Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 16, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | AWK | ||
Entity Registrant Name | American Water Works Company, Inc. | ||
Entity Central Index Key | 1,410,636 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 178,214,748 | ||
Entity Public Float | $ 13,463,200,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||
Property, plant and equipment | $ 19,954 | $ 18,504 |
Accumulated depreciation | (4,962) | (4,571) |
Property, plant and equipment, net | 14,992 | 13,933 |
Current assets: | ||
Cash and cash equivalents | 75 | 45 |
Restricted funds | 20 | 21 |
Accounts receivable, net | 269 | 255 |
Unbilled revenues | 263 | 267 |
Materials and supplies | 39 | 38 |
Other | 118 | 31 |
Total current assets | 784 | 657 |
Regulatory and other long-term assets: | ||
Regulatory assets | 1,289 | 1,271 |
Goodwill | 1,345 | 1,302 |
Other | 72 | 78 |
Total regulatory and other long-term assets | 2,706 | 2,651 |
TOTAL ASSETS | 18,482 | 17,241 |
Capitalization: | ||
Common stock ($0.01 par value, 500,000,000 shares authorized, 181,798,555 and 180,907,483 shares issued, respectively) | 2 | 2 |
Paid-in-capital | 6,388 | 6,351 |
Accumulated deficit | (873) | (1,073) |
Accumulated other comprehensive loss | (86) | (88) |
Treasury stock, at cost (3,701,867 and 2,625,112 shares respectively) | (213) | (143) |
Total common stockholders' equity | 5,218 | 5,049 |
Long-term debt | 5,749 | 5,862 |
Redeemable preferred stock at redemption value | 10 | 12 |
Total long-term debt | 5,759 | 5,874 |
Total capitalization | 10,977 | 10,923 |
Current liabilities: | ||
Short-term debt | 849 | 628 |
Current portion of long-term debt | 574 | 54 |
Accounts payable | 154 | 126 |
Accrued liabilities | 609 | 493 |
Taxes accrued | 31 | 26 |
Interest accrued | 63 | 62 |
Other | 112 | 144 |
Total current liabilities | 2,392 | 1,533 |
Regulatory and other long-term liabilities: | ||
Advances for construction | 300 | 349 |
Deferred income taxes, net | 2,596 | 2,310 |
Deferred investment tax credits | 23 | 24 |
Regulatory liabilities | 403 | 402 |
Accrued pension expense | 419 | 342 |
Accrued postretirement benefit expense | 87 | 169 |
Other | 67 | 68 |
Total regulatory and other long-term liabilities | 3,895 | 3,664 |
Contributions in aid of construction | 1,218 | 1,121 |
Commitments and contingencies (See Note 15) | ||
TOTAL CAPITALIZATION AND LIABILITIES | $ 18,482 | $ 17,241 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 181,798,555 | 180,907,483 |
Treasury Stock, shares | 3,701,867 | 2,625,112 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Income Statement [Abstract] | ||||
Operating revenues | $ 3,302 | $ 3,159 | $ 3,011 | |
Operating expenses: | ||||
Operation and maintenance | 1,504 | 1,404 | 1,350 | |
Depreciation and amortization | 470 | 440 | 424 | |
General taxes | 258 | 243 | 236 | |
Gain on asset dispositions and purchases | (10) | (3) | (2) | |
Total operating expenses, net | 2,222 | 2,084 | 2,008 | |
Operating income | 1,080 | 1,075 | 1,003 | |
Other income (expense): | ||||
Interest, net | (325) | (308) | (299) | |
Other, net | 15 | 15 | 6 | |
Total other income (expense) | (310) | (293) | (293) | |
Income from continuing operations before income taxes | 770 | 782 | 710 | |
Provision for income taxes | 302 | 306 | 280 | |
Income from continuing operations | 468 | 476 | 430 | |
Loss from discontinued operations, net of tax | (7) | |||
Net income attributable to common stockholders | $ 468 | $ 476 | $ 423 | |
Basic earnings per share: | ||||
Income from continuing operations | [1] | $ 2.63 | $ 2.66 | $ 2.40 |
Loss from discontinued operations, net of tax | [1] | (0.04) | ||
Net income attributable to common stockholders | [1] | 2.63 | 2.66 | 2.36 |
Diluted earnings per share: | ||||
Income from continuing operations | [1] | 2.62 | 2.64 | 2.39 |
Loss from discontinued operations, net of tax | [1] | (0.04) | ||
Net income attributable to common stockholders | [1] | $ 2.62 | $ 2.64 | $ 2.35 |
Weighted average common shares outstanding | ||||
Basic | 178 | 179 | 179 | |
Diluted | 179 | 180 | 180 | |
Dividends declared per common share | $ 1.50 | $ 1.36 | $ 1.24 | |
[1] | Amounts may not sum due to rounding. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income attributable to common stockholders | $ 468 | $ 476 | $ 423 |
Other comprehensive income (loss), net of tax: | |||
Change in employee benefit plan funded status, net of tax of $(14), $(6) and $(29) in 2016, 2015 and 2014, respectively | (21) | (10) | (46) |
Pension amortized to periodic benefit cost: | |||
Actuarial loss, net of tax of $4 and $3 in 2016 and 2015, respectively | 6 | 5 | |
Foreign currency translation adjustment | (1) | ||
Unrealized gain (loss) on cash flow hedges, net of tax of $10 and $(1) in 2016 and 2014, respectively | 17 | (1) | |
Net other comprehensive income (loss) | 2 | (6) | (47) |
Comprehensive income attributable to common stockholders | $ 470 | $ 470 | $ 376 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Change in employee benefit plan funded status, tax | $ (14) | $ (6) | $ (29) |
Actuarial loss, tax | 4 | $ 3 | |
Unrealized gain (loss) on cash flow hedge, tax | $ 10 | $ (1) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 468 | $ 476 | $ 423 |
Adjustments to reconcile to net cash flows provided by operating activities: | |||
Depreciation and amortization | 470 | 440 | 424 |
Deferred income taxes and amortization of investment tax credits | 282 | 296 | 254 |
Provision for losses on accounts receivable | 27 | 32 | 37 |
Gain on asset dispositions and purchases | (10) | (3) | (2) |
Pension and non-pension postretirement benefits | 54 | 61 | 24 |
Other non-cash, net | (36) | (53) | (14) |
Changes in assets and liabilities: | |||
Receivables and unbilled revenues | (31) | (84) | (62) |
Pension and non-pension postretirement benefit contributions | (53) | (57) | (52) |
Accounts payable and accrued liabilities | 60 | 80 | 27 |
Other current assets and liabilities, net | (20) | (9) | 38 |
Impact of binding global agreement in principle | 65 | ||
Net cash provided by operating activities | 1,276 | 1,179 | 1,097 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Capital expenditures | (1,311) | (1,160) | (956) |
Acquisitions, net of cash acquired | (204) | (197) | (9) |
Proceeds from sale of assets and securities | 9 | 5 | 14 |
Removal costs from property, plant and equipment retirements, net | (84) | (107) | (78) |
Net funds (restricted) released | 3 | (6) | 15 |
Net cash used in investing activities | (1,587) | (1,465) | (1,014) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from long-term debt | 553 | 565 | 501 |
Repayments of long-term debt | (144) | (130) | (240) |
Proceeds from short-term borrowings with maturities greater than three months | 60 | 35 | |
Repayments of short-term borrowings with maturities greater than three months | (60) | (256) | |
Net short-term borrowings with maturities less than three months | 221 | 180 | 41 |
Proceeds from issuances of employee stock plans and DRIP | 26 | 39 | 21 |
Advances and contributions for construction, net of refunds of $31, $23 and $21 in 2016, 2015 and 2014, respectively | 16 | 26 | 26 |
Debt issuance costs | (5) | (7) | (5) |
Dividends paid | (261) | (239) | (216) |
Anti-dilutive share repurchases | (65) | (126) | |
Tax benefit realized from equity compensation | 6 | ||
Net cash provided by (used in) financing activities | 341 | 308 | (87) |
Net increase (decrease) in cash and cash equivalents | 30 | 22 | (4) |
Cash and cash equivalents at beginning of period | 45 | 23 | 27 |
Cash and cash equivalents at end of period | 75 | 45 | 23 |
Cash paid during the year for: | |||
Interest, net of capitalized amount | 327 | 309 | 301 |
Income taxes, net of refunds of $0, $1 and $4 in 2016, 2015 and 2014, respectively | 16 | 12 | 16 |
Non-cash investing activity: | |||
Capital expenditures acquired on account but unpaid as of year end | $ 171 | $ 224 | $ 186 |
Consolidated Statements of Cas8
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement Of Cash Flows [Abstract] | |||
Advances and contributions for construction, refunds | $ 31 | $ 23 | $ 21 |
Income taxes, refunds | $ 0 | $ 1 | $ 4 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning Balance at Dec. 31, 2013 | $ 4,728 | $ 2 | $ 6,262 | $ (1,496) | $ (35) | $ (5) |
Beginning Balance (in shares) at Dec. 31, 2013 | 178,400,000 | (100,000) | ||||
Net income | 423 | 423 | ||||
Net income attributable to common stockholders | 423 | |||||
Direct stock reinvestment and purchase plan | 2 | 2 | ||||
Direct stock reinvestment and purchase plan (in shares) | 100,000 | |||||
Employee stock purchase plan | 5 | 5 | ||||
Employee stock purchase plan (in shares) | 100,000 | |||||
Stock-based compensation activity | 26 | 33 | (1) | $ (6) | ||
Stock-based compensation activity (in shares) | 900,000 | (100,000) | ||||
Net other comprehensive income (loss) | (47) | (47) | ||||
Dividends | (222) | (222) | ||||
Ending Balance at Dec. 31, 2014 | 4,915 | $ 2 | 6,302 | (1,296) | (82) | $ (11) |
Ending Balance (in shares) at Dec. 31, 2014 | 179,500,000 | (200,000) | ||||
Cumulative effect of change in accounting principle | (8) | (8) | ||||
Net income | 476 | |||||
Net income attributable to common stockholders | 476 | 476 | ||||
Direct stock reinvestment and purchase plan | 4 | 4 | ||||
Direct stock reinvestment and purchase plan (in shares) | 100,000 | |||||
Employee stock purchase plan | 5 | 5 | ||||
Employee stock purchase plan (in shares) | 100,000 | |||||
Stock-based compensation activity | 33 | 40 | (1) | $ (6) | ||
Stock-based compensation activity (in shares) | 1,200,000 | (100,000) | ||||
Repurchases of common stock | $ (126) | $ (126) | ||||
Repurchases of common stock (in shares) | (2,300,000) | (2,300,000) | ||||
Net other comprehensive income (loss) | $ (6) | (6) | ||||
Dividends | (244) | (244) | ||||
Ending Balance at Dec. 31, 2015 | 5,049 | $ 2 | 6,351 | (1,073) | (88) | $ (143) |
Ending Balance (in shares) at Dec. 31, 2015 | 180,900,000 | (2,600,000) | ||||
Net income | 468 | |||||
Net income attributable to common stockholders | 468 | 468 | ||||
Direct stock reinvestment and purchase plan | 5 | 5 | ||||
Direct stock reinvestment and purchase plan (in shares) | 100,000 | |||||
Employee stock purchase plan | 7 | 7 | ||||
Employee stock purchase plan (in shares) | 100,000 | |||||
Stock-based compensation activity | 19 | 25 | (1) | $ (5) | ||
Stock-based compensation activity (in shares) | 700,000 | (100,000) | ||||
Repurchases of common stock | $ (65) | $ (65) | ||||
Repurchases of common stock (in shares) | (1,000,000) | (1,000,000) | ||||
Net other comprehensive income (loss) | $ 2 | 2 | ||||
Dividends | (267) | (267) | ||||
Ending Balance at Dec. 31, 2016 | $ 5,218 | $ 2 | $ 6,388 | $ (873) | $ (86) | $ (213) |
Ending Balance (in shares) at Dec. 31, 2016 | 181,800,000 | (3,700,000) |
Organization and Operation
Organization and Operation | 12 Months Ended |
Dec. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Operation | Note 1: Organization and Operation American Water Works Company, Inc. (the “Company” or “American Water”) is the holding company for regulated and market-based subsidiaries throughout the United States and Ontario, Canada. The Regulated Businesses provide water and wastewater services as public utilities in 16 states in the United States. The Market-Based Businesses is comprised of four non-reportable operating segments including Military Services Group, which conducts operation and maintenance (“O&M”) of water and wastewater systems for military bases; Contract Operations Group, which conducts O&M of water and wastewater facilities for municipalities and the food and beverage industry; Homeowner Services Group, which primarily provides water and sewer line protection plans for homeowners; and Keystone, which provides water services for natural gas exploration and production companies. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2: Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of American Water and all of its subsidiaries in which a controlling interest is maintained after the elimination of intercompany accounts and transactions. Intercompany balances and transactions between subsidiaries have been eliminated. The Company uses the equity method to report its investments in joint ventures in which the Company holds up to a 50% voting interest and cannot exercise control over the operations and policies of the investments. Under the equity method, the Company records its interests as an investment and its percentage share of the investee’s earnings as earnings or losses. In July 2015, the Company acquired a ninety-five percent interest in Water Solutions Holdings, LLC, including its wholly-owned subsidiary, Keystone Clearwater Solutions, LLC (collectively referred to as “Keystone”). The outside stockholders’ interest, which is redeemable at the option of the minority owners, is recognized as redeemable noncontrolling interest. The redeemable noncontrolling interest amounted to $7 as of December 31, 2016 and 2015, and is included in other long-term liabilities in the accompanying Consolidated Balance Sheets. The net loss attributable to the noncontrolling interest was not significant. The Company has entered into an agreement, whereby it has the option to acquire from the minority owners, and the minority owners have the option to sell to the Company, the remaining five percent interest at fair value upon the occurrence of certain triggering events or at the defined date of December 31, 2018. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The Company considers its critical accounting estimates to include: the application of regulatory accounting principles and the related determination and estimates of regulatory assets and liabilities; estimates used in impairment testing of goodwill and other long-lived assets, including regulatory assets; revenue recognition; accounting for income taxes; benefit plan assumptions; and contingent liabilities. The Company’s critical accounting estimates that are particularly sensitive to change in the near term are amounts reported for regulatory assets and liabilities, benefit plans assumptions, contingency-related obligations and goodwill. Regulation The Company’s regulated utilities are subject to economic regulation by the public utility commissions and the local governments of the states in which they operate (the “PUCs”). These PUCs generally authorize revenue at levels intended to recover the estimated costs of providing service, plus a return on net investments, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of utility revenue, an incurred cost that would otherwise be charged to expense by a non-regulated entity is to be deferred as a regulatory asset if it is probable that the cost is recoverable in future rates. Conversely, GAAP requires recording of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and refundable to customers. See Note 6—Regulatory Assets and Liabilities. Property, Plant and Equipment Property, plant and equipment consist primarily of utility plant. Additions to utility plant and replacements of retirement units of property are capitalized. Costs include material, direct labor and such indirect items as engineering and supervision, payroll taxes and benefits, transportation and an allowance for funds used during construction (“AFUDC”). The cost of repairs, maintenance, including planned major maintenance activities, and minor replacements is charged to maintenance expense as incurred. The costs incurred to acquire and internally develop computer software for internal use are capitalized as a unit of property. The carrying value of these costs amounted to $345 and $311 as of December 31, 2016 and 2015, respectively. When units of property are replaced, retired or abandoned, the recorded value is credited to the asset account and charged to accumulated depreciation. To the extent the Company recovers cost of removal or other retirement costs through rates after the retirement costs are incurred, a regulatory asset is recorded. In some cases, the Company recovers retirement costs through rates during the life of the associated asset and before the costs are incurred. These amounts result in a regulatory liability being reported based on the amounts previously recovered through customer rates, until the costs to retire those assets are incurred. The cost of property, plant and equipment is depreciated using the straight-line average remaining life method. The Company’s regulated utility subsidiaries record depreciation in conformity with amounts approved by state regulators after regulatory review of information the Company submits to support its estimates of the assets’ remaining useful lives. Nonutility property consists primarily of buildings and equipment utilized by the Company for internal operations. This property is stated at cost, net of accumulated depreciation calculated using the straight-line method over the useful lives of the assets. Cash and Cash Equivalents Substantially all cash is invested in interest-bearing accounts. All highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. Restricted Funds Restricted funds primarily represent proceeds from financings for the construction and capital improvement of facilities and deposits for future services under O&M projects. The proceeds from these financings are held in escrow until the designated expenditures are incurred. Classification of restricted funds in the Consolidated Balance Sheets as either current or long-term is based upon the intended use of the funds. Accounts Receivable and Unbilled Revenues Accounts receivable include regulated utility customer accounts receivable, which represent amounts billed to water and wastewater customers on a cycle basis. Credit is extended based on the guidelines of the applicable PUCs and collateral is generally not required. Also included are market-based trade accounts receivable and nonutility customer receivables of the regulated subsidiaries. Unbilled revenues are accrued when service has been provided but has not been billed to customers. Allowance for Uncollectible Accounts Allowances for uncollectible accounts are maintained for estimated probable losses resulting from the Company’s inability to collect receivables from customers. Accounts that are outstanding longer than the payment terms are considered past due. A number of factors are considered in determining the allowance for uncollectible accounts, including the length of time receivables are past due and previous loss history. The Company generally writes off accounts when they become uncollectible or are over a certain number of days outstanding. See Note 5—Allowance for Uncollectible Accounts. Materials and Supplies Materials and supplies are stated at the lower of cost or net realizable value. Cost is determined using the average cost method. Goodwill Goodwill represents the excess of the purchase price paid over the estimated fair value of the assets acquired and liabilities assumed in the acquisition of a business. Goodwill is not amortized, but is tested for impairment at least annually or on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Goodwill is primarily associated with the acquisitions of E’town Corporation in 2001, American Water in 2003 and Keystone in 2015 (the “Acquisitions”) and has been assigned to reporting units based on the fair values at the date of the Acquisitions. The reporting units in the Regulated Businesses segment are aggregated into a single reporting unit. The Market-Based Businesses is comprised of four non-reportable reporting units. The Company’s annual impairment test is performed as of November 30 of each year, in conjunction with the completion of the Company’s annual business plan. The Company assesses qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If based on qualitative factors, the fair value of the reporting unit is more likely than not greater than the carrying amount, no further testing is required. If the Company bypasses the qualitative assessment or performs the qualitative assessment, but determines that it is more likely than not that its fair value is less than its carrying amount, a quantitative two-step, fair value-based test is performed. The first step compares the estimated fair value of the reporting unit to its respective net carrying value, including goodwill, on the measurement date. If the estimated fair value of any reporting unit is less than such reporting unit’s carrying value, then the second step is performed to measure the amount of the impairment loss (if any) for such reporting unit. The second step requires an allocation of fair value to the individual assets and liabilities using purchase price allocation accounting guidance in order to determine the implied fair value of goodwill. If the implied fair value of goodwill is less than the carrying amount for the reporting unit, an impairment loss is recorded as a reduction to goodwill and a charge to operating expense. Application of the goodwill impairment test requires management judgment, including the identification of reporting units and determining the fair value of the reporting unit. Management estimates fair value using a combination of a discounted cash flow analysis and market multiples analysis. Significant assumptions used in these fair value analyses include discount and growth rates and projected terminal values. The Company believes the assumptions and other considerations used to value goodwill to be appropriate. However, if experience differs from the assumptions and considerations used in its analysis, the resulting change could have a material adverse impact on the consolidated financial statements. Long-Lived Assets Long-lived assets include land, buildings, equipment and long-term investments. Long-lived assets, other than investments and land, are depreciated over their estimated useful lives, and are reviewed for impairment whenever changes in circumstances indicate the carrying value of the asset may not be recoverable. Such circumstances would include items such as a significant decrease in the market value of a long-lived asset, a significant adverse change in the manner the asset is being used or planned to be used or in its physical condition, or a history of operating or cash flow losses associated with the use of the asset. In addition, changes in the expected useful life of these long-lived assets may also be an impairment indicator. When such events or changes occur, the Company estimates the fair value of the asset from future cash flows expected to result from the use and, if applicable, the eventual disposition of the asset and compares that to the carrying value of the asset. If the carrying value is greater than the fair value, an impairment loss is recorded. The Company believes the assumptions and other considerations used to evaluate the carrying value of long-lived assets are appropriate. However, if actual experience differs from the assumptions and considerations used in its estimates, the resulting change could have a material adverse impact on the consolidated financial statements. The key variables to determine fair value include assumptions regarding sales volume, rates, operating costs, labor and other benefit costs, capital additions, assumed discount rates and other economic factors. These variables require significant management judgment and include inherent uncertainties, since they are forecasting future events. If such assets are considered impaired, an impairment loss is recognized equal to the amount by which the asset’s carrying value exceeds its fair value. The long-lived assets of the regulated utility subsidiaries are tested on a separate entity basis for impairment testing as they are integrated state-wide operations that do not have the option to curtail service and generally have uniform tariffs. A regulatory asset is charged to earnings if and when future recovery in rates of that asset is no longer probable. The Company holds other investments including investments in privately held companies and investments in joint ventures accounted for using the equity method. The Company’s investments in privately held companies and joint ventures are classified as other long-term assets in the accompanying Consolidated Balance Sheets. The fair values of long-term investments are dependent on the financial performance and solvency of the entities in which the Company invests, as well as volatility inherent in the external markets. If such assets are considered impaired, an impairment loss is recognized equal to the amount by which the asset’s carrying value exceeds its fair value. Advances for Construction and Contributions in Aid of Construction Regulated utility subsidiaries may receive advances for construction and contributions in aid of construction from customers, home builders and real estate developers to fund construction necessary to extend service to new areas. Advances are refundable for limited periods of time as new customers begin to receive service or other contractual obligations are fulfilled. Included in other current liabilities as of December 31, 2016 and 2015 in the accompanying Consolidated Balance Sheets are estimated refunds of $21 and $19, respectively. Those amounts represent expected refunds during the next 12-month period. Advances that are no longer refundable are reclassified to contributions. Contributions are permanent collections of plant assets or cash for a particular construction project. For ratemaking purposes, the amount of such contributions generally serves as a rate base reduction since the contributions represent non-investor supplied funds. Generally, the Company depreciates utility plant funded by contributions and amortizes its contributions balance as a reduction to depreciation expense, producing a result which is functionally equivalent to reducing the original cost of the utility plant for the contributions. In accordance with applicable regulatory guidelines, some of the Company’s utility subsidiaries do not amortize contributions, and any contribution received remains on the balance sheet indefinitely. Amortization of contributions in aid of construction was $27, $26 and $24 for the years ended December 31, 2016, 2015 and 2014, respectively. Recognition of Revenues Revenues of the regulated utility subsidiaries are recognized as water and wastewater services are provided, and include amounts billed to customers on a cycle basis and unbilled amounts based on estimated usage from the date of the meter reading associated with the latest customer bill to the end of the accounting period. The Company also recognizes revenue when it is probable that future recovery of previously incurred costs or future refunds that are to be credited to customers will occur through the ratemaking process. The Company has agreements with the U.S. Department of Defense to operate and maintain water and wastewater systems at various military bases pursuant to 50-year contracts (“military agreements”). These contracts also include construction components that are accounted for separately from the O&M components. Nine of the military agreements are subject to periodic price redetermination adjustments and modifications for changes in circumstance. The remaining three agreements are subject to annual price adjustments under a mechanism similar to price redeterminations. Additionally, the Company has agreements ranging in length from two to 40 years with municipalities and businesses in various industries to operate and maintain water and wastewater systems (“O&M agreements”). Revenues from operations and management services are recognized as services are provided. See Note 15—Commitments and Contingencies. Revenues from construction projects are recognized over the contract term based on the costs incurred to date during the period compared to the total estimated costs over the entire contract. Losses on contracts are recognized during the period in which the loss first becomes probable and estimable. Revenues recognized during the period in excess of billings on construction contracts are recorded as unbilled revenue. Billings in excess of revenues recognized on construction contracts are recorded as other current liabilities until the recognition criteria are met. Changes in contract performance and related estimated contract profitability may result in revisions to costs and revenues and are recognized in the period in which revisions are determined. Income Taxes American Water and its subsidiaries participate in a consolidated federal income tax return for U.S. tax purposes. Members of the consolidated group are charged with the amount of federal income tax expense determined as if they filed separate returns. Certain income and expense items are accounted for in different time periods for financial reporting than for income tax reporting purposes. The Company provides deferred income taxes on the difference between the tax basis of assets and liabilities and the amounts at which they are carried in the financial statements. These deferred income taxes are based on the enacted tax rates expected to be in effect when these temporary differences are projected to reverse. In addition, the regulated utility subsidiaries recognize regulatory assets and liabilities for the effect on revenues expected to be realized as the tax effects of temporary differences, previously flowed through to customers, reverse. Investment tax credits have been deferred by the regulated utility subsidiaries and are being amortized to income over the average estimated service lives of the related assets. The Company recognizes accrued interest and penalties related to tax positions as a component of income tax expense and accounts for sales tax collected from customers and remitted to taxing authorities on a net basis. Allowance for Funds Used During Construction AFUDC is a non-cash credit to income with a corresponding charge to utility plant that represents the cost of borrowed funds or a return on equity funds devoted to plant under construction. The regulated utility subsidiaries record AFUDC to the extent permitted by the PUCs. The portion of AFUDC attributable to borrowed funds is shown as a reduction of interest, net in the accompanying Consolidated Statements of Operations. Any portion of AFUDC attributable to equity funds would be included in other income (expenses) in the accompanying Consolidated Statements of Operations. AFUDC is summarized in the following table for the years ended December 31: 2016 2015 2014 Allowance for other funds used during construction $ 15 $ 13 $ 9 Allowance for borrowed funds used during construction 6 8 6 Environmental Costs The Company’s water and wastewater operations are subject to U.S. federal, state, local and foreign requirements relating to environmental protection, and as such, the Company periodically becomes subject to environmental claims in the normal course of business. Environmental expenditures that relate to current operations or provide a future benefit are expensed or capitalized as appropriate. Remediation costs that relate to an existing condition caused by past operations are accrued, on an undiscounted basis, when it is probable that these costs will be incurred and can be reasonably estimated. The Company agreed to pay $1 annually commencing in 2010 with the final payment being made in 2016. Remediation costs accrued amounted to $0 and $1 as of December 31, 2016 and 2015, respectively. The accrual relates entirely to a conservation agreement entered into by a subsidiary of the Company with the National Oceanic and Atmospheric Administration (“NOAA”) requiring the Company to, among other provisions, implement certain measures to protect the steelhead trout and its habitat in the Carmel River watershed in the State of California. Derivative Financial Instruments The Company uses derivative financial instruments for purposes of hedging exposures to fluctuations in interest rates. These derivative contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into derivative contracts for speculative purposes and does not use leveraged instruments. All derivatives are recognized on the balance sheet at fair value. On the date the derivative contract is entered into, the Company may designate the derivative as a hedge of the fair value of a recognized asset or liability (fair-value hedge) or a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash-flow hedge). Changes in the fair value of a fair-value hedge, along with the gain or loss on the underlying hedged item, are recorded in current-period earnings. The gains and losses on the effective portion of cash-flow hedges are recorded in other comprehensive income, until earnings are affected by the variability of cash flows. Any ineffective portion of designated cash-flow hedges is recognized in current-period earnings. Cash flows from derivative contracts are included in net cash provided by operating activities in the accompanying Consolidated Statements of Cash Flows. New Accounting Standards The following recently issued accounting standards have been adopted by the Company as of December 31, 2016: Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements (or Other Significant Matters) Accounting for Fees Paid in a Cloud Computing Arrangement Clarified accounting guidance for fees paid in a cloud computing arrangement. Software license elements in a cloud computing arrangement should be accounted for consistent with other software licenses. A cloud computing arrangement without a software license is accounted for as a service contract. January 1, 2016 Prospective basis Adoption of this standard did not impact the Company's results of operations, financial position or cash flows. The following recently issued accounting standards have not yet been adopted by the Company as of December 31, 2016: Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements (or Other Significant Matters) Simplification of Employee Share-Based Payment Accounting Simplified accounting and disclosure requirements for share-based payment awards. The updated guidance addresses: (i) the recognition of excess tax benefits and deficiencies; (ii) the classification of excess tax benefits and taxes paid on the Consolidated Statements of Cash Flows; (iii) election of an accounting policy for forfeitures; and (iv) the amount an employer can withhold to cover income taxes and still qualify for equity classification. The new guidance requires all tax related cash flows resulting from share-based payments to be reported as cash provided by operating activities in the Consolidated Statements of Cash Flows. January 1, 2017 Alternative transition methods available The cumulative effect to retained earnings prior to 2017 will be an increase of approximately $21, with an offsetting decrease to deferred income taxes, net. Revenue from Contracts with Customers Updated authoritative guidance that changes the criteria for recognizing revenue from a contract with a customer. The new standard replaces existing guidance on revenue recognition, including most industry specific guidance. The objective of the updated standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries and across capital markets. The underlying principle is that an entity will recognize revenue to depict the transfer of goods and services to customers at an amount the entity expects to be entitled to in exchange for those goods or services. The guidance also requires a number of disclosures regarding the nature, amount, timing and uncertainty of revenue and the related cash flows. January 1, 2018; early adoption permitted Retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with a cumulative effect adjustment to retained earnings for initial application of the guidance (modified retrospective method) The Company is evaluating the impact on the consolidated financial statements and related disclosures, as well as the transition method to be used to adopt the guidance. The Company is also considering the impacts of the new standard on its accounting for contributions in aid of construction. The Company does not expect to early adopt. Classification of Certain Cash Receipts and Cash Payments on the Statement of Cash Flows Provided guidance on the presentation and classification in the statement of cash flows for the following cash receipts and payments: (i) debt prepayment or debt extinguishment costs; (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (iii) contingent consideration payments made after a business combination; (iv) proceeds from the settlement of insurance claims; (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (vi) distributions received from equity method investees; (vii) beneficial interests in securitization transactions; and (viii) separately identifiable cash flows and application of the predominance principle. January 1, 2018; early adoption permitted Retrospective The Company does not anticipate significant impacts on its Statements of Cash Flows based on this standard update. Presentation of Changes in Restricted Cash on the Statement of Cash Flows Updated the accounting and disclosure guidance for the classification and presentation of changes in restricted cash on the statement of cash flows. The amended guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts described as restricted cash or restricted cash equivalents. Restricted cash and restricted cash equivalents will now be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows January 1, 2018; early adoption permitted Retrospective The Company does not anticipate significant impacts on its Statements of Cash Flows based on this standard update. Clarifying the Definition of a Business Updated the accounting guidance to clarify the definition of a business with the objective of assisting entities with evaluating whether transactions should be accounted for as acquisitions, or disposals, of assets or businesses. January 1, 2018; early adoption permitted Prospective The Company is evaluating the impact on the consolidated financial statements and related disclosures. Accounting for Leases Updated the accounting and disclosure guidance for leasing arrangements. Under this guidance, a lessee will be required to recognize the following for all leases, excluding short-term leases, at the commencement date: (i) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. Under the guidance, lessor accounting is largely unchanged. January 1, 2019; early adoption permitted Modified retrospective The Company is evaluating the impact on the consolidated financial statements and related disclosures, as well as the timing of adoption. Simplification of Goodwill Impairment Testing Updated authoritative guidance which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments in the update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying value exceeds the reporting unit's fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. January 1, 2020; early adoption permitted for interim or annual goodwill impairment tests performed after January 1, 2017 Prospective The Company is evaluating the impact on the consolidated financial statements and related disclosures, as well as the timing of adoption. Measurement of Credit Losses Updated the accounting guidance on reporting credit losses for financial assets held at amortized cost basis and available-for-sale debt securities. Under this guidance, expected credit losses are required to be measured based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount of financial assets. Also, this guidance requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a direct write-down. January 1, 2020; early adoption permitted Modified retrospective The Company is evaluating the impact on the consolidated financial statements and related disclosures, as well as the timing of adoption. Reclassifications Certain reclassifications have been made to prior periods in the accompanying consolidated financial statements and notes to conform to the current presentation. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Note 3: Acquisitions and Divestitures Acquisitions During 2016, the Company closed on fifteen acquisitions, including the Scranton acquisition in December, of various regulated water and wastewater systems for a total aggregate purchase price of $199. Assets acquired, principally utility plant, totaled $194. Liabilities assumed totaled $30, including $14 of contributions in aid of construction, and assumed debt of $6. The Company recorded additional goodwill of $43 associated with five of its acquisitions, which is reported in its Regulated Businesses segment and is expected to be fully deductible for tax purposes. The preliminary purchase price allocation related to the Scranton acquisition will be finalized once the valuation of net assets acquired has been completed. Also, our Regulated Businesses made a non-escrowed deposit of $5 related to the acquisition of the McKeesport, Pennsylvania’s wastewater system which we expect to close in the second half of 2017. During 2015, the Company closed on fourteen acquisitions of various regulated water and wastewater systems for a total aggregate purchase price of $64. Assets acquired, principally utility plant, totaled $90. Liabilities assumed totaled $26, including $10 of contributions in aid of construction, and assumed debt of $1. The Company recorded additional goodwill of $3 associated with four of its acquisitions, which is reported in its Regulated Businesses segment and is expected to be fully deductible for tax purposes. The Company also recognized a bargain purchase gain of $3 associated with five of its acquisitions, of which $1 was deferred as a regulatory liability. During 2015, the Company also closed on the Keystone acquisition, which is included as part of the Market-Based Businesses, for a total purchase price of $133, net of cash received. The fair value of identifiable assets acquired and liabilities assumed was $56 and $7, respectively, and principally included the acquisition of nonutility property of $25, accounts receivable and unbilled revenues of $18 and intangible assets of $12. The purchase price allocation, which is based on the estimated fair value of net assets acquired, resulted in the Company recording redeemable noncontrolling interest of $7 and additional goodwill of $91. Goodwill is expected to be fully deductible for tax purposes. The pro forma impact of our acquisitions was not material to our consolidated results of operations for the years ended December 31, 2016 and 2015. During 2014, the Company closed on thirteen acquisitions of various regulated water and wastewater systems for a total aggregate purchase price of $9. Assets acquired, principally plant, totaled $17. Liabilities assumed totaled $8, including $5 of contributions in aid of construction and assumed debt of $2. Divestitures In November 2014, the Company completed the sale of Terratec, previously included in the Market-Based Businesses. After post-close adjustments, net proceeds from the sale totaled $1, and the Company recorded a pretax loss on sale of $1. The following table summarizes the operating results of discontinued operations presented in the accompanying Consolidated Statements of Operations for the year ended December 31, 2014: Operating revenues $ 13 Total operating expenses, net 19 Loss from discontinued operations before income taxes (6 ) Provision (benefit) for income taxes 1 Loss from discontinued operations, net of tax $ (7 ) The provision for income taxes of discontinued operations includes the recognition of tax expense related to the difference between the tax basis and book basis of assets upon the sales of Terratec that resulted in taxable gains, since an election was made under Section 338(h)(10) of the Internal Revenue Code to treat the sales as asset sales. There were no assets or liabilities of discontinued operations in the accompanying Consolidated Balance Sheets as of December 31, 2016 and 2015. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | Note 4: Property, Plant and Equipment The following table summarizes the major classes of property, plant and equipment by category as of December 31: Range of Remaining Weighted Average 2016 2015 Useful Lives Useful Life Utility plant: Land and other non-depreciable assets $ 147 $ 141 Sources of supply 734 705 2 to 127 Years 52 Years Treatment and pumping facilities 3,218 3,070 3 to 101 Years 40 Years Transmission and distribution facilities 9,043 8,516 9 to 156 Years 80 Years Services, meters and fire hydrants 3,504 3,250 8 to 93 Years 37 Years General structures and equipment 1,343 1,227 1 to 154 Years 43 Years Waste treatment, pumping and disposal 457 313 2 to 115 Years 55 Years Waste collection 637 473 5 to 109 Years 58 Years Construction work in progress 419 404 Total utility plant 19,502 18,099 Nonutility property 452 405 3 to 50 years 6 Years Total property, plant and equipment $ 19,954 $ 18,504 Property, plant and equipment depreciation expense amounted to $435 , , |
Allowance for Uncollectible Acc
Allowance for Uncollectible Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Financing Receivable Allowance For Credit Loss Additional Information [Abstract] | |
Allowance for Uncollectible Accounts | Note 5: Allowance for Uncollectible Accounts The following table summarizes the changes in the Company’s allowances for uncollectible accounts for the years ended December 31: 2016 2015 2014 Balance as of January 1 $ (39 ) $ (35 ) $ (34 ) Amounts charged to expense (27 ) (32 ) (37 ) Amounts written off 29 31 38 Recoveries of amounts written off (3 ) (3 ) (2 ) Balance as of December 31 $ (40 ) $ (39 ) $ (35 ) |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Regulatory Assets And Liabilities Disclosure [Abstract] | |
Regulatory Assets and Liabilities | Note 6: Regulatory Assets and Liabilities Regulatory Assets Regulatory assets represent costs that are probable of recovery from customers in future rates. The majority of the regulatory assets earn a return. The following table summarizes the composition of regulatory assets as of December 31: 2016 2015 Deferred pension expense $ 310 $ 269 Income taxes recoverable through rates 241 236 Removal costs recoverable through rates 251 225 Deferred other postretirement benefit expense 14 90 San Clemente Dam project costs 91 95 Regulatory balancing accounts 110 88 Debt expense 66 68 Purchase premium recoverable through rates 58 60 Deferred tank painting costs 39 37 Other 109 103 Total Regulatory Assets $ 1,289 $ 1,271 The Company’s deferred pension expense includes a portion of the underfunded status that is probable of recovery through rates in future periods of $300 and $258 as of December 31, 2016 and 2015, respectively. The remaining portion is the pension expense in excess of the amount contributed to the pension plans which is deferred by certain subsidiaries and will be recovered in future service rates as contributions are made to the pension plan. The Company has recorded a regulatory asset for the additional revenues expected to be realized when the tax effects of temporary differences previously flowed through to customers, reverse. These temporary differences are primarily related to the difference between book and tax depreciation on property placed in service before the adoption by the regulatory authorities of full normalization for rate making purposes. Full normalization requires no flow through of tax benefits to customers. The regulatory asset for income taxes recoverable through rates is net of the reduction expected in future revenues as deferred taxes previously provided, attributable to the difference between the state and federal income tax rates under prior law and the current statutory rates, reverse over the average remaining service lives of the related assets. Removal costs recoverable through rates represent costs incurred for removal of property, plant and equipment or other retirement costs. The Company’s deferred other postretirement benefit expense includes a portion of the underfunded status that is probable of recovery through rates in future periods of $12 and $87 as of December 31, 2016 and 2015, respectively. The remaining portion is postretirement benefit expense in excess of the amount recovered in rates through 1997 has been deferred by certain subsidiaries. These costs are recognized in the rates charged for water service and will be recovered as authorized by the Company’s regulatory authorities. San Clemente Dam project costs represent costs incurred and deferred by the Company’s California subsidiary pursuant to its efforts to investigate alternatives to strengthen or remove the dam due to potential earthquake and flood safety concerns. In June 2012, the California Public Utilities Commission (“CPUC”) issued a decision authorizing implementation of a project to reroute the Carmel River and remove the San Clemente Dam. The project includes the Company’s California subsidiary, the California State Conservancy and the National Marine Fisheries Services. Under the order’s terms, the CPUC has authorized recovery for pre-construction costs, interim dam safety measures and environmental costs and construction costs. The authorized costs are to be recovered via a surcharge over a twenty-year period which began in October 2012. The unrecovered balance of project costs incurred, including cost of capital, net of surcharges totaled $91 and $95 as of December 31, 2016 and 2015, respectively. Surcharges collected were $4 for December 31, 2016 and 2015. Regulatory balancing accounts accumulate differences between revenues recognized and authorized revenue requirements until they are collected from customers or are refunded. Regulatory balancing accounts include low income programs and purchased power and water accounts. Debt expense is amortized over the lives of the respective issues. Call premiums on the redemption of long-term debt, as well as unamortized debt expense, are deferred and amortized to the extent they will be recovered through future service rates. Purchase premium recoverable through rates is primarily the recovery of the acquisition premiums related to an asset acquisition by the Company’s California Utility subsidiary during 2002, and acquisitions in 2007 by the Company’s New Jersey Utility subsidiary. As authorized for recovery by the California and New Jersey PUCs, these costs are being amortized to depreciation and amortization in the Consolidated Statements of Operations through November 2048. Tank painting costs are generally deferred and amortized to operations and maintenance expense in the Consolidated Statements of Operations on a straight-line basis over periods ranging from five to fifteen years, as authorized by the regulatory authorities in their determination of rates charged for service. Other regulatory assets include certain construction costs for treatment facilities, property tax stabilization, employee-related costs, business services project expenses, coastal water project costs, rate case expenditures and environmental remediation costs among others. These costs are deferred because the amounts are being recovered in rates or are probable of recovery through rates in future periods. Regulatory Liabilities Regulatory liabilities generally represent amounts that are probable of being credited or refunded to customers through the rate-making process. Also, if costs expected to be incurred in the future are currently being recovered through rates, the Company records those expected future costs as regulatory liabilities. The following table summarizes the composition of regulatory liabilities as of December 31: 2016 2015 Removal costs recovered through rates $ 316 $ 311 Pension and other postretirement benefit balancing accounts 55 59 Other 32 32 Total Regulatory Liabilities $ 403 $ 402 Removal costs recovered through rates are estimated costs to retire assets at the end of their expected useful life that are recovered through customer rates over the life of the associated assets. In December 2008, the Company’s utility subsidiary in New Jersey, at the direction of the New Jersey Board of Public Utilities, began to depreciate $48 of the total balance into depreciation and amortization expense in the Consolidated Statements of Operations via straight line amortization through November 2048. Pension and other postretirement benefit balancing accounts represent the difference between costs incurred and costs authorized by the PUCs that are expected to be refunded to customers. Other regulatory liabilities include legal settlement proceeds, deferred gains and various regulatory balancing accounts. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 7: Goodwill and Other Intangible Assets Goodwill The following table summarizes changes in the carrying amount of goodwill for the years ended December 31, 2016 and 2015: Regulated Businesses Market-Based Businesses Consolidated Cost Accumulated Impairment Cost Accumulated Impairment Cost Accumulated Impairment Total Net Balance as of January 1, 2015 $ 3,412 $ (2,332 ) $ 236 $ (108 ) $ 3,648 $ (2,440 ) $ 1,208 Goodwill from acquisitions 3 — 91 — 94 — 94 Balance as of December 31, 2015 $ 3,415 $ (2,332 ) $ 327 $ (108 ) $ 3,742 $ (2,440 ) $ 1,302 Goodwill from acquisitions 43 — — — 43 — 43 Balance as of December 31, 2016 $ 3,458 $ (2,332 ) $ 327 $ (108 ) $ 3,785 $ (2,440 ) $ 1,345 In 2016, the Company acquired aggregate goodwill of $43 associated with six of its acquisitions in the Regulated Businesses segment. In 2015, the Company recorded goodwill of $91 as part of the Keystone acquisition. The Keystone business is an operating segment comprised of one reporting unit to which all of the goodwill arising from the acquisition was assigned and which is included in the Market-Based Business information. The Company also acquired aggregate goodwill of $3 associated with four of its acquisitions in its Regulated Businesses segment. Excluding goodwill acquired in 2015 related to the Keystone acquisition, the Company determined that no qualitative factors were present that would indicate the estimated fair values of its reporting units were less than the respective carrying values. As such, the Company determined that further quantitative testing was not necessary at November 30, 2016 or 2015. A step one test was completed for the Keystone goodwill. We used an income approach valuation technique which estimates the discounted future cash flows of operations. The discounted cash flow analysis relies on a single scenario reflecting best estimate projected cash flows. Significant assumptions were used in estimating the fair value, including the discount rate, growth rate and terminal value. The estimated fair value of the Keystone reporting unit exceeded its carrying value, and as such the Company determined the goodwill is not impaired. There can be no assurances that the Company will not be required to recognize an impairment of goodwill in the future due to market conditions or other factors related to the performance of the Company’s reporting units. These market events could include a decline over a period of time of the Company’s stock price, a decline over a period of time in valuation multiples of comparable water utilities and reporting unit companies, the lack of an increase in the Company’s market price consistent with its peer companies, decreases in control premiums or continued downward pressure on commodity prices. A decline in the forecasted results in our business plan, such as changes in rate case results or capital investment budgets or changes in our interest rates, could also result in an impairment charge. In regards to the Keystone goodwill, adverse developments in market conditions, including prolonged depression of natural gas prices or other factors that negatively impact our forecast operating results, cash flows or key assumptions in the future could result in an impairment charge of a portion or all of the goodwill balance. Other Intangible Assets Included in other long-term assets at December 31, 2016 and 2015, is a $10 and $12, respectively, customer relationship intangible resulting from the Keystone acquisition. This intangible is being amortized on a straight-line basis over a period of eight years. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Note 8: Stockholders’ Equity Common Stock Under the dividend reinvestment and direct stock purchase plan (the “DRIP”), stockholders may reinvest cash dividends and purchase additional Company common stock, up to certain limits, through the plan administrator without commission fees. Shares purchased by participants through the DRIP may be newly-issued shares, treasury shares, or at the Company’s election, shares purchased by the plan administrator in the open market or in privately negotiated transactions. Purchases generally will be made and credited to DRIP accounts once each week. As of December 31, 2016, there were approximately 4.4 shares available for future issuance under the DRIP. Anti-dilutive Stock Repurchase Program In February 2015, the Company’s Board of Directors authorized an anti-dilutive stock repurchase program, which allowed the Company to purchase up to 10 shares of its outstanding common stock over an unrestricted period of time. The Company repurchased 1.0 shares and 2.3 shares of common stock in the open market at an aggregate cost of $65 and $126 under this program for the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016, there were 6.8 shares of common stock available for purchase under the program. Accumulated Other Comprehensive Loss The following table presents changes in accumulated other comprehensive loss by component, net of tax, for the years ended December 31, 2016 and 2015: Defined Benefit Plans Accumulated Employee Benefit Plan Funded Status Amortization of Prior Service Cost Amortization of Actuarial Loss Foreign Currency Translation Gain (Loss) on Cash Flow Hedge Other Comprehensive Loss Beginning balance as of January 1, 2015 $ (116 ) $ 1 $ 31 $ 3 $ (1 ) $ (82 ) Other comprehensive loss before reclassification (10 ) — — (1 ) — (11 ) Amounts reclassified from accumulated other comprehensive income — — 5 — — 5 Net other comprehensive income (loss) (10 ) — 5 (1 ) — (6 ) Ending balance as of December 31, 2015 $ (126 ) $ 1 $ 36 $ 2 $ (1 ) $ (88 ) Other comprehensive gain (loss) before reclassification (21 ) — — — 17 (4 ) Amounts reclassified from accumulated other comprehensive income — — 6 — — 6 Net other comprehensive income (loss) (21 ) — 6 — 17 2 Ending balance as of December 31, 2016 $ (147 ) $ 1 $ 42 $ 2 $ 16 $ (86 ) The Company does not reclassify the amortization of defined benefit pension cost components from accumulated other comprehensive loss directly to net income in its entirety, as a portion of these costs have been capitalized as a regulatory asset. These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 14—Employee Benefits. The amortization of the loss on cash flow hedge is reclassified to net income during the period incurred and is included in interest, net in the accompanying Consolidated Statements of Operations. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Based Compensation | Note 9: Stock Based Compensation The Company has granted stock options and restricted stock unit (“RSUs”) awards to non-employee directors, officers and other key employees of the Company pursuant to the terms of its 2007 Omnibus Equity Compensation Plan (the “2007 Plan”). The total aggregate number of shares of common stock that may be issued under the 2007 Plan is 15.5. As of December 31, 2016, 7.9 shares were available for grant under the 2007 Plan. Shares issued under the 2007 Plan may be authorized but unissued shares of Company stock or treasury shares, including shares purchased by the Company on the open market. The cost of services received from employees in exchange for the issuance of stock options and restricted stock awards is measured based on the grant date fair value of the awards issued. The value of stock options and RSUs awards at the date of the grant is amortized through expense over the three-year service period. All awards granted in 2016, 2015 and 2014 are classified as equity. The Company recognizes compensation expense for stock awards over the vesting period of the award. The Company stratified its grant populations and used historic employee turnover rates to estimate employee forfeitures. The estimated rate is compared to the actual forfeitures at the end of the reporting period and adjusted as necessary. The following table presents stock-based compensation expense recorded in operation and maintenance expense in the accompanying Consolidated Statements of Operations for the years ended December 31: 2016 2015 2014 Stock options $ 2 $ 2 $ 2 RSUs 8 8 10 ESPP 1 1 1 Stock-based compensation 11 11 13 Income tax benefit (4 ) (4 ) (5 ) Stock-based compensation expense, net of tax $ 7 $ 7 $ 8 There were no significant stock-based compensation costs capitalized during the years ended December 31, 2016, 2015 and 2014. The Company receives a tax deduction based on the intrinsic value of the award at the exercise date for stock options and the distribution date for RSUs. For each award, throughout the requisite service period, the Company recognizes the tax benefits, which have been included in deferred income tax assets, related to compensation costs. The tax deductions in excess of the benefits recorded throughout the requisite service period are recorded to common stockholders’ equity or the statement of operations and are presented in the financing section of the Consolidated Statements of Cash Flows. Stock Options In 2016, 2015 and 2014, the Company granted non-qualified stock options to certain employees under the 2007 Plan. The stock options vest ratably over the three-year service period beginning on January 1 of the year of the grant and have no performance vesting conditions. Expense is recognized using the straight-line method and is amortized over the requisite service period. The following table summarizes the weighted-average assumptions used in the Black-Scholes option-pricing model for grants and the resulting weighted-average grant date fair value per share of stock options granted for the years ended December 31: 2016 2015 2014 Dividend yield 2.09 % 2.35 % 2.55 % Expected volatility 15.89 % 17.64 % 17.75 % Risk-free interest rate 1.15 % 1.48 % 1.06 % Expected life (years) 4.0 4.4 3.6 Exercise price $ 65.25 $ 52.75 $ 44.29 Grant date fair value per share $ 6.61 $ 6.21 $ 4.57 The Company used the actual historical experience of exercises or expirations of the 2009 grant to determine the expected stock option life. The Company began granting stock options at the time of its initial public offering in April 2008. Expected volatility is based on a weighted average of historic volatilities of traded common stock of peer companies (regulated water companies) over the expected term of the stock options and historic volatilities of the Company’s common stock during the period it has been publicly traded. The dividend yield is based on the Company’s expected dividend payments and the stock price on the date of grant. The risk-free interest rate is the market yield on U.S. Treasury strips with maturities similar to the expected term of the stock options. The exercise price of the stock options is equal to the fair market value of the underlying stock on the date of option grant. Stock options vest over periods ranging from one to three years and have a maximum term of seven years from the effective date of the grant. The table below summarizes stock option activity for the year ended December 31, 2016: Shares (in thousands) Weighted- Average Exercise Price (per share) Weighted- Average Remaining Life (years) Aggregate Intrinsic Value Options outstanding as of December 31, 2015 1,187 $ 39.70 3.9 $ 24 Granted 341 65.26 Forfeited or expired (74 ) 56.25 Exercised (467 ) 32.64 Options outstanding as of December 31, 2016 987 $ 50.65 4.3 $ 21 Exercisable as of December 31, 2016 450 $ 41.22 2.9 $ 14 As of December 31, 2016, $2 of total unrecognized compensation cost related to nonvested stock options is expected to be recognized over the remaining weighted-average period of 1.7 years. The total fair value of stock options vested was $1 for the year ended December 31, 2016 and $3 for the years ended December 31, 2015 and 2014. The following table summarizes additional information regarding stock options exercised during the years ended December 31: 2016 2015 2014 Intrinsic value $ 18 $ 22 $ 13 Exercise proceeds 15 30 15 Income tax benefit realized 6 7 4 RSUs During 2016, 2015 and 2014, the Company granted RSUs, both with and without performance conditions, to certain employees under the 2007 Plan. RSUs generally vest over periods ranging from one to three years. During 2016, 2015 and 2014, the Company granted RSUs to non-employee directors under the 2007 Plan. The RSUs vested on the date of grant; however, distribution of the shares will be made within 30 days of the earlier of: (i) 15 months after grant date, subject to any deferral election by the director; or (ii) the participant’s separation from service. Because these RSUs vested on the grant date, the total grant date fair value was recorded in operation and maintenance expense included in the expense table above on the grant date. The RSUs without performance conditions are valued at the market value of the closing price of the Company’s common stock on the date of the grant and vest ratably over the three-year service period beginning January 1 of the year of the grant. These RSUs are amortized through expense over the requisite service period using the straight-line method. The table below summarizes activity of RSUs without performance conditions for the year ended December 31, 2016: Shares (in thousands) Weighted Average Grant Date Fair Value (per share) Non-vested total as of December 31, 2015 81 $ 48.71 Granted 47 67.71 Vested (45 ) 54.06 Forfeited (9 ) 57.99 Non-vested total as of December 31, 2016 74 $ 56.43 RSUs with performance conditions vest ratably over the three-year performance period beginning January 1 of the year of the grant (the “Performance Period”). Distribution of the performance shares is contingent upon the achievement of internal performance measures and, separately, certain market thresholds over the Performance Period. RSUs granted with internal performance measures are valued at the market value of the closing price of the Company’s common stock on the date of grant. RSUs granted with market conditions are valued using a Monte Carlo model. Expected volatility is based on historical volatilities of traded common stock of the Company and comparative companies using daily stock prices over the past three years. The expected term is three years and the risk-free interest rate is based on the three-year U.S. Treasury rate in effect as of the measurement date. The following table presents the weighted-average assumptions used in the Monte Carlo simulation and the weighted-average grant date fair values of RSUs granted for the years ended December 31: 2016 2015 2014 Expected volatility 15.90 % 14.93 % 17.78 % Risk-free interest rate 0.91 % 1.07 % 0.75 % Expected life (years) 3.0 3.0 3.0 Grant date fair value per share $ 77.16 $ 62.10 $ 45.45 The grant date fair value of restricted stock awards that vest ratably and have market and/or performance conditions are amortized through expense over the requisite service period using the graded-vesting method. The table below summarizes activity of RSUs with performance conditions for the year ended December 31, 2016: Shares (in thousands) Weighted Average Grant Date Fair Value (per share) Non-vested total as of December 31, 2015 366 $ 45.91 Granted (a) 173 57.47 Vested (206 ) 40.01 Forfeited (24 ) 49.89 Non-vested total as of December 31, 2016 309 $ 55.94 (a) During 2014, the Company granted selected employees an aggregate of 128 thousand RSUs with internal performance measures and, separately, certain market thresholds. These awards vested in January 2016. The terms of the grants specified that to the extent certain performance goals, comprised of internal measures and, separately, market thresholds were achieved, the RSUs would vest; if performance goals were surpassed, up to 175% of the target awards would be distributed; and if performance goals were not met, the awards would be forfeited. In January 2016, an additional 74 thousand RSUs were granted and distributed because performance thresholds were exceeded and were included in the number of shares granted. As of December 31, 2016, $4 of total unrecognized compensation cost related to the nonvested restricted stock units, with and without performance conditions, is expected to be recognized over the weighted-average remaining life of 1.4 years. The total fair value of RSUs, with and without performance conditions, vested was $14, $12 and $11 for the years ended December 31, 2016, 2015 and 2014, respectively. If dividends are paid with respect to shares of the Company’s common stock before the RSUs are distributed, the Company credits a liability for the value of the dividends that would have been paid if the RSUs were shares of Company common stock. When the RSUs are distributed, the Company pays the participant a lump sum cash payment equal to the value of the dividend equivalents accrued. The Company accrued dividend equivalents totaling $1 to accumulated deficit in the accompanying Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2016, 2015 and 2014, respectively. Employee Stock Purchase Plan Under the Nonqualified Employee Stock Purchase Plan (“ESPP”), employees can use payroll deductions to acquire Company stock at the lesser of 90% of the fair market value of common stock at either the beginning or the end of a three-month purchase period. As of December 31, 2016, there were 1.1 shares of common stock reserved for issuance under the ESPP. The Company’s ESPP is considered compensatory. During the years ended December 31, 2016, 2015 and 2014, the Company issued 93, 98 and 102 thousand shares, respectively, under the ESPP. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 10: Long-Term Debt The Company obtains long-term debt primarily to fund capital expenditures of the regulated subsidiaries and refinance debt of the parent company. The following table summarizes the components of long-term debt as of December 31: Rate Weighted Average Rate Maturity 2016 2015 Long-term debt of American Water Capital Corp. (a) Senior notes — 3.00%-8.27% 5.04% 2017-2046 $ 4,786 $ 4,273 Private activity bonds and government funded debt — 1.79%-6.25% 5.42% 2021-2040 194 195 Long-term debt of other American Water subsidiaries Private activity bonds and government funded debt — (b) 0.00%-6.20% 4.72% 2017-2041 695 790 Mortgage bonds — fixed rate 4.29%-9.71% 7.41% 2017-2039 636 637 Mandatorily redeemable preferred stock 8.47%-9.75% 8.61% 2019-2036 12 13 Capital lease obligations 12.23%-12.44% 12.39% 2026 1 1 6,324 5,909 Unamortized debt premium, net (c) 17 23 Unamortized debt issuance costs (9 ) (7 ) Interest rate swap fair value adjustment 1 3 Less current portion of long-term debt (574 ) (54 ) Total long-term debt $ 5,759 $ 5,874 (a) This indebtedness is considered “debt” for purposes of a support agreement between American Water and American Water Capital Corp. (“AWCC”), American Water’s wholly owned finance subsidiary, which serves as a functional equivalent of a guarantee by American Water of AWCC’s payment obligations under such indebtedness. (b) Includes $6 and $8 of variable rate debt with variable-to-fixed interest rate swaps ranging between 3.93% and 4.65%, as of December 31, 2016 and 2015. This debt was assumed via an acquisition in 2013. (c) Primarily fair value adjustments previously recognized in acquisition purchase accounting. All mortgage bonds and $619 of the private activity bonds and government funded debt held by the subsidiaries were collateralized by utility plant as of December 31, 2016. Long-term debt indentures contain a number of covenants that, among other things, limit, subject to certain exceptions, the Company from issuing debt secured by the Company’s assets. Certain long term notes require the Company to maintain a ratio of consolidated total indebtedness to consolidated total capitalization of not more than 0.70 to 1.00. The ratio as of December 31, 2016 was 0.58 to 1.00. In addition, the Company has $891 of notes which include the right to redeem the notes at par in whole or in part from time to time subject to certain restrictions. The future sinking fund payments and debt maturities were as follows: Year Amount 2017 $ 574 2018 457 2019 166 2020 22 2021 479 Thereafter 4,626 The following long-term debt was issued in 2016: Company Type Rate Maturity Amount American Water Capital Corp. Senior notes—fixed rate 3.00%-4.00% 2026-2046 $ 550 Other American Water subsidiaries Private activity bonds and government funded debt — 1.00%-1.36% 2026-2037 3 Total issuances $ 553 The Company also assumed debt of $6 as a result of an acquisition during 2016, which has a fixed interest rate of 1.00% and matures in 2037. The Company incurred debt issuance costs of $5 related to the above issuances. The following long-term debt was retired through optional redemption or payment at maturity during 2016: Company Type Rate Maturity Amount American Water Capital Corp. Senior notes — 5.52% 2016 $ 37 American Water Capital Corp. Private activity bonds and government funded debt—fixed rate 1.79%-2.90% 2021-2031 1 Other American Water subsidiaries Private activity bonds and government funded debt — 0.00%-5.30% 2016-2041 104 Other American Water subsidiaries Mandatorily redeemable preferred stock 8.49%-9.18% 2031-2036 2 Total retirements and redemptions $ 144 Interest, net includes interest income of approximately $14, $13 and $11 in 2016, 2015 and 2014, respectively. One of the principal market risks to which the Company is exposed is changes in interest rates. In order to manage the exposure, the Company follows risk management policies and procedures, including the use of derivative contracts such as swaps. The Company reduces exposure to interest rates by managing commercial paper and debt maturities. The Company does not enter into derivative contracts for speculative purposes and does not use leveraged instruments. The derivative contracts entered into are for periods consistent with the related underlying exposures. The Company is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. The Company minimizes the counterparty credit risk on these transactions by dealing only with leading, credit-worthy financial institutions having long-term credit ratings of “A” or better. The Company has four forward starting swap agreements with an aggregate notional amount of $300 to reduce interest rate exposure on debt expected to be issued in 2017. The forward starting swap agreements terminate in December 2017 and have an average fixed rate of 2.20%. The Company has designated the forward starting swap agreements as cash flow hedges and the initial fair value, in addition to any subsequent changes in fair value, are recognized in accumulated other comprehensive gain. Upon termination, the cumulative gain or loss recorded in accumulated other comprehensive gain or loss will be amortized through interest, net over the term of the issued debt. On February 8, 2017, the Company entered into a forward starting swap agreement with a notional amount of $100 to reduce interest rate exposure on debt expected to be issued in 2018. This forward starting swap agreement terminates in December 2018 and has an average fixed rate of 2.67%. The forward starting swap agreement is a cash flow hedge and the Company will account for this forward starting swap agreement in the same manner as the aforementioned forward starting swap agreements above. The Company has an interest-rate swap to hedge $100 of its 6.085% fixed-rate debt maturing 2017. The Company pays variable interest of six-month LIBOR plus 3.422% and the interest rate swap matures with the fixed-rate debt in 2017. The Company has designated the interest rate swap as a fair value hedge accounted for at fair value with gains or losses, as well as the offsetting gains or losses on the hedged item, recognized in interest, net. The net loss recognized by the Company was de minimis for the periods ended December 31, 2016 and 2015. The Company has employed interest rate swaps to fix the interest cost on a portion of its variable-rate debt with an aggregate notional amount of $6. The Company has designated these instruments as economic hedges accounted for at fair value with gains or losses recognized in interest, net. The gain recognized by the Company was de minimis for the years ended 2016 and 2015. The following table provides a summary of the gross fair value for the Company’s derivative asset and liabilities, as well as the location of the asset and liability balances in the Consolidated Balance Sheets Derivative Instruments Derivative Designation Balance Sheet Classification December 31, 2016 December 31, 2015 Asset Derivative Interest rate swap Fair value hedge Other long-term assets $ — $ 2 Interest rate swap Fair value hedge Other current assets 1 — Forward starting swaps Cash flow hedge Other current assets 27 — Liability Derivative Interest rate swap Fair value hedge Long-term debt $ — $ 2 Interest rate swap Fair value hedge Current portion of long-term debt 1 — Interest rate swap Economic hedge (non-designated) Other long-term liabilities — 1 |
