Slides
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February 19, 2026 2025 Fourth Quarter & Year-End Earnings Conference Call
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2 Aaron Musgrave Vice President, Investor Relations
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3 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 Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 18, 2026. Non-GAAP Financial Information This presentation includes non-GAAP financial measures. Further information regarding these non-GAAP financial measures, including a reconciliation of historical measures to the most directly comparable GAAP measure, is included in the appendix of this presentation. FORWARD-LOOKING STATEMENTS
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4 John Griffith President & Chief Executive Officer
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5 Strong 2025 Results: Continuing to Execute the Plan EPS Growth Driven by Investments, Regulatory Execution Adjusted Earnings Per Share* ✓ Achieved EPS and dividend growth for the year of 8+% ✓ Continued success in regulatory execution, including rate cases • Completed six cases - TN, VA, MO, IA, HI and KY • Seven active cases - WV, CA, MD, VA, PA, NJ and IL ✓ Entered into equity forward for ~$1 billion; settlement assumed mid-year 2026, no further equity needs planned until 2029 ✓ Invested $3.2 billion, led by water infrastructure improvements ✓ Achieved affordability goal of <1% of MHI (avg. resid. water bill) ✓ $582M of acquisitions under agreement representing ~104,000 customer connections ✓ Announced merger with Essential Utilities on Oct. 27 • All required state filings were made by Dec. 31, as planned 2025 Highlights $5.64 $5.18 * Adjusted EPS is a non -GAAP measure. Please see appendix for reconciliation and further information. 2024 2025
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6 Affirming 2026 EPS Guidance Achieving Consistent Earnings Growth Within 7-9% Range 2023 2025 2030E & Beyond 7-9% EPS CAGR T arget $5.64 $4.77 2026 ADJUSTED EPS GUIDANCE $6.02 - $6.12 2024 $5.18 2026E +8.6% +8.9% $6.12 $6.02 ~8% Note: Adjusted EPS is a non -GAAP measure. Please see appendix for reconciliation and further information . 2023-2026E Adjusted EPS CAGR (at midpt.) of 8.4%
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7 Long-Term Targets Affirmed Strong and Sustainable Growth Outlook for the Future LONG-TERM FINANCIAL TARGETS EPS Growth 7-9% Dividend Per Share Growth 7-9% Customer Affordability + Sustainability Leadership + Dividend Payout Ratio 55-60% Debt to Capital <60% Drivers of Sustainable Shareholder Return Additional Supportive Targets
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Q4 2025 Filed All State Regulatory Applications Required approvals include certain public utility commissions Q1 2026 Shareholder Approvals Received AWK and WTRG shareholders overwhelmingly approved merger proposals on Feb. 10 Progressing on the Path to Merger Close Approvals and Timeline 8 Q1 2027 Transaction Close Transaction expected to close by end of Q1 2027 Q2 2026 – Q1 2027 Obtain Regulatory Approvals Approvals needed from state regulators including PA, TX, NC, NJ, IL, VA, and KY , as well as Hart-Scott-Rodino
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9 David Bowler Executive Vice President & Chief Financial Officer
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10 Details of 2025 Adjusted EPS Note: Adjusted EPS is a non -GAAP measure. Please see appendix for reconciliation and further information . 1.70 (0.42) (0.41) (0.35) (0.09) 0.03 $5.18 $5.64 2024 Adjusted EPS Revenue O&M Depreciation Financing General Taxes Other, net 2025 Adjusted EPS
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11 State Subsidiary Capital Investment Authorized ROE Equity Layer Additional Authorized Revenue Rates Effective Date Kentucky $212 million 9.70% 52.26% $18 million December 16, 2025 Hawaii $41 million 9.75% 52.11% $1 million August 1, 2025 Iowa $157 million 9.60% 52.57% $13 million August 1, 2025 Missouri $1.1 billion 9.75% 50.00% $63 million May 28, 2025 Virginia $110 million 9.70% 45.67% $15 million February 24, 2025 T ennessee $173 million 9.70% 44.19% $1 million January 21, 2025 2025 Completed Rate Cases Other Regulatory Update On November 18, 2025, the California Public Utilities Commission granted the request for a further one-year extension of the cost of capital filing to May 1, 2027, to set our authorized cost of capital beginning January 1, 2028. The ROE will remain 10.20% through Dec. 31, 2027, unless the Water Cost of Capital Mechanism is triggered when next measured on Sept. 30, 2026.
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12 General Rate Case Updates Rate Cases in Progress IN TN IA MO HI WV* KY CA* MD* VA* PA* NJ* IL* Mar. 31, 2023 May 1, 2024 May 1 , 2024 July 1, 2024 Aug. 2, 2024 May 5, 2025 May 16, 2025 July 1, 2025 Aug. 1, 2025 Nov. 3, 2025 Nov. 14, 2025 Jan. 16, 2026 Jan. 27, 2026 Date of Previous Rate Case Filings by State *In progress State Subsidiary Date Filed Capital Investment Rates Expected Effective Date Next Steps Illinois January 27, 2026 $577 million January 2027 Discovery begins in Feb., Testimony expected in summer New Jersey January 16, 2026 $1.4 billion Fall 2026 Discovery begins in Feb., Testimony expected in summer Pennsylvania November 14, 2025 $1.2 billion August 2026 Rebuttal in Feb., Hearings in March Virginia November 3, 2025 $115 million May 2, 2026 Intervenor testimony in April, Rebuttal in May Maryland August 1, 2025 $22 million March 2026 Settlement reached, awaiting final order California July 1, 2025 $750 million January 1, 2027 Rebuttal in March, Hearings in April West Virginia May 5, 2025 $300 million March 1, 2026 March 1, 2027 Awaiting final order by the end of Feb.
