Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 27, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
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 Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 178,191,126 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Property, plant and equipment | $ 20,189 | $ 19,954 |
Accumulated depreciation | (5,061) | (4,962) |
Property, plant and equipment, net | 15,128 | 14,992 |
Current assets: | ||
Cash and cash equivalents | 78 | 75 |
Restricted funds | 23 | 20 |
Accounts receivable, net | 250 | 269 |
Unbilled revenues | 227 | 263 |
Materials and supplies | 41 | 39 |
Other | 148 | 118 |
Total current assets | 767 | 784 |
Regulatory and other long-term assets: | ||
Regulatory assets | 1,298 | 1,289 |
Goodwill | 1,345 | 1,345 |
Other | 72 | 72 |
Total regulatory and other long-term assets | 2,715 | 2,706 |
TOTAL ASSETS | 18,610 | 18,482 |
Capitalization: | ||
Common stock ($0.01 par value, 500,000,000 shares authorized, 182,231,713 and 181,798,555 shares issued, respectively) | 2 | 2 |
Paid-in-capital | 6,400 | 6,388 |
Accumulated deficit | (759) | (873) |
Accumulated other comprehensive loss | (82) | (86) |
Treasury stock, at cost (4,502,221 and 3,701,867 shares, respectively) | (274) | (213) |
Total common stockholders' equity | 5,287 | 5,218 |
Long-term debt | 5,744 | 5,749 |
Redeemable preferred stock at redemption value | 9 | 10 |
Total long-term debt | 5,753 | 5,759 |
Total capitalization | 11,040 | 10,977 |
Current liabilities: | ||
Short-term debt | 980 | 849 |
Current portion of long-term debt | 574 | 574 |
Accounts payable | 108 | 154 |
Accrued liabilities | 453 | 609 |
Taxes accrued | 67 | 31 |
Interest accrued | 101 | 63 |
Other | 135 | 112 |
Total current liabilities | 2,418 | 2,392 |
Regulatory and other long-term liabilities: | ||
Advances for construction | 297 | 300 |
Deferred income taxes, net | 2,629 | 2,596 |
Deferred investment tax credits | 23 | 23 |
Regulatory liabilities | 404 | 403 |
Accrued pension expense | 420 | 419 |
Accrued postretirement benefit expense | 86 | 87 |
Other | 68 | 67 |
Total regulatory and other long-term liabilities | 3,927 | 3,895 |
Contributions in aid of construction | 1,225 | 1,218 |
Commitments and contingencies (see Note 8) | ||
TOTAL CAPITALIZATION AND LIABILITIES | $ 18,610 | $ 18,482 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
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 | 182,231,713 | 181,798,555 |
Treasury Stock, shares | 4,502,221 | 3,701,867 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Operating revenues | $ 756 | $ 743 |
Operating expenses: | ||
Operation and maintenance | 337 | 348 |
Depreciation and amortization | 124 | 116 |
General taxes | 68 | 66 |
Gain on asset dispositions and purchases | (1) | |
Total operating expenses, net | 529 | 529 |
Operating income | 227 | 214 |
Other income (expense): | ||
Interest, net | (85) | (80) |
Other, net | 3 | 2 |
Total other income (expense) | (82) | (78) |
Income from continuing operations before income taxes | 145 | 136 |
Provision for income taxes | 52 | 54 |
Net income attributable to common stockholders | $ 93 | $ 82 |
Basic earnings per share: | ||
Net income attributable to common stockholders | $ 0.52 | $ 0.46 |
Diluted earnings per share: | ||
Net income attributable to common stockholders | $ 0.52 | $ 0.46 |
Weighted-average common shares outstanding: | ||
Basic | 178 | 178 |
Diluted | 179 | 179 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income attributable to common stockholders | $ 93 | $ 82 |
Pension amortized to periodic benefit cost: | ||
Actuarial loss, net of tax of $1 in 2017 and 2016 | 2 | 1 |
Foreign currency translation adjustment | (1) | 1 |
Unrealized gain (loss) on cash flow hedges, net of tax of $2 and $(1) in 2017 and 2016, respectively | 3 | (1) |
Net other comprehensive income | 4 | 1 |
Comprehensive income attributable to common stockholders | $ 97 | $ 83 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Actuarial loss, tax | $ 1 | $ 1 |
Unrealized gain (loss) on cash flow hedges, tax | $ 2 | $ (1) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 93 | $ 82 |
Adjustments to reconcile to net cash flows provided by operating activities: | ||
Depreciation and amortization | 124 | 116 |
Deferred income taxes and amortization of investment tax credits | 64 | 65 |
Provision for losses on accounts receivable | 4 | 6 |
Gain on asset dispositions and purchases | (1) | |
Pension and non-pension postretirement benefits | 15 | 15 |
Other non-cash, net | (18) | (24) |
Changes in assets and liabilities: | ||
Receivables and unbilled revenues | 51 | 49 |
Pension and non-pension postretirement benefit contributions | (11) | (14) |
Accounts payable and accrued liabilities | (72) | 15 |
Other assets and liabilities, net | 27 | (49) |
Net cash provided by operating activities | 277 | 260 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (270) | (284) |
Acquisitions | (2) | (22) |
Proceeds from sale of assets and securities | 1 | |
Removal costs from property, plant and equipment retirements, net | (13) | (17) |
Net funds restricted | (3) | (1) |
Net cash used in investing activities | (288) | (323) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayments of long-term debt | (4) | (11) |
Net short-term borrowings with maturities less than three months | 131 | 211 |
Proceeds from issuances of employee stock plans and DRIP | 10 | 10 |
Advances and contributions for construction, net of refunds of $4 and $4, respectively | 7 | 7 |
Debt issuance costs | (1) | |
Dividends paid | (67) | (61) |
Anti-dilutive stock repurchase | (54) | (62) |
Taxes paid related to employee stock plans | (9) | (9) |
Net cash provided by financing activities | 14 | 84 |
Net increase in cash and cash equivalents | 3 | 21 |
Cash and cash equivalents as of beginning of period | 75 | 45 |
Cash and cash equivalents as of end of period | 78 | 66 |
Non-cash investing activity: | ||
Capital expenditures acquired on account but unpaid as of end of period | $ 142 | $ 166 |
Consolidated Statements of Cas8
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement Of Cash Flows [Abstract] | ||
Advances and contributions for construction, refunds | $ 4 | $ 4 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning Balance at Dec. 31, 2015 | $ 5,049 | $ 2 | $ 6,351 | $ (1,073) | $ (88) | $ (143) |
Beginning Balance (in shares) at Dec. 31, 2015 | 180,900,000 | (2,600,000) | ||||
Net income attributable to common stockholders | 82 | 82 | ||||
Direct stock reinvestment and purchase plan | 1 | 1 | ||||
Employee stock purchase plan | 1 | 1 | ||||
Stock-based compensation activity | 10 | 15 | $ (5) | |||
Stock-based compensation activity (in shares) | 500,000 | (100,000) | ||||
Repurchases of common stock | (62) | $ (62) | ||||
Repurchases of common stock (in shares) | (1,000,000) | |||||
Net other comprehensive income (loss) | 1 | 1 | ||||
Ending Balance at Mar. 31, 2016 | 5,082 | $ 2 | 6,368 | (991) | (87) | $ (210) |
Ending Balance (in shares) at Mar. 31, 2016 | 181,400,000 | (3,700,000) | ||||
Beginning Balance at Dec. 31, 2016 | 5,218 | $ 2 | 6,388 | (873) | (86) | $ (213) |
