Item 1. Business
The "Description of the Business" is set forth on page 23 of the Annual Report to Stockholders for 1993, filed as Exhibit 13 to this Report on Form 10-K; and such description is hereby specifically incorporated herein by reference thereto. The information provided in that section is supplemented by the following details:
The water supplies of the operating subsidiaries consist of surface supplies, wells, and in a limited number of cases, water purchased under contract. Such supplies are considered adequate to meet present require- ments. In general, all surface supplies are filtered and substantially all of the water is treated with chlorine, and, in some cases, special treatment is provided to correct specific conditions of the water.
In general, the operating utility subsidiaries have valid franchises, free from unduly burdensome restrictions, sufficient to enable them to carry on their business as presently conducted. They derive such franchise rights from statutes under which they were incorporated, municipal consents and ordinances, or certificates or permits received from state or local regulatory agencies. In most instances, such franchise rights are non- exclusive.
In most of the states in which the operations of the operating subsidiaries are carried on, there exists the right of municipal acquisition by one or both of the following methods: (1) condemnation; or (2) the right of purchase given or reserved by the law of the state in which the company was incorporated or received its franchise. The price to be paid upon condemnation is usually determined in accordance with the law of the state governing the taking of land or other property under eminent domain statutes; in other instances, the price is fixed by appraisers selected by the parties, or in accordance with a formula prescribed by the law of the state or in the particular franchise or special charter.
Some of the expenditures for construction by operating subsidiaries have included facilities to comply with federal and state water quality and safety standards. The nature of some of the construction is described in the section entitled "System Growth and Development," located on page 26 of the Annual Report to Stockholders for 1993, filed as Exhibit 13 to this Report on Form 10-K; such information is hereby specifically incorporated herein by reference thereto.
The number of persons employed by the Registrant and subsidiary companies totaled 4,062 at December 31, 1993.
Item 1A.
Item 1A. Executive Officers of the Registrant
The following list sets forth the names, ages and offices held with the Registrant by each of the executive officers of the Registrant. No family relationships exist among any of such executive officers, nor do any arrangements or understandings exist between any such executive officer and any other person pursuant to which he was selected as an officer.
Name Age Office Held Office Held Since
George W. Johnstone 55 President & Chief Executive Officer January 2, 1992 J. James Barr 52 Vice President & Treasurer January 20, 1984 Edward W. Limbach 55 Vice President May 3, 1990 Gerald C. Smith 59 Vice President May 2, 1991 W. Timothy Pohl 39 General Counsel & Secretary January 16, 1988 Robert D. Sievers 40 Comptroller February 14, 1992
The executive officers are elected at the annual organizational meeting of the Board of Directors of the Registrant which is held in May. The executive officers serve at the pleasure of the Board of Directors. Successors to officers who resign, die or are removed during the year are elected by the Board.
Prior to his election as President and Chief Executive Officer, Mr. Johnstone was named President-elect in March 1991. In addition, Mr. Johnstone had been a Vice President from May 1987 until January 1992 and an officer of subsidiary companies for more than five years prior to his election as a Vice President. Mr. Barr had been an officer of subsidiary companies for more than five years prior to his election as Treasurer. In addition, Mr. Barr was elected a Vice President on May 6, 1987. Mr. Limbach had been an officer of subsidiary companies for more than five years prior to
his election as a Vice President. Mr. Smith had been an officer of subsidiary companies for more than five years prior to his election as a Vice President. Mr. Pohl had been an officer of subsidiary companies from May 1984 to his election as Secretary. In addition, Mr. Pohl was elected General Counsel on May 3, 1990. Prior to being elected to his current position, Mr. Sievers had been Assistant Comptroller since May 1985.
Item 2.
Item 2. Properties
The Registrant leases its office space, equipment and furniture from one of its wholly-owned subsidiaries. The office space, equipment and furniture are located in Voorhees, New Jersey and are utilized by the Registrant's directors, officers and staff in the conduct of the Registrant's business.
The subsidiary operating companies own, in the states in which they operate, transmission and distribution mains, pump stations, treatment plants, storage tanks, reservoirs and related facilities. Properties are adequately maintained and units of property are replaced as and when necessary. The Registrant considers the properties of its operating companies to be in good operating condition.
A substantial acreage of land is owned by the operating companies, the greater part of which is located in watershed areas, with the balance being principally sites of pumping and treatment plants, storage reservoirs, tanks and standpipes.
Item 3.
