- Setting 2019 diluted earnings per
share (EPS) guidance range of $3.54 to $3.64
- Maintaining our five year adjusted
EPS compound annual growth rate in the top half of the 7 to 10
percent range anchored off 2017 adjusted EPS
- Investing $8.0 - $8.6 billion
predominantly for regulated infrastructure investment over the next
five years
- Affirming narrowed 2018 earnings
guidance range
American Water Works Company, Inc. (NYSE:AWK), the largest
publicly traded U.S. water and wastewater utility company, today
announced its earnings guidance for 2019 and affirmed its earnings
guidance range for 2018.
American Water estimates its 2019 earnings to be in the range of
$3.54 to $3.64 per diluted share.
“We know that our customers expect safe, clean, reliable and
affordable water services every day, and we do that through
focusing on delivering the best customer experience possible,
prudently investing capital for infrastructure replacement, and
being more cost-efficient in our operations,” said Susan Story,
president and CEO of American Water. “We are driven to be ‘best in
class’ in execution of business fundamentals and the ‘go to’ place
for everything water, and our 2019 earnings per share guidance is a
reflection of our dedication to those goals.”
The company affirmed its 2018 narrowed earnings guidance GAAP
range of $3.19 - $3.24 per diluted share, which includes a gain on
sale of the majority of the contracts in the Contract Services
Group, the Keystone Clearwater Solutions impairment charge, and the
benefit from an insurance settlement related to the impact of
Freedom Industries chemical spill. Excluding these items, the
company's 2018 adjusted (non-GAAP) earnings guidance range is $3.27
- $3.32 per diluted share.
American Water will host an Investor Day presentation and audio
webcast with investors, analysts and other interested parties on
Dec. 11 at its headquarters located at 1 Water Street in Camden,
NJ. In addition to Story, presentations will be made by Linda
Sullivan, executive vice president and chief financial officer;
Walter Lynch, executive vice president and chief operating officer
of regulated operations, and other company leaders. The live
webcast and videocast will be accessible to the public from 8:30
a.m. to approximately 1:30 p.m. Eastern Time, and posted on the
Investor Relations page of the company's website at www.amwater.com
for 30 days. Presentation slides that will be used in conjunction
with the conference are also available online at
http://ir.amwater.com.
The company’s earnings forecasts are subject to numerous risks
and uncertainties, including, without limitation, those described
under “Forward-Looking Statements” below and under “Risk Factors”
in its annual and quarterly reports filed with the Securities and
Exchange Commission (SEC).
Non-GAAP Financial Measures
This press release includes a presentation of 2018 adjusted
diluted earnings per share as earnings guidance (“Adjusted EPS”),
which is a “non-GAAP financial measure” under SEC rules. Adjusted
EPS guidance is defined as GAAP earnings guidance per diluted
common share excluding the impact of: (i) the gain recognized in
the third quarter of 2018 on the sale of the majority of the
company’s Contract Services Group’s operation and maintenance
contracts; (ii) a goodwill and intangible asset impairment charge
related to the narrowing of the scope of the business of Keystone
Clearwater Solutions in the third quarter of 2018; and (iii) the
June 2018 insurance settlement related to the Freedom Industries
chemical spill in West Virginia. The company believes that this
non-GAAP measure provides investors with useful information by
excluding certain matters that may not be indicative of its ongoing
operating results, and that providing this non-GAAP measure will
allow investors to understand better its businesses’ operating
performance and facilitate a meaningful year-to-year comparison of
its results of operations. Although management uses this non-GAAP
financial measure internally to evaluate the company’s results of
operations, the company does not intend results excluding the
adjustments to represent results as defined by GAAP, and the reader
should not consider them as indicators of performance. This
non-GAAP financial measure is derived from the company’s
consolidated financial information but is not presented in its
financial statements prepared in accordance with GAAP, and thus it
should be considered in addition to, and not as a substitute for,
measures of financial performance prepared in accordance with GAAP.
In addition, this non-GAAP financial measure as defined and used
above may not be comparable to similarly titled non-GAAP measures
used by other companies, and, accordingly, it may have significant
limitations on its use.
