Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 24, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-34028 | |
Entity Registrant Name | AMERICAN WATER WORKS COMPANY, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 51-0063696 | |
Entity Address, Address Line One | 1 Water Street | |
Entity Address, City or Town | Camden | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 08102-1658 | |
City Area Code | 856 | |
Local Phone Number | 955-4001 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | AWK | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 180,776,169 | |
Entity Central Index Key | 0001410636 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Property, plant and equipment | $ 23,807 | $ 23,204 |
Accumulated depreciation | (5,656) | (5,795) |
Property, plant and equipment, net | 18,151 | 17,409 |
Current assets: | ||
Cash and cash equivalents | 94 | 130 |
Restricted funds | 22 | 28 |
Accounts receivable, net | 335 | 301 |
Unbilled revenues | 187 | 186 |
Materials and supplies | 46 | 41 |
Other | 115 | 95 |
Total current assets | 799 | 781 |
Regulatory and other long-term assets: | ||
Regulatory assets | 1,178 | 1,156 |
Operating lease right-of-use assets | 109 | 0 |
Goodwill | 1,576 | 1,575 |
Intangible assets | 74 | 84 |
Postretirement benefit assets | 150 | 155 |
Other | 201 | 63 |
Total regulatory and other long-term assets | 3,288 | 3,033 |
Total assets | 22,238 | 21,223 |
Capitalization: | ||
Common stock ($0.01 par value; 500,000,000 shares authorized; 185,860,356 and 185,367,158 shares issued, respectively) | 2 | 2 |
Paid-in-capital | 6,695 | 6,657 |
Accumulated deficit | (123) | (464) |
Accumulated other comprehensive loss | (46) | (34) |
Treasury stock, at cost (5,090,726 and 4,683,156 shares, respectively) | (338) | (297) |
Total common shareholders' equity | 6,190 | 5,864 |
Long-term debt | 8,640 | 7,569 |
Redeemable preferred stock at redemption value | 6 | 7 |
Total long-term debt | 8,646 | 7,576 |
Total capitalization | 14,836 | 13,440 |
Current liabilities: | ||
Short-term debt | 474 | 964 |
Current portion of long-term debt | 29 | 71 |
Accounts payable | 149 | 175 |
Accrued liabilities | 490 | 556 |
Accrued taxes | 78 | 45 |
Accrued interest | 96 | 87 |
Other | 172 | 196 |
Total current liabilities | 1,488 | 2,094 |
Regulatory and other long-term liabilities: | ||
Advances for construction | 247 | 252 |
Deferred income taxes and investment tax credits | 1,904 | 1,740 |
Regulatory liabilities | 1,849 | 1,907 |
Operating lease liabilities | 94 | 0 |
Accrued pension liabilities | 399 | 390 |
Other | 76 | 78 |
Total regulatory and other long-term liabilities | 4,569 | 4,367 |
Contributions in aid of construction | 1,345 | 1,322 |
Commitments and contingencies (See Note 9) | ||
Total capitalization and liabilities | $ 22,238 | $ 21,223 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 185,860,356 | 185,367,158 |
Treasury Stock, shares (in shares) | 5,090,726 | 4,683,156 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Income Statement [Abstract] | |||||
Operating revenues | $ 1,013 | $ 976 | $ 2,708 | $ 2,590 | |
Operating expenses: | |||||
Operation and maintenance | 395 | 390 | 1,132 | 1,085 | |
Depreciation and amortization | 144 | 141 | 430 | 404 | |
General taxes | 68 | 71 | 209 | 210 | |
(Gain) on asset dispositions and purchases | 0 | (18) | (9) | (20) | |
Impairment charge | 0 | 57 | 0 | 57 | |
Total operating expenses, net | 607 | 641 | 1,762 | 1,736 | |
Operating income | 406 | 335 | 946 | 854 | |
Other income (expense): | |||||
Interest, net | (97) | (89) | (284) | (259) | |
Non-operating benefit costs, net | 4 | 5 | 12 | 10 | |
Other, net | 5 | 4 | 23 | 12 | |
Total other income (expense) | (88) | (80) | (249) | (237) | |
Income before income taxes | 318 | 255 | 697 | 617 | |
Provision for income taxes | 78 | 70 | 174 | 164 | |
Consolidated net income | 240 | 185 | 523 | 453 | |
Net loss attributable to noncontrolling interest | 0 | (2) | 0 | (2) | |
Net income attributable to common shareholders | $ 240 | $ 187 | $ 523 | $ 455 | |
Basic earnings per share: | |||||
Net income attributable to common shareholders (dollars per share) | [1] | $ 1.33 | $ 1.04 | $ 2.90 | $ 2.54 |
Diluted earnings per share: | |||||
Net income attributable to common shareholders (dollars per share) | [1] | $ 1.33 | $ 1.04 | $ 2.89 | $ 2.53 |
Weighted-average common shares outstanding: | |||||
Basic (shares) | 181 | 181 | 181 | 179 | |
Diluted (shares) | 181 | 181 | 181 | 180 | |
[1] | Amounts may not calculate due to rounding. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income attributable to common shareholders | $ 240 | $ 187 | $ 523 | $ 455 |
Other comprehensive income (loss), net of tax: | ||||
Amortization of actuarial loss, net of tax of $0 and $1 for the three months ended September 30, 2019 and 2018, respectively, and $1 and $2 for the nine months ended September 30, 2019 and 2018, respectively | 1 | 2 | 2 | 6 |
Foreign currency translation adjustment | 0 | 0 | (1) | 0 |
Unrealized gain (loss) on cash flow hedges, net of tax of $0 and $2 for the three months ended September 30, 2019 and 2018, respectively, and $(5) and $4 for the nine months ended September 30, 2019 and 2018, respectively | 0 | 7 | (13) | 13 |
Net other comprehensive income (loss) | 1 | 9 | (12) | 19 |
Comprehensive income attributable to common shareholders | $ 241 | $ 196 | $ 511 | $ 474 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Actuarial (gain) loss, tax | $ 0 | $ 1 | $ 1 | $ 2 |
Unrealized (loss) gain on cash flow hedges, tax | $ 0 | $ 2 | $ (5) | $ 4 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 523 | $ 453 |
Adjustments to reconcile to net cash flows provided by operating activities: | ||
Depreciation and amortization | 430 | 404 |
Deferred income taxes and amortization of investment tax credits | 163 | 142 |
Provision for losses on accounts receivable | 18 | 22 |
(Gain) on asset dispositions and purchases | (9) | (20) |
Impairment charge | 0 | 57 |
Pension and non-pension postretirement benefits | 13 | 19 |
Other non-cash, net | (51) | 27 |
Changes in assets and liabilities: | ||
Receivables and unbilled revenues | (54) | (70) |
Pension and postretirement benefit contributions | (23) | (11) |
Accounts payable and accrued liabilities | (16) | (23) |
Other assets and liabilities, net | (45) | 32 |
Impact of Freedom Industries settlement activities | (4) | (40) |
Net cash provided by operating activities | 945 | 992 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (1,115) | (1,136) |
Acquisitions, net of cash acquired | (85) | (381) |
Proceeds from sale of assets | 17 | 33 |
Removal costs from property, plant and equipment retirements, net | (71) | (61) |
Net cash used in investing activities | (1,254) | (1,545) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from long-term debt | 1,191 | 1,355 |
Repayments of long-term debt | (153) | (330) |
Net short-term borrowings with maturities less than three months | (491) | (341) |
Proceeds from issuance of common stock | 0 | 183 |
Proceeds from issuances of employee stock plans and direct stock purchase plan, net of taxes paid of $11 and $7 for the nine months ended September 30, 2019 and 2018, respectively | 13 | 8 |
Advances and contributions for construction, net of refunds of $25 and $20 for the nine months ended September 30, 2019 and 2018, respectively | 16 | 15 |
Debt issuance costs | (11) | (12) |
Make-whole premium on early debt redemption | 0 | (10) |
Dividends paid | (263) | (237) |
Anti-dilutive share repurchases | (36) | (45) |
Net cash provided by financing activities | 266 | 586 |
Net (decrease) increase in cash, cash equivalents and restricted funds | (43) | 33 |
Cash, cash equivalents and restricted funds at beginning of period | 159 | 83 |
Cash, cash equivalents and restricted funds at end of period | 116 | 116 |
Non-cash investing activity: | ||
Capital expenditures acquired on account but unpaid as of the end of period | $ 245 | $ 187 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Cash Flows [Abstract] | ||
Income taxes paid on proceeds from issuance of employee stock plans and direct stock purchase plan | $ 11 | $ 7 |
Advances and contributions for construction, refunds | $ 25 | $ 20 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common stock, par value $0.01 per share | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2017 | 182.5 | (4.1) | ||||
Beginning 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 | 106 | 106 | ||||
Direct stock reinvestment and purchase plan | 1 | 1 | ||||
Employee stock purchase plan | 1 | 1 | ||||
Stock-based compensation activity (in shares) | 0.2 | (0.1) | ||||
Stock-based compensation activity | (1) | 4 | $ (5) | |||
Repurchases of common stock (in shares) | (0.5) | |||||
Repurchases of common stock | (45) | $ (45) | ||||
Net other comprehensive income (loss) | 4 | 4 | ||||
Ending balance (in shares) at Mar. 31, 2018 | 182.7 | (4.7) | ||||
Ending balance at Mar. 31, 2018 | 5,451 | $ 2 | 6,438 | (617) | (75) | $ (297) |
Beginning balance (in shares) at Dec. 31, 2017 | 182.5 | (4.1) | ||||
Beginning 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 | 455 | |||||
Net other comprehensive income (loss) | 19 | |||||
Ending balance (in shares) at Sep. 30, 2018 | 185.3 | (4.7) | ||||
Ending balance at Sep. 30, 2018 | 5,860 | $ 2 | 6,647 | (432) | (60) | $ (297) |
Beginning balance (in shares) at Mar. 31, 2018 | 182.7 | (4.7) | ||||
Beginning balance at Mar. 31, 2018 | 5,451 | $ 2 | 6,438 | (617) | (75) | $ (297) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to common shareholders | 162 | 162 | ||||
Direct stock reinvestment and purchase plan (in shares) | 0.1 | |||||
Direct stock reinvestment and purchase plan | 3 | 3 | ||||
Employee stock purchase plan (in shares) | 0.1 | |||||
Employee stock purchase plan | 3 | 3 | ||||
Stock-based compensation activity (in shares) | 0 | |||||
Stock-based compensation activity | 9 | 10 | (1) | $ 0 | ||
Issuance of common stock (in shares) | 2.3 | |||||
Issuance of common stock | 183 | 183 | ||||
Net other comprehensive income (loss) | 6 | 6 | ||||
Dividends | (81) | (81) | ||||
Ending balance (in shares) at Jun. 30, 2018 | 185.2 | (4.7) | ||||
Ending balance at Jun. 30, 2018 | 5,736 | $ 2 | 6,637 | (537) | (69) | $ (297) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to common shareholders | 187 | 187 | ||||
Direct stock reinvestment and purchase plan | 1 | 1 | ||||
Employee stock purchase plan | 2 | 2 | ||||
Stock-based compensation activity (in shares) | 0.1 | |||||
Stock-based compensation activity | 7 | 7 | ||||
Net other comprehensive income (loss) | 9 | 9 | ||||
Dividends | (82) | (82) | ||||
Ending balance (in shares) at Sep. 30, 2018 | 185.3 | (4.7) | ||||
Ending balance at Sep. 30, 2018 | 5,860 | $ 2 | 6,647 | (432) | (60) | $ (297) |
Beginning balance (in shares) at Dec. 31, 2018 | 185.4 | (4.7) | ||||
Beginning balance at Dec. 31, 2018 | 5,864 | $ 2 | 6,657 | (464) | (34) | $ (297) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to common shareholders | 113 | 113 | ||||
Direct stock reinvestment and purchase plan | 1 | 1 | ||||
Employee stock purchase plan | 2 | 2 | ||||
Stock-based compensation activity (in shares) | 0.2 | (0.1) | ||||
Stock-based compensation activity | 3 | 8 | $ (5) | |||
Repurchases of common stock (in shares) | (0.3) | |||||
Repurchases of common stock | (36) | $ (36) | ||||
Net other comprehensive income (loss) | (13) | (13) | ||||
Ending balance (in shares) at Mar. 31, 2019 | 185.6 | (5.1) | ||||
Ending balance at Mar. 31, 2019 | 5,932 | $ 2 | 6,668 | (353) | (47) | $ (338) |
Beginning balance (in shares) at Dec. 31, 2018 | 185.4 | (4.7) | ||||
Beginning balance at Dec. 31, 2018 | 5,864 | $ 2 | 6,657 | (464) | (34) | $ (297) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to common shareholders | $ 523 | |||||