Short-Term Debt
Short-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Short Term Borrowings [Abstract] | |
Short-Term Debt | Note 11: Short-Term Debt Short-term debt consists of commercial paper and credit facility borrowings totaling $849 and $628 as of December 31, 2016 and 2015, respectively. As of December 31, 2016 there were no borrowings outstanding with maturities greater than three months. AWCC has a revolving credit facility with $1,750 in aggregate total commitments from a diversified group of financial institutions with a termination date of June 2020. On March 22, 2016, AWCC and its lenders agreed to increase total commitments under AWCC’s revolving credit facility to the $1,750 from $1,250. Other terms and conditions of the existing facility remained unchanged. The agreement also includes a $150 sublimit for letters of credit and a $100 sublimit for swing loans. The Company incurred $1 of issuance costs in connection with the increased lending commitments for the year ended December 31, 2016. On June 30, 2015, AWCC and its lenders extended the termination date of revolving credit facility from October 2018 to June 2020. This amended and restated agreement also allowed AWCC to request to further extend the term of the credit facility for up to two one-year periods. As a result of the amendments made in 2015, the Company incurred $2 of issuance costs for the year ended December 31, 2015. Both the issuance costs incurred in 2016 and 2015 will be amortized over the remaining life of the credit facility and is included in interest, net in the accompanying Consolidated Statements of Operations. Interest on borrowings are based on a LIBOR-based rate, plus an applicable margin. Also, the Company acquired a line of credit facility as part of the Keystone acquisition. This facility has a maximum availability of up to $16, dependent on a collateral base calculation. Based on the collateral assets at December 31, 2016, $6 was available to borrow. At December 31, 2016, there were no outstanding borrowings on this line of credit facility. Borrowings under the facility are due upon demand with interest being paid monthly. Interest accrues each day at a rate per annum equal to 2.75% above the greater of the one month or one day LIBOR. The borrowing base under the facility allows for financing up to the greater of the note or 80% of eligible accounts receivable. The following table summarizes the Company’s aggregate credit facility commitments, letter of credit sub-limit under our revolving credit facility and commercial paper limit, as well as the available capacity for each as of: Credit Facility Available Credit Letter of Credit Available Letter of Commercial Available Commercial Commitment Facility Capacity Sublimit (a) Credit Capacity Paper Limit Paper Capacity (In millions) December 31, 2016 $ 1,766 $ 1,668 $ 150 $ 62 $ 1,600 $ 751 December 31, 2015 1,266 1,182 150 68 1,000 374 (a) Letters of credit are non-debt instruments maintained to provide credit support for certain transactions as requested by third parties. The Company had $88 and $82 of outstanding letters of credit as of December 31, 2016 and 2015, respectively, all of which were issued under the revolving credit facility noted above. The following table summarizes the short-term borrowing activity for AWCC for the years ended December 31: 2016 2015 Average borrowings $ 850 $ 553 Maximum borrowings outstanding 1,016 871 Weighted average interest rates, computed on daily basis 0.78 % 0.49 % Weighted average interest rates, as of December 31 0.98 % 0.66 % The credit facility requires the Company to maintain a ratio of consolidated debt to consolidated capitalization of not more than 0.70 to 1.00. The ratio as of December 31, 2016 was 0.58 to 1.00. None of the Company’s borrowings are subject to default or prepayment as a result of a downgrading of securities, although such a downgrading could increase fees and interest charges under the Company’s credit facility. As part of the normal course of business, the Company routinely enters contracts for the purchase and sale of water, energy, fuels and other services. These contracts either contain express provisions or otherwise permit the Company and its counterparties to demand adequate assurance of future performance when there are reasonable grounds for doing so. In accordance with the contracts and applicable contract law, if the Company is downgraded by a credit rating agency, especially if such downgrade is to a level below investment grade, it is possible that a counterparty would attempt to rely on such a downgrade as a basis for making a demand for adequate assurance of future performance. Depending on the Company’s net position with the counterparty, the demand could be for the posting of collateral. In the absence of expressly agreed provisions that specify the collateral that must be provided, the obligation to supply the collateral requested will be a function of the facts and circumstances of the Company’s situation at the time of the demand. If the Company can reasonably claim that it is willing and financially able to perform its obligations, it may be possible that no collateral would need to be posted or that only an amount equal to two or three months of future payments should be sufficient. The Company does not expect to post any collateral which will have a material adverse impact on the Company’s results of operations, financial position or cash flows. |
General Taxes
General Taxes | 12 Months Ended |
Dec. 31, 2016 | |
General Taxes [Abstract] | |
General Taxes | Note 12: General Taxes The following table summarizes the components of general tax expense from continuing operations for the years ended December 31: 2016 2015 2014 Gross receipts and franchise $ 106 $ 99 $ 96 Property and capital stock 106 98 96 Payroll 32 31 31 Other general 14 15 13 Total general taxes $ 258 $ 243 $ 236 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 13: Income Taxes The following table summarizes the components of income tax expense from continuing operations for the years ended December 31: 2016 2015 2014 Current income taxes State $ 20 $ 10 $ 11 Federal 1 — 15 Total current income taxes $ 21 $ 10 $ 26 Deferred income taxes State $ 24 $ 32 $ 31 Federal 258 265 224 Amortization of deferred investment tax credits (1 ) (1 ) (1 ) Total deferred income taxes 281 296 254 Provision for income taxes $ 302 $ 306 $ 280 The following is a reconciliation between the statutory federal income tax rate and the Company’s effective tax rate for the years ended December 31: 2016 2015 2014 Income tax at statutory rate 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from: State taxes, net of federal taxes 3.8 3.6 3.8 Federal regulatory effects 0.2 0.4 0.3 Other, net 0.2 0.1 0.3 Effective tax rate 39.2 % 39.1 % 39.4 % The following table provides the components of the net deferred tax liability from continuing operations as of December 31: 2016 2015 Deferred tax assets Advances and contributions $ 540 $ 513 Tax losses and credits 301 173 Pension and other postretirement benefits 173 181 Other 90 32 Total deferred tax assets 1,104 899 Valuation allowance (6 ) (8 ) Total deferred tax assets, net of allowance $ 1,098 $ 891 Deferred tax liabilities Property, plant and equipment $ 3,339 $ 2,913 Deferred pension and other postretirement benefits 126 139 Other 229 149 Total deferred tax liabilities 3,694 3,201 Total deferred tax liabilities, net of deferred tax assets $ (2,596 ) $ (2,310 ) As of December 31, 2016 and 2015, the Company recognized federal net operating loss (“NOL”) carryforwards of $1,227 and $1,080, respectively. The 2016 NOL carryforward includes $56 of windfall tax deductions the benefit of which will not be recorded to equity until realized. The Company believes the federal NOL carryforwards are more likely than not to be recovered and require no valuation allowance. The Company’s federal NOL carryforwards will begin to expire in 2028. As of December 31, 2016 and 2015, the Company had state NOLs of $625 and $534, respectively, a portion of which are offset by a valuation allowance because the Company does not believe these NOLs are more likely than not to be realized. The state NOL carryforwards will begin to expire in 2017 through 2036. As of December 31, 2016 and 2015, the Company had an insignificant amount of Canadian NOL carryforwards and capital loss carryforwards for federal income tax purposes. The Company files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local or non-U.S. income tax examinations by tax authorities for years on or before 2012. The Company has state income tax examinations in progress and does not expect material adjustments to result. The Patient Protection and Affordable Care Act (the “PPACA”) became law on March 23, 2010, and the Health Care and Education Reconciliation Act of 2010 became law on March 30, 2010, which makes various amendments to certain aspects of the PPACA (together, the “Acts”). The PPACA effectively changes the tax treatment of federal subsidies paid to sponsors of retiree health benefit plans that provide a benefit that is at least actuarially equivalent to the benefits under Medicare Part D. The Acts effectively make the subsidy payments taxable in tax years beginning after December 31, 2012 and as a result, the Company followed its original accounting for the underfunded status of the other postretirement benefits for the Medicare Part D adjustment and recorded a reduction in deferred tax assets and an increase in its regulatory assets amounting to $6 as of December 31, 2016 and 2015. In connection with the filing of the Company’s consolidated 2015 tax return in September 2015, the Company deducted bonus depreciation, of which approximately $106 of deferred tax liabilities is related to the Regulated Businesses segment. The following table summarizes the changes in the Company’s gross liability, excluding interest and penalties, for unrecognized tax benefits: Balance as of January 1, 2015 $ 195 Increases in current period tax positions 39 Decreases in prior period measurement of tax positions (1 ) Balance as of December 31, 2015 $ 233 Increases in current period tax positions 10 Decreases in prior period measurement of tax positions (74 ) Balance as of December 31, 2016 $ 169 The Company’s tax positions relate primarily to the deductions claimed for repair and maintenance costs on its utility plant. The gross liability was significantly reduced as a result of the accounting method change filed with Company’s 2015 tax return during the current year. The Company does not anticipate material changes to its unrecognized tax benefits within the next year. If the Company sustains all of its positions as of December 31, 2016 and 2015, an unrecognized tax benefit of $9, excluding interest and penalties, would impact the Company’s effective tax rate. The Company had an insignificant amount of interest and penalties related to its tax positions as of December 31, 2016 and 2015. The following table summarizes the changes in the Company’s valuation allowance: Balance as of January 1, 2014 $ 13 Decreases in current period tax positions (3 ) Balance as of December 31, 2014 $ 10 Decreases in current period tax positions (2 ) Balance as of December 31, 2015 $ 8 Decreases in current period tax positions (2 ) Balance as of December 31, 2016 $ 6 |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2016 | |
Defined Benefit Plans And Other Postretirement Benefit Plans Disclosures [Abstract] | |
Employee Benefits | Note 14: Employee Benefits Pension and Other Postretirement Benefits The Company maintains noncontributory defined benefit pension plans covering eligible employees of its regulated utility and shared services operations. Benefits under the plans are based on the employee’s years of service and compensation. The pension plans have been closed for all new employees. The pension plans were closed for most employees hired on or after January 1, 2006. Union employees hired on or after January 1, 2001 had their accrued benefit frozen and will be able to receive this benefit as a lump sum upon termination or retirement. Union employees hired on or after January 1, 2001 and non-union employees hired on or after January 1, 2006 are provided with a 5.25% of base pay defined contribution plan. The Company does not participate in a multiemployer plan. The Company’s pension funding practice is to contribute at least the greater of the minimum amount required by the Employee Retirement Income Security Act of 1974 or the normal cost. Further, the Company will consider additional contributions if needed to avoid “at risk” status and benefit restrictions under the Pension Protection Act of 2006. The Company may also consider increased contributions, based on other financial requirements and the plans’ funded position. Pension plan assets are invested in a number of actively managed and commingled funds including equities, fixed income securities, guaranteed interest contracts with insurance companies, real estate funds and real estate investment trusts (“REITs”). Pension expense in excess of the amount contributed to the pension plans is deferred by certain regulated subsidiaries pending future recovery in rates charged for utility services as contributions are made to the plans. See Note 6—Regulatory Assets and Liabilities. The Company also has unfunded noncontributory supplemental non-qualified pension plans that provide additional retirement benefits to certain employees. The Company maintains other postretirement benefit plans providing varying levels of medical and life insurance to eligible retirees. The retiree welfare plans are closed for union employees hired on or after January 1, 2006. The plans had previously closed for non-union employees hired on or after January 1, 2002. The Company’s policy is to fund other postretirement benefit costs up to the amount recoverable through rates. Assets of the plans are invested in a number of actively managed and commingled funds including equities and fixed income securities. The obligations of the pension and postretirement benefit plans are dominated by obligations for active employees. Because the timing of expected benefit payments is so far in the future, the investment strategy is to allocate a significant percentage of assets to equities, which the Company believes will provide the highest return over the long-term period. The fixed income assets are invested in intermediate and long duration debt securities and may be invested in fixed income instruments, such as futures and options, in order to better match the duration of the plan liability. The Company periodically conducts asset liability studies to ensure the investment strategies are aligned with the profile of the plans’ obligations. None of the Company’s securities are included in pension or other postretirement benefit plan assets. The Company uses fair value for all classes of assets in the calculation of market-related value of plan assets. The investment policy guidelines of the pension plan require that the fixed income portfolio has an overall weighted-average credit rating of A or better by Standard & Poor’s. The investment policies’ objectives are focused on reducing the volatility of the plans’ funding status over a long term horizon. The fair values and asset allocations of pension plan assets as of December 31, 2016 and 2015, respectively, by asset category were as follows: Quoted Prices in Active Significant Significant Percentage Target Markets for Observable Unobservable of Plan Assets Allocation Identical Inputs Inputs as of Asset Category 2017 Total (Level 1) (Level 2) (Level 3) December 31, 2016 Cash — $ 10 $ 10 $ — $ — — Equity Securities: U.S. large cap 24 % 316 316 — — 22 % U.S. small cap 8 % 134 134 — — 9 % International 20 % 259 — 259 — 18 % Fixed Income Securities: 40 % 42 % U.S. Treasury securities and government bonds — 150 114 36 — — Corporate bonds — 391 — 391 — — Mortgage-backed securities — 3 — 3 — — Long duration bond fund — 7 7 — — — Guarantee annuity contracts — 48 — 9 39 — Real Estate Fund 6 % 101 — — 101 7 % REITs 2 % 24 — 24 — 2 % Total 100 % $ 1,443 $ 581 $ 722 $ 140 100 % Quoted Prices in Active Significant Significant Percentage Target Markets for Observable Unobservable of Plan Assets Allocation Identical Inputs Inputs as of Asset Category 2016 Total (Level 1) (Level 2) (Level 3) December 31, 2015 Cash — $ 5 $ 5 $ — $ — — Equity Securities: U.S. large cap 24 % 318 318 — — 23 % U.S. small cap 8 % 115 115 — — 8 % International 20 % 260 — 260 — 19 % Fixed Income Securities: 40 % 41 % U.S. Treasury and government bonds — 120 95 25 — — Corporate bonds — 375 — 375 — — Mortgage-backed securities — 9 — 9 — — Long duration bond fund — 7 7 — — — Guarantee annuity contracts — 49 — 8 41 — Real Estate 6 % 95 — — 95 7 % REITs 2 % 23 — 23 — 2 % Total 100 % $ 1,376 $ 540 $ 700 $ 136 100 % The following tables present a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) for 2016 and 2015, respectively: Level 3 Balance as of January 1, 2016 $ 136 Actual return on assets 8 Purchases, issuances and settlements, net (4 ) Balance as of December 31, 2016 $ 140 Level 3 Balance as of January 1, 2015 $ 127 Actual return on assets 12 Purchases, issuances and settlements, net (3 ) Balance as of December 31, 2015 $ 136 The Company’s other postretirement benefit plans are partially funded and the assets are held under various trusts. The investments and risk mitigation strategies for the plans are tailored specifically for each trust. In setting new strategic asset mixes, consideration is given to the likelihood that the selected asset allocation will effectively fund the projected plan liabilities and the risk tolerance of the Company. The Company periodically updates the long-term, strategic asset allocations and uses various analytics to determine the optimal asset allocation. Considerations include plan liability characteristics, liquidity characteristics, funding requirements, expected rates of return and the distribution of returns. In June 2012, the Company implemented a de-risking strategy for the medical bargaining trust within the plan to minimize volatility. As part of the de-risking strategy, the Company revised the asset allocations to increase the matching characteristics of assets relative to liabilities. The initial de-risking asset allocation for the plan was 60% return-generating assets and 40% liability-driven assets. The investment strategies and policies for the plan reflect a balance of liability driven and return-generating considerations. The objective of minimizing the volatility of assets relative to liabilities is addressed primarily through asset—liability matching, asset diversification and hedging. The fixed income target asset allocation matches the bond-like and long-dated nature of the postretirement liabilities. Assets are broadly diversified within asset classes to achieve risk-adjusted returns that in total lower asset volatility relative to the liabilities. The Company assesses the investment strategy regularly to ensure actual allocations are in line with target allocations as appropriate. Strategies to address the goal of ensuring sufficient assets to pay benefits include target allocations to a broad array of asset classes and, within asset classes strategies are employed to provide adequate returns, diversification and liquidity. The assets of the Company’s other trusts, within the other postretirement benefit plans, have been primarily invested in equities and fixed income funds. The assets under the various other postretirement benefit trusts are invested differently based on the assets and liabilities of each trust. The obligations of the other postretirement benefit plans are dominated by obligations for the medical bargaining trust. Thirty-nine percent and four percent of the total postretirement plan benefit obligations are related to the medical non-bargaining and life insurance trusts, respectively. Because expected benefit payments related to the benefit obligations are so far into the future, and the size of the medical non-bargaining and life insurance trusts’ obligations are large compared to each trusts’ assets, the investment strategy is to allocate a significant portion of the assets’ investment to equities, which the Company believes will provide the highest long-term return and improve the funding ratio. The Company engages third party investment managers for all invested assets. Managers are not permitted to invest outside of the asset class (e.g. fixed income, equity, alternatives) or strategy for which they have been appointed. Investment management agreements and recurring performance and attribution analysis are used as tools to ensure investment managers invest solely within the investment strategy they have been provided. Futures and options may be used to adjust portfolio duration to align with a plan’s targeted investment policy. In order to minimize asset volatility relative to the liabilities, a portion of plan assets is allocated to fixed income investments that are exposed to interest rate risk. Increases in interest rates generally will result in a decline in the value of fixed income assets while reducing the present value of the liabilities. Conversely, rate decreases will increase fixed income assets, partially offsetting the related increase in the liabilities. Within equities, risk is mitigated by constructing a portfolio that is broadly diversified by geography, market capitalization, manager mandate size, investment style and process. Actual allocations to each asset class vary from target allocations due to periodic investment strategy updates, market value fluctuations, the length of time it takes to fully implement investment allocation, and the timing of benefit payments and contributions. The asset allocation is rebalanced on a quarterly basis, if necessary. The fair values and asset allocations of postretirement benefit plan assets as of December 31, 2016 and 2015, respectively, by asset category, were as follows: Quoted Prices in Active Significant Significant Percentage Target Markets for Observable Unobservable of Plan Assets Allocation Identical Inputs Inputs as of Asset Category 2017 Total (Level 1) (Level 2) (Level 3) December 31, 2016 Bargain VEBA: Equity Securities: U.S. large cap 9 % $ 35 $ 35 $ — $ — 9 % International 11 % 40 40 — — 10 % Fixed Income Securities: 80 % 81 % U.S. Treasury securities and government bonds — 84 84 — — — Corporate bonds — 223 — 223 — — Long duration bond fund — 3 3 — — — Future and option contracts (a) — 1 1 — — — Total Bargain VEBA 100 % $ 386 $ 163 $ 223 $ — 100 % Non-bargain VEBA: Cash — $ 2 $ 2 $ — $ — — Equity Securities: U.S. large cap 21 % 29 29 — — 22 % U.S. small cap 21 % 30 30 — — 22 % International 28 % 37 37 — — 27 % Fixed Income Securities: 30 % 29 % Core fixed income bond fund — 36 36 — — — Total Non-bargain VEBA 100 % $ 134 $ 134 $ — $ — 100 % Life VEBA: Equity Securities: U.S. large cap 70 % $ 3 $ 3 $ — $ — 64 % Fixed Income Securities: 30 % 36 % Core fixed income bond fund — 2 2 — — — Total Life VEBA 100 % $ 5 $ 5 $ — $ — 100 % Total 100 % $ 525 $ 302 $ 223 $ — 100 % (a) Includes cash for margin requirements. Quoted Prices in Active Significant Significant Percentage Target Markets for Observable Unobservable of Plan Assets Allocation Identical Assets Inputs Inputs as of Asset Category 2016 Total (Level 1) (Level 2) (Level 3) December 31, 2015 Bargain VEBA: Equity Securities: U.S. large cap 9 % $ 32 $ 32 $ — $ — 9 % International 11 % 38 38 — — 10 % Fixed Income Securities: 80 % 81 % U.S. Treasury and government bonds — 118 118 — — — Corporate bonds — 184 — 184 — — Long duration bond fund — 3 3 — — — Future and option contracts (a) — 1 1 — — — Total Bargain VEBA 100 % $ 376 $ 192 $ 184 $ — 100 % Non-bargain VEBA: Cash — $ 2 $ 2 $ — $ — — Equity Securities: U.S. large cap 21 % 24 24 — — 21 % U.S. small cap 21 % 26 26 — — 22 % International 28 % 33 33 — — 28 % Fixed Income Securities: 30 % 29 % Core fixed income bond fund — 33 33 — — — Total Non-bargain VEBA 100 % $ 118 $ 118 $ — $ — 100 % Life VEBA: Equity Securities: U.S. large cap 70 % $ 4 $ 4 $ — $ — 68 % Fixed Income Securities: 30 % 32 % Core fixed income bond fund — 2 2 — — — Total Life VEBA 100 % $ 6 $ 6 $ — $ — 100 % Total 100 % $ 500 $ 316 $ 184 $ — 100 % (a) Includes cash for margin requirements. Valuation Techniques Used to Determine Fair Value Cash—Cash and investments with maturities of three months or less when purchased, including certain short-term fixed-income securities, are considered cash and are included in the recurring fair value measurements hierarchy as Level 1. Equity securities—For equity securities, the trustees obtain prices from pricing services, whose prices are obtained from direct feeds from market exchanges, that the Company is able to independently corroborate. Equity securities are valued based on quoted prices in active markets and categorized as Level 1. Certain equities, such as international securities held in the pension plan are invested in commingled funds. These funds are valued to reflect the plan fund’s interest in the fund based on the reported year-end net asset value. Since net asset value is not directly observable or not available on a nationally recognized securities exchange for the commingled funds, they are categorized as Level 2. Fixed-income securities—The majority of U.S. Treasury securities and government bonds have been categorized as Level 1 because they trade in highly-liquid and transparent markets that the Company can corroborate. The fair values of corporate bonds, mortgage backed securities, certain government bonds and a guaranteed annuity contract are based on evaluated prices that reflect observable market information, such as actual trade information of similar securities, and have been categorized as Level 2 because the valuations are calculated using models which utilize actively traded market data that the Company can corroborate. Certain other guaranteed annuity contracts are categorized as Level 3 because the investments are not publicly quoted. The fund administrator values the fund using the net asset value per fund share, derived from the quoted prices in active markets of the underlying securities. Since these valuation inputs are not highly observable, these contracts have been categorized as Level 3. Exchange-traded future and option positions are reported in accordance with changes in daily variation margins that are settled daily. Exchange-traded options and futures, for which market quotations are readily available, are valued at the last reported sale price or official closing price on the primary market or exchange on which they are traded and are classified as Level 1. Real estate fund—Real estate fund is valued using the net asset value based on valuation models of underlying securities which generally include significant unobservable inputs that cannot be corroborated using verifiable observable market data. Real estate fund is categorized as Level 3 as the fund uses significant unobservable inputs for fair value measurement. REITs—REITs are invested in commingled funds. Commingled funds are valued to reflect the plan fund’s interest in the fund based on the reported year-end net asset value. Since the net asset value is not directly observable for the commingled funds, they are categorized as Level 2. The following table provides a rollforward of the changes in the benefit obligation and plan assets for the most recent two years for all plans combined: Pension Benefits Other Benefits 2016 2015 2016 2015 Change in benefit obligation: Benefit obligation as of January 1, $ 1,720 $ 1,746 $ 667 $ 703 Service cost 32 37 12 14 Interest cost 80 74 28 30 Plan participants' contributions — — 2 2 Plan amendments — — (156 ) — Actuarial (gain) loss 100 (76 ) 82 (58 ) Settlements (3 ) — — — Gross benefits paid (65 ) (61 ) (26 ) (26 ) Federal subsidy — — 1 2 Benefit obligation as of December 31, $ 1,864 $ 1,720 $ 610 $ 667 Change in plan assets: Fair value of plan assets as of January 1, $ 1,376 $ 1,428 $ 500 $ 512 Actual return on plan assets 99 (21 ) 32 (15 ) Employer contributions 36 30 17 27 Plan participants' contributions — — 2 2 Settlements (3 ) — — — Benefits paid (65 ) (61 ) (26 ) (26 ) Fair value of plan assets as of December 31, $ 1,443 $ 1,376 $ 525 $ 500 Funded status as of December 31, $ (421 ) $ (344 ) $ (85 ) $ (167 ) Amounts recognized in the balance sheet consist of: Noncurrent asset $ — $ — $ 2 $ 2 Current liability (2 ) (2 ) — — Noncurrent liability (419 ) (342 ) (87 ) (169 ) Net amount recognized $ (421 ) $ (344 ) $ (85 ) $ (167 ) On July 31, 2016, the other postretirement benefit plan was remeasured to reflect an announced plan amendment, which capped benefits for certain non-union plan participants. The remeasurement included a $156 reduction in future benefits payable to plan participants, and resulted in a $89 reduction to the net accrued postretirement benefit obligation. The plan amendment will be amortized over 10.2 years, the average future working lifetime to full eligibility age for all plan participants. The following table provides the components of the Company’s accumulated other comprehensive income and regulatory assets that have not been recognized as components of periodic benefit costs as of December 31: Pension Benefits Other Benefits 2016 2015 2016 2015 Net actuarial loss $ 466 $ 397 $ 170 $ 97 Prior service cost (credit) 2 3 (158 ) (10 ) Net amount recognized $ 468 $ 400 $ 12 $ 87 Regulatory assets $ 300 $ 258 $ 12 $ 87 Accumulated other comprehensive income 168 142 — — Total $ 468 $ 400 $ 12 $ 87 As of December 31, 2016 and 2015, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with a projected obligation in excess of plan assets were as follows: Projected Benefit Obligation Exceeds the Fair Value of Plans' Assets 2016 2015 Projected benefit obligation $ 1,864 $ 1,721 Fair value of plan assets 1,443 1,376 Accumulated Benefit Obligation Exceeds the Fair Value of Plans' Assets 2016 2015 Accumulated benefit obligation $ 1,722 $ 1,584 Fair value of plan assets 1,443 1,376 The accumulated postretirement benefit obligation exceeds plan assets for all of the Company’s other postretirement benefit plans. In August 2006, the Pension Protection Act (“PPA”) was signed into law in the U.S. The PPA replaces the funding requirements for defined benefit pension plans by requiring that defined benefit plans contribute to 100% of the current liability funding target over seven years. Defined benefit plans with a funding status of less than 80% of the current liability are defined as being “at risk” and additional funding requirements and benefit restrictions may apply. The PPA was effective for the 2008 plan year with short-term phase-in provisions for both the funding target and at-risk determination. The Company’s qualified defined benefit plan is currently funded above the at-risk threshold, and therefore the Company expects that the plans will not be subject to the “at risk” funding requirements of the PPA. The Company is proactively monitoring the plan’s funded status and projected contributions under the law to appropriately manage the potential impact on cash requirements. Minimum funding requirements for the qualified defined benefit pension plan are determined by government regulations and not by accounting pronouncements. The Company plans to contribute amounts at least equal to the greater of the minimum required contributions or the normal cost in 2017 to the qualified pension plans. The Company plans to contribute to its 2017 other postretirement benefit cost for rate-making purposes. Information about the expected cash flows for the pension and postretirement benefit plans is as follows: Pension Other Benefits Benefits 2017 expected employer contributions To plan trusts $ 40 $ 6 To plan participants 2 — The Company made 2017 contributions to fund pension benefits and other benefits of $10 and $1, respectively, through February 2017. The following table reflects the net benefits expected to be paid from the plan assets or the Company’s assets: Pension Benefits Other Benefits Expected Benefit Payments Expected Benefit Payments Expected Federal Subsidy Payments 2017 $ 71 $ 29 $ 2 2018 76 31 2 2019 82 33 2 2020 89 34 2 2021 94 35 2 2022-2026 551 194 12 Because the above amounts are net benefits, plan participants’ contributions have been excluded from the expected benefits. Accounting for pensions and other postretirement benefits requires an extensive use of assumptions about the discount rate, expected return on plan assets, the rate of future compensation increases received by the Company’s employees, mortality, turnover and medical costs. Each assumption is reviewed annually. The assumptions are selected to represent the average expected experience over time and may differ in any one year from actual experience due to changes in capital markets and the overall economy. These differences will impact the amount of pension and other postretirement benefit expense that the Company recognizes. The significant assumptions related to the Company’s pension and other postretirement benefit plans were as follows: Pension Benefits Other Benefits 2016 2015 2014 2016 2015 2014 Weighted-average assumptions used to determine December 31 benefit obligations Discount rate 4.28% 4.66% 4.24% 4.26% 4.67% 4.24% Rate of compensation increase 3.07% 3.10% 3.12% N/A N/A N/A Medical trend N/A N/A N/A graded from graded from graded from 7.00% in 2016 6.50% in 2015 6.75% in 2014 to 5.00% in 2021+ to 5.00% in 2021+ to 5.00% in 2021+ Weighted-average assumptions used to determine net periodic cost Discount rate 4.66% 4.24% 5.12% 3.66% 4.24% 5.10% Expected return on plan assets 7.02% 6.91% 6.91% 5.37% 4.92% 5.87% Rate of compensation increase 3.10% 3.12% 3.15% N/A N/A N/A Medical trend N/A N/A N/A graded from graded from graded from 6.50% in 2016 6.75% in 2015 7.00% in 2014 to 5.00% in 2021+ to 5.00% in 2021+ to 5.00% in 2019+ N/A — applicable. The discount rate assumption was determined for the pension and postretirement benefit plans independently. At year-end 2011, the Company began using an approach that approximates the process of settlement of obligations tailored to the plans’ expected cash flows by matching the plans’ cash flows to the coupons and expected maturity values of individually selected bonds. The yield curve was developed for a universe containing the majority of U.S.