Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-34028 | |
Entity Registrant Name | AMERICAN WATER WORKS COMPANY, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 51-0063696 | |
Entity Address, Address Line One | 1 Water Street | |
Entity Address, City or Town | Camden | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 08102-1658 | |
City Area Code | 856 | |
Local Phone Number | 955-4001 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | AWK | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 181,204,068 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001410636 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
ASSETS | ||
Property, plant and equipment | $ 24,745 | $ 23,941 |
Accumulated depreciation | (5,801) | (5,709) |
Property, plant and equipment, net | 18,944 | 18,232 |
Current assets: | ||
Cash and cash equivalents | 569 | 60 |
Restricted funds | 36 | 31 |
Accounts receivable, net of allowance for uncollectible accounts of $43 and $41, respectively | 298 | 294 |
Unbilled revenues | 207 | 172 |
Materials and supplies | 51 | 44 |
Assets held for sale | 598 | 566 |
Other | 137 | 118 |
Total current assets | 1,896 | 1,285 |
Regulatory and other long-term assets: | ||
Regulatory assets | 1,144 | 1,128 |
Operating lease right-of-use assets | 99 | 103 |
Goodwill | 1,506 | 1,501 |
Postretirement benefit assets | 158 | 159 |
Intangible assets | 61 | 67 |
Other | 201 | 207 |
Total regulatory and other long-term assets | 3,169 | 3,165 |
Total assets | 24,009 | 22,682 |
Capitalization: | ||
Common stock ($0.01 par value; 500,000,000 shares authorized; 186,369,041 and 185,903,727 shares issued, respectively) | 2 | 2 |
Paid-in-capital | 6,730 | 6,700 |
Accumulated deficit | (7) | (207) |
Accumulated other comprehensive loss | (39) | (36) |
Treasury stock, at cost (5,167,871 and 5,090,855 shares, respectively) | (348) | (338) |
Total common shareholders' equity | 6,338 | 6,121 |
Long-term debt | 9,589 | 8,639 |
Redeemable preferred stock at redemption value | 4 | 5 |
Total long-term debt | 9,593 | 8,644 |
Total capitalization | 15,931 | 14,765 |
Current liabilities: | ||
Short-term debt | 920 | 786 |
Current portion of long-term debt | 69 | 28 |
Accounts payable | 169 | 203 |
Accrued liabilities | 512 | 596 |
Accrued taxes | 58 | 46 |
Accrued interest | 90 | 84 |
Liabilities related to assets held for sale | 133 | 128 |
Other | 162 | 174 |
Total current liabilities | 2,113 | 2,045 |
Regulatory and other long-term liabilities: | ||
Advances for construction | 260 | 240 |
Deferred income taxes and investment tax credits | 1,980 | 1,893 |
Regulatory liabilities | 1,786 | 1,806 |
Operating lease liabilities | 84 | 89 |
Accrued pension expense | 397 | 411 |
Other | 75 | 78 |
Total regulatory and other long-term liabilities | 4,582 | 4,517 |
Contributions in aid of construction | 1,383 | 1,355 |
Commitments and contingencies (See Note 11) | ||
Total capitalization and liabilities | $ 24,009 | $ 22,682 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for uncollectible accounts | $ 43 | $ 41 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 186,369,041 | 185,903,727 |
Treasury Stock, shares (in shares) | 5,167,871 | 5,090,855 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Income Statement [Abstract] | |||||
Operating revenues | $ 931 | $ 882 | $ 1,775 | $ 1,695 | |
Operating expenses: | |||||
Operation and maintenance | 391 | 372 | 774 | 737 | |
Depreciation and amortization | 152 | 142 | 297 | 286 | |
General taxes | 75 | 72 | 152 | 141 | |
(Gain) on asset dispositions and purchases | 0 | (6) | 0 | (9) | |
Total operating expenses, net | 618 | 580 | 1,223 | 1,155 | |
Operating income | 313 | 302 | 552 | 540 | |
Other income (expense): | |||||
Interest, net | (101) | (94) | (197) | (187) | |
Non-operating benefit costs, net | 12 | 4 | 25 | 8 | |
Other, net | 8 | 15 | 11 | 18 | |
Total other income (expense) | (81) | (75) | (161) | (161) | |
Income before income taxes | 232 | 227 | 391 | 379 | |
Provision for income taxes | 56 | 57 | 91 | 96 | |
Net income attributable to common shareholders | $ 176 | $ 170 | $ 300 | $ 283 | |
Basic earnings per share: | |||||
Net income attributable to common shareholders (dollars per share) | $ 0.97 | $ 0.94 | $ 1.66 | $ 1.56 | |
Diluted earnings per share: | |||||
Net income attributable to common shareholders (dollars per share) | [1] | $ 0.97 | $ 0.94 | $ 1.65 | $ 1.56 |
Weighted-average common shares outstanding: | |||||
Basic (shares) | 181 | 181 | 181 | 181 | |
Diluted (shares) | 181 | 181 | 181 | 181 | |
[1] | Amounts may not calculate due to rounding. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income attributable to common shareholders | $ 176 | $ 170 | $ 300 | $ 283 |
Other comprehensive income (loss), net of tax: | ||||
Defined benefit pension plan actuarial loss, net of tax of $0 and $1 for the three months ended June 30, 2020 and 2019, respectively and $0 and $1 for the six months ended June 30, 2020 and 2019, respectively | 0 | 0 | 1 | 1 |
Foreign currency translation adjustment | 0 | (1) | 0 | (1) |
Unrealized gain (loss) on cash flow hedges, net of tax of $1 and $1 for the three months ended June 30, 2020 and 2019, respectively and $(1) and $(5) for the six months ended June 30, 2020 and 2019, respectively | 2 | 1 | (4) | (13) |
Net other comprehensive income (loss) | 2 | 0 | (3) | (13) |
Comprehensive income attributable to common shareholders | $ 178 | $ 170 | $ 297 | $ 270 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Actuarial (gain) loss, tax | $ 0 | $ 1 | $ 0 | $ 1 |
Unrealized gain (loss) on cash flow hedges, tax | $ 1 | $ 1 | $ (1) | $ (5) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 300 | $ 283 |
Adjustments to reconcile to net cash flows provided by operating activities: | ||
Depreciation and amortization | 297 | 286 |
Deferred income taxes and amortization of investment tax credits | 96 | 85 |
Provision for losses on accounts receivable | 14 | 10 |
(Gain) on asset dispositions and purchases | 0 | (9) |
Pension and non-pension postretirement benefits | (4) | 9 |
Other non-cash, net | (40) | (46) |
Changes in assets and liabilities: | ||
Receivables and unbilled revenues | (54) | (40) |
Pension and postretirement benefit contributions | (22) | (14) |
Accounts payable and accrued liabilities | (28) | (47) |
Other assets and liabilities, net | (28) | (37) |
Net cash provided by operating activities | 531 | 480 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (870) | (712) |
Acquisitions, net of cash acquired | (40) | (80) |
Proceeds from sale of assets | 2 | 16 |
Removal costs from property, plant and equipment retirements, net | (50) | (41) |
Net cash used in investing activities | (958) | (817) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from long-term debt | 1,163 | 1,184 |
Repayments of long-term debt | (166) | (146) |
Proceeds from term loan | 500 | 0 |
Net short-term borrowings with maturities less than three months | (367) | (568) |
Proceeds from issuances of employee stock plans and direct stock purchase plan, net of taxes paid of $16 and $9 for the six months ended June 30, 2020 and 2019, respectively | 2 | 6 |
Advances and contributions for construction, net of refunds of $15 and $17 for the six months ended June 30, 2020 and 2019, respectively | 11 | 9 |
Debt issuance costs | (12) | (11) |
Dividends paid | (190) | (173) |
Anti-dilutive share repurchases | 0 | (36) |
Net cash provided by financing activities | 941 | 265 |
Net increase (decrease) in cash, cash equivalents and restricted funds | 514 | (72) |
Cash, cash equivalents and restricted funds at beginning of period | 91 | 159 |
Cash, cash equivalents and restricted funds at end of period | 605 | 87 |
Non-cash investing activity: | ||
Capital expenditures acquired on account but unpaid as of the end of period | $ 250 | $ 194 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Income taxes paid on proceeds from issuance of employee stock plans and direct stock purchase plan | $ 16 | $ 9 |
Advances and contributions for construction, refunds | $ 15 | $ 17 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative effect of change in accounting principle | $ (2) | $ (2) | |||||
Beginning balance (in shares) at Dec. 31, 2018 | 185.4 | (4.7) | |||||
Beginning balance at Dec. 31, 2018 | 5,864 | $ 2 | $ 6,657 | (464) | $ (34) | $ (297) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to common shareholders | 113 | 113 | |||||
Common stock issuances (in shares) | [1] | 0.2 | (0.1) | ||||
Common stock issuances | [1] | 6 | 11 | $ (5) | |||
Repurchases of common stock (in shares) | (0.3) | ||||||
Repurchases of common stock | (36) | $ (36) | |||||
Net other comprehensive income (loss) | (13) | (13) | |||||
Ending balance (in shares) at Mar. 31, 2019 | 185.6 | (5.1) | |||||
Ending balance at Mar. 31, 2019 | 5,932 | $ 2 | 6,668 | (353) | (47) | $ (338) | |
Beginning balance (in shares) at Dec. 31, 2018 | 185.4 | (4.7) | |||||
Beginning balance at Dec. 31, 2018 | 5,864 | $ 2 | 6,657 | (464) | (34) | $ (297) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to common shareholders | 283 | ||||||
Net other comprehensive income (loss) | (13) | ||||||
Ending balance (in shares) at Jun. 30, 2019 | 185.7 | (5.1) | |||||
Ending balance at Jun. 30, 2019 | 6,027 | $ 2 | 6,683 | (273) | (47) | $ (338) | |
Beginning balance (in shares) at Mar. 31, 2019 | 185.6 | (5.1) | |||||
Beginning balance at Mar. 31, 2019 | 5,932 | $ 2 | 6,668 | (353) | (47) | $ (338) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to common shareholders | 170 | 170 | |||||
Common stock issuances (in shares) | [1] | 0.1 | |||||
Common stock issuances | [1] | 15 | 15 | ||||
Net other comprehensive income (loss) | 0 | ||||||
Dividends | (90) | (90) | |||||
Ending balance (in shares) at Jun. 30, 2019 | 185.7 | (5.1) | |||||
Ending balance at Jun. 30, 2019 | 6,027 | $ 2 | 6,683 | (273) | (47) | $ (338) | |
Beginning balance (in shares) at Dec. 31, 2019 | 185.9 | (5.1) | |||||
Beginning balance at Dec. 31, 2019 | 6,121 | $ 2 | 6,700 | (207) | (36) | $ (338) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to common shareholders | 124 | 124 | |||||
Common stock issuances (in shares) | [1] | 0.3 | (0.1) | ||||
Common stock issuances | [1] | 3 | 13 | $ (10) | |||
Net other comprehensive income (loss) | (5) | (5) | |||||
Ending balance (in shares) at Mar. 31, 2020 | 186.2 | (5.2) | |||||
Ending balance at Mar. 31, 2020 | 6,243 | $ 2 | 6,713 | (83) | (41) | $ (348) | |
Beginning balance (in shares) at Dec. 31, 2019 | 185.9 | (5.1) | |||||
Beginning balance at Dec. 31, 2019 | 6,121 | $ 2 | 6,700 | (207) | (36) | $ (338) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to common shareholders | 300 | ||||||
Net other comprehensive income (loss) | (3) | ||||||
Ending balance (in shares) at Jun. 30, 2020 | 186.4 | (5.2) | |||||
Ending balance at Jun. 30, 2020 | 6,338 | $ 2 | 6,730 | (7) | (39) | $ (348) | |
Beginning balance (in shares) at Mar. 31, 2020 | 186.2 | (5.2) | |||||
Beginning balance at Mar. 31, 2020 | 6,243 | $ 2 | 6,713 | (83) | (41) | $ (348) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to common shareholders | 176 | 176 | |||||
Common stock issuances (in shares) | 0.2 | ||||||
Common stock issuances | 17 | 17 | |||||
Net other comprehensive income (loss) | 2 | 2 | |||||
Dividends | (100) | (100) | |||||
Ending balance (in shares) at Jun. 30, 2020 | 186.4 | (5.2) | |||||
Ending balance at Jun. 30, 2020 | $ 6,338 | $ 2 | $ 6,730 | $ (7) | $ (39) | $ (348) | |
