American Water Works (AWK) 10-K risk factor changes: FY2023 vs FY2022

- [removed: cover] [added: recover] our cost of operations, including: purchased water; chemicals; and fuel, power and other commodities used in our operations;

- [removed: cover] [added: recover] our operational labor and labor-related expenses, including without limitation costs and expenses associated with our pension and other post-employment benefits;

Even if the rates approved are sufficient, we face the risk that we will not achieve the rates of return on [removed: our invested capital to the extent] [added: equity] permitted by state PUCs.

This could occur if certain conditions exist, including, but not limited to, (i) water usage is less than the level anticipated in establishing rates, (ii) customers increase their conservation efforts, (iii) we experience unusual or emergent situations, events or [removed: conditions (including with respect to] [added: conditions, (iv) we experience a significant increase in customers without recovery of] the [removed: COVID-19 pandemic),] [added: operating and other costs associated with serving them,] or [removed: (iv)] [added: a decrease in customers that causes a decrease in operating revenue, or (v)] our investments or expenses prove to be higher than the levels estimated in establishing rates.

These requirements include, among others, CERCLA, the Clean Water Act, the Safe Drinking Water Act, the [removed: LCRR] [added: LCR (as amended),] and [added: each of their implementing rules and regulations, as well as] other federal and state requirements.

If [removed: we deliver] [added: the] water or wastewater services [added: we provide] to our customers [removed: that] do not comply with regulatory standards, or otherwise violate environmental laws, regulations or permits, or other health and safety and water quality regulations, we could incur substantial fines, penalties or other sanctions or costs, as well as damage to our reputation.

[removed: Given the nature of our business which, in part, involves] providing water service for human consumption, any potential non-compliance with, or violation of, environmental, water quality and health and safety laws or regulations would likely pose a more [added: significant risk to us than to a company not similarly involved in the water and wastewater industry.]

These laws and regulations and their enforcement, have become more stringent over time, and new or stricter [removed: requirements] [added: requirements, such as the anticipated EPA drinking water regulations for PFAS, the LCRR and the proposed LCRI,] could increase our costs.

We may also incur liabilities if, under environmental laws and regulations, we are required to investigate and clean up environmental contamination, including potential releases of hazardous chemicals, such as [added: gaseous] chlorine, which we use to treat water, or at off-site locations where we have disposed of residual waste or caused an adverse environmental impact.

Examples of sources of contaminants include, but are not limited to, newly created chemical compounds (including, for example, manufactured nanomaterials); human and veterinary products; [removed: perfluorinated and polyfluorinated compounds;] [added: PFAS;] bacteria, microbes, [removed: viruses (including COVID-19),] [added: viruses,] amoebae and other pathogens; and residual by-products of disinfection.

In addition, we believe these contaminants [removed: may] [added: will continue to] form the basis for additional or increased federal or state regulatory initiatives and requirements in the future, which could significantly increase the cost of our operations.

While the Company cannot currently predict the likelihood or result of any adverse outcome associated with these matters, further attempts to comply with the Orders may result in material [added: additional costs or obligations, including fines and penalties against Cal Am in the event of noncompliance with the Orders, which could have a material adverse effect upon us and our business, results of operations and cash flows.]

These include, among other things, storms, freezing conditions, high wind conditions, hurricanes, tornadoes, earthquakes, landslides, drought, wildfires, coastal and intercoastal floods or high water conditions, including those in or near designated flood plains, pandemics [removed: (including COVID-19)] and epidemics, severe electrical storms, [removed: sinkholes and] [added: sinkholes,] solar [removed: flares.][added: flares and chemical spills or other contamination causing temporary unavailability of our source water supplies.]

Seasonal and other drought [removed: conditions, including, for example, those currently being experienced in California,] [added: conditions] that may impact our water services are possible across all of our service areas.

Furthermore, [added: both Federal and state] laws and regulations have been enacted or proposed that seek to reduce or limit greenhouse gas emissions and require or would require additional [removed: reporting] [added: reporting, monitoring] and [removed: monitoring,] [added: disclosure,] 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.

The current regulatory rate setting process may result in a significant delay, also known as “regulatory lag,” from the time that we invest in infrastructure improvements, incur increased operating expenses as a result of inflation or other factors, incur increased cost of capital, including as a result of increasing short- and long-term [added: interest] rates, or experience declining water usage, to the time at which we can seek to address these events in [added: general] rate [removed: case applications;] [added: cases;] our inability to mitigate or minimize regulatory lag [added: or the impacts thereof] could adversely affect our business.

There is typically a delay, known as “regulatory lag,” between the time our Regulated Businesses make a capital investment or incur an operating expense [removed: increase] [added: increase, including as a result of inflation or other factors,] and the time when those costs are reflected in rates.

In addition, billings permitted by state PUCs typically are, to a considerable extent, based on the volume of water [removed: usage] [added: used] in addition to a minimum base rate.

Our inability to mitigate or reduce regulatory lag [added: or the impacts thereof] could have an adverse effect on our financial condition, results of operations, cash flows and liquidity.

For example, two of our states have approved revenue stability mechanisms that adjust rates periodically to ensure that a utility’s revenue will be sufficient to cover its costs regardless of sales volume, including recognition of declining sales resulting from reduced [removed: consumption,] [added: usage,] while providing an incentive for customers to use water more efficiently.

In addition, 10 of our state PUCs permit rates to be adjusted outside of the general rate case [removed: application] process through surcharges that address certain capital investments, such as replacement of aging infrastructure.

These surcharges are adjusted periodically based on factors such as project completion or future budgeted expenditures, and specific surcharges are eliminated once the related capital investment is incorporated in new [removed: PUC approved] [added: PUC-approved] rates.

Furthermore, in setting rates, nine of our state PUCs allow us to use future test years, which extend beyond the date a [added: general] rate [removed: request] [added: case] is filed to allow for current or projected revenues, expenses and investments to be reflected in rates on a more timely basis.

Other examples of such regulatory practices include expense mechanisms that allow us to increase rates for certain cost increases that are beyond our control, such as purchased water costs, property or other taxes, or [removed: power,] [added: costs for power or other fuel,] conservation, chemical or other expenditures.

These mechanisms enable us to adjust rates in less time after costs have been incurred than would be the case under a general rate case [removed: application] process without the mechanisms.

abatement benefit, (iii) the amount of taxes [removed: owed,] [added: owed or paid, including as a result of the Corporate Alternative Minimum Tax provisions,] (iv) the timing of tax effects on rates or (v) the ability to utilize our net operating loss carryforwards;

- increasing the associated costs of, [removed: or] [added: and/or of] difficulty complying with, environmental, health, safety, consumer privacy, water quality, and water quality accountability laws and regulations to which our operations are subject;

- increasing the costs [removed: or] [added: and/or] difficulty of complying with proposed changes to federal contractor affirmative action audits;

[removed: Certain] [added: Some] of our wastewater systems have commercial and industrial customers that are subject to specific limitations on the type, character and [removed: strength] [added: concentration] of the wastewater they are permitted to discharge into our systems.

In [removed: 2022,] [added: 2023,] we invested [removed: $2.3] [added: $2.6] billion in net Company-funded capital improvements.

If we are not able to obtain sufficient [removed: financing,] [added: financing through current or future sources of liquidity,] we may be unable to maintain our existing property, plant and equipment, fund our capital investment strategies or expand our rate base to enable us to meet our growth targets.

Additionally, we may have limited information regarding buried and newly acquired assets, which [removed: could challenge our ability to conduct efficient asset management and maintenance practices.]

Failure of aging infrastructure could result in increased capital expenditures and O&M expenses and other [removed: costs, and negatively impact our future O&M efficiency ratio.][added: costs.]

Adverse publicity and negative consumer sentiment arising out of our operations may render legislatures and other governing bodies, state PUCs and other regulatory authorities, and government officials less likely to view us in a favorable light, and may cause us to be susceptible to less [removed: favorable legislative, regulatory and economic outcomes, as well as increased regulatory or other oversight and more stringent regulatory or economic requirements.]

Unfavorable regulatory and economic outcomes may include [added: negative investigative conclusions and/or findings,] the enactment of more stringent laws and regulations governing our operations and less favorable economic terms in our [removed: agreements] [added: long-term contracts] related to MSG, as well as fines, penalties or other sanctions or requirements.

The properties of our Regulated Businesses segment include [removed: 73] [added: 74] dams, the majority of which are earthen dams.

An important element of our growth strategy is the acquisition and optimization of water and wastewater systems [removed: in order] to broaden our current, and move into new, service areas.

[removed: Further,] [added: As consolidation activity increases in the water and wastewater industries and] competition [removed: for acquisition opportunities] from other regulated utilities, governmental entities and other strategic and financial buyers [added: continues to increase, the prices for suitable acquisition candidates] may [removed: hinder] [added: increase and] our ability to expand [removed: our business.][added: through acquisitions may otherwise be limited.]

The negotiation and execution of potential acquisitions as well as the integration of acquired systems or businesses with our existing operations could require us to incur significant [removed: costs,] [added: costs and] cause diversion of our management’s time and [removed: resources and have a material adverse impact on our results of operations.][added: resources.]

- failure to realize anticipated [added: or perceived] benefits and synergies, such as [added: desired return on equity or profitability,] cost savings and revenue enhancements; and

Given the nature of our business which, in part, involves

- increases in the number, length and severity of disruptions in service;

could challenge our ability to conduct efficient asset management and maintenance practices.

favorable legislative, regulatory and economic outcomes, as well as increased regulatory investigations or other oversight and more stringent regulatory or economic requirements.

In addition, state laws on acquisition treatment or PUC interpretation thereof may affect our ability to recover costs associated with our investments in newly-acquired water and wastewater systems and any difficulties we encounter in the negotiation, execution or integration process could have a material adverse impact on our results of operations, reduce our net income and profitability or adversely affect our internal control over financial reporting.

For example, on December 15, 2023, the MPWMD filed eminent domain litigation against Cal Am in Monterey County Superior Court with respect to the Monterey system assets.

Our efforts to comply with such laws and regulations or contractual provisions, or our failure to do so, may cause us to incur costs related to legal claims or proceedings and regulatory fines or penalties.

These items include but are not limited to

indebtedness or reduce equity in connection with financings or other corporate opportunities that we may believe would be in our best interests or the interests of our shareholders to complete.

The conditional exchange feature of the Exchangeable Senior Notes due 2026, if triggered, may adversely effect our liquidity and financial condition and may dilute the ownership interest of our shareholders or may otherwise depress the price of parent company’s common stock.

In June 2023, AWCC issued $1,035.0 million aggregate principal amount of its 3.625% Exchangeable Senior Notes due 2026 (the “Notes”).

See Note 11—Long-Term Debt in the Notes to the Consolidated Financial Statements for a description of the Notes.

In the event the conditional exchange feature of the Notes is triggered and one or more holders elect to exchange their Notes, AWCC would be required to settle any exchanged principal through the payment of cash, which could adversely affect our liquidity.

In addition, in that case, even if holders do not elect to exchange their Notes, we would be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

If AWCC elects to settle the portion, if any, of an exchange obligation in excess of the aggregate principal amount of the Notes being exchanged in shares of parent company common stock or a combination of cash and shares of such common stock, any sales in the public market of the common stock deliverable upon such exchange could adversely affect prevailing market prices of parent company common stock.

In addition, the existence of the Notes may encourage short selling by market participants because the exchange of the Notes could be used to satisfy short positions, and any anticipated exchange of the Notes for shares of such common stock could depress the price of such common stock.

At December 31, 2023, we had remaining performance commitments, as measured by remaining contract revenue, and primarily related to MSG’s contracts, totaling approximately $7.8 billion, of which $1.2 billion are guaranteed by parent company and the remainder is guaranteed by certain subsidiaries in Other.

significant risk to us than to a company not similarly involved in the water and wastewater industry.

We are also required to augment our Monterey County sources of water supply to comply with the requirements of the Endangered Species Act.

For 2022, Cal Am complied with the diversion limitations contained in the 2016 Order, but continued compliance with these limitations in 2023 and future years may be impacted by a number of factors, including without limitation continued drought conditions in California and the exhaustion of water supply reserves, and will require successful development of alternate water supply sources sufficient to meet customer demand.

additional costs or obligations, including fines and penalties against Cal Am in the event of noncompliance with the Orders, which could have a material adverse effect upon us and our business, results of operations and cash flows.

- increases in disruptions in service;

- changing regulations that affect the benefits we expected to receive when we began offering services in a particular area;

We expect to fund capital improvement projects using cash generated from operations (including, among other things, a portion of the net proceeds from the sale of HOS) borrowings under our revolving credit facility and commercial paper programs and issuances of long-term debt and equity.

We may not be able to access our revolving credit facility or the commercial paper, long-term debt and equity capital markets, when necessary or desirable to fund capital improvements on favorable terms or at all.

As consolidation activity increases in the water and wastewater industries and competition for acquisitions continues to increase, the prices for suitable acquisition candidates may increase and limit our ability to expand through acquisitions.

The systems and businesses we acquire in the future may not achieve anticipated revenue, return on equity or profitability, or other perceived synergies, and any difficulties we encounter in the integration process could interfere with our operations, reduce our net income and profitability or adversely affect our internal control over financial reporting.

For example, in November 2018, Monterey, California ballot Measure J, which was added by a citizens group, was certified as having been approved by a public vote, requiring the MPWMD to conduct a study and submit a written plan concerning the feasibility of a potential purchase of the Monterey system assets without an additional public vote.

The public vote led to the issuance by the MPWMD of (i) a preliminary report finding, among other things, that the acquisition of the Monterey system assets by the MPWMD would be economically feasible, and (ii) a final environmental impact report analyzing the environmental impacts of such an acquisition through the power of eminent domain.

war or terrorism, vandalism or other causes.

Furthermore, the market for cybersecurity insurance is relatively new and coverage available for cybersecurity events will likely evolve as the industry matures.

condition, results of operations, cash flows and liquidity.

systems.

For example, a recent fire at a plant owned by the sole supplier of permanganate in the Western Hemisphere has severely limited the U.S. supply of potassium and sodium permanganate, two chemicals used by water utilities to treat water.

The Company is seeking to utilize alternative methods of treatment and to manage its existing supplies of permanganate, but any inability to source sufficient quantities of these chemicals or utilize alternative chemicals may have a material adverse effect on the Company’s ability to comply with applicable environmental and regulatory requirements.

Eliminating all hazards all of the time is extremely challenging, but through strict adherence to our health and safety practices, and empowering employees to be safety leaders who are instructed to and expected to stop work if deemed “unsafe,” we believe we can achieve an injury-free workplace.

The revolving credit facility currently expires in accordance with its terms in October 2027.

of operations and every three years thereafter.

Annual economic price adjustment is an inflation index-based contract price increase mechanism.

Price redetermination is a contract mechanism to periodically adjust the service fee in the next period to reflect changes in contract obligations and market conditions.

Such internal controls and policies have been and continue to be closely monitored by our management and Board of Directors to ensure continued compliance with these laws, rules and regulations.

