American Water Works Company, Inc. (AWK) Bundle
A Brief History of American Water Works Company, Inc.
Company Overview
American Water Works Company, Inc. (AWK) is the largest publicly traded water and wastewater utility company in the United States, serving approximately 15 million people in over 1,600 communities across 24 states and Canada. The company is headquartered in Camden, New Jersey, and operates through regulated and non-regulated segments.
Financial Performance in 2024
As of September 30, 2024, American Water Works reported the following financial metrics:
| Financial Metrics | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Operating Revenues (in millions) | $1,219 | $1,095 | $3,204 | $2,960 |
| Net Income (in millions) | $350 | $323 | $812 | $773 |
| Diluted EPS | $1.80 | $1.66 | $4.17 | $4.03 |
| Total Assets (in millions) | $31,790 | N/A | N/A | N/A |
Capital Investments
In 2024, American Water Works plans to invest approximately $3.3 billion in capital improvements, with $2.0 billion already invested in the first nine months. This investment focuses on infrastructure improvements, acquisitions, and organic growth strategies. The company added approximately 33,400 new customers through acquisitions and organic growth.
Acquisitions
Significant acquisitions in 2024 include:
- Purchase of a wastewater treatment plant from Granite City for $86 million, adding approximately 26,000 customers.
- Acquisition of wastewater system assets from the Butler Area Sewer Authority for $230 million, expected to add around 15,000 customer connections.
Regulatory Matters
In 2024, American Water Works received regulatory approval for several rate increases, with a total annualized increase of $256 million across various states:
| State | Effective Date | Annualized Revenue Increase (in millions) |
|---|---|---|
| New Jersey | September 15, 2024 | $80 |
| Pennsylvania | August 7, 2024 | $99 |
| Indiana | May 10, 2024 | $48 |
| Kentucky | May 3, 2024 | $11 |
| West Virginia | February 25, 2024 | $18 |
Debt and Liquidity
As of September 30, 2024, American Water Works had total available liquidity of $2.587 billion, consisting of:
| Liquidity Components | Amount (in millions) |
|---|---|
| Cash and Cash Equivalents | $127 |
| Availability on Revolving Credit Facility | $2,460 |
The company's weighted-average interest rate on short-term borrowings was approximately 4.90% as of September 30, 2024.
Market Trends and Challenges
American Water Works continues to navigate challenges such as regulatory pressures, increasing operational costs, and the need for substantial infrastructure investments. The company remains focused on providing safe and reliable water services while expanding its customer base through strategic acquisitions and organic growth initiatives.
A Who Owns American Water Works Company, Inc. (AWK)
Major Shareholders
As of 2024, American Water Works Company, Inc. (AWK) has a diverse ownership structure comprised mainly of institutional investors, mutual funds, and individual shareholders. The largest shareholders include:
| Shareholder Type | Ownership Percentage | Number of Shares Owned (Approx.) | Market Value (Approx.) |
|---|---|---|---|
| Institutional Investors | 82.5% | 165 million | $15.1 billion |
| Mutual Funds | 33.6% | 67.2 million | $6.2 billion |
| Individual Shareholders | 17.5% | 34.5 million | $3.1 billion |
| Insider Ownership | 0.5% | 1 million | $93 million |
Top Institutional Shareholders
The following table lists the top institutional shareholders of American Water Works Company as of 2024:
| Institution | Ownership Percentage | Number of Shares Owned (Approx.) | Market Value (Approx.) |
|---|---|---|---|
| The Vanguard Group, Inc. | 8.1% | 16.2 million | $1.5 billion |
| BlackRock, Inc. | 7.8% | 15.6 million | $1.4 billion |
| State Street Global Advisors | 5.0% | 10.0 million | $930 million |
| Fidelity Investments | 4.5% | 9.0 million | $840 million |
| Invesco Ltd. | 3.6% | 7.2 million | $670 million |
Recent Stock Performance
As of September 30, 2024, American Water Works Company (AWK) has shown a steady performance in the stock market:
| Date | Stock Price (Close) | Market Capitalization (Approx.) | Dividend Yield |
|---|---|---|---|
| September 30, 2024 | $90.00 | $18.1 billion | 3.4% |
| June 30, 2024 | $88.50 | $17.8 billion | 3.5% |
| March 31, 2024 | $85.00 | $17.1 billion | 3.5% |
Shareholder Meetings and Voting
American Water Works Company holds annual shareholder meetings where shareholders can vote on key issues such as board member elections, executive compensation, and other corporate governance matters.
