10-K 0001410636-26-000034 (2026-02-18) vs 10-K 0001410636-25-000022 (2025-02-19)
| Section | Compared text | Words now | Changed |
|---|
| Risk Factors | Item 1A | 21,144 |
26.7% |
| MD&A | Item 7 | 15,504 |
29.0% |
| Legal Proceedings | Item 3 | 7,655 |
23.7% |
| Accounting Policies | Item 8, Note 2 – Significant Accounting Policies | 4,471 |
5.3% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
MD&A 241 words changed in this paragraph; it is 32% similar to last year's version.
On The PaPUC, as part of its July 22, 2024, 2024 approval of the PaPUC released an order approving the adjustment of base rates requested in a general rate case filed by the Company’s Pennsylvania subsidiary on November 8, 2023. The PaPUC approved a $99 million annualized increase in the Pennsylvania subsidiary’s water and wastewater system revenues, excluding previously recovered infrastructure surcharges of $20 million, based on (i) an authorized return on equity of 9.45%, (ii) an authorized rate base of $5.8 billion, which reflects, as requested and included in the general rate case, approximately $1.0 billion in capital investments to be made through mid-2025, (iii) a common equity ratio of 55.30%, and (iv) a long-term debt ratio of 44.70%. Certain acquisitions, including the acquisition of the wastewater collection and treatment system of the Butler Area Sewer Authority, were excluded from authorized base rates. The new rates were effective on August 7, 2024, except that new wastewater rates for two recently acquired systems, including the City of York, will take effect during the first half of 2025 in accordance with the terms of the relevant acquisition agreements. As part of its approval of this rate adjustment, the PaPUC 2023, initiated an investigation into certain reported water service and water quality issues in the Pennsylvania subsidiary’s Northeastern service territory, which reports had been provided during public input hearings convened in the general rate case. The PaPUC is expected to conclude concluded the investigation and issued a Root Cause Analysis Report on August 5, 2025, which found no systemic issues affecting the Pennsylvania subsidiary’s water service in the second quarter Northeastern service territory and expressed satisfaction with the Pennsylvania subsidiary’s efforts to manage water service matters. The PaPUC committed to continued monitoring of 2025. the Pennsylvania subsidiary’s service over the next three years.
Source: Item 7, 10-K 0001410636-26-000034 vs Item 7, 10-K 0001410636-25-000022
Risk Factors 216 words changed in this paragraph; it is 36% similar to last year's version.
Because stated that it will focus on holding responsible under CERCLA entities that significantly contributed to the release of PFAS into the uncertainty environment, it is not yet known whether or to what extent liability protection will be afforded to passive receivers of weather volatility related PFAS, including water and wastewater utilities. In September 2025, the EPA reaffirmed this enforcement approach, explaining that, while it intends to climate variability, focus CERCLA enforcement activities on entities that significantly contributed to PFAS releases and generally does not plan to pursue actions against passive receivers, its enforcement discretion does not alter CERCLA’s underlying liability framework or restrict private party claims, and therefore the extent to which we cannot predict its potential impact on our business, financial condition, results of operations, cash flows and liquidity. may be subject to future CERCLA liability for PFAS-related claims remains uncertain. Furthermore, both Federal federal and state laws and regulations have been enacted or proposed that seek to reduce or limit greenhouse gas GHG emissions and and/or require or would require additional reporting, monitoring and disclosure, disclosure of, among other things, GHG emissions and related financial risks, and these regulations may become more pervasive or stringent in light of changing governmental agendas and priorities, although the exact nature and timing of these changes is uncertain. Although some or all potential expenditures and costs associated with the impact of climate variability and related laws and regulations on our Regulated Businesses could be recovered through rates, infrastructure replacement surcharges or other regulatory mechanisms, there can be no assurance that PUCs would authorize rate increases to enable us to recover such expenditures and costs, in whole or in part.
Source: Item 1A, 10-K 0001410636-26-000034 vs Item 1A, 10-K 0001410636-25-000022
Legal Proceedings 214 words changed in this paragraph; it is 39% similar to last year's version.
