Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 13, 2020 | Jun. 28, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 18,615.8 | ||
Entity Common Stock, Shares Outstanding (in shares) | 180,974,719 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the American Water Works Company, Inc. definitive proxy statement for the 2020 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission within 120 days after December 31, 2019 are incorporated by reference into Part III of this report. | ||
Entity Central Index Key | 0001410636 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Property, plant and equipment | $ 23,941 | $ 23,204 |
Accumulated depreciation | (5,709) | (5,795) |
Property, plant and equipment, net | 18,232 | 17,409 |
Current assets: | ||
Cash and cash equivalents | 60 | 130 |
Restricted funds | 31 | 28 |
Accounts receivable, net | 294 | 301 |
Unbilled revenues | 172 | 186 |
Materials and supplies | 44 | 41 |
Assets held for sale | 566 | 0 |
Other | 118 | 95 |
Total current assets | 1,285 | 781 |
Regulatory and other long-term assets: | ||
Regulatory assets | 1,128 | 1,156 |
Operating lease right-of-use assets | 103 | |
Goodwill | 1,501 | 1,575 |
Postretirement benefit asset | 159 | 155 |
Intangible assets | 67 | 84 |
Other | 207 | 63 |
Total regulatory and other long-term assets | 3,165 | 3,033 |
Total assets | 22,682 | 21,223 |
Capitalization: | ||
Common stock ($0.01 par value, 500,000,000 shares authorized, 185,903,727 and 185,367,158 shares issued, respectively) | 2 | 2 |
Paid-in-capital | 6,700 | 6,657 |
Accumulated deficit | (207) | (464) |
Accumulated other comprehensive loss | (36) | (34) |
Treasury stock, at cost (5,090,855 and 4,683,156 shares, respectively) | (338) | (297) |
Total common shareholders' equity | 6,121 | 5,864 |
Long-term debt | 8,639 | 7,569 |
Redeemable preferred stock at redemption value | 5 | 7 |
Total long-term debt | 8,644 | 7,576 |
Total capitalization | 14,765 | 13,440 |
Current liabilities: | ||
Short-term debt | 786 | 964 |
Current portion of long-term debt | 28 | 71 |
Accounts payable | 203 | 175 |
Accrued liabilities | 596 | 556 |
Accrued taxes | 46 | 45 |
Accrued interest | 84 | 87 |
Liabilities related to assets held for sale | 128 | 0 |
Other | 174 | 196 |
Total current liabilities | 2,045 | 2,094 |
Regulatory and other long-term liabilities: | ||
Advances for construction | 240 | 252 |
Deferred income taxes and investment tax credits | 1,893 | 1,740 |
Regulatory liabilities | 1,806 | 1,907 |
Operating lease liabilities | 89 | |
Accrued pension expense | 411 | 390 |
Other | 78 | 78 |
Total regulatory and other long-term liabilities | 4,517 | 4,367 |
Contributions in aid of construction | 1,355 | 1,322 |
Commitments and contingencies (See Note 16) | ||
Total capitalization and liabilities | $ 22,682 | $ 21,223 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (USD per Share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in Shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in Shares) | 185,903,727 | 185,367,158 |
Treasury Stock, shares (in Shares) | 5,090,855 | 4,683,156 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Income Statement [Abstract] | ||||
Operating revenues | $ 3,610 | $ 3,440 | $ 3,357 | |
Operating expenses: | ||||
Operation and maintenance | 1,544 | 1,479 | 1,369 | |
Depreciation and amortization | 582 | 545 | 492 | |
General taxes | 280 | 277 | 259 | |
Loss (gain) on asset dispositions and purchases | 34 | (20) | (16) | |
Impairment charge | 0 | 57 | 0 | |
Total operating expenses, net | 2,440 | 2,338 | 2,104 | |
Operating income | 1,170 | 1,102 | 1,253 | |
Other income (expense): | ||||
Interest, net | (382) | (350) | (342) | |
Non-operating benefit costs, net | 16 | 20 | (9) | |
Loss on early extinguishment of debt | (4) | (4) | (7) | |
Other, net | 33 | 19 | 17 | |
Total other income (expense) | (337) | (315) | (341) | |
Income before income taxes | 833 | 787 | 912 | |
Provision for income taxes | 212 | 222 | 486 | |
Consolidated net income | 621 | 565 | 426 | |
Net loss attributable to noncontrolling interest | 0 | (2) | 0 | |
Net income attributable to common shareholders | $ 621 | $ 567 | $ 426 | |
Basic earnings per share: | ||||
Net income attributable to common shareholders (USD per share) | [1] | $ 3.44 | $ 3.16 | $ 2.39 |
Diluted earnings per share: | ||||
Net income attributable to common shareholders (USD per share) | [1] | $ 3.43 | $ 3.15 | $ 2.38 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 181,000,000 | 180,000,000 | 178,000,000 | |
Diluted (Shares) | 181,000,000 | 180,000,000 | 179,000,000 | |
[1] | Amounts may not calculate due to rounding. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income attributable to common shareholders | $ 621 | $ 567 | $ 426 |
Other comprehensive income (loss), net of tax: | |||
Change in employee benefit plan funded status, net of tax of $3, $20 and $2 in 2019, 2018 and 2017, respectively | 8 | 60 | 7 |
Defined benefit pension plans: | |||
Amortization of actuarial loss, net of tax of $1, $3 and $5 in 2019, 2018 and 2017, respectively | 4 | 7 | 7 |
Pension reclassification from accumulated other comprehensive loss of tax effects resulting from the Tax Cuts and Jobs Act | 0 | (22) | 0 |
Foreign currency translation adjustment | (1) | 0 | (1) |
Unrealized loss on cash flow hedges, net of tax of $(5), $0 and $(4) in 2019, 2018 and 2017, respectively | (13) | (2) | (6) |
Cash flow hedges reclassification from accumulated other comprehensive loss of tax effects resulting from the Tax Cuts and Jobs Act | 0 | 2 | 0 |
Net other comprehensive (loss) income | (2) | 45 | 7 |
Comprehensive income attributable to common shareholders | $ 619 | $ 612 | $ 433 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Change in employee benefit plan funded status, tax | $ 3 | $ 20 | $ 2 |
Actuarial loss, tax | 1 | 3 | 5 |
Unrealized gain (loss) on cash flow hedge, tax | $ (5) | $ 0 | $ (4) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Cash Flows [Abstract] | |||
Net income | $ 621 | $ 565 | $ 426 |
Adjustments to reconcile to net cash flows provided by operating activities: | |||
Depreciation and amortization | 582 | 545 | 492 |
Deferred income taxes and amortization of investment tax credits | 208 | 195 | 462 |
Provision for losses on accounts receivable | 28 | 33 | 29 |
Loss (gain) on asset dispositions and purchases | 34 | (20) | (16) |
Impairment charge | 0 | 57 | 0 |
Pension and non-pension postretirement benefits | 17 | 23 | 57 |
Other non-cash, net | (41) | 20 | (54) |
Changes in assets and liabilities: | |||
Receivables and unbilled revenues | (25) | (17) | 21 |
Pension and non-pension postretirement benefit contributions | (31) | (22) | (48) |
Accounts payable and accrued liabilities | 66 | 25 | 38 |
Other assets and liabilities, net | (72) | 22 | 64 |
Impact of Freedom Industries settlement activities | (4) | (40) | (22) |
Net cash provided by operating activities | 1,383 | 1,386 | 1,449 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Capital expenditures | (1,654) | (1,586) | (1,434) |
Acquisitions, net of cash acquired | (235) | (398) | (177) |
Proceeds from sale of assets | 48 | 35 | 15 |
Removal costs from property, plant and equipment retirements, net | (104) | (87) | (76) |
Net cash used in investing activities | (1,945) | (2,036) | (1,672) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from long-term debt | 1,530 | 1,358 | 1,395 |
Repayments of long-term debt | (495) | (526) | (896) |
Net short-term borrowings with maturities less than three months | (178) | 60 | 55 |
Issuance of common stock | 0 | 183 | 0 |
Proceeds from issuances of employee stock plans and direct stock purchase plan, net of taxes paid of $11, $8 and $11 in 2019, 2018 and 2017, respectively | 15 | 16 | 15 |
Advances and contributions for construction, net of refunds of $30, $22 and $22 in 2019, 2018 and 2017, respectively | 26 | 21 | 28 |
Debt issuance costs and make-whole premium on early debt redemption | (15) | (22) | (47) |
Dividends paid | (353) | (319) | (289) |
Anti-dilutive share repurchases | (36) | (45) | (54) |
Net cash provided by financing activities | 494 | 726 | 207 |
Net (decrease) increase in cash and cash equivalents and restricted funds | (68) | 76 | (16) |
Cash and cash equivalents and restricted funds at beginning of period | 159 | 83 | 99 |
Cash and cash equivalents and restricted funds at end of period | 91 | 159 | 83 |
Cash paid during the year for: | |||
Interest, net of capitalized amount | 383 | 332 | 338 |
Income taxes, net of refunds of $4, $0 and $0 in 2019, 2018 and 2017, respectively | 12 | 38 | 30 |
Non-cash investing activity: | |||
Capital expenditures acquired on account but unpaid as of year end | 235 | 181 | 204 |
Acquisition financed by treasury stock | $ 0 | $ 0 | $ 33 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Cash Flows [Abstract] | |||
Proceeds from issuances of employee stock plans and direct stock purchase plan, net of taxes paid | $ 11 | $ 8 | $ 11 |
Advances and contributions for construction, refunds | 30 | 22 | 22 |
Income taxes, refunds | $ 4 | $ 0 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning Balance (in shares) at Dec. 31, 2016 | 181.8 | (3.7) | ||||
Beginning Balance at Dec. 31, 2016 | $ 5,218 | $ 2 | $ 6,388 | $ (873) | $ (86) | $ (213) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to common shareholders | 426 | 426 | ||||
Direct stock reinvestment and purchase plan (in shares) | 0.1 | |||||
Direct stock reinvestment and purchase plan | 8 | 8 | ||||
Employee stock purchase plan (in shares) | 0.1 | |||||
Employee stock purchase plan | 7 | 7 | ||||
Stock-based compensation activity (in shares) | 0.5 | (0.1) | ||||
Stock-based compensation activity | 15 | 22 | 0 | $ (7) | ||
Acquisition via treasury stock (in shares) | 0.4 | |||||
Acquisitions via treasury stock | 34 | 7 | $ 27 | |||
Repurchases of common stock (in shares) | (0.7) | |||||
Repurchases of common stock | (54) | $ (54) | ||||
Net other comprehensive income | 7 | 7 | ||||
Dividends (declared per common share) | (297) | (297) | ||||
Ending Balance (in shares) at Dec. 31, 2017 | 182.5 | (4.1) | ||||
Ending Balance at Dec. 31, 2017 | 5,385 | $ 2 | 6,432 | (723) | (79) | $ (247) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to common shareholders | 567 | 567 | ||||
Direct stock reinvestment and purchase plan (in shares) | 0.1 | |||||
Direct stock reinvestment and purchase plan | 8 | 8 | ||||
Employee stock purchase plan (in shares) | 0.1 | |||||
Employee stock purchase plan | 8 | 8 | ||||
Stock-based compensation activity (in shares) | 0.4 | (0.1) | ||||
Stock-based compensation activity | $ 20 | 26 | (1) | $ (5) | ||
Issuance of common stock (in shares) | 2.3 | |||||
Issuance of common stock | $ 183 | 183 | ||||
Repurchases of common stock (in shares) | (0.6) | (0.5) | ||||
Repurchases of common stock | $ (45) | $ (45) | ||||
Net other comprehensive income | 45 | 45 | ||||
Dividends (declared per common share) | (327) | (327) | ||||
Ending Balance (in shares) at Dec. 31, 2018 | 185.4 | (4.7) | ||||
Ending Balance at Dec. 31, 2018 | 5,864 | $ 2 | 6,657 | (464) | (34) | $ (297) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to common shareholders | 621 | 621 | ||||
Direct stock reinvestment and purchase plan (in shares) | 0 | |||||
Direct stock reinvestment and purchase plan | 7 | 7 | ||||
Employee stock purchase plan (in shares) | 0.1 | |||||
Employee stock purchase plan | 10 | 10 | ||||
Stock-based compensation activity (in shares) | 0.4 | (0.1) | ||||
Stock-based compensation activity | $ 21 | 26 | 0 | $ (5) | ||
Repurchases of common stock (in shares) | (0.4) | (0.3) | ||||
Repurchases of common stock | $ (36) | $ (36) | ||||
Net other comprehensive income | (2) | (2) | ||||
Dividends (declared per common share) | (362) | (362) | ||||
Ending Balance (in shares) at Dec. 31, 2019 | 185.9 | (5.1) | ||||
Ending Balance at Dec. 31, 2019 | $ 6,121 | $ 2 | $ 6,700 | $ (207) | $ (36) | $ (338) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | Dec. 06, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per common share (USD per share) | $ 0.50 | $ 2 | $ 1.82 | $ 1.66 |
Organization and Operation
Organization and Operation | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operation | Note 1: Organization and Operation American Water Works Company, Inc. (the “Company” or “American Water”) is a holding company for regulated and market-based subsidiaries throughout the United States. References to “parent company” mean American Water Works Company, Inc., without its subsidiaries. The Company’s primary business involves the ownership of regulated utilities that provide water and wastewater services in 16 states in the United States, collectively referred to as the “ Regulated Businesses .” The Company also operates market-based businesses that provide complementary water and wastewater services within non-reportable operating segments, collectively referred to as the “ Market-Based Businesses .” The Company’s primary Market-Based Businesses include the Homeowner Services Group , which provides various warranty protection programs and other home services to residential customers; and the Military Services Group , which enters into long-term contracts with the U.S. government to provide water and wastewater services on various military installations. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2: Significant Accounting Policies Regulation The Company’s regulated utilities are subject to regulation by multiple state utility commissions or other entities engaged in utility regulation, collectively referred to as Public Utility Commissions (“PUCs”). As such, the Company follows authoritative accounting principles required for rate regulated utilities, which requires the effects of rate regulation to be reflected in the Company’s Consolidated Financial Statements. PUCs generally authorize revenue at levels intended to recover the estimated costs of providing service, plus a return on net investments, or rate base. Regulators may also approve accounting treatments, long-term financing programs and cost of capital, operation and maintenance (“O&M”) expenses, capital expenditures, taxes, affiliated transactions and relationships, reorganizations, mergers, acquisitions and dispositions, along with imposing certain penalties or granting certain incentives. Due to timing and other differences in the collection of a regulated utility’s revenues, these authoritative accounting principles allow a cost that would otherwise be charged as an expense by a non-regulated entity, to be deferred as a regulatory asset if it is probable that such cost is recoverable through future rates. Conversely, these principles also require the creation of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future, or amounts collected in excess of costs incurred and are refundable to customers. See Note 7—Regulatory Assets and Liabilities for additional information. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires that management make estimates, assumptions and judgments that could affect the Company’s financial condition, results of operations and cash flows. Actual results could differ from these estimates, assumptions and judgments. The Company considers its critical accounting estimates to include (i) the application of regulatory accounting principles and the related determination and estimation of regulatory assets and liabilities, (ii) revenue recognition and the estimates used in the calculation of unbilled revenue, (iii) accounting for income taxes, (iv) benefit plan assumptions and (v) the estimates and judgments used in determining loss contingencies. The Company’s critical accounting estimates that are particularly sensitive to change in the near term are amounts reported for regulatory assets and liabilities, income taxes, benefit plan assumptions and contingency-related obligations. Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of American Water and all of its subsidiaries in which a controlling interest is maintained after the elimination of intercompany balances and transactions. Property, Plant and Equipment Property, plant and equipment consists primarily of utility plant utilized by the Company’s regulated utilities. Additions to utility plant and replacement of retirement units of utility plant are capitalized and include costs such as materials, direct labor, payroll taxes and benefits, indirect items such as engineering and supervision, transportation and an allowance for funds used during construction (“AFUDC”). Costs for repair, maintenance and minor replacements are charged to O&M expense as incurred. The cost of utility plant is depreciated using the straight-line average remaining life, group method. The Company’s regulated utilities record depreciation in conformity with amounts approved by PUCs, after regulatory review of the information the Company submits to support its estimates of the assets’ remaining useful lives. Nonutility property consists primarily of buildings and equipment utilized by the Company’s Market-Based Businesses and for internal operations. This property is stated at cost, net of accumulated depreciation, which is calculated using the straight-line method over the useful lives of the assets. When units of property, plant and equipment are replaced, retired or abandoned, the carrying value is credited against the asset and charged to accumulated depreciation. To the extent the Company recovers cost of removal or other retirement costs through rates after the retirement costs are incurred, a regulatory asset is recorded. In some cases, the Company recovers retirement costs through rates during the life of the associated asset and before the costs are incurred. These amounts result in a regulatory liability being reported based on the amounts previously recovered through customer rates, until the costs to retire those assets are incurred. The costs incurred to acquire and internally develop computer software for internal use are capitalized as a unit of property. The carrying value of these costs amounted to $345 million and $336 million as of December 31, 2019 and 2018 , respectively. Cash and Cash Equivalents, and Restricted Funds Substantially all cash is invested in interest-bearing accounts. All highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. Restricted funds consist primarily of proceeds from financings for the construction and capital improvement of facilities, and deposits for future services under O&M projects. Proceeds are held in escrow or interest-bearing accounts until the designated expenditures are incurred. Restricted funds are classified on the Consolidated Balance Sheets as either current or long-term based upon the intended use of the funds. 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 years ended December 31 : 2019 2018 Cash and cash equivalents $ 60 $ 130 Restricted funds 31 28 Restricted funds included in other long-term assets — 1 Cash and cash equivalents and restricted funds as presented on the Consolidated Statements of Cash Flows $ 91 $ 159 Accounts Receivable and Unbilled Revenues Accounts receivable include regulated utility customer accounts receivable, which represent amounts billed to water and wastewater customers generally on a monthly basis. Credit is extended based on the guidelines of the applicable PUCs and collateral is generally not required. Also included are market-based trade accounts receivable and nonutility customer receivables of the regulated subsidiaries. Unbilled revenues are accrued when service has been provided but has not been billed to customers and when costs exceed billings on market-based construction contracts. Allowance for Uncollectible Accounts Allowances for uncollectible accounts are maintained for estimated probable losses resulting from the Company’s inability to collect receivables from customers. Accounts that are outstanding longer than the payment terms are considered past due. A number of factors are considered in determining the allowance for uncollectible accounts, including the length of time receivables are past due and previous loss history. The Company generally writes off accounts when they become uncollectible or reserves accounts that exceed a certain number of days outstanding. See Note 6—Allowance for Uncollectible Accounts for additional information. Materials and Supplies Materials and supplies are stated at the lower of cost or net realizable value. Cost is determined using the average cost method. Leases The Company has operating and finance leases involving real property, including facilities, utility assets, vehicles, and equipment. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“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 made an accounting policy election not to include operating leases with a lease term of twelve months or less. ROU assets represent the right to use an underlying asset for the lease term and the 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 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. Certain lease agreements include variable rental payments adjusted periodically for inflation. Additionally, the Company applies a portfolio approach to effectively account for the ROU assets and lease liabilities. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Goodwill Goodwill represents the excess of the purchase price paid over the estimated fair value of the assets acquired and liabilities assumed in the acquisition of a business. Goodwill is not amortized and must be allocated at the reporting unit level, which is defined as an operating segment or one level below, and tested for impairment at least annually, or more frequently if an event occurs or circumstances change that would more likely than not, reduce the fair value of a reporting unit below its carrying value. The Company’s goodwill is primarily associated with (i) the acquisition of American Water by an affiliate of the Company’s previous owner in 2003, (ii) the acquisition of E’town Corporation by a predecessor to the Company’s previous owner in 2001, and (iii) the acquisition of Pivotal Home Solutions (“Pivotal”) in 2018; and has been allocated to reporting units based on the fair values at the date of the acquisitions. For purposes of testing goodwill for impairment, the reporting units in the Regulated Businesses segment are aggregated into a single reporting unit. The Market-Based Businesses is comprised of the Homeowner Services Group and Military Services Group reporting units. The Company’s annual impairment testing is performed as of November 30 of each year, in conjunction with the completion of the Company’s annual business plan. The Company assesses qualitative factors to determine whether quantitative testing is necessary. If it is determined, based upon qualitative factors, that the estimated fair value of a reporting unit is more likely than not, greater than its carrying value, no further testing is required. If the Company bypasses the qualitative assessment, or performs the qualitative assessment and determines that the estimated fair value of a reporting unit is more likely than not, less than its carrying value, a quantitative, fair value-based test is performed. This quantitative testing compares the estimated fair value of the reporting unit to its respective net carrying value, including goodwill, on the measurement date. An impairment loss will be recognized in the amount equal to the excess of the reporting unit’s carrying value compared to its estimated fair value, limited to the total amount of goodwill allocated to that reporting unit. Application of goodwill impairment testing requires management judgment, including the identification of reporting units and determining the fair value of reporting units. Management estimates fair value using a discounted cash flow analysis. Significant assumptions used in these fair value estimations include, but are not limited to, forecasts of future operating results, discount and growth rates. The Company believes the assumptions and other considerations used to value goodwill to be appropriate, however, if actual experience differs from the assumptions and considerations used in its analysis, the resulting change could have a material adverse impact on the Consolidated Financial Statements. See Note 8—Goodwill and Other Intangible Assets for additional information. Intangible Assets Intangible assets consist primarily of finite-lived customer relationships associated with the acquisition of Pivotal. Finite-lived intangible assets are initially measured at their estimated fair values, and are amortized over their estimated useful lives based on the pattern in which the economic benefits of the intangible assets are consumed or otherwise used. See Note 8—Goodwill and Other Intangible Assets for additional information. Impairment of Long-Lived Assets Long-lived assets include property, plant and equipment, goodwill, intangible assets and long-term investments. The Company evaluates long-lived assets for impairment when circumstances indicate the carrying value of those assets may not be recoverable. When such indicators arise, the Company estimates the fair value of the long-lived asset from future cash flows expected to result from its use and, if applicable, the eventual disposition of the asset, comparing the estimated fair value to the carrying value of the asset. An impairment loss will be recognized in the amount equal to the excess of the long-lived asset’s carrying value compared to its estimated fair value. The long-lived assets of the Company’s regulated utilities are grouped on a separate entity basis for impairment testing, as they are integrated state-wide operations that do not have the option to curtail service and generally have uniform tariffs. A regulatory asset is charged to earnings if and when future recovery in rates of that asset is no longer probable. The Company holds other long-term investments in privately held companies and joint ventures accounted for using the equity method, and are classified as other long-term assets on the Consolidated Balance Sheets. The estimated fair value of the long-term investments is dependent on the financial performance and solvency of the entities in which the Company invests, as well as volatility inherent in the external markets. If such long-term investments are considered impaired, an impairment loss will be recognized in the amount equal to the excess of the investment’s carrying value compared to its estimated fair value. The Company believes the assumptions and other considerations used to value long-lived assets to be appropriate, however, if actual experience differs from the assumptions and considerations used in its estimates, the resulting change could have a material adverse impact on the Consolidated Financial Statements. Advances for Construction and Contributions in Aid of Construction Regulated utility subsidiaries may receive advances for construction and contributions in aid of construction from customers, home builders and real estate developers to fund construction necessary to extend service to new areas. Advances are refundable for limited periods of time as new customers begin to receive service or other contractual obligations are fulfilled. Included in other current liabilities as of December 31, 2019 and 2018 on the Consolidated Balance Sheets are estimated refunds of $25 million and $23 million , respectively. Those amounts represent expected refunds during the next 12-month period. Advances that are no longer refundable are reclassified to contributions. Contributions are permanent collections of plant assets or cash for a particular construction project. For ratemaking purposes, the amount of such contributions generally serves as a rate base reduction since the contributions represent non-investor supplied funds. Generally, the Company depreciates utility plant funded by contributions and amortizes its contributions balance as a reduction to depreciation expense, producing a result which is functionally equivalent to reducing the original cost of the utility plant for the contributions. In accordance with applicable regulatory guidelines, some of the Company’s utility subsidiaries do not amortize contributions, and any contribution received remains on the balance sheet indefinitely. Amortization of contributions in aid of construction was $29 million , $28 million and $27 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue From Contracts With Customers, and all related amendments (collectively, “ASC 606”) , using the modified retrospective approach, applied to contracts which were not completed as of January 1, 2018. Under this approach, periods prior to the adoption date have not been restated and continue to be reported under the accounting standards in effect for those periods. Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under ASC 606, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identifies the contracts with a customer; (ii) identifies the performance obligations within the contract, including whether any performance obligations are distinct and capable of being distinct in the context of the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when, or as, the Company satisfies each performance obligation. The Company’s revenues from contracts with customers are discussed below. Customer payments for contracts are generally due within 30 days of billing and none of the contracts with customers have payment terms that exceed one year ; therefore, the Company elected to apply the significant financing component practical expedient and no amount of consideration has been allocated as a financing component. Regulated Businesses Revenue Revenue from the Company’s Regulated Businesses is generated primarily from water and wastewater services delivered to customers. These contracts contain a single performance obligation, the delivery of water and/or wastewater services, as the promise to transfer the individual good or service is not separately identifiable from other promises within the contracts and, therefore, is not distinct. Revenues are recognized over time, as services are provided. There are generally no significant financing components or variable consideration. Revenues include amounts billed to customers on a cycle basis and unbilled amounts calculated based on estimated usage from the date of the meter reading associated with the latest customer bill, to the end of the accounting period. The amounts that the Company has a right to invoice are determined by each customer’s actual usage, an indicator that the invoice amount corresponds directly to the value transferred to the customer. The Company also recognizes revenue when it is probable that future recovery of previously incurred costs or future refunds that are to be credited to customers will occur through the ratemaking process. Market-Based Businesses Revenue Through various warranty protection programs and other home services, the Company provides fixed fee services to residential customers for interior and exterior water and sewer lines, interior electric and gas lines, heating and cooling systems, water heaters and other home appliances, as well as power surge protection and other related services. Most of the contracts have a one-year term and each service is a separate performance obligation, satisfied over time, as the customers simultaneously receive and consume the benefits provided from the service. Customers are obligated to pay for the protection programs ratably over 12 months or via a one-time, annual fee, with revenues recognized ratably over time for these services. Advances from customers are deferred until the performance obligation is satisfied. The Company also has long-term, fixed fee contracts to operate and maintain water and wastewater systems for the U.S. government on various military installations and facilities owned by municipal and industrial customers, and prior to the sale of Keystone Clearwater Solutions, LLC (“Keystone”), the Company had shorter-term contracts that provided customized water transfer services for shale natural gas companies and customers. Billing and revenue recognition for the fixed fee revenues occurs ratably over the term of the contract, as customers simultaneously receive and consume the benefits provided by the Company. Additionally, these contracts allow the Company to make capital improvements to underlying infrastructure, which are initiated through separate modifications or amendments to the original contract, whereby stand-alone, fixed pricing is separately stated for each improvement. The Company has determined that these capital improvements are separate performance obligations, with revenue recognized over time based on performance completed at the end of each reporting period. Losses on contracts are recognized during the period in which the losses first become probable and estimable. Revenues recognized during the period in excess of billings on construction contracts are recorded as unbilled revenues, with billings in excess of revenues recorded as other current liabilities until the recognition criteria are met. Changes in contract performance and related estimated contract profitability may result in revisions to costs and revenues, and are recognized in the period in which revisions are determined. See Note 3—Revenue Recognition for additional information. Income Taxes The Company and its subsidiaries participate in a consolidated federal income tax return for U.S. tax purposes. Members of the consolidated group are charged with the amount of federal income tax expense determined as if they filed separate returns. Certain income and expense items are accounted for in different time periods for financial reporting than for income tax reporting purposes. The Company provides deferred income taxes on the difference between the tax basis of assets and liabilities and the amounts at which they are carried in the financial statements. These deferred income taxes are based on the enacted tax rates expected to be in effect when these temporary differences are projected to reverse. In addition, the regulated utility subsidiaries recognize regulatory assets and liabilities for the effect on revenues expected to be realized as the tax effects of temporary differences, previously flowed through to customers, reverse. Investment tax credits have been deferred by the regulated utility subsidiaries and are being amortized to income over the average estimated service lives of the related assets. The Company recognizes accrued interest and penalties related to tax positions as a component of income tax expense and accounts for sales tax collected from customers and remitted to taxing authorities on a net basis. See Note 14—Income Taxes for additional information. Allowance for Funds Used During Construction AFUDC is a non-cash credit to income with a corresponding charge to utility plant that represents the cost of borrowed funds or a return on equity funds devoted to plant under construction. The regulated utility subsidiaries record AFUDC to the extent permitted by the PUCs. The portion of AFUDC attributable to borrowed funds is shown as a reduction of interest, net on the Consolidated Statements of Operations. Any portion of AFUDC attributable to equity funds would be included in other, net on the Consolidated Statements of Operations. Presented in the table below is AFUDC for the years ended December 31 : 2019 2018 2017 Allowance for other funds used during construction $ 28 $ 24 $ 19 Allowance for borrowed funds used during construction 13 13 8 Environmental Costs The Company’s