SecProbe.io

April 24, 2013

Via E -mail
Jeffry Sterba
President and Chief Executive Officer
American Water Works Company, Inc.
1025 Laurel Oak Road
Voorhees, New Jersey 08043

Re: American Water Works Company, Inc.
 Form 10-K for the Fiscal Year Ended December 31, 2012
Filed March 1, 2013
Definitive Proxy Statement on Schedule 14A
Filed March 28, 2013
File No. 1-34028

Dear Mr. Sterba :

We have reviewed your filing s and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing s, by
providing the requested  information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these  comments, we may have  additional comments.

Form 10 -K for the Fiscal Year Ended December 31, 2012

Item 6. Selected Financial Data, page 40

1. You disclose on pages  71 and 102 that you accelerated the payment of a dividend that
would have historically been paid in March 2013 to December 2012 to take advantage of
the existing 2012 tax rates.  Instruction 2 of Item 301 of Regulation S -K requires a cross -
reference to or  discussion of factors that materially affect the comparability of the
information reflected in selected financial data.  It appears the modification of the timing
of dividend payments materially affects the comparability of dividend related data you
prese nt on page 41.  Similarly, revise your disclosure to include a cross -reference to or
discussion of any other factors that you believe materially affected the comparability of

 Jeffry Sterba
 American Water Works Company, Inc.
 April 24, 2013
 Page 2

 any other information reflected in selected financial data, such as business comb inations
or dispositions of business operations.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations , page 42

Segment Results of Operations , page 49

Regulated Businesses Segment , page 50

Comparison of Results o f Operations for the Years Ended December 31, 2012 and 2011, page 51

2. We note your disclosure on page 48 that the decrease in other income (expenses) is
attributable in part to an increase in the allowance for funds used during construction
(“AFUDC”) resul ting from increased construction activity.  On page 98, you disclose that
construction work in progress (“CWIP”) was $460,529 thousand and $349,496 thousand
at December 31, 2011, and 2012, respectively.  With a view toward enhanced disclosure,
please tell us whether there was a change in AFUDC equity or debt rates, what the
change in rates was, and how the change impacted the recorded balance.

3. You disclose on page 55 that the 40.2% increase in the uncollectible accounts expense
was mainly the result of a refinement to your allowance for uncollectible calculation
based on more detailed data trends which were derived in conjunction with the
development of your new customer information system.  Please address the following:

 Tell us how you perform your calcu lation of your allowance for uncollectible
accounts.  Describe what the more detailed data trends were, how they impacted
your calculation, and why the previous data you utilized in determining your
allowance did not allow you to observe these trends.

 Explain to us how you determined whether this significant increase was a change
in estimate as opposed to an accounting error.

 If applicable, describe any regulatory implications of this change, such as whether
amounts recorded as bad debt expense are re coverable through rates.

Item 8. Financial Statements and Supplementary Data , page 83

Consolidated Balance Sheets, page 85

4. We note your presentation of contributions in aid of construction (“CIAC”) on the face of
your consolidated balance sheets as well as your related disclosure on page 92.  You
state, in part, that when advances are no longer refundable, they are reclassified to CIAC,
and CIAC are permanent collections of plant assets or cash for a particular construction

 Jeffry Sterba
 American Water Works Company, Inc.
 April 24, 2013
 Page 3

 project.  You also state t hat for ratemaking purposes, these contributions generally serve
as rate base reductions as they are non -investor supplied funds.  Finally, you state that
generally, you depreciated utility plant funded by contributions and amortize its
contributions as a reduction to depreciation expense, which produces a result that is
functionally equivalent to reducing the original cost of the utility plant for the
contributions.  Please address the following:

 Explain to us and disclose how these contributions, refunds , and the expenditures
you make toward property, plant and equipment (“PP&E”) are reflected on your
consolidated statements of cash flows and the GAAP basis for such presentation.

 Tell us whether the amount of net capital expenditures you disclose on pa ges 64
and 65 include funds that were contributed to you in addition to investor supplied
funds.  If they are included, then tell us and disclose the amount. If applicable, tell
us what consideration was given to separately disclosing the amounts which wer e
excluded from rate base.