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13 ✓ Adjusted EPS growth of ~8% in 2026 vs. 2025 ✓ Revenue growth in base rates and in infrastructure mechanisms from capital investment ✓ Focus on customer affordability and driving effective and efficient cost management strategies ✓ De-risked 2026 financing plan via strategic forward equity contract at strong pricing; assumes settlement mid -year 2026 ✓ $795 million HOS note was repaid in full on February 13, 2026 2026 Growth Drivers2026 Growth Drivers Affirming 2026 EPS Guidance of $6.02 to $6.12* * The 2026 adjusted EPS guidance range does not include (i) estimated transaction costs to be incurred by the company during 2026 related to the proposed merger with Essential Utilities, (ii) impacts of weather, if any, during 2026, and (iii) incremental interest income through February 13, 2026 related to the 2024 amendment of the HOS secured seller note. ** Adjus ted EPS is a Non-GAAP Measure. Please see appendix for reconciliation and further information. 2025 Adjusted Revenue O&M Depreciation Financing and Dilution General Tax 2026 Guidance 1.15 – 1.30 (0.05) – (0.15) (0.05) – (0.10) (0.25) – (0.35) (0.25) – (0.35) ~8% growth $6.02 - $6.12* $5.64**
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14 S&P A Moody’s Baa1 As of December 31, 2025 59% Long-Term Target <60% *Proceeds of $795 million from the note related to the sale of HOS were repaid in full on February 13, 2026. *Proceeds of ~$1 billion from the equity forward agreements are assumed to be received mid -year 2026. Note: December 31, 2025 percentage shown is net of cash and cash equivalents of $98 million. Continued Strong Balance Sheet & Credit Ratings AWK Long-Term Senior Unsecured Ratings (Stable Outlook) (Stable Outlook) Ratings and Stable Outlook affirmed at S&P / Moody’s (June ’25/Jan. ‘26) ✓ Low risk business profile ✓ Strong regulatory jurisdictions ✓ Supportive financial plans Total Debt to Total Capital Consolidated Debt Maturity Profile as of December 31, 2025 (Rounded) ($ in millions) Liquidity Profile ($ in millions) Revolving Credit Facility ✓ Credit Facility capacityof $2.75 billion ✓ Maturity date of October 2029 $98 Available Liquidity as of 12/31/25 $1,174 Credit Cash $1,076 $1,475 $650 $875 $950 $515 2026* 2027 2028 2029 2030
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15 Cheryl Norton Executive Vice President & Chief Operating Officer
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16 System Needs Drive Continued Investments Supports Water Quality, Reliability, and a Focus on Affordability Investing in Pipe Replacement, Other System Needs Investments Drive Continued Rate Base Growth Residential Water Bill as % of Median Household Income* Cap Ex Driven by System Renewal, Resiliency, and Water Quality ~8-9% CAGR for Rate Base Estimated Rate Base** (Includes Acquisitions) $ in billions $3.3B $3.2B 2024 2025 $3.7B 2026E Regulated Capital Investments (Includes Acquisitions) ~70% ~10% ~8% ~5% ~4%~3% Capital by Purpose (2026-2035) Infrastructure Renewal Operational Efficiency, Technology & Innovation Water Quality, Including PFAS Resiliency System Expansion Other * Figure is estimated based on data from the US Census Bureau American Community Survey based on zip codes served by Americ an Water and assumptions for future MHI levels. American Water does not collect household income data from its customers. ** An approximation of rate base, which includes Net Utility Plant not yet included in rate base, pending rate case filings/outcome s. 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 2014 2016 2018 2020 2022 2024 2025 2030E 2035E $15.0 $16.3 $17.8 $19.7 $22.1 $24.3 2020 2021 2022 2023 2024 2025 2030E 2035E
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17 More than 1.5 Million Customer Connections in Pipeline ~104,000 Customer Connections Under Agreement Totaling $582 Million ~57,700 Customer Connections 19 Acquisitions in 6 States, $267M Under Agreement As of Dec. 31, 2025 (excl. Nexus) Closed For Year Ended Dec. 31, 2025 ~20,900 Customer Connections 18 Acquisitions in 7 States, $83M ~46,600 Customer Connections 60 Systems in 8 States, $315M* Nexus Water Group Systems Closing expected by or before Aug. 2026 200 400 1,100 4,600 7,000 7,300 8,900 17,100 VA TN NJ MD KY PA IN IL * Subject to adjustment following the closing of the agreement based on the calculations and criteria provided in the Purchase Agreement. 1 2 2 3 3 3 3 4 6 IN CA IL ➢ Closed on December 16, 2025 after 5-0 PA PUC vote ➢ $28 million purchase price ➢ $25 million of follow-on capital planned over the next five years ➢ First PA FMV deal for PA American Water to close since Commission’s FMV update in 2024 ➢ Closed on December 16, 2025 after 5-0 PA PUC vote ➢ $28 million purchase price ➢ $25 million of follow-on capital planned over the next five years ➢ First PA FMV deal for PA American Water to close since Commission’s FMV update in 2024 Elizabeth Borough, PA Wastewater Regulatory approval received from state commission Note: Amounts on slide do not include customer connections related to the proposed merger with Essential Utilities. 200 300 10,900 12,500 15,600 18,200 KY IL MO PA NJ WV
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18 INVESTOR RELATIONS CONTACTS UPCOMING EVENTS Aaron Musgrave, CPA Vice President, Investor Relations aaron.musgrave@amwater.com Janelle McNally Director, Sustainability janelle.mcnally@amwater.com Jack Quinn, CPA Director, Investor Relations jack.quinn@amwater.com Kelley Uyeda Senior Analyst, IR & Sustainability kelley.uyeda@amwater.com Q1 2026 Earnings Call April 30, 2026 (projected) Annual Shareholders Meeting (Virtual) May 13, 2026 (projected) Q2 2026 Earnings Call July 30, 2026 (projected) Q3 2026 Earnings Call October 29, 2026 (projected)
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19 Appendix
