AMERICAN WATER WORKS COMPANY, INC., 10-Q filed on 7/26/2023
Quarterly Report
v3.23.2
Cover Page - shares
 6 Months Ended
Jun. 30, 2023
Jul. 20, 2023
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2023  
Document Transition Report false  
Entity File Number 001-34028  
Entity Registrant Name AMERICAN WATER WORKS COMPANY, INC.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 51-0063696  
Entity Address, Address Line One 1 Water Street  
Entity Address, City or Town Camden  
Entity Address, State or Province NJ  
Entity Address, Postal Zip Code 08102-1658  
City Area Code 856  
Local Phone Number 955-4001  
Title of 12(b) Security Common stock, par value $0.01 per share  
Trading Symbol AWK  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   194,668,641
Amendment Flag false  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q2  
Entity Central Index Key 0001410636  
Current Fiscal Year End Date --12-31  
v3.23.2
Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Millions
Jun. 30, 2023
Dec. 31, 2022
ASSETS    
Property, plant and equipment $ 30,815 $ 29,736
Accumulated depreciation (6,627) (6,513)
Property, plant and equipment, net 24,188 23,223
Current assets:    
Cash and cash equivalents 794 85
Restricted funds 30 32
Accounts receivable, net of allowance for uncollectible accounts of $52 and $60, respectively 352 334
Income tax receivable 74 114
Unbilled revenues 331 275
Materials and supplies 109 98
Other 299 312
Total current assets 1,989 1,250
Regulatory and other long-term assets:    
Regulatory assets 1,020 990
Seller promissory note from the sale of the Homeowner Services Group 720 720
Operating lease right-of-use assets 83 82
Goodwill 1,143 1,143
Other 353 379
Total regulatory and other long-term assets 3,319 3,314
Total assets 29,496 27,787
Capitalization:    
Common stock ($0.01 par value; 500,000,000 shares authorized; 200,083,363 and 187,200,539 shares issued, respectively) 2 2
Paid-in-capital 8,529 6,824
Retained earnings 1,580 1,267
Accumulated other comprehensive loss (22) (23)
Treasury stock, at cost (5,414,838 and 5,342,477 shares, respectively) (388) (377)
Total common shareholders' equity 9,701 7,693
Long-term debt 11,607 10,926
Redeemable preferred stock at redemption value 2 3
Total long-term debt 11,609 10,929
Total capitalization 21,310 18,622
Current liabilities:    
Short-term debt 0 1,175
Current portion of long-term debt 579 281
Accounts payable 246 254
Accrued liabilities 575 706
Accrued taxes 65 49
Accrued interest 91 91
Other 208 255
Total current liabilities 1,764 2,811
Regulatory and other long-term liabilities:    
Advances for construction 333 316
Deferred income taxes and investment tax credits 2,549 2,437
Regulatory liabilities 1,524 1,590
Operating lease liabilities 70 70
Accrued pension expense 209 235
Other 204 202
Total regulatory and other long-term liabilities 4,889 4,850
Contributions in aid of construction 1,533 1,504
Commitments and contingencies (See Note 11)
Total capitalization and liabilities $ 29,496 $ 27,787
v3.23.2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
$ in Millions
Jun. 30, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Allowance for uncollectible accounts $ 52 $ 60
Common stock, par value (dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 500,000,000 500,000,000
Common stock, shares issued (in shares) 200,083,363 187,200,539
Treasury stock, shares (in shares) 5,414,838 5,342,477
v3.23.2
Consolidated Statements of Operations (Unaudited) - USD ($)
shares in Millions, $ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Income Statement [Abstract]        
Operating revenues $ 1,097 $ 937 $ 2,035 $ 1,779
Operating expenses:        
Operation and maintenance 419 376 812 740
Depreciation and amortization 174 163 346 321
General taxes 73 71 151 145
Other (1) 0 (1) 0
Total operating expenses, net 665 610 1,308 1,206
Operating income 432 327 727 573
Other income (expense):        
Interest expense (110) (106) (225) (206)
Interest income 15 12 29 25
Non-operating benefit costs, net 8 20 17 39
Other, net 12 17 23 32
Total other (expense) income (75) (57) (156) (110)
Income before income taxes 357 270 571 463
Provision for income taxes 77 52 121 87
Net income attributable to common shareholders $ 280 $ 218 $ 450 $ 376
Basic earnings per share:        
Net income attributable to common shareholders (dollars per share) $ 1.44 $ 1.20 $ 2.37 $ 2.07
Diluted earnings per share:        
Net income attributable to common shareholders (dollars per share) $ 1.44 $ 1.20 $ 2.37 $ 2.07
Weighted-average common shares outstanding:        
Basic (in shares) 195 182 190 182
Diluted (in shares) 195 182 190 182
v3.23.2
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Statement of Comprehensive Income [Abstract]        
Net income attributable to common shareholders $ 280 $ 218 $ 450 $ 376
Other comprehensive income, net of tax:        
Defined benefit pension plan actuarial loss, net of tax of $0 for the three months ended June 30, 2023 and 2022, and $0 for the six months ended June 30, 2023 and 2022 0 1 0 2
Unrealized gain on cash flow hedges, net of tax of $0 and $1 for the three months ended June 30, 2023 and 2022, respectively, and $0 and $1 for the six months ended June 30, 2023 and 2022, respectively 2 3 0 3
Unrealized (loss) gain on available-for-sale fixed-income securities, net of tax of $0 for the three months ended June 30, 2023 and 2022, and $0 for the six months ended June 30, 2023 and 2022 (1) 0 1 0
Net other comprehensive income 1 4 1 5
Comprehensive income attributable to common shareholders $ 281 $ 222 $ 451 $ 381
v3.23.2
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Statement of Comprehensive Income [Abstract]        
Defined benefit pension plan actuarial loss, tax $ 0 $ 0 $ 0 $ 0
Unrealized gain on cash flow hedges, tax 0 1 0 1
Unrealized (loss) gain on available-for-sale fixed-income securities, tax $ 0 $ 0 $ 0 $ 0
v3.23.2
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES    
Net income $ 450 $ 376
Adjustments to reconcile to net cash flows provided by operating activities:    
Depreciation and amortization 346 321
Deferred income taxes and amortization of investment tax credits 74 (33)
Provision for losses on accounts receivable 9 10
Pension and non-pension postretirement benefits (3) (25)
Other non-cash, net (40) (2)
Changes in assets and liabilities:    
Receivables and unbilled revenues (83) (159)
Income tax receivable 40 4
Pension and non-pension postretirement benefit contributions (20) (31)
Accounts payable and accrued liabilities (22) (63)
Accrued taxes 19 (150)
Other assets and liabilities, net (56) (52)
Net cash provided by operating activities 714 196
CASH FLOWS FROM INVESTING ACTIVITIES    
Capital expenditures (1,153) (995)
Acquisitions, net of cash acquired (33) (240)
Net proceeds from sale of assets 0 608
Removal costs from property, plant and equipment retirements, net (78) (49)
Net cash used in investing activities (1,264) (676)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from long-term debt 1,160 811
Repayments of long-term debt (170) (7)
Net proceeds from common stock financing 1,688 0
Net short-term repayments with maturities less than three months (1,175) (164)
Advances and contributions in aid of construction, net of refunds of $16 and $8 for the six months ended June 30, 2023 and 2022, respectively 28 41
Debt issuance costs and make-whole premium on early debt redemption (13) (7)
Dividends paid (257) (228)
Other, net (4) (5)
Net cash provided by financing activities 1,257 441
Net increase (decrease) in cash, cash equivalents and restricted funds 707 (39)
Cash, cash equivalents and restricted funds at beginning of period 117 136
Cash, cash equivalents and restricted funds at end of period 824 97
Non-cash investing activity:    
Capital expenditures acquired on account but unpaid as of the end of period $ 343 $ 335
v3.23.2
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Statement of Cash Flows [Abstract]    
Advances and contributions in aid of construction, refunds $ 16 $ 8
v3.23.2
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($)
$ in Millions
Total
Common Stock
Paid-in-Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Treasury Stock
Beginning balance (in shares) at Dec. 31, 2021   186,900,000        
Beginning balance at Dec. 31, 2021 $ 7,298 $ 2 $ 6,781 $ 925 $ (45) $ (365)
Beginning balance (in shares) at Dec. 31, 2021           (5,300,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income attributable to common shareholders 158     158    
Common stock issuances (in shares) [1]   200,000        
Common stock issuances [1] 3   15     $ (12)
Net other comprehensive income 1       1  
Ending balance (in shares) at Mar. 31, 2022   187,100,000        
Ending balance at Mar. 31, 2022 7,460 $ 2 6,796 1,083 (44) $ (377)
Ending balance (in shares) at Mar. 31, 2022           (5,300,000)
Beginning balance (in shares) at Dec. 31, 2021   186,900,000        
Beginning balance at Dec. 31, 2021 7,298 $ 2 6,781 925 (45) $ (365)
Beginning balance (in shares) at Dec. 31, 2021           (5,300,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income attributable to common shareholders 376          
Net other comprehensive income 5          
Ending balance (in shares) at Jun. 30, 2022   187,100,000        
Ending balance at Jun. 30, 2022 7,570 $ 2 6,804 1,181 (40) $ (377)
Ending balance (in shares) at Jun. 30, 2022           (5,300,000)
Beginning balance (in shares) at Mar. 31, 2022   187,100,000        
Beginning balance at Mar. 31, 2022 7,460 $ 2 6,796 1,083 (44) $ (377)
Beginning balance (in shares) at Mar. 31, 2022           (5,300,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income attributable to common shareholders 218     218    
Common stock issuances [1] 8   8      
Net other comprehensive income 4       4  
Dividends (declared per common share) (120)     (120)    
Ending balance (in shares) at Jun. 30, 2022   187,100,000        
Ending balance at Jun. 30, 2022 7,570 $ 2 6,804 1,181 (40) $ (377)
Ending balance (in shares) at Jun. 30, 2022           (5,300,000)
Beginning balance (in shares) at Dec. 31, 2022   187,400,000        
Beginning balance at Dec. 31, 2022 $ 7,693 $ 2 6,824 1,267 (23) $ (377)
Beginning balance (in shares) at Dec. 31, 2022 (5,342,477)         (5,400,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income attributable to common shareholders $ 170     170    
Common stock issuances (in shares) [2]   12,700,000        
Common stock issuances [2] 1,684   1,695     $ (11)
Net other comprehensive income 0          
Ending balance (in shares) at Mar. 31, 2023   200,100,000        
Ending balance at Mar. 31, 2023 9,547 $ 2 8,519 1,437 (23) $ (388)
Ending balance (in shares) at Mar. 31, 2023           (5,400,000)
Beginning balance (in shares) at Dec. 31, 2022   187,400,000        
Beginning balance at Dec. 31, 2022 $ 7,693 $ 2 6,824 1,267 (23) $ (377)
Beginning balance (in shares) at Dec. 31, 2022 (5,342,477)         (5,400,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income attributable to common shareholders $ 450          
Net other comprehensive income 1          
Ending balance (in shares) at Jun. 30, 2023   200,100,000        
Ending balance at Jun. 30, 2023 $ 9,701 $ 2 8,529 1,580 (22) $ (388)
Ending balance (in shares) at Jun. 30, 2023 (5,414,838)         (5,400,000)
Beginning balance (in shares) at Mar. 31, 2023   200,100,000        
Beginning balance at Mar. 31, 2023 $ 9,547 $ 2 8,519 1,437 (23) $ (388)
Beginning balance (in shares) at Mar. 31, 2023           (5,400,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income attributable to common shareholders 280     280    
Common stock issuances 10 [2]   10      
Net other comprehensive income 1       1  
Dividends (declared per common share) (137)     (137)    
Ending balance (in shares) at Jun. 30, 2023   200,100,000        
Ending balance at Jun. 30, 2023 $ 9,701 $ 2 $ 8,529 $ 1,580 $ (22) $ (388)
Ending balance (in shares) at Jun. 30, 2023 (5,414,838)         (5,400,000)
[1] Includes stock-based compensation, employee stock purchase plan and dividend reinvestment and direct stock purchase plan activity.
[2] Includes stock-based compensation, employee stock purchase plan and dividend reinvestment and direct stock purchase plan activity.
v3.23.2
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares
 3 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Statement of Stockholders' Equity [Abstract]    
Dividends declared per common share (dollars per share) $ 0.7075 $ 0.6550
v3.23.2
Basis of Presentation
 6 Months Ended
Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Note 1: Basis of Presentation
The unaudited Consolidated Financial Statements included in this report include the accounts of American Water Works Company, Inc. and all of its subsidiaries (the “Company” or “American Water”), in which a controlling interest is maintained after the elimination of intercompany balances and transactions. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting, and the rules and regulations for reporting on Quarterly Reports on Form 10-Q (“Form 10-Q”). Accordingly, they do not contain certain information and disclosures required by GAAP for comprehensive financial statements. In the opinion of management, all adjustments necessary for a fair statement of the financial position as of June 30, 2023, and the results of operations and cash flows for all periods presented, have been made. All adjustments are of a normal, recurring nature, except as otherwise disclosed.
The unaudited Consolidated Financial Statements and Notes included in this report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (“Form 10-K”), which provides a more complete discussion of the Company’s accounting policies, financial position, operating results and other matters. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the year, primarily due to the seasonality of the Company’s operations.
v3.23.2
Significant Accounting Policies
 6 Months Ended
Jun. 30, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]  
Significant Accounting Policies
Note 2: Significant Accounting Policies
New Accounting Standards
Presented in the table below are new accounting standards that were adopted by the Company in 2023:
Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements
Accounting for Contract Assets and Contract Liabilities from Contracts with CustomersThe guidance requires an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification Topic 606, as if it had originated the contracts. The amendments in this update also provide certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination.January 1, 2023ProspectiveThis standard did not have a material impact on the Consolidated Financial Statements
Troubled Debt Restructurings and Vintage DisclosuresThe main provisions of this standard eliminate the receivables accounting guidance for troubled debt restructurings (“TDRs”) by creditors while enhancing disclosure requirements when a borrower is experiencing financial difficulty. Entities must apply the loan refinancing and restructuring guidance for receivables to determine whether a modification results in a new loan or a continuation of an existing loan. Additionally, the amendments in this update require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases.January 1, 2023Prospective, with a modified retrospective option for amendments related to the recognition and measurement of TDRs.This standard did not have a material impact on the Consolidated Financial Statements
Property, Plant and Equipment
The New Jersey Economic Development Authority (“NJEDA”) determined that the Company was qualified to receive $161 million in tax credits in connection with its capital investment in its corporate headquarters in Camden, New Jersey. The Company was qualified to receive the tax credits over a 10-year period commencing in 2019.
In March 2023, the NJEDA issued the utilization certificate for the 2020 tax credits to the Company in the amount of $16 million. The Company sold these tax credits to external parties in March 2023 for $15 million. As of June 30, 2023 and December 31, 2022, the Company had $32 million and $48 million, respectively, in Other current assets and $97 million in Other long-term assets on the Consolidated Balance Sheets as a result of these tax credits. The Company has made the necessary annual filing for the years ended December 31, 2021 and 2022.
Allowance for Uncollectible Accounts
Allowances for uncollectible accounts are maintained for estimated probable losses resulting from the Company’s inability to collect receivables from customers. Accounts that are outstanding longer than the payment terms are considered past due. A number of factors are considered in determining the allowance for uncollectible accounts, including the length of time receivables are past due, previous loss history, current economic and societal conditions and reasonable and supportable forecasts that affect the collectability of receivables from customers. The Company generally writes off accounts when they become uncollectible or are over a certain number of days outstanding.
Presented in the table below are the changes in the allowance for uncollectible accounts for the six months ended June 30:
20232022
Balance as of January 1$(60)$(75)
Amounts charged to expense(9)(10)
Amounts written off13 11 
Other, net (a)4 7 
Balance as of June 30$(52)$(67)
(a)This portion of the allowance for uncollectible accounts is primarily related to COVID-19 related regulatory asset activity.