Repurchases of common stock (in shares) | (0.4) | |||||
Repurchases of common stock | $ (36) | |||||
Net other comprehensive income (loss) | (12) | |||||
Ending balance (in shares) at Sep. 30, 2019 | 185.9 | (5.1) | ||||
Ending balance at Sep. 30, 2019 | 6,190 | $ 2 | 6,695 | (123) | (46) | $ (338) |
Beginning balance (in shares) at Mar. 31, 2019 | 185.6 | (5.1) | ||||
Beginning balance at Mar. 31, 2019 | 5,932 | $ 2 | 6,668 | (353) | (47) | $ (338) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to common shareholders | 170 | 170 | ||||
Direct stock reinvestment and purchase plan | 2 | 2 | ||||
Employee stock purchase plan | 3 | 3 | ||||
Stock-based compensation activity (in shares) | 0.1 | |||||
Stock-based compensation activity | 10 | 10 | ||||
Dividends | (90) | (90) | ||||
Ending balance (in shares) at Jun. 30, 2019 | 185.7 | (5.1) | ||||
Ending balance at Jun. 30, 2019 | 6,027 | $ 2 | 6,683 | (273) | (47) | $ (338) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to common shareholders | 240 | 240 | ||||
Direct stock reinvestment and purchase plan | 3 | 3 | ||||
Employee stock purchase plan | 3 | 3 | ||||
Stock-based compensation activity (in shares) | 0.2 | |||||
Stock-based compensation activity | 6 | 6 | ||||
Net other comprehensive income (loss) | 1 | 1 | ||||
Dividends | (90) | (90) | ||||
Ending balance (in shares) at Sep. 30, 2019 | 185.9 | (5.1) | ||||
Ending balance at Sep. 30, 2019 | $ 6,190 | $ 2 | $ 6,695 | $ (123) | $ (46) | $ (338) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | Sep. 04, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 |
Statement of Stockholders' Equity [Abstract] | |||||
Dividends declared per common share (USD per share) | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.455 | $ 0.455 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1: Basis of Presentation The unaudited Consolidated Financial Statements included in this report include the accounts of American Water Works Company, Inc. and all of its subsidiaries (the “Company” or “American Water”), in which a controlling interest is maintained after the elimination of intercompany balances and transactions. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting, and the rules and regulations for reporting on Quarterly Reports on Form 10-Q (“Form 10-Q”). Accordingly, they do not contain certain information and disclosures required by GAAP for comprehensive financial statements. In the opinion of management, all adjustments necessary for a fair statement of the financial position as of September 30, 2019 , and the results of operations and cash flows for all periods presented, have been made. All adjustments are of a normal, recurring nature, except as otherwise disclosed. The unaudited Consolidated Financial Statements and Notes included in this report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (“Form 10-K”), which provides a more complete discussion of the Company’s accounting policies, financial position, operating results and other matters. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the year, primarily due to the seasonality of the Company’s operations. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Significant Accounting Policies | Note 2: Significant Accounting Policies New Accounting Standards Presented in the table below are new accounting standards that were adopted by the Company in 2019: Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements Accounting for Leases Updated the accounting and disclosure guidance for leasing arrangements. Under this guidance, a lessee is 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 (“ROU”) 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. A package of optional transition practical expedients allows an entity not to reassess under the new guidance: (i) whether any expired or existing contracts as of the adoption date 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 expired or existing land easements as of the adoption date 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 Modified retrospective See Note 12—Leases. Targeted Improvements to Accounting for Hedging Activities Updated the accounting and disclosure guidance for hedging activities, allowing 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 Modified retrospective for adjustments related to the measurement of ineffectiveness for cash flow hedges; prospective for the updated presentation and disclosure requirements. The adoption did not have a material impact on the Consolidated Financial Statements. Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes Designated the OIS rate based on SOFR as an eligible U.S. benchmark interest rate for the purposes of applying hedge accounting. January 1, 2019 Prospective The adoption did not have a material impact on the Consolidated Financial Statements. Presented in the table below are recently issued accounting standards that have not yet been adopted by the Company as of September 30, 2019 : Standard Description Date of Adoption Application Estimated Effect on the Consolidated Financial Statements Measurement of Credit Losses on Financial Instruments Updated the accounting guidance on reporting credit losses for financial assets held at amortized cost basis and available-for-sale debt securities. Under this guidance, expected credit losses are required to be measured based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount of financial assets. Also, this guidance requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a direct write-down. January 1, 2020; early adoption permitted Modified retrospective The Company is evaluating the impact on the Consolidated Financial Statements. Changes to the Disclosure Requirements for Fair Value Measurement Updated the disclosure requirements for fair value measurement. The guidance removes the requirements to disclose transfers between Level 1 and Level 2 measurements, the timing of transfers between levels, and the valuation processes for Level 3 measurements. Disclosure of transfers into and out of Level 3 measurements will be required. The guidance adds disclosure requirements for the change in unrealized gains and losses in other comprehensive income for recurring Level 3 measurements, as well as the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. January 1, 2020; early adoption permitted Prospective for added disclosures and for the narrative description of measurement uncertainty; retrospective for all other amendments. The standard will not have a material impact on the Consolidated Financial Statements. Cash, Cash Equivalents and Restricted Funds Presented in the table below is 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 periods ended September 30 : 2019 2018 Cash and cash equivalents $ 94 $ 86 Restricted funds 22 29 Restricted funds included in other long-term assets — 1 Cash, cash equivalents and restricted funds as presented on the Consolidated Statements of Cash Flows $ 116 $ 116 Reclassifications Certain reclassifications have been made to prior periods in the Consolidated Financial Statements and Notes to conform to the current presentation. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 3: Revenue Recognition Disaggregated Revenues The Company’s primary business involves the ownership of regulated utilities that provide water and wastewater services to residential, commercial, industrial, public authority, fire service and sale for resale customers, collectively presented as the Company’s “ Regulated Businesses .” The Company also operates market-based businesses that provide a broad range of related and complementary water, wastewater and other services to residential and smaller commercial customers, the U.S. government on military installations and shale natural gas exploration and production companies, as well as municipalities, utilities and industrial customers, collectively presented as the Company’s “ Market-Based Businesses .” Presented in the table below are operating revenues disaggregated for the three months ended September 30, 2019 : Revenues from Contracts with Customers Other Revenues Not from Contracts with Customers (a) Total Operating Revenues Regulated Businesses: Water services: Residential $ 503 $ 1 $ 504 Commercial 188 — 188 Fire service 37 — 37 Industrial 38 — 38 Public and other 64 — 64 Total water services 830 1 831 Wastewater services: Residential 31 — 31 Commercial 9 — 9 Industrial 1 — 1 Public and other 2 — 2 Total wastewater services 43 — 43 Miscellaneous utility charges 9 — 9 Alternative revenue programs — (1 ) (1 ) Lease contract revenue — 1 1 Total Regulated Businesses 882 1 883 Market-Based Businesses 136 — 136 Other (5 ) (1 ) (6 ) Total operating revenues $ 1,013 $ — $ 1,013 (a) Includes revenues associated with provisional rates, alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of Accounting Standards Codification Topic 606, Revenue From Contracts With Customers (“ASC 606”), and accounted for under other existing GAAP. Presented in the table below are operating revenues disaggregated for the nine months ended September 30, 2019 : Revenues from Contracts with Customers Other Revenues Not from Contracts with Customers (a) Total Operating Revenues Regulated Businesses: Water services: Residential $ 1,296 $ 1 $ 1,297 Commercial 477 — 477 Fire service 106 — 106 Industrial 104 — 104 Public and other 160 — 160 Total water services 2,143 1 2,144 Wastewater services: Residential 88 — 88 Commercial 23 — 23 Industrial 2 — 2 Public and other 10 — 10 Total wastewater services 123 — 123 Miscellaneous utility charges 27 — 27 Alternative revenue programs — 23 23 Lease contract revenue — 6 6 Total Regulated Businesses 2,293 30 2,323 Market-Based Businesses 402 — 402 Other (16 ) (1 ) (17 ) Total operating revenues $ 2,679 $ 29 $ 2,708 (a) Includes revenues associated with provisional rates, 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 September 30, 2019 . Presented in the table below are the changes in contract assets and liabilities for the nine months ended September 30, 2019 : Amount Contract assets: Balance as of January 1, 2019 $ 14 Additions 14 Transfers to accounts receivable, net (19 ) Balance as of September 30, 2019 $ 9 Contract liabilities: Balance as of January 1, 2019 $ 20 Additions 52 Transfers to operating revenues (42 ) Balance as of September 30, 2019 $ 30 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 U.S. military, municipalities and other customers. As of September 30, 2019 , the Company’s operation and maintenance (“O&M”) 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 2070 and have RPOs of $5.4 billion as of September 30, 2019 , 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 2020 and 2038 and have RPOs of $559 million as of September 30, 2019 , as measured by estimated remaining contract revenue. