|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
51-0063696
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Title of Each Class
|
|
Trading Symbol
|
|
Name of Each Exchange on Which Registered
|
Common stock, par value $0.01 per share
|
|
AWK
|
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
Emerging growth company
|
☐
|
|
|
|
Class
|
|
Shares Outstanding as of April 30, 2020
|
|||
Common Stock, $0.01 par value per share
|
|
181,022,922
|
|
|
Page
|
|
|
|
Item 1.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
•
|
the decisions of governmental and regulatory bodies, including decisions to raise or lower customer rates and regulatory responses to the COVID-19 pandemic;
|
•
|
the timeliness and outcome of regulatory commissions’ actions concerning rates, capital structure, authorized return on equity, capital investment, system acquisitions and dispositions, taxes, permitting and other decisions;
|
•
|
changes in customer demand for, and patterns of use of, water, such as may result from conservation efforts;
|
•
|
limitations on the availability of the Company’s water supplies or sources of water, or restrictions on its use thereof, resulting from allocation rights, governmental or regulatory requirements and restrictions, drought, overuse or other factors;
|
•
|
changes in laws, governmental regulations and policies, including with respect to environmental, health and safety, consumer privacy, water quality and water quality accountability, emerging contaminants, public utility and tax regulations and policies, and impacts resulting from U.S., state and local elections;
|
•
|
weather conditions and events, climate variability patterns, and natural disasters, including drought or abnormally high rainfall, prolonged and abnormal ice or freezing conditions, strong winds, coastal and intercoastal flooding, pandemics (including COVID-19) and epidemics, earthquakes, landslides, hurricanes, tornadoes, wildfires, electrical storms, sinkholes and solar flares;
|
•
|
the outcome of litigation and similar governmental and regulatory proceedings, investigations or actions;
|
•
|
the risks associated with the Company’s aging infrastructure, and its ability to appropriately maintain and replace current infrastructure, including its operational and technology systems, and manage the expansion of its businesses;
|
•
|
exposure or infiltration of the Company’s technology and critical infrastructure systems, including the disclosure of sensitive, personal or confidential information contained therein, through physical or cyber attacks or other means;
|
•
|
the Company’s ability to obtain permits and other approvals for projects;
|
•
|
changes in the Company’s capital requirements;
|
•
|
the Company’s ability to control operating expenses and to achieve operating efficiencies;
|
•
|
the intentional or unintentional actions of a third party, including contamination of the Company’s water supplies or water provided to its customers;
|
•
|
the Company’s ability to obtain adequate and cost-effective supplies of equipment, chemicals, electricity, fuel, water and other raw materials;
|
•
|
the Company’s ability to successfully meet growth projections for the Regulated Businesses and the Market-Based Businesses (each as defined in this Form 10-Q), either individually or in the aggregate, and capitalize on growth opportunities, including, among other things, with respect to:
|
•
|
acquiring, closing and successfully integrating regulated operations and market-based businesses;
|
•
|
entering into contracts and other agreements with, or otherwise obtaining, new customers or partnerships in the Market-Based Businesses; and
|
•
|
realizing anticipated benefits and synergies from new acquisitions;
|
•
|
risks and uncertainties associated with contracting with the U.S. government, including ongoing compliance with applicable government procurement and security regulations;
|
•
|
cost overruns relating to improvements in or the expansion of the Company’s operations;
|
•
|
the Company’s ability to successfully develop and implement new technologies and to protect related intellectual property;
|
•
|
the Company’s ability to maintain safe work sites;
|
•
|
the Company’s exposure to liabilities related to environmental laws and similar matters resulting from, among other things, water and wastewater service provided to customers;
|
•
|
changes in general economic, political, business and financial market conditions, including without limitation conditions and collateral consequences associated with the current pandemic health event resulting from COVID-19;
|
•
|
access to sufficient capital on satisfactory terms and when and as needed to support operations and capital expenditures;
|
•
|
fluctuations in interest rates;
|
•
|
restrictive covenants in or changes to the credit ratings on the Company or any of its subsidiaries, or on any of their current or future indebtedness, that could increase the Company’s financing costs or funding requirements or affect the ability to borrow, make payments on debt or pay dividends;
|
•
|
fluctuations in the value of benefit plan assets and liabilities that could increase the Company’s cost and funding requirements;
|
•
|
changes in federal or state general, income and other tax laws, including any further rules, regulations, interpretations and guidance by the U.S. Department of the Treasury and state or local taxing authorities related to the enactment of the TCJA, the availability of tax credits and tax abatement programs, and the Company’s ability to utilize its U.S. federal and state income tax net operating loss (“NOL”) carryforwards;
|
•
|
migration of customers into or out of the Company’s service territories;
|
•
|
the use by municipalities of the power of eminent domain or other authority to condemn the systems of one or more of the Company’s utility subsidiaries, or the assertion by private landowners of similar rights against such utility subsidiaries;
|
•
|
any difficulty or inability to obtain insurance for the Company, its inability to obtain insurance at acceptable rates and on acceptable terms and conditions, or its inability to obtain reimbursement under existing insurance programs and coverages for any losses sustained;
|
•
|
the incurrence of impairment charges related to the Company’s goodwill or other assets;
|
•
|
labor actions, including work stoppages and strikes;
|
•
|
the Company’s ability to retain and attract qualified employees;
|
•
|