On January 17, 2025, Trial in this matter had been scheduled, but before trial commenced, the parties notified the Circuit Court that an agreement in principle to settle this litigation was reached among reached. On May 2, 2025, the parties. parties jointly filed with the Circuit Court a proposed class action settlement agreement (the “Dunbar Settlement”) with respect to the certified liability claims. On September 12, 2025, the Circuit Court issued an order granting final approval of the Dunbar Settlement. Under the terms of the agreement in principle and any subsequent proposed settlement agreement, approved Dunbar Settlement, WVAWC has not admitted, and will not admit, any fault or liability for any of the allegations made by the Jeffries plaintiffs. The proposed maximum pre-tax amount of the settlement Dunbar Settlement is approximately $18 million, of which the Company currently estimates that final amount of the Company’s and WVAWC’s contributions to the Dunbar Settlement is approximately $5 million would be contributed by the Company and WVAWC, (which have been funded through existing sources of liquidity), and the remainder would has been contributed by certain of the Company’s general liability insurance carriers. The Company previously recorded in the fourth quarter of 2024 a charge to earnings, net of insurance receivables, of $5 million ($4 million after-tax), with respect to the Dunbar Settlement. The actual total amount to be contributed paid to claimants through the Dunbar Settlement will depend upon the claims approved through the claims process, but the Company does not currently anticipate that its maximum liability for the settlement will materially exceed $5 million. The deadline for claims submissions was August 25, 2025, and the settlement administrator is evaluating claim submissions to identify compensable claims.
Source: Item 3, 10-K 0001410636-26-000034 vs Item 3, 10-K 0001410636-25-000022
Accounting Policies 69 words changed in this paragraph; it is 74% similar to last year's version.
Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements Income Taxes The guidance in this standard requires disclosure of a tax rate reconciliation table, in both percentages and reporting currency amounts, which includes additional categories of information about federal, state, and foreign income taxes and provides further details about reconciling items in certain categories that meet a quantitative threshold. The guidance also requires an annual disclosure of income taxes paid, net of refunds, disaggregated by federal, state, and foreign taxes paid, and further disaggregated by jurisdiction based on a quantitative threshold. The standard includes other disclosure requirements and eliminates certain existing disclosure requirements. Annual periods beginning after December 15, 2024 Prospective, with retrospective application also permitted January 1, 2025 Retrospective The Company is evaluating adopted the impact on its standard as of December 31, 2025, including a recast of 2024 and 2023 information, by including additional required disclosures within the Notes to the Consolidated Financial Statements and the timing of adoption. Statements. See Note 14—Income Taxes for further details.
Source: Item 8, Note 2 – Significant Accounting Policies, 10-K 0001410636-26-000034 vs Item 8, Note 2 – Significant Accounting Policies, 10-K 0001410636-25-000022
Every change, by type
Sentences and paragraphs of AWK's Risk Factors and MD&A, 10-K 2026-02-18 against 10-K 2025-02-19.
Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
The following summary is intended to enhance the readability and accessibility of our risk factor disclosures. We encourage you to carefully review the full risk factors discussed below in their entirety for additional information. A number of the factors that could materially and adversely affect our business, financial condition or results of operations include:
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedRisk Factors
•We face technology, cybersecurity and data privacy risks, including failures, cyber attacks, unauthorized access and evolving privacy requirements, any of which may result in operational disruption, regulatory actions or reputational harm.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedRisk Factors
•Our forward sale agreements may adversely affect our results of operations or financial condition, the share price of our common stock and our liquidity, and may potentially cause shareholder dilution.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedRisk Factors
•The proposed merger is subject to various closing conditions, including the receipt of consents and approvals from various governmental and regulatory entities and third parties, and a failure to obtain all such consents or approvals or to satisfy such other closing conditions could prevent or delay the completion of the proposed merger or impose conditions that could have a material adverse effect on us or the combined company.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedRisk Factors
•The proposed merger may cause suppliers, strategic partners, certain customers or others to delay or defer decisions regarding our business, and may adversely affect our ability to effectively manage our business.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedRisk Factors
•The Essential Merger Agreement contains provisions that limit our ability to pursue certain alternatives to the proposed merger, which could discourage a potential acquirer from making an alternative transaction proposal and, in certain circumstances, could require us to pay Essential a significant termination fee.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedRisk Factors