Beginning Balance (in shares) at Dec. 31, 2016 | 181,800,000 | (3,700,000) | ||||
Cumulative effect of change in accounting principle | 21 | 21 | ||||
Net income attributable to common stockholders | 93 | 93 | ||||
Direct stock reinvestment and purchase plan | 3 | 3 | ||||
Employee stock purchase plan | 2 | 2 | ||||
Stock-based compensation activity | 7 | $ (7) | ||||
Stock-based compensation activity (in shares) | 400,000 | (100,000) | ||||
Repurchases of common stock | $ (54) | $ (54) | ||||
Repurchases of common stock (in shares) | (700,000) | (700,000) | ||||
Net other comprehensive income (loss) | $ 4 | 4 | ||||
Ending Balance at Mar. 31, 2017 | $ 5,287 | $ 2 | $ 6,400 | $ (759) | $ (82) | $ (274) |
Ending Balance (in shares) at Mar. 31, 2017 | 182,200,000 | (4,500,000) |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Note 1: Basis of Presentation The unaudited consolidated financial statements provided in this report include the accounts of American Water Works Company, Inc. and all of in which a controlling interest is maintained The Consolidated Balance Sheet as of December 31, 2016 is derived from the Company's audited consolidated financial statements as of December 31, 2016. The unaudited financial statements and notes included in this report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (“Form 10-K”) which provides a more complete discussion of the Company’s accounting policies, financial position, operating results and other matters. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the year, due primarily to the seasonality of the Company’s operations. |
New Accounting Standards
New Accounting Standards | 3 Months Ended |
Mar. 31, 2017 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
New Accounting Standards | Note 2: New Accounting Standards The Company adopted the following accounting standard on January 1, 2017: Standard Description Date of Adoption Application Effect 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 simplification in areas such as: (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. January 1, 2017 Modified retrospective for the recognition of excess tax benefits and deficiencies; full retrospective for the classification of excess tax benefits and taxes paid on the Consolidated Statements of Cash Flows The adoption of this standard resulted in a cumulative effect to increase retained earnings by $21, with an offsetting decrease to deferred income taxes, net. Also, the adoption resulted in a net increase in cash flows from operating activities and a net decrease in cash flows from financing activities of $14 and $13 for the three months ended March 31, 2017 and 2016, respectively, on the Consolidated Statements of Cash Flows. The following recently issued accounting standards are not yet required to be adopted by the Company as of March 31, 2017: Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements (or Other Significant Matters) Revenue from Contracts with Customers Changes the criteria for recognizing revenue from a contract with a customer. Replaces existing guidance on revenue recognition, including most industry specific guidance. The objective is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries and across capital markets. The underlying principle is that an entity will recognize revenue to depict the transfer of goods and services to customers at an amount the entity expects to be entitled to in exchange for those goods or services. The guidance also requires a number of disclosures regarding the nature, amount, timing and uncertainty of revenue and related cash flows. January 1, 2018; early adoption permitted Full or modified retrospective 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 Provides 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 Consolidated Statements of Cash Flows. Presentation of Changes in Restricted Cash on the Statement of Cash Flows Updates the accounting and disclosure guidance for the classification and presentation of changes in restricted cash on the statements of cash flows. The amended guidance requires that the statements 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 statements of cash flows. January 1, 2018; early adoption permitted Retrospective The Company does not anticipate significant impacts on its Consolidated Statements of Cash Flows. Clarifying the Definition of a Business Updates 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. Gains and Losses from the Derecognition of Nonfinancial Assets Updated the guidance to clarify the accounting for gains and losses resulting from the derecognition of nonfinancial assets and partial sale of nonfinancial assets. The guidance also clarifies the definition of an in-substance nonfinancial asset. January 1, 2018; early adoption permitted Full or modified retrospective The Company is evaluating the impact on the consolidated financial statements and related disclosures. Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Updated authoritative guidance requires the service cost component of net periodic benefit cost to be presented in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. The remaining components of net periodic benefit cost are required to be presented separately from the service cost component in an income statement line item outside of operating income. Also, the guidance allows for only the service cost component to be eligible for capitalization. The updated guidance does not impact the accounting for net periodic benefit costs as regulatory assets or liabilities. January 1, 2018; early adoption permitted Retrospective for the presentation of service cost component; prospective for the capitalization of service cost component 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 effect on the consolidated financial statements, 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 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. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Note 3: Acquisitions During the three months ended March 31, 2017, the Company closed on two water system acquisitions for a total aggregate purchase price under $1. Also, our Regulated Business made a non-escrowed deposit of $2 related to the acquisition of the McKeesport, Pennsylvania wastewater system which is expected to close in the fourth quarter of 2017. On April 3, 2017, the Company acquired all of the outstanding capital stock of Shorelands Water Company, Inc. for total consideration of $33, in the form of approximately 0.4 shares of the Company’s common stock. Assets acquired, principally utility plant, totaled $26. Liabilities assumed totaled $19, including $5 of contributions in aid of construction, and assumed debt of $6. This acquisition will be recorded during the second quarter of 2017 and includes $27 of goodwill, which will be reported in the Company’s Regulated Businesses segment. The preliminary price allocation related to this acquisition will be finalized once the valuation of assets acquired has been completed, no later than one year after the acquisition date. