SEC Comment Letter for American Water Works Company, (AWK) — May 9, 2016
American Water Works Company, Inc.
Date: May 9, 2016 · CIK: 0001410636 · Accession: 0000000000-16-075460
AI Filing Summary & Sentiment
Letter
Mail Stop 3561 May 9, 2016 Linda G. Sullivan Executive Vice President and Chief Financial Officer American Water Works Company, Inc. 1025 Laurel Oak Road Voorhees, NJ 08043
Re: American Water Works Company, Inc. Form 10-K for the Fiscal Year Ended December 31, 2015 Response dated May 3, 2016 File No. 001 -34028
Dear Ms. Sullivan :
We have reviewed your May 3, 2016 response to our comment letter and have the following comment . In our comment , we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this comment within ten busine ss days by providing the requested information or advis e us as soon as possible when you w ill respond. If you do not believe our comment appl ies to your facts and circumstances, please tell us why in your response.
After reviewing your response to this comment, we may have additional comments. Unless we note otherwise, our references to prior comments are to comments in our April 20, 2016 letter .
Form 10 -K for the Fiscal Year Ended December 31, 2015
Financial Statements and Supplementary Data
Consolidated Statement of Cash Flows, page 66
1. We have read your response to comment 2 and have the following comments:
Please provide us with the complete set of journal entries you record related to your removal costs. Your statement that you “capitalize costs of removal by charging accumulated depreciation as expenditures are incurred” sug gests that you do not receive rate recovery of such costs until you actually incur the expenditures as opposed to being included in rates and expensed over the life of the asset prior to removal. Please clarify if our understanding is not correct. If our understanding is correct, please advise us why
Linda G. Sullivan American Water Works Company, Inc. May 9 , 2016 Page 2
regulatory liabilities also exist for non -legal removal costs. Please ensure that you include the reason(s) for the entries made to initially record removal costs, upon the creation and amortization of relat ed regulatory assets and/or liabilities, the recording of associated expense, including the timing, and the incurrence of removal expenditures.
Please clarify why your investing activity classification of non -legal removal costs should be accorded diffe rent classification than legal removal costs required to be presented within operating activities pursuant to ASC 230 -10-45-17(e) .
You may contact Andrew Blume, Staff Accountant at (202) 551 -3254 or Melissa Blume, Staff Accountant at (202) 551 -7128, if you have questions regarding comments on the financial statements and related matters. Please contact me at (202) 551 -3737 with any other questions.
Sincerely,
/s/ Jennifer Thompson
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Mail Stop 3561
May 9, 2016
Linda G. Sullivan
Executive Vice President and Chief Financial Officer
American Water Works Company, Inc.
1025 Laurel Oak Road
Voorhees, NJ 08043
Re: American Water Works Company, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2015
Response dated May 3, 2016
File No. 001 -34028
Dear Ms. Sullivan :
We have reviewed your May 3, 2016 response to our comment letter and have the
following comment . In our comment , we may ask you to provide us with information so we may
better understand your disclosure.
Please respond to this comment within ten busine ss days by providing the requested
information or advis e us as soon as possible when you w ill respond. If you do not believe our
comment appl ies to your facts and circumstances, please tell us why in your response.
After reviewing your response to this comment, we may have additional comments.
Unless we note otherwise, our references to prior comments are to comments in our April 20,
2016 letter .
Form 10 -K for the Fiscal Year Ended December 31, 2015
Financial Statements and Supplementary Data
Consolidated Statement of Cash Flows, page 66
1. We have read your response to comment 2 and have the following comments:
Please provide us with the complete set of journal entries you record related to your
removal costs. Your statement that you “capitalize costs of removal by charging
accumulated depreciation as expenditures are incurred” sug gests that you do not receive
rate recovery of such costs until you actually incur the expenditures as opposed to being
included in rates and expensed over the life of the asset prior to removal. Please clarify if
our understanding is not correct. If our understanding is correct, please advise us why
Linda G. Sullivan
American Water Works Company, Inc.
May 9 , 2016
Page 2
regulatory liabilities also exist for non -legal removal costs. Please ensure that you
include the reason(s) for the entries made to initially record removal costs, upon the
creation and amortization of relat ed regulatory assets and/or liabilities, the recording of
associated expense, including the timing, and the incurrence of removal expenditures.
Please clarify why your investing activity classification of non -legal removal costs should
be accorded diffe rent classification than legal removal costs required to be presented
within operating activities pursuant to ASC 230 -10-45-17(e) .
You may contact Andrew Blume, Staff Accountant at (202) 551 -3254 or Melissa Blume,
Staff Accountant at (202) 551 -7128, if you have questions regarding comments on the financial
statements and related matters. Please contact me at (202) 551 -3737 with any other questions.
Sincerely,
/s/ Jennifer Thompson
Jennifer Thompson
Accounting Branch Chief
Office of Consumer Prod ucts