water and wastewater operations and the operations of its Market-Based Businesses are subject to U.S. federal, state, local and foreign requirements relating to environmental protection, and as such, the Company periodically becomes subject to environmental claims in the normal course of business. Environmental expenditures that relate to current operations or provide a future benefit are expensed or capitalized as appropriate. Remediation costs that relate to an existing condition caused by past operations are accrued, on an undiscounted basis, when it is probable that these costs will be incurred and can be reasonably estimated. A conservation agreement entered into by a subsidiary of the Company with the National Oceanic and Atmospheric Administration in 2010 and amended in 2017 required the subsidiary to, among other provisions, implement certain measures to protect the steelhead trout and its habitat in the Carmel River watershed in the State of California. The subsidiary agreed to pay $1 million annually commencing in 2010 with the final payment being made in 2021. Remediation costs accrued amounted to $2 million and $4 million as of December 31, 2019 and 2018 , respectively. Derivative Financial Instruments The Company uses derivative financial instruments for purposes of hedging exposures to fluctuations in interest rates. These derivative contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into derivative contracts for speculative purposes and does not use leveraged instruments. All derivatives are recognized on the balance sheet at fair value. On the date the derivative contract is entered into, the Company may designate the derivative as a hedge of the fair value of a recognized asset or liability (fair-value hedge) or a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash-flow hedge). Changes in the fair value of a fair-value hedge, along with the gain or loss on the underlying hedged item, are recorded in current-period earnings. The gains and losses on the effective portion of cash-flow hedges are recorded in other comprehensive income, until earnings are affected by the variability of cash flows. Any ineffective portion of designated cash-flow hedges is recognized in current-period earnings. Cash flows from derivative contracts are included in net cash provided by operating activities on the Consolidated Statements of Cash Flows. See Note 11—Long-Term Debt for additional information. New Accounting Standards 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 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 19—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 December 31, 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 standard will not have a material impact on the Consolidated Financial Statements. Changes to the Disclosure Requirements for Fair Value Measurement Updated the disclosure requirements for fair value measurement. The guidance removes the requirements to disclose transfers between Level 1 and Level 2 measurements, the timing of transfers between levels, and the valuation processes for Level 3 measurements. Disclosure of transfers into and out of Level 3 measurements will be required. The guidance adds disclosure requirements for the change in unrealized gains and losses in other comprehensive income for recurring Level 3 measurements, as well as the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. January 1, 2020; 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. Simplifying the Accounting for Income Taxes Simplified |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 3: Revenue Recognition Disaggregated Revenues Presented in the table below are operating revenues disaggregated for the year ended December 31, 2019 : Revenues from Contracts with Customers Other Revenues Not from Contracts with Customers (a) Total Operating Revenues Regulated Businesses: Water services: Residential $ 1,734 $ 1 $ 1,735 Commercial 639 — 639 Fire service 142 — 142 Industrial 138 — 138 Public and other 214 — 214 Total water services 2,867 1 2,868 Wastewater services: Residential 119 — 119 Commercial 31 — 31 Industrial 3 — 3 Public and other 14 — 14 Total wastewater services 167 — 167 Miscellaneous utility charges 36 — 36 Alternative revenue programs — 16 16 Lease contract revenue — 7 7 Total Regulated Businesses 3,070 24 3,094 Market-Based Businesses 539 — 539 Other (22 ) (1 ) (23 ) Total operating revenues $ 3,587 $ 23 $ 3,610 (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 December 31, 2019 . Presented in the table below are the changes in contract assets and liabilities for the year ended December 31, 2019 : Amount Contract assets: Balance at January 1, 2019 $ 14 Additions 27 Transfers to accounts receivable, net (28 ) Balance at December 31, 2019 $ 13 Contract liabilities: Balance at January 1, 2019 $ 20 Additions 62 Transfers to operating revenues (55 ) Balance at December 31, 2019 $ 27 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 December 31, 2019 , the Company’s 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 December 31, 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 2021 and 2038 and have RPOs of $547 million as of December 31, 2019 , as measured by estimated remaining contract revenue. Some of the Company’s long-term contracts to operate and maintain a municipality’s, the federal government’s or other party’s water or wastewater treatment and delivery facilities include responsibility for certain maintenance for some of those facilities, in exchange for an annual fee. Unless specifically required to perform certain maintenance activities, the maintenance costs are recognized when the maintenance is performed. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Note 4: Acquisitions and Divestitures Regulated Businesses Acquisitions During 2019, the Company closed on 21 acquisitions of various regulated water and wastewater systems for a total aggregate purchase price of $235 million . Assets acquired, principally utility plant, totaled $237 million . Liabilities assumed, primarily contributions in aid of construction, totaled $5 million . The Company recorded additional goodwill of $3 million associated with three of its acquisitions, which is reported in its Regulated Businesses segment, all of which is expected to be deductible for tax purposes. 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 these acquisitions will be finalized once the valuation of assets acquired has been completed, no later than one year after their acquisition date. During 2018, the Company closed on 15 acquisitions of various regulated water and wastewater systems for a total aggregate purchase price of $33 million . Assets acquired, principally utility plant, totaled $32 million . Liabilities assumed, primarily contributions in aid of construction, totaled $1 million . The Company recorded additional goodwill of $2 million associated with one of its acquisitions, which is reported in its Regulated Businesses segment. Of this total goodwill, none is expected to be deductible for tax purposes. During 2017, the Company closed on 18 acquisitions of various regulated water and wastewater systems for a total aggregate purchase price of $210 million . This included the acquisition of the wastewater system assets of the Municipal Authority of the City of McKeesport, Pennsylvania, on December 18, 2017 . Assets acquired, principally utility plant, totaled $207 million . Liabilities assumed totaled $23 million , including $9 million of contributions in aid of construction and assumed debt of $7 million . The Company recorded additional goodwill of $29 million associated with four of its acquisitions, which is reported in its Regulated Businesses segment. Of this total goodwill, approximately $1 million is expected to be deductible for tax purposes. Additionally, the Company recognized a bargain purchase gain of $3 million associated with three of the acquisitions. Assets Held for Sale On November 20, 2019 , the Company and the Company’s New York subsidiary, entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Liberty Utilities Co. (“Liberty”), pursuant to which Liberty will purchase all of the capital stock of the New York subsidiary (the “Stock Purchase”) for an aggregate purchase price of approximately $608 million in cash, subject to adjustment as provided in the Stock Purchase Agreement. The Company’s New York operations have approximately 125,000 customer connections in the State of New York. Algonquin Power & Utilities Corp., Liberty’s parent company, executed and delivered an absolute and unconditional guaranty of the performance of all of the obligations of Liberty under the Stock Purchase Agreement. The Stock Purchase Agreement contains customary representations, warranties and covenants. The completion of the Stock Purchase is subject to various conditions, including without limitation: (1) obtaining the approval of the New York State Public Service Commission without any terms or conditions that would reasonably be expected to be adverse to the Company or its affiliates (other than the New York subsidiary or its affiliates) or have a material adverse effect (as defined in the Stock Purchase Agreement) on the New York subsidiary or its affiliates or on Liberty and its affiliates; (2) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; and (3) other customary closing conditions, including (a) subject to materiality qualifiers, the accuracy of the parties’ representations and warranties contained in the Stock Purchase Agreement; (b) the absence of any law or order prohibiting the completion of the Stock Purchase or granting substantial damages in connection therewith; (c) the absence of any proceeding (excluding any such matter initiated by Liberty or any of its affiliates) pending before any governmental authority seeking to prohibit the completion of the Stock Purchase or recover substantial damages from Liberty or any affiliate resulting from the Stock Purchase; and (d) the compliance by the parties with their respective covenants, agreements and closing deliveries under the Stock Purchase Agreement. The Company currently estimates that the Stock Purchase is to be completed by early 2021. Accordingly, the assets and related liabilities of the New York subsidiary were classified as held for sale on the Consolidated Balance Sheets as of December 31, 2019 . The Stock Purchase Agreement contains certain termination rights for both the Company and Liberty, including if the Stock Purchase is not consummated by June 30, 2021 (subject to extension for an additional six months if all of the conditions to closing, other than the conditions related to obtaining regulatory approvals, have been satisfied or are capable of being satisfied), as well as a termination right for Liberty if any governmental authority initiates a condemnation or eminent domain proceeding against a majority of the consolidated properties of the New York subsidiary, taken as a whole. If the Stock Purchase Agreement is terminated, such termination will be without liability of any party to the other parties to the Stock Purchase Agreement, except for liability or damages resulting from a willful breach of a party’s representations, warranties, covenants or agreements in the Stock Purchase Agreement prior to termination. Presented in the table below are the components of assets held for sale and liabilities related to assets held for sale of the New York subsidiary as of December 31, 2019 : December 31, 2019 Current assets $ 14 Property, plant and equipment 456 Regulatory assets 55 Goodwill 39 Other assets 2 Assets held for sale $ 566 Current liabilities 24 Deferred income taxes 67 Regulatory liabilities 37 Liabilities related to assets held for sale $ 128 Market-Based Businesses Pivotal Acquisition On June 4, 2018 , the Company, through its wholly owned subsidiary American Water Enterprises, LLC, completed the acquisition of Pivotal for a total purchase price of $365 million , net of cash received and including $9 million in working capital. Pivotal is complementary to the Company’s Homeowner Services Group product offerings and enhances its presence in the home warranty solutions markets through utility partnerships. The results of Pivotal have been consolidated into the Homeowner Services Group non-reportable operating segment. Divestitures On December 12, 2019 , as part of a strategic review undertaken by the Company, American Industrial Water LLC, a wholly owned subsidiary of the Company (“AIW”), sold all of the outstanding membership interests in Water Solutions Holdings, LLC (“WSH”), which was a wholly owned subsidiary of AIW, to a natural gas and oil industry investment group, for total cash consideration of $31 million , subject to adjustment based on post-closing working capital. WSH was the parent company of Keystone Clearwater Solutions, LLC. Keystone provides water transportation services to shale natural gas exploration and production customers in the Appalachian Basin. As a result of the sale, the Company recorded a pre-tax loss on sale of $44 million , or $35 million after-tax, during the fourth quarter of 2019. The pro forma impact of the Company’s acquisitions was not material to the Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 5: Property, Plant and Equipment Presented in the table below are the major classes of property, plant and equipment by category as of December 31 : 2019 2018 Range of Remaining Useful Lives Weighted Average Useful Life Utility plant: Land and other non-depreciable assets $ 166 $ 155 Sources of supply 858 821 2 to 127 Years 47 years Treatment and pumping facilities 3,750 3,607 3 to 101 Years 41 years Transmission and distribution facilities 10,807 10,164 9 to 149 Years 70 years Services, meters and fire hydrants 4,304 4,008 5 to 90 Years 31 years General structures and equipment 1,748 1,625 1 to 109 Years 16 years Waste collection 1,153 943 5 to 114 Years 59 years Waste treatment, pumping and disposal 720 570 3 to 139 Years 45 years Construction work in progress 801 593 Less: Utility plant included in assets held for sale (a) (587 ) — Total utility plant 23,720 22,486 Nonutility property 226 718 3 to 50 Years 6 years Less: Nonutility plant included in assets held for sale (a) (5 ) — Total property, plant and equipment $ 23,941 $ 23,204 (a) This property, plant and equipment is related to the pending transactions contemplated by the Stock Purchase Agreement and is included in assets held for sale on the Consolidated Balance Sheets. See Note 4—Acquisitions and Divestitures for additional information. Property, plant and equipment depreciation expense amounted to $508 million , $497 million and $460 million for the years ended December 31, 2019 , 2018 and 2017 , respectively and was included in depreciation and amortization expense on the Consolidated Statements of Operations. The provision for depreciation expressed as a percentage of the aggregate average depreciable asset balances was 2.96% , 3.09% and 3.07% for years December 31, 2019 , 2018 and 2017 , respectively. In 2019, the Company completed and submitted its project completion certification to the New Jersey Economic Development Authority (“NJEDA”) in connection with its capital investment in its corporate headquarters in Camden, New Jersey. The NJEDA has determined that the Company is qualified to receive $164 million in tax credits over a ten year period. The Company is required to meet various annual requirements in order to monetize one-tenth of the tax credits annually, and is subject to a claw-back period if the Company does not meet certain NJEDA requirements of the tax credit program in years 11 through 15. As a result, the Company recorded receivables of $16 million and $148 million in other current assets and other long-term assets, respectively, on the Consolidated Balance Sheets as of December 31, 2019 . |
Allowance for Uncollectible Acc
Allowance for Uncollectible Accounts | 12 Months Ended |
Dec. 31, 2019 | |
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract] | |
Allowance for Uncollectible Accounts | Note 6: Allowance for Uncollectible Accounts Presented in the table below are the changes in the allowances for uncollectible accounts for the years ended December 31 : 2019 2018 2017 Balance as of January 1 $ (45 ) $ (42 ) $ (40 ) Amounts charged to expense (28 ) (33 ) (29 ) Amounts written off 32 34 30 Recoveries of amounts written off — (4 ) (3 ) Balance as of December 31 $ (41 ) $ (45 ) $ (42 ) |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Regulated Operations [Abstract] | |
Regulatory Assets and Liabilities | Note 7: Regulatory Assets and Liabilities Regulatory Assets Regulatory assets represent costs that are probable of recovery from customers in future rates. The majority of the regulatory assets earn a return. Presented in the table below is the composition of regulatory assets as of December 31 : 2019 2018 Deferred pension expense $ 384 $ 362 Removal costs recoverable through rates 305 292 Regulatory balancing accounts 96 110 Other 398 392 Less: Regulatory assets included in assets held for sale (a) (55 ) — Total regulatory assets $ 1,128 $ 1,156 (a) These regulatory assets are related to the pending transactions contemplated by the Stock Purchase Agreement and are included in assets held for sale on the Consolidated Balance Sheets. See Note 4—Acquisitions and Divestitures for additional information. The Company’s deferred pension expense includes a portion of the underfunded status that is probable of recovery through rates in future periods of $375 million and $352 million as of December 31, 2019 and 2018 , respectively. The remaining portion is the pension expense in excess of the amount contributed to the pension plans which is deferred by certain subsidiaries and will be recovered in future service rates as contributions are made to the pension plan. Removal costs recoverable through rates represent costs incurred for removal of property, plant and equipment or other retirement costs. Regulatory balancing accounts accumulate differences between revenues recognized and authorized revenue requirements until they are collected from customers or are refunded. Regulatory balancing accounts include low income programs and purchased power and water accounts. Other regulatory assets include San Clemente Dam project costs, debt expense, purchase premium recoverable through rates, tank painting costs, certain construction costs for treatment facilities, property tax stabilization, employee-related costs, deferred other postretirement benefit expense, business services project expenses, coastal water project costs, rate case expenditures and environmental remediation costs among others. These costs are deferred because the amounts are being recovered in rates or are probable of recovery through rates in future periods. Regulatory Liabilities Regulatory liabilities generally represent amounts that are probable of being credited or refunded to customers through the rate making process. Also, if costs expected to be incurred in the future are currently being recovered through rates, the Company records those expected future costs as regulatory liabilities. Presented in the table below is the composition of regulatory liabilities as of December 31 : 2019 2018 Income taxes recovered through rates $ 1,258 $ 1,279 Removal costs recovered through rates 297 309 Postretirement benefit liability 186 209 Other 102 110 Less: Regulatory liabilities included in liabilities related to assets held for sale (a) (37 ) — Total regulatory liabilities $ 1,806 $ 1,907 (a) These regulatory liabilities are related to the pending transactions contemplated by the Stock Purchase Agreement and are included in liabilities related to assets held for sale on the Consolidated Balance Sheets. See Note 4—Acquisitions and Divestitures for additional information. Income taxes recovered through rates relate to deferred taxes that will likely be refunded to the Company’s customers. On December 22, 2017 , the TCJA was signed into law, which, among other things, enacted significant and complex changes to the Internal Revenue Code of 1986 (the “Code”), including a reduction in the maximum U.S. federal corporate income tax rate from 35% to 21% as of January 1, 2018. The TCJA created significant excess deferred income taxes that the Company and its regulatory jurisdictions believe should be refunded to customers. Since these are significant refundable amounts, the Company believes it is probable these amounts will be refunded to customers through future rates, and as such the amounts have been recorded to a regulatory liability. During 2018, the Company’s 14 regulatory jurisdictions began to seek to address the impacts of the TCJA. The Company has adjusted customer rates to reflect the lower income tax rate in 11 states. In one of those 11 states, a portion of the tax savings is being used to reduce certain regulatory assets. In one additional state, the Company is using the tax savings to offset additional capital investment and to reduce a regulatory asset. Proceedings in the other two jurisdictions remain pending. With respect to excess accumulated deferred income taxes (“EADIT”), six of the Company’s regulated subsidiaries are amortizing EADIT and crediting customers, including one which is using the EADIT to offset future infrastructure investments. The Company expects the timing of the amortization of EADIT credits by the eight remaining regulated subsidiaries to be addressed in pending or future rate cases or other proceedings. Removal costs recovered through rates are estimated costs to retire assets at the end of their expected useful lives that are recovered through customer rates over the lives of the associated assets. On August 31, 2018 , the Postretirement Medical Benefit Plan was remeasured to reflect an announced plan amendment which changed benefits for certain union and non-union plan participants. As a result of the remeasurement, the Company recorded a $227 million reduction to the net accumulated postretirement benefit obligation, with a corresponding regulatory liability. Other regulatory liabilities include TCJA reserve on revenue, pension and other postretirement benefit balancing accounts, legal settlement proceeds, deferred gains and various regulatory balancing accounts. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 8: Goodwill and Other Intangible Assets Goodwill Presented in the table below are the changes in the carrying value of goodwill for the years ended December 31, 2019 and 2018 : Regulated Businesses Market-Based Businesses Consolidated Cost Accumulated Impairment Cost Accumulated Impairment Cost Accumulated Impairment Total Net Balance as of January 1, 2018 $ 3,492 $ (2,332 ) $ 327 $ (108 ) $ 3,819 $ (2,440 ) $ 1,379 Goodwill from acquisitions 2 — 247 — 249 — 249 Goodwill impairment charge — — — (53 ) — (53 ) (53 ) Balance as of December 31, 2018 $ 3,494 $ (2,332 ) $ 574 $ (161 ) $ 4,068 $ (2,493 ) $ 1,575 Goodwill from acquisitions 3 — — — 3 — 3 Goodwill reduced through sale of Keystone operations — — (91 ) 53 (91 ) 53 (38 ) Less: Goodwill included in assets held for sale (a) (39 ) — — — (39 ) — (39 ) Balance as of December 31, 2019 $ 3,458 $ (2,332 ) $ 483 $ (108 ) $ 3,941 $ (2,440 ) $ 1,501 (a) This goodwill is related to the pending transactions contemplated by the Stock Purchase Agreement and is included in assets held for sale on the Consolidated Balance Sheets. See Note 4—Acquisitions and Divestitures for additional information. In 2019, the Company acquired goodwill of $3 million associated with three of its acquisitions in the Regulated Businesses segment. Additionally, as part of the sale of the Company’s Keystone operations on December 12, 2019 , the Company reduced goodwill, net, by $38 million . See Note 4—Acquisitions and Divestitures for additional information. The Company completed its annual impairment testing of goodwill as of November 30 , 2019 , which included quantitative assessments of its Regulated Businesses , Homeowner Services Group and Military Services Group reporting units. Based on these assessments, the Company determined that there were no factors present that would indicate that the fair value of these reporting units was less than their respective carrying values as of November 30 , 2019 . In 2018, the Company acquired goodwill of $247 million associated with its acquisition of Pivotal, which was allocated to the Homeowner Services Group reporting unit, within the Market-Based Businesses . Additionally, the Company acquired goodwill of $2 million associated with one of its acquisitions in the Regulated Businesses segment. During the third quarter of 2018, as a result of the narrowing the scope of the Company’s former Keystone operations, the Company concluded there were indicators that the Keystone reporting unit may have been impaired. Accordingly, impairment testing was performed as part of the preparation of the Company’s Consolidated Financial Statements during the third quarter of 2018. The results of this impairment test showed the fair value of the former Keystone reporting unit was lower than its carrying value, resulting in a non-cash, pre-tax goodwill impairment charge of $53 million . Additionally, the impairment test showed the fair value of the former Keystone reporting unit’s customer relationship intangible asset was lower than its carrying value, resulting in a non-cash, pre-tax impairment charge of $4 million . In the aggregate, a non-cash, pre-tax impairment charge of $57 million was recorded in impairment charge on the Consolidated Statement of Operations for the year ended December 31, 2018 , of which, $54 million was attributable to the Company, after adjustment for noncontrolling interest. Intangible Assets Presented in the tables below are the gross carrying value and accumulated amortization of the finite-lived intangible assets held by the Company as of December 31 : 2018 Disposals (a) 2019 Customer relationships $ 86 $ (8 ) $ 78 Other intangible assets 13 — 13 Total gross carrying value $ 99 $ (8 ) $ 91 (a) The disposals relate to customer relationship intangible assets disposed of as part of the sale of the Company’s Keystone operations on December 12, 2019 . See Note 4—Acquisitions and Divestitures for additional information. 2018 Amortization Disposals (a) 2019 Customer relationships $ (13 ) $ (12 ) $ 5 $ (20 ) Other intangible assets (2 ) (2 ) — (4 ) Total accumulated amortization $ (15 ) $ (14 ) $ 5 $ (24 ) Total intangible assets, net $ 84 $ 67 (a) The disposals relate to customer relationship intangible assets disposed of as part of the sale of the Company’s Keystone operations on December 12, 2019 . See Note 4—Acquisitions and Divestitures for additional information. Intangible asset amortization expense amounted to $14 million , $12 million and $4 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Estimated amortization expense for the next five years subsequent to December 31, 2019 is as follows: Amount 2020 $ 12 2021 10 2022 9 2023 6 2024 5 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | Note 9: Shareholders ’ Equity Common Stock Under the dividend reinvestment and direct stock purchase plan (the “DRIP”), shareholders may reinvest cash dividends and purchase additional Company common stock, up to certain limits, through the plan administrator without commission fees. Shares purchased by participants through the DRIP may be newly issued shares, treasury shares, or at the Company’s election, shares purchased by the plan administrator in the open market or in privately negotiated transactions. Purchases generally will be made and credited to DRIP accounts once each week. As of December 31, 2019 , there were approximately 4.2 million shares available for future issuance under the DRIP. Anti-dilutive Stock Repurchase Program In February 2015, the Company’s Board of Directors authorized an anti-dilutive stock repurchase program, which allows the Company to purchase up to 10 million shares of its outstanding common stock from time to time over an unrestricted period of time. The Company repurchased 0.4 million shares and 0.6 million shares of common stock in the open market at an aggregate cost of $36 million and $45 million under this program for the years ended December 31, 2019 and 2018 , respectively. As of December 31, 2019 , there were 5.1 million shares of common stock available for purchase under the program. Accumulated Other Comprehensive Loss Presented in the table below are the changes in accumulated other comprehensive loss by component, net of tax, for the years ended December 31, 2019 and 2018 : Defined Benefit Plans Foreign Currency Translation Gain (Loss) on Cash Flow Hedge Accumulated Other Comprehensive Loss Employee Benefit Plan Funded Status Amortization of Prior Service Cost Amortization of Actuarial Loss Beginning balance as of January 1, 2018 $ (140 ) $ 1 $ 49 $ 1 $ 10 $ (79 ) Other comprehensive income (loss) before reclassification 60 — — — (2 ) 58 TCJA tax effects reclassified from accumulated other comprehensive loss (22 ) — — — 2 (20 ) Amounts reclassified from accumulated other comprehensive loss — — 7 — — 7 Net other comprehensive income 38 — 7 — — 45 Ending balance as of December 31, 2018 $ (102 ) $ 1 $ 56 $ 1 $ 10 $ (34 ) Other comprehensive income (loss) before reclassification 8 — — — (13 ) (5 ) Amounts reclassified from accumulated other comprehensive loss — — 4 (1 ) — 3 Net other comprehensive income (loss) 8 — 4 (1 ) (13 ) (2 ) Ending balance as of December 31, 2019 $ (94 ) $ 1 $ 60 $ — $ (3 ) $ (36 ) The Company does not reclassify the amortization of defined benefit pension cost components from accumulated other comprehensive loss directly to net income in its entirety, as a portion of these costs have been capitalized as a regulatory asset. These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 15—Employee Benefits for additional information. 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. Dividends The Company’s Board of Directors authorizes the payment of dividends. The Company’s ability to pay dividends on its common stock is subject to having access to sufficient sources of liquidity, net income and cash flows of the Company’s subsidiaries, the receipt of dividends and repayments of indebtedness from the Company’s subsidiaries, compliance with Delaware corporate and other laws, compliance with the contractual provisions of debt and other agreements, and other factors. The Company’s dividend rate on its common stock is determined by the Board of Directors on a quarterly basis and takes into consideration, among other factors, current and possible future developments that may affect the Company’s income and cash flows. When dividends on common stock are declared, they are typically paid in March, June, September and December. Historically, dividends have been paid quarterly to holders of record less than 30 days prior to the distribution date. Since the dividends on the Company’s common stock are not cumulative, only declared dividends are paid. During 2019 , 2018 and 2017 , the Company paid $353 million , $319 million and $289 million in cash dividends, respectively. Presented in the table below is the per share cash dividends paid for the years ended December 31 : 2019 2018 2017 December $ 0.50 $ 0.455 $ 0.415 September $ 0.50 $ 0.455 $ 0.415 June $ 0.50 $ 0.455 $ 0.415 March $ 0.455 $ 0.415 $ 0.375 On December 6, 2019 , the Company’s Board of Directors declared a quarterly cash dividend payment of $0.50 per share payable on March 4, 2020 , to shareholders of record as of February 7, 2020 . Regulatory Restrictions The issuance of long-term debt or equity securities by the Company or long-term debt by American Water Capital Corp. (“AWCC”), the Company’s wholly owned financing subsidiary, does not require authorization of any state PUC if no guarantee or pledge of the regulated subsidiaries is utilized. However, state PUC authorization is required to issue long-term debt at most of the Company’s regulated subsidiaries. The Company’s regulated subsidiaries normally obtain the required approvals on a periodic basis to cover their anticipated financing needs for a period of time or in connection with a specific financing. Under applicable law, the Company’s subsidiaries can pay dividends only from retained, undistributed or current earnings. A significant loss recorded at a subsidiary may limit the dividends that the subsidiary can distribute to American Water. Furthermore, the ability of the Company’s subsidiaries to pay upstream dividends or repay indebtedness to American Water is subject to compliance with applicable regulatory restrictions and financial obligations, including, for example, debt service and preferred and preference stock dividends, as well as applicable corporate, tax and other laws and regulations, and other agreements or covenants made or entered into by the Company and its subsidiaries. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | Note 10: Stock Based Compensation The Company has granted stock options, stock units and dividend equivalents to non-employee directors, officers and other key employees of the Company pursuant to the terms of its 2007 Omnibus Equity Compensation Plan (the “2007 Plan”). Stock units under the 2007 Plan generally vest based on (i) continued employment with the Company (“RSUs”), or (ii) continued employment with the Company where distribution of the shares is subject to the satisfaction in whole or in part of stated performance-based goals (“PSUs”). The 2007 Plan has been replaced by the 2017 Omnibus Plan, as defined below, and no additional awards may be granted under the 2007 Plan. However, shares may still be issued under the 2007 Plan pursuant to the terms of awards previously issued under that plan prior to May 12, 2017. In May 2017, the Company’s shareholders approved the American Water Works Company, Inc. 2017 Omnibus Equity Compensation Plan (the “2017 Omnibus Plan”). The Company has granted stock units, including RSUs and PSUs, stock awards and dividend equivalents to non-employee directors, officers and employees under the 2017 Omnibus Plan. A total of 7.2 million shares of common stock may be issued under the 2017 Omnibus Plan. As of December 31, 2019 , 6.8 million shares were available for grant under the 2017 Omnibus Plan. The 2017 Omnibus Plan provides that grants of awards may be in any of the following forms: incentive stock options, nonqualified stock options, stock appreciation rights, stock units, stock awards, other stock-based awards and dividend equivalents. Dividend equivalents may be granted only on stock units or other stock-based awards. The 2017 Omnibus Plan expires in 2027. The cost of services received from employees in exchange for the issuance of stock options and restricted stock awards is measured based on the grant date fair value of the awards issued. The value of stock options and stock unit awards at the date of the grant is amortized through expense over the requisite service period. All awards granted in 2019 , 2018 and 2017 are classified as equity. The Company recognizes compensation expense for stock awards over the vesting period of the award. The Company stratified its grant populations and used historic employee turnover rates to estimate employee forfeitures. The estimated rate is compared to the actual forfeitures at the end of the reporting period and adjusted as necessary. Presented in the table below is the stock-based compensation expense recorded in O&M expense in the accompanying Consolidated Statements of Operations for the years ended December 31 : 2019 2018 2017 Stock options $ — $ 1 $ 1 RSUs and PSUs 15 15 9 Nonqualified employee stock purchase plan 2 1 1 Stock-based compensation 17 17 11 Income tax benefit (4 ) (5 ) (4 ) Stock-based compensation expense, net of tax $ 13 $ 12 $ 7 There were no significant stock-based compensation costs capitalized during the years ended December 31, 2019 , 2018 and 2017 . The Company receives a tax deduction based on the intrinsic value of the award at the exercise date for stock options and the distribution date for stock units. For each award, throughout the requisite service period, the Company recognizes the tax benefits, which have been included in deferred income tax assets, related to compensation costs. The tax deductions in excess of the benefits recorded throughout the requisite service period are recorded to the Consolidated Statements of Operations and are presented in the financing section of the Consolidated Statements of Cash Flows. Stock Options There were no grants of stock options to employees in 2019 , 2018 and 2017 . The stock options that were previously issued vested ratably over the three -year service period beginning on January 1 of the year of the grant and have no performance vesting conditions. Expense was recognized using the straight-line method and was amortized over the requisite service period. Presented in the table below is stock option activity for the year ended December 31, 2019 : Shares (in thousands) Weighted Average Exercise Price (per share) Weighted Average Remaining Life (years) Aggregate Intrinsic Value Options outstanding as of December 31, 2018 517 $ 54.92 2.96 $ 19 Granted — — Forfeited or expired — — Exercised (223 ) 52.45 Options outstanding as of December 31, 2019 294 $ 56.80 2.04 $ 19 Options exercisable as of December 31, 2019 294 $ 56.80 2.04 $ 19 As of December 31, 2019 , no unrecognized compensation cost related to nonvested stock options is expected to be recognized as all of the outstanding options are exercisable. The total fair value of stock options vested was $1 million , $1 million and $2 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Presented in the table below is additional information regarding stock options exercised during the years ended December 31 : 2019 2018 2017 Intrinsic value $ 12 $ 9 $ 10 Exercise proceeds 14 7 11 Income tax benefit realized 3 2 3 Stock Units During 2019 , 2018 and 2017 , the Company granted RSUs to certain employees under the 2007 Plan and 2017 Omnibus Plan, as applicable. RSUs generally vest based on continued employment with the Company over periods ranging from one to three years . During 2019 , 2018 and 2017 , the Company granted stock units to non-employee directors under the 2017 Omnibus Plan. The stock units were vested in full on the date of grant; however, distribution of the shares will be made within 30 days of the earlier of (i) 15 months after the date of the last annual meeting of shareholders, subject to any deferral election by the director, or (ii) the participant’s separation from service. Because these stock units vested on the grant date, the total grant date fair value was recorded in operation and maintenance expense on the grant date. The RSUs are valued at the closing price of the Company’s common stock on the date of the grant and the majority vest ratably over a three -year service period. These RSUs are amortized through expense over the requisite service period using the straight-line method. Presented in the table below is RSU activity for the year ended December 31, 2019 : Shares (in thousands) Weighted Average Grant Date Fair Value (per share) Non-vested total as of December 31, 2018 133 $ 77.44 Granted 67 101.25 Vested (65 ) 85.27 Forfeited (17 ) 86.38 Non-vested total as of December 31, 2019 118 $ 85.41 As of December 31, 2019 , $4 million of total unrecognized compensation cost related to the nonvested RSUs is expected to be recognized over the weighted average remaining life of 1.72 years. The total fair value of stock units and RSUs vested was $4 million , $4 million and $3 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. During 2019 , 2018 and 2017 , the Company granted PSUs to certain employees under the 2007 Plan and 2017 Omnibus Plan, as applicable. The majority of PSUs vest ratably based on continued employment with the Company over the three -year performance period (the “Performance Period”). Distribution of the performance shares is contingent upon the achievement of one or more internal performance measures and, separately, a relative total shareholder return performance measure, over the Performance Period. Presented in the table below is PSU activity for the year ended December 31, 2019 : Shares (in thousands) Weighted Average Grant Date Fair Value (per share) Non-vested total as of December 31, 2018 308 $ 73.39 Granted 145 97.73 Vested (112 ) 72.84 Forfeited (25 ) 84.54 Non-vested total as of December 31, 2019 316 $ 83.89 As of December 31, 2019 , $4 million of total unrecognized compensation cost related to the nonvested PSUs is expected to be recognized over the weighted average remaining life of 1.09 years. The total fair value of PSUs vested was $14 million , $12 million and $13 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. PSUs granted with one or more internal performance measures are valued at the market value of the closing price of the Company’s common stock on the date of grant. PSUs granted with a relative total shareholder return condition are valued using a Monte Carlo model. Expected volatility is based on historical volatilities of traded common stock of the Company and comparative companies using daily stock prices over the past three years . The expected term is three years and the risk-free interest rate is based on the three-year U.S. Treasury rate in effect as of the measurement date. Presented in the table below is the weighted average assumptions used in the Monte Carlo simulation and the weighted average grant date fair values of PSUs granted for the years ended December 31 : 2019 2018 2017 Expected volatility 16.80 % 17.23 % 17.40 % Risk-free interest rate 2.47 % 2.36 % 1.53 % Expected life (years) 3.0 3.0 3.0 Grant date fair value per share $ 110.37 $ 73.62 $ 72.81 The grant date fair value of PSUs that vest ratably and have market and/or performance conditions are amortized through expense over the requisite service period using the graded-vesting method. If dividends are paid with respect to shares of the Company’s common stock before the shares underlying the RSUs and PSUs are distributed, the Company credits a liability for the value of the dividends that would have been paid if the RSUs and PSUs were shares of Company common stock. When the shares underlying the RSUs and PSUs are distributed, the Company pays the participant a lump sum cash payment equal to the value of the dividend equivalents accrued. The Company accrued dividend equivalents totaling $1 million , $1 million and less than $1 million to accumulated deficit in the accompanying Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2019 , 2018 and 2017 , respectively. Employee Stock Purchase Plan The Company maintains a nonqualified employee stock purchase plan (the “ESPP”) that expires in 2027 through which employee participants (other than the Company’s executive officers) may use payroll deductions to acquire Company common stock at a discount of 85% of the fair market value of the common stock at the end of the purchase period. A total of 2.0 million shares may be issued under the ESPP, and as of December 31, 2019 , there were 1.8 million shares of common stock reserved for issuance under the ESPP. The ESPP is considered compensatory. During the years ended December 31, 2019 , 2018 and 2017 , the Company issued 88 thousand , 95 thousand and 93 thousand shares, respectively, under the ESPP and its predecessor plan. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 11: Long-Term Debt The Company obtains long-term debt through AWCC primarily to fund capital expenditures of the Regulated Businesses and to lend funds to parent company to refinance debt and for other purposes. Presented in the table below are the components of long-term debt as of December 31 : Rate Weighted Average Rate Maturity 2019 2018 Long-term debt of AWCC: (a) Senior notes—fixed rate 2.95%-8.27% 4.18% 2021-2049 $ 7,191 $ 6,116 Private activity bonds and government funded debt—fixed rate 1.79%-5.38% 3.72% 2021-2040 191 192 Long-term debt of other American Water subsidiaries: Private activity bonds and government funded debt—fixed rate (b) 0.00%-5.60% 3.08% 2020-2048 724 727 Mortgage bonds—fixed rate 3.92%-9.71% 7.49% 2020-2039 578 606 Mandatorily redeemable preferred stock 8.47%-9.75% 8.59% 2024-2036 7 8 Finance lease obligations 12.25% 12.25% 2026 1 1 Term loan — 6 Long-term debt 8,692 7,656 Unamortized debt premium, net (c) 1 7 Unamortized debt issuance costs (21 ) (16 ) Less current portion of long-term debt (28 ) (71 ) Total long-term debt $ 8,644 $ 7,576 (a) This indebtedness is considered “debt” for purposes of a support agreement between parent company and AWCC, which serves as a functional equivalent of a guarantee by parent company of AWCC’s payment obligations under such indebtedness. (b) Includes $3 million and $3 million of variable rate debt as of December 31, 2019 and 2018 , respectively, with variable-to-fixed interest rate swaps ranging between 3.93% and 4.65% . This debt was assumed via an acquisition in 2013. (c) Primarily fair value adjustments previously recognized in acquisition purchase accounting. All mortgage bonds, term loans and $723 million of the private activity bonds and government funded debt held by the Company’s subsidiaries were collateralized as of December 31, 2019 . Long-term debt indentures contain a number of covenants that, among other things, limit, subject to certain exceptions, AWCC from issuing debt secured by the Company’s consolidated assets. Certain long-term notes require the Company to maintain a ratio of consolidated total indebtedness to consolidated total capitalization of not more than 0.70 to 1.00 . The ratio as of December 31, 2019 was 0.61 to 1.00 . In addition, the Company has $877 million of notes which include the right to redeem the notes at par value, in whole or in part, from time to time, subject to certain restrictions. Presented in the table below are future sinking fund payments and debt maturities: Amount 2020 $ 28 2021 310 2022 14 2023 159 2024 473 Thereafter 7,708 Presented in the table below are the issuances of long-term debt in 2019 : Company Type Rate Maturity Amount AWCC Senior notes—fixed rate 3.45%-4.15% 2029-2049 $ 1,100 AWCC (a) Private activity bonds and government funded debt—fixed rate 2.45% 2039 100 Other American Water subsidiaries Private activity bonds and government funded debt—fixed rate 0.00%-5.00% 2021-2048 330 Total issuances $ 1,530 (a) This indebtedness has a mandatory redemption provision callable in 2029. The Company incurred debt issuance costs of $15 million related to the above issuances. Presented in the table below are the retirements and redemptions of long-term debt in 2019 through sinking fund provisions, optional redemption or payment at maturity: Company Type Rate Maturity Amount AWCC Private activity bonds and government funded debt—fixed rate 1.79%-6.25% 2021-2031 $ 101 AWCC Senior notes—fixed rate 7.21% 2019 25 Other American Water subsidiaries Private activity bonds and government funded debt—fixed rate 0.00%-6.20% 2019-2048 333 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%-9.18% 2031-2036 2 Other American Water subsidiaries Term loan 5.76%-5.81% 2021 6 Total retirements and redemptions $ 495 On May 13, 2019 , 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 regulated subsidiary debt at maturity during the second quarter of 2019; and (iv) repay AWCC’s commercial paper obligations, and for general corporate purposes. Interest, net includes interest income of approximately $4 million , $11 million and $14 million in 2019 , 2018 and 2017 , respectively. One of the principal market risks to which the Company is exposed is changes in interest rates. In order to manage the exposure, the Company follows risk management policies and procedures, including the use of derivative contracts such as swaps. The Company reduces exposure to interest rates by managing commercial paper and debt maturities. The Company also does not enter into derivative contracts for speculative purposes and does not use leveraged instruments. The derivative contracts entered into are for periods consistent with the related underlying exposures. The Company is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations and minimizes this risk by dealing only with leading, credit-worthy financial institutions having long-term credit ratings of “A” or better. On May 6, 2019 , AWCC 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 years ended December 31, 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. The gain recognized by the Company was de minimis for the years ended 2019 and 2018 . 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 as of December 31: Derivative Instrument Derivative Designation Balance Sheet Classification 2019 2018 Liability derivative: Forward starting swaps Cash flow hedge Other current liabilities $ — $ 14 |
Short-Term Debt
Short-Term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Short-term Debt [Abstract] | |
Short-Term Debt | Note 12: Short-Term Debt Short-term debt consists of commercial paper and credit facility borrowings totaling $786 million and $964 million as of December 31, 2019 and 2018 , respectively. The weighted average interest rate on AWCC short-term borrowings was approximately 2.54% and 2.28% for the year ended December 31, 2019 and 2018 , respectively. As of December 31, 2019 there were no borrowings outstanding with maturities greater than three months. Liquidity needs for capital investment, working capital and other financial commitments are funded through cash flows from operations, public and private debt offerings, commercial paper markets and, if and to the extent necessary, borrowings under the AWCC revolving credit facility and, in the future, issuances of equity. The revolving credit facility provides $2.25 billion in aggregate total commitments from a diversified group of financial institutions. On April 9, 2019, the termination date of the credit agreement with respect to AWCC’s revolving credit facility was extended, pursuant to the terms of the credit agreement, from March 21, 2023 to March 21, 2024. The facility is used principally to support AWCC’s commercial paper program and to provide a sub-limit of up to $150 million for letters of credit. Letters of credit are non-debt instruments maintained to provide credit support for certain transactions as requested by third parties. Subject to satisfying certain conditions, the credit agreement also permits AWCC to increase the maximum commitment under the facility by up to an aggregate of $500 million , and to request up to two extensions of its expiration date each for up to a one-year period, as to which one such extension request remains. As of December 31, 2019, AWCC had no outstanding borrowings and $76 million of outstanding letters of credit under the revolving credit facility, with $2.17 billion available to fulfill the Company’s short-term liquidity needs and to issue letters of credit. The Company regularly evaluates the capital markets and closely monitors the financial condition of the financial institutions with contractual commitments in its revolving credit facility. Interest rates on advances under the facility are based on a credit spread to the LIBOR rate (or applicable market replacement rate) or base rate in accordance with Moody Investors Service’s and Standard & Poor’s Financial Services’ then applicable credit rating on AWCC’s senior unsecured, non-credit enhanced debt. Presented in the table below are the aggregate credit facility commitments, letter of credit sublimit under the revolving credit facility and the commercial paper limit, as well as the available capacity for each, as of December 31, 2019 and 2018 : Credit Facility Commitment Available Credit Facility Capacity Letter of Credit Sublimit Available Letter of Credit Capacity Commercial Paper Limit Available Commercial Paper Capacity December 31, 2019 $ 2,250 $ 2,174 $ 150 $ 74 $ 2,100 $ 1,314 December 31, 2018 2,262 2,177 150 69 2,100 1,146 Presented in the table below is the short-term borrowing activity for AWCC for the years ended December 31 : 2019 2018 Average borrowings $ 726 $ 1,029 Maximum borrowings outstanding 1,271 1,905 Weighted average interest rates, computed on daily basis 2.54 % 2.28 % Weighted average interest rates, as of December 31 1.86 % 2.84 % The credit facility requires the Company to maintain a ratio of consolidated debt to consolidated capitalization of not more than 0.70 to 1.00 . The ratio as of December 31, 2019 was 0.61 to 1.00 . None of the Company’s borrowings are subject to default or prepayment as a result of a downgrading of securities, although such a downgrading could increase fees and interest charges under AWCC’s revolving credit facility. As part of the normal course of business, the Company routinely enters contracts for the purchase and sale of water, energy, fuels and other services. These contracts either contain express provisions or otherwise permit the Company and its counterparties to demand adequate assurance of future performance when there are reasonable grounds for doing so. In accordance with the contracts and applicable contract law, if the Company is downgraded by a credit rating agency, especially if such downgrade is to a level below investment grade, it is possible that a counterparty would attempt to rely on such a downgrade as a basis for making a demand for adequate assurance of future performance. Depending on the Company’s net position with the counterparty, the demand could be for the posting of collateral. In the absence of expressly agreed provisions that specify the collateral that must be provided, the obligation to supply the collateral requested will be a function of the facts and circumstances of the Company’s situation at the time of the demand. If the Company can reasonably claim that it is willing and financially able to perform its obligations, it may be possible that no collateral would need to be posted or that only an amount equal to two or three months of future payments should be sufficient. The Company does not expect to post any collateral which will have a material adverse impact on the Company’s results of operations, financial position or cash flows. |
General Taxes
General Taxes | 12 Months Ended |
Dec. 31, 2019 | |
General Taxes [Abstract] | |
General Taxes | Note 13: General Taxes Presented in the table below is the components of general tax expense for the years ended December 31 : 2019 2018 2017 Gross receipts and franchise $ 110 $ 112 $ 110 Property and capital stock 124 120 105 Payroll 35 33 31 Other general 11 12 13 Total general taxes $ 280 $ 277 $ 259 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14: Income Taxes Presented in the table below is the components of income tax expense for the years ended December 31 : 2019 2018 2017 Current income taxes: State $ 4 $ 26 $ 25 Federal — 1 (1 ) Total current income taxes $ 4 $ 27 $ 24 Deferred income taxes: State $ 54 $ 33 $ 50 Federal 155 163 413 Amortization of deferred investment tax credits (1 ) (1 ) (1 ) Total deferred income taxes 208 195 462 Provision for income taxes $ 212 $ 222 $ 486 Presented in the table below is a reconciliation between the statutory federal income tax rate and the Company’s effective tax rate for the years ended December 31 : 2019 2018 2017 Income tax at statutory rate 21.0 % 21.0 % 35.0 % Increases (decreases) resulting from: State taxes, net of federal taxes 5.4 % 5.5 % 5.4 % TCJA — % 1.5 % 13.7 % Other, net (1.0 )% 0.2 % (0.8 )% Effective tax rate 25.4 % 28.2 % 53.3 % On December 22, 2017 , the TCJA was signed into law. Substantially all of the provisions of the TCJA are effective for taxable years beginning after December 31, 2017. The TCJA includes significant changes to the Code, including amendments which significantly change the taxation of individuals and business entities, and includes specific provisions related to regulated public utilities. The more significant changes that impact the Company included in the TCJA are reductions in the corporate federal income tax rate from 35% to 21% , and several technical provisions including, among others, limiting the utilization of net operating losses (“NOLs”) arising after December 31, 2017 to 80% of taxable income with an indefinite carryforward. The specific provisions related to regulated public utilities in the TCJA generally allow for the continued deductibility of interest expense, the elimination of full expensing for tax purposes of certain property acquired after September 27, 2017 and the continuation of certain rate normalization requirements for accelerated depreciation benefits. Non-regulated segments of the Company’s business may be able to take advantage of the full expensing provisions of the TCJA. Changes in the Code from the TCJA had a material impact on the Company’s financial statements in 2017. Under GAAP, specifically Accounting Standards Codification Topic 740, Income Taxes (“ASC 740”), the tax effects of changes in tax laws must be recognized in the period in which the law is enacted. ASC 740 also requires deferred income tax assets and liabilities to be measured at the enacted tax rate expected to apply when temporary differences are to be realized or settled. Thus, at the date of enactment, the Company’s deferred income taxes were re-measured based upon the new tax rate. For the Company’s regulated entities, substantially all of the change in deferred income taxes are recorded as an offset to either a regulatory asset or liability because changes are expected to be recovered by or refunded to customers. For the Company’s unregulated operations, the change in deferred income taxes is recorded as a non-cash re-measurement adjustment to earnings. The staff of the U.S. Securities and Exchange Commission recognized the complexity of reflecting the impacts of the TCJA, and on December 22, 2017 issued guidance in Staff Accounting Bulletin 118 (“SAB 118”) which clarifies accounting for income taxes under ASC 740 if information is not yet available or complete and provides for up to a one year period in which to complete the required analyses and accounting. The Company made a reasonable estimate for the measurement and accounting of certain effects of the TCJA which were reflected in the financial statements as of December 31, 2017. The re-measurement of deferred income taxes at the new federal tax rate increased the 2017 deferred income tax provision by $125 million for the year ending December 31, 2017. Additionally, the accumulated deferred income tax liability decreased by $1.39 billion and regulatory liabilities increased by $1.51 billion , respectively, as of December 31, 2017. As of December 31, 2018, the Company recorded all its reasonable estimates resulting from the TCJA under SAB 118. These estimates, however, are still subject to changes due to the future impacts of various items, including further changes in income tax laws, forecasted financial conditions and the actual tax return filings with the tax authorities. As of December 31, 2019, the Company has not identified any changes that would require its prior estimates to be modified. ASC 740 requires the re-measurement of deferred income tax assets and liabilities as a result of a change in tax laws or rates to be presented in net income. Adjusting temporary differences originally recorded to AOCI through the income statement result in disproportionate tax effects remaining in AOCI. As of December 31, 2018, the Company adopted Accounting Standards Update 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows companies to reclassify the income tax effects of TCJA on items within AOCI to retained earnings. As a result of the TCJA tax rate reduction, there were income tax effects related to the Company’s hedge and pension positions of $2 million and $22 million , respectively, remaining in the Company’s accumulated other comprehensive loss balance. The Company reclassified these tax effects from accumulated other comprehensive loss to accumulated deficit as of December 31, 2018. No further adjustments were recorded during 2019 as a result of this re-measurement. Presented in the table below are the components of the net deferred tax liability as of December 31 : 2019 2018 Deferred tax assets: Advances and contributions $ 410 $ 402 Tax losses and credits 136 131 Regulatory income tax assets 335 339 Pension and other postretirement benefits 94 91 Other 151 44 Total deferred tax assets 1,126 1,007 Valuation allowance (21 ) (14 ) Total deferred tax assets, net of allowance $ 1,105 $ 993 Deferred tax liabilities: Property, plant and equipment $ 2,760 $ 2,537 Deferred pension and other postretirement benefits 77 77 Other 207 97 Total deferred tax liabilities 3,044 2,711 Less: Deferred tax liabilities included in liabilities related to assets held for sale (a) 67 — Total deferred tax liabilities, net of deferred tax assets $ (1,872 ) $ (1,718 ) (a) These deferred tax liabilities are related to the pending transactions contemplated by the Stock Purchase Agreement and are included in liabilities related to assets held for sale on the Consolidated Balance Sheets. See Note 4—Acquisitions and Divestitures for additional information. As of December 31, 2019 and 2018 , the Company recognized federal NOL carryforwards of $673 million and $813 million , respectively. The Company believes the federal NOL carryforwards are more likely than not to be recovered and require no valuation allowance. The Company expects to fully utilize its federal NOL carryforwards before they begin to expire in 2028 . As of December 31, 2019 and 2018 , the Company had state NOLs of $453 million and $387 million , respectively, a portion of which are offset by a valuation allowance because the Company does not believe these NOLs are more likely than not to be realized. The state NOL carryforwards began to expire in 2019 through 2038 . The capital loss carryforward for federal income tax purposes have increased from the previous year due to the capital loss produced by the sale of the Company’s Keystone operations. As of December 31, 2019 , the capital loss carryforward for federal income tax purposes was approximately $66 million . As of December 31, 2019 and 2018 , the Company had an insignificant amount of Canadian NOL carryforward. The Company files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local or non-U.S. income tax examinations by tax authorities for years on or before 2012. The Company has state income tax examinations in progress and does not expect material adjustments to result. Presented in the table below are the changes in gross liability, excluding interest and penalties, for unrecognized tax benefits: Amount Balance as of January 1, 2018 $ 106 Increases in current period tax positions 13 Decreases in prior period measurement of tax positions (22 ) Balance as of December 31, 2018 $ 97 Increases in current period tax positions 17 Decreases in prior period measurement of tax positions (4 ) Balance as of December 31, 2019 $ 110 The Company’s tax positions relate primarily to the deductions claimed for repair and maintenance costs on its utility plant. The Company does not anticipate material changes to its unrecognized tax benefits within the next year. As discussed above, the Company expects to utilize its remaining federal NOLs in 2020, after the pending sale of the New York subsidiary is completed, and therefore this federal tax attribute will not be available to reduce the federal liabilities for uncertain tax positions or interest accrued as presented on the Company’s Consolidated Financial Statements. If the Company sustains all of its positions as of December 31, 2019 , an unrecognized tax benefit of $12 million , excluding interest and penalties, would impact the Company’s effective tax rate. The Company had an insignificant amount of interest and penalties related to its tax positions as of December 31, 2019 and 2018 . Presented in the table below are the changes in the valuation allowance: Amount Balance as of January 1, 2017 $ 6 Increases in current period tax positions 7 Balance as of December 31, 2017 $ 13 Increases in current period tax positions 1 Balance as of December 31, 2018 $ 14 Increases in current period tax positions 7 Balance as of December 31, 2019 $ 21 |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Note 15: Employee Benefits Pension and Other Postretirement Benefits The Company maintains noncontributory defined benefit pension plans covering eligible employees of its regulated utility and shared services operations. Benefits under the plans are based on the employee’s years of service and compensation. The pension plans have been closed for all new employees. The pension plans were closed for most employees hired on or after January 1, 2006. Union employees hired on or after January 1, 2001, except for specific eligible groups specified in the plan, had their accrued benefit frozen and will be able to receive this benefit as a lump sum upon termination or retirement. Union employees hired on or after January 1, 2001 and non-union employees hired on or after January 1, 2006 are provided with a 5.25% of base pay defined contribution plan. The Company does not participate in a multi-employer plan. The Company also has unfunded noncontributory supplemental nonqualified pension plans that provide additional retirement benefits to certain employees. The Company’s pension funding practice is to contribute at least the greater of the minimum amount required by the Employee Retirement Income Security Act of 1974 or the normal cost. Further, the Company will consider additional cash contributions and/or available prefunding balances if needed to avoid “at risk” status and benefit restrictions under the Pension Protection Act of 2006 (“PPA”). The Company may also consider increased contributions, based on other financial requirements and the plans’ funded position. Pension expense in excess of the amount contributed to the pension plans is deferred by certain regulated subsidiaries pending future recovery in rates charged for utility services as contributions are made to the plans. See Note 7—Regulatory Assets and Liabilities for additional information. Pension plan assets are invested in a number of actively managed, commingled funds, and limited partnerships including equities, fixed income securities, guaranteed annuity contracts with insurance companies, real estate funds and real estate investment trusts (“REITs”). The Company maintains other postretirement benefit plans providing varying levels of medical and life insurance to eligible retirees. The retiree welfare plans are closed for union employees hired on or after January 1, 2006. The plans had previously closed for non-union employees hired on or after January 1, 2002. The Company’s policy is to fund other postretirement benefit costs up to the amount recoverable through rates. Assets of the plans are invested in a number of actively managed and commingled funds including equities and fixed income securities. The investment policy guideline of the pension plan is focused on diversification, improving returns and reducing the volatility of the funded status over a long-term horizon. The investment policy guidelines of the postretirement plans focus on the appropriate strategy given the funded status of the plans. None of the Company’s securities are included in pension or other postretirement benefit plan assets. The Company uses fair value for all classes of assets in the calculation of market-related value of plan assets. As of 2018, the fair values and asset allocations of the pension plan assets include the American Water Pension Plan, the New York Water Service Corporation Pension Plan, and the Shorelands Water Company, Inc. Pension Plan. Presented in the tables below are the fair values and asset allocations of the pension plan assets as of December 31, 2019 and 2018 , respectively, by asset category: Asset Category 2020 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of December 31, 2019 Cash $ 39 $ 39 $ — $ — 2 % Equity securities: 50 % U.S. large cap 358 358 — — 20 % U.S. small cap 84 78 6 — 5 % International 320 6 137 177 18 % Real estate fund 127 — — 127 7 % REITs 7 — 7 — — % Fixed income securities: 50 % U.S. Treasury securities and government bonds 169 158 11 — 10 % Corporate bonds 542 — 542 — 31 % Mortgage-backed securities 14 — 14 — 1 % Municipal bonds 26 — 26 — 1 % Treasury futures 8 8 — — 1 % Long duration bond fund 8 8 — — 1 % Guarantee annuity contracts 45 — — 45 3 % Total 100 % $ 1,747 $ 655 $ 743 $ 349 100 % Asset Category 2019 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of December 31, 2018 Cash $ 24 $ 24 $ — $ — 2 % Equity securities: 50 % U.S. large cap 297 297 — — 20 % U.S. small cap 76 70 6 — 5 % International 256 2 132 122 17 % Real estate fund 65 — — 65 4 % REITs 20 — 20 — 1 % Fixed income securities: 50 % U.S. Treasury securities and government bonds 181 167 14 — 12 % Corporate bonds 491 — 491 — 33 % Mortgage-backed securities 11 — 11 — 1 % Municipal bonds 28 — 28 — 2 % Long duration bond fund 7 7 — — — % Guarantee annuity contracts 43 — — 43 3 % Total 100 % $ 1,499 $ 567 $ 702 $ 230 100 % Presented in the tables below are a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) for 2019 and 2018 , respectively: Level 3 Balance as of January 1, 2019 $ 230 Actual return on assets 25 Purchases, issuances and settlements, net 94 Balance as of December 31, 2019 $ 349 Level 3 Balance as of January 1, 2018 $ 278 Actual return on assets (23 ) Purchases, issuances and settlements, net (25 ) Balance as of December 31, 2018 $ 230 The Company’s postretirement benefit plans have different levels of funded status and the assets are held under various trusts. The investments and risk mitigation strategies for the plans are tailored specifically for each trust. In setting new strategic asset mixes, consideration is given to the likelihood that the selected asset allocation will effectively fund the projected plan liabilities and meet the risk tolerance criteria of the Company. The Company periodically updates the long-term, strategic asset allocations for these plans through asset liability studies and uses various analytics to determine the optimal asset allocation. Considerations include plan liability characteristics, liquidity needs, funding requirements, expected rates of return and the distribution of returns. In 2018, the Company announced plan design changes to the medical bargaining benefit plan, which resulted in a cap on future benefits and an over funded postretirement medical benefits bargaining plan. Given the change in funded status, the Retirement and Benefit Plans Investment Committee (the “Investment Committee”), which is responsible for overseeing the investment of the Company’s pension and other postretirement benefit plans’ assets, commissioned a new asset-liability study for the postretirement medical bargaining plan. This study concluded that it was prudent to decrease the investment risk in the plan due to the current funded status. The study also recommended reducing its exposure to changes in interest rates by matching the assets of the plan to the projected cash flows for future benefit payments of the