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Note 4: Acquisitions During the nine months ended September 30, 2019 , the Company closed on the acquisition of 16 regulated water and wastewater systems for a total aggregate purchase price of $85 million , including the acquisition of the City of Alton, Illinois’ regional wastewater system on June 27, 2019 for $55 million . Assets acquired from these acquisitions, principally utility plant, totaled $89 million , and liabilities assumed totaled $4 million . These acquisitions were predominately accounted for as business combinations, as the Company continues to grow its business through regulated acquisitions. The preliminary purchase price allocations related to acquisitions accounted for as business combinations will be finalized once the valuation of assets acquired has been completed, no later than one year after their acquisition date. Subsequent to September 30, 2019 , the Company closed on three regulated water and wastewater systems for a total aggregate purchase price of $137 million , highlighted by the acquisition of the water assets of Steelton Borough, Pennsylvania for $22 million and Lake Station, Indiana for $21 million , and the wastewater assets of the Township of Exeter, Pennsylvania for $94 million |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Note 5: Shareholders' Equity Accumulated Other Comprehensive Loss Presented in the table below are the changes in accumulated other comprehensive loss by component, net of tax, for the nine months ended September 30, 2019 and 2018 , respectively: Defined Benefit Pension Plans Foreign Currency Translation Gain (Loss) on Cash Flow Hedges Accumulated Other Comprehensive Loss Funded Status Amortization of Prior Service Cost Amortization of Actuarial Loss Balance as of December 31, 2018 $ (102 ) $ 1 $ 56 $ 1 $ 10 $ (34 ) Other comprehensive loss before reclassifications — — — — (13 ) (13 ) Amounts reclassified from accumulated other comprehensive loss — — 2 (1 ) — 1 Net other comprehensive income (loss) — — 2 (1 ) (13 ) (12 ) Balance as of September 30, 2019 $ (102 ) $ 1 $ 58 $ — $ (3 ) $ (46 ) Balance as of December 31, 2017 $ (140 ) $ 1 $ 49 $ 1 $ 10 $ (79 ) Other comprehensive income before reclassifications — — — — 13 13 Amounts reclassified from accumulated other comprehensive loss — — 6 — — 6 Net other comprehensive income — — 6 — 13 19 Balance as of September 30, 2018 $ (140 ) $ 1 $ 55 $ 1 $ 23 $ (60 ) 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 has been capitalized as a regulatory asset. These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. During the second quarter of 2019, the Company substantially exited its foreign operations in Canada due to a contract expiration in its Contract Services Group . As a result, the Company recognized a pre-tax gain of $1 million from cumulative foreign currency translation, and a corresponding change of accumulated other comprehensive loss. The amortization of the gain (loss) on cash flow hedges is reclassified to net income during the period incurred and is included in interest, net in the accompanying Consolidated Statements of Operations. Anti-Dilutive Stock Repurchase Program During the nine months ended September 30, 2019 , the Company repurchased 0.4 million shares of its common stock in the open market at an aggregate cost of $36 million under the anti-dilutive stock repurchase program authorized by the Company’s Board of Directors in 2015. As of September 30, 2019 , there were 5.1 million shares of common stock available for repurchase under the program. Dividends On September 4, 2019 , the Company paid a cash dividend of $0.50 per share to shareholders of record as of August 9, 2019 . On October 29, 2019 , the Company’s Board of Directors declared a quarterly cash dividend payment of $0.50 per share, payable on December 4, 2019 to shareholders of record as of November 12, 2019 . Future dividends, when and as declared at the discretion of the Board of Directors, will be dependent upon future earnings and cash flows, compliance with various regulatory, financial and legal requirements, and other factors. See Note 9—Shareholders' Equity in the Notes to Consolidated Financial Statements in the Company’s Form 10-K for additional information regarding the payment of dividends on the Company’s common stock. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 6: Long-Term Debt Presented in the table below are issuances of long-term debt during the nine months ended September 30, 2019 : Company Type Rate Maturity Amount American Water Capital Corp. Senior Notes—fixed rate 3.45%-4.15% 2029-2049 $ 1,100 Other American Water subsidiaries Private activity bonds and government funded debt—fixed rate 0.00%-4.23% 2021-2048 91 Total issuances $ 1,191 Presented in the table below are retirements and redemptions of long-term debt through sinking fund provisions, optional redemptions or payment at maturity, during the nine months ended September 30, 2019 : Company Type Rate Maturity Amount American Water Capital Corp. Senior Notes—fixed rate 7.21% 2019 $ 25 American Water Capital Corp. 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%-6.20% 2019-2048 92 Other American Water subsidiaries Mortgage bonds—fixed rate 5.48%-9.13% 2019-2021 28 Other American Water subsidiaries Mandatorily redeemable preferred stock 8.49% 2036 1 Other American Water subsidiaries Term loan 5.76%-5.81% 2021 6 Total retirements and redemptions $ 153 On May 13, 2019 , American Water Capital Corp. (“AWCC”) completed a $1.10 billion debt offering which included the sale of $550 million aggregate principal amount of its 3.45% Senior Notes due 2029 and $550 million aggregate principal amount of its 4.15% Senior Notes due 2049 . At the closing of the offering, AWCC received, after deduction of underwriting discounts and before deduction of offering expenses, net proceeds of approximately $1.09 billion . AWCC used the net proceeds to: (i) lend funds to parent company and its regulated subsidiaries; (ii) repay $25 million principal amount of AWCC’s 7.21% Series I Senior Notes at maturity on May 19, 2019; (iii) repay $26 million aggregate principal amount of subsidiary debt at maturity during the second quarter of 2019; and (iv) repay AWCC’s commercial paper obligations, and for general corporate purposes. On May 6, 2019 , the Company terminated five forward starting swap agreements with an aggregate notional amount of $510 million , realizing a net loss of $30 million , to be amortized through interest, net over 10 and 30 year periods, in accordance with the terms of the new debt issued on May 13, 2019 . No ineffectiveness was recognized on hedging instruments for the three and nine months ended September 30, 2019 and 2018 . 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. Presented in the table below are the gross fair values of the Company’s derivative liabilities, as well as the location of the liability balances on the Consolidated Balance Sheets: Derivative Instrument Derivative Designation Balance Sheet Classification September 30, 2019 December 31, 2018 Liability derivative: Forward starting swaps Cash flow hedge Other current liabilities $ — $ 14 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7: Income Taxes The Company’s effective income tax rate was 24.5% and 27.5% for the three months ended September 30, 2019 and 2018 , respectively, and 25.0% and 26.6% for the nine months ended September 30, 2019 and 2018 , respectively. The decrease in the Company’s effective income tax rate during the three and nine months ended September 30, 2019 was primarily due to changes in state tax law, state income apportionment, and the amortization of excess accumulated deferred income taxes resulting from the Tax Cuts and Jobs Act, which is generally reflected in customer rates beginning in 2019. |
Pension and Other Post-Retireme
Pension and Other Post-Retirement Benefits | 9 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits | Note 8: Pension and Other Postretirement Benefits Presented in the table below are the components of net periodic benefit cost (credit): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Components of net periodic pension benefit cost: Service cost $ 7 $ 8 $ 21 $ 25 Interest cost 21 19 62 57 Expected return on plan assets (23 ) (24 ) (68 ) (73 ) Amortization of prior service credit (1 ) — (3 ) — Amortization of actuarial loss 8 6 24 20 Net periodic pension benefit cost $ 12 $ 9 $ 36 $ 29 Components of net periodic other postretirement benefit credit: Service cost $ 1 $ 2 $ 3 $ 7 Interest cost 4 5 11 16 Expected return on plan assets (5 ) (7 ) (14 ) (20 ) Amortization of prior service credit (9 ) (7 ) (26 ) (16 ) Amortization of actuarial loss 1 1 3 3 Net periodic other postretirement benefit credit $ (8 ) $ (6 ) $ (23 ) $ (10 ) The Company contributed $9 million and $23 million for the funding of its defined benefit pension plans for the three and nine months ended September 30, 2019 , respectively, and made $11 million of funding contributions for the three and nine months ended September 30, 2018 . The Company made no contributions for the funding of its other postretirement benefit plans for each of the three and nine months ended September 30, 2019 and 2018. The Company expects to make pension contributions to the plan trusts of up to $8 million during the remainder of 2019 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9: Commitments and Contingencies Contingencies The Company is routinely involved in legal actions incident to the normal conduct of its business. As of September 30, 2019 , the Company has accrued approximately $20 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 $25 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 9—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 “West Virginia Plaintiffs”) arising out of the January 2014 Freedom Industries, Inc. chemical spill in West Virginia. The effective date of the Settlement was 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 “West Virginia-American Water Defendants”) did not admit, and will not admit, any fault or liability for any of the allegations made by the West Virginia 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 estimated 225,000 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 West Virginia-American Water Defendants of all claims against the insurance carrier related to the Freedom Industries chemical spill. The aggregate pre-tax amount contributed by WVAWC of the $126 million Settlement with respect to the Company, net of insurance recoveries, is $19 million . As of September 30, 2019 , $5 million of the aggregate Settlement amount of $126 million has been reflected in accrued liabilities, and $5 million in offsetting insurance receivables has been reflected in other current assets on the Consolidated Balance Sheets. The amount reflected in accrued liabilities as of September 30, 2019 reflects $20 million of reductions in the liability during the first nine months of 2019, $16 million of which was also recorded as reductions to the offsetting insurance receivable reflected in other current assets. The Company has funded WVAWC’s contributions to the Settlement through existing sources of liquidity. 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 for 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 putative class action complaint captioned Jeffries, et al. v. West Virginia-American Water Company was filed in West Virginia Circuit Court in Kanawha County 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 Jeffries 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 Jeffries 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. On February 21, 2019, the court issued an order denying WVAWC’s motion to dismiss the Jeffries plaintiffs’ tort claims. On August 21, 2019, the court set a procedural schedule in this case, including a trial date of September 21, 2020. Discovery in this case is ongoing. 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. The Company cannot currently estimate the amount of any reasonably possible loss or a range of such losses related to this proceeding. Chattanooga, Tennessee Water Main Break Class Action Litigation On September 12, 2019, Tennessee-American Water Company (“TAWC”), a wholly owned subsidiary of the Company, experienced a break of a 36-inch water transmission main, which caused service fluctuations or interruptions to TAWC customers and the issuance of a boil water notice. TAWC repaired the main break by early morning on September 14, 2019, and restored full water service by the afternoon on September 15, 2019, with the boil water notice lifted for all customers on September 16, 2019. On September 17, 2019, a putative class action complaint captioned Bruce, et al. v. American Water Works Company, Inc., et al. was filed in the Circuit Court of Hamilton County, Tennessee against TAWC, the Company and American Water Works Service Company, Inc., a wholly owned subsidiary of the Company (collectively, the “Tennessee-American Water Defendants”), on behalf of a putative class of individuals or entities who lost water service or suffered monetary losses as a result of the Chattanooga main break (the “Tennessee Plaintiffs”). The complaint alleges breach of contract and negligence against the Tennessee-American Water Defendants, as well as an equitable remedy of piercing the corporate veil. The Tennessee Plaintiffs seek an award of unspecified alleged damages for wage losses, business and economic losses, out-of-pocket expenses, loss of use and enjoyment of property and annoyance and inconvenience, as well as punitive damages, attorneys’ fees and pre- and post-judgment interest. The Tennessee-American Water Defendants believe that they have meritorious defenses to the claims raised in this class action complaint, and they intend to vigorously defend themselves against these allegations. The Company cannot currently estimate the amount of any reasonably possible loss or a range of such losses related to this proceeding. |