•If completed, the proposed merger may not achieve its anticipated results, and we may be unable to integrate Essential’s operations and/or operate the combined company in the manner expected.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedRisk Factors
•The proposed merger may not be accretive to our earnings and may adversely affect our earnings per share, which may negatively affect the market price of our common stock.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedRisk Factors
stated that it will focus on holding responsible under CERCLA entities that significantly contributed to the release of PFAS into the environment, it is not yet known whether or to what extent liability protection will be afforded to passive receivers of PFAS, including water and wastewater utilities. In September 2025, the EPA reaffirmed this enforcement approach, explaining that, while it intends to focus CERCLA enforcement activities on entities that significantly contributed to PFAS releases and generally does not plan to pursue actions against passive receivers, its enforcement discretion does not alter CERCLA’s underlying liability framework or restrict private party claims, and therefore the extent to which we may be subject to future CERCLA liability for PFAS-related claims remains uncertain. Furthermore, both federal and state laws and regulations have been enacted or proposed that seek to reduce or limit GHG emissions and/or require or would require additional reporting, monitoring and disclosure of, among other things, GHG emissions and related financial risks, and these regulations may become more pervasive or stringent in light of changing governmental agendas and priorities, although the exact nature and timing of these changes is uncertain.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedRisk Factors
Some states in which we operate allow the respective public utility commissions to use fair market value to set ratemaking rate base instead of the traditional depreciated original cost of water or wastewater assets for certain qualifying acquisitions. Depending on the state, there are varying rules and circumstances in which fair value is determined. Some states’ regulations allow ratemaking rate base to equal the lower of the average of the appraisals or the purchase price, subject to regulatory approval. There may be situations where we may pay more than the ultimate fair value of the utility assets as set by the regulatory commission, despite the fair value legislation suggesting its full recovery. In June 2024, the Pennsylvania Public Utility Commission updated existing procedures and guidelines designed to increase public involvement and ensure greater consistency in the process for reviewing and evaluating the acquisition and valuation of municipal-owned or authority-owned water and wastewater systems in Pennsylvania. This includes requirements for public notice and meetings, requires a rate impact notice, and provides other measures to improve the fair market value process when investor-owned utilities acquire water and wastewater utilities in Pennsylvania. In these situations, goodwill may be recognized to the extent there is an excess purchase price over the fair value of net tangible and identifiable intangible assets acquired through a business acquisition. Our financial condition and results of operations could be harmed by an inability to earn a return on, and recover our purchase price as a component of rate base.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedRisk Factors
In addition, we maintain a substantial portion of our liability and property insurance coverage through a small number of mutual insurance companies that specialize in providing coverage to the utility industry. These mutual insurers provide us with competitive terms, conditions, and self-insured retentions that may not be available in the broader commercial insurance market. If one or more of these mutual insurers were to experience significant financial distress, experience a dilution in their credit ratings, decide to withdraw from the utility sector, or otherwise restrict insurance terms and conditions, we could face a substantial increase in our insurance premiums or a reduction in the scope of available coverage, or the inability to obtain coverage at all.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedRisk Factors
risk associated with these instruments, that could negatively and materially affect our financial condition, results of operations and cash flows.
Read it in 10-K 2026-02-18 at sec.gov ↗
RemovedRisk Factors
While we believe that we have appropriate security measures and safeguards to protect our operational and information technology systems, the recent cybersecurity incident that we experienced in October 2024 demonstrated that those protections alone may not prevent a cyber attack, and we cannot guarantee that such protections will be completely successful in preventing or mitigating a future cyber attack. The Company has completed its investigation into the scope, nature and impact of the cybersecurity incident and determined the incident did not have a material effect on the Company or its financial condition or results of operations; however, the Company remains subject to various risks as a result of this incident, including those related to litigation, governmental and regulatory scrutiny, including from putative class action lawsuits that have been filed in connection with the recent incident. See Item 3—Legal Proceedings—Cybersecurity Incident Class Action Lawsuits.