[1] | Includes stock-based compensation, employee stock purchase plan and direct stock reinvestment and purchase plan activity. |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | Jun. 02, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared per common share (USD per share) | $ 0.55 | $ 0.55 | $ 0.50 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1: Basis of Presentation The unaudited Consolidated Financial Statements included in this report include the accounts of American Water Works Company, Inc. and all of its subsidiaries (the “Company” or “American Water”), in which a controlling interest is maintained after the elimination of intercompany balances and transactions. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting, and the rules and regulations for reporting on Quarterly Reports on Form 10-Q (“Form 10-Q”). Accordingly, they do not contain certain information and disclosures required by GAAP for comprehensive financial statements. In the opinion of management, all adjustments necessary for a fair statement of the financial position as of June 30, 2020, and the results of operations and cash flows for all periods presented, have been made. All adjustments are of a normal, recurring nature, except as otherwise disclosed. The unaudited Consolidated Financial Statements and Notes included in this report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“Form 10-K”), which provides a more complete discussion of the Company’s accounting policies, financial position, operating results and other matters. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the year, primarily due to the seasonality of the Company’s operations. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Significant Accounting Policies | Note 2: Significant Accounting Policies New Accounting Standards Presented in the table below are new accounting standards that were adopted by the Company in 2020: Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements Measurement of Credit Losses on Financial Instruments Updated the accounting guidance on reporting credit losses for financial assets held at amortized cost basis and available-for-sale debt securities. Under this guidance, expected credit losses are required to be measured based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount of financial assets. Also, this guidance requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a direct write-down. January 1, 2020 Modified retrospective The standard did not have a material impact on the Consolidated Financial Statements. Changes to the Disclosure Requirements for Fair Value Measurement Updated the disclosure requirements for fair value measurement. The guidance removes the requirements to disclose transfers between Level 1 and Level 2 measurements, the timing of transfers between levels, and the valuation processes for Level 3 measurements. Disclosure of transfers into and out of Level 3 measurements will be required. The guidance adds disclosure requirements for the change in unrealized gains and losses in other comprehensive income for recurring Level 3 measurements, as well as the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. January 1, 2020 Prospective for added disclosures and for the narrative description of measurement uncertainty; retrospective for all other amendments. The standard did not have a material impact on the Consolidated Financial Statements. Facilitation of the Effects of Reference Rate Reform on Financial Reporting Provided optional guidance for a limited time to ease the potential accounting burden associated with the transition from LIBOR. The guidance contains optional expedients and exceptions for contract modifications, hedging relationships, and other transactions that reference LIBOR or other reference rates expected to be discontinued. The expedients elected must be applied for all eligible contracts or transactions, with the exception of hedging relationships, which can be applied on an individual basis March 12, 2020 through December 31, 2022 Prospective for contract modifications and hedging relationships; applied as of January 1, 2020. The standard did not have a material impact on the Consolidated Financial Statements. Presented in the table below are recently issued accounting standards that have not yet been adopted by the Company as of June 30, 2020: Standard Description Date of Adoption Application Estimated Effect on the Consolidated Financial Statements Simplifying the Accounting for Income Taxes The guidance removes exceptions related to the incremental approach for intraperiod tax allocation, the requirement to recognize a deferred tax liability for changes in ownership of a foreign subsidiary or equity method investment, and the general methodology for calculating income taxes in an interim period when the year-to-date loss exceeds the anticipated loss. The guidance adds requirements to reflect changes to tax laws or rates in the annual effective tax rate computation in the interim period in which the changes were enacted, to recognize franchise or other similar taxes that are partially based on income as an income-based tax and any incremental amounts as non-income-based tax, and to evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction. January 1, 2021; early adoption permitted Modified retrospective for amendments related to changes in ownership of a foreign subsidiary or equity method investment; Modified retrospective or retrospective for amendments related to taxes partially based on income; Prospective for all other amendments. The Company is evaluating any impact on its Consolidated Financial Statements, as well as the timing of adoption. Cash, Cash Equivalents and Restricted Funds Presented in the table below is a reconciliation of the cash and cash equivalents and restricted funds amounts as presented on the Consolidated Balance Sheets to the sum of such amounts presented on the Consolidated Statements of Cash Flows for the periods ended June 30: 2020 2019 Cash and cash equivalents $ 569 $ 64 Restricted funds 36 22 Restricted funds included in other long-term assets — 1 Cash, cash equivalents and restricted funds as presented on the Consolidated Statements of Cash Flows $ 605 $ 87 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, previous loss history, current economic and societal conditions and reasonable and supportable forecasts that affect the collectability of receivables from customers. The Company generally writes off accounts when they become uncollectible or are over a certain number of days outstanding. Presented in the table below are the changes in the allowance for uncollectible accounts for the periods ended June 30: 2020 2019 Balance as of January 1 $ (41) $ (45) Amounts charged to expense (14) (10) Amounts written off 10 13 Less: Allowance for uncollectible accounts included in assets held for sale (a) 2 — Balance as of June 30 $ (43) $ (42) (a) This portion of the allowance for uncollectible accounts is related to the pending transactions contemplated by the Stock Purchase Agreement between the Company and the Company’s New York subsidiary and Liberty Utilities Co., and is included in assets held for sale on the Consolidated Balance Sheets. See Note 5—Acquisitions and Divestitures for additional information. Reclassifications Certain reclassifications have been made to prior periods in the Consolidated Financial Statements and Notes to conform to the current presentation. |
Impact of Novel Coronavirus (CO
Impact of Novel Coronavirus (COVID-19) Pandemic | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Impact of Novel Coronavirus (COVID-19) Pandemic | Note 3: Impact of Novel Coronavirus (COVID-19) Pandemic American Water continues to monitor the global outbreak of the current novel coronavirus (“COVID-19”) pandemic. To date, the Company has experienced COVID-19 financial impacts, including an increase in uncollectible accounts expense, additional debt costs, and certain incremental operation and maintenance (“O&M”) expenses. The Company has also experienced decreased revenues as a result of the waiver of late fees, foregone reconnect fees, and lower base revenues, primarily from the Company’s commercial and industrial customers, partially offset by increased revenues from the Company’s residential customers. The Company requested authorization for deferred accounting of COVID-19 financial impacts in all 14 regulatory jurisdictions in which it operates. As of August 5, 2020, American Water has commission orders authorizing deferred accounting for COVID-19 financial impacts in ten of 14 jurisdictions, with four requests pending. In addition to approving deferred accounting, two regulatory jurisdictions have also approved cost recovery mechanisms for COVID-19 financial impacts, as presented in the table below: Commission Orders Description States Allowed Regulatory assets Allows the Company to establish regulatory assets to record certain financial impacts related to the COVID-19 pandemic. CA, HI, IA, IL, IN, MD, NJ, PA, VA, WV Cost recovery mechanisms California’s Catastrophic Event Memorandum Account allows the Company to track and recover certain financial impacts related to the COVID-19 pandemic. Illinois has authorized cost recovery of COVID-19 financial impacts through a special purpose rider over a 24-month period. CA, IL Consistent with these regulatory orders, the Company recorded $14 million in regulatory assets and $2 million of regulatory liabilities for financial impacts related to the COVID-19 pandemic on the Consolidated Balance Sheets as of June 30, 2020. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 4: Revenue Recognition Disaggregated Revenues The Company’s primary business involves the ownership of utilities that provide water and wastewater services to residential, commercial, industrial, public authority, fire service and sale for resale customers, collectively presented as the “Regulated Businesses.” The Company also operates market-based businesses that provide complementary services to residential and smaller commercial customers, the U.S. government on military installations, as well as municipalities, utilities and industrial customers, collectively presented as the “Market-Based Businesses.” Presented in the table below are operating revenues disaggregated for the three months ended June 30, 2020: Revenues from Contracts with Customers Other Revenues Not from Contracts with Customers (a) Total Operating Revenues Regulated Businesses: Water services: Residential $ 474 $ — $ 474 Commercial 142 — 142 Fire service 36 — 36 Industrial 31 — 31 Public and other 41 — 41 Total water services 724 — 724 Wastewater services: Residential 33 — 33 Commercial 9 — 9 Industrial — — — Public and other 4 — 4 Total wastewater services 46 — 46 Miscellaneous utility charges 10 — 10 Alternative revenue programs — 21 21 Lease contract revenue — 2 2 Total Regulated Businesses 780 23 803 Market-Based Businesses 132 — 132 Other (4) — (4) Total operating revenues $ 908 $ 23 $ 931 (a) Includes revenues associated with provisional rates, alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of Accounting Standards Codification Topic 606, Revenue From Contracts With Customers (“ASC 606”), and accounted for under other existing GAAP. Presented in the table below are operating revenues disaggregated for the six months ended June 30, 2020: Revenues from Contracts with Customers Other Revenues Not from Contracts with Customers (a) Total Operating Revenues Regulated Businesses: Water services: Residential $ 873 $ — $ 873 Commercial 284 — 284 Fire service 73 — 73 Industrial 63 — 63 Public and other 90 — 90 Total water services 1,383 — 1,383 Wastewater services: Residential 64 — 64 Commercial 17 — 17 Industrial 1 — 1 Public and other 7 — 7 Total wastewater services 89 — 89 Miscellaneous utility charges 18 — 18 Alternative revenue programs — 28 28 Lease contract revenue — 5 5 Total Regulated Businesses 1,490 33 1,523 Market-Based Businesses 260 — 260 Other (8) — (8) Total operating revenues $ 1,742 $ 33 $ 1,775 (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 of $26 million and $13 million are included in unbilled revenues on the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, respectively. There were $29 million of contract assets added during the six months ended June 30, 2020, and $16 million of contract assets were transferred to accounts receivable during the same period. Contract liabilities of $37 million and $27 million are included in other current liabilities on the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, respectively. There were $66 million of contract liabilities added during the six months ended June 30, 2020, and $56 million of contract liabilities were recognized as revenue during the same period. 