Reclassifications
Certain reclassifications have been made to prior periods in the Consolidated Financial Statements and Notes to conform to the current presentation.
v3.23.2
Regulatory Matters
 6 Months Ended
Jun. 30, 2023
Regulated Operations [Abstract]  
Regulatory Matters
Note 3: Regulatory Matters
General Rate Cases
Presented in the table below are annualized incremental revenues, including reductions for the amortization of the excess accumulated deferred income taxes (“EADIT”) that are generally offset in income tax expense, assuming a constant water sales volume and customer count, resulting from general rate case authorizations that became effective during 2023:
(In millions)Effective DateAmount
General rate cases by state:
MissouriMay 28, 2023$44 
VirginiaApril 24, 2023 (a)11 
PennsylvaniaJanuary 28, 2023138 
IllinoisJanuary 1, 202367 
California, Step IncreaseJanuary 1, 202313 
Total general rate case authorizations$273 
(a)Interim rates were effective May 1, 2022, and the difference between interim and final approved rates is subject to refund. 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 authorizes 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 is not retroactive and will be effective from the date of the order through the end of 2024. The decision includes a Water Cost of Capital Mechanism (the “WCCM”) that would allow 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, on June 30, 2023, the California subsidiary filed with the CPUC staff an advice letter to seek a 52 basis point increase to the return on equity for 2023, which was approved on July 25, 2023, increasing the return on equity to 9.50%, effective July 31, 2023.
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 is 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 is $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) is 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 requires that the difference between interim and the final approved rates is 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 is 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.
On December 8, 2022, the Pennsylvania Public Utility Commission issued an order approving the joint settlement agreement in the rate case filed on April 29, 2022, by the Company’s Pennsylvania subsidiary. The general rate case order approved a $138 million annualized increase in water and wastewater revenues, excluding $24 million for previously approved infrastructure filings, and authorizes implementation of the new water and wastewater rates effective January 28, 2023. The annualized revenue increase is driven primarily by significant incremental capital investments since the Pennsylvania subsidiary’s 2021 rate case order that will be completed through December 31, 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 also includes recovery of the Pennsylvania subsidiary’s COVID-19 deferral balance. The Pennsylvania subsidiary’s view of its rate base is $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) is 10.0% and 44.8%, respectively.
On December 15, 2022, the Illinois Commerce Commission issued an order approving the adjustment of base rates requested in a rate case filed on February 10, 2022, by the Company’s Illinois subsidiary. As updated in the Illinois subsidiary’s June 29, 2022 rebuttal filing, the request sought $83 million in additional annualized revenues, excluding previously recovered infrastructure surcharges. The general rate case order approved a $67 million annualized increase in water and wastewater system revenues, excluding previously recovered infrastructure surcharges of $18 million, effective January 1, 2023, based on an authorized return on equity of 9.78%, authorized rate base of $1.64 billion, a common equity ratio of 49.0% and a debt ratio of 51.0%. The annualized revenue increase is being driven primarily by significant water and wastewater system capital investments since the Illinois subsidiary’s 2017 rate case order that have been completed or are planned through December 31, 2023, expected higher pension and other postretirement benefit costs, and increases in production costs, including chemicals, fuel and power costs.
Pending General Rate Case Filings
On June 30, 2023, the Company’s Kentucky subsidiary filed a general rate case requesting $26 million in additional annualized revenues, excluding infrastructure surcharges of $10 million. An order is expected in the general rate case by the end of the first quarter of 2024.
On May 1, 2023, the Company’s West Virginia subsidiary filed a general rate case requesting $45 million in additional annualized revenues, excluding previously approved infrastructure surcharges of $7 million. The general rate case includes a future test year capturing planned investment through 2025 and an order is expected to be reached by February 25, 2024. On June 30, 2023, the West Virginia subsidiary filed its annual infrastructure surcharge requesting $8 million in additional annualized revenues for planned investment through 2024. The infrastructure surcharge will be aligned with the investments recognized in the general rate case if the future test year is approved.
On March 31, 2023, the Company’s Indiana subsidiary filed a general rate case requesting $87 million in additional annualized revenues, excluding $41 million of revenue from infrastructure filings already approved, which includes three step increases, with $43 million of the increase to be included in rates in January 2024, $18 million in May 2024, and $26 million in May 2025. An order is expected in the general rate case by the end of January 2024.
On July 1, 2022, the Company’s California subsidiary filed a general rate case requesting an increase in 2024 revenue of $56 million and a total increase in revenue over the 2024 to 2026 period of $95 million, all as compared to 2022 revenues. The Company updated its filing in January 2023 to capture the authorized step increase effective January 1, 2023. The filing was also updated to incorporate a decoupling proposal and a revision to the Company’s sales and associated variable expense forecast. The revised filing requested additional annualized revenues for the test year 2024 of $37 million, compared to 2023 revenues. This excludes the proposed step rate and attrition rate increase for 2025 and 2026 of $20 million and $19 million, respectively. The total revenue requirement request for the three-year rate case cycle, incorporating updates to present rate revenues and forecasted demand, is $76 million.
Infrastructure Surcharges
A number of states have authorized the use of regulatory mechanisms that permit rates to be adjusted outside of a general rate case for certain costs and investments, such as infrastructure surcharge mechanisms that permit recovery of capital investments to replace aging infrastructure. Presented in the table below are annualized incremental revenues, assuming a constant water sales volume and customer count, resulting from infrastructure surcharge authorizations that became effective during 2023:
(In millions)Effective DateAmount
Infrastructure surcharges by state:
New Jersey(a)$17 
Indiana(b)26 
MissouriJanuary 16, 202314 
PennsylvaniaJanuary 1, 20233 
West VirginiaJanuary 1, 20237 
Total infrastructure surcharge authorizations$67 
(a)In 2023, $1 million was effective June 29 and $16 million was effective April 29.
(b)In 2023, $20 million was effective March 23 and $6 million was effective March 8.
Pending Infrastructure Surcharge Filings
On March 1, 2023, the Company’s Kentucky subsidiary filed an infrastructure surcharge proceeding requesting $4 million in additional annualized revenues. An order is expected in this proceeding in the third quarter of 2023. The infrastructure surcharge will reset to zero once the pending general rate case becomes effective which is expected by the end of the first quarter of 2024.
Other Regulatory Matters
In September 2020, the CPUC released a decision under its Low-Income Rate Payer Assistance program rulemaking that required the Company’s California subsidiary to file a proposal to alter its water revenue adjustment mechanism in its next general rate case filing in 2022, which would become effective in January 2024. On October 5, 2020, the Company’s California subsidiary filed an application for rehearing of the decision and following the CPUC’s denial of its rehearing application in September 2021, the Company’s California subsidiary filed a petition for writ of review with the California Supreme Court on October 27, 2021. On May 18, 2022, the California Supreme Court issued a writ of review for the California subsidiary’s petition and the petitions filed by other entities challenging the decision. Independent of the judicial challenge, California passed Senate Bill 1469, which allows the CPUC to consider and authorize the implementation of a mechanism that separates the water corporation’s revenue and its water sales. Legislation was signed by the Governor on September 30, 2022, and became effective on January 1, 2023. In response to the legislation, on January 27, 2023, the Company’s California subsidiary filed an updated application requesting the CPUC to consider a Water Resources Sustainability Plan decoupling mechanism in its pending 2022 general rate case, which would be effective 2024 through 2026.
On March 2, 2021, an administrative law judge (“ALJ”) in the Office of Administrative Law of New Jersey filed an initial decision with the New Jersey Board of Public Utilities (“NJBPU”) that recommended denial of a petition filed by the Company’s New Jersey subsidiary, which sought approval of acquisition adjustments in rate base of $29 million associated with the acquisitions of Shorelands Water Company, Inc. in 2017 and the Borough of Haddonfield’s water and wastewater systems in 2015. On July 29, 2021, the NJBPU issued an order adopting the ALJ’s initial decision without modification. The Company’s New Jersey subsidiary filed a Notice of Appeal with the New Jersey Appellate Division on September 10, 2021. The Company’s New Jersey subsidiary filed its brief in support of the appeal on March 4, 2022. Response and Reply briefs were filed on June 22, 2022, and August 4, 2022, respectively. Oral argument was held on March 22, 2023, and the Company expects a decision by the end of 2023. There is no financial impact to the Company as a result of the NJBPU’s order, since the acquisition adjustments are currently recorded as goodwill on the Consolidated Balance Sheets.
v3.23.2
Revenue Recognition
 6 Months Ended
Jun. 30, 2023
Revenue from Contract with Customer [Abstract]  
Revenue Recognition
Note 4: Revenue Recognition
Disaggregated Revenues
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 also operates other businesses that provide water and wastewater services to the U.S. government on military installations, as well as municipalities, collectively presented throughout this Form 10-Q within “Other.”
Presented in the table below are operating revenues disaggregated for the three months ended June 30, 2023:
Revenues from Contracts with CustomersOther Revenues Not from Contracts with Customers (a)Total Operating Revenues
Regulated Businesses:
Water services:
Residential$554 $— $554 
Commercial198 — 198 
Fire service39 — 39 
Industrial38 — 38 
Public and other75 — 75 
Total water services904 — 904 
Wastewater services:
Residential57 — 57 
Commercial16 — 16 
Industrial2 — 2 
Public and other7 — 7 
Total wastewater services82 — 82 
Miscellaneous utility charges9 — 9 
Alternative revenue programs— 8 8 
Lease contract revenue— 2 2 
Total Regulated Businesses995 10 1,005 
Other93 (1)92 
Total operating revenues$1,088 $9 $1,097 
(a)Includes revenues associated with alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of Accounting Standards Codification Topic 606, Revenue From Contracts With Customers (“ASC 606”), and accounted for under other existing GAAP.
Presented in the table below are operating revenues disaggregated for the three months ended June 30, 2022:
Revenues from Contracts with CustomersOther Revenues Not from Contracts with Customers (a)Total Operating Revenues
Regulated Businesses:
Water services:
Residential$483 $1 $484 
Commercial174 — 174 
Fire service37 — 37 
Industrial38 — 38 
Public and other59 — 59 
Total water services791 1 792 
Wastewater services:
Residential42 — 42 
Commercial11 — 11 
Industrial1 — 1 
Public and other4 — 4 
Total wastewater services58 — 58 
Miscellaneous utility charges9 — 9 
Alternative revenue programs— 4 4 
Lease contract revenue— 2 2 
Total Regulated Businesses858 7 865 
Other72 — 72 
Total operating revenues$930 $7 $937 
(a)Includes revenues associated with provisional rates, alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of ASC 606, and accounted for under other existing GAAP.
Presented in the table below are operating revenues disaggregated for the six months ended June 30, 2023:
Revenues from Contracts with CustomersOther Revenues Not from Contracts with Customers (a)Total Operating Revenues
Regulated Businesses:
Water services: 
Residential$1,015 $— $1,015 
Commercial369 — 369 
Fire service78 — 78 
Industrial76 — 76 
Public and other131 — 131 
Total water services1,669 — 1,669 
Wastewater services: 
Residential111 — 111 
Commercial30 — 30 
Industrial4 — 4 
Public and other13 — 13 
Total wastewater services158 — 158 
Miscellaneous utility charges17 — 17 
Alternative revenue programs— 17 17 
Lease contract revenue— 4 4 
Total Regulated Businesses1,844 21 1,865 
Other171 (1)170 
Total operating revenues$2,015 $20 $2,035 
(a)Includes revenues associated with alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of Accounting Standards Codification Topic 606, Revenue From Contracts With Customers (“ASC 606”), and accounted for under other existing GAAP.
Presented in the table below are operating revenues disaggregated for the six months ended June 30, 2022:
Revenues from Contracts with CustomersOther Revenues Not from Contracts with Customers (a)Total Operating Revenues
Regulated Businesses:
Water services:
Residential$911 $1 $912 
Commercial327 — 327 
Fire service73 — 73 
Industrial74 — 74 
Public and other116 — 116 
Total water services1,501 1 1,502 
Wastewater services:
Residential83 — 83 
Commercial21 — 21 
Industrial2 — 2 
Public and other7 — 7 
Total wastewater services113 — 113 
Miscellaneous utility charges18 — 18 
Alternative revenue programs— 6 6 
Lease contract revenue— 4 4 
Total Regulated Businesses1,632 11 1,643 
Other136 — 136 
Total operating revenues$1,768 $11 $1,779 
(a)Includes revenues associated with provisional rates, alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of ASC 606, and accounted for under other existing GAAP.
Contract Balances
Contract assets and contract liabilities are the result of timing differences between revenue recognition, billings and cash collections. In the Company’s Military Services Group (“MSG”), certain contracts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Contract assets are recorded when billing occurs subsequent to revenue recognition and are reclassified to accounts receivable when billed and the right to consideration becomes unconditional. Contract liabilities are recorded when the Company receives advances from customers prior to satisfying contractual performance obligations, particularly for construction contracts, and are recognized as revenue when the associated performance obligations are satisfied.
Contract assets of $111 million and $86 million are included in unbilled revenues on the Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022, respectively. Contract liabilities of $71 million and $91 million are included in other current liabilities on the Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022, respectively. Revenues recognized for the six months ended June 30, 2023 and 2022, from amounts included in contract liabilities were $68 million and $65 million, respectively.
Remaining Performance Obligations
Remaining performance obligations (“RPOs”) represent revenues the Company expects to recognize in the future from contracts that are in progress. The Company enters into agreements for the provision of services to water and wastewater facilities for the U.S. military, municipalities and other customers. As of June 30, 2023, the Company’s operation and maintenance (“O&M”) and capital improvement contracts in the MSG and the Contract Services Group have RPOs. Contracts with the U.S. government for work on various military installations expire between 2051 and 2073 and have RPOs of $7.0 billion as of June 30, 2023, as measured by estimated remaining contract revenue. Such contracts are subject to customary termination provisions held by the U.S. government, prior to the agreed-upon contract expiration. Contracts with municipalities and commercial customers expire between 2026 and 2038 and have RPOs of $578 million as of June 30, 2023, as measured by estimated remaining contract revenue. Some of the Company’s long-term contracts to operate and maintain the federal government’s, a municipality’s or other party’s water or wastewater treatment and delivery facilities include responsibility for certain maintenance for some of those facilities, in exchange for an annual fee. Unless specifically required to perform certain maintenance activities, the maintenance costs are recognized when the maintenance is performed.
v3.23.2
Acquisitions and Divestitures
 6 Months Ended
Jun. 30, 2023
Business Combination and Asset Acquisition [Abstract]  
Acquisitions and Divestitures
Note 5: Acquisitions and Divestitures
Regulated Businesses
Closed Acquisitions
During the six months ended June 30, 2023, the Company closed on ten acquisitions of various regulated water and wastewater systems for a total aggregate purchase price of $35 million, which added approximately 7,100 water and wastewater customers. This includes the Company’s New Jersey subsidiary’s acquisition of the water and wastewater assets of Egg Harbor City on June 1, 2023, for a cash purchase price of $22 million, $2 million of which was funded as a deposit to the seller in March 2021 in connection with the execution of the acquisition agreement. The Egg Harbor City acquisition was accounted for as a business combination and the assets acquired consisted primarily of $22 million of utility plant.
Pending Acquisitions
On April 6, 2023, the Company’s Illinois subsidiary entered into an agreement to acquire the assets of the wastewater treatment plant from the City of Granite City for $83 million, subject to adjustment as provided for in the asset purchase agreement. This system provides wastewater service for approximately 26,000 customer connections. The Company now expects to close this acquisition by the end of 2023, pending regulatory approval.
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. The Company expects to close this acquisition by mid-year 2024, pending regulatory approval.
