Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 14, 2019 | Jun. 29, 2018 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | American Water Works Company, Inc. | ||
Entity Central Index Key | 1,410,636 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | AWK | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 180,751,697 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 13,802.1 | ||
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Property, plant and equipment | $ 23,204 | $ 21,716 |
Accumulated depreciation | (5,795) | (5,470) |
Property, plant and equipment, net | 17,409 | 16,246 |
Current assets: | ||
Cash and cash equivalents | 130 | 55 |
Restricted funds | 28 | 27 |
Accounts receivable, net | 301 | 272 |
Unbilled revenues | 186 | 212 |
Materials and supplies | 41 | 41 |
Other | 95 | 113 |
Total current assets | 781 | 720 |
Regulatory and other long-term assets: | ||
Regulatory assets | 1,156 | 1,061 |
Goodwill | 1,575 | 1,379 |
Intangible assets | 84 | 9 |
Postretirement benefit asset | 155 | 0 |
Other | 63 | 67 |
Total regulatory and other long-term assets | 3,033 | 2,516 |
Total assets | 21,223 | 19,482 |
Capitalization: | ||
Common stock ($0.01 par value, 500,000,000 shares authorized, 185,367,158 and 182,508,564 shares issued, respectively) | 2 | 2 |
Paid-in-capital | 6,657 | 6,432 |
Accumulated deficit | (464) | (723) |
Accumulated other comprehensive loss | (34) | (79) |
Treasury stock, at cost (4,683,156 and 4,064,010 shares, respectively) | (297) | (247) |
Total common shareholders' equity | 5,864 | 5,385 |
Long-term debt | 7,569 | 6,490 |
Redeemable preferred stock at redemption value | 7 | 8 |
Total long-term debt | 7,576 | 6,498 |
Total capitalization | 13,440 | 11,883 |
Current liabilities: | ||
Short-term debt | 964 | 905 |
Current portion of long-term debt | 71 | 322 |
Accounts payable | 175 | 195 |
Accrued liabilities | 556 | 630 |
Taxes accrued | 45 | 33 |
Interest accrued | 87 | 73 |
Other | 196 | 167 |
Total current liabilities | 2,094 | 2,325 |
Regulatory and other long-term liabilities: | ||
Advances for construction | 252 | 271 |
Deferred income taxes, net | 1,718 | 1,551 |
Deferred investment tax credits | 22 | 22 |
Regulatory liabilities | 1,907 | 1,664 |
Accrued pension expense | 390 | 384 |
Accrued postretirement benefit expense | 0 | 40 |
Other | 78 | 66 |
Total regulatory and other long-term liabilities | 4,367 | 3,998 |
Contributions in aid of construction | 1,322 | 1,276 |
Commitments and contingencies (See Note 16) | ||
Total capitalization and liabilities | $ 21,223 | $ 19,482 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (USD per Share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in Shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in Shares) | 185,367,158 | 182,508,564 |
Treasury Stock, shares (in Shares) | 4,683,156 | 4,064,010 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Income Statement [Abstract] | ||||
Operating revenues | $ 3,440 | $ 3,357 | $ 3,302 | |
Operating expenses: | ||||
Operation and maintenance | 1,479 | 1,369 | 1,499 | |
Depreciation and amortization | 545 | 492 | 470 | |
General taxes | 277 | 259 | 258 | |
(Gain) on asset dispositions and purchases | (20) | (16) | (10) | |
Impairment charge | 57 | 0 | 0 | |
Total operating expenses, net | 2,338 | 2,104 | 2,217 | |
Operating income | 1,102 | 1,253 | 1,085 | |
Other income (expense): | ||||
Interest, net | (350) | (342) | (325) | |
Non-operating benefit costs, net | 20 | (9) | (5) | |
Loss on early extinguishment of debt | (4) | (7) | 0 | |
Other, net | 19 | 17 | 15 | |
Total other income (expense) | (315) | (341) | (315) | |
Income before income taxes | 787 | 912 | 770 | |
Provision for income taxes | 222 | 486 | 302 | |
Consolidated net income | 565 | 426 | 468 | |
Net loss attributable to noncontrolling interest | (2) | 0 | 0 | |
Net income attributable to common shareholders | $ 567 | $ 426 | $ 468 | |
Basic earnings per share: | ||||
Net income attributable to common stockholders (USD per share) | [1] | $ 3.16 | $ 2.39 | $ 2.63 |
Diluted earnings per share: | ||||
Net income attributable to common stockholders (USD per share) | [1] | $ 3.15 | $ 2.38 | $ 2.62 |
Weighted average common shares outstanding: | ||||
Basic (Shares) | 180 | 178 | 178 | |
Diluted (Shares) | 180 | 179 | 179 | |
[1] | Amounts may not calculate due to rounding. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income attributable to common shareholders | $ 567 | $ 426 | $ 468 |
Other comprehensive income (loss), net of tax: | |||
Change in employee benefit plan funded status, net of tax of $20, $2 and $(14) in 2018, 2017 and 2016, respectively | 60 | 7 | (21) |
Pension amortized to periodic benefit cost: | |||
Actuarial loss, net of tax of $3, $5 and $4 in 2018, 2017 and 2016, respectively | 7 | 7 | 6 |
Pension reclassification from accumulated other comprehensive loss of tax effects resulting from the Tax Cuts and Jobs Act | (22) | 0 | 0 |
Foreign currency translation adjustment | 0 | (1) | 0 |
Unrealized (loss) gain on cash flow hedges, net of tax of $0, $(4) and $10 in 2018, 2017 and 2016, respectively | (2) | (6) | 17 |
Cash flow hedges reclassification from accumulated other comprehensive loss of tax effects resulting from the Tax Cuts and Jobs Act | 2 | 0 | 0 |
Net other comprehensive income | 45 | 7 | 2 |
Comprehensive income attributable to common shareholders | $ 612 | $ 433 | $ 470 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Change in employee benefit plan funded status, tax | $ 20 | $ 2 | $ (14) |
Actuarial loss, tax | 3 | 5 | 4 |
Unrealized gain (loss) on cash flow hedge, tax | $ 0 | $ (4) | $ 10 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Cash Flows [Abstract] | |||
Net income | $ 565 | $ 426 | $ 468 |
Adjustments to reconcile to net cash flows provided by operating activities: | |||
Depreciation and amortization | 545 | 492 | 470 |
Deferred income taxes and amortization of investment tax credits | 195 | 462 | 295 |
Provision for losses on accounts receivable | 33 | 29 | 27 |
(Gain) on asset dispositions and purchases | (20) | (16) | (10) |
Impairment charge | 57 | 0 | 0 |
Pension and non-pension postretirement benefits | 23 | 57 | 54 |
Other non-cash, net | 20 | (54) | (36) |
Changes in assets and liabilities: | |||
Receivables and unbilled revenues | (17) | 21 | (31) |
Pension and non-pension postretirement benefit contributions | (22) | (48) | (53) |
Accounts payable and accrued liabilities | 25 | 38 | 60 |
Other assets and liabilities, net | 22 | 64 | (20) |
Impact of Freedom Industries settlement activities | (40) | (22) | 65 |
Net cash provided by operating activities | 1,386 | 1,449 | 1,289 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Capital expenditures | (1,586) | (1,434) | (1,311) |
Acquisitions, net of cash acquired | (398) | (177) | (204) |
Proceeds from sale of assets | 35 | 15 | 9 |
Removal costs from property, plant and equipment retirements, net | (87) | (76) | (84) |
Net cash used in investing activities | (2,036) | (1,672) | (1,590) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from long-term debt | 1,358 | 1,395 | 553 |
Repayments of long-term debt | (526) | (896) | (144) |
Net short-term borrowings with maturities less than three months | 60 | 55 | 221 |
Issuance of common stock | 183 | 0 | 0 |
Proceeds from issuances of employee stock plans and direct stock purchase plan, net of taxes paid of $8, $11 and $13 in 2018, 2017 and 2016, respectively | 16 | 15 | 13 |
Advances and contributions for construction, net of refunds of $22, $22 and $31 in 2018, 2017 and 2016, respectively | 21 | 28 | 16 |
Debt issuance costs and make-whole premium on early debt redemption | (22) | (47) | (5) |
Dividends paid | (319) | (289) | (261) |
Anti-dilutive share repurchases | (45) | (54) | (65) |
Net cash provided by financing activities | 726 | 207 | 328 |
Net increase (decrease) in cash and cash equivalents and restricted funds | 76 | (16) | 27 |
Cash and cash equivalents and restricted funds at beginning of period | 83 | 99 | 72 |
Cash and cash equivalents and restricted funds at end of period | 159 | 83 | 99 |
Cash paid during the year for: | |||
Interest, net of capitalized amount | 332 | 338 | 327 |
Income taxes, net of refunds of $0 in 2018, 2017 and 2016 | 38 | 30 | 16 |
Non-cash investing activity: | |||
Capital expenditures acquired on account but unpaid as of year end | 181 | 204 | 171 |
Acquisition financed by treasury stock | $ 0 | $ 33 | $ 0 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Cash Flows [Abstract] | |||
Income taxes paid on proceeds from issuance of employee stock plans and direct stock purchase plan | $ 8 | $ 11 | $ 13 |
Advances and contributions for construction, refunds | 22 | 22 | 31 |
Income taxes, refunds | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning Balance (in shares) at Dec. 31, 2015 | 180.9 | (2.6) | ||||
Beginning Balance at Dec. 31, 2015 | $ 5,049 | $ 2 | $ 6,351 | $ (1,073) | $ (88) | $ (143) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to common shareholders | 468 | 468 | ||||
Direct stock reinvestment and purchase plan (in shares) | 0.1 | |||||
Direct stock reinvestment and purchase plan | 5 | 5 | ||||
Employee stock purchase plan (in shares) | 0.1 | |||||
Employee stock purchase plan | 7 | 7 | ||||
Stock-based compensation activity (in shares) | 0.7 | (0.1) | ||||
Stock-based compensation activity | 19 | 25 | (1) | $ (5) | ||
Repurchases of common stock (in shares) | (1) | |||||
Repurchases of common stock | (65) | $ (65) | ||||
Net other comprehensive income | 2 | 2 | ||||
Dividends (declared per common share) | (267) | (267) | ||||
Ending Balance (in shares) at Dec. 31, 2016 | 181.8 | (3.7) | ||||
Ending Balance at Dec. 31, 2016 | 5,218 | $ 2 | 6,388 | (873) | (86) | $ (213) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to common shareholders | 426 | 426 | ||||
Direct stock reinvestment and purchase plan (in shares) | 0.1 | |||||
Direct stock reinvestment and purchase plan | 8 | 8 | ||||
Employee stock purchase plan (in shares) | 0.1 | |||||
Employee stock purchase plan | 7 | 7 | ||||
Stock-based compensation activity (in shares) | 0.5 | (0.1) | ||||
Stock-based compensation activity | 15 | 22 | $ (7) | |||
Acquisition financed by treasury stock (in shares) | 0.4 | |||||
Acquisition financed by treasury stock | $ 34 | 7 | $ 27 | |||
Repurchases of common stock (in shares) | (0.7) | (0.7) | ||||
Repurchases of common stock | $ (54) | $ (54) | ||||
Net other comprehensive income | 7 | 7 | ||||
Dividends (declared per common share) | (297) | (297) | ||||
Ending Balance (in shares) at Dec. 31, 2017 | 182.5 | (4.1) | ||||
Ending Balance at Dec. 31, 2017 | 5,385 | $ 2 | 6,432 | (723) | (79) | $ (247) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to common shareholders | 567 | 567 | ||||
Direct stock reinvestment and purchase plan (in shares) | 0.1 | |||||
Direct stock reinvestment and purchase plan | 8 | 8 | ||||
Employee stock purchase plan (in shares) | 0.1 | |||||
Employee stock purchase plan | 8 | 8 | ||||
Stock-based compensation activity (in shares) | 0.4 | (0.1) | ||||
Stock-based compensation activity | 20 | 26 | (1) | $ (5) | ||
Issuance of common stock (in shares) | 2.3 | |||||
Issuance of common stock | $ 183 | 183 | ||||
Repurchases of common stock (in shares) | (0.6) | (0.5) | ||||
Repurchases of common stock | $ (45) | $ (45) | ||||
Net other comprehensive income | 45 | 45 | ||||
Dividends (declared per common share) | (327) | (327) | ||||
Ending Balance (in shares) at Dec. 31, 2018 | 185.4 | (4.7) | ||||
Ending Balance at Dec. 31, 2018 | $ 5,864 | $ 2 | $ 6,657 | $ (464) | $ (34) | $ (297) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | Dec. 07, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per common share (USD per share) | $ 0.455 | $ 1.82 | $ 1.66 | $ 1.50 |
Organization and Operation
Organization and Operation | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operation | Note 1: Organization and Operation American Water Works Company, Inc. (the “Company” or “American Water”) is a holding company for regulated and market-based subsidiaries throughout the United States and Ontario, Canada. The Company’s primary business involves the ownership of regulated utilities that provide water and wastewater services in 16 states in the United States, collectively referred to as the “ Regulated Businesses .” The Company also operates market-based businesses that provide a broad range of related and complementary water and wastewater services within non-reportable operating segments, collectively referred to as the “ Market-Based Businesses .” The Company’s primary Market-Based Businesses include the Homeowner Services Group , which provides warranty protection programs to residential and smaller commercial customers; the Military Services Group , which provides water and wastewater services to the U.S. government on military installations; and Keystone Clearwater Solutions, LLC, which provides water transfer services for shale natural gas exploration and production companies. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2: Significant Accounting Policies Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of American Water and all of its subsidiaries in which a controlling interest is maintained after the elimination of intercompany balances and transactions. The Company uses the equity method to report its investments in joint ventures where it holds up to a 50% voting interest and cannot exercise control over the operations and policies of the investments. Under the equity method, the Company records its interests as an investment and its percentage share of the investee’s earnings as income or losses. In July 2015, the Company acquired a 95% interest in Water Solutions Holdings, LLC, including its wholly owned subsidiary, Keystone Clearwater Solutions, LLC (collectively referred to as “Keystone”). During the fourth quarter of 2018, pursuant to the exercise of put options by the minority owners, the Company acquired the remaining 5% interest in Keystone, bringing its ownership interest to 100% . The former minority owners’ interest was recognized as redeemable noncontrolling interest and was included in Other long-term liabilities on the Consolidated Balance Sheets. There was no remaining redeemable noncontrolling interest as of December 31, 2018 , and $7 million of redeemable noncontrolling interest as of December 31, 2017 . Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires that management make estimates, assumptions and judgments that could affect the Company’s financial condition, results of operations and cash flows. Actual results could differ from these estimates, assumptions and judgments. The Company considers its critical accounting estimates to include (i) the application of regulatory accounting principles and the related determination and estimation of regulatory assets and liabilities, (ii) assumptions used in impairment testing of goodwill and long-lived assets, including regulatory assets, (iii) revenue recognition and the estimates used in the calculation of unbilled revenue, (iv) accounting for income taxes and the enacted Tax Cuts and Jobs Act (the “TCJA”), (v) benefit plan assumptions and (vi) the estimates and judgments used in determining loss contingencies. The Company’s critical accounting estimates that are particularly sensitive to change in the near term are amounts reported for regulatory assets and liabilities, goodwill, income taxes, benefit plan assumptions and contingency-related obligations. Regulation The Company’s regulated utilities are generally subject to economic regulation by certain state utility commissions or other entities engaged in utility regulation, collectively referred to as Public Utility Commissions (“PUCs” or “Regulators”). As such, the Company follows authoritative accounting principles required for rate regulated utilities, which requires the effects of rate regulation to be reflected in the Company’s Consolidated Financial Statements. PUCs generally authorize revenue at levels intended to recover the estimated costs of providing service, plus a return on net investments, or rate base. Regulators may also approve accounting treatments, long-term financing programs and cost of capital, operation and maintenance (“O&M”) expenses, capital expenditures, taxes, affiliated transactions and relationships, reorganizations, mergers, and acquisitions, along with imposing certain penalties or granting certain incentives. Due to timing and other differences in the collection of a regulated utility’s revenues, these authoritative accounting principles allow a cost that would otherwise be charged as an expense by a non-regulated entity, to be deferred as a regulatory asset if it is probable that such cost is recoverable through future rates. Conversely, these principles also require the creation of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future, or amounts collected in excess of costs incurred and are refundable to customers. See Note 7—Regulatory Assets and Liabilities for additional information. Property, Plant and Equipment Property, plant and equipment consists primarily of utility plant utilized by the Company’s regulated utilities. Additions to utility plant and replacement of retirement units of utility plant are capitalized and include costs such as materials, direct labor, payroll taxes and benefits, indirect items such as engineering and supervision, transportation and an allowance for funds used during construction (“AFUDC”). Costs for repair, maintenance and minor replacements are charged to O&M expense as incurred. The cost of utility plant is depreciated using the straight-line average remaining life, group method. The Company’s regulated utilities record depreciation in conformity with amounts approved by PUCs, after regulatory review of the information the Company submits to support its estimates of the assets’ remaining useful lives. Nonutility property consists primarily of buildings and equipment utilized by the Company’s Market-Based Businesses and for internal operations. This property is stated at cost, net of accumulated depreciation, which is calculated using the straight-line method over the useful lives of the assets. When units of property, plant and equipment are replaced, retired or abandoned, the carrying value is credited against the asset and charged to accumulated depreciation. To the extent the Company recovers cost of removal or other retirement costs through rates after the retirement costs are incurred, a regulatory asset is recorded. In some cases, the Company recovers retirement costs through rates during the life of the associated asset and before the costs are incurred. These amounts result in a regulatory liability being reported based on the amounts previously recovered through customer rates, until the costs to retire those assets are incurred. The costs incurred to acquire and internally develop computer software for internal use are capitalized as a unit of property. The carrying value of these costs amounted to $336 million and $346 million as of December 31, 2018 and 2017 , respectively. Cash and Cash Equivalents, and Restricted Funds Substantially all cash is invested in interest-bearing accounts. All highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. Restricted funds consists primarily of proceeds from financings for the construction and capital improvement of facilities, and deposits for future services under O&M projects. Proceeds are held in escrow or interest-bearing accounts until the designated expenditures are incurred. Restricted funds are classified on the Consolidated Balance Sheets as either current or long-term based upon the intended use of the funds. The following table provides a reconciliation of the Cash and cash equivalents and Restricted funds amounts as presented on the Consolidated Balance Sheets, to the sum of such amounts presented on the Consolidated Statements of Cash Flows for the years ended December 31 : 2018 2017 Cash and cash equivalents $ 130 $ 55 Restricted funds 28 27 Restricted funds included in other long-term assets 1 1 Cash and cash equivalents and restricted funds as presented on the Consolidated Statements of Cash Flows $ 159 $ 83 Accounts Receivable and Unbilled Revenues Accounts receivable include regulated utility customer accounts receivable, which represent amounts billed to water and wastewater customers generally on a monthly basis. Credit is extended based on the guidelines of the applicable PUCs and collateral is generally not required. Also included are market-based trade accounts receivable and nonutility customer receivables of the regulated subsidiaries. Unbilled revenues are accrued when service has been provided but has not been billed to customers and when costs exceed billings on market-based construction contracts. Allowance for Uncollectible Accounts Allowances for uncollectible accounts are maintained for estimated probable losses resulting from the Company’s inability to collect receivables from customers. Accounts that are outstanding longer than the payment terms are considered past due. A number of factors are considered in determining the allowance for uncollectible accounts, including the length of time receivables are past due and previous loss history. The Company generally writes off accounts when they become uncollectible or are over a certain number of days outstanding. See Note 6—Allowance for Uncollectible Accounts for additional information. Materials and Supplies Materials and supplies are stated at the lower of cost or net realizable value. Cost is determined using the average cost method. Goodwill Goodwill represents the excess of the purchase price paid over the estimated fair value of the assets acquired and liabilities assumed in the acquisition of a business. Goodwill is not amortized and must be allocated at the reporting unit level, which is defined as an operating segment or one level below, and tested for impairment at least annually, or more frequently if an event occurs or circumstances change that would more likely than not, reduce the fair value of a reporting unit below its carrying value. The Company’s goodwill is primarily associated with (i) the acquisition of American Water by an affiliate of the Company’s previous owner in 2003, (ii) the acquisition of E’town Corporation by a predecessor to the Company’s previous owner in 2001, (iii) the acquisition of Pivotal Home Solutions (“Pivotal”) in 2018, and (iv) the acquisition of Keystone in 2015; and has been allocated to reporting units based on the fair values at the date of the acquisitions. For purposes of testing goodwill for impairment, the reporting units in the Regulated Businesses segment are aggregated into a single reporting unit. The Market-Based Businesses is comprised of the Homeowner Services Group reporting unit, the Military Services Group reporting unit and the Keystone reporting unit. The Company’s annual impairment testing is performed as of November 30 of each year, in conjunction with the completion of the Company’s annual business plan. The Company assesses qualitative factors to determine whether quantitative testing is necessary. If it is determined, based upon qualitative factors, that the estimated fair value of a reporting unit is more likely than not, greater than its carrying value, no further testing is required. If the Company bypasses the qualitative assessment, or performs the qualitative assessment and determines that the estimated fair value of a reporting unit is more likely than not, less than its carrying value, a quantitative, fair value-based test is performed. This quantitative testing compares the estimated fair value of the reporting unit to its respective net carrying value, including goodwill, on the measurement date. An impairment loss will be recognized in the amount equal to the excess of the reporting unit’s carrying value compared to its estimated fair value, limited to the total amount of goodwill allocated to that reporting unit. Application of goodwill impairment testing requires management judgment, including the identification of reporting units and determining the fair value of reporting units. Management estimates fair value using a combination of a discounted cash flow analysis and a market multiples analysis. Significant assumptions used in these fair value estimations include, but are not limited to, forecasts of future operating results, discount and growth rates, capital expenditures, tax rates, working capital, weighted average cost of capital and projected terminal values. The Company believes the assumptions and other considerations used to value goodwill to be appropriate, however, if actual experience differs from the assumptions and considerations used in its analysis, the resulting change could have a material adverse impact on the Consolidated Financial Statements. See Note 8—Goodwill and Other Intangible Assets for additional information. Intangible Assets Intangible assets consist primarily of finite-lived customer relationships associated with the acquisition of Pivotal and Keystone. Finite-lived intangible assets are initially measured at their estimated fair values, and are amortized over their estimated useful lives based on the pattern in which the economic benefits of the intangible assets are consumed or otherwise used. See Note 8—Goodwill and Other Intangible Assets for additional information. Impairment of Long-Lived Assets Long-lived assets include property, plant and equipment, goodwill, intangible assets and long-term investments. The Company evaluates long-lived assets for impairment when circumstances indicate the carrying value of those assets may not be recoverable. When such indicators arise, the Company estimates the fair value of the long-lived asset from future cash flows expected to result from its use and, if applicable, the eventual disposition of the asset, comparing the estimated value fair to the carrying value of the asset. An impairment loss will be recognized in the amount equal to the excess of the long-lived asset’s carrying value compared to its estimated fair value. The long-lived assets of the Company’s regulated utilities are grouped on a separate entity basis for impairment testing, as they are integrated state-wide operations that do not have the option to curtail service and generally have uniform tariffs. A regulatory asset is charged to earnings if and when future recovery in rates of that asset is no longer probable. The Company holds other long-term investments in privately held companies and joint ventures accounted for using the equity method, and are classified as other Long-term assets on the Consolidated Balance Sheets. The estimated fair value of the long-term investments are dependent on the financial performance and solvency of the entities in which the Company invests, as well as volatility inherent in the external markets. If such long-term investments are considered impaired, an impairment loss will be recognized in the amount equal to the excess of the investment’s carrying value compared to its estimated fair value. The Company believes the assumptions and other considerations used to value long-lived assets to be appropriate, however, if actual experience differs from the assumptions and considerations used in its estimates, the resulting change could have a material adverse impact on the Consolidated Financial Statements. Advances for Construction and Contributions in Aid of Construction Regulated utility subsidiaries may receive advances for construction and contributions in aid of construction from customers, home builders and real estate developers to fund construction necessary to extend service to new areas. Advances are refundable for limited periods of time as new customers begin to receive service or other contractual obligations are fulfilled. Included in Other current liabilities as of December 31, 2018 and 2017 on the Consolidated Balance Sheets are estimated refunds of $23 million and $23 million , respectively. Those amounts represent expected refunds during the next 12-month period. Advances that are no longer refundable are reclassified to contributions. Contributions are permanent collections of plant assets or cash for a particular construction project. For ratemaking purposes, the amount of such contributions generally serves as a rate base reduction since the contributions represent non-investor supplied funds. Generally, the Company depreciates utility plant funded by contributions and amortizes its contributions balance as a reduction to depreciation expense, producing a result which is functionally equivalent to reducing the original cost of the utility plant for the contributions. In accordance with applicable regulatory guidelines, some of the Company’s utility subsidiaries do not amortize contributions, and any contribution received remains on the balance sheet indefinitely. Amortization of contributions in aid of construction was $28 million , $27 million and $27 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue From Contracts With Customers, and all related amendments (collectively, “ASC 606”) , using the modified retrospective approach, applied to contracts which were not completed as of January 1, 2018. Under this approach, periods prior to the adoption date have not been restated and continue to be reported under the accounting standards in effect for those periods. Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under ASC 606, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identifies the contracts with a customer; (ii) identifies the performance obligations within the contract, including whether any performance obligations are distinct and capable of being distinct in the context of the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when, or as, the Company satisfies each performance obligation. The Company’s revenues from contracts with customers are discussed below. Customer payments for contracts are generally due within 30 days of billing and none of the contracts with customers have payment terms that exceed one year; therefore, the Company elected to apply the significant financing component practical expedient and no amount of consideration has been allocated as a financing component. Regulated Businesses Revenue Revenue from the Company’s Regulated Businesses is generated primarily from water and wastewater services delivered to customers. These contracts contain a single performance obligation, the delivery of water and/or wastewater services, as the promise to transfer the individual good or service is not separately identifiable from other promises within the contracts and, therefore, is not distinct. Revenues are recognized over time, as services are provided. There are generally no significant financing components or variable consideration. Revenues include amounts billed to customers on a cycle basis and unbilled amounts calculated based on estimated usage from the date of the meter reading associated with the latest customer bill, to the end of the accounting period. The amounts that the Company has a right to invoice are determined by each customer’s actual usage, an indicator that the invoice amount corresponds directly to the value transferred to the customer. The Company also recognizes revenue when it is probable that future recovery of previously incurred costs or future refunds that are to be credited to customers will occur through the ratemaking process. Market-Based Businesses Revenue Through various warranty protection programs, the Company provides fixed fee services to residential and smaller commercial customers to protect against repair costs for interior and exterior water and sewer lines, interior electric and gas lines, heating and cooling systems, water heaters and other home appliances, as well as power surge protection and other related services. Most of the contracts have a one-year term and each service is a separate performance obligation, satisfied over time, as the customers simultaneously receive and consume the benefits provided from the service. Customers are obligated to pay for the protection programs ratably over 12 months or via a one-time, annual fee, with revenues recognized ratably over time for these services. Advances from customers are deferred until the performance obligation is satisfied. The Company also has long-term, fixed fee contracts to operate and maintain water and wastewater systems for the U.S. government on various military installations and facilities owned by municipal and industrial customers, as well as shorter-term contracts that provide customized water transfer services for shale natural gas companies and customers. Billing and revenue recognition for the fixed fee revenues occurs ratably over the term of the contract, as customers simultaneously receive and consume the benefits provided by the Company. Additionally, these contracts allow the Company to make capital improvements to underlying infrastructure, which are initiated through separate modifications or amendments to the original contract, whereby stand-alone, fixed pricing is separately stated for each improvement. The Company has determined that these capital improvements are separate performance obligations, with revenue recognized over time based on performance completed at the end of each reporting period. Losses on contracts are recognized during the period in which the losses first become probable and estimable. Revenues recognized during the period in excess of billings on construction contracts are recorded as unbilled revenues, with billings in excess of revenues recorded as other current liabilities until the recognition criteria are met. Changes in contract performance and related estimated contract profitability may result in revisions to costs and revenues, and are recognized in the period in which revisions are determined. See Note 3—Revenue Recognition for additional information. Income Taxes The Company and its subsidiaries participate in a consolidated federal income tax return for U.S. tax purposes. Members of the consolidated group are charged with the amount of federal income tax expense determined as if they filed separate returns. Certain income and expense items are accounted for in different time periods for financial reporting than for income tax reporting purposes. The Company provides deferred income taxes on the difference between the tax basis of assets and liabilities and the amounts at which they are carried in the financial statements. These deferred income taxes are based on the enacted tax rates expected to be in effect when these temporary differences are projected to reverse. In addition, the regulated utility subsidiaries recognize regulatory assets and liabilities for the effect on revenues expected to be realized as the tax effects of temporary differences, previously flowed through to customers, reverse. Investment tax credits have been deferred by the regulated utility subsidiaries and are being amortized to income over the average estimated service lives of the related assets. The Company recognizes accrued interest and penalties related to tax positions as a component of income tax expense and accounts for sales tax collected from customers and remitted to taxing authorities on a net basis. See Note 14—Income Taxes for additional information. Allowance for Funds Used During Construction AFUDC is a non-cash credit to income with a corresponding charge to utility plant that represents the cost of borrowed funds or a return on equity funds devoted to plant under construction. The regulated utility subsidiaries record AFUDC to the extent permitted by the PUCs. The portion of AFUDC attributable to borrowed funds is shown as a reduction of Interest, net on the Consolidated Statements of Operations. Any portion of AFUDC attributable to equity funds would be included in Other, net on the Consolidated Statements of Operations. AFUDC is provided in the following table for the years ended December 31 : 2018 2017 2016 Allowance for other funds used during construction $ 24 $ 19 $ 15 Allowance for borrowed funds used during construction 13 8 6 Environmental Costs The Company’s water and wastewater operations and the operations of its Market-Based Businesses are subject to U.S. federal, state, local and foreign requirements relating to environmental protection, and as such, the Company periodically becomes subject to environmental claims in the normal course of business. Environmental expenditures that relate to current operations or provide a future benefit are expensed or capitalized as appropriate. Remediation costs that relate to an existing condition caused by past operations are accrued, on an undiscounted basis, when it is probable that these costs will be incurred and can be reasonably estimated. A conservation agreement entered into by a subsidiary of the Company with the National Oceanic and Atmospheric Administration in 2010 and amended in 2017 required the subsidiary to, among other provisions, implement certain measures to protect the steelhead trout and its habitat in the Carmel River watershed in the State of California. The subsidiary agreed to pay $1 million annually commencing in 2010 with the final payment being made in 2021. Remediation costs accrued amounted to $4 million and $6 million as of December 31, 2018 and 2017 , respectively. Derivative Financial Instruments The Company uses derivative financial instruments for purposes of hedging exposures to fluctuations in interest rates. These derivative contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into derivative contracts for speculative purposes and does not use leveraged instruments. All derivatives are recognized on the balance sheet at fair value. On the date the derivative contract is entered into, the Company may designate the derivative as a hedge of the fair value of a recognized asset or liability (fair-value hedge) or a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash-flow hedge). Changes in the fair value of a fair-value hedge, along with the gain or loss on the underlying hedged item, are recorded in current-period earnings. The gains and losses on the effective portion of cash-flow hedges are recorded in other comprehensive income, until earnings are affected by the variability of cash flows. Any ineffective portion of designated cash-flow hedges is recognized in current-period earnings. Cash flows from derivative contracts are included in Net cash provided by operating activities on the Consolidated Statements of Cash Flows. See Note 11—Long-Term Debt for additional information. New Accounting Standards The following accounting standards were adopted by the Company in 2018 : Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements Revenue from Contracts with Customers Changes the criteria for recognizing revenue from a contract with a customer. Replaces existing guidance on revenue recognition, including most industry-specific guidance. The objective is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries and across capital markets. The underlying principle is that an entity will recognize revenue to depict the transfer of goods and services to customers at an amount the entity expects to be entitled to in exchange for those goods or services. The guidance also requires a number of disclosures regarding the nature, amount, timing and uncertainty of revenue and the related cash flows. January 1, 2018 Modified retrospective The adoption had no material impact on the Consolidated Financial Statements. Additional disclosures were added in the Notes to Consolidated Financial Statements. See Note 3—Revenue Recognition for additional information. Clarifying the Definition of a Business Updated the accounting guidance to clarify the definition of a business, with the objective of assisting entities with evaluating whether transactions should be accounted for as acquisitions, or disposals, of assets or businesses. January 1, 2018 Prospective The adoption had no material impact on the Consolidated Financial Statements. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Updated authoritative guidance to require the service cost component of net periodic benefit cost to be presented in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. The remaining components of net periodic benefit cost are required to be presented separately from the service cost component, in an income statement line item outside of operating income. Also, the guidance only allows for the service cost component to be eligible for capitalization. The updated guidance does not impact the accounting for net periodic benefit costs as regulatory assets or liabilities. January 1, 2018 Retrospective for the presentation of the service cost component and the other components of net periodic benefit costs on the Consolidated Statements of Operations; prospective for the limitation of capitalization to only the service cost component of net periodic benefit costs in total assets. The Company presented in the current period, and reclassified in the prior periods, net periodic benefit costs, other than the service cost component, in non-operating benefit costs, net on the Consolidated Statements of Operations. Simplifying the Test for Goodwill Impairment Updated authoritative guidance to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments in the update, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying value exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. August 31, 2018 Prospective See Note 8—Goodwill and Other Intangible Assets for additional information. Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract Updated the accounting and disclosure guidance for cloud computing arrangements that are service contracts. Under this guidance, implementation costs incurred in cloud computing arrangements and in developing or obtaining internal-use software follow the same capitalization requirements. The accounting for the service element of the arrangement remains unchanged. September 30, 2018 Prospective The adoption had no material impact on the Consolidated Financial Statements. Changes to the Disclosure Requirements for Defined Benefit Plans Updated the disclosure requirements for defined benefit plans. The guidance removes the requirement to disclose the amounts in accumulated other comprehensive income to be recognized as net periodic benefit cost, the effects of a one percent change in assumed healthcare costs and a number of other disclosures. The guidance clarifies that projected benefit obligations and accumulated benefit obligations should be disclosed, and adds disclosure requirements for the weighted average interest crediting rates for promised interest crediting rates and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation. December 31, 2018 Retrospective The adoption had no material impact on the Consolidated Financial Statements. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Permits an entity to reclassify tax effects in accumulated other comprehensive income (“AOCI”) as a result of the TCJA, to retained earnings. December 31, 2018 In the period of adoption. See Note 14—Income Taxes for additional information. The following recently issued accounting standards have not yet been adopted by the Company as of December 31, 2018 : Standard Description Date of Adoption Application Estimated Effect on the Consolidated F |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 3: Revenue Recognition Disaggregated Revenues The following table provides operating revenues disaggregated for the year ended December 31, 2018 : Revenues from Contracts with Customers Other Revenues Not from Contracts with Customers (a) Total Operating Revenues Regulated Businesses: Water services: Residential $ 1,663 $ — $ 1,663 Commercial 616 — 616 Fire service 137 — 137 Industrial 136 — 136 Public and other 197 — 197 Total water services 2,749 — 2,749 Wastewater services: Residential 115 — 115 Commercial 30 — 30 Industrial 2 — 2 Public and other 14 — 14 Total wastewater services 161 — 161 Miscellaneous utility charges 48 — 48 Alternative revenue programs — 19 19 Lease contract revenue — 7 7 Total Regulated Businesses 2,958 26 2,984 Market-Based Businesses 476 — 476 Other (17 ) (3 ) (20 ) Total operating revenues $ 3,417 $ 23 $ 3,440 (a) Includes revenues associated with alternative revenue programs, lease contracts and intercompany rent which are outside the scope of ASC 606 and accounted for under other existing GAAP. Contract Balances Contract assets and contract liabilities are the result of timing differences between revenue recognition, billings and cash collections. In the Company’s Market-Based Businesses, certain contracts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Contract assets are recorded when billing occurs subsequent to revenue recognition, and are reclassified to accounts receivable when billed and the right to consideration becomes unconditional. Contract liabilities are recorded when the Company receives advances from customers prior to satisfying contractual performance obligations, particularly for construction contracts and home warranty protection program contracts, and are recognized as revenue when the associated performance obligations are satisfied. Contract assets are included in Unbilled revenues and contract liabilities are included in Other current liabilities on the Consolidated Balance Sheets as of December 31, 2018 . The following table provides the changes in contract assets and liabilities for the year ended December 31, 2018 : Amount Contract assets: Balance at January 1, 2018 $ 35 Additions 18 Transfers to accounts receivable, net (39 ) Balance at December 31, 2018 $ 14 Contract liabilities: Balance at January 1, 2018 $ 25 Additions 52 Transfers to operating revenues (57 ) Balance at December 31, 2018 $ 20 Remaining Performance Obligations Remaining performance obligations (“RPOs”) represent revenues the Company expects to recognize in the future from contracts that are in progress. The Company enters into agreements for the provision of services to water and wastewater facilities for the United States military, municipalities and other customers. As of December 31, 2018 , the Company’s operation and maintenance and capital improvement contracts in the Market-Based Businesses have RPOs. Contracts with the U.S. government for work on various military installations expire between 2051 and 2069 and have RPOs of $4.4 billion as of December 31, 2018 , as measured by estimated remaining contract revenue. Such contracts are subject to customary termination provisions held by the U.S. government, prior to the agreed-upon contract expiration. Contracts with municipalities and commercial customers expire between 2019 and 2038 and have RPOs of $596 million as of December 31, 2018 , as measured by estimated remaining contract revenue. Some of the Company’s long-term contracts to operate and maintain a municipality’s, the federal government’s or other party’s water or wastewater treatment and delivery facilities include responsibility for certain maintenance for some of those facilities, in exchange for an annual fee. Unless specifically required to perform certain maintenance activities, the maintenance costs are recognized when the maintenance is performed. Approximately $61 million of RPOs were eliminated in conjunction with the sale of 20 of the Contract Services Group ’s contracts to subsidiaries of Veolia Environnement S.A. See Note 4—Acquisitions and Divestitures for further discussion of this transaction. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Note 4: Acquisitions and Divestitures Regulated Businesses Acquisitions During 2018, the Company closed on 15 various regulated water and wastewater systems for a total aggregate purchase price of $33 million . Assets acquired in these acquisitions, principally utility plant, totaled $32 million . Liabilities assumed, primarily contributions in aid of construction, totaled $1 million . The Company recorded additional goodwill of $2 million associated with one of its acquisitions, which is reported in its Regulated Businesses segment. Of this total goodwill, none is expected to be deductible for tax purposes. The preliminary purchase price allocations related to these acquisitions will be finalized once the valuation of assets acquired has been completed, no later than one year after their acquisition date. During 2017, the Company closed on 18 acquisitions of various regulated water and wastewater systems for a total aggregate purchase price of $210 million . This included the acquisition of the wastewater system assets of the Municipal Authority of the City of McKeesport, Pennsylvania, on December 18, 2017 . Assets acquired, principally utility plant, totaled $207 million . Liabilities assumed totaled $23 million , including $9 million of contributions in aid of construction and assumed debt of $7 million . The Company recorded additional goodwill of $29 million associated with four of its acquisitions, which is reported in its Regulated Businesses segment. Of this total goodwill, approximately $1 million is expected to be deductible for tax purposes. Additionally, the Company recognized a bargain purchase gain of $3 million associated with three of the acquisitions. During 2016, the Company closed on 15 acquisitions of various regulated water and wastewater systems for a total aggregate purchase price of $199 million . This included the acquisition of substantially all of the wastewater collection and treatment assets of the Sewer Authority of the City of Scranton, Pennsylvania (“Scranton”) in December 2016. Assets acquired, principally utility plant, totaled $194 million . Liabilities assumed totaled $30 million , including $14 million of contributions in aid of construction and assumed debt of $6 million . During 2017 , the Company recorded additional goodwill of $43 million associated with five of its acquisitions, which is reported in its Regulated Businesses segment. Of this total goodwill, approximately $31 million is expected to be deductible for tax purposes. Additionally, during 2018 the Company recorded a measurement period adjustment of $5 million , increasing the goodwill recognized from the Scranton acquisition. Highlighted Pending Acquisitions On April 13, 2018 , the Company’s Illinois subsidiary entered into an agreement to acquire the City of Alton, Illinois’ regional wastewater system for approximately $54 million . This system currently serves approximately 23,000 customers, comprised of approximately 11,000 customers in Alton and an additional 12,000 customers under bulk contracts in the nearby communities of Bethalto and Godfrey. In connection with the execution of the purchase agreement, the Company’s Illinois subsidiary made a $5 million non-escrowed deposit to the seller during January 2019. The Company expects to close this acquisition during the second quarter of 2019, pending regulatory approval. On May 30, 2018 , the Company’s Pennsylvania subsidiary entered into an agreement to acquire the wastewater assets of Exeter Township, Pennsylvania, for approximately $96 million . This system currently serves approximately 9,000 customers and the Company expects to close this acquisition during the third quarter of 2019, pending regulatory approval. Market-Based Businesses Pivotal Acquisition On June 4, 2018 , the Company, through its wholly-owned subsidiary American Water Enterprises, LLC, completed the acquisition of Pivotal for a total purchase price of $365 million , net of cash received and including $9 million in working capital. Pivotal is headquartered in Naperville, Illinois, and is a provider of home warranty protection products and services, operating in 18 states, with approximately 1.2 million customer contracts at the time of acquisition. Pivotal is complementary to the Company’s Homeowner Services Group product offerings, and enhances its presence in the home warranty solutions markets through utility partnerships. The results of Pivotal have been consolidated into the Homeowner Services Group non-reportable operating segment. This acquisition was funded through the issuance of common stock, as described below, and from borrowings through the Company’s commercial paper program, which were subsequently refinanced with the issuance of long-term debt during the third quarter of 2018. This acquisition is being accounted for as a business combination which requires, among other things, the assets acquired and the liabilities assumed to be recognized at their fair values at the acquisition date. The measurement period adjustments for Pivotal were complete as of December 31, 2018. The following table provides the purchase price allocation for the Pivotal acquisition as of June 4, 2018 , and the adjustments that were made through December 31, 2018: June 4, 2018 (as initially reported) Measurement Period Adjustments June 4, 2018 (as adjusted) Identifiable assets acquired: Accounts receivable $ 23 $ (1 ) $ 22 Other current assets 1 1 2 Property, plant and equipment 21 1 22 Intangible assets 96 (6 ) 90 Total identifiable assets acquired 141 (5 ) 136 Liabilities assumed: Accounts payable and accrued liabilities (5 ) — (5 ) Other current liabilities (14 ) 2 (12 ) Long-term liabilities (1 ) — (1 ) Total liabilities assumed (20 ) 2 (18 ) Net identifiable assets acquired 121 (3 ) 118 Goodwill 242 5 247 Net assets acquired $ 363 $ 2 $ 365 Goodwill was calculated as the excess of the consideration transferred over the net assets recognized, and represents the expected revenue and cost synergies of the combined business and assembled workforce of Pivotal. The goodwill is included in the Company’s Homeowner Services Group reporting unit, within the Market-Based Businesses , and is deductible for income tax purposes. Customer relationships, which comprise the majority of the intangible assets balance, are amortized based on historical attrition rates over their estimated useful lives of up to 21 years , with a weighted average life of approximately six years , as the assets are expected to contribute to the cash flows of the Company. The remaining intangible assets are amortized over their expected benefit periods of up to six years , with a weighted average life of approximately three years . The following table provides the valuation of the intangible assets acquired: Amount Intangible asset class: Customer relationships $ 78 Other intangible assets 12 Total intangible assets $ 90 Pivotal’s revenue and net income included on the Company’s Consolidated Statements of Operations for the year ended December 31, 2018 , did not have a material impact on the overall consolidated results of operations of the Company. Equity Forward Transaction and Common Stock Issuance On April 11, 2018 , the Company effected an equity forward transaction by entering into a forward sale agreement with each of two forward purchasers in connection with a public offering of 2,320,000 shares of the Company’s common stock. In the equity forward transaction, the forward purchasers, or an affiliate, borrowed an aggregate of 2,320,000 shares of the Company’s common stock from third parties and sold them to the underwriters in the public offering. On June 7, 2018 , the Company elected to fully and physically settle both forward sale agreements, resulting in the issuance of a total of 2,320,000 shares of its common stock at a price of $79.01 per share, for aggregate net proceeds of $183 million . The net proceeds of the transaction were used to finance a portion of the purchase price of the Pivotal acquisition described above. Divestitures On July 5, 2018 , the Company entered into an agreement for the sale of the majority of the O&M contracts in its Contract Services Group to subsidiaries of Veolia Environnement S.A. for $27 million . The Company closed on the sale of 20 of the 22 contracts associated with this agreement during the third quarter of 2018, and expects to close on the remaining two contracts, subject to customer consents, during the first half of 2019. As part of the sale, the Company recognized a pre-tax gain of $14 million during the third quarter of 2018. The pro forma impact of the Company’s acquisitions was not material to the Consolidated Statements of Operations for the years ended December 31, 2018 , 2017 and 2016 . |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 5: Property, Plant and Equipment The following table provides the major classes of property, plant and equipment by category as of December 31 : 2018 2017 Range of Remaining Useful Lives Weighted Average Useful Life Utility plant: Land and other non-depreciable assets $ 155 $ 151 Sources of supply 821 798 2 to 127 Years 47 years Treatment and pumping facilities 3,607 3,356 3 to 101 Years 40 years Transmission and distribution facilities 10,164 9,583 9 to 149 Years 70 years Services, meters and fire hydrants 4,008 3,754 5 to 90 Years 31 years General structures and equipment 1,625 1,458 3 to 109 Years 15 years Waste collection 943 904 5 to 114 Years 60 years Waste treatment, pumping and disposal 570 557 3 to 139 Years 41 years Construction work in progress 593 585 Total utility plant 22,486 21,146 Nonutility property 718 570 3 to 50 Years 6 years Total property, plant and equipment $ 23,204 $ 21,716 Property, plant and equipment depreciation expense amounted to $497 million , $460 million and $435 million for the years ended December 31, 2018 , 2017 and 2016 , respectively and was included in Depreciation and amortization expense on the Consolidated Statements of Operations. The provision for depreciation expressed as a percentage of the aggregate average depreciable asset balances was 3.09% , 3.07% and 3.14% for years December 31, 2018 , 2017 and 2016 , respectively. |
Allowance for Uncollectible Acc
Allowance for Uncollectible Accounts | 12 Months Ended |
Dec. 31, 2018 | |
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract] | |
Allowance for Uncollectible Accounts | Note 6: Allowance for Uncollectible Accounts The following table provides the changes in the allowances for uncollectible accounts for the years ended December 31 : 2018 2017 2016 Balance as of January 1 $ (42 ) $ (40 ) $ (39 ) Amounts charged to expense (33 ) (29 ) (27 ) Amounts written off 34 30 29 Recoveries of amounts written off (4 ) (3 ) (3 ) Balance as of December 31 $ (45 ) $ (42 ) $ (40 ) |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Regulated Operations [Abstract] | |
Regulatory Assets and Liabilities | Note 7: Regulatory Assets and Liabilities Regulatory Assets Regulatory assets represent costs that are probable of recovery from customers in future rates. The majority of the regulatory assets earn a return. The following table provides the composition of regulatory assets as of December 31 : 2018 2017 Deferred pension expense $ 362 $ 285 Removal costs recoverable through rates 292 269 Regulatory balancing accounts 110 113 San Clemente Dam project costs 85 89 Debt expense 70 67 Purchase premium recoverable through rates 56 57 Deferred tank painting costs 42 42 Make-whole premium on early extinguishment of debt 33 27 Other 106 112 Total regulatory assets $ 1,156 $ 1,061 The Company’s deferred pension expense includes a portion of the underfunded status that is probable of recovery through rates in future periods of $352 million and $270 million as of December 31, 2018 and 2017 , respectively. The remaining portion is the pension expense in excess of the amount contributed to the pension plans which is deferred by certain subsidiaries and will be recovered in future service rates as contributions are made to the pension plan. Removal costs recoverable through rates represent costs incurred for removal of property, plant and equipment or other retirement costs. Regulatory balancing accounts accumulate differences between revenues recognized and authorized revenue requirements until they are collected from customers or are refunded. Regulatory balancing accounts include low income programs and purchased power and water accounts. San Clemente Dam project costs represent costs incurred and deferred by the Company’s utility subsidiary in California pursuant to its efforts to investigate alternatives and remove the dam due to potential earthquake and flood safety concerns. In June 2012, the California Public Utilities Commission (“CPUC”) issued a decision authorizing implementation of a project to reroute the Carmel River and remove the San Clemente Dam. The project includes the Company’s utility subsidiary in California, the California State Conservancy and the National Marine Fisheries Services. Under the order’s terms, the CPUC has authorized recovery for pre-construction costs, interim dam safety measures and environmental costs and construction costs. The authorized costs were being recovered via a surcharge over a twenty -year period which began in October 2012. The unrecovered balance of project costs incurred, including cost of capital, net of surcharges totaled $85 million and $89 million as of December 31, 2018 and 2017 , respectively. Surcharges collected were $8 million and $7 million for the years ended December 31, 2018 and 2017 , respectively. Pursuant to the general rate case approved in December 2018, approval was granted to reset the twenty -year amortization period to begin January 1, 2018 and to establish an annual revenue requirement of $8 million to be recovered through base rates. Debt expense is amortized over the lives of the respective issues. Call premiums on the redemption of long-term debt, as well as unamortized debt expense, are deferred and amortized to the extent they will be recovered through future service rates. Purchase premium recoverable through rates is primarily the recovery of the acquisition premiums related to an asset acquisition by the Company’s utility subsidiary in California during 2002, and acquisitions in 2007 by the Company’s utility subsidiary in New Jersey. As authorized for recovery by the California and New Jersey PUCs, these costs are being amortized to depreciation and amortization on the Consolidated Statements of Operations through November 2048. Tank painting costs are generally deferred and amortized to operations and maintenance expense on the Consolidated Statements of Operations on a straight-line basis over periods ranging from five to fifteen years, as authorized by the regulatory authorities in their determination of rates charged for service. As a result of the prepayment by American Water Capital Corp., the Company’s wholly owned finance subsidiary (“AWCC”), of the 5.62% Series C Senior Notes due upon maturity on December 21, 2018 (the “Series C Notes”), 5.62% Series E Senior Notes due March 29, 2019 (the “Series E Notes”) and 5.77% Series F Senior Notes due December 21, 2022 (the “Series F Notes,” and together with the Series E Notes, the “Series Notes”), a make-whole premium of $10 million was paid to the holders of the Series Notes on September 11, 2018. Substantially all of these early debt extinguishment costs were allocable to the Company’s utility subsidiaries and recorded as regulatory assets, as the Company believes they are probable of recovery in future rates. Other regulatory assets include certain construction costs for treatment facilities, property tax stabilization, employee-related costs, deferred other postretirement benefit expense, business services project expenses, coastal water project costs, rate case expenditures and environmental remediation costs among others. These costs are deferred because the amounts are being recovered in rates or are probable of recovery through rates in future periods. Regulatory Liabilities Regulatory liabilities generally represent amounts that are probable of being credited or refunded to customers through the rate-making process. Also, if costs expected to be incurred in the future are currently being recovered through rates, the Company records those expected future costs as regulatory liabilities. The following table provides the composition of regulatory liabilities as of December 31 : 2018 2017 Income taxes recovered through rates $ 1,279 $ 1,242 Removal costs recovered through rates 309 315 Postretirement benefit liability 209 33 Pension and other postretirement benefit balancing accounts 46 48 TCJA reserve on revenue 36 — Other 28 26 Total regulatory liabilities $ 1,907 $ 1,664 Income taxes recovered through rates relate to deferred taxes that will likely be refunded to the Company’s customers. On December 22, 2017 , the TCJA was signed into law, which, among other things, enacted significant and complex changes to the Internal Revenue Code of 1986, including a reduction in the maximum U.S. federal corporate income tax rate from 35% to 21% as of January 1, 2018. The TCJA created significant excess deferred income taxes that the Company and its regulatory jurisdictions believe should be refunded to customers. Since these are significant refundable amounts, the Company believes it is probable these amounts will be refunded to customers through future rates, and as such the amounts have been recorded to a regulatory liability. Removal costs recovered through rates are estimated costs to retire assets at the end of their expected useful life that are recovered through customer rates over the life of the associated assets. In December 2008, the Company’s utility subsidiary in New Jersey, at the direction of the New Jersey Board of Public Utilities, began to depreciate $48 million of the total balance into depreciation and amortization expense on the Consolidated Statements of Operations via straight line amortization through November 2048. On August 31, 2018 , the Postretirement Medical Benefit Plan was remeasured to reflect an announced plan amendment which changed benefits for certain union and non-union plan participants. As a result of the remeasurement, the Company recorded a $227 million reduction to the net accumulated postretirement benefit obligation, with a corresponding regulatory liability. See Note 15—Employee Benefits for additional information. Pension and other postretirement benefit balancing accounts represent the difference between costs incurred and costs authorized by the PUCs that are expected to be refunded to customers. During 2018, the Company’s 14 regulatory jurisdictions began to consider the impacts of the TCJA. The Company has adjusted customer rates to reflect the lower income tax rate in 10 states. In one of those 10 states, a portion of the tax savings is being used to reduce certain regulatory assets. In one additional state, the Company is using the tax savings to offset additional capital investment and to reduce a regulatory asset. Proceedings in the other three jurisdictions remain pending. With respect to excess accumulated deferred income taxes, regulators in the eight states that have considered the issue have agreed with the Company’s overall timeline of passing the excess back to customers beginning no earlier than 2019, when the Company is able to produce the normalization schedule using the average rate assumption method. In one of those states, the Company will use the amortization of the excess accumulated deferred income taxes to offset future infrastructure investments. The Company generally expects its regulated customers to benefit from the tax savings resulting from the TCJA. As a result, the Company has recorded a $54 million reserve on revenue during the year ended December 31, 2018 , for the estimated tax savings resulting from the TCJA, with a corresponding regulatory liability, of which the current portion is $18 million and is recorded in other current liabilities, and the long-term portion is $36 million and is recorded in regulatory liabilities. The Company cannot predict how each jurisdiction may calculate the amount of credits due to customers. If any of the Company’s regulatory jurisdictions determines the credits due to customers are higher than the expected reduction to income tax expense, this would result in an adverse impact to the Company’s results of operations and cash flows. Other regulatory liabilities include legal settlement proceeds, deferred gains and various regulatory balancing accounts. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 8: Goodwill and Other Intangible Assets Goodwill The following table provides the changes in the carrying value of goodwill for the years ended December 31, 2018 and 2017 : Regulated Businesses Market-Based Businesses Consolidated Cost Accumulated Impairment Cost Accumulated Impairment Cost Accumulated Impairment Total Net Balance as of January 1, 2017 $ 3,458 $ (2,332 ) $ 327 $ (108 ) $ 3,785 $ (2,440 ) $ 1,345 Goodwill from acquisitions 29 — — — 29 — 29 Measurement period adjustments 5 — — — 5 — 5 Balance as of December 31, 2017 $ 3,492 $ (2,332 ) $ 327 $ (108 ) $ 3,819 $ (2,440 ) $ 1,379 Goodwill from acquisitions 2 — 247 — 249 — 249 Goodwill impairment charge — — — (53 ) — (53 ) (53 ) Balance as of December 31, 2018 $ 3,494 $ (2,332 ) $ 574 $ (161 ) $ 4,068 $ (2,493 ) $ 1,575 In 2018, the Company acquired goodwill of $247 million associated with its acquisition of Pivotal, which was allocated to the Homeowner Services Group reporting unit, within the Market-Based Businesses . Additionally, the Company acquired goodwill of $2 million associated with one of its acquisitions in the Regulated Businesses segment. In 2017, the Company recorded aggregate goodwill of $29 million associated with four of its acquisitions in the Regulated Businesses segment. Additionally, the Company recorded a measurement period adjustment of $5 million , increasing the goodwill recognized from the Scranton acquisition completed in December 2016. As a result of operational and financial challenges encountered in the construction business of Keystone, the Company substantially exited this business line during the third quarter of 2018. This action, along with the exit of the water trucking business line during the first half of 2018, narrowed the scope of the Keystone business going forward, focusing solely on providing water transfer services. Based on these factors, the Company concluded there were indicators that the Keystone reporting unit may be impaired. Accordingly, impairment testing was performed as part of the preparation of the Company’s Consolidated Financial Statements during the third quarter of 2018. In terms of the process followed, the Company first completed an impairment test of the Keystone reporting unit’s customer relationship intangible asset as of September 30, 2018. The results of this impairment test showed the fair value of the intangible asset was lower than its carrying value, resulting in a non-cash, pre-tax impairment charge of $4 million . The Company then completed an interim goodwill impairment test of the Keystone reporting unit as of September 30, 2018. The results of this impairment test showed the fair value of the Keystone reporting unit was lower than its carrying value, resulting in a non-cash, pre-tax impairment charge of $53 million . The Company estimated the fair value of the Keystone reporting unit using an income approach valuation technique which estimates the amount and timing of future discounted cash flows from operations of the Keystone reporting unit, relying on multiple projected scenarios. Significant assumptions used in estimating the fair value included, but was not limited to, forecasts of future operating results, including revenue and revenue growth, profit margins, and weighted average cost of capital. In aggregate, a non-cash, pre-tax impairment charge of $57 million was recorded in Impairment charge on the Consolidated Statement of Operations for the year ended December 31, 2018 , of which, $54 million was attributable to the Company, after adjustment for noncontrolling interest. See Note 18—Fair Value of Financial Information for further information. During 2018, the Company adopted Accounting Standards Update 2017-04, Simplifying the Test for Goodwill Impairment. See Note 2—Significant Accounting Policies for additional information. The Company completed its annual impairment testing of goodwill as of November 30 , 2018 , which included qualitative assessments of its Regulated Businesses , Homeowner Services Group , Military Services Group and Keystone reporting units. Based on these assessments, the Company determined that there were no factors present that would indicate that the fair value of these reporting units was less than their respective carrying values and, as such, quantitative, fair value-based testing was not necessary for these reporting units as of November 30 , 2018 . There can be no assurances that the Company will not be required to recognize an impairment of goodwill in the future due to market conditions or other factors related to the performance of the Company’s reporting units. These market events could include a decline over a period of time of the Company’s stock price, a decline over a period of time in valuation multiples of comparable water utilities and reporting unit companies, the lack of an increase in the Company’s market price consistent with its peer companies, decreases in control premiums, or continued downward pressure on commodity prices. A decline in the forecasted results in the Company’s business plan, such as changes in rate case results, capital investment budgets or interest rates, could also result in an impairment of goodwill. In regards to the Keystone reporting unit’s goodwill, adverse developments in market conditions, including prolonged depression of natural gas or oil prices or other factors that negatively impact the Company’s forecasted operating results, cash flows or key assumptions, could result in an impairment of a portion, or all, of Keystone’s goodwill. Intangible Assets The following tables provides the gross carrying value and accumulated amortization of the finite-lived intangible assets held by the Company as of December 31 : 2017 Acquisitions Impairments Other 2018 Customer relationships $ 12 $ 78 $ (4 ) $ — $ 86 Other intangible assets 2 12 — (1 ) 13 Total gross carrying value $ 14 $ 90 $ (4 ) $ (1 ) $ 99 2017 Amortization Impairments Other 2018 Customer relationships $ (4 ) $ (9 ) $ — $ — $ (13 ) Other intangible assets (1 ) (3 ) — 2 (2 ) Total accumulated amortization $ (5 ) $ (12 ) $ — $ 2 $ (15 ) Total intangible assets, net $ 9 $ 84 In 2018, the Company acquired finite-lived intangibles of $90 million associated with its acquisition of Pivotal. See Note 4—Acquisitions and Divestitures for additional information. Additionally, the Company recorded a $4 million impairment charge associated with Keystone’s customer relationships intangible asset. See the “Goodwill” section above for additional information. Intangible asset amortization expense amounted to $12 million , $4 million and $4 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Estimated amortization expense for the next five years subsequent to December 31, 2018 is as follows: Amount 2019 $ 15 2020 13 2021 11 2022 10 2023 7 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Note 9: Shareholders' Equity Common Stock Under the dividend reinvestment and direct stock purchase plan (the “DRIP”), shareholders may reinvest cash dividends and purchase additional Company common stock, up to certain limits, through the plan administrator without commission fees. Shares purchased by participants through the DRIP may be newly issued shares, treasury shares, or at the Company’s election, shares purchased by the plan administrator in the open market or in privately negotiated transactions. Purchases generally will be made and credited to DRIP accounts once each week. As of December 31, 2018 , there were approximately 4.2 million shares available for future issuance under the DRIP. Anti-dilutive Stock Repurchase Program In February 2015, the Company’s Board of Directors authorized an anti-dilutive stock repurchase program, which allowed the Company to purchase up to 10 million shares of its outstanding common stock over an unrestricted period of time. The Company repurchased 0.6 million shares and 0.7 million shares of common stock in the open market at an aggregate cost of $45 million and $54 million under this program for the years ended December 31, 2018 and 2017 , respectively. As of December 31, 2018 , there were 5.5 million shares of common stock available for purchase under the program. Accumulated Other Comprehensive Loss The following table provides the changes in accumulated other comprehensive loss by component, net of tax, for the years ended December 31, 2018 and 2017 : Defined Benefit Plans Foreign Currency Translation Gain (Loss) on Cash Flow Hedge Accumulated Other Comprehensive Loss Employee Benefit Plan Funded Status Amortization of Prior Service Cost Amortization of Actuarial Loss Beginning balance as of January 1, 2017 $ (147 ) $ 1 $ 42 $ 2 $ 16 $ (86 ) Other comprehensive income (loss) before reclassification 7 — — (1 ) (6 ) — Amounts reclassified from accumulated other comprehensive loss — — 7 — — 7 Net other comprehensive income (loss) 7 — 7 (1 ) (6 ) 7 Ending balance as of December 31, 2017 $ (140 ) $ 1 $ 49 $ 1 $ 10 $ (79 ) Other comprehensive income (loss) before reclassification 60 — — — (2 ) 58 TCJA tax effects reclassified from accumulated other comprehensive loss (22 ) — — — 2 (20 ) Amounts reclassified from accumulated other comprehensive loss — — 7 — — 7 Net other comprehensive income 38 — 7 — — 45 Ending balance as of December 31, 2018 $ (102 ) $ 1 $ 56 $ 1 $ 10 $ (34 ) The Company does not reclassify the amortization of defined benefit pension cost components from accumulated other comprehensive loss directly to net income in its entirety, as a portion of these costs have been capitalized as a regulatory asset. These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 15—Employee Benefits for additional information. The amortization of the loss on cash flow hedge is reclassified to net income during the period incurred and is included in interest, net in the accompanying Consolidated Statements of Operations. As of December 31, 2018, the Company adopted Accounting Standards Update 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which permits entities to reclassify the tax effects in AOCI as a result of the TCJA to retained earnings. See Note 14—Income Taxes for additional information. Dividends The Company’s Board of Directors authorizes the payment of dividends. The Company’s ability to pay dividends on its common stock is subject to having access to sufficient sources of liquidity, net income and cash flows of the Company’s subsidiaries, the receipt of dividends and repayments of indebtedness from the Company’s subsidiaries, compliance with Delaware corporate and other laws, compliance with the contractual provisions of debt and other agreements, and other factors. The Company’s dividend rate on its common stock is determined by the Board of Directors on a quarterly basis and takes into consideration, among other factors, current and possible future developments that may affect the Company’s income and cash flows. When dividends on common stock are declared, they are typically paid in March, June, September and December. Historically, dividends have been paid quarterly to holders of record less than 30 days prior to the distribution date. Since the dividends on the Company’s common stock are not cumulative, only declared dividends are paid. During 2018 , 2017 and 2016 , the Company paid $319 million , $289 million and $261 million in cash dividends, respectively. The following table provides the per share cash dividends paid for the years ended December 31 : 2018 2017 2016 December $ 0.455 $ 0.415 $ 0.375 September $ 0.455 $ 0.415 $ 0.375 June $ 0.455 $ 0.415 $ 0.375 March $ 0.415 $ 0.375 $ 0.34 On December 7, 2018 , the Company’s Board of Directors declared a quarterly cash dividend payment of $0.455 per share payable on March 1, 2019 , to shareholders of record as of February 7, 2019 . Equity Forward Transaction See Note 4—Acquisitions and Divestitures for information regarding the forward sale agreements entered into by the Company on April 11, 2018 , and the subsequent settlement of these agreements on June 7, 2018 . Regulatory Restrictions The issuance of long-term debt or equity securities by the Company or American Water Capital Corp. (“AWCC”), the Company’s wholly owned financing subsidiary, does not require authorization of any state PUC if no guarantee or pledge of the regulated subsidiaries is utilized. However, state PUC authorization is required to issue long-term debt at most of the Company’s regulated subsidiaries. The Company’s regulated subsidiaries normally obtain the required approvals on a periodic basis to cover their anticipated financing needs for a period of time or in connection with a specific financing. Under applicable law, the Company’s subsidiaries can pay dividends only from retained, undistributed or current earnings. A significant loss recorded at a subsidiary may limit the dividends that the subsidiary can distribute to American Water. Furthermore, the ability of the Company’s subsidiaries to pay upstream dividends or repay indebtedness to American Water is subject to compliance with applicable regulatory restrictions and financial obligations, including, for example, debt service and preferred and preference stock dividends, as well as applicable corporate, tax and other laws and regulations, and other agreements or covenants made or entered into by the Company and its subsidiaries. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | Note 10: Stock Based Compensation The Company has granted stock options, stock units and dividend equivalents to non-employee directors, officers and other key employees of the Company pursuant to the terms of its 2007 Omnibus Equity Compensation Plan (the “2007 Plan”). Stock units under the 2007 Plan generally vest based on (i) continued employment with the Company (“RSUs”), or (ii) continued employment with the Company where distribution of the shares is subject to the satisfaction in whole or in part of stated performance-based goals (“PSUs”). The total aggregate number of shares of common stock that may be issued under the 2007 Plan is 15.5 million . As of December 31, 2018 , 7.5 million shares were available for issuance under the 2007 Plan. The 2007 Plan has been replaced by the 2017 Omnibus Plan, as defined below, and no additional awards may be granted under the 2007 Plan. However, shares may still be issued under the 2007 Plan pursuant to the terms of awards previously issued under that plan prior to May 12, 2017. In May 2017, the Company’s shareholders approved the American Water Works Company, Inc. 2017 Omnibus Equity Compensation Plan (the “2017 Omnibus Plan”). The Company has granted stock units, including RSUs and PSUs, stock awards and dividend equivalents to non-employee directors, officers and employees under the 2017 Omnibus Plan. A total of 7.2 million shares of common stock may be issued under the 2017 Omnibus Plan. As of December 31, 2018 , 6.9 million shares were available for grant under the 2017 Omnibus Plan. The 2017 Omnibus Plan provides that grants of awards may be in any of the following forms: incentive stock options, nonqualified stock options, stock appreciation rights, stock units, stock awards, other stock-based awards and dividend equivalents. Dividend equivalents may be granted only on stock units or other stock-based awards. The cost of services received from employees in exchange for the issuance of stock options and restricted stock awards is measured based on the grant date fair value of the awards issued. The value of stock options and stock unit awards at the date of the grant is amortized through expense over the three -year service period. All awards granted in 2018 , 2017 and 2016 are classified as equity. The Company recognizes compensation expense for stock awards over the vesting period of the award. The Company stratified its grant populations and used historic employee turnover rates to estimate employee forfeitures. The estimated rate is compared to the actual forfeitures at the end of the reporting period and adjusted as necessary. The following table provides the stock-based compensation expense recorded in operation and maintenance expense in the accompanying Consolidated Statements of Operations for the years ended December 31 : 2018 2017 2016 Stock options $ 1 $ 1 $ 2 RSUs and PSUs 15 9 8 Nonqualified employee stock purchase plan 1 1 1 Stock-based compensation 17 11 11 Income tax benefit (5 ) (4 ) (4 ) Stock-based compensation expense, net of tax $ 12 $ 7 $ 7 There were no significant stock-based compensation costs capitalized during the years ended December 31, 2018 , 2017 and 2016 . The Company receives a tax deduction based on the intrinsic value of the award at the exercise date for stock options and the distribution date for stock units. For each award, throughout the requisite service period, the Company recognizes the tax benefits, which have been included in deferred income tax assets, related to compensation costs. The tax deductions in excess of the benefits recorded throughout the requisite service period are recorded to the Consolidated Statements of Operations and are presented in the financing section of the Consolidated Statements of Cash Flows. Stock Options There were no grants of stock options to employees in 2018 and 2017 . In 2016 , the Company granted non-qualified stock options to certain employees under the 2007 Plan. The stock options vest ratably over the three -year service period beginning on January 1 of the year of the grant and have no performance vesting conditions. Expense is recognized using the straight-line method and is amortized over the requisite service period. The following table provides the weighted average assumptions used in the Black-Scholes option-pricing model for grants and the resulting weighted average grant date fair value per share of stock options granted for the years ended December 31 : 2018 2017 2016 Dividend yield — % — % 2.09 % Expected volatility — % — % 15.89 % Risk-free interest rate — % — % 1.15 % Expected life (years) 0 0 4.0 Exercise price $ — $ — $ 65.25 Grant date fair value per share $ — $ — $ 6.61 The Company used the actual historical experience of exercises or expirations of the 2009 grant to determine the expected stock option life. The Company began granting stock options at the time of its initial public offering in April 2008. Expected volatility is based on a weighted average of historic volatilities of traded common stock of peer companies (regulated water companies) over the expected term of the stock options and historic volatilities of the Company’s common stock during the period it has been publicly traded. The dividend yield is based on the Company’s expected dividend payments and the stock price on the date of grant. The risk-free interest rate is the market yield on U.S. Treasury strips with maturities similar to the expected term of the stock options. The exercise price of the stock options is equal to the fair market value of the underlying stock on the date of option grant. Stock options vest over periods ranging from one to three years and have a maximum term of seven years from the effective date of the grant. The following table provides stock option activity for the year ended December 31, 2018 : Shares (in thousands) Weighted Average Exercise Price (per share) Weighted Average Remaining Life (years) Aggregate Intrinsic Value Options outstanding as of December 31, 2017 711 $ 53.51 3.67 $ 29 Granted — — Forfeited or expired (7 ) 65.15 Exercised (187 ) 49.32 Options outstanding as of December 31, 2018 517 $ 54.92 2.96 $ 19 Options exercisable as of December 31, 2018 (434 ) $ 52.93 2.76 $ 16 As of December 31, 2018 , less than $1 million of total unrecognized compensation cost related to nonvested stock options is expected to be recognized over the remaining weighted average period of less than one year. The total fair value of stock options vested was $1 million , $2 million and $1 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. The following table provides additional information regarding stock options exercised during the years ended December 31 : 2018 2017 2016 Intrinsic value $ 9 $ 10 $ 18 Exercise proceeds 7 11 15 Income tax benefit realized 2 3 6 Stock Units During 2018 , 2017 and 2016 , the Company granted RSUs to certain employees under the 2007 Plan and 2017 Omnibus Plan, as applicable. RSUs generally vest based on continued employment with the Company over periods ranging from one to three years. During 2018 and 2017 , the Company granted stock units to non-employee directors under the 2017 Omnibus Plan, and during 2016 , these awards were granted under the 2007 Plan. The stock units were vested in full on the date of grant; however, distribution of the shares will be made within 30 days of the earlier of (i) 15 months after the grant date, subject to any deferral election by the director, or (ii) the participant’s separation from service. Because these stock units vested on the grant date, the total grant date fair value was recorded in operation and maintenance expense on the grant date. The RSUs are valued at the market value of the closing price of the Company’s common stock on the date of the grant and the majority vest ratably over the three -year service period beginning January 1 of the year of the grant. These RSUs are amortized through expense over the requisite service period using the straight-line method. The following table provides RSU activity for the year ended December 31, 2018 : Shares (in thousands) Weighted Average Grant Date Fair Value (per share) Non-vested total as of December 31, 2017 89 $ 67.48 Granted 107 82.75 Vested (57 ) 72.11 Forfeited (6 ) 74.34 Non-vested total as of December 31, 2018 133 $ 77.44 As of December 31, 2018 , $5 million of total unrecognized compensation cost related to the nonvested RSUs is expected to be recognized over the weighted average remaining life of 2.1 years. The total fair value of stock units and RSUs vested was $4 million , $3 million and $2 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. During 2018 , 2017 and 2016 , the Company granted PSUs to certain employees under the 2007 Plan and 2017 Omnibus Plan, as applicable. The majority of PSUs vest ratably based on continued employment with the Company over the three -year performance period beginning January 1 of the year of the grant (the “Performance Period”). Distribution of the performance shares is contingent upon the achievement of one or more internal performance measures and, separately, a relative total shareholder return performance measure, over the Performance Period. The following table provides PSU activity for the year ended December 31, 2018 : Shares (in thousands) Weighted Average Grant Date Fair Value (per share) Non-vested total as of December 31, 2017 281 $ 67.33 Granted 165 72.50 Vested (122 ) 58.18 Forfeited (16 ) 73.87 Non-vested total as of December 31, 2018 308 $ 73.39 As of December 31, 2018 , $4 million of total unrecognized compensation cost related to the nonvested PSUs is expected to be recognized over the weighted average remaining life of 1.35 years. The total fair value of PSUs vested was $12 million , $13 million and $12 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. PSUs granted with one or more internal performance measures are valued at the market value of the closing price of the Company’s common stock on the date of grant. PSUs granted with a relative total shareholder return condition are valued using a Monte Carlo model. Expected volatility is based on historical volatilities of traded common stock of the Company and comparative companies using daily stock prices over the past three years. The expected term is three years and the risk-free interest rate is based on the three-year U.S. Treasury rate in effect as of the measurement date. The following table provides the weighted average assumptions used in the Monte Carlo simulation and the weighted average grant date fair values of PSUs granted for the years ended December 31 : 2018 2017 2016 Expected volatility 17.23 % 17.40 % 15.90 % Risk-free interest rate 2.36 % 1.53 % 0.91 % Expected life (years) 3.0 3.0 3.0 Grant date fair value per share $ 73.62 $ 72.81 $ 77.16 The grant date fair value of PSUs that vest ratably and have market and/or performance conditions are amortized through expense over the requisite service period using the graded-vesting method. If dividends are paid with respect to shares of the Company’s common stock before the RSUs and PSUs are distributed, the Company credits a liability for the value of the dividends that would have been paid if the RSUs and PSUs were shares of Company common stock. When the RSUs and PSUs are distributed, the Company pays the participant a lump sum cash payment equal to the value of the dividend equivalents accrued. The Company accrued dividend equivalents totaling $1 million , less than $1 million and $1 million to accumulated deficit in the accompanying Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2018 , 2017 and 2016 , respectively. Employee Stock Purchase Plan The Company maintains a nonqualified employee stock purchase plan (the “ESPP”) through which employee participants may use payroll deductions to acquire Company common stock at a discount. Prior to February 5, 2019, the purchase price of common stock acquired under the ESPP was the lesser of 90% of the fair market value of the common stock at either the beginning or the end of a three -month purchase period. On July 27, 2018, the ESPP was amended, effective February 5, 2019, to permit employee participants to acquire Company common stock at 85% of the fair market value of the common stock at the end of the purchase period. As of December 31, 2018 , there were 1.9 million shares of common stock reserved for issuance under the ESPP. The ESPP is considered compensatory. During the years ended December 31, 2018 , 2017 and 2016 , the Company issued 95 thousand , 93 thousand and 93 thousand shares, respectively, under the ESPP. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 11: Long-Term Debt The Company obtains long-term debt primarily to fund capital expenditures of the Regulated Businesses and to lend funds to the parent company to refinance debt and for other purposes. The following table provides the components of long-term debt as of December 31 : Rate Weighted Average Rate Maturity 2018 2017 Long-term debt of AWCC: (a) Senior notes—fixed rate 2.95%-8.27% 4.26% 2019-2048 $ 6,116 $ 5,292 Private activity bonds and government funded debt—fixed rate 1.79%-6.25% 5.45% 2021-2040 192 193 Long-term debt of other American Water subsidiaries: Private activity bonds and government funded debt—fixed rate (b) 0.00%-6.20% 4.54% 2019-2048 727 712 Mortgage bonds—fixed rate 3.92%-9.71% 7.41% 2019-2039 606 607 Mandatorily redeemable preferred stock 8.47%-9.75% 8.60% 2019-2036 8 10 Capital lease obligations 12.91% 12.91% 2026 1 1 Term loan 5.60%-5.63% 5.62% 2021 6 9 Long-term debt 7,656 6,824 Unamortized debt premium, net (c) 7 9 Unamortized debt issuance costs (16 ) (13 ) Less current portion of long-term debt (71 ) (322 ) Total long-term debt $ 7,576 $ 6,498 (a) This indebtedness is considered “debt” for purposes of a support agreement between American Water and AWCC, which serves as a functional equivalent of a guarantee by American Water of AWCC’s payment obligations under such indebtedness. (b) Includes $3 million and $5 million of variable rate debt as of December 31, 2018 and 2017 , respectively, with variable-to-fixed interest rate swaps ranging between 3.93% and 4.72% . This debt was assumed via an acquisition in 2013. (c) Primarily fair value adjustments previously recognized in acquisition purchase accounting. All mortgage bonds, term loans and $725 million of the private activity bonds and government funded debt held by the Company’s subsidiaries were collateralized as of December 31, 2018 . Long-term debt indentures contain a number of covenants that, among other things, limit, subject to certain exceptions, the Company from issuing debt secured by the Company’s assets. Certain long-term notes require the Company to maintain a ratio of consolidated total indebtedness to consolidated total capitalization of not more than 0.70 to 1.00 . The ratio as of December 31, 2018 was 0.59 to 1.00 . In addition, the Company has $889 million of notes which include the right to redeem the notes at par value, in whole or in part, from time to time, subject to certain restrictions. The following table provides future sinking fund payments and debt maturities: Amount 2019 $ 72 2020 32 2021 303 2022 26 2023 159 Thereafter 7,064 The following table provides the issuances of long-term debt in 2018 : Company Type Rate Maturity Amount AWCC (a) Senior notes—fixed rate 3.75%-4.20% 2028-2048 $ 1,325 Other American Water subsidiaries Private activity bonds and government funded debt—fixed rate (b) 0.00%-5.00% 2021-2048 33 Total issuances $ 1,358 (a) Approximately $29 million of this debt relates to the New Jersey Environmental Infrastructure Financing Program. The Company incurred debt issuance costs of $12 million related to the above issuances. The following table provides the retirements and redemptions of long-term debt in 2018 through sinking fund provisions, optional redemption or payment at maturity: Company Type Rate Maturity Amount AWCC Senior notes—fixed rate 5.62%-6.25% 2018-2022 $ 501 AWCC Private activity bonds and government funded debt—fixed rate 1.79%-2.90% 2021-2031 1 Other American Water subsidiaries Private activity bonds and government funded debt—fixed rate 0.00%-5.50% 2018-2047 18 Other American Water subsidiaries Mortgage bonds—fixed rate 9.13% 2021 1 Other American Water subsidiaries Mandatorily redeemable preferred stock 8.49%-9.18% 2031-2036 2 Other American Water subsidiaries Term loan 4.83%-5.69% 2021 3 Total retirements and redemptions $ 526 On August 9, 2018 , AWCC completed a $1.325 billion debt offering which included the sale of $625 million aggregate principal amount of its 3.75% Senior Notes due in 2028, and $700 million aggregate principal amount of its 4.20% Senior Notes due in 2048. At the closing of the offering, AWCC received, after deduction of underwriting discounts and before deduction of offering expenses, net proceeds of approximately $1.3 billion . AWCC used proceeds from the offering to (i) lend funds to American Water and its regulated operating subsidiaries, (ii) repay $191 million principal amount of AWCC’s Series C Notes upon maturity on December 21, 2018, (iii) prepay $100 million aggregate principal amount of AWCC’s outstanding Series E Notes and $100 million aggregate principal amount of AWCC’s outstanding Series F Notes, and (iv) repay AWCC’s commercial paper obligations and for general corporate purposes. As a result of AWCC’s prepayment of the Series Notes, a make-whole premium of $10 million was paid to the holders thereof on September 11, 2018. Substantially all of these early debt extinguishment costs were allocable to the Company’s utility subsidiaries and recorded as regulatory assets, as the Company believes they are probable of recovery in future rates. Interest, net includes interest income of approximately $11 million , $14 million and $14 million in 2018 , 2017 and 2016 , respectively. One of the principal market risks to which the Company is exposed is changes in interest rates. In order to manage the exposure, the Company follows risk management policies and procedures, including the use of derivative contracts such as swaps. The Company reduces exposure to interest rates by managing commercial paper and debt maturities. The Company also does not enter into derivative contracts for speculative purposes and does not use leveraged instruments. The derivative contracts entered into are for periods consistent with the related underlying exposures. The Company is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations and minimizes this risk by dealing only with leading, credit-worthy financial institutions having long-term credit ratings of “A” or better. On August 6, 2018 , the Company terminated four forward starting swap agreements with an aggregate notional amount of $400 million , realizing a net gain of $9 million , to be amortized through interest, net over 10 - and 30 -year periods, in correlation with the terms of the new debt issued on August 9, 2018 . On August 17, 2018 , the Company entered into two forward starting swap agreements, each with a notional amount of $80 million , to reduce interest rate exposure on debt expected to be issued in 2019. These forward starting swap agreements terminate in August 2019 , and have an average fixed rate of 2.98% . On October 11, 2018 , the Company entered into two additional forward starting swap agreements, each with a notional amount of $100 million , to reduce interest rate exposure on debt expected to be issued in 2019. These forward starting swap agreements terminate in December 2019 , and have an average fixed rate of 3.31% . On January 8, 2019 , the Company entered into an additional forward starting swap agreement, with a notional amount of $150 million , to reduce interest rate exposure on debt expected to be issued in 2019. This forward starting swap agreement terminates in December 2019 , and has an average fixed rate of 2.76% . The Company has designated these forward starting swap agreements as cash flow hedges, with their fair value recorded in accumulated other comprehensive gain or loss. Upon termination, the cumulative gain or loss recorded in accumulated other comprehensive gain or loss will be amortized through interest, net over the term of the new debt. The Company has employed interest rate swaps to fix the interest cost on a portion of its variable-rate debt with an aggregate notional amount of $3 million . The Company has designated these instruments as economic hedges, accounted for at fair value, with gains or losses recognized in interest, net. The gain recognized by the Company was de minimis for the years ended 2018 and 2017 . The following table provides the gross fair value of the Company’s derivative liabilities, as well as the location of the liability balances on the Consolidated Balance Sheets as of December 31: Derivative Instrument Derivative Designation Balance Sheet Classification 2018 2017 Liability derivative: Forward starting swaps Cash flow hedge Other current liabilities 14 3 |
Short-Term Debt
Short-Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
Short-term Debt [Abstract] | |
Short-Term Debt | Note 12: Short-Term Debt Short-term debt consists of commercial paper and credit facility borrowings totaling $964 million and $905 million as of December 31, 2018 and 2017 , respectively. On March 21, 2018, AWCC increased the maximum aggregate principal amount of borrowings authorized for issuance under its commercial paper program from $1.60 billion to $2.10 billion . The weighted average interest rate on AWCC short-term borrowings was approximately 2.28% and 1.24% for the year ended December 31, 2018 and 2017 , respectively. As of December 31, 2018 there were no borrowings outstanding with maturities greater than three months. On March 21, 2018, AWCC and certain lenders amended and restated the credit agreement with respect to AWCC’s revolving credit facility to increase the maximum commitments under the facility from $1.75 billion to $2.25 billion , and to extend the expiration date of the facility from June 2020 to March 2023. The facility is used principally to support AWCC’s commercial paper program and to provide a sub-limit of up to $150 million for letters of credit. Subject to satisfying certain conditions, the credit agreement also permits AWCC to increase the maximum commitment under the facility by up to an aggregate of $500 million , and to request extensions of its expiration date for up to two one-year periods. As of December 31, 2018, AWCC had no outstanding borrowings and $81 million of outstanding letters of credit under the revolving credit facility, with $2.17 billion available to fulfill the Company’s short-term liquidity needs and to issue letters of credit. Letters of credit are non-debt instruments maintained to provide credit support for certain transactions as requested by third parties. The financial covenants with respect to the facility remained unchanged from the credit agreement in effect on December 31, 2017. Issuance costs related to the increased lending commitments will be amortized over the remaining life of the credit facility and is included in interest, net in the accompanying Consolidated Statements of Operations. Interest rates on advances under the facility are based on a credit spread to the LIBOR rate or base rate in accordance with Moody Investors Service’s and Standard & Poor’s Financial Services’ then applicable credit rating on AWCC’s senior unsecured, non-credit enhanced debt. The following table provides the aggregate credit facility commitments, letter of credit sub-limit under the revolving credit facility and commercial paper limit, as well as the available capacity for each as of December 31, 2018 and 2017 : Credit Facility Commitment (a) Available Credit Facility Capacity (a) Letter of Credit Sublimit Available Letter of Credit Capacity Commercial Paper Limit Available Commercial Paper Capacity December 31, 2018 $ 2,262 $ 2,177 $ 150 $ 69 $ 2,100 $ 1,146 December 31, 2017 1,762 1,673 150 66 1,600 695 (a) Includes amounts related to the revolving credit facility of Keystone. As of December 31, 2018 , the total commitment under the Keystone revolving credit facility was $12 million , of which $8 million was available for borrowing, subject to compliance with a collateral base calculation. The following table provides the short-term borrowing activity for AWCC for the years ended December 31 : 2018 2017 Average borrowings $ 1,029 $ 779 Maximum borrowings outstanding 1,905 1,135 Weighted average interest rates, computed on daily basis 2.28 % 1.24 % Weighted average interest rates, as of December 31 2.84 % 1.61 % The credit facility requires the Company to maintain a ratio of consolidated debt to consolidated capitalization of not more than 0.70 to 1.00 . The ratio as of December 31, 2018 was 0.59 to 1.00 . None of the Company’s borrowings are subject to default or prepayment as a result of a downgrading of securities, although such a downgrading could increase fees and interest charges under the Company’s credit facility. As part of the normal course of business, the Company routinely enters contracts for the purchase and sale of water, energy, fuels and other services. These contracts either contain express provisions or otherwise permit the Company and its counterparties to demand adequate assurance of future performance when there are reasonable grounds for doing so. In accordance with the contracts and applicable contract law, if the Company is downgraded by a credit rating agency, especially if such downgrade is to a level below investment grade, it is possible that a counterparty would attempt to rely on such a downgrade as a basis for making a demand for adequate assurance of future performance. Depending on the Company’s net position with the counterparty, the demand could be for the posting of collateral. In the absence of expressly agreed provisions that specify the collateral that must be provided, the obligation to supply the collateral requested will be a function of the facts and circumstances of the Company’s situation at the time of the demand. If the Company can reasonably claim that it is willing and financially able to perform its obligations, it may be possible that no collateral would need to be posted or that only an amount equal to two or three months of future payments should be sufficient. The Company does not expect to post any collateral which will have a material adverse impact on the Company’s results of operations, financial position or cash flows. |
General Taxes
General Taxes | 12 Months Ended |
Dec. 31, 2018 | |
General Taxes [Abstract] | |
General Taxes | Note 13: General Taxes The following table provides the components of general tax expense for the years ended December 31 : 2018 2017 2016 Gross receipts and franchise $ 112 $ 110 $ 106 Property and capital stock 120 105 106 Payroll 33 31 32 Other general 12 13 14 Total general taxes $ 277 $ 259 $ 258 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14: Income Taxes The following table provides the components of income tax expense for the years ended December 31 : 2018 2017 2016 Current income taxes: State $ 26 $ 25 $ 20 Federal 1 (1 ) 1 Total current income taxes $ 27 $ 24 $ 21 Deferred income taxes: State $ 33 $ 50 $ 24 Federal 163 413 258 Amortization of deferred investment tax credits (1 ) (1 ) (1 ) Total deferred income taxes 195 462 281 Provision for income taxes $ 222 $ 486 $ 302 The following table provides a reconciliation between the statutory federal income tax rate and the Company’s effective tax rate for the years ended December 31 : 2018 2017 2016 Income tax at statutory rate 21.0 % 35.0 % 35.0 % Increases (decreases) resulting from: State taxes, net of federal taxes 5.5 % 5.4 % 3.8 % TCJA 1.5 % 13.7 % — % Other, net 0.2 % (0.8 )% 0.4 % Effective tax rate 28.2 % 53.3 % 39.2 % On December 22, 2017 , President Trump signed into law the TCJA. Substantially all of the provisions of the TCJA are effective for taxable years beginning after December 31, 2017. The TCJA includes significant changes to the Internal Revenue Code of 1986, including amendments which significantly change the taxation of individuals and business entities, and includes specific provisions related to regulated public utilities. The more significant changes that impact the Company included in the TCJA are reductions in the corporate federal income tax rate from 35% to 21% , and several technical provisions including, among others, limiting the utilization of net operating losses (“NOLs”) arising after December 31, 2017 to 80% of taxable income with an indefinite carryforward. The specific provisions related to regulated public utilities in the TCJA generally allow for the continued deductibility of interest expense, the elimination of full expensing for tax purposes of certain property acquired after September 27, 2017 and continue certain rate normalization requirements for accelerated depreciation benefits. Non-regulated segments of the Company’s business may be able to take advantage of the full expensing provisions of the TCJA. Changes in the Code from the TCJA had a material impact on the Company’s financial statements in 2017. Under GAAP, specifically Accounting Standards Codification Topic 740, Income Taxes (“ASC 740”), the tax effects of changes in tax laws must be recognized in the period in which the law is enacted. ASC 740 also requires deferred income tax assets and liabilities to be measured at the enacted tax rate expected to apply when temporary differences are to be realized or settled. Thus, at the date of enactment, the Company’s deferred income taxes were re-measured based upon the new tax rate. For the Company’s regulated entities, substantially all of the change in deferred income taxes are recorded as either an offset to a regulatory asset or liability because changes are expected to be recovered by or refunded to customers. For the Company’s unregulated operations, the change in deferred income taxes is recorded as a non-cash re-measurement adjustment to earnings. The staff of the U.S. Securities and Exchange Commission recognized the complexity of reflecting the impacts of the TCJA, and on December 22, 2017 issued guidance in Staff Accounting Bulletin 118 (“SAB 118”) which clarifies accounting for income taxes under ASC 740 if information is not yet available or complete and provides for up to a one year period in which to complete the required analyses and accounting. The Company made a reasonable estimate for the measurement and accounting of certain effects of the TCJA which were reflected in the financial statements as of December 31, 2017. The re-measurement of deferred income taxes at the new federal tax rate increased the 2017 deferred income tax provision by $125 million for the year ending December 31, 2017. Additionally, the accumulated deferred income tax liability decreased by $1.39 billion and regulatory liabilities increased by $1.51 billion , respectively, as of December 31, 2017. As of December 31, 2018 , the Company has recorded all its reasonable estimates resulting from the TCJA under SAB 118. These estimates, however, are still subject to changes due to the future impacts of various items, including further changes in income tax laws, forecasted financial conditions and the actual tax return filings with the tax authorities. ASC 740 requires the re-measurement of deferred income tax assets and liabilities as a result of a change in tax laws or rates to be presented in net income. Adjusting temporary differences originally recorded to AOCI through the income statement result in disproportionate tax effects remaining in AOCI. As of December 31, 2018, the Company adopted Accounting Standards Update 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows companies to reclassify the income tax effects of TCJA on items within AOCI to retained earnings. As a result of the TCJA tax rate reduction, there were income tax effects related to the Company’s hedge and pension positions of $2 million and $22 million , respectively, remaining in the Company’s accumulated other comprehensive loss balance. The Company reclassified these tax effects from accumulated other comprehensive loss to accumulated deficit as of December 31, 2018 . During 2018, the Company continued to assess the impacts of the TCJA and filed its 2017 federal and state income tax returns. As of December 31, 2018, the Company completed its analysis of the estimated impact of TCJA on its federal and state income taxes based on information available to date, and recorded adjustments to its provisional estimates under SAB 118 in the amount of $12 million . These estimates may be revised in the future for changes in income tax laws, additional regulatory guidance, changes to forecasted financial conditions, and actual tax return filings with the tax authorities. The following table provides the components of the net deferred tax liability as of December 31 : 2018 2017 Deferred tax assets: Advances and contributions $ 402 $ 395 Tax losses and credits 131 196 Regulatory income tax assets 339 327 Pension and other postretirement benefits 91 96 Other 44 49 Total deferred tax assets 1,007 1,063 Valuation allowance (14 ) (13 ) Total deferred tax assets, net of allowance $ 993 $ 1,050 Deferred tax liabilities: Property, plant and equipment $ 2,537 $ 2,429 Deferred pension and other postretirement benefits 77 69 Other 97 103 Total deferred tax liabilities 2,711 2,601 Total deferred tax liabilities, net of deferred tax assets $ (1,718 ) $ (1,551 ) As of December 31, 2018 and 2017 , the Company recognized federal NOL carryforwards of $707 million and $1.05 billion , respectively. The Company believes the federal NOL carryforwards are more likely than not to be recovered and require no valuation allowance. The Company’s federal NOL carryforwards will begin to expire in 2028 . As of December 31, 2018 and 2017 , the Company had state NOLs of $547 million and $322 million , respectively, a portion of which are offset by a valuation allowance because the Company does not believe these NOLs are more likely than not to be realized. The state NOL carryforwards began to expire in 2018 through 2037 . As of December 31, 2018 and 2017 , the Company had an insignificant amount of Canadian NOL carryforwards and capital loss carryforwards for federal income tax purposes. The Company files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local or non-U.S. income tax examinations by tax authorities for years on or before 2012. The Company has state income tax examinations in progress and does not expect material adjustments to result. The following table provides the changes in gross liability, excluding interest and penalties, for unrecognized tax benefits: Amount Balance as of January 1, 2017 $ 169 Increases in current period tax positions 8 Decreases in prior period measurement of tax positions (71 ) Balance as of December 31, 2017 $ 106 Increases in current period tax positions 13 Decreases in prior period measurement of tax positions (22 ) Balance as of December 31, 2018 $ 97 The Company’s tax positions relate primarily to the deductions claimed for repair and maintenance costs on its utility plant. The gross liability was reduced primarily as a result of the Section 481(a) adjustment allocated for the current year related to the accounting method change the Company filed with its 2015 tax return. The Company does not anticipate material changes to its unrecognized tax benefits within the next year. However, the Company expects to utilize a significant portion of the remaining NOLs in 2019 and fully utilize its NOLs in 2020, as a result, a balance sheet reclassification between the unrecognized tax benefits and deferred income tax asset is anticipated due to the lack of available NOLs to offset. If the Company sustains all of its positions as of December 31, 2018 , an unrecognized tax benefit of $10 million , excluding interest and penalties, would impact the Company’s effective tax rate. The Company had an insignificant amount of interest and penalties related to its tax positions as of December 31, 2018 and 2017 . The following table provides the changes in the valuation allowance: Amount Balance as of January 1, 2016 $ 8 Decreases in current period tax positions (2 ) Balance as of December 31, 2016 $ 6 Decreases in current period tax positions 7 Balance as of December 31, 2017 $ 13 Increases in current period tax positions 1 Balance as of December 31, 2018 $ 14 |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Note 15: Employee Benefits Pension and Other Postretirement Benefits The Company maintains noncontributory defined benefit pension plans covering eligible employees of its regulated utility and shared services operations. Benefits under the plans are based on the employee’s years of service and compensation. The pension plans have been closed for all new employees. The pension plans were closed for most employees hired on or after January 1, 2006. Union employees hired on or after January 1, 2001, except for specific eligible groups specified in the plan, had their accrued benefit frozen and will be able to receive this benefit as a lump sum upon termination or retirement. Union employees hired on or after January 1, 2001 and non-union employees hired on or after January 1, 2006 are provided with a 5.25% of base pay defined contribution plan. The Company does not participate in a multi-employer plan. The Company also has unfunded noncontributory supplemental non-qualified pension plans that provide additional retirement benefits to certain employees. The Company’s pension funding practice is to contribute at least the greater of the minimum amount required by the Employee Retirement Income Security Act of 1974 or the normal cost. Further, the Company will consider additional contributions if needed to avoid “at risk” status and benefit restrictions under the Pension Protection Act of 2006 (“PPA”). The Company may also consider increased contributions, based on other financial requirements and the plans’ funded position. Pension expense in excess of the amount contributed to the pension plans is deferred by certain regulated subsidiaries pending future recovery in rates charged for utility services as contributions are made to the plans. See Note 7—Regulatory Assets and Liabilities for additional information. Pension plan assets are invested in a number of actively managed, commingled funds, and limited partnerships including equities, fixed income securities, guaranteed annuity contracts with insurance companies, real estate funds and real estate investment trusts (“REITs”). The Company maintains other postretirement benefit plans providing varying levels of medical and life insurance to eligible retirees. The retiree welfare plans are closed for union employees hired on or after January 1, 2006. The plans had previously closed for non-union employees hired on or after January 1, 2002. The Company’s policy is to fund other postretirement benefit costs up to the amount recoverable through rates. Assets of the plans are invested in a number of actively managed and commingled funds including equities and fixed income securities. The investment policy guideline of the pension plan is focused on diversification, improving returns and reducing the volatility of the funded status over a long-term horizon. The investment policy guidelines of the postretirement plans focus on the appropriate strategy given the funded status of the plans. None of the Company’s securities are included in pension or other postretirement benefit plan assets. The Company uses fair value for all classes of assets in the calculation of market-related value of plan assets. As of 2017, the fair values and asset allocations of the pension plan assets include the American Water Pension Plan, the New York Water Service Corporation Pension Plan, and the Shorelands Water Company, Inc. Pension Plan. The following tables provide the fair values and asset allocations of the pension plan assets as of December 31, 2018 and 2017 , respectively, by asset category: Asset Category 2019 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of December 31, 2018 Cash $ 24 $ 24 $ — $ — 2 % Equity securities: 50 % U.S. large cap 297 297 — — 20 % U.S. small cap 76 70 6 — 5 % International 256 2 132 122 17 % Real estate fund 65 — — 65 4 % REITs 20 — 20 — 1 % Fixed income securities: 50 % U.S. Treasury securities and government bonds 181 167 14 — 12 % Corporate bonds 491 — 491 — 33 % Mortgage-backed securities 11 — 11 — 1 % Municipal bonds 28 — 28 — 2 % Long duration bond fund 7 7 — — — Guarantee annuity contracts 43 — — 43 3 % Total 100 % $ 1,499 $ 567 $ 702 $ 230 100 % Asset Category 2018 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of December 31, 2017 Cash $ 7 $ 7 $ — $ — — Equity Securities: 50 % U.S. large cap 344 344 — — 21 % U.S. small cap 84 79 5 — 5 % International 295 2 149 144 18 % Real estate fund 86 — — 86 5 % REITs 26 — 26 — 2 % Fixed income securities: 50 % U.S. Treasury securities and government bonds 200 180 20 — 12 % Corporate bonds 519 — 519 — 31 % Mortgage-backed securities 1 — 1 — — Municipal bonds 31 — 31 — 2 % Long duration bond fund 8 8 — — 1 % Guarantee annuity contracts 48 — — 48 3 % Total 100 % $ 1,649 $ 620 $ 751 $ 278 100 % The following tables provide a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) for 2018 and 2017 , respectively: Level 3 Balance as of January 1, 2018 $ 278 Actual return on assets (23 ) Purchases, issuances and settlements, net (25 ) Balance as of December 31, 2018 $ 230 Level 3 Balance as of January 1, 2017 $ 140 Actual return on assets 2 Purchases, issuances and settlements, net 136 Balance as of December 31, 2017 $ 278 The Company’s postretirement benefit plans have different levels of funded status and the assets are held under various trusts. The investments and risk mitigation strategies for the plans are tailored specifically for each trust. In setting new strategic asset mixes, consideration is given to the likelihood that the selected asset allocation will effectively fund the projected plan liabilities and meet the risk tolerance criteria of the Company. The Company periodically updates the long-term, strategic asset allocations for these plans through asset liability studies and uses various analytics to determine the optimal asset allocation. Considerations include plan liability characteristics, liquidity needs, funding requirements, expected rates of return and the distribution of returns. In 2012, the Company implemented a de-risking strategy for the American Water Pension Plan after conducting an asset-liability study to reduce the volatility of the funded status of the plan. As part of the de-risking strategy, the Company revised the asset allocations to increase the matching characteristics of fixed-income assets relative to liabilities. The fixed income portion of the portfolio was designed to match the bond-like and long-dated nature of the postretirement liabilities. In 2017, the Company further increased its exposure to liability-driven investing and increased its fixed-income allocation to 50% , up from 40% , in an effort to further decrease the funded status volatility of the plan and hedge the portfolio from movements in interest rates. In 2012, the Company also implemented a de-risking strategy for the medical bargaining trust within the plan to minimize volatility. In 2017, the Company conducted a new asset-liability study that indicated medical trend inflation that outpaced the Consumer Price Index by more than 2% for the last 20 years. Given continuously rising medical costs, the Company decided to increase the equity exposure of the portfolio to 30% , up from 20% , while reducing the fixed-income portion of the portfolio from 80% to 70% . The Company also conducted an asset-liability study for the Postretirement Non-Bargaining Medical Plan. Its allocation was adjusted to make it more conservative, reducing the equity allocation from 70% to 60% and increasing the fixed-income allocation from 30% to 40% . The Postretirement Medical Non-Bargaining plan’s equity allocation was reduced due to the cap on benefits for some non-union participants and resultant reduction in the plan’s liabilities. In 2018, the Company announced plan design changes to the medical bargaining benefit plan, which resulted in a cap on future benefits and an over funded postretirement medical benefits bargaining plan. Given the change in funded status, the Retirement and Benefit Plans Investment Committee (the “Investment Committee”), which is responsible for overseeing the investment of the Company’s pension and other postretirement benefit plans’ assets, commissioned a new asset-liability study for the postretirement medical bargaining plan. This study concluded that it was prudent to decrease the risk in the plan and to remove its equity exposure. The study also recommended reducing its exposure to changes in interest rates by matching the assets of the plan to the projected cash flows for future benefit payments of the liability. The Investment Committee agreed with the recommendations and voted to invest the postretirement medical bargaining plan assets in fixed-income securities. The restructuring of the plan was initiated towards the end of 2018. Once fully completed, the plans assets will be invested in fixed-income securities. The majority of the securities will be used to match the projected cash flows for future benefit payments of the liability. Plan assets in excess of those securities designed to match the long-term liabilities will be invested in shorter duration securities with a duration of about three years . The Company engages third-party investment managers for all invested assets. Managers are not permitted to invest outside of the asset class (e.g. fixed income, equity, alternatives) or strategy for which they have been appointed. Investment management agreements and recurring performance and attribution analysis are used as tools to ensure investment managers invest solely within the investment strategy they have been provided. Futures and options may be used to adjust portfolio duration to align with a plan’s targeted investment policy. In order to minimize asset volatility relative to the liabilities, a portion of plan assets is allocated to fixed income investments that are exposed to interest rate risk. Increases in interest rates generally will result in a decline in the value of fixed income assets while reducing the present value of the liabilities. Conversely, rate decreases will increase fixed income assets, partially offsetting the related increase in the liabilities. Within equities, risk is mitigated by constructing a portfolio that is broadly diversified by geography, market capitalization, manager mandate size, investment style and process. For the postretirement medical bargaining plan, all of its assets are in fixed-income securities and the asset structure is designed to meet the cash flows of the liabilities. This design reduces the plan’s exposure to changes in interest rates. Actual allocations to each asset class vary from target allocations due to periodic investment strategy updates, market value fluctuations, the length of time it takes to fully implement investment allocations, and the timing of benefit payments and contributions. The asset allocation is rebalanced on a quarterly basis, if necessary. Voluntary Employees’ Beneficiary Association (“VEBA”) Trust assets include the American Water Postretirement Medical Benefits Bargaining Plan, the New York Water Service Corporation Postretirement Medical Benefits Bargaining Plan, the American Water Postretirement Medical Benefits Non-Bargaining Plan, and the American Water Life Insurance Trust. The following tables provide the fair values and asset allocations of the postretirement benefit plan assets as of December 31, 2018 and 2017 , respectively, by asset category: Asset Category 2019 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of December 31, 2018 Bargain VEBA: Cash $ 31 $ 31 $ — $ — — Equity securities: 2 % U.S. large cap 1 1 — — — International 17 — — 17 4 % Fixed income securities: 98 % U.S. Treasury securities and government bonds 179 178 1 — 47 % Corporate bonds 141 — 141 — 37 % Municipal bonds 9 — 9 — 3 % Long duration bond fund 4 4 — — 1 % Future and option contracts (a) — — — — 8 % Total bargain VEBA 100 % $ 382 $ 214 $ 151 $ 17 100 % Non-bargain VEBA: Cash $ 3 $ 3 $ — $ — — Equity securities: 60 % U.S. large cap 43 43 — — 35 % International 24 24 — — 20 % Fixed income securities: 40 % Core fixed income bond fund (a) 52 — 52 — 45 % Total non-bargain VEBA 100 % $ 122 $ 70 $ 52 $ — 100 % Life VEBA: Equity securities: 70 % U.S. large cap 2 2 — — 67 % Fixed income securities: 30 % Core fixed income bond fund (a) 1 1 — — 33 % Total life VEBA 100 % $ 3 $ 3 $ — $ — 100 % Total 100 % $ 507 $ 287 $ 203 $ 17 100 % (a) Includes cash for margin requirements. Asset