civil disturbances or terrorist threats or acts, or public apprehension about future disturbances or terrorist threats or acts; and
|
•
|
the impact of new, and changes to existing, accounting standards.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
ASSETS
|
|||||||
Property, plant and equipment
|
$
|
24,351
|
|
|
$
|
23,941
|
|
Accumulated depreciation
|
(5,763
|
)
|
|
(5,709
|
)
|
||
Property, plant and equipment, net
|
18,588
|
|
|
18,232
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
556
|
|
|
60
|
|
||
Restricted funds
|
33
|
|
|
31
|
|
||
Accounts receivable, net of allowance for uncollectible accounts of $40 and $41, respectively
|
292
|
|
|
294
|
|
||
Unbilled revenues
|
172
|
|
|
172
|
|
||
Materials and supplies
|
50
|
|
|
44
|
|
||
Assets held for sale
|
579
|
|
|
566
|
|
||
Other
|
119
|
|
|
118
|
|
||
Total current assets
|
1,801
|
|
|
1,285
|
|
||
Regulatory and other long-term assets:
|
|
|
|
|
|
||
Regulatory assets
|
1,132
|
|
|
1,128
|
|
||
Operating lease right-of-use assets
|
101
|
|
|
103
|
|
||
Goodwill
|
1,499
|
|
|
1,501
|
|
||
Postretirement benefit assets
|
158
|
|
|
159
|
|
||
Intangible assets
|
64
|
|
|
67
|
|
||
Other
|
203
|
|
|
207
|
|
||
Total regulatory and other long-term assets
|
3,157
|
|
|
3,165
|
|
||
Total assets
|
$
|
23,546
|
|
|
$
|
22,682
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
CAPITALIZATION AND LIABILITIES
|
|||||||
Capitalization:
|
|
|
|
||||
Common stock ($0.01 par value; 500,000,000 shares authorized; 186,188,334 and 185,903,727 shares issued, respectively)
|
$
|
2
|
|
|
$
|
2
|
|
Paid-in-capital
|
6,713
|
|
|
6,700
|
|
||
Accumulated deficit
|
(83
|
)
|
|
(207
|
)
|
||
Accumulated other comprehensive loss
|
(41
|
)
|
|
(36
|
)
|
||
Treasury stock, at cost (5,167,039 and 5,090,855 shares, respectively)
|
(348
|
)
|
|
(338
|
)
|
||
Total common shareholders' equity
|
6,243
|
|
|
6,121
|
|
||
Long-term debt
|
8,621
|
|
|
8,639
|
|
||
Redeemable preferred stock at redemption value
|
4
|
|
|
5
|
|
||
Total long-term debt
|
8,625
|
|
|
8,644
|
|
||
Total capitalization
|
14,868
|
|
|
14,765
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Short-term debt
|
1,641
|
|
|
786
|
|
||
Current portion of long-term debt
|
49
|
|
|
28
|
|
||
Accounts payable
|
152
|
|
|
203
|
|
||
Accrued liabilities
|
476
|
|
|
596
|
|
||
Accrued taxes
|
64
|
|
|
46
|
|
||
Accrued interest
|
91
|
|
|
84
|
|
||
Liabilities related to assets held for sale
|
130
|
|
|
128
|
|
||
Other
|
164
|
|
|
174
|
|
||
Total current liabilities
|
2,767
|
|
|
2,045
|
|
||
Regulatory and other long-term liabilities:
|
|
|
|
|
|
||
Advances for construction
|
259
|
|
|
240
|
|
||
Deferred income taxes and investment tax credits
|
1,929
|
|
|
1,893
|
|
||
Regulatory liabilities
|
1,795
|
|
|
1,806
|
|
||
Operating lease liabilities
|
87
|
|
|
89
|
|
||
Accrued pension expense
|
404
|
|
|
411
|
|
||
Other
|
75
|
|
|
78
|
|
||
Total regulatory and other long-term liabilities
|
4,549
|
|
|
4,517
|
|
||
Contributions in aid of construction
|
1,362
|
|
|
1,355
|
|
||
Commitments and contingencies (See Note 10)
|
|
|
|
|
|
||
Total capitalization and liabilities
|
$
|
23,546
|
|
|
$
|
22,682
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Operating revenues
|
$
|
844
|
|
|
$
|
813
|
|
Operating expenses:
|
|
|
|
||||
Operation and maintenance
|
383
|
|
|
365
|
|
||
Depreciation and amortization
|
145
|
|
|
144
|
|
||
General taxes
|
77
|
|
|
69
|
|
||
(Gain) on asset dispositions and purchases
|
—
|
|
|
(3
|
)
|
||
Total operating expenses, net
|
605
|
|
|
575
|
|
||
Operating income
|
239
|
|
|
238
|
|
||
Other income (expense):
|
|
|
|
||||
Interest, net
|
(96
|
)
|
|
(93
|
)
|
||
Non-operating benefit costs, net
|
13
|
|
|
4
|
|
||
Other, net
|
3
|
|
|
3
|
|
||
Total other income (expense)
|
(80
|
)
|
|
(86
|
)
|
||
Income before income taxes
|
159
|
|
|
152
|
|
||
Provision for income taxes
|
35
|
|
|
39
|
|
||
Net income attributable to common shareholders
|
$
|
124
|
|
|
$
|
113
|
|
|
|
|
|
||||
Basic earnings per share:
|
|
|
|
||||
Net income attributable to common shareholders
|
$
|
0.69
|
|
|
$
|
0.62
|
|
Diluted earnings per share: (a)
|
|
|
|
||||
Net income attributable to common shareholders
|
$
|
0.68
|
|
|
$
|
0.62
|
|
Weighted-average common shares outstanding:
|
|
|
|
||||
Basic
|
181
|
|
|
181
|
|
||
Diluted
|
181
|
|
|
181
|
|
(a)
|
Amounts may not calculate due to rounding.
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income attributable to common shareholders
|
$
|
124
|
|
|
$
|
113
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Defined benefit pension plan actuarial loss, net of tax of $0 and $0 for the three months ended March 31, 2020 and 2019, respectively
|
1
|
|
|
1
|
|
||
Unrealized loss on cash flow hedges, net of tax of $(2) and $(6) for the three months ended March 31, 2020 and 2019, respectively
|
(6
|
)
|
|
(14
|
)
|
||
Net other comprehensive income (loss)
|
(5
|
)
|
|
(13
|
)
|
||
Comprehensive income attributable to common shareholders
|
$
|
119
|
|
|
$
|
100
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
124
|
|
|
$
|
113
|
|
Adjustments to reconcile to net cash flows provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
145
|
|
|
144
|
|
||
Deferred income taxes and amortization of investment tax credits
|
38
|
|
|
35
|
|
||
Provision for losses on accounts receivable
|
6
|
|
|
4
|
|
||
Gain on asset dispositions and purchases
|
—
|
|
|
(3
|
)
|
||
Pension and non-pension postretirement benefits
|
(1
|
)
|
|
5
|
|
||
Other non-cash, net
|
(18
|
)
|
|
(28
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Receivables and unbilled revenues
|
(4
|
)
|
|
5
|
|
||
Pension and postretirement benefit contributions
|
(10
|
)
|
|
(7
|
)
|
||
Accounts payable and accrued liabilities
|
(91
|
)
|
|
(87
|
)
|
||
Other assets and liabilities, net
|
(9
|
)
|
|
(13
|
)
|
||
Net cash provided by operating activities
|
180
|
|
|
168
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(408
|
)
|
|
(326
|
)
|
||
Acquisitions, net of cash acquired
|
(21
|
)
|
|
(22
|
)
|
||
Proceeds from sale of assets
|
2
|
|
|
15
|
|
||
Removal costs from property, plant and equipment retirements, net
|
(23
|
)
|
|
(18
|
)
|
||
Net cash used in investing activities
|
(450
|
)
|
|
(351
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
||||
Proceeds from long-term debt
|
8
|
|
|
2
|
|
||
Repayments of long-term debt
|
(6
|
)
|
|
(12
|
)
|
||
Proceeds from term loan
|
500
|
|
|
—
|
|
||
Net proceeds from revolving credit facility borrowings