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20 Cert ain stat ements mad e, ref erred to or relied upon in this pres entation including, without limitation , 2026 adjusted earnings p er share guidanc e, the Co mpany’s long-t erm financial, gro wth and dividend t argets, the abilit y to achieve the Company’s strat egies and go als, customer affordabilit y and acquired customer growth, the outcome of th e Co mpany’s p ending acquisition activity (including, without limitation , with respect to the proposed merger with Essential U tilities and th e proposed acquisition of systems own ed indirectly by Nexus Water Group, Inc.), the amount and allocation of p rojected c apital exp enditures and the Company’s capital recovery outlook, and estimat ed revenues fro m rat e c ases and other go vernment agency authorizations, are forward -looking stat ements within th e meaning of the safe harbor provisions of th e Privat e Securities Litigat ion Refo rm Act of 1995 and the Fed eral secu rities laws. In some cas es, th ese fo rward-looking stat ements can be identified by words with prospective meanin gs such as “intend,” “plan,” “estimate,” “believe,” “anticipate,” “exp ect,” “predic t,” “project,” “propose,” “assume,” “forec ast,” “outlook,” “likely,” “uncertain,” “future,” “pending,” “goal,” “objective,” “potential,” “ continue,” “seek to ,” “may,” “can,” “will,” “should” and “could” and or the negat ive of such terms or other variations or similar exp ressions. Thes e forward-lookin g stat ements are predic tions based on American W at er’s current expect ations and assumptions regarding future events. Th ey are not gu arantees or assuran ces of any outcomes, financial results, levels of activity, performance or achievements, and read ers are cautioned not to place undue relianc e upon th em. Th ese fo rward-looking statements are subject to a numb er of estimates, assumptions, known and unknown risks, uncertainties and oth er f actors. Th e Co mpany’s actual results may vary materially fro m thos e discussed in th e forward-looking st atements included in this presentation as a result of the f actors discussed in th e Co mpany’s Annual R eport on Form 10-K for the year end ed Dec emb er 31, 2025 , and subsequent filings with th e SEC, and b ecause of facto rs such as: th e d ecisions of governmental and regulato ry bodies, including decisions to raise or lo wer customer rates ; the timelin ess and outcome of regulatory commissions’ and other authorities’ actions concernin g rates, c apital structu re, authorized return on equity, capital investment, system acquisitions and dispositions, tax es, p ermitting, water s upply and management, and oth er dec isions; changes in customer demand fo r, and p atterns of use of, wat er and en ergy, such as may result fro m conservation efforts, or o therwis e; limitat ions on th e availability of th e Co mpany’s water supplies or sources of wat er, or restrict ions on its use th ereof, resulting f rom alloc ation rights, govern ment al or regulato ry requirements and restrictions, drought, overuse or other factors ; a loss of one or more large industrial or commerc ial customers due to adverse economic conditions, or other facto rs; pres ent and future proposed changes in laws, govern mental regulations and policies, including with respect to th e environment (such as, for ex ample, potential improvements to existing Federal regulations with respect to lead and copper servic e lines and galvanized steel pipe) , health and safety, data and consumer privacy, security and protection, wat er quality and water quality accountabilit y, contaminants of emerging concern (including without limit ation per- and polyfluoroalkyl substances (collectively, “PFAS”)), public utility and tax regulations and policies, and imp acts resulting fro m U.S., stat e and local elec tions and changes in federal, state and local ex ecutive ad ministrations; the Comp any’s abilit y to collect , distribute, use, secure and store consumer data in compliance with current or future go vernmental laws, regulations and policies with respect to dat a and consumer privacy, s ecurity and prot ection; weath er conditions and events, c limat e variability patterns, and natu ral dis asters, including drou ght or abnormally high rainfall, p rolonged and abnormal ice or freezing conditions, st rong winds, coastal and int ercoast al flooding, pand emics and epid emics, earthquakes, landslides, hurric anes, to rnado es, wildfires, elec tric al storms, sinkholes and solar flares; the outcome of litigation and similar governmental and regulatory proc eedin gs, investigations or actions; th e risks associat ed with the Comp any’s aging infrastructure, and its ability to appropriately imp rove the resiliency of or maintain , updat e, redesign and/o r replac e, cu rrent or future infrastructure and systems, including its technology and oth er assets, and manage the expansion of its businesses ; exposure or infiltration of th e Company’s technolo gy and c ritic al infrastructure syst ems, including the disclosure of s ensitive, personal or confid ential informat ion cont ained therein, th rough physical or cyb er attacks or other means, and impac ts fro m required or voluntary public and other disclosures , as well as civil class action and other lit igation or legal, regulatory or administrative proceedin gs, related thereto ; the Co mpany’s ability to obtain permits and other approvals for projec ts and construction, update, red esign and/o r replacement of various water and wastewater facilities; chan ges in the Comp any’s capital requirements ; the Co mpan y’s ability to control op erating exp enses and to achieve operat ing efficiencies, and th e Co mpany’s ability to c reat e, maintain and pro mote initiatives and p rograms that support the affordability of the Co mpany’s regulated utility services ; th e int entional or unintention al actions of a third p arty, including contaminat ion of th e Co mpany’s water supplies or the wat er provid ed to its customers; the Company’s ability to obtain and have d elivered ad equate and cost-effec tive supplies of pip e, equipment (including p ersonal p rotec tive equipment) , chemic als, power and oth er fuel, water and other raw materials, and to address or mitigate supply chain constraints that may result in delays or shortages in, as well as increased costs of, supplies, products and materials that are critic al to or used in the Co mpany’s business operations; th e Comp any’s ability to successfully meet its operational gro wth project ions, eith er individually or in the aggregat e, and capitaliz e on growth opportunities, including, among other things, with respect to: acquiring, closing and successfully integrating regulated op erations, including without limitation the Co mpany’s ability to (i) obtain all required regulatory and oth er consents and appro vals for such acquisitions, (ii) prevail in litigation or oth er challen ges related to such acquisitions, and (iii) recover in rates the f air