Earnings Per Common Share
Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Note 10: Earnings per Common Share Presented in the table below is a reconciliation of the numerator and denominator for the basic and diluted earnings per share (“EPS”) calculations: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net income attributable to common shareholders $ 240 $ 187 $ 523 $ 455 Denominator: Weighted-average common shares outstanding—Basic 181 181 181 179 Effect of dilutive common stock equivalents — — — 1 Weighted-average common shares outstanding—Diluted 181 181 181 180 The effect of dilutive common stock equivalents is related to outstanding stock options, restricted stock units and performance stock units granted under the Company’s 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 three and nine months ended September 30, 2019 and 2018 because their effect would have been anti-dilutive under the treasury stock method. |
Fair Value of Financial Informa
Fair Value of Financial Information | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Information | Note 11: Fair Value of Financial Information Fair Value of Financial Instruments 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. 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. Presented in the tables below are the carrying amounts, including fair value adjustments previously recognized in acquisition purchase accounting, and the fair values of the Company’s financial instruments: Carrying Amount At Fair Value as of September 30, 2019 Level 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 7 $ — $ — $ 10 $ 10 Long-term debt (excluding finance lease obligations) 8,666 7,717 416 1,664 9,797 Carrying Amount At Fair Value as of December 31, 2018 Level 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 8 $ — $ — $ 9 $ 9 Long-term debt (excluding finance lease obligations) 7,638 5,760 433 1,728 7,921 Recurring Fair Value Measurements Presented in the tables below are assets and liabilities measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy: At Fair Value as of September 30, 2019 Level 1 Level 2 Level 3 Total Assets: Restricted funds $ 22 $ — $ — $ 22 Rabbi trust investments 16 — — 16 Deposits 3 — — 3 Other investments 13 — — 13 Total assets 54 — — 54 Liabilities: Deferred compensation obligations 20 — — 20 Total liabilities 20 — — 20 Total assets $ 34 $ — $ — $ 34 At Fair Value as of 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 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 less than $1 million and $1 million were included in other long-term assets on the Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018 , 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. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Note 12: Leases On January 1, 2019, the Company adopted Accounting Standards Update 2016-02, Leases (Topic 842) , and all related amendments (collectively, the “Standard”). The Company implemented the guidance in the Standard using the modified retrospective approach and applied the optional transition method, which allowed entities to apply the new Standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Under this approach, prior periods have not been restated and continue to be reported under the accounting standards in effect for those periods. The Standard includes practical expedients, which relate to the identification and classification of leases that commenced before the adoption date, initial direct costs for leases that commenced before the adoption date, the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset and the ability to carry forward accounting treatment for existing land easements. The Company has made an accounting policy election not to include leases with a lease term of twelve months or less in the adoption of the Standard. Adoption of the Standard resulted in the recognition of operating lease ROU assets and operating lease liabilities as of January 1, 2019 of approximately $117 million and $115 million , respectively. The difference between the ROU assets and operating lease liabilities was recorded as an adjustment to retained earnings. The Standard did not materially impact the Company’s consolidated results of operations and had no impact on cash flows. The Company’s ROU assets represent the right to use an underlying asset for the lease term and the Company’s lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are generally recognized at the commencement date based on the present value of discounted lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of discounted lease payments. The implicit rate is used when readily determinable. ROU assets also include any upfront lease payments and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets, accrued liabilities and operating lease liabilities on the Consolidated Balance Sheets. Finance leases are included in property, plant and equipment, accrued liabilities and other long-term liabilities on the Consolidated Balance Sheets. The Company has lease agreements with lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) and non-lease components (e.g., common-area maintenance costs), which are generally accounted for separately; however, the Company accounts for the lease and non-lease components as a single lease component for certain leases. Additionally, the Company applies a portfolio approach to effectively account for the ROU assets and lease liabilities. The Company has operating and finance leases involving real property, including facilities, utility assets, vehicles, and equipment. Certain operating leases have renewal options ranging from one to 60 years . The exercise of lease renewal options is at the Company’s sole discretion. Renewal options that the Company was reasonably certain to exercise are included in the Company’s ROU assets. Certain operating leases contain the option to purchase the leased property. The operating leases for real property, vehicles and equipment will expire over the next 40 years , seven years , and five years , respectively. Certain lease agreements include variable rental payments adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company participates in a number of arrangements with various public entities (“Partners”) in West Virginia. Under these arrangements, the Company transferred a portion of its utility plant to the Partners in exchange for an equal principal amount of Industrial Development Bonds (“IDBs”) issued by the Partners under the Industrial Development and Commercial Development Bond Act. The Company leased back the utility plant under agreements for a period of 30 to 40 years. The Company has recorded these agreements as finance leases in property, plant and equipment, as ownership of the assets will revert back to the Company at the end of the lease term. The Company determined that the finance lease obligations and the investments in IDBs meet the conditions for offsetting, and as such, are reported net on the Consolidated Balance Sheets and excluded from the finance lease disclosure presented below. The Company also enters into O&M agreements with the Partners. The Company pays an annual fee for use of the Partners’ assets in performing under the O&M agreements. The O&M agreements are recorded as operating leases, and future annual use fees of $4 million in 2019 through 2023, and $59 million thereafter, are included in operating lease ROU assets and operating lease liabilities on the Consolidated Balance Sheets. Rental expenses under operating and finance leases were $4 million and $12 million for the three and nine months ended September 30, 2019 , respectively. Presented in the table below is supplemental cash flow information: For the Three Months Ended September 30, 2019 For the Nine Months Ended September 30, 2019 Cash paid for amounts in lease liabilities (a) $ 3 $ 12 Right-of-use assets obtained in exchange for new operating lease liabilities — 119 (a) Includes operating and financing cash flows from operating and finance leases. Presented in the table below are the weighed-average remaining lease terms and the weighted-average discount rates for finance and operating leases: As of September 30, 2019 Weighted-average remaining lease term: Finance lease 7 years Operating leases 18 years Weighted-average discount rate: Finance lease 12 % Operating leases 4 % Presented in the table below are the future maturities of lease liabilities at September 30, 2019 : Amount 2019 $ 4 2020 15 2021 13 2022 12 2023 8 Thereafter 106 Total lease payments 158 Imputed interest (53 ) Total $ 105 Presented in the table below are the future minimum rental commitments, as of December 31, 2018, 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 Total $ 141 |
