American Water Works Company, Inc. Q2 FY2024 earnings call

• Delivered solid financial results in Q2 2024 and first half of 2024, with earnings of $1.42 per share for Q2 and $2.37 per share for the first 6 months of 2024. Raised 2024 EPS guidance to $5.25-$5.30 per share due to lower-than-expected customer usage declines and revenue increases from regulatory proceedings. • Invested $1.4 billion in capital projects year-to-date, added 43,000 customers in H1 2024 from acquisitions and organic growth, with nearly $500 million in acquisitions under agreement. Published 2023 sustainability report. • Completed four regulatory cases in 2024 in Indiana, West Virginia, Kentucky, and Pennsylvania, authorizing 100% of capital investments. Had several general rate cases and infrastructure recovery mechanisms in front of regulators. • Announced leadership changes: John named President, Cheryl expands to lead Business Development, David Bowler as EVP and CFO, Nick Furia as VP and Treasurer.

• Raised 2024 EPS guidance to the top half of the range, now $5.25 per share to $5.30 per share, driven by lower-than-expected customer usage declines and revenue increases effective in Q2 and Q3 2024. • Affirm long-term targets including earnings and dividend growth targets at 7%-9% over the next 5 years and beyond.

• Regulatory uncertainties, such as the outcome of general rate cases and infrastructure recovery mechanisms. • Court challenges related to acquisitions, like the appeal of the Butler Area Sewer Authority acquisition in Pennsylvania. • Potential impact of legal proceedings like PFAS multi-district litigation on financials, with ongoing wait for payout calculations.

Q: How does the Pennsylvania rate case change regulatory strategy?

A: Need to analyze and evaluate, but need to balance shareholder expectations and capital allocation, with no change in total capital plans.

Q: Is there a potential slowdown in M&A in Pennsylvania?

A: No, continue to identify opportunities, but environment around fair market value and commission process is challenging.

Q: Where does the legal challenge related to Butler stand?

A: In court, waiting for Commonwealth Court decision with no definitive timing.

Q: Update on PFAS multi-district litigation?

A: Submitted data, waiting for calculations of payout, which could be extended but date expected to hold firm.