Summary
American Water Works Company, Inc. (AWK) reported a strong recovery in its financial performance for the nine months ended September 30, 2010, compared to the same period in 2009. Net income swung from a significant loss of $269.5 million in 2009 to a profit of $227.7 million in 2010. This turnaround was largely driven by the absence of a substantial $450 million goodwill impairment charge recorded in the prior year, alongside solid revenue growth in both regulated and non-regulated segments. The company experienced a notable increase in operating revenues, up 11.0% to $2.05 billion for the nine months, primarily due to rate increases and higher consumption in its regulated businesses, complemented by growth in its non-regulated Contract Operations Group following an acquisition. Operating expenses also saw an increase, but excluding the prior year's impairment, the rise was manageable and largely corresponded to revenue growth and operational expansions. The company maintained its capital expenditure program, investing significantly in infrastructure, while managing its debt structure through various refinancing and issuance activities. Overall, AWK demonstrated a return to profitability and operational growth, positioning itself for continued investment in its utility assets.
Financial Highlights
48 data points| Revenue | $744.30M |
| Operating Expenses | $482.43M |
| Operating Income | $266.48M |
| Interest Expense | $74.57M |
| Net Income | $124.11M |
| EPS (Basic) | $0.71 |
| EPS (Diluted) | $0.71 |
| Shares Outstanding (Basic) | 174.86M |
| Shares Outstanding (Diluted) | 175.06M |
Key Highlights
- 1Significant Profitability Turnaround: Net income increased from a loss of $269.5 million in the first nine months of 2009 to a profit of $227.7 million in the same period of 2010, largely due to the absence of a prior year goodwill impairment charge.
- 2Revenue Growth Across Segments: Total operating revenues increased by 11.0% to $2.05 billion for the nine months ended September 30, 2010, driven by rate increases and higher consumption in regulated businesses, and by acquisitions and new contracts in non-regulated businesses.
- 3Strong Performance in Regulated Businesses: The Regulated Businesses segment saw a substantial increase in operating revenues and Adjusted EBIT, reflecting successful rate adjustments and increased customer demand.
- 4Acquisition Integration Driving Non-Regulated Growth: The Non-Regulated segment's revenue growth was significantly boosted by the Contract Operations' Acquisition and increased military contract revenues.
- 5Consistent Capital Investment: The company continued to invest in its infrastructure, with capital expenditures of $522.1 million for the nine months ended September 30, 2010, although slightly lower than the prior year.
- 6Debt Management and Refinancing: AWK actively managed its long-term debt, issuing new debt and retiring existing issues, including a significant refinancing of $150 million by its New Jersey subsidiary to reduce interest costs.
- 7Return to Positive EPS: Diluted earnings per share improved from a loss of ($1.62) in the first nine months of 2009 to $1.30 in the same period of 2010.