On October 11, 2022, the Company’s Pennsylvania subsidiary entered into an agreement to acquire the wastewater assets of the Butler Area Sewer Authority for a total purchase price of $232 million in cash, subject to adjustment as provided for in the asset purchase agreement. This system provides wastewater service for approximately 14,700 customer connections. The Company expects to close this acquisition by the end of 2023, pending regulatory approval.
v3.23.2
Shareholders' Equity
 6 Months Ended
Jun. 30, 2023
Equity [Abstract]  
Shareholders' Equity
Note 6: Shareholders’ Equity
Common Stock Offering
On March 3, 2023, the Company completed an underwritten public offering of an aggregate of 12,650,000 shares of its common stock. Upon closing of this offering, the Company received, after deduction of the underwriting discount and before deduction of offering expenses, net proceeds of approximately $1,688 million. The Company used the net proceeds of the offering to repay short-term commercial paper obligations of American Water Capital Corp. (“AWCC”), the wholly owned finance subsidiary of American Water, and for general corporate purposes.
Accumulated Other Comprehensive Loss
Presented in the table below are the changes in accumulated other comprehensive loss by component, net of tax, for the six months ended June 30, 2023 and 2022, respectively:
 Defined Benefit Pension PlansLoss on Cash Flow HedgesGain on Fixed-Income SecuritiesAccumulated Other Comprehensive Loss
 Employee Benefit Plan Funded StatusAmortization of Prior Service CostAmortization of Actuarial Loss
Balance as of December 31, 2022$(93)$1 $70 $(1)$— $(23)
Other comprehensive income before reclassifications— — — — 1 1 
Amounts reclassified from accumulated other comprehensive loss— — — — — — 
Net other comprehensive income— — — — 1 1 
Balance as of June 30, 2023$(93)$1 $70 $(1)$1 $(22)
Balance as of December 31, 2021$(107)$1 $67 $(6)$— $(45)
Other comprehensive income before reclassifications— — — 4 — 4 
Amounts reclassified from accumulated other comprehensive income— — 1 — — 1 
Net other comprehensive income— — 1 4 — 5 
Balance as of June 30, 2022$(107)$1 $68 $(2)$— $(40)
The Company does not reclassify the amortization of defined benefit pension cost components from accumulated other comprehensive loss directly to net income in its entirety, as a portion of these costs have been deferred as a regulatory asset. These accumulated other comprehensive loss components are included in the computation of net periodic pension cost.
The amortization of the gain (loss) on cash flow hedges is reclassified to net income during the period incurred and is included in interest, net in the accompanying Consolidated Statements of Operations.
An unrealized gain (loss) on available-for-sale fixed-income securities is reclassified to net income upon sale of the securities as a realized gain or loss and is included in Other, net in the accompanying Consolidated Statements of Operations.
Dividends
On June 1, 2023, the Company paid a quarterly cash dividend of $0.7075 per share to shareholders of record as of May 9, 2023.
On July 26, 2023, the Company’s Board of Directors declared a quarterly cash dividend payment of $0.7075 per share, payable on September 1, 2023, to shareholders of record as of August 8, 2023. Future dividends, when and as declared at the discretion of the Board of Directors, will be dependent upon future earnings and cash flows, compliance with various regulatory, financial and legal requirements, and other factors. See Note 9—Shareholders’ Equity in the Notes to Consolidated Financial Statements in the Company’s Form 10-K for additional information regarding the payment of dividends on the Company’s common stock.
v3.23.2
Long-Term Debt
 6 Months Ended
Jun. 30, 2023
Debt Disclosure [Abstract]  
Long-Term Debt
Note 7: Long-Term Debt
On June 29, 2023, AWCC, issued $1,035 million aggregate principal amount of 3.625% Exchangeable Senior Notes due 2026 (the “Notes”). AWCC received net proceeds of approximately $1,022 million, after deduction of underwriting discounts and commissions but before deduction of offering expenses payable by AWCC. A portion of the net proceeds was used to repay AWCC’s commercial paper obligations and the remainder is being used for general corporate purposes. The Notes are senior unsecured obligations of AWCC and have the benefit of a support agreement from parent company, which serves as the functional equivalent of a guarantee by parent company of the obligations of AWCC under the Notes. The Notes will mature on June 15, 2026 (the “Maturity Date”), unless earlier exchanged or repurchased.
The Notes will be exchangeable at an initial exchange rate of 5.8213 shares of parent company's common stock per $1,000 principal amount of Notes (equivalent to an initial exchange price of approximately $171.78 per share of common stock). The initial exchange rate of the Notes is subject to adjustment as provided in the indenture pursuant to which the Notes were issued (the “Note Indenture”). Prior to the close of business on the business day immediately preceding March 15, 2026, the Notes will be exchangeable at the option of the noteholders only upon the satisfaction of specified conditions and during certain periods described in the Note Indenture. On or after March 15, 2026, until the close of business on the business day immediately preceding the Maturity Date, the Notes will be exchangeable at the option of the noteholders at any time regardless of these conditions or periods. Upon any exchange of the Notes, AWCC will (1) pay cash up to the aggregate principal amount of the Notes and (2) pay or deliver (or cause to be delivered), as the case may be, cash, shares of parent company's common stock, or a combination of cash and shares of such common stock, at AWCC's election, in respect of the remainder, if any, of AWCC’s exchange obligation in excess of the aggregate principal amount of the Notes being exchanged.
AWCC may not redeem the Notes prior to the Maturity Date, and no sinking fund is provided for the Notes. Subject to certain conditions, holders of the Notes will have the right to require AWCC to repurchase all or a portion of their Notes upon the occurrence of a fundamental change, as defined in the Note Indenture, at a repurchase price of 100% of their principal amount plus any accrued and unpaid interest.
In addition to the Notes issued by AWCC as described above, during the six months ended June 30, 2023, the Company’s regulated subsidiaries issued in the aggregate $125 million of private activity bonds and government funded debt in multiple transactions with annual interest rates ranging from 0.00% to 3.75%, with a weighted average interest rate of 3.30%, maturing in 2025 through 2041. The private activity bonds and government funded debt issued by the Company's regulated subsidiaries during the six months ended June 30, 2023, were collateralized. During the six months ended June 30, 2023, AWCC and the Company’s regulated subsidiaries made sinking fund payments for, or repaid at maturity, $170 million in aggregate principal amount of outstanding long-term debt, with annual interest rates ranging from 0.00% to 6.55%, a weighted average interest rate of 1.63%, and maturity dates ranging from 2023 to 2051.
The Company had entered into eleven 10-year treasury lock agreements, with notional amounts totaling $300 million. The Company designated these treasury lock agreements as cash flow hedges, with their fair value recorded in accumulated other comprehensive gain or loss. In June 2023, the Company terminated the treasury lock agreements realizing a net gain of $3 million included in Other, net in the accompanying Consolidated Statements of Operations.
No ineffectiveness was recognized on hedging instruments for the three and six months ended June 30, 2023 or 2022.
v3.23.2
Short-Term Debt
 6 Months Ended
Jun. 30, 2023
Debt Disclosure [Abstract]  
Short-Term Debt
Note 8: Short-Term Debt
Liquidity needs for capital investment, working capital and other financial commitments are generally funded through cash flows from operations, public and private debt offerings, commercial paper markets and, if and to the extent necessary, borrowings under the AWCC revolving credit facility and issuances of equity. The revolving credit facility provides $2.75 billion in aggregate total commitments from a diversified group of financial institutions. The termination date of the credit agreement with respect to AWCC’s revolving credit facility is October 2027. The revolving credit facility is used principally to support AWCC’s commercial paper program, to provide additional liquidity support and to provide a sub-limit of up to $150 million for letters of credit. As of June 30, 2023 and December 31, 2022, there were no borrowings under the revolving credit facility. As of June 30, 2023 and December 31, 2022, there were $75 million and $78 million, respectively, of outstanding letters of credit under the revolving credit facility.
At June 30, 2023, there was no outstanding short-term debt as the proceeds of the Notes were used to repay the short-term commercial paper obligations. See Note 7—Long-Term Debt for additional information relating to the Notes.
At December 31, 2022, short-term debt consisting of commercial paper borrowings totaled $1,177 million, or net of discount $1,175 million. The weighted-average interest rate on AWCC’s outstanding short-term borrowings was approximately 4.41% and there were no commercial paper borrowings outstanding with maturities greater than three months.
Presented in the tables below is the aggregate credit facility commitments, commercial paper limit and letter of credit availability under the revolving credit facility, as well as the available capacity for each:
As of June 30, 2023
Commercial Paper LimitLetters of CreditTotal (a)
(In millions)
Total availability$2,600 $150 $2,750 
Outstanding debt— (75)(75)
Remaining availability as of June 30, 2023$2,600 $75 $2,675 
(a)Total remaining availability of $2.68 billion as of June 30, 2023, may be accessed through revolver draws.
As of December 31, 2022
Commercial Paper LimitLetters of Credit
Total (a)
(In millions)
Total availability$2,600 $150 $2,750 
Outstanding debt(1,177)(78)(1,255)
Remaining availability as of December 31, 2022$1,423 $72 $1,495 
(a)Total remaining availability of $1.50 billion as of December 31, 2022, may be accessed through revolver draws.
Presented in the table below is the Company’s total available liquidity as of June 30, 2023 and December 31, 2022, respectively:
Cash and Cash EquivalentsAvailability on Revolving Credit FacilityTotal Available Liquidity
(In millions)
Available liquidity as of June 30, 2023$794 $2,675 $3,469 
Available liquidity as of December 31, 2022$85 $1,495 $1,580 
v3.23.2
Income Taxes
 6 Months Ended
Jun. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
Note 9: Income Taxes
The Company’s effective income tax rate was 21.6% and 19.3% for the three months ended June 30, 2023 and 2022, respectively, and 21.2% and 18.8% for the six months ended June 30, 2023 and 2022, respectively. The increase in the Company’s effective income tax rate for the three and six months ended June 30, 2023, was primarily due to the decrease in the amortization of EADIT pursuant to regulatory orders. The amortization of EADIT is generally offset with reduction in revenue.
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into law. The IRA contains a Corporate Alternative Minimum Tax (“CAMT”) provision, effective January 1, 2023. To determine if a company is considered an applicable corporation subject to CAMT, the company’s average adjusted financial statement income (“AFSI”) for the three consecutive years preceding the tax year must exceed $1 billion. An applicable corporation must make several adjustments to net income when determining AFSI. The Company evaluated the potential impacts of the CAMT provision within the IRA and believes it does not exceed the $1 billion AFSI threshold, and therefore, is not currently subject to CAMT in 2023. The Company is continuing to assess the impact of the initial guidance regarding the application of the CAMT and will continue to monitor as additional guidance is released.
v3.23.2
Pension and Other Postretirement Benefits
 6 Months Ended
Jun. 30, 2023
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefits
Note 10: Pension and Other Postretirement Benefits
Presented in the table below are the components of net periodic benefit costs:
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2023202220232022
Components of net periodic pension benefit cost (credit):
Service cost$4 $7 $8 $15 
Interest cost21 16 43 32 
Expected return on plan assets(23)(30)(46)(61)
Amortization of prior service credit(1)(1)(2)(2)
Amortization of actuarial loss3 5 7 10 
Net periodic pension benefit cost (credit)$4 $(3)$10 $(6)
Components of net periodic other postretirement benefit credit:
Service cost$— $1 $1 $2 
Interest cost3 2 7 5 
Expected return on plan assets(3)(5)(6)(10)
Amortization of prior service credit(8)(8)(16)(16)
Amortization of actuarial loss— — 1 — 
Net periodic other postretirement benefit credit$(8)$(10)$(13)$(19)
The Company contributed $10 million and $20 million for the funding of its defined benefit pension plans for the three and six months ended June 30, 2023, respectively, and contributed $9 million and $18 million for the funding of its defined benefit pension plans for the three and six months ended June 30, 2022, respectively. The Company expects to make pension contributions to the plan trusts of $22 million during the remainder of 2023.
There were no contributions for the three and six months ended June 30, 2023, and $3 million and $13 million of contributions for the three and six months ended June 30, 2022, respectively, for the funding of the Company’s other postretirement benefit plans.
v3.23.2
Commitments and Contingencies
 6 Months Ended
Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Note 11: Commitments and Contingencies
Contingencies
The Company is routinely involved in legal actions incident to the normal conduct of its business. As of June 30, 2023, the Company has accrued approximately $6 million of probable loss contingencies and has estimated that the maximum amount of losses associated with reasonably possible loss contingencies that can be reasonably estimated is $3 million. For certain matters, claims and actions, the Company is unable to estimate possible losses. The Company believes that damages or settlements, if any, recovered by plaintiffs in such matters, claims or actions, other than as described in this Note 11—Commitments and Contingencies, will not have a material adverse effect on the Company.
Dunbar, West Virginia Water Main Break Class Action Litigation
On the evening of June 23, 2015, a 36-inch pre-stressed concrete transmission water main, installed in the early 1970s, failed. The water main is part of the West Relay pumping station located in the City of Dunbar, West Virginia and owned by the Company’s West Virginia subsidiary (“WVAWC”). The failure of the main caused water outages and low pressure for up to approximately 25,000 WVAWC customers. In the early morning hours of June 25, 2015, crews completed a repair, but that same day, the repair developed a leak. On June 26, 2015, a second repair was completed and service was restored that day to approximately 80% of the impacted customers, and to the remaining approximately 20% by the next morning. The second repair showed signs of leaking, but the water main was usable until June 29, 2015, to allow tanks to refill. The system was reconfigured to maintain service to all but approximately 3,000 customers while a final repair was being completed safely on June 30, 2015. Water service was fully restored by July 1, 2015, to all customers affected by this event.
On June 2, 2017, a complaint captioned Jeffries, et al. v. West Virginia-American Water Company was filed in West Virginia Circuit Court in Kanawha County on behalf of an alleged class of residents and business owners who lost water service or pressure as a result of the Dunbar main break. The complaint alleges breach of contract by WVAWC for failure to supply water, violation of West Virginia law regarding the sufficiency of WVAWC’s facilities and negligence by WVAWC in the design, maintenance and operation of the water system. The Jeffries plaintiffs seek unspecified alleged damages on behalf of the class for lost profits, annoyance and inconvenience, and loss of use, as well as punitive damages for willful, reckless and wanton behavior in not addressing the risk of pipe failure and a large outage.
In February 2020, the Jeffries plaintiffs filed a motion seeking class certification on the issues of breach of contract and negligence, and to determine the applicability of punitive damages and a multiplier for those damages if imposed. In July 2020, the Circuit Court entered an order granting the Jeffries plaintiffs’ motion for certification of a class regarding certain liability issues but denying certification of a class to determine a punitive damages multiplier. In August 2020, WVAWC filed a Petition for Writ of Prohibition in the Supreme Court of Appeals of West Virginia seeking to vacate or remand the Circuit Court’s order certifying the issues class. In January 2021, the Supreme Court of Appeals remanded the case back to the Circuit Court for further consideration in light of a decision issued in another case relating to the class certification issues raised on appeal. On July 5, 2022, the Circuit Court entered an order again certifying a class to address at trial certain liability issues but not to consider damages. On August 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 5, 2022 order, which petition was denied on June 8, 2023. The case will now return to the circuit court for further discovery, rulings and ultimately a class trial on issues relating to duty and breach of that duty. The trial will not find class-wide damages or punitive damages.
The Company and WVAWC believe that WVAWC has valid, meritorious defenses to the claims raised in this class action complaint. WVAWC is vigorously defending itself against these allegations. Given the current stage of this proceeding, the Company cannot reasonably estimate the amount of any reasonably possible losses or a range of such losses related to this proceeding.
Chattanooga, Tennessee Water Main Break Class Action Litigation
On September 12, 2019, the Company’s Tennessee subsidiary (“TAWC”), experienced a leak in a 36-inch water transmission main, which caused service fluctuations or interruptions to TAWC customers and the issuance of a boil water notice. TAWC repaired the main by early morning on September 14, 2019, and restored full water service by the afternoon of September 15, 2019, with the boil water notice lifted for all customers on September 16, 2019.