For a discussion and analysis of the Company’s financial statements for fiscal [removed: 2021] [added: 2022] compared to fiscal [removed: 2020,] [added: 2021,] please refer to Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, [removed: 2021,] [added: 2022,] filed with the SEC on February [removed: 16, 2022.*][added: 15, 2023.*]

The Company’s primary business involves the ownership of utilities that provide water and wastewater services to residential, commercial, industrial, public authority, fire service and sale for resale customers, collectively presented as the “Regulated Businesses.” The Company’s utilities operate in approximately [removed: 1,600] [added: 1,700] communities in 14 states in the United States, with [removed: 3.4] [added: 3.5] million active customers with services provided by its water and wastewater networks.

| (In millions, except per share data) | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Operating revenues | | | $ | [removed: 3,792] [added: 4,234] | | | | | $ | [removed: 3,930] [added: 3,792] | | | | | $ | [removed: 3,777] [added: 3,930] | | | | | $ | [removed: 3,610] [added: 3,777] | | | | | $ | [removed: 3,440] [added: 3,610] | |

| Net income attributable to common shareholders | | | [removed: 820] [added: 944] | | | | | | [removed: 1,263] [added: 820] | | | | | | [removed: 709] [added: 1,263] | | | | | | [removed: 621] [added: 709] | | | | | | [removed: 567] [added: 621] | | |

| Net income attributable to common shareholders per basic common share | | | [removed: 4.51] [added: 4.90] | | | | | | [removed: 6.96] [added: 4.51] | | | | | | [removed: 3.91] [added: 6.96] | | | | | | [removed: 3.44] [added: 3.91] | | | | | | [removed: 3.16] [added: 3.44] | | |

| Net income attributable to common shareholders per diluted common share | | | [removed: 4.51] [added: 4.90] | | | | | | [removed: 6.95] [added: 4.51] | | | | | | [removed: 3.91] [added: 6.95] | | | | | | [removed: 3.43] [added: 3.91] | | | | | | [removed: 3.15] [added: 3.43] | | |

| Total assets | | | $ | [removed: 27,787] [added: 30,298] | | | | | $ | [removed: 26,075] [added: 27,787] | | | | | $ | [removed: 24,766] [added: 26,075] | | | | | $ | [removed: 22,682] [added: 24,766] | | | | | $ | [removed: 21,223] [added: 22,682] | |

| Long-term debt and redeemable preferred stock at redemption value | | | [removed: 10,929] [added: 11,718] | | | | | | [removed: 10,344] [added: 10,929] | | | | | | [removed: 9,333] [added: 10,344] | | | | | | [removed: 8,644] [added: 9,333] | | | | | | [removed: 7,576] [added: 8,644] | | |

| Cash dividends declared per common share | | | $ | [removed: 2.62] [added: 2.83] | | | | | $ | [removed: 2.41] [added: 2.62] | | | | | $ | [removed: 2.20] [added: 2.41] | | | | | $ | [removed: 2.00] [added: 2.20] | | | | | $ | [removed: 1.82] [added: 2.00] | |

| Net cash provided by operating activities | | | [removed: 1,108] [added: 1,874] | | | | | | [removed: 1,441] [added: 1,108] | | | | | | [removed: 1,426] [added: 1,441] | | | | | | [removed: 1,383] [added: 1,426] | | | | | | [removed: 1,386] [added: 1,383] | | |

| Net cash used in investing activities | | | [removed: (2,127)] [added: (2,815)] | | | | | | [removed: (1,536)] [added: (2,127)] | | | | | | [removed: (2,061)] [added: (1,536)] | | | | | | [removed: (1,945)] [added: (2,061)] | | | | | | [removed: (2,036)] [added: (1,945)] | | |

| Net cash provided by (used in) financing activities | | | [removed: 1,000] [added: 1,188] | | | | | | [removed: (345)] [added: 1,000] | | | | | | [removed: 1,120] [added: (345)] | | | | | | [removed: 494] [added: 1,120] | | | | | | [removed: 726] [added: 494] | | |

| Capital expenditures included in net cash used in investing activities | | | [removed: (2,297)] [added: (2,575)] | | | | | | [removed: (1,764)] [added: (2,297)] | | | | | | [removed: (1,822)] [added: (1,764)] | | | | | | [removed: (1,654)] [added: (1,822)] | | | | | | [removed: (1,586)] [added: (1,654)] | | |

For the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] diluted earnings per share (GAAP) were [removed: $4.51, $6.95] [added: $4.90, $4.51] and [removed: $3.91,] [added: $6.95,] respectively.

Results for [removed: 2022 also] [added: 2023] reflect the [added: net] favorable impact of [removed: weather,] [added: warmer, drier weather compared to normal,] estimated at [removed: $0.06] [added: $0.13] per share, [removed: primarily due to hot and dry weather in] [added: while results for 2022 reflect] the [removed: third quarter] [added: net favorable impact] of [removed: 2022 as] [added: weather] compared to [removed: a $0.02] [added: normal, estimated at $0.06] per [removed: share favorable impact in 2021.][added: share.]

See Note [removed: 5—Acquisitions and Divestitures] [added: 11—Long-Term Debt] in the Notes to Consolidated Financial Statements for additional information.

The Company continues to grow its businesses, with the [added: substantial] majority of its growth to be achieved in the Regulated Businesses through (i) continued capital investment in the Company’s infrastructure to provide safe, [added: clean,] reliable and affordable water and wastewater services to its customers, and (ii) regulated acquisitions to expand the Company’s services to new customers.

In [removed: 2022,] [added: 2023,] the Company invested [removed: $2.6] [added: $2.7] billion, [removed: primarily] in the Regulated Businesses, as discussed below:

- [removed: $2.3] [added: $2.6] billion capital investment in the Regulated Businesses, the substantial majority for infrastructure improvements and replacements; and

- [removed: $315] [added: $81] million to fund [removed: acquisitions] [added: acquisitions, including deposits for pending acquisitions,] in the Regulated Businesses, which added approximately [removed: 70,000] [added: 18,100] customers during [removed: 2022,] [added: 2023,] in addition to approximately [removed: 18,500] [added: 18,800] customers added through organic growth during [removed: 2022.][added: 2023.]

This includes the Company’s [removed: Pennsylvania] [added: New Jersey] subsidiary’s acquisition of the [added: water and] wastewater [removed: system] assets [removed: from the York City Sewer Authority and the City] of [removed: York] [added: Egg Harbor City] on [removed: May 27, 2022,] [added: June 1, 2023,] for a cash purchase price of [removed: $235] [added: $22] million, [removed: $20] [added: $2] million of which was funded as a deposit to the seller in [removed: April] [added: March] 2021 in connection with the execution of the acquisition agreement.

On [removed: October 11, 2022,] [added: November 9, 2023,] the [removed: Company’s] Pennsylvania [removed: subsidiary entered into an] [added: Public Utility Commission (the “PaPUC”) approved a settlement] agreement [added: without modification with respect] to [added: the Company’s Pennsylvania subsidiary’s application to] acquire the [removed: wastewater assets of] [added: System Assets from] the Butler Area Sewer Authority for a [removed: total] purchase price of [removed: $232 million in cash,] [added: $230 million,] subject to adjustment as provided for in the [removed: Asset Purchase Agreement.][added: asset purchase agreement.]

This system provides wastewater service for approximately [removed: 14,700] [added: 15,000] customer connections.

The Company expects to close this acquisition [removed: by the end of 2023,] [added: in late 2024 or early 2025,] pending [added: final] regulatory approval.

The Company expects to close this acquisition in [removed: early 2023.][added: the first quarter of 2024.]

As of December 31, [removed: 2022,] [added: 2023,] the Company [removed: has] [added: had] entered into [added: 25] agreements [added: with a total aggregate purchase price of $589 million] for [removed: 21] pending acquisitions in the Regulated Businesses, including the [removed: two] agreements discussed above, to add approximately [removed: 32,400] [added: 88,300] additional customers.

[removed: *Sale] [added: Sale] of Homeowner Services [removed: Group*][added: Group]

On December 9, 2021, the Company sold all of the equity interests in subsidiaries that comprised [removed: the Company’s] HOS to a wholly owned subsidiary [added: (the “Buyer”)] of funds advised by Apax Partners LLP, a global private equity advisory [removed: firm (the “Buyer”),] [added: firm,] for total consideration of approximately $1.275 billion, resulting in pre-tax gain of $748 [removed: million during the fourth quarter of 2021.][added: million.]

The consideration [added: at closing] was comprised of $480 million in cash, a [added: secured] seller promissory note [added: payable in cash and] issued by the Buyer in the principal amount of $720 million, [added: with an interest rate of 7.00% per year,] and a contingent cash payment of $75 million payable upon satisfaction of certain conditions on or before December 31, 2023.

See Note 18—Fair Value of Financial Information [added: in the Notes to Consolidated Financial Statements,] for additional information [removed: relating to] [added: on accounting for] the [removed: seller promissory note] [added: assets as investments in debt] and [removed: contingent cash payment.][added: equity securities.]

For the year ended December 31, 2022, the Company recorded [removed: post-close] [added: post-closing] adjustments, primarily related to working capital, of pre-tax income of $20 million, which is included in Gain on sale of businesses on the Consolidated Statements of Operations.

[removed: The] [added: In addition, the interest rate payable on the secured] seller note has [removed: a five-year term, is payable in cash, and bears interest at a rate of] [added: increased from] 7.00% per year [removed: during the term.][added: to 10.00% per year until maturity.]

The Company recognized $50 million of interest income during the [removed: year] [added: years] ended December 31, [added: 2023 and] 2022, from the [added: secured] seller note.

The Company expects to invest between [removed: $14] [added: $16] billion to [removed: $15] [added: $17] billion over the next five years, and between [removed: $30] [added: $34] billion to [removed: $34] [added: $38] billion over the next 10 years, including [removed: $2.9] [added: $3.1] billion in [removed: 2023.][added: 2024.]

- capital investment for infrastructure improvements in the Regulated Businesses between [removed: $12.5] [added: $14.5] billion to [removed: $13] [added: $15] billion over the next five years, and between [removed: $27] [added: $30] billion to [removed: $30] [added: $33] billion over the next 10 [removed: years, including $2.5 billion expected in 2023;] [added: years;] and

- growth from acquisitions in the Regulated Businesses to expand the Company’s water and wastewater customer base of between $1.5 billion to $2 billion over the next five years, and between [removed: $3] [added: $4] billion to [removed: $4] [added: $5] billion over the next 10 [removed: years, including $400 million expected in 2023.][added: years.]

The [added: Naval Station Mayport contract was awarded on June 30, 2022, with the] performance start date for operation [removed: is scheduled for] [added: on] March 1, 2023.

The Company’s adjusted regulated O&M efficiency ratio was [removed: 33.7%] [added: 32.8%] for the year ended December 31, [removed: 2022,] [added: 2023,] compared to [removed: 34.1%] [added: 33.7%] for the year ended December 31, [removed: 2021.][added: 2022.]

| (Dollars in millions) | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

In 2023, as compared to 2022, diluted earnings per share increased $0.39.

The increase was primarily driven by the implementation of new rates in the Regulated Businesses for the return on and recovery of capital and acquisition investments, offset somewhat by increased operating costs, primarily production costs from inflationary pressures, and higher pension costs.

Results for 2023 also reflect the impact of share dilution from the equity financing of $0.29 per share, roughly equivalent to avoided interest expense on the year.

On April 6, 2023, the Company’s Illinois subsidiary entered into an agreement to acquire the wastewater treatment plant from Granite City for an amended purchase price of $86 million.

This plant provides wastewater service for approximately 26,000 customer connections.

Effective March 24, 2023, the Company’s Pennsylvania subsidiary acquired the rights to buy the wastewater system assets of the Township of Towamencin, for an aggregate purchase price of $104 million, subject to adjustment as provided in the asset purchase agreement.

This system provides wastewater services to approximately 6,300 customer connections in seven townships in Montgomery County, Pennsylvania.

On October 11, 2022, the Company’s Pennsylvania subsidiary entered into an agreement to acquire the public wastewater collection and treatment system assets (the “System Assets”) from the Butler Area Sewer Authority.

On December 14, 2023, Center Township and Summit Township filed appeals with the Pennsylvania Commonwealth Court seeking to reverse the order entered by the PaPUC approving the sale of the System Assets.

On December 29, 2023, the Company’s Pennsylvania subsidiary filed applications with the Commonwealth Court seeking to dismiss the appeals and requesting expedited consideration.

By order dated February 1, 2024, the Commonwealth Court deferred deciding the application to dismiss the appeals and directed that the issues raised by the applications to dismiss are to be considered as part of the merits of the appeals.

The order also granted expedited consideration and directed the case to be included on the next available list and established a briefing schedule.

Based on the court’s schedule, the Company estimates that the disposition of the appeals could occur as soon as the second quarter of 2024.

The Company estimates the expected capital investment for infrastructure improvements in its Regulated Businesses over the next ten years will be allocated to the following purposes: infrastructure renewal 68-70%, resiliency 9-11%, water quality, including capital expenditures for the EPA proposed regulations on PFAS 6-8%, operational efficiency, technology and innovation 5-7%, system expansion 4-6%, other 3-5%.

*Environmental, Health and Safety, and Water Quality Regulation*

On March 14, 2023, the EPA announced the proposed National Primary Drinking Water Regulations (“NPDWR”) for six PFAS including perfluorooctanoic acid (“PFOA”), perfluorooctane sulfonic acid (“PFOS”), perfluorononanoic acid (“PFNA”), hexafluoropropylene oxide dimer acid (“HFPO-DA”, commonly known as “GenX Chemicals”), perfluorohexane sulfonic acid (“PFHxS”), and perfluorobutane sulfonic acid (“PFBS”).

The proposed regulations would establish legally enforceable levels for PFAS in drinking water.

The EPA anticipates issuing a final rule in 2024 and utilities will be provided a three-year window to comply with the new regulations once finalized, although the Safe Drinking Water Act allows utilities to request an additional two years if capital improvements are required.

The Company performed an initial review of the NPDWR to assess the four parts per trillion requirements for PFAS and the application of the Hazard Index approach for PFNA, PFBS, PFHxS, and GenX Chemicals.

On May 24, 2023, the Company submitted comments to the EPA outlining its position on key issues to address the proposed regulations, including its projected costs associated with PFAS treatment at the proposed limits and the potential impact to customers’ bills.

The Company estimates an investment of approximately $1 billion of capital expenditures to install additional treatment facilities over a three to five-year period in order to comply with the proposed regulations.

Additionally, the Company estimates annual operating expenses up to approximately $50 million related to testing and treatment in today's dollars.

These are preliminary estimates based on the proposed rule.

The actual expenses may differ from these preliminary estimates and will be dependent upon multiple factors, including the final rule and effective date, as well as the completion of a system-by-system engineering analysis.

The Company supports sound policies and compliance with the NPDWR 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.

| Missouri | | | May 28, 2023 | | | | | | $ | 44 | |

| Virginia | | | April 24, 2023 (a) | | | | | | 11 | | |

The Virginia State Corporation Commission issued its final Order on April 24, 2023.

On June 29, 2023, the California Public Utilities Commission (“CPUC”) issued a decision on the cost of capital application for the Company’s California subsidiary, which authorized a return on equity of 8.98% and a capital structure with an equity component of 57.04% for the three-year period from 2022 to 2024.

The CPUC’s decision was effective from the date of the order through the end of 2024.

The decision included a Water Cost of Capital Mechanism (the “WCCM”) that allows the California subsidiary to increase its return on equity for the remainder of 2023 and 2024 based on capital market rates.

As authorized by the WCCM, the California subsidiary filed with the CPUC staff advice letters to increase the return on equity.

On July 25, 2023, the CPUC staff approved a return on equity of 9.50%, effective July 31, 2023.

On November 15, 2023, the CPUC staff approved a return on equity of 10.20%, effective January 1, 2024.

On May 3, 2023, the Missouri Public Service Commission issued an order approving the March 3, 2023, joint settlement agreement in the general rate case filed on July 1, 2022, by the Company’s Missouri subsidiary.

The general rate case order approved a $44 million annualized increase in water and wastewater revenues, excluding $51 million in previously approved infrastructure surcharges, and authorized implementation of the new water and wastewater rates effective May 28, 2023.

The annualized revenue increase was driven primarily by significant incremental capital investments since the Missouri subsidiary’s 2021 rate case order.

The Missouri subsidiary’s view of its rate base was $2.3 billion, and its view as to its return on equity and long-term debt ratio (each of which is based on the general rate case order but was not disclosed therein) was 9.75% and 50.0%, respectively.

[Table of Content](#if348ed1740c649ea8353396181058b86_7)[s](#if348ed1740c649ea8353396181058b86_7)

The 2021 financial results included a pre-tax gain of $748 million relating to the sale of HOS and a $45 million pre-tax contribution to the American Water Charitable Foundation, a consolidated net impact of $2.70 diluted earnings per share.

After excluding the gain related to the sale of HOS and charitable contribution in 2021, diluted earnings per share increased $0.26 in 2022 as compared to 2021.

This increase was primarily driven by continued growth in the Regulated Businesses from infrastructure investment and acquisitions, as well as organic growth, offset somewhat by impacts from inflationary pressures on production costs and higher interest costs along with higher depreciation expenses from the growth of the business.

Also, included in the results for 2022 are $0.24 per share from interest income earned on the seller note and income earned on revenue share agreements, which compares to HOS operating results for 2021 of $0.31 per share.

Lastly, the operating results for the Company’s New York subsidiary, which was sold on January 1, 2022, were $0.12 per share in 2021.

On March 29, 2021, the Company’s New Jersey subsidiary entered into an agreement to acquire the water and wastewater assets of Egg Harbor City for $22 million.

The water and wastewater systems currently serve approximately 1,500 customers each, or 3,000 combined, and are being sold through the New Jersey Water Infrastructure Protection Act process.

The Company and the Buyer also entered into revenue share agreements, pursuant to which the Company is to receive 10% of the revenue generated from customers who are billed for home warranty services through an applicable Company subsidiary (an “on-bill” arrangement), and 15% of the revenue generated from any future on-bill arrangements entered into after the closing.

Unless earlier terminated, this agreement has a term of up to 15 years, which may be renewed for up to two five-year periods.

The Company recognized $9 million of income during the year ended December 31, 2022, from the revenue share agreements, which is included in Other, net on the Consolidated Statements of Operations.

*Sale of New York American Water Company, Inc.*

On January 1, 2022, the Company completed the previously disclosed sale of its regulated utility operations in New York to Liberty Utilities (Eastern Water Holdings) Corp. (“Liberty”), an indirect, wholly owned subsidiary of Algonquin Power & Utilities Corp. Liberty purchased from the Company all of the capital stock of the Company’s New York subsidiary for a purchase price of $608 million in cash.

*Sale of Michigan American Water Company*

On February 4, 2022, the Company completed the sale of its operations in Michigan for $6 million in cash.

*Future Growth*

Presented in the following chart is the estimated allocation of the Company’s expected capital investment for infrastructure improvements in its Regulated Businesses over the next five years, by purpose:


*Military Services Group*

On June 30, 2022, MSG was awarded a contract for the ownership, operation, maintenance and replacement of the wastewater utility system assets at Naval Station Mayport in Jacksonville, Florida.

The contract was effective July 1, 2022, and its total revenue is approximately $341 million over a 50-year period, subject to an annual economic price adjustment.

