10-QPeriod: Q1 FY2024

American Water Works Company, Inc. Quarterly Report for Q1 Ended Mar 31, 2024

Filed May 1, 2024For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) reported solid financial performance for the first quarter of 2024, demonstrating consistent growth and operational strength. The company saw an increase in operating revenues to $1.011 billion from $938 million in the prior year's quarter, signaling effective rate adjustments and growth initiatives. Diluted earnings per share (EPS) also rose to $0.95, up from $0.91 in Q1 2023, driven by new rates in regulated businesses and contributions from capital investments and acquisitions. AWK continues to execute its capital investment strategy, allocating substantial funds towards infrastructure improvements and strategic acquisitions. The company invested $720 million in the first quarter of 2024, highlighting its commitment to long-term growth and service reliability. The company also maintained a strong liquidity position with $3.26 billion in total available liquidity as of March 31, 2024, underscoring its financial stability. Management's outlook remains positive, with ongoing efforts to secure regulatory approvals for rate increases and pursue strategic acquisitions.

Financial Highlights

47 data points
Beta

Revenue

$1.00B

Net Income

$185.00M

18.4% Net Margin

EPS (Diluted)

$0.95

Total Assets

$31.09B

Cash & Equivalents

$584.00M

Free Cash Flow

-$227.00M

Financial Statements
Beta
Revenue$1.00B
Operating Expenses$685.00M
Operating Income$326.00M
Net Income$185.00M
EPS (Basic)$0.95
EPS (Diluted)$0.95
Shares Outstanding (Basic)195.00M
Shares Outstanding (Diluted)195.00M

Key Highlights

  • 1Operating revenues increased by 7.8% to $1.011 billion for Q1 2024 compared to $938 million in Q1 2023.
  • 2Diluted EPS rose to $0.95 in Q1 2024, a 4.4% increase from $0.91 in Q1 2023.
  • 3Capital expenditures for the first three months of 2024 were $609 million, supporting infrastructure improvements.
  • 4The company completed an acquisition of a wastewater treatment plant in Illinois for $86 million.
  • 5Total available liquidity stood at $3.26 billion as of March 31, 2024, providing financial flexibility.
  • 6AWK reported $43 million in annualized incremental revenues from general rate case authorizations effective in 2024.
  • 7The company continues to pursue multiple pending rate case filings and acquisitions across various states.

Frequently Asked Questions

Operating revenues increased by $73 million, or 7.8%, to $1.011 billion for the three months ended March 31, 2024, compared to $938 million for the same period in 2023. This growth was primarily driven by authorized rate increases in regulated businesses, including infrastructure surcharges, to fund capital investments, as well as contributions from water and wastewater acquisitions and organic growth in existing systems. Reduced amortization of excess accumulated deferred income taxes (EADIT) also contributed to the revenue increase.

American Water is committed to significant capital investment in its infrastructure. In the first three months of 2024, the company invested $609 million primarily in the Regulated Businesses for infrastructure improvements and replacements. Additionally, it invested $86 million in acquisitions, such as the wastewater treatment plant in Illinois, and plans to invest approximately $3.1 billion in growth strategies for the full year 2024.

The company maintains a strong financial position. As of March 31, 2024, total assets were $31.09 billion. Total available liquidity stood at $3.26 billion, comprising $584 million in cash and cash equivalents and $2.68 billion in availability on its revolving credit facility. Long-term debt was $12.57 billion, and the company was in compliance with its debt covenants.

The company is actively managing various regulatory and environmental matters. Key among these is the EPA's new National Primary Drinking Water Regulation for six PFAS chemicals, which is estimated to require approximately $1 billion in capital expenditures over five years and up to $50 million in annual operating expenses for testing and treatment. American Water is also involved in various legal proceedings, including class action litigations related to water main breaks and environmental issues like PFAS contamination, and is actively advocating for policies to hold polluters accountable.