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 June 30, 2020, 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 $5.5 billion as of June 30, 2020, 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 $493 million as of June 30, 2020, as measured by estimated remaining contract revenue. Some of the Company’s long-term contracts to operate and maintain the federal government’s, a municipality’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 | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Note 5: Acquisitions and Divestitures During the six months ended June 30, 2020, the Company closed on the acquisition of 12 regulated water and wastewater systems for a total aggregate purchase price of $40 million, including the acquisition of the water system assets of the California based Fruitridge Vista Water Company, on February 4, 2020. Assets acquired from these acquisitions, principally utility plant, totaled $57 million, and liabilities assumed totaled $24 million, including $15 million of contributions in aid of construction and assumed debt of $6 million. The Company recorded additional goodwill of $7 million associated with two of its acquisitions, which is reported in its Regulated Businesses segment. Several of these acquisitions were accounted for as business combinations, as the Company continues to grow its business through regulated acquisitions. The preliminary purchase price allocations related to acquisitions accounted for as business combinations will be finalized once the valuation of assets acquired has been completed, no later than one year after their acquisition date. 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 regulated 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 the obligations of Liberty under the Stock Purchase Agreement. The Stock Purchase is subject to various conditions, including obtaining regulatory approval and satisfying or waiving other closing conditions. The Stock Purchase Agreement may be terminated by either party if the Stock Purchase is not completed by June 30, 2021, subject to extension for up to six months if all of the conditions to closing have been met, other than obtaining regulatory approvals. Liberty may also terminate the Stock Purchase Agreement 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. Progress toward completion of the transaction continues, and subject to such closing conditions and no exercise of termination rights, the Company estimates that the Stock Purchase will be completed in 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 June 30, 2020. 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 June 30, 2020: June 30, 2020 Current assets $ 15 Property, plant and equipment 479 Regulatory assets 59 Goodwill 39 Other assets 6 Assets held for sale $ 598 Current liabilities 21 Deferred income taxes 70 Regulatory liabilities 37 Other liabilities 5 Liabilities related to assets held for sale $ 133 |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Note 6: Shareholders' Equity Accumulated Other Comprehensive Loss Presented in the table below are the changes in accumulated other comprehensive loss by component, net of tax, for the six months ended June 30, 2020 and 2019, respectively: Defined Benefit Pension Plans Foreign Currency Translation Gain (Loss) on Cash Flow Hedges Accumulated Other Comprehensive Loss Employee Benefit Plan Funded Status Amortization of Prior Service Cost Amortization of Actuarial Loss Balance as of December 31, 2019 $ (94) $ 1 $ 60 $ — $ (3) $ (36) Other comprehensive loss before reclassifications — — — — (4) (4) Amounts reclassified from accumulated other comprehensive loss — — 1 — — 1 Net other comprehensive income (loss) — — 1 — (4) (3) Balance as of June 30, 2020 $ (94) $ 1 $ 61 $ — $ (7) $ (39) Balance as of December 31, 2018 $ (102) $ 1 $ 56 $ 1 $ 10 $ (34) Other comprehensive loss before reclassifications — — — — (13) (13) Amounts reclassified from accumulated other comprehensive loss — — 1 (1) — — Net other comprehensive income (loss) — — 1 (1) (13) (13) Balance as of June 30, 2019 $ (102) $ 1 $ 57 $ — $ (3) $ (47) 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. 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 On June 2, 2020, the Company paid a quarterly cash dividend of $0.55 per share to shareholders of record as of May 12, 2020. On July 29, 2020, the Company’s Board of Directors declared a quarterly cash dividend payment of $0.55 per share, payable on September 1, 2020 to shareholders of record as of August 12, 2020. Future dividends, when and as declared at the discretion of the Board of Directors, will be dependent upon future earnings and cash flows, compliance with various regulatory, financial and legal requirements, and other factors. See Note 9—Shareholders' Equity in the Notes to Consolidated Financial Statements in the Company’s Form 10-K for additional information regarding the payment of dividends on the Company’s common stock. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 7: Long-Term Debt On April 14, 2020, American Water Capital Corp. (“AWCC”) completed a $1.0 billion debt offering which included the sale of $500 million aggregate principal amount of its 2.80% senior notes due 2030 and $500 million aggregate principal amount of its 3.45% senior notes due 2050. At the closing of the offering, AWCC received, after deduction of underwriting discounts and before deduction of offering expenses, net proceeds of $989 million. AWCC used the net proceeds of this offering: (i) to lend funds to parent company and its regulated subsidiaries; (ii) to fund sinking fund payments for, and to repay at maturity, $28 million in aggregate principal amount of outstanding long-term debt of AWCC and certain of the Company’s regulated subsidiaries; (iii) to repay AWCC’s commercial paper obligations and short-term indebtedness under AWCC’s $2.25 billion unsecured revolving credit facility; and (iv) for general corporate purposes. During March 2020, the Company entered into four 10-year treasury lock agreements, each with a notional amount of $100 million, to reduce interest rate exposure on debt, which was subsequently issued on April 14, 2020. These treasury lock agreements had an average fixed rate of 0.94%. The Company designated these treasury lock agreements as cash flow hedges, with their fair value recorded in accumulated other comprehensive gain or loss. On April 8, 2020 the Company terminated these four treasury lock agreements with an aggregate notional amount of $400 million, realizing a net loss of $6 million, to be amortized through interest, net over a 10 year period, in accordance with the terms of the $1.0 billion new debt issued on April 14, 2020. No ineffectiveness was recognized on hedging instruments for the three and six months ended June 30, 2020 and 2019. In addition to the senior notes issued by AWCC as described above, during the six months ended June 30, 2020, the Company’s regulated subsidiaries issued $163 million of senior notes, private activity bonds and government funded debt with rates ranging from 0.00% to 5.00%, maturing in 2021 through 2048. During the six months ended June 30, 2020, AWCC, along with the Company’s regulated subsidiaries, retired or paid at maturity $166 million of various long-term debt with rates ranging from 0.00% to 12.25%, maturing in 2020 through 2048. |
Short-Term Debt
Short-Term Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Short-Term Debt | Note 8: Short-Term Debt As a result of the COVID-19 pandemic and to ensure adequate liquidity, on March 20, 2020, AWCC entered into a Term Loan Credit Agreement, by and among American Water, AWCC and the lenders party thereto, which provides for a term loan facility of up to $750 million (the “Term Loan Facility”). On March 20, 2020, AWCC borrowed $500 million under the Term Loan Facility, the proceeds of which were used for general corporate purposes of AWCC and American Water, and to provide additional liquidity. The Term Loan Facility allowed for a single additional borrowing of up to $250 million, which expired unused on June 19, 2020. The Term Loan Facility commitments terminate on March 19, 2021. AWCC may from time to time prepay all or a portion of amounts due under the Term Loan Facility without any premium or penalty. Borrowings under the Term Loan Facility bear interest at a variable annual rate based on LIBOR, plus a margin of 0.80%. The credit agreement for the Term Loan Facility contains the same affirmative and negative covenants and events of default as under AWCC’s $2.25 billion revolving credit facility. As of June 30, 2020, $500 million of principal was outstanding under the Term Loan Facility. On April 1, 2020, 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, 2024 to March 21, 2025. As of June 30, 2020, AWCC had no outstanding borrowings and $76 million of outstanding letters of credit under the revolving credit facility, and $420 million of outstanding commercial paper, with $1.75 billion available to fulfill short-term liquidity needs and to issue letters of credit. During the six months ended June 30, 2020, the Company drew down and subsequently paid off $650 million of borrowings under the revolving credit facility. The weighted-average interest rate on AWCC short-term borrowings outstanding, including $500 million of principal outstanding under the Term Loan Facility as of June 30, 2020, was approximately 1.06% and 1.86% at June 30, 2020 and December 31, 2019, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9: Income Taxes The Company’s effective income tax rate was 24.1% and 25.1% for the three months ended June 30, 2020 and 2019, respectively and 23.3% and 25.3% for the six months ended June 30, 2020 and 2019, respectively. The decrease in the Company’s effective income tax rate for the three months ended June 30, 2020 was primarily due to the amortization of the excess accumulated deferred income taxes (“EADIT”) resulting from the Tax Cuts and Jobs Act (the “TCJA”), which began in the second quarter of 2019 . The decrease in the Company’s effective income tax rate for the six months ended June 30, 2020 was primarily due to the amortization of the EADIT resulting from the TCJA, and an increase in stock based compensation benefits. |
Pension and Other Post-Retireme