Leases | Note 12: Leases On January 1, 2019, the Company adopted Accounting Standards Update 2016-02, Leases (Topic 842) , and all related amendments (collectively, the “Standard”). The Company implemented the guidance in the Standard using the modified retrospective approach and applied the optional transition method, which allowed entities to apply the new Standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Under this approach, prior periods have not been restated and continue to be reported under the accounting standards in effect for those periods. The Standard includes practical expedients, which relate to the identification and classification of leases that commenced before the adoption date, initial direct costs for leases that commenced before the adoption date, the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset and the ability to carry forward accounting treatment for existing land easements. The Company has made an accounting policy election not to include leases with a lease term of twelve months or less in the adoption of the Standard. Adoption of the Standard resulted in the recognition of operating lease ROU assets and operating lease liabilities as of January 1, 2019 of approximately $117 million and $115 million , respectively. The difference between the ROU assets and operating lease liabilities was recorded as an adjustment to retained earnings. The Standard did not materially impact the Company’s consolidated results of operations and had no impact on cash flows. The Company’s ROU assets represent the right to use an underlying asset for the lease term and the Company’s lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are generally recognized at the commencement date based on the present value of discounted lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of discounted lease payments. The implicit rate is used when readily determinable. ROU assets also include any upfront lease payments and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets, accrued liabilities and operating lease liabilities on the Consolidated Balance Sheets. Finance leases are included in property, plant and equipment, accrued liabilities and other long-term liabilities on the Consolidated Balance Sheets. The Company has lease agreements with lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) and non-lease components (e.g., common-area maintenance costs), which are generally accounted for separately; however, the Company accounts for the lease and non-lease components as a single lease component for certain leases. Additionally, the Company applies a portfolio approach to effectively account for the ROU assets and lease liabilities. The Company has operating and finance leases involving real property, including facilities, utility assets, vehicles, and equipment. Certain operating leases have renewal options ranging from one to 60 years . The exercise of lease renewal options is at the Company’s sole discretion. Renewal options that the Company was reasonably certain to exercise are included in the Company’s ROU assets. Certain operating leases contain the option to purchase the leased property. The operating leases for real property, vehicles and equipment will expire over the next 40 years , seven years , and five years , respectively. Certain lease agreements include variable rental payments adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company participates in a number of arrangements with various public entities (“Partners”) in West Virginia. Under these arrangements, the Company transferred a portion of its utility plant to the Partners in exchange for an equal principal amount of Industrial Development Bonds (“IDBs”) issued by the Partners under the Industrial Development and Commercial Development Bond Act. The Company leased back the utility plant under agreements for a period of 30 to 40 years. The Company has recorded these agreements as finance leases in property, plant and equipment, as ownership of the assets will revert back to the Company at the end of the lease term. The Company determined that the finance lease obligations and the investments in IDBs meet the conditions for offsetting, and as such, are reported net on the Consolidated Balance Sheets and excluded from the finance lease disclosure presented below. The Company also enters into O&M agreements with the Partners. The Company pays an annual fee for use of the Partners’ assets in performing under the O&M agreements. The O&M agreements are recorded as operating leases, and future annual use fees of $4 million in 2019 through 2023, and $59 million thereafter, are included in operating lease ROU assets and operating lease liabilities on the Consolidated Balance Sheets. Rental expenses under operating and finance leases were $4 million and $12 million for the three and nine months ended September 30, 2019 , respectively. Presented in the table below is supplemental cash flow information: For the Three Months Ended September 30, 2019 For the Nine Months Ended September 30, 2019 Cash paid for amounts in lease liabilities (a) $ 3 $ 12 Right-of-use assets obtained in exchange for new operating lease liabilities — 119 (a) Includes operating and financing cash flows from operating and finance leases. Presented in the table below are the weighed-average remaining lease terms and the weighted-average discount rates for finance and operating leases: As of September 30, 2019 Weighted-average remaining lease term: Finance lease 7 years Operating leases 18 years Weighted-average discount rate: Finance lease 12 % Operating leases 4 % Presented in the table below are the future maturities of lease liabilities at September 30, 2019 : Amount 2019 $ 4 2020 15 2021 13 2022 12 2023 8 Thereafter 106 Total lease payments 158 Imputed interest (53 ) Total $ 105 Presented in the table below are the future minimum rental commitments, as of December 31, 2018, 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 Total $ 141 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Note 13: 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, assess performance and allocate resources. The Company operates its businesses primarily through one reportable segment, the Regulated Businesses segment. The Company also operates market-based businesses that, individually, do not meet the criteria of a reportable segment in accordance with GAAP, and are collectively presented as the Market-Based Businesses . “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. Presented in the tables below is summarized segment information: As of or for the Three Months Ended September 30, 2019 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 883 $ 136 $ (6 ) $ 1,013 Depreciation and amortization 132 9 3 144 Total operating expenses, net 505 108 (6 ) 607 Interest, net (74 ) 1 (24 ) (97 ) Income before income taxes 313 30 (25 ) 318 Provision for income taxes 77 7 (6 ) 78 Net income attributable to common shareholders 236 23 (19 ) 240 Total assets 19,787 1,060 1,391 22,238 Capital expenditures 399 2 2 403 As of or for the Three Months Ended September 30, 2018 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 857 $ 125 $ (6 ) $ 976 Depreciation and amortization 128 9 4 141 Impairment charge — 57 — 57 Total operating expenses, net 505 139 (3 ) 641 Interest, net (71 ) — (18 ) (89 ) Income before income taxes 288 (14 ) (19 ) 255 Provision for income taxes 76 (5 ) (1 ) 70 Net income attributable to common shareholders 213 (7 ) (19 ) 187 Total assets 18,415 973 1,492 20,880 Capital expenditures 373 2 22 397 As of or for the Nine Months Ended September 30, 2019 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 2,323 $ 402 $ (17 ) $ 2,708 Depreciation and amortization 394 26 10 430 Total operating expenses, net 1,455 322 (15 ) 1,762 Interest, net (221 ) 3 (66 ) (284 ) Income before income taxes 671 86 (60 ) 697 Provision for income taxes 169 22 (17 ) 174 Net income attributable to common shareholders 502 64 (43 ) 523 Total assets 19,787 1,060 1,391 22,238 Capital expenditures 1,092 10 13 1,115 As of or for the Nine Months Ended September 30, 2018 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 2,267 $ 339 $ (16 ) $ 2,590 Depreciation and amortization 373 20 11 404 Impairment charge — 57 — 57 Total operating expenses, net 1,420 323 (7 ) 1,736 Interest, net (209 ) 3 (53 ) (259 ) Income before income taxes 656 20 (59 ) 617 Provision for income taxes 173 4 (13 ) 164 Net income attributable to common shareholders 484 18 (47 ) 455 Total assets 18,415 973 1,492 20,880 Capital expenditures 1,050 9 77 1,136 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Standards | Presented in the table below are new accounting standards that were adopted by the Company in 2019: Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements Accounting for Leases Updated the accounting and disclosure guidance for leasing arrangements. Under this guidance, a lessee is 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 (“ROU”) 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. A package of optional transition practical expedients allows an entity not to reassess under the new guidance: (i) whether any expired or existing contracts as of the adoption date 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 expired or existing land easements as of the adoption date 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 Modified retrospective See Note 12—Leases. Targeted Improvements to Accounting for Hedging Activities Updated the accounting and disclosure guidance for hedging activities, allowing 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 Modified retrospective for adjustments related to the measurement of ineffectiveness for cash flow hedges; prospective for the updated presentation and disclosure requirements. The adoption did not have a material impact on the Consolidated Financial Statements. Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes Designated the OIS rate based on SOFR as an eligible U.S. benchmark interest rate for the purposes of applying hedge accounting. January 1, 2019 Prospective The adoption did not have a material impact on the Consolidated Financial Statements. Presented in the table below are recently issued accounting standards that have not yet been adopted by the Company as of September 30, 2019 : Standard Description Date of Adoption Application Estimated Effect on the Consolidated Financial Statements Measurement of Credit Losses on Financial Instruments Updated the accounting guidance on reporting credit losses for financial assets held at amortized cost basis and available-for-sale debt securities. Under this guidance, expected credit losses are required to be measured based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount of financial assets. Also, this guidance requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a direct write-down. January 1, 2020; early adoption permitted Modified retrospective The Company is evaluating the impact on the Consolidated Financial Statements. Changes to the Disclosure Requirements for Fair Value Measurement Updated the disclosure requirements for fair value measurement. The guidance removes the requirements to disclose transfers between Level 1 and Level 2 measurements, the timing of transfers between levels, and the valuation processes for Level 3 measurements. Disclosure of transfers into and out of Level 3 measurements will be required. The guidance adds disclosure requirements for the change in unrealized gains and losses in other comprehensive income for recurring Level 3 measurements, as well as the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. January 1, 2020; early adoption permitted Prospective for added disclosures and for the narrative description of measurement uncertainty; retrospective for all other amendments. The standard will not have a material impact on the Consolidated Financial Statements. |