MSG operates and maintains water and/or wastewater systems and related capital programs as part of the U.S. government’s Utilities Privatization Program.

This contract represents the 18th installation in MSG’s footprint and the first contract with respect to a U.S. Navy installation.

*Permanganate Supply Disruption*

In January 2023, a fire occurred at a plant owned by the sole supplier of permanganate in the Western Hemisphere, which has severely limited the U.S. supply of potassium and sodium permanganate, two chemicals used by water utilities to treat water.

The Company is seeking to utilize alternative methods of treatment and to manage its existing supplies of permanganate, but any inability to source sufficient quantities of these chemicals or utilize alternative chemicals may have a material adverse effect on the Company’s ability to comply with applicable environmental and regulatory requirements.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (In millions) | | | Effective Date | | | | | | Amount | | |

| General rate cases by state: | | | | | | | | | | | |

| Hawaii | | | July 1, 2022 | | | | | | 2 | | |

| West Virginia | | | February 25, 2022 | | | | | | 13 | | |

| California, Step Increase | | | January 1, 2022 | | | | | | 9 | | |

| Pennsylvania, Step Increase | | | January 1, 2022 | | | | | | 20 | | |

| Total general rate case authorizations | | | | | | | | | $ | 218 | |

The rate case proceeding was resolved through a “black box” settlement agreement and did not specify an approved return on equity (“ROE”).

On August 17, 2022, the Company’s New Jersey subsidiary was authorized additional annual revenues of $46 million in its general rate case, effective September 1, 2022, based on an authorized return on equity of 9.6%, authorized rate base of $4.15 billion, a common equity ratio of 54.6% and a long-term debt ratio of 45.4%.

The request incorporated updated estimates of production costs, including chemicals, fuel and power costs.

Beginning January 1, 2023, the Company’s New Jersey subsidiary will defer as a regulatory asset or liability, as appropriate, the difference between its pension expense and other postretirement benefits expense and those amounts included in base rates.

The deferral period for this regulatory asset or liability will be two years or, if earlier, will end at the conclusion of the Company’s New Jersey subsidiary’s next general rate case.

As of December 31, [removed: 2022,] [added: 2023,] a hypothetical increase of interest rates by 1% associated with the Company’s short-term borrowings would result in a [removed: $6] [added: $3] million increase in short-term interest expense.

As of December 31, 2023, the Company had six treasury lock agreements, each with a term of 10 years, with notional amounts totaling $225 million, to reduce interest rate exposure on debt expected to be issued in 2024.

These treasury lock agreements terminate in September 2024, and have an average fixed rate of 4.24%.

When entering into treasury locks, the Company is subject to market risk with respect to changes in the underlying benchmark interest rate that impacts the fair value of the treasury locks.

The Company manages market risk by matching the terms of the treasury locks with the critical terms of the expected debt issuance.

The fair value of the treasury locks at December 31, 2023, was in a loss position of $8 million.

A hypothetical 1% adverse change in interest rates would result in a decrease in the fair value of the treasury locks to a loss position of approximately $26 million at December 31, 2023.

[Table of Content](#if348ed1740c649ea8353396181058b86_7)[s](#if348ed1740c649ea8353396181058b86_7)

The Company conducts the majority of its business through regulated utilities that provide water and wastewater services, collectively presented as [added: one reportable segment, referred to as] the “Regulated Businesses.” The Company also operates other [removed: market-based] businesses that provide water and wastewater services to the U.S. government on military installations, as well as municipalities.

Individually, these [removed: market-based] [added: other] businesses do not meet the criteria of a reportable segment in accordance with generally accepted accounting principles in the United States (“GAAP”), and are collectively presented throughout this Annual Report on Form 10-K within “Other,” which is consistent with how management assesses the results of these businesses.

On December 9, 2021 (the “Closing Date”), the Company sold all of the equity interests of the HOS [removed: subsidiaries.][added: subsidiaries for total consideration of approximately $1.275 billion.]

The Company’s utilities operate in approximately [removed: 1,600] [added: 1,700] communities in 14 states in the United States, with [removed: 3.4] [added: 3.5] million active customers in its water and wastewater networks.

Operating revenues for the Regulated Businesses were [removed: $3,505] [added: $3,920] million for [removed: 2022, $3,384] [added: 2023, $3,505] million for [removed: 2021] [added: 2022] and [removed: $3,255] [added: $3,384] million for [removed: 2020,] [added: 2021,] accounting for [removed: 92%, 86%] [added: 93%, 92%] and 86%, respectively, of the Company’s total operating revenues for the same periods.

Presented in the table below is a geographic summary of the Regulated Businesses’ operating revenues and the number of customers the Company serves, by type of service, for and as of the year ended December 31, [removed: 2022:][added: 2023:]

(a)Includes [removed: water revenues from] public authorities and other utilities and community water [added: and wastewater] systems under bulk contracts.

Presented in the table below is the number of water and wastewater customers the [removed: Company] [added: Company’s Regulated Businesses’] served by class [added: of customer] as of December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] which represents approximately 14 million people served as of December 31, [removed: 2022:][added: 2023:]

| | | | [removed: 2022] [added: 2023] | | | | | | | | | | | | [removed: 2021] [added: 2022] | | | | | | | | | | | | [removed: 2020] [added: 2021] | | | | | | | | |

| Residential | | | [removed: 2,870] [added: 2,893] | | | | | | [removed: 270] [added: 279] | | | | | | [removed: 2,972] [added: 2,870] | | | | | | [removed: 245] [added: 270] | | | | | | [removed: 2,948] [added: 2,972] | | | | | | [removed: 236] [added: 245] | | |

| Commercial | | | [removed: 219] [added: 221] | | | | | | [removed: 17] [added: 18] | | | | | | [removed: 225] [added: 219] | | | | | | [removed: 15] [added: 17] | | | | | | 225 | | | | | | 15 | | |

| Fire service | | | [removed: 51] [added: 4] | | | | | | — | | | | | | [removed: 52] [added: 51] | | | | | | — | | | | | | [removed: 50] [added: 52] | | | | | | — | | |

| Industrial | | | [removed: 4] [added: 52] | | | | | | — | | | | | | 4 | | | | | | — | | | | | | 4 | | | | | | — | | |

| Public and other (a) | | | [removed: 17] [added: 18] | | | | | | 1 | | | | | | [removed: 16] [added: 17] | | | | | | 1 | | | | | | [removed: 17] [added: 16] | | | | | | 1 | | |

| Total (b) | | | [removed: 3,161] [added: 3,188] | | | | | | [removed: 288] [added: 298] | | | | | | [removed: 3,269] [added: 3,161] | | | | | | [removed: 261] [added: 288] | | | | | | [removed: 3,244] [added: 3,269] | | | | | | [removed: 252] [added: 261] | | |

[removed: (a) Includes] [added: (a)Includes water revenues from] public authorities and other [removed: utilities and] [added: utilities,] community water [removed: and wastewater] systems under bulk [removed: contracts.][added: contracts and alternative revenue programs.]

The Company plans to invest between [removed: $30] [added: $34] billion and [removed: $34] [added: $38] billion over the next 10 years for capital improvements, including acquisitions, to its Regulated Businesses’ water and wastewater infrastructure, largely for pipe replacement and upgrading aging water and wastewater treatment facilities.

The Company has proactively improved its pipe renewal rate from a 250-year replacement cycle in 2009 to an [removed: expected 110-year] [added: approximate 125-year] replacement cycle by [removed: 2027,] [added: 2028,] which it anticipates will enable the Company to replace nearly [removed: 2,100] [added: 2,000] miles of mains and collection pipes between [removed: 2023] [added: 2024] and [removed: 2027.][added: 2028.]

In addition, from [removed: 2023] [added: 2024] to [removed: 2027,] [added: 2028,] the Company’s capital investment in treatment plants, storage tanks and other key, above-ground facilities is expected to increase, further seeking to address infrastructure renewal, resiliency, water quality, operational efficiency, technology and innovation, and emerging regulatory compliance needs.

[removed: Additionally, the] [added: The] Company continues to invest significantly in resiliency projects to address the impacts of climate and weather variability by hardening its assets.

According to the [added: most recent study by the] U.S. Environmental Protection Agency (“EPA”), as of 2017, approximately 84% of the water market is served by municipal systems and approximately 98% of the country’s wastewater systems are government owned.

The Company’s current customer mix of [removed: 92%] [added: 91%] water and [removed: 8%] [added: 9%] wastewater also presents strategic opportunities for wastewater growth and consolidation, allowing the Company to add wastewater customers where it already serves water customers.

The Company will also evaluate whether there is a line of sight to grow to sufficient scale in a new regulated market so that it can attain efficiencies [added: and promote customer affordability] after entering a new domestic market.

On January 1, 2022, the Company completed the [added: previously disclosed] sale of its [added: regulated utility operations in] New York [removed: subsidiary] to Liberty Utilities (Eastern Water Holdings) Corp. (“Liberty”), an indirect, wholly owned subsidiary of Algonquin Power & Utilities Corp. [removed: Under the terms of the Stock Purchase Agreement, dated November 20, 2019, as amended, by and among the Company, the Company’s New York subsidiary and] Liberty [removed: (the “Stock Purchase Agreement”), Liberty] purchased from the Company all of the capital stock of the Company’s New York subsidiary for a purchase price of $608 million in cash.

The Company’s regulated New York operations [removed: had] [added: represented] approximately 127,000 customers in the State of New York.

[removed: This] [added: In New Jersey, the] law imposes requirements in areas such as asset management, water quality reporting, remediation of notices of violation, [removed: and] hydrant and valve [removed: maintenance.][added: maintenance and cybersecurity.]

[removed: The] [added: In Indiana, the] law requires water and wastewater utilities to conduct rate analyses, develop capital asset management plans and conduct cybersecurity and water loss audits.

In [removed: 2020, Missouri enacted] [added: Missouri,] the [removed: Water Safety and Security Act, which] [added: act] requires [removed: small and medium-sized] water [removed: providers] [added: and wastewater utilities] to create cybersecurity, valve inspection and hydrant inspection programs.

However, the Company’s Regulated Businesses do face [added: increasing] competition from governmental agencies, other investor-owned utilities, large industrial customers with the ability to provide their own water supply/treatment process and strategic buyers that are entering new markets and/or making strategic acquisitions.

For more information on [removed: the lawsuit against LAFCO,] [added: this matter,] see Item 3—Legal Proceedings—Proposed Acquisition of Monterey System Assets — [removed: Local Area Formation Commission Litigation.][added: Potential Condemnation.]

Presented in the table below are the percentages of water supply by source type for the Company’s Top Five States [added: individually and the Regulated Businesses collectively] for the year ended December 31, [removed: 2022:][added: 2023:]

| New Jersey | | | 74% | | | | | | [removed: 22%] [added: 20%] | | | | | | [removed: 4%] [added: 6%] | | |

In California, where the state has [removed: been experiencing] [added: recently experienced] a multi-year drought, the Company utilizes multiple water supply options including numerous ground water wells in multiple aquifers as well as various long-term purchase water agreements with regional water suppliers to optimize supplies while assuring resiliency during dry years.

The Water Supply Project includes the construction of a desalination plant, to be owned by [removed: the Company’s California subsidiary,] [added: Cal Am,] and the construction of wells that would supply water to the desalination plant.

In addition, the Water Supply Project also includes [removed: the California subsidiary’s] [added: Cal Am’s] purchase of water from a groundwater replenishment project (the “GWR Project”) between Monterey One Water (formerly known as the Monterey Regional Water Pollution Control Agency) and the MPWMD.

The Water Supply Project is intended, among other things, to fulfill obligations of [removed: the California subsidiary] [added: Cal Am] to eliminate unauthorized diversions from the Carmel River as required under orders of the California State Water Resources Control Board (the “SWRCB”).

Weather that is [removed: hotter] [added: warmer] and/or drier than average generally increases operating revenues, whereas, weather that is cooler and/or wetter than average generally suppresses customer water demand and can reduce water operating revenues.

Other primarily includes the MSG business, which enters into long-term contracts with the U.S. government to provide water and wastewater services on [removed: various] military installations.

The [removed: Company] [added: Contract Services Group (“CSG”),] also [added: included in Other,] has [removed: four] [added: three] contracts with municipal customers to operate and manage water and wastewater facilities and provide other related [removed: services through its Contract Services Group (“CSG”).][added: services.]

Other also includes [removed: CSG,] corporate costs that are not allocated to the Company’s Regulated Businesses, interest income related to the [added: secured] seller promissory note [removed: and income] from the [removed: revenue share agreement from the] sale of HOS, [added: income from assets not associated with the Regulated Businesses,] eliminations of inter-segment transactions and fair value adjustments related to acquisitions that have not been allocated to the Regulated Businesses segment.

| Pennsylvania | | | $ | 810 | | | | | $ | 155 | | | | | $ | 965 | | | | | 24.6 | | % | | | | 683 | | | | | | 98 | | | | | | 781 | | | | | | 22.4 | | % |

| New Jersey | | | 908 | | | | | | 57 | | | | | | 965 | | | | | | 24.6 | | % | | | | 668 | | | | | | 64 | | | | | | 732 | | | | | | 21.0 | | % |

| Missouri | | | 430 | | | | | | 20 | | | | | | 450 | | | | | | 11.5 | | % | | | | 483 | | | | | | 24 | | | | | | 507 | | | | | | 14.5 | | % |

| Illinois | | | 366 | | | | | | 61 | | | | | | 427 | | | | | | 10.9 | | % | | | | 299 | | | | | | 72 | | | | | | 371 | | | | | | 10.6 | | % |

| California | | | 300 | | | | | | 4 | | | | | | 304 | | | | | | 7.8 | | % | | | | 190 | | | | | | 3 | | | | | | 193 | | | | | | 5.5 | | % |

| Total—Top Five States (b) | | | 2,814 | | | | | | 297 | | | | | | 3,111 | | | | | | 79.4 | | % | | | | 2,323 | | | | | | 261 | | | | | | 2,584 | | | | | | 74.1 | | % |

| Other (c) | | | 779 | | | | | | 30 | | | | | | 809 | | | | | | 20.6 | | % | | | | 865 | | | | | | 37 | | | | | | 902 | | | | | | 25.9 | | % |

| Total Regulated Businesses | | | $ | 3,593 | | | | | $ | 327 | | | | | $ | 3,920 | | | | | 100.0 | | % | | | | 3,188 | | | | | | 298 | | | | | | 3,486 | | | | | | 100.0 | | % |

Presented in the table below is a breakout of the Company’s Regulated Businesses’ operating revenue by class of customer, for the years ended December 31, 2023, 2022 and 2021:

| (In millions) | | | Revenue | | | | | | Percentage of Revenue | | | | | | Revenue | | | | | | Percentage of Revenue | | | | | | Revenue | | | | | | Percentage of Revenue | | |

| Water services: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Residential | | | $ | 2,143 | | | | | 55 | | % | | | | $ | 1,941 | | | | | 55 | | % | | | | $ | 1,935 | | | | | 57 | | % |

| Commercial | | | 798 | | | | | | 20 | | % | | | | 710 | | | | | | 20 | | % | | | | 676 | | | | | | 20 | | % |

| Fire service | | | 158 | | | | | | 4 | | % | | | | 147 | | | | | | 4 | | % | | | | 151 | | | | | | 5 | | % |

| Industrial | | | 167 | | | | | | 4 | | % | | | | 153 | | | | | | 4 | | % | | | | 141 | | | | | | 4 | | % |

| Public and other water (a) | | | 284 | | | | | | 7 | | % | | | | 267 | | | | | | 8 | | % | | | | 239 | | | | | | 7 | | % |

| Wastewater | | | 327 | | | | | | 8 | | % | | | | 242 | | | | | | 7 | | % | | | | 208 | | | | | | 6 | | % |

| Other (b) | | | 43 | | | | | | 2 | | % | | | | 45 | | | | | | 2 | | % | | | | 34 | | | | | | 1 | | % |

| Total | | | $ | 3,920 | | | | | 100 | | % | | | | $ | 3,505 | | | | | 100 | | % | | | | $ | 3,384 | | | | | 100 | | % |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | 2023 | | | | | | | | | | | | 2022 | | | | | | | | | | | | 2021 | | | | | | | | |

In 2020 and 2021, the United States Congress passed, and the President signed into law, legislation with water and wastewater provisions including the Infrastructure Investment and Jobs Act (the “IIJA”), the Consolidated Appropriations Act of 2021 and the American Rescue Plan of 2021.

The legislation provided funding for a variety of initiatives to support water and wastewater infrastructure, lead service line replacement, treatment of PFAS and other contaminants of emerging concern, and low-income water assistance (“LIHWAP”).

LIHWAP expired in 2023.

The Company’s regulated subsidiaries in New Jersey, Indiana, and Missouri have versions of water quality or safety accountability acts which require operational or safety and security standards for water and wastewater utilities serving a certain number of customers.

| Missouri | | | 84% | | | | | | 15% | | | | | | 1% | | |

| Illinois | | | 55% | | | | | | 35% | | | | | | 10% | | |

| California | | | —% | | | | | | 67% | | | | | | 33% | | |

| Regulated Businesses | | | 71% | | | | | | 22% | | | | | | 7% | | |

Affordability

The Company supports the United Nations’ declaration of access to clean water and sanitation as a human right, regardless of economic status.