Item 3. Legal Proceedings
There are no pending material legal proceedings, other than ordinary, routine litigation incidental to the business, to which the Registrant or any of its subsidiaries is a party or of which any of their property is the subject.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5.
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
The information required under this item is contained in the section entitled "Range of Market Prices," located on the inside back cover of the Annual Report to Stockholders for 1993, filed as Exhibit 13 to this Report on Form 10-K; such information is hereby specifically incorporated herein by reference thereto.
Item 6.
Item 6. Selected Financial Data
The information required under this item is contained in the section entitled "Consolidated Summary of Selected Financial Data," located on page 22 of the Annual Report to Stockholders for 1993, filed as Exhibit 13 to this Report on Form 10-K; such information is hereby specifically incorporated by reference thereto.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The information required under this item is contained in the section entitled "Management's Discussion and Analysis," located on pages 23 through 33 of the Annual Report to Stockholders for 1993, filed as Exhibit 13 to this Report on Form 10-K; such information is hereby specifically incorporated herein by reference thereto.
Item 8.
Item 8. Financial Statements and Supplementary Data
The financial statements, together with the report thereon of Price Waterhouse dated February 1, 1994, appearing on pages 35 through 53 of the 1993 Annual Report to Stockholders, filed as Exhibit 13 to this Report on Form 10-K, are hereby specifically incorporated herein by reference thereto.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
The information required under this item with respect to the Directors of the Registrant appears in the fourth full paragraph on page 2 through the first full paragraph on page 4 and in the section entitled "Compliance with Section 16(a) of the Securities Exchange Act of 1934, As Amended" which is located on page 6 of the definitive Proxy Statement relating to the Registrant's Annual Meeting of Stockholders on May 5, 1994, to be filed by the Registrant with the Commission pursuant to Section 14(a) of the Securities Exchange Act of 1934 (the "1934 Act"); such information is hereby specifically incorporated herein by reference thereto.
The information required under this item with respect to the Executive Officers of the Registrant is set forth in Item 1A of Part I above pursuant to paragraph (3) of General Instruction G to Form 10-K.
Item 11.
Item 11. Executive Compensation
The information required under this item is contained in the sections entitled "Management Remuneration," "Pension Plan," "Report of the Compensation and Management Development Committee of the Board of Directors on Executive Compensation," "Director Remuneration" and "Performance Graph"
which are located on pages 7 through 11 of the definitive Proxy Statement relating to the Registrant's Annual Meeting of Stockholders on May 5, 1994, to be filed by the Registrant with the Commission pursuant to Section 14(a) of the 1934 Act, and is hereby specifically incorporated herein by reference thereto, except for the "Report of the Compensation and Management Development Committee of the Board of Directors on Executive Compensation" and "Performance Graph" which are not so incorporated by reference.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required under this item is contained in the section entitled "Stock Ownership Information" which is located on pages 4, 5 and 6 of the definitive Proxy Statement relating to the Registrant's Annual Meeting of Stockholders on May 5, 1994, to be filed by the Registrant with the Commission pursuant to Section 14(a) of the 1934 Act, and is hereby specifically incorporated herein by reference thereto.
Item 13.
Item 13. Certain Relationships and Related Transactions
There are no material relationships or related transactions other than those disclosed in response to Item 11 of this Part III.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
a) The following documents are filed as part of this report:
1. Financial Statements: the Financial Statements required to be filed by Item 8 are listed in the Index to Financial Statements, which appears on Pages 10 and 11 of this Report on Form 10-K.
2. Financial Statement Schedules: the Financial Statement Schedules required to be filed by Item 8 and by paragraph (d) of this Item are listed in the Index to Financial Statements, which appears on Pages 10 and 11 of this Report on Form 10-K.
3. Exhibits: the Exhibits to this Form 10-K are listed in the Index to Exhibits, which appears on Pages 17 to 19 of this Report on Form 10-K.
b) Reports on Form 8-K.
During the last quarter of the period covered by this Report on Form 10-K, the Registrant filed no reports on Form 8-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
By: /s/ George W. Johnstone George W. Johnstone, President and Chief Executive Officer
DATE: March 3, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
Signature Title Date
Principal Executive Officer:
/s/ George W. Johnstone President and March 3, 1994 George W. Johnstone Chief Executive Officer
Principal Financial Officer:
/s/ J. James Barr Vice President and March 3, 1994 J. James Barr Treasurer
Principal Accounting Officer:
/s/ Robert D. Sievers Comptroller March 3, 1994 Robert D. Sievers
SIGNATURES (Cont'd.)