|
215
|
|
|
—
|
|
||
Net short-term borrowings with maturities less than three months
|
139
|
|
|
237
|
|
||
Proceeds from issuances of employee stock plans and direct stock purchase plan, net of taxes paid of $11 and $6 for the three months ended March 31, 2020 and 2019, respectively
|
(5
|
)
|
|
(1
|
)
|
||
Advances and contributions for construction, net of refunds of $8 and $9 for the three months ended March 31, 2020 and 2019, respectively
|
7
|
|
|
2
|
|
||
Dividends paid
|
(90
|
)
|
|
(82
|
)
|
||
Anti-dilutive share repurchases
|
—
|
|
|
(36
|
)
|
||
Net cash provided by financing activities
|
768
|
|
|
110
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted funds
|
498
|
|
|
(73
|
)
|
||
Cash, cash equivalents and restricted funds at beginning of period
|
91
|
|
|
159
|
|
||
Cash, cash equivalents and restricted funds at end of period
|
$
|
589
|
|
|
$
|
86
|
|
Non-cash investing activity:
|
|
|
|
||||
Capital expenditures acquired on account but unpaid as of the end of period
|
$
|
256
|
|
|
$
|
184
|
|
|
Common Stock
|
|
Paid-in-Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Total Shareholders' Equity
|
||||||||||||||||||
|
Shares
|
|
Par Value
|
|
|
|
|
Shares
|
|
At Cost
|
|
||||||||||||||||||
Balance as of December 31, 2019
|
185.9
|
|
|
$
|
2
|
|
|
$
|
6,700
|
|
|
$
|
(207
|
)
|
|
$
|
(36
|
)
|
|
(5.1
|
)
|
|
$
|
(338
|
)
|
|
$
|
6,121
|
|
Net income attributable to common shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124
|
|
||||||
Common stock issuances (a)
|
0.3
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(10
|
)
|
|
3
|
|
||||||
Net other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||||
Balance as of March 31, 2020
|
186.2
|
|
|
$
|
2
|
|
|
$
|
6,713
|
|
|
$
|
(83
|
)
|
|
$
|
(41
|
)
|
|
(5.2
|
)
|
|
$
|
(348
|
)
|
|
$
|
6,243
|
|
(a)
|
Includes stock-based compensation, employee stock purchase plan and direct stock reinvestment and purchase plan activity.
|
|
Common Stock
|
|
Paid-in-Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Total Shareholders' Equity
|
||||||||||||||||||
|
Shares
|
|
Par Value
|
|
|
|
|
Shares
|
|
At Cost
|
|
||||||||||||||||||
Balance as of December 31, 2018
|
185.4
|
|
|
$
|
2
|
|
|
$
|
6,657
|
|
|
$
|
(464
|
)
|
|
$
|
(34
|
)
|
|
(4.7
|
)
|
|
$
|
(297
|
)
|
|
$
|
5,864
|
|
Cumulative effect of change in accounting principle
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Net income attributable to common shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
113
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
113
|
|
||||||
Common stock issuances (a)
|
0.2
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(5
|
)
|
|
6
|
|
||||||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(36
|
)
|
|
(36
|
)
|
||||||
Net other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||||
Balance as of March 31, 2019
|
185.6
|
|
|
$
|
2
|
|
|
$
|
6,668
|
|
|
$
|
(353
|
)
|
|
$
|
(47
|
)
|
|
(5.1
|
)
|
|
$
|
(338
|
)
|
|
$
|
5,932
|
|
(a)
|
Includes stock-based compensation, employee stock purchase plan and direct stock reinvestment and purchase plan activity.
|
Standard
|
|
Description
|
|
Date of Adoption
|
|
Application
|
|
Effect on the Consolidated Financial Statements
|
Measurement of Credit Losses on Financial Instruments
|
|
Updated the accounting guidance on reporting credit losses for financial assets held at amortized cost basis and available-for-sale debt securities. Under this guidance, expected credit losses are required to be measured based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount of financial assets. Also, this guidance requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a direct write-down.
|
|
January 1, 2020
|
|
Modified retrospective
|
|
The standard did not have a material impact on the Consolidated Financial Statements.
|
Changes to the Disclosure Requirements for Fair Value Measurement
|
|
Updated the disclosure requirements for fair value measurement. The guidance removes the requirements to disclose transfers between Level 1 and Level 2 measurements, the timing of transfers between levels, and the valuation processes for Level 3 measurements. Disclosure of transfers into and out of Level 3 measurements will be required. The guidance adds disclosure requirements for the change in unrealized gains and losses in other comprehensive income for recurring Level 3 measurements, as well as the range and weighted average of significant unobservable inputs used to develop Level 3 measurements.
|
|
January 1, 2020
|
|
Prospective for added disclosures and for the narrative description of measurement uncertainty; retrospective for all other amendments.
|
|
The standard did not have a material impact on the Consolidated Financial Statements.
|
Facilitation of the Effects of Reference Rate Reform on Financial Reporting
|
|
Provided optional guidance for a limited time to ease the potential accounting burden associated with the transition from LIBOR. The guidance contains optional expedients and exceptions for contract modifications, hedging relationships, and other transactions that reference LIBOR or other reference rates expected to be discontinued. The expedients elected must be applied for all eligible contracts or transactions, with the exception of hedging relationships, which can be applied on an individual basis
|
|
March 12, 2020 through December 31, 2022
|
|
Prospective for contract modifications and hedging relationships; applied as of January 1, 2020.
|
|
The standard did not have a material impact on the Consolidated Financial Statements.
|
Standard
|
|
Description
|
|
Date of Adoption
|
|
Application
|
|
Estimated Effect on the Consolidated Financial Statements
|
Simplifying the Accounting for Income Taxes
|
|
The guidance removes exceptions related to the incremental approach for intraperiod tax allocation, the requirement to recognize a deferred tax liability for changes in ownership of a foreign subsidiary or equity method investment, and the general methodology for calculating income taxes in an interim period when the year-to-date loss exceeds the anticipated loss. The guidance adds requirements to reflect changes to tax laws or rates in the annual effective tax rate computation in the interim period in which the changes were enacted, to recognize franchise or other similar taxes that are partially based on income as an income-based tax and any incremental amounts as non-income-based tax, and to evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction.