value of assets of the acquired regulat ed operations ; the Co mpany’s Milit ary Services Group ent ering into new military installation contrac ts, price redetermin ations, and other agreements and contracts, with the U.S. go vernment; and realizing anticipated ben efits and synergies from new acquisitions ; in addition to the foregoing, various risks and o ther uncertainties associated with th e Co mpany’s merger agreement with Essential Utilities and the related propos ed merger, including: a fixed exch ange ratio that will not adjust or account for fluctu ations in the Company’s or Essential Utilities’ stock pric e; limitations on the parties’ ability to pursue alt ern atives to th e propos ed merger ; an event, ch ange or o ther circu mstance that could give rise to th e t ermination of th e merger agreement; a delay in the timin g to consummat e the p roposed merger ; each party’s ability to obt ain required go vernmental and regulato ry approvals required fo r th e proposed merger (and/or th at such approvals may result in th e imposition of burdensome or commercially undesirable conditions, including required dispositions, that could adversely aff ect th e combin ed comp any or the expec ted b enefits of th e proposed merger) ; financial impacts of the proposed merger on th e Comp any and th e co mbined company’s earnings, earnin gs per share, financial condition, results of operations, cash flows and share price, and any relat ed accounting imp acts; any imp act of the proposed merger on the Comp any’s and the combin ed company’s ability to declare and pay quarterly dividends on its common stock; the risk of litigation related to th e proposed merger ; ch anges in the parties’ key management and p ersonnel; th e amount and nature of incurred transaction costs associat ed with th e proposed merger ; and reduc ed o wnership and voting int erests for th e Comp any’s and Essential Ut ilities' shareholders upon completion of the p roposed merger ; in addition to th e foregoing, various risks and oth er uncertainties associated with th e agreement to acquire c ertain wat er and wast ewat er syst ems fro m a subsidiary of N exus Water Group, Inc., including: th e final amount of the rat e base to be acquired , and the amo unt of post-closing adjustments to the purchase pric e, if any, as cont emplated by th e acquisition agreement ; the various imp acts and eff ects of (i) co mplianc e, or attempt ed co mpliance, with th e t erms and conditions of th e acquisition agreement , and/or (ii) th e co mpletion of, or actions t aken by the Co mpany to co mplete, the acquisition, on the Company’s operations, strategy, guidance, exp ect ations and plans with respect to its R egulated Businesses (considered individually or togeth er as a whole), its current or future capit al expenditu res, its current and future debt and equity c apital needs, divid ends, earnin gs (including earnin gs per share), gro wth, future regulato ry outco mes, exp ectations with respect to rat e bas e gro wth, and oth er fin ancial and operat ional goals, plans, estimat es and projections ; and any requirement by th e Comp any to p ay a t ermination f ee in th e event the c losing does not occu r; the ability of the Company to red eploy successfully and t imely th e n et proc eeds of the amended s ecured seller not e into the Company’s R egulated Busin esses; risks and uncertainties associated with contractin g with th e U .S. govern ment, including on going co mpliance with applic able govern ment procurement, s ecurity and c ybers ecurity regulations ; cost overruns relating to improvements in or the expansion of the Company’s operations ; the Co mpany’s ability to successfully d evelop and implement new technolo gies and to prot ect related int ellectual property ; th e Co mpany’s ability to maint ain s afe wo rk sit es; the Comp any’s exposure to liabilities related to environmental laws and regulations, includ ing those en act ed or adopt ed and under consideration , and the substances related thereto , including without limitation copper, lead and galvaniz ed steel, PFAS and other contamin ants of emerging conc ern, and similar matters resultin g fro m, amon g oth er things, water and wastewater servic e provid ed to customers ; the ability of energy provid ers, state govern ments and oth er third part ies to achieve or fulfill their greenhouse gas emission reduction go als, including without limitation through st at ed renewable portfolio stand ards and carbon transition plans; with respect to any of the Co mpany's forward sale agreements : (i) th e in ability of the forward purchas ers (or th eir affiliat es) to perform their obligations th ereunder, (ii) th e timing and method of any settlement thereof, (iii) the amount and intended use of proc eeds that may be rec eived by the Company from any such settlement, and (iv) the timin g and amount of any co mmon stock dilution resulting th erefrom; ch anges in gen eral economic , politic al, business and financial market condit ions; access to sufficient debt and /or equity capit al on sat isfactory t erms and as n eed ed to support op erations and capit al exp enditures; fluctu ations in inflation or interest rates, and the Comp any’s ability to address or mitigate th e impacts th ereof; the ability to co mply with affirmative or n egative covenants in th e cu rrent or future indebtedness of th e Company or any of its subsidiaries, or the issuance of n ew or modified credit ratings or outlooks by c redit rating agencies with respect to the Co mpany or any of its subsidiaries (or any current or future indebtedness th ereof), which could increas e fin ancing costs or funding requirements and affect th e Co mpany’s or its subsidiaries’ ability to issue, repay or red eem d ebt, pay divid ends or make distributions ; fluctuat ions in th e valu e of , or assumptions and estimat es relat ed to , its ben efit plan assets and liabilit ies, including with respect to its pension and oth er post -retirement ben efit plans, that could increas e expenses and plan funding requirements ; changes in f ederal or st at e general, inco me and oth er tax laws, and the imposition, utilization or change in economic tariffs (or any attempt or effort to do so), including (i) future significant tax legislation or regulations (including without limitation imp acts related to th e Co rporat e Alt ernative Minimum Tax), and (ii) the availability of, or th e Co