Pension and Other Post-Retirement Benefits | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits | Note 10: Pension and Other Postretirement Benefits Presented in the table below are the components of net periodic benefit cost (credit): For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Components of net periodic pension benefit cost: Service cost $ 8 $ 7 $ 16 $ 14 Interest cost 18 21 37 41 Expected return on plan assets (28) (23) (56) (45) Amortization of prior service credit (1) (1) (2) (2) Amortization of actuarial loss 8 8 16 16 Net periodic pension benefit cost before settlements 5 12 11 24 Settlements (a) 1 — 1 — Net periodic pension benefit cost $ 6 $ 12 $ 12 $ 24 Components of net periodic other postretirement benefit credit: Service cost $ 1 $ 1 $ 2 $ 2 Interest cost 3 4 6 7 Expected return on plan assets (5) (5) (9) (9) Amortization of prior service credit (8) (9) (16) (17) Amortization of actuarial loss — 1 1 2 Net periodic other postretirement benefit credit $ (9) $ (8) $ (16) $ (15) (a) Due to the amount of lump sum payment distributions from the Company’s New York Water Service Corporation Pension Plan, a settlement charge of $1 million was recorded during the three and six months ended June 30, 2020. There were no settlement charges recorded during the three and six months ended June 30, 2019. In accordance with existing regulatory accounting treatment, the Company has maintained the settlement charge in regulatory assets. The amount is being amortized in accordance with existing regulatory practice. The Company contributed $12 million and $22 million for the funding of its defined benefit pension plans for the three and six months ended June 30, 2020, respectively, and contributed $7 million and $14 million for the funding of its defined benefit pension plans for the three and six months ended June 30, 2019, respectively. The Company made no contributions for the funding of its other postretirement benefit plans for each of the three and six months ended June 30, 2020 and 2019. The Company expects to make pension contributions to the plan trusts of up to $17 million during the remainder of 2020. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11: Commitments and Contingencies Contingencies The Company is routinely involved in legal actions incident to the normal conduct of its business. As of June 30, 2020, the Company has accrued approximatel y $8 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 $2 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 11—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 (collectively, the “West Virginia-American Water Defendants”) did not admit, and will not admit, any fault or liability for any of the allegations made by the West Virginia Plaintiffs in any of the actions that were resolved. 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 June 30, 2020, $0.5 million of the aggregate Settlement amount of $126 million has been reflected in accrued liabilities, and $0.5 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 June 30, 2020 reflects reductions in the liability and appropriate reductions to the offsetting insurance receivable reflected in other current assets, associated with payments made to the Settlement fund, the receipt of a determination by the Settlement fund’s appeal adjudicator on all remaining medical claims and the calculation of remaining attorneys’ fees and claims administration costs. 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 was held on March 11, 2020, followed by a status conference on April 7, 2020. On June 11, 2020, the court ruled that it would partially grant the Jeffries plaintiffs’ motion for certification of an issues class and would deny the request for certification of a class to determine a punitive damages multiplier for the class. On July 14, 2020, the court entered an order reflecting its June 11, 2020 rulings, and WVAWC intends to appeal this order to the West Virginia Supreme Court of Appeals. The court also set a new trial date for April 12, 2021 and requested the parties prepare an appropriate scheduling order. The Company and WVAWC believe that WVAWC has valid, meritorious defenses to the claims raised in this class action complaint. WVAWC is vigorously defending itself against these allegations. The Company cannot currently 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 was held on February 18, 2020. On June 8, 2020, the judge hearing the case transferred the matter to a different judge prior to ruling on the motion to dismiss. Oral argument on the motion to dismiss has been scheduled for September 9, 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 | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Note 12: Earnings per Common Share Presented in the table below is a reconciliation of the numerator and denominator for the basic and diluted earnings per share (“EPS”) calculations: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Numerator: Net income attributable to common shareholders $ 176 $ 170 $ 300 $ 283 Denominator: Weighted-average common shares outstanding—Basic 181 181 181 181 Effect of dilutive common stock equivalents — — — — Weighted-average common shares outstanding—Diluted 181 181 181 181 The effect of dilutive common stock equivalents is related to outstanding stock options, restricted stock units and performance stock units granted under the Company’s 2007 Omnibus Equity Compensation Plan and outstanding restricted stock units and performance stock units granted under the Company’s 2017 Omnibus Equity Compensation 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 three and six months ended June 30, 2020 and 2019, because their effect would have been anti-dilutive under the treasury stock method. |
Fair Value of Financial Informa
Fair Value of Financial Information | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Information | Note 13: Fair Value of Financial Information Fair Value of Financial Instruments The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: Current assets and current liabilities—The carrying amounts reported on the Consolidated Balance Sheets for current assets and current liabilities, including revolving credit debt, due to the short-term maturities and variable interest rates, approximate their fair values. Preferred stock with mandatory redemption requirements and long-term debt—The fair values of preferred stock with mandatory redemption requirements and long-term debt are categorized within the fair value hierarchy based on the inputs that are used to value each instrument. The fair value of long-term debt classified as Level 1 is calculated using quoted prices in active markets. Level 2 instruments are valued using observable inputs and Level 3 instruments are valued using observable and unobservable inputs. Presented in the tables below are the carrying amounts, including fair value adjustments previously recognized in acquisition purchase accounting, and the fair values of the Company’s financial instruments: Carrying Amount At Fair Value as of June 30, 2020 Level 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 6 $ — $ — $ 7 $ 7 Long-term debt (excluding finance lease obligations) 9,656 9,387 424 1,747 11,558 Carrying Amount At Fair Value as of December 31, 2019 Level 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 7 $ — $ — $ 9 $ 9 Long-term debt (excluding finance lease obligations) 8,664 7,689 417 1,664 9,770 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 June 30, 2020 Level 1 Level 2 Level 3 Total Assets: Restricted funds $ 36 $ — $ — $ 36 Rabbi trust investments 16 — — 16 Deposits 4 — — 4 Other investments 14 — — 14 Total assets 70 — — 70 Liabilities: Deferred compensation obligations 20 — — 20 Total liabilities 20 — — 20 Total assets (liabilities) $ 50 $ — $ — $ 50 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 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. 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 treasury lock agreements, 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 | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | Note 14: Leases The Company has operating and finance leases involving real property, including facilities, utility assets, vehicles, and equipment. Certain operating leases have renewal options ranging from one 40 years , seven years, and five years , respectively. Certain lease agreements include variable rental payments adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company participates in a number of arrangements with various public entities (“Partners”) in West Virginia. Under these arrangements, the Company transferred a portion of its utility plant to the Partners in exchange for an equal principal amount of Industrial Development Bonds (“IDBs”) issued by the Partners under the Industrial Development and Commercial Development Bond Act. The Company leased back the utility plant under agreements for a period of 30 to 40 years. The Company has recorded these agreements as finance leases in property, plant and equipment, as ownership of the assets will revert back to the Company at the end of the lease term. The carrying value of the finance lease assets was $147 million as of June 30, 2020 and December 31, 2019. 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 $56 million thereafter, are included in operating lease ROU assets and operating lease liabilities on the Consolidated Balance Sheets. Rental expenses under operating and finance leases were $3 million and $7 million for the three and six months ended June 30, 2020, respectively. Presented in the table below is supplemental cash flow information: For the Three Months Ended June 30, For the Six Months Ended June 30, Cash paid for amounts in lease liabilities (a) $ 4 $ 8 Right-of-use assets obtained in exchange for new operating lease liabilities — 1 (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 June 30, 2020 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 June 30, 2020: Amount 2020 $ 6 2021 13 2022 11 2023 7 2024 7 Thereafter 100 Total lease payments 144 Imputed interest (50) Total $ 94 |
Leases | Note 14: Leases The Company has operating and finance leases involving real property, including facilities, utility assets, vehicles, and equipment. Certain operating leases have renewal options ranging from one 40 years , seven years, and five years , respectively. Certain lease agreements include variable rental payments adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company participates in a number of arrangements with various public entities (“Partners”) in West Virginia. Under these arrangements, the Company transferred a portion of its utility plant to the Partners in exchange for an equal principal amount of Industrial Development Bonds (“IDBs”) issued by the Partners under the Industrial Development and Commercial Development Bond Act. The Company leased back the utility plant under agreements for a period of 30 to 40 years. The Company has recorded these agreements as finance leases in property, plant and equipment, as ownership of the assets will revert back to the Company at the end of the lease term. The carrying value of the finance lease assets was $147 million as of June 30, 2020 and December 31, 2019. 