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Note 4: Stockholders’ Equity Accumulated Other Comprehensive Loss The following table presents changes in accumulated other comprehensive loss by component, net of tax, for the three months ended March 31, 2017 and 2016, respectively: 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 Hedges Other Comprehensive Loss Beginning balance as of December 31, 2016 $ (147 ) $ 1 $ 42 $ 2 $ 16 $ (86 ) Other comprehensive income (loss) before reclassifications — — — (1 ) 3 2 Amounts reclassified from accumulated other comprehensive loss — — 2 — — 2 Net other comprehensive income (loss) — — 2 (1 ) 3 4 Ending balance as of March 31, 2017 $ (147 ) $ 1 $ 44 $ 1 $ 19 $ (82 ) Beginning balance as of December 31, 2015 $ (126 ) $ 1 $ 36 $ 2 $ (1 ) $ (88 ) Other comprehensive income (loss) before reclassifications — — — 1 (1 ) — Amounts reclassified from accumulated other comprehensive loss — — 1 — — 1 Net other comprehensive income (loss) — — 1 1 (1 ) 1 Ending balance as of March 31, 2016 $ (126 ) $ 1 $ 37 $ 3 $ (2 ) $ (87 ) 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 income loss components are included in the computation of net periodic pension cost. See Note 7 — The amortization of the loss on cash flow hedges is reclassified to net income during the period incurred and is included in interest, net in the accompanying Consolidated Statements of Operations. Anti-dilutive Stock Repurchase Program During the three months ended March 31, 2017, the Company repurchased 0.7 shares of common stock in the open market at an aggregate cost of $54 under the anti-dilutive stock repurchase program authorized by the Company’s Board of Directors in 2015. As of March 31, 2017, there were 6.1 shares of common stock available for repurchase under the program. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 5: Long-Term Debt The following long-term debt was retired through sinking fund provisions, optional redemptions or payment at maturity during the three months ended March 31, 2017: Company Type Rate Maturity Amount American Water Capital Corp. (a) Private activity bonds and government funded debt—fixed rate 1.79%-2.90% 2021-2031 $ 1 Other American Water subsidiaries Private activity bonds and government funded debt—fixed rate 0.00%-5.38% 2017-2041 2 Other American Water subsidiaries Mandatorily redeemable preferred stock 8.49% 2036 1 Total retirements and redemptions $ 4 (a) American Water Capital Corp. , which is a wholly owned subsidiary of the Company, has a support agreement with the Company that, under certain circumstances, is the functional equivalent of a guarantee 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. These forward starting swap agreements terminate in December 2017 and have an average fixed rate of 2.20%. On February 8, 2017, the Company entered into a forward starting swap agreement with a notional amount of $100 to reduce interest rate exposure for a portion of the expected refinancing of the Company’s 5.62% fixed-rate long-term debt maturing in December 2018. This forward starting swap agreement terminates in November 2018 and has an average fixed rate of 2.67%. The Company has designated these 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 or loss. Upon termination, the cumulative gain or loss recorded in accumulated other comprehensive gain or loss will be amortized through interest, net over the term of the issued debt. The Company has an interest rate swap to hedge $100 of its 6.085% fixed-rate debt maturing in 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 gain recognized by the Company was de minimis for the three months ended March 31, 2017 and 2016. 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 net gain recognized by the Company was de minimis for the three months ended March 31, 2017 and 2016. No ineffectiveness was recognized for the three months ended March 31, 2017 and 2016 related to hedging instruments. 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 March 31, 2017 December 31, 2016 Asset Derivative Forward starting swaps Cash flow hedge Other current assets $ 31 $ 27 Forward starting swaps Cash flow hedge Other long-term assets 1 — Interest rate swap Fair value hedge Other current assets 1 1 Liability Derivative Interest rate swap Fair value hedge Current portion of long-term debt $ 1 $ 1 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 6: Income Taxes The Company’s effective income tax rate was On April 11, 2017, the State of New York enacted legislation that would increase the state income tax rate on the Company’s taxable income attributable to New York. Manufacturers in New York are taxed at a lower income tax rate, and this legislation eliminated the production of water as a qualified manufacturing activity. The effective date of the legislation is January 1, 2018 and this future increase in the New York tax rate will cause the Company to book a one-time adjustment during the second quarter of 2017, increasing its state accumulated deferred income tax liability. An offsetting adjustment will be recorded to regulatory assets for the amount recoverable in future customer rates, with the remaining balance recorded to income tax expense. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 3 Months Ended |
Mar. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Pension and Other Postretirement Benefits | Note 7: Pension and Other Postretirement Benefits The following table provides the components of net periodic benefit costs: For the Three Months Ended March 31, 2017 2016 Components of net periodic pension benefit cost Service cost $ 9 $ 8 Interest cost 20 20 Expected return on plan assets (24 ) (24 ) Amortization of actuarial loss 9 7 Net periodic pension benefit cost $ 14 $ 11 Components of net periodic other postretirement benefit cost Service cost $ 3 $ 3 Interest cost 7 7 Expected return on plan assets (7 ) (6 ) Amortization of prior service credit (5 ) (1 ) Amortization of actuarial loss 3 1 Net periodic other postretirement benefit cost $ 1 $ 4 The Company contributed $10 to its defined benefit pension plans in the first three months of 2017 and expects to contribute $30 during the remainder of 2017. In addition, the Company contributed $1 for the funding of its other postretirement plans in the first three months of 2017 and expects to contribute $5 during the remainder of 2017. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8: Commitments and Contingencies Contingencies The Company is routinely involved in legal actions incident to the normal conduct of its business. As of March 31, 2017, 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 $28. 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 8, will not have a material adverse effect on the Company. West Virginia Elk River Freedom Industries Chemical Spill Background 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, 74 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 has granted several continuances of the trial, which is currently postponed until June 6, 2017 and remains subject to further delay in light of the binding global agreement in principle described below. The Mass Litigation Panel has also stayed its proceedings until July 26, 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 March 31, 2017. 