-issued AA-graded corporate bonds, all of which were non-callable (or callable with make-whole provisions). Historically, for each plan, the discount rate was developed as the level equivalent rate that would produce the same present value as that using spot rates aligned with the projected benefit payments. The expected long-term rate of return on plan assets is based on historical and projected rates of return, prior to administrative and investment management fees, for current and planned asset classes in the plans’ investment portfolios. Assumed projected rates of return for each of the plans’ projected asset classes were selected after analyzing historical experience and future expectations of the returns and volatility of the various asset classes. Based on the target asset allocation for each asset class, the overall expected rate of return for the portfolio was developed, adjusted for historical and expected experience of active portfolio management results compared to the benchmark returns and for the effect of expenses paid from plan assets. The Company’s pension expense increases as the expected return on assets decreases. The Company used an expected return on plan assets of 6.49% to estimate its 2017 pension benefit costs, and an expected blended return based on weighted assets of 5.09% to estimate its 2017 other postretirement benefit costs. In the determination of year end 2014 projected benefit plan obligations, the Company adopted a new table based on the Society of Actuaries RP 2014 mortality table including a generational BB-2D projection scale. The adoption resulted in a significant increase to pension and other postretirement benefit plans’ projected benefit obligations. In 2015 a new RP 2015 mortality table was issued. All of the experience upon which the table is based was considered by the Company in selecting its 2014 assumptions. Assumed health care cost trend rates have a significant effect on the amounts reported for the other postretirement benefit plans. The health care cost trend rate is based on historical rates and expected market conditions. A one-percentage-point change in assumed health care cost trend rates would have the following effects: One-Percentage-Point Increase One-Percentage-Point Decrease Effect on total of service and interest cost components $ 7 $ (6 ) Effect on other postretirement benefit obligation $ 74 $ (61 ) The following table provides the components of net periodic benefit costs for the years ended December 31: 2016 2015 2014 Components of net periodic pension benefit cost Service cost $ 32 $ 37 $ 32 Interest cost 80 74 76 Expected return on plan assets (95 ) (97 ) (95 ) Amortization of: Prior service cost (credit) 1 1 1 Actuarial (gain) loss 27 25 — Net periodic pension benefit cost $ 45 $ 40 $ 14 Other changes in plan assets and benefit obligations recognized in other comprehensive income Amortization of prior service credit (cost) $ — $ — $ — Current year actuarial (gain) loss 21 10 46 Amortization of actuarial gain (loss) (6 ) (5 ) — Total recognized in other comprehensive income $ 15 $ 5 $ 46 Total recognized in net periodic benefit cost and comprehensive income $ 60 $ 45 $ 60 Components of net periodic other postretirement benefit cost Service cost $ 12 $ 14 $ 11 Interest cost 28 30 29 Expected return on plan assets (27 ) (26 ) (28 ) Amortization of: Prior service cost (credit) (9 ) (2 ) (2 ) Actuarial (gain) loss 5 5 — Net periodic other postretirement benefit cost $ 9 $ 21 $ 10 The Company’s policy is to recognize curtailments when the total expected future service of plan participants is reduced by greater than 10% due to an event that results in terminations and/or retirements. Cumulative gains and losses that are in excess of 10% of the greater of either the projected benefit obligation or the fair value of plan assets are amortized over the expected average remaining future service of the current active membership for the plans. The estimated amounts that will be amortized from accumulated other comprehensive income and regulatory assets into net periodic benefit cost in 2017 are as follows: Pension Benefits Other Benefits Actuarial (gain) loss $ 34 $ 10 Prior service cost (credit) 1 (18 ) Total $ 35 $ (8 ) Savings Plans for Employees The Company maintains 401(k) savings plans that allow employees to save for retirement on a tax-deferred basis. Employees can make contributions that are invested at their direction in one or more funds. The Company makes matching contributions based on a percentage of an employee’s contribution, subject to certain limitations. Due to the Company’s discontinuing new entrants into the defined benefit pension plan, on January 1, 2006 the Company began providing an additional 5.25% of base pay defined contribution benefit for union employees hired on or after January 1, 2001 and non-union employees hired on or after January 1, 2006. Plan expenses totaled $9, $9 and $8 for 2016, 2015 and 2014, respectively. All of the Company’s contributions are invested in one or more funds at the direction of the employees. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15: Commitments and Contingencies Commitments have been made in connection with certain construction programs. The estimated capital expenditures required under legal and binding contractual obligations amounted to $469 The Company’s regulated subsidiaries maintain agreements with other water purveyors for the purchase of water to supplement their water supply. The future annual commitments related to minimum quantities of purchased water having non-cancelable terms are as follows: Year Amount 2017 $ 56 2018 58 2019 64 2020 64 2021 65 Thereafter 735 The Company enters into agreements for the provision of services to water and wastewater facilities for the United States military, municipalities and other customers. The Company’s military agreements expire between 2051 and 2065 and have remaining performance commitments as measured by estimated remaining contract revenue of $3,143 as of December 31, 2016. The military agreements are subject to customary termination provisions held by the U.S. Federal Government prior to the agreed upon contract expiration. The Company’s O&M agreements with municipalities and other customers expire between 2017 and 2048 and have remaining performance commitments as measured by estimated remaining contract revenue of $794 as of December 31, 2016. Some of the Company’s long-term contracts to operate and maintain a municipality’s, federal government’s or other party’s water or wastewater treatment and delivery facilities include responsibility for certain maintenance for some of those facilities, in exchange for an annual fee. Unless specifically required to perform certain maintenance activities, the maintenance costs are recognized when the maintenance is performed. Contingencies The Company is routinely involved in legal actions incident to the normal conduct of its business. As of December 31, 2016, the Company has accrued approximately $138 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 $51. 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 15, will not have a material adverse effect on the Company. West Virginia Elk River Freedom Industries Chemical Spill On January 9, 2014, a chemical storage tank owned by Freedom Industries, Inc. leaked two substances, 4-methylcyclohexane methanol, or MCHM, and PPH/DiPPH, a mix of polyglycol ethers, into the Elk River near the West Virginia-American Water Company (“WVAWC”) treatment plant intake in Charleston, West Virginia. After having been alerted to the leak of MCHM by the West Virginia Department of Environmental Protection (“DEP”), WVAWC took immediate steps to gather more information about MCHM, augment its treatment process as a precaution, and begin consultations with federal, state and local public health officials. As soon as possible after it was determined that the augmented treatment process would not fully remove the MCHM, a joint decision was reached in consultation with the West Virginia Bureau for Public Health to issue a “Do Not Use” order for all of its approximately 93,000 customer accounts in parts of nine West Virginia counties served by the Charleston treatment plant. By January 18, 2014, none of WVAWC’s customers were subject to the Do Not Use order. Following the Freedom Industries chemical spill, numerous lawsuits were filed against WVAWC and certain other Company affiliated entities (collectively, the “American Water Defendants”) with respect to this matter in the U.S. District Court for the Southern District of West Virginia or West Virginia Circuit Courts in Kanawha, Boone and Putnam counties, and to date, 73 cases remain pending. Four of the cases pending before the U.S. district court were consolidated for purposes of discovery, and an amended consolidated class action complaint for those cases (the “Federal action”) was filed in December 2014 by several plaintiffs. On January 28, 2016, all of the then-filed state court cases were referred to West Virginia’s Mass Litigation Panel for further proceedings, which have been stayed pending the negotiation by the parties and approval by the court in the Federal action of a global agreement to settle all of such cases, as described below. On July 7, 2016, the court in the Federal action scheduled trial to begin on October 25, 2016, but the court delayed the start of the trial pending ongoing settlement negotiations between the parties and has since granted a continuance of the trial until March 21, 2017. The Mass Litigation Panel has also stayed its proceedings until May 1, 2017. WVAWC Binding Global Agreement in Principle to Settle Claims On October 31, 2016, the court in the Federal action approved the preliminary principles, terms and conditions of a binding global agreement in principle to settle claims (the “Settlement”) among the American Water Defendants, and all class members, putative class members, claimants and potential claimants (collectively, the “Plaintiffs”), arising out of the Freedom Industries chemical spill. The terms of the Settlement propose a global federal and state resolution of all litigation and potential claims against the American Water Defendants and their insurers. A claimant may elect to opt out of any final settlement agreement, in which case such claimant will not receive any benefit from or be bound by the terms of the Settlement. Under the terms and conditions of the Settlement and any subsequent final settlement agreement, the American Water Defendants have not admitted, and will not admit, any fault or liability for any of the allegations made by the Plaintiffs in any of the actions to be resolved. The proposed aggregate pre-tax amount of the Settlement is $126, of which $65 would be contributed by WVAWC, and the remainder would be contributed by certain of the Company’s general liability insurance carriers. The Company has general liability insurance under a series of policies underwritten by a number of individual carriers. Two of these insurance carriers, which provide an aggregate of $50 in insurance coverage to the Company under these policies, were requested, but presently have not agreed, to participate in the Settlement. The Company and WVAWC are vigorously pursuing their rights to insurance coverage from these non-participating carriers for any contributions by WVAWC to the Settlement. In this regard, WVAWC filed a lawsuit against one of these carriers alleging that the carrier’s failure to agree to participate in the Settlement constitutes a breach of contract, and the Company is pursuing mandatory arbitration against the other non-participating carrier. The preliminary terms of the Settlement intend to establish a two-tier settlement fund for the payment of claims, comprised of (i) a simple claim fund, which is also referred to as the “guaranteed fund,” of $76, of which $51 will be contributed by WVAWC, including insurance deductibles, and $25 would be contributed by one of the Company’s general liability insurance carriers, and (ii) an individual review claim fund of up to $50, of which up to $14 would be contributed by WVAWC and $36 would be contributed by a number of the Company’s general liability insurance carriers. Separately, up to $25 would be contributed to the guaranteed fund by another defendant to the Settlement. As a result of these events, the Company recorded a charge to earnings, net of insurance receivables, of $65 ($39 after-tax) in the third quarter of 2016. The settlement amount of $126 is reflected in Accrued Liabilities and the offsetting insurance receivable is reflected in Other Current Assets in the Consolidated Balance Sheet as of December 31, 2016. The Company intends to fund WVAWC’s contributions to the Settlement through existing sources of liquidity, although no contribution by WVAWC will be required unless and until the terms of the Settlement are finally approved by the court in the Federal action. Furthermore, under the terms of the Settlement, WVAWC has agreed that it will not seek rate recovery from the Public Service Commission of West Virginia for approximately $4 in direct response costs expensed in 2014 by WVAWC relating to the Freedom Industries chemical spill as well as for amounts paid by WVAWC under the Settlement. The Company’s insurance policies operate under a layered structure where coverage is generally provided in the upper layers after claims have exhausted lower layers of coverage. The $36 to be contributed by a number of the Company’s general liability insurance carriers to the individual review claim fund, as noted above, is from higher layers of the insurance structure than the two insurance carriers that were requested, but presently have not agreed, to participate in the Settlement. Any recovery by WVAWC or the Company from the non-participating carriers would reimburse WVAWC for its contributions to the guaranteed fund. Following the court’s October 31 approval, the parties have continued to negotiate the details of the Settlement. If preliminary approval of the Settlement is obtained, notice of the terms of the Settlement would then be provided to members of the settlement class. Following the notice period, the court in the Federal action would hold a fairness hearing to consider final approval of the Settlement. Other Related Investigations Additionally, investigations with respect to the matter have been initiated by the U.S. Chemical Safety and Hazard Investigation Board (the “CSB”), the U.S. Attorney’s Office for the Southern District of West Virginia, the West Virginia Attorney General, and the Public Service Commission of West Virginia (the “PSC”). As a result of the U.S. Attorney’s Office investigation, Freedom Industries and six former Freedom Industries employees (three of whom also were former owners of Freedom Industries), pled guilty to violations of the federal Clean Water Act. In May 2014, the PSC issued an Order initiating a General Investigation into certain matters relating to WVAWC’s response to the Freedom Industries chemical spill. Three parties intervened in the proceeding, including the Consumer Advocate Division of the PSC and two attorney-sponsored groups, including one sponsored by some of the plaintiffs’ counsel involved in the civil litigation described above. On January 26, 2017, WVAWC and the other parties agreed to resolve the General Investigation and filed a joint stipulation with the PSC containing the terms of the settlement. The parties to the joint stipulation filed a proposed order with the PSC on February 8, 2017. The CSB is an independent investigatory agency with no regulatory mandate or ability to issue fines or citations; rather, the CSB can only issue recommendations for further action. In response to the Freedom Industries chemical spill, the CSB commenced an investigation shortly thereafter. On September 28, 2016, the CSB issued and adopted its investigation report in which it recommended that the Company conduct additional source water protection activities. The Company provided written comments to the CSB’s report suggesting that the recommendation made to the Company would be better directed to the U.S. Environmental Protection Agency in order to promote industry-wide implementation of the CSB’s recommendation. On February 15, 2017, the Company filed a response to the CSB’s recommendation. The CSB has indicated that it may consider issuing a supplemental report on the Freedom Industries chemical spill. Missouri Infrastructure System Replacement Surcharge Litigation On March 8, 2016, the Western District of the Missouri Court of Appeals ruled that the Missouri Public Service Commission (“MoPSC”) did not have statutory authority to issue an order in June 2015 approving an infrastructure system replacement surcharge (“ISRS”) for Missouri-American Water Company (“MAWC”), a wholly owned subsidiary of the Company. The court held that the MoPSC’s June 2015 order authorizing the ISRS increase was invalid because St. Louis County did not have a population of at least one million residents, as |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Note 16: Earnings per Common Share The following is a reconciliation of the numerator and denominator for basic and diluted earnings per share (“EPS”) calculations for the years ended December 31: 2016 2015 2014 Numerator Income from continuing operations $ 468 $ 476 $ 430 Loss from discontinued operations, net of tax — — (7 ) Net income attributable to common stockholders $ 468 $ 476 $ 423 Denominator Weighted average common shares outstanding — 178 179 179 Effect of dilutive common stock equivalents 1 1 1 Weighted average common shares outstanding—Diluted 179 180 180 The effect of dilutive common stock equivalents is related to the RSUs and stock options granted under the 2007 Plan, and shares purchased under the ESPP. Less than one million share-based awards were excluded from the computation of diluted EPS for the years ended December 31, 2016, 2015 and 2014 because their effect would have been anti-dilutive under the treasury stock method. |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Values of Financial Instruments | Note 17: Fair Values 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 in the Consolidated Balance Sheets for current assets and current liabilities, including revolving credit debt, due to the short-term maturities and variable interest rates, approximate their fair values. Preferred stock with mandatory redemption requirements and long-term debt—The fair values of preferred stock with mandatory redemption requirements and long-term debt are categorized within the fair value hierarchy based on the inputs that are used to value each instrument. The fair value of long-term debt classified as Level 1 is calculated using quoted prices in active markets. Level 2 instruments are valued using observable inputs and Level 3 instruments are valued using observable and unobservable inputs. The fair values of instruments classified as Level 2 and 3 are determined by a valuation model that is based on a conventional discounted cash flow methodology and utilizes assumptions of current market rates. As a majority of the Company’s debts do not trade in active markets, the Company calculated a base yield curve using a risk-free rate (a U.S. Treasury securities yield curve) plus a credit spread that is based on the following two factors: an average of the Company’s own publicly-traded debt securities and the current market rates for U.S. Utility A debt securities. The Company used these yield curve assumptions to derive a base yield for the Level 2 and Level 3 securities. Additionally, the Company adjusted the base yield for specific features of the debt securities including call features, coupon tax treatment and collateral for the Level 3 instruments. The carrying amounts, including fair value adjustments previously recognized in acquisition purchase accounting and a fair value adjustment related to the Company’s interest rate swap fair value hedge (which is classified as Level 2 in the fair value hierarchy), and fair values of the financial instruments were as follows: Carrying December 31, 2016 Amount L e Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 12 $ — $ — $ 15 $ 15 Long-term debt (excluding capital lease obligations) 6,320 3,876 1,363 1,805 7,044 Carrying December 31, 2015 Amount L e Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 13 $ — $ — $ 18 $ 18 Long-term debt (excluding capital lease obligations) 5,914 3,397 1,419 1,941 6,757 Fair Value Measurements To increase consistency and comparability in fair value measurements, GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: • Level 1—quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date. Financial assets and liabilities utilizing Level 1 inputs include active exchange-traded equity securities, exchange-based derivatives, mutual funds and money market funds. • Level 2—inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange-based derivatives, commingled investment funds not subject to purchase and sale restrictions and fair-value hedges. • Level 3—unobservable inputs, such as internally-developed pricing models for the asset or liability due to little or no market activity for the asset or liability. Financial assets and liabilities utilizing Level 3 inputs include infrequently-traded non-exchange-based derivatives and commingled investment funds subject to purchase and sale restrictions. Recurring Fair Value Measurements The following table presents assets and liabilities measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy as of December 31, 2016 and 2015, respectively: December 31, 2016 Level 1 Level 2 Level 3 Total Assets Restricted funds $ 24 $ — $ — $ 24 Rabbi trust investments 12 — — 12 Deposits 3 — — 3 Mark-to-market derivative asset — 28 — 28 Other investments 1 — — 1 Total assets 40 28 — 68 Liabilities Deferred compensation obligation 13 — — 13 Mark-to-market derivative liability — — — - Total liabilities 13 — — 13 Total net assets (liabilities) $ 27 $ 28 $ — $ 55 December 31, 2015 Level 1 Level 2 Level 3 Total Assets Restricted funds $ 27 $ — $ — $ 27 Rabbi trust investments 12 — 12 Deposits 1 — — 1 Mark-to-market derivative asset — 2 — 2 Other investments 4 — — 4 Total assets 44 2 — 46 Liabilities Deferred compensation obligation 11 — — 11 Mark-to-market derivative liability — 1 — 1 Total liabilities 11 1 — 12 Total net assets (liabilities) $ 33 $ 1 $ — $ 34 Restricted funds—The Company’s restricted funds primarily represent proceeds received from financings for the construction and capital improvement of facilities and from customers for future services under operations and maintenance projects. The proceeds of these financings are held in escrow until the designated expenditures are incurred. Long-term restricted funds of $4 and $6 were included in other long-term assets as of December 31, 2016 and 2015, respectively. Rabbi trust investments—The Company’s rabbi trust investments consist of equity and index funds from which supplemental executive retirement plan benefits and deferred compensation obligations can be paid. The Company includes these assets in other long-term assets. Deposits—Deposits include escrow funds and certain other deposits held in trust. The Company includes cash deposits in other current assets. 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. 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 asset and liability—The Company utilizes fixed-to-floating interest-rate swaps, typically designated as fair-value hedges, to achieve a targeted level of variable-rate debt as a percentage of total debt. The Company also employs derivative financial instruments in the form of variable-to-fixed interest rate swaps and forward starting interest rate swaps, classified as economic hedges and cash flow hedges, respectively, in order to fix the interest cost on existing or forecasted debt. The Company uses a calculation of future cash inflows and estimated future outflows, which are discounted, to determine the current fair value. Additional inputs to the present value calculation include the contract terms, counterparty credit risk, interest rates and market volatility. Other investments—Other investments primarily represent money market funds used for active employee benefits. The Company includes other investments in other current assets. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases | Note 18: Leases The Company has entered into operating leases involving certain facilities and equipment. Rental expenses under operating leases were $24 for 2016, $21 for 2015 and $22 for 2014. The operating leases for facilities will expire over the next 25 years and the operating leases for equipment will expire over the next five years. Certain operating leases have renewal options ranging from one to five years. The minimum annual future rental commitment under operating leases that have initial or remaining non-cancelable lease terms over the next five years and thereafter are as follows: Year Amount 2017 $ 14 2018 12 2019 11 2020 9 2021 6 Thereafter 70 The Company has a series of agreements with various public entities (the “Partners”) to establish certain joint ventures, commonly referred to as “public-private partnerships.” Under the public-private partnerships, the Company constructed utility plant, financed by the Company and the Partners constructed utility plant (connected to the Company’s property), financed by the Partners. The Company agreed to transfer and convey some of its real and personal property to the Partners in exchange for an equal principal amount of Industrial Development Bonds (“IDBs”), issued by the Partners under a state Industrial Development Bond and Commercial Development Act. The Company leased back the total facilities, including portions funded by both the Company and the Partners, under leases for a period of 40 years. The leases related to the portion of the facilities funded by the Company have required payments from the Company to the Partners that approximate the payments required by the terms of the IDBs from the Partners to the Company (as the holder of the IDBs). As the ownership of the portion of the facilities constructed by the Company will revert back to the Company at the end of the lease, the Company has recorded these as capital leases. The lease obligation and the receivable for the principal amount of the IDBs are presented by the Company on a net basis. The gross cost of the facilities funded by the Company recognized as a capital lease asset was $152 and $156 as of December 31, 2016 and 2015, respectively, which is presented in property, plant and equipment in the accompanying Consolidated Balance Sheets. The future payments under the lease obligations are equal to and offset by the payments receivable under the IDBs. As of December 31, 2016, the minimum annual future rental commitment under the operating leases for the portion of the facilities funded by the Partners that have initial or remaining non-cancelable lease terms in excess of one year included in the preceding minimum annual rental commitments are $4 in 2017 through 2021, and $66 thereafter. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Note 19: Segment Information The Company’s operating segments are comprised of the revenue-generating components of its businesses for which separate financial information is internally produced and regularly used by management to make operating decisions and assess performance. The Company operates its businesses primarily through one reportable segment, the Regulated Businesses segment. The Company also operates businesses that provide a broad range of related and complementary water and wastewater services in non-regulated markets, which includes four operating segments that individually do not meet the criteria of a reportable segment. These four non-reportable operating segments are collectively presented as our “Market-Based Businesses”. The Regulated Businesses segment is the largest component of the Company’s business and includes 18 subsidiaries that provide water and wastewater services to customers in 16 states. The Market-Based Businesses’ four non-reportable operating segments are Military Services Group, Contract Operations Group, Homeowner Services Group and Keystone Operations. Military Services Group performs 50 - The accounting policies of the segments are the same as those described in the summary of significant accounting policies. See Note 2—Significant Accounting Policies. The Regulated Businesses segment and Market-Based Businesses include intercompany costs that are allocated by American Water Works Service Company, Inc. and intercompany interest that is charged by American Water Capital Corp., which are eliminated to reconcile to the consolidated results of operations. Inter-segment revenues, include the sale of water from a regulated subsidiary to market-based subsidiaries, leased office space, furniture and equipment provided by the Company’s market-based subsidiaries to its regulated subsidiaries. “Other” includes corporate costs that are not allocated to the Company’s operating segments, eliminations of inter-segment transactions, fair value adjustments and associated income and deductions related to the acquisitions that have not been allocated to the operating segments for evaluation of performance and allocation of resource purposes. The adjustments related to the acquisitions are reported in Other as they are excluded from segment performance measures evaluated by management. The following tables include the Company’s summarized segment information as of and for the years ended December 31: 2016 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 2,871 $ 451 $ (20 ) $ 3,302 Depreciation and amortization 440 15 15 470 Total operating expenses, net 1,852 391 (21 ) 2,222 Interest, net 256 (2 ) 71 325 Income from continuing operations before income taxes 775 65 (70 ) 770 Provision for income taxes 303 26 (27 ) 302 Net income attributable to common stockholders 472 39 (43 ) 468 Total assets 16,405 637 1,440 18,482 Capital expenditures 1,274 18 19 1,311 2015 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 2,743 $ 434 $ (18 ) $ 3,159 Depreciation and amortization 411 8 21 440 Total operating expenses, net 1,732 370 (18 ) 2,084 Interest, net 248 (2 ) 62 308 Income from continuing operations before income taxes 776 68 (62 ) 782 Provision for income taxes 303 26 (23 ) 306 Net income attributable to common stockholders 473 42 (39 ) 476 Total assets 15,258 496 1,487 17,241 Capital expenditures 1,143 17 — 1,160 2014 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 2,674 $ 355 $ (18 ) $ 3,011 Depreciation and amortization 394 6 24 424 Total operating expenses, net 1,726 300 (18 ) 2,008 Interest, net 248 (2 ) 53 299 Income from continuing operations before income taxes 707 58 (55 ) 710 Provision for income taxes 273 18 (11 ) 280 Income from continuing operations 434 40 (44 ) 430 Loss from discontinued operations, net of tax — (7 ) — (7 ) Net income attributable to common stockholders 434 33 (44 ) 423 Total assets 14,343 314 1,381 16,038 Capital expenditures 946 10 — 956 |
Unaudited Quarterly Data
Unaudited Quarterly Data | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Unaudited Quarterly Data | Note 20: Unaudited Quarterly Data The following table summarizes certain supplemental unaudited consolidated quarterly financial data for each of the four quarters in the years ended December 31, 2016 and 2015, respectively. The operating results for any quarter are not indicative of results that may be expected for a full year or any future periods. 2016 First Quarter Second Quarter Third Quarter Fourth Quarter (In millions, except per share data) Operating revenues $ 743 $ 827 $ 930 $ 802 Operating income 214 299 319 248 Net income attributable to common stockholders 82 137 148 101 Basic earnings per share: Net income attributable to common stockholders 0.46 0.77 0.83 0.57 Diluted earnings per share: Net income attributable to common stockholders 0.46 0.77 0.83 0.57 2015 First Quarter Second Quarter Third Quarter Fourth Quarter (In millions, except per share data) Operating revenues $ 698 $ 782 $ 896 $ 783 Operating income 204 278 361 232 Net income attributable to common stockholders 80 123 174 99 Basic earnings per share: Net income attributable to common stockholders 0.45 0.69 0.97 0.55 Diluted earnings per share: Net income attributable to common stockholders 0.44 0.68 0.96 0.55 |
Significant Accounting Polici30
