AMERICAN WATER WORKS COMPANY, INC. Investor Presentation
June 2024
FORWARD-LOOKINGSTATEMENTS
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, performance or achievements, and readers are cautioned not to place undue reliance upon them. The forward-looking statements are subject to a number of estimates and assumptions, and known and unknown risks, uncertainties and other factors. Actual results may differ materially from those discussed in the forward-looking statements included in this presentation. The factors that could cause actual results to differ are discussed in the Appendix to this presentation, and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, as filed with the SEC on May 1, 2024.
Non-GAAP Financial Information
This presentation includes non-GAAP financial measures. Further information regarding these non-GAAP financial measures, including a reconciliation of each of these measures to the most directly comparable GAAP measure, is included in the Appendix to this presentation.
Business Review
Only Pure Play, Large-Cap Water Utility in the U.S.
Regulated Customer Count*
11.2%
22.5%
4.9%
5.6%
Pennsylvania
New Jersey
Missouri
9.6%
3.5M Total Customer
Illinois
Regulated Operations*
- 53,700 miles of pipe
- 620 water treatment plants
- 175 wastewater treatment plants
- 1,200 wells and 74 dams
Connections
20.9%
10.7%
14.6%
Military Services Group
- Regulated-likeearnings
- Serves 18 military installations
- 12 Army
- 5 AirForce
- 1 Navy
Indiana
California
West Virginia
Other
- As of December 31,2023
Highly Fragmented Water/Wastewater Industry Creates Opportunity
Industry Opportunity
>50K Water Systems | >15K Wastewater Systems |
16% Investor Owned | 2% Investor Owned |
84% Public & Other | 98% Public & Other |
American Water Footprint
- Ideal for industry consolidation opportunities
- Target 5,000-50,000 customer connections per acquisition
- Water and wastewater focus (AWK customer connections mix - 91% water & 9% wastewater)
Electric Utilities Source: Form EIA-
Water Utilities Source: EPA SDWIS Federal Reports Search861 detailed data files www.eia.gov/electricity/data/eia8
Gas Utilities Source: EPA F.L.I.G.H.T. Greenhouse Gas Emissions from Large Facilities Ghgdata.epa.gov/ghgp/main.do#
Long-Term Targets
Strong and Sustainable Growth Outlook for the Future
LONG-TERM FINANCIAL TARGETS
Drivers of Sustainable Shareholder Return
EPS
Growth
7-9%
Dividend Per Share Growth
7-9%
Customer
Affordability
+
ESG
Leadership
+
Additional Supportive Targets
Dividend
Payout Ratio
55-60%
Debt to Capital
<60%
Five-Year Capital Plan: Investments to Support
System Needs, Including ~$1 Billion for PFAS
Capital Plan ($ in billions)
$34 - $38
$30 | - $34 | Regulated | ||
$4 - $5 | ||||
$3 | - $4 | Acquisitions | ||
$16 - $17* | |||
$3.1 | $14 - $15 | ||
$1.5 - $2.0 | |||
$1.5 - $2.0 | |||
$27 - $30 | $30 - $33 | Regulated |
System | ||
Investments
$12.5 - $13.0 $14.5 - $15.0
2024E | 2023 - 2027 | 2024 - 2028 | 2023 - 2032 | 2024 - 2033 |
(Prior Plan) | (Prior Plan) |
*Includes ~$1 billion of cap ex related to PFAS
Investments Drive Continued Rate Base Growth
Foundational to Overall Growth
Regulated Capital Investments | Capital Recovery |
(Includes Acquisitions) | (2024-2028 Plan) |
2024E | ~70% | |
Infrastructure | ||
Q1 2024 | Surcharge | |
Mechanisms | ||
Q1 2023 | ~45% | |
$720M | $3.1B | ~30% |
Future Test | Traditional | |
Years | ||
$538M | Recovery | |
~30% | ~25% | |
~25% |
Capital by Purpose
(2024-2033)
3-5%
4-6%
5-7%
6-8%
9-11%
68-70%
Infrastructure | Operational Efficiency, |
Renewal | Technology & Innovation |
Resiliency | System Expansion |
Water Quality | Other |
State Legislation & Regulation Enable Growth
Fair | Consolidated | Future | Hybrid | Infrastructure | |||||||||
Value | Tariffs | Test Year | Test Year | Mechanism | |||||||||
CA | MO | CA | MO | CA | KY | MD | NJ | IA | NJ | ||||
IA | NJ | IA | NJ | HI | PA | MO | WV | 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 | ||||||||||||
11 | 11 | 9 | 4 | 10 | |||||||||
Water Quality
Accountability | IN MO NJ 3 |
Legislation |
Continued Focus on Customer Affordability
$ | Monthly Water Bill as % of |
Median Household Income* |
0.90%
0.80%
0.70%
0.60%
0.50%
0.40%
0.30%
0.20%
0.10%
0.00%
2012 2014 2016 2018 2020 2021 2022 2023 2028E
Values Around Affordability
- Focused on keeping customer bills affordable compared to income (wallet share)
- Goal for AW average residential water customer bills: 1% or less of median household income
- Continue to promote and advocate for low-income customer assistance tariffs and programs in each State
- Advocating for a permanent, federal Low Income Household Water Assistance Program (LIHWAP)
- Supportive of consolidated tariffs in each State that allow customers to benefit from efficiencies of scale
* Figure is estimated based on data from the US Census Bureau American Community Survey based on zip codes served by American Water. American Water does not collect household income data from its customers.
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Disclaimer
American Water Works Co. Inc. published this content on 17 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 June 2024 13:24:03 UTC.