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. On April 27, 2017, the parties filed with the court in the Federal action a proposed settlement agreement providing details of the terms of the Settlement consistent with those described above. The parties also requested that the court in the Federal action grant preliminary approval of the Settlement. If and when 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 Proceedings 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. On April 4, 2017, the CSB indicated that the implementation by the Company of source water protection activities resolved the first two parts of the CSB’s recommendation. The CSB also noted that compliance by the Company with the third part of its recommendation is ongoing and that closure of this part is contingent upon completion of updated contingency planning for the Company’s water utilities outside of West Virginia. On March 16, 2017, the Lincoln County (West Virginia) Commission (the “LCC”) passed a county ordinance entitled the “Lincoln County, WV Comprehensive Public Nuisance Investigation and Abatement Ordinance.” The ordinance establishes a mechanism that Lincoln County believes will allow it to pursue criminal or civil proceedings for the “public nuisance” it alleges was caused by the Freedom Industries chemical spill. On April 20, 2017, the LCC filed a complaint in Lincoln County state court against WVAWC and certain other defendants not affiliated with the Company, alleging that the Freedom Industries chemical spill caused a public nuisance in Lincoln County. The complaint seeks an injunction against WVAWC that would require the creation of various databases and public repositories of documents related to this chemical spill, as well as further study and risk assessments regarding the alleged exposure by Lincoln County residents to the released chemicals. WVAWC believes that the lawsuit is without merit and intends to vigorously contest the claims and allegations raised in the complaint. California Public Utilities Commission Residential Rate Design Proceeding In December 2016, the California Public Utilities Commission (the “CPUC”) issued a final decision in a proceeding involving California-American Water Company, the Company’s wholly owned subsidiary (“Cal Am”), adopting a new residential rate design for Cal Am’s Monterey District. The decision allowed for recovery by Cal Am of $32 in under-collections in the water revenue adjustment mechanism/modified cost balancing account (“WRAM/MCBA”) over a five-year period, plus interest, and modified existing conservation and rationing plans. In its decision, the CPUC noted concern regarding Cal Am’s residential tariff administration, specifically regarding the lack of verification of customer-provided information about the number of residents per household. This information was used for generating billing determinants under the tiered rate system. As a result, the CPUC kept this proceeding open to address several issues, including whether Cal Am’s residential tariff administration violated a statute, rule or CPUC decision, and if so, whether a penalty should be imposed. On February 24, 2017, Cal Am, the Monterey Peninsula Water Management District, the CPUC’s Office of Ratepayer Advocates, and the Coalition of Peninsula Businesses filed for CPUC approval of a joint settlement agreement (the “Joint Settlement Agreement”), which among other things, proposed to resolve the CPUC’s residential tariff administration concerns by providing for a waiver by Cal Am of $0.5 of cost recovery for residential customers through the WRAM/MCBA in lieu of a penalty. Approval of the Joint Settlement Agreement, which is required for it to take effect, remains pending before the CPUC. On March 28, 2017, the administrative law judge assigned to the proceeding issued a ruling stating there was sufficient evidence to conclude, on a preliminary basis, that Cal Am’s administration of the residential tariff violated certain provisions of the California Public Utilities Code and a CPUC decision. The ruling ordered Cal Am to show cause why it should not be penalized for these administrative violations and directed the settling parties to address whether the cost recovery waiver in the Joint Settlement Agreement was reasonable compared to a potential penalty range described by the administrative law judge. During hearings held on April 13-14, 2017, the administrative law judge clarified that this potential penalty range is $3 to $179 (calculated as a continuing violation dating back to 2000 and applying penalties of up to $20 thousand per day until January 1, 2012 and penalties of up to $50 thousand per day thereafter, reflecting a 2012 change to the relevant statute). The administrative law judge also noted that a per diem penalty may not be appropriate, as Cal Am’s monthly billing practices did not allow Cal Am to update customer-provided information for billing purposes on a daily basis. The administrative law judge has set further hearings in this proceeding for August 17, 2017, and has permitted certain of the parties, including Cal Am, to submit additional written testimony on the issue of whether Cal Am should be penalized, and if so, the reasonable amount of any such penalty. As of March 31, 2017, the portions of this loss contingency that are probable and/or reasonable possible have been determined to be immaterial to the Company and have been included in the aggregate maximum amounts described above in this Note 8. Missouri Infrastructure System Replacement Surcharge Litigation In March 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 On March 14, 2017, in a unanimous decision, the Missouri Supreme Court dismissed the case as moot, finding that there were no longer any ISRS funds in dispute because MAWC had completed a rate case during the appellate process and the disputed charges were now incorporated in base rates. On March 29, 2017, the Missouri Office of Public Counsel filed a Motion for Rehearing with the Missouri Supreme Court, which remains pending. As a result of the Missouri Supreme Court’s decision, the Company has determined that, as of March 31, 2017, a loss associated with this matter is remote. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | N ote 9: 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 Three Months Ended March 31, 2017 2016 Numerator Net income attributable to common stockholders $ 93 $ 82 Denominator Weighted-average common shares outstanding — 178 178 Effect of dilutive common stock equivalents 1 1 Weighted-average common shares outstanding—Diluted 179 179 The effect of dilutive common stock equivalents is related to restricted stock units and stock options granted under the 2007 Plan, and shares purchased under the Company’s Nonqualified Employee Stock Purchase Plan. