American Water Reports First Quarter 2021 Results
American Water Works Company (NYSE: AWK) reported Q1 2021 earnings of $0.73 per share, up from $0.68 in Q1 2020. Net income for Regulated Businesses rose to $135 million, driven by infrastructure investments and acquisitions. The company announced its largest municipal acquisition, adding over 45,000 customer connections from York, PA. Capital investments for the quarter were approximately $342 million, with plans to invest $1.9 billion throughout 2021. However, Market-Based Businesses saw a decline in net income to $17 million due to increased claims from extreme weather.
- Earnings per share increased from $0.68 to $0.73 year-over-year.
- Regulated Businesses' net income rose to $135 million, up from $123 million.
- Successful announcement of the largest municipal acquisition in Pennsylvania history.
- Capital investments of approximately $342 million, with a projected total of $1.9 billion for 2021.
- Authorization of additional annualized revenues of approximately $112 million from rate cases.
- Market-Based Businesses' net income decreased to $17 million from $22 million due to increased claims expenses.
- Higher O&M expenses of $22 million negatively impacted overall revenue.
American Water Works Company, Inc. (NYSE: AWK) today reported results for the quarter ended March 31, 2021 of
“American Water continues to provide essential services to the communities we serve, and our employees again delivered strong first quarter results of
“As an example of this successful execution, we recently announced what will be the largest municipal acquisition in Pennsylvania American Water’s history. On April 6, we signed an agreement to acquire the wastewater treatment and collection system for the City of York, Pa., which will add an equivalent customer connection total of more than 45,000. To date this year, we have added approximately 4,500 customer connections through organic growth and closed acquisitions. We also have under agreement more than 86,000 customer connections, including the City of York,” continued Lynch.
Consolidated Results
For the three months ended March 31, 2021, earnings per share were
For the first three months of 2021, the Company made capital investments of approximately
Regulated Businesses
For the first three months of 2021, the Regulated Businesses’ net income was
Regulated revenue increased approximately
To date, the Company has been authorized additional annualized revenues, excluding agreed to reductions for excess accumulated deferred income taxes, of approximately
For the 12-month period ended March 31, 2021, the Company’s adjusted regulated O&M efficiency ratio (a non-GAAP financial measure) was 34.1 percent, a decrease from 34.5 percent for the 12-month period ended March 31, 2020.
Market-Based Businesses
In the first quarter of 2021, net income for the Market-Based Businesses was
Dividends
On April 28, 2021, the Company’s board of directors declared a quarterly cash dividend payment of
2021 Earnings Guidance
The Company expects its 2021 earnings per share to be in the range of
Non-GAAP Financial Measures
This press release also includes a presentation of adjusted regulated O&M efficiency ratio, which excludes from its calculation estimated purchased water revenues and purchased water expenses, reductions for the amortization of excess accumulated deferred income taxes, and the allocable portion of non-O&M support services costs, mainly depreciation and general taxes. This item constitutes a “non-GAAP financial measure” under SEC rules. This item is derived from American Water’s consolidated financial information but is not presented in its financial statements prepared in accordance with GAAP. This non-GAAP financial measure supplements and should be read in conjunction with the Company’s GAAP disclosures and should be considered as an addition to, and not a substitute for, any GAAP measure.
Management evaluates its operating performance using this ratio and believes that this non-GAAP financial measure is useful to the Company’s investors because it directly measures improvement in the operating performance and efficiency of the Company’s Regulated Businesses. The Company’s adjusted regulated O&M efficiency ratio (i) is not an accounting measure that is based on GAAP; (ii) is not based on a standard, objective industry definition or method of calculation; (iii) may not be comparable to other companies’ operating measures; and (iv) should not be used in place of the GAAP information provided elsewhere in this press release.
Set forth in this release is a table that calculates the Company’s adjusted regulated O&M efficiency ratio and reconciles each of the components used to calculate this ratio to the most directly comparable GAAP financial measure.
First Quarter 2021 Earnings Conference Call
The first quarter 2021 earnings conference call will take place on Tuesday, May 4, 2021, at 9 a.m. Eastern Daylight Time. Interested parties may listen to an audio webcast through a link on the Company’s Investor Relations website at ir.amwater.com. Presentation slides that will be used in conjunction with the earnings conference call will also be made available online. The Company recognizes its website as a key channel of distribution to reach public investors and as a means of disclosing material non-public information to comply with its obligations under SEC Regulation FD.
Following the earnings conference call, an audio archive of the call will be available for one year on American Water’s investor relations website at ir.amwater.com/events.
