How American Water Grows Earnings
AMERICAN WATER
Reconciliation Table:
Regulated Segment O&M Efficiency Ratio
Regulated Segment O&M Efficiency Ratio
(A Non-GAAP Unaudited Number)
FY
2010
FY
2012
FY
2014
FY
2016
FY
LTM
2018 6/30/2019
($ in millions)
Total operations and maintenance expense
$1,291
$1,330
$1,350
$1,504 $1,479 $1,520
Less:
Operations and maintenance expense - Market Based Operations
Operations and maintenance expense - Other
257
256
289
372
362
387
(61)
(56)
(51)
(44)
(42)
Total operations and maintenance expense - Regulated Businesses
Less:
$1,095
$1,130
$1,112
$1,176
$1,159
(48)
$1,181
Regulated purchased water expense
100
110
122
122
133
132
Allocation of non-operation and maintenance expenses
29
35
39
30
31
33
Impact of Freedom Industries activities
-
10
65
(20)
(4)
Estimated impact of weather
5
(2)
Adjusted operations and maintenance expense - Regulated Businesses (a)
$966
$980
$943
$959
$1,015 $1,020
Total operating revenues
$2,555
$2,854
$3,011
$3,302
$3,440 $3,521
Less:
Operating Revenues - Market Based Operations
295.
307
355
451
476
528
Operating Revenues - Other
(26)
(17)
(18)
(20)
(20)
(22)
Total pro forma operating revenues-Regulated Businesses
$2,286
$2,564
$2,674
$2,871
$2,984
$3,015
Less:
Regulated Purchased Water expense*
100
110
122
122
133
132
Plus:
Freedom Industries chemical spill in West Virginia
1
Estimated impact of weather
(47)
17
Adjusted pro forma operating revenues-Regulated Businesses (b)
$2,186
$2,407
$2,570
$2,749
$2,851
$2,883
Adjusted O&M efficiency ratio-Regulated Businesses (a)/(b)
44.2%
40.7%
36.7%
34.9%
35.6%
35.4%
Adjusted operations and maintenance expense - Regulated Businesses
Less:
$966
$980
$943
$959
***
Impact of adoption of ASU 2017-07
39
(8)
12
Adjusted operations and maintenance expense - Regulated Businesses (c)
$966
$941
$951
$947
Adjusted operating revenues-Regulated Businesses
$2,186
$2,407
$2,570
$2,749
Less pro form a adjustment:
Pro forma adjustment for impact of the TCJA**
89
Adjusted pro forma operating revenues-Regulated Businesses (d)
$2,097
112
$2,294
137
$2,433
161
$2,588
Adjusted O&M efficiency ratio-Regulated Businesses (c)/(d)
46.1%
41.0%
39.1%
36.6%
* Calculation assumes purchased water revenues approximate purchased
water expenses
** Calculation of Estimated tax reform = Revenue Requirement with new
Effective Tax Rate (taxes grossed up) - Revenue Requirement with old
Effective Tax Rate
*** Includes the impact of the Company's adoption of ASU 2017-
07, Compensation - Retirement Benefits (Topic 715): Improving the
Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement
Benefit, on January 1, 2018.
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