American Water Works Company, Inc. · NYSE:AWK
American Water Works — Q4 2024 Earnings Presentation
39 slides from American Water Works's earnings presentation, Feb 20, 2025
Slide 1: 2024 Fourth Quarter & Year-End Earnings Conference Call
2024 Fourth Quarter & Year-End Earnings Conference Call February 20, 2025
Slide 2: Aaron Musgrave, Vice President, Investor Relations
Aaron Musgrave Vice President, Investor Relations 2
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Safe Harbor This presentation includes forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the Federal securities laws. They are not guarantees or assurances of any outcomes, financial resu
Slide 4: M. Susan Hardwick, Chief Executive Officer
M. Susan Hardwick Chief Executive Officer 4
Slide 5: John Griffith, President
4 AMERICAN WATER John Griffith President
Slide 6: Strong 2024 Results: Continuing to Execute the Plan
Strong 2024 Results: Continuing to Execute the Plan EPS Growth Driven by Investments, Regulatory Execution Earnings Per Share 2024 Highlights $5.39 $4.90 $0.12 Achieved planned EPS and dividend growth for the year of 8+% $0.09 $0.13 Continued success in regulatory execution Completed seven rat
Slide 7: Long-Term Targets Affirmed
Long-Term Targets Affirmed Low Risk Capital Plan, Leading Earnings & Dividend Growth Outlook 2025 EPS Guidance Affirming 2025 Guidance of $5.65-5.75* 8% EPS Growth Higher revenues from investments over weather-normalized 2024 EPS in rate base while proactively guidance, midpoint to midpoint managing
Slide 8: EPS Guidance: Affirming 2025
EPS Guidance: Affirming 2025 Consistent Future Earnings Growth Within 7-9% Range 2025 EPS Guidance of 7-9% EPS 2024 EPS of $5.65 - $5.75 CAGR Target $5.39 $0.10 incremental 2025 EPS Guidance Reflects $0.12 of weather interest from amended HOS $5.65 - $5.75 and $0.09 seller note incremental interest
Slide 9: David Bowler, Executive Vice President & Chief Financial Officer
David Bowler Executive Vice President & Chief Financial Officer 9
Slide 10: Reconciliation of 2024 EPS Results Compared to 2023
Reconciliation of 2024 EPS Results Compared to 2023 1.28 (0.22) (0.05) (0.31) 0.09 $5.39 0.04 $5.30 (0.33) $4.90 (0.01) FY 2023 Actual Weather* Revenue** O&M General Tax - Depreciation Long-Term Other, net FY 2024 Interest from FY 2024 Actual Property and Financing Subtotal Amended HOS Gross Receipt
Slide 11: 2024 Completed Rate Cases
2024 Completed Rate Cases State Subsidiary Capital Authorized ROE Equity Layer Additional Authorized Rates Effective Date Investment Revenue $25 million February 21, 2024 Indiana $875 million 9.65% 56.15% $23 million May 10, 2024 $18 million May 2025 West Virginia $340 million 9.80% 50.12% $25 milli
Slide 12: General Rate Case and Other Regulatory Updates
General Rate Case and Other Regulatory Updates Rate Cases in Progress Other Regulatory Update State Filed Capital Rates Expected On January 14, 2025, the California Public Utilities Commission granted the Subsidiary Investment Effective Date request for a further one-year extension of the cost of ca
Slide 13: Continued Strong Balance Sheet & Credit Ratings
Continued Strong Balance Sheet & Credit Ratings AWK Long-Term Senior Unsecured Ratings Total Debt to Total Capital S&P Moody’s A Baa1 As of Long-Term (Stable Outlook) (Stable Outlook) December 31, 2024 Target Ratings and Stable Outlook Low risk business profile 57% <60% Strong regulatory affirme
Slide 14: Affirming 2025 EPS Guidance of $5.65 to $5.75
Affirming 2025 EPS Guidance of $5.65 to $5.75** Also Affirming 2025-2029 Financing Plans 2025 Growth Drivers Financing Plans 8% EPS growth in 2025 (at midpoint) vs. 2024 on a weather-normalized basis $2.5B equity issuance in 2025-2029 plan, driven by capital investment • Revenue growth in base r