Read it in 10-K 2025-02-19 at sec.gov ↗
RewordedRisk Factors
We have a significant amount of If the proposed Essential merger is completed, we may be required to record goodwill and or we may acquire other assets measured and recorded at fair value on a recurring basis, and value, and, thereafter, we may be required to record impairments to the goodwill or changes in to the fair value to these of the other assets, either of which may negatively affect our financial condition and results of operations.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedRisk Factors
We are subject to an increasing number of complex and continually evolving data and consumer privacy, security and protection laws and regulations administered by various federal, state and local governments, including, for example, the California Privacy Rights Act, together with its amendments and implementing regulations, the Virginia Consumer Data Protection Act and the Cyber Incident Reporting for Critical Infrastructure Act of 2022. governments.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedRisk Factors
Any failure or perceived failure by us to comply with current or future federal, state, or local data or consumer privacy or security laws, regulations, policies, guidance, industry standards, or legal obligations, or any incident resulting in unauthorized access to, or the acquisition, release, or transfer of, personally identifiable information or other data relating to our customers, employees and others, may result in private or governmental enforcement actions, litigation, including, for example, from putative class action lawsuits filed in connection with our recent cybersecurity incident, litigation or other claims against us, fines and penalties, or claims, as well as damages, fines, penalties and/or adverse disclosures, perception or publicity about us and our businesses.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedRisk Factors
For example, catastrophic events can result in decreased coverage limits, more limited coverage, increased premium costs costs, a reduction in the number of insurance carriers willing or deductibles. able to provide us with coverage, or increased deductibles or self-insured retention requirements.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedRisk Factors
Although in the past we have been generally able to obtain insurance coverage related to our business, there can be no assurance that we can continue to be able to secure all necessary or appropriate insurance in the future, future on an economically reasonable basis or that such insurance can be economically secured. at all.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedRisk Factors
However, these efforts may not be effective to fully mitigate interest rate risk, and may expose us to other risks and uncertainties, including quarterly “mark to market” valuation risk associated with these instruments, that could negatively and materially affect our financial condition, results of operations and cash flows.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedRisk Factors
The water supplies that flow into our treatment plants or are delivered through our distribution system, or the water service that is provided to our customers, may be subject to contamination, including, among other types, contamination from naturally-occurring compounds, chemicals in groundwater systems, pollution resulting from manufactured sources (such as perchlorate, perfluorinated and polyfluorinated compounds, PFAS, methyl tertiary butyl ether, 1,4-dioxane, lead and other materials, or chemical spills or other incidents that result in contaminants entering the water source), and contamination resulting from new and emerging contaminants as well as cyber attacks, possible terrorist attacks or other similar incidents. incidents directed at our operations or industries upstream from our water treatment plants.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedRisk Factors
In the most serious cases, regulators could reduce requested rate increases or force us to discontinue operations and sell our operating assets to another utility or to a municipality.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedRisk Factors
Seasonal and other drought conditions, such as those experienced during 2024 in New Jersey, for example, conditions that may impact our water services are possible across all of our service areas.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedRisk Factors
These events could also require us to change our business practices, and the events (including any actions we may take to respond to or following such events) or such changes may result in significant diversions of resources, distract management and divert the focus and attention of our security and technical personnel from other critical activities.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedRisk Factors
The failure of a dam would also adversely affect our ability to supply water in sufficient quantities to our customers and could adversely affect our financial condition and results of operations.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedRisk Factors
Responses may range from voluntary to mandatory water use restrictions (including those mandated in New Jersey in 2024), restrictions, rationing restrictions, water conservation regulations, and requirements to minimize water system leaks.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedMD&A
The following table provides the Company’s diluted earnings per share (GAAP) and adjusted diluted earnings per share (a non-GAAP measure):
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedMD&A
