Q3 2024 American Water Works Company Inc Earnings Call Transcript
Key Points
- American Water Works Co Inc (AWK) delivered strong financial results in the third quarter, with earnings of $1.80 per share, up from $1.66 in the same period last year.
- The company closed a $230 million acquisition of the wastewater system assets of Butler Area Sewer Authority in Pennsylvania, adding 15,000 customers.
- AWK is initiating its 2025 earnings guidance of $5.65 to $5.75 per share, representing 8% EPS growth compared to 2024.
- The company plans to invest $17 billion to $18 billion from 2025 to 2029, reflecting a $1 billion increase over the previous five-year plan.
- AWK's regulated acquisition strategy and organic revenue growth opportunities are expected to drive an 8% to 9% rate base growth over the next decade.
- The company experienced a cybersecurity incident, although it did not impact water or wastewater facilities, the investigation is ongoing.
- Operating and maintenance costs increased by $0.19 per share, driven by employee-related costs and production costs.
- AWK's long-term financing costs increased by $0.28 per share, including interest on a $1 billion convertible note and a $1.4 billion senior note issuance.
- The company expects to be a cash taxpayer starting in 2025, with anticipated cash tax payments of around $100 million annually.
- AWK's rate case in Missouri did not receive the desired ruling for a full future test year, although discrete adjustments were allowed.
(technical difficulty) Our current expectations, estimates and assumptions. However, since these statements deal with future events, they are subject to numerous known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results indicated or implied by such statements. Additional information regarding these risks, uncertainties and factors as well as a more detailed analysis of our financials and other important information is provided in the third quarter earnings release and in our September 30 Form 10-Q each filed yesterday with the SEC. And finally, all statements during this presentation related to earnings and earnings per share, refer to diluted earnings and diluted earnings per share.
John Griffith, our President, will share highlights of the third quarter and year to date results and will comment on our 2025 EPS guidance and longer-term targets. David Bowler, our Executive Vice President and CFO, will discuss our year to date financial
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