American Water Works Company, Inc. · NYSE:AWK
American Water Works — Q1 2023 Earnings Presentation
26 slides from American Water Works's earnings presentation, Apr 27, 2023
Slide 1: 2023 First Quarter Earnings Conference Call
2023 First Quarter Earnings Conference Call April 27, 2023
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, President and CEO
M. Susan Hardwick President and Chief Executive Officer 4
Slide 5: Successful First Quarter 2023 Results
Successful First Quarter 2023 Results Earnings Per Share Q1/YTD Highlights 2023 Q1 EPS of $0.91 driven by higher revenue on increased rate base $0.91 $0.87 Issued approximately $1.7 billion in common stock Invested well over $500 million of capital in infrastructure improvements in the quarter
Slide 6: 2023 EPS Guidance and Long-Term Targets Affirmed
2023 EPS Guidance and Long-Term Targets Affirmed AWK EPS Growth Triangle 2023 EPS Guidance 7-9% EPS CAGR Target Affirming 2023 EPS Guidance Range of $4.72 to $4.82 • Higher revenues from investments in rate base Business Mix and acquisitions drive EPS growth 100% Military Regulated and ~0.5% ~1% S
Slide 7: Top Tier Dividend Growth Continues in 2023
Top Tier Dividend Growth Continues in 2023 8.0% Increase Aligns with Long-Term Target AWK’s Strong and Consistent Dividend Growth* ($ rounded) $2.78 $2.57 $2.36 $2.15 $1.96 $1.78 2018 2019 2020 2021 2022 2023E 7 * Future dividends are subject to approval of the American Water Board of Directors
Slide 8: John Griffith, Executive VP & CFO
John Griffith Executive VP & Chief Financial Officer 8
Slide 9: Financing Recap – 2023 Equity Issuance
Financing Recap – 2023 Equity Issuance Raised ~$1.7 Billion Proceeds from Common Stock Issuance Closing Date March 3, 2023 Securities Issued Common Stock Total Debt to Total Capital Size 12,650,000 Shares Public Offering Price $135.50/Share March 31, Long-Term 2023 Target File-to-Offer Discount 3.5%
Slide 10: Details of First Quarter 2023 EPS
Details of First Quarter 2023 EPS 0.31 (0.11) (0.06) (0.04) $0.91 $0.87 (0.04) (0.02) Q1 2022 Revenue O&M Depreciation LT Financing* ST Debt Financing Other, net Q1 2023 ~75% of inflationary costs incl. in Investment Growth revenue from recent rate cases *Reflects $(0.02) per share of share count di
Slide 11: Strong Outlook for Acquisitions in 2023 and Beyond
Strong Outlook for Acquisitions in 2023 and Beyond Towamencin Township, PA Closed Under Agreement Wastewater As of March 31, 2023 As of March 31, 2023 Continues our Wastewater execution in ≈48,200 Customer Connections Pennsylvania ≈1,400 Customer Connections 27 Acquisitions in 9 States, $481M $104 m
Slide 12: Cheryl Norton, Executive VP & COO
Cheryl Norton Executive VP & Chief Operating Officer 12
Slide 13: Strong Cap Ex Growth to Start 2023
Strong Cap Ex Growth to Start 2023 Drives Improved Water Quality, Reliability, and Earnings Growth AWK EPS Growth Triangle Capital Investment 7-9% EPS CAGR Target Business Mix $2.9B 100% Military Regulated Regulated and ~0.5% ~1% Services ≈0.2% $0.4B Acquisitions Regulated-Like Earnings Group Regula
Slide 14: Rate Filings Summary
Rate Filings Summary ($ in millions) Rate Filings Requested Revenue in Completed* Pending Base Rate Effective since January 1, 2023 Proceedings $50 $279 $229 $20 $144 $124 Rate Cases Infrastructure Total Rate Cases ** Infrastructure Total (Includes Charges Charges Step Increases) *Annualized revenue
Slide 15: Timely Recovery of Capital and Operating Costs