Reclassification | 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) | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Reconciliation of the cash and cash equivalents and restricted funds | Presented in the table below is 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 periods ended September 30 : 2019 2018 Cash and cash equivalents $ 94 $ 86 Restricted funds 22 29 Restricted funds included in other long-term assets — 1 Cash, cash equivalents and restricted funds as presented on the Consolidated Statements of Cash Flows $ 116 $ 116 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Presented in the table below are the changes in contract assets and liabilities for the nine months ended September 30, 2019 : Amount Contract assets: Balance as of January 1, 2019 $ 14 Additions 14 Transfers to accounts receivable, net (19 ) Balance as of September 30, 2019 $ 9 Contract liabilities: Balance as of January 1, 2019 $ 20 Additions 52 Transfers to operating revenues (42 ) Balance as of September 30, 2019 $ 30 Presented in the table below are operating revenues disaggregated for the three months ended September 30, 2019 : Revenues from Contracts with Customers Other Revenues Not from Contracts with Customers (a) Total Operating Revenues Regulated Businesses: Water services: Residential $ 503 $ 1 $ 504 Commercial 188 — 188 Fire service 37 — 37 Industrial 38 — 38 Public and other 64 — 64 Total water services 830 1 831 Wastewater services: Residential 31 — 31 Commercial 9 — 9 Industrial 1 — 1 Public and other 2 — 2 Total wastewater services 43 — 43 Miscellaneous utility charges 9 — 9 Alternative revenue programs — (1 ) (1 ) Lease contract revenue — 1 1 Total Regulated Businesses 882 1 883 Market-Based Businesses 136 — 136 Other (5 ) (1 ) (6 ) Total operating revenues $ 1,013 $ — $ 1,013 (a) Includes revenues associated with provisional rates, alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of Accounting Standards Codification Topic 606, Revenue From Contracts With Customers (“ASC 606”), and accounted for under other existing GAAP. Presented in the table below are operating revenues disaggregated for the nine months ended September 30, 2019 : Revenues from Contracts with Customers Other Revenues Not from Contracts with Customers (a) Total Operating Revenues Regulated Businesses: Water services: Residential $ 1,296 $ 1 $ 1,297 Commercial 477 — 477 Fire service 106 — 106 Industrial 104 — 104 Public and other 160 — 160 Total water services 2,143 1 2,144 Wastewater services: Residential 88 — 88 Commercial 23 — 23 Industrial 2 — 2 Public and other 10 — 10 Total wastewater services 123 — 123 Miscellaneous utility charges 27 — 27 Alternative revenue programs — 23 23 Lease contract revenue — 6 6 Total Regulated Businesses 2,293 30 2,323 Market-Based Businesses 402 — 402 Other (16 ) (1 ) (17 ) Total operating revenues $ 2,679 $ 29 $ 2,708 (a) Includes revenues associated with provisional rates, alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of ASC 606, and accounted for under other existing GAAP. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | table below are the changes in accumulated other comprehensive loss by component, net of tax, for the nine months ended September 30, 2019 and 2018 , respectively: Defined Benefit Pension Plans Foreign Currency Translation Gain (Loss) on Cash Flow Hedges Accumulated Other Comprehensive Loss Funded Status Amortization of Prior Service Cost Amortization of Actuarial Loss Balance as of December 31, 2018 $ (102 ) $ 1 $ 56 $ 1 $ 10 $ (34 ) Other comprehensive loss before reclassifications — — — — (13 ) (13 ) Amounts reclassified from accumulated other comprehensive loss — — 2 (1 ) — 1 Net other comprehensive income (loss) — — 2 (1 ) (13 ) (12 ) Balance as of September 30, 2019 $ (102 ) $ 1 $ 58 $ — $ (3 ) $ (46 ) Balance as of December 31, 2017 $ (140 ) $ 1 $ 49 $ 1 $ 10 $ (79 ) Other comprehensive income before reclassifications — — — — 13 13 Amounts reclassified from accumulated other comprehensive loss — — 6 — — 6 Net other comprehensive income — — 6 — 13 19 Balance as of September 30, 2018 $ (140 ) $ 1 $ 55 $ 1 $ 23 $ (60 ) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt Issued | Presented in the table below are issuances of long-term debt during the nine months ended September 30, 2019 : Company Type Rate Maturity Amount American Water Capital Corp. Senior Notes—fixed rate 3.45%-4.15% 2029-2049 $ 1,100 Other American Water subsidiaries Private activity bonds and government funded debt—fixed rate 0.00%-4.23% 2021-2048 91 Total issuances $ 1,191 |
Long-Term Debt Retired Through Sinking Fund Provisions, Optional Redemptions or Payments at Maturities | Presented in the table below are retirements and redemptions of long-term debt through sinking fund provisions, optional redemptions or payment at maturity, during the nine months ended September 30, 2019 : Company Type Rate Maturity Amount American Water Capital Corp. Senior Notes—fixed rate 7.21% 2019 $ 25 American Water Capital Corp. 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%-6.20% 2019-2048 92 Other American Water subsidiaries Mortgage bonds—fixed rate 5.48%-9.13% 2019-2021 28 Other American Water subsidiaries Mandatorily redeemable preferred stock 8.49% 2036 1 Other American Water subsidiaries Term loan 5.76%-5.81% 2021 6 Total retirements and redemptions $ 153 |
Gross Fair Value Derivative Asset and Liabilities | Presented in the table below are the gross fair values of the Company’s derivative liabilities, as well as the location of the liability balances on the Consolidated Balance Sheets: Derivative Instrument Derivative Designation Balance Sheet Classification September 30, 2019 December 31, 2018 Liability derivative: Forward starting swaps Cash flow hedge Other current liabilities $ — $ 14 |
Pension and Other Post-Retire_2
Pension and Other Post-Retirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Costs | Presented in the table below are the components of net periodic benefit cost (credit): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Components of net periodic pension benefit cost: Service cost $ 7 $ 8 $ 21 $ 25 Interest cost 21 19 62 57 Expected return on plan assets (23 ) (24 ) (68 ) (73 ) Amortization of prior service credit (1 ) — (3 ) — Amortization of actuarial loss 8 6 24 20 Net periodic pension benefit cost $ 12 $ 9 $ 36 $ 29 Components of net periodic other postretirement benefit credit: Service cost $ 1 $ 2 $ 3 $ 7 Interest cost 4 5 11 16 Expected return on plan assets (5 ) (7 ) (14 ) (20 ) Amortization of prior service credit (9 ) (7 ) (26 ) (16 ) Amortization of actuarial loss 1 1 3 3 Net periodic other postretirement benefit credit $ (8 ) $ (6 ) $ (23 ) $ (10 ) |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerator and Denominator for Basic and Diluted Earnings Per Share | Presented in the table below is a reconciliation of the numerator and denominator for the basic and diluted earnings per share (“EPS”) calculations: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net income attributable to common shareholders $ 240 $ 187 $ 523 $ 455 Denominator: Weighted-average common shares outstanding—Basic 181 181 181 179 Effect of dilutive common stock equivalents — — — 1 Weighted-average common shares outstanding—Diluted 181 181 181 180 |
Fair Value of Financial Infor_2
Fair Value of Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Carrying Amounts and Fair Values of Financial Instruments | Presented in the tables below are the carrying amounts, including fair value adjustments previously recognized in acquisition purchase accounting, and the fair values of the Company’s financial instruments: Carrying Amount At Fair Value as of September 30, 2019 Level 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 7 $ — $ — $ 10 $ 10 Long-term debt (excluding finance lease obligations) 8,666 7,717 416 1,664 9,797 Carrying Amount At Fair Value as of December 31, 2018 Level 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 8 $ — $ — $ 9 $ 9 Long-term debt (excluding finance lease obligations) 7,638 5,760 433 1,728 7,921 |
Fair Value Measurements of Assets and Liabilities on Recurring Basis | Presented in the tables below are assets and liabilities measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy: At Fair Value as of September 30, 2019 Level 1 Level 2 Level 3 Total Assets: Restricted funds $ 22 $ — $ — $ 22 Rabbi trust investments 16 — — 16 Deposits 3 — — 3 Other investments 13 — — 13 Total assets 54 — — 54 Liabilities: Deferred compensation obligations 20 — — 20 Total liabilities 20 — — 20 Total assets $ 34 $ — $ — $ 34 At Fair Value as of 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 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Presented in the table below is supplemental cash flow information: For the Three Months Ended September 30, 2019 For the Nine Months Ended September 30, 2019 Cash paid for amounts in lease liabilities (a) $ 3 $ 12 Right-of-use assets obtained in exchange for new operating lease liabilities — 119 (a) Includes operating and financing cash flows from operating and finance leases. |
Finance and Operating Leases, Remaining Lease Term and Discount Rate | Presented in the table below are the weighed-average remaining lease terms and the weighted-average discount rates for finance and operating leases: As of September 30, 2019 Weighted-average remaining lease term: Finance lease 7 years Operating leases 18 years Weighted-average discount rate: Finance lease 12 % Operating leases 4 % |
Lessee, Operating Lease, Liability, Maturity | Presented in the table below are the future maturities of lease liabilities at September 30, 2019 : Amount 2019 $ 4 2020 15 2021 13 2022 12 2023 8 Thereafter 106 Total lease payments 158 Imputed interest (53 ) Total $ 105 |
Finance Lease, Liability, Maturity | Presented in the table below are the future maturities of lease liabilities at September 30, 2019 : Amount 2019 $ 4 2020 15 2021 13 2022 12 2023 8 Thereafter 106 Total lease payments 158 Imputed interest (53 ) Total $ 105 |
Schedule of Future Minimum Rental Payments for Operating Leases | Presented in the table below are the future minimum rental commitments, as of December 31, 2018, 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 Total $ 141 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Summarized Segment Information | Presented in the tables below is summarized segment information: As of or for the Three Months Ended September 30, 2019 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 883 $ 136 $ (6 ) $ 1,013 Depreciation and amortization 132 9 3 144 Total operating expenses, net 505 108 (6 ) 607 Interest, net (74 ) 1 (24 ) (97 ) Income before income taxes 313 30 (25 ) 318 Provision for income taxes 77 7 (6 ) 78 Net income attributable to common shareholders 236 23 (19 ) 240 Total assets 19,787 1,060 1,391 22,238 Capital expenditures 399 2 2 403 As of or for the Three Months Ended September 30, 2018 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 857 $ 125 $ (6 ) $ 976 Depreciation and amortization 128 9 4 141 Impairment charge — 57 — 57 Total operating expenses, net 505 139 (3 ) 641 Interest, net (71 ) — (18 ) (89 ) Income before income taxes 288 (14 ) (19 ) 255 Provision for income taxes 76 (5 ) (1 ) 70 Net income attributable to common shareholders 213 (7 ) (19 ) 187 Total assets 18,415 973 1,492 20,880 Capital expenditures 373 2 22 397 As of or for the Nine Months Ended September 30, 2019 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 2,323 $ 402 $ (17 ) $ 2,708 Depreciation and amortization 394 26 10 430 Total operating expenses, net 1,455 322 (15 ) 1,762 Interest, net (221 ) 3 (66 ) (284 ) Income before income taxes 671 86 (60 ) 697 Provision for income taxes 169 22 (17 ) 174 Net income attributable to common shareholders 502 64 (43 ) 523 Total assets 19,787 1,060 1,391 22,238 Capital expenditures 1,092 10 13 1,115 As of or for the Nine Months Ended September 30, 2018 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 2,267 $ 339 $ (16 ) $ 2,590 Depreciation and amortization 373 20 11 404 Impairment charge — 57 — 57 Total operating expenses, net 1,420 323 (7 ) 1,736 Interest, net (209 ) 3 (53 ) (259 ) Income before income taxes 656 20 (59 ) 617 Provision for income taxes 173 4 (13 ) 164 Net income attributable to common shareholders 484 18 (47 ) 455 Total assets 18,415 973 1,492 20,880 Capital expenditures 1,050 9 77 1,136 |
Significant Accounting Polici_4
Significant Accounting Policies - Cash, Cash Equivalents and Restricted Funds (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||
Cash and cash equivalents | $ 94 | $ 130 | $ 86 | |
Restricted funds | 22 | 28 | 29 | |
Restricted funds included in other long-term assets | 0 | 1 | ||
Cash, cash equivalents and restricted funds as presented on the Consolidated Statements of Cash Flows | $ 116 | $ 159 | $ 116 | $ 83 |
Revenue Recognition Disaggregat
Revenue Recognition Disaggregated Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | $ 1,013 | $ 2,679 | ||
Other operating income | 0 | 29 | ||