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 $56 million thereafter, are included in operating lease ROU assets and operating lease liabilities on the Consolidated Balance Sheets. Rental expenses under operating and finance leases were $3 million and $7 million for the three and six months ended June 30, 2020, respectively. Presented in the table below is supplemental cash flow information: For the Three Months Ended June 30, For the Six Months Ended June 30, Cash paid for amounts in lease liabilities (a) $ 4 $ 8 Right-of-use assets obtained in exchange for new operating lease liabilities — 1 (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 June 30, 2020 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 June 30, 2020: Amount 2020 $ 6 2021 13 2022 11 2023 7 2024 7 Thereafter 100 Total lease payments 144 Imputed interest (50) Total $ 94 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Note 15: Segment Information The Company’s operating segments are comprised of the revenue-generating components of its businesses for which separate financial information is internally produced and regularly used by management to make operating decisions, assess performance and allocate resources. The Company operates its businesses primarily through one reportable segment, the Regulated Businesses segment. The Company also operates market-based businesses that, individually, do not meet the criteria of a reportable segment in accordance with GAAP, and are collectively presented as the Market-Based Businesses. “Other” includes corporate costs that are not allocated to the Company’s operating segments, eliminations of inter-segment transactions, fair value adjustments and associated income and deductions related to the acquisitions that have not been allocated to the operating segments for evaluation of performance and allocation of resource purposes. The adjustments related to the acquisitions are reported in Other as they are excluded from segment performance measures evaluated by management. Presented in the tables below is summarized segment information: As of or for the Three Months Ended June 30, 2020 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 803 $ 132 $ (4) $ 931 Depreciation and amortization 144 7 1 152 Total operating expenses, net 512 102 4 618 Interest, net (74) — (27) (101) Income before income taxes 236 30 (34) 232 Provision for income taxes 58 8 (10) 56 Net income attributable to common shareholders 177 23 (24) 176 Total assets 21,536 1,075 1,398 24,009 Cash paid for capital expenditures 457 3 2 462 As of or for the Three Months Ended June 30, 2019 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 755 $ 132 $ (5) $ 882 Depreciation and amortization 132 8 2 142 Total operating expenses, net 480 106 (6) 580 Interest, net (74) 1 (21) (94) Income before income taxes 208 29 (10) 227 Provision for income taxes 52 8 (3) 57 Net income attributable to common shareholders 156 21 (7) 170 Total assets 19,338 1,056 1,460 21,854 Cash paid for capital expenditures 378 4 4 386 As of or for the Six Months Ended June 30, 2020 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 1,523 $ 260 $ (8) $ 1,775 Depreciation and amortization 279 13 5 297 Total operating expenses, net 1,015 201 7 1,223 Interest, net (146) 1 (52) (197) Income before income taxes 398 60 (67) 391 Provision for income taxes 98 16 (23) 91 Net income attributable to common shareholders 300 45 (45) 300 Total assets 21,536 1,075 1,398 24,009 Cash paid for capital expenditures 861 6 3 870 As of or for the Six Months Ended June 30, 2019 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 1,440 $ 266 $ (11) $ 1,695 Depreciation and amortization 262 17 7 286 Total operating expenses, net 950 214 (9) 1,155 Interest, net (147) 2 (42) (187) Income before income taxes 358 56 (35) 379 Provision for income taxes 92 15 (11) 96 Net income attributable to common shareholders 266 41 (24) 283 Total assets 19,338 1,056 1,460 21,854 Cash paid for capital expenditures 693 8 11 712 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Standards | Presented in the table below are new accounting standards that were adopted by the Company in 2020: Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements Measurement of Credit Losses on Financial Instruments Updated the accounting guidance on reporting credit losses for financial assets held at amortized cost basis and available-for-sale debt securities. Under this guidance, expected credit losses are required to be measured based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount of financial assets. Also, this guidance requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a direct write-down. January 1, 2020 Modified retrospective The standard did not have a material impact on the Consolidated Financial Statements. Changes to the Disclosure Requirements for Fair Value Measurement Updated the disclosure requirements for fair value measurement. The guidance removes the requirements to disclose transfers between Level 1 and Level 2 measurements, the timing of transfers between levels, and the valuation processes for Level 3 measurements. Disclosure of transfers into and out of Level 3 measurements will be required. The guidance adds disclosure requirements for the change in unrealized gains and losses in other comprehensive income for recurring Level 3 measurements, as well as the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. January 1, 2020 Prospective for added disclosures and for the narrative description of measurement uncertainty; retrospective for all other amendments. The standard did not have a material impact on the Consolidated Financial Statements. Facilitation of the Effects of Reference Rate Reform on Financial Reporting Provided optional guidance for a limited time to ease the potential accounting burden associated with the transition from LIBOR. The guidance contains optional expedients and exceptions for contract modifications, hedging relationships, and other transactions that reference LIBOR or other reference rates expected to be discontinued. The expedients elected must be applied for all eligible contracts or transactions, with the exception of hedging relationships, which can be applied on an individual basis March 12, 2020 through December 31, 2022 Prospective for contract modifications and hedging relationships; applied as of January 1, 2020. The standard did not have a material impact on the Consolidated Financial Statements. Presented in the table below are recently issued accounting standards that have not yet been adopted by the Company as of June 30, 2020: Standard Description Date of Adoption Application Estimated Effect on the Consolidated Financial Statements Simplifying the Accounting for Income Taxes The guidance removes exceptions related to the incremental approach for intraperiod tax allocation, the requirement to recognize a deferred tax liability for changes in ownership of a foreign subsidiary or equity method investment, and the general methodology for calculating income taxes in an interim period when the year-to-date loss exceeds the anticipated loss. The guidance adds requirements to reflect changes to tax laws or rates in the annual effective tax rate computation in the interim period in which the changes were enacted, to recognize franchise or other similar taxes that are partially based on income as an income-based tax and any incremental amounts as non-income-based tax, and to evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction. January 1, 2021; early adoption permitted Modified retrospective for amendments related to changes in ownership of a foreign subsidiary or equity method investment; Modified retrospective or retrospective for amendments related to taxes partially based on income; Prospective for all other amendments. The Company is evaluating any impact on its Consolidated Financial Statements, as well as the timing of adoption. |
Allowance for Uncollectible Accounts | Allowance for Uncollectible Accounts Allowances for uncollectible accounts are maintained for estimated probable losses resulting from the Company’s inability to collect receivables from customers. Accounts that are outstanding longer than the payment terms are considered past due. A number of factors are considered in determining the allowance for uncollectible accounts, including the length of time receivables are past due, previous loss history, current economic and societal conditions and reasonable and supportable forecasts that affect the collectability of receivables from customers. The Company generally writes off accounts when they become uncollectible or are over a certain number of days outstanding. |
Reclassification | Reclassifications Certain reclassifications have been made to prior periods in the Consolidated Financial Statements and Notes to conform to the current presentation. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Schedule of new accounting pronouncements and changes in accounting principles | Presented in the table below are new accounting standards that were adopted by the Company in 2020: Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements Measurement of Credit Losses on Financial Instruments Updated the accounting guidance on reporting credit losses for financial assets held at amortized cost basis and available-for-sale debt securities. Under this guidance, expected credit losses are required to be measured based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount of financial assets. Also, this guidance requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a direct write-down. January 1, 2020 Modified retrospective The standard did not have a material impact on the Consolidated Financial Statements. Changes to the Disclosure Requirements for Fair Value Measurement Updated the disclosure requirements for fair value measurement. The guidance removes the requirements to disclose transfers between Level 1 and Level 2 measurements, the timing of transfers between levels, and the valuation processes for Level 3 measurements. Disclosure of transfers into and out of Level 3 measurements will be required. The guidance adds disclosure requirements for the change in unrealized gains and losses in other comprehensive income for recurring Level 3 measurements, as well as the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. January 1, 2020 Prospective for added disclosures and for the narrative description of measurement uncertainty; retrospective for all other amendments. The standard did not have a material impact on the Consolidated Financial Statements. Facilitation of the Effects of Reference Rate Reform on Financial Reporting Provided optional guidance for a limited time to ease the potential accounting burden associated with the transition from LIBOR. The guidance contains optional expedients and exceptions for contract modifications, hedging relationships, and other transactions that reference LIBOR or other reference rates expected to be discontinued. The expedients elected must be applied for all eligible contracts or transactions, with the exception of hedging relationships, which can be applied on an individual basis March 12, 2020 through December 31, 2022 Prospective for contract modifications and hedging relationships; applied as of January 1, 2020. The standard did not have a material impact on the Consolidated Financial Statements. Presented in the table below are recently issued accounting standards that have not yet been adopted by the Company as of June 30, 2020: Standard Description Date of Adoption Application Estimated Effect on the Consolidated Financial Statements Simplifying the Accounting for Income Taxes The guidance removes exceptions related to the incremental approach for intraperiod tax allocation, the requirement to recognize a deferred tax liability for changes in ownership of a foreign subsidiary or equity method investment, and the general methodology for calculating income taxes in an interim period when the year-to-date loss exceeds the anticipated loss. The guidance adds requirements to reflect changes to tax laws or rates in the annual effective tax rate computation in the interim period in which the changes were enacted, to recognize franchise or other similar taxes that are partially based on income as an income-based tax and any incremental amounts as non-income-based tax, and to evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction. January 1, 2021; early adoption permitted Modified retrospective for amendments related to changes in ownership of a foreign subsidiary or equity method investment; Modified retrospective or retrospective for amendments related to taxes partially based on income; Prospective for all other amendments. The Company is evaluating any impact on its Consolidated Financial Statements, as well as the timing of adoption. |