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of American Water and all of its subsidiaries in which a controlling interest is maintained after the elimination of intercompany accounts and transactions. Intercompany balances and transactions between subsidiaries have been eliminated. The Company uses the equity method to report its investments in joint ventures in which the Company holds up to a 50% voting interest and cannot exercise control over the operations and policies of the investments. Under the equity method, the Company records its interests as an investment and its percentage share of the investee’s earnings as earnings or losses. In July 2015, the Company acquired a ninety-five percent interest in Water Solutions Holdings, LLC, including its wholly-owned subsidiary, Keystone Clearwater Solutions, LLC (collectively referred to as “Keystone”). The outside stockholders’ interest, which is redeemable at the option of the minority owners, is recognized as redeemable noncontrolling interest. The redeemable noncontrolling interest amounted to $7 as of December 31, 2016 and 2015, and is included in other long-term liabilities in the accompanying Consolidated Balance Sheets. The net loss attributable to the noncontrolling interest was not significant. The Company has entered into an agreement, whereby it has the option to acquire from the minority owners, and the minority owners have the option to sell to the Company, the remaining five percent interest at fair value upon the occurrence of certain triggering events or at the defined date of December 31, 2018. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The Company considers its critical accounting estimates to include: the application of regulatory accounting principles and the related determination and estimates of regulatory assets and liabilities; estimates used in impairment testing of goodwill and other long-lived assets, including regulatory assets; revenue recognition; accounting for income taxes; benefit plan assumptions; and contingent liabilities. The Company’s critical accounting estimates that are particularly sensitive to change in the near term are amounts reported for regulatory assets and liabilities, benefit plans assumptions, contingency-related obligations and goodwill. |
Regulation | Regulation The Company’s regulated utilities are subject to economic regulation by the public utility commissions and the local governments of the states in which they operate (the “PUCs”). These PUCs generally authorize revenue at levels intended to recover the estimated costs of providing service, plus a return on net investments, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of utility revenue, an incurred cost that would otherwise be charged to expense by a non-regulated entity is to be deferred as a regulatory asset if it is probable that the cost is recoverable in future rates. Conversely, GAAP requires recording of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and refundable to customers. See Note 6—Regulatory Assets and Liabilities. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consist primarily of utility plant. Additions to utility plant and replacements of retirement units of property are capitalized. Costs include material, direct labor and such indirect items as engineering and supervision, payroll taxes and benefits, transportation and an allowance for funds used during construction (“AFUDC”). The cost of repairs, maintenance, including planned major maintenance activities, and minor replacements is charged to maintenance expense as incurred. The costs incurred to acquire and internally develop computer software for internal use are capitalized as a unit of property. The carrying value of these costs amounted to $345 and $311 as of December 31, 2016 and 2015, respectively. When units of property are replaced, retired or abandoned, the recorded value is credited to the asset account and charged to accumulated depreciation. To the extent the Company recovers cost of removal or other retirement costs through rates after the retirement costs are incurred, a regulatory asset is recorded. In some cases, the Company recovers retirement costs through rates during the life of the associated asset and before the costs are incurred. These amounts result in a regulatory liability being reported based on the amounts previously recovered through customer rates, until the costs to retire those assets are incurred. The cost of property, plant and equipment is depreciated using the straight-line average remaining life method. The Company’s regulated utility subsidiaries record depreciation in conformity with amounts approved by state regulators after regulatory review of information the Company submits to support its estimates of the assets’ remaining useful lives. Nonutility property consists primarily of buildings and equipment utilized by the Company for internal operations. This property is stated at cost, net of accumulated depreciation calculated using the straight-line method over the useful lives of the assets. |
Cash and Cash Equivalents | Cash and Cash Equivalents Substantially all cash is invested in interest-bearing accounts. All highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. |
Restricted Funds | Restricted Funds Restricted funds primarily represent proceeds from financings for the construction and capital improvement of facilities and deposits for future services under O&M projects. The proceeds from these financings are held in escrow until the designated expenditures are incurred. Classification of restricted funds in the Consolidated Balance Sheets as either current or long-term is based upon the intended use of the funds. |
Accounts Receivable and Unbilled Revenues | Accounts Receivable and Unbilled Revenues Accounts receivable include regulated utility customer accounts receivable, which represent amounts billed to water and wastewater customers on a cycle basis. Credit is extended based on the guidelines of the applicable PUCs and collateral is generally not required. Also included are market-based trade accounts receivable and nonutility customer receivables of the regulated subsidiaries. Unbilled revenues are accrued when service has been provided but has not been billed to customers. |
Allowance for Uncollectible Accounts | Allowance for Uncollectible Accounts Allowances for uncollectible accounts are maintained for estimated probable losses resulting from the Company’s inability to collect receivables from customers. Accounts that are outstanding longer than the payment terms are considered past due. A number of factors are considered in determining the allowance for uncollectible accounts, including the length of time receivables are past due and previous loss history. The Company generally writes off accounts when they become uncollectible or are over a certain number of days outstanding. See Note 5—Allowance for Uncollectible Accounts. |
Materials and Supplies | Materials and Supplies Materials and supplies are stated at the lower of cost or net realizable value. Cost is determined using the average cost method. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price paid over the estimated fair value of the assets acquired and liabilities assumed in the acquisition of a business. Goodwill is not amortized, but is tested for impairment at least annually or on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Goodwill is primarily associated with the acquisitions of E’town Corporation in 2001, American Water in 2003 and Keystone in 2015 (the “Acquisitions”) and has been assigned to reporting units based on the fair values at the date of the Acquisitions. The reporting units in the Regulated Businesses segment are aggregated into a single reporting unit. The Market-Based Businesses is comprised of four non-reportable reporting units. The Company’s annual impairment test is performed as of November 30 of each year, in conjunction with the completion of the Company’s annual business plan. The Company assesses qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If based on qualitative factors, the fair value of the reporting unit is more likely than not greater than the carrying amount, no further testing is required. If the Company bypasses the qualitative assessment or performs the qualitative assessment, but determines that it is more likely than not that its fair value is less than its carrying amount, a quantitative two-step, fair value-based test is performed. The first step compares the estimated fair value of the reporting unit to its respective net carrying value, including goodwill, on the measurement date. If the estimated fair value of any reporting unit is less than such reporting unit’s carrying value, then the second step is performed to measure the amount of the impairment loss (if any) for such reporting unit. The second step requires an allocation of fair value to the individual assets and liabilities using purchase price allocation accounting guidance in order to determine the implied fair value of goodwill. If the implied fair value of goodwill is less than the carrying amount for the reporting unit, an impairment loss is recorded as a reduction to goodwill and a charge to operating expense. Application of the goodwill impairment test requires management judgment, including the identification of reporting units and determining the fair value of the reporting unit. Management estimates fair value using a combination of a discounted cash flow analysis and market multiples analysis. Significant assumptions used in these fair value analyses include discount and growth rates and projected terminal values. The Company believes the assumptions and other considerations used to value goodwill to be appropriate. However, if experience differs from the assumptions and considerations used in its analysis, the resulting change could have a material adverse impact on the consolidated financial statements. |
Long-Lived Assets | Long-Lived Assets Long-lived assets include land, buildings, equipment and long-term investments. Long-lived assets, other than investments and land, are depreciated over their estimated useful lives, and are reviewed for impairment whenever changes in circumstances indicate the carrying value of the asset may not be recoverable. Such circumstances would include items such as a significant decrease in the market value of a long-lived asset, a significant adverse change in the manner the asset is being used or planned to be used or in its physical condition, or a history of operating or cash flow losses associated with the use of the asset. In addition, changes in the expected useful life of these long-lived assets may also be an impairment indicator. When such events or changes occur, the Company estimates the fair value of the asset from future cash flows expected to result from the use and, if applicable, the eventual disposition of the asset and compares that to the carrying value of the asset. If the carrying value is greater than the fair value, an impairment loss is recorded. The Company believes the assumptions and other considerations used to evaluate the carrying value of long-lived assets are appropriate. However, if actual experience differs from the assumptions and considerations used in its estimates, the resulting change could have a material adverse impact on the consolidated financial statements. The key variables to determine fair value include assumptions regarding sales volume, rates, operating costs, labor and other benefit costs, capital additions, assumed discount rates and other economic factors. These variables require significant management judgment and include inherent uncertainties, since they are forecasting future events. If such assets are considered impaired, an impairment loss is recognized equal to the amount by which the asset’s carrying value exceeds its fair value. The long-lived assets of the regulated utility subsidiaries are tested on a separate entity basis for impairment testing as they are integrated state-wide operations that do not have the option to curtail service and generally have uniform tariffs. A regulatory asset is charged to earnings if and when future recovery in rates of that asset is no longer probable. The Company holds other investments including investments in privately held companies and investments in joint ventures accounted for using the equity method. The Company’s investments in privately held companies and joint ventures are classified as other long-term assets in the accompanying Consolidated Balance Sheets. The fair values of long-term investments are dependent on the financial performance and solvency of the entities in which the Company invests, as well as volatility inherent in the external markets. If such assets are considered impaired, an impairment loss is recognized equal to the amount by which the asset’s carrying value exceeds its fair value. |
Advances for Construction and Contributions in Aid of Construction | Advances for Construction and Contributions in Aid of Construction Regulated utility subsidiaries may receive advances for construction and contributions in aid of construction from customers, home builders and real estate developers to fund construction necessary to extend service to new areas. Advances are refundable for limited periods of time as new customers begin to receive service or other contractual obligations are fulfilled. Included in other current liabilities as of December 31, 2016 and 2015 in the accompanying Consolidated Balance Sheets are estimated refunds of $21 and $19, respectively. Those amounts represent expected refunds during the next 12-month period. Advances that are no longer refundable are reclassified to contributions. Contributions are permanent collections of plant assets or cash for a particular construction project. For ratemaking purposes, the amount of such contributions generally serves as a rate base reduction since the contributions represent non-investor supplied funds. Generally, the Company depreciates utility plant funded by contributions and amortizes its contributions balance as a reduction to depreciation expense, producing a result which is functionally equivalent to reducing the original cost of the utility plant for the contributions. In accordance with applicable regulatory guidelines, some of the Company’s utility subsidiaries do not amortize contributions, and any contribution received remains on the balance sheet indefinitely. Amortization of contributions in aid of construction was $27, $26 and $24 for the years ended December 31, 2016, 2015 and 2014, respectively. |
Recognition of Revenues | Recognition of Revenues Revenues of the regulated utility subsidiaries are recognized as water and wastewater services are provided, and include amounts billed to customers on a cycle basis and unbilled amounts based on estimated usage from the date of the meter reading associated with the latest customer bill to the end of the accounting period. The Company also recognizes revenue when it is probable that future recovery of previously incurred costs or future refunds that are to be credited to customers will occur through the ratemaking process. The Company has agreements with the U.S. Department of Defense to operate and maintain water and wastewater systems at various military bases pursuant to 50-year contracts (“military agreements”). These contracts also include construction components that are accounted for separately from the O&M components. Nine of the military agreements are subject to periodic price redetermination adjustments and modifications for changes in circumstance. The remaining three agreements are subject to annual price adjustments under a mechanism similar to price redeterminations. Additionally, the Company has agreements ranging in length from two to 40 years with municipalities and businesses in various industries to operate and maintain water and wastewater systems (“O&M agreements”). Revenues from operations and management services are recognized as services are provided. See Note 15—Commitments and Contingencies. Revenues from construction projects are recognized over the contract term based on the costs incurred to date during the period compared to the total estimated costs over the entire contract. Losses on contracts are recognized during the period in which the loss first becomes probable and estimable. Revenues recognized during the period in excess of billings on construction contracts are recorded as unbilled revenue. Billings in excess of revenues recognized on construction contracts are recorded as other current liabilities until the recognition criteria are met. Changes in contract performance and related estimated contract profitability may result in revisions to costs and revenues and are recognized in the period in which revisions are determined. |
Income Taxes | Income Taxes American Water and its subsidiaries participate in a consolidated federal income tax return for U.S. tax purposes. Members of the consolidated group are charged with the amount of federal income tax expense determined as if they filed separate returns. Certain income and expense items are accounted for in different time periods for financial reporting than for income tax reporting purposes. The Company provides deferred income taxes on the difference between the tax basis of assets and liabilities and the amounts at which they are carried in the financial statements. These deferred income taxes are based on the enacted tax rates expected to be in effect when these temporary differences are projected to reverse. In addition, the regulated utility subsidiaries recognize regulatory assets and liabilities for the effect on revenues expected to be realized as the tax effects of temporary differences, previously flowed through to customers, reverse. Investment tax credits have been deferred by the regulated utility subsidiaries and are being amortized to income over the average estimated service lives of the related assets. The Company recognizes accrued interest and penalties related to tax positions as a component of income tax expense and accounts for sales tax collected from customers and remitted to taxing authorities on a net basis. |
Allowance for Funds Used During Construction | Allowance for Funds Used During Construction AFUDC is a non-cash credit to income with a corresponding charge to utility plant that represents the cost of borrowed funds or a return on equity funds devoted to plant under construction. The regulated utility subsidiaries record AFUDC to the extent permitted by the PUCs. The portion of AFUDC attributable to borrowed funds is shown as a reduction of interest, net in the accompanying Consolidated Statements of Operations. Any portion of AFUDC attributable to equity funds would be included in other income (expenses) in the accompanying Consolidated Statements of Operations. AFUDC is summarized in the following table for the years ended December 31: 2016 2015 2014 Allowance for other funds used during construction $ 15 $ 13 $ 9 Allowance for borrowed funds used during construction 6 8 6 |
Environmental Costs | Environmental Costs The Company’s water and wastewater operations are subject to U.S. federal, state, local and foreign requirements relating to environmental protection, and as such, the Company periodically becomes subject to environmental claims in the normal course of business. Environmental expenditures that relate to current operations or provide a future benefit are expensed or capitalized as appropriate. Remediation costs that relate to an existing condition caused by past operations are accrued, on an undiscounted basis, when it is probable that these costs will be incurred and can be reasonably estimated. The Company agreed to pay $1 annually commencing in 2010 with the final payment being made in 2016. Remediation costs accrued amounted to $0 and $1 as of December 31, 2016 and 2015, respectively. The accrual relates entirely to a conservation agreement entered into by a subsidiary of the Company with the National Oceanic and Atmospheric Administration (“NOAA”) requiring the Company to, among other provisions, implement certain measures to protect the steelhead trout and its habitat in the Carmel River watershed in the State of California. |
Derivative Financial Instruments | Derivative Financial Instruments The Company uses derivative financial instruments for purposes of hedging exposures to fluctuations in interest rates. These derivative contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into derivative contracts for speculative purposes and does not use leveraged instruments. All derivatives are recognized on the balance sheet at fair value. On the date the derivative contract is entered into, the Company may designate the derivative as a hedge of the fair value of a recognized asset or liability (fair-value hedge) or a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash-flow hedge). Changes in the fair value of a fair-value hedge, along with the gain or loss on the underlying hedged item, are recorded in current-period earnings. The gains and losses on the effective portion of cash-flow hedges are recorded in other comprehensive income, until earnings are affected by the variability of cash flows. Any ineffective portion of designated cash-flow hedges is recognized in current-period earnings. Cash flows from derivative contracts are included in net cash provided by operating activities in the accompanying Consolidated Statements of Cash Flows. |
New Accounting Standards | New Accounting Standards The following recently issued accounting standards have been adopted by the Company as of December 31, 2016: Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements (or Other Significant Matters) Accounting for Fees Paid in a Cloud Computing Arrangement Clarified accounting guidance for fees paid in a cloud computing arrangement. Software license elements in a cloud computing arrangement should be accounted for consistent with other software licenses. A cloud computing arrangement without a software license is accounted for as a service contract. January 1, 2016 Prospective basis Adoption of this standard did not impact the Company's results of operations, financial position or cash flows. The following recently issued accounting standards have not yet been adopted by the Company as of December 31, 2016: Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements (or Other Significant Matters) Simplification of Employee Share-Based Payment Accounting Simplified accounting and disclosure requirements for share-based payment awards. The updated guidance addresses: (i) the recognition of excess tax benefits and deficiencies; (ii) the classification of excess tax benefits and taxes paid on the Consolidated Statements of Cash Flows; (iii) election of an accounting policy for forfeitures; and (iv) the amount an employer can withhold to cover income taxes and still qualify for equity classification. The new guidance requires all tax related cash flows resulting from share-based payments to be reported as cash provided by operating activities in the Consolidated Statements of Cash Flows. January 1, 2017 Alternative transition methods available The cumulative effect to retained earnings prior to 2017 will be an increase of approximately $21, with an offsetting decrease to deferred income taxes, net. Revenue from Contracts with Customers Updated authoritative guidance that changes the criteria for recognizing revenue from a contract with a customer. The new standard replaces existing guidance on revenue recognition, including most industry specific guidance. The objective of the updated standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries and across capital markets. The underlying principle is that an entity will recognize revenue to depict the transfer of goods and services to customers at an amount the entity expects to be entitled to in exchange for those goods or services. The guidance also requires a number of disclosures regarding the nature, amount, timing and uncertainty of revenue and the related cash flows. January 1, 2018; early adoption permitted Retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with a cumulative effect adjustment to retained earnings for initial application of the guidance (modified retrospective method) The Company is evaluating the impact on the consolidated financial statements and related disclosures, as well as the transition method to be used to adopt the guidance. The Company is also considering the impacts of the new standard on its accounting for contributions in aid of construction. The Company does not expect to early adopt. Classification of Certain Cash Receipts and Cash Payments on the Statement of Cash Flows Provided guidance on the presentation and classification in the statement of cash flows for the following cash receipts and payments: (i) debt prepayment or debt extinguishment costs; (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (iii) contingent consideration payments made after a business combination; (iv) proceeds from the settlement of insurance claims; (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (vi) distributions received from equity method investees; (vii) beneficial interests in securitization transactions; and (viii) separately identifiable cash flows and application of the predominance principle. January 1, 2018; early adoption permitted Retrospective The Company does not anticipate significant impacts on its Statements of Cash Flows based on this standard update. Presentation of Changes in Restricted Cash on the Statement of Cash Flows Updated the accounting and disclosure guidance for the classification and presentation of changes in restricted cash on the statement of cash flows. The amended guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts described as restricted cash or restricted cash equivalents. Restricted cash and restricted cash equivalents will now be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows January 1, 2018; early adoption permitted Retrospective The Company does not anticipate significant impacts on its Statements of Cash Flows based on this standard update. Clarifying the Definition of a Business Updated the accounting guidance to clarify the definition of a business with the objective of assisting entities with evaluating whether transactions should be accounted for as acquisitions, or disposals, of assets or businesses. January 1, 2018; early adoption permitted Prospective The Company is evaluating the impact on the consolidated financial statements and related disclosures. Accounting for Leases Updated the accounting and disclosure guidance for leasing arrangements. Under this guidance, a lessee will be required to recognize the following for all leases, excluding short-term leases, at the commencement date: (i) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. Under the guidance, lessor accounting is largely unchanged. January 1, 2019; early adoption permitted Modified retrospective The Company is evaluating the impact on the consolidated financial statements and related disclosures, as well as the timing of adoption. Simplification of Goodwill Impairment Testing Updated authoritative guidance which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments in the update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying value exceeds the reporting unit's fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. January 1, 2020; early adoption permitted for interim or annual goodwill impairment tests performed after January 1, 2017 Prospective The Company is evaluating the impact on the consolidated financial statements and related disclosures, as well as the timing of adoption. Measurement of Credit Losses Updated the accounting guidance on reporting credit losses for financial assets held at amortized cost basis and available-for-sale debt securities. Under this guidance, expected credit losses are required to be measured based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount of financial assets. Also, this guidance requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a direct write-down. January 1, 2020; early adoption permitted Modified retrospective The Company is evaluating the impact on the consolidated financial statements and related disclosures, as well as the timing of adoption. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior periods in the accompanying consolidated financial statements and notes to conform to the current presentation. |
Significant Accounting Polici31
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Allowance for Funds Used During Construction | AFUDC is summarized in the following table for the years ended December 31: 2016 2015 2014 Allowance for other funds used during construction $ 15 $ 13 $ 9 Allowance for borrowed funds used during construction 6 8 6 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Summary of Discontinued Operations Presented in Consolidated Statements of Operations | The following table summarizes the operating results of discontinued operations presented in the accompanying Consolidated Statements of Operations for the year ended December 31, 2014: Operating revenues $ 13 Total operating expenses, net 19 Loss from discontinued operations before income taxes (6 ) Provision (benefit) for income taxes 1 Loss from discontinued operations, net of tax $ (7 ) |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Summary of Major Classes of Property, Plant and Equipment by Category | The following table summarizes the major classes of property, plant and equipment by category as of December 31: Range of Remaining Weighted Average 2016 2015 Useful Lives Useful Life Utility plant: Land and other non-depreciable assets $ 147 $ 141 Sources of supply 734 705 2 to 127 Years 52 Years Treatment and pumping facilities 3,218 3,070 3 to 101 Years 40 Years Transmission and distribution facilities 9,043 8,516 9 to 156 Years 80 Years Services, meters and fire hydrants 3,504 3,250 8 to 93 Years 37 Years General structures and equipment 1,343 1,227 1 to 154 Years 43 Years Waste treatment, pumping and disposal 457 313 2 to 115 Years 55 Years Waste collection 637 473 5 to 109 Years 58 Years Construction work in progress 419 404 Total utility plant 19,502 18,099 Nonutility property 452 405 3 to 50 years 6 Years Total property, plant and equipment $ 19,954 $ 18,504 |
Allowance for Uncollectible A34
Allowance for Uncollectible Accounts (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Financing Receivable Allowance For Credit Loss Additional Information [Abstract] | |
Schedule of Allowances for Uncollectible Accounts | The following table summarizes the changes in the Company’s allowances for uncollectible accounts for the years ended December 31: 2016 2015 2014 Balance as of January 1 $ (39 ) $ (35 ) $ (34 ) Amounts charged to expense (27 ) (32 ) (37 ) Amounts written off 29 31 38 Recoveries of amounts written off (3 ) (3 ) (2 ) Balance as of December 31 $ (40 ) $ (39 ) $ (35 ) |
Regulatory Assets and Liabili35
Regulatory Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Regulatory Assets And Liabilities Disclosure [Abstract] | |
Summary of Composition of Regulatory Assets | Regulatory assets represent costs that are probable of recovery from customers in future rates. The majority of the regulatory assets earn a return. The following table summarizes the composition of regulatory assets as of December 31: 2016 2015 Deferred pension expense $ 310 $ 269 Income taxes recoverable through rates 241 236 Removal costs recoverable through rates 251 225 Deferred other postretirement benefit expense 14 90 San Clemente Dam project costs 91 95 Regulatory balancing accounts 110 88 Debt expense 66 68 Purchase premium recoverable through rates 58 60 Deferred tank painting costs 39 37 Other 109 103 Total Regulatory Assets $ 1,289 $ 1,271 |
Summary of Composition of Regulatory Liabilities | The following table summarizes the composition of regulatory liabilities as of December 31: 2016 2015 Removal costs recovered through rates $ 316 $ 311 Pension and other postretirement benefit balancing accounts 55 59 Other 32 32 Total Regulatory Liabilities $ 403 $ 402 |
Goodwill and Other Intangible36
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill Assets | Goodwill The following table summarizes changes in the carrying amount of goodwill for the years ended December 31, 2016 and 2015: Regulated Businesses Market-Based Businesses Consolidated Cost Accumulated Impairment Cost Accumulated Impairment Cost Accumulated Impairment Total Net Balance as of January 1, 2015 $ 3,412 $ (2,332 ) $ 236 $ (108 ) $ 3,648 $ (2,440 ) $ 1,208 Goodwill from acquisitions 3 — 91 — 94 — 94 Balance as of December 31, 2015 $ 3,415 $ (2,332 ) $ 327 $ (108 ) $ 3,742 $ (2,440 ) $ 1,302 Goodwill from acquisitions 43 — — — 43 — 43 Balance as of December 31, 2016 $ 3,458 $ (2,332 ) $ 327 $ (108 ) $ 3,785 $ (2,440 ) $ 1,345 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component, Net of Tax | The following table presents changes in accumulated other comprehensive loss by component, net of tax, for the years ended December 31, 2016 and 2015: Defined Benefit Plans Accumulated Employee Benefit Plan Funded Status Amortization of Prior Service Cost Amortization of Actuarial Loss Foreign Currency Translation Gain (Loss) on Cash Flow Hedge Other Comprehensive Loss Beginning balance as of January 1, 2015 $ (116 ) $ 1 $ 31 $ 3 $ (1 ) $ (82 ) Other comprehensive loss before reclassification (10 ) — — (1 ) — (11 ) Amounts reclassified from accumulated other comprehensive income — — 5 — — 5 Net other comprehensive income (loss) (10 ) — 5 (1 ) — (6 ) Ending balance as of December 31, 2015 $ (126 ) $ 1 $ 36 $ 2 $ (1 ) $ (88 ) Other comprehensive gain (loss) before reclassification (21 ) — — — 17 (4 ) Amounts reclassified from accumulated other comprehensive income — — 6 — — 6 Net other comprehensive income (loss) (21 ) — 6 — 17 2 Ending balance as of December 31, 2016 $ (147 ) $ 1 $ 42 $ 2 $ 16 $ (86 ) |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock-Based Compensation Expense | The cost of services received from employees in exchange for the issuance of stock options and restricted stock awards is measured based on the grant date fair value of the awards issued. The value of stock options and RSUs awards at the date of the grant is amortized through expense over the three-year service period. All awards granted in 2016, 2015 and 2014 are classified as equity. The Company recognizes compensation expense for stock awards over the vesting period of the award. The Company stratified its grant populations and used historic employee turnover rates to estimate employee forfeitures. The estimated rate is compared to the actual forfeitures at the end of the reporting period and adjusted as necessary. The following table presents stock-based compensation expense recorded in operation and maintenance expense in the accompanying Consolidated Statements of Operations for the years ended December 31: 2016 2015 2014 Stock options $ 2 $ 2 $ 2 RSUs 8 8 10 ESPP 1 1 1 Stock-based compensation 11 11 13 Income tax benefit (4 ) (4 ) (5 ) Stock-based compensation expense, net of tax $ 7 $ 7 $ 8 |
Summary of Stock Option Activity | The table below summarizes stock option activity for the year ended December 31, 2016: Shares (in thousands) Weighted- Average Exercise Price (per share) Weighted- Average Remaining Life (years) Aggregate Intrinsic Value Options outstanding as of December 31, 2015 1,187 $ 39.70 3.9 $ 24 Granted 341 65.26 Forfeited or expired (74 ) 56.25 Exercised (467 ) 32.64 Options outstanding as of December 31, 2016 987 $ 50.65 4.3 $ 21 Exercisable as of December 31, 2016 450 $ 41.22 2.9 $ 14 |
Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Weighted Average Assumptions | The following table summarizes the weighted-average assumptions used in the Black-Scholes option-pricing model for grants and the resulting weighted-average grant date fair value per share of stock options granted for the years ended December 31: 2016 2015 2014 Dividend yield 2.09 % 2.35 % 2.55 % Expected volatility 15.89 % 17.64 % 17.75 % Risk-free interest rate 1.15 % 1.48 % 1.06 % Expected life (years) 4.0 4.4 3.6 Exercise price $ 65.25 $ 52.75 $ 44.29 Grant date fair value per share $ 6.61 $ 6.21 $ 4.57 |
Additional Information to Stock Options Activity | The following table summarizes additional information regarding stock options exercised during the years ended December 31 2016 2015 2014 Intrinsic value $ 18 $ 22 $ 13 Exercise proceeds 15 30 15 Income tax benefit realized 6 7 4 |