liability. The Investment Committee approved the recommendations. The Company engages third-party investment managers for all invested assets. Managers are not permitted to invest outside of the asset class (e.g. fixed income, equity, alternatives) or strategy for which they have been appointed. Investment management agreements and recurring performance and attribution analysis are used as tools to ensure investment managers invest solely within the investment strategy they have been provided. Futures and options may be used to adjust portfolio duration to align with a plan’s targeted investment policy. In order to minimize asset volatility relative to the liabilities, a portion of plan assets is allocated to long duration fixed income investments that are exposed to interest rate risk. Increases in interest rates generally will result in a decline in the value of fixed income assets while reducing the present value of the liabilities. Conversely, rate decreases will increase fixed income assets, partially offsetting the related increase in the liabilities. Within equities, risk is mitigated by constructing a portfolio that is broadly diversified by geography, market capitalization, manager mandate size, investment style and process. For the postretirement medical bargaining plan, its asset structure is designed to meet the cash flows of the liabilities. This design reduces the plan’s exposure to changes in interest rates. Actual allocations to each asset class vary from target allocations due to periodic investment strategy updates, market value fluctuations, the length of time it takes to fully implement investment allocations, and the timing of benefit payments and contributions. The asset allocation is rebalanced on a quarterly basis, if necessary. Voluntary Employees’ Beneficiary Association (“VEBA”) Trust assets include the American Water Postretirement Medical Benefits Bargaining Plan, the New York Water Service Corporation Postretirement Medical Benefits Bargaining Plan, the American Water Postretirement Medical Benefits Non-Bargaining Plan, and the American Water Life Insurance Trust. Presented in the tables below are the fair values and asset allocations of the postretirement benefit plan assets as of December 31, 2019 and 2018 , respectively, by asset category: Asset Category 2020 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of December 31, 2019 Bargain VEBA: Cash $ 6 $ 6 $ — $ — 2 % Equity securities: 4 % U.S. large cap 13 13 — — 3 % Fixed income securities: 96 % U.S. Treasury securities and government bonds 373 298 75 — 94 % Long duration bond fund 4 4 — — 1 % Total bargain VEBA 100 % $ 396 $ 321 $ 75 $ — 100 % Non-bargain VEBA: Cash $ 4 $ 4 $ — $ — — Equity securities: 60 % U.S. large cap 48 48 — — 36 % International 30 30 — — 23 % Fixed income securities: 40 % Core fixed income bond fund (a) 50 — 50 — 41 % Total non-bargain VEBA 100 % $ 132 $ 82 $ 50 $ — 100 % Life VEBA: Equity securities: 70 % U.S. large cap $ 2 $ 2 $ — $ — 50 % Fixed income securities: 30 % Core fixed income bond fund (a) 2 2 — — 50 % Total life VEBA 100 % $ 4 $ 4 $ — $ — 100 % Total 100 % $ 532 $ 407 $ 125 $ — 100 % (a) Includes cash for margin requirements. Asset Category 2019 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of 12/31/2018 Bargain VEBA: Cash $ 31 $ 31 $ — $ — — Equity securities: 2 % U.S. large cap 1 1 — — — % International 17 — — 17 4 % Fixed income securities: 98 % U.S. Treasury securities and government bonds 179 178 1 — 47 % Corporate bonds 141 — 141 — 37 % Municipal bonds 9 — 9 — 3 % Long duration bond fund 4 4 — — 1 % Future and option contracts (a) — — — — 8 % Total bargain VEBA 100 % $ 382 $ 214 $ 151 $ 17 100 % Non-bargain VEBA: Cash $ 3 $ 3 $ — $ — — Equity securities: 60 % U.S. large cap 43 43 — — 35 % International 24 24 — — 20 % Fixed income securities: 40 % Core fixed income bond fund (a) 52 — 52 — 45 % Total non-bargain VEBA 100 % $ 122 $ 70 $ 52 $ — 100 % Life VEBA: Equity securities: 70 % U.S. large cap $ 2 $ 2 $ — $ — 67 % Fixed income securities: 30 % Core fixed income bond fund (a) 1 1 — — 33 % Total life VEBA 100 % $ 3 $ 3 $ — $ — 100 % Total 100 % $ 507 $ 287 $ 203 $ 17 100 % (a) Includes cash for margin requirements. Valuation Techniques Used to Determine Fair Value Cash—Cash and investments with maturities of three months or less when purchased, including certain short-term fixed-income securities, are considered cash and are included in the recurring fair value measurements hierarchy as Level 1. Equity securities—For equity securities, the trustees obtain prices from pricing services, whose prices are obtained from direct feeds from market exchanges, that the Company is able to independently corroborate. Certain equity securities are valued based on quoted prices in active markets and categorized as Level 1. Other equities, such as international securities held in the pension plan, are invested in commingled funds and/or limited partnerships. These funds are valued to reflect the plan fund’s interest in the fund based on the reported year-end net asset value. Since net asset value is not directly observable or not available on a nationally recognized securities exchange for the commingled funds, they are categorized as Level 2. For limited partnerships, the assets as a whole are categorized as Level 3 due to the fact that the partnership provides the pricing and the pricing inputs are less readily observable. In addition, the limited partnership vehicle cannot be readily traded. Fixed-income securities—The majority of U.S. Treasury securities and government bonds have been categorized as Level 1 because they trade in highly-liquid and transparent markets and their prices can be corroborated. The fair values of corporate bonds, mortgage backed securities, and certain government bonds are based on prices that reflect observable market information, such as actual trade information of similar securities. They are categorized as Level 2 because the valuations are calculated using models which utilize actively traded market data that the Company can corroborate. Exchange-traded options and futures, for which market quotations are readily available, are valued at the last reported sale price or official closing price on the primary market or exchange on which they are traded and are classified as Level 1. Real estate fund—Real estate fund is categorized as Level 3 as the fund uses significant unobservable inputs for fair value measurement and the vehicle is in the form of a limited partnership. REITs—REITs are invested in commingled funds. Commingled funds are valued to reflect the plan fund’s interest in the fund based on the reported year-end net asset value. Since the net asset value is not directly observable for the commingled funds, they are categorized as Level 2. Guaranteed annuity contracts—Guaranteed annuity contracts are categorized as Level 3 because the investments are not publicly quoted. Since these market values are determined by the provider, they are not highly observable and have been categorized as Level 3. Exchange-traded future and option positions are reported in accordance with changes in variation margins that are settled daily. Presented in the table below is a rollforward of the changes in the benefit obligation and plan assets for the two most recent years, for all plans combined: Pension Benefits Other Benefits 2019 2018 2019 2018 Change in benefit obligation: Benefit obligation as of January 1, $ 1,892 $ 2,034 $ 353 $ 614 Service cost 28 34 4 8 Interest cost 82 76 15 20 Plan participants' contributions — — 2 2 Plan amendments — (23 ) (1 ) (174 ) Actuarial loss (gain) 264 (153 ) 25 (89 ) Gross benefits paid (105 ) (76 ) (25 ) (29 ) Federal subsidy — — 1 1 Benefit obligation as of December 31, $ 2,161 $ 1,892 $ 374 $ 353 Change in plan assets: Fair value of plan assets as of January 1, $ 1,499 $ 1,649 $ 507 $ 576 Actual return on plan assets 319 (97 ) 51 (40 ) Employer contributions 33 24 (2 ) (2 ) Plan participants' contributions — — 2 2 Benefits paid (104 ) (77 ) (26 ) (29 ) Fair value of plan assets as of December 31, $ 1,747 $ 1,499 $ 532 $ 507 Funded value as of December 31, $ (414 ) $ (393 ) $ 158 $ 154 Amounts recognized on the balance sheet: Noncurrent asset $ — $ — $ 159 $ 155 Current liability (3 ) (3 ) — — Noncurrent liability (411 ) (390 ) (1 ) (1 ) Net amount recognized $ (414 ) $ (393 ) $ 158 $ 154 On August 31, 2018 , the Postretirement Medical Benefit Plan was remeasured to reflect a plan change. The plan change resulted in a $175 million reduction in future benefits payable to plan participants, and, in combination with other experience reflected as of the remeasurement date, resulted in a $227 million reduction to the net accumulated postretirement benefit obligation. Presented in the table below are the components of accumulated other comprehensive income and regulatory assets that have not been recognized as components of periodic benefit costs as of December 31 : Pension Benefits Other Benefits 2019 2018 2019 2018 Net actuarial loss $ 435 $ 431 $ 72 $ 83 Prior service credit (19 ) (22 ) (257 ) (291 ) Net amount recognized $ 416 $ 409 $ (185 ) $ (208 ) Regulatory assets (liabilities) $ 375 $ 352 $ (185 ) $ (208 ) Accumulated other comprehensive income 41 57 — — Total $ 416 $ 409 $ (185 ) $ (208 ) Presented in the tables below are the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with a projected obligation in excess of plan assets as of December 31, 2019 and 2018 : Projected Benefit Obligation Exceeds the Fair Value of Plans' Assets 2019 2018 Projected benefit obligation $ 2,161 $ 1,892 Fair value of plan assets 1,748 1,499 Accumulated Benefit Obligation Exceeds the Fair Value of Plans' Assets 2019 2018 Accumulated benefit obligation $ 2,018 $ 1,768 Fair value of plan assets 1,748 1,499 The accumulated postretirement plan assets exceed benefit obligations for all of the Company’s other postretirement benefit plans, except for the Northern Illinois Retiree Welfare Plan. In 2006, the PPA replaced the funding requirements for defined benefit pension plans by requiring that defined benefit plans contribute to 100% of the current liability funding target over seven years. Defined benefit plans with a funding status of less than 80% of the current liability are defined as being “at risk” and additional funding requirements and benefit restrictions may apply. The PPA was effective for the 2008 plan year with short-term phase-in provisions for both the funding target and at-risk determination. The Company’s qualified defined benefit plan is currently funded above the at-risk threshold, and therefore the Company expects that the plans will not be subject to the “at risk” funding requirements of the PPA. The Company is proactively monitoring the plan’s funded status and projected contributions under the law to appropriately manage the potential impact on cash requirements. Minimum funding requirements for the qualified defined benefit pension plan are determined by government regulations and not by accounting pronouncements. The Company plans to contribute amounts at least equal to or greater than the minimum required contributions or the normal cost in 2020 to the qualified pension plans. Contributions may be in the form of cash contributions as well as available prefunding balances. Presented in the table below is information about the expected cash flows for the pension and postretirement benefit plans: Pension Benefits Other Benefits 2020 expected employer contributions: To plan trusts $ 38 $ — To plan participants 2 — Presented in the table below are the net benefits expected to be paid from the plan assets or the Company’s assets: Pension Benefits Other Benefits Expected Benefit Payments Expected Benefit Payments Expected Federal Subsidy Payments 2020 $ 113 $ 27 $ 1 2021 115 27 1 2022 118 27 1 2023 123 27 1 2024 126 27 1 2025-2029 657 131 6 Because the above amounts are net benefits, plan participants’ contributions have been excluded from the expected benefits. Accounting for pensions and other postretirement benefits requires an extensive use of assumptions about the discount rate, expected return on plan assets, the rate of future compensation increases received by the Company’s employees, mortality, turnover and medical costs. Each assumption is reviewed annually. The assumptions are selected to represent the average expected experience over time and may differ in any one year from actual experience due to changes in capital markets and the overall economy. These differences will impact the amount of pension and other postretirement benefit expense that the Company recognizes. Presented in the table below are the significant assumptions related to the pension and other postretirement benefit plans: Pension Benefits Other Benefits 2019 2018 2017 2019 2018 2017 Weighted average assumptions used to determine December 31 benefit obligations: Discount rate 3.44% 4.38% 3.75% 3.36% 4.32% 3.73% Rate of compensation increase 2.97% 3.00% 3.02% N/A N/A N/A Medical trend N/A N/A N/A graded from graded from graded from 6.50% in 2020 6.75% in 2019 7.00% in 2018 to 5.00% in 2026+ to 5.00% in 2026+ to 4.50% in 2026+ Weighted average assumptions used to determine net periodic cost: Discount rate 4.38% 3.75% 4.28% 4.32% 4.23% 4.26% Expected return on plan assets 6.20% 5.95% 6.49% 3.56% 4.77% 5.09% Rate of compensation increase 3.00% 3.02% 3.07% N/A N/A N/A Medical trend N/A N/A N/A graded from graded from graded from 6.75% in 2019 7.00% in 2018 7.00% in 2017 to 5.00% in 2026+ to 4.50% in 2026+ to 5.00% in 2021+ NOTE “N/A” in the table above means assumption is not applicable. The discount rate assumption was determined for the pension and postretirement benefit plans independently. The Company uses an approach that approximates the process of settlement of obligations tailored to the plans’ expected cash flows by matching the plans’ cash flows to the coupons and expected maturity values of individually selected bonds. Historically, for each plan, the discount rate was developed at the level equivalent rate that would produce the same present value as that using spot rates aligned with the projected benefit payments. The expected long-term rate of return on plan assets is based on historical and projected rates of return, prior to administrative and investment management fees, for current and planned asset classes in the plans’ investment portfolios. Assumed projected rates of return for each of the plans’ projected asset classes were selected after analyzing historical experience and future expectations of the returns and volatility of the various asset classes. Based on the target asset allocation for each asset class, the overall expected rate of return for the portfolio was developed, adjusted for historical and expected experience of active portfolio management results compared to the benchmark returns. The Company’s pension expense increases as the expected return on assets decreases. The Company used an expected return on plan assets of 6.20% to estimate its 2019 pension benefit costs, and an expected blended return based on weighted assets of 3.56% to estimate its 2019 other postretirement benefit costs. The Company adopted a table based on the Society of Actuaries RP 2014 mortality table including a generational BB-2D projection scale. In 2018, the Company adopted the new MP-2018 mortality improvement scale to gradually adjust future mortality rates downward. In 2019, the Company maintained the MP-2018 mortality improvement scale until it can conduct a new experience study. Presented in the table below are the components of net periodic benefit costs for the years ended December 31 : 2019 2018 2017 Components of net periodic pension benefit cost: Service cost $ 28 $ 34 $ 33 Interest cost 82 76 80 Expected return on plan assets (91 ) (97 ) (93 ) Amortization of prior service (credit) cost (3 ) 1 1 Amortization of actuarial loss 32 27 34 Net periodic pension benefit cost $ 48 $ 41 $ 55 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Current year actuarial (gain) loss $ (8 ) $ (60 ) $ (7 ) Amortization of actuarial loss (4 ) (7 ) (7 ) Total recognized in other comprehensive income (12 ) (67 ) (14 ) Total recognized in net periodic benefit cost and other comprehensive income $ 36 $ (26 ) $ 41 Components of net periodic other postretirement benefit (credit) cost: Service cost $ 4 $ 8 $ 10 Interest cost 15 20 26 Expected return on plan assets (18 ) (26 ) (26 ) Amortization of prior service credit (35 ) (23 ) (18 ) Amortization of actuarial loss 3 3 10 Net periodic other postretirement benefit (credit) cost $ (31 ) $ (18 ) $ 2 The Company’s policy is to recognize curtailments when the total expected future service of plan participants is reduced by greater than 10% due to an event that results in terminations and/or retirements. Cumulative gains and losses that are in excess of 10% of the greater of either the projected benefit obligation or the fair value of plan assets are amortized over the expected average remaining future service of the current active membership for the plans. Savings Plans for Employees The Company maintains 401(k) savings plans that allow employees to save for retirement on a tax-deferred basis. Employees can make contributions that are invested at their direction in one or more funds. The Company makes matching contributions based on a percentage of an employee’s contribution, subject to certain limitations. Due to the Company’s discontinuing new entrants into the defined benefit pension plan, on January 1, 2006, the Company began providing an additional 5.25% of base pay defined contribution benefit for union employees hired on or after January 1, 2001 and non-union employees hired on or after January 1, 2006. The Company’s 401(k) savings plan expenses totaled $12 million , $12 million and $13 million for 2019 , 2018 and 2017 , respectively. Additionally, the Company’s 5.25% of base pay defined contribution benefit expenses totaled $13 million , $11 million and $9 million for 2019 , 2018 and 2017 , respectively. All of the Company’s contributions are invested in one or more funds at the direction of the employees. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 16: Commitments and Contingencies Commitments have been made in connection with certain construction programs. The estimated capital expenditures required under legal and binding contractual obligations amounted to $579 million as of December 31, 2019 . The Company’s regulated subsidiaries maintain agreements with other water purveyors for the purchase of water to supplement their water supply. Presented in the table below are the future annual commitments related to minimum quantities of purchased water having non-cancelable: Amount 2020 $ 65 2021 65 2022 65 2023 63 2024 49 Thereafter 605 The Company enters into agreements for the provision of services to water and wastewater facilities for the U.S. military, municipalities and other customers. See Note 3—Revenue Recognition for additional information regarding the Company’s performance obligations. Contingencies The Company is routinely involved in legal actions incident to the normal conduct of its business. As of December 31, 2019 , the Company has accrued approximately $17 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 16—Commitments and Contingencies , will not have a material adverse effect on the Company. West Virginia Elk River Freedom Industries Chemical Spill On June 8, 2018, the U.S. District Court for the Southern District of West Virginia granted final approval of a settlement class and global class action settlement (the “Settlement”) for all claims and potential claims by all 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 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. The aggregate pre-tax amount contributed by WVAWC of the $126 million portion of the Settlement with respect to the Company, net of insurance recoveries, is $19 million . As of December 31, 2019 , $5 million of that $126 million has been reflected in accrued liabilities, and $5 million in offsetting insurance receivables have been reflected in other current assets on the Consolidated Balance Sheets. The amount reflected in accrued liabilities as of December 31, 2019 reflects reductions in the liability and appropriate reductions to the offsetting insurance receivable reflected in other current assets, associated with the ongoing processing of actual and potential Settlement claims. The Company 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 complaint captioned Jeffries, et al. v. West Virginia-American Water Company was filed in West Virginia Circuit Court in Kanawha County on behalf of an alleged 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. In May 2018, the court, at a hearing, denied WVAWC’s motion to apply the primary jurisdiction doctrine, and in October 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. On February 4, 2020, the Jeffries plaintiffs filed a motion seeking class certification on the issues of breach of contract and negligence, and to determine the applicability of punitive damages and a multiplier for those damages if imposed. A hearing on class certification is currently scheduled for March 11, 2020. The Company and WVAWC believe that WVAWC has meritorious defenses to the claims raised in this class action complaint. WVAWC is vigorously defending itself against these allegations. The Company cannot currently determine the likelihood of a loss, if any, or estimate the amount of any 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, a wholly owned subsidiary of the Company (“TAWC”), 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 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 an alleged 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. On November 22, 2019, the Tennessee-American Water Defendants filed a motion to dismiss the complaint for failure to state a claim upon which relief may be granted, and, with respect to the Company, for lack of personal jurisdiction. A hearing on this motion is scheduled for February 18, 2020. The Tennessee-American Water Defendants believe that they have meritorious defenses to the claims raised in this class action complaint, and they are vigorously defending themselves against these allegations. The Company cannot currently determine the likelihood of a loss, if any, or estimate the amount of any loss or a range of such losses related to this proceeding. |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Note 17: 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 years ended December 31 : 2019 2018 2017 Numerator: Net income attributable to common shareholders $ 621 $ 567 $ 426 Denominator: Weighted average common shares outstanding—Basic 181 180 178 Effect of dilutive common stock equivalents — — 1 Weighted average common shares outstanding—Diluted 181 180 179 The effect of dilutive common stock equivalents is related to outstanding stock options, RSUs and PSUs granted under the Company’s 2007 Plan and 2017 Omnibus Plan, as well as estimated shares to be purchased under the Company’s 2017 Nonqualified Employee Stock Purchase Plan. Less than one million share-based awards were excluded from the computation of diluted EPS for the years ended December 31, 2019 , 2018 and 2017 , because their effect would have been anti-dilutive under the treasury stock method. |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Values of Financial Instruments | Note 18: Fair Value of Financial Information The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: Current assets and current liabilities—The carrying amounts reported on the Consolidated Balance Sheets for current assets and current liabilities, including revolving credit debt, due to the short-term maturities and variable interest rates, approximate their fair values. Preferred stock with mandatory redemption requirements and long-term debt—The fair values of preferred stock with mandatory redemption requirements and long-term debt are categorized within the fair value hierarchy based on the inputs that are used to value each instrument. The fair value of long-term debt classified as Level 1 is calculated using quoted prices in active markets. Level 2 instruments are valued using observable inputs and Level 3 instruments are valued using observable and unobservable inputs. The fair values of instruments classified as Level 2 and Level 3 are determined by a valuation model that is based on a conventional discounted cash flow methodology and utilizes assumptions of current market rates. 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 December 31, 2019 L e vel 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 7 $ — $ — $ 9 $ 9 Long-term debt (excluding finance lease obligations) 8,664 7,689 417 1,664 9,770 Carrying Amount December 31, 2018 L e vel 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 8 $ — $ — $ 9 $ 9 Long-term debt (excluding finance lease obligations) 7,638 5,760 433 1,728 7,921 Fair Value Measurements To increase consistency and comparability in fair value measurements, GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date. Financial assets and liabilities utilizing Level 1 inputs include active exchange-traded equity securities, exchange-based derivatives, mutual funds and money market funds. Level 2—Inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange-based derivatives, commingled investment funds not subject to purchase and sale restrictions and fair-value hedges. Level 3—Unobservable inputs, such as internally-developed pricing models for the asset or liability due to little or no market activity for the asset or liability. Financial assets and liabilities utilizing Level 3 inputs include infrequently-traded non-exchange-based derivatives and commingled investment funds subject to purchase and sale restrictions. Recurring Fair Value Measurements 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 December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Restricted funds $ 31 $ — $ — $ 31 Rabbi trust investments 17 — — 17 Deposits 3 — — 3 Other investments 8 — — 8 Total assets 59 — — 59 Liabilities: Deferred compensation obligations 21 — — 21 Total liabilities 21 — — 21 Total assets $ 38 $ — $ — $ 38 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 operation, 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 December 31, 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 | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 19: 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. Adoption of the Standard resulted in the recognition of operating lease right-of-use (“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. 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. 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 carrying value of the finance lease assets was $147 million and $147 million as of December 31, 2019 and 2018, respectively. 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 2020 through 2024, and $54 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 presented on the Consolidated Balance Sheets were $16 million for the year ended December 31, 2019. Rental expenses under operating leases which included variable and short-term lease costs were $35 million and $29 million for the years ended December 31, 2018 and 2017, respectively. Presented in the table below is supplemental cash flow information for the year ended December 31 : 2019 Cash paid for amounts in lease liabilities (a) $ 16 Right-of-use assets obtained in exchange for new operating lease liabilities 121 (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 December 31, 2019 Weighted-average remaining lease term: Finance lease 6 years Operating leases 19 years Weighted-average discount rate: Finance lease 12 % Operating leases 4 % Presented in the table below are the future maturities of lease liabilities at December 31, 2019: Amount 2020 $ 14 2021 13 2022 11 2023 7 2024 7 Thereafter 100 Total lease payments 152 Imputed interest (53 ) Total $ 99 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 19: 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. Adoption of the Standard resulted in the recognition of operating lease right-of-use (“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. 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. 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 carrying value of the finance lease assets was $147 million and $147 million as of December 31, 2019 and 2018, respectively. 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 2020 through 2024, and $54 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 presented on the Consolidated Balance Sheets were $16 million for the year ended December 31, 2019. Rental expenses under operating leases which included variable and short-term lease costs were $35 million and $29 million for the years ended December 31, 2018 and 2017, respectively. Presented in the table below is supplemental cash flow information for the year ended December 31 : 2019 Cash paid for amounts in lease liabilities (a) $ 16 Right-of-use assets obtained in exchange for new operating lease liabilities 121 (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 December 31, 2019 Weighted-average remaining lease term: Finance lease 6 years Operating leases 19 years Weighted-average discount rate: Finance lease 12 % Operating leases 4 % Presented in the table below are the future maturities of lease liabilities at December 31, 2019: Amount 2020 $ 14 2021 13 2022 11 2023 7 2024 7 Thereafter 100 Total lease payments 152 Imputed interest (53 ) Total $ 99 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 | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Note 20: Segment Information The Company’s operating segments are comprised of the revenue-generating components of its businesses for which separate financial information is internally produced and regularly used by management to make operating decisions, 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 . The Regulated Businesses segment is the largest component of the Company’s business and includes subsidiaries that provide water and wastewater services to customers in 16 states. The Company’s primary Market-Based Businesses include the Homeowner Services Group , which provides various warranty protection programs and other home services to residential customers, and the Military Services Group , which enters into long-term contracts with the U.S. government to provide water and wastewater services on various military installations. The accounting policies of the segments are the same as those described in Note 2—Significant Accounting Policies . The Regulated Businesses segment and Market-Based Businesses include intercompany costs that are allocated by American Water Works Service Company, Inc. and intercompany interest that is charged by AWCC, both of which are eliminated to reconcile to the Consolidated Statements of Operations. Inter-segment revenues include the sale of water from a regulated subsidiary to market-based subsidiaries, leased office space, and furniture and equipment provided by the market-based subsidiaries to regulated subsidiaries. “Other” includes corporate costs that are not allocated to the Company’s operating segments, eliminations of inter-segment transactions, fair value adjustments, and associated income and deductions related to the acquisitions that have not been allocated to the operating segments for evaluation of performance and allocation of resource purposes. The adjustments related to the acquisitions are reported in Other as they are excluded from segment performance measures evaluated by management. Presented in the tables below is summarized segment information as of and for the years ended December 31 : 2019 Regulated Market-Based Other Consolidated Operating revenues $ 3,094 $ 539 $ (23 ) $ 3,610 Depreciation and amortization 529 37 16 582 Total operating expenses, net 1,964 480 (4 ) 2,440 Interest, net (295 ) 5 (92 ) (382 ) Income before income taxes 869 66 (102 ) 833 Provision for income taxes 215 20 (23 ) 212 Net income attributable to common shareholders 654 46 (79 ) 621 Total assets 20,318 1,008 1,356 22,682 Cash paid for capital expenditures 1,627 13 14 1,654 2018 Regulated Market-Based Other Consolidated Operating revenues $ 2,984 $ 476 $ (20 ) $ 3,440 Depreciation and amortization 500 29 16 545 Impairment charge — 57 — 57 Total operating expenses, net 1,912 441 (15 ) 2,338 Interest, net (280 ) 4 (74 ) (350 ) Income before income taxes 826 41 (80 ) 787 Provision for income taxes 224 11 (13 ) 222 Net income attributable to common shareholders 602 32 (67 ) 567 Total assets 18,680 999 1,544 21,223 Cash paid for capital expenditures 1,477 13 96 1,586 2017 Regulated Market-Based Other Consolidated Operating revenues $ 2,958 $ 422 $ (23 ) $ 3,357 Depreciation and amortization 462 18 12 492 Total operating expenses, net 1,766 360 (22 ) 2,104 Interest, net (268 ) 3 (77 ) (342 ) Income before income taxes 925 66 (79 ) 912 Provision for income taxes 366 28 92 486 Net income attributable to common shareholders 559 38 (171 ) 426 Total assets 17,602 599 1,281 19,482 Cash paid for capital expenditures 1,316 18 100 1,434 |
Unaudited Quarterly Data
Unaudited Quarterly Data | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Data [Abstract] | |
Unaudited Quarterly Data | Note 21: Unaudited Quarterly Data Presented in the tables below are supplemental, unaudited, consolidated, quarterly financial data for each of the four quarters in the years ended December 31, 2019 and 2018 , respectively. The operating results for any quarter are not indicative of results that may be expected for a full year or any future periods. 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Operating revenues $ 813 $ 882 $ 1,013 $ 902 Operating income 238 302 406 224 Net income attributable to common shareholders 113 170 240 98 Basic earnings per share: (a) Net income attributable to common shareholders $ 0.62 $ 0.94 $ 1.33 $ 0.54 Diluted earnings per share: Net income attributable to common shareholders 0.62 0.94 1.33 0.54 (a) Amounts may not sum due to rounding. 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Operating revenues $ 761 $ 853 $ 976 $ 850 Operating income 217 302 335 248 Net income attributable to common shareholders 106 162 187 112 Basic earnings per share: Net income attributable to common shareholders $ 0.60 $ 0.90 $ 1.04 $ 0.62 Diluted earnings per share: (a) Net income attributable to common shareholders 0.59 0.91 1.04 0.62 (a) Amounts may not sum due to rounding. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Regulation | Regulation |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires that management make estimates, assumptions and judgments that could affect the Company’s financial condition, results of operations and cash flows. Actual results could differ from these estimates, assumptions and judgments. The Company considers its critical accounting estimates to include (i) the application of regulatory accounting principles and the related determination and estimation of regulatory assets and liabilities, (ii) revenue recognition and the estimates used in the calculation of unbilled revenue, (iii) accounting for income taxes, (iv) benefit plan assumptions and (v) the estimates and judgments used in determining loss contingencies. The Company’s critical accounting estimates that are particularly sensitive to change in the near term are amounts reported for regulatory assets and liabilities, income taxes, benefit plan assumptions and contingency-related obligations. |