mpany’s co mplianc e with, the t erms of applic able tax credits and tax abat ement programs ; migration of customers into or out of the Company’s service t erritories and ch anges in wat er and energy consumption resulting th erefro m; the use by municip alities of th e power of emin ent domain or other autho rity to condemn the systems of one or mo re of th e Comp any’s utility subsidiaries, including without limitation lit igation and oth er proceedings with respec t to th e water system assets of the Compan y’s California subsidiary located in Monterey, C alifornia, or the assertion by private landown ers of similar rights against such utility subsidiaries ; any difficulty or inability to obtain insurance for th e Company, its inability to obt ain insuranc e at acc ept able rat es and on accept able t erms and conditions, or its inability to o btain reimbursement under ex isting or future insurance programs and coverages for any losses sustain ed; the incurrence of imp airment charges, chan ges in fair value and o ther adjustments relat ed to the Comp any’s good will or the valu e of its oth er assets; labo r actions, including wo rk stoppages and strikes ; the Comp any’s ability to ret ain and attract highly qualified and skilled employees and talent; civil disturbances or unrest, or terrorist threats or acts, or public apprehension about future disturbances, unrest, or terrorist threats or acts; and the impact of new, and changes to existing, accounting standards . These forward-looking statements are qualified by, and should be read together with, the risks and uncertainties set forth above , and the risk factors included in American Water’s annual, quarterly and other SEC filings, and readers should refer to such risks, uncertainties and risk factors in evaluating such forward - looking statements. Any forward -looking statements American Water makes shall speak only as of the date of this presentation. Ex cept as required by the federal securities laws, American Water does not have any obligation, and it specifically disclaims, any undertaking or intention, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or otherwise . New factors emerge from time to time, and it is not possible for the Company to predict all such factors. Furthermore, it may not be possible to assess the impact of any such factor on the Company’s businesses, either viewed independently or together, or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward -looking statement. The foregoing factors should not be c onstrued as exhaustive. Forward Looking Statements
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21 This presentation includes presentations of consolidated adjusted diluted earnings per share, both as historical financial information and as earnings guidance (“Adjusted EPS”). Adjusted constitutes a “non-GAAP financial measure” under SEC rules. The most directly comparable GAAP measure for historical adjusted diluted earnings per share is the reported diluted earnings per share (GAAP) and is reconciled in this press release. The 2026 adjusted guidance range does not include (i) estimated transaction costs to be incurred by the company during 2026 related to the proposed merger with Essential Utilities, Inc. (“Essential Utilities”), (ii) impacts of weather, if any, during 2026, and (iii) incremental interest income through February 13, 2026 related to the 2024 amendment of the HOS secured seller note. Management is unable to present a reconciliation of the adjusted EPS guidance range to a GAAP guidance range without unreasonable effort because management cannot reliably predict the nature, amount or probable significance of all of such adjustments for future periods; however, these adjustments may, individually or in the aggregate, cause adjusted EPS to differ significantly from GAAP EPS. These non-GAAP financial measures are derived from the company’s consolidated financial information but are not presented in the financial statements prepared in accordance with GAAP . These measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP . The company believes that these non-GAAP measures provides investors with useful information by excluding certain matters that may not be indicative of the company’s ongoing operating results , and, with respect to weather, to provide for a measure of the company’s operating performance without the variability of estimated weather impacts, and that providing these non-GAAP measures will allow investors to better understand the businesses’ operating performance and facilitate a meaningful year-to-year comparison of the company’s results of operations. Although management uses these non-GAAP financial measures internally to evaluate the company’s results of operations, management does not intend results reflected by these non-GAAP measures to represent results as defined by GAAP , and the reader should not consider them as indicators of performance. In addition, these non-GAAP financial measures as defined and used above may not be comparable to similarly titled non-GAAP measures used by other companies, and, accordingly, they may have significant limitations on their use. Non-GAAP Financial Measures
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23 Reconciliation Table – Consolidated EPS Adjusted diluted earnings per share represents a non -GAAP financial measure and, as shown in the table above, is calculated as G AAP diluted earnings per share, excluding the impact of one or more of the following events: (i) estimated impact of weather; (ii) incremental interest income from the February 2, 2024 amendment to the HOS secured seller promissory note, which increased the aggregate principal amount from $720 million to $795 million and increased the interest rate from 7.00% per year to 10.00% per year; and (iii) transaction costs i ncurred during 2025 associated with the proposed merger with Essential. The most directly comparable GAAP measure for adjusted diluted earnings per share is the reported diluted earnings per share (GAAP) and is reco nciled in the table above.
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24 Details of Fourth Quarter 2025 Adjusted EPS 0.28 (0.01) (0.09) (0.08) (0.03) 0.02 $1.15 $1.24 Q4 2024 Adjusted EPS Revenue O&M Depreciation Financing General Taxes Other, net Q4 2025 Adjusted EPS Note: Adjusted EPS is a non -GAAP measure. Please see appendix for reconciliation and further information .
