American Water Works Company, Inc.AWK
American Water Works Company, Inc. PP&E Disclosure
Note 7: Property, Plant and Equipment
Presented in the table below are the major classes of property, plant and equipment by category as of December 31:
| 2021 | 2020 | Range of Remaining Useful Lives | Weighted Average Useful Life | ||||||||||||||||||||
| Utility plant: | |||||||||||||||||||||||
| Land and other non-depreciable assets | $ | 210 | $ | 174 | |||||||||||||||||||
| Sources of supply | 938 | 897 | 2 to 127 years | 46 years | |||||||||||||||||||
| Treatment and pumping facilities | 4,198 | 3,984 | 3 to 111 years | 39 years | |||||||||||||||||||
| Transmission and distribution facilities | 12,308 | 11,457 | 9 to 130 years | 69 years | |||||||||||||||||||
| Services, meters and fire hydrants | 4,888 | 4,555 | 5 to 90 years | 31 years | |||||||||||||||||||
| General structures and equipment | 2,200 | 2,003 | 1 to 109 years | 15 years | |||||||||||||||||||
| Waste collection | 1,363 | 1,288 | 5 to 113 years | 58 years | |||||||||||||||||||
| Waste treatment, pumping and disposal | 912 | 859 | 2 to 139 years | 38 years | |||||||||||||||||||
| Construction work in progress | 934 | 837 | |||||||||||||||||||||
Less: Utility plant included in assets held for sale (a) | (664) | (646) | |||||||||||||||||||||
| Total utility plant | 27,287 | 25,408 | |||||||||||||||||||||
| Nonutility property | 126 | 211 | 3 to 50 years | 6 years | |||||||||||||||||||
Less: Nonutility plant included in assets held for sale (a) | — | (5) | |||||||||||||||||||||
| Total property, plant and equipment | $ | 27,413 | $ | 25,614 | |||||||||||||||||||
(a)This property, plant and equipment is related to the sale of the Company’s New York subsidiary, which was completed on January 1, 2022, and is included in assets held for sale on the Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020. See Note 6—Acquisitions and Divestitures for additional information.
Property, plant and equipment depreciation expense amounted to $550 million, $520 million and $508 million for the years ended December 31, 2021, 2020 and 2019, respectively and was included in depreciation and amortization expense on the Consolidated Statements of Operations. The provision for depreciation expressed as a percentage of the aggregate average depreciable asset balances was 2.77%, 2.82% and 2.96% for years December 31, 2021, 2020 and 2019, respectively. Additionally, the Company had capital expenditures acquired on account but unpaid of $292 million and $221 million included in accrued liabilities on the Consolidated Balance Sheets as of December 31, 2021 and 2020, respectively.
In 2019, the Company completed and submitted its project completion certification to the New Jersey Economic Development Authority (“NJEDA”) in connection with its capital investment in its corporate headquarters in Camden, New Jersey. The NJEDA determined that the Company is qualified to receive $164 million in tax credits over a ten-year period. The Company is required to meet various annual requirements in order to monetize one-tenth of the tax credits annually and is subject to a claw-back period if the Company does not meet certain NJEDA requirements of the tax credit program in years 11 through 15. The Company has made the necessary annual filings for the years ended December 31, 2019 and 2020 and expects to file the 2021 filing by April 30, 2022. As a result, the Company had receivables of $49 million and $115 million in other current assets and other long-term assets, respectively, on the Consolidated Balance Sheets as of December 31, 2021. The submitted filings are under review by the NJEDA and it is expected that the Company will receive final NJEDA approval and monetize the credits in the first half of 2022.
In March 2020, in connection with the COVID-19 pandemic, the NJEDA, pursuant to Executive Order 103 - State of Emergency and a Public Health Emergency, temporarily waived the requirement that a full-time employee must spend at least 80% of his or her time at the qualified business facility (“QBF”) to meet the definition of eligible position or full-time job. The waiver will continue for as long as New Jersey’s Executive Order 281 is valid. On July 2, 2021, New Jersey’s Governor approved a bill that revised provisions of the Economic Recovery Act of 2020 and other economic development programs, including amending the definition of an eligible position and full-time job in the Grow New Jersey Program and replacing the 80% requirement of time spent at the QBF. The bill states that an eligible position is one that is filled by a full-time employee who has their primary office at the QBF and spends at least 60% of their time at the QBF. The bill specifically states that it supersedes the existing regulations and existing incentive agreements that require an eligible employee spend at least 80% of their time at the QBF.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2021 | Feb 16, 2022 | Showing above |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 19, 2019 | |
| 2017 | Feb 20, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 25, 2016 | |
About PP&E Disclosures
The PP&E disclosure details a company's physical asset base — land, buildings, machinery, and equipment — along with the depreciation methods and useful life assumptions that determine how these costs flow through the income statement. Capitalization policy thresholds reveal management's judgment on the boundary between expense and asset, directly affecting both reported earnings and asset values.
Key signals: changes in estimated useful lives or depreciation methods can materially shift reported earnings without any operational change. Compare capital expenditures against depreciation expense — when capex consistently trails depreciation, the asset base may be aging and underinvested. Watch for large asset impairments or write-downs that signal overvalued carrying amounts. Asset retirement obligations reveal future environmental or decommissioning costs that are often underappreciated. Compare PP&E intensity (PP&E-to-revenue) against industry peers to assess capital efficiency and competitive positioning.