As a water utility, the Company’s water must be safe, efficient, reliable, accessible and affordable.

Through increased efficiency, conservation and low-income support programs, on average across the enterprise, the Company consistently achieves water costs that are significantly below the EPA’s suggested guidance of 2% of household income.

Succeeding in water affordability positively affects the health and safety of the Company’s customers and contributes to the economic prosperity of the communities in which it operates.

The Company’s approach to water access and affordability consists of two key strategies.

The first is to supply water that is safe, reliable and meets the needs of its customers.

The second is to provide affordable water services to customers while protecting its customers’ right to clean water, regardless of economic status or geographic location.

The Company also focuses on addressing water affordability by maximizing both supply-side and demand-side efficiency.

Average residential water bills for the Company’s customers are approximately $55 to $65 per month, and the expected average annual rate increases across the Company’s footprint over the next five years is 5% to 6%.

See Item 1—Business—Other—Sale of Homeowner Services Group below and Note 5—Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information.

On January 1, 2022, the Company completed the sale of its New York subsidiary, see Item 1—Business—Regulated Businesses—Sale of New York American Water Company, Inc. below and Note 5—Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information.

| New Jersey | | | $ | 858 | | | | | $ | 51 | | | | | $ | 909 | | | | | 25.9 | | % | | | | 663 | | | | | | 59 | | | | | | 722 | | | | | | 20.9 | | % |

| Pennsylvania | | | 714 | | | | | | 105 | | | | | | 819 | | | | | | 23.4 | | % | | | | 679 | | | | | | 97 | | | | | | 776 | | | | | | 22.5 | | % |

| Missouri | | | 367 | | | | | | 16 | | | | | | 383 | | | | | | 10.9 | | % | | | | 480 | | | | | | 22 | | | | | | 502 | | | | | | 14.6 | | % |

| Illinois | | | 310 | | | | | | 39 | | | | | | 349 | | | | | | 10.0 | | % | | | | 297 | | | | | | 71 | | | | | | 368 | | | | | | 10.7 | | % |

| California | | | 281 | | | | | | 4 | | | | | | 285 | | | | | | 8.1 | | % | | | | 189 | | | | | | 3 | | | | | | 192 | | | | | | 5.6 | | % |

| Total—Top Five States (b) | | | 2,530 | | | | | | 215 | | | | | | 2,745 | | | | | | 78.3 | | % | | | | 2,308 | | | | | | 252 | | | | | | 2,560 | | | | | | 74.2 | | % |

| Other (c) | | | 733 | | | | | | 27 | | | | | | 760 | | | | | | 21.7 | | % | | | | 853 | | | | | | 36 | | | | | | 889 | | | | | | 25.8 | | % |

| Total Regulated Businesses | | | $ | 3,263 | | | | | $ | 242 | | | | | $ | 3,505 | | | | | 100.0 | | % | | | | 3,161 | | | | | | 288 | | | | | | 3,449 | | | | | | 100.0 | | % |

The Company completed the sale of its New York subsidiary on January 1, 2022 and the sale of its Michigan subsidiary on February 4, 2022.

The following chart depicts the allocation of the Company’s Regulated Businesses’ operating revenue of $3,505 million by type, including a breakout of the total water services revenues by class of customer, for the year ended December 31, 2022:


The sale was approved by the New York State Department of Public Service on December 16, 2021.

See Note 5—Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information.

On November 15, 2021, the Infrastructure Investment and Jobs Act (the “IIJA”) was signed into law and provides for up to $55 billion to aid in improving the country’s ailing water infrastructure, including $23.4 billion for drinking water and wastewater, $15 billion for lead service line replacement (through the drinking water state revolving fund), and $10 billion for the treatment of per- and polyfluoroalkyl substances (“PFAS”) and other contaminants of emerging concern.

The IIJA also included a low-income assistance program, in which eligible low-income customers who receive their water from public and private entities may participate.

The Company has leveraged these funds throughout its service areas to benefit its customers.

In December 2020, Congress passed, and the President signed into law, a $900 billion COVID-19 relief and $1.4 trillion U.S. government appropriations package for 2021, which included $638 million for a low-income water assistance program and $2.8 billion for capitalization grants under the Clean Water and Drinking Water state revolving funds.

In 2017, New Jersey enacted the Water Quality Accountability Act (the “WQAA”), which sets operational standards for all water utilities in New Jersey, including municipal and investor-owned utilities with more than 500 service connections.

The WQAA requires the most senior water manager, or either the executive director for municipal utility authorities or the mayor or chief executive officer for municipally owned public water systems, to certify that the system meets the requirements under the WQAA.

Enhanced WQAA legislation includes additional enforcement requirements for disclosure of results, requires the sale of systems for prolonged violations and imposes new cybersecurity requirements and asset management plans.

The new amendments, which provide for both civil and criminal penalties for falsification of documents, were signed by the Governor with an effective date of November 8, 2021.

In 2018, Indiana passed a law to set minimum operational expectations for all water and wastewater utilities in the state, including municipal and investor-owned utilities.

In 2019, the MPWMD issued a preliminary valuation and cost of service analysis report, finding in part that (1) an estimate of the Monterey system assets’ total value plus adjustments would be approximately $513 million, (2) the cost of service modeling results indicate significant annual reductions in revenue requirements and projected monthly water bills, and (3) the acquisition of the Monterey system assets by the MPWMD would be economically feasible.

In 2020, the MPWMD certified a final environmental impact report, analyzing the environmental impacts of the MPWMD’s project to (1) acquire the Monterey system assets through the power of eminent domain, if necessary, and (2) expand its geographic boundaries to include all parts of this system.

In February 2021, the MPWMD filed an application with the Local Agency Formation Commission of Monterey County (“LAFCO”) seeking approval to become a retail water provider and annex approximately 58 parcels of land into the MPWMD’s boundaries.

In June 2021, LAFCO’s commissioners voted to require a third-party independent financial study as to the feasibility of an acquisition by the MPWMD of the Monterey system assets.

In December 2021, LAFCO’s commissioners denied the MPWMD’s application to become a retail water provider, determining that the MPWMD does not have the authority to proceed with a condemnation of the Monterey system assets.

On April 1, 2022, the MPWMD filed a lawsuit against LAFCO challenging its decision to deny the MPWMD’s application seeking approval to become a retail water provider.

By letter dated October 3, 2022, the MPWMD notified Cal Am of a decision to appraise the Monterey system assets and requesting access to a number of Cal Am’s properties and documents to assist the MPWMD with such an appraisal.

Cal Am responded by letter on October 24, 2022, denying the request for access, stating that the MPWMD does not have the right to appraise Cal Am’s system without LAFCO approval to become a retail water provider.

Also, five municipalities in the Chicago, Illinois area (approximately 30,300 customers in total) formed a water agency and filed an eminent domain lawsuit against the Company in January 2013, seeking to condemn the water pipeline that serves those five municipalities.

During a valuation trial held in January 2023, the parties settled the lawsuit and the water agency dismissed the eminent domain case, and as a result the Company will retain the pipeline.

As part of the dismissal, the Company’s Illinois subsidiary and another subsidiary entered into a settlement agreement with the water agency agreeing to, among other things, maintain through December 31, 2027 the utility-specific wholesale water rate passed through to customers of the pipeline, such that the rate, exclusive of other pass-through charges, remains no higher than the current rate.

Presented in the chart below are the Company’s sources of water supply as of December 31, 2022:


| Missouri | | | 78% | | | | | | 21% | | | | | | 1% | | |

| Illinois | | | 54% | | | | | | 35% | | | | | | 11% | | |

| California | | | — | | | | | | 68% | | | | | | 32% | | |

Set forth below is information related to the Company’s material pending legal proceedings as of February [removed: 15, 2023,] [added: 14, 2024,] other than ordinary routine litigation incidental to the business, required to be disclosed in this Annual Report on Form 10-K.

In July 2016, at the request of Cal Am and several Monterey County government agencies, the SWRCB issued the 2016 Order approving a deadline of December 31, [removed: 2021] [added: 2021,] for Cal Am’s compliance with the 2009 Order.

Following issuance by the Coastal Commission in November [removed: 2022] [added: 2022,] of a coastal development permit, as described below, Cal Am continues to work constructively with all appropriate agencies to obtain the remaining required permits for the Water Supply Project.

For the year ended December 31, [removed: 2022,] [added: 2023,] Cal Am has complied with the diversion limitations contained in the 2016 Order.

Continued compliance with the diversion limitations in [removed: 2023] [added: 2024,] and future years may be impacted by a number of factors, including without limitation [removed: continued] [added: potential recurrence of] drought conditions in California and the [added: reduction or] exhaustion of water supply reserves, and will require successful development of alternate water supply sources sufficient to meet customer demand.

Cal Am has incurred [removed: $206] [added: $241] million in aggregate costs as of December 31, [removed: 2022,] [added: 2023,] related to the Water Supply Project, which includes [removed: $51] [added: $72] million in AFUDC.

While Cal Am believes that its expenditures to date have been prudent and necessary to comply with the 2009 Order and the 2016 Order, as well as [removed: the CPUC’s 2016 and 2018] [added: relevant] final [removed: decisions,] [added: decisions of the CPUC related thereto,] Cal Am cannot currently predict its ability to recover all of its costs and expenses associated with the Water Supply Project and there can be no assurance that Cal Am will be able to recover all of such costs and expenses in excess of the $112 million in aggregate construction costs, plus applicable AFUDC, previously approved by the CPUC in its 2016 and December 2022 final [removed: decisions.][added: decisions, as amended by its March 30, 2023 rehearing decision.]

[removed: On] [added: In] October [removed: 5,] 2022, Cal Am announced a phasing plan for the proposed desalination plant component of the Water Supply Project.

[removed: On] [added: In] November [removed: 18,] 2022, the Coastal Commission approved the Marina Application and the Original Jurisdiction Application with respect to the phased development of the proposed desalination plant, subject to compliance with a number of conditions, all of which Cal Am expects to satisfy.

[removed: On] [added: In] December [removed: 29,] 2022, the City, Marina Coast Water District (“MCWD”), MCWD’s groundwater sustainability agency (“GSA”), and the MPWMD jointly filed a petition for writ of mandate in Monterey County Superior Court against the Coastal Commission, alleging that the Coastal Commission violated the California Coastal Act and the California Environmental Quality Act in issuing a coastal development permit to Cal Am for construction of the MPWSP slant wells.

Subject to the impact or resolution of this litigation, construction of the desalination plant is expected to begin in [removed: 2024] [added: 2025] and the desalination plant is estimated to be in-service by the end of 2027.

In July 2019, the Board of Supervisors heard appeals filed by MCWD and a public advocacy group, at which time it denied the appeals and [added: approved the permit.]

These [removed: appeals] [added: motions] remain pending.

Because Cal Am may use the test slant well as one of the slant wells for the Water Supply Project, Cal Am sought and obtained from the Coastal Commission permit amendments to allow the test slant well to remain in place and be maintained until February 28, [removed: 2024.][added: 2025.]

A required lease obtained from the California State Lands Commission, as amended, [removed: expired] [added: expires] on December 16, [removed: 2022.][added: 2027.]

The lawsuit, as amended, alleges a claim for breach of contract against CEMEX and seeks declaratory relief to void the permanent easement and prohibiting extraction of water by Cal Am’s slant wells at the CEMEX [added: site in excess of 500 acre-feet per year and the export of such water outside the groundwater basin.]

The Monterey County Superior Court has set a trial date of [removed: October 23, 2023,] [added: July 15, 2024,] for the City’s lawsuit.

[removed: Currently, both] [added: The related] validation [added: and reverse validation] actions remain stayed during the pendency of the [removed: City’s appeals.][added: appeal.]

Proposed Acquisition of Monterey System Assets — [removed: Local Area Formation Commission Litigation][added: Potential Condemnation]

In November 2018, voters in Monterey, California passed “Measure J,” which decided that the MPWMD should conduct a feasibility study concerning the potential purchase of Cal Am’s Monterey system assets, and, if feasible, to proceed with a purchase of [added: those assets without an additional public vote.]

In February 2021, the MPWMD filed an application with [removed: LAFCO] [added: the Local Agency Formation Commission of Monterey County (“LAFCO”)] seeking approval to become a retail water provider and annex approximately 58 parcels of land into the MPWMD’s boundaries.

In December 2021, LAFCO’s commissioners denied the MPWMD’s application to become a retail water provider, determining that the MPWMD does not have the authority to [removed: operate the Monterey system assets, a result that precludes the MPWMD from proceeding] [added: proceed] with a condemnation [removed: thereof.][added: of the Monterey system assets.]

[removed: On] [added: In] April [removed: 1,] 2022, the MPWMD filed a lawsuit against LAFCO challenging its [removed: denial.][added: decision to deny the MPWMD’s application seeking approval to become a retail water provider.]

[removed: On] [added: In] June [removed: 17,] 2022, the court granted, with conditions, a motion by Cal Am to intervene in the MPWMD’s lawsuit against LAFCO.

[removed: On] [added: In] December [removed: 13,] 2022, the court sustained in part, and denied in part, demurrers that had been filed by LAFCO seeking to dismiss the MPWMD’s lawsuit.

[removed: On] [added: In] July [removed: 5,] 2022, the Circuit Court entered an order again certifying a class to address at trial certain liability issues but not to consider damages.

[removed: On] [added: In] August [removed: 26,] 2022, WVAWC filed another Petition for Writ of Prohibition in the Supreme Court of Appeals of West Virginia challenging the West Virginia Circuit Court’s July [removed: 5,] 2022 [removed: order.][added: order, which petition was denied on June 8, 2023.]

In April 2021, American Water Resources, LLC (“AWR”), which, prior to the December [removed: 9,] 2021 sale of the Company’s former [removed: HOS] [added: Homeowner Services Group] business [added: (“HOS”)] was one of the indirect, wholly owned subsidiaries comprising that business, received a grand jury subpoena in connection with an investigation by the U.S. Attorney’s Office for the Eastern District of New York (the “EDNY”).

The subpoena [removed: seeks] [added: sought] documents regarding AWR’s operations and its contractor network in the New York City metropolitan area.

[removed: On] [added: In] September [removed: 9,] 2022, a former employee of AWR pled guilty in U.S. District Court to two felony counts in connection with the matters [removed: being investigated] [added: under investigation] by the EDNY.

While [removed: it is not possible at this time to predict] the [removed: outcome of the investigation or determine the amount, if any, of fines, penalties or other liabilities] [added: EDNY has not formally communicated] that [removed: may be incurred in connection with it,] [added: its investigation is complete,] the Company does not [removed: currently] believe that the investigation will have a material adverse effect on the Company’s results of operations, financial condition or liquidity.

On March 30, 2023, the CPUC issued a decision denying Cal Am’s application for rehearing but adopting its proposed AFUDC for already incurred and future costs.

The decision also provides Cal Am the opportunity to serve supplemental testimony to increase its cost cap for certain of the Water Supply Project’s extraction wells.

The amended water purchase agreement and a memorandum of understanding to negotiate certain milestones related to the expansion of the GWR Project have been signed by the relevant parties.

Further hearings were scheduled in a Phase 2 to this CPUC proceeding to focus on updated supply and demand estimates for the Water Supply Project, and Phase 2 testimony was completed in September 2022.

On October 23, 2023, a status conference was held to determine procedural steps to conclude the proceeding.

Further evidentiary hearings in this proceeding have been scheduled for March 2024.

On November 14, 2023, the court set an initial trial date of May 1, 2024.

On September 8, 2023, the court of appeal issued its opinion reversing the trial court’s determination in favor of MCWD as to the statement of overriding considerations and rejecting MCWD’s appeals on all of its claims that the Monterey County Superior Court had denied.

On September 25, 2023, MCWD filed a petition for rehearing in the court of appeal, which was denied on October 4, 2023.

On November 13, 2023, MCWD filed a petition for review in the California Supreme Court, which was denied on January 10, 2024.

The changes to the local coastal plan would need to be submitted to the Coastal Commission for approval; however, the Coastal Commission’s November 2022 approval of Cal Am’s coastal development permit application has rendered moot the impact of these proposed local coastal program and zoning changes on the issuance of the coastal development permit.

The SWRCB held hearings in 2022 and 2023, on the referred issues before its Administrative Hearing Officer.

On May 3, 2023, the City filed a second reverse validation complaint, challenging the adoption of amendments to the GSP for the 180/400 subbasin.

On November 13, 2023, the California Court of Appeal affirmed the trial court's decision.

On December 22, 2023, the City filed a petition for review with the California Supreme Court.

*Local Agency Formation Commission Litigation*

In 2019, the MPWMD issued a preliminary valuation and cost of service analysis report, finding in part that (1) an estimate of the Monterey system assets’ total value plus adjustments would be approximately $513 million, (2) the cost of service modeling results indicate significant annual reductions in revenue requirements and projected monthly water bills, and (3) the acquisition of the Monterey system assets by the MPWMD would be economically feasible.

In 2020, the MPWMD certified a final environmental impact report, analyzing the environmental impacts of the MPWMD’s project to (1) acquire the Monterey system assets through the power of eminent domain, if necessary, and (2) expand its geographic boundaries to include all parts of this system.