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25 Capital Plan ($ in billions) $3.7 $17.0 - $17.5 $2.0 - $2.5 $19 - $20* $42 - $43 $4 - $5 $46 - $48 Regulated System Investments Regulated Acquisitions 2026E 2026 – 2030 2026 – 2035 Five- and Ten-Year Capital Plans: Investments to Support System Needs *Includes $2 billion related to PFAS, primarily in 2026 -2028; and $1.5 billion related to LCRI. ➢ $2 billion increase in 5-year capital plan • $1 billion to meet compliance requirements for EPA’s PFAS Rule • $0.5 billion to meet compliance requirements for EPA’s Lead & Copper Rule Improvements (LCRI) • $0.5 billion of other, including related to rolling forward the plan one year ➢ $6 billion increase in 10-year capital plan driven by expansion of aging infrastructure replacement programs (including ongoing lead and galvanized steel service line replacements), and other emerging needs
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26 ($ in millions) Financing Plan: 2026-2030 Funding the 2026-2030 Capital Investment Plan Operating Cash Flows $14,000 Debt Financing $11,800 Equity Issuances $2,500 Sale Proceeds (HOS)* $795 ➢ $2.5B of equity issuances in 2026 -2030, driven by capital investment needs and consistently achieving <60% debt to cap target • Includes ~$1 billion equity financing in 2026, which is covered by the equity forward agreements entered into in August 2025, assumes proceeds are received in mid -2026, plus an additional ~$1.5 billion in 2029, to support growth in the business; issuances are subject to market conditions • Uses of funds: primarily ~$19 -20 billion of capital investments, ~$4.5 billion of LTD maturities, and dividends • Current 2026 financing plan includes $1.5 -2.0B of long-term debt financing ➢ Investors should expect equity financing to occur consistent with a traditional regulated utility financing strategy and to m aintain our strong balance sheet and credit metrics, with timing and sizing in alignment with our investment program and rate case cy cle ~$29 BillionTotal Sources: * $795 million HOS note was repaid in full on February 13, 2026.
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27 Successfully completed our long- term debt financing for the year with issuance of Senior Notes Successfully Executed $800 Million Senior Note Offering Issuer American Water Capital Corp. Pricing Date February 24, 2025 T enor 10yr Senior Unsecured Size $800M Annual Interest Rate 5.250% Successfully Completed 2025 Financing Plan Strong demand for issuances (4x over-subscribed) and successful execution helps fund growth while managing financing costs Successfully Executed $900 Million Senior Note Offering Issuer American Water Capital Corp. Pricing Date August 6, 2025 T enor 30yr Senior Unsecured Size $900M Annual Interest Rate 5.700%
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28 State Legislative Highlights in 2025 • Water and wastewater utilities may request the use of a Future Test Year in a general rate case beginning July 1, 2026. • Passed on March 13, 2025 – signed by the Governor on April 9, 2025. • Legislation became effective on August 28, 2025. • Provides expanded eligibility for recovery of more types of infrastructure investments for water and wastewater utilities outside of a base rate case. • Passed on February 20, 2025 - signed by the Governor on March 24, 2025. • Legislation became effective July 1, 2025. Virginia - Eligible Infrastructure Replacement and Enhancement (SB850) • Allows for deferred depreciation from in -service date and post in -service carrying costs. Authorizes IURC to approve mechanisms to allow utilities to invest in and earn on acquired utility assets. Amended to include language prohibiting lawsuits against a utility that is compliant with water quality standards. • Passed on March 24, 2025 – signed by the Governor on April 3, 2025. • Legislation became effective on July 1, 2025. Indiana - Water Utility Infrastructure (DSIC, Acquisition Recovery, and Lawsuit Immunity) (SB426) Missouri - Future Test Year (SB4)
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29 Implications of Final Federal PFAS Rule ➢ U.S. EPA announced on May 14, 2025 its intent to maintain drinking water limits of 4.0 parts per trillion for PFOA and PFOS. ➢ American Water estimates $2B of capital and up to $50M annually for operating expenses in its 2026-2030 plan. ➢ American Water has entered into a nine-year supply contract with Calgon Carbon to supply granular activated carbon, equipment and reactivation services to >50 treatment sites across 10 states through 2033. ➢ U.S. EPA designated PFOA and PFOS as hazardous substances under CERCLA in April 2024. The Company continues to actively advocate for and support bipartisan legislation that would provide PFAS liability protections under CERCLA for water and wastewater systems, as passive receivers of PFAS. PFAS Treatment Plans PFAS Litigation Recap ➢ American Water is a party to the Multi-District Litigation (MDL) lawsuit against several PFAS manufacturers. •In 2024, the MDL court approved settlements with DuPont, 3M, Tyco Fire Products LP and BASF Corporation respectively; the amount of proceeds to be received from each settlement is pending. •As of December 31, 2025, the Company’s utility subsidiaries received settlement payments from defendants 3M and DuPont of ~$159 million, collectively, net of legal fees and administrative costs. The Company intends to seek regulatory approval from its respective public utility commissions to apply the net proceeds for the benefit of customers. The Company anticipates that, during 2026, it may receive one or more additional settlement payments from the defendants named above. *Includes PFAS treatment
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30 Military Services Group Currently Serving 18 Military Installations 5 Air Force/Space Force 1 Navy 0 Marine Corps 12 Army 70 Additional Installation Opportunities 23 Air Force/Space Force 19 Navy 13 Marine Corps 15 Army Military Services Group Provides Strategic Value Regulated-like earnings Favorable ROI opportunity Capital light / cash flow positive Positive branding Leverage core competencies Dual wins for AWK & U.S.
