2016 Second Quarter Earnings Conference Call August 4, 2016 1 Greg - - PowerPoint PPT Presentation

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2016 Second Quarter Earnings Conference Call August 4, 2016

Greg Panagos Vice President of Investor Relations

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NYSE: AWK www.amwater.com

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Forward-Looking Statements

Certain statements in this presentation including, without limitation, 2016 earnings guidance, the outcome of pending acquisition activity, the amount of future capital investments, and estimated revenues from rate cases and other government agency authorizations, are forward-looking statements within the meaning

• f the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the Federal securities laws. These forward-looking statements are

predictions based on American Water’s current expectations and assumptions regarding future events. They are not guarantees or assurances of any

• utcomes, financial results of 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 press release as a result of the factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, and in subsequent filings with the Securities and Exchange Commission (SEC), and because of factors such as: the decisions of governmental and regulatory bodies, including decisions to raise or lower rates; the timeliness of regulatory commissions’ actions concerning rates and other matters; changes in laws, governmental regulations and policies, including environmental, health and safety, water quality, and public utility regulations and policies; potential costs and liabilities of American Water for environmental and similar matters resulting from, among other things, the provision of water services to customers in the natural gas exploration and production market; the outcome of litigation and government action related to the Freedom Industries chemical spill in West Virginia; weather conditions, patterns or events or natural disasters, including drought or abnormally high rainfall, strong winds, coastal and intercoastal flooding, earthquakes, landslides, hurricanes and tornadoes, and cooler than normal temperatures; changes in customer demand for, and patterns of use of, water, such as may result from conservation efforts; its ability to appropriately maintain current infrastructure, including its technology systems, and manage the expansion of its business; its ability to obtain permits and other approvals for projects; changes in its capital requirements; its ability to control operating expenses and to achieve efficiencies in its operations; the intentional or unintentional acts of a third party, including contamination of its water supplies or water supplied to its customers and attacks on, or infiltration of, its computer systems or other critical infrastructure; its ability to obtain adequate and cost-effective supplies of chemicals, electricity, fuel, water and other raw materials that are needed for its operations; its ability to successfully meet growth projections and capitalize on growth opportunities, including its ability to, among other things, acquire and integrate water and wastewater systems into its regulated operations and enter into contracts and other agreements with, or

• therwise obtain, new customers in its Market-based Businesses; cost overruns relating to improvements in or the expansion of its operations; our ability to

maintain safe work sites; changes in general economic, business and financial market conditions; access to sufficient capital on satisfactory terms and when and as needed to support operations and capital expenditures; fluctuations in interest rates; restrictive covenants in or changes to the credit ratings on its current or future debt that could increase its financing costs or affect its ability to borrow, make payments on debt or pay dividends; fluctuations in the value

• f benefit plan assets and liabilities that could increase its financing costs and funding requirements; changes in Federal or state income tax laws, including

tax reform, the availability of tax credits and tax abatement programs, and the ability to utilize its U.S. and state net operating loss carryforwards; migration of customers into or out of its service territories; the use by municipalities of the power of eminent domain or other authority to condemn its systems; difficulty in

• btaining, or the inability to obtain, insurance at acceptable rates and on acceptable terms and conditions; its ability to retain and attract qualified employees;

labor actions including work stoppages and strikes; the incurrence of impairment charges related to American Water’s goodwill or other assets; and civil disturbances, terrorist threats or acts, or public apprehension about future disturbances or terrorist threats or acts. 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 the company’s earnings release and Form 10-K, and in subsequent filings with the SEC, and readers should refer to such risks, uncertainties and risk factors in evaluating such forward-looking statements. Any forward-looking statements speak only as of the date this presentation is first given. The company does not have any obligation or intention to update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as otherwise required by the Federal securities laws. 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 construed as exhaustive.