In June 2021, LAFCO’s commissioners voted to require a third-party independent financial study as to the feasibility of an acquisition by the MPWMD of the Monterey system assets.

On December 11, 2023, the Monterey County Superior Court issued a writ of mandate directing LAFCO to vacate and set aside its original denial of the MPWMD’s application to serve as a retail water provider (in conjunction with its effort to acquire the Monterey water system assets) and allowing the MPWMD to seek further LAFCO review of its application in compliance with all applicable law.

The court held that LAFCO incorrectly applied two statutory standards and noted a lack of sufficient evidence to support certain of LAFCO’s factual findings.

As a result, the LAFCO denial has been nullified and LAFCO will be required to hold another hearing on the MPWMD’s application.

On February 8, 2024, and February 9, 2024, each of Cal Am and LAFCO, respectively, filed a notice of appeal with the California Court of Appeals regarding the Monterey County Superior Court’s decision to issue the writ of mandate.

Cal Am is evaluating potential additional actions to contest the writ of mandate and to seek to uphold LAFCO’s denial of the MPWMD’s application, including filing other challenges and/or making suitable presentations at a subsequent LAFCO rehearing.

*Potential Condemnation Actions by MPWMD*

Separate from the proceedings related to the MPWMD’s application with LAFCO, by letter dated October 3, 2022, the MPWMD notified Cal Am of a decision to appraise the Monterey system assets and requesting access to a number of Cal Am’s properties and documents to assist the MPWMD with such an appraisal.

Cal Am responded by letter on October 24, 2022, denying the request for access, stating that the MPWMD does not have the right to appraise Cal Am’s system without LAFCO approval to become a retail water provider.

On April 28, 2023, Cal Am rejected an offer by the MPWMD to purchase the Monterey system assets for $448.8 million.

Over the written and oral objections of Cal Am, at a hearing held on October 10, 2023, the MPWMD adopted a resolution of necessity to authorize it to file an eminent domain lawsuit with respect to the Monterey system assets.

On December 15, 2023, the MPWMD filed a lawsuit in Monterey County Superior Court seeking to condemn the Monterey system assets.

While the Company cannot currently predict the outcome of this lawsuit, the Company believes that, given existing legal precedent related to similar attempts by public agencies in California to take over water systems and its other defenses, Cal Am should be able to defend itself successfully against the MPWMD’s eminent domain lawsuit.

On August 21, 2023, the Circuit Court set a date of September 9, 2024, for a class trial on issues relating to duty and breach of that duty.

The trial will not find class-wide or punitive damages.

On September 21, 2023, the court upheld its prior ruling but gave the Tennessee Plaintiffs the option to file an amended class definition.

On October 12, 2023, the Tennessee Plaintiffs filed an amended class definition seeking certification of a business customer-only class.

On December 1, 2023, TAWC filed a memorandum in opposition to the amended class definition.

On January 18, 2024, the court heard oral argument on the motions but issued no decision.

The court instead requested additional briefing and a second oral argument, deadlines for which have not yet been set.

Mountaineer Gas Company Main Break

During the afternoon of November 10, 2023, WVAWC was informed that an 8-inch ductile iron water main owned by WVAWC, located on the West Side of Charleston, West Virginia and originally installed in approximately 1989, experienced a leak.

Cal Am is requesting inclusion in the cost cap all infrastructure costs for the GWR Project expansion that were not included in the final decision.

Cal Am believes that the December 5, 2022 final decision is contrary to the CPUC’s precedent and that obtaining recovery of these infrastructure costs is a key component of the GWR Project expansion and Cal Am’s ability to meet the future water supply needs of its customers in Monterey.

This application remains pending.

approved the permit.

The changes to the local coastal plan must be submitted to the Coastal Commission for approval and are not effective until such approval is obtained.

Cal Am has filed an applications for extension of the State Lands Commission lease.

site in excess of 500 acre-feet per year and the export of such water outside the groundwater basin.

The SWRCB has scheduled hearings on the referred issues before its Administrative Hearing Officer, which took place in the fourth quarter of 2022 and are set to continue into early 2023.

This complaint remains pending.

those assets without an additional public vote.

See Item 1—Business—Regulated Businesses—Condemnation and Eminent Domain for more information on this matter.

The Writ Petition has been supported by an amicus brief filed by certain water and utility industry trade groups.

On February 9, 2023, the Supreme Court of Appeals accepted the Writ Petition by issuing a Rule to Show Cause and scheduling oral argument for April 26, 2023.

The Company has been fully cooperating with the EDNY investigation and continues to do so, and continues to believe that the investigation is not focused on the Company.

In connection with the sale of the HOS operations (including all of the Company’s equity interests in AWR), in December 2021, the Company and AWR entered into an agreement with the buyer of the HOS operations, which facilitates a common defense for, and the sharing of information concerning, the EDNY investigation and any legal or regulatory inquiries or proceedings related to or resulting from it or the subject matter in the subpoena (collectively, the “Covered Matters”).

The Company, on behalf of AWR, is required to defend any Covered Matter, using commercially reasonable efforts to resolve it on a reasonably expedient basis.

Further, the Company is required to consult with the buyer in specified circumstances and obtain its prior written consent (which consent may not be unreasonably withheld, conditioned or delayed) before entering into any resolution of any Covered Matter that imposes non-monetary provisions or undertakings or any other terms for which there will be no indemnification under this agreement.

In addition, until March 9, 2025, the Company is required to indemnify the buyer for any monetary losses or out-of-pocket damages (as described in the agreement) incurred by the buyer or certain of the HOS subsidiaries to the extent directly arising in connection with, or directly resulting from, any Covered Matter.

For the fiscal year ended December 31, [removed: 2022][added: 2023]

Common Stock, $0.01 par [removed: value—$25,487,300,000] [added: value—$24,527,200,000] as of June 30, [removed: 2022] [added: 2023] (solely for purposes of calculating this aggregate market value, American Water has defined its affiliates to include (i) those persons who were, as of June 30, [removed: 2022,] [added: 2023,] its executive officers, directors or known beneficial owners of more than 10% of its common stock, and (ii) such other persons who were deemed, as of June 30, [removed: 2022,] [added: 2023,] to be controlled by, or under common control with, American Water or any such persons in clause (i) above).

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date: Common Stock, $0.01 par value per [removed: share—181,858,619] [added: share—194,755,320] shares as of [removed: January 31, 2023.][added: February 6, 2024.]

Portions of the American Water Works Company, Inc. definitive proxy statement for the [removed: 2023] [added: 2024] Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2022] [added: 2023] are incorporated by reference into Part III of this report.

| [Forward-Looking [removed: Statements](#if348ed1740c649ea8353396181058b86_13)] [added: Statements](#i3c090b3ff6cd4ccd8bbfc58c9f828836_13)] | | | | | | [removed: [1](#if348ed1740c649ea8353396181058b86_13)] [added: [1](#i3c090b3ff6cd4ccd8bbfc58c9f828836_13)] | | |

| Item 1. | | | [removed: [Business](#if348ed1740c649ea8353396181058b86_19)] [added: [Business](#i3c090b3ff6cd4ccd8bbfc58c9f828836_19)] | | | [removed: [4](#if348ed1740c649ea8353396181058b86_19)] [added: [4](#i3c090b3ff6cd4ccd8bbfc58c9f828836_19)] | | |

| Item 1A. | | | [Risk [removed: Factors](#if348ed1740c649ea8353396181058b86_46)] [added: Factors](#i3c090b3ff6cd4ccd8bbfc58c9f828836_46)] | | | [removed: [25](#if348ed1740c649ea8353396181058b86_46)] [added: [22](#i3c090b3ff6cd4ccd8bbfc58c9f828836_46)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#if348ed1740c649ea8353396181058b86_49)] [added: Comments](#i3c090b3ff6cd4ccd8bbfc58c9f828836_49)] | | | [removed: [40](#if348ed1740c649ea8353396181058b86_49)] [added: [37](#i3c090b3ff6cd4ccd8bbfc58c9f828836_49)] | | |

| Item 2. | | | [removed: [Properties](#if348ed1740c649ea8353396181058b86_52)] [added: [Properties](#i3c090b3ff6cd4ccd8bbfc58c9f828836_52)] | | | [removed: [40](#if348ed1740c649ea8353396181058b86_52)] [added: [39](#i3c090b3ff6cd4ccd8bbfc58c9f828836_52)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#if348ed1740c649ea8353396181058b86_55)] [added: Proceedings](#i3c090b3ff6cd4ccd8bbfc58c9f828836_55)] | | | [removed: [40](#if348ed1740c649ea8353396181058b86_55)] [added: [39](#i3c090b3ff6cd4ccd8bbfc58c9f828836_55)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#if348ed1740c649ea8353396181058b86_58)] [added: Disclosures](#i3c090b3ff6cd4ccd8bbfc58c9f828836_58)] | | | [removed: [46](#if348ed1740c649ea8353396181058b86_58)] [added: [48](#i3c090b3ff6cd4ccd8bbfc58c9f828836_58)] | | |

| Item 5. | | | [Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#if348ed1740c649ea8353396181058b86_64)] [added: Securities](#i3c090b3ff6cd4ccd8bbfc58c9f828836_64)] | | | [removed: [47](#if348ed1740c649ea8353396181058b86_64)] [added: [49](#i3c090b3ff6cd4ccd8bbfc58c9f828836_64)] | | |

| Item 6. | | | [removed: [\[](#if348ed1740c649ea8353396181058b86_2049)[Reserved](#if348ed1740c649ea8353396181058b86_2049)[\]](#if348ed1740c649ea8353396181058b86_2049)] [added: [\[Reserved\]](#i3c090b3ff6cd4ccd8bbfc58c9f828836_67)] | | | [removed: [47](#if348ed1740c649ea8353396181058b86_64)] [added: [49](#i3c090b3ff6cd4ccd8bbfc58c9f828836_64)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#if348ed1740c649ea8353396181058b86_67)] [added: Operations](#i3c090b3ff6cd4ccd8bbfc58c9f828836_70)] | | | [removed: [48](#if348ed1740c649ea8353396181058b86_67)] [added: [50](#i3c090b3ff6cd4ccd8bbfc58c9f828836_70)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#if348ed1740c649ea8353396181058b86_100)] [added: Risk](#i3c090b3ff6cd4ccd8bbfc58c9f828836_109)] | | | [removed: [74](#if348ed1740c649ea8353396181058b86_100)] [added: [75](#i3c090b3ff6cd4ccd8bbfc58c9f828836_109)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#if348ed1740c649ea8353396181058b86_103)] [added: Data](#i3c090b3ff6cd4ccd8bbfc58c9f828836_112)] | | | [removed: [76](#if348ed1740c649ea8353396181058b86_103)] [added: [77](#i3c090b3ff6cd4ccd8bbfc58c9f828836_112)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#if348ed1740c649ea8353396181058b86_196)] [added: Disclosure](#i3c090b3ff6cd4ccd8bbfc58c9f828836_205)] | | | [removed: [134](#if348ed1740c649ea8353396181058b86_196)] [added: [138](#i3c090b3ff6cd4ccd8bbfc58c9f828836_205)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#if348ed1740c649ea8353396181058b86_199)] [added: Procedures](#i3c090b3ff6cd4ccd8bbfc58c9f828836_208)] | | | [removed: [134](#if348ed1740c649ea8353396181058b86_199)] [added: [138](#i3c090b3ff6cd4ccd8bbfc58c9f828836_208)] | | |

| Item 9B. | | | [Other [removed: Information](#if348ed1740c649ea8353396181058b86_202)] [added: Information](#i3c090b3ff6cd4ccd8bbfc58c9f828836_211)] | | | [removed: [135](#if348ed1740c649ea8353396181058b86_202)] [added: [139](#i3c090b3ff6cd4ccd8bbfc58c9f828836_211)] | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#if348ed1740c649ea8353396181058b86_205)] [added: Inspections](#i3c090b3ff6cd4ccd8bbfc58c9f828836_214)] | | | [removed: [135](#if348ed1740c649ea8353396181058b86_205)] [added: [139](#i3c090b3ff6cd4ccd8bbfc58c9f828836_214)] | | |

| Item 10. | | | [Directors, Executive [removed: Officers of the Registrant and] [added: Officers](#i3c090b3ff6cd4ccd8bbfc58c9f828836_220) [and] Corporate [removed: Governance](#if348ed1740c649ea8353396181058b86_211)] [added: Governance](#i3c090b3ff6cd4ccd8bbfc58c9f828836_220)] | | | [removed: [136](#if348ed1740c649ea8353396181058b86_211)] [added: [140](#i3c090b3ff6cd4ccd8bbfc58c9f828836_220)] | | |

| Item 11. | | | [Executive [removed: Compensation](#if348ed1740c649ea8353396181058b86_214)] [added: Compensation](#i3c090b3ff6cd4ccd8bbfc58c9f828836_223)] | | | [removed: [136](#if348ed1740c649ea8353396181058b86_214)] [added: [140](#i3c090b3ff6cd4ccd8bbfc58c9f828836_223)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#if348ed1740c649ea8353396181058b86_217)] [added: Matters](#i3c090b3ff6cd4ccd8bbfc58c9f828836_226)] | | | [removed: [136](#if348ed1740c649ea8353396181058b86_217)] [added: [140](#i3c090b3ff6cd4ccd8bbfc58c9f828836_226)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions and Director [removed: Independence](#if348ed1740c649ea8353396181058b86_220)] [added: Independence](#i3c090b3ff6cd4ccd8bbfc58c9f828836_229)] | | | [removed: [136](#if348ed1740c649ea8353396181058b86_220)] [added: [140](#i3c090b3ff6cd4ccd8bbfc58c9f828836_229)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#if348ed1740c649ea8353396181058b86_223)] [added: Services](#i3c090b3ff6cd4ccd8bbfc58c9f828836_232)] | | | [removed: [136](#if348ed1740c649ea8353396181058b86_223)] [added: [140](#i3c090b3ff6cd4ccd8bbfc58c9f828836_232)] | | |

| Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#if348ed1740c649ea8353396181058b86_229)] [added: Schedules](#i3c090b3ff6cd4ccd8bbfc58c9f828836_238)] | | | [removed: [137](#if348ed1740c649ea8353396181058b86_229)] [added: [141](#i3c090b3ff6cd4ccd8bbfc58c9f828836_238)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#if348ed1740c649ea8353396181058b86_232)] [added: Summary](#i3c090b3ff6cd4ccd8bbfc58c9f828836_241)] | | | [removed: [137](#if348ed1740c649ea8353396181058b86_232)] [added: [141](#i3c090b3ff6cd4ccd8bbfc58c9f828836_241)] | | |

Forward-looking statements may relate to, among other things: the Company’s future financial performance, liquidity and cash flows; the timing and amount of rate and revenue adjustments, including through general rate case filings, filings for infrastructure surcharges and other governmental agency authorizations and proceedings, and filings to address regulatory lag; the Company’s [added: ability to execute its current and long-term business, operational, capital expenditures and] growth [added: plans] and [removed: portfolio optimization strategies, including] [added: strategies;] the timing and outcome of pending or future acquisition [removed: activity;] [added: activity, and] the ability [added: to achieve organic customer growth; the ability] of the Company’s California subsidiary to obtain adequate alternative water supplies in lieu of diversions from the Carmel River; the [removed: amount and] [added: amount,] allocation [added: and timing] of projected capital expenditures and related funding requirements; the Company’s ability to repay or refinance debt; the future impacts of increased or increasing financing costs, inflation and interest rates; the Company’s ability to [removed: execute its current and long-term business, operational and capital expenditures strategies; the Company’s ability to] finance current [added: and projected] operations, capital [removed: expenditures] [added: expenditure needs] and growth initiatives by accessing the debt and equity capital [removed: markets;] [added: markets and sources of short-term liquidity;] the outcome and impact on the Company of governmental and regulatory [added: investigations and] proceedings and related potential fines, penalties and other sanctions; the ability to meet or exceed the Company’s stated environmental and sustainability goals, including its greenhouse gas (“GHG”) emission reduction, water delivery efficiency and water system resiliency goals; the ability to complete, and the timing and efficacy of, the design, development, implementation and improvement of technology and other strategic initiatives; the [removed: impacts] [added: Company’s ability] to [removed: the Company of the ongoing COVID-19 pandemic;] [added: comply with new and changing environmental regulations;] the ability to capitalize on existing or future utility privatization opportunities; trends in the water and wastewater industries in which the Company operates, including macro trends with respect to the Company’s efforts related to customer, technology and work execution; regulatory, legislative, tax policy or legal developments; and impacts that future significant tax legislation may have on the Company and on its business, results of operations, cash flows and liquidity.