 Explain to us the GAAP basis for recording contributed amounts as assets and the
CIAC amounts as a liability citing any relevant accounting literature.  In your
response, please tell us whether there is any possible scenario in which the
property asset could be converted back into cash or potentially refundable to the
party that provided the original funds.  Please also advise how such assets
represent future economic benefits you expect to receive from a cash flow basis.
Lastly,  tell us if there are any industry peers netting the retained contributions
against the related plant balance similar to other regulated industries.

 Tell us if the contributed amounts are classified within restricted funds during the
period they have n ot been spent.  If not, explain your basis for unrestricted
classification.

 Please tell us the amount of gross and net PP&E that was funded by CIAC as of
December 31, 2012 and 2011.  Additionally, please tell us what consideration was
given to disaggreg ating your recorded PP&E balance within your footnotes and
MD&A on a supplemental basis to illustrate amounts excluded from rate base.

 Please discuss the extent to which your accounting policy is impacted by
regulatory requirements and whether such requirements are consistent across the
jurisdictions your regulated subsidiaries serve.  If the requirements are not
consistent across jurisdictions, then tell us how you considered this in determining
your one accounting policy for all CIAC.

 We note that  you have presented the CIAC line item outside of the subtotal of
total regulatory and other long -term liabilities.  Please explain the basis for your
presentation.

 Jeffry Sterba
 American Water Works Company, Inc.
 April 24, 2013
 Page 4

Note 3. Acquisitions and Divestitures, page 95

5. Please summarize for us and disclose how t he fiscal 2012 income tax provision of $7.8
million was calculated.  In this regard, we note you recorded a pre -tax loss as it relates to
your discontinued operations.

Exhibit Index , page 141

6. Please file complete copies of material agreements, includin g all exhibits, schedules and
attachments.  Please refer to Item 601(b)(10) of Regulation S -K.  In this regard, we note
that you have not included all of the schedules and/or exhibits to Exhibit 10.1, which is
incorporated by reference to Exhibit 99.1 to y our Form 8 -K filed October 31, 2012.
Please note that this comment applies to all exhibits filed pursuant to Item 601(b)(10) of
Regulation S -K.

Definitive Proxy Statement on Schedule 14A

Compensation Discussion and Analysis, page 24

Determination of In dividual AIP Awards for NEOs, page 32

7. We note your disclosure on page 33 that the board “assessed Mr. Sterba’s performance as
‘exceeding expectations’ and awarded him an AIP payment of $970,500.”  Please revise
your disclosure to explain the way in which the board’s evaluation of Mr. Sterba as
“exceeding expectations” resulted in an AIP payment of $970,500.  Please refer to Item
402(b)(1)(v) of Regulation S -K.  In doing so, please discuss the way(s) in which the
Corporate Multiplier informed the board’s de cision with respect to Mr. Sterba’s AIP
payment.  Please also discuss generally the impact of the Corporate Multiplier on the
awards granted under the company’s annual incentive program, including the amount by
which awards can be adjusted to account for t he individual performance factors referred
to in this section.  Finally, please discuss the reason(s) that the board determined that Mr.
Sterba had “exceeded expectations.”  We may have further comment upon reviewing
your response.

8. We note your disclosure  on page 33 regarding the structure of Mr. Lynch’s award.
Please disclose the way in which you determined that “[t]he performance of regulated
operations resulted in achievement equal to 130.6% of target performance.”  In doing so,
please disclose the tar gets applicable to any of the enumerated goals and the resulting
performance related to any such target.  Please refer to Item 402(b)(1)(v) of Regulation
S-K.

 Jeffry Sterba
 American Water Works Company, Inc.
 April 24, 2013
 Page 5

 We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the compa ny and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the co mpany
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing s;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect  to the filing s; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Jarrett Torno, Staff Accountant,  at (202) 551 -3703  or Robert Babula,
Staff Accountant,  at (202) 551 -3339  if you have questions regarding comments on the financial
statements and related matters.  Please contact Lisa Kohl, Staff Attorney, at (202) 551 -3252  or
Lilyanna Peyser, Special Counsel,  at (202) 551 -3222 if you have questions regarding any other
comments.  You may contact me at (202) 551 -3720  with any other questions.

Sincerely,

 /s/ Andrew D. Mew

Andrew D. Mew
Accounting Branch Chief