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Today’s Speakers:

Susan Story President and Chief Executive Officer Walter Lynch Chief Operating Officer Linda Sullivan Executive Vice President and Chief Financial Officer

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Susan Story President and Chief Executive Officer

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$0.41 $0.44 $0.46 $0.63 $0.68 $0.77 $1.04 $1.13(2) $1.23 $0.00 $0.25 $0.50 $0.75 $1.00 $1.25 $1.50 2014(1) 2015 2016

Q1 Q2

Adjusted Diluted Earnings Per Share Continuing Operations

Note: (1) Reported 2014 Q1 EPS from continuing operations of $0.39 was adjusted $0.02 to $0.41. Reported 2014 Q2 EPS from continuing operations of $0.61 was also adjusted $0.02 to $0.63. Both adjustments were for the impact of the Freedom Industries’ chemical spill in West Virginia (see appendix for reconciliation). (2) Amount does not sum due to rounding. (3) GAAP measure without adjustment

Operating Revenues

(in millions)

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Strong Second Quarter Results: Year-to-Date Remains on Track

$679 $698 $743 $755 $782 $827 $1,434 $1,480 $1,570 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2014 2015 2016

Q1 Q2

2014(1) 2015(3) 2016(3)

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~1% AWE 1-2% Regulated Acquisitions 1 – 2%

Regulated Investment CapEx 4-6%

Keystone

• $1.2 billion 2016 regulated

system investments

• O&M efficiency of 35.2%(3)
• H1 2016: $511 million of

regulated infrastructure investment(4) and organic growth of 5,300 customers

• 55,400 customers closed or

pending

• Agreement to acquire 11,000

customers from Shorelands Water Company in NJ(2)

• $24 million spent year to date on

acquisition costs Military Services

• Began serving Vandenberg Air

Force Base June 1 (12th base) Contract Services

• Ten year O&M agreement with

Township of South Orange Village, NJ (4,700 customers) Homeowner Services

• New partnership in

Georgetown, SC

• EPS neutral in 2016
• Increased market share to 35% in

challenging natural gas market

Executing on Growth Strategy: EPS CAGR 7-10% 2016 – 2020(1)

Our Regulated Business Remains the Foundation

(1) 2016 – 2020 EPS CAGR goal of 7-10% anchored from adjusted FY 2014. (2) Subject to regulatory approval.. (3) For 12-months ended 6/30/2016 (4) Total first half of 2016 included $511 of regulated investment , $24 of investment in regulated acquisitions, and $17 million of market -based and other investments.

Other

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Market Based Businesses

NYSE: AWK www.amwater.com

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Second Quarter 2016 Results – AWK Continues to Execute

 Affirm 2016 guidance of $2.75 - $2.85  Long-term EPS CAGR target remains 7-10 percent through 2020*

8 * Anchored from FY 2014 adjusted earnings. Reconciliation table in appendix.

Walter Lynch Chief Operating Officer

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Regulated Businesses - Investment Update

Missouri American Water: Rate Case Settlement Adopted

• $4.5 million revenue settlement approved by PSC

New York American Water: Rate Case Filed

• $8.5 million revenue request
• Operating expenses lower by $1.9 million than previously authorized

Iowa American Water: Rate Case Filed

• $5.1 million revenue request
• Operating expenses reduced by almost 10% since 2013

California American Water

• Final rate case application filed July 1
• Request to increase revenues by $51 million over three years ($35 million in 2018)
• Extension Granted on Carmel River Withdrawals

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Regulated Businesses – Public Policy Update

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Consolidated Tax Adjustment Eliminated

• No longer uses consolidated tax adjustments for ratemaking

purposes Infrastructure Rules Expanded

• Infrastructure program expanded to include almost all capital

improvements from intake to tap

• Overall cap removed on infrastructure program

Public Private Partnership (“P3”) Legislation

• Law passed to establish public private partnership framework
• State and local governments can leverage private investment

to complete infrastructure projects

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Regulated Acquisitions Closed & Pending through August 3rd

584 5,315 175 659 730 93 34,100 2,063 360 107

7,556 New Customers - Closed 47,845 New Customers - Pending** Legend State with fair value legislation*

*Indiana also has fair value legislation, but does not have a pending or closed acquisition currently. **Does not include the 720 customers of Bluegrass, Iowa, as there is not yet a signed agreement.