Principles of Consolidation | Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of American Water and all of its subsidiaries in which a controlling interest is maintained after the elimination of intercompany balances and transactions. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consists primarily of utility plant utilized by the Company’s regulated utilities. Additions to utility plant and replacement of retirement units of utility plant are capitalized and include costs such as materials, direct labor, payroll taxes and benefits, indirect items such as engineering and supervision, transportation and an allowance for funds used during construction (“AFUDC”). Costs for repair, maintenance and minor replacements are charged to O&M expense as incurred. The cost of utility plant is depreciated using the straight-line average remaining life, group method. The Company’s regulated utilities record depreciation in conformity with amounts approved by PUCs, after regulatory review of the information the Company submits to support its estimates of the assets’ remaining useful lives. Nonutility property consists primarily of buildings and equipment utilized by the Company’s Market-Based Businesses and for internal operations. This property is stated at cost, net of accumulated depreciation, which is calculated using the straight-line method over the useful lives of the assets. When units of property, plant and equipment are replaced, retired or abandoned, the carrying value is credited against the asset and charged to accumulated depreciation. To the extent the Company recovers cost of removal or other retirement costs through rates after the retirement costs are incurred, a regulatory asset is recorded. In some cases, the Company recovers retirement costs through rates during the life of the associated asset and before the costs are incurred. These amounts result in a regulatory liability being reported based on the amounts previously recovered through customer rates, until the costs to retire those assets are incurred. |
Cash and Cash Equivalents, and Restricted Funds | Cash and Cash Equivalents, and Restricted Funds Substantially all cash is invested in interest-bearing accounts. All highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. Restricted funds consist primarily of proceeds from financings for the construction and capital improvement of facilities, and deposits for future services under O&M projects. Proceeds are held in escrow or interest-bearing accounts until the designated expenditures are incurred. Restricted funds are classified on the Consolidated Balance Sheets as either current or long-term based upon the intended use of the funds. |
Accounts Receivable and Unbilled Revenues | Accounts Receivable and Unbilled Revenues Accounts receivable include regulated utility customer accounts receivable, which represent amounts billed to water and wastewater customers generally on a monthly basis. Credit is extended based on the guidelines of the applicable PUCs and collateral is generally not required. Also included are market-based trade accounts receivable and nonutility customer receivables of the regulated subsidiaries. Unbilled revenues are accrued when service has been provided but has not been billed to customers and when costs exceed billings on market-based construction contracts. |
Allowance for Uncollectible Accounts | Allowance for Uncollectible Accounts |
Materials and Supplies | Materials and Supplies Materials and supplies are stated at the lower of cost or net realizable value. Cost is determined using the average cost method. |
Leases | Leases The Company has operating and finance leases involving real property, including facilities, utility assets, vehicles, and equipment. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“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 made an accounting policy election not to include operating leases with a lease term of twelve months or less. ROU assets represent the right to use an underlying asset for the lease term and the 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 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. Certain lease agreements include variable rental payments adjusted periodically for inflation. Additionally, the Company applies a portfolio approach to effectively account for the ROU assets and lease liabilities. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. |
Leases | Leases The Company has operating and finance leases involving real property, including facilities, utility assets, vehicles, and equipment. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“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 made an accounting policy election not to include operating leases with a lease term of twelve months or less. ROU assets represent the right to use an underlying asset for the lease term and the 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 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. Certain lease agreements include variable rental payments adjusted periodically for inflation. Additionally, the Company applies a portfolio approach to effectively account for the ROU assets and lease liabilities. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price paid over the estimated fair value of the assets acquired and liabilities assumed in the acquisition of a business. Goodwill is not amortized and must be allocated at the reporting unit level, which is defined as an operating segment or one level below, and tested for impairment at least annually, or more frequently if an event occurs or circumstances change that would more likely than not, reduce the fair value of a reporting unit below its carrying value. The Company’s goodwill is primarily associated with (i) the acquisition of American Water by an affiliate of the Company’s previous owner in 2003, (ii) the acquisition of E’town Corporation by a predecessor to the Company’s previous owner in 2001, and (iii) the acquisition of Pivotal Home Solutions (“Pivotal”) in 2018; and has been allocated to reporting units based on the fair values at the date of the acquisitions. For purposes of testing goodwill for impairment, the reporting units in the Regulated Businesses segment are aggregated into a single reporting unit. The Market-Based Businesses is comprised of the Homeowner Services Group and Military Services Group reporting units. The Company’s annual impairment testing is performed as of November 30 of each year, in conjunction with the completion of the Company’s annual business plan. The Company assesses qualitative factors to determine whether quantitative testing is necessary. If it is determined, based upon qualitative factors, that the estimated fair value of a reporting unit is more likely than not, greater than its carrying value, no further testing is required. If the Company bypasses the qualitative assessment, or performs the qualitative assessment and determines that the estimated fair value of a reporting unit is more likely than not, less than its carrying value, a quantitative, fair value-based test is performed. This quantitative testing compares the estimated fair value of the reporting unit to its respective net carrying value, including goodwill, on the measurement date. An impairment loss will be recognized in the amount equal to the excess of the reporting unit’s carrying value compared to its estimated fair value, limited to the total amount of goodwill allocated to that reporting unit. Application of goodwill impairment testing requires management judgment, including the identification of reporting units and determining the fair value of reporting units. Management estimates fair value using a discounted cash flow analysis. Significant assumptions used in these fair value estimations include, but are not limited to, forecasts of future operating results, discount and growth rates. |
Intangible Assets | Intangible Assets Intangible assets consist primarily of finite-lived customer relationships associated with the acquisition of Pivotal. Finite-lived intangible assets are initially measured at their estimated fair values, and are amortized over their estimated useful lives based on the pattern in which the economic benefits of the intangible assets are consumed or otherwise used. See Note 8—Goodwill and Other Intangible Assets for additional information. |
Impairments of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets include property, plant and equipment, goodwill, intangible assets and long-term investments. The Company evaluates long-lived assets for impairment when circumstances indicate the carrying value of those assets may not be recoverable. When such indicators arise, the Company estimates the fair value of the long-lived asset from future cash flows expected to result from its use and, if applicable, the eventual disposition of the asset, comparing the estimated fair value to the carrying value of the asset. An impairment loss will be recognized in the amount equal to the excess of the long-lived asset’s carrying value compared to its estimated fair value. The long-lived assets of the Company’s regulated utilities are grouped on a separate entity basis for impairment testing, as they are integrated state-wide operations that do not have the option to curtail service and generally have uniform tariffs. A regulatory asset is charged to earnings if and when future recovery in rates of that asset is no longer probable. The Company holds other long-term investments in privately held companies and joint ventures accounted for using the equity method, and are classified as other long-term assets on the Consolidated Balance Sheets. The estimated fair value of the long-term investments is dependent on the financial performance and solvency of the entities in which the Company invests, as well as volatility inherent in the external markets. If such long-term investments are considered impaired, an impairment loss will be recognized in the amount equal to the excess of the investment’s carrying value compared to its estimated fair value. The Company believes the assumptions and other considerations used to value long-lived assets to be appropriate, however, if actual experience differs from the assumptions and considerations used in its estimates, the resulting change could have a material adverse impact on the Consolidated Financial Statements. |
Advances for Construction and Contributions in Aid of Construction | Advances for Construction and Contributions in Aid of Construction Regulated utility subsidiaries may receive advances for construction and contributions in aid of construction from customers, home builders and real estate developers to fund construction necessary to extend service to new areas. Advances are refundable for limited periods of time as new customers begin to receive service or other contractual obligations are fulfilled. Included in other current liabilities as of December 31, 2019 and 2018 on the Consolidated Balance Sheets are estimated refunds of $25 million and $23 million , respectively. Those amounts represent expected refunds during the next 12-month period. Advances that are no longer refundable are reclassified to contributions. Contributions are permanent collections of plant assets or cash for a particular construction project. For ratemaking purposes, the amount of such contributions generally serves as a rate base reduction since the contributions represent non-investor supplied funds. |
Revenues Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue From Contracts With Customers, and all related amendments (collectively, “ASC 606”) , using the modified retrospective approach, applied to contracts which were not completed as of January 1, 2018. Under this approach, periods prior to the adoption date have not been restated and continue to be reported under the accounting standards in effect for those periods. Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under ASC 606, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identifies the contracts with a customer; (ii) identifies the performance obligations within the contract, including whether any performance obligations are distinct and capable of being distinct in the context of the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when, or as, the Company satisfies each performance obligation. The Company’s revenues from contracts with customers are discussed below. Customer payments for contracts are generally due within 30 days of billing and none of the contracts with customers have payment terms that exceed one year ; therefore, the Company elected to apply the significant financing component practical expedient and no amount of consideration has been allocated as a financing component. Regulated Businesses Revenue Revenue from the Company’s Regulated Businesses is generated primarily from water and wastewater services delivered to customers. These contracts contain a single performance obligation, the delivery of water and/or wastewater services, as the promise to transfer the individual good or service is not separately identifiable from other promises within the contracts and, therefore, is not distinct. Revenues are recognized over time, as services are provided. There are generally no significant financing components or variable consideration. Revenues include amounts billed to customers on a cycle basis and unbilled amounts calculated based on estimated usage from the date of the meter reading associated with the latest customer bill, to the end of the accounting period. The amounts that the Company has a right to invoice are determined by each customer’s actual usage, an indicator that the invoice amount corresponds directly to the value transferred to the customer. The Company also recognizes revenue when it is probable that future recovery of previously incurred costs or future refunds that are to be credited to customers will occur through the ratemaking process. Market-Based Businesses Revenue Through various warranty protection programs and other home services, the Company provides fixed fee services to residential customers for interior and exterior water and sewer lines, interior electric and gas lines, heating and cooling systems, water heaters and other home appliances, as well as power surge protection and other related services. Most of the contracts have a one-year term and each service is a separate performance obligation, satisfied over time, as the customers simultaneously receive and consume the benefits provided from the service. Customers are obligated to pay for the protection programs ratably over 12 months or via a one-time, annual fee, with revenues recognized ratably over time for these services. Advances from customers are deferred until the performance obligation is satisfied. |
Income Taxes | Income Taxes The Company and its subsidiaries participate in a consolidated federal income tax return for U.S. tax purposes. Members of the consolidated group are charged with the amount of federal income tax expense determined as if they filed separate returns. Certain income and expense items are accounted for in different time periods for financial reporting than for income tax reporting purposes. The Company provides deferred income taxes on the difference between the tax basis of assets and liabilities and the amounts at which they are carried in the financial statements. These deferred income taxes are based on the enacted tax rates expected to be in effect when these temporary differences are projected to reverse. In addition, the regulated utility subsidiaries recognize regulatory assets and liabilities for the effect on revenues expected to be realized as the tax effects of temporary differences, previously flowed through to customers, reverse. Investment tax credits have been deferred by the regulated utility subsidiaries and are being amortized to income over the average estimated service lives of the related assets. |
Allowance for Funds Used During Construction | Allowance for Funds Used During Construction |
Environmental Costs | Environmental Costs The Company’s water and wastewater operations and the operations of its Market-Based Businesses |
Derivative Financial Instruments | Derivative Financial Instruments The Company uses derivative financial instruments for purposes of hedging exposures to fluctuations in interest rates. These derivative contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into derivative contracts for speculative purposes and does not use leveraged instruments. All derivatives are recognized on the balance sheet at fair value. On the date the derivative contract is entered into, the Company may designate the derivative as a hedge of the fair value of a recognized asset or liability (fair-value hedge) or a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash-flow hedge). Changes in the fair value of a fair-value hedge, along with the gain or loss on the underlying hedged item, are recorded in current-period earnings. The gains and losses on the effective portion of cash-flow hedges are recorded in other comprehensive income, until earnings are affected by the variability of cash flows. Any ineffective portion of designated cash-flow hedges is recognized in current-period earnings. |
New Accounting Standards | 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 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 19—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 December 31, 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 standard will not have a material impact on the Consolidated Financial Statements. Changes to the Disclosure Requirements for Fair Value Measurement Updated the disclosure requirements for fair value measurement. The guidance removes the requirements to disclose transfers between Level 1 and Level 2 measurements, the timing of transfers between levels, and the valuation processes for Level 3 measurements. Disclosure of transfers into and out of Level 3 measurements will be required. The guidance adds disclosure requirements for the change in unrealized gains and losses in other comprehensive income for recurring Level 3 measurements, as well as the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. January 1, 2020; 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. Simplifying the Accounting for Income Taxes Simplified the accounting for income taxes by removing certain exceptions and by adding certain requirements. The guidance removes exceptions related to the incremental approach for intraperiod tax allocation, the requirement to recognize a deferred tax liability for changes in ownership of a foreign subsidiary or equity method investment, and the general methodology for calculating income taxes in an interim period when the year-to-date loss exceeds the anticipated loss. The guidance adds requirements to reflect changes to tax laws or rates in the annual effective tax rate computation in the interim period in which the changes were enacted, to recognize franchise or other similar taxes that are partially based on income as an income-based tax and any incremental amounts as non-income-based tax, and to evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction. January 1, 2021; early adoption permitted Modified retrospective for amendments related to changes in ownership of a foreign subsidiary or equity method investment; Modified retrospective or retrospective for amendments related to taxes partially based on income; Prospective for all other amendments. The Company is evaluating any impact on its Consolidated Financial Statements, as well as the timing of adoption. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior periods in the Consolidated Financial Statements and Notes to conform to the current presentation. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Reconciliation Of Cash And Cash Equivalents, And Restricted Cash Reported | 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 years ended December 31 : 2019 2018 Cash and cash equivalents $ 60 $ 130 Restricted funds 31 28 Restricted funds included in other long-term assets — 1 Cash and cash equivalents and restricted funds as presented on the Consolidated Statements of Cash Flows $ 91 $ 159 |
Schedule of Allowance for Funds Used During Construction | Presented in the table below is AFUDC for the years ended December 31 : 2019 2018 2017 Allowance for other funds used during construction $ 28 $ 24 $ 19 Allowance for borrowed funds used during construction 13 13 8 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | 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 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 19—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 December 31, 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 standard will not have a material impact on the Consolidated Financial Statements. Changes to the Disclosure Requirements for Fair Value Measurement Updated the disclosure requirements for fair value measurement. The guidance removes the requirements to disclose transfers between Level 1 and Level 2 measurements, the timing of transfers between levels, and the valuation processes for Level 3 measurements. Disclosure of transfers into and out of Level 3 measurements will be required. The guidance adds disclosure requirements for the change in unrealized gains and losses in other comprehensive income for recurring Level 3 measurements, as well as the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. January 1, 2020; 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. Simplifying the Accounting for Income Taxes Simplified the accounting for income taxes by removing certain exceptions and by adding certain requirements. The guidance removes exceptions related to the incremental approach for intraperiod tax allocation, the requirement to recognize a deferred tax liability for changes in ownership of a foreign subsidiary or equity method investment, and the general methodology for calculating income taxes in an interim period when the year-to-date loss exceeds the anticipated loss. The guidance adds requirements to reflect changes to tax laws or rates in the annual effective tax rate computation in the interim period in which the changes were enacted, to recognize franchise or other similar taxes that are partially based on income as an income-based tax and any incremental amounts as non-income-based tax, and to evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction. January 1, 2021; early adoption permitted Modified retrospective for amendments related to changes in ownership of a foreign subsidiary or equity method investment; Modified retrospective or retrospective for amendments related to taxes partially based on income; Prospective for all other amendments. The Company is evaluating any impact on its Consolidated Financial Statements, as well as the timing of adoption. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 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 year ended December 31, 2019 : Amount Contract assets: Balance at January 1, 2019 $ 14 Additions 27 Transfers to accounts receivable, net (28 ) Balance at December 31, 2019 $ 13 Contract liabilities: Balance at January 1, 2019 $ 20 Additions 62 Transfers to operating revenues (55 ) Balance at December 31, 2019 $ 27 Presented in the table below are operating revenues disaggregated for the year ended December 31, 2019 : Revenues from Contracts with Customers Other Revenues Not from Contracts with Customers (a) Total Operating Revenues Regulated Businesses: Water services: Residential $ 1,734 $ 1 $ 1,735 Commercial 639 — 639 Fire service 142 — 142 Industrial 138 — 138 Public and other 214 — 214 Total water services 2,867 1 2,868 Wastewater services: Residential 119 — 119 Commercial 31 — 31 Industrial 3 — 3 Public and other 14 — 14 Total wastewater services 167 — 167 Miscellaneous utility charges 36 — 36 Alternative revenue programs — 16 16 Lease contract revenue — 7 7 Total Regulated Businesses 3,070 24 3,094 Market-Based Businesses 539 — 539 Other (22 ) (1 ) (23 ) Total operating revenues $ 3,587 $ 23 $ 3,610 (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. |
Acquisitions and Divestitures A
Acquisitions and Divestitures Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Components of Assets Held For Sale and Liabilities | Presented in the table below are the components of assets held for sale and liabilities related to assets held for sale of the New York subsidiary as of December 31, 2019 : December 31, 2019 Current assets $ 14 Property, plant and equipment 456 Regulatory assets 55 Goodwill 39 Other assets 2 Assets held for sale $ 566 Current liabilities 24 Deferred income taxes 67 Regulatory liabilities 37 Liabilities related to assets held for sale $ 128 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Summary of Major Classes of Property, Plant and Equipment by Category | Presented in the table below are the major classes of property, plant and equipment by category as of December 31 : 2019 2018 Range of Remaining Useful Lives Weighted Average Useful Life Utility plant: Land and other non-depreciable assets $ 166 $ 155 Sources of supply 858 821 2 to 127 Years 47 years Treatment and pumping facilities 3,750 3,607 3 to 101 Years 41 years Transmission and distribution facilities 10,807 10,164 9 to 149 Years 70 years Services, meters and fire hydrants 4,304 4,008 5 to 90 Years 31 years General structures and equipment 1,748 1,625 1 to 109 Years 16 years Waste collection 1,153 943 5 to 114 Years 59 years Waste treatment, pumping and disposal 720 570 3 to 139 Years 45 years Construction work in progress 801 593 Less: Utility plant included in assets held for sale (a) (587 ) — Total utility plant 23,720 22,486 Nonutility property 226 718 3 to 50 Years 6 years Less: Nonutility plant included in assets held for sale (a) (5 ) — Total property, plant and equipment $ 23,941 $ 23,204 (a) This property, plant and equipment is related to the pending transactions contemplated by the Stock Purchase Agreement and is included in assets held for sale on the Consolidated Balance Sheets. See Note 4—Acquisitions and Divestitures for additional information. |
Allowance for Uncollectible A_2
Allowance for Uncollectible Accounts (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract] | |
Schedule of Allowances for Uncollectible Accounts | Presented in the table below are the changes in the allowances for uncollectible accounts for the years ended December 31 : 2019 2018 2017 Balance as of January 1 $ (45 ) $ (42 ) $ (40 ) Amounts charged to expense (28 ) (33 ) (29 ) Amounts written off 32 34 30 Recoveries of amounts written off — (4 ) (3 ) Balance as of December 31 $ (41 ) $ (45 ) $ (42 ) |
Regulatory Assets and Liabili_2
Regulatory Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Regulated Operations [Abstract] | |
Summary of Composition of Regulatory Assets | Presented in the table below is the composition of regulatory assets as of December 31 : 2019 2018 Deferred pension expense $ 384 $ 362 Removal costs recoverable through rates 305 292 Regulatory balancing accounts 96 110 Other 398 392 Less: Regulatory assets included in assets held for sale (a) (55 ) — Total regulatory assets $ 1,128 $ 1,156 (a) These regulatory assets are related to the pending transactions contemplated by the Stock Purchase Agreement and are included in assets held for sale on the Consolidated Balance Sheets. See Note 4—Acquisitions and Divestitures for additional information. |
Summary of Composition of Regulatory Liabilities | Presented in the table below is the composition of regulatory liabilities as of December 31 : 2019 2018 Income taxes recovered through rates $ 1,258 $ 1,279 Removal costs recovered through rates 297 309 Postretirement benefit liability 186 209 Other 102 110 Less: Regulatory liabilities included in liabilities related to assets held for sale (a) (37 ) — Total regulatory liabilities $ 1,806 $ 1,907 (a) These regulatory liabilities are related to the pending transactions contemplated by the Stock Purchase Agreement and are included in liabilities related to assets held for sale on the Consolidated Balance Sheets. See Note 4—Acquisitions and Divestitures for additional information. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill Assets | Presented in the table below are the changes in the carrying value of goodwill for the years ended December 31, 2019 and 2018 : Regulated Businesses Market-Based Businesses Consolidated Cost Accumulated Impairment Cost Accumulated Impairment Cost Accumulated Impairment Total Net Balance as of January 1, 2018 $ 3,492 $ (2,332 ) $ 327 $ (108 ) $ 3,819 $ (2,440 ) $ 1,379 Goodwill from acquisitions 2 — 247 — 249 — 249 Goodwill impairment charge — — — (53 ) — (53 ) (53 ) Balance as of December 31, 2018 $ 3,494 $ (2,332 ) $ 574 $ (161 ) $ 4,068 $ (2,493 ) $ 1,575 Goodwill from acquisitions 3 — — — 3 — 3 Goodwill reduced through sale of Keystone operations — — (91 ) 53 (91 ) 53 (38 ) Less: Goodwill included in assets held for sale (a) (39 ) — — — (39 ) — (39 ) Balance as of December 31, 2019 $ 3,458 $ (2,332 ) $ 483 $ (108 ) $ 3,941 $ (2,440 ) $ 1,501 (a) This goodwill is related to the pending transactions contemplated by the Stock Purchase Agreement and is included in assets held for sale on the Consolidated Balance Sheets. See Note 4—Acquisitions and Divestitures for additional information. |
Schedule of Impaired Intangible Assets | Presented in the tables below are the gross carrying value and accumulated amortization of the finite-lived intangible assets held by the Company as of December 31 : 2018 Disposals (a) 2019 Customer relationships $ 86 $ (8 ) $ 78 Other intangible assets 13 — 13 Total gross carrying value $ 99 $ (8 ) $ 91 (a) The disposals relate to customer relationship intangible assets disposed of as part of the sale of the Company’s Keystone operations on December 12, 2019 . See Note 4—Acquisitions and Divestitures for additional information. 2018 Amortization Disposals (a) 2019 Customer relationships $ (13 ) $ (12 ) $ 5 $ (20 ) Other intangible assets (2 ) (2 ) — (4 ) Total accumulated amortization $ (15 ) $ (14 ) $ 5 $ (24 ) Total intangible assets, net $ 84 $ 67 (a) The disposals relate to customer relationship intangible assets disposed of as part of the sale of the Company’s Keystone operations on December 12, 2019 . See Note 4—Acquisitions and Divestitures for additional information. |
Intangible Assets Amortization Expense | Intangible asset amortization expense amounted to $14 million , $12 million and $4 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Estimated amortization expense for the next five years subsequent to December 31, 2019 is as follows: Amount 2020 $ 12 2021 10 2022 9 2023 6 2024 5 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component, Net of Tax | Presented in the table below are the changes in accumulated other comprehensive loss by component, net of tax, for the years ended December 31, 2019 and 2018 : Defined Benefit Plans Foreign Currency Translation Gain (Loss) on Cash Flow Hedge Accumulated Other Comprehensive Loss Employee Benefit Plan Funded Status Amortization of Prior Service Cost Amortization of Actuarial Loss Beginning balance as of January 1, 2018 $ (140 ) $ 1 $ 49 $ 1 $ 10 $ (79 ) Other comprehensive income (loss) before reclassification 60 — — — (2 ) 58 TCJA tax effects reclassified from accumulated other comprehensive loss (22 ) — — — 2 (20 ) Amounts reclassified from accumulated other comprehensive loss — — 7 — — 7 Net other comprehensive income 38 — 7 — — 45 Ending balance as of December 31, 2018 $ (102 ) $ 1 $ 56 $ 1 $ 10 $ (34 ) Other comprehensive income (loss) before reclassification 8 — — — (13 ) (5 ) Amounts reclassified from accumulated other comprehensive loss — — 4 (1 ) — 3 Net other comprehensive income (loss) 8 — 4 (1 ) (13 ) (2 ) Ending balance as of December 31, 2019 $ (94 ) $ 1 $ 60 $ — $ (3 ) $ (36 ) |
Dividends Declared | During 2019 , 2018 and 2017 , the Company paid $353 million , $319 million and $289 million in cash dividends, respectively. Presented in the table below is the per share cash dividends paid for the years ended December 31 : 2019 2018 2017 December $ 0.50 $ 0.455 $ 0.415 September $ 0.50 $ 0.455 $ 0.415 June $ 0.50 $ 0.455 $ 0.415 March $ 0.455 $ 0.415 $ 0.375 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-Based Compensation Expense | Presented in the table below is the stock-based compensation expense recorded in O&M expense in the accompanying Consolidated Statements of Operations for the years ended December 31 : 2019 2018 2017 Stock options $ — $ 1 $ 1 RSUs and PSUs 15 15 9 Nonqualified employee stock purchase plan 2 1 1 Stock-based compensation 17 17 11 Income tax benefit (4 ) (5 ) (4 ) Stock-based compensation expense, net of tax $ 13 $ 12 $ 7 |
Summary of Stock Option Activity | Presented in the table below is stock option activity for the year ended December 31, 2019 : Shares (in thousands) Weighted Average Exercise Price (per share) Weighted Average Remaining Life (years) Aggregate Intrinsic Value Options outstanding as of December 31, 2018 517 $ 54.92 2.96 $ 19 Granted — — Forfeited or expired — — Exercised (223 ) 52.45 Options outstanding as of December 31, 2019 294 $ 56.80 2.04 $ 19 Options exercisable as of December 31, 2019 294 $ 56.80 2.04 $ 19 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Additional Information to Stock Options Activity | Presented in the table below is additional information regarding stock options exercised during the years ended December 31 : 2019 2018 2017 Intrinsic value $ 12 $ 9 $ 10 Exercise proceeds 14 7 11 Income tax benefit realized 3 2 3 |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Restricted Stock Unit Activity | Presented in the table below is RSU activity for the year ended December 31, 2019 : Shares (in thousands) Weighted Average Grant Date Fair Value (per share) Non-vested total as of December 31, 2018 133 $ 77.44 Granted 67 101.25 Vested (65 ) 85.27 Forfeited (17 ) 86.38 Non-vested total as of December 31, 2019 118 $ 85.41 |
Performance Condition | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Restricted Stock Unit Activity | Presented in the table below is PSU activity for the year ended December 31, 2019 : Shares (in thousands) Weighted Average Grant Date Fair Value (per share) Non-vested total as of December 31, 2018 308 $ 73.39 Granted 145 97.73 Vested (112 ) 72.84 Forfeited (25 ) 84.54 Non-vested total as of December 31, 2019 316 $ 83.89 |
Summary of Weighted Average Assumptions | Presented in the table below is the weighted average assumptions used in the Monte Carlo simulation and the weighted average grant date fair values of PSUs granted for the years ended December 31 : 2019 2018 2017 Expected volatility 16.80 % 17.23 % 17.40 % Risk-free interest rate 2.47 % 2.36 % 1.53 % Expected life (years) 3.0 3.0 3.0 Grant date fair value per share $ 110.37 $ 73.62 $ 72.81 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Debt | Presented in the table below are the components of long-term debt as of December 31 : Rate Weighted Average Rate Maturity 2019 2018 Long-term debt of AWCC: (a) Senior notes—fixed rate 2.95%-8.27% 4.18% 2021-2049 $ 7,191 $ 6,116 Private activity bonds and government funded debt—fixed rate 1.79%-5.38% 3.72% 2021-2040 191 192 Long-term debt of other American Water subsidiaries: Private activity bonds and government funded debt—fixed rate (b) 0.00%-5.60% 3.08% 2020-2048 724 727 Mortgage bonds—fixed rate 3.92%-9.71% 7.49% 2020-2039 578 606 Mandatorily redeemable preferred stock 8.47%-9.75% 8.59% 2024-2036 7 8 Finance lease obligations 12.25% 12.25% 2026 1 1 Term loan — 6 Long-term debt 8,692 7,656 Unamortized debt premium, net (c) 1 7 Unamortized debt issuance costs (21 ) (16 ) Less current portion of long-term debt (28 ) (71 ) Total long-term debt $ 8,644 $ 7,576 (a) This indebtedness is considered “debt” for purposes of a support agreement between parent company and AWCC, which serves as a functional equivalent of a guarantee by parent company of AWCC’s payment obligations under such indebtedness. (b) Includes $3 million and $3 million of variable rate debt as of December 31, 2019 and 2018 , respectively, with variable-to-fixed interest rate swaps ranging between 3.93% and 4.65% . This debt was assumed via an acquisition in 2013. (c) Primarily fair value adjustments previously recognized in acquisition purchase accounting. |