For the Years Ended December 31, 2025 2024 2023 Diluted earnings per share (GAAP): Net income attributable to shareholders $ 5.69 $ 5.39 $ 4.90 Non-GAAP adjustments: Estimated impact of favorable weather — (0.16) (0.17) Income tax impact — 0.04 0.04 Net non-GAAP adjustment — (0.12) (0.13) Incremental interest income from amended HOS seller note (0.13) (0.12) — Income tax impact 0.03 0.03 — Net non-GAAP adjustment (0.10) (0.09) — Transaction costs associated with the pending merger with Essential 0.07 — — Income tax impact (0.02) — — Net non-GAAP adjustment 0.05 — — Total net adjustments (0.05) (0.21) (0.13) Adjusted diluted earnings per share (non-GAAP) $ 5.64 $ 5.18 $ 4.77
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedMD&A
Adjusted diluted earnings per share represents a non-GAAP financial measure and, as shown in the table above, is calculated as GAAP diluted earnings per share, excluding the impact of one or more of the following events: (i) estimated impact of weather; (ii) incremental interest income from the February 2, 2024 amendment to the HOS secured seller promissory note, which increased the aggregate principal amount from $720 million to $795 million and increased the interest rate from 7.00% per year to 10.00% per year; and (iii) transaction costs incurred during 2025 associated with the proposed merger with Essential. The most directly comparable GAAP measure for adjusted diluted earnings per share is the reported diluted earnings per share (GAAP) and is reconciled in the table above.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedMD&A
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 (or, in the case of weather, that is outside the Company’s operational control and is subject to significant period-to-period variability), and that providing this non-GAAP measure will allow investors to better understand the businesses’ operating performance and facilitate a meaningful year-to-year comparison of the Company’s results of operations and without the estimated impact of weather. Although management uses this non-GAAP financial measure internally to evaluate its results of operations, the Company does not intend results reflected by this non-GAAP measure 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 the financial statements prepared in accordance with GAAP. This measure 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, may have significant limitations on its use.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedMD&A
•$83 million to fund acquisitions in the Regulated Businesses, which added approximately 20,900 customers during 2025. This includes the Company’s acquisitions effective May 28, 2025, and October 27, 2025, of all the outstanding capital stock of Audubon Water Company and Appalachian Utilities Inc., respectively, for aggregate consideration of $11 million, in the form of shares of parent company common stock.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedMD&A
On October 26, 2025, parent company entered into the Essential Merger Agreement to combine the two companies in a stock-for-stock transaction. The Essential Merger Agreement provides that, upon the completion of the proposed merger, Essential’s shareholders will receive 0.305 shares of parent company common stock in exchange for each share of Essential common stock eligible for exchange in the merger. Upon completion of the proposed merger, Essential will be a wholly owned subsidiary of parent company, which will retain its existing name and remain headquartered in Camden, New Jersey. The Company will continue to maintain substantial operations in Pennsylvania, including Essential’s offices in Bryn Mawr and Pittsburgh, Pennsylvania.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedMD&A
Completion of the proposed merger is subject to certain customary conditions, including, among others, the receipt of required approvals from all applicable PUCs on such terms and conditions that would not, individually or in the aggregate, result in a Burdensome Effect (as defined in the Essential Merger Agreement), and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. There can be no guarantee that all of the closing conditions and approvals will be satisfied, and the failure to complete the proposed merger on a timely basis or at all may adversely affect the Company’s financial condition and results of operations. The Company currently estimates that the closing of the proposed merger will occur by the end of the first quarter of 2027. For the year ended December 31, 2025, $13 million of merger-related costs were included in Operation and maintenance expense in the Consolidated Statements of Operations. Including the costs incurred for the year ended December 31, 2025, the Company estimates a total of $150 million of merger-related costs will be incurred by the Company and by Essential prior to the closing of the proposed merger.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedMD&A