On September 17, 2019, a complaint captioned Bruce, et al. v. American Water Works Company, Inc., et al. was filed in the Circuit Court of Hamilton County, Tennessee against TAWC, the Company and American Water Works Service Company, Inc. (“Service Company” and, together with TAWC and the Company, collectively, the “Tennessee-American Water Defendants”), on behalf of a proposed class of individuals or entities who lost water service or suffered monetary losses as a result of the Chattanooga incident (the “Tennessee Plaintiffs”). The complaint alleged breach of contract and negligence against the Tennessee-American Water Defendants, as well as an equitable remedy of piercing the corporate veil. In the complaint as originally filed, the Tennessee Plaintiffs were seeking an award of unspecified alleged damages for wage losses, business and economic losses, out-of-pocket expenses, loss of use and enjoyment of property and annoyance and inconvenience, as well as punitive damages, attorneys’ fees and pre- and post-judgment interest. In September 2020, the court dismissed all of the Tennessee Plaintiffs’ claims in their complaint, except for the breach of contract claims against TAWC, which remain pending. In October 2020, TAWC answered the complaint, and the parties have been engaging in discovery. On January 12, 2023, after hearing oral argument, the court issued an oral ruling denying the Tennessee Plaintiffs’ motion for class certification. On February 9, 2023, the Tennessee Plaintiffs sought reconsideration of the ruling by the court, and any final ruling is appealable to the Tennessee Court of Appeals, as allowed under Tennessee law.
TAWC and the Company believe that TAWC has meritorious defenses to the claims raised in this class action complaint, and TAWC is vigorously defending itself against these allegations. The Company cannot currently determine the likelihood of a loss, if any, or estimate the amount of any loss or a range of such losses related to this proceeding.
Alternative Water Supply in Lieu of Carmel River Diversions
Compliance with Orders to Reduce Carmel River Diversions—Monterey Peninsula Water Supply Project
Under a 2009 order (the “2009 Order”) of the State Water Resources Control Board (the “SWRCB”), the Company’s California subsidiary (“Cal Am”) is required to decrease significantly its yearly diversions of water from the Carmel River according to a set reduction schedule. In 2016, the SWRCB issued an order (the “2016 Order,” and, together with the 2009 Order, the “Orders”) approving a deadline of December 31, 2021, for Cal Am’s compliance with these prior orders.
Cal Am is currently involved in developing the Monterey Peninsula Water Supply Project (the “Water Supply Project”), which includes the construction of a desalination plant, to be owned by Cal Am, and the construction of wells that would supply water to the desalination plant. In addition, the Water Supply Project also includes Cal Am’s purchase of water from a groundwater replenishment project (the “GWR Project”) between Monterey One Water and the Monterey Peninsula Water Management District (the “MPWMD”). The Water Supply Project is intended, among other things, to fulfill Cal Am’s obligations under the Orders.
Cal Am’s ability to move forward on the Water Supply Project is subject to administrative review by the CPUC and other government agencies, obtaining necessary permits, and intervention from other parties. In September 2016, the CPUC unanimously approved a final decision to authorize Cal Am to enter into a water purchase agreement for the GWR Project and to construct a pipeline and pump station facilities and recover up to $50 million in associated incurred costs, plus an allowance for funds used during construction (“AFUDC”), subject to meeting certain criteria.
In September 2018, the CPUC unanimously approved another final decision finding that the Water Supply Project meets the CPUC’s requirements for a certificate of public convenience and necessity and an additional procedural phase was not necessary to consider alternative projects. The CPUC’s 2018 decision concludes that the Water Supply Project is the best project to address estimated future water demands in Monterey, and, in addition to the cost recovery approved in its 2016 decision, adopts Cal Am’s cost estimates for the Water Supply Project, which amounted to an aggregate of $279 million plus AFUDC at a rate representative of Cal Am’s actual financing costs. The 2018 final decision specifies the procedures for recovery of all of Cal Am’s prudently incurred costs associated with the Water Supply Project upon its completion, subject to the frameworks included in the final decision related to cost caps, operation and maintenance costs, financing, ratemaking and contingency matters. The reasonableness of the Water Supply Project costs will be reviewed by the CPUC when Cal Am seeks cost recovery for the Water Supply Project. Cal Am is also required to implement mitigation measures to avoid, minimize or offset significant environmental impacts from the construction and operation of the Water Supply Project and comply with a mitigation monitoring and reporting program, a reimbursement agreement for CPUC costs associated with that program, and reporting requirements on plant operations following placement of the Water Supply Project in service. Cal Am has incurred $223 million in aggregate costs as of June 30, 2023 related to the Water Supply Project, which includes $62 million in AFUDC.
In September 2021, Cal Am, Monterey One Water and the MPWMD reached an agreement on Cal Am’s purchase of additional water from an expansion to the GWR Project, which is not expected to produce additional water until 2024 at the earliest. On December 5, 2022, the CPUC issued a final decision that authorized Cal Am to enter into the amended water purchase agreement, and specifically to increase pumping capacity and reliability of groundwater extraction from the Seaside Groundwater Basin. The final decision sets the cost cap for the proposed facilities at approximately $62 million. Cal Am may seek recovery of amounts above the cost cap in a subsequent rate filing or general rate case. Additionally, the final decision authorizes AFUDC at Cal Am’s actual weighted average cost of debt for most of the facilities. On December 30, 2022, Cal Am filed with the CPUC an application for rehearing of the CPUC’s December 5, 2022 final decision, and 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. This decision also provided 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 to be scheduled in a Phase 2 to this CPUC proceeding will focus on updated supply and demand estimates for the Water Supply Project.
While Cal Am believes that its expenditures to date have been prudent and necessary to comply with the Orders, as well as relevant final 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 final decision and its December 2022 final decision, as amended by its March 30, 2023 rehearing decision.
Coastal Development Permit Application
In 2018, Cal Am submitted a coastal development permit application (the “Marina Application”) to the City of Marina (the “City”) for those project components of the Water Supply Project located within the City’s coastal zone. Members of the City’s Planning Commission, as well as City councilpersons, have publicly expressed opposition to the Water Supply Project. In May 2019, the City issued a notice of final local action based upon the denial by the Planning Commission of the Marina Application. Thereafter, Cal Am appealed this decision to the Coastal Commission, as permitted under the City’s code and the California Coastal Act. At the same time, Cal Am submitted an application (the “Original Jurisdiction Application”) to the Coastal Commission for a coastal development permit for those project components located within the Coastal Commission’s original jurisdiction. After Coastal Commission staff issued reports recommending denial of the Original Jurisdiction Application, noting potential impacts on environmentally sensitive habitat areas and wetlands and possible disproportionate impacts to communities of concern, in September 2020, Cal Am withdrew the Original Jurisdiction Application in order to address the staff’s environmental justice concerns. The withdrawal of the Original Jurisdiction Application did not impact Cal Am’s appeal of the City’s denial of the Marina Application, which remains pending before the Coastal Commission. In November 2020, Cal Am refiled the Original Jurisdiction Application.
On October 5, 2022, Cal Am announced a phasing plan for the proposed desalination plant component of the Water Supply Project. The desalination plant and slant wells originally approved by the CPUC would produce up to 6.4 million gallons of desalinated water per day. Under the phased approach, the facilities would initially be constructed to produce up to 4.8 million gallons per day of desalinated water, enough to meet anticipated demand through about 2030, and would limit the number of slant wells initially constructed. As demand increases in the future, desalination facilities would be expanded to meet the additional demand. The phased approach seeks to meet near-term demand by allowing for additional supply as it becomes needed, while also providing an opportunity for regional future public participation and was developed by Cal Am based on feedback received from the community.
On November 17, 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. On December 29, 2022, the City, Marina Coast Water District (“MCWD”), MCWD’s groundwater sustainability agency, 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 slant wells. Cal Am is named as a real party in interest. This matter remains pending.
Following the issuance of the coastal development permit, Cal Am continues to work constructively with all appropriate agencies to provide necessary information in connection with obtaining the remaining required permits for the Water Supply Project. However, there can be no assurance that the Water Supply Project in its current configuration will be completed on a timely basis, if ever. For the year ended December 31, 2022, Cal Am has complied with the diversion limitations contained in the 2016 Order. Continued compliance with the diversion 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. The Orders remain in effect until Cal Am certifies to the SWRCB, and the SWRCB concurs, that Cal Am has obtained a permanent supply of water to substitute for past unauthorized Carmel River diversions. 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 additional costs and obligations to Cal Am, including fines and penalties against Cal Am in the event of noncompliance with the Orders.
West Virginia Elk River Freedom Industries Chemical Spill
On June 8, 2018, the U.S. District Court for the Southern District of West Virginia granted final approval of a settlement class and global class action settlement (the “Settlement”) for all claims and potential claims by all class members (collectively, the “West Virginia Plaintiffs”) arising out of the January 2014 Freedom Industries, Inc. chemical spill in West Virginia. The effective date of the Settlement was July 16, 2018. Under the terms and conditions of the Settlement, WVAWC and certain other Company affiliated entities did not admit, and will not admit, any fault or liability for any of the allegations made by the West Virginia Plaintiffs in any of the actions that were resolved.
As of June 30, 2023, $0.5 million of the aggregate Settlement amount of $126 million remains reflected in accrued liabilities, and $0.5 million in an offsetting insurance receivable remains reflected in other current assets on the Consolidated Balance Sheets pending resolution of all asserted actual or potential claims associated with this matter. The amount reflected in accrued liabilities reflects the status of the liability and the offsetting insurance receivable reflected in other current assets, each as of as of June 30, 2023.
v3.23.2
Earnings Per Common Share
 6 Months Ended
Jun. 30, 2023
Earnings Per Share [Abstract]  
Earnings Per Common Share
Note 12: Earnings per Common Share
Presented in the table below is a reconciliation of the numerator and denominator for the basic and diluted earnings per share (“EPS”) calculations:
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2023202220232022
Numerator:
Net income attributable to common shareholders$280 $218 $450 $376 
Denominator:
Weighted-average common shares outstanding—Basic195 182 190 182 
Effect of dilutive common stock equivalents— — — — 
Weighted-average common shares outstanding—Diluted195 182 190 182 
The effect of dilutive common stock equivalents is related to outstanding restricted stock units (“RSUs”) and performance stock units (“PSUs”) granted under the Company’s 2007 Omnibus Equity Compensation Plan and outstanding RSUs and PSUs granted under the Company’s 2017 Omnibus Equity Compensation Plan, as well as estimated shares to be purchased under the Company’s 2017 Nonqualified Employee Stock Purchase Plan. Less than one million share-based awards were excluded from the computation of diluted EPS for the three and six months ended June 30, 2023 and 2022, because their effect would have been anti-dilutive under the treasury stock method.
The if-converted method is applied to the Notes issued in June 2023 for computing diluted EPS. For both periods presented, there was no dilution resulting from the Notes. See Note 7—Long-Term Debt for additional information relating to the Notes.
v3.23.2
Fair Value of Financial Information
 6 Months Ended
Jun. 30, 2023
Fair Value Disclosures [Abstract]  
Fair Value of Financial Information
Note 13: Fair Value of Financial Information
Fair Value of Financial Instruments
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:
Current assets and current liabilities—The carrying amounts reported on the Consolidated Balance Sheets for current assets and current liabilities, including revolving credit debt, due to the short-term maturities and variable interest rates, approximate their fair values.
Seller promissory note from the sale of the Homeowner Services Group (“HOS”) — The carrying amount reported on the Consolidated Balance Sheets for the seller promissory note, included as part of the consideration from the sale of HOS, is $720 million as of June 30, 2023 and December 31, 2022. This amount represents the principal amount owed under the seller note, for which the Company expects to receive full payment. The accounting fair value measurement of the seller note approximated $691 million and $686 million as of June 30, 2023 and December 31, 2022, respectively. The accounting fair value measurement is an estimate that is reflective of changes in benchmark interest rates. The seller note is classified as Level 3 within the fair value hierarchy.
Preferred stock with mandatory redemption requirements and long-term debt—The fair values of preferred stock with mandatory redemption requirements and long-term debt are categorized within the fair value hierarchy based on the inputs that are used to value each instrument. The fair value of long-term debt classified as Level 1 is calculated using quoted prices in active markets. Level 2 instruments are valued using observable inputs and Level 3 instruments are valued using observable and unobservable inputs.
Presented in the tables below are the carrying amounts, including fair value adjustments previously recognized in acquisition purchase accounting, and the fair values of the Company’s financial instruments:
As of June 30, 2023
Carrying AmountAt Fair Value
 Level 1Level 2Level 3Total
Preferred stock with mandatory redemption requirements$3 $— $— $3 $3 
Long-term debt12,185 9,725 34 1,356 11,115 
As of December 31, 2022
 Carrying AmountAt Fair Value
 Level 1Level 2Level 3Total
Preferred stock with mandatory redemption requirements$3 $— $— $3 $3 
Long-term debt (excluding finance lease obligations)11,207 8,599 49 1,427 10,075 
Recurring Fair Value Measurements
Presented in the tables below are assets and liabilities measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy:
As of June 30, 2023
 Level 1Level 2Level 3Total
Assets:    
Restricted funds$31 $— $— $31 
Rabbi trust investments21 — — 21 
Deposits6 — — 6 
Other investments
Money market and other30 — — 30 
Fixed-Income Securities166 6 — 172 
Contingent cash payment from the sale of HOS— — 72 72 
Total assets254 6 72 332 
Liabilities:    
Deferred compensation obligations25 — — 25 
Total liabilities25 — — 25 
Total assets$229 $6 $72 $307 
As of December 31, 2022
 Level 1Level 2Level 3Total
Assets:    
Restricted funds$32 $— $— $32 
Rabbi trust investments21 — — 21 
Deposits7 — — 7 
Other investments
Money market and other61 — — 61 
Fixed-Income Securities147 6 — 153 
Contingent cash payment from the sale of HOS— — 72 72 
Mark-to-market derivative asset— 1 — 1 
Total assets268 7 72 347 
Liabilities:    
Deferred compensation obligations24 — — 24 
Total liabilities24 — — 24 
Total assets$244 $7 $72 $323 
Restricted funds—The Company’s restricted funds primarily represent proceeds received from financings for the construction and capital improvement of facilities and from customers for future services under operation, maintenance and repair projects.
Rabbi trust investments—The Company’s rabbi trust investments consist of equity and index funds from which supplemental executive retirement plan benefits and deferred compensation obligations can be paid. The Company includes these assets in other long-term assets on the Consolidated Balance Sheets.
Deposits—Deposits include escrow funds and certain other deposits held in trust. The Company includes cash deposits in other current assets on the Consolidated Balance Sheets.
Deferred compensation obligations—The Company’s deferred compensation plans allow participants to defer certain cash compensation into notional investment accounts. The Company includes such plans in other long-term liabilities on the Consolidated Balance Sheets. The value of the Company’s deferred compensation obligations is based on the market value of the participants’ notional investment accounts. The notional investments are comprised primarily of mutual funds, which are based on observable market prices.
Mark-to-market derivative assets and liabilities—The Company employs derivative financial instruments in the form of treasury lock agreements, classified as cash flow hedges, in order to fix the interest cost on existing or forecasted debt. The Company uses a calculation of future cash inflows and estimated future outflows, which are discounted, to determine the current fair value. Additional inputs to the present value calculation include the contract terms, counterparty credit risk, interest rates and market volatility.
Other investments—The Company maintains a Voluntary Employees’ Beneficiary Association trust for purposes of paying active union employee medical benefits (“Active VEBA”). The investments in the Active VEBA trust primarily consist of money market funds and available-for-sale fixed income securities.
The money market and other investments have original maturities of three months or less when purchased. The fair value measurement of the money market and other investments is based on observable market prices and therefore included in the recurring fair value measurements hierarchy as Level 1.
The available-for-sale fixed income securities are primarily investments in U.S. Treasury securities and government bonds. The majority of U.S. Treasury securities and government bonds have been categorized as Level 1 because they trade in highly-liquid and transparent markets. Certain U.S. Treasury securities are based on prices that reflect observable market information, such as actual trade information of similar securities, and are therefore categorized as Level 2, because the valuations are calculated using models which utilize actively traded market data that the Company can corroborate.