|
|
January 1, 2021; early adoption permitted
|
|
Modified retrospective for amendments related to changes in ownership of a foreign subsidiary or equity method investment; Modified retrospective or retrospective for amendments related to taxes partially based on income; Prospective for all other amendments.
|
|
The Company is evaluating any impact on its Consolidated Financial Statements, as well as the timing of adoption.
|
|
2020
|
|
2019
|
||||
Cash and cash equivalents
|
$
|
556
|
|
|
$
|
63
|
|
Restricted funds
|
33
|
|
|
22
|
|
||
Restricted funds included in other long-term assets
|
—
|
|
|
1
|
|
||
Cash, cash equivalents and restricted funds as presented on the Consolidated Statements of Cash Flows
|
$
|
589
|
|
|
$
|
86
|
|
|
Revenues from Contracts with Customers
|
|
Other Revenues Not from Contracts with Customers (a)
|
|
Total Operating Revenues
|
||||||
Regulated Businesses:
|
|
|
|
|
|
||||||
Water services:
|
|
|
|
|
|
||||||
Residential
|
$
|
399
|
|
|
$
|
—
|
|
|
$
|
399
|
|
Commercial
|
142
|
|
|
—
|
|
|
142
|
|
|||
Fire service
|
37
|
|
|
—
|
|
|
37
|
|
|||
Industrial
|
32
|
|
|
—
|
|
|
32
|
|
|||
Public and other
|
49
|
|
|
—
|
|
|
49
|
|
|||
Total water services
|
659
|
|
|
—
|
|
|
659
|
|
|||
Wastewater services:
|
|
|
|
|
|
|
|||||
Residential
|
31
|
|
|
—
|
|
|
31
|
|
|||
Commercial
|
8
|
|
|
—
|
|
|
8
|
|
|||
Industrial
|
1
|
|
|
—
|
|
|
1
|
|
|||
Public and other
|
3
|
|
|
—
|
|
|
3
|
|
|||
Total wastewater services
|
43
|
|
|
—
|
|
|
43
|
|
|||
Miscellaneous utility charges
|
8
|
|
|
—
|
|
|
8
|
|
|||
Alternative revenue programs
|
—
|
|
|
7
|
|
|
7
|
|
|||
Lease contract revenue
|
—
|
|
|
3
|
|
|
3
|
|
|||
Total Regulated Businesses
|
710
|
|
|
10
|
|
|
720
|
|
|||
Market-Based Businesses
|
128
|
|
|
—
|
|
|
128
|
|
|||
Other
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Total operating revenues
|
$
|
834
|
|
|
$
|
10
|
|
|
$
|
844
|
|
(a)
|
Includes revenues associated with provisional rates, alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of Accounting Standards Codification Topic 606, Revenue From Contracts With Customers (“ASC 606”), and accounted for under other existing GAAP.
|
|
March 31, 2020
|
||
Current assets
|
$
|
13
|
|
Property, plant and equipment
|
468
|
|
|
Regulatory assets
|
54
|
|
|
Goodwill
|
39
|
|
|
Other assets
|
5
|
|
|
Assets held for sale
|
$
|
579
|
|
Current liabilities
|
25
|
|
|
Deferred income taxes
|
68
|
|
|
Regulatory liabilities
|
37
|
|
|
Liabilities related to assets held for sale
|
$
|
130
|
|
|
Defined Benefit Pension Plans
|
|
Foreign Currency Translation
|
|
Gain (Loss) on Cash Flow Hedges
|
|
Accumulated Other Comprehensive Loss
|
||||||||||||||||
|
Employee Benefit Plan Funded Status
|
|
Amortization of Prior Service Cost
|
|
Amortization of Actuarial Loss
|
|
|
|
|||||||||||||||
Balance as of December 31, 2019
|
$
|
(94
|
)
|
|
$
|
1
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
(36
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Net other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(6
|
)
|
|
(5
|
)
|
||||||
Balance as of March 31, 2020
|
$
|
(94
|
)
|
|
$
|
1
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
(41
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance as of December 31, 2018
|
$
|
(102
|
)
|
|
$
|
1
|
|
|
$
|
56
|
|
|
$
|
1
|
|
|
$
|
10
|
|
|
$
|
(34
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Net other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(14
|
)
|
|
(13
|
)
|
||||||
Balance as of March 31, 2019
|
$
|
(102
|
)
|
|
$
|
1
|
|
|
$
|
57
|
|
|
$
|
1
|
|
|
$
|
(4
|
)
|
|
$
|
(47
|
)
|
Derivative Instrument
|
|
Derivative Designation
|
|
Balance Sheet Classification
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Liability derivative:
|
|
|
|
|
|
|
|
|
|
|
||
Treasury lock agreements
|
|
Cash flow hedge
|
|
Other current liabilities
|
|
$
|
8
|
|
|
$
|
—
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Components of net periodic pension benefit cost:
|
|
|
|
||||
Service cost
|
$
|
8
|
|
|
$
|
7
|
|
Interest cost
|
19
|
|
|
20
|
|
||
Expected return on plan assets
|
(28
|
)
|
|
(22
|
)
|
||
Amortization of prior service credit
|
(1
|
)
|
|
(1
|
)
|
||
Amortization of actuarial loss
|
8
|
|
|
8
|
|
||
Net periodic pension benefit cost
|
$
|
6
|
|
|
$
|
12
|
|
|
|
|
|
||||
Components of net periodic other postretirement benefit credit:
|
|
|
|
||||
Service cost
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
3
|
|
|
3
|
|
||
Expected return on plan assets
|
(4
|
)
|
|
(4
|
)
|
||
Amortization of prior service credit
|
(8
|
)
|
|
(8
|
)
|
||
Amortization of actuarial loss
|
1
|
|
|
1
|
|
||
Net periodic other postretirement benefit credit
|
$
|
(7
|
)
|
|
$
|
(7
|
)
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Numerator:
|
|
|
|
||||
Net income attributable to common shareholders
|
$
|
124
|
|
|
$
|
113
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
|
|
||
Weighted-average common shares outstanding—Basic
|
181
|
|
|
181
|
|
||
Effect of dilutive common stock equivalents
|
—
|
|
|
—
|
|
||
Weighted-average common shares outstanding—Diluted
|
181
|
|
|
181
|
|
|
Carrying Amount
|
|
At Fair Value as of March 31, 2020
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
Preferred stock with mandatory redemption requirements
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
7
|
|
Long-term debt (excluding finance lease obligations)
|
8,667
|
|
|
7,456
|
|
|
404
|
|
|
1,616
|
|
|
9,476
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Carrying Amount
|
|
At Fair Value as of December 31, 2019
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
Preferred stock with mandatory redemption requirements
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
9
|
|
Long-term debt (excluding finance lease obligations)
|
8,664
|
|
|
7,689
|
|
|
417
|
|
|
1,664
|
|
|
9,770
|
|
|
At Fair Value as of March 31, 2020
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Restricted funds
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33
|
|
Rabbi trust investments
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
||||
Deposits
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Other investments
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Total assets
|
63
|
|
|
—
|
|
|
—
|
|
|
63
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation obligations
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||
Mark-to-market derivative liabilities
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
Total liabilities
|
20
|
|
|
8
|
|
|
—
|
|
|
28
|
|
||||
Total assets (liabilities)
|
$
|
43
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
$
|
35
|
|
|
At Fair Value as of December 31, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Restricted funds
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31
|
|
Rabbi trust investments
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||
Deposits
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Other investments
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||
Total assets
|
59
|
|
|
—
|
|
|
—
|
|
|
59
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation obligations
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||
Total liabilities
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||
Total assets
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
For the Three Months Ended March 31, 2020
|
||
Cash paid for amounts in lease liabilities (a)
|
$
|
3
|
|
(a)
|
Includes operating and financing cash flows from operating and finance leases.
