American Water Works Company, Inc.AWK
American Water Works Company, Inc. Revenue Disclosure
Note 4: Revenue Recognition
Disaggregated Revenues
Presented in the table below are operating revenues disaggregated for the year ended December 31, 2025:
| Revenues from Contracts with Customers | Other Revenues Not from Contracts with Customers (a) | Total Operating Revenues | |||||||||||||||
| Regulated Businesses: | |||||||||||||||||
| Water services: | |||||||||||||||||
| Residential | $ | 2,557 | $ | — | $ | 2,557 | |||||||||||
| Commercial | 981 | — | 981 | ||||||||||||||
| Fire service | 189 | — | 189 | ||||||||||||||
| Industrial | 195 | — | 195 | ||||||||||||||
| Public and other | 311 | — | 311 | ||||||||||||||
| Total water services | 4,233 | — | 4,233 | ||||||||||||||
| Wastewater services: | |||||||||||||||||
| Residential | 287 | — | 287 | ||||||||||||||
| Commercial | 86 | — | 86 | ||||||||||||||
| Industrial | 10 | — | 10 | ||||||||||||||
| Public and other | 39 | — | 39 | ||||||||||||||
| Total wastewater services | 422 | — | 422 | ||||||||||||||
| Miscellaneous utility charges | 49 | — | 49 | ||||||||||||||
| Alternative revenue programs | — | 12 | 12 | ||||||||||||||
| Lease contract revenue | — | 7 | 7 | ||||||||||||||
| Total Regulated Businesses | 4,704 | 19 | 4,723 | ||||||||||||||
| Other | 417 | — | 417 | ||||||||||||||
| Total operating revenues | $ | 5,121 | $ | 19 | $ | 5,140 | |||||||||||
(a)Includes revenues associated with 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 year ended December 31, 2024:
| Revenues from Contracts with Customers | Other Revenues Not from Contracts with Customers (a) | Total Operating Revenues | |||||||||||||||
| Regulated Businesses: | |||||||||||||||||
| Water services: | |||||||||||||||||
| Residential | $ | 2,344 | $ | 5 | $ | 2,349 | |||||||||||
| Commercial | 881 | 4 | 885 | ||||||||||||||
| Fire service | 164 | — | 164 | ||||||||||||||
| Industrial | 182 | 2 | 184 | ||||||||||||||
| Public and other | 291 | — | 291 | ||||||||||||||
| Total water services | 3,862 | 11 | 3,873 | ||||||||||||||
| Wastewater services: | |||||||||||||||||
| Residential | 243 | 2 | 245 | ||||||||||||||
| Commercial | 70 | — | 70 | ||||||||||||||
| Industrial | 12 | — | 12 | ||||||||||||||
| Public and other | 36 | — | 36 | ||||||||||||||
| Total wastewater services | 361 | 2 | 363 | ||||||||||||||
| Miscellaneous utility charges | 42 | — | 42 | ||||||||||||||
| Alternative revenue programs | — | 10 | 10 | ||||||||||||||
| Lease contract revenue | — | 8 | 8 | ||||||||||||||
| Total Regulated Businesses | 4,265 | 31 | 4,296 | ||||||||||||||
| Other | 388 | — | 388 | ||||||||||||||
| Total operating revenues | $ | 4,653 | $ | 31 | $ | 4,684 | |||||||||||
(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 year ended December 31, 2023:
| Revenues from Contracts with Customers | Other Revenues Not from Contracts with Customers (a) | Total Operating Revenues | |||||||||||||||
| Regulated Businesses: | |||||||||||||||||
| Water services: | |||||||||||||||||
| Residential | $ | 2,143 | $ | — | $ | 2,143 | |||||||||||
| Commercial | 798 | — | 798 | ||||||||||||||
| Fire service | 158 | — | 158 | ||||||||||||||
| Industrial | 167 | — | 167 | ||||||||||||||
| Public and other | 274 | — | 274 | ||||||||||||||
| Total water services | 3,540 | — | 3,540 | ||||||||||||||
| Wastewater services: | |||||||||||||||||
| Residential | 228 | — | 228 | ||||||||||||||
| Commercial | 62 | — | 62 | ||||||||||||||
| Industrial | 8 | — | 8 | ||||||||||||||
| Public and other | 29 | — | 29 | ||||||||||||||
| Total wastewater services | 327 | — | 327 | ||||||||||||||
| Miscellaneous utility charges | 35 | — | 35 | ||||||||||||||
| Alternative revenue programs | — | 10 | 10 | ||||||||||||||
| Lease contract revenue | — | 8 | 8 | ||||||||||||||
| Total Regulated Businesses | 3,902 | 18 | 3,920 | ||||||||||||||
| Other | 315 | (1) | 314 | ||||||||||||||
| Total operating revenues | $ | 4,217 | $ | 17 | $ | 4,234 | |||||||||||
(a)Includes revenues associated with 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 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 $171 million, $84 million and $95 million are included in unbilled revenues on the Consolidated Balance Sheets as of December 31, 2025, 2024 and 2023, respectively. Also, contract assets of $5 million and $39 million are included in other long-term assets on the Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively, and there were no contract assets in other long-term assets on the Consolidated Balance Sheets as of December 31, 2023. There were $175 million of contract assets added during 2025, and $122 million of contract assets were transferred to accounts receivable during 2025. There were $114 million of contract assets added during 2024, and $86 million of contract assets were transferred to accounts receivable during 2024.
Contract liabilities of $19 million, $40 million and $63 million are included in other current liabilities on the Consolidated Balance Sheets as of December 31, 2025, 2024 and 2023, respectively. Also, contract liabilities of $19 million and $14 million are included in other long-term liabilities on the Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively, and there were no contract liabilities in other long-term liabilities on the Consolidated Balance Sheets as of December 31, 2023. There were $88 million of contract liabilities added during 2025, and $104 million of contract liabilities were recognized as revenue during 2025. There were $83 million of contract liabilities added during 2024, and $92 million of contract liabilities were recognized as revenue during 2024.
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 December 31, 2025, the Company’s O&M and capital improvement contracts have RPOs. Contracts with the U.S. government for work on military installations expire between 2051 and 2073 and have RPOs of $7.4 billion as of December 31, 2025, 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 2031 and 2038 and have RPOs of $508 million as of December 31, 2025, as measured by estimated remaining contract revenue.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 14, 2024 | |
| 2022 | Feb 15, 2023 | |
| 2021 | Feb 16, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 19, 2019 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.