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | Note 10: Fair Value of Financial Assets and Liabilities Fair Value of Financial Instruments The Company used the following methods and assumptions to estimate its fair value disclosures for financial instruments: Current assets and current liabilities—The carrying amounts reported in the accompanying 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 portion 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: (i) an average of the Company’s own publicly-traded debt securities and (ii) 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 At Fair Value as of March 31, 2017 Amount Level 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 11 $ — $ — $ 14 $ 14 Long-term debt (excluding capital lease obligations) 6,316 3,972 1,363 1,822 7,157 Carrying At Fair Value as of December 31, 2016 Amount Level 1 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 Recurring Fair Value Measurements The following table presents assets and liabilities measured and recorded at fair value on a recurring basis and their level in the fair value hierarchy: At Fair Value as of March 31, 2017 Level 1 Level 2 Level 3 Total Assets: Restricted funds $ 28 $ — $ — $ 28 Rabbi trust investments 13 — — 13 Deposits 4 — — 4 Mark-to-market derivative assets — 33 — 33 Other investments 4 — — 4 Total assets 49 33 — 82 Liabilities: Deferred compensation obligations 15 — — 15 Mark-to-market derivative liabilities — — — — Total liabilities 15 — — 15 Total net assets (liabilities) $ 34 $ 33 $ — $ 67 At Fair Value as of 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 assets — 28 — 28 Other investments 1 — — 1 Total assets 40 28 — 68 Liabilities: Deferred compensation obligations 13 — — 13 Mark-to-market derivative liabilities — — — — Total liabilities 13 — — 13 Total net assets (liabilities) $ 27 $ 28 $ — $ 55 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 were included in other long-term assets as of March 31, 2017 and December 31, 2016. 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. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Note 11: Segment Information 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”. “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 acquisitions that have not been allocated to the operating segments for evaluation of performance and allocation of resource purposes. As of or for the Three Months Ended March 31, 2017 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 659 $ 103 $ (6 ) $ 756 Depreciation and amortization 117 4 3 124 Total operating expenses, net 441 94 (6 ) 529 Interest, net 66 — 19 85 Income from continuing operations before income taxes 154 10 (19 ) 145 Provision for income taxes 60 3 (11 ) 52 Net income attributable to common stockholders 94 7 (8 ) 93 Total assets 16,632 555 1,423 18,610 As of or for the Three Months Ended March 31, 2016 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 634 $ 114 $ (5 ) $ 743 Depreciation and amortization 108 3 5 116 Total operating expenses, net 430 104 (5 ) 529 Interest, net 64 — 16 80 Income from continuing operations before income taxes 143 10 (17 ) 136 Provision for income taxes 56 4 (6 ) 54 Net income attributable to common stockholders 87 6 (11 ) 82 Total assets 15,472 512 1,433 17,417 |
New Accounting Standards (Polic
New Accounting Standards (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
New Accounting Standards | The Company adopted the following accounting standard on January 1, 2017: Standard Description Date of Adoption Application Effect 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 simplification in areas such as: (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. January 1, 2017 Modified retrospective for the recognition of excess tax benefits and deficiencies; full retrospective for the classification of excess tax benefits and taxes paid on the Consolidated Statements of Cash Flows The adoption of this standard resulted in a cumulative effect to increase retained earnings by $21, with an offsetting decrease to deferred income taxes, net. Also, the adoption resulted in a net increase in cash flows from operating activities and a net decrease in cash flows from financing activities of $14 and $13 for the three months ended March 31, 2017 and 2016, respectively, on the Consolidated Statements of Cash Flows. The following recently issued accounting standards are not yet required to be adopted by the Company as of March 31, 2017: Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements (or Other Significant Matters) Revenue from Contracts with Customers Changes the criteria for recognizing revenue from a contract with a customer. Replaces existing guidance on revenue recognition, including most industry specific guidance. The objective is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries and across capital markets. The underlying principle is that an entity will recognize revenue to depict the transfer of goods and services to customers at an amount the entity expects to be entitled to in exchange for those goods or services. The guidance also requires a number of disclosures regarding the nature, amount, timing and uncertainty of revenue and related cash flows. January 1, 2018; early adoption permitted Full or modified retrospective 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 Provides 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 Consolidated Statements of Cash Flows. Presentation of Changes in Restricted Cash on the Statement of Cash Flows Updates the accounting and disclosure guidance for the classification and presentation of changes in restricted cash on the statements of cash flows. The amended guidance requires that the statements 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 statements of cash flows. January 1, 2018; early adoption permitted Retrospective The Company does not anticipate significant impacts on its Consolidated Statements of Cash Flows. Clarifying the Definition of a Business Updates 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. Gains and Losses from the Derecognition of Nonfinancial Assets Updated the guidance to clarify the accounting for gains and losses resulting from the derecognition of nonfinancial assets and partial sale of nonfinancial assets. The guidance also clarifies the definition of an in-substance nonfinancial asset. January 1, 2018; early adoption permitted Full or modified retrospective The Company is evaluating the impact on the consolidated financial statements and related disclosures. Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Updated authoritative guidance requires the service cost component of net periodic benefit cost to be presented in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. The remaining components of net periodic benefit cost are required to be presented separately from the service cost component in an income statement line item outside of operating income. Also, the guidance allows for only the service cost component to be eligible for capitalization. The updated guidance does not impact the accounting for net periodic benefit costs as regulatory assets or liabilities. January 1, 2018; early adoption permitted Retrospective for the presentation of service cost component; prospective for the capitalization of service cost component 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 effect on the consolidated financial statements, 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 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. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 three months ended March 31, 2017 and 2016, respectively: 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 Hedges Other Comprehensive Loss Beginning balance as of December 31, 2016 $ (147 ) $ 1 $ 42 $ 2 $ 16 $ (86 ) Other comprehensive income (loss) before reclassifications — — — (1 ) 3 2 Amounts reclassified from accumulated other comprehensive loss — — 2 — — 2 Net other comprehensive income (loss) — — 2 (1 ) 3 4 Ending balance as of March 31, 2017 $ (147 ) $ 1 $ 44 $ 1 $ 19 $ (82 ) Beginning balance as of December 31, 2015 $ (126 ) $ 1 $ 36 $ 2 $ (1 ) $ (88 ) Other comprehensive income (loss) before reclassifications — — — 1 (1 ) — Amounts reclassified from accumulated other comprehensive loss — — 1 — — 1 Net other comprehensive income (loss) — — 1 1 (1 ) 1 Ending balance as of March 31, 2016 $ (126 ) $ 1 $ 37 $ 3 $ (2 ) $ (87 ) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt Retired Through Sinking Fund Provisions, Optional Redemptions or Payments at Maturities | The following long-term debt was retired through sinking fund provisions, optional redemptions or payment at maturity during the three months ended March 31, 2017: Company Type Rate Maturity Amount American Water Capital Corp. (a) Private activity bonds and government funded debt—fixed rate 1.79%-2.90% 2021-2031 $ 1 Other American Water subsidiaries Private activity bonds and government funded debt—fixed rate 0.00%-5.38% 2017-2041 2 Other American Water subsidiaries Mandatorily redeemable preferred stock 8.49% 2036 1 Total retirements and redemptions $ 4 (a) American Water Capital Corp. , which is a wholly owned subsidiary of the Company, has a support agreement with the Company that, under certain circumstances, is the functional equivalent of a guarantee |
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 March 31, 2017 December 31, 2016 Asset Derivative Forward starting swaps Cash flow hedge Other current assets $ 31 $ 27 Forward starting swaps Cash flow hedge Other long-term assets 1 — Interest rate swap Fair value hedge Other current assets 1 1 Liability Derivative Interest rate swap Fair value hedge Current portion of long-term debt $ 1 $ 1 |
Pension and Other Postretirem24
Pension and Other Postretirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Costs | The following table provides the components of net periodic benefit costs: For the Three Months Ended March 31, 2017 2016 Components of net periodic pension benefit cost Service cost $ 9 $ 8 Interest cost 20 20 Expected return on plan assets (24 ) (24 ) Amortization of actuarial loss 9 7 Net periodic pension benefit cost $ 14 $ 11 Components of net periodic other postretirement benefit cost Service cost $ 3 $ 3 Interest cost 7 7 Expected return on plan assets (7 ) (6 ) Amortization of prior service credit (5 ) (1 ) Amortization of actuarial loss 3 1 Net periodic other postretirement benefit cost $ 1 $ 4 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 Three Months Ended March 31, 2017 2016 Numerator Net income attributable to common stockholders $ 93 $ 82 Denominator Weighted-average common shares outstanding — 178 178 Effect of dilutive common stock equivalents 1 1 Weighted-average common shares outstanding—Diluted 179 179 |
Fair Value of Financial Asset26
Fair Value of Financial Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 At Fair Value as of March 31, 2017 Amount Level 1 Level 2 Level 3 Total Preferred stock with mandatory redemption requirements $ 11 $ — $ — $ 14 $ 14 Long-term debt (excluding capital lease obligations) 6,316 3,972 1,363 1,822 7,157 Carrying At Fair Value as of December 31, 2016 Amount Level 1 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 |
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 in the fair value hierarchy: At Fair Value as of March 31, 2017 Level 1 Level 2 Level 3 Total Assets: Restricted funds $ 28 $ — $ — $ 28 Rabbi trust investments 13 — — 13 Deposits 4 — — 4 Mark-to-market derivative assets — 33 — 33 Other investments 4 — — 4 Total assets 49 33 — 82 Liabilities: Deferred compensation obligations 15 — — 15 Mark-to-market derivative liabilities — — — — Total liabilities 15 — — 15 Total net assets (liabilities) $ 34 $ 33 $ — $ 67 At Fair Value as of 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 assets — 28 — 28 Other investments 1 — — 1 Total assets 40 28 — 68 Liabilities: Deferred compensation obligations 13 — — 13 Mark-to-market derivative liabilities — — — — Total liabilities 13 — — 13 Total net assets (liabilities) $ 27 $ 28 $ — $ 55 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Summarized Segment Information | The following tables include the Company’s summarized segment information: As of or for the Three Months Ended March 31, 2017 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 659 $ 103 $ (6 ) $ 756 Depreciation and amortization 117 4 3 124 Total operating expenses, net 441 94 (6 ) 529 Interest, net 66 — 19 85 Income from continuing operations before income taxes 154 10 (19 ) 145 Provision for income taxes 60 3 (11 ) 52 Net income attributable to common stockholders 94 7 (8 ) 93 Total assets 16,632 555 1,423 18,610 As of or for the Three Months Ended March 31, 2016 Regulated Businesses Market-Based Businesses Other Consolidated Operating revenues $ 634 $ 114 $ (5 ) $ 743 Depreciation and amortization 108 3 5 116 Total operating expenses, net 430 104 (5 ) 529 Interest, net 64 — 16 80 Income from continuing operations before income taxes 143 10 (17 ) 136 Provision for income taxes 56 4 (6 ) 54 Net income attributable to common stockholders 87 6 (11 ) 82 Total assets 15,472 512 1,433 17,417 |
New Accounting Standards - Addi
New Accounting Standards - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Cumulative effect to increase retained earnings on simplification of employee Share-based payment accounting | $ 21 | |
New Accounting Standards | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Offsetting decrease to deferred income taxes, net | (21) | |
Net increase in cash flows from operating activities | 14 | $ 13 |
Net decrease in cash flows from financing activities | $ (14) | $ (13) |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) shares in Millions, $ in Millions | Apr. 03, 2017USD ($)shares | Mar. 31, 2017USD ($)Investment | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,345 | $ 1,345 | |
Regulated Water And Wastewater Systems | |||
Business Acquisition [Line Items] | |||
Business acquisition, number of companies acquired | Investment | 2 | ||
Purchase price | $ 1 | ||
Regulated Water And Wastewater Systems | McKeesport Wastewater System | |||
Business Acquisition [Line Items] | |||
Non-escrowed deposit | $ 2 | ||
Regulated Water And Wastewater Systems | Shorelands Water Company, Inc. | Subsequent Event | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 33 | ||
Purchase price allocation, assets acquired | 26 | ||
Purchase price allocation, liabilities assumed | 19 | ||