|
|
As of March 31, 2020
|
|
Weighted-average remaining lease term:
|
|
|
Finance lease
|
6 years
|
|
Operating leases
|
19 years
|
|
|
|
|
Weighted-average discount rate:
|
|
|
Finance lease
|
12
|
%
|
Operating leases
|
4
|
%
|
|
Amount
|
||
2020
|
$
|
11
|
|
2021
|
13
|
|
|
2022
|
11
|
|
|
2023
|
7
|
|
|
2024
|
7
|
|
|
Thereafter
|
100
|
|
|
Total lease payments
|
149
|
|
|
Imputed interest
|
(52
|
)
|
|
Total
|
$
|
97
|
|
|
As of or for the Three Months Ended March 31, 2020
|
||||||||||||||
|
Regulated Businesses
|
|
Market-Based Businesses
|
|
Other
|
|
Consolidated
|
||||||||
Operating revenues
|
$
|
720
|
|
|
$
|
128
|
|
|
$
|
(4
|
)
|
|
$
|
844
|
|
Depreciation and amortization
|
135
|
|
|
6
|
|
|
4
|
|
|
145
|
|
||||
Total operating expenses, net
|
503
|
|
|
99
|
|
|
3
|
|
|
605
|
|
||||
Interest, net
|
(72
|
)
|
|
1
|
|
|
(25
|
)
|
|
(96
|
)
|
||||
Income before income taxes
|
162
|
|
|
30
|
|
|
(33
|
)
|
|
159
|
|
||||
Provision for income taxes
|
40
|
|
|
8
|
|
|
(13
|
)
|
|
35
|
|
||||
Net income attributable to common shareholders
|
123
|
|
|
22
|
|
|
(21
|
)
|
|
124
|
|
||||
Total assets
|
20,575
|
|
|
1,037
|
|
|
1,934
|
|
|
23,546
|
|
||||
Cash paid for capital expenditures
|
404
|
|
|
3
|
|
|
1
|
|
|
408
|
|
|
As of or for the Three Months Ended March 31, 2019
|
||||||||||||||
|
Regulated Businesses
|
|
Market-Based Businesses
|
|
Other
|
|
Consolidated
|
||||||||
Operating revenues
|
$
|
685
|
|
|
$
|
134
|
|
|
$
|
(6
|
)
|
|
$
|
813
|
|
Depreciation and amortization
|
130
|
|
|
9
|
|
|
5
|
|
|
144
|
|
||||
Total operating expenses, net
|
470
|
|
|
108
|
|
|
(3
|
)
|
|
575
|
|
||||
Interest, net
|
(73
|
)
|
|
1
|
|
|
(21
|
)
|
|
(93
|
)
|
||||
Income before income taxes
|
150
|
|
|
27
|
|
|
(25
|
)
|
|
152
|
|
||||
Provision for income taxes
|
40
|
|
|
7
|
|
|
(8
|
)
|
|
39
|
|
||||
Net income attributable to common shareholders
|
110
|
|
|
20
|
|
|
(17
|
)
|
|
113
|
|
||||
Total assets
|
18,937
|
|
|
1,019
|
|
|
1,508
|
|
|
21,464
|
|
||||
Cash paid for capital expenditures
|
315
|
|
|
4
|
|
|
7
|
|
|
326
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Diluted earnings per share (GAAP):
|
|
|
|
||||
Net income attributable to common shareholders
|
$
|
0.68
|
|
|
$
|
0.62
|
|
Adjustments:
|
|
|
|
||||
Depreciation related to assets held for sale
|
(0.02
|
)
|
|
—
|
|
||
Income tax impact
|
0.01
|
|
|
—
|
|
||
Net adjustment
|
(0.01
|
)
|
|
—
|
|
||
|
|
|
|
||||
Freedom Industries settlement activities
|
—
|
|
|
(0.02
|
)
|
||
Income tax impact
|
—
|
|
|
0.01
|
|
||
Net adjustment
|
—
|
|
|
(0.01
|
)
|
||
|
|
|
|
||||
Total net adjustments
|
(0.01
|
)
|
|
(0.01
|
)
|
||
|
|
|
|
||||
Adjusted diluted earnings per share (non-GAAP)
|
$
|
0.67
|
|
|
$
|
0.61
|
|
•
|
$432 million capital investment in the Regulated Businesses, the majority for infrastructure improvements and replacements.
|
•
|
$21 million to fund acquisitions in the Regulated Businesses, which added approximately 5,100 water and wastewater customers through March 31, 2020.
