Company: AWK
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0001410636-25-000083
Chunk: 64

Company: American Water Works Company, Inc.
Filing Date: 2025-04-30
Form: 10-Q
Item: Part I, Item 1
Chunk 64
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 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.

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Secured seller promissory note from the sale of the Homeowner Services Group—The carrying amount reported on the Consolidated Balance Sheets for the secured seller promissory note, included as part of the consideration from the sale of HOS, is $795 million as of March 31, 2025, and December 31, 2024. This amount represents the principal amount owed under the secured seller promissory note, for which the Company expects to receive full payment. The accounting fair value measurement of the secured seller promissory note approximated $797 million and $793 million as of March 31, 2025, and December 31, 2024, respectively. The accounting fair value measurement is an estimate that is reflective of changes in benchmark interest rates. The secured seller promissory 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 March 31, 2025Carrying AmountAt Fair Value Level 1Level 2Level 3TotalPreferred stock with mandatory redemption requirements$3 $— $— $3 $3 Long-term debt13,432 10,570 1,053 664 12,287 As of December 31, 2024 Carrying AmountAt Fair Value Level 1Level 2Level 3TotalPreferred stock with mandatory redemption requirements$3 $— $— $3 $3 Long-term debt13,155 10,165 1,050 658 11,873 Recurring Fair Value MeasurementsPresented in the tables below are