Reconciliation of the cash and cash equivalents and restricted funds | Presented in the table below is a reconciliation of the cash and cash equivalents and restricted funds amounts as presented on the Consolidated Balance Sheets to the sum of such amounts presented on the Consolidated Statements of Cash Flows for the periods ended June 30: 2020 2019 Cash and cash equivalents $ 569 $ 64 Restricted funds 36 22 Restricted funds included in other long-term assets — 1 Cash, cash equivalents and restricted funds as presented on the Consolidated Statements of Cash Flows $ 605 $ 87 |
Accounts receivable, allowance for credit loss | Presented in the table below are the changes in the allowance for uncollectible accounts for the periods ended June 30: 2020 2019 Balance as of January 1 $ (41) $ (45) Amounts charged to expense (14) (10) Amounts written off 10 13 Less: Allowance for uncollectible accounts included in assets held for sale (a) 2 — Balance as of June 30 $ (43) $ (42) (a) This portion of the allowance for uncollectible accounts is related to the pending transactions contemplated by the Stock Purchase Agreement between the Company and the Company’s New York subsidiary and Liberty Utilities Co., and is included in assets held for sale on the Consolidated Balance Sheets. See Note 5—Acquisitions and Divestitures for additional information. |
Impact of Novel Coronavirus (_2
Impact of Novel Coronavirus (COVID-19) Pandemic (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Schedule Related To Approved Cost Recovery Mechanisms Related To Certain Incremental Costs From The COVID-19 Pandemic | In addition to approving deferred accounting, two regulatory jurisdictions have also approved cost recovery mechanisms for COVID-19 financial impacts, as presented in the table below: Commission Orders Description States Allowed Regulatory assets Allows the Company to establish regulatory assets to record certain financial impacts related to the COVID-19 pandemic. CA, HI, IA, IL, IN, MD, NJ, PA, VA, WV Cost recovery mechanisms California’s Catastrophic Event Memorandum Account allows the Company to track and recover certain financial impacts related to the COVID-19 pandemic. Illinois has authorized cost recovery of COVID-19 financial impacts through a special purpose rider over a 24-month period. CA, IL |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Presented in the table below are operating revenues disaggregated for the three months ended June 30, 2020: Revenues from Contracts with Customers Other Revenues Not from Contracts with Customers (a) Total Operating Revenues Regulated Businesses: Water services: Residential $ 474 $ — $ 474 Commercial 142 — 142 Fire service 36 — 36 Industrial 31 — 31 Public and other 41 — 41 Total water services 724 — 724 Wastewater services: Residential 33 — 33 Commercial 9 — 9 Industrial — — — Public and other 4 — 4 Total wastewater services 46 — 46 Miscellaneous utility charges 10 — 10 Alternative revenue programs — 21 21 Lease contract revenue — 2 2 Total Regulated Businesses 780 23 803 Market-Based Businesses 132 — 132 Other (4) — (4) Total operating revenues $ 908 $ 23 $ 931 (a) Includes revenues associated with provisional rates, alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of Accounting Standards Codification Topic 606, Revenue From Contracts With Customers (“ASC 606”), and accounted for under other existing GAAP. Presented in the table below are operating revenues disaggregated for the six months ended June 30, 2020: Revenues from Contracts with Customers Other Revenues Not from Contracts with Customers (a) Total Operating Revenues Regulated Businesses: Water services: Residential $ 873 $ — $ 873 Commercial 284 — 284 Fire service 73 — 73 Industrial 63 — 63 Public and other 90 — 90 Total water services 1,383 — 1,383 Wastewater services: Residential 64 — 64 Commercial 17 — 17 Industrial 1 — 1 Public and other 7 — 7 Total wastewater services 89 — 89 Miscellaneous utility charges 18 — 18 Alternative revenue programs — 28 28 Lease contract revenue — 5 5 Total Regulated Businesses 1,490 33 1,523 Market-Based Businesses 260 — 260 Other (8) — (8) Total operating revenues $ 1,742 $ 33 $ 1,775 (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 (
Acquisitions and Divestitures (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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 June 30, 2020: June 30, 2020 Current assets $ 15 Property, plant and equipment 479 Regulatory assets 59 Goodwill 39 Other assets 6 Assets held for sale $ 598 Current liabilities 21 Deferred income taxes 70 Regulatory liabilities 37 Other liabilities 5 Liabilities related to assets held for sale $ 133 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Presented in the table below are the changes in accumulated other comprehensive loss by component, net of tax, for the six months ended June 30, 2020 and 2019, respectively: Defined Benefit Pension Plans Foreign Currency Translation Gain (Loss) on Cash Flow Hedges Accumulated Other Comprehensive Loss Employee Benefit Plan Funded Status Amortization of Prior Service Cost Amortization of Actuarial Loss Balance as of December 31, 2019 $ (94) $ 1 $ 60 $ — $ (3) $ (36) Other comprehensive loss before reclassifications — — — — (4) (4) Amounts reclassified from accumulated other comprehensive loss — — 1 — — 1 Net other comprehensive income (loss) — — 1 — (4) (3) Balance as of June 30, 2020 $ (94) $ 1 $ 61 $ — $ (7) $ (39) Balance as of December 31, 2018 $ (102) $ 1 $ 56 $ 1 $ 10 $ (34) Other comprehensive loss before reclassifications — — — — (13) (13) Amounts reclassified from accumulated other comprehensive loss — — 1 (1) — — Net other comprehensive income (loss) — — 1 (1) (13) (13) Balance as of June 30, 2019 $ (102) $ 1 $ 57 $ — $ (3) $ (47) |
Pension and Other Post-Retire_2
Pension and Other Post-Retirement Benefits (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Costs | Presented in the table below are the components of net periodic benefit cost (credit): For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Components of net periodic pension benefit cost: Service cost $ 8 $ 7 $ 16 $ 14 Interest cost 18 21 37 41 Expected return on plan assets (28) (23) (56) (45) Amortization of prior service credit (1) (1) (2) (2) Amortization of actuarial loss 8 8 16 16 Net periodic pension benefit cost before settlements 5 12 11 24 Settlements (a) 1 — 1 — Net periodic pension benefit cost $ 6 $ 12 $ 12 $ 24 Components of net periodic other postretirement benefit credit: Service cost $ 1 $ 1 $ 2 $ 2 Interest cost 3 4 6 7 Expected return on plan assets (5) (5) (9) (9) Amortization of prior service credit (8) (9) (16) (17) Amortization of actuarial loss — 1 1 2 Net periodic other postretirement benefit credit $ (9) $ (8) $ (16) $ (15) (a) Due to the amount of lump sum payment distributions from the Company’s New York Water Service Corporation Pension Plan, a settlement charge of $1 million was recorded during the three and six months ended June 30, 2020. There were no settlement charges recorded during the three and six months ended June 30, 2019. In accordance with existing regulatory accounting treatment, the Company has maintained the settlement charge in regulatory assets. The amount is being amortized in accordance with existing regulatory practice. |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerator and Denominator for Basic and Diluted Earnings Per Share | Presented in the table below is a reconciliation of the numerator and denominator for the basic and diluted earnings per share (“EPS”) calculations: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Numerator: Net income attributable to common shareholders $ 176 $ 170 $ 300 $ 283 Denominator: Weighted-average common shares outstanding—Basic 181 181 181 181 Effect of dilutive common stock equivalents — — — — Weighted-average common shares outstanding—Diluted 181 181 181 181 |
Fair Value of Financial Infor_2
Fair Value of Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Carrying Amounts and Fair Values of Financial Instruments | Presented in the tables below are the carrying amounts, including fair value adjustments previously recognized in acquisition purchase accounting, and the fair values of the Company’s financial instruments: Carrying Amount At Fair Value as of June 30, 2020 Level 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 6 $ — $ — $ 7 $ 7 Long-term debt (excluding finance lease obligations) 9,656 9,387 424 1,747 11,558 Carrying Amount At Fair Value as of December 31, 2019 Level 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 7 $ — $ — $ 9 $ 9 Long-term debt (excluding finance lease obligations) 8,664 7,689 417 1,664 9,770 |
Fair Value Measurements of Assets and Liabilities on Recurring Basis | Presented in the tables below are assets and liabilities measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy: At Fair Value as of June 30, 2020 Level 1 Level 2 Level 3 Total Assets: Restricted funds $ 36 $ — $ — $ 36 Rabbi trust investments 16 — — 16 Deposits 4 — — 4 Other investments 14 — — 14 Total assets 70 — — 70 Liabilities: Deferred compensation obligations 20 — — 20 Total liabilities 20 — — 20 Total assets (liabilities) $ 50 $ — $ — $ 50 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 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Presented in the table below is supplemental cash flow information: For the Three Months Ended June 30, For the Six Months Ended June 30, Cash paid for amounts in lease liabilities (a) $ 4 $ 8 Right-of-use assets obtained in exchange for new operating lease liabilities — 1 (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 June 30, 2020 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 June 30, 2020: Amount 2020 $ 6 2021 13 2022 11 2023 7 2024 7 Thereafter 100 Total lease payments 144 Imputed interest (50) Total $ 94 |
Finance Lease, Liability, Maturity | Presented in the table below are the future maturities of lease liabilities at June 30, 2020: Amount 2020 $ 6 2021 13 2022 11 2023 7 2024 7 Thereafter 100 Total lease payments 144 Imputed interest (50) Total $ 94 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Summarized Segment Information | Presented in the tables below is summarized segment information: As of or for the Three Months Ended June 30, 2020 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 803 $ 132 $ (4) $ 931 Depreciation and amortization 144 7 1 152 Total operating expenses, net 512 102 4 618 Interest, net (74) — (27) (101) Income before income taxes 236 30 (34) 232 Provision for income taxes 58 8 (10) 56 Net income attributable to common shareholders 177 23 (24) 176 Total assets 21,536 1,075 1,398 24,009 Cash paid for capital expenditures 457 3 2 462 As of or for the Three Months Ended June 30, 2019 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 755 $ 132 $ (5) $ 882 Depreciation and amortization 132 8 2 142 Total operating expenses, net 480 106 (6) 580 Interest, net (74) 1 (21) (94) Income before income taxes 208 29 (10) 227 Provision for income taxes 52 8 (3) 57 Net income attributable to common shareholders 156 21 (7) 170 Total assets 19,338 1,056 1,460 21,854 Cash paid for capital expenditures 378 4 4 386 As of or for the Six Months Ended June 30, 2020 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 1,523 $ 260 $ (8) $ 1,775 Depreciation and amortization 279 13 5 297 Total operating expenses, net 1,015 201 7 1,223 Interest, net (146) 1 (52) (197) Income before income taxes 398 60 (67) 391 Provision for income taxes 98 16 (23) 91 Net income attributable to common shareholders 300 45 (45) 300 Total assets 21,536 1,075 1,398 24,009 Cash paid for capital expenditures 861 6 3 870 As of or for the Six Months Ended June 30, 2019 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 1,440 $ 266 $ (11) $ 1,695 Depreciation and amortization 262 17 7 286 Total operating expenses, net 950 214 (9) 1,155 Interest, net (147) 2 (42) (187) Income before income taxes 358 56 (35) 379 Provision for income taxes 92 15 (11) 96 Net income attributable to common shareholders 266 41 (24) 283 Total assets 19,338 1,056 1,460 21,854 Cash paid for capital expenditures 693 8 11 712 |