11,000 215

NYSE: AWK www.amwater.com

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44% 29% 13% 5%

• 25%
• 17%

56% 71% 87% 95% 100% 100% 2010 2011 2012 2013 2014 2015 Opex Capex

On Track to Achieve 34% O&M Efficiency Target by 2020

Note: * O&M Efficiency Ratio - Non GAAP Measure – See appendix for reconciliation.

Incremental Revenue Requirement*

• Increases Attributable to Opex vs. Capex-

Note: *Approximation in states where we received black box award. For general rate cases effective in 2014 and 2015, the incremental revenue requirements were reduced 25% and 17%, respectively, due to lower

• perating expenditures.

O&M Efficiency Ratio*

44.2% 42.4% 40.7% 38.5% 36.7% 35.9% 35.2% 34.0%

0.0 10.0 20.0 30.0 40.0 50.0 13

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West Virginia Flood Response

• Partnered with

Department of Homeland Security and Emergency Management

• Donations made to

the American Red Cross & United Way

• f Central West

Virginia

• Round the clock

efforts to restore service & repair damage

• Potable water

delivered to our customers & to neighboring communities

Linda Sullivan Executive Vice President and Chief Financial Officer

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Strong Second Quarter Results, Year-to-Date Remains on Track - Contribution by Business

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Diluted EPS – Second Quarter 2Q 2015 2Q 2016 Change Regulated Businesses $0.68 $0.76 $0.08 Market-Based Businesses $0.06 $0.07 $0.01 Parent ($0.06) ($0.06) $0.00 Total EPS $0.68 $0.77 $0.09 Diluted EPS – Year to Date YTD 2Q 2015 YTD 2Q 2016 Change Regulated Businesses $1.13 $1.24 $0.11 Market-Based Businesses $0.10 $0.11 $0.01 Parent ($0.10) ($0.12) ($0.02) Total EPS $1.13 $1.23 $0.10

NYSE: AWK www.amwater.com

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Strong Second Quarter Results Regulated Revenue Drives EPS Growth

17 $0.01 $0.02 $0.04 $0.68 $0.77 $0.10 $0.01 $0.05 $0.55 $0.60 $0.65 $0.70 $0.75 $0.80 $0.85 $0.90

EPS Bridge - Q2 2016 Year Over Year

Regulated Market-Based

Regulated $0.08 Market-Based $0.01

Regulatory Filings Awaiting Final Order

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• A. Rate Cases Filed

Company Docket / Case Number Date Filed Revenue Increase ROE Requested Rate Base Virginia Case No. 2015-00097 10/30/2015 $8.7 (a) 10.75% $162.2 Illinois Docket No 16-0093 1/21/2016 40.0 (b) 10.75% 899.3 Kentucky Case No. 2015-00418 1/29/2016 13.5 10.75% 403.9 New York Case No. 16-W-0259 4/29/2016 8.5 10.75% 278.4 Iowa Case No. RPU-2016-0002 4/29/2016 5.1 (c) 10.80% 108.0 California Case No. A.16-07-002 7/1/2016 34.6 (d) NA 493.9 $110.4 $2,345.7

• B. Infrastructure Charges Filed

WV (IRP) 16-0550-W-P 4/29/2016 $2.6 $18.4 $2.6 $18.4 Total Awaiting Final Order $113.0

Rates Effective since July 1, 2015

Total Effective $102.0

(c) Iowa rates were increased on an interim basis, under bond and subject to refund, effecitve 5/9/2016 in he amount of $2.1 million on an annual basis. (d) For this final application, Test Year 2018 revenue requirement request is $34.56MM. This excludes the step rate and attrition rate increase for 2019 and 2020 of $8.48MM and $7.74MM,

• respectively. The total revenue requirement request for the three year rate case cycle is $50.78

(b) The revenue amount requested includes $40.0 million for water and wastewater operations, these amounts exclude the $9.5 million in QIP revenue previously allowed for a total request of $49.5 (a) The rate base requested includes $6.7 million for Other Public Authority customers not regulated by the State Corporation Commission ("SCC"). Interim rates were effective on April 1, 2016, under bond and subject to refund,

NYSE: AWK www.amwater.com

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Cash Flow From Operations

($ in millions)

(1) Adjusted Return on Equity: Non-GAAP measure. See appendix for

reconciliation.