Timely Recovery of Capital and Operating Costs American Water’s Jurisdictions As of 2010 As of 2022 Capital 11 11 Recovery 10 10 (2023-2027 9 ≈65% Plan) Infrastructure 7 ≈70% Surcharge Mechanisms 6 ≈45% 5 5 Forward Test 1 2 1 Years ≈30% ≈30% Traditional Recovery ≈25% Revenue Infrastructure Expense C
Slide 16: General Rate Case and Regulatory Updates
General Rate Case and Regulatory Updates Rate Cases in Progress Federal PFAS Update • Rate case filed 7/1/22, Settlement filed 3/3/23 • Settlement: additional adjusted authorized base revenues On March 14, 2023, the United States Environmental Protection Agency (EPA) of $95M vs. $145M requested, i
Slide 17: Q&A Session
Q&A Session 17
Slide 18: Investor Relations Contacts
Investor Relations Contacts Aaron Musgrave, CPA Jack Quinn, CPA Vice President, Investor Relations Senior Manager, Investor Relations aaron.musgrave@amwater.com jack.quinn@amwater.com Janelle McNally Kelley Uyeda Senior Manager, Investor Relations & ESG Analyst, Investor Relations & ESG janelle.mcna
Slide 19: Appendix
Appendix 19
Slide 20: Forward-Looking Statements
Forward-Looking Statements Certain statements made, referred to or relied upon in this presentation including, without limitation, with respect to 2023 earnings guidance, the Company’s long-term financial, growth and dividend targets, future capital needs and the timing and amount of the Company’s f
Slide 21: State Legislation & Regulation Enable Growth
State Legislation & Regulation Enable Growth Fair Market Value 11 Consolidated Tariffs 11 Forward Looking Test Year 9 Infrastructure Mechanisms 10 CA MO CA MO CA KY IA NJ IA NJ IA NJ HI PA IL PA IL PA IL PA IA TN IN TN IN VA IN VA IL VA KY VA KY WV KY WV IN MO WV MD MD Water Quality Accountability L
Slide 22: Closed Acquisitions
Closed Acquisitions March 31, 2023 NUMBER WATER CUSTOMER CONNECTIONS WASTEWATER CUSTOMER CONNECTIONS STATE TOTAL CUSTOMER CONNECTIONS OF SYSTEMS Missouri 4 600 600 1,200 Indiana 1 200 - 200 Total 5 800 600 1,400 22
Slide 23: Acquisitions Under Agreement
Acquisitions Under Agreement March 31, 2023 NUMBER STATE WATER CUSTOMER CONNECTIONS WASTEWATER CUSTOMER CONNECTIONS TOTAL CUSTOMER CONNECTIONS OF SYSTEMS Pennsylvania 6 100 27,900 28,000 Missouri 4 1,000 900 1,900 Illinois 3 1,500 1,200 2,700 New Jersey 3 1,600 5,200 6,800 Virginia 3 1,600 1,400 3,0
Slide 24: Rates Effective Since January 1, 2023
Rates Effective Since… January 1, 2023 ($ in millions) Date Annualized Date Annualized Rate Cases & Step Increases Infrastructure Charges Effective Revenue Increases Effective Revenue Increases West Virginia (DSIC) 1/1/2023 $7 Illinois 1/1/2023 $67(a) Pennsylvania (DSIC) 1/1/2023 3 California, Step
Slide 25: Pending Rate Case Filings
Pending Rate Case Filings ($ in millions) Rate Cases Filed Docket/Case Number Date Filed Requested Revenue Increase ROE Requested Rate Base California (a) Case No. A.22-07-001 7/1/2022 $37 NA $921 Indiana (b) Cause No. 45870 3/31/2023 43 10.60% 1,614 Sub-Total $80 $2,535 Infrastructure Charges Filed
Slide 26: Regulatory Information – Top 10 States
Regulatory Information – Top 10 States CALIFORNIA ILLINOIS INDIANA KENTUCKY MISSOURI Authorized Rate Base* $667,632(g) $1,642,200 $1,182,170 $443,654 $1,703,170(c) ROE 9.20%(a) 9.78% 9.80% 9.70% 9.55%(d) Equity 55.39%(a) 49.00% 53.41%(b) 48.90% 50.00%(e) Effective Date of Rate Case 1/1/2021(g) 1/1/2
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