|
|
For the Twelve Months Ended March 31,
|
||||||
(Dollars in millions)
|
2020
|
|
2019
|
||||
Total operation and maintenance expenses
|
$
|
1,562
|
|
|
$
|
1,496
|
|
Less:
|
|
|
|
||||
Operation and maintenance expenses—Market-Based Businesses
|
386
|
|
|
380
|
|
||
Operation and maintenance expenses—Other
|
(27
|
)
|
|
(43
|
)
|
||
Total operation and maintenance expenses—Regulated Businesses
|
1,203
|
|
|
1,159
|
|
||
Less:
|
|
|
|
||||
Regulated purchased water expenses
|
139
|
|
|
131
|
|
||
Allocation of non-operation and maintenance expenses
|
31
|
|
|
32
|
|
||
Impact of Freedom Industries settlement activities (a)
|
—
|
|
|
(24
|
)
|
||
Adjusted operation and maintenance expenses—Regulated Businesses (i)
|
$
|
1,033
|
|
|
$
|
1,020
|
|
|
|
|
|
||||
Total operating revenues
|
$
|
3,640
|
|
|
$
|
3,493
|
|
Less:
|
|
|
|
||||
Operating revenues—Market-Based Businesses
|
533
|
|
|
511
|
|
||
Operating revenues—Other
|
(22
|
)
|
|
(21
|
)
|
||
Total operating revenues—Regulated Businesses
|
3,129
|
|
|
3,003
|
|
||
Less:
|
|
|
|
||||
Regulated purchased water revenues (b)
|
139
|
|
|
131
|
|
||
Adjusted operating revenues—Regulated Businesses (ii)
|
$
|
2,990
|
|
|
$
|
2,872
|
|
|
|
|
|
||||
Adjusted O&M efficiency ratio—Regulated Businesses (i) / (ii)
|
34.5
|
%
|
|
35.5
|
%
|
(a)
|
Includes the impact of a settlement in 2018 with one of the Company’s general liability insurance carriers, and a reduction in the first quarter of 2019 of a liability, each related to the Freedom Industries chemical spill.
|
(b)
|
The calculation assumes regulated purchased water revenues approximate regulated purchased water expenses.
|
(In millions)
|
During the Three Months Ended March 31, 2020
|
||
General rate cases by state:
|
|
||
California (a)
|
$
|
5
|
|
Total general rate cases
|
$
|
5
|
|
|
|
||
Infrastructure surcharges by state:
|
|
||
Pennsylvania (effective January 1, 2020)
|
$
|
10
|
|
New Jersey (effective January 1, 2020)
|
10
|
|
|
Illinois (effective January 1, 2020)
|
7
|
|
|
West Virginia (effective January 1, 2020)
|
3
|
|
|
Total infrastructure surcharges
|
$
|
30
|
|
(a)
|
The Company’s California subsidiary filed for the third year (2020) step increase requesting $5 million associated with its most recent general case authorization. The $5 million request was approved and the step rates became effective on January 1, 2020.
|
(In millions)
|
Date Filed
|
|
Amount
|
||
Pending infrastructure surcharge filings by state:
|
|
|
|
||
Tennessee
|
November 15, 2019
|
|
$
|
2
|
|
Missouri
|
March 2, 2020
|
|
9
|
|
|
Kentucky
|
March 2, 2020
|
|
2
|
|
|
Total pending infrastructure surcharge filings
|
|
|
$
|
13
|
|
•
|
Indiana House Enrolled Act 1131 establishes an appraisal process for non-municipal utilities to establish fair value and creates a presumption that the appraised value is a reasonable purchase price. Additionally, all new municipal systems will now be regulated for 10 years.
|
•
|
Indiana Senate Enrolled Act 254 authorizes recovery without a full rate case for service enhancements for health, safety or environmental concerns for above ground infrastructure, and exempts relocation from distribution system improvement charge recovery caps.
|
•
|
West Virginia Senate Bill 551 allows for expanded asset valuation, combined water and wastewater ratemaking and the expansion of how municipalities can utilize proceeds from the sale of a water or wastewater system.
|
•
|
Virginia SB831 establishes fair market value for the state, and the legislation authorizes a water or sewer public utility acquiring a water or sewer system to elect to have its rate base established by using the fair market value.
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
(Dollars in millions)
|
|
|
|
||||
Operating revenues
|
$
|
844
|
|
|
$
|
813
|
|
Operating expenses:
|
|
|
|
||||
Operation and maintenance
|
383
|
|
|
365
|
|
||
Depreciation and amortization
|
145
|
|
|
144
|
|
||
General taxes
|
77
|
|
|
69
|
|
||
(Gain) on asset dispositions and purchases
|
—
|
|
|
(3
|
)
|
||
Total operating expenses, net
|
605
|
|
|
575
|
|
||
Operating income
|
239
|
|
|
238
|
|
||
Other income (expense):
|
|
|
|
||||
Interest, net
|
(96
|
)
|
|
(93
|
)
|
||
Non-operating benefit costs, net
|
13
|
|
|
4
|
|
||
Other, net
|
3
|
|
|
3
|
|
||
Total other income (expense)
|
(80
|
)
|
|
(86
|
)
|
||
Income before income taxes
|
159
|
|
|
152
|
|
||
Provision for income taxes
|
35
|
|
|
39
|
|
||
Net income attributable to common shareholders
|
$
|
124
|
|
|
$
|
113
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
(Dollars in millions)
|
|
|
|
||||
Operating revenues
|
$
|
720
|
|
|
$
|
685
|
|
Operation and maintenance
|
298
|
|
|
278
|
|
||
Depreciation and amortization
|
135
|
|
|
130
|
|
||
General taxes
|
72
|
|
|
64
|
|
||
Other income (expenses)
|
(54
|
)
|
|
(65
|
)
|
||
Income before income taxes
|
162
|
|
|
150
|
|
||
Provision for income taxes
|
40
|
|
|
40
|
|
||
Net income attributable to common shareholders
|
123
|
|
|
110
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
(Dollars in millions)
|
|
|
|
||||
Water services:
|
|
|
|
||||
Residential
|
$
|
399
|
|
|
$
|
378
|
|
Commercial
|
142
|
|
|
136
|
|
||
Fire service
|
37
|
|
|
34
|
|
||
Industrial
|
32
|
|
|
32
|
|
||
Public and other
|
56
|
|
|
52
|
|
||
Total water services
|
666
|
|
|
632
|
|
||
Wastewater services
|
43
|
|
|
40
|
|
||
Other (a)
|
11
|
|
|
13
|
|
||
Total operating revenues
|
$
|
720
|
|
|
$
|
685
|
|
(a)
|
Includes other operating revenues consisting primarily of miscellaneous utility charges, fees and rents.
|
|
For the Three Months Ended March 31,
|
||||
|
2020
|
|
2019
|
||
(Gallons in millions)
|
|
|
|
||
Billed water services volumes:
|
|
|
|
||
Residential
|
35,550
|
|
|
35,767
|
|
Commercial
|
17,080
|
|
|
17,436
|
|
Industrial
|
8,439
|
|
|
8,645
|
|
Fire service, public and other
|
11,546
|
|
|
11,091
|
|
Billed water services volumes
|
72,615
|
|
|
72,939
|
|
•
|
$31 million increase from authorized rate increases, including infrastructure surcharges, principally to fund infrastructure investment in various states; and a
|
•
|
$7 million increase from water and wastewater acquisitions, as well as organic growth in existing systems.