Continued Strong Financial Performance

Total Capital Investments

($ in millions)

Adjusted Return On Equity(1)

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$167 $236 $348 $316 $515 $552

$0 $100 $200 $300 $400 $500 $600 2015 2016 1Q 2Q

$198 $247 $220 $271 $418 $518

$0 $100 $200 $300 $400 $500 $600 2015 2016 1Q 2Q

Four Consecutive Double Digit Dividend Increases

*The dividend normally paid in 1Q 2013 was accelerated and paid in late December 2012, to allow shareholders to take advantage of 2012 dividend tax rates.

$0.25 $0.28 $0.31 $0.34 $0.375

$0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40

11% 12% 10% 10% 4Q 2012 *2Q 2013 - 1Q 2014 2Q 2014 - 1Q 2015 2Q 2015 - 1Q 2016 2Q 2016

8.98% 9.55% 8.00% 8.50% 9.00% 9.50% 10.00% 2015 2016

NYSE: AWK www.amwater.com

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Cents per share variation

• 2
• 3
• 3
• 7

+1 +1 +3 +7

• 8
• 6
• 4
• 2

2 4 6 8 Shale AWE Regulated Weather

Keystone

2016 Guidance: Major Variables

Affirming 2016 Earnings Guidance: $2.75 - $2.85

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Susan Story President and Chief Executive Officer

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Health Transformation Alliance (HTA): 33 Companies; $21 Billion Annual Spend Will Provide Better Health Care for Our Employees

• Ensure employee health care needs

are met more effectively and efficiently;

• Pool data (that doesn’t identify

individuals) for better treatments, better outcomes and more reasonable pricing;

• Provide better information that

explains health care choices in simple terms;

• Change costly and inefficient

pharmaceutical purchasing contracting systems that don’t deliver better results.

HTA Founders 2016

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Original Founding Companies

• American Express Company
• American Water
• BNSF Railway Company
• Brunswick Corporation
• Caterpillar Inc.
• E.I. du Pont de Nemours & Company
• HCA Inc.
• IBM Corporation
• Ingersoll Rand Company
• International Paper Company
• Lincoln Financial Group
• Macy's, Inc.
• Marriott International, Inc.
• NextEra Energy, Inc.
• Pitney Bowes Inc.
• Shell Oil Company
• The Coca-Cola Company
• The Hartford Financial Services Group, Inc.
• Verizon Communications, Inc.
• Weyerhaeuser Company

NYSE: AWK www.amwater.com

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Why American Water?

• EPS growth 7-10%, over next 5 years*
• Multi-decade investment needs
• Fragmented market
• Smooth regulated capital deployment
• Absence of federal economic regulation
• Geographic diversity
• Market-based complementary businesses
• Strong local presence and national scale
• Regulatory expertise
• Strong record of execution
• Broad and diversified experience
• Strong bench strength
• Dividend growth
• Strong credit ratings/access to capital
• Market cap >$14.5 billion
• Strong cash flows
• Added to S&P500 in 2016 and DJUA in 2015

Growth Risk Profile Financial Strength and Stability People & Business Model

 Top quartile  Clear line of sight  Water & wastewater

Top quartile

*Anchored from 2014, adjusted EPS. **Under normal operating conditions. 23  Committed and passionate employees  Personalized economies of scale  Seasoned state leaders  2010-2015 EPS CAGR of 12.6%  Multi-utility backgrounds  Robust succession Planning  Flexible and sustainable  Unlike electrics and gas  Most diverse utility  Regulated-like  Top quartile  Top quartile  Only water utility >$10 billion  No need to issue equity**  Only water utility on S&P500 and DJUA

Environmental & Technology Leadership

• Industry leading R&D function
• Innovation development process
• Dow Jones Sustainability Index
• Leader in intelligent water grid implementation
• Most water quality awards

