Slide 1: 2021 Second Quarter Earnings Conference Call
2021 Second Quarter Earnings Conference Call August 3, 2021
Slide 2: Ed Vallejo
Ed Vallejo Vice President, Investor Relations
Slide 3: Safe Harbor
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 results, levels of activity, pe
Slide 4: Walter Lynch
Walter Lynch President and Chief Executive Officer
Slide 5: Strong Second Quarter and Year-to-Date Results
Strong Second Quarter and Year-to-Date Results Earnings Per Share* Highlights ≈$782 million total capex invested as of June 30, 2021 Added ≈11,200 customer connections through closed acquisitions as of August 1, 2021, and organic growth as of the end of the second quarter ≈86,900 customer connection
Slide 6: Continued Execution of Our Strategies Enable 7-10% Long-Term EPS Growth
Continued Execution of Our Strategies Enable 7-10% Long-Term EPS Growth 2021-2025 Plan Advance infrastructure improvement through five- 7-10%* EPS CAGR range year capital investment plan of approximately $10.4 Market-Based billion and expected ten-year plan of $22-$25 billion Businesses ~0.5% ~1% Ac
Slide 7: Regulated Business Update
Regulated Business Update Completed Rate Cases Legislative New Jersey • Additional authorized revenues of $1 million* Senate Bill 647 / House Bill 4825 • ROE of 9.6% • Strengthens cyber-security and asset management planning • Capital Investment of ≈$87 million requirements of the state’s existing W
Slide 8: Managing Customer Bill Impact with a Disciplined Focus on Operating Costs
Managing Customer Bill Impact with a Disciplined Focus on Operating Costs Regulated O&M ** Efficiency Ratio* Added ≈333,000*** Adjusted O&M Expenses from customer connections 2010 to LTM 2021 increased just since 2010 over 1% CAGR* * Non-GAAP Measure – See appendix for reconciliation. O&M Efficiency
Slide 9: Regulated Acquisitions Update
Regulated Acquisitions Update Growing Opportunity for Under Agreement* Closed Over Customer Connections as of August 1, 2021 as of August 1, 2021 Five-Year Outlook ≈86,900 Customer Connections ≈3,000 Customer Connections 37 Acquisitions 8 Acquisitions in 4 States Opportunities Totaling ≈1,300,000 CA
Slide 10: Susan Hardwick
Susan Hardwick Chief Financial Officer
Slide 11: Continued Execution of Strategy
Continued Execution of Strategy Second Quarter EPS Contribution by Business 2021 Results Three Months Ended 6/30/2021 Three Months Ended 6/30/2020 Change Regulated $1.18 $0.97 $0.21 Market-Based $0.11 $0.13 ($0.02) Parent Interest & Other ($0.15) ($0.13) ($0.02) Total EPS $1.14 $0.97 $0.17 First Hal
Slide 12: Second Quarter EPS Detail by Business
Second Quarter EPS Detail by Business Regulated $0.21 MBB ($0.02) Other ($0.02) Note: Results for Q2 2020 and Q2 2021 both include a $0.02 per share benefit from depreciation not recorded as required by assets held for sale accounting.
Slide 13: Year-to-Date EPS Detail by Business
Year-to-Date EPS Detail by Business Regulated $0.27 MBB ($0.05) Other $0.00 Note: Year-to-date results for 2020 and 2021 both include a $0.03 per share benefit from depreciation not recorded as required by assets held for sale accounting.
Slide 14: Rate Filings Summary
Rate Filings Summary ($ in millions) Rate Filings Requested Revenue in Completed* Pending Base Rate Effective since January 1, 2021 Proceedings * Annualized Revenue Increase for Rates Effective Since January 1, 2021; excludes agreed to revenue reductions for excess accumulated deferred income taxes;
Slide 15: Financing Recap – May 2021 Debt Offering
Financing Recap – May 2021 Debt Offering Successfully Executed $1.1 Billion Senior Note Offering at Lowest Coupons To-Date Consolidated Debt Maturity Profile 5 Year Total ≈$1.8 Billion Issuer American Water Capital Corp. as of August 1, 2021 Pricing Date May 10, 2021 Issue Type 10yr Senior 30yr Seni
Slide 16: 2021 EPS & Long-Term Guidance
2021 EPS & Long-Term Guidance 7-10%** CAGR Range 2021 EPS Guidance Range $4.28 $3.91 2020 EPS includes $0.07 per share of $4.18 favorable weather $3.84* 2020 2021 2025 * Weather normalized. ** Anchored off weather normalized 2020 EPS.
Slide 17: Delivering Value for Our Shareholders
Delivering Value for Our Shareholders 5-Year Total Shareholder Return* *As of 7/16/21 end date. Source: Factset.