Dividends
The company declared a quarterly cash dividend of $0.7650 per share in 2024, reflecting its commitment to returning value to shareholders. The dividend history for the year is as follows:
| Declaration Date | Payment Date | Dividend Amount |
|---|---|---|
| January 30, 2024 | March 1, 2024 | $0.7650 |
| April 29, 2024 | June 3, 2024 | $0.7650 |
| July 30, 2024 | September 3, 2024 | $0.7650 |
| October 29, 2024 | December 3, 2024 | $0.7650 |
Future Outlook
American Water Works Company continues to focus on growth through capital investment in infrastructure and strategic acquisitions, targeting approximately $3.3 billion in investments for 2024 to enhance service delivery and expand customer base.
American Water Works Company, Inc. (AWK) Mission Statement
The mission of American Water Works Company, Inc. (AWK) focuses on providing safe, clean, reliable, and affordable water and wastewater services to its customers. The company aims to achieve sustainable growth through capital investment in infrastructure, regulated acquisitions, and organic growth in existing systems.
Financial Performance Overview
For the three and nine months ended September 30, 2024, American Water reported significant financial metrics:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Operating Revenues | $1,219 million | $1,095 million | $3,204 million | $2,960 million |
| Net Income | $350 million | $323 million | $812 million | $773 million |
| Diluted Earnings per Share | $1.80 | $1.66 | $4.17 | $4.03 |
| Capital Expenditures | $1,962 million | $1,779 million | $2,159 million | $1,928 million |
Capital Investment Strategy
American Water plans to invest approximately $3.3 billion in 2024, primarily in the following areas:
- Infrastructure improvements and replacements: $1.9 billion
- Regulated acquisitions: $119 million, adding approximately 33,400 customers
- Organic growth in existing systems: approximately 14,700 new customers
Rate Adjustments and Regulatory Filings
The company has seen several rate adjustments in 2024, contributing to its revenue growth:
| State | Annualized Incremental Revenue | Effective Date |
|---|---|---|
| New Jersey | $80 million | September 15, 2024 |
| Pennsylvania | $99 million | August 7, 2024 |
| Indiana | $66 million (step increases) | Various dates in 2024 |
| Kentucky | $11 million | May 3, 2024 |
| West Virginia | $18 million | February 25, 2024 |
Customer Base and Service Expansion
As of September 30, 2024, American Water serves approximately:
- 15,000 customer connections from the Butler Area Sewer Authority acquisition for $230 million
- 26,000 new wastewater customers from the Granite City acquisition for $86 million
- 43,400 additional customers from pending acquisitions
Operational Efficiency and Cost Management
For the three months ended September 30, 2024, American Water's operational expenses included:
| Expense Category | Q3 2024 | Q3 2023 |
|---|---|---|
| Operation and Maintenance | $402 million | $368 million |
| Depreciation and Amortization | $196 million | $174 million |
| General Taxes | $79 million | $72 million |
Overall, American Water Works Company, Inc. continues to position itself as a leader in the water utility sector through strategic investments and a strong focus on customer service and regulatory compliance.
How American Water Works Company, Inc. (AWK) Works
Overview of Operations
American Water Works Company, Inc. (AWK) is the largest publicly traded water and wastewater utility in the United States, providing services to residential, commercial, and industrial customers. As of 2024, it operates in 14 states and serves approximately 15 million people. The company focuses on regulated water and wastewater services, which are subject to oversight by various state utility commissions.
Financial Performance
For the three months ended September 30, 2024, American Water reported:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Operating Revenues | $1,219 million | $1,095 million |
| Net Income Attributable to Common Shareholders | $350 million | $323 million |
| Earnings Per Share (Diluted) | $1.80 | $1.66 |
| Operating and Maintenance Expenses | $402 million | $368 million |
For the nine months ended September 30, 2024, the financial metrics were as follows:
| Metric | YTD 2024 | YTD 2023 |
|---|---|---|
| Operating Revenues | $3,204 million | $2,960 million |
| Net Income Attributable to Common Shareholders | $812 million | $773 million |
| Earnings Per Share (Diluted) | $4.17 | $4.03 |
| Operating and Maintenance Expenses | $1,109 million | $1,043 million |
Investment in Infrastructure
American Water has committed to a capital investment of approximately $3.3 billion for 2024. In the first nine months of 2024, the company invested:
| Investment Type | Amount (in millions) |
|---|---|
| Infrastructure Improvements | $1,900 million |
| Acquisitions | $119 million |
These investments aim to enhance service reliability and expand customer base, adding approximately 33,400 customers through acquisitions and organic growth.
Regulatory Environment and Rate Cases
In 2024, American Water has seen several rate case approvals across various states, leading to increased revenues:
| State | Annualized Revenue Increase (in millions) | Effective Date |
|---|---|---|
| New Jersey | $80 million | September 15, 2024 |
| Pennsylvania | $99 million | August 7, 2024 |
| Indiana | $66 million | February 2024 |
| West Virginia | $18 million | February 25, 2024 | Kentucky | $11 million | May 3, 2024 |
Cash Flow Analysis
For the nine months ended September 30, 2024, the cash flow metrics were:
| Cash Flow Type | Amount (in millions) |
|---|---|
| Net Cash Provided by Operating Activities | $1,406 million |
| Capital Expenditures | $(1,962 million) |
| Net Cash Used in Investing Activities | $(2,159 million) |
| Net Cash Provided by Financing Activities | $566 million |
Operational Challenges and Opportunities
American Water faces challenges such as rising production costs and regulatory compliance. However, opportunities exist in the form of infrastructure investments and acquisitions aimed at expanding its service area and customer base.