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 more than 7,100
dedicated professionals who provide regulated and market-based
drinking water, wastewater and other related services to over 14
million people in 45 states and Ontario, Canada. 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, 2018 and 2019 earnings guidance, 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, 2017, 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 rates; the timeliness
and outcome of regulatory commissions’ actions concerning rates,
capital structure, authorized return on equity, capital investment,
permitting, and other decisions; changes in laws, governmental
regulations and policies, including environmental, health and
safety, water quality, and public utility and tax regulations and
policies, and impacts resulting from U.S., state and local
elections; potential costs and liabilities of American Water for
environmental laws and similar matters resulting from, among other
things, water and wastewater service provided to customers,
including, for example, water management solutions focused on
customers in the shale natural gas exploration and production
market; the outcome of litigation and similar government actions;
weather conditions, and events, climate change patterns, and
natural disasters, including drought or abnormally high rainfall,
strong winds, coastal and intercoastal flooding, earthquakes,
landslides, hurricanes, tornadoes, wildfires, electrical storms and
solar flares; changes in customer demand for, and patterns of use
of, water, such as may result from conservation efforts; its
ability to appropriately maintain current infrastructure, including
its operational and information technology (“IT”) systems, and
manage the expansion of its business; its ability to obtain permits
and other approvals for projects; changes in its capital
requirements; its ability to control operating expenses and to
achieve efficiencies in its operations; the intentional or
unintentional acts of a third party, including contamination of its
water supplies or water provided to its customers; exposure or
infiltration of its critical infrastructure, operational technology
and IT systems, including the disclosure of sensitive or
confidential information contained therein, through physical or
cyber-attacks or other disruptions; its ability to obtain adequate
and cost-effective supplies of chemicals, electricity, fuel, water
and other raw materials that are needed for its operations; its
ability to successfully meet growth projections and capitalize on
growth opportunities, including its ability to, among other things,
acquire, close and successfully integrate regulated operations and
Market-based businesses, enter into contracts and other agreements
with, or otherwise obtain, new customers in the Market-based
businesses, and realize anticipated benefits and synergies from new
acquisitions; cost overruns relating to improvements in or the
expansion of its operations; its ability to maintain safe work
sites; risks and uncertainties associated with contracting with the
U.S. government, including ongoing compliance with applicable
government procurement and security regulations; changes in general
economic, political, business and financial market conditions;
access to sufficient capital on satisfactory terms and when and as
needed to support operations and capital expenditures; fluctuations
in interest rates; restrictive covenants in or changes to the
credit ratings on its current or future debt that could increase
its financing costs or funding requirements or affect its ability
to borrow, make payments on debt or pay dividends; fluctuations in
the value of benefit plan assets and liabilities that could
increase its financing costs and funding requirements; changes in
Federal or state income, general and other tax laws, including tax
reform, the availability of tax credits and tax abatement programs,
and the ability to utilize its U.S. and state net operating loss
carryforwards; migration of customers into or out of its service
territories; the use by municipalities of the power of eminent
domain or other authority to condemn its systems; difficulty in
obtaining, or the inability to obtain, insurance at acceptable
rates and on acceptable terms and conditions; its ability to retain
and attract qualified employees; labor actions including work
stoppages and strikes; the incurrence of impairment charges related
to American Water’s goodwill or other assets; civil disturbances,
terrorist threats or acts, or public apprehension about future
disturbances or terrorist threats or acts; and the impact of new
accounting standards or changes to existing 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 the company’s annual and quarterly 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. The company 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.
American Water Works Company, Inc.
and Subsidiary Companies Adjusted Earnings Guidance Range (A
Non-GAAP, unaudited measure) 2018 Low End
High End Diluted earnings per share:
Earnings
guidance range (GAAP) $3.19 $3.24 Non-GAAP
adjustments: Gain on sale of portion of Contract Operations Group
contracts (0.08 ) (0.08 ) Income tax impact 0.02 0.02
Net non-GAAP adjustment (0.06 ) (0.06 ) Impairment charges
0.31 0.31 Income tax impact (0.08 ) (0.08 ) Net loss attributable
to noncontrolling interest (0.01 ) (0.01 ) Net non-GAAP adjustment
0.22 0.22 Impact of Freedom Industries settlement activities
(0.11 ) (0.11 ) Income tax impact 0.03 0.03 Net
non-GAAP adjustment (0.08 ) (0.08 ) Total net non-GAAP
adjustments 0.08 0.08
Adjusted earnings guidance range
(non-GAAP) $3.27 $3.32
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version on businesswire.com: https://www.businesswire.com/news/home/20181211005254/en/
Edward VallejoVice President, Investor
Relations856-955-4445edward.vallejo@amwater.comMaureen
DuffyVice President, Communications and Federal
Affairs856-955-4163Maureen.Duffy@amwater.com
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