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31 Hybrid Test Year 3 MD NJ WV Fair Value CA IA IL IN KY MD MO NJ PA VA WV Consolidated Tariff Future Test Year 11 CA IA IL IN KY MO NJ PA VA WV 10 CA HI IA IL IN KY MO PA TN VA 10 Infrastructure Mechanism IA IL IN MO NJ PA TN VA WV 9 Water Quality Accountability Legislation IN MO NJ 3 CA IA IL IN KY MD MO NJ PA TN VA WV 12 Affordability Tariffs/Programs State Legislation & Regulation Enable Growth
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32 Reconciliation of Estimated Rate Base Estimated Rate Base* ($ in billions) As of 12/31/2025 Net Utility Plant $30.5 Less Advances for Construction $0.4 CIAC – Contributions in Aid of Construction $1.6 Net Deferred Income Taxes $4.2 $6.2 T otal Estimated Rate Base $24.3 * An approximation of rate base, which includes Net Utility Plant not yet included in rate base, pending rate case filings/outcome s.
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33 Pennsylvania 7 7,800 3,500 11,300 New Jersey 2 5,300 - 5,300 California 4 1,600 - 1,600 Illinois 1 - 1,500 1,500 West Virginia 1 900 - 900 Iowa 2 100 100 200 Missouri 1 100 - 100 Total 18 15,800 5,100 20,900 STATE NUMBER OF SYSTEMS WATER CUSTOMER CONNECTIONS WASTEWATER CUSTOMER CONNECTIONS TOTAL CUSTOMER CONNECTIONS Closed Acquisitions December 31, 2025
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34 West Virginia 7 3,500 14,700 18,200 New Jersey 2 15,600 - 15,600 Pennsylvania 5 2,700 9,800 12,500 Missouri 3 5,500 5,400 10,900 Illinois 1 - 300 300 Kentucky 1 200 - 200 Sub-Total 19 27,500 30,200 57,700 Acquisitions Under Agreement STATE NUMBER OF SYSTEMS WATER CUSTOMER CONNECTIONS WASTEWATER CUSTOMER CONNECTIONS TOTAL CUSTOMER CONNECTIONS Dec. 31, 2025 Illinois 37 13,400 3,700 17,100 Indiana 5 5,500 3,400 8,900 Pennsylvania 6 3,300 4,000 7,300 Kentucky 2 7,000 - 7,000 Maryland 6 3,550 1,050 4,600 New Jersey 2 800 300 1,100 Tennessee 1 400 - 400 Virginia 1 - 200 200 Sub-Total 60 33,950 12,650 46,600 Total 79 61,450 42,850 104,300 STATE NUMBER OF SYSTEMS WATER CUSTOMER CONNECTIONS WASTEWATER CUSTOMER CONNECTIONS TOTAL CUSTOMER CONNECTIONS + Nexus Water Group Systems
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35 Annualized Revenue from Rate Proceedings Requested Revenue in Pending Rate Proceedings * Annualized revenue increase for rates effective since January 1, 2025 ** Excludes revenue already approved through infrastructure mechanisms Rate Filings Completed* Effective since January 1, 2025 ($ in millions) $250 $69 $319 $14 $16 $30 Rate Cases (Includes Step Increases) Infrastructure Charges Total 2025 2026 $542 $31 $573 Rate Cases (Excludes Step Increases)** Infrastructure Charges Total $264 $85 $349
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36 Rates Effective Since… a) The Company’s Illinois subsidiary was authorized additional annualized revenues of $105.2 million, excluding reductions in re venues for infrastructure surcharges in the amount of $5.1 million. b) The Company’s Tennessee subsidiary was authorized additional annualized revenues of $1.0 million, this excludes the $17.5 mil lio n for infrastructure surcharges. c) Interim rates were effective on May 1, 2024, and the difference between interim and final Commission approved rates are subje ct to refund. On September 20, 2024 the Company’s Viginia subsidiary filed a stipulation of settlement which agreed upon a $14.6 million annualized increase in revenues. On February 24, 2025 the Company received a n Order approving the settlement. d) The Company’s Missouri subsidiary was authorized additional annualized revenues of $63.1 million, excluding reductions in rev enues for infrastructure surcharges in the amount of $63.3 million. e) The Company’s Iowa subsidiary was authorized additional annualized revenues of $12.7 million, excluding reductions in revenue s for infrastructure surcharges in the amount of $0.9 million. Interim rates were effective on May 11, 2024 , in the amount of $5.1 million. f) The Company’s Hawaii subsidiary was authorized additional annualized revenues of $1.46 million. g) The Company’s Kentucky subsidiary was authorized additional annualized revenues of $18.2 million, this excludes the $9.9 mill ion for infrastructure surcharges. ($ in millions) Infrastructure Charges Date Effective Annualized Revenue Increases Kentucky (QIP) 1/1/2025 $2 West Virginia (DSIC/WSIC) 1/1/2025 4 Missouri (WSIRA) 2/7/2025 17 New Jersey (DSIC, WSIC, & RESIC) 5/30/2025 15 Pennsylvania (DSIC) 10/1/2025 5 New Jersey (DSIC, WSIC, & RESIC) 11/29/2025 26 Sub-Total $69 2025 Total $319 Rate Cases & Step Increases Date Effective Annualized Revenue Increases Illinois 1/1/2025 105(a) California, Step Increase 1/1/2025 17 Tennessee 1/21/2025 1(b) Virginia 2/24/2025 15(c) Indiana, Step Increase 5/14/2025 17 Missouri 5/28/2025 63(d) Iowa 8/1/2025 13(e) Hawaii 8/1/2025 1(f) Kentucky 12/16/2025 18(g) Sub-Total $250 January 1, 2025 January 1, 2026 Rate Case Date Effective Annualized Revenue Increase California, Step Increase 1/1/2026 $14 Infrastructure Charges Date Effective Annualized Revenue Increases Pennsylvania (DSIC) 1/1/2026 $11 Illinois (QIP) 1/1/2026 5 2026 Total $30
