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AMERICAN WATER WORKS COMPANY INC Reports Operating Results (10-K)

February 28, 2012 | About:
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AMERICAN WATER WORKS COMPANY INC (AWK) filed Annual Report for the period ended 2011-12-31.

Amer Water Work has a market cap of $5.95 billion; its shares were traded at around $33.62 with a P/E ratio of 20.7 and P/S ratio of 2.2. The dividend yield of Amer Water Work stocks is 2.7%.

Highlight of Business Operations:

Despite challenging weather events in the northeast region of the United Sates in the third quarter of 2011, for the year ended December 31, 2011, we generated $2,666.2 million in total operating revenue, and $803.1 million in operating income compared to total operating revenue of $2,555.0 million, and $728.1 million in operating income in 2010. Our Regulated Businesses, our largest operating segment, generated $2,368.9 million in operating revenue, representing 88.8% of our consolidated operating revenue compared to $2,285.7 in operating revenues representing 89.5% of our consolidated operating revenue in 2010. This increase of 3.6% in operating revenues, when compared to 2010, was primarily driven by rate increases offset by decrease in sales volume in all customer classes in 2011. Additionally, for the year ended December 31, 2011, our Market-Based Operations generated $327.8 million in operating revenue, compared to $294.7 million in operating revenues in 2010, an increase of 11.2%.

For the year ended December 31, 2011, we reported net income of $309.6 million, or diluted earnings per share of $1.75 compared to net income of $267.8 million, or diluted EPS of $1.53 for the comparable period in 2010. Net income for 2011 includes a benefit of $15.1 million, or $0.09 diluted earnings per share, as a result of the benefit from the cessation of depreciation on property, plant and equipment and a charge of $25.1 million or $0.14 diluted earnings, per share, to reduce the net asset values, of certain of our discontinued operations, which include associated parent company goodwill, to their net realizable values. Net income from continuing operations was $304.9 million for the year ended December 31, 2011 compared to net income from continuing operations of $255.1 million for the year ended December 31, 2010. Diluted earnings from continuing operations per average common share was $1.73 for the year ended December 31, 2011 as compared to $1.46 for year ended December 31, 2010. In addition, we generated increased cash flow from operations during 2011 of $808.4 million, compared to $774.9 million in 2010.

Other income (expenses). Other income and (expenses) increased $0.8 million or 0.3% for the year ended December 31, 2011 compared to the same period in the prior year. This increase is attributable to an increase in allowance for funds used during construction (AFUDC) of $4.2 million resulting from increased construction activity and a decrease in interest expense, net of interest income, of $1.4 million partially offset by a decrease in Other, net. The decrease in Other, net of $5.8 million is mainly due to the inclusion in 2010, the release of the remaining balance of a loss reserve amounting to $1.3 million, resulting from the resolution of the outstanding issues and uncertainties, incremental rental revenues of $2.6 million and the recognition of funds received related to the methyl tertiary butyl ether (MTBE) legal settlement for $1.9 million resulting from the outcome of a subsidiarys rate order.

Operating revenues. Our operating revenues increased by $264.6 million, or 11.6%, to $2,555.0 million for 2010 from $2,290.4 million for 2009. Regulated Businesses revenues increased by $209.1 million, or 10.1%, for 2010 compared to 2009 primarily attributable to rate increases and increased consumption. The Market-Based Operations revenues for 2010 increased by $56.5 million, or 23.7%, from 2009 and was mainly attributable to higher revenues in the Contract Operations and Homeowner Services Groups. For further information see the respective Operating Revenues discussions within the Segment Results.

Water service operating revenues from public and other customers, including municipal governments, other governmental entities and resale customers increased $10.9 million, or 3.7% to $302.3 million, for the year ended December 31, 2011 from $291.4 million in the same period of 2010. Revenues from municipal governments for fire protection services and customers requiring special private fire service facilities totaled $126.9 million for the year ended December 31, 2011, an increase of $7.1 million compared to the same period of 2010. Revenues generated by sales to governmental entities and resale customers totaled $175.4 million, an increase of $3.8 from the year ended December 31, 2010.

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