Slide 15: Cheryl Norton, Executive Vice President & Chief Operating Officer
Cheryl Norton Executive Vice President & Chief Operating Officer 15
Slide 16: Investments Drive Continued Rate Base Growth
Investments Drive Continued Rate Base Growth Investments to Support System Needs Investments Drive Continued Rate Base Growth Regulated Capital Investments Estimated Rate Base** ~8-9% (Includes Acquisitions) (Includes Acquisitions) CAGR for Rate $ in billions $ in billions Base 2024 2025E 2023 $19.7
Slide 17: $417 Million of Acquisitions Closed in 2024
$417 Million of Acquisitions Closed in 2024 Strong Acquisition Pipeline, Balanced Across Many States Closed Under Agreement For Year Ended December 31, 2024 As of January 1, 2025 Business Development Outlook ~69,500 Customer Connections ~24,200 Customer Connections Significant Business Development
Slide 18: AWK's Steady Growth Drivers Serve Critical Needs
AWK’s Steady Growth Drivers Serve Critical Needs Low-Risk Plan to Achieve 7-9% EPS/DPS Growth that is Affordable Aging Pipes, Meters, Increasing Water Quality Acquisition Affordability of Water and Service Lines and Resiliency Needs Opportunities Plentiful Remains Industry Best Decades of Pipe Treat
Slide 19: Q&A Session
Q&A Session 19
Slide 20: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS Aaron Musgrave, CPA Jack Quinn, CPA Vice President, Investor Relations Senior Manager, Investor Relations aaron.musgrave@amwater.com jack.quinn@amwater.com Janelle McNally Kelley Uyeda Director, Sustainability Analyst, Investor Relations & ESG janelle.mcnally@amwater.com
Slide 21: Appendix
Appendix 21
Slide 22: End of Year Highlights
We) YEAR BY NATIONAL ASSOCIATION OF CORPORATE DIRECTORS NEW JERSEY CHAPTER 4 & We * RANKED 4°7 IN THE UTILITIES INDUSTRY CATEGORY ON FORBES AMERICA’S BEST LARGE EMPLOYERS LIST CELEBRATED 50 YEARS OF THE SAFE DRINKING WATER ACT CAPITAL ISSUED 8TH SUSTAINABILITY REPORT COVERING INDUSTRY LEADERSHIP AND
Slide 23: Forward Looking Statements
Forward Looking Statements Certain statements made, referred to or relied upon in this presentation including, without limitation, 2025 earnings guidance, the Company’s long-term financial, growth and dividend targets, the ability to achieve the Company’s strategies and goals, customer affordability
Slide 24: 2024 Earnings and 2025 Earnings Guidance (Non-GAAP)
2024 Earnings and 2025 Earnings Guidance (Non-GAAP) This presentation includes a description of American Water’s 2024 earnings per share, 2025 earnings per share guidance range, and its 2024 dividend payout ratio, excluding the incremental interest from the amendment in early 2024 of the HOS seller
Slide 25: Details of Fourth Quarter 2024 EPS
Details of Fourth Quarter 2024 EPS 0.44 0.01 (0.04) 0.03 $1.20 0.02 $1.22 (0.10) (0.05) $0.88 0.03 Q4 2023 Weather* Revenue** O&M General Tax - Depreciation Long-Term Other, net Q4 2024 Interest from Q4 2024 Property and Financing Subtotal Amended HOS Reported Gross Receipts Note * Includes weather
Slide 26: Reconciliation of Estimated Rate Base
Reconciliation of Estimated Rate Base Estimated Rate Base* As of 12/31/2024 Net Utility Plant $28.0 Less Advances for Construction $0.4 CIAC – Contributions in Aid of Construction $1.6 Net Deferred Income Taxes $3.9 $5.9 Total Estimated Rate Base $22.1 * An approximation of rate base, which includes
Slide 27: U.S. EPA PFAS Rule
U.S. EPA PFAS Rule Supply Agreement Signed with Calgon Carbon Final Federal PFAS Rule Recap Drinking water limits of 4.0 parts per trillion (ppt) for PFOA and PFOS; limits set for three additional PFAS American Water’s estimates ~$1B of capital and up to ~$50M annually for operating expenses A
Slide 28: State Legislative Highlights in 2024
State Legislative Highlights in 2024 28
Slide 29: Only Pure Play, Large-Cap Water Utility in the U.S.
