AWK Filings — American Water Works Company, Inc. - FilingSpy
AWK
American Water Works Company, Inc.
A provider of water and wastewater services, American Water is the largest publicly-traded water utility in the United States, serving millions of people across more than a dozen states. It was founded in 1886 in Pennsylvania by brothers James and William Kuhn, who built a business of buying up and managing local water systems; the "Guarantee" in its original name, American Water Works & Guarantee Company, reflected its role as a parent firm backing those utilities financially. It also runs water systems on military installations under long-term contracts.
Operating income rose 10.8% to $542M as rate increases and a $346M acquisition spend drove the quarter, while the Essential merger nears its early-2027 close.
Rate increases and acquisitions lifted , but a swing to a loss in the Other and rising narrowed the bottom-line gain. Revenue rose 6.2% to $1.355 billion and increased 8.8% to $1.61, as $52 million in authorized rate increases and infrastructure surcharges in the Regulated Businesses were partially offset by a $21 million drop in interest income after the Homeowner Services seller note was repaid. The company invested $1.8 billion in the first half of the year and carries $14.0 billion in as it prepares to close the Essential Utilities merger.
Key takeaways
rose 10.8% to $542 million and widened 1.7 points to 40.0%, as a $90 million increase in Regulated Businesses , driven by $52 million in authorized rate increases and $11 million from acquisitions and , was accompanied by only a $3 million rise in regulated operation and maintenance expense.
increased 8.8% to $1.61, but the gain was constrained by a swing in the Other to a $16 million net loss, primarily from a $21 million decline in interest income following the February 2026 repayment of the Homeowner Services Group seller note.
Section summaries
Management's Discussion and Analysis
Regulated revenue rose on rate hikes and acquisitions; GAAP EPS reached $1.61 in Q2 2026, up from $1.48.
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Regulated Businesses operating grew $90M in Q2 2026, driven by $52M from authorized rate increases and infrastructure surcharges, plus $11M from acquisitions and .
doubled to $602 million, and for the first half reached $907 million, largely because the prior-year period included a large corporate alternative minimum tax payment that did not recur.
The company invested $1.8 billion in the first half of 2026, including $1.4 billion in infrastructure and $346 million on acquisitions that added 52,700 customer connections, and plans approximately $3.7 billion for the full year.
rose 14.4% to $14.0 billion, while increased 9.2% to $11.7 billion, reflecting the continued financing of the capital program.
The pending merger with Essential Utilities is expected to close by the end of the first quarter of 2027, with $9 million in merger costs incurred in the first half of 2026.
What changed
The Q1 2026 filing flagged a 4.8% decline in as rising costs offset rate increases; in Q2, the cost pressure eased, with regulated operation and maintenance expense rising only $3 million, allowing the rate-driven gain to flow through to a 10.8% increase in .
The Q1 2026 filing noted a 7.9% decline in ; in Q2, operating cash flow rose 100% to $602 million, driven by the absence of a large prior-year tax payment, and first-half cash from operations reached $907 million.
The Q1 2026 filing highlighted the $795 million repayment of the Homeowner Services seller note as a boost to investing cash flow; in Q2, the consequence appeared in earnings as a $21 million drop in interest income, swinging the Other to a $16 million loss.
The FY 2025 10-K flagged the Essential merger's expected early-2027 close and potential termination fee; this filing confirms the timeline has narrowed to the end of Q1 2027 and that $9 million in merger costs have been incurred so far.
The FY 2025 10-K estimated $3.5 billion in PFAS and Lead and Copper Rule compliance between 2026 and 2030; this filing reports $234 million net in PFAS settlement receipts to date, with $131 million still held in escrow, but provides no update to the total compliance cost estimate.
What to watch
Whether the $3.7 billion 2026 capital plan can be funded without further increases in , which reached $14.0 billion this quarter, given that remained negative at -$258 million.
The outcome of the MPWMD condemnation action following the December 2025 denial of Cal Am's summary judgment motion, which will determine cost recovery for $324 million in incurred project costs.
Progress on closing the $315 million Nexus Regulated Utilities acquisition by August 2026 and how it is financed alongside the capital plan and the Essential merger.
Decisions on pending rate cases in Missouri, Illinois, and California, which will determine whether rate relief can continue to outpace operating expense growth and support the planned capital investment.
Regulated operation and maintenance expense rose only $3M in Q2 as higher production and employee costs were largely offset by lower operating supplies and maintenance costs.
Other swung to a $16M loss in Q2 2026, mainly due to a $21M drop in interest income after the Homeowner Services Group seller note was repaid in February 2026.
jumped to $907M for the first half of 2026 from $632M a year earlier, largely because the prior-year period included a large -related tax payment.
The company invested $1.8B in the first half of 2026, including $1.4B in infrastructure and $346M on acquisitions that added 52,700 customers, and plans ~$3.7B for the full year.
Pending merger with Essential is expected to close by end of Q1 2027; $9M in merger costs were incurred in the first half of 2026.
Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to market risk in the normal course of business, including changes in commodity prices, equity prices and interest rates. For further discussion of its exposure to market risk, see Part II, Item 7A—Quantitative and Qualitative Disclosures about Market Risk…
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The Company is exposed to market risk in the normal course of business, including changes in commodity prices, equity prices and interest rates. For further discussion of its exposure to market risk, see Part II, Item 7A—Quantitative and Qualitative Disclosures about Market Risk in the Company’s Form 10-K. There have been no significant changes to the Company’s exposure to market risk since December 31, 2025.
Company discloses multiple pending legal and regulatory proceedings, with no single matter described as individually material to financial condition.
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A proposed $9 million class-action settlement related to the Mountaineer Gas main break is expected to be substantially covered by insurance.
The CPUC denied rehearing of its Water Supply Project approval, closing that proceeding, while a related CEQA challenge to a state lands lease remains pending.
A Pennsylvania court denied class certification in a over manganese levels in East Stroudsburg water, though the case continues.
The company has received $234 million net in PFAS multi-district litigation settlements, with $131 million still held in escrow pending regulatory approvals.
A CPUC complaint seeks to halt the desalination project and alleges violations of a 2018 certificate; the company believes the complaint is without merit.
In addition to the other information set forth in this report, readers should carefully consider the factors discussed in Item 1A—Risk Factors in the Form 10-K, and in the Company’s other filings with the SEC, which could materially affect the Company’s business, financial condi…
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In addition to the other information set forth in this report, readers should carefully consider the factors discussed in Item 1A—Risk Factors in the Form 10-K, and in the Company’s other filings with the SEC, which could materially affect the Company’s business, financial condition, cash flows or future results. There have been no material changes from the risk factors previously disclosed in Item 1A—Risk Factors in the Form 10-K.