Restricted Stock Units Without Performance Restrictions | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Restricted Stock Unit Activity | The table below summarizes activity of RSUs without performance conditions for the year ended December 31, 2016: Shares (in thousands) Weighted Average Grant Date Fair Value (per share) Non-vested total as of December 31, 2015 81 $ 48.71 Granted 47 67.71 Vested (45 ) 54.06 Forfeited (9 ) 57.99 Non-vested total as of December 31, 2016 74 $ 56.43 |
Restricted Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Weighted Average Assumptions | The following table presents the weighted-average assumptions used in the Monte Carlo simulation and the weighted-average grant date fair values of RSUs granted for the years ended December 31: 2016 2015 2014 Expected volatility 15.90 % 14.93 % 17.78 % Risk-free interest rate 0.91 % 1.07 % 0.75 % Expected life (years) 3.0 3.0 3.0 Grant date fair value per share $ 77.16 $ 62.10 $ 45.45 |
Summary of Restricted Stock Unit Activity | The table below summarizes activity of RSUs with performance conditions for the year ended December 31, 2016: Shares (in thousands) Weighted Average Grant Date Fair Value (per share) Non-vested total as of December 31, 2015 366 $ 45.91 Granted (a) 173 57.47 Vested (206 ) 40.01 Forfeited (24 ) 49.89 Non-vested total as of December 31, 2016 309 $ 55.94 (a) During 2014, the Company granted selected employees an aggregate of 128 thousand RSUs with internal performance measures and, separately, certain market thresholds. These awards vested in January 2016. The terms of the grants specified that to the extent certain performance goals, comprised of internal measures and, separately, market thresholds were achieved, the RSUs would vest; if performance goals were surpassed, up to 175% of the target awards would be distributed; and if performance goals were not met, the awards would be forfeited. In January 2016, an additional 74 thousand RSUs were granted and distributed because performance thresholds were exceeded and were included in the number of shares granted. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Debt | The Company obtains long-term debt primarily to fund capital expenditures of the regulated subsidiaries and refinance debt of the parent company. The following table summarizes the components of long-term debt as of December 31: Rate Weighted Average Rate Maturity 2016 2015 Long-term debt of American Water Capital Corp. (a) Senior notes — 3.00%-8.27% 5.04% 2017-2046 $ 4,786 $ 4,273 Private activity bonds and government funded debt — 1.79%-6.25% 5.42% 2021-2040 194 195 Long-term debt of other American Water subsidiaries Private activity bonds and government funded debt — (b) 0.00%-6.20% 4.72% 2017-2041 695 790 Mortgage bonds — fixed rate 4.29%-9.71% 7.41% 2017-2039 636 637 Mandatorily redeemable preferred stock 8.47%-9.75% 8.61% 2019-2036 12 13 Capital lease obligations 12.23%-12.44% 12.39% 2026 1 1 6,324 5,909 Unamortized debt premium, net (c) 17 23 Unamortized debt issuance costs (9 ) (7 ) Interest rate swap fair value adjustment 1 3 Less current portion of long-term debt (574 ) (54 ) Total long-term debt $ 5,759 $ 5,874 (a) This indebtedness is considered “debt” for purposes of a support agreement between American Water and American Water Capital Corp. (“AWCC”), American Water’s wholly owned finance subsidiary, which serves as a functional equivalent of a guarantee by American Water of AWCC’s payment obligations under such indebtedness. (b) Includes $6 and $8 of variable rate debt with variable-to-fixed interest rate swaps ranging between 3.93% and 4.65%, as of December 31, 2016 and 2015. This debt was assumed via an acquisition in 2013. (c) Primarily fair value adjustments previously recognized in acquisition purchase accounting. |
Future Sinking Fund Payments and Debt Maturities | The future sinking fund payments and debt maturities were as follows: Year Amount 2017 $ 574 2018 457 2019 166 2020 22 2021 479 Thereafter 4,626 |
Long-Term Debt Issued | The following long-term debt was issued in 2016: Company Type Rate Maturity Amount American Water Capital Corp. Senior notes—fixed rate 3.00%-4.00% 2026-2046 $ 550 Other American Water subsidiaries Private activity bonds and government funded debt — 1.00%-1.36% 2026-2037 3 Total issuances $ 553 |
Long-Term Debt Retired Through Optional Redemptions or Payments at Maturities | The following long-term debt was retired through optional redemption or payment at maturity during 2016: Company Type Rate Maturity Amount American Water Capital Corp. Senior notes — 5.52% 2016 $ 37 American Water Capital Corp. Private activity bonds and government funded debt—fixed rate 1.79%-2.90% 2021-2031 1 Other American Water subsidiaries Private activity bonds and government funded debt — 0.00%-5.30% 2016-2041 104 Other American Water subsidiaries Mandatorily redeemable preferred stock 8.49%-9.18% 2031-2036 2 Total retirements and redemptions $ 144 |
Summary of Gross Fair Value Derivative Asset and Liabilities | The following table provides a summary of the gross fair value for the Company’s derivative asset and liabilities, as well as the location of the asset and liability balances in the Consolidated Balance Sheets Derivative Instruments Derivative Designation Balance Sheet Classification December 31, 2016 December 31, 2015 Asset Derivative Interest rate swap Fair value hedge Other long-term assets $ — $ 2 Interest rate swap Fair value hedge Other current assets 1 — Forward starting swaps Cash flow hedge Other current assets 27 — Liability Derivative Interest rate swap Fair value hedge Long-term debt $ — $ 2 Interest rate swap Fair value hedge Current portion of long-term debt 1 — Interest rate swap Economic hedge (non-designated) Other long-term liabilities — 1 |
Short-Term Debt (Tables)
Short-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Short Term Borrowings [Abstract] | |
Schedule of Company's Aggregate Credit Facility Commitments, Letter of Credit Sub-Limit Under Revolving Credit Facility and Commercial Paper Limit and Available Capacity | The following table summarizes the Company’s aggregate credit facility commitments, letter of credit sub-limit under our revolving credit facility and commercial paper limit, as well as the available capacity for each as of: Credit Facility Available Credit Letter of Credit Available Letter of Commercial Available Commercial Commitment Facility Capacity Sublimit (a) Credit Capacity Paper Limit Paper Capacity (In millions) December 31, 2016 $ 1,766 $ 1,668 $ 150 $ 62 $ 1,600 $ 751 December 31, 2015 1,266 1,182 150 68 1,000 374 |
Schedule Of Short-Term Borrowings Activity | The following table summarizes the short-term borrowing activity for AWCC for the years ended December 31: 2016 2015 Average borrowings $ 850 $ 553 Maximum borrowings outstanding 1,016 871 Weighted average interest rates, computed on daily basis 0.78 % 0.49 % Weighted average interest rates, as of December 31 0.98 % 0.66 % |
General Taxes (Tables)
General Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
General Taxes [Abstract] | |
Components of General Tax Expense from Continuing Operations | The following table summarizes the components of general tax expense from continuing operations for the years ended December 31: 2016 2015 2014 Gross receipts and franchise $ 106 $ 99 $ 96 Property and capital stock 106 98 96 Payroll 32 31 31 Other general 14 15 13 Total general taxes $ 258 $ 243 $ 236 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense from Continuing Operations | The following table summarizes the components of income tax expense from continuing operations for the years ended December 31: 2016 2015 2014 Current income taxes State $ 20 $ 10 $ 11 Federal 1 — 15 Total current income taxes $ 21 $ 10 $ 26 Deferred income taxes State $ 24 $ 32 $ 31 Federal 258 265 224 Amortization of deferred investment tax credits (1 ) (1 ) (1 ) Total deferred income taxes 281 296 254 Provision for income taxes $ 302 $ 306 $ 280 |
Reconciliation of Income Tax Expense from Continuing Operations | The following is a reconciliation between the statutory federal income tax rate and the Company’s effective tax rate for the years ended December 31: 2016 2015 2014 Income tax at statutory rate 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from: State taxes, net of federal taxes 3.8 3.6 3.8 Federal regulatory effects 0.2 0.4 0.3 Other, net 0.2 0.1 0.3 Effective tax rate 39.2 % 39.1 % 39.4 % |
Components of Net Deferred Tax Liability from Continuing Operations | The following table provides the components of the net deferred tax liability from continuing operations as of December 31: 2016 2015 Deferred tax assets Advances and contributions $ 540 $ 513 Tax losses and credits 301 173 Pension and other postretirement benefits 173 181 Other 90 32 Total deferred tax assets 1,104 899 Valuation allowance (6 ) (8 ) Total deferred tax assets, net of allowance $ 1,098 $ 891 Deferred tax liabilities Property, plant and equipment $ 3,339 $ 2,913 Deferred pension and other postretirement benefits 126 139 Other 229 149 Total deferred tax liabilities 3,694 3,201 Total deferred tax liabilities, net of deferred tax assets $ (2,596 ) $ (2,310 ) |
Changes in Gross Liability Excluding Interest and Penalties for Unrecognized Tax Benefits | The following table summarizes the changes in the Company’s gross liability, excluding interest and penalties, for unrecognized tax benefits: Balance as of January 1, 2015 $ 195 Increases in current period tax positions 39 Decreases in prior period measurement of tax positions (1 ) Balance as of December 31, 2015 $ 233 Increases in current period tax positions 10 Decreases in prior period measurement of tax positions (74 ) Balance as of December 31, 2016 $ 169 |
Changes in Valuation Allowance | The following table summarizes the changes in the Company’s valuation allowance: Balance as of January 1, 2014 $ 13 Decreases in current period tax positions (3 ) Balance as of December 31, 2014 $ 10 Decreases in current period tax positions (2 ) Balance as of December 31, 2015 $ 8 Decreases in current period tax positions (2 ) Balance as of December 31, 2016 $ 6 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Significant Unobservable Inputs | The following tables present a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) for 2016 and 2015, respectively: Level 3 Balance as of January 1, 2016 $ 136 Actual return on assets 8 Purchases, issuances and settlements, net (4 ) Balance as of December 31, 2016 $ 140 Level 3 Balance as of January 1, 2015 $ 127 Actual return on assets 12 Purchases, issuances and settlements, net (3 ) Balance as of December 31, 2015 $ 136 |
Schedule of Rollforward Changes in Benefit Obligation and Plan Assets | The following table provides a rollforward of the changes in the benefit obligation and plan assets for the most recent two years for all plans combined: Pension Benefits Other Benefits 2016 2015 2016 2015 Change in benefit obligation: Benefit obligation as of January 1, $ 1,720 $ 1,746 $ 667 $ 703 Service cost 32 37 12 14 Interest cost 80 74 28 30 Plan participants' contributions — — 2 2 Plan amendments — — (156 ) — Actuarial (gain) loss 100 (76 ) 82 (58 ) Settlements (3 ) — — — Gross benefits paid (65 ) (61 ) (26 ) (26 ) Federal subsidy — — 1 2 Benefit obligation as of December 31, $ 1,864 $ 1,720 $ 610 $ 667 Change in plan assets: Fair value of plan assets as of January 1, $ 1,376 $ 1,428 $ 500 $ 512 Actual return on plan assets 99 (21 ) 32 (15 ) Employer contributions 36 30 17 27 Plan participants' contributions — — 2 2 Settlements (3 ) — — — Benefits paid (65 ) (61 ) (26 ) (26 ) Fair value of plan assets as of December 31, $ 1,443 $ 1,376 $ 525 $ 500 Funded status as of December 31, $ (421 ) $ (344 ) $ (85 ) $ (167 ) Amounts recognized in the balance sheet consist of: Noncurrent asset $ — $ — $ 2 $ 2 Current liability (2 ) (2 ) — — Noncurrent liability (419 ) (342 ) (87 ) (169 ) Net amount recognized $ (421 ) $ (344 ) $ (85 ) $ (167 ) |
Summary of Accumulated Other Comprehensive Income and Regulatory Assets | The following table provides the components of the Company’s accumulated other comprehensive income and regulatory assets that have not been recognized as components of periodic benefit costs as of December 31: Pension Benefits Other Benefits 2016 2015 2016 2015 Net actuarial loss $ 466 $ 397 $ 170 $ 97 Prior service cost (credit) 2 3 (158 ) (10 ) Net amount recognized $ 468 $ 400 $ 12 $ 87 Regulatory assets $ 300 $ 258 $ 12 $ 87 Accumulated other comprehensive income 168 142 — — Total $ 468 $ 400 $ 12 $ 87 |
Schedule of Projected Benefit Obligation, Accumulated Benefit Obligation and Fair Value of Plan Assets | As of December 31, 2016 and 2015, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with a projected obligation in excess of plan assets were as follows: Projected Benefit Obligation Exceeds the Fair Value of Plans' Assets 2016 2015 Projected benefit obligation $ 1,864 $ 1,721 Fair value of plan assets 1,443 1,376 Accumulated Benefit Obligation Exceeds the Fair Value of Plans' Assets 2016 2015 Accumulated benefit obligation $ 1,722 $ 1,584 Fair value of plan assets 1,443 1,376 |
Schedule of Expected Cash Flows for Pension and Postretirement Benefit Plans | Information about the expected cash flows for the pension and postretirement benefit plans is as follows: Pension Other Benefits Benefits 2017 expected employer contributions To plan trusts $ 40 $ 6 To plan participants 2 — |
Schedule of Expected Benefit Payments | The following table reflects the net benefits expected to be paid from the plan assets or the Company’s assets: Pension Benefits Other Benefits Expected Benefit Payments Expected Benefit Payments Expected Federal Subsidy Payments 2017 $ 71 $ 29 $ 2 2018 76 31 2 2019 82 33 2 2020 89 34 2 2021 94 35 2 2022-2026 551 194 12 |
Schedule of Significant Assumptions of Pension and Other Postretirement Benefit Plans | The significant assumptions related to the Company’s pension and other postretirement benefit plans were as follows: Pension Benefits Other Benefits 2016 2015 2014 2016 2015 2014 Weighted-average assumptions used to determine December 31 benefit obligations Discount rate 4.28% 4.66% 4.24% 4.26% 4.67% 4.24% Rate of compensation increase 3.07% 3.10% 3.12% N/A N/A N/A Medical trend N/A N/A N/A graded from graded from graded from 7.00% in 2016 6.50% in 2015 6.75% in 2014 to 5.00% in 2021+ to 5.00% in 2021+ to 5.00% in 2021+ Weighted-average assumptions used to determine net periodic cost Discount rate 4.66% 4.24% 5.12% 3.66% 4.24% 5.10% Expected return on plan assets 7.02% 6.91% 6.91% 5.37% 4.92% 5.87% Rate of compensation increase 3.10% 3.12% 3.15% N/A N/A N/A Medical trend N/A N/A N/A graded from graded from graded from 6.50% in 2016 6.75% in 2015 7.00% in 2014 to 5.00% in 2021+ to 5.00% in 2021+ to 5.00% in 2019+ N/A — applicable. |
Schedule of Effect of One Percentage Point Change in Assumed Health Care Cost Trend Rates | Assumed health care cost trend rates have a significant effect on the amounts reported for the other postretirement benefit plans. The health care cost trend rate is based on historical rates and expected market conditions. A one-percentage-point change in assumed health care cost trend rates would have the following effects: One-Percentage-Point Increase One-Percentage-Point Decrease Effect on total of service and interest cost components $ 7 $ (6 ) Effect on other postretirement benefit obligation $ 74 $ (61 ) |
Components of Net Periodic Benefit Costs | The following table provides the components of net periodic benefit costs for the years ended December 31: 2016 2015 2014 Components of net periodic pension benefit cost Service cost $ 32 $ 37 $ 32 Interest cost 80 74 76 Expected return on plan assets (95 ) (97 ) (95 ) Amortization of: Prior service cost (credit) 1 1 1 Actuarial (gain) loss 27 25 — Net periodic pension benefit cost $ 45 $ 40 $ 14 Other changes in plan assets and benefit obligations recognized in other comprehensive income Amortization of prior service credit (cost) $ — $ — $ — Current year actuarial (gain) loss 21 10 46 Amortization of actuarial gain (loss) (6 ) (5 ) — Total recognized in other comprehensive income $ 15 $ 5 $ 46 Total recognized in net periodic benefit cost and comprehensive income $ 60 $ 45 $ 60 Components of net periodic other postretirement benefit cost Service cost $ 12 $ 14 $ 11 Interest cost 28 30 29 Expected return on plan assets (27 ) (26 ) (28 ) Amortization of: Prior service cost (credit) (9 ) (2 ) (2 ) Actuarial (gain) loss 5 5 — Net periodic other postretirement benefit cost $ 9 $ 21 $ 10 |
Schedule of Estimated Amounts Amortized Accumulated other Comprehensive Income | The estimated amounts that will be amortized from accumulated other comprehensive income and regulatory assets into net periodic benefit cost in 2017 are as follows: Pension Benefits Other Benefits Actuarial (gain) loss $ 34 $ 10 Prior service cost (credit) 1 (18 ) Total $ 35 $ (8 ) |
Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Changes in Fair Value of Plan Assets | The fair values and asset allocations of pension plan assets as of December 31, 2016 and 2015, respectively, by asset category were as follows: Quoted Prices in Active Significant Significant Percentage Target Markets for Observable Unobservable of Plan Assets Allocation Identical Inputs Inputs as of Asset Category 2017 Total (Level 1) (Level 2) (Level 3) December 31, 2016 Cash — $ 10 $ 10 $ — $ — — Equity Securities: U.S. large cap 24 % 316 316 — — 22 % U.S. small cap 8 % 134 134 — — 9 % International 20 % 259 — 259 — 18 % Fixed Income Securities: 40 % 42 % U.S. Treasury securities and government bonds — 150 114 36 — — Corporate bonds — 391 — 391 — — Mortgage-backed securities — 3 — 3 — — Long duration bond fund — 7 7 — — — Guarantee annuity contracts — 48 — 9 39 — Real Estate Fund 6 % 101 — — 101 7 % REITs 2 % 24 — 24 — 2 % Total 100 % $ 1,443 $ 581 $ 722 $ 140 100 % Quoted Prices in Active Significant Significant Percentage Target Markets for Observable Unobservable of Plan Assets Allocation Identical Inputs Inputs as of Asset Category 2016 Total (Level 1) (Level 2) (Level 3) December 31, 2015 Cash — $ 5 $ 5 $ — $ — — Equity Securities: U.S. large cap 24 % 318 318 — — 23 % U.S. small cap 8 % 115 115 — — 8 % International 20 % 260 — 260 — 19 % Fixed Income Securities: 40 % 41 % U.S. Treasury and government bonds — 120 95 25 — — Corporate bonds — 375 — 375 — — Mortgage-backed securities — 9 — 9 — — Long duration bond fund — 7 7 — — — Guarantee annuity contracts — 49 — 8 41 — Real Estate 6 % 95 — — 95 7 % REITs 2 % 23 — 23 — 2 % Total 100 % $ 1,376 $ 540 $ 700 $ 136 100 % |
Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Changes in Fair Value of Plan Assets | The fair values and asset allocations of postretirement benefit plan assets as of December 31, 2016 and 2015, respectively, by asset category, were as follows: Quoted Prices in Active Significant Significant Percentage Target Markets for Observable Unobservable of Plan Assets Allocation Identical Inputs Inputs as of Asset Category 2017 Total (Level 1) (Level 2) (Level 3) December 31, 2016 Bargain VEBA: Equity Securities: U.S. large cap 9 % $ 35 $ 35 $ — $ — 9 % International 11 % 40 40 — — 10 % Fixed Income Securities: 80 % 81 % U.S. Treasury securities and government bonds — 84 84 — — — Corporate bonds — 223 — 223 — — Long duration bond fund — 3 3 — — — Future and option contracts (a) — 1 1 — — — Total Bargain VEBA 100 % $ 386 $ 163 $ 223 $ — 100 % Non-bargain VEBA: Cash — $ 2 $ 2 $ — $ — — Equity Securities: U.S. large cap 21 % 29 29 — — 22 % U.S. small cap 21 % 30 30 — — 22 % International 28 % 37 37 — — 27 % Fixed Income Securities: 30 % 29 % Core fixed income bond fund — 36 36 — — — Total Non-bargain VEBA 100 % $ 134 $ 134 $ — $ — 100 % Life VEBA: Equity Securities: U.S. large cap 70 % $ 3 $ 3 $ — $ — 64 % Fixed Income Securities: 30 % 36 % Core fixed income bond fund — 2 2 — — — Total Life VEBA 100 % $ 5 $ 5 $ — $ — 100 % Total 100 % $ 525 $ 302 $ 223 $ — 100 % (a) Includes cash for margin requirements. Quoted Prices in Active Significant Significant Percentage Target Markets for Observable Unobservable of Plan Assets Allocation Identical Assets Inputs Inputs as of Asset Category 2016 Total (Level 1) (Level 2) (Level 3) December 31, 2015 Bargain VEBA: Equity Securities: U.S. large cap 9 % $ 32 $ 32 $ — $ — 9 % International 11 % 38 38 — — 10 % Fixed Income Securities: 80 % 81 % U.S. Treasury and government bonds — 118 118 — — — Corporate bonds — 184 — 184 — — Long duration bond fund — 3 3 — — — Future and option contracts (a) — 1 1 — — — Total Bargain VEBA 100 % $ 376 $ 192 $ 184 $ — 100 % Non-bargain VEBA: Cash — $ 2 $ 2 $ — $ — — Equity Securities: U.S. large cap 21 % 24 24 — — 21 % U.S. small cap 21 % 26 26 — — 22 % International 28 % 33 33 — — 28 % Fixed Income Securities: 30 % 29 % Core fixed income bond fund — 33 33 — — — Total Non-bargain VEBA 100 % $ 118 $ 118 $ — $ — 100 % Life VEBA: Equity Securities: U.S. large cap 70 % $ 4 $ 4 $ — $ — 68 % Fixed Income Securities: 30 % 32 % Core fixed income bond fund — 2 2 — — — Total Life VEBA 100 % $ 6 $ 6 $ — $ — 100 % Total 100 % $ 500 $ 316 $ 184 $ — 100 % (a) Includes cash for margin requirements. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Future Annual Commitments Related to Minimum Quantities of Purchased Water Having Non-Cancelable Terms | The Company’s regulated subsidiaries maintain agreements with other water purveyors for the purchase of water to supplement their water supply. The future annual commitments related to minimum quantities of purchased water having non-cancelable terms are as follows: Year Amount 2017 $ 56 2018 58 2019 64 2020 64 2021 65 Thereafter 735 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerator and Denominator for Basic and Diluted Earnings Per Share | The following is a reconciliation of the numerator and denominator for basic and diluted earnings per share (“EPS”) calculations for the years ended December 31: 2016 2015 2014 Numerator Income from continuing operations $ 468 $ 476 $ 430 Loss from discontinued operations, net of tax — — (7 ) Net income attributable to common stockholders $ 468 $ 476 $ 423 Denominator Weighted average common shares outstanding — 178 179 179 Effect of dilutive common stock equivalents 1 1 1 Weighted average common shares outstanding—Diluted 179 180 180 |
Fair Values of Financial Inst46
Fair Values of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Carrying Amounts and Fair Values of Financial Instruments | The carrying amounts, including fair value adjustments previously recognized in acquisition purchase accounting and a fair value adjustment related to the Company’s interest rate swap fair value hedge (which is classified as Level 2 in the fair value hierarchy), and fair values of the financial instruments were as follows: Carrying December 31, 2016 Amount L e Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 12 $ — $ — $ 15 $ 15 Long-term debt (excluding capital lease obligations) 6,320 3,876 1,363 1,805 7,044 Carrying December 31, 2015 Amount L e Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 13 $ — $ — $ 18 $ 18 Long-term debt (excluding capital lease obligations) 5,914 3,397 1,419 1,941 6,757 |
Fair Value Measurements of Assets and Liabilities on Recurring Basis | Recurring Fair Value Measurements The following table presents assets and liabilities measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy as of December 31, 2016 and 2015, respectively: December 31, 2016 Level 1 Level 2 Level 3 Total Assets Restricted funds $ 24 $ — $ — $ 24 Rabbi trust investments 12 — — 12 Deposits 3 — — 3 Mark-to-market derivative asset — 28 — 28 Other investments 1 — — 1 Total assets 40 28 — 68 Liabilities Deferred compensation obligation 13 — — 13 Mark-to-market derivative liability — — — - Total liabilities 13 — — 13 Total net assets (liabilities) $ 27 $ 28 $ — $ 55 December 31, 2015 Level 1 Level 2 Level 3 Total Assets Restricted funds $ 27 $ — $ — $ 27 Rabbi trust investments 12 — 12 Deposits 1 — — 1 Mark-to-market derivative asset — 2 — 2 Other investments 4 — — 4 Total assets 44 2 — 46 Liabilities Deferred compensation obligation 11 — — 11 Mark-to-market derivative liability — 1 — 1 Total liabilities 11 1 — 12 Total net assets (liabilities) $ 33 $ 1 $ — $ 34 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of Minimum Annual Future Rental Commitment Under Operating Leases | The minimum annual future rental commitment under operating leases that have initial or remaining non-cancelable lease terms over the next five years and thereafter are as follows: Year Amount 2017 $ 14 2018 12 2019 11 2020 9 2021 6 Thereafter 70 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Summarized Segment Information | The following tables include the Company’s summarized segment information as of and for the years ended December 31: 2016 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 2,871 $ 451 $ (20 ) $ 3,302 Depreciation and amortization 440 15 15 470 Total operating expenses, net 1,852 391 (21 ) 2,222 Interest, net 256 (2 ) 71 325 Income from continuing operations before income taxes 775 65 (70 ) 770 Provision for income taxes 303 26 (27 ) 302 Net income attributable to common stockholders 472 39 (43 ) 468 Total assets 16,405 637 1,440 18,482 Capital expenditures 1,274 18 19 1,311 2015 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 2,743 $ 434 $ (18 ) $ 3,159 Depreciation and amortization 411 8 21 440 Total operating expenses, net 1,732 370 (18 ) 2,084 Interest, net 248 (2 ) 62 308 Income from continuing operations before income taxes 776 68 (62 ) 782 Provision for income taxes 303 26 (23 ) 306 Net income attributable to common stockholders 473 42 (39 ) 476 Total assets 15,258 496 1,487 17,241 Capital expenditures 1,143 17 — 1,160 2014 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 2,674 $ 355 $ (18 ) $ 3,011 Depreciation and amortization 394 6 24 424 Total operating expenses, net 1,726 300 (18 ) 2,008 Interest, net 248 (2 ) 53 299 Income from continuing operations before income taxes 707 58 (55 ) 710 Provision for income taxes 273 18 (11 ) 280 Income from continuing operations 434 40 (44 ) 430 Loss from discontinued operations, net of tax — (7 ) — (7 ) Net income attributable to common stockholders 434 33 (44 ) 423 Total assets 14,343 314 1,381 16,038 Capital expenditures 946 10 — 956 |
Unaudited Quarterly Data (Table
Unaudited Quarterly Data (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Schedule Of Unaudited Quarterly Data | The following table summarizes certain supplemental unaudited consolidated quarterly financial data for each of the four quarters in the years ended December 31, 2016 and 2015, respectively. The operating results for any quarter are not indicative of results that may be expected for a full year or any future periods. 2016 First Quarter Second Quarter Third Quarter Fourth Quarter (In millions, except per share data) Operating revenues $ 743 $ 827 $ 930 $ 802 Operating income 214 299 319 248 Net income attributable to common stockholders 82 137 148 101 Basic earnings per share: Net income attributable to common stockholders 0.46 0.77 0.83 0.57 Diluted earnings per share: Net income attributable to common stockholders 0.46 0.77 0.83 0.57 2015 First Quarter Second Quarter Third Quarter Fourth Quarter (In millions, except per share data) Operating revenues $ 698 $ 782 $ 896 $ 783 Operating income 204 278 361 232 Net income attributable to common stockholders 80 123 174 99 Basic earnings per share: Net income attributable to common stockholders 0.45 0.69 0.97 0.55 Diluted earnings per share: Net income attributable to common stockholders 0.44 0.68 0.96 0.55 |
Significant Accounting Polici50
Significant Accounting Policies - Additional Information (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016USD ($)Segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jul. 31, 2015 | |
Significant Accounting Policies [Line Items] | ||||
Voting interest | 50.00% | |||
Ownership percentage in subsidiary | 95.00% | |||
Redeemable noncontrolling interest | $ 7 | $ 7 | ||
Minority owners ownership interest | 5.00% | |||
Estimated refunds | $ 21 | 19 | ||
Amortization of contributions in aid of construction | $ 27 | 26 | $ 24 | |
Agreements range | 50 years | |||
Remediation costs accrued | $ 0 | 1 | ||
Accrual for environmental loss contingencies payments | 1 | |||
Cumulative effect on simplification of employee Share-based payment accounting | $ 21 | |||
Military Services Agreements | Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Agreements range | 50 years | |||
Operations And Maintenance | Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Agreements range | 40 years | |||
Operations And Maintenance | Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Agreements range | 2 years | |||
Market-Based Businesses | ||||
Significant Accounting Policies [Line Items] | ||||
Number of non-reportable reporting units for market-based businesses | Segment | 4 | |||
Software | ||||
Significant Accounting Policies [Line Items] | ||||
Acquisition cost, carrying value | $ 345 | $ 311 |
Significant Accounting Polici51
Significant Accounting Policies - Schedule of Allowance for Funds Used During Construction (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Funds | |||
Significant Accounting Policies [Line Items] | |||
Allowance for funds used during construction | $ 15 | $ 13 | $ 9 |
Borrowed Funds | |||
Significant Accounting Policies [Line Items] | |||
Allowance for funds used during construction | $ 6 | $ 8 | $ 6 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||
Nov. 30, 2014USD ($) | Dec. 31, 2016USD ($)Investment | Dec. 31, 2015USD ($)Investment | Dec. 31, 2014USD ($)Investment | Dec. 12, 2014USD ($) | |
Business Acquisition And Divestitures [Line Items] | |||||
Debt related to purchase price allocation | $ 6,000,000 | ||||
Goodwill | 1,345,000,000 | $ 1,302,000,000 | $ 1,208,000,000 | ||
Assets of discontinued operations | 0 | 0 | |||
Liabilities of discontinued operations | $ 0 | 0 | |||
Terratec Environmental Limited | |||||
Business Acquisition And Divestitures [Line Items] | |||||
Proceeds from sale of stock | $ 1,000,000 | ||||
Gain (loss) on sale of assets included in discontinued operation | $ (1,000,000) | ||||
Keystone Clearwater Solutions | |||||
Business Acquisition And Divestitures [Line Items] | |||||
Purchase price | 133,000,000 | ||||
Purchase price allocation, assets acquired | 56,000,000 | ||||
Purchase price allocation, liabilities assumed | 7,000,000 | ||||
Goodwill | 91,000,000 | ||||
Acquisition of nonutility property | 25,000,000 | ||||
Estimated fair value of the redeemable noncontrolling interest | 7,000,000 | ||||
Account receivable and unbilled revenues | 18,000,000 | ||||
Intangible assets | $ 12,000,000 | ||||
Regulated Water And Wastewater Systems | |||||
Business Acquisition And Divestitures [Line Items] | |||||
Business acquisition, number of companies acquired | Investment | 15 | 14 | 13 | ||
Purchase price | $ 199,000,000 | $ 64,000,000 | $ 9,000,000 | ||
Purchase price allocation, assets acquired | 194,000,000 | 90,000,000 | $ 17,000,000 | ||
Purchase price allocation, liabilities assumed | 30,000,000 | 26,000,000 | 8,000,000 | ||
Contributions in aid of construction | 14,000,000 | 10,000,000 | 5,000,000 | ||
Debt related to purchase price allocation | 6,000,000 | 1,000,000 | $ 2,000,000 | ||
Goodwill | 43,000,000 | 3,000,000 | |||
Bargain purchase gain recognized | 3,000,000 | ||||
Business combination, purchase gain deferred as regulatory liability | $ 1,000,000 | ||||
Regulated Water And Wastewater Systems | McKeesport Wastewater System | |||||
Business Acquisition And Divestitures [Line Items] | |||||
Non-escrowed deposit | $ 5,000,000 |
Summary of Discontinued Operati
Summary of Discontinued Operations Presented in Consolidated Statements of Operations (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |
Loss from discontinued operations, net of tax | $ (7) |
Terratec Environmental Limited | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |
Operating revenues | 13 |
Total operating expenses, net | 19 |
Loss from discontinued operations before income taxes | (6) |
Provision (benefit) for income taxes | 1 |
Loss from discontinued operations, net of tax | $ (7) |
Schedule of Major Classes of Pr
Schedule of Major Classes of Property, Plant and Equipment by Category (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Public Utility Property Plant And Equipment [Line Items] | ||
Construction work in progress | $ 419 | $ 404 |
Total utility plant | 19,502 | 18,099 |
Nonutility property | 452 | 405 |
Total property, plant and equipment | $ 19,954 | 18,504 |
Weighted Average Useful Life | 6 years | |
Minimum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 3 years | |
Maximum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 50 years | |
Utility Plant | Land and Other Non-Depreciable Assets | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 147 | 141 |
Utility Plant | Sources of Supply | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 734 | 705 |
Weighted Average Useful Life | 52 years | |
Utility Plant | Sources of Supply | Minimum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 2 years | |
Utility Plant | Sources of Supply | Maximum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 127 years | |
Utility Plant | Treatment and Pumping Facilities | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 3,218 | 3,070 |
Weighted Average Useful Life | 40 years | |
Utility Plant | Treatment and Pumping Facilities | Minimum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 3 years | |
Utility Plant | Treatment and Pumping Facilities | Maximum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 101 years | |
Utility Plant | Transmission and Distribution Facilities | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 9,043 | 8,516 |
Weighted Average Useful Life | 80 years | |
Utility Plant | Transmission and Distribution Facilities | Minimum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 9 years | |
Utility Plant | Transmission and Distribution Facilities | Maximum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 156 years | |
Utility Plant | Services, Meters and Fire Hydrants | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 3,504 | 3,250 |
Weighted Average Useful Life | 37 years | |
Utility Plant | Services, Meters and Fire Hydrants | Minimum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 8 years | |
Utility Plant | Services, Meters and Fire Hydrants | Maximum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 93 years | |
Utility Plant | General Structures and Equipment | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 1,343 | 1,227 |
Weighted Average Useful Life | 43 years | |
Utility Plant | General Structures and Equipment | Minimum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 1 year | |
Utility Plant | General Structures and Equipment | Maximum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 154 years | |
Utility Plant | Waste Treatment, Pumping and Disposal | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 457 | 313 |
Weighted Average Useful Life | 55 years | |
Utility Plant | Waste Treatment, Pumping and Disposal | Minimum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 2 years | |
Utility Plant | Waste Treatment, Pumping and Disposal | Maximum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 115 years | |
Utility Plant | Waste Collection | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Utility plant excluding Construction work in progress | $ 637 | $ 473 |
Weighted Average Useful Life | 58 years | |
Utility Plant | Waste Collection | Minimum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 5 years | |
Utility Plant | Waste Collection | Maximum | ||
Public Utility Property Plant And Equipment [Line Items] | ||
Range of Remaining Useful Lives | 109 years |
Property, Plant and Equipment -
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $ 435 | $ 405 | $ 392 |
Provision for depreciation, percentage of aggregate average depreciable asset | 3.14% | 3.13% | 3.20% |
Schedule of Allowances for Unco