About American Water
With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly-traded water and wastewater utility company. The Company employs approximately 7,000 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to over 15 million people in 46 states. More information can be found by visiting amwater.com and follow American Water on Twitter, Facebook and LinkedIn.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements in this press release including, without limitation, 2021 earnings guidance, the outcome of pending acquisition activity, the amount and allocation of projected capital expenditures; the impacts to the Company of the current novel coronavirus (COVID-19) pandemic health event, and estimated revenues from rate cases and other government agency authorizations, are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the Federal securities laws. In some cases, these forward-looking statements can be identified by words with prospective meanings such as “intend,” “plan,” “estimate,” “believe,” “anticipate,” “expect,” “predict,” “project,” “propose,” “assume,” “forecast,” “outlook,” “future,” “pending,” “goal,” “objective,” “potential,” “continue,” “seek to,” “may,” “can,” “will,” “should” and “could” and or the negative of such terms or other variations or similar expressions. These forward-looking statements are predictions based on American Water’s current expectations and assumptions regarding future events. They are not guarantees or assurances of any outcomes, financial results of levels of activity, performance or achievements, and readers are cautioned not to place undue reliance upon them. The forward-looking statements are subject to a number of estimates and assumptions, and known and unknown risks, uncertainties and other factors. Actual results may differ materially from those discussed in the forward-looking statements included in this press release as a result of the factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, and subsequent filings with the SEC, and because of factors such as: the decisions of governmental and regulatory bodies, including decisions to raise or lower customer rates and regulatory responses to the COVID-19 pandemic; the timeliness and outcome of regulatory commissions’ and other authorities’ actions concerning rates, capital structure, authorized return on equity, capital investment, system acquisitions and dispositions, taxes, permitting, water supply and management, and other decisions; changes in customer demand for, and patterns of use of, water, such as may result from conservation efforts, impacts of the COVID-19 pandemic, or otherwise; a loss of one or more large industrial or commercial customers due to adverse economic conditions, the COVID-19 pandemic, or other factors; limitations on the availability of the Company’s water supplies or sources of water, or restrictions on its use thereof, resulting from allocation rights, governmental or regulatory requirements and restrictions, drought, overuse or other factors; changes in laws, governmental regulations and policies, including with respect to environmental, health and safety, consumer and data privacy, water quality and water quality accountability, contaminants of emerging concern, public utility and tax regulations and policies, and impacts resulting from U.S., state and local elections and changes in federal, state and local executive administrations; weather conditions and events, climate variability patterns, and natural disasters, including drought or abnormally high rainfall, prolonged and abnormal ice or freezing conditions, strong winds, coastal and intercoastal flooding, pandemics (including COVID-19) and epidemics, earthquakes, landslides, hurricanes, tornadoes, wildfires, electrical storms, sinkholes and solar flares; the outcome of litigation and similar governmental and regulatory proceedings, investigations or actions; the risks associated with the Company’s aging infrastructure, and its ability to appropriately improve the resiliency of, or maintain and replace, current or future infrastructure and systems, including its technology and other assets, and manage the expansion of its businesses; exposure or infiltration of the Company’s technology and critical infrastructure systems, including the disclosure of sensitive, personal or confidential information contained therein, through physical or cyber attacks or other means; the Company’s ability to obtain permits and other approvals for projects and construction of various water and wastewater facilities; changes in the Company’s capital requirements; the Company’s ability to control operating expenses and to achieve operating efficiencies; the intentional or unintentional actions of a third party, including contamination of the Company’s water supplies or the water provided to its customers; the Company’s ability to obtain adequate and cost-effective supplies of