Category 2018 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of 12/31/2017 Bargain VEBA: Cash $ 18 $ 18 $ — $ — — Equity securities: 30 % U.S. large cap 44 44 — — 10 % International 51 51 — — 12 % Fixed income securities: 70 % U.S. Treasury securities and government bonds 48 21 27 — 11 % Corporate bonds 233 — 233 — 55 % Municipal bonds 26 — 26 — 6 % Long duration bond fund 4 4 — — 1 % Future and option contracts (a) 2 2 — — 5 % Total bargain VEBA 100 % $ 426 $ 140 $ 286 $ — 100 % Non-bargain VEBA: Cash $ 1 $ 1 $ — $ — — Equity securities: 60 % U.S. large cap 53 53 — — 37 % U.S. small cap 5 5 — — 4 % International 47 47 — — 33 % Fixed income securities: 40 % Core fixed income bond fund (a) 36 36 — — 26 % Total non-bargain VEBA 100 % $ 142 $ 142 $ — $ — 100 % Life VEBA: Cash $ 3 $ 3 $ — $ — — Equity securities: 70 % U.S. large cap 3 3 — — 38 % Fixed income securities: 30 % Core fixed income bond fund (a) 2 2 — — 62 % Total life VEBA 100 % $ 8 $ 8 $ — $ — 100 % Total 100 % $ 576 $ 290 $ 286 $ — 100 % (a) Includes cash for margin requirements. Valuation Techniques Used to Determine Fair Value Cash—Cash and investments with maturities of three months or less when purchased, including certain short-term fixed-income securities, are considered cash and are included in the recurring fair value measurements hierarchy as Level 1. Equity securities—For equity securities, the trustees obtain prices from pricing services, whose prices are obtained from direct feeds from market exchanges, that the Company is able to independently corroborate. Equity securities are valued based on quoted prices in active markets and categorized as Level 1. Certain equities, such as international securities held in the pension plan are invested in commingled funds and/or limited partnerships. These funds are valued to reflect the plan fund’s interest in the fund based on the reported year-end net asset value. Since net asset value is not directly observable or not available on a nationally recognized securities exchange for the commingled funds, they are categorized as Level 2. For limited partnerships, the assets as a whole are categorized as Level 3 due to the fact that the partnership provides the pricing and the pricing inputs are less readily observable. In addition, the limited partnership vehicle cannot be readily traded. Fixed-income securities—The majority of U.S. Treasury securities and government bonds have been categorized as Level 1 because they trade in highly-liquid and transparent markets and their prices can be corroborated. The fair values of corporate bonds, mortgage backed securities, and certain government bonds are based on prices that reflect observable market information, such as actual trade information of similar securities. They are categorized as Level 2 because the valuations are calculated using models which utilize actively traded market data that the Company can corroborate. Exchange-traded options and futures, for which market quotations are readily available, are valued at the last reported sale price or official closing price on the primary market or exchange on which they are traded and are classified as Level 1. Real estate fund—Real estate fund is categorized as Level 3 as the fund uses significant unobservable inputs for fair value measurement and the vehicle is in the form of a limited partnership. REITs—REITs are invested in commingled funds. Commingled funds are valued to reflect the plan fund’s interest in the fund based on the reported year-end net asset value. Since the net asset value is not directly observable for the commingled funds, they are categorized as Level 2. Guaranteed annuity contracts—Guaranteed annuity contracts are categorized as Level 3 because the investments are not publicly quoted. Since these market values are determined by the provider, they are not highly observable and have been categorized as Level 3. Exchange-traded future and option positions are reported in accordance with changes in variation margins that are settled daily. The following table provides a rollforward of the changes in the benefit obligation and plan assets for the two most recent years, for all plans combined: Pension Benefits Other Benefits 2018 2017 2018 2017 Change in benefit obligation: Benefit obligation as of January 1, $ 2,034 $ 1,864 $ 614 $ 610 Service cost 34 33 8 10 Interest cost 76 80 20 26 Plan participants' contributions — — 2 2 Plan amendments (23 ) — (174 ) — Actuarial (gain) loss (153 ) 118 (89 ) (9 ) Acquisitions — 9 — — Gross benefits paid (76 ) (70 ) (29 ) (26 ) Federal subsidy — — 1 1 Benefit obligation as of December 31, $ 1,892 $ 2,034 $ 353 $ 614 Change in plan assets: Fair value of plan assets as of January 1, $ 1,649 $ 1,443 $ 576 $ 525 Actual return on plan assets (97 ) 227 (40 ) 69 Employer contributions 24 42 (2 ) 6 Plan participants' contributions — — 2 2 Acquisitions — 7 — — Benefits paid (77 ) (70 ) (29 ) (26 ) Fair value of plan assets as of December 31, $ 1,499 $ 1,649 $ 507 $ 576 Funded value as of December 31, $ (393 ) $ (385 ) $ 154 $ (38 ) Amounts recognized on the balance sheet: Noncurrent asset $ — $ — $ 155 $ 2 Current liability (3 ) (1 ) — — Noncurrent liability (390 ) (384 ) (1 ) (40 ) Net amount recognized $ (393 ) $ (385 ) $ 154 $ (38 ) The pension and postretirement plans were negatively impacted from the market’s volatile and abrupt fourth quarter 2018 decline, that reversed all market gains in 2018. On July 31, 2016, the other postretirement benefit plan was re-measured to reflect a plan amendment, which capped benefits for certain non-union plan participants. The re-measurement included a $156 million reduction in future benefits payable to plan participants, and resulted in an $89 million reduction to the net accrued postretirement benefit obligation. The plan amendment will be amortized over 10.2 years, the average future working lifetime to full eligibility age for all plan participants. On August 31, 2018 , the Postretirement Medical Benefit Plan was remeasured to reflect a plan change. The plan change resulted in a $175 million reduction in future benefits payable to plan participants, and, in combination with other experience reflected as of the remeasurement date, resulted in a $227 million reduction to the net accumulated postretirement benefit obligation. The following table provides the components of accumulated other comprehensive income and regulatory assets that have not been recognized as components of periodic benefit costs as of December 31 : Pension Benefits Other Benefits 2018 2017 2018 2017 Net actuarial loss $ 431 $ 416 $ 83 $ 108 Prior service cost (credit) (22 ) 2 (291 ) (140 ) Net amount recognized $ 409 $ 418 $ (208 ) $ (32 ) Regulatory assets (liabilities) $ 352 $ 270 $ (208 ) $ (32 ) Accumulated other comprehensive income 57 148 — — Total $ 409 $ 418 $ (208 ) $ (32 ) The following table provides the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with a projected obligation in excess of plan assets as of December 31, 2018 and 2017 : Projected Benefit Obligation Exceeds the Fair Value of Plans' Assets 2018 2017 Projected benefit obligation $ 1,892 $ 2,034 Fair value of plan assets 1,499 1,649 Accumulated Benefit Obligation Exceeds the Fair Value of Plans' Assets 2018 2017 Accumulated benefit obligation $ 1,768 $ 1,888 Fair value of plan assets 1,499 1,649 The accumulated postretirement plan assets exceed benefit obligations for all of the Company’s other postretirement benefit plans, except for the Northern Illinois Retiree Welfare Plan. In August 2006, the PPA was signed into law in the U.S. The PPA replaces the funding requirements for defined benefit pension plans by requiring that defined benefit plans contribute to 100% of the current liability funding target over seven years. Defined benefit plans with a funding status of less than 80% of the current liability are defined as being “at risk” and additional funding requirements and benefit restrictions may apply. The PPA was effective for the 2008 plan year with short-term phase-in provisions for both the funding target and at-risk determination. The Company’s qualified defined benefit plan is currently funded above the at-risk threshold, and therefore the Company expects that the plans will not be subject to the “at risk” funding requirements of the PPA. The Company is proactively monitoring the plan’s funded status and projected contributions under the law to appropriately manage the potential impact on cash requirements. Minimum funding requirements for the qualified defined benefit pension plan are determined by government regulations and not by accounting pronouncements. The Company plans to contribute amounts at least equal to or greater than the minimum required contributions or the normal cost in 2019 to the qualified pension plans. The Company plans to contribute to its 2019 other postretirement benefit cost for rate-making purposes. The following table provides information about the expected cash flows for the pension and postretirement benefit plans: Pension Benefits Other Benefits 2019 expected employer contributions: To plan trusts $ 31 $ — To plan participants 2 — The following table provides the net benefits expected to be paid from the plan assets or the Company’s assets: Pension Benefits Other Benefits Expected Benefit Payments Expected Benefit Payments Expected Federal Subsidy Payments 2019 $ 102 $ 27 $ 1 2020 107 27 1 2021 111 28 1 2022 115 28 1 2023 120 28 1 2024-2028 634 136 6 Because the above amounts are net benefits, plan participants’ contributions have been excluded from the expected benefits. Accounting for pensions and other postretirement benefits requires an extensive use of assumptions about the discount rate, expected return on plan assets, the rate of future compensation increases received by the Company’s employees, mortality, turnover and medical costs. Each assumption is reviewed annually. The assumptions are selected to represent the average expected experience over time and may differ in any one year from actual experience due to changes in capital markets and the overall economy. These differences will impact the amount of pension and other postretirement benefit expense that the Company recognizes. The following table provides the significant assumptions related to the pension and other postretirement benefit plans: Pension Benefits Other Benefits 2018 2017 2016 2018 2017 2016 Weighted average assumptions used to determine December 31 benefit obligations: Discount rate 4.38% 3.75% 4.28% 4.32% 3.73% 4.26% Rate of compensation increase 3.00% 3.02% 3.07% N/A N/A N/A Medical trend N/A N/A N/A graded from graded from graded from 6.75% in 2019 7.00% in 2018 7.00% in 2017 to 5.00% in 2026+ to 4.50% in 2026+ to 5.00% in 2021+ Weighted average assumptions used to determine net periodic cost: Discount rate 3.75% 4.28% 4.66% 4.23% 4.26% 3.66% Expected return on plan assets 5.95% 6.49% 7.02% 4.77% 5.09% 5.37% Rate of compensation increase 3.02% 3.07% 3.10% N/A N/A N/A Medical trend N/A N/A N/A graded from graded from graded from 7.00% in 2018 7.00% in 2017 6.50% in 2016 to 4.50% in 2026+ to 5.00% in 2021+ to 5.00% in 2021+ NOTE “N/A” in the table above means assumption is not applicable. The discount rate assumption was determined for the pension and postretirement benefit plans independently. At year-end 2011, the Company began using an approach that approximates the process of settlement of obligations tailored to the plans’ expected cash flows by matching the plans’ cash flows to the coupons and expected maturity values of individually selected bonds. Historically, for each plan, the discount rate was developed at the level equivalent rate that would produce the same present value as that using spot rates aligned with the projected benefit payments. The expected long-term rate of return on plan assets is based on historical and projected rates of return, prior to administrative and investment management fees, for current and planned asset classes in the plans’ investment portfolios. Assumed projected rates of return for each of the plans’ projected asset classes were selected after analyzing historical experience and future expectations of the returns and volatility of the various asset classes. Based on the target asset allocation for each asset class, the overall expected rate of return for the portfolio was developed, adjusted for historical and expected experience of active portfolio management results compared to the benchmark returns. The Company’s pension expense increases as the expected return on assets decreases. The Company used an expected return on plan assets of 5.95% to estimate its 2018 pension benefit costs, and an expected blended return based on weighted assets of 4.77% to estimate its 2018 other postretirement benefit costs. In the determination of year end 2014 projected benefit plan obligations, the Company adopted a new table based on the Society of Actuaries RP 2014 mortality table including a generational BB-2D projection scale. The adoption resulted in a significant increase to pension and other postretirement benefit plans’ projected benefit obligations. In 2015, a new MP 2015 Projection Scale was issued, but not adopted by the Company since all of the experience upon which the MP 2015 Projection Scale is based was considered by the Company in selecting its 2014 assumptions. For year-end 2017, the Company retained the Society of Actuaries RP-2014 mortality table as its base mortality table but adopted the new MP-2017 generational projection scale to project mortality improvements after 2006. In 2018, the Company adopted the new MP-2018 mortality improvement scale to gradually adjust future mortality rates downward. The following table provides the components of net periodic benefit costs for the years ended December 31 : 2018 2017 2016 Components of net periodic pension benefit cost: Service cost $ 34 $ 33 $ 32 Interest cost 76 80 80 Expected return on plan assets (97 ) (93 ) (95 ) Amortization of: Prior service cost (credit) 1 1 1 Actuarial (gain) loss 27 34 27 Net periodic pension benefit cost $ 41 $ 55 $ 45 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Current year actuarial (gain) loss (60 ) (7 ) 21 Amortization of actuarial gain (loss) (7 ) (7 ) (6 ) Total recognized in other comprehensive income $ (67 ) $ (14 ) $ 15 Total recognized in net periodic benefit cost and other comprehensive income $ (26 ) $ 41 $ 60 Components of net periodic other postretirement benefit cost: Service cost $ 8 $ 10 $ 12 Interest cost 20 26 28 Expected return on plan assets (26 ) (26 ) (27 ) Amortization of: Prior service cost (credit) (23 ) (18 ) (9 ) Actuarial (gain) loss 3 10 5 Net periodic other postretirement benefit cost $ (18 ) $ 2 $ 9 The Company’s policy is to recognize curtailments when the total expected future service of plan participants is reduced by greater than 10% due to an event that results in terminations and/or retirements. Cumulative gains and losses that are in excess of 10% of the greater of either the projected benefit obligation or the fair value of plan assets are amortized over the expected average remaining future service of the current active membership for the plans. Savings Plans for Employees The Company maintains 401(k) savings plans that allow employees to save for retirement on a tax-deferred basis. Employees can make contributions that are invested at their direction in one or more funds. The Company makes matching contributions based on a percentage of an employee’s contribution, subject to certain limitations. Due to the Company’s discontinuing new entrants into the defined benefit pension plan, on January 1, 2006, the Company began providing an additional 5.25% of base pay defined contribution benefit for union employees hired on or after January 1, 2001 and non-union employees hired on or after January 1, 2006. Plan expenses totaled $12 million , $13 million and $9 million for 2018 , 2017 and 2016 , respectively. All of the Company’s contributions are invested in one or more funds at the direction of the employees. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 16: Commitments and Contingencies Commitments have been made in connection with certain construction programs. The estimated capital expenditures required under legal and binding contractual obligations amounted to $419 million as of December 31, 2018 . The Company’s regulated subsidiaries maintain agreements with other water purveyors for the purchase of water to supplement their water supply. The following table provides the future annual commitments related to minimum quantities of purchased water having non-cancelable: Amount 2019 $ 65 2020 65 2021 65 2022 64 2023 57 Thereafter 641 The Company enters into agreements for the provision of services to water and wastewater facilities for the United States military, municipalities and other customers. See Note 3—Revenue Recognition for additional information regarding the Company’s performance obligations. Contingencies The Company is routinely involved in legal actions incident to the normal conduct of its business. As of December 31, 2018 , the Company has accrued approximately $54 million of probable loss contingencies and has estimated that the maximum amount of losses associated with reasonably possible loss contingencies that can be reasonably estimated is $26 million . For certain matters, claims and actions, the Company is unable to estimate possible losses. The Company believes that damages or settlements, if any, recovered by plaintiffs in such matters, claims or actions, other than as described in this Note 16—Commitments and Contingencies , will not have a material adverse effect on the Company. West Virginia Elk River Freedom Industries Chemical Spill On June 8, 2018, the U.S. District Court for the Southern District of West Virginia granted final approval of a settlement class and global class action settlement (the “Settlement”) for all claims and potential claims by all putative class members (collectively, the “Plaintiffs”) arising out of the January 2014 Freedom Industries, Inc. chemical spill in West Virginia. The effective date of the Settlement is July 16, 2018. Under the terms and conditions of the Settlement, West Virginia-American Water Company (“WVAWC”) and certain other Company affiliated entities (collectively, the “American Water Defendants”) did not admit, and will not admit, any fault or liability for any of the allegations made by the Plaintiffs in any of the actions that were resolved. Under federal class action rules, claimants had the right, until December 8, 2017, to elect to opt out of the final Settlement. Less than 100 of the 225,000 estimated putative class members elected to opt out from the Settlement, and these claimants will not receive any benefit from or be bound by the terms of the Settlement. In June 2018, the Company and its remaining non-participating general liability insurance carrier settled for a payment to the Company of $20 million , out of a maximum of $25 million in potential coverage under the terms of the relevant policy, in exchange for a full release by the American Water Defendants of all claims against the insurance carrier related to the Freedom Industries chemical spill. As a result, the aggregate pre-tax amount to be contributed by WVAWC of the $126 million Settlement with respect to the Company, net of insurance recoveries, is $23 million . As of December 31, 2018 , $40 million of the aggregate settlement amount of $126 million , reflecting payments made by the Company under the terms of the Settlement, is reflected in Accrued liabilities, and the offsetting insurance receivables are reflected in Other current assets on the Consolidated Balance Sheet. The Company has funded WVAWC’s contributions to the Settlement through existing sources of liquidity. In April 2017, the Lincoln County (West Virginia) Commission (the “LCC”) filed a complaint in Lincoln County state court against WVAWC and certain other defendants not affiliated with the Company, which in June 2017 was transferred to the West Virginia Mass Litigation Panel, alleging that the Freedom Industries chemical spill caused a public nuisance in Lincoln County under an ordinance enacted by the LCC in March 2017, more than three years after the Freedom Industries chemical spill occurred. The complaint sought an injunction against WVAWC that would have required the creation of various databases and public repositories of documents related to the Freedom Industries chemical spill, as well as further study and risk assessments regarding the alleged exposure of Lincoln County residents to the released chemicals. On July 31, 2018, WVAWC filed a motion to dismiss the LCC’s complaint. On December 12, 2018, the Mass Litigation Panel granted WVAWC’s motion to dismiss on several grounds, including being barred by the applicable statute of limitations, failure to allege a nuisance under applicable law, lack of standing, improper retroactive application of the nuisance ordinance and violation of WVAWC’s due process. The LCC voted not to appeal this decision. Dunbar, West Virginia Water Main Break Class Action Litigation On the evening of June 23, 2015, a 36-inch pre-stressed concrete transmission water main, installed in the early 1970s, failed. The water main is part of WVAWC’s West Relay pumping station located in the City of Dunbar. The failure of the main caused water outages and low pressure to up to approximately 25,000 WVAWC customers. In the early morning hours of June 25, 2015, crews completed a repair, but that same day, the repair developed a leak. On June 26, 2015, a second repair was completed and service was restored that day to approximately 80% of the impacted customers, and to the remaining approximately 20% by the next morning. The second repair showed signs of leaking but the water main was usable until June 29, 2015 to allow tanks to refill. The system was reconfigured to maintain service to all but approximately 3,000 customers while a final repair was completed safely on June 30, 2015. Water service was fully restored by July 1, 2015 to all customers affected by this event. On June 2, 2017, a class action complaint was filed in West Virginia Circuit Court in Kanawha County against WVAWC on behalf of a purported class of residents and business owners who lost water service or pressure as a result of the Dunbar main break. The complaint alleges breach of contract by WVAWC for failure to supply water, violation of West Virginia law regarding the sufficiency of WVAWC’s facilities and negligence by WVAWC in the design, maintenance and operation of the water system. The plaintiffs seek unspecified alleged damages on behalf of the class for lost profits, annoyance and inconvenience, and loss of use, as well as punitive damages for willful, reckless and wanton behavior in not addressing the risk of pipe failure and a large outage. In October 2017, WVAWC filed with the court a motion seeking to dismiss all of the plaintiffs’ counts alleging statutory and common law tort claims. Furthermore, WVAWC asserted that the Public Service Commission of West Virginia, and not the court, has primary jurisdiction over allegations involving violations of the applicable tariff, the public utility code and related rules. On May 30, 2018, the court, at a hearing, denied WVAWC’s motion to apply the primary jurisdiction doctrine, and on October 11, 2018, the court issued a written order to that effect. The court has not yet issued a written order on WVAWC’s motion to dismiss plaintiffs’ tort claims. The court has requested the parties submit a scheduling order with a trial date of August 26, 2019, and WVAWC has sought to prevent further discovery while its motion to dismiss is pending. The Company and WVAWC believe that WVAWC has valid, meritorious defenses to the claims raised in this class action complaint. WVAWC is vigorously defending itself against these allegations. Given the current stage of this proceeding, the Company cannot reasonably estimate the amount of any reasonably possible losses or a range of such losses related to this proceeding. |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Note 17: Earnings per Common Share The following table provides a reconciliation of the numerator and denominator for basic and diluted earnings per share (“EPS”) calculations for the years ended December 31 : 2018 2017 2016 Numerator: Net income attributable to common shareholders $ 567 $ 426 $ 468 Denominator: Weighted average common shares outstanding—Basic 180 178 178 Effect of dilutive common stock equivalents — 1 1 Weighted average common shares outstanding—Diluted 180 179 179 The effect of dilutive common stock equivalents is related to outstanding stock options, RSUs and PSUs granted under the 2007 and 2017 Omnibus Equity Compensation Plans, as well as estimated shares to be purchased under the Company’s 2017 Nonqualified Employee Stock Purchase Plan. Less than one million share-based awards were excluded from the computation of diluted EPS for the years ended December 31, 2018 , 2017 and 2016 , because their effect would have been anti-dilutive under the treasury stock method. Equity Forward Transaction and Common Stock Issuance See Note 4—Acquisitions and Divestitures for information regarding the forward sale agreements entered into by the Company on April 11, 2018 , and the physical settlement of these agreements on June 7, 2018 . |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Values of Financial Instruments | Note 18: Fair Value of Financial Information The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: Current assets and current liabilities—The carrying amounts reported on the Consolidated Balance Sheets for current assets and current liabilities, including revolving credit debt, due to the short-term maturities and variable interest rates, approximate their fair values. Preferred stock with mandatory redemption requirements and long-term debt—The fair values of preferred stock with mandatory redemption requirements and long-term debt are categorized within the fair value hierarchy based on the inputs that are used to value each instrument. The fair value of long-term debt classified as Level 1 is calculated using quoted prices in active markets. Level 2 instruments are valued using observable inputs and Level 3 instruments are valued using observable and unobservable inputs. The fair values of instruments classified as Level 2 and Level 3 are determined by a valuation model that is based on a conventional discounted cash flow methodology and utilizes assumptions of current market rates. As a majority of the Company’s debt is not traded in active markets, the Company calculated a base yield curve using a risk-free rate (a U.S. Treasury securities yield curve) plus a credit spread that is based on the following two factors: an average of the Company’s own publicly-traded debt securities and the current market rates for U.S. Utility A debt securities. The Company used these yield curve assumptions to derive a base yield for the Level 2 and Level 3 securities. Additionally, the Company adjusted the base yield for specific features of the debt securities including call features, coupon tax treatment and collateral for the Level 3 instruments. The following tables provide the carrying amounts, including fair value adjustments previously recognized in acquisition purchase accounting, and a fair value adjustment related to interest rate swap fair value hedges (classified as Level 2 in the fair value hierarchy), and the fair values of the financial instruments: Carrying Amount December 31, 2018 L e vel 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 8 $ — $ — $ 9 $ 9 Long-term debt (excluding capital lease obligations) 7,638 5,760 433 1,728 7,921 Carrying Amount December 31, 2017 L e vel 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 10 $ — $ — $ 14 $ 14 Long-term debt (excluding capital lease obligations) 6,809 4,846 976 1,821 7,643 Fair Value Measurements To increase consistency and comparability in fair value measurements, GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date. Financial assets and liabilities utilizing Level 1 inputs include active exchange-traded equity securities, exchange-based derivatives, mutual funds and money market funds. Level 2—Inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange-based derivatives, commingled investment funds not subject to purchase and sale restrictions and fair-value hedges. Level 3—Unobservable inputs, such as internally-developed pricing models for the asset or liability due to little or no market activity for the asset or liability. Financial assets and liabilities utilizing Level 3 inputs include infrequently-traded non-exchange-based derivatives and commingled investment funds subject to purchase and sale restrictions. Recurring Fair Value Measurements The following tables provide assets and liabilities measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy as of December 31, 2018 and 2017 , respectively: December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Restricted funds $ 29 $ — $ — $ 29 Rabbi trust investments 15 — — 15 Deposits 3 — — 3 Other investments 3 — — 3 Total assets 50 — — 50 Liabilities: Deferred compensation obligations 17 — — 17 Mark-to-market derivative liabilities — 14 — 14 Total liabilities 17 14 — 31 Total assets (liabilities) $ 33 $ (14 ) $ — $ 19 December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Restricted funds $ 28 $ — $ — $ 28 Rabbi trust investments 15 — — 15 Deposits 4 — — 4 Other investments 3 — — 3 Total assets 50 — — 50 Liabilities: Deferred compensation obligations 17 — — 17 Mark-to-market derivative liabilities — 3 — 3 Total liabilities 17 3 — 20 Total assets (liabilities) $ 33 $ (3 ) $ — $ 30 Restricted funds—The Company’s restricted funds primarily represent proceeds received from financings for the construction and capital improvement of facilities and from customers for future services under operations, maintenance and repair projects. Long-term restricted funds of $1 million and $1 million were included in Other long-term assets on the Consolidated Balance Sheets as of December 31, 2018 and 2017 , respectively. Rabbi trust investments—The Company’s rabbi trust investments consist of equity and index funds from which supplemental executive retirement plan benefits and deferred compensation obligations can be paid. The Company includes these assets in Other long-term assets on the Consolidated Balance Sheets. Deposits—Deposits include escrow funds and certain other deposits held in trust. The Company includes cash deposits in Other current assets on the Consolidated Balance Sheets. Deferred compensation obligations—The Company’s deferred compensation plans allow participants to defer certain cash compensation into notional investment accounts. The Company includes such plans in Other long-term liabilities on the Consolidated Balance Sheets. The value of the Company’s deferred compensation obligations is based on the market value of the participants’ notional investment accounts. The notional investments are comprised primarily of mutual funds, which are based on observable market prices. Mark-to-market derivative assets and liabilities—The Company utilizes fixed-to-floating interest rate swaps, typically designated as fair value hedges, to achieve a targeted level of variable-rate debt as a percentage of total debt. The Company also employs derivative financial instruments in the form of variable-to-fixed interest rate swaps and forward starting interest rate swaps, classified as economic hedges and cash flow hedges, respectively, in order to fix the interest cost on existing or forecasted debt. The Company uses a calculation of future cash inflows and estimated future outflows, which are discounted, to determine the current fair value. Additional inputs to the present value calculation include the contract terms, counterparty credit risk, interest rates and market volatility. Other investments—Other investments primarily represent money market funds used for active employee benefits. The Company includes other investments in Other current assets on the Consolidated Balance Sheets. Nonrecurring Fair Value Measurements The following table provides assets measured and recorded at fair value on a nonrecurring basis and their level within the fair value hierarchy as of December 31, 2018 : At Fair Value as of December 31, 2018 Level 1 Level 2 Level 3 Total 2018 Impairment Charge Assets: Keystone goodwill (a) $ — $ — $ 38 $ 38 $ 53 Keystone intangible asset (a) — — 3 3 4 Total $ — $ — $ 41 $ 41 $ 57 (a) As of December 31, 2017, Keystone’s goodwill balance was $91 million and its intangible asset balance was $8 million . Subsequent to the impairment charge recorded in the third quarter of 2018, Keystone’s goodwill and intangible asset balances were $38 million and $3 million , respectively, as of December 31, 2018. The Company’s estimation of the fair value of the Keystone reporting unit as part of evaluating its goodwill and intangible asset for impairment represents a Level 3 fair value measurement, due to the use of internal projections and unobservable measurement inputs. See Note 8—Goodwill and Other Intangible Assets for further discussion. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Leases | Note 19: Leases The Company has entered into operating leases involving certain real property, vehicles, and equipment. Rental expenses under operating leases were $35 million , $29 million and $24 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. The operating leases for real property, vehicles, and equipment will expire over the next 40 years, seven years and five years, respectively. Certain operating leases have renewal options ranging from one to 60 years. The following table provides the minimum annual future rental commitment under operating leases that have initial or remaining non-cancelable lease terms over the next five years and thereafter: Amount 2019 $ 17 2020 15 2021 12 2022 11 2023 6 Thereafter 80 The Company has a series of agreements with various public entities (the “Partners”) to establish certain joint ventures, commonly referred to as “public-private partnerships.” Under the public-private partnerships, the Company constructed utility plant, financed by the Company, and the Partners constructed utility plant (connected to the Company’s property), financed by the Partners. The Company agreed to transfer and convey some of its real and personal property to the Partners in exchange for an equal principal amount of Industrial Development Bonds (“IDBs”), issued by the Partners under a state Industrial Development Bond and Commercial Development Act. The Company leased back the total facilities, including portions funded by both the Company and the Partners, under leases for a period of 40 years. The leases related to the portion of the facilities funded by the Company have required payments from the Company to the Partners that approximate the payments required by the terms of the IDBs from the Partners to the Company (as the holder of the IDBs). As the ownership of the portion of the facilities constructed by the Company will revert back to the Company at the end of the lease, the Company has recorded these as capital leases. The lease obligation and the receivable for the principal amount of the IDBs are presented by the Company on a net basis. The carrying value of the facilities funded by the Company recognized as a capital lease asset was $147 million and $150 million as of December 31, 2018 and 2017 , respectively, which is presented in Property, plant and equipment on the Consolidated Balance Sheets. The future payments under the lease obligations are equal to and offset by the payments receivable under the IDBs. As of December 31, 2018 , the minimum annual future rental commitment under the operating leases for the portion of the facilities funded by the Partners that have initial or remaining non-cancelable lease terms in excess of one year included in the preceding minimum annual rental commitments are $4 million in 2019 through 2023 , and $59 million thereafter. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Note 20: Segment Information The Company’s operating segments are comprised of the revenue-generating components of its businesses for which separate financial information is internally produced and regularly used by management to make operating decisions and assess performance. The Company operates its businesses primarily through one reportable segment, the Regulated Businesses segment. The Company also operates market-based businesses that provide a broad range of related and complementary water and wastewater services within non-reportable operating segments, collectively referred to as the Market-Based Businesses . The Regulated Businesses segment is the largest component of the Company’s business and includes 20 subsidiaries that provide water and wastewater services to customers in 16 states. The Company’s primary Market-Based Businesses include the Homeowner Services Group , which provides warranty protection programs to residential and smaller commercial customers; the Military Services Group , which provides water and wastewater services to the U.S. government on military installations; and Keystone, which provides water transfer services for shale natural gas exploration and production companies. The accounting policies of the segments are the same as those described in Note 2—Significant Accounting Policies . The Regulated Businesses segment and Market-Based Businesses include intercompany costs that are allocated by American Water Works Service Company, Inc. and intercompany interest that is charged by AWCC, both of which are eliminated to reconcile to the Consolidated Statements of Operations. Inter-segment revenues include the sale of water from a regulated subsidiary to market-based subsidiaries, leased office space, and furniture and equipment provided by the market-based subsidiaries to regulated subsidiaries. “Other” includes corporate costs that are not allocated to the Company’s operating segments, eliminations of inter-segment transactions, fair value adjustments, and associated income and deductions related to the acquisitions that have not been allocated to the operating segments for evaluation of performance and allocation of resource purposes. The adjustments related to the acquisitions are reported in Other as they are excluded from segment performance measures evaluated by management. The following tables provide summarized segment information as of and for the years ended December 31 : 2018 Regulated Market-Based Other Consolidated Operating revenues $ 2,984 $ 476 $ (20 ) $ 3,440 Depreciation and amortization 500 29 16 545 Impairment charge — 57 — 57 Total operating expenses, net 1,912 441 (15 ) 2,338 Interest, net (280 ) 4 (74 ) (350 ) Income before income taxes 826 41 (80 ) 787 Provision for income taxes 224 11 (13 ) 222 Net income attributable to common shareholders 602 32 (67 ) 567 Total assets 18,680 999 1,544 21,223 Capital expenditures 1,477 13 96 1,586 2017 Regulated Market-Based Other Consolidated Operating revenues $ 2,958 $ 422 $ (23 ) $ 3,357 Depreciation and amortization 462 18 12 492 Total operating expenses, net 1,766 360 (22 ) 2,104 Interest, net (268 ) 3 (77 ) (342 ) Income before income taxes 925 66 (79 ) 912 Provision for income taxes 366 28 92 486 Net income attributable to common shareholders 559 38 (171 ) 426 Total assets 17,602 599 1,281 19,482 Capital expenditures 1,316 18 100 1,434 2016 Regulated Market-Based Other Consolidated Operating revenues $ 2,871 $ 451 $ (20 ) $ 3,302 Depreciation and amortization 440 15 15 470 Total operating expenses, net 1,840 391 (14 ) 2,217 Interest, net (256 ) 2 (71 ) (325 ) Income before income taxes 775 65 (70 ) 770 Provision for income taxes 303 26 (27 ) 302 Net income attributable to common shareholders 472 39 (43 ) 468 Total assets 16,405 637 1,440 18,482 Capital expenditures 1,274 18 19 1,311 |
Unaudited Quarterly Data
Unaudited Quarterly Data | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data [Abstract] | |
Unaudited Quarterly Data | Note 21: Unaudited Quarterly Data The following tables provide supplemental, unaudited, consolidated, quarterly financial data for each of the four quarters in the years ended December 31, 2018 and 2017 , respectively. The operating results for any quarter are not indicative of results that may be expected for a full year or any future periods. 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Operating revenues $ 761 $ 853 $ 976 $ 850 Operating income 217 302 335 248 Net income attributable to common shareholders 106 162 187 112 Basic earnings per share: Net income attributable to common shareholders $ 0.60 $ 0.90 $ 1.04 $ 0.62 Diluted earnings per share: (a) Net income attributable to common shareholders 0.59 0.91 1.04 0.62 (a) Amounts may not sum due to rounding. 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Operating revenues $ 756 $ 844 $ 936 $ 821 Operating income 230 310 432 281 Net income attributable to common shareholders 93 131 203 (1 ) Basic earnings per share: Net income attributable to common shareholders $ 0.52 $ 0.74 $ 1.14 $ (0.01 ) Diluted earnings per share: Net income attributable to common shareholders 0.52 0.73 1.13 — |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of American Water and all of its subsidiaries in which a controlling interest is maintained after the elimination of intercompany balances and transactions. The Company uses the equity method to report its investments in joint ventures where it holds up to a 50% voting interest and cannot exercise control over the operations and policies of the investments. Under the equity method, the Company records its interests as an investment and its percentage share of the investee’s earnings as income or losses. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires that management make estimates, assumptions and judgments that could affect the Company’s financial condition, results of operations and cash flows. Actual results could differ from these estimates, assumptions and judgments. The Company considers its critical accounting estimates to include (i) the application of regulatory accounting principles and the related determination and estimation of regulatory assets and liabilities, (ii) assumptions used in impairment testing of goodwill and long-lived assets, including regulatory assets, (iii) revenue recognition and the estimates used in the calculation of unbilled revenue, (iv) accounting for income taxes and the enacted Tax Cuts and Jobs Act (the “TCJA”), (v) benefit plan assumptions and (vi) the estimates and judgments used in determining loss contingencies. The Company’s critical accounting estimates that are particularly sensitive to change in the near term are amounts reported for regulatory assets and liabilities, goodwill, income taxes, benefit plan assumptions and contingency-related obligations. |
