American Water Works Company, Inc. (AWK) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that American Water Works Company, Inc. surfaced in its latest filing.

• In Monterey County, California, Cal Am is subject to cease and desist orders issued by the SWRCB in July 1995 and October 2009, as amended in July 2016, requiring significant decreases in diversions from the Carmel River.July 2016
• In June 2024, the Pennsylvania Public Utility Commission updated procedures for reviewing acquisitions of municipal-owned or authority-owned water and wastewater systems.June 2024
• In December 2023, the MPWMD filed eminent domain litigation against Cal Am in Monterey County Superior Court with respect to the Monterey system assets and the case is pending.December 2023
• In April 2024, the EPA issued a final rule designating PFOA and PFOS as hazardous substances under CERCLA.April 2024
• In September 2025, the EPA reaffirmed that enforcement discretion does not alter CERCLA’s liability framework or restrict private party claims, leaving PFAS-related CERCLA liability for utilities uncertain.September 2025
• The Company experienced a cybersecurity incident in October 2024.October 2024
• In June 2023, AWCC issued $1,035 million aggregate principal amount of Exchangeable Notes.June 2023
• In August 2025, the Company entered into forward sale agreements with Wells Fargo National Bank, JPMorgan Chase Bank, and Mizuho Markets Americas LLC relating to an aggregate of 8,098,592 shares of common stock, with settlement dates at the Company's discretion on or prior to December 31, 2026.August 2025
• The Company entered into an Essential Merger Agreement under which each outstanding share of Essential common stock will be converted into 0.305 shares of parent company common stock; completion is subject to regulatory approvals including the Pennsylvania Public Utility Commission, and the agreement includes termination fees of $835 million payable by the Company and $370 million payable by Essential under certain circumstances.
• The Essential Merger Agreement can be terminated without a termination fee if final regulatory conditions would have a 'burdensome effect' as defined.
• As of December 31, 2025, aggregate long-term and short-term debt balance was $15.8 billion, with debt maturities and sinking fund payments in 2026, 2027, and 2028 of $1,479 million, $646 million, and $869 million, respectively.December 31, 2025
• As of December 31, 2025, $1,590 million of commercial paper was outstanding and $84 million in letters of credit under the $2.75 billion revolving credit facility and $2.60 billion commercial paper program.December 31, 2025
• The Company incurred $13 million of merger-related costs for the year ended December 31, 2025 and estimates $150 million of merger-related costs will be incurred prior to closing.December 31, 2025
• As of December 31, 2025, approximately 44% of the workforce was represented by unions under 74 collective bargaining agreements, with 26 agreements scheduled to expire during 2026.December 31, 2025
• In 2025, the Company invested $3.2 billion in net Company-funded capital improvements.2025
• The Company used borrowings under its commercial paper program to meet short-term liquidity requirements during 2025.2025
• Goodwill of $1.2 billion as of December 31, 2025, primarily associated with the acquisition of American Water in 2003.December 31, 2025
• Total assets measured at fair value on a recurring basis were $254 million as of December 31, 2025.December 31, 2025
• Parent company provides guarantees of specified performance obligations for MSG's water and wastewater services to municipalities and federal governmental entities, with remaining performance commitments guaranteed by parent company totaling approximately $1.1 billion as of December 31, 2025, out of $7.9 billion in total remaining performance commitments.December 31, 2025