01—Abstract
Summary
Summary of the 10-Q filed August 2, 2021. Cited figures are marked; the original filing is the authoritative source.
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.
02—Key points
Key Highlights
- Operating revenues increased by $68 million to $999 million for the three months ended June 30, 2021, compared to the prior year's $931 million.
- Net 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.
- The company has secured deferred accounting or cost recovery for COVID-19 financial impacts in 11 of 14 jurisdictions, with proceedings pending in two others.
- Capital expenditures for the six months ended June 30, 2021, totaled $752 million, primarily focused on infrastructure improvements and replacements in the Regulated Businesses.
- AWK raised $1.1 billion in debt in May 2021 to fund its operations and prepay existing debt.
- The 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.
- The company reported a strong adjusted regulated O&M efficiency ratio of 33.9% for the twelve months ended June 30, 2021, indicating operational effectiveness.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2021filed August 2, 2021Financial Statements
Q2 FY2021 against Q2 FY2020
| Line item | Q2 FY2021Q2 FY2020 | Change |
|---|---|---|
| Revenue | $990.00M$908.00M | +9.0% |
| Operating Expenses | $669.00M$618.00M | +8.3% |
| Operating Income | $330.00M$313.00M | +5.4% |
| Net Income | $207.00M$176.00M | +17.6% |
| EPS (Basic) | $1.14$0.97 | +17.5% |
| EPS (Diluted) | $1.14$0.97 | +17.5% |
| Shares Outstanding (Basic) | 182.00M181.00M | +0.6% |
| Shares Outstanding (Diluted) | 182.00M181.00M | +0.6% |
05—Questions
Frequently Asked Questions
What is the impact of the COVID-19 pandemic on American Water's financial results?
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.
What is the status of the sale of the New York subsidiary?
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.
How is American Water investing in its infrastructure?
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.
What is the company's liquidity position?
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.
06—Continue