________________________________________ 3) Filing Party: __________________________________________________________________ 4) Date Filed: _______________________________________________________________ 1 Voorhees, N.J., October 29, 2001 Press Release American Water Works Company, Inc. Announces Earnings for the Third Quarter 2001 American Water Works Company, Inc. (NYSE:AWK) today announced earnings per share were 63 cents and net income to common stock was $62.6 million for the quarter ended September 30, 2001 prior to one-time transactions. This represents a 24% increase in earnings per share above the 51 cents per share reported for the third quarter last year. A ten-cents per share charge resulted from expenses incurred for the RWE/AG transaction announced September 17, 2001 and a three-cent per share net gain was recorded for the sale of water assets serving the city of Salisbury, Massachusetts. After these one-time transactions, per share earnings were 56 cents and net income to common stock was $55.6 million. ``Increased revenues from more than 40,000 new customers, authorized increases in rates charged for service, and modest weather pattern improvements were contributing factors to the improvement in results from on-going operations,'' said Ellen Wolf the company's chief financial officer. Cooler temperatures and frequent rainfall negatively impacted the company's revenues during the third quarter last year. ``Even though we did not return to historical sales levels in all states during the quarter, our geographical diversity helped to mitigate this year's weather impacts,'' added Ms. Wolf. Compared with revenues for the third quarter last year, revenues increased $31 million, or 8.5 % to $395 million. Total operation and maintenance (O&M) expenses increased 8.1% compared to O&M expenses for the third quarter last year. However, as a result of continued growth, per customer O&M expenses on a twelve-month basis were up only 3.5 % from per customer expense levels one year ago. Operating margins for comparative twelve-month periods were unchanged. Depreciation expense increased 12.4% as a result of capital investments that increased net utility plant more than $244 million. Approval of the company's purchase of the water and wastewater assets of Citizens Communication Company in California was received from the California Public Utilities Commission in September. The company now has approval from state regulatory agencies in all six states covered by the purchase agreement and pending resolution of appeals from the California decision, anticipates completing that transaction by the end of this year. Closing on the acquisition of Azurix-North America is anticipated in November. The company stated that approval of the agreement with RWE/AG will be required in fourteen states and filings of the agreement must be made in five other states. It is anticipated that those filings will be made by the end of this year. As announced earlier this month, a conference call with analysts regarding this earnings announcement will be available today on the company's website (http://www.amwater.com) at 3:00 PM (EST). 2 With annual revenues of $1.4 billion, American Water Works Company, Inc. is the nation's largest publicly traded enterprise devoted exclusively to water and wastewater business opportunities. For the three month, nine month and twelve month periods ended September 30, American Water Works Company, Inc., reports unaudited consolidated operating results as follows: (In thousands, except per share amounts)
Three months ended Nine months ended September 30, September 30, ----------------------------------------------------- 2001 2000 2001 2000 ----------- ----------- ----------- ----------- Operating revenues $ 394,956 $ 364,125 $ 1,075,261 $ 1,018,293 ----------- ----------- ----------- ----------- Operating expenses Operation and maintenance 166,890 154,400 478,189 453,028 Depreciation and amortization 46,819 41,648 136,248 122,061 General taxes 33,049 31,942 98,825 96,610 ----------- ----------- ----------- ----------- 246,758 227,990 713,262 671,699 ----------- ----------- ----------- ----------- 3 Operating income 148,198 136,135 361,999 346,594 RWE/AG acquisition expense (9,860) (9,860) Gain from sale of operating system 4,820 4,820 Other income (deductions), net (45,409) (51,916) (138,735) (142,662) ----------- ----------- ----------- ----------- Income before income taxes 97,749 84,219 218,224 203,932 Income taxes 41,972 33,488 89,605 80,979 ----------- ----------- ----------- ----------- Net income 55,777 50,731 128,619 122,953 Dividends on preferred stock 146 996 438 2,988 ----------- ----------- ----------- ----------- Net income to common stock 55,631 49,735 128,181 119,965 Other comprehensive income, net (13,285) (23,856) (19,794) (47,062) ----------- ----------- ----------- ----------- Comprehensive income $ 42,346 $ 25,879 $ 108,387 $ 72,903 =========== =========== =========== =========== Net income to common stock $ 55,631 $ 49,735 $ 128,181 $ 119,965 One-time transactions, net of tax 6,930 6,930 ----------- ----------- ----------- ----------- Net income to common stock - excluding one- time transactions $ 62,561 $ 49,735 $ 135,111 $ 119,965 =========== =========== =========== =========== Average shares of basic common stock outstanding 99,723 98,139 99,287 97,944 4 Basic and diluted earnings per common share on average shares outstanding $ 0.56 $ 0.51 $ 1.29 $ 1.22 =========== =========== =========== =========== Basic and diluted earnings per common share on average shares outstanding excluding one-time transactions $ 0.63 $ 0.51 $ 1.36 $ 1.22 =========== =========== =========== =========== Other information Water sales (billions of gallons) 102.0 99.5 260.7 258.0 Utility customers (as of September 30) 2,624 2,583 2,624 2,583