Contributions in aid of construction | 5 | ||
Debt related to purchase price allocation | 6 | ||
Goodwill | $ 27 | ||
Regulated Water And Wastewater Systems | Shorelands Water Company, Inc. | Subsequent Event | Common Stock | |||
Business Acquisition [Line Items] | |||
Purchase price of common stock paid | shares | 0.4 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss by Component, Net of Tax (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | $ 5,218 | $ 5,049 |
Other comprehensive income (loss) before reclassifications | 2 | |
Amounts reclassified from accumulated other comprehensive loss | 2 | 1 |
Net other comprehensive income (loss) | 4 | 1 |
Ending Balance | 5,287 | 5,082 |
Employee Benefit Plan Funded Status | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (147) | (126) |
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 | 42 | 36 |
Amounts reclassified from accumulated other comprehensive loss | 2 | 1 |
Net other comprehensive income (loss) | 2 | 1 |
Ending Balance | 44 | 37 |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | 2 | 2 |
Other comprehensive income (loss) before reclassifications | (1) | 1 |
Net other comprehensive income (loss) | (1) | 1 |
Ending Balance | 1 | 3 |
Gain (Loss) on Cash Flow Hedge | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | 16 | (1) |
Other comprehensive income (loss) before reclassifications | 3 | (1) |
Net other comprehensive income (loss) | 3 | (1) |
Ending Balance | 19 | (2) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (86) | (88) |
Ending Balance | $ (82) | $ (87) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Equity [Abstract] | ||
Shares of common stock repurchased | 700,000 | |
Aggregate cost of shares repurchased | $ 54 | $ 62 |
Share of common stock available for repurchase | 6,100,000 |
Long-Term Debt Retired Through
Long-Term Debt Retired Through Sinking Fund Provisions, Optional Redemptions or Payments at Maturities (Details) - Debt retired during the year $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($) | ||
Debt Instrument [Line Items] | ||
Total retirements and redemptions | $ 4 | |
Other American Water subsidiaries | Mandatorily redeemable preferred stock | ||
Debt Instrument [Line Items] | ||
Interest Rate | 8.49% | |
Maturity Date, Maximum | 2,036 | |
Total retirements and redemptions | $ 1 | |
Fixed rate two | American Water Capital Corp. | Private activity bonds and government funded debt | ||
Debt Instrument [Line Items] | ||
Maturity Date, Minimum | 2,021 | [1] |
Maturity Date, Maximum | 2,031 | [1] |
Total retirements and redemptions | $ 1 | [1] |
Fixed rate two | American Water Capital Corp. | Minimum | Private activity bonds and government funded debt | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.79% | [1] |
Fixed rate two | American Water Capital Corp. | Maximum | Private activity bonds and government funded debt | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.90% | [1] |
Fixed rate two | Other American Water subsidiaries | Private activity bonds and government funded debt | ||
Debt Instrument [Line Items] | ||
Maturity Date, Minimum | 2,017 | |
Maturity Date, Maximum | 2,041 | |
Total retirements and redemptions | $ 2 | |
Fixed rate two | Other American Water subsidiaries | Minimum | Private activity bonds and government funded debt | ||
Debt Instrument [Line Items] | ||
Interest Rate | 0.00% | |
Fixed rate two | Other American Water subsidiaries | Maximum | Private activity bonds and government funded debt | ||
Debt Instrument [Line Items] | ||
Interest Rate | 5.38% | |
[1] | American Water Capital Corp., which is a wholly owned subsidiary of the Company, has a support agreement with the Company that, under certain circumstances, is the functional equivalent of a guarantee. This indebtedness is considered “debt” for purposes of this support agreement. |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | Feb. 08, 2017USD ($) | Mar. 31, 2017USD ($)Agreement | Mar. 31, 2016USD ($) |
Debt Instrument [Line Items] | |||
Number of forward starting swap agreements | Agreement | 4 | ||
Hedging instruments ineffectiveness | $ 0 | $ 0 | |
Forward Starting Swap Agreements | |||
Debt Instrument [Line Items] | |||
Derivate instrument notional amount | $ 100,000,000 | $ 300,000,000 | |
Derivative agreement termination year | 2018-11 | 2017-12 | |
Derivative average fixed interest rate | 2.67% | 2.20% | |
Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Derivate instrument notional amount | $ 100,000,000 | ||
Interest Rate | 6.085% | ||
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% | ||
5.62% Fixed-Rate Long-Term Debt | |||
Debt Instrument [Line Items] | |||
Interest Rate | 5.62% | ||
Debt instrument maturity month and year | 2018-12 | ||
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 |
Summary of Gross Fair Value Der
Summary of Gross Fair Value Derivative Asset and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fair value hedge | Interest Rate Swap | Other current assets | ||
Derivative [Line Items] | ||
Derivative Asset | $ 1 | $ 1 |
Fair value hedge | Interest Rate Swap | Current portion of Long-term debt | ||
Derivative [Line Items] | ||
Derivative Liabilities | 1 | 1 |
Cash flow hedge | Forward starting swaps | Other current assets | ||
Derivative [Line Items] | ||
Derivative Asset | 31 | $ 27 |
Cash flow hedge | Forward starting swaps | Other long-term assets | ||
Derivative [Line Items] | ||
Derivative Asset | $ 1 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 35.90% | 39.70% |
Tax benefit impact on effective income tax rate | $ 5 |
Schedule of Net Periodic Benefi
Schedule of Net Periodic Benefit Cost Components (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Pension Plan Asset | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 9 | $ 8 |
Interest cost | 20 | 20 |
Expected return on plan assets | (24) | (24) |
Amortization of actuarial loss | 9 | 7 |
Net periodic pension benefit cost | 14 | 11 |
Other Postretirement Benefit Cost | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 3 | 3 |
Interest cost | 7 | 7 |
Expected return on plan assets | (7) | (6) |
Amortization of prior service credit | (5) | (1) |
Amortization of actuarial loss | 3 | 1 |
Net periodic pension benefit cost | $ 1 | $ 4 |
Pension and Other Postretirem37
Pension and Other Postretirement Benefits - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Pension Plan Asset | |
Defined Benefit Plan Disclosure [Line Items] | |
Company contributions | $ 10 |
Expected contributions during the remainder of 2017 | 30 |
Other Postretirement Benefit Cost | |
Defined Benefit Plan Disclosure [Line Items] | |
Company contributions | 1 |
Expected contributions during the remainder of 2017 | $ 5 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | Feb. 24, 2017USD ($) | Dec. 31, 2016USD ($) | Mar. 31, 2017USD ($)CustomerAccountClaim | Sep. 30, 2016USD ($) | Apr. 14, 2017USD ($) | Dec. 31, 2014Claim |
Commitments And Contingencies [Line Items] | ||||||
Loss contingency, probable loss | $ 138,000,000 | |||||
Number of customer accounts | CustomerAccount | 93,000 | |||||
Loss contingency, number of pending claims | Claim | 74 | |||||