On May 19, 2025, the Company entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with Nexus Regulated Utilities, LLC (“Seller”), a subsidiary of Nexus Water Group, Inc., a privately-held water and wastewater utility. Seller directly owns all of the issued and outstanding equity interests in specified entities (collectively, the “Acquired Entities”) that own regulated water and wastewater system assets located in Illinois, Indiana, Kentucky, Maryland, New Jersey, Pennsylvania, Tennessee and Virginia. Under the terms of the Purchase Agreement, the Company has agreed to acquire from Seller all of Seller’s equity interests in each of the Acquired Entities on a cash-free and debt-free basis. The aggregate purchase price to be paid by the Company will be approximately $315 million in cash, subject to adjustment at closing based on the calculations and criteria provided in the Purchase Agreement. Aggregate rate base that would be acquired at closing is estimated to be approximately $200 million, subject to final determination by the respective PUCs. Based on current connection counts, the Company would add nearly 47,000 customer connections in total to its Regulated Businesses in the eight states above. The Company intends to fund the payment of the final purchase price through its cash flow from operations and its existing sources of liquidity. Closing is subject to certain customary and other conditions, including, among others, the receipt of all required regulatory approvals. The Company currently anticipates that the closing will occur by or before August 2026.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedMD&A
Several of the Company’s utility subsidiaries are parties to an MDL lawsuit, which commenced on December 7, 2018, in U.S. District Court for the District of South Carolina, against manufacturers of certain PFAS for damages, contribution and reimbursement of costs incurred and continuing to be incurred to address the presence of such PFAS in public water supply systems owned and operated by these utility subsidiaries and throughout their service areas. Settlements with several defendants in the MDL proceeding have received final approval by the MDL court.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedMD&A
As of December 31, 2025, the Company has received settlement payments from defendants 3M Company and DuPont de Nemours, Inc. totaling $159 million, net of legal fees and administrative costs and exclusive of interest. The Company intends to seek regulatory approval from its respective PUCs to apply the net proceeds for the benefit of customers, where permissible. Regulatory approvals have been obtained with respect to seven of the Company’s utility subsidiaries that are parties to the MDL, and two regulatory applications have been denied. Most of the funds received by the Company are being held in a law firm escrow account and are awaiting distribution to the Company’s utility subsidiaries that are parties to the MDL after approval or denial is received from the applicable PUCs. As of December 31, 2025, the funds held in a law firm escrow account totaled $114 million and have been recorded on the Company’s Consolidated Balance Sheet within other current assets. A corresponding amount has been recorded as a regulatory liability. As of December 31, 2025, approximately $47 million of the escrowed funds, including escrow interest, has been transferred from the law firm escrow account for distribution to utility subsidiaries that have received approval. The Company anticipates that, during 2026, it may receive one or more additional settlement payments from the defendants in the MDL.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedMD&A
The Company has also become aware of a number of substantially similar personal injury short-form complaints that had been filed in the MDL naming, in addition to various other water providers and manufacturers, certain Company utility subsidiaries as defendants. The Company believes that the claims asserted are without merit and the relevant utility subsidiaries have valid, meritorious defenses to the claims. In October 2025, all MDL personal injury complaints that the Company had been made aware of were dismissed by the plaintiffs without prejudice.
Read it in 10-K 2026-02-18 at sec.gov ↗
AddedMD&A
(a)Interim rates of $5 million were effective May 11, 2024. The Iowa Utilities Commission issued its final order on May 21, 2025.
Read it in 10-K 2026-02-18 at sec.gov ↗
RemovedMD&A
This selected financial data below should be read in conjunction with the Company’s Consolidated Financial Statements and related Notes in this Annual Report on Form 10-K as well as the remainder of this Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
For the Years Ended December 31, (In millions, except per share data) 2024 2023 2022 2021 2020 Statement of Operations data: Operating revenues $ 4,684 $ 4,234 $ 3,792 $ 3,930 $ 3,777 Net income attributable to common shareholders 1,051 944 820 1,263 709 Net income attributable to common shareholders per basic common share 5.39 4.90 4.51 6.96 3.91 Net income attributable to common shareholders per diluted common share 5.39 4.90 4.51 6.95 3.91 Balance Sheet data: Total assets $ 32,830 $ 30,298 $ 27,787 $ 26,075 $ 24,766 Long-term debt and redeemable preferred stock at redemption value 12,521 11,718 10,929 10,344 9,333 Other data: Cash dividends declared per common share $ 3.06 $ 2.83 $ 2.62 $ 2.41 $ 2.20 Net cash provided by operating activities 2,045 1,874 1,108 1,441 1,426 Net cash used in investing activities (3,379) (2,815) (2,127) (1,536) (2,061) Net cash provided by (used in) financing activities 1,110 1,188 1,000 (345) 1,120 Capital expenditures included in net cash used in investing activities (2,856) (2,575) (2,297) (1,764) (1,822)
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
•$417 million to fund acquisitions in the Regulated Businesses, which added approximately 69,500 customers during 2024. This includes the acquisitions by the Company’s Pennsylvania subsidiary of the wastewater collection and treatment system assets from the Butler Area Sewer Authority on October 29, 2024, for a cash purchase price of $230 million, which added approximately 15,000 customer connections, and by the Company’s Illinois subsidiary of a wastewater treatment plant and related assets from Granite City on March 11, 2024, for a cash purchase price of $86 million, which added approximately 26,000 wastewater customers, including 15,500 customers indirectly in surrounding communities.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