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
(Dollars in millions)
|
|
|
|
||||
Employee-related costs
|
$
|
125
|
|
|
$
|
117
|
|
Production costs
|
72
|
|
|
69
|
|
||
Operating supplies and services
|
56
|
|
|
55
|
|
||
Maintenance materials and supplies
|
19
|
|
|
19
|
|
||
Customer billing and accounting
|
14
|
|
|
11
|
|
||
Other
|
12
|
|
|
7
|
|
||
Total
|
$
|
298
|
|
|
$
|
278
|
|
•
|
$8 million increase in employee-related costs from higher headcount and related compensation expense in support of the growth in the business; and a
|
•
|
$3 million increase in customer billing and accounting primarily due to higher customer uncollectible expense; and a
|
•
|
$5 million increase in other operation and maintenance expense principally due to a $4 million reduction to the liability related to the Freedom Industries chemical spill, recorded in the first quarter of 2019.
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
(Dollars in millions)
|
|
|
|
||||
Operating revenues
|
$
|
128
|
|
|
$
|
134
|
|
Operation and maintenance
|
91
|
|
|
98
|
|
||
Depreciation and amortization
|
6
|
|
|
9
|
|
||
Income before income taxes
|
30
|
|
|
27
|
|
||
Provision for income taxes
|
8
|
|
|
7
|
|
||
Net income attributable to common shareholders
|
22
|
|
|
20
|
|
•
|
$16 million decrease in Keystone Clearwater Solutions, LLC (“Keystone”) from the sale of the Company’s Keystone operations in the fourth quarter of 2019; partially offset by a
|
•
|
$9 million increase in Military Services Group (“MSG”) from increased capital upgrades primarily at Fort Polk and Fort Hood, and the addition of two new military contracts in 2019 (Joint Base San Antonio and the United States Military Academy at West Point); and a
|
•
|
$4 million increase in Homeowner Services Group primarily from price increases for existing customers and contract growth.
|
•
|
$14 million decrease in Keystone from the sale of the Company’s Keystone operations in the fourth quarter of 2019; partially offset by a
|
•
|
$8 million increase in MSG from increased capital upgrades, as discussed above.
|
|
Commercial Paper Limit
|
|
Letters of Credit Sublimit
|
|
Total (a)
|
||||||
(In millions)
|
|
|
|
|
|
||||||
Total availability
|
$
|
2,100
|
|
|
$
|
150
|
|
|
$
|
2,250
|
|
Outstanding commercial paper
|
(926
|
)
|
|
—
|
|
|
(926
|
)
|
|||
Outstanding revolving credit facility borrowings
|
(215
|
)
|
|
—
|
|
|
(215
|
)
|
|||
Outstanding letters of credit
|
—
|
|
|
(76
|
)
|
|
(76
|
)
|
|||
Total outstanding
|
(1,141
|
)
|
|
(76
|
)
|
|
(1,217
|
)
|
|||
Remaining availability as of March 31, 2020
|
$
|
959
|
|
|
$
|
74
|
|
|
$
|
1,033
|
|
(a)
|
Total remaining availability of $1.03 billion as of March 31, 2020 may be accessed through revolver draws.
|
|
Cash and Cash Equivalents
|
|
Availability on Revolving Credit Facility
|
|
Availability on Term Loan Credit Facility
|
|
Total Available Liquidity
|
||||||||
(In millions)
|
|
|
|
|
|
|
|
||||||||
Available Liquidity as of March 31, 2020
|
$
|
556
|
|
|
$
|
1,033
|
|
|
$
|
250
|
|
|
$
|
1,839
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
(In millions)
|
|
|
|
||||
Net income
|
$
|
124
|
|
|
$
|
113
|
|
Add (less):
|
|
|
|
||||
Depreciation and amortization
|
145
|
|
|
144
|
|
||
Deferred income taxes and amortization of investment tax credits
|
38
|
|
|
35
|
|
||
Other non-cash activities (a)
|
(13
|
)
|
|
(22
|
)
|
||
Changes in working capital (b)
|
(104
|
)
|
|
(95
|
)
|
||
Pension and postretirement healthcare contributions
|
(10
|
)
|
|
(7
|
)
|
||
Net cash flows provided by operations
|
$
|
180
|
|
|
$
|
168
|
|
(a)
|
Includes provision for losses on accounts receivable, (gain) on asset dispositions and purchases, pension and non-pension postretirement benefits and other non-cash, net. Details of each component can be found on the Consolidated Statements of Cash Flows.
|
(b)
|
Changes in working capital include changes to receivables and unbilled revenues, accounts payable and accrued liabilities, and other current assets and liabilities, net.
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
(In millions)
|
|
|
|
||||
Net capital expenditures
|
$
|
(408
|
)
|
|
$
|
(326
|
)
|
Acquisitions
|
(21
|
)
|
|
(22
|
)
|
||
Other investing activities, net (a)
|
(21
|
)
|
|
(3
|
)
|
||
Net cash flows used in investing activities
|
$
|
(450
|
)
|
|
$
|
(351
|
)
|
(a)
|
Includes removal costs from property, plant and equipment retirements and proceeds from sale of assets.
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
(In millions)
|
|
|
|
||||
Proceeds from long-term debt
|
$
|
8
|
|
|
$
|
2
|
|
Repayments of long-term debt
|
(6
|
)
|
|
(12
|
)
|
||
Proceeds from term loan
|
500
|
|
|
—
|
|
||
Net proceeds from revolving credit facility borrowings
|
215
|
|
|
—
|
|
||
Net proceeds from short-term borrowings
|
139
|
|
|
237
|
|
||
Dividends paid
|
(90
|
)
|
|
(82
|
)
|
||
Anti-dilutive stock repurchases
|
—
|
|
|
(36
|
)
|
||
Other financing activities, net (a)
|
2
|
|
|
1
|
|
||
Net cash flows provided by financing activities
|
$
|
768
|
|
|
$
|
110
|
|
(a)
|
Includes proceeds from issuances of common stock under various employee stock plans and the dividend reinvestment plan, net of taxes paid, and advances and contributions for construction, net of refunds.
|
Securities
|
|
Moody's Investors Service
|
|
Standard & Poor's Ratings Service
|
Rating Outlook
|
|
Stable
|
|
Stable
|
Senior unsecured debt
|
|
Baa1
|
|
A
|
Commercial paper
|
|
P-2
|
|
A-1
|
•
|
cover our expenses, including purchased water and costs of chemicals, fuel and other commodities used in our operations;
|
•
|
enable us to recover our investment; and
|
•
|
provide us with an opportunity to earn an appropriate rate of return on our investment.