Future Sinking Fund Payments and Debt Maturities | Presented in the table below are future sinking fund payments and debt maturities: Amount 2020 $ 28 2021 310 2022 14 2023 159 2024 473 Thereafter 7,708 |
Long-Term Debt Issued | Presented in the table below are the issuances of long-term debt in 2019 : Company Type Rate Maturity Amount AWCC Senior notes—fixed rate 3.45%-4.15% 2029-2049 $ 1,100 AWCC (a) Private activity bonds and government funded debt—fixed rate 2.45% 2039 100 Other American Water subsidiaries Private activity bonds and government funded debt—fixed rate 0.00%-5.00% 2021-2048 330 Total issuances $ 1,530 (a) This indebtedness has a mandatory redemption provision callable in 2029. |
Long-term debt retired through optional redemptions or payments at maturities | Presented in the table below are the retirements and redemptions of long-term debt in 2019 through sinking fund provisions, optional redemption or payment at maturity: Company Type Rate Maturity Amount AWCC Private activity bonds and government funded debt—fixed rate 1.79%-6.25% 2021-2031 $ 101 AWCC Senior notes—fixed rate 7.21% 2019 25 Other American Water subsidiaries Private activity bonds and government funded debt—fixed rate 0.00%-6.20% 2019-2048 333 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%-9.18% 2031-2036 2 Other American Water subsidiaries Term loan 5.76%-5.81% 2021 6 Total retirements and redemptions $ 495 |
Summary of 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 as of December 31: Derivative Instrument Derivative Designation Balance Sheet Classification 2019 2018 Liability derivative: Forward starting swaps Cash flow hedge Other current liabilities $ — $ 14 |
Short-Term Debt (Tables)
Short-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Short-term Debt [Abstract] | |
Schedule of Company's Aggregate Credit Facility Commitments, Letter of Credit Sub-Limit Under Revolving Credit Facility and Commercial Paper Limit and Available Capacity | Presented in the table below are the aggregate credit facility commitments, letter of credit sublimit under the revolving credit facility and the commercial paper limit, as well as the available capacity for each, as of December 31, 2019 and 2018 : Credit Facility Commitment Available Credit Facility Capacity Letter of Credit Sublimit Available Letter of Credit Capacity Commercial Paper Limit Available Commercial Paper Capacity December 31, 2019 $ 2,250 $ 2,174 $ 150 $ 74 $ 2,100 $ 1,314 December 31, 2018 2,262 2,177 150 69 2,100 1,146 |
Schedule Of Short-Term Borrowings Activity | Presented in the table below is the short-term borrowing activity for AWCC for the years ended December 31 : 2019 2018 Average borrowings $ 726 $ 1,029 Maximum borrowings outstanding 1,271 1,905 Weighted average interest rates, computed on daily basis 2.54 % 2.28 % Weighted average interest rates, as of December 31 1.86 % 2.84 % |
General Taxes (Tables)
General Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
General Taxes [Abstract] | |
Components of General Tax Expense from Continuing Operations | Presented in the table below is the components of general tax expense for the years ended December 31 : 2019 2018 2017 Gross receipts and franchise $ 110 $ 112 $ 110 Property and capital stock 124 120 105 Payroll 35 33 31 Other general 11 12 13 Total general taxes $ 280 $ 277 $ 259 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense from Continuing Operations | Presented in the table below is the components of income tax expense for the years ended December 31 : 2019 2018 2017 Current income taxes: State $ 4 $ 26 $ 25 Federal — 1 (1 ) Total current income taxes $ 4 $ 27 $ 24 Deferred income taxes: State $ 54 $ 33 $ 50 Federal 155 163 413 Amortization of deferred investment tax credits (1 ) (1 ) (1 ) Total deferred income taxes 208 195 462 Provision for income taxes $ 212 $ 222 $ 486 |
Reconciliation of Income Tax Expense from Continuing Operations | Presented in the table below is a reconciliation between the statutory federal income tax rate and the Company’s effective tax rate for the years ended December 31 : 2019 2018 2017 Income tax at statutory rate 21.0 % 21.0 % 35.0 % Increases (decreases) resulting from: State taxes, net of federal taxes 5.4 % 5.5 % 5.4 % TCJA — % 1.5 % 13.7 % Other, net (1.0 )% 0.2 % (0.8 )% Effective tax rate 25.4 % 28.2 % 53.3 % |
Components of Net Deferred Tax Liability from Continuing Operations | Presented in the table below are the components of the net deferred tax liability as of December 31 : 2019 2018 Deferred tax assets: Advances and contributions $ 410 $ 402 Tax losses and credits 136 131 Regulatory income tax assets 335 339 Pension and other postretirement benefits 94 91 Other 151 44 Total deferred tax assets 1,126 1,007 Valuation allowance (21 ) (14 ) Total deferred tax assets, net of allowance $ 1,105 $ 993 Deferred tax liabilities: Property, plant and equipment $ 2,760 $ 2,537 Deferred pension and other postretirement benefits 77 77 Other 207 97 Total deferred tax liabilities 3,044 2,711 Less: Deferred tax liabilities included in liabilities related to assets held for sale (a) 67 — Total deferred tax liabilities, net of deferred tax assets $ (1,872 ) $ (1,718 ) (a) These deferred tax liabilities are related to the pending transactions contemplated by the Stock Purchase Agreement and are included in liabilities related to assets held for sale on the Consolidated Balance Sheets. See Note 4—Acquisitions and Divestitures for additional information. |
Changes in Gross Liability Excluding Interest and Penalties for Unrecognized Tax Benefits | Presented in the table below are the changes in gross liability, excluding interest and penalties, for unrecognized tax benefits: Amount Balance as of January 1, 2018 $ 106 Increases in current period tax positions 13 Decreases in prior period measurement of tax positions (22 ) Balance as of December 31, 2018 $ 97 Increases in current period tax positions 17 Decreases in prior period measurement of tax positions (4 ) Balance as of December 31, 2019 $ 110 |
Changes in Valuation Allowance | Presented in the table below are the changes in the valuation allowance: Amount Balance as of January 1, 2017 $ 6 Increases in current period tax positions 7 Balance as of December 31, 2017 $ 13 Increases in current period tax positions 1 Balance as of December 31, 2018 $ 14 Increases in current period tax positions 7 Balance as of December 31, 2019 $ 21 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Significant Unobservable Inputs | Presented in the tables below are a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) for 2019 and 2018 , respectively: Level 3 Balance as of January 1, 2019 $ 230 Actual return on assets 25 Purchases, issuances and settlements, net 94 Balance as of December 31, 2019 $ 349 Level 3 Balance as of January 1, 2018 $ 278 Actual return on assets (23 ) Purchases, issuances and settlements, net (25 ) Balance as of December 31, 2018 $ 230 |
Schedule of Rollforward Changes in Benefit Obligation and Plan Assets | Presented in the table below is a rollforward of the changes in the benefit obligation and plan assets for the two most recent years, for all plans combined: Pension Benefits Other Benefits 2019 2018 2019 2018 Change in benefit obligation: Benefit obligation as of January 1, $ 1,892 $ 2,034 $ 353 $ 614 Service cost 28 34 4 8 Interest cost 82 76 15 20 Plan participants' contributions — — 2 2 Plan amendments — (23 ) (1 ) (174 ) Actuarial loss (gain) 264 (153 ) 25 (89 ) Gross benefits paid (105 ) (76 ) (25 ) (29 ) Federal subsidy — — 1 1 Benefit obligation as of December 31, $ 2,161 $ 1,892 $ 374 $ 353 Change in plan assets: Fair value of plan assets as of January 1, $ 1,499 $ 1,649 $ 507 $ 576 Actual return on plan assets 319 (97 ) 51 (40 ) Employer contributions 33 24 (2 ) (2 ) Plan participants' contributions — — 2 2 Benefits paid (104 ) (77 ) (26 ) (29 ) Fair value of plan assets as of December 31, $ 1,747 $ 1,499 $ 532 $ 507 Funded value as of December 31, $ (414 ) $ (393 ) $ 158 $ 154 Amounts recognized on the balance sheet: Noncurrent asset $ — $ — $ 159 $ 155 Current liability (3 ) (3 ) — — Noncurrent liability (411 ) (390 ) (1 ) (1 ) Net amount recognized $ (414 ) $ (393 ) $ 158 $ 154 |
Summary of Accumulated Other Comprehensive Income and Regulatory Assets | Presented in the table below are the components of accumulated other comprehensive income and regulatory assets that have not been recognized as components of periodic benefit costs as of December 31 : Pension Benefits Other Benefits 2019 2018 2019 2018 Net actuarial loss $ 435 $ 431 $ 72 $ 83 Prior service credit (19 ) (22 ) (257 ) (291 ) Net amount recognized $ 416 $ 409 $ (185 ) $ (208 ) Regulatory assets (liabilities) $ 375 $ 352 $ (185 ) $ (208 ) Accumulated other comprehensive income 41 57 — — Total $ 416 $ 409 $ (185 ) $ (208 ) |
Schedule of Projected Benefit Obligation, Accumulated Benefit Obligation and Fair Value of Plan Assets | Presented in the tables below are the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with a projected obligation in excess of plan assets as of December 31, 2019 and 2018 : Projected Benefit Obligation Exceeds the Fair Value of Plans' Assets 2019 2018 Projected benefit obligation $ 2,161 $ 1,892 Fair value of plan assets 1,748 1,499 Accumulated Benefit Obligation Exceeds the Fair Value of Plans' Assets 2019 2018 Accumulated benefit obligation $ 2,018 $ 1,768 Fair value of plan assets 1,748 1,499 |
Schedule of Expected Cash Flows for Pension and Postretirement Benefit Plans | Presented in the table below is information about the expected cash flows for the pension and postretirement benefit plans: Pension Benefits Other Benefits 2020 expected employer contributions: To plan trusts $ 38 $ — To plan participants 2 — |
Schedule of Expected Benefit Payments | Presented in the table below are the net benefits expected to be paid from the plan assets or the Company’s assets: Pension Benefits Other Benefits Expected Benefit Payments Expected Benefit Payments Expected Federal Subsidy Payments 2020 $ 113 $ 27 $ 1 2021 115 27 1 2022 118 27 1 2023 123 27 1 2024 126 27 1 2025-2029 657 131 6 |
Schedule of Significant Assumptions of Pension and Other Postretirement Benefit Plans | Presented in the table below are the significant assumptions related to the pension and other postretirement benefit plans: Pension Benefits Other Benefits 2019 2018 2017 2019 2018 2017 Weighted average assumptions used to determine December 31 benefit obligations: Discount rate 3.44% 4.38% 3.75% 3.36% 4.32% 3.73% Rate of compensation increase 2.97% 3.00% 3.02% N/A N/A N/A Medical trend N/A N/A N/A graded from graded from graded from 6.50% in 2020 6.75% in 2019 7.00% in 2018 to 5.00% in 2026+ to 5.00% in 2026+ to 4.50% in 2026+ Weighted average assumptions used to determine net periodic cost: Discount rate 4.38% 3.75% 4.28% 4.32% 4.23% 4.26% Expected return on plan assets 6.20% 5.95% 6.49% 3.56% 4.77% 5.09% Rate of compensation increase 3.00% 3.02% 3.07% N/A N/A N/A Medical trend N/A N/A N/A graded from graded from graded from 6.75% in 2019 7.00% in 2018 7.00% in 2017 to 5.00% in 2026+ to 4.50% in 2026+ to 5.00% in 2021+ NOTE “N/A” in the table above means assumption is not applicable. |
Components of Net Periodic Benefit Costs | Presented in the table below are the components of net periodic benefit costs for the years ended December 31 : 2019 2018 2017 Components of net periodic pension benefit cost: Service cost $ 28 $ 34 $ 33 Interest cost 82 76 80 Expected return on plan assets (91 ) (97 ) (93 ) Amortization of prior service (credit) cost (3 ) 1 1 Amortization of actuarial loss 32 27 34 Net periodic pension benefit cost $ 48 $ 41 $ 55 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Current year actuarial (gain) loss $ (8 ) $ (60 ) $ (7 ) Amortization of actuarial loss (4 ) (7 ) (7 ) Total recognized in other comprehensive income (12 ) (67 ) (14 ) Total recognized in net periodic benefit cost and other comprehensive income $ 36 $ (26 ) $ 41 Components of net periodic other postretirement benefit (credit) cost: Service cost $ 4 $ 8 $ 10 Interest cost 15 20 26 Expected return on plan assets (18 ) (26 ) (26 ) Amortization of prior service credit (35 ) (23 ) (18 ) Amortization of actuarial loss 3 3 10 Net periodic other postretirement benefit (credit) cost $ (31 ) $ (18 ) $ 2 |
Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Changes in Fair Value of Plan Assets | Presented in the tables below are the fair values and asset allocations of the pension plan assets as of December 31, 2019 and 2018 , respectively, by asset category: Asset Category 2020 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of December 31, 2019 Cash $ 39 $ 39 $ — $ — 2 % Equity securities: 50 % U.S. large cap 358 358 — — 20 % U.S. small cap 84 78 6 — 5 % International 320 6 137 177 18 % Real estate fund 127 — — 127 7 % REITs 7 — 7 — — % Fixed income securities: 50 % U.S. Treasury securities and government bonds 169 158 11 — 10 % Corporate bonds 542 — 542 — 31 % Mortgage-backed securities 14 — 14 — 1 % Municipal bonds 26 — 26 — 1 % Treasury futures 8 8 — — 1 % Long duration bond fund 8 8 — — 1 % Guarantee annuity contracts 45 — — 45 3 % Total 100 % $ 1,747 $ 655 $ 743 $ 349 100 % Asset Category 2019 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of December 31, 2018 Cash $ 24 $ 24 $ — $ — 2 % Equity securities: 50 % U.S. large cap 297 297 — — 20 % U.S. small cap 76 70 6 — 5 % International 256 2 132 122 17 % Real estate fund 65 — — 65 4 % REITs 20 — 20 — 1 % Fixed income securities: 50 % U.S. Treasury securities and government bonds 181 167 14 — 12 % Corporate bonds 491 — 491 — 33 % Mortgage-backed securities 11 — 11 — 1 % Municipal bonds 28 — 28 — 2 % Long duration bond fund 7 7 — — — % Guarantee annuity contracts 43 — — 43 3 % Total 100 % $ 1,499 $ 567 $ 702 $ 230 100 % |
Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Changes in Fair Value of Plan Assets | Presented in the tables below are the fair values and asset allocations of the postretirement benefit plan assets as of December 31, 2019 and 2018 , respectively, by asset category: Asset Category 2020 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of December 31, 2019 Bargain VEBA: Cash $ 6 $ 6 $ — $ — 2 % Equity securities: 4 % U.S. large cap 13 13 — — 3 % Fixed income securities: 96 % U.S. Treasury securities and government bonds 373 298 75 — 94 % Long duration bond fund 4 4 — — 1 % Total bargain VEBA 100 % $ 396 $ 321 $ 75 $ — 100 % Non-bargain VEBA: Cash $ 4 $ 4 $ — $ — — Equity securities: 60 % U.S. large cap 48 48 — — 36 % International 30 30 — — 23 % Fixed income securities: 40 % Core fixed income bond fund (a) 50 — 50 — 41 % Total non-bargain VEBA 100 % $ 132 $ 82 $ 50 $ — 100 % Life VEBA: Equity securities: 70 % U.S. large cap $ 2 $ 2 $ — $ — 50 % Fixed income securities: 30 % Core fixed income bond fund (a) 2 2 — — 50 % Total life VEBA 100 % $ 4 $ 4 $ — $ — 100 % Total 100 % $ 532 $ 407 $ 125 $ — 100 % (a) Includes cash for margin requirements. Asset Category 2019 Target Allocation Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Percentage of Plan Assets as of 12/31/2018 Bargain VEBA: Cash $ 31 $ 31 $ — $ — — Equity securities: 2 % U.S. large cap 1 1 — — — % International 17 — — 17 4 % Fixed income securities: 98 % U.S. Treasury securities and government bonds 179 178 1 — 47 % Corporate bonds 141 — 141 — 37 % Municipal bonds 9 — 9 — 3 % Long duration bond fund 4 4 — — 1 % Future and option contracts (a) — — — — 8 % Total bargain VEBA 100 % $ 382 $ 214 $ 151 $ 17 100 % Non-bargain VEBA: Cash $ 3 $ 3 $ — $ — — Equity securities: 60 % U.S. large cap 43 43 — — 35 % International 24 24 — — 20 % Fixed income securities: 40 % Core fixed income bond fund (a) 52 — 52 — 45 % Total non-bargain VEBA 100 % $ 122 $ 70 $ 52 $ — 100 % Life VEBA: Equity securities: 70 % U.S. large cap $ 2 $ 2 $ — $ — 67 % Fixed income securities: 30 % Core fixed income bond fund (a) 1 1 — — 33 % Total life VEBA 100 % $ 3 $ 3 $ — $ — 100 % Total 100 % $ 507 $ 287 $ 203 $ 17 100 % (a) Includes cash for margin requirements. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Future Annual Commitments Related to Minimum Quantities of Purchased Water Having Non-Cancelable Terms | Presented in the table below are the future annual commitments related to minimum quantities of purchased water having non-cancelable: Amount 2020 $ 65 2021 65 2022 65 2023 63 2024 49 Thereafter 605 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 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 years ended December 31 : 2019 2018 2017 Numerator: Net income attributable to common shareholders $ 621 $ 567 $ 426 Denominator: Weighted average common shares outstanding—Basic 181 180 178 Effect of dilutive common stock equivalents — — 1 Weighted average common shares outstanding—Diluted 181 180 179 |
Fair Values of Financial Inst_2
Fair Values of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2019 L e vel 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 7 $ — $ — $ 9 $ 9 Long-term debt (excluding finance lease obligations) 8,664 7,689 417 1,664 9,770 Carrying Amount December 31, 2018 L e vel 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 8 $ — $ — $ 9 $ 9 Long-term debt (excluding finance lease obligations) 7,638 5,760 433 1,728 7,921 |
Schedule of Fair Value, Assets and Liabilities Measured 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 December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Restricted funds $ 31 $ — $ — $ 31 Rabbi trust investments 17 — — 17 Deposits 3 — — 3 Other investments 8 — — 8 Total assets 59 — — 59 Liabilities: Deferred compensation obligations 21 — — 21 Total liabilities 21 — — 21 Total assets $ 38 $ — $ — $ 38 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) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Presented in the table below is supplemental cash flow information for the year ended December 31 : 2019 Cash paid for amounts in lease liabilities (a) $ 16 Right-of-use assets obtained in exchange for new operating lease liabilities 121 (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 December 31, 2019 Weighted-average remaining lease term: Finance lease 6 years Operating leases 19 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 December 31, 2019: Amount 2020 $ 14 2021 13 2022 11 2023 7 2024 7 Thereafter 100 Total lease payments 152 Imputed interest (53 ) Total $ 99 |
Finance Lease, Liability, Maturity | Presented in the table below are the future maturities of lease liabilities at December 31, 2019: Amount 2020 $ 14 2021 13 2022 11 2023 7 2024 7 Thereafter 100 Total lease payments 152 Imputed interest (53 ) Total $ 99 |
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) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Summarized Segment Information | Presented in the tables below is summarized segment information as of and for the years ended December 31 : 2019 Regulated Market-Based Other Consolidated Operating revenues $ 3,094 $ 539 $ (23 ) $ 3,610 Depreciation and amortization 529 37 16 582 Total operating expenses, net 1,964 480 (4 ) 2,440 Interest, net (295 ) 5 (92 ) (382 ) Income before income taxes 869 66 (102 ) 833 Provision for income taxes 215 20 (23 ) 212 Net income attributable to common shareholders 654 46 (79 ) 621 Total assets 20,318 1,008 1,356 22,682 Cash paid for capital expenditures 1,627 13 14 1,654 2018 Regulated Market-Based Other Consolidated Operating revenues $ 2,984 $ 476 $ (20 ) $ 3,440 Depreciation and amortization 500 29 16 545 Impairment charge — 57 — 57 Total operating expenses, net 1,912 441 (15 ) 2,338 Interest, net (280 ) 4 (74 ) (350 ) Income before income taxes 826 41 (80 ) 787 Provision for income taxes 224 11 (13 ) 222 Net income attributable to common shareholders 602 32 (67 ) 567 Total assets 18,680 999 1,544 21,223 Cash paid for capital expenditures 1,477 13 96 1,586 2017 Regulated Market-Based Other Consolidated Operating revenues $ 2,958 $ 422 $ (23 ) $ 3,357 Depreciation and amortization 462 18 12 492 Total operating expenses, net 1,766 360 (22 ) 2,104 Interest, net (268 ) 3 (77 ) (342 ) Income before income taxes 925 66 (79 ) 912 Provision for income taxes 366 28 92 486 Net income attributable to common shareholders 559 38 (171 ) 426 Total assets 17,602 599 1,281 19,482 Cash paid for capital expenditures 1,316 18 100 1,434 |
Unaudited Quarterly Data (Table
Unaudited Quarterly Data (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Data [Abstract] | |
Schedule Of Unaudited Quarterly Data | Presented in the tables below are supplemental, unaudited, consolidated, quarterly financial data for each of the four quarters in the years ended December 31, 2019 and 2018 , respectively. The operating results for any quarter are not indicative of results that may be expected for a full year or any future periods. 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Operating revenues $ 813 $ 882 $ 1,013 $ 902 Operating income 238 302 406 224 Net income attributable to common shareholders 113 170 240 98 Basic earnings per share: (a) Net income attributable to common shareholders $ 0.62 $ 0.94 $ 1.33 $ 0.54 Diluted earnings per share: Net income attributable to common shareholders 0.62 0.94 1.33 0.54 (a) Amounts may not sum due to rounding. 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Operating revenues $ 761 $ 853 $ 976 $ 850 Operating income 217 302 335 248 Net income attributable to common shareholders 106 162 187 112 Basic earnings per share: Net income attributable to common shareholders $ 0.60 $ 0.90 $ 1.04 $ 0.62 Diluted earnings per share: (a) Net income attributable to common shareholders 0.59 0.91 1.04 0.62 (a) Amounts may not sum due to rounding. |
Organization and Operation - Ad
Organization and Operation - Additional Details (Details) | Dec. 31, 2019state |
Market-Based Businesses | |
Segment Reporting Information [Line Items] | |
Number of states in which entity provides water and wastewater services | 16 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Significant Accounting Policies [Line Items] | |||
Estimated refunds | $ 25 | $ 23 | |
Amortization of contributions in aid of construction | $ 29 | 28 | $ 27 |
Payment terms from billing, period | 30 days | ||
Payments for environmental loss contingencies | $ 1 | ||
Remediation costs accrued | 2 | 4 | |
Software | |||
Significant Accounting Policies [Line Items] | |||
Acquisition cost, carrying value | $ 345 | $ 336 | |
Market-Based Businesses | |||
Significant Accounting Policies [Line Items] | |||
Payment terms from billing, period | 12 months | ||
Maximum | |||
Significant Accounting Policies [Line Items] | |||
Payment terms from billing, period | 1 year |
Significant Accounting Polici_5
Significant Accounting Policies - Reconciliation Of Cash And Cash Equivalents, And Restricted Cash Reported (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 60 | $ 130 | ||
Restricted funds | 31 | 28 | ||
Restricted funds included in other long-term assets | 0 | 1 | ||
Cash and cash equivalents and restricted funds as presented on the Consolidated Statements of Cash Flows | $ 91 | $ 159 | $ 83 | $ 99 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Allowance for Funds Used During Construction (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Funds | |||
Significant Accounting Policies [Line Items] | |||
Allowance for funds used during construction | $ 28 | $ 24 | $ 19 |
Borrowed Funds | |||
Significant Accounting Policies [Line Items] | |||
Allowance for funds used during construction | $ 13 | $ 13 | $ 8 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregated Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | $ 3,587 | ||||||||||
Other operating income | 23 | ||||||||||
Operating revenues | $ 902 | $ 1,013 | $ 882 | $ 813 | $ 850 | $ 976 | $ 853 | $ 761 | 3,610 | $ 3,440 | $ 3,357 |
Service, Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | (22) | ||||||||||
Other operating income | (1) | ||||||||||
Operating revenues | (23) | ||||||||||
Regulated Businesses | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 3,070 | ||||||||||
Other operating income | 24 | ||||||||||
Alternative revenue programs | 16 | ||||||||||
Lease contract revenue | 7 | ||||||||||
Operating revenues | 3,094 | ||||||||||
Regulated Businesses | Water Services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 2,867 | ||||||||||
Other operating income | 1 | ||||||||||
Operating revenues | 2,868 | ||||||||||
Regulated Businesses | Water Services | Residential | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 1,734 | ||||||||||
Other operating income | 1 | ||||||||||
Operating revenues | 1,735 | ||||||||||
Regulated Businesses | Water Services | Commercial | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 639 | ||||||||||
Other operating income | 0 | ||||||||||
Operating revenues | 639 | ||||||||||
Regulated Businesses | Water Services | Fire Service | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 142 | ||||||||||
Operating revenues | 142 | ||||||||||
Regulated Businesses | Water Services | Industrial | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 138 | ||||||||||
Operating revenues | 138 | ||||||||||
Regulated Businesses | Water Services | Public and Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 214 | ||||||||||
Other operating income | 0 | ||||||||||
Operating revenues | 214 | ||||||||||
Regulated Businesses | Wastewater Services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 167 | ||||||||||
Operating revenues | 167 | ||||||||||
Regulated Businesses | Wastewater Services | Residential | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 119 | ||||||||||
Operating revenues | 119 | ||||||||||
Regulated Businesses | Wastewater Services | Commercial | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 31 | ||||||||||
Operating revenues | 31 | ||||||||||
Regulated Businesses | Wastewater Services | Industrial | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 3 | ||||||||||
Operating revenues | 3 | ||||||||||
Regulated Businesses | Wastewater Services | Public and Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 14 | ||||||||||
Operating revenues | 14 | ||||||||||
Regulated Businesses | Miscellaneous Utility Charge | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 36 | ||||||||||
Operating revenues | 36 | ||||||||||
Market-Based Businesses | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contract with customer | 539 | ||||||||||
Operating revenues | $ 539 |
Revenue Recognition - Contract
Revenue Recognition - Contract Assets and Liabilities (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Contract with Customer, Asset, after Allowance for Credit Loss [Abstract] | |
Contract asset, beginning | $ 14 |
Additions | 27 |
Transfers to accounts receivable, net | (28) |
Contract asset, ending | 13 |
Contract with Customer, Liability [Abstract] | |
Contract liability, beginning | 20 |
Additions | 62 |
Transfers to operating revenues | (55) |
Contract liability, ending | $ 27 |
Revenue Recognition - (Details)
Revenue Recognition - (Details) - Market-Based Businesses $ in Millions | Dec. 31, 2019USD ($) |
U.S. Government | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 5,400 |
Municipalities and Commercial | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 547 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) Contract in Thousands | Dec. 12, 2019USD ($) | Nov. 20, 2019USD ($)Contract | Jun. 04, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($)Acquisition | Dec. 31, 2018USD ($)Acquisition | Dec. 31, 2017USD ($)Acquisition |
Business Acquisition And Divestitures [Line Items] | |||||||
Goodwill | $ 1,501,000,000 | $ 1,501,000,000 | $ 1,575,000,000 | $ 1,379,000,000 | |||
Business Acquisitions 2019 | Regulated Water And Wastewater Systems | |||||||
Business Acquisition And Divestitures [Line Items] | |||||||
Number of companies acquired | Acquisition | 21 | ||||||
Purchase price | $ 235,000,000 | ||||||
Purchase price allocation, assets acquired | 237,000,000 | 237,000,000 | |||||
Contributions in aid of construction | 5,000,000 | $ 5,000,000 | |||||
Business Acquisitions 2019 | Regulated Businesses | Regulated Water And Wastewater Systems | |||||||
Business Acquisition And Divestitures [Line Items] | |||||||
Number of companies acquired | Acquisition | 3 | ||||||
Goodwill | 3,000,000 | $ 3,000,000 | |||||
Business Acquisition 2018 | Regulated Water And Wastewater Systems | |||||||
Business Acquisition And Divestitures [Line Items] | |||||||
Number of companies acquired | Acquisition | 15 | ||||||
Purchase price | $ 33,000,000 | ||||||
Purchase price allocation, assets acquired | 32,000,000 | ||||||
Contributions in aid of construction | $ 1,000,000 | ||||||
Business Acquisition 2018 | Regulated Businesses | Regulated Water And Wastewater Systems | |||||||
Business Acquisition And Divestitures [Line Items] | |||||||
Number of companies acquired | Acquisition | 1 | ||||||
Goodwill | $ 2,000,000 | ||||||
Goodwill, expected tax deductible amount | $ 0 | ||||||
Business Acquisitions 2017 | |||||||
Business Acquisition And Divestitures [Line Items] | |||||||
Number of companies acquired | Acquisition | 3 | ||||||
Business Acquisitions 2017 | Regulated Water And Wastewater Systems | |||||||
Business Acquisition And Divestitures [Line Items] | |||||||
Number of companies acquired | Acquisition | 18 | ||||||
Purchase price | $ 210,000,000 | ||||||
Purchase price allocation, assets acquired | 207,000,000 | ||||||
Contributions in aid of construction | 9,000,000 | ||||||
Purchase price allocation, liabilities assumed | 23,000,000 | ||||||
Debt related to purchase price allocation | 7,000,000 | ||||||
Bargain purchase gain recognized | $ 3,000,000 | ||||||
Business Acquisitions 2017 | Regulated Businesses | Regulated Water And Wastewater Systems | |||||||
Business Acquisition And Divestitures [Line Items] | |||||||
Number of companies acquired | Acquisition | 4 | ||||||
Goodwill | $ 29,000,000 | ||||||
Goodwill, expected tax deductible amount | $ 1,000,000 | ||||||
New York American Water Company | |||||||
Business Acquisition And Divestitures [Line Items] | |||||||
Purchase price | $ 608,000,000 | ||||||
Number Of Customer Accounts | Contract | 125 | ||||||
Pivotal | |||||||
Business Acquisition And Divestitures [Line Items] | |||||||
Purchase price | $ 365,000,000 | ||||||
Working capital | $ 9,000,000 | ||||||
Water Solutions Holding | Discontinued Operations, Disposed of by Sale | |||||||
Business Acquisition And Divestitures [Line Items] | |||||||
Total cash consideration for business divestiture | $ 31,000,000 | ||||||
Pre-tax loss on business divestiture | 44,000,000 | ||||||
After-tax loss on business divestiture | $ 35,000,000 |
Acquisitions - Components of As
Acquisitions - Components of Assets Held-for-sale (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Business Combinations [Abstract] | ||
Current assets | $ 14 | |
Property, plant and equipment | 456 | |
Regulatory assets | 55 | |
Goodwill | 39 | |
Other assets | 2 | |
Assets held for sale | 566 | $ 0 |
Current liabilities | 24 | |
Deferred income taxes | 67 | |
Regulatory liabilities | 37 | |
Liabilities related to assets held for sale | $ 128 | $ 0 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Major Classes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Public Utility, Property, Plant and Equipment [Line Items] | ||
Construction work in progress | $ 801 | $ 593 |
Total utility plant | 23,720 | 22,486 |
Nonutility property | 226 | 718 |
Less: Nonutility plant included in assets held for sale | (5) | 0 |
Total property, plant and equipment | $ 23,941 | 23,204 |
Weighted Average Useful Life | 6 years | |
Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 3 years | |
Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 50 years | |
Utility Plant | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Less: Utility plant included in assets held for sale | $ (587) | 0 |
Utility Plant | Land and other non-depreciable assets | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | 166 | 155 |
Utility Plant | Sources of supply | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 858 | 821 |
Weighted Average Useful Life | 47 years | |
Utility Plant | Sources of supply | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 2 years | |
Utility Plant | Sources of supply | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 127 years | |
Utility Plant | Treatment and pumping facilities | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 3,750 | 3,607 |
Weighted Average Useful Life | 41 years | |
Utility Plant | Treatment and pumping facilities | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 3 years | |
Utility Plant | Treatment and pumping facilities | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 101 years | |
Utility Plant | Transmission and distribution facilities | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 10,807 | 10,164 |
Weighted Average Useful Life | 70 years | |
Utility Plant | Transmission and distribution facilities | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 9 years | |
Utility Plant | Transmission and distribution facilities | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 149 years | |
Utility Plant | Services, meters and fire hydrants | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 4,304 | 4,008 |
Weighted Average Useful Life | 31 years | |
Utility Plant | Services, meters and fire hydrants | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 5 years | |
Utility Plant | Services, meters and fire hydrants | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 90 years | |
Utility Plant | General structures and equipment | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 1,748 | 1,625 |
Weighted Average Useful Life | 16 years | |
Utility Plant | General structures and equipment | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 1 year | |
Utility Plant | General structures and equipment | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 109 years | |
Utility Plant | Waste collection | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 1,153 | 943 |
Weighted Average Useful Life | 59 years | |
Utility Plant | Waste collection | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 5 years | |
Utility Plant | Waste collection | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 114 years | |
Utility Plant | Waste treatment, pumping and disposal | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 720 | $ 570 |
Weighted Average Useful Life | 45 years | |
Utility Plant | Waste treatment, pumping and disposal | Minimum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 3 years | |
Utility Plant | Waste treatment, pumping and disposal | Maximum | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Range of Remaining Useful Lives | 139 years |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 508 | $ 497 | $ 460 |