The Company includes other investments measured and recorded at fair value on the Consolidated Balance Sheets of $69 million and $67 million in Other current assets, as of June 30, 2023 and December 31, 2022, respectively, and $133 million and $147 million in Other long-term assets, as of June 30, 2023 and December 31, 2022, respectively. Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and reported in other comprehensive income until realized.
The following tables summarize the unrealized positions for available-for-sale fixed income securities as of June 30, 2023 and December 31, 2022:
As of June 30, 2023
Amortized Cost BasisGross unrealized gainsGross unrealized lossesFair Value
Available-for-sale fixed-income securities$171 $6 $5 $172 
As of December 31, 2022
Amortized Cost BasisGross unrealized gainsGross unrealized lossesFair Value
Available-for-sale fixed-income securities$153 $— $— $153 
The fair value of the Company’s available-for-sale fixed income securities, summarized by contractual maturities, as of June 30, 2023, is as follows:
Amount
Other investments - Available-for-sale fixed-income securities
Less than one year$116 
1 year - 5 years42 
5 years - 10 years3 
Greater than 10 years11 
Total$172 
Contingent cash payment from the sale of HOS—The Company’s contingent cash payment derivative included as part of the consideration from the sale of HOS, payable upon satisfaction of certain conditions on or before December 31, 2023, is included in other current assets on the Consolidated Balance Sheets. The accounting fair value measurement of the contingent cash payment approximated $72 million, which is reflective of changes in the benchmark interest rate and estimated using the probability of the outcome of receipt of the $75 million, a Level 3 input.
v3.23.2
Leases
 6 Months Ended
Jun. 30, 2023
Leases [Abstract]  
Leases
Note 14: Leases
The Company has operating and finance leases involving real property, including facilities, utility assets, vehicles, and equipment. Certain operating leases have renewal options ranging from one to 60 years. The exercise of lease renewal options is at the Company’s sole discretion. Renewal options that the Company was reasonably certain to exercise are included in the Company’s right-of-use (“ROU”) assets. Certain operating leases contain the option to purchase the leased property. The operating leases for real property, vehicles and equipment will expire over the next 37 years, six years, and three years, respectively.
The Company participates in a number of arrangements with various public entities (“Partners”) in West Virginia. Under these arrangements, the Company transferred a portion of its utility plant to the Partners in exchange for an equal principal amount of Industrial Development Bonds (“IDBs”) issued by the Partners under the Industrial Development and Commercial Development Bond Act. The Company leased back the utility plant under agreements for a period of 30 to 40 years. The Company has recorded these agreements as finance leases in property, plant and equipment, as ownership of the assets will revert back to the Company at the end of the lease term. The carrying value of the finance lease assets was $144 million and $145 million as of June 30, 2023 and December 31, 2022, respectively. The Company determined that the finance lease obligations and the investments in IDBs meet the conditions for offsetting, and as such, are reported net on the Consolidated Balance Sheets and are excluded from the lease disclosure presented below.
The Company also enters into O&M agreements with the Partners. The Company pays an annual fee for use of the Partners’ assets in performing under the O&M agreements. The O&M agreements are recorded as operating leases, and future annual use fees of $2 million in 2023, $4 million in 2024 through 2027, and $45 million thereafter, are included in operating lease ROU assets and operating lease liabilities on the Consolidated Balance Sheets.
Rental expenses under operating leases were $3 million for each of the three months ended June 30, 2023 and June 30, 2022, and $6 million for each of the six months ended June 30, 2023 and June 30, 2022.
For the three and six months ended June 30, 2023, cash paid for amounts in lease liabilities, which includes operating cash flows from operating leases, were $3 million and $5 million, respectively. For the six months ended June 30, 2023, there were ROU assets obtained in exchange for new operating lease liabilities of $4 million.
As of June 30, 2023, the weighted-average remaining lease term of the operating leases was 17 years, and the weighted-average discount rate of the operating leases was 4%.
The future maturities of lease liabilities as of June 30, 2023 were $5 million in 2023, $10 million in 2024, $9 million in 2025, $8 million in 2026, $7 million in 2027, and $76 million thereafter. As of June 30, 2023, imputed interest was $37 million.
Leases
Note 14: Leases
The Company has operating and finance leases involving real property, including facilities, utility assets, vehicles, and equipment. Certain operating leases have renewal options ranging from one to 60 years. The exercise of lease renewal options is at the Company’s sole discretion. Renewal options that the Company was reasonably certain to exercise are included in the Company’s right-of-use (“ROU”) assets. Certain operating leases contain the option to purchase the leased property. The operating leases for real property, vehicles and equipment will expire over the next 37 years, six years, and three years, respectively.
The Company participates in a number of arrangements with various public entities (“Partners”) in West Virginia. Under these arrangements, the Company transferred a portion of its utility plant to the Partners in exchange for an equal principal amount of Industrial Development Bonds (“IDBs”) issued by the Partners under the Industrial Development and Commercial Development Bond Act. The Company leased back the utility plant under agreements for a period of 30 to 40 years. The Company has recorded these agreements as finance leases in property, plant and equipment, as ownership of the assets will revert back to the Company at the end of the lease term. The carrying value of the finance lease assets was $144 million and $145 million as of June 30, 2023 and December 31, 2022, respectively. The Company determined that the finance lease obligations and the investments in IDBs meet the conditions for offsetting, and as such, are reported net on the Consolidated Balance Sheets and are excluded from the lease disclosure presented below.
The Company also enters into O&M agreements with the Partners. The Company pays an annual fee for use of the Partners’ assets in performing under the O&M agreements. The O&M agreements are recorded as operating leases, and future annual use fees of $2 million in 2023, $4 million in 2024 through 2027, and $45 million thereafter, are included in operating lease ROU assets and operating lease liabilities on the Consolidated Balance Sheets.
Rental expenses under operating leases were $3 million for each of the three months ended June 30, 2023 and June 30, 2022, and $6 million for each of the six months ended June 30, 2023 and June 30, 2022.
For the three and six months ended June 30, 2023, cash paid for amounts in lease liabilities, which includes operating cash flows from operating leases, were $3 million and $5 million, respectively. For the six months ended June 30, 2023, there were ROU assets obtained in exchange for new operating lease liabilities of $4 million.
As of June 30, 2023, the weighted-average remaining lease term of the operating leases was 17 years, and the weighted-average discount rate of the operating leases was 4%.
The future maturities of lease liabilities as of June 30, 2023 were $5 million in 2023, $10 million in 2024, $9 million in 2025, $8 million in 2026, $7 million in 2027, and $76 million thereafter. As of June 30, 2023, imputed interest was $37 million.
v3.23.2
Segment Information
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
Segment Information
Note 15: Segment Information
The Company’s operating segments are comprised of its businesses which generate revenue, incur expense and have separate financial information which is regularly used by management to make operating decisions, assess performance and allocate resources. The Company operates its businesses primarily through one reportable segment, the Regulated Businesses segment. The Regulated Businesses segment also includes inter-segment revenues, costs and interest which are eliminated to reconcile to the Consolidated Statements of Operations.
The Company also operates other businesses, primarily MSG, that do not meet the criteria of a reportable segment in accordance with GAAP, and are collectively presented throughout this Form 10-Q within “Other,” which is consistent with how management assesses the results of these businesses. Other also includes corporate costs that are not allocated to the Company’s Regulated Businesses, interest income related to the seller promissory note and income from the revenue share agreement from the sale of HOS, eliminations of inter-segment transactions and fair value adjustments related to acquisitions that have not been allocated to the Regulated Businesses segment. The adjustments related to the acquisitions are reported in Other as they are excluded from segment performance measures evaluated by management.
The seller promissory note from the sale of HOS has a five-year term, is payable in cash, and bears interest at a rate of 7.00% per year during the term. The Company recognized $12 million of interest income from the seller note for each of the three months ended June 30, 2023 and 2022, and $25 million of interest income from the seller note for each of the six months ended June 30, 2023 and 2022.
The Company recognized $3 million and $2 million of income during the three months ended June 30, 2023 and 2022, respectively, and $6 million and $4 million of income during the six months ended June 30, 2023 and 2022, respectively, from the revenue share agreements from the sale of HOS, which is included in Other, net on the Consolidated Statements of Operations.
Presented in the tables below is summarized segment information:
 As of or for the Three Months Ended June 30, 2023
 Regulated BusinessesOtherConsolidated
Operating revenues$1,005 $92 $1,097 
Depreciation and amortization172 2 174 
Total operating expenses, net584 81 665 
Interest expense(90)(20)(110)
Interest income6 9 15 
Provision for income taxes73 4 77 
Net income attributable to common shareholders278 2 280 
Total assets26,243 3,253 29,496 
Cash paid for capital expenditures622 5 627 
 As of or for the Three Months Ended June 30, 2022
 Regulated BusinessesOtherConsolidated
Operating revenues$865 $72 $937 
Depreciation and amortization157 6 163 
Total operating expenses, net546 64 610 
Interest expense(76)(30)(106)
Interest income— 12 12 
Provision for income taxes47 5 52 
Net income (loss) attributable to common shareholders219 (1)218 
Total assets23,864 2,710 26,574 
Cash paid for capital expenditures568 3 571 
 As of or for the Six Months Ended June 30, 2023
 Regulated BusinessesOtherConsolidated
Operating revenues$1,865 $170 $2,035 
Depreciation and amortization341 5 346 
Total operating expenses, net1,156 152 1,308 
Interest expense(177)(48)(225)
Interest income7 22 29 
Provision for income taxes119 2 121 
Net income (loss) attributable to common shareholders452 (2)450 
Total assets26,243 3,253 29,496 
Cash paid for capital expenditures1,146 7 1,153 
As of or for the Six Months Ended June 30, 2022
 Regulated BusinessesOtherConsolidated
Operating revenues$1,643 $136 $1,779 
Depreciation and amortization312 9 321 
Total operating expenses, net1,084 122 1,206 
Interest expense(146)(60)(206)
Interest income— 25 25 
Provision for income taxes83 4 87 
Net income (loss) attributable to common shareholders379 (3)376 
Total assets23,864 2,710 26,574 
Cash paid for capital expenditures990 5 995 
v3.23.2
Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]  
New Accounting Standards
New Accounting Standards
Presented in the table below are new accounting standards that were adopted by the Company in 2023:
Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements
Accounting for Contract Assets and Contract Liabilities from Contracts with CustomersThe guidance requires an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification Topic 606, as if it had originated the contracts. The amendments in this update also provide certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination.January 1, 2023ProspectiveThis standard did not have a material impact on the Consolidated Financial Statements
Troubled Debt Restructurings and Vintage DisclosuresThe main provisions of this standard eliminate the receivables accounting guidance for troubled debt restructurings (“TDRs”) by creditors while enhancing disclosure requirements when a borrower is experiencing financial difficulty. Entities must apply the loan refinancing and restructuring guidance for receivables to determine whether a modification results in a new loan or a continuation of an existing loan. Additionally, the amendments in this update require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases.January 1, 2023Prospective, with a modified retrospective option for amendments related to the recognition and measurement of TDRs.This standard did not have a material impact on the Consolidated Financial Statements
Property, Plant and Equipment
Property, Plant and Equipment
The New Jersey Economic Development Authority (“NJEDA”) determined that the Company was qualified to receive $161 million in tax credits in connection with its capital investment in its corporate headquarters in Camden, New Jersey. The Company was qualified to receive the tax credits over a 10-year period commencing in 2019.
In March 2023, the NJEDA issued the utilization certificate for the 2020 tax credits to the Company in the amount of $16 million. The Company sold these tax credits to external parties in March 2023 for $15 million. As of June 30, 2023 and December 31, 2022, the Company had $32 million and $48 million, respectively, in Other current assets and $97 million in Other long-term assets on the Consolidated Balance Sheets as a result of these tax credits. The Company has made the necessary annual filing for the years ended December 31, 2021 and 2022.
Allowance for Uncollectible Accounts
Allowance for Uncollectible Accounts
Allowances for uncollectible accounts are maintained for estimated probable losses resulting from the Company’s inability to collect receivables from customers. Accounts that are outstanding longer than the payment terms are considered past due. A number of factors are considered in determining the allowance for uncollectible accounts, including the length of time receivables are past due, previous loss history, current economic and societal conditions and reasonable and supportable forecasts that affect the collectability of receivables from customers. The Company generally writes off accounts when they become uncollectible or are over a certain number of days outstanding.
Reclassifications
Reclassifications
Certain reclassifications have been made to prior periods in the Consolidated Financial Statements and Notes to conform to the current presentation.
v3.23.2
Significant Accounting Policies (Tables)
 6 Months Ended
Jun. 30, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]  
Schedule of New Accounting Pronouncements and Changes in Accounting Principles
Presented in the table below are new accounting standards that were adopted by the Company in 2023:
Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements
Accounting for Contract Assets and Contract Liabilities from Contracts with CustomersThe guidance requires an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification Topic 606, as if it had originated the contracts. The amendments in this update also provide certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination.January 1, 2023ProspectiveThis standard did not have a material impact on the Consolidated Financial Statements
Troubled Debt Restructurings and Vintage DisclosuresThe main provisions of this standard eliminate the receivables accounting guidance for troubled debt restructurings (“TDRs”) by creditors while enhancing disclosure requirements when a borrower is experiencing financial difficulty. Entities must apply the loan refinancing and restructuring guidance for receivables to determine whether a modification results in a new loan or a continuation of an existing loan. Additionally, the amendments in this update require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases.January 1, 2023Prospective, with a modified retrospective option for amendments related to the recognition and measurement of TDRs.This standard did not have a material impact on the Consolidated Financial Statements
Schedule of Accounts Receivable, Allowance for Credit Loss
Presented in the table below are the changes in the allowance for uncollectible accounts for the six months ended June 30:
20232022
Balance as of January 1$(60)$(75)
Amounts charged to expense(9)(10)
Amounts written off13 11 
Other, net (a)4 7 
Balance as of June 30$(52)$(67)
(a)This portion of the allowance for uncollectible accounts is primarily related to COVID-19 related regulatory asset activity.
v3.23.2
Regulatory Matters (Tables)
 6 Months Ended
Jun. 30, 2023
Regulated Operations [Abstract]  
Schedule of Generate Rate Cases and Infrastructure Surcharges
Presented in the table below are annualized incremental revenues, including reductions for the amortization of the excess accumulated deferred income taxes (“EADIT”) that are generally offset in income tax expense, assuming a constant water sales volume and customer count, resulting from general rate case authorizations that became effective during 2023:
(In millions)Effective DateAmount
General rate cases by state:
MissouriMay 28, 2023$44 
VirginiaApril 24, 2023 (a)11 
PennsylvaniaJanuary 28, 2023138 
IllinoisJanuary 1, 202367 
California, Step IncreaseJanuary 1, 202313 
Total general rate case authorizations$273 
(a)Interim rates were effective May 1, 2022, and the difference between interim and final approved rates is subject to refund. The Virginia State Corporation Commission issued its final Order on April 24, 2023.
Schedule of Annualized Incremental Revenues Presented in the table below are annualized incremental revenues, assuming a constant water sales volume and customer count, resulting from infrastructure surcharge authorizations that became effective during 2023:
(In millions)Effective DateAmount
Infrastructure surcharges by state:
New Jersey(a)$17 
Indiana(b)26 
MissouriJanuary 16, 202314 
PennsylvaniaJanuary 1, 20233 
West VirginiaJanuary 1, 20237 
Total infrastructure surcharge authorizations$67 
(a)In 2023, $1 million was effective June 29 and $16 million was effective April 29.
