Company: AWK
Filing Date: 2025-10-29
Form Type: 10-Q
Source: 0001410636-25-000173
Chunk: 91

Company: American Water Works Company, Inc.
Filing Date: 2025-10-29
Form: 10-Q
Item: Part I, Item 1
Chunk 91
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 measured by estimated remaining contract revenue.

20

Note 5: Acquisitions and DivestituresRegulated BusinessesDuring the nine months ended September 30, 2025, the Company closed on ten acquisitions of various regulated water and wastewater systems for a total aggregate purchase price of $29 million, which added approximately 11,000 water and wastewater customers. This includes the Company’s acquisition of the Audubon Water Company effective May 28, 2025, for a total consideration of $7 million, in the form of 48,381 shares of parent company common stock, net of an indemnity escrow claim. Assets acquired from the ten acquisitions, principally utility plant, totaled $44 million and liabilities assumed totaled $22 million, including assumed debt of $12 million. The Company recorded goodwill of $7 million associated with three of its acquisitions, which is reported in the Company’s Regulated Businesses segment. Five of these acquisitions were accounted for as a business combination and the purchase price allocation will be finalized once the valuation of assets acquired has been completed, no later than one year after the acquisition date.The pro forma impact of the Company’s business combinations was not material to the Consolidated Statements of Operations for the periods ended September 30, 2025 and 2024.Secured Seller Promissory Note from the Sale of Homeowner Services Group On December 9, 2021 (the “Closing Date”), the Company sold all of the equity interests in subsidiaries that comprised the Homeowner Services Group (“HOS”) to a wholly owned subsidiary (the “Buyer”) of funds advised by Apax Partners LLP, a global private equity advisory firm, for total consideration of approximately $1.275 billion. The outstanding consideration as of September 30, 2025, is a secured seller note payable in cash and issued by the Buyer in the principal amount of $795 million, with an interest rate of 10.00% per year. The Company recognized $20 million of interest income during each of the three months ended September 30, 2025 and 2024, and $60 million and $57 million of interest income during the nine months ended September 30, 2025 and 2024, respectively, from the secured seller note. The final maturity date of the secured seller note is December 9, 2026.The secured seller note may not be repaid at the Buyer’s election (except in certain limited circumstances) before the fourth anniversary of the Closing Date. If the Buyer seeks to repay the