Directors:
/s/ William O. Albertini March 3, 1994 William O. Albertini
/s/ William R. Cobb March 3, 1994 William R. Cobb
/s/ Elizabeth H. Gemmill March 3, 1994 Elizabeth H. Gemmill
/s/ Henry G. Hager March 3, 1994 Henry G. Hager
/s/ Nelson G. Harris March 3, 1994 Nelson G. Harris
/s/ William F. Hyland March 3, 1994 William F. Hyland
/s/ George W. Johnstone March 3, 1994 George W. Johnstone
/s/ Marilyn W. Lewis March 3, 1994 Marilyn W. Lewis
Nancy W. Wainwright
/s/ Paul W. Ware March 3, 1994 Paul W. Ware
/s/ Ross A. Webber March 3, 1994 Ross A. Webber
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT
YEAR ENDED DECEMBER 31, 1993
AMERICAN WATER WORKS COMPANY, INC.
FINANCIAL STATEMENTS
AMERICAN WATER WORKS COMPANY, INC.
The following documents are filed as part of this report:
Page(s) in (1) FINANCIAL STATEMENTS Annual Report*
Report of Independent Accountants . . . . . . . . . . . . . . 35
Consolidated Balance Sheet of American Water Works Company, Inc. and Subsidiary Companies at December 31, 1993 and 1992 . . . . . . . . . . . . . . . . . . . . . . .36 and 37
Consolidated Statements of Income and Retained Earnings of American Water Works Company, Inc. and Subsidiary Companies for each of the three years in the period ended December 31, 1993 . . . . . . . . . 38
Consolidated Statement of Cash Flows of American Water Works Company, Inc. and Subsidiary Companies for each of the three years in the period ended December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . 39
Balance Sheet of American Water Works Company, Inc. at December 31, 1993 and 1992 . . . . . . . . . . . . . . . . 40
Statements of Income and Retained Earnings of American Water Works Company, Inc. for each of the three years in the period ended December 31, 1993 . . . . . . 41
Statement of Cash Flows of American Water Works Company, Inc. for each of the three years in the period ended December 31, 1993. . . . . . . . . . . . . . . . 42
Schedules Accompanying Financial Statements . . . . . . .43 through 45
Notes to Financial Statements . . . . . . . . . . . . . .46 through 53
*Incorporated by reference from the indicated pages of the 1993 Annual Report to Stockholders, which is Exhibit 13 to this Report on Form 10-K.
AMERICAN WATER WORKS COMPANY, INC.
INDEX TO FINANCIAL STATEMENTS (Continued)
(2) FINANCIAL STATEMENT SCHEDULES
Description Page*
Report of Independent Accountants on Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Consent of Independent Accountants. . . . . . . . . . . . . . . 13
Schedule V: Property, Plant and Equipment . . . . . . . . . 14
Schedule VI: Accumulated Depreciation of Property, Plant and Equipment . . . . . . . . . . . . . . 15
Schedule VIII: Valuation and Qualifying Accounts-Allowance for Uncollectible Accounts. . . . . . . . . . . 16
Schedule X: Supplementary Income Statement Information. . . 16
Financial Statement Schedules not included in this Report on Form 10-K have been omitted because they are not applicable or the required information is shown in the Financial Statements or notes thereto.
*Page number shown refers to the page number in this Report on Form 10-K.
Report of Independent Accountants on Financial Statement Schedules
To the Board of Directors American Water Works Company, Inc.
Our audits of the consolidated financial statements referred to in our report dated February 1, 1994 appearing on page 35 of the 1993 Annual Report to Stockholders of American Water Works Company, Inc. (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedules listed in Item 14(a) of this Form 10-K. In our opinion, these Financial Statements Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
PRICE WATERHOUSE
Thirty South Seventeenth Street Philadelphia, Pennsylvania 19103 February 1, 1994
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectuses constituting part of the Registration Statements on Form S-3 (Number 33- 32051), on Form S-8 (Number 33-34804) and on Form S-8 (Number 33-62438) of American Water Works Company, Inc. of our report dated February 1, 1994 appearing on page 35 of the Annual Report to Stockholders which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report on the Financial Statements Schedules, which appears on page 12 of this Form 10-K.
