v3.26.1
Revenue Recognition
 6 Months Ended
Jun. 30, 2026
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, 2026:
 
    
Revenues from
Contracts with
Customers
     
Other Revenues Not
from Contracts with
Customers (a)
     
Total Operating
Revenues
  
Regulated Businesses:
         
Water services:
         
Residential
    $ 689      $ —       $ 689  
Commercial
      259        —         259  
Fire service
      49        —         49  
Industrial
      56        —         56  
Public and other
      85        —         85  
  
 
 
     
 
 
     
 
 
  
Total water services
      1,138        —         1,138  
Wastewater services:
         
Residential
      74        —         74  
Commercial
      25        —         25  
Industrial
      3        —         3  
Public and other
      11        —         11  
  
 
 
     
 
 
     
 
 
  
Total wastewater services
      113        —         113  
Miscellaneous utility charges
      12        —         12  
Alternative revenue programs
      —         4        4  
Lease contract revenue
      —         1        1  
  
 
 
     
 
 
     
 
 
  
Total Regulated Businesses
      1,263        5        1,268  
  
 
 
     
 
 
     
 
 
  
Other
      87        —         87  
  
 
 
     
 
 
     
 
 
  
Total operating revenues
    $ 1,350      $ 5      $ 1,355  
  
 
 
     
 
 
     
 
 
  
 
(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, 2025:
 
    
Revenues from
Contracts with
Customers
     
Other Revenues Not
from Contracts with
Customers (a)
     
Total Operating
Revenues
  
Regulated Businesses:
         
Water services:
         
Residential
    $ 637      $ —       $ 637  
Commercial
      243        —         243  
Fire service
      48        —         48  
Industrial
      46        —         46  
Public and other
      78        —         78  
  
 
 
     
 
 
     
 
 
  
Total water services
      1,052        —         1,052  
Wastewater services:
         
Residential
      71        —         71  
Commercial
      21        —         21  
Industrial
      5        —         5  
Public and other
      10        —         10  
  
 
 
     
 
 
     
 
 
  
Total wastewater services
      107        —         107  
Miscellaneous utility charges
      14        —         14  
Alternative revenue programs
      —         4        4  
Lease contract revenue
      —         1        1  
  
 
 
     
 
 
     
 
 
  
Total Regulated Businesses
      1,173        5        1,178  
  
 
 
     
 
 
     
 
 
  
Other
      99        (1 )       98  
  
 
 
     
 
 
     
 
 
  
Total operating revenues
    $ 1,272      $ 4      $ 1,276  
  
 
 
     
 
 
     
 
 
  
 
(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 six months ended June 30, 2026:
 
    
Revenues from
Contracts with
Customers
     
Other Revenues Not
from Contracts with
Customers (a)
     
Total Operating
Revenues
  
Regulated Businesses:
         
Water services:
         
Residential
    $ 1,282      $ —       $ 1,282  
Commercial
      488        —         488  
Fire service
      97        —         97  
Industrial
      104        —         104  
Public and other
      155        —         155  
  
 
 
     
 
 
     
 
 
  
Total water services
      2,126        —         2,126  
Wastewater services:
         
Residential
      148        —         148  
Commercial
      47        —         47  
Industrial
      5        —         5  
Public and other
      20        —         20  
  
 
 
     
 
 
     
 
 
  
Total wastewater services
      220        —         220  
Miscellaneous utility charges
      24        —         24  
Alternative revenue programs
      —         6        6  
Lease contract revenue
      —         3        3  
  
 
 
     
 
 
     
 
 
  
Total Regulated Businesses
      2,370        9        2,379  
  
 
 
     
 
 
     
 
 
  
Other
      183        —         183  
  
 
 
     
 
 
     
 
 
  
Total operating revenues
    $ 2,553      $ 9      $ 2,562  
  
 
 
     
 
 
     
 
 
  
 
(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 six months ended June 30, 2025:
 
    
Revenues from
Contracts with
Customers
     
Other Revenues Not
from Contracts with
Customers (a)
     
Total Operating
Revenues
  
Regulated Businesses:
         
Water services:
         
Residential
    $ 1,197      $ —       $ 1,197  
Commercial
      455        —         455  
Fire service
      93        —         93  
Industrial
      91        —         91  
Public and other
      145        —         145  
  
 
 
     
 
 
     
 
 
  
Total water services
      1,981        —         1,981  
Wastewater services:
         
Residential
      139        —         139  
Commercial
      39        —         39  
Industrial
      10        —         10  
Public and other
      20        —         20  
  
 
 
     
 
 
     
 
 
  
Total wastewater services
      208        —         208  
Miscellaneous utility charges
      25        —         25  
Alternative revenue programs
      —         10        10  
Lease contract revenue
      —         3        3  
  
 
 
     
 
 
     
 
 
  
Total Regulated Businesses
      2,214        13        2,227  
  
 
 
     
 
 
     
 
 
  
Other
      192        (1 )       191  
  
 
 
     
 
 
     
 
 
  
Total operating revenues
    $ 2,406      $ 12      $ 2,418  
  
 
 
     
 
 
     
 
 
  
 
(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 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 $188 million and $171 million are included in Unbilled revenues on the Consolidated Balance Sheets as of June 30, 2026, and December 31, 2025, respectively. Also, contract assets of $4 million and $5 million are included in other long-term assets on the Consolidated Balance Sheets as of June 30, 2026, and December 31, 2025, respectively. Contract liabilities of $24 million and $19 million are included in other current liabilities on the Consolidated Balance Sheets as of June 30, 2026, and December 31, 2025, respectively. Also, contract liabilities of $17 million and $19 million are included in other long-term liabilities on the Consolidated Balance Sheets as of June 30, 2026, and December 31, 2025, respectively. Revenues recognized for the six months ended June 30, 2026 and 2025, from amounts included in contract liabilities were $42 million and $46 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, 2026, the Company’s operation and maintenance (“O&M”) and capital improvement contracts have RPOs. Contracts with the U.S. government for work on various military installations expire between 2051 and 2073 and have RPOs of $7.4 billion as of June 30, 2026, 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 $521 million as of June 30, 2026, as measured by estimated remaining contract revenue.