In December 2020, the Company’s Pennsylvania subsidiary entered into an agreement (an acquisition intended to comply with Act 12 (discussed below)) to acquire the wastewater collection system assets of Brentwood Borough (“Brentwood”) for a purchase price of approximately $19 million. On February 22, 2024, the Pennsylvania Public Utility Commission (the “PaPUC”) denied the Pennsylvania subsidiary’s application to acquire Brentwood. On April 3, 2024, the Pennsylvania subsidiary filed an appeal of the decision with the Pennsylvania Commonwealth Court, asserting, among other things, the PaPUC did not apply the correct legal standard in its decision. The Company cannot currently predict the outcome of this appeal, and the matter remains pending.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
On July 2, 2024, the PaPUC issued the Final Supplemental Implementation Order (“FSIO”), which makes certain changes to the process by which the PaPUC considers and decides applications to acquire water and wastewater assets under Pennsylvania’s existing utility valuation law, known as Act 12 of 2016 (“Act 12”). The FSIO includes, among other things, a reasonableness review ratio that would be applied to help guide the determination on the overall prudency of the transaction and reasonableness of the purchase price. The provisions of the FSIO are not retroactive and apply to acquisition applications filed after July 2, 2024. The Company cannot currently predict the impact of the FSIO, but the Company intends to continue to support outcomes that allow for consolidation and investment in water and wastewater infrastructure in Pennsylvania and in its other regulated jurisdictions.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
The Company has entered into a nine-year exclusive contract with a third-party vendor to supply granular activated carbon, equipment and reactivation services to more than 50 of the Company’s treatment sites across 10 states through 2033. The equipment and services provided through the contract will aid the Company in treating drinking water to assist in complying with the NPDWR for PFAS.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
The Company supports sound policies and compliance with the NPDWR for PFAS by all water utilities, while protecting customers and communities from the costly burden of monitoring and mitigating PFAS contamination in water systems. The Company continues to advocate for policies that hold polluters accountable and is participating in the multi-district litigation and other lawsuits filed against certain PFAS manufacturers seeking damages and reimbursement of costs incurred and continuing to be incurred to address contamination of public water supply systems by PFAS. For more information on the PFAS multi-district litigation, see Item 3—Legal Proceedings—PFAS Multi-District Litigation.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
On April 19, 2024, the EPA issued a final rule to designate PFOA and PFOS as hazardous substances under CERCLA. The Company, along with a coalition of other water and wastewater organizations, is actively advocating for and supporting bipartisan legislation that would provide PFAS liability protections under CERCLA for water and wastewater systems, as passive receivers of PFAS, and to hold polluters, and not the public or customers, accountable for PFAS-related liability.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
The Company continues to comply with the EPA’s existing Lead and Copper Rule requirements by replacing lead service lines in accordance with current scientific guidance and utilizing appropriate corrosion control techniques as necessary to comply with current water quality regulatory requirements.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
The Company met the LCRR requirements, effective October 16, 2024, identified as enforceable by the EPA. Remaining LCRR requirements are deferred under the LCRI.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
On October 3, 2024, the Company identified unauthorized activity within its information technology computer networks and systems, which was determined to be the result of a cybersecurity incident. Upon identification of this activity, the Company immediately activated its incident response protocols and third-party cybersecurity experts to assist with containment and mitigation activities and to investigate the nature and scope of the incident. The Company also promptly notified law enforcement and has coordinated fully with them. As part of the incident response, and in order to protect its systems and data, the Company disconnected and deactivated certain of its systems, which have since been reconnected and reactivated upon verification that those systems were secure.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
All necessary containment, mitigation and restoration activities related to this incident have been completed. None of the Company’s water or wastewater facilities were impacted by this incident, and the incident did not have a material effect on the Company or its financial condition or results of operations. In addition, a number of putative class action lawsuits have been filed in connection with this cybersecurity incident, primarily alleging claims related to federal and/or state consumer protection and data privacy laws, and while the Company believes the claims are without merit and is vigorously defending itself against these claims, it cannot currently predict the outcome or impact of these lawsuits. See Item 3—Legal Proceedings—Cybersecurity Incident Class Action Lawsuits for more information.