Provision for depreciation, percentage of aggregate average depreciable asset | 2.96% | 3.09% | 3.07% |
Investment tax credit | $ 164 | ||
Other Current Assets | |||
Property, Plant and Equipment [Line Items] | |||
Investment tax credit, receivable | 16 | ||
Other Long-term Assets | |||
Property, Plant and Equipment [Line Items] | |||
Investment tax credit, receivable | $ 148 |
Allowance for Uncollectible A_3
Allowance for Uncollectible Accounts - Schedule of Allowances for Uncollectible Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance as of January 1 | $ (45) | $ (42) | $ (40) |
Amounts charged to expense | (28) | (33) | (29) |
Amounts written off | 32 | 34 | 30 |
Recoveries of amounts written off | 0 | (4) | (3) |
Balance as of December 31 | $ (41) | $ (45) | $ (42) |
Regulatory Assets and Liabili_3
Regulatory Assets and Liabilities - Summary of Composition of Regulatory Assets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Regulatory Assets [Line Items] | ||
Regulatory assets | $ 1,128 | $ 1,156 |
Deferred pension expense | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | 384 | 362 |
Removal costs recoverable through rates | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | 305 | 292 |
Regulatory balancing accounts | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | 96 | 110 |
Other | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | 398 | 392 |
Assets held for sale | ||
Regulatory Assets [Line Items] | ||
Regulatory assets | $ 55 | $ 0 |
Regulatory Assets and Liabili_4
Regulatory Assets and Liabilities - Additional Information (Details) $ in Millions | Aug. 31, 2018USD ($) | Dec. 31, 2019USD ($)state | Dec. 31, 2018USD ($)state |
Regulatory Asset And Liabilities [Line Items] | |||
Number of proceedings | 14 | ||
Number of proceedings, number of states effected | 11 | ||
Number of proceedings, number of states effected, offset additional capital investment | 1 | ||
Number of proceedings, number of states effected, reduction of certain regulatory assets | 1 | ||
Number of proceedings, pending | 2 | ||
Number of proceedings, amortizing EADIT and crediting customers | 6 | ||
Number of proceedings, pending amortization of EADIT | 8 | ||
Deferred pension expense | |||
Regulatory Asset And Liabilities [Line Items] | |||
Regulatory assets underfunded status | $ | $ 375 | $ 352 | |
Postretirement Benefit Plan Assets | |||
Regulatory Asset And Liabilities [Line Items] | |||
Reduction to net accrued postretirement benefit obligation | $ | $ 227 |
Regulatory Assets and Liabili_5
Regulatory Assets and Liabilities - Summary of Composition of Regulatory Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Regulatory Liabilities [Line Items] | ||
Regulatory liability | $ 1,806 | $ 1,907 |
Income taxes recovered through rates | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liability | 1,258 | 1,279 |
Removal costs recovered through rates | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liability | 297 | 309 |
Postretirement benefit liability | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liability | 186 | 209 |
Other | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liability | 102 | 110 |
Assets held for sale | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liability | $ 37 | $ 0 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Summary of Changes in Goodwill Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Cost, beginning balance | $ 4,068 | $ 3,819 |
Accumulated Impairment, beginning balance | (2,493) | (2,440) |
Total Net, beginning balance | 1,575 | 1,379 |
Goodwill from acquisitions | 3 | 249 |
Goodwill impairment charge | (53) | |
Goodwill reduced through sale of Keystone operations | (38) | |
Less: Goodwill included in assets held for sale | (39) | |
Cost, ending balance | 3,941 | 4,068 |
Accumulated Impairment, ending balance | (2,440) | (2,493) |
Total Net, ending balance | 1,501 | 1,575 |
Operating Segments | ||
Goodwill [Roll Forward] | ||
Goodwill impairment charge | (53) | |
Operating Segments | Regulated Businesses | ||
Goodwill [Roll Forward] | ||
Cost, beginning balance | 3,494 | 3,492 |
Accumulated Impairment, beginning balance | (2,332) | (2,332) |
Goodwill from acquisitions | 2 | |
Cost, ending balance | 3,458 | 3,494 |
Accumulated Impairment, ending balance | (2,332) | (2,332) |
Operating Segments | Market-Based Businesses | ||
Goodwill [Roll Forward] | ||
Cost, beginning balance | 574 | 327 |
Accumulated Impairment, beginning balance | (161) | (108) |
Goodwill from acquisitions | 247 | |
Cost, ending balance | 483 | 574 |
Accumulated Impairment, ending balance | (108) | $ (161) |
Regulated Water And Wastewater Systems | Regulated Businesses | ||
Goodwill [Roll Forward] | ||
Goodwill from acquisitions | 3 | |
Less: Goodwill included in assets held for sale | (39) | |
Keystone | ||
Goodwill [Roll Forward] | ||
Goodwill reduced through sale of Keystone operations | (91) | |
Goodwill reduced through sale of Keystone operations | 53 | |
Keystone | Operating Segments | Market-Based Businesses | ||
Goodwill [Roll Forward] | ||
Goodwill reduced through sale of Keystone operations | (91) | |
Goodwill reduced through sale of Keystone operations | $ 53 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Additional Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Dec. 31, 2019USD ($)Acquisition | Dec. 31, 2018USD ($)Acquisition | Dec. 31, 2017USD ($) | |
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill from acquisitions | $ 3 | $ 249 | ||
Goodwill reduced through sale of Keystone operations | (38) | |||
Impairment of intangible assets | $ 4 | 8 | ||
Amortization expense | 14 | 12 | $ 4 | |
Keystone | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill impairment charge | 57 | |||
Goodwill, impairment loss, net of tax | 54 | |||
Regulated Businesses | Regulated Water And Wastewater Systems | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill from acquisitions | $ 3 | |||
Operating Segments | Market-Based Businesses | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill from acquisitions | 247 | |||
Goodwill impairment charge | $ 53 | |||
Operating Segments | Regulated Businesses | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill from acquisitions | $ 2 | |||
Business Acquisitions 2019 | Regulated Water And Wastewater Systems | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Number of companies acquired | Acquisition | 21 | |||
Business Acquisitions 2019 | Regulated Businesses | Regulated Water And Wastewater Systems | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Number of companies acquired | Acquisition | 3 | |||
Business Acquisition 2018 | Regulated Water And Wastewater Systems | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Number of companies acquired | Acquisition | 15 | |||
Business Acquisition 2018 | Regulated Businesses | Regulated Water And Wastewater Systems | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Number of companies acquired | Acquisition | 1 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Intangible Assets - Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2019 | |
Finite-lived Intangible Assets [Roll Forward] | ||
Finite-lived intangible assets, net, beginning | $ 99 | |
Disposals, finite-lived | $ (4) | (8) |
Finite-lived intangible assets, net, ending | 91 | |
Customer relationships | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Finite-lived intangible assets, net, beginning | 86 | |
Disposals, finite-lived | (8) | |
Finite-lived intangible assets, net, ending | 78 | |
Other intangible assets | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Finite-lived intangible assets, net, beginning | 13 | |
Disposals, finite-lived | 0 | |
Finite-lived intangible assets, net, ending | $ 13 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Intangible Assets - Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Finite-lived intangible assets, accumulated amortization, beginning | $ (15) | ||
Finite-lived intangible assets, net, beginning | 84 | ||
Finite-lived intangible assets, amortization | (14) | $ (12) | $ (4) |
Finite-lived intangible assets, accumulated amortization, disposals | 5 | ||
Finite-lived intangible assets, accumulated amortization, ending | (24) | (15) | |
Finite-lived intangible assets, net, ending | 67 | 84 | |
Customer relationships | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Finite-lived intangible assets, accumulated amortization, beginning | (13) | ||
Finite-lived intangible assets, amortization | (12) | ||
Finite-lived intangible assets, accumulated amortization, disposals | 5 | ||
Finite-lived intangible assets, accumulated amortization, ending | (20) | (13) | |
Other intangible assets | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Finite-lived intangible assets, accumulated amortization, beginning | (2) | ||
Finite-lived intangible assets, amortization | (2) | ||
Finite-lived intangible assets, accumulated amortization, disposals | 0 | ||
Finite-lived intangible assets, accumulated amortization, ending | $ (4) | $ (2) |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Amortization of Intangibles (Details) $ in Millions | Dec. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 12 |
2021 | 10 |
2022 | 9 |
2023 | 6 |
2024 | $ 5 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 06, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 28, 2015 |
Stockholders Equity Note [Line Items] | ||||||
Shares of common stock repurchased (in Shares) | 400,000 | 600,000 | ||||
Aggregate cost of shares repurchased | $ 36 | $ 45 | $ 54 | |||
Share of common stock available for repurchase (in Shares) | 5,100,000 | |||||
Amounts reclassified from accumulated other comprehensive loss | $ 3 | 7 | ||||
Dividends paid | $ 353 | $ 319 | $ 289 | |||
Dividends declared per common share (USD per share) | $ 0.50 | $ 2 | $ 1.82 | $ 1.66 | ||
Maximum | ||||||
Stockholders Equity Note [Line Items] | ||||||
Shares available under the program to purchase outstanding common stock (in Shares) | 10,000,000 | |||||
DRIP | ||||||
Stockholders Equity Note [Line Items] | ||||||
Shares available for grant (in Shares) | 4,200,000 | |||||
Foreign Currency Translation | ||||||
Stockholders Equity Note [Line Items] | ||||||
Amounts reclassified from accumulated other comprehensive loss | $ 1 | $ (1) |
Shareholders' Equity - Changes
Shareholders' Equity - Changes in Accumulated Other Comprehensive Loss by Component, Net of Tax (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Attributable to Parent [Roll Forward] | |||
Beginning Balance | $ 5,864 | $ 5,385 | |
Other comprehensive income (loss) before reclassification | (5) | 58 | |
TCJA tax effects reclassified from accumulated other comprehensive loss | (20) | ||
Amounts reclassified from accumulated other comprehensive loss | 3 | 7 | |
Net other comprehensive income | (2) | 45 | |
Ending Balance | 6,121 | 5,864 | |
Employee Benefit Plan Funded Status | |||
AOCI Attributable to Parent [Roll Forward] | |||
Beginning Balance | (102) | (140) | |
Other comprehensive income (loss) before reclassification | 8 | 60 | |
TCJA tax effects reclassified from accumulated other comprehensive loss | (22) | ||
Net other comprehensive income | 8 | 38 | |
Ending Balance | (94) | (102) | |
Amortization of Prior Service Cost | |||
AOCI Attributable to Parent [Roll Forward] | |||
Beginning Balance | 1 | 1 | |
Ending Balance | 1 | 1 | |
Amortization of Actuarial Loss | |||
AOCI Attributable to Parent [Roll Forward] | |||
Beginning Balance | 56 | 49 | |
Amounts reclassified from accumulated other comprehensive loss | 4 | 7 | |
Net other comprehensive income | 4 | 7 | |
Ending Balance | 60 | 56 | |
Foreign Currency Translation | |||
AOCI Attributable to Parent [Roll Forward] | |||
Beginning Balance | 1 | 1 | |
Amounts reclassified from accumulated other comprehensive loss | $ 1 | (1) | |
Net other comprehensive income | (1) | 0 | |
Ending Balance | 0 | 1 | |
Gain (Loss) on Cash Flow Hedge | |||
AOCI Attributable to Parent [Roll Forward] | |||
Beginning Balance | 10 | 10 | |
Other comprehensive income (loss) before reclassification | (13) | (2) | |
TCJA tax effects reclassified from accumulated other comprehensive loss | 2 | ||
Net other comprehensive income | (13) | 0 | |
Ending Balance | (3) | 10 | |
Accumulated Other Comprehensive Loss | |||
AOCI Attributable to Parent [Roll Forward] | |||
Beginning Balance | (34) | (79) | |
Ending Balance | $ (36) | $ (34) |
Shareholders' Equity - Dividend
Shareholders' Equity - Dividends (Details) - $ / shares | 3 Months Ended | |||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | |
Equity [Abstract] | ||||||||||||
Dividends declared per common share (USD per share) | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.455 | $ 0.455 | $ 0.455 | $ 0.455 | $ 0.415 | $ 0.415 | $ 0.415 | $ 0.415 | $ 0.375 |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Details) - USD ($) $ in Millions | Feb. 05, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | May 30, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation, capitalized amount | $ 0 | $ 0 | $ 0 | ||
Vesting period | 3 years | ||||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock distribution period | 30 days | ||||
Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock distribution period | 15 months | ||||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 67,000 | ||||
Total fair value of shares vested | $ 4 | 4 | 3 | ||
Unrecognized compensation cost (less than) | $ 4 | ||||
Weighted-average period | 1 year 8 months 19 days | ||||
Accrued dividend equivalents | $ 1 | 1 | 1 | ||
Performance Condition | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 145,000 | ||||
Vesting period | 3 years | ||||
Total fair value of shares vested | $ 14 | $ 12 | $ 13 | ||
Unrecognized compensation cost (less than) | $ 4 | ||||
Weighted-average period | 1 year 1 month 2 days | ||||
Historical volatility, stock price, period | 3 years | ||||
Expected term | 3 years | ||||
2017 Omnibus Equity Compensation Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total shares authorized for grant (in shares) | 7,200,000 | ||||
Shares available for grant (in shares) | 6,800,000 | ||||
2007 Omnibus Equity Compensation Plan | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 0 | 0 | 0 | ||
Vesting period | 3 years | ||||
Total fair value of shares vested | $ 1 | $ 1 | $ 2 | ||
Unrecognized compensation cost (less than) | $ 0 | ||||
Weighted-average period | 1 year | ||||
2007 Omnibus Equity Compensation Plan | Stock Options | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | ||||
2007 Omnibus Equity Compensation Plan | Restricted Stock Units | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | 1 year | 1 year | ||
2007 Omnibus Equity Compensation Plan | Restricted Stock Units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | 3 years | 3 years | ||
Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for grant (in shares) | 1,800,000 | ||||
Lesser of fair market value | 85.00% | ||||
Stock issuable (in shares) | 2,000,000 | ||||
Shares issued (in shares) | 88,000 | 95,000 | 93,000 |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 17 | $ 17 | $ 11 |
Income tax benefit | (4) | (5) | (4) |
Stock-based compensation expense, net of tax | 13 | 12 | 7 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 0 | 1 | 1 |
Restricted Stock Units (RSUs) and Performance Conditions (PSU) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 15 | 15 | 9 |
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 2 | $ 1 | $ 1 |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Stock Option Activity (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
December 31, 2018 (in shares) | 517 | |
Granted (in shares) | 0 | |
Forfeited or expired (in shares) | 0 | |
Exercised (in shares) | (223) | |
December 31, 2019 (in shares) | 294 | 517 |
Options exercisable as of December 31, 2019 (in shares) | 294 | |
Weighted Average Exercise Price | ||
Options outstanding at December 31, 2018 (in USD per share) | $ 54.92 | |
Granted (in USD per share) | 0 | |
Forfeited or expired (in USD per share) | 0 | |
Exercised (in USD per share) | 52.45 | |
Options outstanding at December 31, 2019 (in USD per share) | 56.80 | $ 54.92 |
Options exercisable at December 31, 2019 (in USD per share) | $ 56.80 | |
Options outstanding, Weighted Average Remaining Life | 2 years 14 days | 2 years 11 months 15 days |
Options exercisable as of December 31, 2019, Weighted Average Remaining Life | 2 years 14 days | |
Options outstanding, Aggregate intrinsic value | $ 19 | $ 19 |
Options exercisable as of December 31, 2019, Aggregate intrinsic value | $ 19 |
Stock Based Compensation - Ad_2
Stock Based Compensation - Additional Information to Stock Options Exercised (Details) - Stock Options - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value | $ 12 | $ 9 | $ 10 |
Exercise proceeds | 14 | 7 | 11 |
Income tax benefit realized | $ 3 | $ 2 | $ 3 |
Stock Based Compensation - Su_2
Stock Based Compensation - Summary of Weighted-Average Assumptions (Details) - Performance Condition - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 16.80% | 17.23% | 17.40% |
Risk-free interest rate | 2.47% | 2.36% | 1.53% |
Expected life (years) | 3 years | 3 years | 3 years |
Grant date fair value per share (USD per share) | $ 110.37 | $ 73.62 | $ 72.81 |
Stock Based Compensation - Su_3
Stock Based Compensation - Summary of Restricted Stock Unit Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Restricted Stock Units Without Performance Restrictions | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested, beginning (in shares) | shares | 133 |
Granted (in shares) | shares | 67 |
Vested (in shares) | shares | (65) |
Forfeited (in shares) | shares | (17) |
Non-vested, ending (in shares) | shares | 118 |
Weighted-average grant date fair value (USD per share), non-vested total beginning balance | $ / shares | $ 77.44 |
Weighted-average grant date fair value (USD per share), granted | $ / shares | 101.25 |
Weighted-average grant date fair value (USD per share), vested | $ / shares | 85.27 |
Weighted-average grant date fair value (USD per share), forfeited | $ / shares | 86.38 |
Weighted-average grant date fair value (USD per share), non-vested total ending balance | $ / shares | $ 85.41 |
Performance Condition | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested, beginning (in shares) | shares | 308 |
Granted (in shares) | shares | 145 |
Vested (in shares) | shares | (112) |
Forfeited (in shares) | shares | (25) |
Non-vested, ending (in shares) | shares | 316 |
Weighted-average grant date fair value (USD per share), non-vested total beginning balance | $ / shares | $ 73.39 |
Weighted-average grant date fair value (USD per share), granted | $ / shares | 97.73 |
Weighted-average grant date fair value (USD per share), vested | $ / shares | 72.84 |
Weighted-average grant date fair value (USD per share), forfeited | $ / shares | 84.54 |
Weighted-average grant date fair value (USD per share), non-vested total ending balance | $ / shares | $ 83.89 |
Long-Term Debt - Components of
Long-Term Debt - Components of Long-Term Debt (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 8,692 | $ 7,656 |
Unamortized debt premium, net | 1 | 7 |
Unamortized debt issuance costs | (21) | (16) |
Less current portion of long-term debt | (28) | (71) |
Total long-term debt | $ 8,644 | 7,576 |
Interest rate | 2.45% | |
Other American Water subsidiaries | Mandatorily redeemable preferred stock | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 7 | 8 |
Weighted Average Rate | 8.59% | |
Other American Water subsidiaries | Mandatorily redeemable preferred stock | Minimum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 8.47% | |
Maturity date, minimum | 2024 | |
Other American Water subsidiaries | Mandatorily redeemable preferred stock | Maximum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 9.75% | |
Maturity date, maximum | 2036 | |
Other American Water subsidiaries | Private activity bonds and government funded debt | Fixed rate | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 724 | 727 |
Weighted Average Rate | 3.08% | |
Other American Water subsidiaries | Private activity bonds and government funded debt | Fixed rate | Minimum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.00% | |
Maturity date, minimum | 2020 | |
Other American Water subsidiaries | Private activity bonds and government funded debt | Fixed rate | Maximum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.60% | |
Maturity date, maximum | 2048 | |
Other American Water subsidiaries | Mortgage bonds | Fixed rate | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 578 | 606 |
Weighted Average Rate | 7.49% | |
Other American Water subsidiaries | Mortgage bonds | Fixed rate | Minimum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.92% | |
Maturity date, minimum | 2020 | |
Other American Water subsidiaries | Mortgage bonds | Fixed rate | Maximum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 9.71% | |
Maturity date, maximum | 2039 | |
Other American Water subsidiaries | Finance lease obligation | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 1 | 1 |
Interest rate | 12.25% | |
Weighted Average Rate | 12.25% | |
Maturity date | 2026 | |
Other American Water subsidiaries | Term loan | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 0 | 6 |
Other American Water subsidiaries | Term loan | Minimum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.60% | |
Other American Water subsidiaries | Term loan | Maximum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.63% | |
American Water Capital Corp. | Senior notes | Fixed rate | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 7,191 | 6,116 |
Weighted Average Rate | 4.18% | |
American Water Capital Corp. | Senior notes | Fixed rate | Minimum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.95% | |
Maturity date, minimum | 2021 | |
American Water Capital Corp. | Senior notes | Fixed rate | Maximum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 8.27% | |
Maturity date, maximum | 2049 | |
American Water Capital Corp. | Private activity bonds and government funded debt | ||
Debt Instrument [Line Items] | ||
Maturity date | 2039 | |
American Water Capital Corp. | Private activity bonds and government funded debt | Fixed rate | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 191 | $ 192 |
Weighted Average Rate | 3.72% | |
American Water Capital Corp. | Private activity bonds and government funded debt | Fixed rate | Minimum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.79% | |
Maturity date, minimum | 2021 | |
American Water Capital Corp. | Private activity bonds and government funded debt | Fixed rate | Maximum | Long Term Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.38% | |
Maturity date, maximum | 2040 |
Long-Term Debt Long-Term Debt -
Long-Term Debt Long-Term Debt - Components of Long-Term Debt - Footnotes (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Variable rate debt | $ 3 | $ 3 |
Minimum | ||
Debt Instrument [Line Items] | ||
Variable-to-fixed rate | 3.93% | |
Maximum | ||
Debt Instrument [Line Items] | ||
Variable-to-fixed rate | 4.65% | 4.72% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | May 13, 2019USD ($) | May 06, 2019USD ($)forward_starting_swap_agreement | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||||
Long-term debt | $ 8,692,000,000 | $ 7,656,000,000 | |||
Line of credit facility consolidated debt to consolidated capitalization ratio | 0.61 | ||||
Redeemable debt, amount outstanding | $ 877,000,000 | ||||
Debt issuance cost | $ 15,000,000 | ||||
Interest rate | 2.45% | ||||
Proceeds from long-term debt | $ 1,530,000,000 | 1,358,000,000 | $ 1,395,000,000 | ||
Interest income | $ 4,000,000 | $ 11,000,000 | $ 14,000,000 | ||
Forward Starting Swap Agreements | |||||
Debt Instrument [Line Items] | |||||
Net loss from terminated forward swaps | $ 30,000,000 | ||||
Line of credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility consolidated debt to consolidated capitalization ratio | 0.70 | ||||
Variable rate | Interest Rate Swap | |||||
Debt Instrument [Line Items] | |||||
Aggregate notional amount | $ 3,000,000 | ||||
Other American Water subsidiaries | Private activity bonds and government funded debt | Collateralized Debt Obligations | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 723,000,000 | ||||
Minimum | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility consolidated debt to consolidated capitalization ratio | 0.61 | ||||
American Water Capital Corp. | Private activity bonds and government funded debt | |||||
Debt Instrument [Line Items] | |||||
Proceeds from long-term debt | $ 100,000,000 | ||||
American Water Capital Corp. | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 1,100,000,000 | ||||
Proceeds from long-term debt | 1,090,000,000 | ||||
Repayments of debt | 26,000,000 | ||||
Senior Note 3.45% Due 2029 | American Water Capital Corp. | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 550,000,000 | ||||
Interest rate | 3.45% | ||||
Senior Note 4.15% Due 2049 | American Water Capital Corp. | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 550,000,000 | ||||
Interest rate | 4.15% | ||||
Senior Note 7.21% Due 2019 | American Water Capital Corp. | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 7.21% | ||||
Repayments of debt | $ 25,000,000 | ||||
Designated as Hedging Instrument | Forward Starting Swap Agreements | |||||
Debt Instrument [Line Items] | |||||
Number of forward starting swap agreements, terminated | forward_starting_swap_agreement | 5 | ||||
Aggregate notional amount | $ 510,000,000 | ||||
Designated as Hedging Instrument | Minimum | Forward Starting Swap Agreements | |||||
Debt Instrument [Line Items] | |||||
Amortization period for forward swap with interest | 10 years | ||||
Designated as Hedging Instrument | Maximum | Forward Starting Swap Agreements | |||||
Debt Instrument [Line Items] | |||||
Amortization period for forward swap with interest | 30 years |
Long-Term Debt - Future Sinking
Long-Term Debt - Future Sinking Fund Payments and Debt Maturities (Details) $ in Millions | Dec. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 28 |
2021 | 310 |
2022 | 14 |
2023 | 159 |
2024 | 473 |
Thereafter | $ 7,708 |
Long-Term Debt - Issued (Detail
Long-Term Debt - Issued (Details) - USD ($) $ in Millions | May 13, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||
Interest rate | 2.45% | |||
Total issuances | $ 1,530 | $ 1,358 | $ 1,395 | |
Other American Water subsidiaries | Private activity bonds and government funded debt | Private Activity Bonds And Government Funded, Issued In 2017 | ||||
Debt Instrument [Line Items] | ||||
Total issuances | $ 330 | |||
Other American Water subsidiaries | Private activity bonds and government funded debt | Minimum | Private Activity Bonds And Government Funded, Issued In 2017 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 0.00% | |||
Maturity date | 2021 | |||
Other American Water subsidiaries | Private activity bonds and government funded debt | Maximum | Private Activity Bonds And Government Funded, Issued In 2017 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.00% | |||
Maturity date | 2048 | |||
American Water Capital Corp. | Senior notes | ||||
Debt Instrument [Line Items] | ||||
Total issuances | $ 1,090 | |||
American Water Capital Corp. | Senior notes | Senior Notes, Issued In 2017 | ||||
Debt Instrument [Line Items] | ||||
Total issuances | $ 1,100 | |||
American Water Capital Corp. | Senior notes | Minimum | Senior Notes, Issued In 2017 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.45% | |||
Maturity date | 2029 | |||
American Water Capital Corp. | Senior notes | Maximum | Senior Notes, Issued In 2017 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.15% | |||
Maturity date | 2049 | |||
American Water Capital Corp. | Private activity bonds and government funded debt | ||||
Debt Instrument [Line Items] | ||||
Maturity date | 2039 | |||
Total issuances | $ 100 |
Long-Term Debt - Retired Throug
Long-Term Debt - Retired Through Optional Redemptions or Payments at Maturities (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |
Interest rate | 2.45% |
Debt retired during the year | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 495 |
Debt retired during the year | Other American Water subsidiaries | Mandatorily redeemable preferred stock | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 2 |
Debt retired during the year | Other American Water subsidiaries | Term loan | |
Debt Instrument [Line Items] | |
Maturity date, maximum | 2021 |
Total retirements and redemptions | $ 6 |
Debt retired during the year | American Water Capital Corp. | Senior notes | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 101 |
Debt retired during the year | Minimum | Other American Water subsidiaries | Mandatorily redeemable preferred stock | |
Debt Instrument [Line Items] | |
Interest rate | 8.49% |
Maturity date, minimum | 2031 |
Debt retired during the year | Minimum | Other American Water subsidiaries | Term loan | |
Debt Instrument [Line Items] | |
Interest rate | 5.76% |
Debt retired during the year | Maximum | Other American Water subsidiaries | Mandatorily redeemable preferred stock | |
Debt Instrument [Line Items] | |
Interest rate | 9.18% |
Maturity date, maximum | 2036 |
Debt retired during the year | Maximum | Other American Water subsidiaries | Term loan | |
Debt Instrument [Line Items] | |
Interest rate | 5.81% |
Debt retired during the year | Fixed rate | Other American Water subsidiaries | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 333 |
Debt retired during the year | Fixed rate | Other American Water subsidiaries | Mortgage bonds | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 28 |
Debt retired during the year | Fixed rate | American Water Capital Corp. | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest rate | 7.21% |
Total retirements and redemptions | $ 25 |
Debt retired during the year | Fixed rate | Minimum | Other American Water subsidiaries | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest rate | 0.00% |
Maturity date, minimum | 2019 |
Debt retired during the year | Fixed rate | Minimum | Other American Water subsidiaries | Mortgage bonds | |
Debt Instrument [Line Items] | |
Interest rate | 5.48% |
Maturity date, minimum | 2019 |
Debt retired during the year | Fixed rate | Minimum | American Water Capital Corp. | Senior notes | |
Debt Instrument [Line Items] | |
Maturity date, maximum | 2019 |
Debt retired during the year | Fixed rate | Minimum | American Water Capital Corp. | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest rate | 1.79% |
Maturity date, minimum | 2021 |
Debt retired during the year | Fixed rate | Maximum | Other American Water subsidiaries | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest rate | 6.20% |
Maturity date, maximum | 2048 |
Debt retired during the year | Fixed rate | Maximum | Other American Water subsidiaries | Mortgage bonds | |
Debt Instrument [Line Items] | |
Interest rate | 9.13% |
Maturity date, maximum | 2021 |
Debt retired during the year | Fixed rate | Maximum | American Water Capital Corp. | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest rate | 6.25% |
Maturity date, maximum | 2031 |
Long-Term Debt - Summary of Gro
Long-Term Debt - Summary of Gross Fair Value Derivative Asset and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Cash flow hedge | Forward starting swaps | Other long-term liabilities | ||
Derivative [Line Items] | ||
Derivative liabilities | $ 0 | $ 14 |
Short-Term Debt - Additional In
Short-Term Debt - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)Extension | Dec. 31, 2018USD ($) | Mar. 21, 2018USD ($) | |
Short-term Debt [Line Items] | |||
Short-term debt | $ 786,000,000 | $ 964,000,000 | |
Maturity in More Than Three Months | |||
Short-term Debt [Line Items] | |||
Proceeds from short-term borrowings with maturities greater than three months | 0 | ||
Letter of Credit | |||
Short-term Debt [Line Items] | |||
Available credit facility capacity | 2,170,000,000 | ||
Commercial Paper Program | |||
Short-term Debt [Line Items] | |||
Short-term debt | 786,000,000 | 964,000,000 | |
Revolving Credit Facility | |||
Short-term Debt [Line Items] | |||
Maximum borrowing capacity | 2,250,000,000 | 2,262,000,000 | |
Letters of credit, outstanding amount | 76,000,000 | ||
Revolving Credit Facility | Letter of Credit | |||
Short-term Debt [Line Items] | |||
Maximum borrowing capacity | $ 150,000,000 | $ 150,000,000 | |
American Water Capital Corp. | |||
Short-term Debt [Line Items] | |||
Interest rate during period | 2.54% | 2.28% | |
Maximum borrowing capacity | $ 500,000,000 | ||
Number of extensions allowed | Extension | 2 | ||
Extension period duration | 1 year | ||
American Water Capital Corp. | Revolving Credit Facility | |||
Short-term Debt [Line Items] | |||
Proceeds from lines of credit | $ 0 | ||
American Water Capital Corp. | Revolving Credit Facility | Letter of Credit | |||
Short-term Debt [Line Items] | |||
Maximum borrowing capacity | $ 150,000,000 |
Short-Term Debt - Schedule of C
Short-Term Debt - Schedule of Company's Aggregate Credit Facility Commitments, Letter of Credit Sub-Limit Under Revolving Credit Facility and Commercial Paper Limit and Available Capacity (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Revolving Credit Facility | ||
Short-term Debt [Line Items] | ||
Credit Facility Commitment | $ 2,250 | $ 2,262 |
Available Credit Facility/Credit Capacity | 2,174 | 2,177 |
Revolving Credit Facility | Letter of Credit | ||
Short-term Debt [Line Items] | ||
Credit Facility Commitment | 150 | 150 |
Available Credit Facility/Credit Capacity | 74 | 69 |
Commercial Paper Program | ||
Short-term Debt [Line Items] | ||
Commercial Paper Limit | 2,100 | 2,100 |
Available Commercial Paper Capacity | $ 1,314 | $ 1,146 |
Short-Term Debt - Schedule of S
Short-Term Debt - Schedule of Short-Term Borrowings Activity (Details) - American Water Capital Corp. - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | ||
Average borrowings | $ 726 | $ 1,029 |
Maximum borrowings outstanding | $ 1,271 | $ 1,905 |
Weighted average interest rates, computed on daily basis | 2.54% | 2.28% |
Weighted average interest rates, as of December 31 | 1.86% | 2.84% |
Short-Term Debt - Credit Facili
Short-Term Debt - Credit Facility - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Short-term Debt [Line Items] | |
Line of credit facility consolidated debt to consolidated capitalization ratio, required | 0.70 |
Line of credit facility consolidated debt to consolidated capitalization ratio | 0.61 |
Minimum | |
Short-term Debt [Line Items] | |
Line of credit facility consolidated debt to consolidated capitalization ratio | 0.61 |
Debt, no collateral, prepaid period | 2 months |
Maximum | |
Short-term Debt [Line Items] | |
Debt, no collateral, prepaid period | 3 months |
General Taxes - Components of G
General Taxes - Components of General Tax Expense from Continuing Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
General Taxes [Abstract] | |||
Gross receipts and franchise | $ 110 | $ 112 | $ 110 |
Property and capital stock | 124 | 120 | 105 |
Payroll | 35 | 33 | 31 |
Other general | 11 | 12 | 13 |
Total general taxes | $ 280 | $ 277 | $ 259 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense from Continuing Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current income taxes: | |||
State | $ 4 | $ 26 | $ 25 |
Federal | 0 | 1 | (1) |
Total current income taxes | 4 | 27 | 24 |
Deferred income taxes: | |||
State | 54 | 33 | 50 |
Federal | 155 | 163 | 413 |
Amortization of deferred investment tax credits | (1) | (1) | (1) |
Total deferred income taxes | 208 | 195 | 462 |
