American Water Works Company, Inc. · NYSE:AWK
American Water Works — Q1 2022 Earnings Presentation
27 slides from American Water Works's earnings presentation, Apr 28, 2022
Slide 1: 2022 First Quarter Earnings Conference Call
2022 First Quarter Earnings Conference Call April 28, 2022
Slide 2: Aaron Musgrave, Senior Director, Investor Relations
Aaron Musgrave Senior Director, 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: Susan Hardwick
Susan Hardwick President, Chief Executive Officer and Chief Financial Officer 4
Slide 5: Executing the Plan
Executing the Plan Earnings Per Share Q1/YTD Highlights • Achieved 19% EPS growth vs. Q1 2021 driven by higher revenue on increased infrastructure investment • Invested $437 million of capital in regulated infrastructure improvements and acquisitions • Executed on our regulatory, rate case, and grow
Slide 6: First Quarter 2022 EPS Detail By Business
First Quarter 2022 EPS Detail By Business 6
Slide 7: 2022 Earnings Guidance and Long-Term Targets Affirmed
2022 Earnings Guidance and Long-Term Targets Affirmed 7-9% EPS CAGR Target 2022 EPS Guidance 2022 EPS Guidance 2021 EPS $4.39 - $4.49 2021 EPSEPS of of 2020 $3.84 $6.95 reflects share excludes $0.07 per $4.49 of favorable $2.70 gainweather on sale of HOS $4.39 $4.25 2026 2021 2022 & Beyond 7
Slide 8: Excellent Dividend Growth
Excellent Dividend Growth Long-Term Dividend Growth Target Target at High End of 7-10%* Dividend Payout Ratio 55-60% 8 * Future dividends are subject to approval of the American Water Board of Directors
Slide 9: ESG at AWK: Continued Focus on Transparency and Stakeholder Engagement
ESG at AWK: Continued Focus on Transparency and Stakeholder Engagement Upcoming Publications in May 2022; Review of GHG Target Underway ESG Data Summary Inclusion, Diversity & Equity GHG Emissions Target • Updating ESG Data Disclosure Metrics Report • Updating Scope 1 and 2 GHG with FY 2021 actuals
Slide 10: Cheryl Norton
Cheryl Norton Executive VP & Chief Operating Officer 10
Slide 11: Strong Cap Ex Growth to Start 2022
Strong Cap Ex Growth to Start 2022 AWK Growth Outlook Capital Investments 7-9% EPS CAGR Target (2022-2026 Plan) ($ in millions) Military ~0.5% ~1% Services ≈0.2% Group Q1 2022 Regulated Acquisitions 2-3% 1.5-2.5% Q1 2021 Regulated Regulated $430 Regulated Regulated $336 5-7% Investment System 5-7% I
Slide 12: Legislative and Rate Case Updates
Legislative and Rate Case Updates Legislative Completed Rate Cases in 2022 • Step Increase Indiana • Additional authorized revenues of $20 million Senate Enrolled Act 272 Effective 7/1/2022 • Effective 1/1/2022 • Requires public reporting of a non-jurisdictional utility’s asset management program •
Slide 13: Rate Filings Summary
Rate Filings Summary ($ in millions) Rate Filings Requested Revenue in Completed* Pending Base Rate Effective since January 1, 2022 Proceedings $31 $79 $22 $220 $198 $48 Rate Cases Infrastructure Total Rate Cases Infrastructure Total (Includes Charges Charges Step Increases) 13 * Annualized revenue
Slide 14: Good Momentum in 2022 as Acquisitions Under Agreement now 77,300 Customers
Good Momentum in 2022 as Acquisitions Under Agreement now 77,300 Customers Growing Opportunity for Closed Over Five- Customer Connections Under Agreement As of March 31, 2022 As of March 31, 2022 Year Outlook June 2022 ≈77,300 Customer Connections Expected Close ≈1,800 Customer Connections 4 Acquisi