Regulation | Regulation The Company’s regulated utilities are generally subject to economic regulation by certain state utility commissions or other entities engaged in utility regulation, collectively referred to as Public Utility Commissions (“PUCs” or “Regulators”). As such, the Company follows authoritative accounting principles required for rate regulated utilities, which requires the effects of rate regulation to be reflected in the Company’s Consolidated Financial Statements. PUCs generally authorize revenue at levels intended to recover the estimated costs of providing service, plus a return on net investments, or rate base. Regulators may also approve accounting treatments, long-term financing programs and cost of capital, operation and maintenance (“O&M”) expenses, capital expenditures, taxes, affiliated transactions and relationships, reorganizations, mergers, and acquisitions, along with imposing certain penalties or granting certain incentives. Due to timing and other differences in the collection of a regulated utility’s revenues, these authoritative accounting principles allow a cost that would otherwise be charged as an expense by a non-regulated entity, to be deferred as a regulatory asset if it is probable that such cost is recoverable through future rates. Conversely, these principles also require the creation of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future, or amounts collected in excess of costs incurred and are refundable to customers. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consists primarily of utility plant utilized by the Company’s regulated utilities. Additions to utility plant and replacement of retirement units of utility plant are capitalized and include costs such as materials, direct labor, payroll taxes and benefits, indirect items such as engineering and supervision, transportation and an allowance for funds used during construction (“AFUDC”). Costs for repair, maintenance and minor replacements are charged to O&M expense as incurred. The cost of utility plant is depreciated using the straight-line average remaining life, group method. The Company’s regulated utilities record depreciation in conformity with amounts approved by PUCs, after regulatory review of the information the Company submits to support its estimates of the assets’ remaining useful lives. Nonutility property consists primarily of buildings and equipment utilized by the Company’s Market-Based Businesses and for internal operations. This property is stated at cost, net of accumulated depreciation, which is calculated using the straight-line method over the useful lives of the assets. When units of property, plant and equipment are replaced, retired or abandoned, the carrying value is credited against the asset and charged to accumulated depreciation. To the extent the Company recovers cost of removal or other retirement costs through rates after the retirement costs are incurred, a regulatory asset is recorded. In some cases, the Company recovers retirement costs through rates during the life of the associated asset and before the costs are incurred. These amounts result in a regulatory liability being reported based on the amounts previously recovered through customer rates, until the costs to retire those assets are incurred. The costs incurred to acquire and internally develop computer software for internal use are capitalized as a unit of property. The carrying value of these costs amounted to $336 million and $346 million as of December 31, 2018 and 2017 , respectively. |
Cash and Cash Equivalents, and Restricted Funds | Cash and Cash Equivalents, and Restricted Funds Substantially all cash is invested in interest-bearing accounts. All highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. Restricted funds consists primarily of proceeds from financings for the construction and capital improvement of facilities, and deposits for future services under O&M projects. Proceeds are held in escrow or interest-bearing accounts until the designated expenditures are incurred. Restricted funds are classified on the Consolidated Balance Sheets as either current or long-term based upon the intended use of the funds. |
Accounts Receivable and Unbilled Revenues | Accounts Receivable and Unbilled Revenues Accounts receivable include regulated utility customer accounts receivable, which represent amounts billed to water and wastewater customers generally on a monthly basis. Credit is extended based on the guidelines of the applicable PUCs and collateral is generally not required. Also included are market-based trade accounts receivable and nonutility customer receivables of the regulated subsidiaries. Unbilled revenues are accrued when service has been provided but has not been billed to customers and when costs exceed billings on market-based construction contracts. |
Allowance for Uncollectible Accounts | Allowance for Uncollectible Accounts Allowances for uncollectible accounts are maintained for estimated probable losses resulting from the Company’s inability to collect receivables from customers. Accounts that are outstanding longer than the payment terms are considered past due. A number of factors are considered in determining the allowance for uncollectible accounts, including the length of time receivables are past due and previous loss history. The Company generally writes off accounts when they become uncollectible or are over a certain number of days outstanding. |
Materials and Supplies | Materials and Supplies Materials and supplies are stated at the lower of cost or net realizable value. Cost is determined using the average cost method. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price paid over the estimated fair value of the assets acquired and liabilities assumed in the acquisition of a business. Goodwill is not amortized and must be allocated at the reporting unit level, which is defined as an operating segment or one level below, and tested for impairment at least annually, or more frequently if an event occurs or circumstances change that would more likely than not, reduce the fair value of a reporting unit below its carrying value. The Company’s goodwill is primarily associated with (i) the acquisition of American Water by an affiliate of the Company’s previous owner in 2003, (ii) the acquisition of E’town Corporation by a predecessor to the Company’s previous owner in 2001, (iii) the acquisition of Pivotal Home Solutions (“Pivotal”) in 2018, and (iv) the acquisition of Keystone in 2015; and has been allocated to reporting units based on the fair values at the date of the acquisitions. For purposes of testing goodwill for impairment, the reporting units in the Regulated Businesses segment are aggregated into a single reporting unit. The Market-Based Businesses is comprised of the Homeowner Services Group reporting unit, the Military Services Group reporting unit and the Keystone reporting unit. The Company’s annual impairment testing is performed as of November 30 of each year, in conjunction with the completion of the Company’s annual business plan. The Company assesses qualitative factors to determine whether quantitative testing is necessary. If it is determined, based upon qualitative factors, that the estimated fair value of a reporting unit is more likely than not, greater than its carrying value, no further testing is required. If the Company bypasses the qualitative assessment, or performs the qualitative assessment and determines that the estimated fair value of a reporting unit is more likely than not, less than its carrying value, a quantitative, fair value-based test is performed. This quantitative testing compares the estimated fair value of the reporting unit to its respective net carrying value, including goodwill, on the measurement date. An impairment loss will be recognized in the amount equal to the excess of the reporting unit’s carrying value compared to its estimated fair value, limited to the total amount of goodwill allocated to that reporting unit. Application of goodwill impairment testing requires management judgment, including the identification of reporting units and determining the fair value of reporting units. Management estimates fair value using a combination of a discounted cash flow analysis and a market multiples analysis. Significant assumptions used in these fair value estimations include, but are not limited to, forecasts of future operating results, discount and growth rates, capital expenditures, tax rates, working capital, weighted average cost of capital and projected terminal values. The Company believes the assumptions and other considerations used to value goodwill to be appropriate, however, if actual experience differs from the assumptions and considerations used in its analysis, the resulting change could have a material adverse impact on the Consolidated Financial Statements. |
Intangible Assets | Intangible Assets Intangible assets consist primarily of finite-lived customer relationships associated with the acquisition of Pivotal and Keystone. Finite-lived intangible assets are initially measured at their estimated fair values, and are amortized over their estimated useful lives based on the pattern in which the economic benefits of the intangible assets are consumed or otherwise used. See Note 8—Goodwill and Other Intangible Assets for additional information. |
Impairments of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets include property, plant and equipment, goodwill, intangible assets and long-term investments. The Company evaluates long-lived assets for impairment when circumstances indicate the carrying value of those assets may not be recoverable. When such indicators arise, the Company estimates the fair value of the long-lived asset from future cash flows expected to result from its use and, if applicable, the eventual disposition of the asset, comparing the estimated value fair to the carrying value of the asset. An impairment loss will be recognized in the amount equal to the excess of the long-lived asset’s carrying value compared to its estimated fair value. The long-lived assets of the Company’s regulated utilities are grouped on a separate entity basis for impairment testing, as they are integrated state-wide operations that do not have the option to curtail service and generally have uniform tariffs. A regulatory asset is charged to earnings if and when future recovery in rates of that asset is no longer probable. The Company holds other long-term investments in privately held companies and joint ventures accounted for using the equity method, and are classified as other Long-term assets on the Consolidated Balance Sheets. The estimated fair value of the long-term investments are dependent on the financial performance and solvency of the entities in which the Company invests, as well as volatility inherent in the external markets. If such long-term investments are considered impaired, an impairment loss will be recognized in the amount equal to the excess of the investment’s carrying value compared to its estimated fair value. The Company believes the assumptions and other considerations used to value long-lived assets to be appropriate, however, if actual experience differs from the assumptions and considerations used in its estimates, the resulting change could have a material adverse impact on the Consolidated Financial Statements. |
Advances for Construction and Contributions in Aid of Construction | Advances for Construction and Contributions in Aid of Construction Regulated utility subsidiaries may receive advances for construction and contributions in aid of construction from customers, home builders and real estate developers to fund construction necessary to extend service to new areas. Advances are refundable for limited periods of time as new customers begin to receive service or other contractual obligations are fulfilled. Included in Other current liabilities as of December 31, 2018 and 2017 on the Consolidated Balance Sheets are estimated refunds of $23 million and $23 million , respectively. Those amounts represent expected refunds during the next 12-month period. Advances that are no longer refundable are reclassified to contributions. Contributions are permanent collections of plant assets or cash for a particular construction project. For ratemaking purposes, the amount of such contributions generally serves as a rate base reduction since the contributions represent non-investor supplied funds. Generally, the Company depreciates utility plant funded by contributions and amortizes its contributions balance as a reduction to depreciation expense, producing a result which is functionally equivalent to reducing the original cost of the utility plant for the contributions. In accordance with applicable regulatory guidelines, some of the Company’s utility subsidiaries do not amortize contributions, and any contribution received remains on the balance sheet indefinitely. |
Revenues Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue From Contracts With Customers, and all related amendments (collectively, “ASC 606”) , using the modified retrospective approach, applied to contracts which were not completed as of January 1, 2018. Under this approach, periods prior to the adoption date have not been restated and continue to be reported under the accounting standards in effect for those periods. Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under ASC 606, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identifies the contracts with a customer; (ii) identifies the performance obligations within the contract, including whether any performance obligations are distinct and capable of being distinct in the context of the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when, or as, the Company satisfies each performance obligation. The Company’s revenues from contracts with customers are discussed below. Customer payments for contracts are generally due within 30 days of billing and none of the contracts with customers have payment terms that exceed one year; therefore, the Company elected to apply the significant financing component practical expedient and no amount of consideration has been allocated as a financing component. Regulated Businesses Revenue Revenue from the Company’s Regulated Businesses is generated primarily from water and wastewater services delivered to customers. These contracts contain a single performance obligation, the delivery of water and/or wastewater services, as the promise to transfer the individual good or service is not separately identifiable from other promises within the contracts and, therefore, is not distinct. Revenues are recognized over time, as services are provided. There are generally no significant financing components or variable consideration. Revenues include amounts billed to customers on a cycle basis and unbilled amounts calculated based on estimated usage from the date of the meter reading associated with the latest customer bill, to the end of the accounting period. The amounts that the Company has a right to invoice are determined by each customer’s actual usage, an indicator that the invoice amount corresponds directly to the value transferred to the customer. The Company also recognizes revenue when it is probable that future recovery of previously incurred costs or future refunds that are to be credited to customers will occur through the ratemaking process. Market-Based Businesses Revenue Through various warranty protection programs, the Company provides fixed fee services to residential and smaller commercial customers to protect against repair costs for interior and exterior water and sewer lines, interior electric and gas lines, heating and cooling systems, water heaters and other home appliances, as well as power surge protection and other related services. Most of the contracts have a one-year term and each service is a separate performance obligation, satisfied over time, as the customers simultaneously receive and consume the benefits provided from the service. Customers are obligated to pay for the protection programs ratably over 12 months or via a one-time, annual fee, with revenues recognized ratably over time for these services. Advances from customers are deferred until the performance obligation is satisfied. The Company also has long-term, fixed fee contracts to operate and maintain water and wastewater systems for the U.S. government on various military installations and facilities owned by municipal and industrial customers, as well as shorter-term contracts that provide customized water transfer services for shale natural gas companies and customers. Billing and revenue recognition for the fixed fee revenues occurs ratably over the term of the contract, as customers simultaneously receive and consume the benefits provided by the Company. Additionally, these contracts allow the Company to make capital improvements to underlying infrastructure, which are initiated through separate modifications or amendments to the original contract, whereby stand-alone, fixed pricing is separately stated for each improvement. The Company has determined that these capital improvements are separate performance obligations, with revenue recognized over time based on performance completed at the end of each reporting period. Losses on contracts are recognized during the period in which the losses first become probable and estimable. Revenues recognized during the period in excess of billings on construction contracts are recorded as unbilled revenues, with billings in excess of revenues recorded as other current liabilities until the recognition criteria are met. Changes in contract performance and related estimated contract profitability may result in revisions to costs and revenues, and are recognized in the period in which revisions are determined. |
Income Taxes | Income Taxes The Company and its subsidiaries participate in a consolidated federal income tax return for U.S. tax purposes. Members of the consolidated group are charged with the amount of federal income tax expense determined as if they filed separate returns. Certain income and expense items are accounted for in different time periods for financial reporting than for income tax reporting purposes. The Company provides deferred income taxes on the difference between the tax basis of assets and liabilities and the amounts at which they are carried in the financial statements. These deferred income taxes are based on the enacted tax rates expected to be in effect when these temporary differences are projected to reverse. In addition, the regulated utility subsidiaries recognize regulatory assets and liabilities for the effect on revenues expected to be realized as the tax effects of temporary differences, previously flowed through to customers, reverse. Investment tax credits have been deferred by the regulated utility subsidiaries and are being amortized to income over the average estimated service lives of the related assets. The Company recognizes accrued interest and penalties related to tax positions as a component of income tax expense and accounts for sales tax collected from customers and remitted to taxing authorities on a net basis. |
Allowance for Funds Used During Construction | Allowance for Funds Used During Construction AFUDC is a non-cash credit to income with a corresponding charge to utility plant that represents the cost of borrowed funds or a return on equity funds devoted to plant under construction. The regulated utility subsidiaries record AFUDC to the extent permitted by the PUCs. The portion of AFUDC attributable to borrowed funds is shown as a reduction of Interest, net on the Consolidated Statements of Operations. Any portion of AFUDC attributable to equity funds would be included in Other, net on the Consolidated Statements of Operations. |
Environmental Costs | Environmental Costs The Company’s water and wastewater operations and the operations of its Market-Based Businesses are subject to U.S. federal, state, local and foreign requirements relating to environmental protection, and as such, the Company periodically becomes subject to environmental claims in the normal course of business. Environmental expenditures that relate to current operations or provide a future benefit are expensed or capitalized as appropriate. Remediation costs that relate to an existing condition caused by past operations are accrued, on an undiscounted basis, when it is probable that these costs will be incurred and can be reasonably estimated. A conservation agreement entered into by a subsidiary of the Company with the National Oceanic and Atmospheric Administration in 2010 and amended in 2017 required the subsidiary to, among other provisions, implement certain measures to protect the steelhead trout and its habitat in the Carmel River watershed in the State of California. |
Derivative Financial Instruments | Derivative Financial Instruments The Company uses derivative financial instruments for purposes of hedging exposures to fluctuations in interest rates. These derivative contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into derivative contracts for speculative purposes and does not use leveraged instruments. All derivatives are recognized on the balance sheet at fair value. On the date the derivative contract is entered into, the Company may designate the derivative as a hedge of the fair value of a recognized asset or liability (fair-value hedge) or a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash-flow hedge). Changes in the fair value of a fair-value hedge, along with the gain or loss on the underlying hedged item, are recorded in current-period earnings. The gains and losses on the effective portion of cash-flow hedges are recorded in other comprehensive income, until earnings are affected by the variability of cash flows. Any ineffective portion of designated cash-flow hedges is recognized in current-period earnings. Cash flows from derivative contracts are included in Net cash provided by operating activities on the Consolidated Statements of Cash Flows. |
New Accounting Standards | New Accounting Standards The following accounting standards were adopted by the Company in 2018 : Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements Revenue from Contracts with Customers Changes the criteria for recognizing revenue from a contract with a customer. Replaces existing guidance on revenue recognition, including most industry-specific guidance. The objective is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries and across capital markets. The underlying principle is that an entity will recognize revenue to depict the transfer of goods and services to customers at an amount the entity expects to be entitled to in exchange for those goods or services. The guidance also requires a number of disclosures regarding the nature, amount, timing and uncertainty of revenue and the related cash flows. January 1, 2018 Modified retrospective The adoption had no material impact on the Consolidated Financial Statements. Additional disclosures were added in the Notes to Consolidated Financial Statements. See Note 3—Revenue Recognition for additional information. Clarifying the Definition of a Business Updated the accounting guidance to clarify the definition of a business, with the objective of assisting entities with evaluating whether transactions should be accounted for as acquisitions, or disposals, of assets or businesses. January 1, 2018 Prospective The adoption had no material impact on the Consolidated Financial Statements. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Updated authoritative guidance to require the service cost component of net periodic benefit cost to be presented in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. The remaining components of net periodic benefit cost are required to be presented separately from the service cost component, in an income statement line item outside of operating income. Also, the guidance only allows for the service cost component to be eligible for capitalization. The updated guidance does not impact the accounting for net periodic benefit costs as regulatory assets or liabilities. January 1, 2018 Retrospective for the presentation of the service cost component and the other components of net periodic benefit costs on the Consolidated Statements of Operations; prospective for the limitation of capitalization to only the service cost component of net periodic benefit costs in total assets. The Company presented in the current period, and reclassified in the prior periods, net periodic benefit costs, other than the service cost component, in non-operating benefit costs, net on the Consolidated Statements of Operations. Simplifying the Test for Goodwill Impairment Updated authoritative guidance to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments in the update, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying value exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. August 31, 2018 Prospective See Note 8—Goodwill and Other Intangible Assets for additional information. Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract Updated the accounting and disclosure guidance for cloud computing arrangements that are service contracts. Under this guidance, implementation costs incurred in cloud computing arrangements and in developing or obtaining internal-use software follow the same capitalization requirements. The accounting for the service element of the arrangement remains unchanged. September 30, 2018 Prospective The adoption had no material impact on the Consolidated Financial Statements. Changes to the Disclosure Requirements for Defined Benefit Plans Updated the disclosure requirements for defined benefit plans. The guidance removes the requirement to disclose the amounts in accumulated other comprehensive income to be recognized as net periodic benefit cost, the effects of a one percent change in assumed healthcare costs and a number of other disclosures. The guidance clarifies that projected benefit obligations and accumulated benefit obligations should be disclosed, and adds disclosure requirements for the weighted average interest crediting rates for promised interest crediting rates and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation. December 31, 2018 Retrospective The adoption had no material impact on the Consolidated Financial Statements. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Permits an entity to reclassify tax effects in accumulated other comprehensive income (“AOCI”) as a result of the TCJA, to retained earnings. December 31, 2018 In the period of adoption. See Note 14—Income Taxes for additional information. The following recently issued accounting standards have not yet been adopted by the Company as of December 31, 2018 : Standard Description Date of Adoption Application Estimated Effect on the Consolidated Financial Statements Accounting for Leases Updated the accounting and disclosure guidance for leasing arrangements. Under this guidance, a lessee will be required to recognize the following for all leases, excluding short-term leases, at the commencement date: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the guidance, lessor accounting is largely unchanged. A package of optional transition practical expedients allows an entity not to reassess under the new guidance (i) whether any existing contracts are or contain leases (ii) lease classification, and (iii) initial direct costs. Additional optional transition practical expedients are available which allow an entity not to evaluate existing land easements if the easements were not previously accounted for as leases, and to apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment in the opening balance of retained earnings in the period of adoption. January 1, 2019; early adoption permitted Modified retrospective The adoption will result in recording operating lease right-of-use assets of approximately $118 million and operating lease liabilities of approximately $116 million on the Consolidated Balance Sheets. The immaterial difference between the operating lease right-of-use assets and operating lease liabilities will be recorded as an adjustment to retained earnings. The Company has defined a process and implemented internal controls and software to meet the accounting and reporting requirements of the guidance and did not elect early adoption for the standard. The Company will elect all practical expedients available under the new lease accounting and disclosure guidance. The practical expedient related to land easements allowed the Company to carry forward accounting treatment for existing land easements, which is to record easements as land and land rights in utility plant. Targeted Improvements to Accounting for Hedging Activities Updated the accounting and disclosure guidance for hedging activities, which allows for more financial and nonfinancial hedging strategies to be eligible for hedge accounting. Under this guidance, a qualitative effectiveness assessment is permitted for certain hedges if an entity can reasonably support an expectation of high effectiveness throughout the term of the hedge, provided that an initial quantitative test establishes that the hedge relationship is highly effective. Also, for cash flow hedges determined to be highly effective, all changes in the fair value of the hedging instrument will be recorded in other comprehensive income, with a subsequent reclassification to earnings when the hedged item impacts earnings. January 1, 2019; early adoption permitted Modified retrospective for adjustments related to the measurement of ineffectiveness for cash flow hedges; prospective for the updated presentation and disclosure requirements. The adoption will not have a material impact on the Consolidated Financial Statements based upon the Company’s hedging activities as of the most recent balance sheet date. Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes Designates the OIS rate based on SOFR as an eligible U.S. benchmark interest rate for the purposes of applying hedge accounting. January 1, 2019; early adoption permitted Prospective The adoption will not have a material impact on the Consolidated Financial Statements based upon the Company’s hedging activities as of the most recent balance sheet date. 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; early adoption permitted Modified retrospective The Company is evaluating any impact on its Consolidated Financial Statements, as well as the timing of adoption. 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; early adoption permitted Prospective for added disclosures and for the narrative description of measurement uncertainty; retrospective for all other amendments. The Company does not expect the adoption to have a material impact on its Consolidated Financial Statements, and the Company is evaluating the timing of adoption. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior periods in the Consolidated Financial Statements and Notes to conform to the current presentation. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Reconciliation Of Cash And Cash Equivalents, And Restricted Cash Reported | The following table provides a reconciliation of the Cash and cash equivalents and Restricted funds amounts as presented on the Consolidated Balance Sheets, to the sum of such amounts presented on the Consolidated Statements of Cash Flows for the years ended December 31 : 2018 2017 Cash and cash equivalents $ 130 $ 55 Restricted funds 28 27 Restricted funds included in other long-term assets 1 1 Cash and cash equivalents and restricted funds as presented on the Consolidated Statements of Cash Flows $ 159 $ 83 |
Schedule of Allowance for Funds Used During Construction | AFUDC is provided in the following table for the years ended December 31 : 2018 2017 2016 Allowance for other funds used during construction $ 24 $ 19 $ 15 Allowance for borrowed funds used during construction 13 8 6 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | New Accounting Standards The following accounting standards were adopted by the Company in 2018 : Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements Revenue from Contracts with Customers Changes the criteria for recognizing revenue from a contract with a customer. Replaces existing guidance on revenue recognition, including most industry-specific guidance. The objective is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries and across capital markets. The underlying principle is that an entity will recognize revenue to depict the transfer of goods and services to customers at an amount the entity expects to be entitled to in exchange for those goods or services. The guidance also requires a number of disclosures regarding the nature, amount, timing and uncertainty of revenue and the related cash flows. January 1, 2018 Modified retrospective The adoption had no material impact on the Consolidated Financial Statements. Additional disclosures were added in the Notes to Consolidated Financial Statements. See Note 3—Revenue Recognition for additional information. Clarifying the Definition of a Business Updated the accounting guidance to clarify the definition of a business, with the objective of assisting entities with evaluating whether transactions should be accounted for as acquisitions, or disposals, of assets or businesses. January 1, 2018 Prospective The adoption had no material impact on the Consolidated Financial Statements. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Updated authoritative guidance to require the service cost component of net periodic benefit cost to be presented in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. The remaining components of net periodic benefit cost are required to be presented separately from the service cost component, in an income statement line item outside of operating income. Also, the guidance only allows for the service cost component to be eligible for capitalization. The updated guidance does not impact the accounting for net periodic benefit costs as regulatory assets or liabilities. January 1, 2018 Retrospective for the presentation of the service cost component and the other components of net periodic benefit costs on the Consolidated Statements of Operations; prospective for the limitation of capitalization to only the service cost component of net periodic benefit costs in total assets. The Company presented in the current period, and reclassified in the prior periods, net periodic benefit costs, other than the service cost component, in non-operating benefit costs, net on the Consolidated Statements of Operations. Simplifying the Test for Goodwill Impairment Updated authoritative guidance to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments in the update, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying value exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. August 31, 2018 Prospective See Note 8—Goodwill and Other Intangible Assets for additional information. Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract Updated the accounting and disclosure guidance for cloud computing arrangements that are service contracts. Under this guidance, implementation costs incurred in cloud computing arrangements and in developing or obtaining internal-use software follow the same capitalization requirements. The accounting for the service element of the arrangement remains unchanged. September 30, 2018 Prospective The adoption had no material impact on the Consolidated Financial Statements. Changes to the Disclosure Requirements for Defined Benefit Plans Updated the disclosure requirements for defined benefit plans. The guidance removes the requirement to disclose the amounts in accumulated other comprehensive income to be recognized as net periodic benefit cost, the effects of a one percent change in assumed healthcare costs and a number of other disclosures. The guidance clarifies that projected benefit obligations and accumulated benefit obligations should be disclosed, and adds disclosure requirements for the weighted average interest crediting rates for promised interest crediting rates and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation. December 31, 2018 Retrospective The adoption had no material impact on the Consolidated Financial Statements. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Permits an entity to reclassify tax effects in accumulated other comprehensive income (“AOCI”) as a result of the TCJA, to retained earnings. December 31, 2018 In the period of adoption. See Note 14—Income Taxes for additional information. The following recently issued accounting standards have not yet been adopted by the Company as of December 31, 2018 : Standard Description Date of Adoption Application Estimated Effect on the Consolidated Financial Statements Accounting for Leases Updated the accounting and disclosure guidance for leasing arrangements. Under this guidance, a lessee will be required to recognize the following for all leases, excluding short-term leases, at the commencement date: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the guidance, lessor accounting is largely unchanged. A package of optional transition practical expedients allows an entity not to reassess under the new guidance (i) whether any existing contracts are or contain leases (ii) lease classification, and (iii) initial direct costs. Additional optional transition practical expedients are available which allow an entity not to evaluate existing land easements if the easements were not previously accounted for as leases, and to apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment in the opening balance of retained earnings in the period of adoption. January 1, 2019; early adoption permitted Modified retrospective The adoption will result in recording operating lease right-of-use assets of approximately $118 million and operating lease liabilities of approximately $116 million on the Consolidated Balance Sheets. The immaterial difference between the operating lease right-of-use assets and operating lease liabilities will be recorded as an adjustment to retained earnings. The Company has defined a process and implemented internal controls and software to meet the accounting and reporting requirements of the guidance and did not elect early adoption for the standard. The Company will elect all practical expedients available under the new lease accounting and disclosure guidance. The practical expedient related to land easements allowed the Company to carry forward accounting treatment for existing land easements, which is to record easements as land and land rights in utility plant. Targeted Improvements to Accounting for Hedging Activities Updated the accounting and disclosure guidance for hedging activities, which allows for more financial and nonfinancial hedging strategies to be eligible for hedge accounting. Under this guidance, a qualitative effectiveness assessment is permitted for certain hedges if an entity can reasonably support an expectation of high effectiveness throughout the term of the hedge, provided that an initial quantitative test establishes that the hedge relationship is highly effective. Also, for cash flow hedges determined to be highly effective, all changes in the fair value of the hedging instrument will be recorded in other comprehensive income, with a subsequent reclassification to earnings when the hedged item impacts earnings. January 1, 2019; early adoption permitted Modified retrospective for adjustments related to the measurement of ineffectiveness for cash flow hedges; prospective for the updated presentation and disclosure requirements. The adoption will not have a material impact on the Consolidated Financial Statements based upon the Company’s hedging activities as of the most recent balance sheet date. Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes Designates the OIS rate based on SOFR as an eligible U.S. benchmark interest rate for the purposes of applying hedge accounting. January 1, 2019; early adoption permitted Prospective The adoption will not have a material impact on the Consolidated Financial Statements based upon the Company’s hedging activities as of the most recent balance sheet date. 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; early adoption permitted Modified retrospective The Company is evaluating any impact on its Consolidated Financial Statements, as well as the timing of adoption. 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; early adoption permitted Prospective for added disclosures and for the narrative description of measurement uncertainty; retrospective for all other amendments. The Company does not expect the adoption to have a material impact on its Consolidated Financial Statements, and the Company is evaluating the timing of adoption. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table provides the changes in contract assets and liabilities for the year ended December 31, 2018 : Amount Contract assets: Balance at January 1, 2018 $ 35 Additions 18 Transfers to accounts receivable, net (39 ) Balance at December 31, 2018 $ 14 Contract liabilities: Balance at January 1, 2018 $ 25 Additions 52 Transfers to operating revenues (57 ) Balance at December 31, 2018 $ 20 The following table provides operating revenues disaggregated for the year ended December 31, 2018 : Revenues from Contracts with Customers Other Revenues Not from Contracts with Customers (a) Total Operating Revenues Regulated Businesses: Water services: Residential $ 1,663 $ — $ 1,663 Commercial 616 — 616 Fire service 137 — 137 Industrial 136 — 136 Public and other 197 — 197 Total water services 2,749 — 2,749 Wastewater services: Residential 115 — 115 Commercial 30 — 30 Industrial 2 — 2 Public and other 14 — 14 Total wastewater services 161 — 161 Miscellaneous utility charges 48 — 48 Alternative revenue programs — 19 19 Lease contract revenue — 7 7 Total Regulated Businesses 2,958 26 2,984 Market-Based Businesses 476 — 476 Other (17 ) (3 ) (20 ) Total operating revenues $ 3,417 $ 23 $ 3,440 (a) Includes revenues associated with alternative revenue programs, lease contracts and intercompany rent which are outside the scope of ASC 606 and accounted for under other existing GAAP. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | The following table provides the purchase price allocation for the Pivotal acquisition as of June 4, 2018 , and the adjustments that were made through December 31, 2018: June 4, 2018 (as initially reported) Measurement Period Adjustments June 4, 2018 (as adjusted) Identifiable assets acquired: Accounts receivable $ 23 $ (1 ) $ 22 Other current assets 1 1 2 Property, plant and equipment 21 1 22 Intangible assets 96 (6 ) 90 Total identifiable assets acquired 141 (5 ) 136 Liabilities assumed: Accounts payable and accrued liabilities (5 ) — (5 ) Other current liabilities (14 ) 2 (12 ) Long-term liabilities (1 ) — (1 ) Total liabilities assumed (20 ) 2 (18 ) Net identifiable assets acquired 121 (3 ) 118 Goodwill 242 5 247 Net assets acquired $ 363 $ 2 $ 365 |
Intangible Assets Acquired as Part of Business Combination | The following table provides the valuation of the intangible assets acquired: Amount Intangible asset class: Customer relationships $ 78 Other intangible assets 12 Total intangible assets $ 90 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of Major Classes of Property, Plant and Equipment by Category | The following table provides the major classes of property, plant and equipment by category as of December 31 : 2018 2017 Range of Remaining Useful Lives Weighted Average Useful Life Utility plant: Land and other non-depreciable assets $ 155 $ 151 Sources of supply 821 798 2 to 127 Years 47 years Treatment and pumping facilities 3,607 3,356 3 to 101 Years 40 years Transmission and distribution facilities 10,164 9,583 9 to 149 Years 70 years Services, meters and fire hydrants 4,008 3,754 5 to 90 Years 31 years General structures and equipment 1,625 1,458 3 to 109 Years 15 years Waste collection 943 904 5 to 114 Years 60 years Waste treatment, pumping and disposal 570 557 3 to 139 Years 41 years Construction work in progress 593 585 Total utility plant 22,486 21,146 Nonutility property 718 570 3 to 50 Years 6 years Total property, plant and equipment $ 23,204 $ 21,716 |