|
•
|
limiting our ability to obtain additional financing to fund future working capital requirements or capital expenditures;
|
•
|
exposing us to interest rate risk with respect to the portion of our indebtedness that bears interest at variable rates;
|
•
|
limiting our ability to pay dividends on our common stock or make payments in connection with our other obligations;
|
•
|
impairing our access to the capital markets for debt and equity;
|
•
|
requiring that an increasing portion of our cash flows from operations be dedicated to the payment of the principal and interest on our debt, thereby reducing funds available for future operations, dividends on our common stock or capital expenditures;
|
•
|
limiting our ability to take advantage of significant business opportunities, such as acquisition opportunities, and to react to changes in market or industry conditions; and
|
•
|
placing us at a competitive disadvantage compared to those of our competitors that have less debt.
|
Exhibit Number
|
|
Exhibit Description
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
10.1.1
|
|
|
10.1.2
|
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*10.1.3
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10.2
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*10.3
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*10.4
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*10.5
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*10.6
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*10.7
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*10.8
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*10.9
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*10.10
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*10.11
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*10.12
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*10.13
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*10.14
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*10.15
|
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Exhibit Number
|
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Exhibit Description
|
*10.16
|
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*10.17
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*10.18
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*31.1
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*31.2
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**32.1
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**32.2
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101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
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101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
|
AMERICAN WATER WORKS COMPANY, INC.
|
|
(REGISTRANT)
|
By
|
/s/ WALTER J. LYNCH
|
|
Walter J. Lynch
President and Chief Executive Officer
(Principal Executive Officer)
|
By
|
/s/ M. SUSAN HARDWICK
|
|
M. Susan Hardwick
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
By
|
/s/ MELISSA K. WIKLE
|
|
Melissa K. Wikle
Vice President and Controller
(Principal Accounting Officer)
|
Service Date
|
Units Vesting
|
January 31, 2021
|
1/3
|
January 31, 2022
|
1/3
|
January 31, 2023
|
1/3
|
Service Date
|
Units Vesting
|
January 31, 2021
|
1/3
|
January 31, 2022
|
1/3
|
January 31, 2023
|
1/3
|
Service Date
|
Units Vesting
|
January 31, 2021
|
1/3
|
January 31, 2022
|
1/3
|
January 31, 2023
|
1/3
|
Service Date
|
Units Vesting
|
January 31, 2021
|
1/3
|
January 31, 2022
|
2/3
|
|
|
|
|
|
|
|
|
|
|
12/31/2019
|
|
|
12/31/2022
|
||
|
|
Adjusted
|
|
|
Illustration
|
||
|
|
|
|||||
Adjusted diluted earnings per share from continuing operations
|
|
$
|
3.61
|
|
|
$
|
4.65
|
|
|
|
|
|
|
|
|
Compounded EPS growth
|
|
|
|
|
|
|
8.80%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Achievement
|
|
|
Award
|
||
|
|
|
|||||
Compounded EPS Growth
|
|
|
8.80%
|
|
|
|
160.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2019
|
|
|
12/31/2022
|
||
|
|
Adjusted
|
|
|
Illustration
|
||
|
|
|
|||||
Adjusted diluted earnings per share from continuing operations
|
|
$
|
3.61
|
|
|
$
|
4.65
|
|
|
|
|
|
|
|
|
Compounded EPS growth
|
|
|
|
|
|
|
8.80%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Achievement
|
|
|
Award
|
||
|
|
|
|||||
Compounded EPS Growth
|
|
|
8.80%
|
|
|
|
160.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2019
|
|
|
12/31/2022
|
||
|
|
Adjusted
|
|
|
Illustration
|
||
|
|
|
|||||
Adjusted diluted earnings per share from continuing operations
|
|
$
|
3.61
|
|
|
$
|
4.65
|
|
|
|
|
|
|
|
|
Compounded EPS growth
|
|
|
|
|
|
|
8.80%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Achievement
|
|
|
Award
|
||
|
|
|
|||||
Compounded EPS Growth
|
|
|
8.80%
|
|
|
|
160.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2019
|
|
|
12/31/2022
|
||
|
|
Adjusted
|
|
|
Illustration
|
||
|
|
|
|||||
Adjusted diluted earnings per share from continuing operations
|
|
$
|
3.61
|
|
|
$
|
4.65
|
|
|
|
|
|
|
|
|
Compounded EPS growth
|
|
|
|
|
|
|
8.80%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Achievement
|
|
|
Award
|
||
|
|
|
|||||
Compounded EPS Growth
|
|
|
8.80%
|
|
|
|
160.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2019
|
|
|
12/31/2022
|
||
|
|
Adjusted
|
|
|
Illustration
|
||
|
|
|
|||||
Adjusted diluted earnings per share from continuing operations
|
|
$
|
3.61
|
|
|
$
|
4.65
|
|
|
|
|
|
|
|
|
Compounded EPS growth
|
|
|
|
|
|
|
8.80%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Achievement
|
|
|
Award
|
||
|
|
|
|||||
Compounded EPS Growth
|
|
|
8.80%
|
|
|
|
160.0%
|
|
|
|
|
|
|
|
|
•
|
in the event of a normal retirement, defined as having attained age 60 and five years of service, an award will continue to vest in full; and
|
•
|
in the event of an early retirement, defined as having attained age 55 and five years of service, 75 percent of each award will continue to vest.
|
By:
|
/s/ JAMES S. MERANTE
|
Name:
|
James S. Merante
|
Title:
|
Vice President and Treasurer
|
By:
|
/s/ JAMES S. MERANTE
|
Name:
|
James S. Merante
|
Title:
|
Vice President and Treasurer
|
Title:
|
Managing Director
|
Title:
|
Executive Director
|
Title:
|
Authorized Signatory
|
Title:
|
Vice President
|
Title:
|
Senior Vice President
|
Title:
|
Senior Vice President
|
Title:
|
Authorized Signatory
|
Title:
|
Managing Director
|
Title:
|
Senior Vice President
|
Title:
|
Senior Vice President
|
Title:
|
Director
|
Title:
|
Vice President
|
Title:
|
Director
|
By:
|
/s/ WALTER J. LYNCH
|
|
Walter J. Lynch
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
By:
|
/s/ M. SUSAN HARDWICK
|
|
M. Susan Hardwick
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
By:
|
/s/ WALTER J. LYNCH
|
|
Walter J. Lynch
President and Chief Executive Officer
(Principal Executive Officer)
|
|
May 6, 2020
|
By:
|
/s/ M. SUSAN HARDWICK
|
|
M. Susan Hardwick
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
May 6, 2020
|