Significant Accounting Polici_4
Significant Accounting Policies - Cash, Cash Equivalents and Restricted Funds (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||
Cash and cash equivalents | $ 569 | $ 60 | $ 64 | |
Restricted funds | 36 | 31 | 22 | |
Restricted funds included in other long-term assets | 0 | 1 | ||
Cash, cash equivalents and restricted funds as presented on the Consolidated Statements of Cash Flows | $ 605 | $ 91 | $ 87 | $ 159 |
Significant Accounting Polici_5
Significant Accounting Policies - Allowance for Uncollectible Accounts (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance as of January 1 | $ (41) | $ (45) |
Amounts charged to expense | (14) | (10) |
Amounts written off | 10 | 13 |
Less: Allowance for uncollectible accounts included in assets held for sale (a) | 2 | 0 |
Balance as of June 30 | $ (43) | $ (42) |
Impact of Novel Coronavirus (_3
Impact of Novel Coronavirus (COVID-19) Pandemic - Narrative (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2020USD ($)segmentregulatoryJurisdictionstate | Dec. 31, 2019USD ($) | |
Risks and Uncertainties [Abstract] | ||
Total number of regulatory jurisdictions | segment | 14 | |
Number of regulatory jurisdictions that began to seek to address the impacts of COVID-19 | regulatoryJurisdiction | 10 | |
Number of regulatory jurisdictions that remain pending to seek to address the impacts of COVID-19 | regulatoryJurisdiction | 4 | |
Number of regulatory jurisdictions that are in discussions to address the impacts of COVID-19 | state | 2 | |
Unusual Risk or Uncertainty [Line Items] | ||
Regulatory assets | $ 1,144 | $ 1,128 |
Regulatory liabilities | $ 1,786 | $ 1,806 |
Illinois | ||
Unusual Risk or Uncertainty [Line Items] | ||
Authorized cost recovery period | 24 months | |
COVID-19 | ||
Unusual Risk or Uncertainty [Line Items] | ||
Regulatory assets | $ 14 | |
Regulatory liabilities | $ 2 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregated Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | $ 908 | $ 1,742 | ||
Other operating income | 23 | 33 | ||
Operating revenues | 931 | $ 882 | 1,775 | $ 1,695 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | (4) | (8) | ||
Other operating income | 0 | 0 | ||
Operating revenues | (4) | (8) | ||
Regulated Businesses | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 780 | 1,490 | ||
Other operating income | 23 | 33 | ||
Alternative revenue programs | 21 | 28 | ||
Lease contract revenue | 2 | 5 | ||
Operating revenues | 803 | 1,523 | ||
Regulated Businesses | Water Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 724 | 1,383 | ||
Other operating income | 0 | 0 | ||
Operating revenues | 724 | 1,383 | ||
Regulated Businesses | Wastewater Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 46 | 89 | ||
Operating revenues | 46 | 89 | ||
Regulated Businesses | Miscellaneous Utility Charge | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 10 | 18 | ||
Operating revenues | 10 | 18 | ||
Market-Based Businesses | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 132 | 260 | ||
Operating revenues | 132 | 260 | ||
Residential | Regulated Businesses | Water Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 474 | 873 | ||
Other operating income | 0 | 0 | ||
Operating revenues | 474 | 873 | ||
Residential | Regulated Businesses | Wastewater Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 33 | 64 | ||
Operating revenues | 33 | 64 | ||
Commercial | Regulated Businesses | Water Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 142 | 284 | ||
Operating revenues | 142 | 284 | ||
Commercial | Regulated Businesses | Wastewater Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 9 | 17 | ||
Operating revenues | 9 | 17 | ||
Fire service | Regulated Businesses | Water Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 36 | 73 | ||
Operating revenues | 36 | 73 | ||
Industrial | Regulated Businesses | Water Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 31 | 63 | ||
Operating revenues | 31 | 63 | ||
Industrial | Regulated Businesses | Wastewater Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 0 | 1 | ||
Operating revenues | 0 | 1 | ||
Public and other | Regulated Businesses | Water Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 41 | 90 | ||
Operating revenues | 41 | 90 | ||
Public and other | Regulated Businesses | Wastewater Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract | 4 | 7 | ||
Operating revenues | $ 4 | $ 7 |
Revenue Recognition - Contract
Revenue Recognition - Contract Assets and Liabilities (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Contract assets: | ||
Contract asset | $ 26 | $ 13 |
Additions | 29 | |
Transfers to accounts receivable, net | 16 | |
Contract liabilities: | ||
Contract liability | 37 | $ 27 |
Additions | 66 | |
Transfers to operating revenues | $ 56 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligations (Details) - Market-Based Businesses $ in Millions | Jun. 30, 2020USD ($) |
U.S. Government | |
Disaggregation of Revenue [Line Items] | |
Revenue, remaining performance obligation | $ 5,500 |
Municipalities and Commercial | |
Disaggregation of Revenue [Line Items] | |
Revenue, remaining performance obligation | $ 493 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Additional Information (Details) Connection in Thousands, $ in Millions | Nov. 20, 2019USD ($)Connection | Jun. 30, 2020USD ($)Acquisition |
Business Acquisition [Line Items] | ||
Business acquisition, number of companies acquired | Acquisition | 12 | |
Purchase price | $ 40 | |
Purchase price allocation, assets acquired | 57 | |
Purchase price allocation, liabilities assumed | 24 | |
Purchase price allocation, contributions In aid of construction | 15 | |
Purchase price allocation, debt assumed | 6 | |
Additional goodwill | $ 7 | |
Additional goodwill, number of acquisitions | Acquisition | 2 | |
New York American Water Company | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 608 | |
Number of connections | Connection | 125 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Components of Assets Held-for-sale (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Business Combinations [Abstract] | ||
Current assets | $ 15 | |
Property, plant and equipment | 479 | |
Regulatory assets | 59 | |
Goodwill | 39 | |
Other assets | 6 | |
Assets held for sale | 598 | $ 566 |
Current liabilities | 21 | |
Deferred income taxes | 70 | |
Regulatory liabilities | 37 | |
Other liabilities | 5 | |
Liabilities related to assets held for sale | $ 133 | $ 128 |
Shareholders' Equity - Changes
Shareholders' Equity - Changes in Accumulated Other Comprehensive Loss by Component (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 6,121 | $ 5,864 |
Other comprehensive income (loss) before reclassifications | (4) | (13) |
Amounts reclassified from accumulated other comprehensive loss | 1 | 0 |
Net other comprehensive income (loss) | (3) | (13) |
Ending balance | 6,338 | 6,027 |
Employee Benefit Plan Funded Status | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (94) | (102) |
Ending balance | (94) | (102) |
Amortization of Prior Service Cost | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 1 | 1 |
Ending balance | 1 | 1 |
Amortization of Actuarial Loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 60 | 56 |
Amounts reclassified from accumulated other comprehensive loss | 1 | 1 |
Net other comprehensive income (loss) | 1 | 1 |
Ending balance | 61 | 57 |
Foreign Currency Translation | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 0 | 1 |
Amounts reclassified from accumulated other comprehensive loss | (1) | |
Net other comprehensive income (loss) | (1) | |
Ending balance | 0 | 0 |
Gain (Loss) on Cash Flow Hedges | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (3) | 10 |
Other comprehensive income (loss) before reclassifications | (4) | (13) |
Net other comprehensive income (loss) | (4) | (13) |
Ending balance | (7) | (3) |
Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (36) | (34) |
Ending balance | $ (39) | $ (47) |
Shareholders' Equity - Dividend
Shareholders' Equity - Dividends (Details) - $ / shares | Jun. 02, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jul. 01, 2020 |
Equity [Abstract] | ||||
Dividends declared per common share (dollars per share) | $ 0.55 | $ 0.55 | $ 0.50 | |
Subsequent Event | ||||
Dividends Payable [Line Items] | ||||
Dividends payable (dollars per share) | $ 0.55 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | Apr. 14, 2020USD ($) | Apr. 08, 2020USD ($)treasury_lock_agreement | Mar. 31, 2020USD ($)treasury_lock_agreement | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) |
Debt Instrument [Line Items] | |||||||
Proceeds from long-term debt | $ 1,163,000,000 | $ 1,184,000,000 | |||||
Fair value hedge ineffectiveness | $ 0 | $ 0 | 0 | $ 0 | |||
Designated as Hedging Instrument | Treasury lock agreements | |||||||
Debt Instrument [Line Items] | |||||||
Derivative, number of instruments held | treasury_lock_agreement | 4 | ||||||
Debt instrument, term | 10 years | ||||||
Derivative notional amount, per contract | $ 100,000,000 | ||||||
Derivative, average fixed rate | 0.94% | ||||||
Derivative, number of instruments terminated | treasury_lock_agreement | 4 | ||||||
Derivate instrument notional amount | $ 400,000,000 | ||||||
Proceeds received from (payment due to) terminated forward swaps | $ (6,000,000) | ||||||
Various debt | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from long-term debt | $ 163,000,000 | ||||||
Senior Notes | American Water Capital Corp. | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 1,000,000,000 | ||||||
Proceeds from long-term debt | 989,000,000 | ||||||
Repayments of debt | 28,000,000 | ||||||
Senior Notes | American Water Capital Corp. | Senior Note 2.80% Due 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 500,000,000 | ||||||
Interest rate | 2.80% | ||||||
Senior Notes | American Water Capital Corp. | Senior Note 3.45% Due 2050 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 500,000,000 | ||||||
Interest rate | 3.45% | ||||||
Minimum | Designated as Hedging Instrument | Treasury lock agreements | |||||||
Debt Instrument [Line Items] | |||||||
Derivative net gain amortized through interest | 10 years | ||||||
Minimum | Various debt maturing in 2021 through 2050 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 0.00% | 0.00% | |||||
Maturity date | 2021 | ||||||
Minimum | Various debt maturing in 2020 through 2048 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 0.00% | 0.00% | |||||
Maturity date | 2020 | ||||||
Maximum | Various debt maturing in 2021 through 2050 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 5.00% | 5.00% | |||||
Maturity date | 2048 | ||||||
Maximum | Various debt maturing in 2020 through 2048 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 12.25% | 12.25% | |||||
Maturity date | 2048 | ||||||
Debt instrument, redemption, period one | |||||||
Debt Instrument [Line Items] | |||||||
Repayments of debt | $ 166,000,000 |
Short-Term Debt (Details)
Short-Term Debt (Details) - USD ($) | Mar. 20, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Short-term Debt [Line Items] | |||
Short-term debt | $ 920,000,000 | $ 786,000,000 | |
Commercial paper average outstanding | 420,000,000 | ||
Short-term debt | 1,750,000,000 | ||
American Water Capital Corp. | |||
Short-term Debt [Line Items] | |||
Short-term debt | 0 | ||
Letters of credit outstanding, amount | $ 76,000,000 | ||