(b)In 2023, $20 million was effective March 23 and $6 million was effective March 8.
v3.23.2
Revenue Recognition (Tables)
 6 Months Ended
Jun. 30, 2023
Revenue from Contract with Customer [Abstract]  
Schedule of Disaggregation of Revenue
Presented in the table below are operating revenues disaggregated for the three months ended June 30, 2023:
Revenues from Contracts with CustomersOther Revenues Not from Contracts with Customers (a)Total Operating Revenues
Regulated Businesses:
Water services:
Residential$554 $— $554 
Commercial198 — 198 
Fire service39 — 39 
Industrial38 — 38 
Public and other75 — 75 
Total water services904 — 904 
Wastewater services:
Residential57 — 57 
Commercial16 — 16 
Industrial2 — 2 
Public and other7 — 7 
Total wastewater services82 — 82 
Miscellaneous utility charges9 — 9 
Alternative revenue programs— 8 8 
Lease contract revenue— 2 2 
Total Regulated Businesses995 10 1,005 
Other93 (1)92 
Total operating revenues$1,088 $9 $1,097 
(a)Includes revenues associated with alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of Accounting Standards Codification Topic 606, Revenue From Contracts With Customers (“ASC 606”), and accounted for under other existing GAAP.
Presented in the table below are operating revenues disaggregated for the three months ended June 30, 2022:
Revenues from Contracts with CustomersOther Revenues Not from Contracts with Customers (a)Total Operating Revenues
Regulated Businesses:
Water services:
Residential$483 $1 $484 
Commercial174 — 174 
Fire service37 — 37 
Industrial38 — 38 
Public and other59 — 59 
Total water services791 1 792 
Wastewater services:
Residential42 — 42 
Commercial11 — 11 
Industrial1 — 1 
Public and other4 — 4 
Total wastewater services58 — 58 
Miscellaneous utility charges9 — 9 
Alternative revenue programs— 4 4 
Lease contract revenue— 2 2 
Total Regulated Businesses858 7 865 
Other72 — 72 
Total operating revenues$930 $7 $937 
(a)Includes revenues associated with provisional rates, alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of ASC 606, and accounted for under other existing GAAP.
Presented in the table below are operating revenues disaggregated for the six months ended June 30, 2023:
Revenues from Contracts with CustomersOther Revenues Not from Contracts with Customers (a)Total Operating Revenues
Regulated Businesses:
Water services: 
Residential$1,015 $— $1,015 
Commercial369 — 369 
Fire service78 — 78 
Industrial76 — 76 
Public and other131 — 131 
Total water services1,669 — 1,669 
Wastewater services: 
Residential111 — 111 
Commercial30 — 30 
Industrial4 — 4 
Public and other13 — 13 
Total wastewater services158 — 158 
Miscellaneous utility charges17 — 17 
Alternative revenue programs— 17 17 
Lease contract revenue— 4 4 
Total Regulated Businesses1,844 21 1,865 
Other171 (1)170 
Total operating revenues$2,015 $20 $2,035 
(a)Includes revenues associated with alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of Accounting Standards Codification Topic 606, Revenue From Contracts With Customers (“ASC 606”), and accounted for under other existing GAAP.
Presented in the table below are operating revenues disaggregated for the six months ended June 30, 2022:
Revenues from Contracts with CustomersOther Revenues Not from Contracts with Customers (a)Total Operating Revenues
Regulated Businesses:
Water services:
Residential$911 $1 $912 
Commercial327 — 327 
Fire service73 — 73 
Industrial74 — 74 
Public and other116 — 116 
Total water services1,501 1 1,502 
Wastewater services:
Residential83 — 83 
Commercial21 — 21 
Industrial2 — 2 
Public and other7 — 7 
Total wastewater services113 — 113 
Miscellaneous utility charges18 — 18 
Alternative revenue programs— 6 6 
Lease contract revenue— 4 4 
Total Regulated Businesses1,632 11 1,643 
Other136 — 136 
Total operating revenues$1,768 $11 $1,779 
(a)Includes revenues associated with provisional rates, alternative revenue programs, lease contracts and intercompany rent, which are outside the scope of ASC 606, and accounted for under other existing GAAP.
v3.23.2
Shareholders' Equity (Tables)
 6 Months Ended
Jun. 30, 2023
Equity [Abstract]  
Schedule of Accumulated Other Comprehensive Income (Loss)
Presented in the table below are the changes in accumulated other comprehensive loss by component, net of tax, for the six months ended June 30, 2023 and 2022, respectively:
 Defined Benefit Pension PlansLoss on Cash Flow HedgesGain on Fixed-Income SecuritiesAccumulated Other Comprehensive Loss
 Employee Benefit Plan Funded StatusAmortization of Prior Service CostAmortization of Actuarial Loss
Balance as of December 31, 2022$(93)$1 $70 $(1)$— $(23)
Other comprehensive income before reclassifications— — — — 1 1 
Amounts reclassified from accumulated other comprehensive loss— — — — — — 
Net other comprehensive income— — — — 1 1 
Balance as of June 30, 2023$(93)$1 $70 $(1)$1 $(22)
Balance as of December 31, 2021$(107)$1 $67 $(6)$— $(45)
Other comprehensive income before reclassifications— — — 4 — 4 
Amounts reclassified from accumulated other comprehensive income— — 1 — — 1 
Net other comprehensive income— — 1 4 — 5 
Balance as of June 30, 2022$(107)$1 $68 $(2)$— $(40)
v3.23.2
Short-Term Debt (Tables)
 6 Months Ended
Jun. 30, 2023
Debt Disclosure [Abstract]  
Schedule of Line of Credit Facilities
Presented in the tables below is the aggregate credit facility commitments, commercial paper limit and letter of credit availability under the revolving credit facility, as well as the available capacity for each:
As of June 30, 2023
Commercial Paper LimitLetters of CreditTotal (a)
(In millions)
Total availability$2,600 $150 $2,750 
Outstanding debt— (75)(75)
Remaining availability as of June 30, 2023$2,600 $75 $2,675 
(a)Total remaining availability of $2.68 billion as of June 30, 2023, may be accessed through revolver draws.
As of December 31, 2022
Commercial Paper LimitLetters of Credit
Total (a)
(In millions)
Total availability$2,600 $150 $2,750 
Outstanding debt(1,177)(78)(1,255)
Remaining availability as of December 31, 2022$1,423 $72 $1,495 
(a)Total remaining availability of $1.50 billion as of December 31, 2022, may be accessed through revolver draws.
Presented in the table below is the Company’s total available liquidity as of June 30, 2023 and December 31, 2022, respectively:
Cash and Cash EquivalentsAvailability on Revolving Credit FacilityTotal Available Liquidity
(In millions)
Available liquidity as of June 30, 2023$794 $2,675 $3,469 
Available liquidity as of December 31, 2022$85 $1,495 $1,580 
v3.23.2
Pension and Other Postretirement Benefits (Tables)
 6 Months Ended
Jun. 30, 2023
Retirement Benefits [Abstract]  
Schedule of Components of Net Periodic Benefit Costs
Presented in the table below are the components of net periodic benefit costs:
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2023202220232022
Components of net periodic pension benefit cost (credit):
Service cost$4 $7 $8 $15 
Interest cost21 16 43 32 
Expected return on plan assets(23)(30)(46)(61)
Amortization of prior service credit(1)(1)(2)(2)
Amortization of actuarial loss3 5 7 10 
Net periodic pension benefit cost (credit)$4 $(3)$10 $(6)
Components of net periodic other postretirement benefit credit:
Service cost$— $1 $1 $2 
Interest cost3 2 7 5 
Expected return on plan assets(3)(5)(6)(10)
Amortization of prior service credit(8)(8)(16)(16)
Amortization of actuarial loss— — 1 — 
Net periodic other postretirement benefit credit$(8)$(10)$(13)$(19)
v3.23.2
Earnings Per Common Share (Tables)
 6 Months Ended
Jun. 30, 2023
Earnings Per Share [Abstract]  
Schedule of Reconciliation of Numerator and Denominator for Basic and Diluted Earnings Per Share
Presented in the table below is a reconciliation of the numerator and denominator for the basic and diluted earnings per share (“EPS”) calculations:
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2023202220232022
Numerator:
Net income attributable to common shareholders$280 $218 $450 $376 
Denominator:
Weighted-average common shares outstanding—Basic195 182 190 182 
Effect of dilutive common stock equivalents— — — — 
Weighted-average common shares outstanding—Diluted195 182 190 182 
v3.23.2
Fair Value of Financial Information (Tables)
 6 Months Ended
Jun. 30, 2023
Fair Value Disclosures [Abstract]  
Schedule of Carrying Amounts and Fair Values of Financial Instruments
Presented in the tables below are the carrying amounts, including fair value adjustments previously recognized in acquisition purchase accounting, and the fair values of the Company’s financial instruments:
As of June 30, 2023
Carrying AmountAt Fair Value
 Level 1Level 2Level 3Total
Preferred stock with mandatory redemption requirements$3 $— $— $3 $3 
Long-term debt12,185 9,725 34 1,356 11,115 
As of December 31, 2022
 Carrying AmountAt Fair Value
 Level 1Level 2Level 3Total
Preferred stock with mandatory redemption requirements$3 $— $— $3 $3 
Long-term debt (excluding finance lease obligations)11,207 8,599 49 1,427 10,075 
Schedule of Fair Value Measurements of Assets and Liabilities on Recurring Basis
Presented in the tables below are assets and liabilities measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy:
As of June 30, 2023
 Level 1Level 2Level 3Total
Assets:    
Restricted funds$31 $— $— $31 
Rabbi trust investments21 — — 21 
Deposits6 — — 6 
Other investments
Money market and other30 — — 30 
Fixed-Income Securities166 6 — 172 
Contingent cash payment from the sale of HOS— — 72 72 
Total assets254 6 72 332 
Liabilities:    
Deferred compensation obligations25 — — 25 
Total liabilities25 — — 25 
Total assets$229 $6 $72 $307 
As of December 31, 2022
 Level 1Level 2Level 3Total
Assets:    
Restricted funds$32 $— $— $32 
Rabbi trust investments21 — — 21 
Deposits7 — — 7 
Other investments
Money market and other61 — — 61 
Fixed-Income Securities147 6 — 153 
Contingent cash payment from the sale of HOS— — 72 72 
Mark-to-market derivative asset— 1 — 1 
Total assets268 7 72 347 
Liabilities:    
Deferred compensation obligations24 — — 24 
Total liabilities24 — — 24 
Total assets$244 $7 $72 $323 
Schedule of Unrealized Positions for Available-for-Sale Fixed-Income Securities
The following tables summarize the unrealized positions for available-for-sale fixed income securities as of June 30, 2023 and December 31, 2022:
As of June 30, 2023
Amortized Cost BasisGross unrealized gainsGross unrealized lossesFair Value
Available-for-sale fixed-income securities$171 $6 $5 $172 
As of December 31, 2022
Amortized Cost BasisGross unrealized gainsGross unrealized lossesFair Value
Available-for-sale fixed-income securities$153 $— $— $153 
Schedule of Investments Classified by Contractual Maturity Date
The fair value of the Company’s available-for-sale fixed income securities, summarized by contractual maturities, as of June 30, 2023, is as follows:
Amount
Other investments - Available-for-sale fixed-income securities
Less than one year$116 
1 year - 5 years42 
5 years - 10 years3 
Greater than 10 years11 
Total$172 
v3.23.2
Segment Information (Tables)
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
Schedule of Summarized Segment Information
Presented in the tables below is summarized segment information:
 As of or for the Three Months Ended June 30, 2023
 Regulated BusinessesOtherConsolidated
Operating revenues$1,005 $92 $1,097 
Depreciation and amortization172 2 174 
Total operating expenses, net584 81 665 
Interest expense(90)(20)(110)
Interest income6 9 15 
Provision for income taxes73 4 77 
Net income attributable to common shareholders278 2 280 
Total assets26,243 3,253 29,496 
Cash paid for capital expenditures622 5 627 
 As of or for the Three Months Ended June 30, 2022
 Regulated BusinessesOtherConsolidated
Operating revenues$865 $72 $937 
Depreciation and amortization157 6 163 
Total operating expenses, net546 64 610 
Interest expense(76)(30)(106)
Interest income— 12 12 
Provision for income taxes47 5 52 
Net income (loss) attributable to common shareholders219 (1)218 
Total assets23,864 2,710 26,574 
Cash paid for capital expenditures568 3 571 
 As of or for the Six Months Ended June 30, 2023
 Regulated BusinessesOtherConsolidated
Operating revenues$1,865 $170 $2,035 
Depreciation and amortization341 5 346 
Total operating expenses, net1,156 152 1,308 
Interest expense(177)(48)(225)
Interest income7 22 29 
Provision for income taxes119 2 121 
Net income (loss) attributable to common shareholders452 (2)450 
Total assets26,243 3,253 29,496 
Cash paid for capital expenditures1,146 7 1,153 
As of or for the Six Months Ended June 30, 2022
 Regulated BusinessesOtherConsolidated
Operating revenues$1,643 $136 $1,779 
Depreciation and amortization312 9 321 
Total operating expenses, net1,084 122 1,206 
Interest expense(146)(60)(206)
Interest income— 25 25 
Provision for income taxes83 4 87 
Net income (loss) attributable to common shareholders379 (3)376 
Total assets23,864 2,710 26,574 
Cash paid for capital expenditures990 5 995 
v3.23.2
Significant Accounting Policies - Additional Information (Details) - USD ($)
$ in Millions
 1 Months Ended 6 Months Ended 12 Months Ended
Mar. 31, 2023
Jun. 30, 2023
Dec. 31, 2022
Dec. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Investment tax credit $ 16     $ 161
Investment tax credit, period       10 years
Investment tax credit, sold to external parties $ 15      
Other Current Assets        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Investment tax credit   $ 32 $ 48  
Other Long-term Assets        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Investment tax credit   $ 97 $ 97  
v3.23.2
Significant Accounting Policies - Allowance for Uncollectible Accounts (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Accounts Receivable, Allowance for Credit Loss [Roll Forward]    
Beginning balance $ (60) $ (75)
Amounts charged to expense (9) (10)
Amounts written off 13 11
Other, net 4 7
Ending balance $ (52) $ (67)
v3.23.2
Regulatory Matters - Generate Rate Cases (Details)
$ in Millions
 6 Months Ended
Jun. 30, 2023
USD ($)
Public Utilities, General Disclosures  
General rate case authorizations, annualized incremental revenues, including reduction for the amortization of the excess accumulated deferred income taxes $ 273
Missouri  
Public Utilities, General Disclosures  
General rate case authorizations, annualized incremental revenues, including reduction for the amortization of the excess accumulated deferred income taxes 44
Virginia  
Public Utilities, General Disclosures  
General rate case authorizations, annualized incremental revenues, including reduction for the amortization of the excess accumulated deferred income taxes 11
Pennsylvania  
Public Utilities, General Disclosures  
General rate case authorizations, annualized incremental revenues, including reduction for the amortization of the excess accumulated deferred income taxes 138
Illinois  
Public Utilities, General Disclosures  
General rate case authorizations, annualized incremental revenues, including reduction for the amortization of the excess accumulated deferred income taxes 67
California  
Public Utilities, General Disclosures  
General rate case authorizations, annualized incremental revenues, including reduction for the amortization of the excess accumulated deferred income taxes $ 13
v3.23.2
Regulatory Matters - General Rate Cases and Pending General Rate Case Filings Additional Information (Details) - USD ($)
$ in Millions
Jul. 31, 2023
Jun. 30, 2023
Jun. 29, 2023
May 03, 2023
May 01, 2023
Apr. 24, 2023
Mar. 31, 2023
Mar. 01, 2023
Dec. 15, 2022
Dec. 08, 2022
Jul. 01, 2022
Jun. 29, 2022
Missouri                        
Public Utilities, General Disclosures                        
Common equity, percentage       9.75%                
General rate case authorizations, annualized incremental revenues, approved amount       $ 44                
General rate case authorizations, annualized incremental revenues, previously approved infrastructure filings amount       51                
Authorized rate base amount       $ 2,300                
Debt ratio, percentage       50.00%                
Virginia                        
Public Utilities, General Disclosures                        
Common equity, percentage           40.70%            
Proposed return on equity, percentage           9.70%            
General rate case authorizations, annualized incremental revenues, approved amount           $ 11            
Pennsylvania                        
Public Utilities, General Disclosures                        
Common equity, percentage                   10.00%    
General rate case authorizations, annualized incremental revenues, approved amount                   $ 138    
General rate case authorizations, annualized incremental revenues, previously approved infrastructure filings amount                   24    
Authorized rate base amount                   $ 5,100    