Operating revenues | 1,013 | $ 976 | 2,708 | $ 2,590 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | (5) | (16) | ||
Other operating income | (1) | (1) | ||
Operating revenues | (6) | (17) | ||
Regulated Businesses | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 882 | 2,293 | ||
Other operating income | 1 | 30 | ||
Alternative revenue programs | (1) | 23 | ||
Lease contract revenue | 1 | 6 | ||
Operating revenues | 883 | 2,323 | ||
Regulated Businesses | Water Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 830 | 2,143 | ||
Other operating income | 1 | 1 | ||
Operating revenues | 831 | 2,144 | ||
Regulated Businesses | Wastewater Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 43 | 123 | ||
Operating revenues | 43 | 123 | ||
Regulated Businesses | Miscellaneous Utility Charge | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 9 | 27 | ||
Operating revenues | 9 | 27 | ||
Market-Based Businesses | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 136 | 402 | ||
Operating revenues | 136 | 402 | ||
Residential | Regulated Businesses | Water Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 503 | 1,296 | ||
Other operating income | 1 | 1 | ||
Operating revenues | 504 | 1,297 | ||
Residential | Regulated Businesses | Wastewater Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 31 | 88 | ||
Operating revenues | 31 | 88 | ||
Commercial | Regulated Businesses | Water Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 188 | 477 | ||
Operating revenues | 188 | 477 | ||
Commercial | Regulated Businesses | Wastewater Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 9 | 23 | ||
Operating revenues | 9 | 23 | ||
Fire service | Regulated Businesses | Water Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 37 | 106 | ||
Operating revenues | 37 | 106 | ||
Industrial | Regulated Businesses | Water Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 38 | 104 | ||
Operating revenues | 38 | 104 | ||
Industrial | Regulated Businesses | Wastewater Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 1 | 2 | ||
Operating revenues | 2 | |||
Public and other | Regulated Businesses | Water Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 64 | 160 | ||
Operating revenues | 64 | 160 | ||
Public and other | Regulated Businesses | Wastewater Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 2 | 10 | ||
Operating revenues | $ 2 | $ 10 |
Revenue Recognition Contract As
Revenue Recognition Contract Assets and Liabilities (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Contract assets: | |
Contract asset, beginning | $ 14 |
Additions | 14 |
Transfers to accounts receivable, net | (19) |
Contract asset, ending | 9 |
Contract liabilities: | |
Contract liability, beginning | 20 |
Additions | 52 |
Transfers to operating revenues | (42) |
Contract liability, ending | $ 30 |
Revenue Recognition (Details)
Revenue Recognition (Details) - Market-Based Businesses $ in Millions | Sep. 30, 2019USD ($) |
U.S. Government | |
Disaggregation of Revenue [Line Items] | |
Revenue, remaining performance obligation | $ 5,400 |
Municipalities and Commercial | |
Disaggregation of Revenue [Line Items] | |
Revenue, remaining performance obligation | $ 559 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) $ in Millions | Jun. 27, 2019USD ($) | Oct. 30, 2019USD ($)Acquisition | Sep. 30, 2019USD ($)Acquisition |
Business Acquisition [Line Items] | |||
Business acquisition, number of companies acquired | Acquisition | 16 | ||
Purchase price | $ 85 | ||
Subsequent Event | |||
Business Acquisition [Line Items] | |||
Business acquisition, number of companies acquired | Acquisition | 3 | ||
Purchase price | $ 137 | ||
City Of Alton, Illinois’ Regional Wastewater System | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 55 | ||
Purchase price allocation, assets acquired | 89 | ||
Purchase price allocation, liabilities assumed | $ 4 | ||
Steelton Borough, Pennsylvania Water Assets | Subsequent Event | |||
Business Acquisition [Line Items] | |||
Purchase price | 22 | ||
Lake Station, Indiana Water Assets | Subsequent Event | |||
Business Acquisition [Line Items] | |||
Purchase price | 21 | ||
Exeter Township, Pennsylvania Wastewater Assets | Subsequent Event | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 94 |
Shareholders' Equity - Changes
Shareholders' Equity - Changes in Accumulated Other Comprehensive Loss by Component (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 5,932 | $ 5,864 | $ 5,385 |
Other comprehensive income (loss) before reclassifications | (13) | 13 | |
Amounts reclassified from accumulated other comprehensive loss | 1 | 6 | |
Net other comprehensive income (loss) | (12) | 19 | |
Ending balance | 6,027 | 6,190 | 5,860 |
Funded Status | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (102) | (140) | |
Ending balance | (102) | (140) | |
Amortization of Prior Service Cost | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 1 | 1 | |
Ending balance | 1 | 1 | |
Amortization of Actuarial Loss | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 56 | 49 | |
Amounts reclassified from accumulated other comprehensive loss | 2 | 6 | |
Net other comprehensive income (loss) | 2 | 6 | |
Ending balance | 58 | 55 | |
Foreign Currency Translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 1 | 1 | |
Amounts reclassified from accumulated other comprehensive loss | 1 | (1) | |
Net other comprehensive income (loss) | (1) | ||
Ending balance | 0 | 1 | |
Gain (Loss) on Cash Flow Hedges | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 10 | 10 | |
Other comprehensive income (loss) before reclassifications | (13) | 13 | |
Net other comprehensive income (loss) | (13) | 13 | |
Ending balance | (3) | 23 | |
Accumulated Other Comprehensive Loss | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (47) | (34) | (79) |
Ending balance | $ (47) | $ (46) | $ (60) |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Sep. 04, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Oct. 29, 2019 |
Equity [Abstract] | ||||||||||
Shares of common stock repurchased (in shares) | 0.4 | |||||||||
Aggregate cost of shares repurchased | $ 36 | $ 45 | $ 36 | |||||||
Share of common stock available for repurchase (in shares) | 5.1 | 5.1 | ||||||||
Dividends declared per common share (dollars per share) | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.455 | $ 0.455 | |||||
Dividends Payable [Line Items] | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | $ 1 | $ 6 | ||||||||
Subsequent Event | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Dividends payable (dollars per share) | $ 0.50 | |||||||||
Foreign Currency Translation | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | $ 1 | $ (1) |
Long-Term Debt - Issued (Detail
Long-Term Debt - Issued (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Debt Instrument [Line Items] | ||
Total issuances | $ 1,191 | $ 1,355 |
Senior Notes | Fixed rate | ||
Debt Instrument [Line Items] | ||
Total issuances | $ 1,100 | |
Senior Notes | Minimum | Fixed rate | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.45% | |
Maturity date | 2029 | |
Senior Notes | Maximum | Fixed rate | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.15% | |
Maturity date | 2049 | |
Private activity bonds and government funded debt | Other American Water subsidiaries | Fixed rate | ||
Debt Instrument [Line Items] | ||
Total issuances | $ 91 | |
Private activity bonds and government funded debt | Minimum | Other American Water subsidiaries | Fixed rate | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.00% | |
Maturity date | 2021 | |
Private activity bonds and government funded debt | Maximum | Other American Water subsidiaries | Fixed rate | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.23% | |
Maturity date | 2048 |
Long-Term Debt - Retired Throug
Long-Term Debt - Retired Through Sinking Fund Provisions, Optional Redemptions or Payments at Maturities (Details) - Debt instrument, redemption, period one $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 153 |
Senior Notes | |
Debt Instrument [Line Items] | |
Interest rate | 7.21% |
Maturity date | 2019 |
Total retirements and redemptions | $ 25 |
Other American Water subsidiaries | Mandatorily redeemable preferred stock | |
Debt Instrument [Line Items] | |
Interest rate | 8.49% |
Maturity date | 2036 |
Total retirements and redemptions | $ 1 |
Other American Water subsidiaries | Mortgage bonds | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 28 |
Other American Water subsidiaries | Term loan | |
Debt Instrument [Line Items] | |
Maturity date | 2021 |
Total retirements and redemptions | $ 6 |
Minimum | Mortgage bonds | |
Debt Instrument [Line Items] | |
Interest rate | 5.48% |
Maturity date | 2019 |
Minimum | Other American Water subsidiaries | Term loan | |
Debt Instrument [Line Items] | |
Interest rate | 5.76% |
Maximum | Mortgage bonds | |
Debt Instrument [Line Items] | |
Interest rate | 9.13% |
Maturity date | 2021 |
Maximum | Other American Water subsidiaries | Term loan | |
Debt Instrument [Line Items] | |
Interest rate | 5.81% |
Fixed rate two | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 1 |
Fixed rate two | Minimum | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest rate | 1.79% |
Maturity date | 2021 |
Fixed rate two | Maximum | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest rate | 2.90% |
Maturity date | 2031 |
Fixed rate three | Other American Water subsidiaries | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 92 |
Fixed rate three | Minimum | Other American Water subsidiaries | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest rate | 0.00% |
Maturity date | 2019 |
Fixed rate three | Maximum | Other American Water subsidiaries | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest rate | 6.20% |
Maturity date | 2048 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | May 13, 2019USD ($) | May 06, 2019USD ($)forward_starting_swap_agreement | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) |
Debt Instrument [Line Items] | ||||||
Proceeds from long-term debt | $ 1,191,000,000 | $ 1,355,000,000 | ||||
Fair value hedge ineffectiveness | $ 0 | $ 0 | 0 | $ 0 | ||
Forward starting swap | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds received from (payment due to) terminated forward swaps | $ (30,000,000) | |||||
Designated as Hedging Instrument | Forward starting swap | ||||||
Debt Instrument [Line Items] | ||||||
Derivative, number of instruments held | forward_starting_swap_agreement | 5 | |||||
Derivate instrument notional amount | $ 510,000,000 | |||||
Designated as Hedging Instrument | Interest rate swap | Interest expense | ||||||
Debt Instrument [Line Items] | ||||||
Derivate instrument notional amount | $ 3,000,000 | $ 3,000,000 | ||||
American Water Capital Corp. | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt | $ 26,000,000 | |||||
Senior Notes | American Water Capital Corp. | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | 1,100,000,000 | |||||
Proceeds from long-term debt | 1,090,000,000 | |||||
Senior Notes | American Water Capital Corp. | Senior Note 3.45% Due 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 550,000,000 | |||||
Interest rate | 3.45% | |||||
Senior Notes | American Water Capital Corp. | Senior Note 4.15% Due 2049 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 550,000,000 | |||||
Interest rate | 4.15% | |||||
Senior Notes | American Water Capital Corp. | Senior Note 7.21% Due 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 7.21% | |||||
Repayments of debt | $ 25,000,000 | |||||
Minimum | Designated as Hedging Instrument | Forward starting swap | ||||||
Debt Instrument [Line Items] | ||||||
Derivative net gain amortized through interest | 10 years | |||||
Maximum | Designated as Hedging Instrument | Forward starting swap | ||||||