Provision for income taxes | $ 212 | $ 222 | $ 486 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense from Continuing Operations (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax at statutory rate | 21.00% | 21.00% | 35.00% |
State taxes, net of federal taxes | 5.40% | 5.50% | 5.40% |
TCJA | 0.00% | 1.50% | 13.70% |
Other, net | (1.00%) | 0.20% | (0.80%) |
Effective tax rate | 25.40% | 28.20% | 53.30% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Examination [Line Items] | ||||
Utilization of net operating losses due to tax cuts & jobs act 2017 | 80.00% | |||
Tax Cuts and Jobs Act of 2017, Deferred income tax expense | $ 125 | |||
Tax Cuts and Jobs Act of 2017, decrease in deferred tax liability | 1,390 | |||
Tax Cuts and Jobs Act of 2017, increase in regulatory liability | 1,510 | |||
Cash flow hedges reclassification from accumulated other comprehensive loss of tax effects resulting from the Tax Cuts and Jobs Act | $ 2 | $ 0 | $ 2 | 0 |
Pension reclassification from accumulated other comprehensive loss of tax effects resulting from the Tax Cuts and Jobs Act | (22) | 0 | (22) | $ 0 |
Unrecognized tax benefit excluding interest and penalties, that would affect the effective tax rate | 12 | |||
Federal | ||||
Income Tax Examination [Line Items] | ||||
Net operating loss carryforwards | 813 | 673 | 813 | |
Capital loss carryforwards | 66 | |||
State | ||||
Income Tax Examination [Line Items] | ||||
Net operating loss carryforwards | $ 387 | $ 453 | $ 387 | |
Net operating loss carryforwards expiration date | The state NOL carryforwards began to expire in 2019 through 2038 |
Income Taxes - Components of Ne
Income Taxes - Components of Net Deferred Tax Liability from Continuing Operations (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||||
Advances and contributions | $ 410 | $ 402 | ||
Tax losses and credits | 136 | 131 | ||
Regulatory income tax assets | 335 | 339 | ||
Pension and other postretirement benefits | 94 | 91 | ||
Other | 151 | 44 | ||
Total deferred tax assets | 1,126 | 1,007 | ||
Valuation allowance | (21) | (14) | $ (13) | $ (6) |
Total deferred tax assets, net of allowance | 1,105 | 993 | ||
Deferred tax liabilities: | ||||
Property, plant and equipment | 2,760 | 2,537 | ||
Deferred pension and other postretirement benefits | 77 | 77 | ||
Other | 207 | 97 | ||
Total deferred tax liabilities | 3,044 | 2,711 | ||
Less: Deferred tax liabilities included in liabilities related to assets held for sale | 67 | 0 | ||
Total deferred tax liabilities, net of deferred tax assets | $ (1,872) | $ (1,718) |
Income Taxes - Changes in Gross
Income Taxes - Changes in Gross Liability Excluding Interest and Penalties for Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning Balance | $ 97 | $ 106 |
Increases in current period tax positions | 17 | 13 |
Decreases in prior period measurement of tax positions | (4) | (22) |
Ending Balance | $ 110 | $ 97 |
Income Taxes - Changes in Valua
Income Taxes - Changes in Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Movement in Valuation Allowances [Roll Forward] | |||
Beginning Balance | $ 14 | $ 13 | $ 6 |
Decreases/Increases in current period tax positions | 7 | 1 | 7 |
Ending Balance | $ 21 | $ 14 | $ 13 |
Employee Benefits - Additional
Employee Benefits - Additional Information (Details) - USD ($) $ in Millions | Aug. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Base pay rate of contribution plan | 5.25% | |||
Minimum reduction of expected future service of plan participants | 10.00% | |||
Cumulative gains losses as percentage of benefit obligations or plan assets | 10.00% | |||
Employer matching contribution, percent | 5.25% | |||
Cost of contribution plan | $ 12 | $ 12 | $ 13 | |
Additional cost of contribution plan | 13 | 11 | $ 9 | |
Postretirement Benefit Plan Assets | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Reduction in future benefits payable | $ 175 | 1 | $ 174 | |
Reduction to net accrued postretirement benefit obligation | $ 227 | |||
Expected blended return on weighted assets percentage | 3.56% | |||
Pension Plan Asset | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Reduction in future benefits payable | $ 0 | $ 23 | ||
Expected return on plan assets percentage | 6.20% |
Employee Benefits - Schedule of
Employee Benefits - Schedule of Changes in Fair Value of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of Plan Assets | 2.00% | ||
Level 2 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 50 | $ 52 | |
Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 17 | ||
Level 3 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 17 | ||
U.S. small cap | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 76 | ||
Percentage of Plan Assets | 5.00% | ||
U.S. small cap | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 70 | ||
U.S. small cap | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 6 | ||
International | Level 3 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 17 | ||
U.S. Treasury securities and government bonds | Level 2 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 1 | ||
Future and option contracts | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of Plan Assets | 8.00% | ||
Core fixed income bond fund | Level 2 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 50 | $ 52 | |
Pension Plan Asset | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation | 100.00% | 100.00% | |
Fair value of plan assets | $ 1,747 | $ 1,499 | $ 1,649 |
Percentage of Plan Assets | 100.00% | 100.00% | |
Pension Plan Asset | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 655 | $ 567 | |
Pension Plan Asset | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 743 | 702 | |
Pension Plan Asset | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 349 | 230 | |
Pension Plan Asset | Cash | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 39 | $ 24 | |
Percentage of Plan Assets | 2.00% | 2.00% | |
Pension Plan Asset | Cash | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 39 | $ 24 | |
Pension Plan Asset | REITs | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 7 | $ 20 | |
Percentage of Plan Assets | 0.00% | 1.00% | |
Pension Plan Asset | REITs | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 7 | $ 20 | |
Pension Plan Asset | Equity securities: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation | 50.00% | 50.00% | |
Pension Plan Asset | U.S. large cap | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 358 | $ 297 | |
Percentage of Plan Assets | 20.00% | 20.00% | |
Pension Plan Asset | U.S. large cap | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 358 | $ 297 | |
Pension Plan Asset | U.S. small cap | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 84 | ||
Percentage of Plan Assets | 5.00% | ||
Pension Plan Asset | U.S. small cap | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 78 | ||
Pension Plan Asset | U.S. small cap | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 6 | ||
Pension Plan Asset | International | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 320 | $ 256 | |
Percentage of Plan Assets | 18.00% | 17.00% | |
Pension Plan Asset | International | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 6 | $ 2 | |
Pension Plan Asset | International | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 137 | 132 | |
Pension Plan Asset | International | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 177 | 122 | |
Pension Plan Asset | Real estate fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 127 | $ 65 | |
Percentage of Plan Assets | 7.00% | 4.00% | |
Pension Plan Asset | Real estate fund | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 127 | $ 65 | |
Pension Plan Asset | Fixed income securities: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation | 50.00% | 50.00% | |
Pension Plan Asset | U.S. Treasury securities and government bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 169 | $ 181 | |
Percentage of Plan Assets | 10.00% | 12.00% | |
Pension Plan Asset | U.S. Treasury securities and government bonds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 158 | $ 167 | |
Pension Plan Asset | U.S. Treasury securities and government bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 11 | 14 | |
Pension Plan Asset | Corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 542 | $ 491 | |
Percentage of Plan Assets | 31.00% | 33.00% | |
Pension Plan Asset | Corporate bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 542 | $ 491 | |
Pension Plan Asset | Mortgage-backed securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 14 | $ 11 | |
Percentage of Plan Assets | 1.00% | 1.00% | |
Pension Plan Asset | Mortgage-backed securities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 14 | $ 11 | |
Pension Plan Asset | Municipal bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 26 | $ 28 | |
Percentage of Plan Assets | 1.00% | 2.00% | |
Pension Plan Asset | Municipal bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 26 | $ 28 | |
Pension Plan Asset | Treasury futures | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 8 | ||
Percentage of Plan Assets | 1.00% | ||
Pension Plan Asset | Treasury futures | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 8 | ||
Pension Plan Asset | Long duration bond fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 8 | $ 7 | |
Percentage of Plan Assets | 1.00% | 0.00% | |
Pension Plan Asset | Long duration bond fund | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 8 | $ 7 | |
Pension Plan Asset | Guarantee annuity contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 45 | $ 43 | |
Percentage of Plan Assets | 3.00% | 3.00% | |
Pension Plan Asset | Guarantee annuity contracts | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 45 | $ 43 | |
Postretirement Benefit Plan Assets | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation | 100.00% | 100.00% | |
Fair value of plan assets | $ 532 | $ 507 | $ 576 |
Percentage of Plan Assets | 100.00% | 100.00% | |
Postretirement Benefit Plan Assets | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation | 100.00% | 100.00% | |
Fair value of plan assets | $ 396 | $ 382 | |
Percentage of Plan Assets | 100.00% | 100.00% | |
Postretirement Benefit Plan Assets | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation | 100.00% | 100.00% | |
Fair value of plan assets | $ 132 | $ 122 | |
Percentage of Plan Assets | 100.00% | 100.00% | |
Postretirement Benefit Plan Assets | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation | 100.00% | 100.00% | |
Fair value of plan assets | $ 4 | $ 3 | |
Percentage of Plan Assets | 100.00% | 100.00% | |
Postretirement Benefit Plan Assets | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 407 | $ 287 | |
Postretirement Benefit Plan Assets | Level 1 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 321 | 214 | |
Postretirement Benefit Plan Assets | Level 1 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 82 | 70 | |
Postretirement Benefit Plan Assets | Level 1 | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 4 | 3 | |
Postretirement Benefit Plan Assets | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 125 | 203 | |
Postretirement Benefit Plan Assets | Level 2 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 75 | 151 | |
Postretirement Benefit Plan Assets | Cash | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 6 | 31 | |
Postretirement Benefit Plan Assets | Cash | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 4 | 3 | |
Postretirement Benefit Plan Assets | Cash | Level 1 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 6 | 31 | |
Postretirement Benefit Plan Assets | Cash | Level 1 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 4 | $ 3 | |
Postretirement Benefit Plan Assets | Equity securities: | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation | 4.00% | 2.00% | |
Postretirement Benefit Plan Assets | Equity securities: | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation | 60.00% | 60.00% | |
Postretirement Benefit Plan Assets | Equity securities: | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation | 70.00% | 70.00% | |
Postretirement Benefit Plan Assets | U.S. large cap | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 13 | $ 1 | |
Percentage of Plan Assets | 3.00% | ||
Postretirement Benefit Plan Assets | U.S. large cap | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 48 | $ 43 | |
Percentage of Plan Assets | 36.00% | 35.00% | |
Postretirement Benefit Plan Assets | U.S. large cap | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 2 | $ 2 | |
Percentage of Plan Assets | 50.00% | 67.00% | |
Postretirement Benefit Plan Assets | U.S. large cap | Level 1 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 13 | $ 1 | |
Postretirement Benefit Plan Assets | U.S. large cap | Level 1 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 48 | 43 | |
Postretirement Benefit Plan Assets | U.S. large cap | Level 1 | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2 | 2 | |
Postretirement Benefit Plan Assets | International | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 17 | ||
Percentage of Plan Assets | 4.00% | ||
Postretirement Benefit Plan Assets | International | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 30 | $ 24 | |
Percentage of Plan Assets | 23.00% | 20.00% | |
Postretirement Benefit Plan Assets | International | Level 1 | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 30 | $ 24 | |
Postretirement Benefit Plan Assets | Fixed income securities: | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation | 96.00% | 98.00% | |
Postretirement Benefit Plan Assets | Fixed income securities: | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation | 40.00% | 40.00% | |
Postretirement Benefit Plan Assets | Fixed income securities: | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation | 30.00% | 30.00% | |
Postretirement Benefit Plan Assets | U.S. Treasury securities and government bonds | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 373 | $ 179 | |
Percentage of Plan Assets | 94.00% | 47.00% | |
Postretirement Benefit Plan Assets | U.S. Treasury securities and government bonds | Level 1 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 298 | $ 178 | |
Postretirement Benefit Plan Assets | U.S. Treasury securities and government bonds | Level 2 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 75 | ||
Postretirement Benefit Plan Assets | Corporate bonds | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 141 | ||
Percentage of Plan Assets | 37.00% | ||
Postretirement Benefit Plan Assets | Corporate bonds | Level 2 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 141 | ||
Postretirement Benefit Plan Assets | Municipal bonds | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 9 | ||
Percentage of Plan Assets | 3.00% | ||
Postretirement Benefit Plan Assets | Municipal bonds | Level 2 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 9 | ||
Postretirement Benefit Plan Assets | Long duration bond fund | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 4 | $ 4 | |
Percentage of Plan Assets | 1.00% | 1.00% | |
Postretirement Benefit Plan Assets | Long duration bond fund | Level 1 | Bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 4 | $ 4 | |
Postretirement Benefit Plan Assets | Core fixed income bond fund | Non-bargain VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 50 | $ 52 | |
Percentage of Plan Assets | 41.00% | 45.00% | |
Postretirement Benefit Plan Assets | Core fixed income bond fund | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 2 | $ 1 | |
Percentage of Plan Assets | 50.00% | 33.00% | |
Postretirement Benefit Plan Assets | Core fixed income bond fund | Level 1 | Life VEBA: | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 2 | $ 1 |
Employee Benefits - Schedule _2
Employee Benefits - Schedule of Significant Unobservable Inputs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Pension Plan Asset | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Fair value of plan assets beginning balance | $ 1,499 | $ 1,649 |
Actual return on assets | 319 | (97) |
Fair value of plan assets ending balance | 1,747 | 1,499 |
Level 3 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Fair value of plan assets beginning balance | 17 | |
Fair value of plan assets ending balance | 17 | |
Level 3 | Pension Plan Asset | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Fair value of plan assets beginning balance | 230 | |
Purchases, issuances and settlements, net | 94 | (25) |
Fair value of plan assets ending balance | 349 | 230 |
Level 3 | Pension Plan Asset | Guaranteed Annuity Contracts And Real Estate | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Fair value of plan assets beginning balance | 230 | 278 |
Actual return on assets | 25 | (23) |
Fair value of plan assets ending balance | $ 349 | $ 230 |
Employee Benefits - Schedule _3
Employee Benefits - Schedule of Rollforward Changes in Benefit Obligation and Plan Assets (Details) - USD ($) $ in Millions | Aug. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Amounts recognized on the balance sheet: | ||||
Noncurrent liability | $ (411) | $ (390) | ||
Pension Plan Asset | ||||
Change in benefit obligation: | ||||
Benefit obligation beginning balance | 1,892 | 2,034 | ||
Service cost | 28 | 34 | $ 33 | |
Interest cost | 82 | 76 | 80 | |
Plan participants' contributions | 0 | 0 | ||
Plan amendments | 0 | (23) | ||
Actuarial loss (gain) | 264 | (153) | ||
Gross benefits paid | (105) | (76) | ||
Federal subsidy | 0 | 0 | ||
Benefit obligation ending balance | 2,161 | 1,892 | 2,034 | |
Change in plan assets: | ||||
Fair value of plan assets beginning balance | 1,499 | 1,649 | ||
Actual return on assets | 319 | (97) | ||
Employer contributions | 33 | 24 | ||
Plan participants' contributions | 0 | 0 | ||
Benefits paid | (104) | (77) | ||
Fair value of plan assets ending balance | 1,747 | 1,499 | 1,649 | |
Funded status ending balance | (414) | (393) | ||
Amounts recognized on the balance sheet: | ||||
Noncurrent asset | 0 | 0 | ||
Current liability | (3) | (3) | ||
Noncurrent liability | (411) | (390) | ||
Net amount recognized | (414) | (393) | ||
Postretirement Benefit Plan Assets | ||||
Change in benefit obligation: | ||||
Benefit obligation beginning balance | 353 | 614 | ||
Service cost | 4 | 8 | 10 | |
Interest cost | 15 | 20 | 26 | |
Plan participants' contributions | 2 | 2 | ||
Plan amendments | $ (175) | (1) | (174) | |
Actuarial loss (gain) | 25 | (89) | ||
Gross benefits paid | (25) | (29) | ||
Federal subsidy | 1 | 1 | ||
Benefit obligation ending balance | 374 | 353 | 614 | |
Change in plan assets: | ||||
Fair value of plan assets beginning balance | 507 | 576 | ||
Actual return on assets | 51 | (40) | ||
Employer contributions | (2) | (2) | ||
Plan participants' contributions | 2 | 2 | ||
Benefits paid | (26) | (29) | ||
Fair value of plan assets ending balance | 532 | 507 | $ 576 | |
Funded status ending balance | 158 | 154 | ||
Amounts recognized on the balance sheet: | ||||
Noncurrent asset | 159 | 155 | ||
Current liability | 0 | 0 | ||
Noncurrent liability | (1) | (1) | ||
Net amount recognized | $ 158 | $ 154 |
Employee Benefits - Summary of
Employee Benefits - Summary of Accumulated Other Comprehensive Income and Regulatory Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Pension Plan Asset | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss | $ 435 | $ 431 |
Prior service credit | (19) | (22) |
Net amount recognized | 416 | 409 |
Regulatory assets (liabilities) | 375 | 352 |
Accumulated other comprehensive income | 41 | 57 |
Postretirement Benefit Plan Assets | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss | 72 | 83 |
Prior service credit | (257) | (291) |
Net amount recognized | (185) | (208) |
Regulatory assets (liabilities) | (185) | (208) |
Accumulated other comprehensive income | $ 0 | $ 0 |
Employee Benefits - Schedule _4
Employee Benefits - Schedule of Projected Benefit Obligation, Accumulated Benefit Obligation and Fair Value of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Retirement Benefits [Abstract] | ||
Projected benefit obligation | $ 2,161 | $ 1,892 |
Fair value of plan assets | 1,748 | 1,499 |
Accumulated benefit obligation | 2,018 | 1,768 |
Fair value of plan assets | $ 1,748 | $ 1,499 |
Employee Benefits - Schedule _5
Employee Benefits - Schedule of Expected Cash Flow for Pension and Post Retirement Benefit Plans (Details) $ in Millions | Dec. 31, 2019USD ($) |
To plan trusts | Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected employer contributions | $ 38 |
To plan trusts | Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected employer contributions | 0 |
To plan participants | Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected employer contributions | 2 |
To plan participants | Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected employer contributions | $ 0 |
Employee Benefits - Schedule _6
Employee Benefits - Schedule of Expected Benefit Payments (Details) $ in Millions | Dec. 31, 2019USD ($) |
Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | $ 113 |
2021 | 115 |
2022 | 118 |
2023 | 123 |
2024 | 126 |
2025-2029 | 657 |
Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | 27 |
2021 | 27 |
2022 | 27 |
2023 | 27 |
2024 | 27 |
2025-2029 | 131 |
Defined Benefit Plan, Expected Future Prescription Drug Subsidy Receipt [Abstract] | |
2020 | 1 |
2021 | 1 |
2022 | 1 |
2023 | 1 |
2024 | 1 |
2025-2029 | $ 6 |
Employee Benefits - Schedule _7
Employee Benefits - Schedule of Significant Assumptions of Pension and Other Postretirement Benefit Plans (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension Plan Asset | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 3.44% | 4.38% | 3.75% |
Rate of compensation increase | 2.97% | 3.00% | 3.02% |
Discount rate | 4.38% | 3.75% | 4.28% |
Expected return on plan assets | 6.20% | 5.95% | 6.49% |
Rate of compensation increase | 3.00% | 3.02% | 3.07% |
Other Postretirement Benefit Cost | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 3.36% | 4.32% | 3.73% |
Discount rate | 4.32% | 4.23% | 4.26% |
Expected return on plan assets | 3.56% | 4.77% | 5.09% |
Other Postretirement Benefit Cost | Maximum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Health care cost trend rate, benefit obligations, percentage | 6.50% | 6.75% | 7.00% |
Health care cost trend rate, net periodic costs, percentage | 6.75% | 7.00% | 7.00% |
Other Postretirement Benefit Cost | Minimum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Health care cost trend rate, benefit obligations, percentage | 5.00% | 5.00% | 4.50% |
Health care cost trend rate, benefit obligation, year | 2026 | 2026 | 2026 |
Health care cost trend rate, net periodic costs, percentage | 5.00% | 4.50% | 5.00% |
Health care cost trend rate, net periodic costs, year | 2026 | 2026 | 2021 |
Employee Benefits - Schedule _8
Employee Benefits - Schedule of Net Periodic Benefit Cost Components (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other changes in plan assets and benefit obligations recognized in other comprehensive income: | |||
Amortization of actuarial loss | $ (4) | $ (7) | $ (7) |
Pension Plan Asset | |||
Components of net periodic pension benefit cost and other postretirement benefit cost | |||
Service cost | 28 | 34 | 33 |
Interest cost | 82 | 76 | 80 |
Expected return on plan assets | (91) | (97) | (93) |
Amortization of prior service (credit) cost | (3) | 1 | 1 |
Amortization of actuarial loss | 32 | 27 | 34 |
Net periodic pension benefit cost | 48 | 41 | 55 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income: | |||
Current year actuarial (gain) loss | (8) | (60) | (7) |
Amortization of actuarial loss | (4) | (7) | (7) |
Total recognized in other comprehensive income | (12) | (67) | (14) |
Total recognized in net periodic benefit cost and other comprehensive income | 36 | (26) | 41 |
Other Postretirement Benefit Cost | |||
Components of net periodic pension benefit cost and other postretirement benefit cost | |||
Service cost | 4 | 8 | 10 |
Interest cost | 15 | 20 | 26 |
Expected return on plan assets | (18) | (26) | (26) |
Amortization of prior service (credit) cost | (35) | (23) | (18) |
Amortization of actuarial loss | 3 | 3 | 10 |
Net periodic pension benefit cost | $ (31) | $ (18) | $ 2 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Jun. 30, 2015Customer | Jun. 27, 2015 | Jun. 26, 2015 | Jun. 23, 2015Customer | |
Commitments And Contingencies [Line Items] | |||||
Estimated capital expenditures under legal and binding contractual obligations | $ 579 | ||||
Loss contingency, probable loss | 17 | ||||
Dunbar, Virgina | WVAWC | |||||
Commitments And Contingencies [Line Items] | |||||
Number of customers impacted due to failure of main that caused that water outages and low pressure | Customer | 25,000 | ||||
Percentage of impacted customers to which service was restored | 20.00% | 80.00% | |||
Number of customers for whom system was reconfigured to maintain service while final repair was completed | Customer | 3,000 | ||||
Binding Agreement | |||||
Commitments And Contingencies [Line Items] | |||||
Litigation settlement amount awarded to other party, pre tax, net | 126 | ||||
Litigation settlement amount awarded to other party | 5 | ||||
Insurance settlements receivable | 5 | ||||
Binding Agreement | WVAWC | |||||
Commitments And Contingencies [Line Items] | |||||
Litigation settlement amount awarded to other party | 19 | ||||
Maximum | |||||
Commitments And Contingencies [Line Items] | |||||
Loss contingency, possible loss | $ 25 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Future Annual Commitments Related to Minimum Quantities of Purchased Water Having Non-Cancelable Terms (Details) $ in Millions | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 65 |
2021 | 65 |
2022 | 65 |
2023 | 63 |
2024 | 49 |
Thereafter | $ 605 |
Earnings Per Common Share - Rec
Earnings Per Common Share - Reconciliation of Numerator and Denominator for Basic and Diluted Earnings Per Share (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||||||||
Net income attributable to common shareholders | $ 98 | $ 240 | $ 170 | $ 113 | $ 112 | $ 187 | $ 162 | $ 106 | $ 621 | $ 567 | $ 426 |
Weighted average common shares outstanding—Basic (in shares) | 181,000,000 | 180,000,000 | 178,000,000 | ||||||||
Effect of dilutive common stock equivalents (in shares) | 0 | 0 | 1,000,000 | ||||||||
Weighted average common shares outstanding—Diluted (in shares) | 181,000,000 | 180,000,000 | 179,000,000 |
Earnings Per Common Share - Add
Earnings Per Common Share - Additional Information (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Maximum | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share (in Shares) | 1 | 1 | 1 |
Fair Values of Financial Inst_3
Fair Values of Financial Instruments Fair Values of Financial Instruments - Carrying Amounts and Fair Values of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
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 | 8,664 | 7,638 |
Preferred stock with mandatory redemption requirements, fair value | 9 | 9 |
Long-term debt (excluding finance lease obligations), fair value | 9,770 | 7,921 |
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 | 7,689 | 5,760 |
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 | 417 | 433 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, fair value | 9 | 9 |
Long-term debt (excluding finance lease obligations), fair value | $ 1,664 | $ 1,728 |
Fair Values of Financial Inst_4
Fair Values of Financial Instruments - Fair Value Measurements of Assets and Liabilities on Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Restricted funds | $ 31 | $ 29 |
Rabbi trust investments | 17 | 15 |
Deposits | 3 | 3 |
Other investments | 8 | 3 |
Total assets | 59 | 50 |
Liabilities: | ||
Deferred compensation obligations | 21 | 17 |
Mark-to-market derivative liabilities | 14 | |
Total liabilities | 21 | 31 |
Total assets (liabilities) | 38 | 19 |
Level 1 | ||
Assets: | ||
Restricted funds | 31 | 29 |
Rabbi trust investments | 17 | 15 |
Deposits | 3 | 3 |
Other investments | 8 | 3 |
Total assets | 59 | 50 |
Liabilities: | ||
Deferred compensation obligations | 21 | 17 |
Mark-to-market derivative liabilities | 0 | |
Total liabilities | 21 | 17 |
Total assets (liabilities) | 38 | 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 Values of Financial Inst_5
Fair Values of Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Long term restricted funds | $ 1 | $ 1 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease right-of-use assets | $ 103 | |||
Carrying value of finance lease assets | 147 | $ 147 | ||
Future minimum sublease rentals, 2021 | 15 | |||
Future minimum sublease rentals, 2022 | 12 | |||
Future minimum sublease rentals, 2023 | 11 | |||
Future minimum sublease rentals, 2024 | 6 | |||
Operating and financing leases, rent expense, net | 16 | |||
Lease and rental expense | $ 35 | $ 29 | ||
Facilities | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Future minimum sublease rentals, 2021 | 4 | |||
Future minimum sublease rentals, 2022 | 4 | |||
Future minimum sublease rentals, 2023 | 4 | |||
Future minimum sublease rentals, 2024 | $ 4 | |||
Real Property | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease, term of contract | 40 years | |||
Vehicles | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease, term of contract | 7 years | |||
Equipment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease, term of contract | 5 years | |||
Operating and Maintenance Agreement | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Future minimum sublease rentals, 2020 | $ 4 | |||
Future minimum sublease rentals, thereafter | $ 54 | |||
Minimum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease, renewal term | 1 year | |||
Maximum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease, renewal term | 60 years | |||
Utility Plant | Minimum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Lessee, finance lease, term of contract | 30 years | |||
Utility Plant | Maximum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Lessee, finance lease, term of contract | 40 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 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for amounts in lease liabilities | $ 16 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 121 |
Leases - Remaining Lease Term a
Leases - Remaining Lease Term and Discount Rate (Details) | Dec. 31, 2019 |
Weighted-average Remaining Lease Term [Abstract] | |
Finance lease | 6 years |
Operating leases | 19 years |
Weighted-average Discount Rate [Abstract] | |
Finance lease | 12.00% |
Operating leases | 4.00% |
Leases - Future Maturities of L
Leases - Future Maturities of Lease Liabilities (Details) $ in Millions | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 14 |
2021 | 13 |
2022 | 11 |
2023 | 7 |
2024 | 7 |
Thereafter | 100 |
Total lease payments | 152 |
Imputed interest | (53) |
Total | $ 99 |
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) | 12 Months Ended |
Dec. 31, 2019stateSegment | |
Regulated Businesses | |
Segment Reporting Information [Line Items] | |
Number of reportable segment | Segment | 1 |
Market-Based Businesses | |
Segment Reporting Information [Line Items] | |
Number of states in which entity provides water and wastewater services | state | 16 |
Segment Information - Summarize
Segment Information - Summarized Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | $ 902 | $ 1,013 | $ 882 | $ 813 | $ 850 | $ 976 | $ 853 | $ 761 | $ 3,610 | $ 3,440 | $ 3,357 |
Depreciation and amortization | 582 | 545 | 492 | ||||||||
Impairment charge | 0 | 57 | 0 | ||||||||
Total operating expenses, net | 2,440 | 2,338 | 2,104 | ||||||||
Interest, net | (382) | (350) | (342) | ||||||||
Income before income taxes | 833 | 787 | 912 | ||||||||
Provision for income taxes | 212 | 222 | 486 | ||||||||
Net income attributable to common shareholders | 98 | $ 240 | $ 170 | $ 113 | 112 | $ 187 | $ 162 | $ 106 | 621 | 567 | 426 |
Total assets | 22,682 | 21,223 | 22,682 | 21,223 | 19,482 | ||||||
Cash paid for capital expenditures | 1,654 | 1,586 | 1,434 | ||||||||
Regulated Businesses | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 3,094 | ||||||||||
Market-Based Businesses | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 539 | ||||||||||
Operating Segments | Regulated Businesses | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 3,094 | 2,984 | 2,958 | ||||||||
Depreciation and amortization | 529 | 500 | 462 | ||||||||
Impairment charge | 0 | ||||||||||
Total operating expenses, net | 1,964 | 1,912 | 1,766 | ||||||||
Interest, net | (295) | (280) | (268) | ||||||||
Income before income taxes | 869 | 826 | 925 | ||||||||
Provision for income taxes | 215 | 224 | 366 | ||||||||
Net income attributable to common shareholders | 654 | 602 | 559 | ||||||||
Total assets | 20,318 | 18,680 | 20,318 | 18,680 | 17,602 | ||||||
Cash paid for capital expenditures | 1,627 | 1,477 | 1,316 | ||||||||
Operating Segments | Market-Based Businesses | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 539 | 476 | 422 | ||||||||
Depreciation and amortization | 37 | 29 | 18 | ||||||||
Impairment charge | 57 | ||||||||||
Total operating expenses, net | 480 | 441 | 360 | ||||||||
Interest, net | 5 | 4 | 3 | ||||||||
Income before income taxes | 66 | 41 | 66 | ||||||||
Provision for income taxes | 20 | 11 | 28 | ||||||||
Net income attributable to common shareholders | 46 | 32 | 38 | ||||||||
Total assets | 1,008 | 999 | 1,008 | 999 | 599 | ||||||
Cash paid for capital expenditures | 13 | 13 | 18 | ||||||||
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | (23) | (20) | (23) | ||||||||
Depreciation and amortization | 16 | 16 | 12 | ||||||||
Impairment charge | 0 | ||||||||||
Total operating expenses, net | (4) | (15) | (22) | ||||||||
Interest, net | (92) | (74) | (77) | ||||||||
Income before income taxes | (102) | (80) | (79) | ||||||||
Provision for income taxes | (23) | (13) | 92 | ||||||||
Net income attributable to common shareholders | (79) | (67) | (171) | ||||||||
Total assets | $ 1,356 | $ 1,544 | 1,356 | 1,544 | 1,281 | ||||||
Cash paid for capital expenditures | $ 14 | $ 96 | $ 100 |
Unaudited Quarterly Data - Sche
Unaudited Quarterly Data - Schedule Of Unaudited Quarterly Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||||
Quarterly Financial Data [Abstract] | ||||||||||||||
Operating revenues | $ 902 | $ 1,013 | $ 882 | $ 813 | $ 850 | $ 976 | $ 853 | $ 761 | $ 3,610 | $ 3,440 | $ 3,357 | |||
Operating income | 224 | 406 | 302 | 238 | 248 | 335 | 302 | 217 | 1,170 | 1,102 | 1,253 | |||
Net income attributable to common shareholders | $ 98 | $ 240 | $ 170 | $ 113 | $ 112 | $ 187 | $ 162 | $ 106 | $ 621 | $ 567 | $ 426 | |||
Basic earnings per share: | ||||||||||||||
Net income attributable to common shareholders (USD per share) | $ 0.54 | $ 1.33 | $ 0.94 | $ 0.62 | $ 0.62 | $ 1.04 | $ 0.90 | $ 0.60 | $ 3.44 | [1] | $ 3.16 | [1] | $ 2.39 | [1] |
Diluted earnings per share: | ||||||||||||||
Net income attributable to common shareholders (USD per share) | $ 0.54 | $ 1.33 | $ 0.94 | $ 0.62 | $ 0.62 | $ 1.04 | $ 0.91 | $ 0.59 | $ 3.43 | [1] | $ 3.15 | [1] | $ 2.38 | [1] |
[1] | Amounts may not calculate due to rounding. |
Uncategorized Items - a12312019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 21,000,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (2,000,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 20,000,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (2,000,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 20,000,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 21,000,000 |