Schedule of Allowances for Uncollectible Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounts Notes Loans And Financing Receivable Gross Allowance And Net [Abstract] | |||
Balance as of January 1 | $ (39) | $ (35) | $ (34) |
Amounts charged to expense | (27) | (32) | (37) |
Amounts written off | 29 | 31 | 38 |
Recoveries of amounts written off | (3) | (3) | (2) |
Balance as of December 31 | $ (40) | $ (39) | $ (35) |
Summary of Composition of Regul
Summary of Composition of Regulatory Assets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Regulatory Asset [Line Items] | ||
Regulatory assets | $ 1,289 | $ 1,271 |
Deferred Pension Expense | ||
Regulatory Asset [Line Items] | ||
Regulatory assets | 310 | 269 |
Income Taxes Recoverable through Rates | ||
Regulatory Asset [Line Items] | ||
Regulatory assets | 241 | 236 |
Removal Costs Recoverable through Rates | ||
Regulatory Asset [Line Items] | ||
Regulatory assets | 251 | 225 |
Deferred Other Postretirement Benefit Expense | ||
Regulatory Asset [Line Items] | ||
Regulatory assets | 14 | 90 |
San Clemente Dam Project Costs | ||
Regulatory Asset [Line Items] | ||
Regulatory assets | 91 | 95 |
Regulatory Balancing Accounts | ||
Regulatory Asset [Line Items] | ||
Regulatory assets | 110 | 88 |
Debt Expense | ||
Regulatory Asset [Line Items] | ||
Regulatory assets | 66 | 68 |
Purchase Premium Recoverable through Rates | ||
Regulatory Asset [Line Items] | ||
Regulatory assets | 58 | 60 |
Deferred Tank Painting Costs | ||
Regulatory Asset [Line Items] | ||
Regulatory assets | 39 | 37 |
Other | ||
Regulatory Asset [Line Items] | ||
Regulatory assets | $ 109 | $ 103 |
Regulatory Assets and Liabili58
Regulatory Assets and Liabilities - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2008 | Dec. 31, 2016 | Dec. 31, 2015 |
Removal Costs Recovered through Rates | |||
Regulatory Asset And Liabilities [Line Items] | |||
Amortization expense of regulatory assets | $ 48 | ||
Amortization expense of regulatory assets period end date | 2048-11 | ||
Deferred Pension Expense | |||
Regulatory Asset And Liabilities [Line Items] | |||
Regulatory assets underfunded status | $ 300 | $ 258 | |
Deferred Other Postretirement Benefit Expense | |||
Regulatory Asset And Liabilities [Line Items] | |||
Regulatory assets underfunded status | $ 12 | 87 | |
San Clemente Dam Project Costs | |||
Regulatory Asset And Liabilities [Line Items] | |||
Regulatory assets amortization period | 20 years | ||
Uncovered balance of project costs incurred, including cost of capital, net of surcharges | $ 91 | 95 | |
Surcharges collections | $ 4 | $ 4 | |
Deferred Tank Painting Costs | Minimum | |||
Regulatory Asset And Liabilities [Line Items] | |||
Regulatory assets amortization period | 5 years | ||
Deferred Tank Painting Costs | Maximum | |||
Regulatory Asset And Liabilities [Line Items] | |||
Regulatory assets amortization period | 15 years |
Summary of Composition of Reg59
Summary of Composition of Regulatory Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Regulatory Liabilities [Line Items] | ||
Regulatory liabilities | $ 403 | $ 402 |
Removal Costs Recovered through Rates | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liabilities | 316 | 311 |
Pension and Other Postretirement Benefit Balancing Accounts | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liabilities | 55 | 59 |
Other | ||
Regulatory Liabilities [Line Items] | ||
Regulatory liabilities | $ 32 | $ 32 |
Summary of Changes in Goodwill
Summary of Changes in Goodwill Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Line Items] | |||
Cost, beginning balance | $ 3,742 | $ 3,648 | |
Goodwill from acquisitions | 43 | 94 | |
Cost, ending balance | 3,785 | 3,742 | |
Accumulated Impairment | (2,440) | (2,440) | $ (2,440) |
Total Net, beginning balance | 1,302 | 1,208 | |
Total Net, ending balance | 1,345 | 1,302 | |
Regulated Businesses | |||
Goodwill [Line Items] | |||
Cost, beginning balance | 3,415 | 3,412 | |
Goodwill from acquisitions | 43 | 3 | |
Cost, ending balance | 3,458 | 3,415 | |
Accumulated Impairment | (2,332) | (2,332) | (2,332) |
Market-Based Businesses | |||
Goodwill [Line Items] | |||
Cost, beginning balance | 327 | 236 | |
Goodwill from acquisitions | 91 | ||
Cost, ending balance | 327 | 327 | |
Accumulated Impairment | $ (108) | $ (108) | $ (108) |
Goodwill and Other Intangible61
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Finite Lived Intangible Assets [Line Items] | ||
Goodwill from acquisitions | $ 43 | $ 94 |
Keystone Clearwater Solutions | Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets acquired | $ 10 | 12 |
Intangible assets useful life | 8 years | |
Regulated Businesses | ||
Finite Lived Intangible Assets [Line Items] | ||
Goodwill from acquisitions | $ 43 | 3 |
Regulated Businesses | Keystone Clearwater Solutions | ||
Finite Lived Intangible Assets [Line Items] | ||
Goodwill from acquisitions | 3 | |
Market-Based Businesses | ||
Finite Lived Intangible Assets [Line Items] | ||
Goodwill from acquisitions | 91 | |
Market-Based Businesses | Keystone Clearwater Solutions | ||
Finite Lived Intangible Assets [Line Items] | ||
Goodwill from acquisitions | $ 91 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Feb. 28, 2015 | |
Stockholders Equity Note [Line Items] | |||
Shares of common stock repurchased | 1,000,000 | 2,300,000 | |
Aggregate cost of shares repurchased | $ 65 | $ 126 | |
Share of common stock available for repurchase | 6,800,000 | ||
Maximum | |||
Stockholders Equity Note [Line Items] | |||
Shares available under the program to purchase outstanding common stock | 10,000,000 | ||
DRIP | |||
Stockholders Equity Note [Line Items] | |||
Shares available for grant | 4,400,000 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss by Component, Net of Tax (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | $ 5,049 | $ 4,915 |
Ending Balance | 5,218 | 5,049 |
Employee Benefit Plan Funded Status | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (126) | (116) |
Other comprehensive gain (loss) before reclassifications | (21) | (10) |
Net other comprehensive income (loss) | (21) | (10) |
Ending Balance | (147) | (126) |
Amortization of Prior Service Cost | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | 1 | 1 |
Ending Balance | 1 | 1 |
Amortization of Actuarial Loss | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | 36 | 31 |
Amounts reclassified from accumulated other comprehensive income | 6 | 5 |
Net other comprehensive income (loss) | 6 | 5 |
Ending Balance | 42 | 36 |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | 2 | 3 |
Other comprehensive gain (loss) before reclassifications | (1) | |
Net other comprehensive income (loss) | (1) | |
Ending Balance | 2 | 2 |
Gain (Loss) on Cash Flow Hedge | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (1) | (1) |
Other comprehensive gain (loss) before reclassifications | 17 | |
Net other comprehensive income (loss) | 17 | |
Ending Balance | 16 | (1) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (88) | (82) |
Other comprehensive gain (loss) before reclassifications | (4) | (11) |
Amounts reclassified from accumulated other comprehensive income | 6 | 5 |
Net other comprehensive income (loss) | 2 | (6) |
Ending Balance | $ (86) | $ (88) |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Details) - USD ($) | Jan. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Stock-based compensation, capitalized amount | $ 0 | $ 0 | $ 0 | |||
Restricted Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Unrecognized compensation cost | $ 4,000,000 | |||||
Weighted-average period (in years) | 1 year 4 months 24 days | |||||
Total fair value of shares vested | $ 14,000,000 | 12,000,000 | 11,000,000 | |||
Expected term | 3 years | |||||
Number of grants | 74,000 | 128,000 | 47,000 | |||
Restricted shares granted | The terms of the grants specified that to the extent certain performance goals, comprised of internal measures and, separately, market thresholds were achieved, the RSUs would vest; if performance goals were surpassed, up to 175% of the target awards would be distributed; and if performance goals were not met, the awards would be forfeited. | |||||
Accrued dividend equivalents | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | |||
Restricted Stock Units With Performance Restrictions | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of grants | [1] | 173,000 | ||||
Restricted Stock Units With Performance Restrictions | Maximum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Percentage of performance goals target award | 175.00% | |||||
2007 Omnibus Equity Compensation Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Total shares authorized for grant | 15,500,000 | |||||
Shares available for grant | 7,900,000 | |||||
2007 Omnibus Equity Compensation Plan | Stock Options | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | 3 years | 3 years | |||
Maximum terms | 7 years | |||||
Unrecognized compensation cost | $ 2,000,000 | |||||
Weighted-average period (in years) | 1 year 8 months 12 days | |||||
Total fair value of shares vested | $ 1,000,000 | $ 3,000,000 | $ 3,000,000 | |||
2007 Omnibus Equity Compensation Plan | Stock Options | Minimum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 1 year | |||||
2007 Omnibus Equity Compensation Plan | Stock Options | Maximum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
2007 Omnibus Equity Compensation Plan | Restricted Stock Units | Minimum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 1 year | |||||
2007 Omnibus Equity Compensation Plan | Restricted Stock Units | Maximum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Employee Stock Purchase Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares available for grant | 1,100,000 | |||||
Lesser of fair market value | 90.00% | |||||
Shares issued | 93,000 | 98,000 | 102,000 | |||
[1] | During 2014, the Company granted selected employees an aggregate of 128 thousand RSUs with internal performance measures and, separately, certain market thresholds. These awards vested in January 2016. The terms of the grants specified that to the extent certain performance goals, comprised of internal measures and, separately, market thresholds were achieved, the RSUs would vest; if performance goals were surpassed, up to 175% of the target awards would be distributed; and if performance goals were not met, the awards would be forfeited. In January 2016, an additional 74 thousand RSUs were granted and distributed because performance thresholds were exceeded and were included in the number of shares granted. |
Stock-Based Compensation Expens
Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock-based compensation | $ 11 | $ 11 | $ 13 |
Income tax benefit | (4) | (4) | (5) |
Stock-based compensation expense, net of tax | 7 | 7 | 8 |
Stock Options | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock-based compensation | 2 | 2 | 2 |
Restricted Stock Units | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock-based compensation | 8 | 8 | 10 |
Employee Stock Purchase Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock-based compensation | $ 1 | $ 1 | $ 1 |
Summary of Weighted-Average Ass
Summary of Weighted-Average Assumptions (Details) - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Dividend yield | 2.09% | 2.35% | 2.55% |
Expected volatility | 15.89% | 17.64% | 17.75% |
Risk-free interest rate | 1.15% | 1.48% | 1.06% |
Expected life (years) | 4 years | 4 years 4 months 24 days | 3 years 7 months 6 days |
Exercise price | $ 65.25 | $ 52.75 | $ 44.29 |
Grant date fair value per share | $ 6.61 | $ 6.21 | $ 4.57 |
Summary of Stock Option Activit
Summary of Stock Option Activity (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Options outstanding as of December 31, 2015 | 1,187 | |
Granted | 341 | |
Forfeited or expired | (74) | |
Exercised | (467) | |
Options outstanding as of December 31, 2016 | 987 | 1,187 |
Exercisable as of December 31, 2016 | 450 | |
Weighted Average Exercise Price (per share), Options outstanding at January 1, 2016 | $ 39.70 | |
Weighted Average Exercise Price (per share), Granted | 65.26 | |
Weighted Average Exercise Price (per share), Forfeited or expired | 56.25 | |
Weighted Average Exercise Price (per share), Exercised | 32.64 | |
Weighted Average Exercise Price (per share), Options outstanding at December 31, 2016 | 50.65 | $ 39.70 |
Weighted Average Exercise Price (per share), Options exercisable at December 31, 2016 | $ 41.22 | |
Weighted Average Remaining Life (years), Options outstanding at December 31, 2015 | 4 years 3 months 18 days | 3 years 10 months 24 days |
Weighted Average Remaining Life (years), Exercisable at December 31, 2016 | 2 years 10 months 24 days | |
Aggregate intrinsic Value, Options | $ 21 | $ 24 |
Aggregate intrinsic Value, Exercisable at December 31, 2016 | $ 14 |
Additional Information to Stock
Additional Information to Stock Options Exercised (Details) - Stock Options - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Intrinsic value | $ 18 | $ 22 | $ 13 |
Exercise proceeds | 15 | 30 | 15 |
Income tax benefit realized | $ 6 | $ 7 | $ 4 |
Summary of Restricted Stock Uni
Summary of Restricted Stock Unit Activity (Details) - $ / shares shares in Thousands | Jan. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2016 | |
Restricted Stock Units Without Performance Restrictions | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Non-vested total as of December 31, 2015 | 81 | |||
Granted | 74 | 128 | 47 | |
Vested | (45) | |||
Forfeited | (9) | |||
Non-vested total as of December 31, 2016 | 74 | |||
Weighted-average grant date fair value (per share), non-vested total beginning balance | $ 48.71 | |||
Weighted-average grant date fair value (per share), granted | 67.71 | |||
Weighted-average grant date fair value (per share), vested | 54.06 | |||
Weighted-average grant date fair value (per share), forfeited | 57.99 | |||
Weighted-average grant date fair value (per share), non-vested total ending balance | $ 56.43 | |||
Restricted Stock Units With Performance Restrictions | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Non-vested total as of December 31, 2015 | 366 | |||
Granted | [1] | 173 | ||
Vested | (206) | |||
Forfeited | (24) | |||
Non-vested total as of December 31, 2016 | 309 | |||
Weighted-average grant date fair value (per share), non-vested total beginning balance | $ 45.91 | |||
Weighted-average grant date fair value (per share), granted | [1] | 57.47 | ||
Weighted-average grant date fair value (per share), vested | 40.01 | |||
Weighted-average grant date fair value (per share), forfeited | 49.89 | |||
Weighted-average grant date fair value (per share), non-vested total ending balance | $ 55.94 | |||
[1] | During 2014, the Company granted selected employees an aggregate of 128 thousand RSUs with internal performance measures and, separately, certain market thresholds. These awards vested in January 2016. The terms of the grants specified that to the extent certain performance goals, comprised of internal measures and, separately, market thresholds were achieved, the RSUs would vest; if performance goals were surpassed, up to 175% of the target awards would be distributed; and if performance goals were not met, the awards would be forfeited. In January 2016, an additional 74 thousand RSUs were granted and distributed because performance thresholds were exceeded and were included in the number of shares granted. |
Weighted-Average Assumptions Us
Weighted-Average Assumptions Used in Monte Carlo Simulation (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected volatility | 15.90% | 14.93% | 17.78% |
Risk-free interest rate | 0.91% | 1.07% | 0.75% |
Expected life (years) | 3 years | 3 years | 3 years |
Grant date fair value per share | $ 77.16 | $ 62.10 | $ 45.45 |
Components of Long-Term Debt (D
Components of Long-Term Debt (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Debt Instrument [Line Items] | |||
Long-term debt | $ 6,324 | $ 5,909 | |
Unamortized debt premium, net | [1] | 17 | 23 |
Unamortized debt issuance costs | (9) | (7) | |
Interest rate swap fair value adjustment | 1 | 3 | |
Less current portion of long-term debt | (574) | (54) | |
Total long-term debt | $ 5,759 | 5,874 | |
Interest Rate | 1.00% | ||
Senior notes | American Water Capital Corp. | Fixed rate | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | [2] | $ 4,786 | 4,273 |
Weighted Average Rate | [2] | 5.04% | |
Maturity Date, Minimum | [2] | 2,017 | |
Maturity Date, Maximum | [2] | 2,046 | |
Senior notes | American Water Capital Corp. | Minimum | Fixed rate | |||
Debt Instrument [Line Items] | |||
Interest Rate | 3.00% | ||
Senior notes | American Water Capital Corp. | Minimum | Fixed rate | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Interest Rate | [2] | 3.00% | |
Senior notes | American Water Capital Corp. | Maximum | Fixed rate | |||
Debt Instrument [Line Items] | |||
Interest Rate | 4.00% | ||
Senior notes | American Water Capital Corp. | Maximum | Fixed rate | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Interest Rate | [2] | 8.27% | |
Private activity bonds and government funded debt | American Water Capital Corp. | Fixed rate | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | [2] | $ 194 | 195 |
Weighted Average Rate | [2] | 5.42% | |
Maturity Date, Minimum | [2] | 2,021 | |
Maturity Date, Maximum | [2] | 2,040 | |
Private activity bonds and government funded debt | American Water Capital Corp. | Minimum | Fixed rate | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Interest Rate | [2] | 1.79% | |
Private activity bonds and government funded debt | American Water Capital Corp. | Maximum | Fixed rate | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Interest Rate | [2] | 6.25% | |
Private activity bonds and government funded debt | Other American Water subsidiaries | Fixed rate | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | [3] | $ 695 | 790 |
Weighted Average Rate | [3] | 4.72% | |
Maturity Date, Minimum | [3] | 2,017 | |
Maturity Date, Maximum | [3] | 2,041 | |
Private activity bonds and government funded debt | Other American Water subsidiaries | Minimum | Fixed rate | |||
Debt Instrument [Line Items] | |||
Interest Rate | 1.00% | ||
Private activity bonds and government funded debt | Other American Water subsidiaries | Minimum | Fixed rate | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Interest Rate | [3] | 0.00% | |
Private activity bonds and government funded debt | Other American Water subsidiaries | Maximum | Fixed rate | |||
Debt Instrument [Line Items] | |||
Interest Rate | 1.36% | ||
Private activity bonds and government funded debt | Other American Water subsidiaries | Maximum | Fixed rate | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Interest Rate | [3] | 6.20% | |
Mortgage bonds | Other American Water subsidiaries | Fixed rate | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 636 | 637 | |
Weighted Average Rate | 7.41% | ||
Maturity Date, Minimum | 2,017 | ||
Maturity Date, Maximum | 2,039 | ||
Mortgage bonds | Other American Water subsidiaries | Minimum | Fixed rate | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Interest Rate | 4.29% | ||
Mortgage bonds | Other American Water subsidiaries | Maximum | Fixed rate | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Interest Rate | 9.71% | ||
Capital lease obligations | Other American Water subsidiaries | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 1 | 1 | |
Weighted Average Rate | 12.39% | ||
Maturity Date, Maximum | 2,026 | ||
Capital lease obligations | Other American Water subsidiaries | Minimum | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Interest Rate | 12.23% | ||
Capital lease obligations | Other American Water subsidiaries | Maximum | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Interest Rate | 12.44% | ||
Mandatorily redeemable preferred stock | Other American Water subsidiaries | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 12 | $ 13 | |
Weighted Average Rate | 8.61% | ||
Maturity Date, Minimum | 2,019 | ||
Maturity Date, Maximum | 2,036 | ||
Mandatorily redeemable preferred stock | Other American Water subsidiaries | Minimum | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Interest Rate | 8.47% | ||
Mandatorily redeemable preferred stock | Other American Water subsidiaries | Maximum | Long Term Debt | |||
Debt Instrument [Line Items] | |||
Interest Rate | 9.75% | ||
[1] | Primarily fair value adjustments previously recognized in acquisition purchase accounting. | ||
[2] | This indebtedness is considered “debt” for purposes of a support agreement between American Water and American Water Capital Corp. (“AWCC”), American Water’s wholly owned finance subsidiary, which serves as a functional equivalent of a guarantee by American Water of AWCC’s payment obligations under such indebtedness. | ||
[3] | Includes $6 and $8 of variable rate debt with variable-to-fixed interest rate swaps ranging between 3.93% and 4.65%, as of December 31, 2016 and 2015. This debt was assumed via an acquisition in 2013. |
Components of Long-Term Debt (P
Components of Long-Term Debt (Parenthetical) (Details) - Interest Rate Swap - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Variable rate debt | $ 6 | $ 8 |
Minimum | ||
Debt Instrument [Line Items] | ||
Variable-to-fixed rate | 3.93% | |
Maximum | ||
Debt Instrument [Line Items] | ||
Variable-to-fixed rate | 4.65% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | Feb. 08, 2017USD ($) | Dec. 31, 2016USD ($)Agreement | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 6,324,000,000 | $ 5,909,000,000 | ||
Line of credit facility consolidated debt to consolidated capitalization ratio | 0.58 | |||
Redeemable debt, amount outstanding | $ 891,000,000 | |||
Business acquisition, assumed debt | 6,000,000 | |||
Debt issuance cost | $ 5,000,000 | |||
Interest Rate | 1.00% | |||
Maturity Date | 2,037 | |||
Interest income | $ 14,000,000 | $ 13,000,000 | $ 11,000,000 | |
Number of forward starting swap agreements | Agreement | 4 | |||
Forward Starting Swap Agreements | ||||
Debt Instrument [Line Items] | ||||
Derivate instrument notional amount | $ 300,000,000 | |||
Derivative agreement termination year | 2017-12 | |||
Derivative average fixed interest rate | 2.20% | |||
Forward Starting Swap Agreements | Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Derivate instrument notional amount | $ 100,000,000 | |||
Derivative agreement termination year | 2018-12 | |||
Derivative average fixed interest rate | 2.67% | |||
Interest Rate Swap | ||||
Debt Instrument [Line Items] | ||||
Interest Rate | 6.085% | |||
Derivate instrument notional amount | $ 100,000,000 | |||
Derivative description of variable rate basis | six-month LIBOR plus 3.422 | |||
Maturity Date, Maximum | 2,017 | |||
Interest Rate Swap | London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt, basis spread on variable rate | 3.422% | |||
Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility consolidated debt to consolidated capitalization ratio | 0.70 | |||
6.085% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Maturity Date, Maximum | 2,017 | |||
Variable Rate | Interest Rate Swap | ||||
Debt Instrument [Line Items] | ||||
Derivate instrument notional amount | $ 6,000,000 | |||
Other American Water subsidiaries | Private activity bonds and government funded debt | Collateralized Debt Obligations | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 619,000,000 |
Future Sinking Fund Payments an
Future Sinking Fund Payments and Debt Maturities (Details) $ in Millions | Dec. 31, 2016USD ($) |
Debt Disclosure [Abstract] | |
2,017 | $ 574 |
2,018 | 457 |
2,019 | 166 |
2,020 | 22 |
2,021 | 479 |
Thereafter | $ 4,626 |
Long-Term Debt Issued (Details)
Long-Term Debt Issued (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Interest Rate | 1.00% | ||
Maturity Date | 2,037 | ||
Total issuances | $ 553 | $ 565 | $ 501 |
American Water Capital Corp. | Senior notes | Fixed rate | |||
Debt Instrument [Line Items] | |||
Total issuances | $ 550 | ||
American Water Capital Corp. | Senior notes | Minimum | Fixed rate | |||
Debt Instrument [Line Items] | |||
Interest Rate | 3.00% | ||
Maturity Date | 2,026 | ||
American Water Capital Corp. | Senior notes | Maximum | Fixed rate | |||
Debt Instrument [Line Items] | |||
Interest Rate | 4.00% | ||
Maturity Date | 2,046 | ||
Other American Water subsidiaries | Private activity bonds and government funded debt | Fixed rate | |||
Debt Instrument [Line Items] | |||
Total issuances | $ 3 | ||
Other American Water subsidiaries | Private activity bonds and government funded debt | Minimum | Fixed rate | |||
Debt Instrument [Line Items] | |||
Interest Rate | 1.00% | ||
Maturity Date | 2,026 | ||
Other American Water subsidiaries | Private activity bonds and government funded debt | Maximum | Fixed rate | |||
Debt Instrument [Line Items] | |||
Interest Rate | 1.36% | ||
Maturity Date | 2,037 |
Long-Term Debt Retired Through
Long-Term Debt Retired Through Optional Redemptions or Payments at Maturities (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | |
Interest Rate | 1.00% |
Debt retired during the year | |
Debt Instrument [Line Items] | |
Total retirements and redemptions | $ 144 |
Debt retired during the year | Other American Water subsidiaries | Mandatorily redeemable preferred stock | |
Debt Instrument [Line Items] | |
Maturity Date, Minimum | 2,031 |
Maturity Date, Maximum | 2,036 |
Total retirements and redemptions | $ 2 |
Debt retired during the year | Minimum | Other American Water subsidiaries | Mandatorily redeemable preferred stock | |
Debt Instrument [Line Items] | |
Interest Rate | 8.49% |
Debt retired during the year | Maximum | Other American Water subsidiaries | Mandatorily redeemable preferred stock | |
Debt Instrument [Line Items] | |
Interest Rate | 9.18% |
Debt retired during the year | Fixed rate two | American Water Capital Corp. | Senior notes | |
Debt Instrument [Line Items] | |
Interest Rate | 5.52% |
Maturity Date, Maximum | 2,016 |
Total retirements and redemptions | $ 37 |
Debt retired during the year | Fixed rate two | American Water Capital Corp. | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Maturity Date, Minimum | 2,021 |
Maturity Date, Maximum | 2,031 |
Total retirements and redemptions | $ 1 |
Debt retired during the year | Fixed rate two | Other American Water subsidiaries | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Maturity Date, Minimum | 2,016 |
Maturity Date, Maximum | 2,041 |
Total retirements and redemptions | $ 104 |
Debt retired during the year | Fixed rate two | Minimum | American Water Capital Corp. | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest Rate | 1.79% |
Debt retired during the year | Fixed rate two | Minimum | Other American Water subsidiaries | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest Rate | 0.00% |
Debt retired during the year | Fixed rate two | Maximum | American Water Capital Corp. | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest Rate | 2.90% |
Debt retired during the year | Fixed rate two | Maximum | Other American Water subsidiaries | Private activity bonds and government funded debt | |
Debt Instrument [Line Items] | |
Interest Rate | 5.30% |
Summary of Gross Fair Value Der
Summary of Gross Fair Value Derivative Asset and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Economic hedge (non-designated) | Interest Rate Swap | Other long-term liabilities | ||
Derivative [Line Items] | ||
Derivative Liabilities | $ 1 | |
Fair value hedge | Interest Rate Swap | Other long-term assets | ||
Derivative [Line Items] | ||
Derivative Asset | 2 | |
Fair value hedge | Interest Rate Swap | Other current assets | ||
Derivative [Line Items] | ||
Derivative Asset | $ 1 | |
Fair value hedge | Interest Rate Swap | Long-term debt | ||
Derivative [Line Items] | ||
Derivative Liabilities | $ 2 | |
Fair value hedge | Interest Rate Swap | Current portion of Long-term debt | ||
Derivative [Line Items] | ||
Derivative Liabilities | 1 | |
Cash flow hedge | Forward starting swaps | Other current assets | ||
Derivative [Line Items] | ||
Derivative Asset | $ 27 |
Short-Term Debt - Additional In
Short-Term Debt - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Short Term Debt [Line Items] | |||
Short-term debt | $ 849,000,000 | $ 628,000,000 | |
Proceeds from short-term borrowings with maturities greater than three months | 60,000,000 | $ 35,000,000 | |
Maturity in More Than Three Months | |||
Short Term Debt [Line Items] | |||
Proceeds from short-term borrowings with maturities greater than three months | 0 | ||
Commercial Paper Program | |||
Short Term Debt [Line Items] | |||
Short-term debt | $ 849,000,000 | $ 628,000,000 |
Short-Term Debt - AWCC Revolvin
Short-Term Debt - AWCC Revolving Credit Facility - Additional Information (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 22, 2016 | |
Short Term Debt [Line Items] | ||||||
Debt issuance costs | $ 5,000,000 | $ 7,000,000 | $ 5,000,000 | |||
Revolving Credit Facility | ||||||
Short Term Debt [Line Items] | ||||||
Maximum borrowing capacity | 1,766,000,000 | 1,266,000,000 | ||||
Letter of Credit | Revolving Credit Facility | ||||||
Short Term Debt [Line Items] | ||||||
Maximum borrowing capacity | [1] | $ 150,000,000 | 150,000,000 | |||
American Water Capital Corp. | ||||||
Short Term Debt [Line Items] | ||||||
Line of credit facility term extension description | This amended and restated agreement also allowed AWCC to request to further extend the term of the credit facility for up to two one-year periods. | |||||
American Water Capital Corp. | Revolving Credit Facility | ||||||
Short Term Debt [Line Items] | ||||||
Maximum borrowing capacity | $ 1,750,000,000 | $ 1,250,000,000 | ||||
New agreement expiration date | 2020-06 | |||||
Line of credit facility, swing loan sublimit | $ 100,000,000 | |||||
Debt issuance costs | 1,000,000 | $ 2,000,000 | ||||
American Water Capital Corp. | Credit Facility June Two Thousand Twenty | ||||||
Short Term Debt [Line Items] | ||||||
New agreement expiration date | 2018-10 | |||||
New agreement extended expiration date | 2020-06 | |||||
American Water Capital Corp. | Letter of Credit | Revolving Credit Facility | ||||||
Short Term Debt [Line Items] | ||||||
Maximum borrowing capacity | $ 150,000,000 | |||||
[1] | Letters of credit are non-debt instruments maintained to provide credit support for certain transactions as requested by third parties. The Company had $88 and $82 of outstanding letters of credit as of December 31, 2016 and 2015, respectively, all of which were issued under the revolving credit facility noted above. |
Short-Term Debt - Keystone Acqu
Short-Term Debt - Keystone Acquisition - Additional Information (Details) - Revolving Credit Facility - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Short Term Debt [Line Items] | ||
Maximum borrowing capacity | $ 1,766,000,000 | $ 1,266,000,000 |
Keystone Clearwater Solutions | ||
Short Term Debt [Line Items] | ||
Maximum borrowing capacity | 16,000,000 | |
Available credit facility capacity | 6,000,000 | |
Line of credit facility, outstanding borrowings | $ 0 | |
Derivative description of variable rate basis | one month or one day LIBOR | |
Line of credit facility, borrowing base, description | The borrowing base under the facility allows for financing up to the greater of the note or 80% of eligible accounts receivable. | |
Keystone Clearwater Solutions | London Interbank Offered Rate (LIBOR) [Member] | ||
Short Term Debt [Line Items] | ||
Debt, basis spread on variable rate | 2.75% |
Schedule of Company's Aggregate
Schedule of Company's Aggregate Credit Facility Commitments, Letter of Credit Sub-Limit Under Revolving Credit Facility and Commercial Paper Limit and Available Capacity (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Revolving Credit Facility | |||
Short Term Debt [Line Items] | |||
Credit Facility Commitment | $ 1,766,000,000 | $ 1,266,000,000 | |
Available Credit Facility Capacity | 1,668,000,000 | 1,182,000,000 | |
Commercial Paper Program | |||
Short Term Debt [Line Items] | |||
Commercial Paper Limit | 1,600,000,000 | 1,000,000,000 | |
Available Commercial Paper Capacity | 751,000,000 | 374,000,000 | |
Letter of Credit | Revolving Credit Facility | |||
Short Term Debt [Line Items] | |||
Credit Facility Commitment | [1] | 150,000,000 | 150,000,000 |
Available Credit Facility Capacity | $ 62,000,000 | $ 68,000,000 | |
[1] | Letters of credit are non-debt instruments maintained to provide credit support for certain transactions as requested by third parties. The Company had $88 and $82 of outstanding letters of credit as of December 31, 2016 and 2015, respectively, all of which were issued under the revolving credit facility noted above. |
Schedule of Company's Aggrega82
Schedule of Company's Aggregate Credit Facility Commitments, Letter of Credit Sub-Limit Under Revolving Credit Facility and Commercial Paper Limit and Available Capacity (Parenthetical) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Revolving Credit Facility | ||
Short Term Debt [Line Items] | ||
Letters of credit, outstanding amount | $ 88 | $ 82 |
Schedule of Short-Term Borrowin
Schedule of Short-Term Borrowings Activity (Details) - American Water Capital Corp. - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Short Term Debt [Line Items] | ||
Average borrowings | $ 850 | $ 553 |
Maximum borrowings outstanding | $ 1,016 | $ 871 |
Weighted average interest rates, computed on daily basis | 0.78% | 0.49% |
Weighted average interest rates, as of December 31 | 0.98% | 0.66% |
Short-Term Debt - Credit Facili
Short-Term Debt - Credit Facility - Additional Information (Details) | Dec. 31, 2016 |
Debt Disclosure [Abstract] | |
Line of credit facility consolidated debt to consolidated capitalization ratio | 0.58 |
Line of credit facility consolidated debt to consolidated capitalization ratio | 0.70 |
Components of General Tax Expen
Components of General Tax Expense from Continuing Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Income And Expenses [Abstract] | |||
Gross receipts and franchise | $ 106 | $ 99 | $ 96 |
Property and capital stock | 106 | 98 | 96 |
Payroll | 32 | 31 | 31 |
Other general | 14 | 15 | 13 |
Total general taxes | $ 258 | $ 243 | $ 236 |
Components of Income Tax Expens
Components of Income Tax Expense from Continuing Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
State | $ 20 | $ 10 | $ 11 |
Federal | 1 | 15 | |
Total current income taxes | 21 | 10 | 26 |
State | 24 | 32 | 31 |
Federal | 258 | 265 | 224 |
Amortization of deferred investment tax credits | (1) | (1) | (1) |
Total deferred income taxes | 281 | 296 | 254 |
Provision for income taxes | $ 302 | $ 306 | $ 280 |
Reconciliation of Income Tax Ex
Reconciliation of Income Tax Expense from Continuing Operations (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Income tax at statutory rate | 35.00% | 35.00% | 35.00% |
State taxes, net of federal taxes | 3.80% | 3.60% | 3.80% |
Federal regulatory effects | 0.20% | 0.40% | 0.30% |
Other, net | 0.20% | 0.10% | 0.30% |
Effective tax rate | 39.20% | 39.10% | 39.40% |
Components of Net Deferred Tax
Components of Net Deferred Tax Liability from Continuing Operations (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Income Tax Disclosure [Abstract] | ||||
Advances and contributions | $ 540 | $ 513 | ||
Tax losses and credits | 301 | 173 | ||
Pension and other postretirement benefits | 173 | 181 | ||
Other | 90 | 32 | ||
Total deferred tax assets | 1,104 | 899 | ||
Valuation allowance | (6) | (8) | $ (10) | $ (13) |
Total deferred tax assets, net of allowance | 1,098 | 891 | ||
Property, plant and equipment | 3,339 | 2,913 | ||
Deferred pension and other postretirement benefits | 126 | 139 | ||
Other | 229 | 149 | ||
Total deferred tax liabilities | 3,694 | 3,201 | ||
Total deferred tax liabilities, net of deferred tax assets | $ (2,596) | $ (2,310) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | |
Income Tax Examination [Line Items] | |||
Net of deferred tax assets and regulatory assets | $ 6 | ||
Unrecognized tax benefit excluding interest and penalties, that would affect the effective tax rate | 9 | ||
Regulated Businesses | |||
Income Tax Examination [Line Items] | |||
Deferred tax liabilities | $ 106 | ||
Federal | |||
Income Tax Examination [Line Items] | |||