Cal Am | California Public Utilities Commission | ||||||
Commitments And Contingencies [Line Items] | ||||||
Amount recovery under residential rate design | $ 32,000,000 | |||||
New residential rate collection periods | 5 years | |||||
Description of new residential rate design | In December 2016, the California Public Utilities Commission (the “CPUC”) issued a final decision in a proceeding involving California-American Water Company, the Company’s wholly owned subsidiary (“Cal Am”), adopting a new residential rate design for Cal Am’s Monterey District. The decision allowed for recovery by Cal Am of $32 in under-collections in the water revenue adjustment mechanism/modified cost balancing account (“WRAM/MCBA”) over a five-year period, plus interest, and modified existing conservation and rationing plans. | |||||
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 | 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 | |||||
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 | |||||
California Public Utilities Commission Residential Rate Design Proceeding | ||||||
Commitments And Contingencies [Line Items] | ||||||
Penalties for continuing violation | During hearings held on April 13-14, 2017, the administrative law judge clarified that this potential penalty range is $3 to $179 (calculated as a continuing violation dating back to 2000 and applying penalties of up to $20 thousand per day until January 1, 2012 and penalties of up to $50 thousand per day thereafter, reflecting a 2012 change to the relevant statute). | |||||
California Public Utilities Commission Residential Rate Design Proceeding | Cal Am | ||||||
Commitments And Contingencies [Line Items] | ||||||
Waiver of cost recovery for residential customers | $ 500,000 | |||||
Missouri-American Water Company | ||||||
Commitments And Contingencies [Line Items] | ||||||
Decision for ISRS funds dispute | On March 14, 2017, in a unanimous decision, the Missouri Supreme Court dismissed the case as moot, finding that there were no longer any ISRS funds in dispute because MAWC had completed a rate case during the appellate process and the disputed charges were now incorporated in base rates. | |||||
Maximum | ||||||
Commitments And Contingencies [Line Items] | ||||||
Loss contingency, possible loss | $ 28,000,000 | |||||
Maximum | California Public Utilities Commission Residential Rate Design Proceeding | Subsequent Event | ||||||
Commitments And Contingencies [Line Items] | ||||||
Loss contingency, possible loss | $ 179,000,000 | |||||
Amount per day of potential penalties until January 1, 2012 | 20,000 | |||||
Amount per day of potential penalties thereafter | 50,000 | |||||
Minimum | California Public Utilities Commission Residential Rate Design Proceeding | Subsequent Event | ||||||
Commitments And Contingencies [Line Items] | ||||||
Loss contingency, possible loss | $ 3,000,000 |
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 | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Net income attributable to common stockholders | $ 93 | $ 82 |
Weighted-average common shares outstanding—Basic | 178 | 178 |
Effect of dilutive common stock equivalents | 1 | 1 |
Weighted-average common shares outstanding—Diluted | 179 | 179 |
Carrying Amounts and Fair Value
Carrying Amounts and Fair Values of Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Carrying Amount | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements | $ 11 | $ 12 |
Long-term debt (excluding capital lease obligations), carrying amount | 6,316 | 6,320 |
Fair Value | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements | 14 | 15 |
Long-term debt (excluding capital lease obligations), fair value | 7,157 | 7,044 |
Fair Value | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Long-term debt (excluding capital lease obligations), fair value | 3,972 | 3,876 |
Fair Value | 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 | 1,363 |
Fair Value | Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Preferred stock with mandatory redemption requirements | 14 | 15 |
Long-term debt (excluding capital lease obligations), fair value | $ 1,822 | $ 1,805 |
Fair Value Measurements of Asse
Fair Value Measurements of Assets and Liabilities on Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Restricted funds | $ 28 | $ 24 |
Rabbi trust investments | 13 | 12 |
Deposits | 4 | 3 |
Mark-to-market derivative assets | 33 | 28 |
Other investments | 4 | 1 |
Total assets | 82 | 68 |
Deferred compensation obligations | 15 | 13 |
Total liabilities | 15 | 13 |
Total net assets (liabilities) | 67 | 55 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Restricted funds | 28 | 24 |
Rabbi trust investments | 13 | 12 |
Deposits | 4 | 3 |
Other investments | 4 | 1 |
Total assets | 49 | 40 |
Deferred compensation obligations | 15 | 13 |
Total liabilities | 15 | 13 |
Total net assets (liabilities) | 34 | 27 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Mark-to-market derivative assets | 33 | 28 |
Total assets | 33 | 28 |
Total net assets (liabilities) | $ 33 | $ 28 |
Fair Values of Financial Instru
Fair Values of Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Long term restricted funds | $ 4 | $ 4 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2017Segment | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 1 |
Number of non-reportable operating segments for market-based businesses | 4 |
Summarized Segment Information
Summarized Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Operating revenues | $ 756 | $ 743 | |
Depreciation and amortization | 124 | 116 | |
Total operating expenses, net | 529 | 529 | |
Interest, net | 85 | 80 | |
Income from continuing operations before income taxes | 145 | 136 | |
Provision for income taxes | 52 | 54 | |
Net income attributable to common stockholders | 93 | 82 | |
Total assets | 18,610 | 17,417 | $ 18,482 |
Operating Segments | Regulated Businesses | |||
Segment Reporting Information [Line Items] | |||
Operating revenues | 659 | 634 | |
Depreciation and amortization | 117 | 108 | |
Total operating expenses, net | 441 | 430 | |
Interest, net | 66 | 64 | |
Income from continuing operations before income taxes | 154 | 143 | |
Provision for income taxes | 60 | 56 | |
Net income attributable to common stockholders | 94 | 87 | |
Total assets | 16,632 | 15,472 | |
Operating Segments | Market-Based Businesses | |||
Segment Reporting Information [Line Items] | |||
Operating revenues | 103 | 114 | |
Depreciation and amortization | 4 | 3 | |
Total operating expenses, net | 94 | 104 | |
Income from continuing operations before income taxes | 10 | 10 | |
Provision for income taxes | 3 | 4 | |
Net income attributable to common stockholders | 7 | 6 | |
Total assets | 555 | 512 | |
Other | |||
Segment Reporting Information [Line Items] | |||
Operating revenues | (6) | (5) | |
Depreciation and amortization | 3 | 5 | |
Total operating expenses, net | (6) | (5) | |
Interest, net | 19 | 16 | |
Income from continuing operations before income taxes | (19) | (17) | |
Provision for income taxes | (11) | (6) | |
Net income attributable to common stockholders | (8) | (11) | |
Total assets | $ 1,423 | $ 1,433 |