Allowance for Uncollectible A_2
Allowance for Uncollectible Accounts (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract] | |
Schedule of Allowances for Uncollectible Accounts | The following table provides the changes in the allowances for uncollectible accounts for the years ended December 31 : 2018 2017 2016 Balance as of January 1 $ (42 ) $ (40 ) $ (39 ) Amounts charged to expense (33 ) (29 ) (27 ) Amounts written off 34 30 29 Recoveries of amounts written off (4 ) (3 ) (3 ) Balance as of December 31 $ (45 ) $ (42 ) $ (40 ) |
Regulatory Assets and Liabili_2
Regulatory Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Regulated Operations [Abstract] | |
Summary of Composition of Regulatory Assets | The following table provides the composition of regulatory assets as of December 31 : 2018 2017 Deferred pension expense $ 362 $ 285 Removal costs recoverable through rates 292 269 Regulatory balancing accounts 110 113 San Clemente Dam project costs 85 89 Debt expense 70 67 Purchase premium recoverable through rates 56 57 Deferred tank painting costs 42 42 Make-whole premium on early extinguishment of debt 33 27 Other 106 112 Total regulatory assets $ 1,156 $ 1,061 |
Summary of Composition of Regulatory Liabilities | The following table provides the composition of regulatory liabilities as of December 31 : 2018 2017 Income taxes recovered through rates $ 1,279 $ 1,242 Removal costs recovered through rates 309 315 Postretirement benefit liability 209 33 Pension and other postretirement benefit balancing accounts 46 48 TCJA reserve on revenue 36 — Other 28 26 Total regulatory liabilities $ 1,907 $ 1,664 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill Assets | The following table provides the changes in the carrying value of goodwill for the years ended December 31, 2018 and 2017 : Regulated Businesses Market-Based Businesses Consolidated Cost Accumulated Impairment Cost Accumulated Impairment Cost Accumulated Impairment Total Net Balance as of January 1, 2017 $ 3,458 $ (2,332 ) $ 327 $ (108 ) $ 3,785 $ (2,440 ) $ 1,345 Goodwill from acquisitions 29 — — — 29 — 29 Measurement period adjustments 5 — — — 5 — 5 Balance as of December 31, 2017 $ 3,492 $ (2,332 ) $ 327 $ (108 ) $ 3,819 $ (2,440 ) $ 1,379 Goodwill from acquisitions 2 — 247 — 249 — 249 Goodwill impairment charge — — — (53 ) — (53 ) (53 ) Balance as of December 31, 2018 $ 3,494 $ (2,332 ) $ 574 $ (161 ) $ 4,068 $ (2,493 ) $ 1,575 |
Schedule of Impaired Intangible Assets | The following tables provides the gross carrying value and accumulated amortization of the finite-lived intangible assets held by the Company as of December 31 : 2017 Acquisitions Impairments Other 2018 Customer relationships $ 12 $ 78 $ (4 ) $ — $ 86 Other intangible assets 2 12 — (1 ) 13 Total gross carrying value $ 14 $ 90 $ (4 ) $ (1 ) $ 99 2017 Amortization Impairments Other 2018 Customer relationships $ (4 ) $ (9 ) $ — $ — $ (13 ) Other intangible assets (1 ) (3 ) — 2 (2 ) Total accumulated amortization $ (5 ) $ (12 ) $ — $ 2 $ (15 ) Total intangible assets, net $ 9 $ 84 |
Intangible Assets Amortization Expense | Intangible asset amortization expense amounted to $12 million , $4 million and $4 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Estimated amortization expense for the next five years subsequent to December 31, 2018 is as follows: Amount 2019 $ 15 2020 13 2021 11 2022 10 2023 7 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component, Net of Tax | The following table provides the changes in accumulated other comprehensive loss by component, net of tax, for the years ended December 31, 2018 and 2017 : Defined Benefit Plans Foreign Currency Translation Gain (Loss) on Cash Flow Hedge Accumulated Other Comprehensive Loss Employee Benefit Plan Funded Status Amortization of Prior Service Cost Amortization of Actuarial Loss Beginning balance as of January 1, 2017 $ (147 ) $ 1 $ 42 $ 2 $ 16 $ (86 ) Other comprehensive income (loss) before reclassification 7 — — (1 ) (6 ) — Amounts reclassified from accumulated other comprehensive loss — — 7 — — 7 Net other comprehensive income (loss) 7 — 7 (1 ) (6 ) 7 Ending balance as of December 31, 2017 $ (140 ) $ 1 $ 49 $ 1 $ 10 $ (79 ) Other comprehensive income (loss) before reclassification 60 — — — (2 ) 58 TCJA tax effects reclassified from accumulated other comprehensive loss (22 ) — — — 2 (20 ) Amounts reclassified from accumulated other comprehensive loss — — 7 — — 7 Net other comprehensive income 38 — 7 — — 45 Ending balance as of December 31, 2018 $ (102 ) $ 1 $ 56 $ 1 $ 10 $ (34 ) |
Dividends Declared | The following table provides the per share cash dividends paid for the years ended December 31 : 2018 2017 2016 December $ 0.455 $ 0.415 $ 0.375 September $ 0.455 $ 0.415 $ 0.375 June $ 0.455 $ 0.415 $ 0.375 March $ 0.415 $ 0.375 $ 0.34 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-Based Compensation Expense | The following table provides the stock-based compensation expense recorded in operation and maintenance expense in the accompanying Consolidated Statements of Operations for the years ended December 31 : 2018 2017 2016 Stock options $ 1 $ 1 $ 2 RSUs and PSUs 15 9 8 Nonqualified employee stock purchase plan 1 1 1 Stock-based compensation 17 11 11 Income tax benefit (5 ) (4 ) (4 ) Stock-based compensation expense, net of tax $ 12 $ 7 $ 7 |
Summary of Stock Option Activity | The following table provides stock option activity for the year ended December 31, 2018 : Shares (in thousands) Weighted Average Exercise Price (per share) Weighted Average Remaining Life (years) Aggregate Intrinsic Value Options outstanding as of December 31, 2017 711 $ 53.51 3.67 $ 29 Granted — — Forfeited or expired (7 ) 65.15 Exercised (187 ) 49.32 Options outstanding as of December 31, 2018 517 $ 54.92 2.96 $ 19 Options exercisable as of December 31, 2018 (434 ) $ 52.93 2.76 $ 16 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Weighted Average Assumptions | The following table provides the weighted average assumptions used in the Black-Scholes option-pricing model for grants and the resulting weighted average grant date fair value per share of stock options granted for the years ended December 31 : 2018 2017 2016 Dividend yield — % — % 2.09 % Expected volatility — % — % 15.89 % Risk-free interest rate — % — % 1.15 % Expected life (years) 0 0 4.0 Exercise price $ — $ — $ 65.25 Grant date fair value per share $ — $ — $ 6.61 |
Additional Information to Stock Options Activity | The following table provides additional information regarding stock options exercised during the years ended December 31 : 2018 2017 2016 Intrinsic value $ 9 $ 10 $ 18 Exercise proceeds 7 11 15 Income tax benefit realized 2 3 6 |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Restricted Stock Unit Activity | The following table provides RSU activity for the year ended December 31, 2018 : Shares (in thousands) Weighted Average Grant Date Fair Value (per share) Non-vested total as of December 31, 2017 89 $ 67.48 Granted 107 82.75 Vested (57 ) 72.11 Forfeited (6 ) 74.34 Non-vested total as of December 31, 2018 133 $ 77.44 |
Performance Condition | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Weighted Average Assumptions | The following table provides the weighted average assumptions used in the Monte Carlo simulation and the weighted average grant date fair values of PSUs granted for the years ended December 31 : 2018 2017 2016 Expected volatility 17.23 % 17.40 % 15.90 % Risk-free interest rate 2.36 % 1.53 % 0.91 % Expected life (years) 3.0 3.0 3.0 Grant date fair value per share $ 73.62 $ 72.81 $ 77.16 |
Summary of Restricted Stock Unit Activity | The following table provides PSU activity for the year ended December 31, 2018 : Shares (in thousands) Weighted Average Grant Date Fair Value (per share) Non-vested total as of December 31, 2017 281 $ 67.33 Granted 165 72.50 Vested (122 ) 58.18 Forfeited (16 ) 73.87 Non-vested total as of December 31, 2018 308 $ 73.39 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Debt | The following table provides the components of long-term debt as of December 31 : Rate Weighted Average Rate Maturity 2018 2017 Long-term debt of AWCC: (a) Senior notes—fixed rate 2.95%-8.27% 4.26% 2019-2048 $ 6,116 $ 5,292 Private activity bonds and government funded debt—fixed rate 1.79%-6.25% 5.45% 2021-2040 192 193 Long-term debt of other American Water subsidiaries: Private activity bonds and government funded debt—fixed rate (b) 0.00%-6.20% 4.54% 2019-2048 727 712 Mortgage bonds—fixed rate 3.92%-9.71% 7.41% 2019-2039 606 607 Mandatorily redeemable preferred stock 8.47%-9.75% 8.60% 2019-2036 8 10 Capital lease obligations 12.91% 12.91% 2026 1 1 Term loan 5.60%-5.63% 5.62% 2021 6 9 Long-term debt 7,656 6,824 Unamortized debt premium, net (c) 7 9 Unamortized debt issuance costs (16 ) (13 ) Less current portion of long-term debt (71 ) (322 ) Total long-term debt $ 7,576 $ 6,498 (a) This indebtedness is considered “debt” for purposes of a support agreement between American Water and AWCC, which serves as a functional equivalent of a guarantee by American Water of AWCC’s payment obligations under such indebtedness. (b) Includes $3 million and $5 million of variable rate debt as of December 31, 2018 and 2017 , respectively, with variable-to-fixed interest rate swaps ranging between 3.93% and 4.72% . This debt was assumed via an acquisition in 2013. (c) Primarily fair value adjustments previously recognized in acquisition purchase accounting. |
Future Sinking Fund Payments and Debt Maturities | The following table provides future sinking fund payments and debt maturities: Amount 2019 $ 72 2020 32 2021 303 2022 26 2023 159 Thereafter 7,064 |
Long-Term Debt Issued | The following table provides the issuances of long-term debt in 2018 : Company Type Rate Maturity Amount AWCC (a) Senior notes—fixed rate 3.75%-4.20% 2028-2048 $ 1,325 Other American Water subsidiaries Private activity bonds and government funded debt—fixed rate (b) 0.00%-5.00% 2021-2048 33 Total issuances $ 1,358 (a) Approximately $29 million of this debt relates to the New Jersey Environmental Infrastructure Financing Program. |
Long-term debt retired through optional redemptions or payments at maturities | The following table provides the retirements and redemptions of long-term debt in 2018 through sinking fund provisions, optional redemption or payment at maturity: Company Type Rate Maturity Amount AWCC Senior notes—fixed rate 5.62%-6.25% 2018-2022 $ 501 AWCC Private activity bonds and government funded debt—fixed rate 1.79%-2.90% 2021-2031 1 Other American Water subsidiaries Private activity bonds and government funded debt—fixed rate 0.00%-5.50% 2018-2047 18 Other American Water subsidiaries Mortgage bonds—fixed rate 9.13% 2021 1 Other American Water subsidiaries Mandatorily redeemable preferred stock 8.49%-9.18% 2031-2036 2 Other American Water subsidiaries Term loan 4.83%-5.69% 2021 3 Total retirements and redemptions $ 526 |
Summary of Gross Fair Value Derivative Asset and Liabilities | The following table provides the gross fair value of the Company’s derivative liabilities, as well as the location of the liability balances on the Consolidated Balance Sheets as of December 31: Derivative Instrument Derivative Designation Balance Sheet Classification 2018 2017 Liability derivative: Forward starting swaps Cash flow hedge Other current liabilities 14 3 |
Short-Term Debt (Tables)
Short-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Short-term Debt [Abstract] | |
Schedule of Company's Aggregate Credit Facility Commitments, Letter of Credit Sub-Limit Under Revolving Credit Facility and Commercial Paper Limit and Available Capacity | The following table provides the aggregate credit facility commitments, letter of credit sub-limit under the revolving credit facility and commercial paper limit, as well as the available capacity for each as of December 31, 2018 and 2017 : Credit Facility Commitment (a) Available Credit Facility Capacity (a) Letter of Credit Sublimit Available Letter of Credit Capacity Commercial Paper Limit Available Commercial Paper Capacity December 31, 2018 $ 2,262 $ 2,177 $ 150 $ 69 $ 2,100 $ 1,146 December 31, 2017 1,762 1,673 150 66 1,600 695 (a) Includes amounts related to the revolving credit facility of Keystone. As of December 31, 2018 , the total commitment under the Keystone revolving credit facility was $12 million , of which $8 million was available for borrowing, subject to compliance with a collateral base calculation. |
Schedule Of Short-Term Borrowings Activity | The following table provides the short-term borrowing activity for AWCC for the years ended December 31 : 2018 2017 Average borrowings $ 1,029 $ 779 Maximum borrowings outstanding 1,905 1,135 Weighted average interest rates, computed on daily basis 2.28 % 1.24 % Weighted average interest rates, as of December 31 2.84 % 1.61 % |
General Taxes (Tables)
General Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
General Taxes [Abstract] | |
Components of General Tax Expense from Continuing Operations | The following table provides the components of general tax expense for the years ended December 31 : 2018 2017 2016 Gross receipts and franchise $ 112 $ 110 $ 106 Property and capital stock 120 105 106 Payroll 33 31 32 Other general 12 13 14 Total general taxes $ 277 $ 259 $ 258 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense from Continuing Operations | The following table provides the components of income tax expense for the years ended December 31 : 2018 2017 2016 Current income taxes: State $ 26 $ 25 $ 20 Federal 1 (1 ) 1 Total current income taxes $ 27 $ 24 $ 21 Deferred income taxes: State $ 33 $ 50 $ 24 Federal 163 413 258 Amortization of deferred investment tax credits (1 ) (1 ) (1 ) Total deferred income taxes 195 462 281 Provision for income taxes $ 222 $ 486 $ 302 |
Reconciliation of Income Tax Expense from Continuing Operations | The following table provides a reconciliation between the statutory federal income tax rate and the Company’s effective tax rate for the years ended December 31 : 2018 2017 2016 Income tax at statutory rate 21.0 % 35.0 % 35.0 % Increases (decreases) resulting from: State taxes, net of federal taxes 5.5 % 5.4 % 3.8 % TCJA 1.5 % 13.7 % — % Other, net 0.2 % (0.8 )% 0.4 % Effective tax rate 28.2 % 53.3 % 39.2 % |
Components of Net Deferred Tax Liability from Continuing Operations | The following table provides the components of the net deferred tax liability as of December 31 : 2018 2017 Deferred tax assets: Advances and contributions $ 402 $ 395 Tax losses and credits 131 196 Regulatory income tax assets 339 327 Pension and other postretirement benefits 91 96 Other 44 49 Total deferred tax assets 1,007 1,063 Valuation allowance (14 ) (13 ) Total deferred tax assets, net of allowance $ 993 $ 1,050 Deferred tax liabilities: Property, plant and equipment $ 2,537 $ 2,429 Deferred pension and other postretirement benefits 77 69 Other 97 103 Total deferred tax liabilities 2,711 2,601 Total deferred tax liabilities, net of deferred tax assets $ (1,718 ) $ (1,551 ) |
Changes in Gross Liability Excluding Interest and Penalties for Unrecognized Tax Benefits | The following table provides the changes in gross liability, excluding interest and penalties, for unrecognized tax benefits: Amount Balance as of January 1, 2017 $ 169 Increases in current period tax positions 8 Decreases in prior period measurement of tax positions (71 ) Balance as of December 31, 2017 $ 106 Increases in current period tax positions 13 Decreases in prior period measurement of tax positions (22 ) Balance as of December 31, 2018 $ 97 |
Changes in Valuation Allowance | The following table provides the changes in the valuation allowance: Amount Balance as of January 1, 2016 $ 8 Decreases in current period tax positions (2 ) Balance as of December 31, 2016 $ 6 Decreases in current period tax positions 7 Balance as of December 31, 2017 $ 13 Increases in current period tax positions 1 Balance as of December 31, 2018 $ 14 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Significant Unobservable Inputs | The following tables provide a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) for 2018 and 2017 , respectively: Level 3 Balance as of January 1, 2018 $ 278 Actual return on assets (23 ) Purchases, issuances and settlements, net (25 ) Balance as of December 31, 2018 $ 230 Level 3 Balance as of January 1, 2017 $ 140 Actual return on assets 2 Purchases, issuances and settlements, net 136 Balance as of December 31, 2017 $ 278 |
Schedule of Rollforward Changes in Benefit Obligation and Plan Assets | The following table provides a rollforward of the changes in the benefit obligation and plan assets for the two most recent years, for all plans combined: Pension Benefits Other Benefits 2018 2017 2018 2017 Change in benefit obligation: Benefit obligation as of January 1, $ 2,034 $ 1,864 $ 614 $ 610 Service cost 34 33 8 10 Interest cost 76 80 20 26 Plan participants' contributions — — 2 2 Plan amendments (23 ) — (174 ) — Actuarial (gain) loss (153 ) 118 (89 ) (9 ) Acquisitions — 9 — — Gross benefits paid (76 ) (70 ) (29 ) (26 ) Federal subsidy — — 1 1 Benefit obligation as of December 31, $ 1,892 $ 2,034 $ 353 $ 614 Change in plan assets: Fair value of plan assets as of January 1, $ 1,649 $ 1,443 $ 576 $ 525 Actual return on plan assets (97 ) 227 (40 ) 69 Employer contributions 24 42 (2 ) 6 Plan participants' contributions — — 2 2 Acquisitions — 7 — — Benefits paid (77 ) (70 ) (29 ) (26 ) Fair value of plan assets as of December 31, $ 1,499 $ 1,649 $ 507 $ 576 Funded value as of December 31, $ (393 ) $ (385 ) $ 154 $ (38 ) Amounts recognized on the balance sheet: Noncurrent asset $ — $ — $ 155 $ 2 Current liability (3 ) (1 ) — — Noncurrent liability (390 ) (384 ) (1 ) (40 ) Net amount recognized $ (393 ) $ (385 ) $ 154 $ (38 ) |
Summary of Accumulated Other Comprehensive Income and Regulatory Assets | The following table provides the components of accumulated other comprehensive income and regulatory assets that have not been recognized as components of periodic benefit costs as of December 31 : Pension Benefits Other Benefits 2018 2017 2018 2017 Net actuarial loss $ 431 $ 416 $ 83 $ 108 Prior service cost (credit) (22 ) 2 (291 ) (140 ) Net amount recognized $ 409 $ 418 $ (208 ) $ (32 ) Regulatory assets (liabilities) $ 352 $ 270 $ (208 ) $ (32 ) Accumulated other comprehensive income 57 148 — — Total $ 409 $ 418 $ (208 ) $ (32 ) |
Schedule of Projected Benefit Obligation, Accumulated Benefit Obligation and Fair Value of Plan Assets | The following table provides the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with a projected obligation in excess of plan assets as of December 31, 2018 and 2017 : Projected Benefit Obligation Exceeds the Fair Value of Plans' Assets 2018 2017 Projected benefit obligation $ 1,892 $ 2,034 Fair value of plan assets 1,499 1,649 Accumulated Benefit Obligation Exceeds the Fair Value of Plans' Assets 2018 2017 Accumulated benefit obligation $ 1,768 $ 1,888 Fair value of plan assets 1,499 1,649 |
Schedule of Expected Cash Flows for Pension and Postretirement Benefit Plans | The following table provides information about the expected cash flows for the pension and postretirement benefit plans: Pension Benefits Other Benefits 2019 expected employer contributions: To plan trusts $ 31 $ — To plan participants 2 — |
Schedule of Expected Benefit Payments | The following table provides the net benefits expected to be paid from the plan assets or the Company’s assets: Pension Benefits Other Benefits Expected Benefit Payments Expected Benefit Payments Expected Federal Subsidy Payments 2019 $ 102 $ 27 $ 1 2020 107 27 1 2021 111 28 1 2022 115 28 1 2023 120 28 1 2024-2028 634 136 6 |
Schedule of Significant Assumptions of Pension and Other Postretirement Benefit Plans | The following table provides the significant assumptions related to the pension and other postretirement benefit plans: Pension Benefits Other Benefits 2018 2017 2016 2018 2017 2016 Weighted average assumptions used to determine December 31 benefit obligations: Discount rate 4.38% 3.75% 4.28% 4.32% 3.73% 4.26% Rate of compensation increase 3.00% 3.02% 3.07% N/A N/A N/A Medical trend N/A N/A N/A graded from graded from graded from 6.75% in 2019 7.00% in 2018 7.00% in 2017 to 5.00% in 2026+ to 4.50% in 2026+ to 5.00% in 2021+ Weighted average assumptions used to determine net periodic cost: Discount rate 3.75% 4.28% 4.66% 4.23% 4.26% 3.66% Expected return on plan assets 5.95% 6.49% 7.02% 4.77% 5.09% 5.37% Rate of compensation increase 3.02% 3.07% 3.10% N/A N/A N/A Medical trend N/A N/A N/A graded from graded from graded from 7.00% in 2018 7.00% in 2017 6.50% in 2016 to 4.50% in 2026+ to 5.00% in 2021+ to 5.00% in 2021+ NOTE “N/A” in the table above means assumption is not applicable. |
Components of Net Periodic Benefit Costs | The following table provides the components of net periodic benefit costs for the years ended December 31 : 2018 2017 2016 Components of net periodic pension benefit cost: Service cost $ 34 $ 33 $ 32 Interest cost 76 80 80 Expected return on plan assets (97 ) (93 ) (95 ) Amortization of: Prior service cost (credit) 1 1 1 Actuarial (gain) loss 27 34 27 Net periodic pension benefit cost $ 41 $ 55 $ 45 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Current year actuarial (gain) loss (60 ) (7 ) 21 Amortization of actuarial gain (loss) (7 ) (7 ) (6 ) Total recognized in other comprehensive income $ (67 ) $ (14 ) $ 15 Total recognized in net periodic benefit cost and other comprehensive income $ (26 ) $ 41 $ 60 Components of net periodic other postretirement benefit cost: Service cost $ 8 $ 10 $ 12 Interest cost 20 26 28 Expected return on plan assets (26 ) (26 ) (27 ) Amortization of: Prior service cost (credit) (23 ) (18 ) (9 ) Actuarial (gain) loss 3 10 5 Net periodic other postretirement benefit cost $ (18 ) $ 2 $ 9 |
Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Changes in Fair Value of Plan Assets | The following tables provide the fair values and asset allocations of the pension plan assets as of December 31, 2018 and 2017 , respectively, by asset category: Asset Category 2019 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of December 31, 2018 Cash $ 24 $ 24 $ — $ — 2 % Equity securities: 50 % U.S. large cap 297 297 — — 20 % U.S. small cap 76 70 6 — 5 % International 256 2 132 122 17 % Real estate fund 65 — — 65 4 % REITs 20 — 20 — 1 % Fixed income securities: 50 % U.S. Treasury securities and government bonds 181 167 14 — 12 % Corporate bonds 491 — 491 — 33 % Mortgage-backed securities 11 — 11 — 1 % Municipal bonds 28 — 28 — 2 % Long duration bond fund 7 7 — — — Guarantee annuity contracts 43 — — 43 3 % Total 100 % $ 1,499 $ 567 $ 702 $ 230 100 % Asset Category 2018 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of December 31, 2017 Cash $ 7 $ 7 $ — $ — — Equity Securities: 50 % U.S. large cap 344 344 — — 21 % U.S. small cap 84 79 5 — 5 % International 295 2 149 144 18 % Real estate fund 86 — — 86 5 % REITs 26 — 26 — 2 % Fixed income securities: 50 % U.S. Treasury securities and government bonds 200 180 20 — 12 % Corporate bonds 519 — 519 — 31 % Mortgage-backed securities 1 — 1 — — Municipal bonds 31 — 31 — 2 % Long duration bond fund 8 8 — — 1 % Guarantee annuity contracts 48 — — 48 3 % Total 100 % $ 1,649 $ 620 $ 751 $ 278 100 % |
Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Changes in Fair Value of Plan Assets | The following tables provide the fair values and asset allocations of the postretirement benefit plan assets as of December 31, 2018 and 2017 , respectively, by asset category: Asset Category 2019 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of December 31, 2018 Bargain VEBA: Cash $ 31 $ 31 $ — $ — — Equity securities: 2 % U.S. large cap 1 1 — — — International 17 — — 17 4 % Fixed income securities: 98 % U.S. Treasury securities and government bonds 179 178 1 — 47 % Corporate bonds 141 — 141 — 37 % Municipal bonds 9 — 9 — 3 % Long duration bond fund 4 4 — — 1 % Future and option contracts (a) — — — — 8 % Total bargain VEBA 100 % $ 382 $ 214 $ 151 $ 17 100 % Non-bargain VEBA: Cash $ 3 $ 3 $ — $ — — Equity securities: 60 % U.S. large cap 43 43 — — 35 % International 24 24 — — 20 % Fixed income securities: 40 % Core fixed income bond fund (a) 52 — 52 — 45 % Total non-bargain VEBA 100 % $ 122 $ 70 $ 52 $ — 100 % Life VEBA: Equity securities: 70 % U.S. large cap 2 2 — — 67 % Fixed income securities: 30 % Core fixed income bond fund (a) 1 1 — — 33 % Total life VEBA 100 % $ 3 $ 3 $ — $ — 100 % Total 100 % $ 507 $ 287 $ 203 $ 17 100 % (a) Includes cash for margin requirements. Asset Category 2018 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of 12/31/2017 Bargain VEBA: Cash $ 18 $ 18 $ — $ — — Equity securities: 30 % U.S. large cap 44 44 — — 10 % International 51 51 — — 12 % Fixed income securities: 70 % U.S. Treasury securities and government bonds 48 21 27 — 11 % Corporate bonds 233 — 233 — 55 % Municipal bonds 26 — 26 — 6 % Long duration bond fund 4 4 — — 1 % Future and option contracts (a) 2 2 — — 5 % Total bargain VEBA 100 % $ 426 $ 140 $ 286 $ — 100 % Non-bargain VEBA: Cash $ 1 $ 1 $ — $ — — Equity securities: 60 % U.S. large cap 53 53 — — 37 % U.S. small cap 5 5 — — 4 % International 47 47 — — 33 % Fixed income securities: 40 % Core fixed income bond fund (a) 36 36 — — 26 % Total non-bargain VEBA 100 % $ 142 $ 142 $ — $ — 100 % Life VEBA: Cash $ 3 $ 3 $ — $ — — Equity securities: 70 % U.S. large cap 3 3 — — 38 % Fixed income securities: 30 % Core fixed income bond fund (a) 2 2 — — 62 % Total life VEBA 100 % $ 8 $ 8 $ — $ — 100 % Total 100 % $ 576 $ 290 $ 286 $ — 100 % (a) Includes cash for margin requirements. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Future Annual Commitments Related to Minimum Quantities of Purchased Water Having Non-Cancelable Terms | The following table provides the future annual commitments related to minimum quantities of purchased water having non-cancelable: Amount 2019 $ 65 2020 65 2021 65 2022 64 2023 57 Thereafter 641 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerator and Denominator for Basic and Diluted Earnings Per Share | The following table provides a reconciliation of the numerator and denominator for basic and diluted earnings per share (“EPS”) calculations for the years ended December 31 : 2018 2017 2016 Numerator: Net income attributable to common shareholders $ 567 $ 426 $ 468 Denominator: Weighted average common shares outstanding—Basic 180 178 178 Effect of dilutive common stock equivalents — 1 1 Weighted average common shares outstanding—Diluted 180 179 179 |
Fair Values of Financial Inst_2
Fair Values of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Carrying Amounts and Fair Values of Financial Instruments | The following tables provide the carrying amounts, including fair value adjustments previously recognized in acquisition purchase accounting, and a fair value adjustment related to interest rate swap fair value hedges (classified as Level 2 in the fair value hierarchy), and the fair values of the financial instruments: Carrying Amount December 31, 2018 L e vel 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 8 $ — $ — $ 9 $ 9 Long-term debt (excluding capital lease obligations) 7,638 5,760 433 1,728 7,921 Carrying Amount December 31, 2017 L e vel 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 10 $ — $ — $ 14 $ 14 Long-term debt (excluding capital lease obligations) 6,809 4,846 976 1,821 7,643 |
Fair Value Measurements of Assets and Liabilities on Recurring Basis | The following tables provide assets and liabilities measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy as of December 31, 2018 and 2017 , respectively: December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Restricted funds $ 29 $ — $ — $ 29 Rabbi trust investments 15 — — 15 Deposits 3 — — 3 Other investments 3 — — 3 Total assets 50 — — 50 Liabilities: Deferred compensation obligations 17 — — 17 Mark-to-market derivative liabilities — 14 — 14 Total liabilities 17 14 — 31 Total assets (liabilities) $ 33 $ (14 ) $ — $ 19 December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Restricted funds $ 28 $ — $ — $ 28 Rabbi trust investments 15 — — 15 Deposits 4 — — 4 Other investments 3 — — 3 Total assets 50 — — 50 Liabilities: Deferred compensation obligations 17 — — 17 Mark-to-market derivative liabilities — 3 — 3 Total liabilities 17 3 — 20 Total assets (liabilities) $ 33 $ (3 ) $ — $ 30 |
Fair Value Measurements, Nonrecurring | The following table provides assets measured and recorded at fair value on a nonrecurring basis and their level within the fair value hierarchy as of December 31, 2018 : At Fair Value as of December 31, 2018 Level 1 Level 2 Level 3 Total 2018 Impairment Charge Assets: Keystone goodwill (a) $ — $ — $ 38 $ 38 $ 53 Keystone intangible asset (a) — — 3 3 4 Total $ — $ — $ 41 $ 41 $ 57 (a) As of December 31, 2017, Keystone’s goodwill balance was $91 million and its intangible asset balance was $8 million . Subsequent to the impairment charge recorded in the third quarter of 2018, Keystone’s goodwill and intangible asset balances were $38 million and $3 million , respectively, as of December 31, 2018. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Schedule of Minimum Annual Future Rental Commitment Under Operating Leases | The following table provides the minimum annual future rental commitment under operating leases that have initial or remaining non-cancelable lease terms over the next five years and thereafter: Amount 2019 $ 17 2020 15 2021 12 2022 11 2023 6 Thereafter 80 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Summarized Segment Information | The following tables provide summarized segment information as of and for the years ended December 31 : 2018 Regulated Market-Based Other Consolidated Operating revenues $ 2,984 $ 476 $ (20 ) $ 3,440 Depreciation and amortization 500 29 16 545 Impairment charge — 57 — 57 Total operating expenses, net 1,912 441 (15 ) 2,338 Interest, net (280 ) 4 (74 ) (350 ) Income before income taxes 826 41 (80 ) 787 Provision for income taxes 224 11 (13 ) 222 Net income attributable to common shareholders 602 32 (67 ) 567 Total assets 18,680 999 1,544 21,223 Capital expenditures 1,477 13 96 1,586 2017 Regulated Market-Based Other Consolidated Operating revenues $ 2,958 $ 422 $ (23 ) $ 3,357 Depreciation and amortization 462 18 12 492 Total operating expenses, net 1,766 360 (22 ) 2,104 Interest, net (268 ) 3 (77 ) (342 ) Income before income taxes 925 66 (79 ) 912 Provision for income taxes 366 28 92 486 Net income attributable to common shareholders 559 38 (171 ) 426 Total assets 17,602 599 1,281 19,482 Capital expenditures 1,316 18 100 1,434 2016 Regulated Market-Based Other Consolidated Operating revenues $ 2,871 $ 451 $ (20 ) $ 3,302 Depreciation and amortization 440 15 15 470 Total operating expenses, net 1,840 391 (14 ) 2,217 Interest, net (256 ) 2 (71 ) (325 ) Income before income taxes 775 65 (70 ) 770 Provision for income taxes 303 26 (27 ) 302 Net income attributable to common shareholders 472 39 (43 ) 468 Total assets 16,405 637 1,440 18,482 Capital expenditures 1,274 18 19 1,311 |
Unaudited Quarterly Data (Table
Unaudited Quarterly Data (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data [Abstract] | |
Schedule Of Unaudited Quarterly Data | The following tables provide supplemental, unaudited, consolidated, quarterly financial data for each of the four quarters in the years ended December 31, 2018 and 2017 , respectively. The operating results for any quarter are not indicative of results that may be expected for a full year or any future periods. 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Operating revenues $ 761 $ 853 $ 976 $ 850 Operating income 217 302 335 248 Net income attributable to common shareholders 106 162 187 112 Basic earnings per share: Net income attributable to common shareholders $ 0.60 $ 0.90 $ 1.04 $ 0.62 Diluted earnings per share: (a) Net income attributable to common shareholders 0.59 0.91 1.04 0.62 (a) Amounts may not sum due to rounding. 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Operating revenues $ 756 $ 844 $ 936 $ 821 Operating income 230 310 432 281 Net income attributable to common shareholders 93 131 203 (1 ) Basic earnings per share: Net income attributable to common shareholders $ 0.52 $ 0.74 $ 1.14 $ (0.01 ) Diluted earnings per share: Net income attributable to common shareholders 0.52 0.73 1.13 — |
Organization and Operation - Ad
Organization and Operation - Additional Details (Details) | Dec. 31, 2018state |
Market-Based Businesses | |
Segment Reporting Information [Line Items] | |
Number of states in which entity provides water and wastewater services | 16 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 01, 2019USD ($) | Jul. 31, 2015 | |
Significant Accounting Policies [Line Items] | |||||
Voting interest | 50.00% | ||||
Ownership percentage in subsidiary | 95.00% | ||||
Redeemable noncontrolling interest | $ 0 | $ 7,000,000 | |||
Estimated refunds | 23,000,000 | 23,000,000 | |||
Amortization of contributions in aid of construction | $ 28,000,000 | 27,000,000 | $ 27,000,000 | ||
Payment terms from billing, period | 30 days | ||||
Payments for environmental loss contingencies | $ 1,000,000 | ||||
Remediation costs accrued | 4,000,000 | 6,000,000 | |||
Software | |||||
Significant Accounting Policies [Line Items] | |||||
Acquisition cost, carrying value | $ 336,000,000 | $ 346,000,000 | |||
Water Solutions Holding | |||||
Significant Accounting Policies [Line Items] | |||||
Additional percentage of voting interests acquired | 5.00% | ||||
Total percentage of voting interests | 100.00% | ||||
Accounting Standards Update 2016-02 | Forecast | |||||
Significant Accounting Policies [Line Items] | |||||
Operating lease right-of-use asset | $ 118,000,000 | ||||
Operating lease liabilities | $ 116,000,000 | ||||
Market-Based Businesses | |||||
Significant Accounting Policies [Line Items] | |||||
Number of reporting unit | 1 | ||||
Payment terms from billing, period | 12 months | ||||
Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Payment terms from billing, period | 1 year |
Significant Accounting Polici_5
Significant Accounting Policies - Reconciliation Of Cash And Cash Equivalents, And Restricted Cash Reported (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 130 | $ 55 | ||
Restricted funds | 28 | 27 | ||
Restricted funds included in other long-term assets | 1 | 1 | ||
Cash and cash equivalents and restricted funds as presented on the Consolidated Statements of Cash Flows | $ 159 | $ 83 | $ 99 | $ 72 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Allowance for Funds Used During Construction (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Funds | |||
Significant Accounting Policies [Line Items] | |||
Allowance for funds used during construction | $ 24 | $ 19 | $ 15 |
Borrowed Funds | |||
Significant Accounting Policies [Line Items] | |||
Allowance for funds used during construction | $ 13 | $ 8 | $ 6 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregated Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | $ 3,417 | ||||||||||
Other operating income | 23 | ||||||||||
Operating revenues | $ 850 | $ 976 | $ 853 | $ 761 | $ 821 | $ 936 | $ 844 | $ 756 | 3,440 | $ 3,357 | $ 3,302 |
Service, Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | (17) | ||||||||||
Other operating income | (3) | ||||||||||
Operating revenues | (20) | ||||||||||
Regulated Businesses | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 2,958 | ||||||||||
Other operating income | 26 | ||||||||||
Alternative revenue programs | 19 | ||||||||||
Lease contract revenue | 7 | ||||||||||
Operating revenues | 2,984 | ||||||||||
Regulated Businesses | Water Services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 2,749 | ||||||||||
Other operating income | 0 | ||||||||||
Operating revenues | 2,749 | ||||||||||
Regulated Businesses | Water Services | Residential | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 1,663 | ||||||||||
Other operating income | 0 | ||||||||||
Operating revenues | 1,663 | ||||||||||
Regulated Businesses | Water Services | Commercial | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 616 | ||||||||||
Other operating income | 0 | ||||||||||
Operating revenues | 616 | ||||||||||
Regulated Businesses | Water Services | Fire Service | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 137 | ||||||||||
Operating revenues | 137 | ||||||||||
Regulated Businesses | Water Services | Industrial | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 136 | ||||||||||
Operating revenues | 136 | ||||||||||
Regulated Businesses | Water Services | Public and Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 197 | ||||||||||
Other operating income | 0 | ||||||||||
Operating revenues | 197 | ||||||||||
Regulated Businesses | Wastewater Services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 161 | ||||||||||
Operating revenues | 161 | ||||||||||
Regulated Businesses | Wastewater Services | Residential | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 115 | ||||||||||
Operating revenues | 115 | ||||||||||
Regulated Businesses | Wastewater Services | Commercial | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 30 | ||||||||||
Operating revenues | 30 | ||||||||||
Regulated Businesses | Wastewater Services | Industrial | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 2 | ||||||||||
Operating revenues | 2 | ||||||||||
Regulated Businesses | Wastewater Services | Public and Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 14 | ||||||||||
Operating revenues | 14 | ||||||||||
Regulated Businesses | Miscellaneous Utility Charge | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 48 | ||||||||||
Operating revenues | 48 | ||||||||||
Market-Based Businesses | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 476 | ||||||||||
Operating revenues | $ 476 |
Revenue Recognition - Contract
Revenue Recognition - Contract Assets and Liabilities (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Contract with Customer, Asset, Net [Abstract] | |
Contract asset, beginning | $ 35 |
Additions | 18 |
Transfers to accounts receivable, net | (39) |
Contract asset, ending | 14 |
Contract with Customer, Liability [Abstract] | |
Contract liability, beginning | 25 |
Additions | 52 |
Transfers to operating revenues | (57) |
Contract liability, ending | $ 20 |
Revenue Recognition - (Details)
Revenue Recognition - (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($)Contract | |
Market-Based Businesses | U.S. Government | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 4,400 |
Market-Based Businesses | Municipalities and Commercial | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 596 |
Contract Operations Group | Veolia Environnement | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contracts, closed | Contract | 20 |
Contract Operations Group | Veolia Environnement | Market-Based Businesses | Municipalities and Commercial | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 61 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) $ / shares in Units, CustomerAccount in Thousands | Jul. 05, 2018USD ($)Contract | Jun. 04, 2018USD ($)CustomerAccountstate | May 30, 2018USD ($)CustomerAccount | Apr. 13, 2018USD ($)CustomerAccount | Jan. 31, 2019USD ($) | Sep. 30, 2018USD ($)Contract | Dec. 31, 2018USD ($)AcquisitionContract | Dec. 31, 2017USD ($)Acquisition | Dec. 31, 2016USD ($)Acquisition | Jun. 07, 2018USD ($)$ / sharesshares | Apr. 11, 2018forward_purchasershares |
Business Acquisition And Divestitures [Line Items] | |||||||||||
Goodwill | $ 1,575,000,000 | $ 1,379,000,000 | $ 1,345,000,000 | ||||||||
Measurement period adjustments | $ 5,000,000 | ||||||||||
Number of forward purchasers | forward_purchaser | 2 | ||||||||||
Forward sale agreement, number of shares authorized | shares | 2,320,000 | 2,320,000 | |||||||||
Forward sale agreement, share price (USD per share) | $ / shares | $ 79.01 | ||||||||||
Forward sale agreement, net proceeds | $ 183,000,000 | ||||||||||
Regulated Water And Wastewater Systems | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Number of companies acquired | Acquisition | 15 | 15 | |||||||||
Purchase price | $ 33,000,000 | ||||||||||
Purchase price allocation, assets acquired | 32,000,000 | ||||||||||
Contributions in aid of construction | $ 1,000,000 | ||||||||||
Regulated Businesses | Regulated Water And Wastewater Systems | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Number of companies acquired | Acquisition | 1 | ||||||||||
Goodwill | $ 2,000,000 | ||||||||||
Goodwill, expected tax deductible amount | 0 | ||||||||||
Business Acquisitions 2017 | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Number of companies acquired | Acquisition | 3 | ||||||||||
Business Acquisitions 2017 | Regulated Water And Wastewater Systems | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Number of companies acquired | Acquisition | 18 | ||||||||||
Purchase price | $ 210,000,000 | ||||||||||
Purchase price allocation, assets acquired | 207,000,000 | ||||||||||
Contributions in aid of construction | 9,000,000 | ||||||||||
Purchase price allocation, liabilities assumed | 23,000,000 | ||||||||||
Debt related to purchase price allocation | 7,000,000 | ||||||||||
Bargain purchase gain recognized | $ 3,000,000 | ||||||||||
Business Acquisitions 2017 | Regulated Businesses | Regulated Water And Wastewater Systems | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Number of companies acquired | Acquisition | 4 | ||||||||||
Goodwill | $ 29,000,000 | ||||||||||
Goodwill, expected tax deductible amount | $ 1,000,000 | ||||||||||
Business Acquisitions 2016 | Regulated Water And Wastewater Systems | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Purchase price | $ 199,000,000 | ||||||||||
Purchase price allocation, assets acquired | 194,000,000 | ||||||||||
Contributions in aid of construction | 14,000,000 | ||||||||||
Purchase price allocation, liabilities assumed | 30,000,000 | ||||||||||
Debt related to purchase price allocation | $ 6,000,000 | ||||||||||
Business Acquisitions 2016 | Regulated Businesses | Regulated Water And Wastewater Systems | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Number of companies acquired | Acquisition | 5 | ||||||||||
Goodwill | $ 43,000,000 | ||||||||||
Goodwill, expected tax deductible amount | $ 31,000,000 | ||||||||||
Measurement period adjustments | 5,000,000 | ||||||||||
Alton, Illinois Wastewater | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Purchase price | $ 54,000,000 | ||||||||||
Number of customer accounts | CustomerAccount | 23 | ||||||||||
Exeter Township, Pennsylvania Wastewater Assets | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Purchase price | $ 96,000,000 | ||||||||||
Number of customer accounts | CustomerAccount | 9 | ||||||||||
Pivotal | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Purchase price | $ 365,000,000 | ||||||||||
Purchase price allocation, assets acquired | 136,000,000 | ||||||||||
Goodwill | 247,000,000 | ||||||||||
Purchase price allocation, liabilities assumed | $ 18,000,000 | ||||||||||
Measurement period adjustments | $ 5,000,000 | ||||||||||