Weighted average interest rate on short-term debt | 1.06% | 1.86% | |
Revolving Credit Facility | American Water Capital Corp. | |||
Short-term Debt [Line Items] | |||
Debt instrument, face amount | $ 2,250,000,000 | ||
Proceeds from short-term debt | 650,000,000 | ||
Repayments of short-term debt | 650,000,000 | ||
Term Loan Facility | American Water Capital Corp. | |||
Short-term Debt [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 750,000,000 | ||
Net proceeds from revolving credit facility borrowings | 500,000,000 | ||
Additional maximum borrowing capacity | $ 250,000,000 | ||
Fair value of amount outstanding | $ 500,000,000 | ||
London Interbank Offered Rate (LIBOR) | Term Loan Facility | American Water Capital Corp. | |||
Short-term Debt [Line Items] | |||
Basis spread on variable rate | 0.80% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 24.10% | 25.10% | 23.30% | 25.30% |
Pension and Other Post-Retire_3
Pension and Other Post-Retirement Benefits - Schedule of Net Periodic Benefit Cost Components (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Pension Plan Asset | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 8,000,000 | $ 7,000,000 | $ 16,000,000 | $ 14,000,000 |
Interest cost | 18,000,000 | 21,000,000 | 37,000,000 | 41,000,000 |
Expected return on plan assets | (28,000,000) | (23,000,000) | (56,000,000) | (45,000,000) |
Amortization of prior service credit | (1,000,000) | (1,000,000) | (2,000,000) | (2,000,000) |
Amortization of actuarial loss | 8,000,000 | 8,000,000 | 16,000,000 | 16,000,000 |
Net periodic pension benefit cost before settlements | 5,000,000 | 12,000,000 | 11,000,000 | 24,000,000 |
Settlements | 1,000,000 | 0 | 1,000,000 | 0 |
Net periodic benefit (credit) cost | 6,000,000 | 12,000,000 | 12,000,000 | 24,000,000 |
Pension Plan Asset | New York Water Service Corporation Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Settlements | (1,000,000) | 0 | (1,000,000) | 0 |
Other Postretirement Benefit Cost | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1,000,000 | 1,000,000 | 2,000,000 | 2,000,000 |
Interest cost | 3,000,000 | 4,000,000 | 6,000,000 | 7,000,000 |
Expected return on plan assets | (5,000,000) | (5,000,000) | (9,000,000) | (9,000,000) |
Amortization of prior service credit | (8,000,000) | (9,000,000) | (16,000,000) | (17,000,000) |
Amortization of actuarial loss | 0 | 1,000,000 | 1,000,000 | 2,000,000 |
Net periodic benefit (credit) cost | $ (9,000,000) | $ (8,000,000) | $ (16,000,000) | $ (15,000,000) |
Pension and Other Post-Retire_4
Pension and Other Post-Retirement Benefits - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Pension Plan Asset | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Company contributions | $ 12,000,000 | $ 7,000,000 | $ 22,000,000 | $ 14,000,000 |
Expected contributions | 17,000,000 | 17,000,000 | ||
Other Postretirement Benefit Cost | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Company contributions | $ 0 | $ 0 | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) Customer in Thousands, $ in Millions | 6 Months Ended | ||||
Jun. 30, 2020USD ($) | Jun. 30, 2015Customer | Jun. 27, 2015 | Jun. 26, 2015 | Jun. 23, 2015Customer | |
Commitments And Contingencies [Line Items] | |||||
Loss contingency, probable loss | $ 8 | ||||
WVAWC | Dunbar | |||||
Commitments And Contingencies [Line Items] | |||||
Number of customers impacted due to failure of main that caused water outages and low pressure | Customer | 25 | ||||
Percentage of impacted customers to which service was restored | 20.00% | 80.00% | |||
Number of customers for whom system was reconfigured to maintain service while a final repair was completed | Customer | 3 | ||||
Binding Agreement | |||||
Commitments And Contingencies [Line Items] | |||||
Loss contingency, probable loss | 0.5 | ||||
Amount of settlement | 126 | ||||
Offsetting insurance receivable | 0.5 | ||||
Binding Agreement | WVAWC | |||||
Commitments And Contingencies [Line Items] | |||||
Amount of settlement | 19 | ||||
Maximum | |||||
Commitments And Contingencies [Line Items] | |||||
Loss contingency, possible loss | $ 2 |
Earnings Per Common Share - Rec
Earnings Per Common Share - Reconciliation of Numerator and Denominator for Basic and Diluted Earnings Per Share (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||||
Net income attributable to common shareholders | $ 176 | $ 124 | $ 170 | $ 113 | $ 300 | $ 283 |
Weighted-average common shares outstanding - Basic (per share) | 181 | 181 | 181 | 181 | ||
Effect of dilutive common stock equivalents (per shares) | 0 | 0 | 0 | 0 | ||
Weighted-average common shares outstanding - Diluted (per share) | 181 | 181 | 181 | 181 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Maximum | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (less than) | 1 | 1 | 1 | 1 |
Fair Value of Financial Infor_3
Fair Value of Financial Information - Carrying Amounts and Fair Values of Financial Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, carrying amount | $ 6 | $ 7 |
Long-term debt (excluding finance lease obligations), carrying amount | 9,656 | 8,664 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, fair value | 7 | 9 |
Long-term debt (excluding finance lease obligations), fair value | 11,558 | 9,770 |
Fair Value | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, fair value | 0 | 0 |
Long-term debt (excluding finance lease obligations), fair value | 9,387 | 7,689 |
Fair Value | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, fair value | 0 | 0 |
Long-term debt (excluding finance lease obligations), fair value | 424 | 417 |
Fair Value | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, fair value | 7 | 9 |
Long-term debt (excluding finance lease obligations), fair value | $ 1,747 | $ 1,664 |
Fair Value of Financial Infor_4
Fair Value of Financial Information - Measurements of Assets and Liabilities on Recurring Basis (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Restricted funds | $ 36 | $ 31 |
Rabbi trust investments | 16 | 17 |
Deposits | 4 | 3 |
Other investments | 14 | 8 |
Total assets | 70 | 59 |
Liabilities: | ||
Deferred compensation obligations | 20 | 21 |
Total liabilities | 20 | 21 |
Total assets (liabilities) | 50 | 38 |
Level 1 | ||
Assets: | ||
Restricted funds | 36 | 31 |
Rabbi trust investments | 16 | 17 |
Deposits | 4 | 3 |
Other investments | 14 | 8 |
Total assets | 70 | 59 |
Liabilities: | ||
Deferred compensation obligations | 20 | 21 |
Total liabilities | 20 | 21 |
Total assets (liabilities) | 50 | 38 |
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 |
Total liabilities | 0 | 0 |
Total assets (liabilities) | 0 | 0 |
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 |
Total liabilities | 0 | 0 |
Total assets (liabilities) | $ 0 | $ 0 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Finance lease, right-of-use asset | $ 147 | $ 147 | $ 147 |
Operating and financing leases, rent expense, net | $ 3 | $ 7 | |
Real Property | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease, term of contract | 40 years | 40 years | |
Vehicles | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease, term of contract | 7 years | 7 years | |
Equipment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease, term of contract | 5 years | 5 years | |
Operating and Maintenance Agreement | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Future minimum sublease rentals, 2020 | $ 4 | $ 4 | |
Future minimum sublease rentals, 2021 | 4 | 4 | |
Future minimum sublease rentals, 2022 | 4 | 4 | |
Future minimum sublease rentals, 2023 | 4 | 4 | |
Future minimum sublease rentals, 2024 | 4 | 4 | |
Future minimum sublease rentals, thereafter | $ 56 | $ 56 | |
Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease, renewal term | 1 year | 1 year | |
Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease, renewal term | 60 years | 60 years | |
Utility Plant | Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lessee, finance lease, term of contract | 30 years | 30 years | |
Utility Plant | Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lessee, finance lease, term of contract | 40 years | 40 years |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Leases [Abstract] | ||
Cash paid for amounts in lease liabilities | $ 4 | $ 8 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 0 | $ 1 |
Leases - Remaining Lease Term a
Leases - Remaining Lease Term and Discount Rate (Details) | Jun. 30, 2020 |
Weighted-average Remaining Lease Term [Abstract] | |
Finance lease | 6 years |
Operating lease | 19 years |
Weighted-average Discount Rate [Abstract] | |
Finance lease | 12.00% |
Operating lease | 4.00% |
Leases - Future Maturities of L
Leases - Future Maturities of Lease Liabilities (Details) $ in Millions | Jun. 30, 2020USD ($) |
Leases [Abstract] | |
2020 | $ 6 |
2021 | 13 |
2022 | 11 |
2023 | 7 |
2024 | 7 |
Thereafter | 100 |
Total lease payments | 144 |
Imputed interest | (50) |
Total | $ 94 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Segment Information - Summarize
Segment Information - Summarized Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||||
Operating revenues | $ 931 | $ 882 | $ 1,775 | $ 1,695 | |||
Depreciation and amortization | 152 | 142 | 297 | 286 | |||
Total operating expenses, net | 618 | 580 | 1,223 | 1,155 | |||
Interest, net | (101) | (94) | (197) | (187) | |||
Income before income taxes | 232 | 227 | 391 | 379 | |||
Provision for income taxes | 56 | 57 | 91 | 96 | |||
Net income attributable to common shareholders | 176 | $ 124 | 170 | $ 113 | 300 | 283 | |
Total assets | 24,009 | 21,854 | 24,009 | 21,854 | $ 22,682 | ||
Cash paid for capital expenditures | 462 | 386 | 870 | 712 | |||
Regulated Businesses | |||||||
Segment Reporting Information [Line Items] | |||||||
Operating revenues | 803 | 1,523 | |||||
Market-Based Businesses | |||||||
Segment Reporting Information [Line Items] | |||||||
Operating revenues | 132 | 260 | |||||
Operating Segments | Regulated Businesses | |||||||
Segment Reporting Information [Line Items] | |||||||
Operating revenues | 803 | 755 | 1,523 | 1,440 | |||
Depreciation and amortization | 144 | 132 | 279 | 262 | |||
Total operating expenses, net | 512 | 480 | 1,015 | 950 | |||
Interest, net | (74) | (74) | (146) | (147) | |||
Income before income taxes | 236 | 208 | 398 | 358 | |||
Provision for income taxes | 58 | 52 | 98 | 92 | |||
Net income attributable to common shareholders | 177 | 156 | 300 | 266 | |||
Total assets | 21,536 | 19,338 | 21,536 | 19,338 | |||
Cash paid for capital expenditures | 457 | 378 | 861 | 693 | |||
Operating Segments | Market-Based Businesses | |||||||
Segment Reporting Information [Line Items] | |||||||
Operating revenues | 132 | 132 | 260 | 266 | |||
Depreciation and amortization | 7 | 8 | 13 | 17 | |||
Total operating expenses, net | 102 | 106 | 201 | 214 | |||
Interest, net | 0 | 1 | 1 | 2 | |||
Income before income taxes | 30 | 29 | 60 | 56 | |||
Provision for income taxes | 8 | 8 | 16 | 15 | |||
Net income attributable to common shareholders | 23 | 21 | 45 | 41 | |||
Total assets | 1,075 | 1,056 | 1,075 | 1,056 | |||
Cash paid for capital expenditures | 3 | 4 | 6 | 8 | |||
Other | |||||||
Segment Reporting Information [Line Items] | |||||||
Operating revenues | (4) | (5) | (8) | (11) | |||
Depreciation and amortization | 1 | 2 | 5 | 7 | |||
Total operating expenses, net | 4 | (6) | 7 | (9) | |||
Interest, net | (27) | (21) | (52) | (42) | |||
Income before income taxes | (34) | (10) | (67) | (35) | |||
Provision for income taxes | (10) | (3) | (23) | (11) | |||
Net income attributable to common shareholders | (24) | (7) | (45) | (24) | |||
Total assets | 1,398 | 1,460 | 1,398 | 1,460 | |||
Cash paid for capital expenditures | $ 2 | $ 4 | $ 3 | $ 11 |