10-QPeriod: Q1 FY2022

American Water Works Company, Inc. Quarterly Report for Q1 Ended Mar 31, 2022

Filed April 27, 2022For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) reported solid financial results for the first quarter of 2022. The company demonstrated growth in its regulated businesses, driven by infrastructure investments and strategic acquisitions. Diluted earnings per share increased to $0.87, up from $0.73 in the prior year's quarter, reflecting improved operational performance and the positive impact of recent divestitures. The company continues to execute its capital investment plan, with approximately $437 million invested in the first quarter, primarily in infrastructure improvements and replacements within its regulated operations. AWK also completed several strategic divestitures, including its New York and Michigan operations, which are expected to strengthen its financial position and allow for reinvestment in core regulated assets. Despite a decrease in overall operating revenues due to these sales, the company's underlying regulated business performance remains robust, supported by rate increases and a focus on operational efficiency.

Financial Highlights

47 data points
Beta

Revenue

$838.00M

Net Income

$158.00M

18.9% Net Margin

EPS (Diluted)

$0.87

Total Assets

$25.69B

Cash & Equivalents

$75.00M

Free Cash Flow

-$270.00M

Financial Statements
Beta
Revenue$838.00M
Operating Expenses$596.00M
Operating Income$246.00M
Net Income$158.00M
EPS (Basic)$0.87
EPS (Diluted)$0.87
Shares Outstanding (Basic)182.00M
Shares Outstanding (Diluted)182.00M

Key Highlights

  • 1Diluted Earnings Per Share (EPS) increased to $0.87 for Q1 2022, up from $0.73 in Q1 2021, driven by regulated business growth and benefits from the sale of the Homeowner Services Group.
  • 2Capital expenditures of $437 million were invested in the first quarter of 2022, primarily directed towards infrastructure improvements and replacements in the Regulated Businesses.
  • 3The company completed the sale of its New York operations for $608 million and its Michigan operations for $6 million, generating cash for reinvestment.
  • 4Operating revenues for the Regulated Businesses increased by $23 million year-over-year, primarily due to authorized rate increases and acquisitions.
  • 5The adjusted regulated O&M efficiency ratio improved slightly to 33.9% for the twelve months ended March 31, 2022, compared to 34.1% in the prior year, indicating ongoing cost management.
  • 6Total available liquidity remained strong at $1.93 billion as of March 31, 2022, comprising $75 million in cash and cash equivalents and $1.85 billion in availability on its revolving credit facility.

Frequently Asked Questions

The sales of the New York and Michigan operations, completed in January and February 2022 respectively, generated significant cash proceeds of $608 million and $6 million. While these divestitures led to a decrease in overall operating revenues and operating expenses for the "Market-Based Businesses and Other" segment, they are expected to allow American Water to focus on and reinvest in its core regulated businesses, strengthening its overall financial position and supporting future growth initiatives.

American Water plans to invest approximately $2.5 billion across its footprint in 2022, with $437 million already invested in the first quarter. This investment is primarily directed towards infrastructure improvements and replacements within its Regulated Businesses. The company also continues to pursue regulated acquisitions to expand its customer base and service offerings, with agreements in place to add approximately 77,300 customers.

The company is actively engaged in regulatory processes across its operating states. During the first quarter of 2022, the company saw annualized incremental revenues approved through general rate cases and infrastructure surcharges in various states, totaling $48 million and $29 million respectively. Several other rate case filings and infrastructure surcharge proceedings are pending, which are crucial for recovering infrastructure investments and ensuring continued service reliability.