Read it in 10-K 2025-02-19 at sec.gov ↗
RewordedMD&A
The stipulation of settlement general rate case order also agreed, approved, solely for purposes of the Virginia subsidiary’s future filings requiring a stated cost of capital and/or capital structure (including its annual information and water and wastewater infrastructure surcharge filings), that its a return on equity will be of 9.70% and its a capital structure will consist consisting of an equity component of 45.67% and a debt and other component of 54.33%. 54.33%, which also represents the Virginia subsidiary’s view of its return on equity and capital structure in this general rate case.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedMD&A
On August 2, 2024, the Company’s Hawaii subsidiary filed a general rate case requesting approximately $2 million in The request seeks aggregate annualized incremental revenues, which revenues of approximately $22 million and is based on a proposed return on equity of 10.67% 10.75% and a capital structure with an equity component of 52.11% and debt component of 47.89%. 51.79%.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedMD&A
Company Type Rate Weighted Average Rate Maturity Amount (in millions) AWCC Senior notes—fixed rate 3.85% 3.85% 2024 3.40% 3.40% 2025 $ 400 AWCC Private activity bonds and government funded debt—fixed rate 1.79%-2.31% 2.24% 2024-2031 1 525 Other American Water subsidiaries Private activity bonds and government funded debt—fixed rate 0.00%-5.50% 1.53% 2024-2061 14 0.00%-5.00% 0.37% 2025-2061 145 Other American Water subsidiaries Mortgage bonds—fixed rate 6.99%-7.17% 7.13% 2024 60 8.15%-8.58% 8.23% 2025 21 Total retirements and redemptions $ 475 691
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedMD&A
On August 2, 2024, the Company’s Hawaii subsidiary filed a general rate case requesting approximately $2 million in annualized incremental revenues, which The request is based on a proposed return on equity of 10.67% 10.75% and a capital structure with an equity component of 52.11% 50.80% and debt component 50.97%, respectively, for each of 47.89%. the two steps.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedMD&A
On August 2, 2024, the Company’s Hawaii subsidiary filed a general rate case requesting approximately $2 million in The request seeks aggregate annualized incremental revenues, which revenues of approximately $146 million and is based on a proposed return on equity of 10.67% 10.75% and a capital structure with an equity component of 52.11% 55.18% and a debt component of 47.89%. 44.82%.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedMD&A
The remaining proceeds See Note 5—Mergers, Acquisitions and Divestitures—Secured Seller Promissory Note from the sale of HOS include receipt of payments under a secured seller promissory note, plus interest, see Note 5—Acquisitions and Divestitures —Sale Sale of Homeowner Services Group, in the Notes to Consolidated Financial Statements for additional information.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedMD&A
On August 2, 2024, the Company’s Hawaii subsidiary filed a general rate case requesting The final order approves an annualized increase of approximately $2 $1 million in annualized incremental revenues, wastewater revenue, which is based on a proposed return on equity of 10.67% 9.75% and a capital structure with an equity component of 52.11% and a debt component of 47.89%.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedMD&A
On August 2, 2024, the Company’s Hawaii subsidiary filed a general rate case requesting approximately $2 million in annualized incremental revenues, which The request is based on a proposed return on equity of 10.67% 10.95% and a capital structure with an equity component of 52.11% and debt component of 47.89%. 55.33%.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedMD&A
The general rate case final order approved an $18 million annualized increase of $105 million in annualized water and wastewater system revenues, excluding previously recovered infrastructure surcharges of $5 $10 million, based on an authorized return on equity of 9.84%, 9.70%, authorized rate base of $2.2 billion, $667 million and a capital structure with an a common equity component of 49.00% 52.26% and a debt non-equity component of 51.00%. 47.74%.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedMD&A
For the Years Ended December 31, (In millions) 2025 2024 2023 2022 Operating revenues $ 417 $ 388 $ 314 $ 287 Operation and maintenance 377 341 279 244 Depreciation and amortization 11 16 11 16 General taxes 23 19 19 17 Interest expense (141) (107) (96) (119) Interest income 85 77 45 50 Gain on sale of businesses — — 19 Other income 14 10 12 6 Provision for (benefit from) income taxes (10) 6 (7) — Net loss attributable to common shareholders $ (26) $ (14) $ (27) $ (34)
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedMD&A
In 2024, 2025, cash flows provided by operating activities increased $171 $14 million, primarily due to an increase in net income and depreciation, partially offset by changes the payment of CAMT liability, utilization of income tax receivables in deferred income taxes. the prior year and higher customer receivables and unbilled revenues in the current period.
Read it in 10-K 2026-02-18 at sec.gov ↗
RewordedMD&A
In 2024, 2025, as compared to 2023, 2024, operating supplies and services increased $19 $32 million primarily due to from higher technology related costs, higher contracted services and software licensing increased maintenance and service costs as well as an increase in various other operating expenses. on buildings.
Read it in 10-K 2026-02-18 at sec.gov ↗
Quiet changesMD&A
The Company employs approximately 6,700 7,000 professionals who provide drinking water, wastewater and other related services to over approximately 14 million people in 24 states.
Read it in 10-K 2026-02-18 at sec.gov ↗
Quiet changesMD&A
The Company also grows its business primarily through acquisitions of water and wastewater systems.
Read it in 10-K 2026-02-18 at sec.gov ↗