Slide 15: MSG Constructs Net Zero Operations Center
MSG Constructs Net Zero Operations Center AWK Impact Our Military Services Group constructed a net zero operations center at Hill Air Force Base to enhance energy efficiency and reduce emissions that contribute to climate variability. • Reduced energy usage through decentralized heating and cooling
Slide 16: Experienced and Skilled Executive Management Team Additions
Experienced and Skilled Executive Management Team Additions John Griffith James Gallegos Executive Vice President Executive Vice President and Chief Financial Officer and General Counsel • Will join American Water on May 16, 2022. • Joined American Water on April 1, 2022. • Most recently served as a
Slide 17: Q&A Session
Q&A Session 17
Slide 18: Investor Relations Contacts
Investor Relations Contacts Aaron Musgrave, CPA Upcoming Events Senior Director, Investor Relations aaron.musgrave@amwater.com May 11, 2022 Annual Shareholders Meeting Jack Quinn, CPA July 28, 2022 (projected) Senior Manager, Investor Relations Q2 2022 Earnings Call jack.quinn@amwater.com November 1
Slide 19: Appendix
Appendix 19
Slide 20: Forward-Looking Statements
Forward-Looking Statements Certain statements made, referred to or relied upon in this presentation including, without limitation, with respect to 2022 earnings guidance, the Company’s long-term financial, growth and dividend targets, future capital needs, the ability to achieve the Company’s strate
Slide 21: 2022 EPS Detail by Business
2022 EPS Detail by Business 21
Slide 22: State Legislation & Regulation Enable Growth
State Legislation & Regulation Enable Growth Utility Valuation Water Quality Legislation & Regulation 12 Consolidated Tariffs 11 Accountability Legislation 3 CA IA CA MO IL IN IA NJ NJ KY MD IL PA IN MO NJ IN VA MO PA TN KY WV VA WV MD 22
Slide 23: Closed Acquisitions
Closed Acquisitions March 31, 2022 NUMBER WASTEWATER CUSTOMER CONNECTIONS TOTAL CUSTOMER STATE WATER CUSTOMER CONNECTIONS OF SYSTEMS CONNECTIONS Illinois 1 250 - 250 Missouri 3 400 1,150 1,550 Total 4 650 1,150 1,800 23
Slide 24: Acquisitions Under Agreement
Acquisitions Under Agreement March 31, 2022 NUMBER WASTEWATER CUSTOMER CONNECTIONS TOTAL CUSTOMER STATE WATER CUSTOMER CONNECTIONS OF SYSTEMS CONNECTIONS California 3 3,450 - 3,450 Iowa 3 100 850 1,000 Illinois 7 2,600 1,850 4,450 Missouri 9 4,750 4,650 9,400 New Jersey 3 1,600 4,300 5,900 Pennsylva
Slide 25: Rates Effective Since…
Rates Effective Since… ($ in millions) January 1, 2022 Date Annualized Date Annualized Rate Cases & Step Increases Infrastructure Charges Effective Revenue Increases Effective Revenue Increases Illinois (QIP) 1/1/2022 $6 Pennsylvania, Step Increase (a) 1/1/2022 $20 Missouri (WSIRA) 2/1/2022 12 Calif
Slide 26: Pending Rate Case Filings
Pending Rate Case Filings ($ in millions) Rate Cases Filed Docket/Case Number Date Filed Requested Revenue Increase ROE Requested Rate Base Hawaii (a) Docket No. 2021-0063 8/18/2021 $2 10.3% $40 Virginia (b) Case No. PUR-2021-00255 11/15/2021 15 10.9% 287 Kentucky Wastewater (c) Docket No. 2021-0043
Slide 27: Regulatory Information – Top 10 States
Regulatory Information – Top 10 States CALIFORNIA ILLINOIS INDIANA KENTUCKY MISSOURI Authorized Rate Base* $667,632 $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 1/1/2021(a) 1/1/2017 5
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