Net operating loss carryforwards | 1,227 | $ 1,080 | |
Net operating loss carryforwards windfall tax deductions | $ 56 | ||
Net operating loss carryforwards expiration start year | 2,028 | ||
State | |||
Income Tax Examination [Line Items] | |||
Net operating loss carryforwards | $ 625 | $ 534 | |
Net operating loss carryforwards expiration date | The state NOL carryforwards will begin to expire in 2017 through 2036 |
Changes in Gross Liability Excl
Changes in Gross Liability Excluding Interest and Penalties for Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Beginning Balance | $ 233 | $ 195 |
Increases in current period tax positions | 10 | 39 |
Decreases in prior period measurement of tax positions | (74) | (1) |
Ending Balance | $ 169 | $ 233 |
Changes in Valuation Allowance
Changes in Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Valuation Allowance [Line Items] | |||
Beginning Balance | $ 8 | $ 10 | $ 13 |
Ending Balance | 6 | 8 | 10 |
Decrease | |||
Valuation Allowance [Line Items] | |||
Current period tax positions | $ (2) | $ (2) | $ (3) |
Employee Benefits - Additional
Employee Benefits - Additional Information (Details) - USD ($) $ in Millions | Jul. 31, 2016 | Jun. 30, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Defined Benefit Plan Disclosure [Line Items] | |||||
Base pay rate of contribution plan | 5.25% | ||||
Percentage return expected from plan assets | 60.00% | ||||
Percentage of liability driven assets | 40.00% | ||||
Minimum reduction of expected future service of plan participants | 10.00% | ||||
Cumulative gains losses as percentage of benefit obligations or plan assets | 10.00% | ||||
Cost of contribution plan | $ 9 | $ 9 | $ 8 | ||
Postretirement Benefit Plan Assets | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Reduction in future benefits payable | $ 156 | 156 | |||
Reduction to net accrued postretirement benefit obligation | $ 89 | ||||
Plan amendment amortization period | 10 years 2 months 12 days | ||||
Expected employer contributions, 2016 | $ 1 | ||||
Expected blended return on weighted assets percentage | 5.09% | ||||
Pension Plan Asset | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Expected employer contributions, 2016 | $ 10 | ||||
Expected return on plan assets percentage | 6.49% |
Schedule of Changes in Fair Val
Schedule of Changes in Fair Value of Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension Plan Asset | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 100.00% | 100.00% | |
Fair value of plan assets | $ 1,443 | $ 1,376 | $ 1,428 |
Percentage of Plan Assets | 100.00% | 100.00% | |
Pension Plan Asset | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 581 | $ 540 | |
Pension Plan Asset | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 722 | 700 | |
Pension Plan Asset | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 140 | $ 136 | |
Pension Plan Asset | U.S. Treasury securities and government bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 150 | ||
Pension Plan Asset | U.S. Treasury securities and government bonds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 114 | ||
Pension Plan Asset | U.S. Treasury securities and government bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 36 | ||
Pension Plan Asset | Real Estate Fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 6.00% | 6.00% | |
Fair value of plan assets | $ 101 | $ 95 | |
Percentage of Plan Assets | 7.00% | 7.00% | |
Pension Plan Asset | Real Estate Fund | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 101 | $ 95 | |
Pension Plan Asset | REITs | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 2.00% | 2.00% | |
Fair value of plan assets | $ 24 | $ 23 | |
Percentage of Plan Assets | 2.00% | 2.00% | |
Pension Plan Asset | REITs | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 24 | $ 23 | |
Pension Plan Asset | Cash | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 10 | 5 | |
Pension Plan Asset | Cash | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 10 | $ 5 | |
Pension Plan Asset | Equity Securities | U.S. large cap | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 24.00% | 24.00% | |
Fair value of plan assets | $ 316 | $ 318 | |
Percentage of Plan Assets | 22.00% | 23.00% | |
Pension Plan Asset | Equity Securities | U.S. large cap | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 316 | $ 318 | |
Pension Plan Asset | Equity Securities | U.S. small cap | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 8.00% | 8.00% | |
Fair value of plan assets | $ 134 | $ 115 | |
Percentage of Plan Assets | 9.00% | 8.00% | |
Pension Plan Asset | Equity Securities | U.S. small cap | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 134 | $ 115 | |
Pension Plan Asset | Equity Securities | International | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 20.00% | 20.00% | |
Fair value of plan assets | $ 259 | $ 260 | |
Percentage of Plan Assets | 18.00% | 19.00% | |
Pension Plan Asset | Equity Securities | International | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 259 | $ 260 | |
Pension Plan Asset | Fixed Income Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 40.00% | 40.00% | |
Percentage of Plan Assets | 42.00% | 41.00% | |
Pension Plan Asset | Fixed Income Securities | U.S. Treasury securities and government bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 120 | ||
Pension Plan Asset | Fixed Income Securities | U.S. Treasury securities and government bonds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 95 | ||
Pension Plan Asset | Fixed Income Securities | U.S. Treasury securities and government bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 25 | ||
Pension Plan Asset | Fixed Income Securities | Corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 391 | 375 | |
Pension Plan Asset | Fixed Income Securities | Corporate bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 391 | 375 | |
Pension Plan Asset | Fixed Income Securities | Mortgage-backed securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 3 | 9 | |
Pension Plan Asset | Fixed Income Securities | Mortgage-backed securities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 3 | 9 | |
Pension Plan Asset | Fixed Income Securities | Long duration bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 7 | 7 | |
Pension Plan Asset | Fixed Income Securities | Long duration bonds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 7 | 7 | |
Pension Plan Asset | Fixed Income Securities | Guarantee annuity contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 48 | 49 | |
Pension Plan Asset | Fixed Income Securities | Guarantee annuity contracts | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 9 | 8 | |
Pension Plan Asset | Fixed Income Securities | Guarantee annuity contracts | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 39 | $ 41 | |
Postretirement Benefit Plan Assets | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 100.00% | 100.00% | |
Fair value of plan assets | $ 525 | $ 500 | $ 512 |
Percentage of Plan Assets | 100.00% | 100.00% | |
Postretirement Benefit Plan Assets | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 100.00% | 100.00% | |
Fair value of plan assets | $ 386 | $ 376 | |
Percentage of Plan Assets | 100.00% | 100.00% | |
Postretirement Benefit Plan Assets | Non-bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 100.00% | 100.00% | |
Fair value of plan assets | $ 134 | $ 118 | |
Percentage of Plan Assets | 100.00% | 100.00% | |
Postretirement Benefit Plan Assets | Life VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 100.00% | 100.00% | |
Fair value of plan assets | $ 5 | $ 6 | |
Percentage of Plan Assets | 100.00% | 100.00% | |
Postretirement Benefit Plan Assets | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 302 | $ 316 | |
Postretirement Benefit Plan Assets | Level 1 | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 163 | 192 | |
Postretirement Benefit Plan Assets | Level 1 | Non-bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 134 | 118 | |
Postretirement Benefit Plan Assets | Level 1 | Life VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 5 | 6 | |
Postretirement Benefit Plan Assets | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 223 | 184 | |
Postretirement Benefit Plan Assets | Level 2 | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 223 | 184 | |
Postretirement Benefit Plan Assets | U.S. Treasury securities and government bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 84 | ||
Postretirement Benefit Plan Assets | U.S. Treasury securities and government bonds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 84 | ||
Postretirement Benefit Plan Assets | Cash | Non-bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2 | 2 | |
Postretirement Benefit Plan Assets | Cash | Level 1 | Non-bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 2 | $ 2 | |
Postretirement Benefit Plan Assets | Equity Securities | U.S. large cap | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 9.00% | 9.00% | |
Fair value of plan assets | $ 35 | $ 32 | |
Percentage of Plan Assets | 9.00% | 9.00% | |
Postretirement Benefit Plan Assets | Equity Securities | U.S. large cap | Non-bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 21.00% | 21.00% | |
Fair value of plan assets | $ 29 | $ 24 | |
Percentage of Plan Assets | 22.00% | 21.00% | |
Postretirement Benefit Plan Assets | Equity Securities | U.S. large cap | Life VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 70.00% | 70.00% | |
Fair value of plan assets | $ 3 | $ 4 | |
Percentage of Plan Assets | 64.00% | 68.00% | |
Postretirement Benefit Plan Assets | Equity Securities | U.S. large cap | Level 1 | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 35 | $ 32 | |
Postretirement Benefit Plan Assets | Equity Securities | U.S. large cap | Level 1 | Non-bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 29 | 24 | |
Postretirement Benefit Plan Assets | Equity Securities | U.S. large cap | Level 1 | Life VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 3 | $ 4 | |
Postretirement Benefit Plan Assets | Equity Securities | U.S. small cap | Non-bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 21.00% | 21.00% | |
Fair value of plan assets | $ 30 | $ 26 | |
Percentage of Plan Assets | 22.00% | 22.00% | |
Postretirement Benefit Plan Assets | Equity Securities | U.S. small cap | Level 1 | Non-bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 30 | $ 26 | |
Postretirement Benefit Plan Assets | Equity Securities | International | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 11.00% | 11.00% | |
Fair value of plan assets | $ 40 | $ 38 | |
Percentage of Plan Assets | 10.00% | 10.00% | |
Postretirement Benefit Plan Assets | Equity Securities | International | Non-bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 28.00% | 28.00% | |
Fair value of plan assets | $ 37 | $ 33 | |
Percentage of Plan Assets | 27.00% | 28.00% | |
Postretirement Benefit Plan Assets | Equity Securities | International | Level 1 | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 40 | $ 38 | |
Postretirement Benefit Plan Assets | Equity Securities | International | Level 1 | Non-bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 37 | $ 33 | |
Postretirement Benefit Plan Assets | Fixed Income Securities | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 80.00% | 80.00% | |
Percentage of Plan Assets | 81.00% | 81.00% | |
Postretirement Benefit Plan Assets | Fixed Income Securities | Non-bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 30.00% | 30.00% | |
Percentage of Plan Assets | 29.00% | 29.00% | |
Postretirement Benefit Plan Assets | Fixed Income Securities | Life VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target Allocation | 30.00% | 30.00% | |
Percentage of Plan Assets | 36.00% | 32.00% | |
Postretirement Benefit Plan Assets | Fixed Income Securities | U.S. Treasury securities and government bonds | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 118 | ||
Postretirement Benefit Plan Assets | Fixed Income Securities | U.S. Treasury securities and government bonds | Level 1 | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 118 | ||
Postretirement Benefit Plan Assets | Fixed Income Securities | Corporate bonds | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 223 | 184 | |
Postretirement Benefit Plan Assets | Fixed Income Securities | Corporate bonds | Level 2 | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 223 | 184 | |
Postretirement Benefit Plan Assets | Fixed Income Securities | Long duration bonds | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 3 | 3 | |
Postretirement Benefit Plan Assets | Fixed Income Securities | Long duration bonds | Level 1 | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 3 | 3 | |
Postretirement Benefit Plan Assets | Fixed Income Securities | Future and option contracts | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1 | 1 | |
Postretirement Benefit Plan Assets | Fixed Income Securities | Future and option contracts | Level 1 | Bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1 | 1 | |
Postretirement Benefit Plan Assets | Fixed Income Securities | Core fixed income bond fund | Non-bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 36 | 33 | |
Postretirement Benefit Plan Assets | Fixed Income Securities | Core fixed income bond fund | Life VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2 | 2 | |
Postretirement Benefit Plan Assets | Fixed Income Securities | Core fixed income bond fund | Level 1 | Non-bargain VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 36 | 33 | |
Postretirement Benefit Plan Assets | Fixed Income Securities | Core fixed income bond fund | Level 1 | Life VEBA | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 2 | $ 2 |
Schedule of Significant Unobser
Schedule of Significant Unobservable Inputs (Details) - Pension Plan Asset - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets beginning balance | $ 1,376 | $ 1,428 |
Actual return on assets | 99 | (21) |
Fair value of plan assets ending balance | 1,443 | 1,376 |
Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets beginning balance | 136 | |
Purchases, issuances and settlements, net | (4) | (3) |
Fair value of plan assets ending balance | 140 | 136 |
Level 3 | Guaranteed Annuity Contracts And Real Estate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets beginning balance | 136 | 127 |
Actual return on assets | 8 | 12 |
Fair value of plan assets ending balance | $ 140 | $ 136 |
Schedule of Rollforward Changes
Schedule of Rollforward Changes in Benefit Obligation and Plan Assets (Details) - USD ($) $ in Millions | Jul. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Noncurrent liability | $ (419) | $ (342) | ||
Pension Plan Asset | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Benefit obligation beginning balance | 1,720 | 1,746 | ||
Service cost | 32 | 37 | $ 32 | |
Interest cost | 80 | 74 | 76 | |
Actuarial (gain) loss | 100 | (76) | ||
Settlements | (3) | |||
Benefits paid | (65) | (61) | ||
Benefit obligation ending balance | 1,864 | 1,720 | 1,746 | |
Fair value of plan assets beginning balance | 1,376 | 1,428 | ||
Actual return on assets | 99 | (21) | ||
Employer contributions | 36 | 30 | ||
Fair value of plan assets ending balance | 1,443 | 1,376 | 1,428 | |
Funded status ending balance | (421) | (344) | ||
Current liability | (2) | (2) | ||
Noncurrent liability | (419) | (342) | ||
Net amount recognized | (421) | (344) | ||
Postretirement Benefit Plan Assets | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Benefit obligation beginning balance | 667 | 703 | ||
Service cost | 12 | 14 | 11 | |
Interest cost | 28 | 30 | 29 | |
Plan participants' contributions | 2 | 2 | ||
Plan amendments | $ (156) | (156) | ||
Actuarial (gain) loss | 82 | (58) | ||
Benefits paid | (26) | (26) | ||
Federal subsidy | 1 | 2 | ||
Benefit obligation ending balance | 610 | 667 | 703 | |
Fair value of plan assets beginning balance | 500 | 512 | ||
Actual return on assets | 32 | (15) | ||
Employer contributions | 17 | 27 | ||
Fair value of plan assets ending balance | 525 | 500 | $ 512 | |
Funded status ending balance | (85) | (167) | ||
Noncurrent asset | 2 | 2 | ||
Noncurrent liability | (87) | (169) | ||
Net amount recognized | $ (85) | $ (167) |
Summary of Accumulated Other Co
Summary of Accumulated Other Comprehensive Income and Regulatory Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Plan Asset | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss | $ 466 | $ 397 |
Prior service cost (credit) | 2 | 3 |
Net amount recognized | 468 | 400 |
Regulatory assets | 300 | 258 |
Accumulated other comprehensive income | 168 | 142 |
Postretirement Benefit Plan Assets | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss | 170 | 97 |
Prior service cost (credit) | (158) | (10) |
Net amount recognized | 12 | 87 |
Regulatory assets | $ 12 | $ 87 |
Schedule of Projected Benefit O
Schedule of Projected Benefit Obligation, Accumulated Benefit Obligation and Fair Value of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Compensation And Retirement Disclosure [Abstract] | ||
Projected benefit obligation | $ 1,864 | $ 1,721 |
Projected benefit obligation exceeds, fair value of plan assets | 1,443 | 1,376 |
Accumulated benefit obligation | 1,722 | 1,584 |
Accumulated benefit obligation exceeds, fair value of plan assets | $ 1,443 | $ 1,376 |
Schedule of Expected Cash Flow
Schedule of Expected Cash Flow for Pension and Post Retirement Benefit Plans (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected employer contributions, 2017 | $ 10 |
Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected employer contributions, 2017 | 1 |
To Plan Trusts | Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected employer contributions, 2017 | 40 |
To Plan Trusts | Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected employer contributions, 2017 | 6 |
To Plan Participants | Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected employer contributions, 2017 | $ 2 |
Schedule of Expected Benefit Pa
Schedule of Expected Benefit Payments (Details) $ in Millions | Dec. 31, 2016USD ($) |
Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
2,017 | $ 71 |
2,018 | 76 |
2,019 | 82 |
2,020 | 89 |
2,021 | 94 |
2022-2026 | 551 |
Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
2,017 | 29 |
2,018 | 31 |
2,019 | 33 |
2,020 | 34 |
2,021 | 35 |
2022-2026 | 194 |
Expected Federal Subsidy Payments | Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
2,017 | 2 |
2,018 | 2 |
2,019 | 2 |
2,020 | 2 |
2,021 | 2 |
2022-2026 | $ 12 |
Schedule of Significant Assumpt
Schedule of Significant Assumptions of Pension and Other Postretirement Benefit Plans (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Benefit Obligations | Pension Plan Asset | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average assumptions used to determine benefit obligations, Discount rate | 4.28% | 4.66% | 4.24% |
Weighted average assumptions used to determine benefit obligations, Rate of compensation increase | 3.07% | 3.10% | 3.12% |
Benefit Obligations | Postretirement Benefit Plan Assets | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average assumptions used to determine benefit obligations, Discount rate | 4.26% | 4.67% | 4.24% |
Benefit Obligations | Postretirement Benefit Plan Assets | Maximum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average assumptions used to determine benefit obligations and net periodic cost, Medical trend rate | 7.00% | 6.50% | 6.75% |
Benefit Obligations | Postretirement Benefit Plan Assets | Minimum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average assumptions used to determine benefit obligations and net periodic cost, Medical trend rate | 5.00% | 5.00% | 5.00% |
Weighted average assumptions used to determine benefit obligations and net periodic cost, Year reaches Medical trend rate | 2,021 | 2,021 | 2,021 |
Net Periodic Costs | Pension Plan Asset | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average assumptions used to determine net periodic cost, Discount rate | 4.66% | 4.24% | 5.12% |
Weighted average assumptions used to determine net periodic cost, Expected return on plan assets | 7.02% | 6.91% | 6.91% |
Weighted average assumptions used to determine net periodic cost, Rate of compensation increase | 3.10% | 3.12% | 3.15% |
Net Periodic Costs | Postretirement Benefit Plan Assets | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average assumptions used to determine net periodic cost, Discount rate | 3.66% | 4.24% | 5.10% |
Weighted average assumptions used to determine net periodic cost, Expected return on plan assets | 5.37% | 4.92% | 5.87% |
Net Periodic Costs | Postretirement Benefit Plan Assets | Maximum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average assumptions used to determine benefit obligations and net periodic cost, Medical trend rate | 6.50% | 6.75% | 7.00% |
Net Periodic Costs | Postretirement Benefit Plan Assets | Minimum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average assumptions used to determine benefit obligations and net periodic cost, Medical trend rate | 5.00% | 5.00% | 5.00% |
Weighted average assumptions used to determine benefit obligations and net periodic cost, Year reaches Medical trend rate | 2,021 | 2,021 | 2,019 |
Schedule of Effect of One Perce
Schedule of Effect of One Percentage Point Change in Assumed Health Care Cost Trend Rates (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Compensation And Retirement Disclosure [Abstract] | |
Effect on total of service and interest cost components, One - Percentage - Point Increase | $ 7 |
Effect on other postretirement benefit obligation, One - Percentage - Point Increase | 74 |
Effect on total of service and interest cost components, One - Percentage - Point Decrease | (6) |
Effect on other postretirement benefit obligation One - Percentage - Point Decrease | $ (61) |
Schedule of Net Periodic Benefi
Schedule of Net Periodic Benefit Cost Components (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Current year actuarial (gain) loss | $ 21 | $ 10 | $ 46 |
Amortization of actuarial gain (loss) | (6) | (5) | |
Total recognized in other comprehensive income | 15 | 5 | 46 |
Total recognized in net periodic benefit cost and comprehensive income | 60 | 45 | 60 |
Pension Plan Asset | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 32 | 37 | 32 |
Interest cost | 80 | 74 | 76 |
Expected return on plan assets | (95) | (97) | (95) |
Prior service cost (credit) | 1 | 1 | 1 |
Actuarial (gain) loss | 27 | 25 | |
Net periodic pension benefit cost | 45 | 40 | 14 |
Other Postretirement Benefit Cost | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 12 | 14 | 11 |
Interest cost | 28 | 30 | 29 |
Expected return on plan assets | (27) | (26) | (28) |
Prior service cost (credit) | (9) | (2) | (2) |
Actuarial (gain) loss | 5 | 5 | |
Net periodic pension benefit cost | $ 9 | $ 21 | $ 10 |
Schedule of Estimated Amounts A
Schedule of Estimated Amounts Amortized Accumulated Other Comprehensive Income (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
Actuarial (gain) loss | $ 34 |
Prior service cost (credit) | 1 |
Net amount recognized | 35 |
Postretirement Benefit Plan Assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Actuarial (gain) loss | 10 |
Prior service cost (credit) | (18) |
Net amount recognized | $ (8) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)CustomerAccountClaim | Dec. 31, 2014Claim | |
Commitments And Contingencies [Line Items] | |||
Estimated capital expenditures under legal and binding contractual obligations | $ 469,000,000 | ||
Loss contingency, probable loss | $ 138,000,000 | ||
Number of customer accounts | CustomerAccount | 93,000 | ||
Loss contingency, number of pending claims | Claim | 73 | ||
Federal Action | |||
Commitments And Contingencies [Line Items] | |||
Loss contingency, number of pending claims | Claim | 4 | ||
Binding Agreement | |||
Commitments And Contingencies [Line Items] | |||
Pre-tax amount of settlement | $ 126,000,000 | ||
Loss contingency preliminary terms of settlement | The preliminary terms of the Settlement intend to establish a two-tier settlement fund for the payment of claims, comprised of (i) a simple claim fund, which is also referred to as the “guaranteed fund,” of $76, of which $51 will be contributed by WVAWC, including insurance deductibles, and $25 would be contributed by one of the Company’s general liability insurance carriers, and (ii) an individual review claim fund of up to $50, of which up to $14 would be contributed by WVAWC and $36 would be contributed by a number of the Company’s general liability insurance carriers. Separately, up to $25 would be contributed to the guaranteed fund by another defendant to the Settlement | ||
Settlement guarantee fund contribution | $ 76,000,000 | ||
Claims-based payment fund contribution | 50,000,000 | ||
Payment of settlement, after tax | $ 39,000,000 | ||
Binding Agreement | WVAWC | |||
Commitments And Contingencies [Line Items] | |||
Payment of settlement | $ 65,000,000 | 65,000,000 | |
Settlement guarantee fund contribution | 51,000,000 | ||
Claims-based payment fund contribution | 14,000,000 | ||
Direct response costs | 4,000,000 | ||
Binding Agreement | Two Insurance Carrier | |||
Commitments And Contingencies [Line Items] | |||
Insurance coverage | 50,000,000 | ||
Binding Agreement | Insurance Carrier One | |||
Commitments And Contingencies [Line Items] | |||
Settlement guarantee fund contribution | 25,000,000 | ||
Binding Agreement | General Liability Insurance Carriers | |||
Commitments And Contingencies [Line Items] | |||
Claims-based payment fund contribution | 36,000,000 | ||
Binding Agreement | Other Defendants | |||
Commitments And Contingencies [Line Items] | |||
Settlement guarantee fund contribution | 25,000,000 | ||
Minimum | Missouri-American Water Company | |||
Commitments And Contingencies [Line Items] | |||
Loss contingency, possible loss | 0 | ||
Maximum | |||
Commitments And Contingencies [Line Items] | |||
Loss contingency, possible loss | 51,000,000 | ||
Maximum | Missouri-American Water Company | |||
Commitments And Contingencies [Line Items] | |||
Loss contingency, possible loss | 26,000,000 | ||
Military Services Agreements | |||
Commitments And Contingencies [Line Items] | |||
Estimated remaining contract revenue | $ 3,143,000,000 | ||
Military Services Agreements | Minimum | |||
Commitments And Contingencies [Line Items] | |||
Agreements expiration period | 2,051 | ||
Military Services Agreements | Maximum | |||
Commitments And Contingencies [Line Items] | |||
Agreements expiration period | 2,065 | ||
Operations And Maintenance | |||
Commitments And Contingencies [Line Items] | |||
Estimated remaining contract revenue | $ 794,000,000 | ||
Operations And Maintenance | Minimum | |||
Commitments And Contingencies [Line Items] | |||
Agreements expiration period | 2,017 | ||
Operations And Maintenance | Maximum | |||
Commitments And Contingencies [Line Items] | |||
Agreements expiration period | 2,048 |
Commitments and Contingencie105
Commitments and Contingencies - Summary of Future Annual Commitments Related to Minimum Quantities of Purchased Water Having Non-Cancelable Terms (Details) $ in Millions | Dec. 31, 2016USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,017 | $ 56 |
2,018 | 58 |
2,019 | 64 |
2,020 | 64 |
2,021 | 65 |
Thereafter | $ 735 |
Reconciliation of Numerator and
Reconciliation of Numerator and Denominator for Basic and Diluted Earnings Per Share (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |||||||||||
Income from continuing operations | $ 468 | $ 476 | $ 430 | ||||||||
Loss from discontinued operations, net of tax | (7) | ||||||||||
Net income attributable to common stockholders | $ 101 | $ 148 | $ 137 | $ 82 | $ 99 | $ 174 | $ 123 | $ 80 | $ 468 | $ 476 | $ 423 |
Weighted average common shares outstanding—Basic | 178 | 179 | 179 | ||||||||
Effect of dilutive common stock equivalents | 1 | 1 | 1 | ||||||||
Weighted average common shares outstanding—Diluted | 179 | 180 | 180 |
Earnings Per Common Share - Add
Earnings Per Common Share - Additional Information (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Maximum | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share | 1 | 1 | 1 |
Carrying Amounts and Fair Value
Carrying Amounts and Fair Values of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, carrying amount | $ 12 | $ 13 |
Long-term debt (excluding capital lease obligations), carrying amount | 6,320 | 5,914 |
Preferred stock with mandatory redemption requirements, fair value | 15 | 18 |
Long-term debt (excluding capital lease obligations), fair value | 7,044 | 6,757 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Long-term debt (excluding capital lease obligations), fair value | 3,876 | 3,397 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Long-term debt (excluding capital lease obligations), fair value | 1,363 | 1,419 |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements, fair value | 15 | 18 |
Long-term debt (excluding capital lease obligations), fair value | $ 1,805 | $ 1,941 |
Fair Value Measurements of Asse
Fair Value Measurements of Assets and Liabilities on Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Restricted funds | $ 24 | $ 27 |
Rabbi trust investments | 12 | 12 |
Deposits | 3 | 1 |
Mark-to-market derivative asset | 28 | 2 |
Other investments | 1 | 4 |
Total assets | 68 | 46 |
Deferred compensation obligation | 13 | 11 |
Mark-to-market derivative liability | 1 | |
Total liabilities | 13 | 12 |
Total net assets (liabilities) | 55 | 34 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Restricted funds | 24 | 27 |
Rabbi trust investments | 12 | 12 |
Deposits | 3 | 1 |
Other investments | 1 | 4 |
Total assets | 40 | 44 |
Deferred compensation obligation | 13 | 11 |
Total liabilities | 13 | 11 |
Total net assets (liabilities) | 27 | 33 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Mark-to-market derivative asset | 28 | 2 |
Total assets | 28 | 2 |
Mark-to-market derivative liability | 1 | |
Total liabilities | 1 | |
Total net assets (liabilities) | $ 28 | $ 1 |
Fair Values of Financial Ins110
Fair Values of Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Long term restricted funds | $ 4 | $ 6 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating and Capital Leases [Line Items] | |||
Rental expenses under operating leases | $ 24 | $ 21 | $ 22 |
Capital lease asset | 152 | $ 156 | |
Minimum annual future rental commitment, 2017 | 14 | ||
Minimum annual future rental commitment, 2018 | 12 | ||
Minimum annual future rental commitment, 2019 | 11 | ||
Minimum annual future rental commitment, 2020 | 9 | ||
Minimum annual future rental commitment, 2021 | 6 | ||
Minimum annual future rental commitment, thereafter | $ 70 | ||
Minimum | |||
Operating and Capital Leases [Line Items] | |||
Operating leases renewal term, years | 1 year | ||
Maximum | |||
Operating and Capital Leases [Line Items] | |||
Operating leases renewal term, years | 5 years | ||
Equipment | |||
Operating and Capital Leases [Line Items] | |||
Operating leases expiration term, years | 5 years | ||
Facilities | |||
Operating and Capital Leases [Line Items] | |||
Operating leases expiration term, years | 25 years | ||
Minimum annual future rental commitment, 2017 | $ 4 | ||
Minimum annual future rental commitment, 2018 | 4 | ||
Minimum annual future rental commitment, 2019 | 4 | ||
Minimum annual future rental commitment, 2020 | 4 | ||
Minimum annual future rental commitment, 2021 | 4 | ||
Minimum annual future rental commitment, thereafter | $ 66 | ||
Utilities | |||
Operating and Capital Leases [Line Items] | |||
Operating leases expiration term, years | 40 years |
Schedule of Minimum Annual Futu
Schedule of Minimum Annual Future Rental Commitment Under Operating Leases (Details) $ in Millions | Dec. 31, 2016USD ($) |
Leases [Abstract] | |
2,017 | $ 14 |
2,018 | 12 |
2,019 | 11 |
2,020 | 9 |
2,021 | 6 |
Thereafter | $ 70 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2016Segment | |
Segment Reporting [Abstract] | |
Number of non-reportable operating segments for market-based businesses | 4 |
Number of Reportable Segments | 1 |
Segment Reporting, Additional Information about Entity's Reportable Segments | The Regulated Businesses segment is the largest component of the Company’s business and includes 18 subsidiaries that provide water and wastewater services to customers in 16 states. |
Agreements range | 50 years |
Summarized Segment Information
Summarized Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | $ 802 | $ 930 | $ 827 | $ 743 | $ 783 | $ 896 | $ 782 | $ 698 | $ 3,302 | $ 3,159 | $ 3,011 |
Depreciation and amortization | 470 | 440 | 424 | ||||||||
Total operating expenses, net | 2,222 | 2,084 | 2,008 | ||||||||
Interest, net | 325 | 308 | 299 | ||||||||
Income from continuing operations before income taxes | 770 | 782 | 710 | ||||||||
Provision for income taxes | 302 | 306 | 280 | ||||||||
Income from continuing operations | 468 | 476 | 430 | ||||||||
Loss from discontinued operations, net of tax | (7) | ||||||||||
Net income attributable to common stockholders | 101 | $ 148 | $ 137 | $ 82 | 99 | $ 174 | $ 123 | $ 80 | 468 | 476 | 423 |
Total assets | 18,482 | 17,241 | 18,482 | 17,241 | 16,038 | ||||||
Capital expenditures | 1,311 | 1,160 | 956 | ||||||||
Operating Segments | Regulated Businesses | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 2,871 | 2,743 | 2,674 | ||||||||
Depreciation and amortization | 440 | 411 | 394 | ||||||||
Total operating expenses, net | 1,852 | 1,732 | 1,726 | ||||||||
Interest, net | 256 | 248 | 248 | ||||||||
Income from continuing operations before income taxes | 775 | 776 | 707 | ||||||||
Provision for income taxes | 303 | 303 | 273 | ||||||||
Income from continuing operations | 434 | ||||||||||
Net income attributable to common stockholders | 472 | 473 | 434 | ||||||||
Total assets | 16,405 | 15,258 | 16,405 | 15,258 | 14,343 | ||||||
Capital expenditures | 1,274 | 1,143 | 946 | ||||||||
Operating Segments | Market-Based Businesses | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 451 | 434 | 355 | ||||||||
Depreciation and amortization | 15 | 8 | 6 | ||||||||
Total operating expenses, net | 391 | 370 | 300 | ||||||||
Interest, net | (2) | (2) | (2) | ||||||||
Income from continuing operations before income taxes | 65 | 68 | 58 | ||||||||
Provision for income taxes | 26 | 26 | 18 | ||||||||
Income from continuing operations | 40 | ||||||||||
Loss from discontinued operations, net of tax | (7) | ||||||||||
Net income attributable to common stockholders | 39 | 42 | 33 | ||||||||
Total assets | 637 | 496 | 637 | 496 | 314 | ||||||
Capital expenditures | 18 | 17 | 10 | ||||||||
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | (20) | (18) | (18) | ||||||||
Depreciation and amortization | 15 | 21 | 24 | ||||||||
Total operating expenses, net | (21) | (18) | (18) | ||||||||
Interest, net | 71 | 62 | 53 | ||||||||
Income from continuing operations before income taxes | (70) | (62) | (55) | ||||||||
Provision for income taxes | (27) | (23) | (11) | ||||||||
Income from continuing operations | (44) | ||||||||||
Net income attributable to common stockholders | (43) | (39) | (44) | ||||||||
Total assets | $ 1,440 | $ 1,487 | 1,440 | $ 1,487 | $ 1,381 | ||||||
Capital expenditures | $ 19 |
Schedule Of Unaudited Quarterly
Schedule Of Unaudited Quarterly Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Operating revenues | $ 802 | $ 930 | $ 827 | $ 743 | $ 783 | $ 896 | $ 782 | $ 698 | $ 3,302 | $ 3,159 | $ 3,011 | |||
Operating income | 248 | 319 | 299 | 214 | 232 | 361 | 278 | 204 | 1,080 | 1,075 | 1,003 | |||
Net income attributable to common stockholders | $ 101 | $ 148 | $ 137 | $ 82 | $ 99 | $ 174 | $ 123 | $ 80 | $ 468 | $ 476 | $ 423 | |||
Basic earnings per share: | ||||||||||||||
Net income attributable to common stockholders | $ 0.57 | $ 0.83 | $ 0.77 | $ 0.46 | $ 0.55 | $ 0.97 | $ 0.69 | $ 0.45 | $ 2.63 | [1] | $ 2.66 | [1] | $ 2.36 | [1] |
Diluted earnings per share: | ||||||||||||||
Net income attributable to common stockholders | $ 0.57 | $ 0.83 | $ 0.77 | $ 0.46 | $ 0.55 | $ 0.96 | $ 0.68 | $ 0.44 | $ 2.62 | [1] | $ 2.64 | [1] | $ 2.35 | [1] |
[1] | Amounts may not sum due to rounding. |