10-QPeriod: Q3 FY2024

American Water Works Company, Inc. Quarterly Report for Q3 Ended Sep 30, 2024

Filed October 30, 2024For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) reported solid financial results for the third quarter and first nine months of 2024. Revenue growth was driven by authorized rate increases across its regulated utilities, reflecting significant capital investments in infrastructure improvements and replacements. The company also completed several strategic acquisitions to expand its customer base. Net income attributable to common shareholders increased year-over-year for both the three and nine-month periods, signaling effective cost management and successful integration of new assets. Despite increased operating expenses, particularly in production and employee-related costs, and higher financing costs due to increased debt, AWK demonstrated its ability to translate top-line growth into bottom-line performance. The company continues to prioritize long-term growth through consistent capital deployment and strategic acquisitions, positioning it for sustained value creation for shareholders.

Financial Highlights

48 data points
Beta

Revenue

$1.33B

Net Income

$350.00M

26.4% Net Margin

EPS (Diluted)

$1.80

Total Assets

$31.79B

Cash & Equivalents

$127.00M

Free Cash Flow

-$4.00M

Financial Statements
Beta
Revenue$1.33B
Operating Expenses$780.00M
Operating Income$543.00M
Net Income$350.00M
EPS (Basic)$1.80
EPS (Diluted)$1.80
Shares Outstanding (Basic)195.00M
Shares Outstanding (Diluted)195.00M

Key Highlights

  • 1Operating revenues increased by $156 million to $1,323 million for the three months ended September 30, 2024, compared to the same period in 2023, driven by rate increases and acquisitions.
  • 2Net income attributable to common shareholders rose to $350 million ($1.80 per diluted share) for the three months ended September 30, 2024, up from $323 million ($1.66 per diluted share) in the prior year.
  • 3For the nine months ended September 30, 2024, net income attributable to common shareholders was $812 million ($4.17 per diluted share), an increase from $773 million ($4.03 per diluted share) in the same period of 2023.
  • 4Capital expenditures for infrastructure improvements and replacements in the Regulated Businesses totaled $1.9 billion for the first nine months of 2024.
  • 5The company completed several regulated acquisitions during the first nine months of 2024, adding approximately 33,400 customers.
  • 6Total assets grew to $31.8 billion as of September 30, 2024, from $30.3 billion at the end of 2023, primarily due to increased property, plant, and equipment.
  • 7Long-term debt increased to $12.55 billion as of September 30, 2024, from $11.71 billion at the end of 2023, reflecting financing for capital investments and acquisitions.

Frequently Asked Questions

Operating revenues increased primarily due to authorized rate increases across American Water's regulated utilities, reflecting investments in infrastructure, as well as revenues from recent water and wastewater acquisitions and organic customer growth.

Net income attributable to common shareholders increased for both the three-month and nine-month periods ended September 30, 2024, compared to the same periods in 2023. This improvement was driven by higher revenues, partially offset by increased operating expenses and financing costs.

American Water's growth strategy is primarily focused on the Regulated Businesses segment through continued capital investment in infrastructure, strategic regulated acquisitions to expand its customer base, and organic growth within its existing systems.

Key regulatory and environmental matters include the EPA's final regulations for PFAS in drinking water, which are estimated to require approximately $1 billion in capital expenditures over five years, and the finalization of the Lead and Copper Rule Improvements (LCRI) which will require further review for capital and operating costs. The company is also actively engaged in various rate cases and infrastructure surcharge filings across its jurisdictions to recover costs and investments.