Only Pure Play, Large-Cap Water Utility in the U.S. Regulated Customer Count* 11.4% 22.6% Pennsylvania 4.9% New Jersey 5.5% Missouri 3.5M Total Customer Illinois 9.7% Connections Indiana 20.9% California 10.6% West Virginia Other 14.4% * As of December 31, 2024 Regulated Operations* Military Service
Slide 30: Highly Fragmented Water/Wastewater Industry Creates Opportunity
Highly Fragmented Water/Wastewater Industry Creates Opportunity Industry Opportunity American Water Footprint >50K Water Systems >17K Wastewater Systems • Ideal for industry consolidation opportunities • Target 5,000-50,000 customer connections per 16% Investor Owned 2% Investor Owned acquisition •
Slide 31: Top Tier Dividend Growth Continued in 2024
Top Tier Dividend Growth Continued in 2024 8.1% Increase Aligns with Long-Term Target AWK’s Strong and Consistent Total Dividend Payout Ratio Dividend Growth* Long-Term December 31, 2024 Target $3.0025 58% 55-60% $2.7775 Note: Annual 2024 cash dividends per share of $3.0025 over weather-normalized 2
Slide 32: Five- and Ten-Year Capital Plans
Five- and Ten-Year Capital Plans: Investments to Support System Needs Capital Plan ($ in billions) $40 - $42 $4 - $5 Regulated Acquisitions $17 - $18* $1.5 - $2.0 Regulated $36 - $37 System $3.3 Investments $15.5 - $16.0 2025E 2025 – 2029 2025 – 2034 *Includes ~$1 billion related to PFAS, primarily
Slide 33: State Legislation & Regulation Enable Growth
State Legislation & Regulation Enable Growth Fair Consolidated Future Hybrid Infrastructure Affordability Value Tariff Test Year Test Year Mechanism Tariffs/Programs CA MO CA MO CA KY MD NJ IA NJ CA MO IA NJ IA NJ HI PA MO WV IL PA IA NJ IL PA IL PA IA TN IN TN IL PA IN VA IN VA IL VA KY VA IN TN KY
Slide 34: Closed Acquisitions
Closed Acquisitions December 31, 2024 NUMBER WATER CUSTOMER CONNECTIONS WASTEWATER CUSTOMER CONNECTIONS STATE TOTAL CUSTOMER CONNECTIONS OF SYSTEMS Illinois 2 - 31,600 31,600 Pennsylvania 4 1,900 14,400 16,300 New Jersey 3 2,400 6,500 8,900 Virginia 2 1,400 1,400 2,800 Indiana 1 8,200 - 8,200 Maryla
Slide 35: Acquisitions Under Agreement
Acquisitions Under Agreement January 1, 2025 NUMBER STATE WATER CUSTOMER CONNECTIONS WASTEWATER CUSTOMER CONNECTIONS TOTAL CUSTOMER CONNECTIONS OF SYSTEMS Pennsylvania 9 7,800 8,300 16,100 West Virginia 1 - 4,600 4,600 California 4 1,600 - 1,600 Illinois 1 - 1,500 1,500 New Jersey 1 300 - 300 Missou
Slide 36: Annualized Revenue from Rate Proceedings
Annualized Revenue from Rate Proceedings ($ in millions) Rate Filings Completed* Requested Revenue in Pending Rate Proceedings Effective since January 1, 2024 $502 $389 $129 $106 $178 $0 $178 $373 $283 $113 $23 $90 Rate Cases Infrastructure Total Rate Cases Infrastructure Total (Includes Charges (In
Slide 37: Rates Effective Since January 1, 2024
Rates Effective Since… January 1, 2024 January 1, 2025 ($ in millions) Date Annualized Revenue Date Annualized Revenue Annualized Rate Cases & Step Increases Effective Increases Infrastructure Charges Date Revenue Effective Increases Rate Case Effective Increase California 1/1/2024 $21(a) Illinois (
Slide 38: Pending Rate Case Filings
Pending Rate Case Filings ($ in millions) Rate Cases Filed Docket/Case Number Date Filed Requested Revenue Increase ROE Requested Rate Base Iowa (a) Docket No. RPU-2024-0002 5/1/2024 $21 10.75% $258 Missouri (b) Docket No. WR-2024-0320 7/1/2024 123 10.75% 3,185 Hawaii Docket No. 2024-0038 8/2/2024 2
Slide 39: Regulatory Information – Top States
Regulatory Information – Top 10 States CALIFORNIA ILLINOIS INDIANA KENTUCKY MISSOURI Authorized Rate Base* $882,554g) $2,185,956 $1,723,927 $489,426 $2,318,849(c) ROE 10.20%(a) 9.84% 9.65% 9.70% 9.75%(d) Equity 57.04%(a) 49.00% 56.15%(b) 52.22% 50.00%(e) Effective Date of Rate Case 1/1/2024(g) 1/1/2
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