equipment (including personal protective equipment), chemicals, electricity, fuel, water and other raw materials; the Company’s ability to successfully meet growth projections for the Regulated Businesses and the Market-Based Businesses, either individually or in the aggregate, and capitalize on growth opportunities, including, among other things, with respect to acquiring, closing and successfully integrating regulated operations and market-based businesses, entering into contracts and other agreements with, or otherwise obtaining, new customers or partnerships in the Market-Based Businesses, and realizing anticipated benefits and synergies from new acquisitions; risks and uncertainties associated with contracting with the U.S. government, including ongoing compliance with applicable government procurement and security regulations; cost overruns relating to improvements in or the expansion of the Company’s operations; the Company’s ability to successfully develop and implement new technologies and to protect related intellectual property; the Company’s ability to maintain safe work sites; the Company’s exposure to liabilities related to environmental laws and similar matters resulting from, among other things, water and wastewater service provided to customers; changes in general economic, political, business and financial market conditions, including without limitation conditions and collateral consequences associated with the current pandemic health event resulting from COVID-19; access to sufficient debt and/or equity capital on satisfactory terms and when and as needed to support operations and capital expenditures; fluctuations in interest rates; the Company’s ability to comply with affirmative or negative covenants in the current or future indebtedness of the Company or any of its subsidiaries, or the issuance of new or modified credit ratings or outlooks or other communications by credit rating agencies with respect to the Company or any of its subsidiaries (or any current or future indebtedness thereof), which could increase financing costs or funding requirements and affect the Company’s or its subsidiaries’ ability to issue, repay or redeem debt, pay dividends or make distributions; fluctuations in the value of benefit plan assets and liabilities that could increase the Company’s cost and funding requirements; changes in federal or state general, income and other tax laws, including (i) future significant tax legislation; (ii) further rules, regulations, interpretations and guidance by the U.S. Department of the Treasury and state or local taxing authorities related to the enactment of the Tax Cuts and Jobs Act; (iii) the availability of, or the Company’s compliance with, the terms of applicable tax credits and tax abatement programs; and (iv) the Company’s ability to utilize its U.S. federal and state income tax net operating loss carryforwards; migration of customers into or out of the Company’s service territories; the use by municipalities of the power of eminent domain or other authority to condemn the systems of one or more of the Company’s utility subsidiaries, or the assertion by private landowners of similar rights against such utility subsidiaries; any difficulty or inability to obtain insurance for the Company, its inability to obtain insurance at acceptable rates and on acceptable terms and conditions, or its inability to obtain reimbursement under existing or future insurance programs and coverages for any losses sustained; the incurrence of impairment charges related to the Company’s goodwill or other assets; labor actions, including work stoppages and strikes; the Company’s ability to retain and attract qualified employees; civil disturbances or terrorist threats or acts, or public apprehension about future disturbances, unrest or terrorist threats or acts; and the impact of new, and changes to existing, accounting standards.
These forward-looking statements are qualified by, and should be read together with, the risks and uncertainties set forth above and the risk factors included in American Water’s annual, quarterly and other SEC filings, and readers should refer to such risks, uncertainties and risk factors in evaluating such forward-looking statements. Any forward-looking statements speak only as of the date of this press release. American Water does not have or undertake any obligation or intention to update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as otherwise required by the federal securities laws. Furthermore, it may not be possible to assess the impact of any such factor on the Company’s businesses, either viewed independently or together, or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. The foregoing factors should not be construed as exhaustive.
AWK-IR
American Water Works Company, Inc. and Subsidiary Companies Consolidated Statements of Operations (Unaudited) (In millions, except per share data) |