How American Water Works Company, Inc. (AWK) Makes Money
Revenue Sources
American Water Works Company, Inc. (AWK) generates its revenue primarily through its regulated businesses, which provide water and wastewater services to residential, commercial, and industrial customers. As of the third quarter of 2024, the total operating revenues for AWK were $3,204 million for the nine months ended September 30, 2024, compared to $2,960 million for the same period in 2023.
| Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) | YTD 2024 (in millions) | YTD 2023 (in millions) |
|---|---|---|---|---|
| Residential Water Services | 679 | 607 | 1,763 | 1,622 |
| Commercial Water Services | 255 | 231 | 659 | 600 |
| Fire Service | 41 | 40 | 123 | 118 |
| Industrial Water Services | 50 | 50 | 138 | 126 |
| Public and Other Water Services | 81 | 72 | 212 | 220 |
| Total Water Services | 1,106 | 1,000 | 2,895 | 2,686 |
| Residential Wastewater Services | 62 | 58 | 181 | 169 |
| Commercial Wastewater Services | 20 | 16 | 52 | 46 |
| Industrial Wastewater Services | 4 | 2 | 9 | 6 |
| Public and Other Wastewater Services | 11 | 8 | 28 | 21 |
| Total Wastewater Services | 97 | 84 | 270 | 242 |
| Other Revenues | 16 | 11 | 39 | 32 |
| Total Operating Revenues | 1,219 | 1,095 | 3,204 | 2,960 |
Rate Increases and Infrastructure Investments
AWK's revenue growth is significantly driven by authorized rate increases. For the nine months ended September 30, 2024, increases in revenues from authorized rate increases were approximately $183 million. The company has planned capital investments of approximately $3.3 billion in 2024, focusing on infrastructure improvements and regulated acquisitions.
Operational Costs
Operating expenses for AWK also play a crucial role in its financial performance. For the nine months ended September 30, 2024, total operation and maintenance expenses were $1,109 million, up from $1,043 million in the same period of 2023. Major components include:
| Expense Type | Q3 2024 (in millions) | Q3 2023 (in millions) | YTD 2024 (in millions) | YTD 2023 (in millions) |
|---|---|---|---|---|
| Employee-related costs | 134 | 127 | 405 | 386 |
| Production costs | 133 | 125 | 344 | 324 |
| Operating supplies and services | 72 | 59 | 196 | 173 |
| Maintenance materials and supplies | 25 | 22 | 66 | 65 |
| Customer billing and accounting | 20 | 19 | 48 | 48 |
| Other | 18 | 16 | 50 | 47 |
| Total Operation and Maintenance Expense | 402 | 368 | 1,109 | 1,043 |
Net Income and Earnings Per Share
For the three months ended September 30, 2024, net income attributable to common shareholders was $350 million, resulting in diluted earnings per share of $1.80, compared to $323 million and $1.66 per share in Q3 2023. For the nine months ended September 30, 2024, net income was $812 million, reflecting an increase from $773 million in 2023, yielding an earnings per share of $4.17 compared to $4.03 in 2023.
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Income (in millions) | 350 | 323 | 812 | 773 |
| Diluted Earnings Per Share | $1.80 | $1.66 | $4.17 | $4.03 |
Capital Investments and Acquisitions
AWK has made significant capital investments to enhance its service capabilities. In 2024, the company invested approximately $2.0 billion in regulated businesses, which included $1.9 billion for infrastructure improvements and $119 million for acquisitions that added around 33,400 customers. For example, the company's acquisition of a wastewater treatment plant in Illinois for $86 million added approximately 26,000 customers.
Financing Activities
In February 2024, American Water Capital Corp. completed a $1.4 billion debt offering to support its capital investment plans, which included senior notes with interest rates of 5.150% and 5.450% maturing in 2034 and 2054, respectively. This financing allows AWK to fund ongoing infrastructure improvements and acquisitions effectively.
Conclusion
American Water Works Company, Inc. continues to leverage its operational efficiencies, regulatory mechanisms for rate increases, and strategic capital investments to enhance its revenue streams while maintaining a focus on providing reliable water and wastewater services across its operating regions.
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Article updated on 8 Nov 2024
Resources:
- American Water Works Company, Inc. (AWK) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of American Water Works Company, Inc. (AWK)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View American Water Works Company, Inc. (AWK)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.