Segment Information

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company’s operating segments are comprised of the revenue-generating components of its businesses for which separate financial information is internally produced and regularly used by management to make operating decisions and assess performance. The Company operates its businesses primarily through one reportable segment, the Regulated Businesses segment. The Company also operates businesses that provide a broad range of related and complementary water and wastewater services in non-regulated markets, which includes four operating segments that individually do not meet the criteria of a reportable segment. These four non-reportable operating segments are collectively presented as our “Market-Based Businesses.”

The Regulated Businesses segment is the largest component of the Company’s business and includes 20 subsidiaries that provide water and wastewater services to customers in 16 states.

The Market-Based Businesses’ four non-reportable operating segments are Military Services Group, Contract Operations Group, Homeowner Services Group and Keystone Operations. Military Services Group performs 50-year contracts with the U.S. government for the operation and maintenance of the water and wastewater systems on certain military bases. Homeowner Services Group provides services to domestic homeowners and smaller commercial establishments to protect against the cost of repairing damaged or blocked pipes inside and outside their accommodations, as well as interior electric lines. Contract Operations Group performs contracts with municipalities, the food and beverage industry and other customers to operate and maintain water and wastewater facilities. Keystone Operations provides customized water sourcing, transfer services, pipeline construction and water storage solutions, for natural gas exploration and production companies.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. See Note 2—Significant Accounting Policies. The Regulated Businesses segment and Market-Based Businesses include intercompany costs that are allocated by American Water Works Service Company, Inc. and intercompany interest that is charged by American Water Capital Corp., which are eliminated to reconcile to the Consolidated Statements of Operations. Inter-segment revenues, include the sale of water from a regulated subsidiary to market-based subsidiaries, leased office space, furniture and equipment provided by the Company’s market-based subsidiaries to its regulated subsidiaries. “Other” includes corporate costs that are not allocated to the Company’s operating segments, eliminations of inter-segment transactions, fair value adjustments and associated income and deductions related to the acquisitions that have not been allocated to the operating segments for evaluation of performance and allocation of resource purposes. The adjustments related to the acquisitions are reported in Other as they are excluded from segment performance measures evaluated by management.

The following tables include the Company’s summarized segment information as of and for the years ended December 31:

	2017
	Regulated Businesses			Market-Based Businesses		Other			Consolidated
Operating revenues	$	2,958		$	422	$	(23	)	$	3,357
Depreciation and amortization	462			18		12			492
Total operating expenses, net	1,781			360		(28		)	2,113
Interest, net	(268		)	3		(77		)	(342		)
Income before income taxes	925			66		(79		)	912
Provision for income taxes	366			28		92			486
Net income attributable to common stockholders	559			38		(171		)	426
Total assets	17,602			599		1,281			19,482
Capital expenditures	1,316			18		100			1,434

	2016
	Regulated Businesses			Market-Based Businesses		Other			Consolidated
Operating revenues	$	2,871		$	451	$	(20	)	$	3,302
Depreciation and amortization	440			15		15			470
Total operating expenses, net	1,852			391		(21		)	2,222
Interest, net	(256		)	2		(71		)	(325		)
Income before income taxes	775			65		(70		)	770
Provision for income taxes	303			26		(27		)	302
Net income attributable to common stockholders	472			39		(43		)	468
Total assets	16,405			637		1,440			18,482
Capital expenditures	1,274			18		19			1,311

	2015
	Regulated Businesses			Market-Based Businesses		Other			Consolidated
Operating revenues	$	2,743		$	434	$	(18	)	$	3,159
Depreciation and amortization	411			8		21			440
Total operating expenses, net	1,732			370		(18		)	2,084
Interest, net	(248		)	2		(62		)	(308		)
Income before income taxes	776			68		(62		)	782
Provision for income taxes	303			26		(23		)	306
Net income attributable to common stockholders	473			42		(39		)	476
Total assets	15,258			496		1,487			17,241
Capital expenditures	1,143			17		—			1,160