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
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AMERICAN WATER WORKS COMPANY, INC.
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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).
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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
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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.
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