- [added: present and future proposed] changes in laws, governmental regulations and policies, including with respect to [removed: environmental,] [added: the environment (such as, for example, potential improvements to existing Federal regulations with respect to lead and copper service lines and galvanized steel pipe),] health and safety, data and consumer privacy, security and protection, water quality and water quality accountability, contaminants of emerging [removed: concern,] [added: concern (including without limitation per- and polyfluoroalkyl substances (“PFAS”)),] public utility and tax regulations and policies, and impacts resulting from U.S., state and local elections and changes in federal, state and local executive administrations;

- the risks associated with the Company’s aging infrastructure, and its ability to appropriately improve the resiliency of or [removed: maintain and] [added: maintain, update, redesign and/or] replace, current or future infrastructure and systems, including its technology and other assets, and manage the expansion of its businesses;

- exposure or infiltration of the Company’s technology and critical infrastructure systems, including the disclosure of sensitive, personal or confidential information contained therein, through physical or cyber attacks or other [removed: means;][added: means, and impacts from required or voluntary public and other disclosures related thereto;]

- the Company’s ability to obtain permits and other approvals for projects and [removed: construction] [added: construction, update, redesign and/or replacement] of various water and wastewater facilities;

- the Company’s ability to control operating expenses and to achieve operating [removed: efficiencies;][added: efficiencies, and the Company’s ability to create, maintain and promote initiatives and programs that support the affordability of the Company’s regulated utility services;]

- the Company’s ability to receive [removed: any contingent consideration provided for in the HOS sale, as well as] amounts due, payable and owing to the Company under the [added: amended secured] seller note when due; and

- the Company’s exposure to liabilities related to environmental laws and [added: regulations, including those enacted or adopted and under consideration, and the substances related thereto, including without limitation lead and galvanized steel, PFAS and other contaminants of emerging concern, and] similar matters resulting from, among other things, water and wastewater service provided to customers;

- fluctuations in the value of, or assumptions and estimates related to, its benefit plan assets and liabilities, including with respect to its pension and other post-retirement benefit plans, that could increase expenses and plan funding [added: requirements;]

- changes in federal or state general, income and other tax laws, including (i) future significant tax [removed: legislation,] [added: legislation or regulations (including without limitation impacts related to the Corporate Alternative Minimum Tax),] and (ii) the availability of, or the Company’s compliance with, the terms of applicable tax credits and tax abatement programs;

- the use by municipalities of the power of eminent domain or other authority to condemn the systems of one or more of the Company’s utility subsidiaries, [added: including without limitation litigation and other proceedings with respect to the water system assets of the Company’s California subsidiary (“Cal Am”) located in Monterey, California (the “Monterey system assets”),] or the assertion by private landowners of similar rights against such utility subsidiaries;

| | | | [Part I](#i3c090b3ff6cd4ccd8bbfc58c9f828836_16) | | | | | |

| Item 1C. | | | [Cyber Security](#i3c090b3ff6cd4ccd8bbfc58c9f828836_1975) | | | [37](#i3c090b3ff6cd4ccd8bbfc58c9f828836_1975) | | |

| | | | [Part II](#i3c090b3ff6cd4ccd8bbfc58c9f828836_61) | | | | | |

| | | | [Part III](#i3c090b3ff6cd4ccd8bbfc58c9f828836_217) | | | | | |

| | | | [Part IV](#i3c090b3ff6cd4ccd8bbfc58c9f828836_235) | | | | | |

| [Exhibit Index](#i3c090b3ff6cd4ccd8bbfc58c9f828836_244) | | | | | | [141](#i3c090b3ff6cd4ccd8bbfc58c9f828836_244) | | |

| [Signatures](#i3c090b3ff6cd4ccd8bbfc58c9f828836_247) | | | | | | [146](#i3c090b3ff6cd4ccd8bbfc58c9f828836_247) | | |

| | | | [Part I](#if348ed1740c649ea8353396181058b86_16) | | | | | |

| | | | [Part II](#if348ed1740c649ea8353396181058b86_61) | | | | | |

| | | | [Part III](#if348ed1740c649ea8353396181058b86_208) | | | | | |

| | | | [Part IV](#if348ed1740c649ea8353396181058b86_226) | | | | | |

| [Exhibit Index](#if348ed1740c649ea8353396181058b86_235) | | | | | | [137](#if348ed1740c649ea8353396181058b86_235) | | |

| [Signatures](#if348ed1740c649ea8353396181058b86_238) | | | | | | [142](#if348ed1740c649ea8353396181058b86_238) | | |

requirements;

The Company’s Cybersecurity Program

The Company’s cybersecurity program is an integral part of the long-term sustainability and effectiveness of the Company’s operational and technology environment.

To protect the integrity of its data and operational and technology systems, the Company employs a “defense-in-depth” strategy that uses multiple security measures.

This strategy aligns with the National Institute of Standards and Technology Cyber Security Framework and provides preventative, detective, and responsive measures to identify and manage risks.

The Company periodically reviews and modifies the implementation of its cybersecurity strategy based on threat trends, program maturity, the results of assessments, and the advice of third-party security consultants.

The Company’s cybersecurity program includes the following areas of focus:

- Technology that includes, among other things, encryption, threat management, monitoring, investigation support and backups for physical devices, such as mobile phones and computers, connected to the Company network;

- Identity and access management controls that include, among other things, multi-factor authentication and safeguards associated with granting elevated privileges;

- Proactive cybersecurity processes, including vulnerability scanning, penetration testing and periodic program assessments by outside security consultants and assessors;

- Reactive cybersecurity processes that are regularly evaluated using various incident response and disaster recovery exercises;

- Employee cyber risk awareness and training, including regular simulation exercises with employees, that covers cybersecurity threats and actions to prevent and report attacks; and

- Third-party risk management and security standards, including due diligence, continuous monitoring, cyber risk scoring and contractual obligations, and periodic review of third-party control environments to align the Company’s risk exposure with its business requirements and risk tolerances.

Third-Party Relationships

The Company utilizes partners and third-party service providers to help deliver safe and reliable water and wastewater services across its regulated operations and has implemented a third-party risk management program to understand the cybersecurity risks to the Company that may arise out of these third-party relationships.

The Company categorizes third-party relationships by risk level, which is determined primarily by the service provided by the third-party and its level of access to the Company’s data.

Each category has specific cybersecurity controls, data privacy and documentation requirements, which are outlined in the agreement between the Company and the third-party service provider.

In addition, the Company evaluates the online security footprint for its service providers at the time of agreement, and on a regular basis, thereafter, depending on the provider’s risk level.

The Company reviews its agreements with third-party service providers periodically related to terms and conditions governing cybersecurity controls and data privacy.

The Company also monitors, as appropriate, risks relating to potential compromises of sensitive Company information through third parties and reevaluates these risks periodically.

In addition, the Company obtains annual attestation reports related to data security and privacy from certain third-party providers to further support compliance with industry-standard cybersecurity protocols.

Cybersecurity Risks

The Company believes that its current preventative actions and response activities provide reasonable measures of protection against security breaches and serve generally to reduce the Company’s overall cybersecurity risk.

However, cybersecurity threats are constantly evolving and have and will continue to become more frequent and sophisticated.

Although the Company has implemented measures that it believes are reasonable to safeguard its operational and technology systems and has sought to establish a culture of continuous monitoring and improvement, the evolving nature of cybersecurity attacks and vulnerabilities means that these protections may not always be effective.

In addition, the Company has obtained insurance to provide coverage for a portion of the losses and damages that may result from a cyber attack or a security breach, but such insurance is subject to exclusions, limitations and exceptions, and may not cover the total loss or damage caused by an attack or breach.

To date, management has determined that no cybersecurity incident experienced by the Company has resulted in a material impact on its financial condition, results of operations or business strategy.

For additional information concerning cybersecurity-related risks, see Item 1A—Risk Factors—We may be subject to physical and cyber attacks, and —We may sustain losses that exceed or are excluded from our insurance coverage or for which we are self-insured.

Cybersecurity Risk Management and Strategy

The Company has established an enterprise-wide cybersecurity program designed to prevent disruption to critical information systems, minimize the loss or manipulation of sensitive information, and to timely identify, escalate and promptly remediate and recover from cybersecurity incidents and facilitate compliance with regulatory and disclosure requirements.

To oversee cybersecurity risk management, the Company employs a dedicated unit, led by the Company’s Chief Security Officer (“CSO”), to implement cybersecurity controls, assess and report on cybersecurity risks and consult with the Company’s internal Enterprise Risk Management Committee, a decision-making body which supports and oversees the identification, assessment, prioritization, and mitigation strategies for enterprise-level risks, including cybersecurity risks.

The Company’s CSO has 23 years of work experience in the cybersecurity field throughout various industries, including the utility sector, and has obtained several professional certifications, including from the International Information System Security Certification Consortium.

The CSO reports directly to the Company's Chief Information Officer (“CIO”), who is responsible for the Company’s information technology program.

The CIO has over 25 years of work experience in the information technology, physical security and cybersecurity fields, including previously serving as the Company’s CSO, and holds the Certified Protection Professional, Professional Certified Investigator and Physical Security Professional certifications from ASIS International.

The CIO serves on the Water Sector Coordinating Council (“WSCC”), an advisory body comprised of representatives from various U.S. water and wastewater organizations, which serves as a policy, strategy and coordination mechanism for the water sector on critical infrastructure security and resilience issues.

In that role, the CIO partners with representatives from the Department of Homeland Security and the EPA on U.S. water and wastewater sector initiatives.

The CIO is also the former Chair of the WSCC, the National Association of Water Companies’ Safety and Security Committee, and the ASIS Utility Security Council.

The Company’s security team provides oversight and policy guidance on physical, cyber and information security, as well as business continuity, throughout the Company’s operations.

It is responsible for designing, implementing, monitoring and supporting effective physical and technical security controls for the Company’s physical assets, business systems and operational technologies.

The Company’s security team also conducts annual and ongoing cybersecurity awareness training and education for the Company’s employees.

In 2023, 100% of the Company’s active workforce completed mandatory cybersecurity training.

- [removed: 490] [added: 540] groundwater treatment plants;

- [removed: 53,500] [added: 53,700] miles of transmission, distribution and collection mains and pipes;

- [removed: 1,100] [added: 1,200] groundwater wells;

- [removed: 73] [added: 74] dams.

Approximately [removed: 51%] [added: 50%] of all properties that the Company owns are located in New Jersey and Pennsylvania.

Since April 23, 2008, the Company’s common stock has traded on the New York Stock Exchange (“NYSE”) under the symbol “AWK.” As of [removed: January 31, 2023,] [added: February 6, 2024,] there were [removed: 181,858,619] [added: 194,755,320] shares of common stock outstanding held by approximately [removed: 2,234] [added: 2,101] record holders.

From April 1, 2015, the date repurchases under the anti-dilutive stock repurchase program commenced, through December 31, [removed: 2022,] [added: 2023,] the Company repurchased an aggregate of 4,860,000 shares of its common stock under the program, leaving an aggregate of 5,140,000 shares available for repurchase under this program.

There were no repurchases of common stock in [removed: 2022.][added: 2023.]

[Table of Content](#if348ed1740c649ea8353396181058b86_7)[s](#if348ed1740c649ea8353396181058b86_7)

| [Report of Independent Registered Public Accounting [removed: Firm](#if348ed1740c649ea8353396181058b86_106)] [added: Firm](#i3c090b3ff6cd4ccd8bbfc58c9f828836_115)] [(PCAOB [removed: ID](#if348ed1740c649ea8353396181058b86_106) 238[)](#if348ed1740c649ea8353396181058b86_106)] [added: ID](#i3c090b3ff6cd4ccd8bbfc58c9f828836_115) 238[)](#i3c090b3ff6cd4ccd8bbfc58c9f828836_115)] | | | [removed: [77](#if348ed1740c649ea8353396181058b86_106)] [added: [78](#i3c090b3ff6cd4ccd8bbfc58c9f828836_115)] | | |

| [Consolidated Balance Sheets as of December 31, [removed: 202](#if348ed1740c649ea8353396181058b86_112)[2](#if348ed1740c649ea8353396181058b86_112)] [added: 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_121)[3](#i3c090b3ff6cd4ccd8bbfc58c9f828836_121)] [and [removed: 20](#if348ed1740c649ea8353396181058b86_112)[21](#if348ed1740c649ea8353396181058b86_112)] [added: 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_121)[2](#i3c090b3ff6cd4ccd8bbfc58c9f828836_121)] | | | [removed: [79](#if348ed1740c649ea8353396181058b86_112)] [added: [80](#i3c090b3ff6cd4ccd8bbfc58c9f828836_121)] | | |

| [Consolidated Statements of Operations for the years ended December 31, [removed: 202](#if348ed1740c649ea8353396181058b86_115)[2](#if348ed1740c649ea8353396181058b86_115)[, 202](#if348ed1740c649ea8353396181058b86_115)[1](#if348ed1740c649ea8353396181058b86_115)] [added: 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_124)[3](#i3c090b3ff6cd4ccd8bbfc58c9f828836_124)[, 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_124)[2](#i3c090b3ff6cd4ccd8bbfc58c9f828836_124)] [and [removed: 2](#if348ed1740c649ea8353396181058b86_115)[020](#if348ed1740c649ea8353396181058b86_115)] [added: 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_124)[1](#i3c090b3ff6cd4ccd8bbfc58c9f828836_124)] | | | [removed: [81](#if348ed1740c649ea8353396181058b86_115)] [added: [82](#i3c090b3ff6cd4ccd8bbfc58c9f828836_124)] | | |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 202](#if348ed1740c649ea8353396181058b86_118)[2](#if348ed1740c649ea8353396181058b86_118)[, 202](#if348ed1740c649ea8353396181058b86_118)[1](#if348ed1740c649ea8353396181058b86_118)] [added: 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_127)[3](#i3c090b3ff6cd4ccd8bbfc58c9f828836_127)[, 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_127)[2](#i3c090b3ff6cd4ccd8bbfc58c9f828836_127)] [and [removed: 2](#if348ed1740c649ea8353396181058b86_118)[02](#if348ed1740c649ea8353396181058b86_118)[0](#if348ed1740c649ea8353396181058b86_118)] [added: 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_127)[1](#i3c090b3ff6cd4ccd8bbfc58c9f828836_127)] | | | [removed: [82](#if348ed1740c649ea8353396181058b86_118)] [added: [83](#i3c090b3ff6cd4ccd8bbfc58c9f828836_127)] | | |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 202](#if348ed1740c649ea8353396181058b86_121)[2](#if348ed1740c649ea8353396181058b86_121)[, 202](#if348ed1740c649ea8353396181058b86_121)[1](#if348ed1740c649ea8353396181058b86_121)] [added: 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_130)[3](#i3c090b3ff6cd4ccd8bbfc58c9f828836_130)[, 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_130)[2](#i3c090b3ff6cd4ccd8bbfc58c9f828836_130)] [and [removed: 20](#if348ed1740c649ea8353396181058b86_121)[20](#if348ed1740c649ea8353396181058b86_121)] [added: 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_130)[1](#i3c090b3ff6cd4ccd8bbfc58c9f828836_130)] | | | [removed: [83](#if348ed1740c649ea8353396181058b86_121)] [added: [84](#i3c090b3ff6cd4ccd8bbfc58c9f828836_130)] | | |

| [Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, [removed: 202](#if348ed1740c649ea8353396181058b86_124)[2](#if348ed1740c649ea8353396181058b86_124)[, 202](#if348ed1740c649ea8353396181058b86_124)[1](#if348ed1740c649ea8353396181058b86_124)] [added: 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_133)[3](#i3c090b3ff6cd4ccd8bbfc58c9f828836_133)[, 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_133)[2](#i3c090b3ff6cd4ccd8bbfc58c9f828836_133)] [and [removed: 20](#if348ed1740c649ea8353396181058b86_124)[20](#if348ed1740c649ea8353396181058b86_124)] [added: 202](#i3c090b3ff6cd4ccd8bbfc58c9f828836_133)[1](#i3c090b3ff6cd4ccd8bbfc58c9f828836_133)] | | | [removed: [84](#if348ed1740c649ea8353396181058b86_124)] [added: [85](#i3c090b3ff6cd4ccd8bbfc58c9f828836_133)] | | |

| [Notes to Consolidated Financial [removed: Statements](#if348ed1740c649ea8353396181058b86_127)] [added: Statements](#i3c090b3ff6cd4ccd8bbfc58c9f828836_136)] | | | [removed: [85](#if348ed1740c649ea8353396181058b86_127)] [added: [86](#i3c090b3ff6cd4ccd8bbfc58c9f828836_136)] | | |

We have audited the accompanying consolidated balance sheets of American Water Works Company, Inc. and its subsidiaries (the “Company”) as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2022] [added: 2023] in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

As described in Notes 2 and 3 to the consolidated financial statements, the Company’s consolidated regulatory assets and liabilities balances were [removed: $1,030] [added: $1,119] million and [removed: $1,595] [added: $1,482] million, respectively, as of December 31, [removed: 2022.][added: 2023.]