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37 $573 $18,520 West Virginia (a) Docket No. 25 -0426 -W-42T and 25-0428 -S-42T 5/5/2025 $33 10.75% $1,071 California (b) Case No. A.25-07-003 7/1/2025 51 N/A 1,242 Virginia Docket No. PUR-2025 -00185 11/3/2025 22 10.75% 446 Pennsylvania (c) Docket Nos. R-2025 -3057983 & R -2025 -3058051 11/14/2025 169 10.95% 6,630 New Jersey (d) Docket No. WR26010010 1/16/2026 146 10.75% 6,124 Illinois (e) Docket No. 26 -0127 1/27/2026 119 10.75% 2,735 Total Rate Cases Filed Docket/Case Number Date Filed Requested Revenue Increase ROE Requested Rate Base a) The Company’s West Virginia s ubsidiary has requested additional annualized revenues of $32.6 million, this excludes the $12.7 million for infrastructure s urcharges. This also excludes a Step two proposed increase of $15.2 million which is proposed to be effective 1 year after Step 1. The total revenue requirement request for the two step rate case cycle is $47. 8 million. b) The Company’s California subsidiary s ubmitted its 100 Day Update on October 13, 2025, with the revised request of additional annualized revenues of $62.1 million for the test year 2027. This increase as filed represented an increase against 2025 rates. Subsequent to the filing of the rate case, the Company adjusted its authorized rates effective January 1, 2026, which revised its net increase proposed for the test year 2027 to $51.1 million. This increase also excludes the proposed s tep rate and attrition rate increase for 2028 and 2029 of $21.5 million and $26.4 million, respectively. c) The Company’s Pennsylvania subsidiary has requested additional annualized revenues of $168.7 million, this excludes the $18.8 mi llion for infrastructure surcharges. d) The Company’s New Jersey s ubsidiary has requested additional annualized revenues of $146.4 million, this excludes the $64.0 mill ion for infrastructure s urcharges. e) The Company’s Illinois subsidiary has requested additional annualized revenues of $119.494 million, this excludes the $8.0 million for infrastructure surcharges, and $14.9 million for rates effective 1/1/2027 and 1/1/2028, respectively. f) The Company’s Maryland subsidiary is waiting for final approval of a settlement filed on January 22, 2026, with a revenue increase of $1.979 million. Pending Rate Case Filings ($ in millions) $540 $18,248 Infrastructure Surcharges Filed West Virginia (DSIC and WSIC) 6/30/2025 $3 $23 Missouri (WSIRA) 9/3/2025 13 118 Indiana (DSIC) 1/20/2026 15 131 $31 $272 Rate Case Awaiting Regulatory Approval Maryland (f) 8/1/2025 $2 $2
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38 Authorized Rate Base* ROE Equity Effective Date of Rate Case Customer Connections*** Rate Base stated in $000s, rounded ** Rounded as of 12/31/25 Pennsylvania $5,800,000 9.45% 55.30% 8/7/2024 814,000 New Jersey $5,100,000 9.60% 55.00% 9/15/2024 750,000 Missouri $3,200,000(c) 9.75% (d) 50.00% (e) 5/28/2025 510,000 Illinois $2,200,000 9.84% 49.00% 1/1/2025 376,000 Indiana $1,800,000 9.65% 56.30% (b) 5/14/2025 349,000 West Virginia $890,000 9.80% 50.12% 2/25/2024 174,000 California $880,000 (g) 10.20% (a) 57.04% (a) 1/1/2024 (g) 196,000 Kentucky $670,000 9.70% 52.26% 12/16/2025 142,000 Virginia $370,000 (c) 9.70% 45.67% 2/24/2025 (f) 87,000 T ennessee $300,000 9.70% 44.19% 1/21/2025 89,000 Iowa $260,000 9.60% 52.57% 8/1/2025 70,000 Hawaii $52,000 9.75% 52.11% 8/1/2025 10,000 Maryland $28,000 (c) 9.90% (d) 48.66% (e) 2/5/2019 5,000 a) On June 29, 2023, Decision 23-06-025 set the authorized cost of capital through 2024. CA has a separate Cost of Capital case which sets the rate of return outside of a general proceeding. The decision established an ROE of 8.98% effective 30-days after the decision date. On June 30, 2023, the Company filed to implement an automatic ROE adjustment to 9.50% for 2023 based on the Commission approved Water Cost of Capital Adjustment Mechanism (WCCM), effective July 31, 2023. On October 16, 2023, the Company filed to implement an automatic ROE adjustment to 10.20% based on the WCCM upon approval from the Commission, effective January 1, 2024. b) The Authorized Equity excludes cost-free items or tax credit balances at the overall rate of return which lowers the equity percentage as an alternative to the common practice of deducting such items from rate base. c) The Authorized Rate Base listed is the Company's view of the Rate Base allowed in the case; the Rate Base was not disclosed in the Order or the applicable settlement agreement. d) The listed ROE is the Company's view of the ROE allowed in the case; the ROE was not disclosed in the Order or the applicable settlement agreement. e) The equity ratio listed is the Company's view of the equity ratio allowed in the case; the actual equity ratio was not disclosed in the Order or the applicable settlement agreement. f) Interim rates were effective May 1, 2024 and received final Order February 24, 2025. g) The Rate Base and Effective date are based off of Year 1 of the rate case. Annual adjustments are made for Year 2 and 3 which reflect authorized capital improvements for Rate Base and inflationary adjustments for O&M. Regulatory Information