||||||||
|
For the Three Months Ended March 31, |
|||||||
|
2021 |
|
2020 |
|||||
Operating revenues |
$ |
888 |
|
|
$ |
844 |
|
|
Operating expenses: |
|
|
|
|||||
Operation and maintenance |
|
419 |
|
|
|
383 |
|
|
Depreciation and amortization |
|
157 |
|
|
|
145 |
|
|
General taxes |
|
83 |
|
|
|
77 |
|
|
Total operating expenses, net |
|
659 |
|
|
|
605 |
|
|
Operating income |
|
229 |
|
|
|
239 |
|
|
Other income (expense): |
|
|
|
|||||
Interest, net |
|
(98 |
) |
|
|
(96 |
) |
|
Non-operating benefit costs, net |
|
20 |
|
|
|
13 |
|
|
Other, net |
|
4 |
|
|
|
3 |
|
|
Total other income (expense) |
|
(74 |
) |
|
|
(80 |
) |
|
Income before income taxes |
|
155 |
|
|
|
159 |
|
|
Provision for income taxes |
|
22 |
|
|
|
35 |
|
|
Net income attributable to common shareholders |
$ |
133 |
|
|
$ |
124 |
|
|
|
|
|
|
|||||
Basic earnings per share: |
|
|
|
|||||
Net income attributable to common shareholders |
$ |
0.73 |
|
|
$ |
0.69 |
|
|
Diluted earnings per share: (a) |
|
|
|
|||||
Net income attributable to common shareholders |
$ |
0.73 |
|
|
$ |
0.68 |
|
|
Weighted-average common shares outstanding: |
|
|
|
|||||
Basic |
|
181 |
|
|
|
181 |
|
|
Diluted |
|
182 |
|
|
|
181 |
|
|
(a) Amounts may not calculate due to rounding. |
||||||||
American Water Works Company, Inc. and Subsidiary Companies Consolidated Balance Sheets (Unaudited) (In millions, except share and per share data) |
||||||||
|
March 31, 2021 |
|
December 31, 2020 |
|||||
ASSETS |
||||||||
Property, plant and equipment |
$ |
25,934 |
|
|
$ |
25,614 |
|
|
Accumulated depreciation |
|
(6,029 |
) |
|
|
(5,904 |
) |
|
Property, plant and equipment, net |
|
19,905 |
|
|
|
19,710 |
|
|
Current assets: |
|
|
|
|||||
Cash and cash equivalents |
|
69 |
|
|
|
547 |
|
|
Restricted funds |
|
30 |
|
|
|
29 |
|
|
Accounts receivable, net of allowance for uncollectible accounts of |
|
274 |
|
|
|
321 |
|
|
Unbilled revenues |
|
219 |
|
|
|
206 |
|
|
Materials and supplies |
|
52 |
|
|
|
47 |
|
|
Assets held for sale |
|
654 |
|
|
|
629 |
|
|
Other |
|
168 |
|
|
|
127 |
|
|
Total current assets |
|
1,466 |
|
|
|
1,906 |
|
|
Regulatory and other long-term assets: |
|
|
|
|||||
Regulatory assets |
|
1,127 |
|
|
|
1,127 |
|
|
Operating lease right-of-use assets |
|
98 |
|
|
|
95 |
|
|
Goodwill |
|
1,511 |
|
|
|
1,504 |
|
|
Postretirement benefit assets |
|
167 |
|
|
|
173 |
|
|
Intangible assets |
|
52 |
|
|
|
55 |
|
|
Other |
|
199 |
|
|
|
196 |
|
|
Total regulatory and other long-term assets |
|
3,154 |
|
|
|
3,150 |
|
|
Total assets |
$ |
24,525 |
|
|
$ |
24,766 |
|
|
American Water Works Company, Inc. and Subsidiary Companies Consolidated Balance Sheets (Unaudited) (In millions, except share and per share data) |
||||||||
|
March 31, 2021 |
|
December 31, 2020 |
|||||
CAPITALIZATION AND LIABILITIES |
||||||||
Capitalization: |
|
|
|
|||||
Common stock ( |
$ |
2 |
|
|
$ |
2 |
|
|
Paid-in-capital |
|
6,757 |
|
|
|
6,747 |
|
|
Retained earnings |
|
235 |
|
|
|
102 |
|
|
Accumulated other comprehensive loss |
|
(48 |
) |
|
|
(49 |
) |
|
Treasury stock, at cost (5,260,064 and 5,168,215 shares, respectively) |
|
(363 |
) |
|
|
(348 |
) |
|
Total common shareholders' equity |
|
6,583 |
|
|
|
6,454 |
|
|
Long-term debt |
|
9,325 |
|
|
|
9,329 |
|
|
Redeemable preferred stock at redemption value |
|
3 |
|
|
|
4 |
|
|
Total long-term debt |
|
9,328 |
|
|
|
9,333 |
|
|
Total capitalization |
|
15,911 |
|
|
|
15,787 |
|
|
Current liabilities: |
|
|
|
|||||
Short-term debt |
|
1,115 |
|
|
|
1,282 |
|
|
Current portion of long-term debt |
|
311 |
|
|
|
329 |
|
|
Accounts payable |
|
134 |
|
|
|
189 |
|
|
Accrued liabilities |
|
466 |
|
|
|
591 |
|
|
Accrued taxes |
|
76 |
|
|
|
50 |
|
|
Accrued interest |
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FAQ
What are the Q1 2021 earnings per share for American Water Works (AWK)?
American Water Works reported Q1 2021 earnings per share of $0.73.
What was the main reason for the increase in net income for American Water's Regulated Businesses in Q1 2021?
The increase was primarily driven by infrastructure investment, acquisitions, and organic growth.
What significant acquisition did American Water Works announce recently?
American Water announced the acquisition of the wastewater treatment and collection system for the City of York, PA, adding over 45,000 customer connections.
How much does American Water Works plan to invest in 2021?
The company plans to invest approximately $1.9 billion across its operations in 2021.
What was the impact of extreme weather on American Water's financial results?
Extreme cold weather contributed to increased claims expenses, negatively affecting the net income of Market-Based Businesses.
American Water Works Company, Inc
NYSE:AWKAWK RankingsAWK Latest NewsAWK Stock Data
27.05B
194.14M
0.12%
93.7%
1.89%
Utilities - Regulated Water
Water Supply
United States of America
CAMDEN
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