Twelve months ended September 30, -------------------------- 2001 2000 ----------- ----------- Operating revenues $ 1,407,558 $ 1,329,181 ----------- ----------- Operating expenses Operation and maintenance 628,466 597,673 Depreciation and amortization 180,075 161,852 General taxes 127,434 126,037 ----------- ----------- 935,975 885,562 ----------- ----------- Operating income 471,583 443,619 RWE/AG acquisition expense (9,860) Gain from sale of operating system 4,820 Other income (deductions), net (185,884) (187,286) ----------- ----------- 5 Income before income taxes 280,659 256,333 Income taxes 113,932 100,822 ----------- ----------- Net income 166,727 155,511 Dividends on preferred stock 1,150 3,984 ----------- ----------- Net income to common stock 165,577 151,527 Other comprehensive income, net (39,890) (32,813) ----------- ----------- Comprehensive income $ 125,687 $ 118,714 =========== =========== Net income to common stock $ 165,577 $ 151,527 One-time transactions, net of tax 6,930 ----------- ----------- Net income to common stock - excluding one-time transactions $ 172,507 $ 151,527 =========== =========== Average shares of basic common stock outstanding 99,091 97,612 Basic and diluted earnings per common share on average shares outstanding $ 1.67 $ 1.55 =========== =========== Basic and diluted earnings per common share on average shares outstanding excluding one-time transactions $ 1.74 $ 1.55 =========== =========== Other information Water sales (billions of gallons) 344.7 343.0 Utility customers (as of September 30) 2,624 2,583
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 that 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: the success of pending applications for rate increases, inability to obtain, or to meet conditions imposed for, regulatory approval of pending acquisitions, weather conditions that tend to extremes of temperature or duration; availability, terms and development of capital; business abilities and judgment of personnel; changes in, or the failure to comply with governmental regulations, particularly those affecting the environment and water quality; competition; success of operating initiatives, advertising and promotional efforts; existence of adverse publicity or litigation; changes in business strategy or plans; quality of management; general economic and business conditions; 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. __________ Contact: American Water Works Company, Inc. James E. Harrison, 856/346-8207 Nancy A. Macenko, 856/566-4026 * * * American Water Works Company, Inc. (the "Company"), RWE Aktiengesellschaft, a company organized under the laws of the Federal Republic of Germany ("Guarantor"), Thames Water Aqua Holdings GmbH, a company organized under the laws of the Federal Republic of Germany and a wholly owned subsidiary of Guarantor ("Parent"), and Apollo Acquisition Company, a Delaware corporation and a wholly owned subsidiary of Parent ("Sub") have entered into an Agreement and Plan of Merger, dated as of September 16, 2001, pursuant to which Sub will be merged with and into the Company with the Company surviving the merger (the "Merger"). In connection with the Merger, the Company will be filing a proxy statement with the Securities and Exchange Commission (the "SEC"). SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT CONTAINS IMPORTANT INFORMATION REGARDING THE MERGER. Investors and security holders may obtain a free copy of the proxy statement when it becomes available and other documents filed by the Company with the SEC in connection with the Merger at the SEC's web site at www.sec.gov. Security holders of the Company may also obtain for free a copy of the proxy statement and other documents filed with the SEC by the Company in connection with the Merger by contacting Nancy A. Macenko, Vice President External Affairs, at (856) 566-4026. The Company and its subsidiaries and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company's stockholders in favor of the Merger. These directors include the following: Marilyn Ware, Gerald C. Smith, J. James Barr, Henry G. Hager, Ross A. Webber, Frederick S. Kirkpatrick, Paul W. Ware, Nancy Ware Wainwright, Ray J. Groves, Elizabeth H. Gemmill, William S. White, Anthony P. Terracciano, William O. Albertini, Rhoda W. Cobb and Horace Wilkins, Jr. and these officers include Joseph F. Hartnett, Jr., Daniel L. Kelleher, W. Timothy Pohl, Robert D. Sievers, Ellen C. Wolf, Nancy A. Macenko and James E. Harrison. Collectively, as of March 5, 2001, the directors and executive officers of the Company may be deemed to beneficially own approximately 21.9% of the outstanding shares of the Company's common stock and under 5% of the outstanding shares of the Company's Cumulative Preferred Stock, 5% Series. Stockholders of the Company may obtain additional information regarding the interests of the participants by reading the proxy statement when it becomes available. 6