Debt ratio, percentage       44.80%                
Illinois                        
Public Utilities, General Disclosures                        
Common equity, percentage                 49.00%      
Proposed return on equity, percentage                 9.78%      
General rate case authorizations, annualized incremental revenues, approved amount                 $ 67      
Authorized rate base amount                 $ 1,640      
Debt ratio, percentage                 51.00%      
General rate case authorizations, annualized incremental revenues, requested amount                       $ 83
General rate case authorizations, annualized incremental revenues, previously recovered infrastructure surcharge amount                 $ 18      
West Virginia                        
Public Utilities, General Disclosures                        
General rate case authorizations, annualized incremental revenues, requested rate increase, amount         $ 45              
General rate case authorizations, annualized incremental revenues, requested rate increase, previously approved infrastructure filings, amount         $ 7              
Infrastructure surcharge, annualized incremental revenues, requested amount   $ 8                    
Indiana                        
Public Utilities, General Disclosures                        
General rate case authorizations, annualized incremental revenues, requested rate increase, amount             $ 87          
General rate case authorizations, annualized incremental revenues, requested rate increase, previously approved infrastructure filings, amount             41          
Indiana | January 2024                        
Public Utilities, General Disclosures                        
General rate case authorizations, annualized incremental revenues, requested rate increase, amount             43          
Indiana | May 2024                        
Public Utilities, General Disclosures                        
General rate case authorizations, annualized incremental revenues, requested rate increase, amount             18          
Indiana | May 2025                        
Public Utilities, General Disclosures                        
General rate case authorizations, annualized incremental revenues, requested rate increase, amount             $ 26          
California                        
Public Utilities, General Disclosures                        
Approved return on equity, percentage     8.98%                  
Common equity, percentage     57.04%                  
Increase to the return on equity for 2023   0.52%                    
General rate case authorizations, rate case cycle period                     3 years  
California | Subsequent Event                        
Public Utilities, General Disclosures                        
Approved return on equity, percentage 9.50%                      
California | Year 2024                        
Public Utilities, General Disclosures                        
General rate case authorizations, requested rate increase, amount                     $ 56  
General rate case authorizations, revenue, revised requested rate increase, amount                     37  
California | Year 2024 to 2026                        
Public Utilities, General Disclosures                        
General rate case authorizations, requested rate increase, amount                     95  
General rate case authorizations, revenue, revised requested rate increase, amount                     76  
California | Year 2025                        
Public Utilities, General Disclosures                        
General rate case authorizations, revenue, revised requested rate increase, amount                     20  
California | Year 2026                        
Public Utilities, General Disclosures                        
General rate case authorizations, revenue, revised requested rate increase, amount                     $ 19  
Kentucky                        
Public Utilities, General Disclosures                        
General rate case authorizations, annualized incremental revenues, requested rate increase, amount   $ 26                    
General rate case authorizations, annualized incremental revenues, requested rate increase, previously approved infrastructure filings, amount   $ 10                    
Infrastructure surcharge, annualized incremental revenues, requested amount               $ 4        
v3.23.2
Regulatory Matters - Summary of Infrastructure Surcharge Authorizations (Details)
$ in Millions
 6 Months Ended
Jun. 30, 2023
USD ($)
Public Utilities, General Disclosures  
Infrastructure surcharge authorizations $ 67
New Jersey  
Public Utilities, General Disclosures  
Infrastructure surcharge authorizations 17
New Jersey | June 29, 2023  
Public Utilities, General Disclosures  
Infrastructure surcharge authorizations 1
New Jersey | April 29, 2023  
Public Utilities, General Disclosures  
Infrastructure surcharge authorizations 16
Indiana  
Public Utilities, General Disclosures  
Infrastructure surcharge authorizations 26
Indiana | March 23, 2023  
Public Utilities, General Disclosures  
Infrastructure surcharge authorizations 20
Indiana | March 08, 2023  
Public Utilities, General Disclosures  
Infrastructure surcharge authorizations 6
Missouri  
Public Utilities, General Disclosures  
Infrastructure surcharge authorizations 14
Pennsylvania  
Public Utilities, General Disclosures  
Infrastructure surcharge authorizations 3
West Virginia  
Public Utilities, General Disclosures  
Infrastructure surcharge authorizations $ 7
v3.23.2
Regulatory Matters - Pending Infrastructure Surcharge Filings and Other Regulatory Matters Additional Information (Details) - USD ($)
$ in Millions
Jun. 30, 2023
Mar. 01, 2023
Mar. 02, 2021
West Virginia      
Public Utilities, General Disclosures      
Infrastructure surcharge, annualized incremental revenues, requested amount $ 8    
Kentucky      
Public Utilities, General Disclosures      
Infrastructure surcharge, annualized incremental revenues, requested amount   $ 4  
New Jersey      
Public Utilities, General Disclosures      
Base rate, acquisition adjustment, requested amount     $ 29
v3.23.2
Revenue Recognition - Disaggregated Revenues (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Disaggregation of Revenue [Line Items]        
Revenue from contract $ 1,088 $ 930 $ 2,015 $ 1,768
Other operating income 9 7 20 11
Operating revenues 1,097 937 2,035 1,779
Other        
Disaggregation of Revenue [Line Items]        
Revenue from contract 93 72 171 136
Other operating income     (1)  
Operating revenues 92 72 170 136
Regulated Businesses | Operating Segments        
Disaggregation of Revenue [Line Items]        
Revenue from contract 995 858 1,844 1,632
Alternative revenue programs 8 4 17 6
Lease contract revenue 2 2 4 4
Other operating income 10 7 21 11
Operating revenues 1,005 865 1,865 1,643
Regulated Businesses | Water Services | Operating Segments        
Disaggregation of Revenue [Line Items]        
Revenue from contract 904 791 1,669 1,501
Other operating income   1   1
Operating revenues 904 792 1,669 1,502
Regulated Businesses | Wastewater Services | Operating Segments        
Disaggregation of Revenue [Line Items]        
Revenue from contract 82 58 158 113
Operating revenues 82 58 158 113
Regulated Businesses | Miscellaneous Utility Charge | Operating Segments        
Disaggregation of Revenue [Line Items]        
Revenue from contract 9 9 17 18
Operating revenues 9 9 17 18
Regulated Businesses | Residential | Water Services | Operating Segments        
Disaggregation of Revenue [Line Items]        
Revenue from contract 554 483 1,015 911
Other operating income   1   1
Operating revenues 554 484 1,015 912
Regulated Businesses | Residential | Wastewater Services | Operating Segments        
Disaggregation of Revenue [Line Items]        
Revenue from contract 57 42 111 83
Operating revenues 57 42 111 83
Regulated Businesses | Commercial | Water Services | Operating Segments        
Disaggregation of Revenue [Line Items]        
Revenue from contract 198 174 369 327
Operating revenues 198 174 369 327
Regulated Businesses | Commercial | Wastewater Services | Operating Segments        
Disaggregation of Revenue [Line Items]        
Revenue from contract 16 11 30 21
Operating revenues 16 11 30 21
Regulated Businesses | Fire service | Water Services | Operating Segments        
Disaggregation of Revenue [Line Items]        
Revenue from contract 39 37 78 73
Operating revenues 39 37 78 73
Regulated Businesses | Industrial | Water Services | Operating Segments        
Disaggregation of Revenue [Line Items]        
Revenue from contract 38 38 76 74
Operating revenues 38 38 76 74
Regulated Businesses | Industrial | Wastewater Services | Operating Segments        
Disaggregation of Revenue [Line Items]        
Revenue from contract 2 1 4 2
Operating revenues 2 1 4 2
Regulated Businesses | Public and other | Water Services | Operating Segments        
Disaggregation of Revenue [Line Items]        
Revenue from contract 75 59 131 116
Operating revenues 75 59 131 116
Regulated Businesses | Public and other | Wastewater Services | Operating Segments        
Disaggregation of Revenue [Line Items]        
Revenue from contract 7 4 13 7
Operating revenues $ 7 $ 4 $ 13 $ 7
v3.23.2
Revenue Recognition - Contract Assets and Liabilities (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Contract assets:      
Contract asset $ 111   $ 86
Contract liabilities:      
Contract liability 71   $ 91
Transfers to operating revenues $ 68 $ 65  
v3.23.2
Revenue Recognition - Remaining Performance Obligations (Details) - Other
$ in Millions
Jun. 30, 2023
USD ($)
U.S. Government  
Disaggregation of Revenue [Line Items]  
Revenue, remaining performance obligation $ 7,000
Municipalities and Commercial  
Disaggregation of Revenue [Line Items]  
Revenue, remaining performance obligation $ 578
v3.23.2
Acquisitions and Divestitures - Additional Information (Details)
$ in Millions
 6 Months Ended
Jun. 01, 2023
USD ($)
Apr. 06, 2023
USD ($)
connection
Mar. 24, 2023
USD ($)
connection
township
Oct. 11, 2022
USD ($)
connection
Jun. 30, 2023
USD ($)
customer
acquisition
Business Acquisition [Line Items]          
Number of assets acquisitions | acquisition         10
Consideration transferred         $ 35
Water and Wastewater Services          
Business Acquisition [Line Items]          
Number of customers in service | customer         7,100
Illinois American Water Company          
Business Acquisition [Line Items]          
Consideration transferred   $ 83      
Number of customers connections | connection   26,000      
Pennsylvania American Water Company          
Business Acquisition [Line Items]          
Consideration transferred     $ 104 $ 232  
Number of customers connections | connection     6,300 14,700  
Number of townships | township     7    
New Jersey American Water Company          
Business Acquisition [Line Items]          
Consideration transferred $ 22        
Cash deposit 2        
New Jersey American Water Company | Utility Plant          
Business Acquisition [Line Items]          
Asset acquired $ 22        
v3.23.2
Shareholders' Equity - Common Stock Offering (Details) - Underwritten Public Offering
$ in Millions
Mar. 03, 2023
USD ($)
shares
Subsidiary, Sale of Stock [Line Items]  
Sale of stock, consideration received on transaction | $ $ 1,688
Common Stock  
Subsidiary, Sale of Stock [Line Items]  
Sale of stock, number of shares in transaction (in shares) | shares 12,650,000
v3.23.2
Shareholders' Equity - Changes in Accumulated Other Comprehensive Loss by Component (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2022
Mar. 31, 2022
Jun. 30, 2023
Jun. 30, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance $ 9,547 $ 7,693 $ 7,460 $ 7,298 $ 7,693 $ 7,298
Other comprehensive income before reclassifications         1 4
Amounts reclassified from accumulated other comprehensive income (loss)         0 1
Net other comprehensive income 1 0 4 1 1 5
Ending balance 9,701 9,547 7,570 7,460 9,701 7,570
Employee Benefit Plan Funded Status            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance   (93)   (107) (93) (107)
Other comprehensive income before reclassifications         0 0
Amounts reclassified from accumulated other comprehensive income (loss)         0 0
Net other comprehensive income         0 0
Ending balance (93)   (107)   (93) (107)
Amortization of Prior Service Cost            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance   1   1 1 1
Other comprehensive income before reclassifications         0 0
Amounts reclassified from accumulated other comprehensive income (loss)         0 0
Net other comprehensive income         0 0
Ending balance 1   1   1 1
Amortization of Actuarial Loss            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance   70   67 70 67
Other comprehensive income before reclassifications         0 0
Amounts reclassified from accumulated other comprehensive income (loss)         0 1
Net other comprehensive income         0 1
Ending balance 70   68   70 68
Loss on Cash Flow Hedges            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance   (1)   (6) (1) (6)
Other comprehensive income before reclassifications         0 4
Amounts reclassified from accumulated other comprehensive income (loss)         0 0
Net other comprehensive income         0 4
Ending balance (1)   (2)   (1) (2)
Gain on Fixed-Income Securities            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance   0   0 0 0
Other comprehensive income before reclassifications         1 0
Amounts reclassified from accumulated other comprehensive income (loss)         0 0
Net other comprehensive income         1 0
Ending balance 1   0   1 0
Accumulated Other Comprehensive Loss            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance (23) (23) (44) (45) (23) (45)
Net other comprehensive income 1   4 1    
Ending balance $ (22) $ (23) $ (40) $ (44) $ (22) $ (40)
v3.23.2
Shareholders' Equity - Dividends (Details) - $ / shares
 3 Months Ended
Jul. 26, 2023
Jun. 01, 2023
Jun. 30, 2023
Jun. 30, 2022
Dividends Payable [Line Items]        
Dividends cash paid per common share (dollars per share)   $ 0.7075    
Dividends declared per common share (dollars per share)     $ 0.7075 $ 0.6550
Subsequent Event        
Dividends Payable [Line Items]        
Dividends declared per common share (dollars per share) $ 0.7075      
v3.23.2
Long-Term Debt - Additional Information (Details)
 1 Months Ended 3 Months Ended 6 Months Ended
Jun. 29, 2023
USD ($)
$ / shares
Jun. 30, 2023
USD ($)
treasuryLockAgreement
Jun. 30, 2023
USD ($)
treasuryLockAgreement
Jun. 30, 2022
USD ($)
Jun. 30, 2023
USD ($)
treasuryLockAgreement
Jun. 30, 2022
USD ($)
Dec. 31, 2022
Debt Instrument [Line Items]              
Proceeds from long-term debt         $ 1,160,000,000 $ 811,000,000  
Eleven Treasury Lock Agreements | Designated as Hedging Instrument              
Debt Instrument [Line Items]              
Debt instrument, face amount   $ 300,000,000 $ 300,000,000   $ 300,000,000    
Derivative, number of instruments held | treasuryLockAgreement   11 11   11    
Debt instrument, term         10 years    
Gain from termination of derivative instruments   $ 3,000,000          
Ineffectiveness recognized on hedge instruments     $ 0 $ 0 $ 0 $ 0  
American Water Capital Corp.              
Debt Instrument [Line Items]              
Weighted average interest rate             4.41%
Repayments of debt         170,000,000    
Exchangeable Senior Note 3.625% Due 2026 | American Water Capital Corp. | Exchangeable Debt              
Debt Instrument [Line Items]              
Debt instrument, face amount $ 1,035,000,000            
Interest rate 3.625%            
Proceeds from long-term debt $ 1,022,000,000            
Debt instrument, exchangeable, conversion ratio 0.0058213            
Debt instrument, exchangeable, conversion price (dollars per share ) | $ / shares $ 171.78            
Various debt              
Debt Instrument [Line Items]              
Debt instrument, face amount   $ 125,000,000 $ 125,000,000   $ 125,000,000    
Various debt | American Water Capital Corp.              
Debt Instrument [Line Items]              
Debt Instrument, Redemption Price, Percentage         100.00%    
Various debt maturing in 2025 through 2041              
Debt Instrument [Line Items]              
Weighted average interest rate   3.30% 3.30%   3.30%    
Various debt maturing in 2025 through 2041 | Minimum              
Debt Instrument [Line Items]              
Interest rate   0.00% 0.00%   0.00%    
Various debt maturing in 2025 through 2041 | Maximum              
Debt Instrument [Line Items]              
Interest rate   3.75% 3.75%   3.75%    
Various debt maturing in 2023 through 2051 | American Water Capital Corp.              