PRICE WATERHOUSE
Thirty South Seventeenth Street Philadelphia, Pennsylvania 19103 March 25, 1994
FINANCIAL STATEMENT SCHEDULE V
AMERICAN WATER WORKS COMPANY, INC. AND SUBSIDIARY COMPANIES
SCHEDULE V - Property, Plant and Equipment
Years Ended December 31 (In thousands)
Other Beginning Additions Changes-Add Ending Year Balance At Cost (A) Retirements (Deduct) (B) Balance - ---- ---------- ----------- ----------- ------------ ----------
1993 $2 596 267 $363 015 $ 17 103 $ 14 602 $2 956 781
1992 2 412 748 204 792 20 506 (767) 2 596 267
1991 2 244 032 187 396 15 908 (2 772) 2 412 748
1993 1992 1991 -------- -------- --------
(A) Construction expenditures $193 116 $197 579 $182 987 Property acquired 169 899 7 213 4 409 -------- -------- --------
$363 015 $204 792 $187 396 ======== ======== ========
(B) Property sold $ (23) $ (251) $ (37) Return of contributed property (1 747) Adoption of Statement of Financial Accounting Standards No. 109 -- Gross-up of allowance for borrowed funds used during construction 16 477 Miscellaneous (1 852) (516) (988) -------- -------- ---------
$ 14 602 $ (767) $ (2 772) ======== ======== ========
FINANCIAL STATEMENT SCHEDULE VI
AMERICAN WATER WORKS COMPANY, INC. AND SUBSIDIARY COMPANIES
SCHEDULE VI - Accumulated Depreciation of Property, Plant and Equipment
Years Ended December 31 (In thousands)
Additions Charged to Other Beginning Costs and Changes-Add Ending Year Balance Expenses (A) Retirements (Deduct) (B) Balance - ---- --------- ------------ ----------- ------------ ---------
1993 $414 482 $66 093 $17 103 $27 808 $491 280
1992 377 646 58 257 20 506 (915) 414 482
1991 342 717 51 887 15 908 (1 050) 377 646
1993 1992 1991 -------- -------- --------
(A) Additions to accumulated depreciation charged to costs and expenses $66 093 $58 257 $51 887 Amortization of premature property retirements 396 289 366 Other 349 (164) (186) ------- ------- -------
Depreciation and amortization charged to operating expenses $66 838 $58 382 $52 067 ======= ======= =======
(B) Property acquired $31 050 $ 984 $ 43 Depreciation charged to contributed property 2 202 1 861 2 048 Removal costs (6 201) (5 224) (4 815) Salvage credits 1 744 1 190 1 207 Miscellaneous (987) 274 467 ------- ------- -------
$27 808 $ (915) $(1 050) ======= ======= =======
FINANCIAL STATEMENT SCHEDULES VIII & X
AMERICAN WATER WORKS COMPANY, INC. AND SUBSIDIARY COMPANIES
SCHEDULE VIII - Valuation and Qualifying Accounts
Allowance for Uncollectible Accounts
Years Ended December 31 (In thousands)
Balance Additions Charged to Balance Beginning ------------------------- End of Year of Year Expense (A) Other (B) Deductions (C) Year - ---- --------- ----------- --------- -------------- -------
1993 $ 925 $ 3 377 $ 102 $ 3 297 $ 1 107
1992 871 3 580 3 526 925
1991 844 4 028 4 001 871
(A) Provisions included in operating expense.
(B) Allowance for uncollectible accounts of acquired companies.
(C) Amounts written off as uncollectible, net of recovery of amounts previously written off.
SCHEDULE X - Supplementary Income Statement Information (In thousands)
Charged to Costs and Expenses ----------------------------- During the Years Ended December 31 ----------------------------------- Item 1993 1992 1991 ---- ------- ------- -------
1. Maintenance and repairs $45 914 $41 721 $47 043
3. Taxes, other than payroll and income taxes: Property and capital stock 24 664 21 867 20 287 Gross receipts and franchise 30 174 28 600 25 540 Miscellaneous 2 186 2 412 2 145
AMERICAN WATER WORKS COMPANY, INC.
INDEX TO EXHIBITS
Exhibit Number Description
3 Articles of Incorporation and By-laws
(a) Certificate of Incorporation of the Registrant, as amended and restated as of May 15, 1987, is incorporated herein by reference to Exhibit 3(a) to Form 10-K report of the Registrant for 1987.
(b) Certificate of Amendment of the Certificate of Incorporation of the Registrant, effective May 9, 1989, is incorporated herein by reference to Exhibit 3(a) to Form 10-Q report of the Registrant for June 30, 1989.