Number of customer accounts | CustomerAccount | 1,200 | ||||||||||
Working capital | $ 9,000,000 | ||||||||||
Number of states in which entity operates | state | 18 | ||||||||||
Intangible assets useful life | 6 years | ||||||||||
Intangible assets, weighted average useful life (years) | 3 years | ||||||||||
Pivotal | Customer Relationships | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Intangible assets useful life | 21 years | ||||||||||
Intangible assets, weighted average useful life (years) | 6 years | ||||||||||
Direct Connections | Alton, Illinois Wastewater | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Number of customer accounts | CustomerAccount | 11 | ||||||||||
Bulk Contracts | Alton, Illinois Wastewater | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Number of customer accounts | CustomerAccount | 12 | ||||||||||
Veolia Environnement | Contract Operations Group | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Gain (loss) on disposition of business | $ 27,000,000 | $ 14,000,000 | |||||||||
Contracts, closed | Contract | 20 | ||||||||||
Contracts | Contract | 22 | ||||||||||
Contracts, pending to be closed | Contract | 2 | ||||||||||
Subsequent event | Alton, Illinois Wastewater | |||||||||||
Business Acquisition And Divestitures [Line Items] | |||||||||||
Non-escrowed deposit | $ 5,000,000 |
Acquisitions and Divestitures A
Acquisitions and Divestitures Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Jun. 04, 2018 | Dec. 31, 2016 | |
Liabilities assumed: | ||||
Goodwill | $ 1,575 | $ 1,379 | $ 1,345 | |
Goodwill, adjustment | $ 5 | |||
Pivotal | ||||
Identifiable assets acquired: | ||||
Accounts receivable | $ 22 | |||
Accounts receivable, adjustment | (1) | |||
Other current assets | 2 | |||
Other current assets, adjustment | 1 | |||
Property, plant and equipment | 22 | |||
Property, plant and equipment, adjustment | 1 | |||
Intangible assets | 90 | |||
Intangible assets, adjustment | (6) | |||
Total identifiable assets acquired | 136 | |||
Total identifiable assets acquired, adjustment | (5) | |||
Liabilities assumed: | ||||
Accounts payable and accrued liabilities | (5) | |||
Accounts payable and accrued liabilities, adjustment | 0 | |||
Other current liabilities | (12) | |||
Other current liabilities, adjustment | 2 | |||
Long-term liabilities | (1) | |||
Long-term liabilities, adjustment | 0 | |||
Total liabilities assumed | (18) | |||
Total liabilities assumed, adjustment | 2 | |||
Net identifiable assets acquired | 118 | |||
Net identifiable assets acquired, adjustment | (3) | |||
Goodwill | 247 | |||
Goodwill, adjustment | 5 | |||
Net assets acquired | 365 | |||
Net assets acquired, adjustment | $ 2 | |||
Initially reported | Pivotal | ||||
Identifiable assets acquired: | ||||
Accounts receivable | 23 | |||
Other current assets | 1 | |||
Property, plant and equipment | 21 | |||
Intangible assets | 96 | |||
Total identifiable assets acquired | 141 | |||
Liabilities assumed: | ||||
Accounts payable and accrued liabilities | (5) | |||
Other current liabilities | (14) | |||
Long-term liabilities | (1) | |||
Total liabilities assumed | (20) | |||
Net identifiable assets acquired | 121 | |||
Goodwill | 242 | |||
Net assets acquired | $ 363 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures Acquisitions - Intangible Assets Acquired (Details) - USD ($) $ in Millions | Jun. 04, 2018 | Dec. 31, 2018 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 90 | |
Customer Relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | 78 | |
Other Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | 12 | |
Pivotal | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 90 | $ 90 |
Pivotal | Customer Relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | 78 | |
Pivotal | Other Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 12 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Major Classes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Public Utility, Property, Plant and Equipment [Line Items] | ||
Construction work in progress | $ 593 | $ 585 |
Total utility plant | 22,486 | 21,146 |
Nonutility property | 718 | 570 |
Total property, plant and equipment | $ 23,204 | 21,716 |
Weighted Average Useful Life | 6 years | |
Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 3 years | |
Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 50 years | |
Utility Plant | Land and other non-depreciable assets | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 155 | 151 |
Utility Plant | Sources of supply | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 821 | 798 |
Weighted Average Useful Life | 47 years | |
Utility Plant | Sources of supply | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 2 years | |
Utility Plant | Sources of supply | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 127 years | |
Utility Plant | Treatment and pumping facilities | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 3,607 | 3,356 |
Weighted Average Useful Life | 40 years | |
Utility Plant | Treatment and pumping facilities | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 3 years | |
Utility Plant | Treatment and pumping facilities | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 101 years | |
Utility Plant | Transmission and distribution facilities | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 10,164 | 9,583 |
Weighted Average Useful Life | 70 years | |
Utility Plant | Transmission and distribution facilities | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 9 years | |
Utility Plant | Transmission and distribution facilities | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 149 years | |
Utility Plant | Services, meters and fire hydrants | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 4,008 | 3,754 |
Weighted Average Useful Life | 31 years | |
Utility Plant | Services, meters and fire hydrants | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 5 years | |
Utility Plant | Services, meters and fire hydrants | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 90 years | |
Utility Plant | General structures and equipment | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 1,625 | 1,458 |
Weighted Average Useful Life | 15 years | |
Utility Plant | General structures and equipment | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 3 years | |
Utility Plant | General structures and equipment | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 109 years | |
Utility Plant | Waste collection | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 943 | 904 |
Weighted Average Useful Life | 60 years | |
Utility Plant | Waste collection | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 5 years | |
Utility Plant | Waste collection | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 114 years | |
Utility Plant | Waste treatment, pumping and disposal | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 570 | $ 557 |
Weighted Average Useful Life | 41 years | |
Utility Plant | Waste treatment, pumping and disposal | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 3 years | |
Utility Plant | Waste treatment, pumping and disposal | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 139 years |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 497 | $ 460 | $ 435 |
Provision for depreciation, percentage of aggregate average depreciable asset | 3.09% | 3.07% | 3.14% |
Allowance for Uncollectible A_3
Allowance for Uncollectible Accounts - Schedule of Allowances for Uncollectible Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance as of January 1 | $ (42) | $ (40) | $ (39) |
Amounts charged to expense | (33) | (29) | (27) |
Amounts written off | 34 | 30 | 29 |
Recoveries of amounts written off | (4) | (3) | (3) |
Balance as of December 31 | $ (45) | $ (42) | $ (40) |
Regulatory Assets and Liabili_3
Regulatory Assets and Liabilities - Summary of Composition of Regulatory Assets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Regulatory Assets [Line Items] | ||
Regulatory assets | $ 1,156 | $ 1,061 |
Deferred pension expense | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | 362 | 285 |
Removal costs recoverable through rates | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | 292 | 269 |
Regulatory balancing accounts | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | 110 | 113 |
San Clemente Dam project costs | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | 85 | 89 |
Debt expense | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | 70 | 67 |
Purchase premium recoverable through rates | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | 56 | 57 |
Deferred tank painting costs | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | 42 | 42 |
Make-whole premium on early extinguishment of debt | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | 33 | 27 |
Other | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | $ 106 | $ 112 |
Regulatory Assets and Liabili_4
Regulatory Assets and Liabilities - Additional Information (Details) $ in Millions | Sep. 11, 2018USD ($) | Dec. 31, 2008USD ($) | Dec. 31, 2018USD ($)state | Dec. 31, 2017USD ($) |
Regulatory Asset And Liabilities [Line Items] | ||||
Number of proceedings | state | 14 | |||
Number of proceedings, number of states effected | state | 10 | |||
Number of proceedings, number of states effected, offset additional capital investment | state | 1 | |||
Number of proceedings, number of states effected, reduction of certain regulatory assets | state | 1 | |||
Number of proceedings, pending | state | 3 | |||
Number of proceedings, number of states effected, timeline approved for customer refunds | state | 8 | |||
Number of proceedings, number of states effected, stipulated settlement | state | 1 | |||
Deferred revenue | $ 54 | |||
Removal costs recovered through rates | ||||
Regulatory Asset And Liabilities [Line Items] | ||||
Amortization expense of regulatory assets period end date | 2048-11 | |||
Amortization of regulatory asset | $ 48 | |||
Regulatory liabilities, current | TCJA reserve on revenue | ||||
Regulatory Asset And Liabilities [Line Items] | ||||
Regulatory liabilities | 18 | |||
Regulatory liabilities, noncurrent | TCJA reserve on revenue | ||||
Regulatory Asset And Liabilities [Line Items] | ||||
Regulatory liabilities | 36 | |||
Deferred pension expense | ||||
Regulatory Asset And Liabilities [Line Items] | ||||
Regulatory assets underfunded status | $ 352 | $ 270 | ||
San Clemente Dam project costs | ||||
Regulatory Asset And Liabilities [Line Items] | ||||
Regulatory assets amortization period | 20 years | |||
Uncovered balance of project costs incurred, including cost of capital, net of surcharges | $ 85 | 89 | ||
Surcharges collections | 8 | $ 7 | ||
Revenue requirement to be recovered through base rates | $ 8 | |||
Deferred tank painting costs | Minimum | ||||
Regulatory Asset And Liabilities [Line Items] | ||||
Regulatory assets amortization period | 5 years | |||
Deferred tank painting costs | Maximum | ||||
Regulatory Asset And Liabilities [Line Items] | ||||
Regulatory assets amortization period | 15 years | |||
American Water Capital Corp. | ||||
Regulatory Asset And Liabilities [Line Items] | ||||
Early repayment of senior debt | $ 10 | |||
Senior notes | Senior Note 5.62% due 2018 | American Water Capital Corp. | ||||
Regulatory Asset And Liabilities [Line Items] | ||||
Interest rate | 5.62% | |||
Senior notes | Senior Note 5.77% due 2021 | American Water Capital Corp. | ||||
Regulatory Asset And Liabilities [Line Items] | ||||
Interest rate | 5.77% |
Regulatory Assets and Liabili_5
Regulatory Assets and Liabilities - Summary of Composition of Regulatory Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Regulatory Liabilities [Line Items] | ||
Regulatory liabilities | $ 1,907 | $ 1,664 |
Income taxes recovered through rates | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liabilities | 1,279 | 1,242 |
Removal costs recovered through rates | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liabilities | 309 | 315 |
Postretirement benefit liability | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liabilities | 209 | 33 |
Pension and other postretirement benefit balancing accounts | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liabilities | 46 | 48 |
TCJA reserve on revenue | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liabilities | 36 | 0 |
Other | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liabilities | $ 28 | $ 26 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Summary of Changes in Goodwill Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Cost, beginning balance | $ 3,819 | $ 3,785 |
Accumulated Impairment, beginning balance | (2,440) | (2,440) |
Total Net, beginning balance | 1,379 | 1,345 |
Goodwill from acquisitions | 249 | 29 |
Measurement period adjustments | 5 | |
Goodwill impairment charge | (53) | |
Cost, ending balance | 4,068 | 3,819 |
Accumulated Impairment, ending balance | (2,493) | (2,440) |
Total Net, ending balance | 1,575 | 1,379 |
Operating Segments | Regulated Businesses | ||
Goodwill [Roll Forward] | ||
Cost, beginning balance | 3,492 | 3,458 |
Accumulated Impairment, beginning balance | (2,332) | (2,332) |
Goodwill from acquisitions | 29 | |
Measurement period adjustments | 5 | |
Cost, ending balance | 3,494 | 3,492 |
Accumulated Impairment, ending balance | (2,332) | (2,332) |
Operating Segments | Market-Based Businesses | ||
Goodwill [Roll Forward] | ||
Cost, beginning balance | 327 | 327 |
Accumulated Impairment, beginning balance | (108) | (108) |
Goodwill from acquisitions | 247 | |
Goodwill impairment charge | (53) | |
Cost, ending balance | 574 | 327 |
Accumulated Impairment, ending balance | $ (161) | $ (108) |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Additional Information (Details) $ in Millions | Jun. 04, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)Acquisition | Dec. 31, 2017USD ($)Acquisition | Dec. 31, 2016USD ($)Acquisition |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill from acquisitions | $ 249 | $ 29 | |||
Goodwill | 1,575 | 1,379 | $ 1,345 | ||
Measurement period adjustments | 5 | ||||
Impairment of intangible assets | 4 | ||||
Goodwill impairment charge | 53 | ||||
Finite-lived intangible assets acquired | 90 | ||||
Amortization expense | $ 12 | 4 | $ 4 | ||
Regulated Water And Wastewater Systems | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of companies acquired | Acquisition | 15 | 15 | |||
Keystone | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment charge | $ 57 | ||||
Goodwill, impairment loss, net of tax | $ 54 | ||||
Regulated Businesses | Regulated Water And Wastewater Systems | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill from acquisitions | $ 2 | ||||
Number of companies acquired | Acquisition | 1 | ||||
Goodwill | $ 2 | ||||
Operating Segments | Market-Based Businesses | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill from acquisitions | 247 | ||||
Goodwill impairment charge | 53 | ||||
Operating Segments | Regulated Businesses | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill from acquisitions | 29 | ||||
Measurement period adjustments | $ 5 | ||||
Business Acquisitions 2017 | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of companies acquired | Acquisition | 3 | ||||
Business Acquisitions 2017 | Regulated Water And Wastewater Systems | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of companies acquired | Acquisition | 18 | ||||
Business Acquisitions 2017 | Regulated Businesses | Regulated Water And Wastewater Systems | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of companies acquired | Acquisition | 4 | ||||
Goodwill | $ 29 | ||||
Business Acquisitions 2016 | Regulated Businesses | Regulated Water And Wastewater Systems | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of companies acquired | Acquisition | 5 | ||||
Goodwill | $ 43 | ||||
Measurement period adjustments | 5 | ||||
Pivotal | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 247 | ||||
Measurement period adjustments | 5 | ||||
Finite-lived intangible assets acquired | $ 90 | $ 90 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Intangible Assets - Cost (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Finite-lived Intangible Assets [Roll Forward] | |
Finite-lived intangible assets, net, beginning | $ 14 |
Finite-lived intangible assets acquired | 90 |
Impairment of intangible assets, finite-lived | (4) |
Finite-lived intangible assets, other | (1) |
Finite-lived intangible assets, net, ending | 99 |
Customer Relationships | |
Finite-lived Intangible Assets [Roll Forward] | |
Finite-lived intangible assets, net, beginning | 12 |
Finite-lived intangible assets acquired | 78 |
Impairment of intangible assets, finite-lived | (4) |
Finite-lived intangible assets, other | 0 |
Finite-lived intangible assets, net, ending | 86 |
Other Intangible Assets | |
Finite-lived Intangible Assets [Roll Forward] | |
Finite-lived intangible assets, net, beginning | 2 |
Finite-lived intangible assets acquired | 12 |
Impairment of intangible assets, finite-lived | 0 |
Finite-lived intangible assets, other | (1) |
Finite-lived intangible assets, net, ending | $ 13 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Intangible Assets - Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Finite-lived intangible assets, accumulated amortization, beginning | $ (5) | ||
Finite-lived intangible assets, net, beginning | 9 | ||
Finite-lived intangible assets, amortization | (12) | $ (4) | $ (4) |
Finite-lived intangible assets, accumulated amortization, other | 2 | ||
Finite-lived intangible assets, accumulated amortization, ending | (15) | (5) | |
Finite-lived intangible assets, net, ending | 84 | 9 | |
Customer Relationships | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Finite-lived intangible assets, accumulated amortization, beginning | (4) | ||
Finite-lived intangible assets, amortization | (9) | ||
Finite-lived intangible assets, accumulated amortization, other | 0 | ||
Finite-lived intangible assets, accumulated amortization, ending | (13) | (4) | |
Other Intangible Assets | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Finite-lived intangible assets, accumulated amortization, beginning | (1) | ||
Finite-lived intangible assets, amortization | (3) | ||
Finite-lived intangible assets, accumulated amortization, other | 2 | ||
Finite-lived intangible assets, accumulated amortization, ending | $ (2) | $ (1) |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Amortization of Intangibles (Details) $ in Millions | Dec. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,019 | $ 15 |
2,020 | 13 |
2,021 | 11 |
2,022 | 10 |
2,023 | $ 7 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 07, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 28, 2015 |
Stockholders Equity Note [Line Items] | |||||
Shares of common stock repurchased (in Shares) | 600,000 | 700,000 | |||
Aggregate cost of shares repurchased | $ 45 | $ 54 | $ 65 | ||
Share of common stock available for repurchase (in Shares) | 5,500,000 | ||||
Dividends paid | $ 319 | $ 289 | $ 261 | ||
Dividends declared per common share (USD per share) | $ 0.455 | $ 1.82 | $ 1.66 | $ 1.50 | |
Maximum | |||||
Stockholders Equity Note [Line Items] | |||||
Shares available under the program to purchase outstanding common stock (in Shares) | 10,000,000 | ||||
DRIP | |||||
Stockholders Equity Note [Line Items] | |||||
Shares available for grant (in Shares) | 4,200,000 |
Stockholders' Equity - Changes
Stockholders' Equity - Changes in Accumulated Other Comprehensive Loss by Component, Net of Tax (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
AOCI Attributable to Parent [Roll Forward] | ||
Beginning Balance | $ 5,385 | $ 5,218 |
Ending Balance | 5,864 | 5,385 |
Employee Benefit Plan Funded Status | ||
AOCI Attributable to Parent [Roll Forward] | ||
Beginning Balance | (140) | (147) |
Other comprehensive income (loss) before reclassification | 60 | 7 |
TCJA tax effects reclassified from accumulated other comprehensive loss | (22) | |
Net other comprehensive income (loss) | 38 | 7 |
Ending Balance | (102) | (140) |
Amortization of Prior Service Cost | ||
AOCI Attributable to Parent [Roll Forward] | ||
Beginning Balance | 1 | 1 |
Ending Balance | 1 | 1 |
Amortization of Actuarial Loss | ||
AOCI Attributable to Parent [Roll Forward] | ||
Beginning Balance | 49 | 42 |
Amounts reclassified from accumulated other comprehensive loss | 7 | 7 |
Net other comprehensive income (loss) | 7 | 7 |
Ending Balance | 56 | 49 |
Foreign Currency Translation | ||
AOCI Attributable to Parent [Roll Forward] | ||
Beginning Balance | 1 | 2 |
Other comprehensive income (loss) before reclassification | (1) | |
Net other comprehensive income (loss) | 0 | (1) |
Ending Balance | 1 | 1 |
Gain (Loss) on Cash Flow Hedge | ||
AOCI Attributable to Parent [Roll Forward] | ||
Beginning Balance | 10 | 16 |
Other comprehensive income (loss) before reclassification | (2) | (6) |
TCJA tax effects reclassified from accumulated other comprehensive loss | 2 | |
Net other comprehensive income (loss) | 0 | (6) |
Ending Balance | 10 | 10 |
Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent [Roll Forward] | ||
Beginning Balance | (79) | (86) |
Other comprehensive income (loss) before reclassification | 58 | 0 |
TCJA tax effects reclassified from accumulated other comprehensive loss | (20) | |
Amounts reclassified from accumulated other comprehensive loss | 7 | 7 |
Net other comprehensive income (loss) | 45 | 7 |
Ending Balance | $ (34) | $ (79) |
Stockholders' Equity - Dividend
Stockholders' Equity - Dividends (Details) - $ / shares | 3 Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | |
Equity [Abstract] | ||||||||||||
Dividends declared per common share (USD per share) | $ 0.455 | $ 0.455 | $ 0.455 | $ 0.415 | $ 0.415 | $ 0.415 | $ 0.415 | $ 0.375 | $ 0.375 | $ 0.375 | $ 0.375 | $ 0.34 |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Details) - USD ($) $ in Millions | Feb. 05, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | May 30, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock based compensation, amortization expense period | 3 years | ||||
Stock-based compensation, capitalized amount | $ 0 | $ 0 | $ 0 | ||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock distribution period | 30 days | ||||
Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock distribution period | 15 months | ||||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (Shares) | 107,000 | ||||
Vesting period | 3 years | ||||
Unrecognized compensation cost (less than) | $ 5 | ||||
Weighted-average period (in Years) | 2 years 1 month 1 day | ||||
Total fair value of shares vested | $ 4 | 3 | 2 | ||
Accrued dividend equivalents | $ 1 | 1 | |||
Restricted Stock Units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Accrued dividend equivalents | 1 | ||||
Performance Condition | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (Shares) | 165,000 | ||||
Vesting period | 3 years | ||||
Unrecognized compensation cost (less than) | $ 4 | ||||
Weighted-average period (in Years) | 1 year 4 months 6 days | ||||
Total fair value of shares vested | $ 12 | $ 13 | 12 | ||
Historical volatility, stock price, period | 3 years | ||||
Expected term | 3 years | ||||
2007 Omnibus Equity Compensation Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total shares authorized for grant (in Shares) | 15,500,000 | ||||
Shares available for grant (in Shares) | 7,500,000 | ||||
2007 Omnibus Equity Compensation Plan | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (Shares) | 0 | 0 | |||
Vesting period | 3 years | ||||
Maximum terms | 7 years | ||||
Unrecognized compensation cost (less than) | $ 1 | ||||
Weighted-average period (in Years) | 1 year | ||||
Total fair value of shares vested | $ 1 | $ 2 | $ 1 | ||
2007 Omnibus Equity Compensation Plan | Stock Options | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | ||||
2007 Omnibus Equity Compensation Plan | Stock Options | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
2007 Omnibus Equity Compensation Plan | Restricted Stock Units | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | 1 year | 1 year | ||
2007 Omnibus Equity Compensation Plan | Restricted Stock Units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | 3 years | 3 years | ||
2017 Omnibus Equity Compensation Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total shares authorized for grant (in Shares) | 7,200,000 | ||||
Shares available for grant (in Shares) | 6,900,000 | ||||
Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for grant (in Shares) | 1,900,000 | ||||
Lesser of fair market value | 90.00% | ||||
Purchase period | 3 months | ||||
Shares issued (in shares) | 95,000 | 93,000 | 93,000 | ||
Subsequent event | Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Lesser of fair market value | 85.00% |
Stock-Based Compensation Expens
Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 17 | $ 11 | $ 11 |
Income tax benefit | (5) | (4) | (4) |
Stock-based compensation expense, net of tax | 12 | 7 | 7 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 1 | 1 | 2 |
Income tax benefit | (2) | (3) | (6) |
Restricted Stock Units (RSUs) and Performance Conditions (PSU) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 15 | 9 | 8 |
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 1 | $ 1 | $ 1 |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Weighted-Average Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0.00% | 0.00% | 2.09% |
Expected volatility | 0.00% | 0.00% | 15.89% |
Risk-free interest rate | 0.00% | 0.00% | 1.15% |
Expected life (years) | 0 years | 0 years | 4 years |
Exercise price (USD per share) | $ 0 | $ 0 | $ 65.25 |
Grant date fair value per share (USD per share) | $ 0 | $ 0 | $ 6.61 |
Performance Condition | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 17.23% | 17.40% | 15.90% |
Risk-free interest rate | 2.36% | 1.53% | 0.91% |
Expected life (years) | 3 years | 3 years | 3 years |
Grant date fair value per share (USD per share) | $ 73.62 | $ 72.81 | $ 77.16 |
Stock Based Compensation - Su_2
Stock Based Compensation - Summary of Stock Option Activity (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
December 31, 2017 | 711 | |
Granted | 0 | |
Forfeited or expired | (7) | |
Exercised | (187) | |
December 31, 2018 | 517 | 711 |
Options exercisable as of December 31, 2018 | (434) | |
Weighted Average Exercise Price | ||
Weighted average exercise price (per share), options outstanding at December 31, 2017 | $ 53.51 | |
Weighted average exercise price (per share), granted | 0 | |
Weighted average exercise price (per share), forfeited or expired | 65.15 | |
Weighted average exercise price (per share), exercised | 49.32 | |
Weighted average exercise price (per share), options outstanding at December 31, 2018 | 54.92 | $ 53.51 |
Weighted average exercise price (per share), options exercisable at December 31, 2018 | $ 52.93 | |
Weighted average remaining life (years), options outstanding | 2 years 11 months 15 days | 3 years 8 months 1 day |
Weighted average remaining life (years), exercisable | 2 years 9 months 2 days | |
Aggregate intrinsic value, options outstanding | $ 19 | $ 29 |
Aggregate intrinsic value, exercisable at December 31, 2018 | $ 16 |
Stock Based Compensation - Ad_2
Stock Based Compensation - Additional Information to Stock Options Exercised (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Income tax benefit realized | $ 5 | $ 4 | $ 4 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value | 9 | 10 | 18 |
Exercise proceeds | 7 | 11 | 15 |
Income tax benefit realized | $ 2 | $ 3 | $ 6 |
Stock Based Compensation - Su_3
Stock Based Compensation - Summary of Restricted Stock Unit Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Restricted Stock Units Without Performance Restrictions | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested, beginning (Shares) | shares | 89 |
Granted (Shares) | shares | 107 |
Vested (Shares) | shares | (57) |
Forfeited (Shares) | shares | (6) |
Non-vested, ending (Shares) | shares | 133 |
Weighted-average grant date fair value (USD per share), non-vested total beginning balance | $ / shares | $ 67.48 |
Weighted-average grant date fair value (USD per share), granted | $ / shares | 82.75 |
Weighted-average grant date fair value (USD per share), vested | $ / shares | 72.11 |
Weighted-average grant date fair value (USD per share), forfeited | $ / shares | 74.34 |
Weighted-average grant date fair value (USD per share), non-vested total ending balance | $ / shares | $ 77.44 |
Performance Condition | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested, beginning (Shares) | shares | 281 |
Granted (Shares) | shares | 165 |
Vested (Shares) | shares | (122) |
Forfeited (Shares) | shares | (16) |
Non-vested, ending (Shares) | shares | 308 |
Weighted-average grant date fair value (USD per share), non-vested total beginning balance | $ / shares | $ 67.33 |
Weighted-average grant date fair value (USD per share), granted | $ / shares | 72.50 |
Weighted-average grant date fair value (USD per share), vested | $ / shares | 58.18 |
Weighted-average grant date fair value (USD per share), forfeited | $ / shares | 73.87 |
Weighted-average grant date fair value (USD per share), non-vested total ending balance | $ / shares | $ 73.39 |
Long-Term Debt - Components of
Long-Term Debt - Components of Long-Term Debt (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 7,656 | $ 6,824 |
Unamortized debt premium, net | 7 | 9 |
Unamortized debt issuance costs | (16) | (13) |
Less current portion of long-term debt | (71) | (322) |
Long-term debt | 7,576 | 6,498 |
Other American Water subsidiaries | Mandatorily redeemable preferred stock | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 8 | 10 |
Weighted average rate | 8.60% | |
Other American Water subsidiaries | Mandatorily redeemable preferred stock | Minimum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 8.47% | |
Maturity date, minimum | 2,019 | |
Other American Water subsidiaries | Mandatorily redeemable preferred stock | Maximum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 9.75% | |
Maturity date, maximum | 2,036 | |
Other American Water subsidiaries | Private activity bonds and government funded debt | Fixed rate | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 727 | 712 |
Weighted average rate | 4.54% | |
Other American Water subsidiaries | Private activity bonds and government funded debt | Fixed rate | Minimum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.00% | |
Maturity date, minimum | 2,019 | |
Other American Water subsidiaries | Private activity bonds and government funded debt | Fixed rate | Maximum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.20% | |
Maturity date, maximum | 2,048 | |
Other American Water subsidiaries | Mortgage bonds | Fixed rate | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 606 | 607 |
Weighted average rate | 7.41% | |
Other American Water subsidiaries | Mortgage bonds | Fixed rate | Minimum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.92% | |
Maturity date, minimum | 2,019 | |
Other American Water subsidiaries | Mortgage bonds | Fixed rate | Maximum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 9.71% | |
Maturity date, maximum | 2,039 | |
Other American Water subsidiaries | Capital lease obligations | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 1 | 1 |
Interest rate | 12.91% | |
Weighted average rate | 12.91% | |
Maturity date | 2,026 | |
Other American Water subsidiaries | Term loan | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 6 | 9 |
Weighted average rate | 5.62% | |
Maturity date | 2,021 | |
Other American Water subsidiaries | Term loan | Minimum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.60% | |
Other American Water subsidiaries | Term loan | Maximum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.63% | |
American Water Capital Corp. | Senior notes | Fixed rate | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 6,116 | 5,292 |
Weighted average rate | 4.26% | |
American Water Capital Corp. | Senior notes | Fixed rate | Minimum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.95% | |
Maturity date, minimum | 2,019 | |
American Water Capital Corp. | Senior notes | Fixed rate | Maximum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 8.27% | |
Maturity date, maximum | 2,048 | |
American Water Capital Corp. | Private activity bonds and government funded debt | Fixed rate | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 192 | $ 193 |
Weighted average rate | 5.45% | |
American Water Capital Corp. | Private activity bonds and government funded debt | Fixed rate | Minimum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.79% | |
Maturity date, minimum | 2,021 | |
American Water Capital Corp. | Private activity bonds and government funded debt | Fixed rate | Maximum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.25% | |
Maturity date, maximum | 2,040 |
Long-Term Debt - Components o_2
Long-Term Debt - Components of Long-Term Debt (Textual) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Variable rate debt | $ 3 | $ 5 |
Minimum | ||
Debt Instrument [Line Items] | ||
Variable-to-fixed rate | 3.93% | |
Maximum | ||
Debt Instrument [Line Items] | ||
Variable-to-fixed rate | 4.72% | 4.72% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | Sep. 11, 2018USD ($) | Aug. 09, 2018USD ($) | Aug. 06, 2018USD ($)forward_starting_swap_agreement | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 08, 2019USD ($) | Oct. 11, 2018USD ($)forward_starting_swap_agreement | Aug. 17, 2018USD ($)forward_starting_swap_agreement |
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 7,656,000,000 | $ 6,824,000,000 | |||||||
Line of credit facility consolidated debt to consolidated capitalization ratio | 0.59 | ||||||||
Redeemable debt, amount outstanding | $ 889,000,000 | ||||||||
Debt issuance cost | 12,000,000 | ||||||||
Proceeds from long-term debt | 1,358,000,000 | 1,395,000,000 | $ 553,000,000 | ||||||
Interest income | $ 11,000,000 | $ 14,000,000 | $ 14,000,000 | ||||||
Forward Starting Swap Agreements | |||||||||
Debt Instrument [Line Items] | |||||||||
Derivate instrument notional amount | $ 400,000,000 | ||||||||
Proceeds received from terminated forward swaps | $ 9,000,000 | ||||||||
Forward Starting Swap Agreements | Designated as Hedging Instrument | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of forward starting swap agreements, terminated | forward_starting_swap_agreement | 4 | ||||||||
Forward Starting Swap Agreements 2.98% | |||||||||
Debt Instrument [Line Items] | |||||||||
Derivative termination month and year | 2019-08 | ||||||||
Forward Starting Swap Agreements 2.98% | Designated as Hedging Instrument | |||||||||
Debt Instrument [Line Items] | |||||||||
Derivate instrument notional amount | $ 80,000,000 | ||||||||
Number of forward starting swap agreements, entered in to | forward_starting_swap_agreement | 2 | ||||||||
Derivative average fixed interest rate | 2.98% | ||||||||
Forward Starting Swap Agreements 3.31% | |||||||||
Debt Instrument [Line Items] | |||||||||
Derivative termination month and year | 2019-12 | ||||||||
Forward Starting Swap Agreements 3.31% | Designated as Hedging Instrument | |||||||||
Debt Instrument [Line Items] | |||||||||
Derivate instrument notional amount | $ 100,000,000 | ||||||||
Number of forward starting swap agreements, entered in to | forward_starting_swap_agreement | 2 | ||||||||
Derivative average fixed interest rate | 3.31% | ||||||||
Forward Starting Swap Agreements 2.76% | |||||||||
Debt Instrument [Line Items] | |||||||||
Derivative termination month and year | 2019-12 | ||||||||
Line of credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility consolidated debt to consolidated capitalization ratio | 0.70 | ||||||||
Variable rate | Interest Rate Swap | |||||||||
Debt Instrument [Line Items] | |||||||||
Derivate instrument notional amount | $ 3,000,000 | ||||||||
Other American Water subsidiaries | Private activity bonds and government funded debt | Collateralized Debt Obligations | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 725,000,000 | ||||||||
American Water Capital Corp. | |||||||||
Debt Instrument [Line Items] | |||||||||
Early repayment of senior debt | $ 10,000,000 | ||||||||
American Water Capital Corp. | Senior Note 6.085% Series F Due March 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of debt | $ 100,000,000 | ||||||||
American Water Capital Corp. | Senior notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | 1,325,000,000 | ||||||||
Proceeds from long-term debt | 1,300,000,000 | ||||||||
American Water Capital Corp. | Senior notes | Senior Note 2.95% due 2027 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 625,000,000 | ||||||||
Interest rate | 3.75% | ||||||||
American Water Capital Corp. | Senior notes | Senior Note 3.75% due 2047 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 700,000,000 | ||||||||
Interest rate | 4.20% | ||||||||
American Water Capital Corp. | Senior notes | Senior Note 5.62% due 2018 | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 5.62% | ||||||||
Repayments of debt | $ 191,000,000 | ||||||||
American Water Capital Corp. | Senior notes | Senior Note 5.77% due 2021 | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 5.77% | ||||||||
Repayments of debt | $ 100,000,000 | ||||||||
Minimum | Forward Starting Swap Agreements | Designated as Hedging Instrument | |||||||||
Debt Instrument [Line Items] | |||||||||
Amortization period for forward swap with interest | 10 years | ||||||||
Maximum | Forward Starting Swap Agreements | Designated as Hedging Instrument | |||||||||
Debt Instrument [Line Items] | |||||||||
Amortization period for forward swap with interest | 30 years | ||||||||
Subsequent event | Forward Starting Swap Agreements 2.76% | Designated as Hedging Instrument | |||||||||
Debt Instrument [Line Items] | |||||||||
Derivate instrument notional amount | $ 150,000,000 | ||||||||
Derivative average fixed interest rate | 2.76% |
Long-Term Debt - Future Sinking
Long-Term Debt - Future Sinking Fund Payments and Debt Maturities (Details) $ in Millions | Dec. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,019 | $ 72 |
2,020 | 32 |
2,021 | 303 |
2,022 | 26 |
2,023 | 159 |
Thereafter | $ 7,064 |
Long-Term Debt - Issued (Detail
Long-Term Debt - Issued (Details) - USD ($) $ in Millions | Aug. 09, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Total issuances | $ 1,358 | $ 1,395 | $ 553 | |
New Jersey Environmental Infrastructure Financing Program [Member] | ||||
Debt Instrument [Line Items] | ||||
Total issuances | 29 | |||
Other American Water subsidiaries | Private activity bonds and government funded debt | Private Activity Bonds And Government Funded, Issued In 2017 | ||||
Debt Instrument [Line Items] | ||||
Total issuances | $ 33 | |||
Other American Water subsidiaries | Private activity bonds and government funded debt | Minimum | Private Activity Bonds And Government Funded, Issued In 2017 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 0.00% | |||
Maturity date | 2,021 | |||
Other American Water subsidiaries | Private activity bonds and government funded debt | Maximum | Private Activity Bonds And Government Funded, Issued In 2017 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.00% | |||
Maturity date | 2,048 | |||
American Water Capital Corp. | Senior notes | ||||
Debt Instrument [Line Items] | ||||
Total issuances | $ 1,300 | |||
American Water Capital Corp. | Senior notes | Senior Notes, Issued In 2017 | ||||
Debt Instrument [Line Items] | ||||
Total issuances | $ 1,325 | |||
American Water Capital Corp. | Senior notes | Minimum | Senior Notes, Issued In 2017 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.75% | |||
Maturity date | 2,028 | |||
American Water Capital Corp. | Senior notes | Maximum | Senior Notes, Issued In 2017 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.20% | |||
Maturity date | 2,048 |
Long-Term Debt - Retired Throug
Long-Term Debt - Retired Through Optional Redemptions or Payments at Maturities (Details) - Debt retired during the year $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 526 |
Other American Water subsidiaries | Mandatorily redeemable preferred stock | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 2 |
Other American Water subsidiaries | Term loan | |
Debt Instrument [Line Items] | |
Maturity date, maximum | 2,021 |
American Water Capital Corp. | Senior notes | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 501 |
American Water Capital Corp. | Term loan | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 3 |
Minimum | Other American Water subsidiaries | Mandatorily redeemable preferred stock | |
Debt Instrument [Line Items] | |
Interest rate | 8.49% |
Maturity date, minimum | 2,031 |
Minimum | Other American Water subsidiaries | Term loan | |
Debt Instrument [Line Items] | |
Interest rate | 4.83% |
Maximum | Other American Water subsidiaries | Mandatorily redeemable preferred stock | |
Debt Instrument [Line Items] | |
Interest rate | 9.18% |
Maturity date, maximum | 2,036 |
Maximum | Other American Water subsidiaries | Term loan | |
Debt Instrument [Line Items] | |
Interest rate | 5.69% |
Fixed rate | Other American Water subsidiaries | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 18 |
Fixed rate | Other American Water subsidiaries | Mortgage bonds | |
Debt Instrument [Line Items] | |
Interest rate | 9.13% |
Maturity date, maximum | 2,021 |
Total retirements and redemptions | $ 1 |
Fixed rate | American Water Capital Corp. | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 1 |
Fixed rate | Minimum | Other American Water subsidiaries | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest rate | 0.00% |
Maturity date, minimum | 2,018 |
Fixed rate | Minimum | American Water Capital Corp. | Senior notes | |
Debt Instrument [Line Items] | |
Interest rate | 5.62% |
Maturity date, minimum | 2,018 |
Fixed rate | Minimum | American Water Capital Corp. | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest rate | 1.79% |
Maturity date, minimum | 2,021 |
Fixed rate | Maximum | Other American Water subsidiaries | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest rate | 5.50% |
Maturity date, maximum | 2,047 |
Fixed rate | Maximum | American Water Capital Corp. | Senior notes | |
Debt Instrument [Line Items] | |
Interest rate | 6.25% |
Maturity date, maximum | 2,022 |
Fixed rate | Maximum | American Water Capital Corp. | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest rate | 2.90% |
Maturity date, maximum | 2,031 |
Long-Term Debt - Summary of Gro
Long-Term Debt - Summary of Gross Fair Value Derivative Asset and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Cash flow hedge | Forward starting swaps | Other long-term liabilities | ||
Derivative [Line Items] | ||
Derivative liabilities | $ 14 | $ 3 |
Short-Term Debt - Additional In
Short-Term Debt - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($)Extension | Dec. 31, 2017USD ($) | Mar. 21, 2018USD ($) | Mar. 20, 2018USD ($) | |
Short-term Debt [Line Items] | ||||
Short-term debt | $ 964,000,000 | $ 905,000,000 | ||
Maturity in More Than Three Months | ||||
Short-term Debt [Line Items] | ||||
Proceeds from short-term borrowings with maturities greater than three months | 0 | |||
Letter of Credit | ||||
Short-term Debt [Line Items] | ||||
Available credit facility capacity | 2,170,000,000 | |||
Commercial Paper Program | ||||
Short-term Debt [Line Items] | ||||
Short-term debt | 964,000,000 | 905,000,000 | ||