Debt Instrument [Line Items]              
Weighted average interest rate   1.63% 1.63%   1.63%    
Various debt maturing in 2023 through 2051 | American Water Capital Corp. | Minimum              
Debt Instrument [Line Items]              
Interest rate   0.00% 0.00%   0.00%    
Various debt maturing in 2023 through 2051 | American Water Capital Corp. | Maximum              
Debt Instrument [Line Items]              
Interest rate   6.55% 6.55%   6.55%    
v3.23.2
Short-Term Debt - Additional Information (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Jun. 30, 2023
Short-term Debt [Line Items]    
Short-term debt $ 1,175,000,000 $ 0
Outstanding debt 1,177,000,000 0
Commercial paper borrowings with maturities greater than three months $ 0  
American Water Capital Corp.    
Short-term Debt [Line Items]    
Weighted average interest rate on short-term debt 4.41%  
Revolving Credit Facility    
Short-term Debt [Line Items]    
Short-term debt   0
Revolving Credit Facility | Letter of Credit    
Short-term Debt [Line Items]    
Letters of credit, maximum borrowing capacity $ 150,000,000 150,000,000
Letters of credit outstanding, amount 78,000,000 75,000,000
Revolving Credit Facility | American Water Capital Corp.    
Short-term Debt [Line Items]    
Letters of credit, maximum borrowing capacity 2,750,000,000 2,750,000,000
Revolving Credit Facility | American Water Capital Corp. | Letter of Credit    
Short-term Debt [Line Items]    
Letters of credit, maximum borrowing capacity $ 150,000,000 $ 150,000,000
v3.23.2
Short-Term Debt - Schedule of Company's Aggregate Credit Facility Commitments, Commercial Paper Limit, Letter of Credit Availability and Availability Capacity (Details) - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Short-term Debt [Line Items]    
Total availability $ 2,600,000,000 $ 2,600,000,000
Total availability 2,750,000,000 2,750,000,000
Outstanding debt 0 (1,177,000,000)
Outstanding debt (75,000,000) (1,255,000,000)
Remaining availability 2,600,000,000 1,423,000,000
Remaining availability 2,675,000,000 1,495,000,000
Revolving Credit Facility    
Short-term Debt [Line Items]    
Remaining availability 2,675,000,000 1,495,000,000
Revolving Credit Facility | Letter of Credit    
Short-term Debt [Line Items]    
Total availability 150,000,000 150,000,000
Outstanding debt (75,000,000) (78,000,000)
Remaining availability $ 75,000,000 $ 72,000,000
v3.23.2
Short-Term Debt - Schedule of Availability Liquidity (Details) - USD ($)
$ in Millions
Jun. 30, 2023
Dec. 31, 2022
Short-term Debt [Line Items]    
Cash and Cash Equivalents $ 794 $ 85
Remaining availability 2,675 1,495
Total Available Liquidity 3,469 1,580
Revolving Credit Facility    
Short-term Debt [Line Items]    
Remaining availability $ 2,675 $ 1,495
v3.23.2
Income Taxes - Additional Information (Details)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Income Tax Disclosure [Abstract]        
Effective income tax rate 21.60% 19.30% 21.20% 18.80%
v3.23.2
Pension and Other Postretirement Benefits - Schedule of Net Periodic Benefit Cost Components (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Pension Plan Asset        
Defined Benefit Plan Disclosure [Line Items]        
Service cost $ 4 $ 7 $ 8 $ 15
Interest cost 21 16 43 32
Expected return on plan assets (23) (30) (46) (61)
Amortization of prior service credit (1) (1) (2) (2)
Amortization of actuarial loss 3 5 7 10
Net periodic benefit credit 4 (3) 10 (6)
Other Postretirement Benefit Cost        
Defined Benefit Plan Disclosure [Line Items]        
Service cost 0 1 1 2
Interest cost 3 2 7 5
Expected return on plan assets (3) (5) (6) (10)
Amortization of prior service credit (8) (8) (16) (16)
Amortization of actuarial loss 0 0 1 0
Net periodic benefit credit $ (8) $ (10) $ (13) $ (19)
v3.23.2
Pension and Other Postretirement Benefits - Additional Information (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Pension Plan Asset        
Defined Benefit Plan Disclosure [Line Items]        
Company contributions $ 10,000,000 $ 9,000,000 $ 20,000,000 $ 18,000,000
Expected contributions 22,000,000   22,000,000  
Other Postretirement Benefit Cost        
Defined Benefit Plan Disclosure [Line Items]        
Company contributions $ 0 $ 3,000,000 $ 0 $ 13,000,000
v3.23.2
Commitments and Contingencies - Additional Information (Details)
customer in Thousands, gal in Millions, $ in Millions
 6 Months Ended
Jun. 30, 2023
USD ($)
Dec. 05, 2022
USD ($)
Oct. 05, 2022
gal
Sep. 30, 2018
USD ($)
Sep. 30, 2016
USD ($)
Jun. 30, 2015
customer
Jun. 27, 2015
Jun. 26, 2015
Jun. 23, 2015
customer
Commitments And Contingencies [Line Items]                  
Loss contingency, probable loss $ 6.0                
Daily production, number of gallons related to desalinated water | gal     6.4            
Initial daily production, number of gallons related to desalinated water | gal     4.8            
Binding Agreement | WVAWC                  
Commitments And Contingencies [Line Items]                  
Loss contingency, probable loss 0.5                
Amount of settlement 126.0                
Offsetting insurance receivable 0.5                
Dunbar | WVAWC                  
Commitments And Contingencies [Line Items]                  
Number of customers impacted due to failure of main that caused water outages and low pressure | customer                 25
Percentage of impacted customers to which service was restored             20.00% 80.00%  
Number of customers for whom system was reconfigured to maintain service while a final repair was completed | customer           3      
Monterey | Cal Am | SWRCB                  
Commitments And Contingencies [Line Items]                  
Approved cost estimates       $ 279.0          
Aggregate costs 223.0                
Allowance for funds used during construction 62.0                
Cost cap for proposed facilities, final   $ 62.0              
Maximum                  
Commitments And Contingencies [Line Items]                  
Loss contingency, possible loss $ 3.0                
Maximum | Monterey | Cal Am | SWRCB                  
Commitments And Contingencies [Line Items]                  
Approved recovery amount   $ 112.0     $ 50.0        
v3.23.2
Earnings Per Common Share - Reconciliation of Numerator and Denominator for Basic and Diluted Earnings Per Share (Details) - USD ($)
shares in Millions, $ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Earnings Per Share [Abstract]        
Net income attributable to common shareholders - Basic $ 280 $ 218 $ 450 $ 376
Net income attributable to common shareholders - Diluted $ 280 $ 218 $ 450 $ 376
Weighted-average common shares outstanding - Basic (in shares) 195 182 190 182
Effect of dilutive common stock equivalents (in shares) 0 0 0 0
Weighted-average common shares outstanding - Diluted (in shares) 195 182 190 182
v3.23.2
Earnings Per Common Share - Additional Information (Details) - shares
shares in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Earnings Per Share [Abstract]        
Antidilutive securities excluded from computation of earnings per share, less than (in shares) 1 1 1 1
v3.23.2
Fair Value of Financial Information - Additional Information (Details) - USD ($)
$ in Millions
Jun. 30, 2023
Dec. 31, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]    
Seller promissory note from the sale of the Homeowner Services Group $ 720 $ 720
Contingent cash payment from the sale of HOS 72 72
Other Current Assets    
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]    
Other investments 69 67
Other Long-term Assets    
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]    
Other investments 133 147
Carrying Amount    
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]    
Seller promissory note from the sale of the Homeowner Services Group 720 720
Level 3    
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]    
Contingent cash payment from the sale of HOS 72 72
Disposal Group, Disposed of by Sale | Homeowner Services Group | Level 3    
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]    
Contingent consideration receivable 75  
Disposal Group, Disposed of by Sale | Homeowner Services Group | Level 3 | Fair Value    
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]    
Seller promissory note from the sale of the Homeowner Services Group $ 691 $ 686
v3.23.2
Fair Value of Financial Information - Carrying Amounts and Fair Values of Financial Instruments (Details) - USD ($)
$ in Millions
Jun. 30, 2023
Dec. 31, 2022
Carrying Amount    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Preferred stock with mandatory redemption requirements, carrying amount $ 3 $ 3
Long-term debt (excluding finance lease obligations), carrying amount 12,185 11,207
Fair Value    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Preferred stock with mandatory redemption requirements, fair value 3 3
Long-term debt (excluding finance lease obligations), fair value 11,115 10,075
Fair Value | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Preferred stock with mandatory redemption requirements, fair value 0 0
Long-term debt (excluding finance lease obligations), fair value 9,725 8,599
Fair Value | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Preferred stock with mandatory redemption requirements, fair value 0 0
Long-term debt (excluding finance lease obligations), fair value 34 49
Fair Value | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Preferred stock with mandatory redemption requirements, fair value 3 3
Long-term debt (excluding finance lease obligations), fair value $ 1,356 $ 1,427
v3.23.2
Fair Value of Financial Information - Measurements of Assets and Liabilities on Recurring Basis (Details) - USD ($)
$ in Millions
Jun. 30, 2023
Dec. 31, 2022
Assets:    
Restricted funds $ 31 $ 32
Rabbi trust investments 21 21
Deposits 6 7
Contingent cash payment from the sale of HOS 72 72
Mark-to-market derivative asset   1
Total assets 332 347
Liabilities:    
Deferred compensation obligations 25 24
Total liabilities 25 24
Total assets 307 323
Fixed-Income Securities    
Assets:    
Other investments 172 153
Money market and other    
Assets:    
Other investments 30 61
Level 1    
Assets:    
Restricted funds 31 32
Rabbi trust investments 21 21
Deposits 6 7
Contingent cash payment from the sale of HOS 0 0
Mark-to-market derivative asset   0
Total assets 254 268
Liabilities:    
Deferred compensation obligations 25 24
Total liabilities 25 24
Total assets 229 244
Level 1 | Fixed-Income Securities    
Assets:    
Other investments 166 147
Level 1 | Money market and other    
Assets:    
Other investments 30 61
Level 2    
Assets:    
Restricted funds 0 0
Rabbi trust investments 0 0
Deposits 0 0
Contingent cash payment from the sale of HOS 0 0
Mark-to-market derivative asset   1
Total assets 6 7
Liabilities:    
Deferred compensation obligations 0 0
Total liabilities 0 0
Total assets 6 7
Level 2 | Fixed-Income Securities    
Assets:    
Other investments 6 6
Level 2 | Money market and other    
Assets:    
Other investments 0 0
Level 3    
Assets:    
Restricted funds 0 0
Rabbi trust investments 0 0
Deposits 0 0
Contingent cash payment from the sale of HOS 72 72
Mark-to-market derivative asset   0
Total assets 72 72
Liabilities:    
Deferred compensation obligations 0 0
Total liabilities 0 0
Total assets 72 72
Level 3 | Fixed-Income Securities    
Assets:    
Other investments 0 0
Level 3 | Money market and other    
Assets:    
Other investments $ 0 $ 0
v3.23.2
Fair Value of Financial Information - Unrealized Positions for Available-for-sale Fixed-Income Securities (Details) - Fixed-Income Securities - USD ($)
$ in Millions
Jun. 30, 2023
Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Amortized Cost Basis $ 171 $ 153
Gross unrealized gains 6 0
Gross unrealized losses 5 0
Total $ 172 $ 153
v3.23.2
Fair Value of Financial Information - Available-for-sale Fixed-Income Securities (Details) - Fixed-Income Securities - USD ($)
$ in Millions
Jun. 30, 2023
Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Less than one year $ 116  
1 year - 5 years 42  
5 years - 10 years 3  
Greater than 10 years 11  
Total $ 172 $ 153
v3.23.2
Leases - Additional Information (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Finance lease, right-of-use asset $ 144   $ 144   $ 145
Operating lease, expense $ 3 $ 3 $ 6 $ 6  
Real Property          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Operating lease, term of contract 37 years   37 years    
Vehicles          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Operating lease, term of contract 6 years   6 years    
Equipment          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Operating lease, term of contract 3 years   3 years    
Operating and Maintenance Agreement          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Future minimum sublease rentals, remainder of fiscal year $ 2   $ 2    
Future minimum sublease rentals, year one 4   4    
Future minimum sublease rentals, year two 4   4    
Future minimum sublease rentals, year three 4   4    
Future minimum sublease rentals, year four 4   4    
Future minimum sublease rentals, thereafter $ 45   $ 45    
Minimum          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Operating lease, renewal term 1 year   1 year    
Maximum          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Operating lease, renewal term 60 years   60 years    
Utility Plant | Minimum          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Lessee, finance lease, term of contract 30 years   30 years    
Utility Plant | Maximum          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Lessee, finance lease, term of contract 40 years   40 years    
v3.23.2
Leases - Supplemental Cash Flow (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2023
Leases [Abstract]    
Operating lease payments $ 3 $ 5
Right-of-use asset obtained in exchange for operating lease liability   $ 4
v3.23.2
Leases - Remaining Lease Term and Discount Rate (Details)
Jun. 30, 2023
Weighted-average Remaining Lease Term [Abstract]  
Operating lease 17 years
Weighted-average Discount Rate [Abstract]  
Operating lease 4.00%
v3.23.2
Leases - Future Maturities of Lease Liabilities (Details)
$ in Millions
Jun. 30, 2023
USD ($)
Leases [Abstract]  
Payments, remainder of fiscal year $ 5
Payments, year one 10
Payments, year two 9
Payments, year three 8
Payments, year four 7
Thereafter 76
Imputed interest $ 37
v3.23.2
Segment Information - Additional Information (Details)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2023
USD ($)
Jun. 30, 2022
USD ($)
Jun. 30, 2023
USD ($)
segment
Jun. 30, 2022
USD ($)
Segment Reporting Information [Line Items]        
Number of reportable segments | segment     1  
Interest income $ 15 $ 12 $ 29 $ 25
Other, net 12 17 23 32
Other        
Segment Reporting Information [Line Items]        
Interest income 9 12 22 25
Disposal Group, Disposed of by Sale | Homeowner Services Group | Other        
Segment Reporting Information [Line Items]        
Other, net $ 3 2 $ 6 4
Secured Seller Promissory Note | Disposal Group, Disposed of by Sale | Homeowner Services Group        
Segment Reporting Information [Line Items]        
Debt instrument, term     5 years  
Interest rate 7.00%   7.00%  
Interest income $ 12 $ 12 $ 25 $ 25
v3.23.2
Segment Information - Summarized Segment Information (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2022
Mar. 31, 2022
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Segment Reporting Information [Line Items]              
Operating revenues $ 1,097   $ 937   $ 2,035 $ 1,779  
Depreciation and amortization 174   163   346 321  
Total operating expenses, net 665   610   1,308 1,206  
Interest expense (110)   (106)   (225) (206)  
Interest income 15   12   29 25  
Provision for income taxes 77   52   121 87  
Net income attributable to common shareholders 280 $ 170 218 $ 158 450 376  
Total assets 29,496   26,574   29,496 26,574 $ 27,787
Cash paid for capital expenditures 627   571   1,153 995  
Other              
Segment Reporting Information [Line Items]              
Operating revenues 92   72   170 136  
Depreciation and amortization 2   6   5 9  
Total operating expenses, net 81   64   152 122  
Interest expense (20)   (30)   (48) (60)  
Interest income 9   12   22 25  
Provision for income taxes 4   5   2 4  
Net income attributable to common shareholders 2   (1)   (2) (3)  
Total assets 3,253   2,710   3,253 2,710  
Cash paid for capital expenditures 5   3   7 5  
Regulated Businesses | Operating Segments              
Segment Reporting Information [Line Items]              
Operating revenues 1,005   865   1,865 1,643  
Depreciation and amortization 172   157   341 312  
Total operating expenses, net 584   546   1,156 1,084  
Interest expense (90)   (76)   (177) (146)  
Interest income 6   0   7 0  
Provision for income taxes 73   47   119 83  
Net income attributable to common shareholders 278   219   452 379  
Total assets 26,243   23,864   26,243 23,864  
Cash paid for capital expenditures $ 622   $ 568   $ 1,146 $ 990