These procedures also included, among others, evaluating the reasonableness of management’s judgments regarding the probability of recovery and settlement based on the Company’s correspondence with regulators, status of regulatory proceedings, past practices, and other relevant information; evaluating the related accounting and disclosure implications; and evaluating regulatory [removed: assets] [added: asset] and [removed: liabilities] [added: liability] balances based on provisions and formulas outlined in rate orders and other correspondence with the Company’s regulators.

| | | | December 31, [removed: 2022] [added: 2023] | | | | | | December 31, [removed: 2021] [added: 2022] | | |

| Property, plant and equipment | | | $ | [removed: 29,736] [added: 32,189] | | | | | $ | [removed: 27,413] [added: 29,736] | |

| Accumulated depreciation | | | [removed: (6,513)] [added: (6,751)] | | | | | | [removed: (6,329)] [added: (6,513)] | | |

| Property, plant and equipment, net | | | [removed: 23,223] [added: 25,438] | | | | | | [removed: 21,084] [added: 23,223] | | |

| Cash and cash equivalents | | | [removed: 85] [added: 330] | | | | | | [removed: 116] [added: 85] | | |

| Restricted funds | | | [removed: 32] [added: 34] | | | | | | [removed: 20] [added: 32] | | |

| Accounts receivable, net of allowance for uncollectible accounts of [removed: $60] [added: $51] and [removed: $75,] [added: $60,] respectively | | | [removed: 334] [added: 339] | | | | | | [removed: 271] [added: 334] | | |

| Income tax receivable | | | [removed: 114] [added: 86] | | | | | | [removed: 4] [added: 114] | | |

| Unbilled revenues | | | [removed: 275] [added: 302] | | | | | | [removed: 248] [added: 275] | | |

| Materials and supplies | | | [removed: 98] [added: 112] | | | | | | [removed: 57] [added: 98] | | |

| Other | | | [removed: 312] [added: 186] | | | | | | [removed: 155] [added: 312] | | |

| Total current assets | | | [removed: 1,250] [added: 1,389] | | | | | | [removed: 1,554] [added: 1,250] | | |

| Regulatory assets | | | [removed: 990] [added: 1,106] | | | | | | [removed: 1,051] [added: 990] | | |

| Operating lease right-of-use assets | | | [removed: 82] [added: 86] | | | | | | [removed: 92] [added: 82] | | |

| Goodwill | | | 1,143 | | | | | | [removed: 1,139] [added: 1,143] | | |

| Other | | | [removed: 379] [added: 416] | | | | | | [removed: 242] [added: 379] | | |

| Total regulatory and other long-term assets | | | [removed: 3,314] [added: 3,471] | | | | | | [removed: 3,437] [added: 3,314] | | |

| Total assets | | | $ | [removed: 27,787] [added: 30,298] | | | | | $ | [removed: 26,075] [added: 27,787] | |

| Common stock ($0.01 par value; 500,000,000 shares authorized; [removed: 187,200,539] [added: 200,144,968] and [removed: 186,880,413] [added: 187,200,539] shares issued, respectively) | | | $ | 2 | | | | | $ | 2 | |

| Paid-in-capital | | | [removed: 6,824] [added: 8,550] | | | | | | [removed: 6,781] [added: 6,824] | | |

| Retained earnings | | | [removed: 1,267] [added: 1,659] | | | | | | [removed: 925] [added: 1,267] | | |

| Accumulated other comprehensive loss | | | [removed: (23)] [added: (26)] | | | | | | [removed: (45)] [added: (23)] | | |

| Treasury stock, at cost [removed: (5,342,477] [added: (5,414,867] and [removed: 5,269,324] [added: 5,342,477] shares, respectively) | | | [removed: (377)] [added: (388)] | | | | | | [removed: (365)] [added: (377)] | | |

| Total common shareholders' equity | | | [removed: 7,693] [added: 9,797] | | | | | | [removed: 7,298] [added: 7,693] | | |

| Long-term debt | | | [removed: 10,926] [added: 11,715] | | | | | | [removed: 10,341] [added: 10,926] | | |

| Total long-term debt | | | [removed: 10,929] [added: 11,718] | | | | | | [removed: 10,344] [added: 10,929] | | |

| Total capitalization | | | [removed: 18,622] [added: 21,515] | | | | | | [removed: 17,642] [added: 18,622] | | |

| Unrealized gain (loss) on available-for-sale fixed-income securities, net of tax of $0 in 2023, 2022 and 2021 | | | 4 | | | | | | — | | | | | | — | | |

| Depreciation and amortization | | | 704 | | | | | | 649 | | | | | | 636 | | |

| Net proceeds from common stock financing | | | 1,688 | | | | | | — | | | | | | — | | |

| Balance as of December 31, 2023 | | | 200.1 | | | | | | $ | 2 | | | | | $ | 8,550 | | | | | $ | 1,659 | | | | | $ | (26) | | | | | (5.5) | | | | | | $ | (388) | | | | | $ | 9,797 | |

The Company’s primary business involves the ownership of regulated utilities that provide water and wastewater services in 14 states in the United States, collectively referred to as the “Regulated Businesses.” The Company also operates other businesses that provide water and wastewater services to the U.S. government on military installations, as well as municipalities.

These other businesses do not meet the criteria of a reportable segment in accordance with generally accepted accounting principles in the United States (“GAAP”), and are collectively presented throughout this Annual Report on Form 10-K within “Other.”

| Presentation and Disclosure Requirements | | | | | | The guidance amends GAAP disclosure and presentation requirements for various subtopics in the Financial Accounting Standards Board Codification and was issued in response to the U.S. Securities and Exchange Commission’s (“SEC”) final rule published in August 2018 that updated and simplified disclosure requirements that it believed were outdated, superseded, overlapping, duplicative and redundant. The new guidance is intended to align GAAP requirements with those of the SEC for all entities. | | | | | | The date on which the SEC’s removal of the related disclosure requirement became effective | | | | | | Prospective | | | | | | This standard did not have a material impact on the Consolidated Financial Statements | | |

| Segment Reporting | | | | | | The guidance in this standard expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. Additionally, the guidance enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit and loss, provides new segment disclosure requirements for entities with a single reportable segment, and other disclosure requirements. | | | | | | January 1, 2024, effective for fiscal year 2024 and interim periods within fiscal years beginning in 2025 | | | | | | Retrospective | | | | | | The Company is evaluating the impact on its 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. | | | | | | January 1, 2025 | | | | | | Prospective, with retrospective application also permitted | | | | | | The Company is evaluating the impact on its Consolidated Financial Statements and the timing of adoption. | | |

| Missouri | | | May 28, 2023 | | | | | | $ | 44 | |

| Virginia | | | April 24, 2023 (a) | | | | | | 11 | | |

The Virginia State Corporation Commission issued its final Order on April 24, 2023.

On June 29, 2023, the California Public Utilities Commission (“CPUC”) issued a decision on the cost of capital application for the Company’s California subsidiary, which authorized a return on equity of 8.98% and a capital structure with an equity component of 57.04% for the three-year period from 2022 to 2024.

The CPUC’s decision was effective from the date of the order through the end of 2024.

The decision included a Water Cost of Capital Mechanism (the “WCCM”) that allows the California subsidiary to increase its return on equity for the remainder of 2023 and 2024 based on capital market rates.

As authorized by the WCCM, the California subsidiary filed with the CPUC staff advice letters to increase the return on equity.

On July 25, 2023, the CPUC staff approved a return on equity of 9.50%, effective July 31, 2023.

On November 15, 2023, the CPUC staff approved a return on equity of 10.20%, effective January 1, 2024.

On May 3, 2023, the Missouri Public Service Commission issued an order approving the March 3, 2023, joint settlement agreement in the general rate case filed on July 1, 2022, by the Company’s Missouri subsidiary.

The general rate case order approved a $44 million annualized increase in water and wastewater revenues, excluding $51 million in previously approved infrastructure surcharges, and authorized implementation of the new water and wastewater rates effective May 28, 2023.

The annualized revenue increase was driven primarily by significant incremental capital investments since the Missouri subsidiary’s 2021 rate case order.

The Missouri subsidiary’s view of its rate base was $2.3 billion, and its view as to its return on equity and long-term debt ratio (each of which is based on the general rate case order but was not disclosed therein) was 9.75% and 50.0%, respectively.

On April 24, 2023, the Virginia State Corporation Commission issued an order approving the settlement of the rate case filed on September 26, 2022, by the Company’s Virginia subsidiary.

The general rate case order approved an $11 million annualized increase in water and wastewater revenues.

Interim rates in this proceeding were effective on May 1, 2022, and the order required that the difference between interim and the final approved rates were subject to refund within 90 days of the order issuance.

The order approves the settlement terms with a return on equity of 9.7% and a common equity ratio of 40.7%.

The annualized revenue increase was driven primarily by significant incremental capital investments since the Virginia subsidiary’s 2020 rate case order that have been completed or were planned through April 30, 2023, increases in pension and other postretirement benefits expense and increases in production costs, including chemicals, fuel and power costs.

The general rate case order includes recovery of the Virginia subsidiary’s COVID-19 deferral balance.

It also includes approval of the accounting deferral of deviations in pension and other postretirement benefits expense from those established in base rates, until the Virginia subsidiary’s next base rate case.

The Pennsylvania subsidiary’s view of its rate base was $5.1 billion, and its view as to its return on equity and long-term debt ratio (each of which is based on the general rate case order but was not disclosed therein) was 10.0% and 44.8%, respectively.

On January 25, 2024, the Company’s Illinois subsidiary filed tariffs for new water and wastewater rates.

The request seeks a two-step rate increase consisting of aggregate annualized incremental revenue, based on a proposed return on equity of 10.75%, of (i) approximately $136 million effective January 1, 2025, based on a future test year through December 31, 2025 with average rate base and a capital structure with an equity component of 52.27% and a debt component of 47.73%, and (ii) approximately $16 million effective January 1, 2026, based on a future test year to include end of period rate base and a capital structure with an equity component of 54.43% and a debt component of 45.57%.

The requested increases are driven primarily by an estimated $557 million in capital investments to be made by the Illinois subsidiary starting January 2024 through December 2025.

The request also proposes a treatment and compliance rider to address recovery of future environmental compliance investments, and a modification to the existing volume balancing account mechanism to include full production cost recovery.

On January 19, 2024, the Company’s New Jersey subsidiary filed a general rate case requesting approximately $162 million in additional annualized revenues, which is based on a proposed return on equity of 10.75% and a capital structure with an equity component of 56.30% and a debt component of 43.70%.

The requested annualized revenue increase is driven primarily by approximately $1.3 billion in capital investments made and to be made by the New Jersey subsidiary through December 2024.

The request also proposes a revenue decoupling mechanism and seeks a deferral of certain production cost adjustments.

On December 15, 2023, the Company’s California subsidiary submitted a request to delay by one year its cost of capital filing and maintain its current authorized cost of capital through 2025.

On February 2, 2024, the CPUC granted the request for a one year extension of the cost of capital filing to May 1, 2025, to set its authorized cost of capital beginning January 1, 2026.

The request is based on a proposed return on equity of 10.95% and a capital structure with an equity component of 55.30% and a debt component of 44.70%.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

[Table of Content](#if348ed1740c649ea8353396181058b86_7)[s](#if348ed1740c649ea8353396181058b86_7)

| February 15, 2023 | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Assets held for sale | | | — | | | | | | 683 | | |

| Postretirement benefit assets | | | — | | | | | | 193 | | |

| Liabilities related to assets held for sale | | | — | | | | | | 83 | | |

| Balance as of December 31, 2019 | | | 185.9 | | | | | | $ | 2 | | | | | $ | 6,700 | | | | | $ | (207) | | | | | $ | (36) | | | | | (5.1) | | | | | | $ | (338) | | | | | $ | 6,121 | |

The Company’s primary business involves the ownership of regulated utilities that provide water and wastewater services in 14 states in the United States, collectively referred to as the “Regulated Businesses.” The Company also operates other market-based businesses that provide water and wastewater services within non-reportable operating segments, collectively presented throughout this Annual Report on Form 10-K within “Other.” The Company’s primary market-based businesses included within Other are the Military Services Group (“MSG”), which enters into long-term contracts with the U.S. government to provide water and wastewater services on various military installations; and the former Homeowner Services Group (“HOS”), which was sold on December 9, 2021, and provided various warranty protection programs and other home services to residential customers.

| Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity | | | | | | Simplification of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. This will result in fewer embedded conversion features being separately recognized from the host contract. Earnings per share (“EPS”) calculations have been simplified for certain instruments. | | | | | | January 1, 2022 | | | | | | Modified retrospective | | | | | | The standard did not have a material impact on the Consolidated Financial Statements. | | |

| Disclosures by Business Entities about Government Assistance | | | | | | The amendments in this update require additional disclosures regarding government grants and contributions. These disclosures require information on the following three items about government transactions to be provided: information on the nature of transactions and related accounting policy used to account for transactions, the line items on the balance sheet and income statement affected by these transactions including amounts applicable to each line, and significant terms and conditions of the transactions, including commitments and contingencies. | | | | | | January 1, 2022 | | | | | | Prospective | | | | | | The standard did not have a material impact on the Consolidated Financial Statements. | | |

| Reference Rate Reform | | | | | | This update provides an additional two-year deferral on the sunset date for temporary relief during the reference rate reform transition period. After December 31, 2024, the Company will no longer be permitted to apply the relief for reference rate reform. | | | | | | December 21, 2022 | | | | | | Prospective | | | | | | The standard did not have a material impact on the Consolidated Financial Statements | | |

| General rate cases by state: | | | | | | | | | | | |

| Hawaii | | | July 1, 2022 | | | | | | 2 | | |

| West Virginia | | | February 25, 2022 | | | | | | 13 | | |

| California, Step Increase | | | January 1, 2022 | | | | | | 9 | | |

| Pennsylvania, Step Increase | | | January 1, 2022 | | | | | | 20 | | |

| Total general rate case authorizations | | | | | | | | | $ | 218 | |

The rate case proceeding was resolved through a “black box” settlement agreement and did not specify an approved return on equity (“ROE”).

On August 17, 2022, the Company’s New Jersey subsidiary was authorized additional annual revenues of $46 million in its general rate case, effective September 1, 2022, based on an authorized return on equity of 9.6%, authorized rate base of $4.15 billion, a common equity ratio of 54.6% and a long-term debt ratio of 45.4%.

The request incorporated updated estimates of production costs, including chemicals, fuel and power costs.

Beginning January 1, 2023, the Company’s New Jersey subsidiary will defer as a regulatory asset or liability, as appropriate, the difference between its pension expense and other postretirement benefits expense and those amounts included in base rates.

The deferral period for this regulatory asset or liability will be two years or, if earlier, will end at the conclusion of the Company’s New Jersey subsidiary’s next general rate case.

The Company’s New Jersey subsidiary also withdrew its request, without prejudice, to recover its existing authorized COVID-19-related regulatory asset in the general rate case and will seek recovery in a separate proceeding within the process established in the New Jersey Board of Public Utilities’ (the “NJBPU”) generic COVID-19-related proceeding.

On February 24, 2022, the Company’s West Virginia subsidiary (“WVAWC”) was authorized additional annual revenues of $13 million in its general rate case, effective February 25, 2022, based on an authorized return on equity of 9.8%, authorized rate base of $734 million and a common equity ratio of 47.9%.

Staff of the Public Service Commission of West Virginia moved for reconsideration of the final order on several grounds.

WVAWC filed its response to the Staff's Petition for Reconsideration on March 28, 2022, in support of the authorized revenue requirement.

On October 21, 2022, the Public Service Commission of West Virginia denied the motion for reconsideration.

On September 26, 2022, a settlement agreement, supported by all parties except one, was filed with the Virginia State Corporation Commission for a $11 million annual revenue increase.

Public hearings were held on September 27 and 28, 2022.

A final decision on this matter is expected in the first quarter of 2023.

The Company’s California subsidiary submitted its application on May 3, 2021, to set its cost of capital for 2022 through 2024.

According to the CPUC’s procedural schedule, a decision setting the authorized cost of capital is expected to be issued in the first quarter of 2023.

| New Jersey | | | (a) | | | | | | $ | 11 | |

| Pennsylvania | | | (b) | | | | | | 19 | | |

| Missouri | | | (c) | | | | | | 30 | | |

| Tennessee | | | August 8, 2022 | | | | | | 3 | | |

| Kentucky | | | July 1, 2022 | | | | | | 3 | | |

Based on that evaluation, the Company’s Chief Executive Officer and its Chief Financial Officer have concluded that, as of December 31, [removed: 2022,] [added: 2023,] the Company’s disclosure controls and procedures were effective at a reasonable level of assurance.

The Company’s management, including the Company’s Chief Executive Officer and its Chief Financial Officer, assessed the effectiveness of its internal control over financial reporting, as of December 31, [removed: 2022,] [added: 2023,] using the criteria described in *Internal Control—Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on the Company’s evaluation under the framework in *Internal Control—Integrated Framework (2013)*, its management concluded that its internal control over financial reporting was effective as of December 31, [removed: 2022.][added: 2023.]

The effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2022] [added: 2023,] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report appearing in Item 8—Financial Statements and Supplementary Data of this Annual Report on Form 10-K.

On February [removed: 15, 2023,] [added: 8, 2024,] Karl F.

[removed: He currently serves] [added: Marberry to replace Admiral Stavridis both] as [removed: a member] [added: Chair] of the [removed: Audit, Finance and Risk] [added: SETO] Committee and [added: as a member of] the Nominating/Corporate Governance Committee.

The Company wishes to thank [removed: Mr. MacKenzie] [added: Admiral Stavridis] for his many years of service to the [removed: Board of Directors.][added: Board.]

Kurz, the Company’s Board Chair, was notified by Admiral James G.

Stavridis of his decision to resign as a member of the Board of Directors of the Company (the “Board”), effective as of February 12, 2024.

