American Water Works Company, Inc.

ITEM 1. LEGAL PROCEEDINGS

The following information updates and amends the information provided in the Company’s Form 10-K in Item 3—Legal Proceedings. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Company’s Form 10-K and Form 10-Q. In accordance with the SEC’s disclosure rules, the Company has elected to disclose environmental proceedings involving the Company and a governmental authority if the amount of potential monetary sanctions, exclusive of interest and costs, that the Company reasonably believes will result from such proceeding is $1 million or more.

Alternative Water Supply in Lieu of Carmel River Diversions

Compliance with SWRCB Orders to Reduce Carmel River Diversions

During June and July 2026, the SWRCB issued and subsequently amended a Notice of Hearing related to its consideration of a modification to the moratorium on new service connections contained in the 2009 Order. Written and rebuttal testimony was filed on August 19, 2026, and September 18, 2026, respectively. A hearing to receive public comment and presentation of policy statements is scheduled for November 5, 2026, to be followed by issuance of a draft order for consideration by the SWRCB.

Monterey Peninsula Water Supply Project

CPUC Final Approval of Water Supply Project

On October 23, 2026, Cal Am submitted an application to the CPUC updating the project cost estimates, the financing framework and the ratemaking proposal for the Water Supply Project’s desalination facilities. Reflective of the lengthy approval and permitting processes and legal challenges, escalation of labor, material and construction costs, and significant engineering, procurement and legal expense, Cal Am’s application has updated the total cost estimate as originally approved in the 2018 Final Decision to $825 million plus AFUDC. This application remains subject to public comment, and CPUC review and approval.

Approvals for Use of Outfall for Water Supply Project Brine Discharge

On July 31, 2026, the RWQCB issued a revised draft NPDES permit for public comment and indicated that approval of the permit would be considered at its December 2026 meeting.

Complaint Filed in CPUC Against Cal Am

On June 16, 2026, the MPWMD, the City and MCWD jointly filed a complaint with the CPUC against Cal Am, seeking (i) an immediate stop to Cal Am’s current desalination project activities, (ii) to require Cal Am to seek modification of the CPUC’s 2018 final decision finding that the Water Supply Project meets its requirements for a certificate of public convenience and necessity, (iii) a finding that Cal Am is in violation of that final decision, and (iv) issuance of an order to show cause why Cal Am should not be sanctioned for implementing a phased project. The complainants argued that the implementation of the 6.4 million gallon per day desalination project with an initial phase of development of 4.8 million gallons per day, is not consistent with the CPUC’s 2018 final decision. Cal Am has responded to the complaint, seeking to dismiss it, and believes it to be without merit.

Proposed Acquisition of Monterey System Assets — Potential Condemnation

MPWMD Condemnation Action

The court scheduled an evidentiary hearing commencing October 19, 2026 to consider whether LAFCO approval is required for the MPWMD to proceed with its eminent domain claim.

Chattanooga, Tennessee Class Action Litigation

On December 4, 2025, the Court of Appeals of Tennessee denied the Tennessee Plaintiffs’ appeal, and on January 30, 2026, the Tennessee Plaintiffs filed an appeal with the Supreme Court of Tennessee, which was denied on August 13, 2026. The matter has been remanded to the Circuit Court for further proceedings.

Mountaineer Gas Company Main Break

Mountaineer Gas Customer Putative Class Action Lawsuits

On October 2, 2026, the parties jointly filed with the Circuit Court a proposed class action settlement agreement (the “MGC Class Settlement”) intending to cover all four putative class action lawsuits filed against Mountaineer Gas and WVAWC, together with a motion for preliminary approval of the MGC Class Settlement. The motion remains pending.

Mountaineer Gas Company Lawsuit

On July 9, 2026, WVAWC filed a motion seeking a continuance of the August 10, 2026 trial date for this lawsuit. The trial date has been continued and has been rescheduled to February 2027.

East Stroudsburg, Pennsylvania Putative Class Action

On July 21, 2026, the court issued an order denying the plaintiffs’ motion for class certification, and on August 11, 2026, the court denied plaintiffs’ motion challenging the court’s class certification denial order. Plaintiffs have filed a notice of appeal as to both the court’s denial of the challenge as well as the class certification motion. This matter remains pending.

As of September 30, 2026, the Company has received settlement payments from defendants in the multi-district litigation (the “MDL”) totaling $235 million, net of legal fees and administrative costs. The Company is seeking regulatory approval from the respective PUCs to apply the net proceeds of the settlement payments for the benefit of customers, where permissible. As of September 30, 2026, out of 11 Company utility subsidiaries that are parties to the MDL settlements and have filed to obtain such regulatory approval, approvals have been obtained for eight, two have been denied, and one remains pending.

On September 10, 2026, the MDL court granted motions for preliminary approval of four additional class settlements, with MDL defendants Amerex Corporation, Archroma U.S., Inc., Carrier Global Corporation and Nations Ford Chemical Company, for a total of approximately $149 million. The final fairness hearing for all four settlements is currently scheduled for January 15, 2027.

When and as received, funds are initially being held in a law firm escrow account prior to distribution to the Company’s utility subsidiaries that are parties to the MDL settlements after approval or denial is received from the applicable PUCs. As of September 30, 2026, the funds held in the escrow account and not yet transferred to the Company or returned to customers, totaled $108 million. Approximately $126 million of the escrowed funds were transferred from the escrow account for distribution to the Company’s utility subsidiaries. The Company anticipates that, during the remainder of 2026, it may receive one or more additional settlement payments from parties to the MDL settlements.