10-QPeriod: Q2 FY2021

American Water Works Company, Inc. Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 2, 2021For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) reported solid financial results for the quarter and six months ended June 30, 2021. Revenue growth was driven by infrastructure investments, regulated acquisitions, and organic growth, partially offset by the impact of the COVID-19 pandemic. The company successfully navigated various regulatory environments, securing rate increases and cost recovery mechanisms for pandemic-related impacts. Despite ongoing challenges such as potential regulatory disallowances in Pennsylvania and the pending sale of its New York subsidiary, AWK maintained a stable financial position and strong liquidity. The company continues its strategic capital investment program, emphasizing infrastructure improvements and expansion through acquisitions.

Financial Highlights

47 data points
Beta

Revenue

$990.00M

Net Income

$207.00M

20.9% Net Margin

EPS (Diluted)

$1.14

Total Assets

$24.95B

Cash & Equivalents

$70.00M

Free Cash Flow

-$69.00M

Financial Statements
Beta
Revenue$990.00M
Operating Expenses$669.00M
Operating Income$330.00M
Net Income$207.00M
EPS (Basic)$1.14
EPS (Diluted)$1.14
Shares Outstanding (Basic)182.00M
Shares Outstanding (Diluted)182.00M

Key Highlights

  • 1Operating revenues increased by $68 million to $999 million for the three months ended June 30, 2021, compared to the prior year's $931 million.
  • 2Net income attributable to common shareholders rose to $207 million ($1.14 per diluted share) for the three months ended June 30, 2021, from $176 million ($0.97 per diluted share) in the same period of 2020.
  • 3The company has secured deferred accounting or cost recovery for COVID-19 financial impacts in 11 of 14 jurisdictions, with proceedings pending in two others.
  • 4Capital expenditures for the six months ended June 30, 2021, totaled $752 million, primarily focused on infrastructure improvements and replacements in the Regulated Businesses.
  • 5AWK raised $1.1 billion in debt in May 2021 to fund its operations and prepay existing debt.
  • 6The sale of the New York subsidiary remains on track, with the closing date extended to January 3, 2022; the assets and liabilities are classified as held for sale.
  • 7The company reported a strong adjusted regulated O&M efficiency ratio of 33.9% for the twelve months ended June 30, 2021, indicating operational effectiveness.

Frequently Asked Questions

The COVID-19 pandemic has resulted in financial impacts including lower revenues from suspended late fees and foregone reconnect fees, increased operation and maintenance expenses, higher uncollectible account expenses, and additional debt costs. However, the company has secured regulatory approval for deferred accounting or cost recovery in most of its jurisdictions, mitigating some of these impacts.

The sale of American Water's New York subsidiary to Liberty Utilities Co. is proceeding, with the closing date extended to January 3, 2022. The assets and related liabilities of this subsidiary have been classified as held for sale on the Consolidated Balance Sheets.

American Water is making significant capital investments in its infrastructure. For the six months ended June 30, 2021, the company invested $752 million, primarily in the Regulated Businesses for infrastructure improvements and replacements, supporting the delivery of safe, clean, reliable, and affordable water and wastewater services.

American Water maintains a strong liquidity position. As of June 30, 2021, the company had $70 million in cash and cash equivalents and $1.57 billion in remaining availability on its revolving credit facility, totaling $1.64 billion in available liquidity. The company believes its existing sources of liquidity are sufficient to meet its future cash requirements.