Slide 18: Continued ESG Focus
Continued ESG Focus Environmental Policy ESG Data Summary CDP response Energy & Emissions Inclusion & Diversity Public Disclosure Now Online NEW Climate Change 36%* DEI – 100% Commitment to Concise subset of ESG data Measure, manage, and Reduce absolute scope 1 Recognized as a top-scoring compliance
Slide 19: Q&A Session
Q&A Session
Slide 20: Investor Relations Contacts
Investor Relations Contacts Ed Vallejo Upcoming Events Vice President, Investor Relations edward.vallejo@amwater.com November 3, 2021 (projected) Q3 2021 Earnings Call Michael Tavani, CFA November 7-9, 2021 Senior Manager, Investor Relations EEI Financial Conference michael.tavani@amwater.com Abbey
Slide 21: Appendix
Appendix
Slide 22: Forward-Looking Statements
Forward-Looking Statements Statements made, referred to or relied upon in this presentation, including, without limitation, with respect to: earnings per share guidance; dividend growth guidance; the timing and outcome of pending or future acquisition activity; our future financial performance, liqu
Slide 23: Non-GAAP Financial Information
Non-GAAP Financial Information This presentation includes adjusted regulated O&M efficiency ratios, both historical and forward-looking, which exclude from their calculation (i) estimated purchased water and other revenues and purchased water expenses, (ii) the impact of the Freedom Industries chemi
Slide 24: 2021 Closed Acquisitions
2021 Closed Acquisitions* As of August 1, 2021 NUMBER OF WATER CUSTOMER WASTEWATER CUSTOMER TOTAL CUSTOMER STATE SYSTEMS CONNECTIONS CONNECTIONS CONNECTIONS Illinois 1 150 - 150 Missouri 4 50 750 800 Pennsylvania 2 - 1,650 1,650 West Virginia 1 400 - 400 Total 8 600 2,400 3,000 *Customer Connections
Slide 25: Acquisitions Under Agreement as of August 1, 2021
Acquisitions* Under Agreement as of August 1, 2021 NUMBER OF WATER CUSTOMER WASTEWATER CUSTOMER TOTAL CUSTOMER STATE SYSTEMS CONNECTIONS CONNECTIONS CONNECTIONS California 4 6,250 - 6,250 Illinois 7 1,850 1,600 3,450 Indiana 3 4,100 100 4,200 Missouri 11 5,350 6,000 11,350 New Jersey 2 1,600 1,400 3
Slide 26: Investment in Rate Base is the Foundation of Our Growth
Investment in Rate Base is the Foundation of Our Growth ($ in billions) ≈7-8%* Rate base CAGR expected through 2025 Estimated Rate Base** As of 6/30/2021 Net Utility Plant $20.6 Less Advances for Construction $0.3 CIAC - Contributions in Aid of Construction $1.4 Net Deferred income taxes $3.4 $5.1 T
Slide 27: Rates Effective Since January 1, 2021
Rates Effective Since… January 1, 2021 Date Annualized Date Annualized Rate Cases & Step Increases Infrastructure Charges Effective Revenue Increases Effective Revenue Increases Pennsylvania 1/28/21 $70(a) West Virginia (DSIC) 1/1/2021 $5 Missouri 5/28/21 22(b) Pennsylvania (DSIC) 1/1/2021 8 New Yor
Slide 28: Pending Rate Case Filings
Pending Rate Case Filings Rate Cases Filed Docket/Case Number Date Filed Requested Revenue Increase ROE Requested Rate Base California Case No. A.19-07-004 7/1/2019 $29(a) $689 Case No. 21-0369-W-42T & West Virginia 4/30/21 32(b) 10.5% 757 21-0370-S-42T Sub-Total $61 $1,446 Infrastructure Charges Fi
Slide 29: Regulatory Information – Top States
Regulatory Information – Top 10 States CALIFORNIA ILLINOIS INDIANA KENTUCKY MISSOURI Authorized Rate Base* $498,135 $883,386 $1,182,170 $443,654 $1,703,170(c) ROE 9.20%(a) 9.79% 9.80% 9.70% 9.55%(d) Equity 55.39%(a) 49.80% 53.41%(b) 48.90% 50.00%(e) Effective Date of Rate Case 1/1/2018(a) 1/1/2017 5
Slide 30: Reconciliation Table: Regulated Segment O&M Efficiency Ratio
Reconciliation Table: Regulated Segment O&M Efficiency Ratio Regulated Segment O&M Efficiency Ratio FY FY FY FY FY LTM LTM (A Non-GAAP Unaudited Number) 2010 2012 2014 2016 2018 6/30/2020 6/30/2021 ($ in millions) Total operations and maintenance expense $1,291 $1,330 $1,350 $1,504 $1,479 $1,581 $1,