Maximum borrowing capacity | $ 2,100,000,000 | $ 1,600,000,000 | ||
Revolving Credit Facility | ||||
Short-term Debt [Line Items] | ||||
Maximum borrowing capacity | 2,262,000,000 | 1,762,000,000 | ||
Letters of credit, outstanding amount | 81,000,000 | |||
Revolving Credit Facility | Letter of Credit | ||||
Short-term Debt [Line Items] | ||||
Maximum borrowing capacity | $ 150,000,000 | $ 150,000,000 | ||
American Water Capital Corp. | ||||
Short-term Debt [Line Items] | ||||
Maximum borrowing capacity | 500,000,000 | |||
Interest rate during period | 2.28% | 1.24% | ||
Number of extensions allowed under credit facility, instances | Extension | 2 | |||
Number of extensions allowed under credit facility, duration | 1 year | |||
American Water Capital Corp. | Revolving Credit Facility | ||||
Short-term Debt [Line Items] | ||||
Maximum borrowing capacity | 2,250,000,000 | $ 1,750,000,000 | ||
Proceeds from lines of credit | $ 0 | |||
American Water Capital Corp. | Revolving Credit Facility | Letter of Credit | ||||
Short-term Debt [Line Items] | ||||
Maximum borrowing capacity | $ 150,000,000 |
Short-Term Debt - Schedule of C
Short-Term Debt - Schedule of Company's Aggregate Credit Facility Commitments, Letter of Credit Sub-Limit Under Revolving Credit Facility and Commercial Paper Limit and Available Capacity (Details) - USD ($) | Dec. 31, 2018 | Mar. 21, 2018 | Mar. 20, 2018 | Dec. 31, 2017 |
Letter of Credit | ||||
Short-term Debt [Line Items] | ||||
Available credit facility capacity | $ 2,170,000,000 | |||
Revolving Credit Facility | ||||
Short-term Debt [Line Items] | ||||
Credit Facility Commitment | 2,262,000,000 | $ 1,762,000,000 | ||
Available Credit Facility/Credit Capacity | 2,177,000,000 | 1,673,000,000 | ||
Revolving Credit Facility | Letter of Credit | ||||
Short-term Debt [Line Items] | ||||
Credit Facility Commitment | 150,000,000 | 150,000,000 | ||
Available Credit Facility/Credit Capacity | 69,000,000 | 66,000,000 | ||
Commercial Paper Program | ||||
Short-term Debt [Line Items] | ||||
Credit Facility Commitment | $ 2,100,000,000 | $ 1,600,000,000 | ||
Commercial Paper Limit | 2,100,000,000 | 1,600,000,000 | ||
Available Commercial Paper Capacity | 1,146,000,000 | $ 695,000,000 | ||
Keystone Clearwater Solutions | Revolving Credit Facility | ||||
Short-term Debt [Line Items] | ||||
Credit Facility Commitment | 12,000,000 | |||
Available credit facility capacity | $ 8,000,000 |
Short-Term Debt - Schedule of S
Short-Term Debt - Schedule of Short-Term Borrowings Activity (Details) - American Water Capital Corp. - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Short-term Debt [Line Items] | ||
Average borrowings | $ 1,029 | $ 779 |
Maximum borrowings outstanding | $ 1,905 | $ 1,135 |
Interest rate during period | 2.28% | 1.24% |
Weighted average interest rates, as of December 31 | 2.84% | 1.61% |
Short-Term Debt - Credit Facili
Short-Term Debt - Credit Facility - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Short-term Debt [Line Items] | |
Line of credit facility consolidated debt to consolidated capitalization ratio, required | 0.70 |
Line of credit facility consolidated debt to consolidated capitalization ratio | 0.59 |
Minimum | |
Short-term Debt [Line Items] | |
Debt, no collateral, prepaid period | 2 months |
Maximum | |
Short-term Debt [Line Items] | |
Debt, no collateral, prepaid period | 3 months |
General Taxes - Components of G
General Taxes - Components of General Tax Expense from Continuing Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
General Taxes [Abstract] | |||
Gross receipts and franchise | $ 112 | $ 110 | $ 106 |
Property and capital stock | 120 | 105 | 106 |
Payroll | 33 | 31 | 32 |
Other general | 12 | 13 | 14 |
Total general taxes | $ 277 | $ 259 | $ 258 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense from Continuing Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current income taxes: | |||
State | $ 26 | $ 25 | $ 20 |
Federal | 1 | (1) | 1 |
Total current income taxes | 27 | 24 | 21 |
Deferred income taxes: | |||
State | 33 | 50 | 24 |
Federal | 163 | 413 | 258 |
Amortization of deferred investment tax credits | (1) | (1) | (1) |
Total deferred income taxes | 195 | 462 | 281 |
Provision for income taxes | $ 222 | $ 486 | $ 302 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense from Continuing Operations (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Income tax at statutory rate | 21.00% | 35.00% | 35.00% |
State taxes, net of federal taxes | 5.50% | 5.40% | 3.80% |
TCJA | 1.50% | 13.70% | 0.00% |
Other, net | 0.20% | (0.80%) | 0.40% |
Effective tax rate | 28.20% | 53.30% | 39.20% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Examination [Line Items] | ||||
Utilization of net operating losses due to tax cuts & jobs act 2017 | 80.00% | |||
Tax Cuts and Jobs Act of 2017, Deferred income tax expense | $ 125 | |||
Tax Cuts and Jobs Act of 2017, decrease in deferred tax liability | 1,390 | |||
Tax Cuts and Jobs Act of 2017, increase in regulatory liability | 1,510 | |||
Cash flow hedges reclassification from accumulated other comprehensive loss of tax effects resulting from the Tax Cuts and Jobs Act | $ 2 | $ 2 | 0 | $ 0 |
Pension reclassification from accumulated other comprehensive loss of tax effects resulting from the Tax Cuts and Jobs Act | (22) | (22) | 0 | $ 0 |
Tax Cuts and Jobs Act of 2017, adjustment | 12 | |||
Unrecognized tax benefit excluding interest and penalties, that would affect the effective tax rate | 10 | 10 | ||
Federal | ||||
Income Tax Examination [Line Items] | ||||
Net operating loss carryforwards | 707 | $ 707 | 1,050 | |
Net operating loss carryforwards expiration start year | 2,028 | |||
State | ||||
Income Tax Examination [Line Items] | ||||
Net operating loss carryforwards | $ 547 | $ 547 | $ 322 | |
Net operating loss carryforwards expiration date | The state NOL carryforwards began to expire in 2018 through 2037 |
Income Taxes - Components of Ne
Income Taxes - Components of Net Deferred Tax Liability from Continuing Operations (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||||
Advances and contributions | $ 402 | $ 395 | ||
Tax losses and credits | 131 | 196 | ||
Regulatory income tax assets | 339 | 327 | ||
Pension and other postretirement benefits | 91 | 96 | ||
Other | 44 | 49 | ||
Total deferred tax assets | 1,007 | 1,063 | ||
Valuation allowance | (14) | (13) | $ (6) | $ (8) |
Total deferred tax assets, net of allowance | 993 | 1,050 | ||
Deferred tax liabilities: | ||||
Property, plant and equipment | 2,537 | 2,429 | ||
Deferred pension and other postretirement benefits | 77 | 69 | ||
Other | 97 | 103 | ||
Total deferred tax liabilities | 2,711 | 2,601 | ||
Total deferred tax liabilities, net of deferred tax assets | $ (1,718) | $ (1,551) |
Income Taxes - Changes in Gross
Income Taxes - Changes in Gross Liability Excluding Interest and Penalties for Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning Balance | $ 106 | $ 169 |
Increases in current period tax positions | 13 | 8 |
Decreases in prior period measurement of tax positions | (22) | (71) |
Ending Balance | $ 97 | $ 106 |
Income Taxes - Changes in Valua
Income Taxes - Changes in Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Movement in Valuation Allowances [Roll Forward] | |||
Beginning Balance | $ 13 | $ 6 | $ 8 |
Ending Balance | 14 | 13 | 6 |
Decrease | |||
Movement in Valuation Allowances [Roll Forward] | |||
Decreases/Increases in current period tax positions | $ 1 | $ 7 | $ (2) |
Employee Benefits - Additional
Employee Benefits - Additional Information (Details) - USD ($) $ in Millions | Aug. 31, 2018 | Jul. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | |||||
Base pay rate of contribution plan | 5.25% | ||||
Minimum reduction of expected future service of plan participants | 10.00% | ||||
Cumulative gains losses as percentage of benefit obligations or plan assets | 10.00% | ||||
Employer matching contribution, percent | 5.25% | ||||
Cost of contribution plan | $ 12 | $ 13 | $ 9 | ||
Pension Plan Asset | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of liability driven assets and fixed income products | 50.00% | 40.00% | |||
2,019 | 100.00% | 100.00% | |||
Reduction in future benefits payable | $ 23 | $ 0 | |||
Expected return on plan assets percentage | 5.95% | ||||
Postretirement Benefit Plan Assets | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
2,019 | 100.00% | 100.00% | |||
In excess of securities, long term liabilities, duration | 3 years | ||||
Reduction in future benefits payable | $ 175 | $ 156 | $ 174 | $ 0 | |
Reduction to net accrued postretirement benefit obligation | $ 227 | $ 89 | |||
Plan amendment amortization period | 10 years 2 months 12 days | ||||
Expected blended return on weighted assets percentage | 4.77% | ||||
Equity Securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
2,019 | 30.00% | 20.00% | |||
Equity Securities | Pension Plan Asset | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
2,019 | 50.00% | 50.00% | |||
Equity Securities | Postretirement Benefit Plan Assets | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
2,019 | 60.00% | 70.00% | |||
Fixed Income Securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
2,019 | 70.00% | 80.00% | |||
Fixed Income Securities | Postretirement Benefit Plan Assets | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
2,019 | 40.00% | 30.00% |
Employee Benefits - Schedule of
Employee Benefits - Schedule of Changes in Fair Value of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Level 2 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 52 | ||
Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 17 | ||
Level 3 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 17 | ||
Equity Securities: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 30.00% | 20.00% | |
International | Level 3 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 17 | ||
U.S. Treasury securities and government bonds | Level 2 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 27 | ||
Future and option contracts | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of Plan Assets | 5.00% | ||
Core fixed income bond fund | Level 2 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 52 | ||
Pension Plan Asset | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 100.00% | 100.00% | |
Fair value of plan assets | $ 1,499 | $ 1,649 | $ 1,443 |
Percentage of Plan Assets | 100.00% | 100.00% | |
Pension Plan Asset | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 567 | $ 620 | |
Pension Plan Asset | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 702 | 751 | |
Pension Plan Asset | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 230 | 278 | |
Pension Plan Asset | Cash | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 24 | 7 | |
Percentage of Plan Assets | 2.00% | ||
Pension Plan Asset | Cash | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 24 | $ 7 | |
Pension Plan Asset | Equity Securities: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 50.00% | 50.00% | |
Pension Plan Asset | U.S. large cap | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 297 | $ 344 | |
Percentage of Plan Assets | 20.00% | 21.00% | |
Pension Plan Asset | U.S. large cap | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 297 | $ 344 | |
Pension Plan Asset | U.S. small cap | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 76 | $ 84 | |
Percentage of Plan Assets | 5.00% | 5.00% | |
Pension Plan Asset | U.S. small cap | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 70 | $ 79 | |
Pension Plan Asset | U.S. small cap | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 6 | 5 | |
Pension Plan Asset | International | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 256 | $ 295 | |
Percentage of Plan Assets | 17.00% | 18.00% | |
Pension Plan Asset | International | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 2 | $ 2 | |
Pension Plan Asset | International | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 132 | 149 | |
Pension Plan Asset | International | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 122 | 144 | |
Pension Plan Asset | Real estate fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 65 | $ 86 | |
Percentage of Plan Assets | 4.00% | 5.00% | |
Pension Plan Asset | Real estate fund | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 65 | $ 86 | |
Pension Plan Asset | REITs | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 20 | $ 26 | |
Percentage of Plan Assets | 1.00% | 2.00% | |
Pension Plan Asset | REITs | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 20 | $ 26 | |
Pension Plan Asset | Fixed income securities: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 50.00% | 50.00% | |
Pension Plan Asset | U.S. Treasury securities and government bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 181 | $ 200 | |
Percentage of Plan Assets | 12.00% | 12.00% | |
Pension Plan Asset | U.S. Treasury securities and government bonds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 167 | $ 180 | |
Pension Plan Asset | U.S. Treasury securities and government bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 14 | 20 | |
Pension Plan Asset | Corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 491 | $ 519 | |
Percentage of Plan Assets | 33.00% | 31.00% | |
Pension Plan Asset | Corporate bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 491 | $ 519 | |
Pension Plan Asset | Mortgage-backed securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 11 | 1 | |
Percentage of Plan Assets | 1.00% | ||
Pension Plan Asset | Mortgage-backed securities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 11 | 1 | |
Pension Plan Asset | Municipal bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 28 | $ 31 | |
Percentage of Plan Assets | 2.00% | 2.00% | |
Pension Plan Asset | Municipal bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 28 | $ 31 | |
Pension Plan Asset | Long duration bond fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 7 | $ 8 | |
Percentage of Plan Assets | 1.00% | ||
Pension Plan Asset | Long duration bond fund | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 7 | $ 8 | |
Pension Plan Asset | Guarantee annuity contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 43 | $ 48 | |
Percentage of Plan Assets | 3.00% | 3.00% | |
Pension Plan Asset | Guarantee annuity contracts | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 43 | $ 48 | |
Postretirement Benefit Plan Assets | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 100.00% | 100.00% | |
Fair value of plan assets | $ 507 | $ 576 | $ 525 |
Percentage of Plan Assets | 100.00% | 100.00% | |
Postretirement Benefit Plan Assets | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 100.00% | 100.00% | |
Fair value of plan assets | $ 382 | $ 426 | |
Percentage of Plan Assets | 100.00% | 100.00% | |
Postretirement Benefit Plan Assets | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 100.00% | 100.00% | |
Fair value of plan assets | $ 122 | $ 142 | |
Percentage of Plan Assets | 100.00% | 100.00% | |
Postretirement Benefit Plan Assets | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 100.00% | 100.00% | |
Fair value of plan assets | $ 3 | $ 8 | |
Percentage of Plan Assets | 100.00% | 100.00% | |
Postretirement Benefit Plan Assets | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 287 | $ 290 | |
Postretirement Benefit Plan Assets | Level 1 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 214 | 140 | |
Postretirement Benefit Plan Assets | Level 1 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 70 | 142 | |
Postretirement Benefit Plan Assets | Level 1 | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 3 | 8 | |
Postretirement Benefit Plan Assets | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 203 | 286 | |
Postretirement Benefit Plan Assets | Level 2 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 151 | 286 | |
Postretirement Benefit Plan Assets | Cash | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 31 | 18 | |
Postretirement Benefit Plan Assets | Cash | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 3 | 1 | |
Postretirement Benefit Plan Assets | Cash | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 3 | ||
Postretirement Benefit Plan Assets | Cash | Level 1 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 31 | 18 | |
Postretirement Benefit Plan Assets | Cash | Level 1 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 3 | 1 | |
Postretirement Benefit Plan Assets | Cash | Level 1 | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 3 | ||
Postretirement Benefit Plan Assets | Equity Securities: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 60.00% | 70.00% | |
Postretirement Benefit Plan Assets | Equity Securities: | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 2.00% | 30.00% | |
Postretirement Benefit Plan Assets | Equity Securities: | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 60.00% | 60.00% | |
Postretirement Benefit Plan Assets | Equity Securities: | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 70.00% | 70.00% | |
Postretirement Benefit Plan Assets | U.S. large cap | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 1 | $ 44 | |
Percentage of Plan Assets | 10.00% | ||
Postretirement Benefit Plan Assets | U.S. large cap | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 43 | $ 53 | |
Percentage of Plan Assets | 35.00% | 37.00% | |
Postretirement Benefit Plan Assets | U.S. large cap | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 2 | $ 3 | |
Percentage of Plan Assets | 67.00% | 38.00% | |
Postretirement Benefit Plan Assets | U.S. large cap | Level 1 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 1 | $ 44 | |
Postretirement Benefit Plan Assets | U.S. large cap | Level 1 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 43 | 53 | |
Postretirement Benefit Plan Assets | U.S. large cap | Level 1 | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2 | 3 | |
Postretirement Benefit Plan Assets | U.S. small cap | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 5 | ||
Percentage of Plan Assets | 4.00% | ||
Postretirement Benefit Plan Assets | U.S. small cap | Level 1 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 5 | ||
Postretirement Benefit Plan Assets | International | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 17 | $ 51 | |
Percentage of Plan Assets | 4.00% | 12.00% | |
Postretirement Benefit Plan Assets | International | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 24 | $ 47 | |
Percentage of Plan Assets | 20.00% | 33.00% | |
Postretirement Benefit Plan Assets | International | Level 1 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 51 | ||
Postretirement Benefit Plan Assets | International | Level 1 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 24 | $ 47 | |
Postretirement Benefit Plan Assets | Fixed income securities: | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 98.00% | 70.00% | |
Postretirement Benefit Plan Assets | Fixed income securities: | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 40.00% | 40.00% | |
Postretirement Benefit Plan Assets | Fixed income securities: | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2,019 | 30.00% | 30.00% | |
Postretirement Benefit Plan Assets | U.S. Treasury securities and government bonds | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 179 | $ 48 | |
Percentage of Plan Assets | 47.00% | 11.00% | |
Postretirement Benefit Plan Assets | U.S. Treasury securities and government bonds | Level 1 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 178 | $ 21 | |
Postretirement Benefit Plan Assets | U.S. Treasury securities and government bonds | Level 2 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1 | ||
Postretirement Benefit Plan Assets | Corporate bonds | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 141 | $ 233 | |
Percentage of Plan Assets | 37.00% | 55.00% | |
Postretirement Benefit Plan Assets | Corporate bonds | Level 2 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 141 | $ 233 | |
Postretirement Benefit Plan Assets | Municipal bonds | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 9 | $ 26 | |
Percentage of Plan Assets | 3.00% | 6.00% | |
Postretirement Benefit Plan Assets | Municipal bonds | Level 2 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 9 | $ 26 | |
Postretirement Benefit Plan Assets | Long duration bond fund | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 4 | $ 4 | |
Percentage of Plan Assets | 1.00% | 1.00% | |
Postretirement Benefit Plan Assets | Long duration bond fund | Level 1 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 4 | $ 4 | |
Postretirement Benefit Plan Assets | Future and option contracts | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2 | ||
Percentage of Plan Assets | 8.00% | ||
Postretirement Benefit Plan Assets | Future and option contracts | Level 1 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2 | ||
Postretirement Benefit Plan Assets | Core fixed income bond fund | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 52 | $ 36 | |
Percentage of Plan Assets | 45.00% | 26.00% | |
Postretirement Benefit Plan Assets | Core fixed income bond fund | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 1 | $ 2 | |
Percentage of Plan Assets | 33.00% | 62.00% | |
Postretirement Benefit Plan Assets | Core fixed income bond fund | Level 1 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 36 | ||
Postretirement Benefit Plan Assets | Core fixed income bond fund | Level 1 | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 1 | $ 2 |
Employee Benefits - Schedule _2
Employee Benefits - Schedule of Significant Unobservable Inputs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Pension Plan Asset | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Fair value of plan assets beginning balance | $ 1,649 | $ 1,443 |
Actual return on assets | (97) | 227 |
Fair value of plan assets ending balance | 1,499 | 1,649 |
Level 3 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Fair value of plan assets ending balance | 17 | |
Level 3 | Pension Plan Asset | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Fair value of plan assets beginning balance | 278 | |
Purchases, issuances and settlements, net | (25) | 136 |
Fair value of plan assets ending balance | 230 | 278 |
Level 3 | Pension Plan Asset | Guaranteed Annuity Contracts And Real Estate | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Fair value of plan assets beginning balance | 278 | 140 |
Actual return on assets | (23) | 2 |
Fair value of plan assets ending balance | $ 230 | $ 278 |
Employee Benefits - Schedule _3
Employee Benefits - Schedule of Rollforward Changes in Benefit Obligation and Plan Assets (Details) - USD ($) $ in Millions | Aug. 31, 2018 | Jul. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Amounts recognized on the balance sheet: | |||||
Noncurrent liability | $ (390) | $ (384) | |||
Pension Plan Asset | |||||
Change in benefit obligation: | |||||
Benefit obligation beginning balance | 2,034 | 1,864 | |||
Service cost | 34 | 33 | $ 32 | ||
Interest cost | 76 | 80 | 80 | ||
Plan participants' contributions | 0 | 0 | |||
Plan amendments | (23) | 0 | |||
Actuarial (gain) loss | (153) | 118 | |||
Acquisitions | 0 | 9 | |||
Gross benefits paid | (76) | (70) | |||
Federal subsidy | 0 | 0 | |||
Benefit obligation ending balance | 1,892 | 2,034 | 1,864 | ||
Change in plan assets: | |||||
Fair value of plan assets beginning balance | 1,649 | 1,443 | |||
Actual return on assets | (97) | 227 | |||
Employer contributions | 24 | 42 | |||
Plan participants' contributions | 0 | 0 | |||
Acquisitions | 0 | 7 | |||
Benefits paid | 77 | 70 | |||
Fair value of plan assets ending balance | 1,499 | 1,649 | 1,443 | ||
Funded status ending balance | (393) | (385) | |||
Amounts recognized on the balance sheet: | |||||
Noncurrent asset | 0 | 0 | |||
Current liability | (3) | (1) | |||
Noncurrent liability | (390) | (384) | |||
Net amount recognized | (393) | (385) | |||
Postretirement Benefit Plan Assets | |||||
Change in benefit obligation: | |||||
Benefit obligation beginning balance | 614 | 610 | |||
Service cost | 8 | 10 | 12 | ||
Interest cost | 20 | 26 | 28 | ||
Plan participants' contributions | 2 | 2 | |||
Plan amendments | $ (175) | $ (156) | (174) | 0 | |
Actuarial (gain) loss | (89) | (9) | |||
Acquisitions | 0 | 0 | |||
Gross benefits paid | (29) | (26) | |||
Federal subsidy | 1 | 1 | |||
Benefit obligation ending balance | 353 | 614 | 610 | ||
Change in plan assets: | |||||
Fair value of plan assets beginning balance | 576 | 525 | |||
Actual return on assets | (40) | 69 | |||
Employer contributions | (2) | 6 | |||
Plan participants' contributions | 2 | 2 | |||
Acquisitions | 0 | 0 | |||
Benefits paid | 29 | 26 | |||
Fair value of plan assets ending balance | 507 | 576 | $ 525 | ||
Funded status ending balance | 154 | (38) | |||
Amounts recognized on the balance sheet: | |||||
Noncurrent asset | 155 | 2 | |||
Current liability | 0 | 0 | |||
Noncurrent liability | (1) | (40) | |||
Net amount recognized | $ 154 | $ (38) |
Employee Benefits - Summary of
Employee Benefits - Summary of Accumulated Other Comprehensive Income and Regulatory Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Pension Plan Asset | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss | $ 431 | $ 416 |
Prior service cost (credit) | (22) | 2 |
Net amount recognized | 409 | 418 |
Regulatory assets (liabilities) | 352 | 270 |
Accumulated other comprehensive income | 57 | 148 |
Postretirement Benefit Plan Assets | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss | 83 | 108 |
Prior service cost (credit) | (291) | (140) |
Net amount recognized | (208) | (32) |
Regulatory assets (liabilities) | (208) | (32) |
Accumulated other comprehensive income | $ 0 | $ 0 |
Employee Benefits - Schedule _4
Employee Benefits - Schedule of Projected Benefit Obligation, Accumulated Benefit Obligation and Fair Value of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Retirement Benefits [Abstract] | ||
Projected benefit obligation | $ 1,892 | $ 2,034 |
Fair value of plan assets | 1,499 | 1,649 |
Accumulated benefit obligation | 1,768 | 1,888 |
Fair value of plan assets | $ 1,499 | $ 1,649 |
Employee Benefits - Schedule _5
Employee Benefits - Schedule of Expected Cash Flow for Pension and Post Retirement Benefit Plans (Details) $ in Millions | Dec. 31, 2018USD ($) |
To plan trusts | Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected employer contributions | $ 31 |
To plan trusts | Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected employer contributions | 0 |
To plan participants | Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected employer contributions | 2 |
To plan participants | Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected employer contributions | $ 0 |
Employee Benefits - Schedule _6
Employee Benefits - Schedule of Expected Benefit Payments (Details) $ in Millions | Dec. 31, 2018USD ($) |
Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | $ 102 |
2,020 | 107 |
2,021 | 111 |
2,022 | 115 |
2,023 | 120 |
2024-2028 | 634 |
Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | 27 |
2,020 | 27 |
2,021 | 28 |
2,022 | 28 |
2,023 | 28 |
2024-2028 | 136 |
Defined Benefit Plan, Expected Future Prescription Drug Subsidy Receipt [Abstract] | |
2,019 | 1 |
2,020 | 1 |
2,021 | 1 |
2,022 | 1 |
2,023 | 1 |
2024-2028 | $ 6 |
Employee Benefits - Schedule _7
Employee Benefits - Schedule of Significant Assumptions of Pension and Other Postretirement Benefit Plans (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pension Plan Asset | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.38% | 3.75% | 4.28% |
Rate of compensation increase | 3.00% | 3.02% | 3.07% |
Discount rate | 3.75% | 4.28% | 4.66% |
Expected return on plan assets | 5.95% | 6.49% | 7.02% |
Rate of compensation increase | 3.02% | 3.07% | 3.10% |
Other Postretirement Benefit Cost | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.32% | 3.73% | 4.26% |
Discount rate | 4.23% | 4.26% | 3.66% |
Expected return on plan assets | 4.77% | 5.09% | 5.37% |
Other Postretirement Benefit Cost | Maximum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Health care cost trend rate, benefit obligations, percentage | 6.75% | 7.00% | 7.00% |
Health care cost trend rate, net periodic costs, percentage | 7.00% | 7.00% | 6.50% |
Other Postretirement Benefit Cost | Minimum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Health care cost trend rate, benefit obligations, percentage | 5.00% | 4.50% | 5.00% |
Health care cost trend rate, benefit obligation, year | 2,026 | 2,026 | 2,021 |
Health care cost trend rate, net periodic costs, percentage | 4.50% | 5.00% | 5.00% |
Health care cost trend rate, net periodic costs, year | 2,026 | 2,021 | 2,021 |
Employee Benefits - Schedule _8
Employee Benefits - Schedule of Net Periodic Benefit Cost Components (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other changes in plan assets and benefit obligations recognized in other comprehensive income: | |||
Amortization of actuarial gain (loss) | $ (7) | $ (7) | $ (6) |
Pension Plan Asset | |||
Components of net periodic pension benefit cost and other postretirement benefit cost | |||
Service cost | 34 | 33 | 32 |
Interest cost | 76 | 80 | 80 |
Expected return on plan assets | (97) | (93) | (95) |
Prior service cost (credit) | 1 | 1 | 1 |
Actuarial (gain) loss | 27 | 34 | 27 |
Net periodic pension benefit cost | 41 | 55 | 45 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income: | |||
Current year actuarial (gain) loss | (60) | (7) | 21 |
Amortization of actuarial gain (loss) | (7) | (7) | (6) |
Total recognized in other comprehensive income | (67) | (14) | 15 |
Total recognized in net periodic benefit cost and other comprehensive income | (26) | 41 | 60 |
Other Postretirement Benefit Cost | |||
Components of net periodic pension benefit cost and other postretirement benefit cost | |||
Service cost | 8 | 10 | 12 |
Interest cost | 20 | 26 | 28 |
Expected return on plan assets | (26) | (26) | (27) |
Prior service cost (credit) | (23) | (18) | (9) |
Actuarial (gain) loss | 3 | 10 | 5 |
Net periodic pension benefit cost | $ (18) | $ 2 | $ 9 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) Customer in Thousands | Jun. 01, 2018USD ($) | Dec. 31, 2018USD ($) | Jun. 08, 2018putative_plaintiff | Jun. 30, 2015Customer | Jun. 27, 2015 | Jun. 26, 2015 | Jun. 23, 2015Customer |
Commitments And Contingencies [Line Items] | |||||||
Estimated capital expenditures under legal and binding contractual obligations | $ 419,000,000 | ||||||
Loss contingency, probable loss | 54,000,000 | ||||||
Dunbar, Virgina | WVAWC | |||||||
Commitments And Contingencies [Line Items] | |||||||
Number of customers impacted due to failure of main that caused that water outages and low pressure | Customer | 25 | ||||||
Percentage of impacted customers to which service was restored | 20.00% | 80.00% | |||||
Number of customers for whom system was reconfigured to maintain service while final repair was completed | Customer | 3 | ||||||
Missouri-American Water Company | WVAWC | |||||||
Commitments And Contingencies [Line Items] | |||||||
Payments for legal settlements | $ 20,000,000 | ||||||
Loss contingency, damages sought, value | $ 25,000,000 | ||||||
Binding Agreement | |||||||
Commitments And Contingencies [Line Items] | |||||||
Litigation settlement amount awarded to other party, pre tax, net | 126,000,000 | ||||||
Litigation settlement amount awarded to other party | 40,000,000 | ||||||
Binding Agreement | WVAWC | |||||||
Commitments And Contingencies [Line Items] | |||||||
Litigation settlement amount awarded to other party | 23,000,000 | ||||||
Minimum | WVAWC | |||||||
Commitments And Contingencies [Line Items] | |||||||
Number of putative plaintiffs that have submitted opt-out notices | putative_plaintiff | 100 | ||||||
Maximum | |||||||
Commitments And Contingencies [Line Items] | |||||||
Loss contingency, possible loss | $ 26,000,000 | ||||||
Maximum | WVAWC | |||||||
Commitments And Contingencies [Line Items] | |||||||
Number of putative plaintiffs that have submitted opt-out notices | putative_plaintiff | 225,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Future Annual Commitments Related to Minimum Quantities of Purchased Water Having Non-Cancelable Terms (Details) $ in Millions | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 65 |
2,020 | 65 |
2,021 | 65 |
2,022 | 64 |
2,023 | 57 |
Thereafter | $ 641 |
Earnings Per Common Share - Rec
Earnings Per Common Share - Reconciliation of Numerator and Denominator for Basic and Diluted Earnings Per Share (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||||||||||
Net income attributable to common shareholders | $ 112 | $ 187 | $ 162 | $ 106 | $ (1) | $ 203 | $ 131 | $ 93 | $ 567 | $ 426 | $ 468 |
Weighted average common shares outstanding—Basic (in Shares) | 180 | 178 | 178 | ||||||||
Effect of dilutive common stock equivalents (in Shares) | 0 | 1 | 1 | ||||||||
Weighted average common shares outstanding—Diluted (in Shares) | 180 | 179 | 179 |
Earnings Per Common Share - Add
Earnings Per Common Share - Additional Information (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Maximum | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share (in Shares) | 1 | 1 | 1 |
Fair Values of Financial Inst_3
Fair Values of Financial Instruments - Carrying Amounts and Fair Values of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, carrying amount | $ 8 | $ 10 |
Long-term debt (excluding capital lease obligations), carrying amount | 7,638 | 6,809 |
Preferred stock with mandatory redemption requirements, fair value | 9 | 14 |
Long-term debt (excluding capital lease obligations), fair value | 7,921 | 7,643 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, fair value | 0 | 0 |
Long-term debt (excluding capital lease obligations), fair value | 5,760 | 4,846 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, fair value | 0 | 0 |
Long-term debt (excluding capital lease obligations), fair value | 433 | 976 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, fair value | 9 | 14 |
Long-term debt (excluding capital lease obligations), fair value | $ 1,728 | $ 1,821 |
Fair Values of Financial Inst_4
Fair Values of Financial Instruments - Fair Value Measurements of Assets and Liabilities on Recurring Basis (Details) - Recurring - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Restricted funds | $ 29 | $ 28 |
Rabbi trust investments | 15 | 15 |
Deposits | 3 | 4 |
Other investments | 3 | 3 |
Total assets | 50 | 50 |
Liabilities: | ||
Deferred compensation obligations | 17 | 17 |
Mark-to-market derivative liabilities | 14 | 3 |
Total liabilities | 31 | 20 |
Total assets (liabilities) | 19 | 30 |
Level 1 | ||
Assets: | ||
Restricted funds | 29 | 28 |
Rabbi trust investments | 15 | 15 |
Deposits | 3 | 4 |
Other investments | 3 | 3 |
Total assets | 50 | 50 |
Liabilities: | ||
Deferred compensation obligations | 17 | 17 |
Mark-to-market derivative liabilities | 0 | 0 |
Total liabilities | 17 | 17 |
Total assets (liabilities) | 33 | 33 |
Level 2 | ||
Assets: | ||
Restricted funds | 0 | 0 |
Rabbi trust investments | 0 | 0 |
Deposits | 0 | 0 |
Other investments | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Deferred compensation obligations | 0 | 0 |
Mark-to-market derivative liabilities | 14 | 3 |
Total liabilities | 14 | 3 |
Total assets (liabilities) | (14) | (3) |
Level 3 | ||
Assets: | ||
Restricted funds | 0 | 0 |
Rabbi trust investments | 0 | 0 |
Deposits | 0 | 0 |
Other investments | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Deferred compensation obligations | 0 | 0 |
Mark-to-market derivative liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Total assets (liabilities) | $ 0 | $ 0 |
Fair Values of Financial Inst_5
Fair Values of Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Long term restricted funds | $ 1 | $ 1 |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities - Nonrecurring Fair Value Measurements (Details) (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | $ 41 | |
Impairment expense | 57 | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 0 | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 0 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 41 | |
Goodwill | Keystone | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 38 | $ 91 |
Impairment expense | 53 | |
Goodwill | Keystone | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 0 | |
Goodwill | Keystone | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 0 | |
Goodwill | Keystone | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 38 | |
Intangible Asset | Keystone | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 3 | $ 8 |
Impairment expense | 4 | |
Intangible Asset | Keystone | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 0 | |
Intangible Asset | Keystone | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 0 | |
Intangible Asset | Keystone | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | $ 3 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating and Capital Leases [Line Items] | |||
Rental expenses under operating leases | $ 35 | $ 29 | $ 24 |
Operating leases renewal term, years | 5 years | ||
Capital lease asset | $ 147 | $ 150 | |
Minimum annual future rental commitment, 2019 | 17 | ||
Minimum annual future rental commitment, 2020 | 15 | ||
Minimum annual future rental commitment, 2021 | 12 | ||
Minimum annual future rental commitment, 2022 | 11 | ||
Minimum annual future rental commitment, 2023 | 6 | ||
Minimum annual future rental commitment, thereafter | $ 80 | ||
Minimum | |||
Operating and Capital Leases [Line Items] | |||
Operating leases renewal term, years | 1 year | ||
Maximum | |||
Operating and Capital Leases [Line Items] | |||
Operating leases renewal term, years | 60 years | ||
Real property | |||
Operating and Capital Leases [Line Items] | |||
Operating leases expiration term, years | 40 years | ||
Vehicles | |||
Operating and Capital Leases [Line Items] | |||
Operating leases expiration term, years | 7 years | ||
Equipment | |||
Operating and Capital Leases [Line Items] | |||
Operating leases expiration term, years | 5 years | ||
Utilities | |||
Operating and Capital Leases [Line Items] | |||
Operating leases renewal term, years | 40 years | ||
Facilities | |||
Operating and Capital Leases [Line Items] | |||
Minimum annual future rental commitment, 2019 | $ 4 | ||
Minimum annual future rental commitment, 2020 | 4 | ||
Minimum annual future rental commitment, 2021 | 4 | ||
Minimum annual future rental commitment, 2022 | 4 | ||
Minimum annual future rental commitment, 2023 | 4 | ||
Minimum annual future rental commitment, thereafter | $ 59 |
Leases - Schedule of Minimum An
Leases - Schedule of Minimum Annual Future Rental Commitment Under Operating Leases (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2,019 | $ 17 |
2,020 | 15 |
2,021 | 12 |
2,022 | 11 |
2,023 | 6 |
Thereafter | $ 80 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018stateSegmentsubsidiary | |
Market-Based Businesses | |
Segment Reporting Information [Line Items] | |
Number of states in which entity provides water and wastewater services | state | 16 |
Regulated Businesses | |
Segment Reporting Information [Line Items] | |
Number of reportable segment | Segment | 1 |
Number of subsidiaries in which entity provides water and wastewater services | subsidiary | 20 |
Summarized Segment Information
Summarized Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | $ 850 | $ 976 | $ 853 | $ 761 | $ 821 | $ 936 | $ 844 | $ 756 | $ 3,440 | $ 3,357 | $ 3,302 |
Depreciation and amortization | 545 | 492 | 470 | ||||||||
Impairment charge | 57 | 0 | 0 | ||||||||
Total operating expenses, net | 2,338 | 2,104 | 2,217 | ||||||||
Interest, net | (350) | (342) | (325) | ||||||||
Income before income taxes | 787 | 912 | 770 | ||||||||
Provision for income taxes | 222 | 486 | 302 | ||||||||
Net income attributable to common shareholders | 112 | $ 187 | $ 162 | $ 106 | (1) | $ 203 | $ 131 | $ 93 | 567 | 426 | 468 |
Total assets | 21,223 | 19,482 | 21,223 | 19,482 | 18,482 | ||||||
Capital expenditures | 1,586 | 1,434 | 1,311 | ||||||||
Regulated Businesses | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 2,984 | ||||||||||
Market-Based Businesses | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 476 | ||||||||||
Operating Segments | Regulated Businesses | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 2,984 | 2,958 | 2,871 | ||||||||
Depreciation and amortization | 500 | 462 | 440 | ||||||||
Impairment charge | 0 | ||||||||||
Total operating expenses, net | 1,912 | 1,766 | 1,840 | ||||||||
Interest, net | (280) | (268) | (256) | ||||||||
Income before income taxes | 826 | 925 | 775 | ||||||||
Provision for income taxes | 224 | 366 | 303 | ||||||||
Net income attributable to common shareholders | 602 | 559 | 472 | ||||||||
Total assets | 18,680 | 17,602 | 18,680 | 17,602 | 16,405 | ||||||
Capital expenditures | 1,477 | 1,316 | 1,274 | ||||||||
Operating Segments | Market-Based Businesses | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 476 | 422 | 451 | ||||||||
Depreciation and amortization | 29 | 18 | 15 | ||||||||
Impairment charge | 57 | ||||||||||
Total operating expenses, net | 441 | 360 | 391 | ||||||||
Interest, net | 4 | 3 | 2 | ||||||||
Income before income taxes | 41 | 66 | 65 | ||||||||
Provision for income taxes | 11 | 28 | 26 | ||||||||
Net income attributable to common shareholders | 32 | 38 | 39 | ||||||||
Total assets | 999 | 599 | 999 | 599 | 637 | ||||||
Capital expenditures | 13 | 18 | 18 | ||||||||
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | (20) | (23) | (20) | ||||||||
Depreciation and amortization | 16 | 12 | 15 | ||||||||
Impairment charge | 0 | ||||||||||
Total operating expenses, net | (15) | (22) | (14) | ||||||||
Interest, net | (74) | (77) | (71) | ||||||||
Income before income taxes | (80) | (79) | (70) | ||||||||
Provision for income taxes | (13) | 92 | (27) | ||||||||
Net income attributable to common shareholders | (67) | (171) | (43) | ||||||||
Total assets | $ 1,544 | $ 1,281 | 1,544 | 1,281 | 1,440 | ||||||
Capital expenditures | $ 96 | $ 100 | $ 19 |
Unaudited Quarterly Data - Sche
Unaudited Quarterly Data - Schedule Of Unaudited Quarterly Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Quarterly Financial Data [Abstract] | ||||||||||||||
Operating revenues | $ 850 | $ 976 | $ 853 | $ 761 | $ 821 | $ 936 | $ 844 | $ 756 | $ 3,440 | $ 3,357 | $ 3,302 | |||
Operating income | 248 | 335 | 302 | 217 | 281 | 432 | 310 | 230 | 1,102 | 1,253 | 1,085 | |||
Net income attributable to common shareholders | $ 112 | $ 187 | $ 162 | $ 106 | $ (1) | $ 203 | $ 131 | $ 93 | $ 567 | $ 426 | $ 468 | |||
Basic earnings per share: | ||||||||||||||
Net income attributable to common stockholders (USD per share) | $ 0.62 | $ 1.04 | $ 0.90 | $ 0.60 | $ (0.01) | $ 1.14 | $ 0.74 | $ 0.52 | $ 3.16 | [1] | $ 2.39 | [1] | $ 2.63 | [1] |
Diluted earnings per share: | ||||||||||||||
Net income attributable to common stockholders (USD per share) | $ 0.62 | $ 1.04 | $ 0.91 | $ 0.59 | $ 0 | $ 1.13 | $ 0.73 | $ 0.52 | $ 3.15 | [1] | $ 2.38 | [1] | $ 2.62 | [1] |
[1] | Amounts may not calculate due to rounding. |
Uncategorized Items - awk-20181
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 21,000,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 20,000,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 21,000,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 20,000,000 |