Debt Instrument [Line Items] | ||||||
Derivative net gain amortized through interest | 30 years |
Long-Term Debt - Summary of Gro
Long-Term Debt - Summary of Gross Fair Value Derivative Asset and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Cash flow hedge | Forward starting swaps | Other current liabilities | ||
Derivative [Line Items] | ||
Derivative liabilities | $ 0 | $ 14 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 24.50% | 27.50% | 25.00% | 26.60% |
Pension and Other Post-Retire_3
Pension and Other Post-Retirement Benefits - Schedule of Net Periodic Benefit Cost Components (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Pension Plan Asset | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 7 | $ 8 | $ 21 | $ 25 |
Interest cost | 21 | 19 | 62 | 57 |
Expected return on plan assets | (23) | (24) | (68) | (73) |
Amortization of prior service credit | (1) | 0 | (3) | 0 |
Amortization of actuarial loss | 8 | 6 | 24 | 20 |
Net periodic benefit (credit) cost | 12 | 9 | 36 | 29 |
Other Postretirement Benefit Cost | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 2 | 3 | 7 |
Interest cost | 4 | 5 | 11 | 16 |
Expected return on plan assets | (5) | (7) | (14) | (20) |
Amortization of prior service credit | (9) | (7) | (26) | (16) |
Amortization of actuarial loss | 1 | 1 | 3 | 3 |
Net periodic benefit (credit) cost | $ (8) | $ (6) | $ (23) | $ (10) |
Pension and Other Post-Retire_4
Pension and Other Post-Retirement Benefits - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Pension Plan Asset | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Company contributions | $ 9,000,000 | $ 11,000,000 | $ 23,000,000 | $ 11,000,000 |
Expected contributions | 8,000,000 | 8,000,000 | ||
Other Postretirement Benefit Cost | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Company contributions | $ 0 | $ 0 | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) Customer in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 08, 2018putative_plaintiff | Jun. 30, 2015Customer | Jun. 27, 2015 | Jun. 26, 2015 | Jun. 23, 2015Customer | |
Commitments And Contingencies [Line Items] | ||||||||
Loss contingency, probable loss | $ 20,000,000 | $ 20,000,000 | ||||||
WVAWC | Dunbar | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Number of customers impacted due to failure of main that caused 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 a final repair was completed | Customer | 3 | |||||||
Case Against Insurance Carrier | WVAWC | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Payments for legal settlements | $ 20,000,000 | |||||||
Damages sought, value | 25,000,000 | |||||||
Binding Agreement | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Loss contingency, probable loss | 5,000,000 | 5,000,000 | ||||||
Amount of settlement | $ 126,000,000 | |||||||
Offsetting insurance receivable | 5,000,000 | 5,000,000 | ||||||
Binding Agreement | WVAWC | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Amount of settlement | 19,000,000 | |||||||
Reduction of liability | 20,000,000 | |||||||
Increase (decrease) in insurance settlements receivable | 16,000,000 | |||||||
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 | $ 25,000,000 | $ 25,000,000 | ||||||
Maximum | WVAWC | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Number of putative plaintiffs that have submitted opt-out notices | putative_plaintiff | 225,000 |
Earnings Per Common Share - Re
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 | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||||||
Net income attributable to common shareholders | $ 240 | $ 170 | $ 113 | $ 187 | $ 162 | $ 106 | $ 523 | $ 455 |
Weighted-average common shares outstanding - Basic (per share) | 181 | 181 | 181 | 179 | ||||
Effect of dilutive common stock equivalents (per shares) | 0 | 0 | 0 | 1 | ||||
Weighted-average common shares outstanding - Diluted (per share) | 181 | 181 | 181 | 180 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Maximum | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 1 | 1 | 1 | 1 |
Fair Value of Financial Infor_3
Fair Value of Financial Information - Carrying Amounts and Fair Values of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, carrying amount | $ 7 | $ 8 |
Long-term debt (excluding finance lease obligations), carrying amount | 8,666 | 7,638 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, fair value | 10 | 9 |
Long-term debt (excluding finance lease obligations), fair value | 9,797 | 7,921 |
Fair Value | 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 finance lease obligations), fair value | 7,717 | 5,760 |
Fair Value | 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 finance lease obligations), fair value | 416 | 433 |
Fair Value | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, fair value | 10 | 9 |
Long-term debt (excluding finance lease obligations), fair value | $ 1,664 | $ 1,728 |
Fair Value of Financial Infor_4
Fair Value of Financial Information - Measurements of Assets and Liabilities on Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Restricted funds | $ 22 | $ 29 |
Rabbi trust investments | 16 | 15 |
Deposits | 3 | 3 |
Other investments | 13 | 3 |
Total assets | 54 | 50 |
Liabilities: | ||
Deferred compensation obligations | 20 | 17 |
Mark-to-market derivative liabilities | 14 | |
Total liabilities | 20 | 31 |
Total assets (liabilities) | 34 | 19 |
Level 1 | ||
Assets: | ||
Restricted funds | 22 | 29 |
Rabbi trust investments | 16 | 15 |
Deposits | 3 | 3 |
Other investments | 13 | 3 |
Total assets | 54 | 50 |
Liabilities: | ||
Deferred compensation obligations | 20 | 17 |
Mark-to-market derivative liabilities | 0 | |
Total liabilities | 20 | 17 |
Total assets (liabilities) | 34 | 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 | |
Total liabilities | 0 | 14 |
Total assets (liabilities) | 0 | (14) |
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 | |
Total liabilities | 0 | 0 |
Total assets (liabilities) | $ 0 | $ 0 |
Fair Value of Financial Infor_5
Fair Value of Financial Information - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Long term restricted funds | $ 1 | $ 1 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease right-of-use assets | $ 109 | $ 109 | $ 0 | |
Operating and financing leases, rent expense, net | $ 4 | $ 12 | ||
Real Property | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease, term of contract | 40 years | 40 years | ||
Vehicles | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease, term of contract | 7 years | 7 years | ||
Equipment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease, term of contract | 5 years | 5 years | ||
Operating and Maintenance Agreement | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Future minimum sublease rentals, 2019 | $ 4 | $ 4 | ||
Future minimum sublease rentals, 2020 | 4 | 4 | ||
Future minimum sublease rentals, 2021 | 4 | 4 | ||
Future minimum sublease rentals, 2022 | 4 | 4 | ||
Future minimum sublease rentals, 2023 | 4 | 4 | ||
Future minimum sublease rentals, thereafter | $ 59 | $ 59 | ||
Minimum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease, renewal term | 1 year | 1 year | ||
Maximum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease, renewal term | 60 years | 60 years | ||
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease right-of-use assets | $ 117 | |||
Operating lease liabilities | $ 115 | |||
Utility Plant | Minimum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Lessee, finance lease, term of contract | 30 years | 30 years | ||
Utility Plant | Maximum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Lessee, finance lease, term of contract | 40 years | 40 years |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts in lease liabilities | $ 3 | $ 12 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 0 | $ 119 |
Leases - Remaining Lease Term a
Leases - Remaining Lease Term and Discount Rate (Details) | Sep. 30, 2019 |
Weighted-average Remaining Lease Term [Abstract] | |
Finance lease | 7 years |
Operating lease | 18 years |
Weighted-average Discount Rate [Abstract] | |
Finance lease | 12.00% |
Operating lease | 4.00% |
Leases - Future Maturities of L
Leases - Future Maturities of Lease Liabilities (Details) $ in Millions | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 4 |
2020 | 15 |
2021 | 13 |
2022 | 12 |
2023 | 8 |
Thereafter | 106 |
Total lease payments | 158 |
Imputed interest | (53) |
Total | $ 105 |
Leases - Future Maturities of_2
Leases - Future Maturities of Lease Liabilities Initial or Non Cancelable Terms (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 17 |
2020 | 15 |
2021 | 12 |
2022 | 11 |
2023 | 6 |
Thereafter | 80 |
Total | $ 141 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Segment Information - Summarize
Segment Information - Summarized Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||||||
Operating revenues | $ 1,013 | $ 976 | $ 2,708 | $ 2,590 | |||||
Depreciation and amortization | 144 | 141 | 430 | 404 | |||||
Impairment charge | 0 | 57 | 0 | 57 | |||||
Total operating expenses, net | 607 | 641 | 1,762 | 1,736 | |||||
Interest, net | (97) | (89) | (284) | (259) | |||||
Income before income taxes | 318 | 255 | 697 | 617 | |||||
Provision for income taxes | 78 | 70 | 174 | 164 | |||||
Consolidated net income | 240 | $ 170 | $ 113 | 187 | $ 162 | $ 106 | 523 | 455 | |
Total assets | 22,238 | 20,880 | 22,238 | 20,880 | $ 21,223 | ||||
Capital expenditures | 403 | 397 | 1,115 | 1,136 | |||||
Regulated Businesses | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Operating revenues | 883 | 2,323 | |||||||
Market-Based Businesses | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Operating revenues | 136 | 402 | |||||||
Operating Segments | Regulated Businesses | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Operating revenues | 883 | 857 | 2,323 | 2,267 | |||||
Depreciation and amortization | 132 | 128 | 394 | 373 | |||||
Impairment charge | 0 | 0 | |||||||
Total operating expenses, net | 505 | 505 | 1,455 | 1,420 | |||||
Interest, net | (74) | (71) | (221) | (209) | |||||
Income before income taxes | 313 | 288 | 671 | 656 | |||||
Provision for income taxes | 77 | 76 | 169 | 173 | |||||
Consolidated net income | 236 | 213 | 502 | 484 | |||||
Total assets | 19,787 | 18,415 | 19,787 | 18,415 | |||||
Capital expenditures | 399 | 373 | 1,092 | 1,050 | |||||
Operating Segments | Market-Based Businesses | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Operating revenues | 136 | 125 | 402 | 339 | |||||
Depreciation and amortization | 9 | 9 | 26 | 20 | |||||
Impairment charge | 57 | 57 | |||||||
Total operating expenses, net | 108 | 139 | 322 | 323 | |||||
Interest, net | 1 | 0 | 3 | 3 | |||||
Income before income taxes | 30 | (14) | 86 | 20 | |||||
Provision for income taxes | 7 | (5) | 22 | 4 | |||||
Consolidated net income | 23 | (7) | 64 | 18 | |||||
Total assets | 1,060 | 973 | 1,060 | 973 | |||||
Capital expenditures | 2 | 2 | 10 | 9 | |||||
Other | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Operating revenues | (6) | (6) | (17) | (16) | |||||
Depreciation and amortization | 3 | 4 | 10 | 11 | |||||
Impairment charge | 0 | 0 | |||||||
Total operating expenses, net | (6) | (3) | (15) | (7) | |||||
Interest, net | (24) | (18) | (66) | (53) | |||||
Income before income taxes | (25) | (19) | (60) | (59) | |||||
Provision for income taxes | (6) | (1) | (17) | (13) | |||||
Consolidated net income | (19) | (19) | (43) | (47) | |||||
Total assets | 1,391 | 1,492 | 1,391 | 1,492 | |||||
Capital expenditures | $ 2 | $ 22 | $ 13 | $ 77 |
Uncategorized Items - a93020191
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (2,000,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (2,000,000) |