(c) Certificate of Amendment of the Restated Certificate of Incorporation of the Registrant, effective May 3, 1990, is incorporated herein by reference to Exhibit 3(a) to Form 10-Q report of the Registrant for June 30, 1990.
(d) Certificate of Designations of the Registrant relating to its Cumulative Preferred Stock, 8.50% Series, is incorporated herein by reference to Exhibit 3(d) to Form 10-K report of the Registrant for 1990.
(e) By-laws of the Registrant, as amended to January 6, 1994, are filed herewith.
4 Instruments Defining the Rights of Security Holders, Including Indentures
(a) Indenture dated as of November 1, 1977 between the Registrant and The Fidelity Bank (name later changed to First Fidelity Bank, National Association), Trustee, is incorporated herein by reference to Exhibit E to Form 10-K report of the Registrant for 1977.
(b) First Supplemental Indenture dated as of December 1, 1989 between the Registrant and Fidelity Bank, National Association (name later changed to First Fidelity Bank, National Association), as Trustee, is incorporated herein by reference to Exhibit 4(i) to Form 10-K report of the Registrant for 1989.
AMERICAN WATER WORKS COMPANY, INC.
INDEX TO EXHIBITS
Exhibit Number Description
4 (cont.) (c) Second Supplemental Indenture dated as of February 1, 1993 between the Registrant and Fidelity Bank, National Association (name later changed to First Fidelity Bank, National Association), as Trustee, is incorporated herein by reference to Exhibit 4(c) to Form 10-K report of the Registrant for 1992.
(d) Flip-Over Rights Agreement dated as of March 2, 1989 between the Registrant and Bank of Delaware, as Rights Agent, is incorporated herein by reference to Exhibit 1 to Form 8-A Registration Statement of the Registrant, No. 1-3437-2.
(e) Flip-In Rights Agreement dated as of March 2, 1989 between the Registrant and Bank of Delaware, as Rights Agent, is incorporated herein by reference to Exhibit 1 to Form 8-A Registration Statement of the Registrant, No. 1-3437-2.
10 Material Contracts
(a) Employees' Stock Ownership Plan of the Registrant and Its Designated Subsidiaries, as Amended and Restated Effective January 1, 1987, is incorporated herein by reference to Exhibit 19(b) to Form 10-K report of the Registrant for 1986.
(b) Amendment No. 1 to Employees' Stock Ownership Plan of the Registrant and Its Designated Subsidiaries, as Amended and Restated Effective January 1, 1987, is incorporated herein by reference to Exhibit 19(b) to Form 10-K report of the Registrant for 1988.
(c) Amendment No. 2 to Employees' Stock Ownership Plan of the Registrant and Its Designated Subsidiaries, as Amended and Restated Effective January 1, 1987, is incorporated herein by reference to Exhibit 10(c) to Form 10-K report of the Registrant for 1989.
(d) Amendment No. 3 to Employees' Stock Ownership Plan of the Registrant and Its Designated Subsidiaries, as Amended and Restated Effective January 1, 1987, is incorporated herein by reference to Exhibit 10(d) to Form 10-K report of the Registrant for 1990.
AMERICAN WATER WORKS COMPANY, INC.
INDEX TO EXHIBITS
Exhibit Number Description
10 (cont.) (e) Supplemental Executive Retirement Plan of the Registrant, effective as of January 1, 1985, is incorporated herein by reference to Exhibit 19(c) to Form 10-K report of the Registrant for 1985.
(f) Amendment No. 1 to Supplemental Executive Retirement Plan of the Registrant is incorporated herein by reference to Exhibit 10(e) to Form 10-K report of the Registrant for 1989.
(g) Amendment No. 2 to Supplemental Executive Retirement Plan of the Registrant is incorporated herein by reference to Exhibit 10(g) to Form 10-K report of the Registrant for 1990.
(h) Supplemental Retirement Plan of the Registrant, effective as of April 1, 1989, is incorporated herein by reference to Exhibit 10(f) to Form 10-K report of the Registrant for 1989.
13 Annual Report to Security Holders
The Registrant's Annual Report to Stockholders for 1993 is filed as exhibit hereto solely to the extent portions thereof are specifically incorporated herein by reference.
21 Subsidiaries of the Registrant
Subsidiaries of the Registrant as of December 31, 1993.
23 Consents of Experts and Counsel
See "Consent of Independent Accountants" on page 13 of this Form 10-K report.