Admiral Stavridis’s notification stated that he was resigning to focus on all of his professional and personal obligations and that he did not have any disagreements with the Company on any matter relating to the Company’s operations, policies or practices.

Admiral Stavridis had been a director of the Company since 2018 and served as Chair of the Safety, Environmental, Technology and Operations Committee (the “SETO Committee”) since 2021.

At the effective time of his resignation, Admiral Stavridis also had served as a member of the Nominating/Corporate Governance Committee.

On February 14, 2024, upon the recommendation of the Nominating/Corporate Governance Committee, the Board reduced the size of the Board from ten to nine members and appointed Board member Michael L.

Kurz, the Company’s Board Chair, was notified by George MacKenzie that Mr. MacKenzie does not wish to be considered as a candidate for re-election at the Company’s 2023 Annual Meeting of Shareholders.

Mr. MacKenzie’s notification was not due to any known disagreement on any matter relating to the Company’s operations, policies or practices.

Mr. MacKenzie has been a director of the Company since 2003 and served as Chairman of the Board from 2006 until 2018.

The information required by this item and not set forth below or in Item 1—Business—Executive Officers of this Annual Report on Form 10-K, is incorporated by reference from the Company’s Proxy Statement for the [removed: 2023] [added: 2024] Annual Meeting of Shareholders, to be filed with the SEC within 120 days following the end of the fiscal year covered by this report, under the captions entitled “Board of Directors and Corporate Governance” and “Proposal 1—Election of Directors.”

Information required by this item is incorporated by reference in the Company’s Proxy Statement for the [removed: 2023] [added: 2024] Annual Meeting of Shareholders, under the captions entitled [added: “Board of Directors and Corporate Governance—Board Role in Risk Oversight—Executive Development and Compensation Committee Role,”] “Proposal 1—Election of Directors—Director Compensation Table,” “Compensation Discussion and Analysis,” “Executive Compensation” (excluding the subsection “Pay Versus Performance”), “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report” (with the latter report being furnished, and not filed, in this Annual Report on Form 10-K).

Information required by this item setting forth the security ownership of certain beneficial owners and management is incorporated by reference in the Company’s Proxy Statement for the [removed: 2023] [added: 2024] Annual Meeting of Shareholders, under the captions entitled “Certain Beneficial Ownership Matters—Security Ownership of Management,” “Certain Beneficial Ownership Matters—Security Ownership of Certain Beneficial Owners” and “Equity Compensation Plan Information.”

Information required by this item is incorporated by reference in the Company’s Proxy Statement for the [removed: 2023] [added: 2024] Annual Meeting of Shareholders, under the caption entitled “Board of Directors and Corporate Governance—Board Review of Related Person Transactions” and “Proposal 1—Election of Directors—Director Independence.”

Information required by this item is incorporated by reference in the Company’s Proxy Statement for the [removed: 2023] [added: 2024] Annual Meeting of Shareholders, under the caption entitled “Proposal [removed: 4—Ratification] [added: 3—Ratification] of Appointment of Independent Registered Public Accounting Firm—Fees Paid to Independent Registered Public Accounting Firm” and “Proposal [removed: 4—Ratification] [added: 3—Ratification] of Appointment of Independent Registered Public Accounting Firm—Pre-Approval of Services Provided by Independent Registered Public Accounting Firm.”

| 2.2# | | | | | | [Membership Interest Purchase Agreement, dated as of October 28, 2021, by and among American Water Enterprises, LLC, American [added: Water] (USA), LLC, American Water Resources, LLC, Pivotal Home Solutions, LLC, American Water Resources Holdings, LLC, American Water Works Company, Inc. and Lakehouse Buyer Inc. (incorporated by reference to Exhibit 2.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed October 29, 2021).](http://www.sec.gov/Archives/edgar/data/1410636/000119312521312453/d226943dex21.htm) | | |

| 3.2 | | | | | | [Amended and Restated Bylaws of American Water Works Company, Inc. (incorporated by reference to Exhibit 3.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed [removed: December](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000165/exhibit31-amendedandrestat.htm) [8](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000165/exhibit31-amendedandrestat.htm)[, 202](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000165/exhibit31-amendedandrestat.htm)[2](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000165/exhibit31-amendedandrestat.htm)[).](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000165/exhibit31-amendedandrestat.htm)] [added: December 8, 2022).](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000165/exhibit31-amendedandrestat.htm)] | | |

| 4.2 | | | | | | [Indenture, dated as of December 4, 2009, between American Water Capital Corp. [removed: and](http://www.sec.gov/Archives/edgar/data/1410636/000119312510273459/dex41.htm) [Computersha](http://www.sec.gov/Archives/edgar/data/1410636/000119312510273459/dex41.htm)[re] [added: and Computershare] Trust [removed: C](http://www.sec.gov/Archives/edgar/data/1410636/000119312510273459/dex41.htm)[o](http://www.sec.gov/Archives/edgar/data/1410636/000119312510273459/dex41.htm)[mpany, N](http://www.sec.gov/Archives/edgar/data/1410636/000119312510273459/dex41.htm)[.A.,] [added: Company, N.A.,] as [removed: successor](http://www.sec.gov/Archives/edgar/data/1410636/000119312510273459/dex41.htm) [to](http://www.sec.gov/Archives/edgar/data/1410636/000119312510273459/dex41.htm) [Wells] [added: successor to Wells] Fargo Bank, National Association (incorporated by reference to Exhibit 4.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed December 3, 2010).](http://www.sec.gov/Archives/edgar/data/1410636/000119312510273459/dex41.htm) | | |

| [removed: 4.3] [added: 4.5] | | | | | | [Officers’ Certificate, dated December 17, 2012, establishing the 4.300% Senior Notes due 2042 (incorporated by reference to Exhibit 4.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed December 17, 2012).](http://www.sec.gov/Archives/edgar/data/1410636/000119312512505064/d455208dex41.htm) | | |

| [removed: 4.4] [added: 4.6] | | | | | | [Officers’ Certificate, dated November 20, 2013, establishing the 3.850% Senior Notes due 2024 (incorporated by reference to Exhibit 4.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed November 20, 2013).](http://www.sec.gov/Archives/edgar/data/1410636/000119312513448115/d629514dex41.htm) | | |

| [removed: 4.5] [added: 4.7] | | | | | | [Officers’ Certificate, dated August 14, 2014, establishing the 3.400% Senior Notes due 2025 (incorporated by reference to Exhibit 4.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed August 14, 2014).](http://www.sec.gov/Archives/edgar/data/1410636/000119312514309521/d773032dex41.htm) | | |

| [removed: 4.6] [added: 4.8] | | | | | | [Officers’ Certificate, dated August 14, 2014, providing for a further issuance of the 4.300% Senior Notes due 2042 (incorporated by reference to Exhibit 4.3 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed August 14, 2014).](http://www.sec.gov/Archives/edgar/data/1410636/000119312514309521/d773032dex43.htm) | | |

| [removed: 4.7] [added: 4.9] | | | | | | [Officers’ Certificate, dated August 13, 2015, establishing the 4.300% Senior Notes due 2045 (incorporated by reference to Exhibit 4.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed August 13, 2015).](http://www.sec.gov/Archives/edgar/data/1410636/000119312515290164/d122389dex41.htm) | | |

| [removed: 4.8] [added: 4.10] | | | | | | [Officers’ Certificate, dated August 13, 2015, providing for a further issuance of the 3.400% Senior Notes due 2025 (incorporated by reference to Exhibit 4.3 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed August 13, 2015).](http://www.sec.gov/Archives/edgar/data/1410636/000119312515290164/d122389dex43.htm) | | |

| [removed: 4.9] [added: 4.11] | | | | | | [Officers’ Certificate, dated November 17, 2016, establishing the 3.000% Senior Notes due 2026 (incorporated by reference to Exhibit 4.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed November 17, 2016).](http://www.sec.gov/Archives/edgar/data/1410636/000156459016029433/awk-ex41_7.htm) | | |

| [removed: 4.10] [added: 4.12] | | | | | | [Officers’ Certificate, dated November 17, 2016, establishing the 4.000% Senior Notes due 2046 (incorporated by reference to Exhibit 4.2 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed November 17, 2016).](http://www.sec.gov/Archives/edgar/data/1410636/000156459016029433/awk-ex42_8.htm) | | |

| [removed: 4.11] [added: 4.13] | | | | | | [Officers’ Certificate, dated August 10, 2017, establishing the 2.950% Senior Notes due 2027 (incorporated by reference to Exhibit 4.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed August 10, 2017).](http://www.sec.gov/Archives/edgar/data/1410636/000156459017017181/awk-ex41_7.htm) | | |

| [removed: 4.12] [added: 4.14] | | | | | | [Officers’ Certificate, dated August 10, 2017, establishing the 3.750% Senior Notes due 2047 (incorporated by reference to Exhibit 4.2 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed August 10, 2017).](http://www.sec.gov/Archives/edgar/data/1410636/000156459017017181/awk-ex42_8.htm) | | |

| [removed: 4.13] [added: 4.15] | | | | | | [Officer’s Certificate, dated August 9, 2018, establishing the 3.750% Senior Notes due 2028 (incorporated by reference to Exhibit 4.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed August 9, 2018).](http://www.sec.gov/Archives/edgar/data/1410636/000119312518243833/d552087dex41.htm) | | |

| [removed: 4.14] [added: 4.16] | | | | | | [Officer’s Certificate, dated August 9, 2018, establishing the 4.200% Senior Notes due 2048 (incorporated by reference to Exhibit 4.2 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed August 9, 2018).](http://www.sec.gov/Archives/edgar/data/1410636/000119312518243833/d552087dex42.htm) | | |

| [removed: 4.15] [added: 4.17] | | | | | | [Officers’ Certificate, dated May 13, 2019, establishing the 3.450% Senior Notes due 2029 (incorporated by reference to Exhibit 4.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed on May 13, 2019).](http://www.sec.gov/Archives/edgar/data/1410636/000119312519144941/d748410dex41.htm) | | |

| [removed: 4.16] [added: 4.18] | | | | | | [Officers’ Certificate, dated May 13, 2019, establishing [added: the] 4.150% Senior Notes due 2049 (incorporated by reference to Exhibit 4.2 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed on May 13, 2019).](http://www.sec.gov/Archives/edgar/data/1410636/000119312519144941/d748410dex42.htm) | | |

| [removed: 4.17] [added: 4.19] | | | | | | [Officers’ [removed: Certificate of American Water Capital Corp.,] [added: Certificate,] dated April 14, 2020, establishing the [removed: terms and authorizing the issuance of the] 2.800% Senior Notes due 2030 (incorporated by reference to Exhibit 4.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed April 14, 2020).](https://www.sec.gov/Archives/edgar/data/1410636/000119312520106105/d917260dex41.htm) | | |

| [removed: 4.18] [added: 4.20] | | | | | | [Officers’ [removed: Certificate of American Water Capital Corp.,] [added: Certificate,] dated April 14, 2020, establishing the [removed: terms and authorizing the issuance of the] 3.450% Senior Notes due 2050 (incorporated by reference to Exhibit 4.2 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed April 14, 2020).](https://www.sec.gov/Archives/edgar/data/1410636/000119312520106105/d917260dex42.htm) | | |

| [removed: 4.19] [added: 4.21] | | | | | | [Officers’ [removed: Certificate of American Water Capital Corp.,] [added: Certificate,] dated May 14, 2021, establishing the [removed: terms and authorizing the issuance of the] 2.300% Senior Notes due 2031 (incorporated by reference to Exhibit 4.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed on May 14, 2021).](http://www.sec.gov/Archives/edgar/data/1410636/000119312521161616/d934327dex41.htm) | | |

| [removed: 4.20] [added: 4.22] | | | | | | [Officers’ [removed: Certificate of American Water Capital Corp.,] [added: Certificate,] dated May 14, 2021, establishing the [removed: terms and authorizing the issuance of the] 3.250% Senior Notes due 2051 (incorporated by reference to Exhibit 4.2 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed on May 14, 2021).](https://www.sec.gov/Archives/edgar/data/1410636/000119312521161616/d934327dex42.htm) | | |

| [removed: 4.21] [added: 4.23] | | | | | | [Officers’ [removed: Certificate of American Water Capital Corp.,] [added: Certificate,] dated May 5, 2022, establishing the [removed: terms and authorizing the issuance of the] 4.450% Senior Notes due 2032 (incorporated by reference to Exhibit 4.1 to American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed on May 5, 2022).](https://www.sec.gov/Archives/edgar/data/1410636/000119312522141570/d341242dex41.htm) | | |

| [removed: 4.22] [added: 4.24] | | | | | | [Description of American Water Works Company, Inc.’s Equity Securities (filed [removed: herewith).](https://www.sec.gov/Archives/edgar/data/1410636/000141063623000020/ex-422x12312022xdescriptio.htm)] [added: herewith).](https://www.sec.gov/Archives/edgar/data/1410636/000141063624000050/ex-424xdescriptionofequity.htm)] | | |

| [removed: 4.23] [added: 4.4] | | | | | | [removed: [Note Purchase Agreement, dated May 15, 2008, between American Water Capital Corp. and the purchasers party thereto] [added: [Form of 3.625% Exchangeable Senior Note due 2026 (included in Exhibit 4.](https://www.sec.gov/Archives/edgar/data/1410636/000119312523178616/d514709dex41.htm)[3](https://www.sec.gov/Archives/edgar/data/1410636/000119312523178616/d514709dex41.htm)[)] (incorporated by reference to Exhibit [removed: 10.1 to] [added: 4.](https://www.sec.gov/Archives/edgar/data/1410636/000119312523178616/d514709dex41.htm)[1](https://www.sec.gov/Archives/edgar/data/1410636/000119312523178616/d514709dex41.htm) [to] American Water Works Company, Inc.’s Current Report on Form 8-K, File No. 001-34028, filed [removed: May 19, 2008) with respect to the 6.55% Series H Senior Notes due May 15, 2023.](https://www.sec.gov/Archives/edgar/data/1410636/000119312508118312/dex101.htm)] [added: June 29, 2023).](https://www.sec.gov/Archives/edgar/data/1410636/000119312523178616/d514709dex41.htm)] | | |

| [removed: 10.1#] [added: 10.1.1#] | | | | | | [removed: [Third](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm) [Amended] [added: [Third Amended] and Restated Credit Agreement, dated as [removed: of](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm) [October 26](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm)[, 20](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm)[22](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm)[,] [added: of October 26, 2022,] by and among American Water Works Company, Inc., American Water Capital Corp., each of the Lenders party thereto, Wells Fargo Bank, National Association, as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, and Mizuho Bank, Ltd., PNC Bank, National Association, and U.S. Bank National Association, as co-documentation agents (incorporated by reference to Exhibit 10.1 to American Water Works Company, [removed: Inc.’s](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm) [Quarterly](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm) [](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm)[Report] [added: Inc.’s Quarterly Report] on [removed: Form](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm) [10-Q](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm)[,] [added: Form 10-Q,] File No. 001-34028, filed [removed: on](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm) [October 31](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm)[, 20](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm)[22](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm)[).](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm)] [added: on October 31, 2022).](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000155/q32022ex-101xwellsfargox3r.htm)] | | |

| 10.3* | | | | | | [Offer Letter for Employment, dated as of February 2, 2022, between American Water Works Company, Inc. and M. Susan Hardwick (incorporated by reference to Exhibit [removed: 10.](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000048/exhibit103-susanhardwick.htm)[3](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000048/exhibit103-susanhardwick.htm) [to] [added: 10.3 to] American Water Works Company, [removed: Inc.’s](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000048/exhibit103-susanhardwick.htm) [Annual](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000048/exhibit103-susanhardwick.htm) [Report] [added: Inc.’s Annual Report] on Form [removed: 10-](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000048/exhibit103-susanhardwick.htm)[K](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000048/exhibit103-susanhardwick.htm)[,] [added: 10-K,] File No. 001-34028, [removed: filed](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000048/exhibit103-susanhardwick.htm) [February 16](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000048/exhibit103-susanhardwick.htm)[,] [added: filed February 16,] 2022).](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000048/exhibit103-susanhardwick.htm) | | |

| 10.6* | | | | | | [Offer Letter for Employment, [removed: dated](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000144/a2022q2ex-101griffith_john.htm) [April 27](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000144/a2022q2ex-101griffith_john.htm)[,] [added: dated April 27,] 2022, between American Water Works Company, Inc. [removed: and](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000144/a2022q2ex-101griffith_john.htm) [John] [added: and John] C. [removed: Griffith](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000144/a2022q2ex-101griffith_john.htm) [(incorporated] [added: Griffith (incorporated] by reference to Exhibit [removed: 10.](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000144/a2022q2ex-101griffith_john.htm)[1] [added: 10.1] to American Water Works Company, Inc.’s Quarterly Report on Form 10-Q, File No. 001-34028, [removed: filed](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000144/a2022q2ex-101griffith_john.htm) [July](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000144/a2022q2ex-101griffith_john.htm) [27,] [added: filed July 27,] 2022).](https://www.sec.gov/Archives/edgar/data/1410636/000141063622000144/a2022q2ex-101griffith_john.htm) | | |