 20 staff scientists, 20 ongoing projects  Engage all employees, 8 patents/patents pending  Only water utility on index  Enhanced infrastructure, sensors and meters  Over 150 federal, state and industry awards

NYSE: AWK www.amwater.com

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Investor Relations

Greg Panagos

Vice President – Investor Relations Gregory.panagos@amwater.com Tel: 856-566-4005 Fax: 856-782-2782 Upcoming Events

• Nov. 3, 2016, 9 a.m. ET, Q3 2016 Earnings Call

Melissa Schwarzell

Director– Investor Relations Melissa.schwarzell@amwater.com

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Appendix

NYSE: AWK www.amwater.com

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2016 Second Quarter Revenue Breakdown

($ in millions)

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NYSE: AWK www.amwater.com

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2016 Second Quarter Operating Expense Breakdown

($ in millions)

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NYSE: AWK www.amwater.com

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Regulated Utilities: Rate Base & Authorized Return on Equity

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Authorized Rate Base* $439,448 $706,386 $841,915 (b) $384,729 $1,132,843 (b) Authorized ROE 9.99% (a) 9.34% 9.75% 9.70% 9.75% (g) Authorized Equity 53.00% (a) 48.10% 41.55% (c) 44.70% 50.04% (e) Effective Date of Rate Case 1/1/2015 (a) 10/1/2012 1/29/2015 10/25/2013 (d) No sooner than 6/25/16 Authorized Rate Base* $2,386,790 $128,882 (f) $2,425,711 (b) $119,254 (b) $529,212 Authorized ROE 9.75% 9.65% (f) 10.25% (g) 9.75% 9.75% Authorized Equity 52.00% 42.00% (f) 51.69% (e) 42.67% (e) 45.80% Effective Date of Rate Case 9/21/2015 4/1/2012 (f) 1/1/2014 12/12/2012 (h) 2/25/2016 *Rate Base stated in $000s Notes: a) CA received D.15-04-007 on April 9, 2015. The decision, addressing the revenue requirement, is retroactive to 1/1/2015. CA has a separate Cost of Capital case which sets the rate of return outside of a general rate proceeding and is still under the decision issued July 12, 2012. The next Cost of Capital application is scheduled to be filed March 31, 2016 with a projected effective date in 2017. b) The 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. c) Regulatory capital structure includes 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 d) Rates Under Bond were effective July 27, 2013 and received final Order October 25, 2013. 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) Information pertains only to the former company of Long Island American Water. g) The ROE listed 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. h) Rates Under Bond were effective July 12, 2012 and received final Order December 12, 2012.

Last Rate Case Awarded - Largest Regulated Subsidiaries

NYSE: AWK www.amwater.com

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Rates Effective since July 1, 2015

29 Date Effective Authorized July 1, 2015 - Dec. 31, 2015 Authorized

• Jan. 1, 2016 - Jun. 30,

2016

• A. Step Increases

California 1/1/2016-1/4/2016 $1.9 $1.9

• B. Infrastructure Charges

Pennsylvania (DSIC - W & WW) 7/1/2015 $4.6 Pennsylvania (DSIC - W & WW) 10/1/2015 7.8 New York (SIC) 12/1/2015 0.7 $13.1 Pennsylvania (DSIC - W & WW) 1/1/2016 $10.5 Illinois (QIP) 1/1/2016 1.0 NY (SIC) 3/15/2016 0.3 Tennessee 3/15/2016 2.2 Pennsylvania (DSIC - W) 4/1/2016 2.2 IN (DSIC) 5/4/2016 3.0 NJ (DSIC) 6/1/2016 9.0 PA (DSIC - W) 7/1/2016 5.8 Illinois QIP 7/20/2016 6.2 $40.2

• F. Rate Cases

Kentucky WW 7/2/2015 $0.2 (a) New Jersey 9/21/2015 22.0 $22.2 Indiana 1/29/2016 $1.6 West Virginia 2/25/2016 18.3 (b) Michigan 5/1/2016 0.2 (c) Missouri No sooner than 6/25 4.5 (d) $24.6 Total $35.3 $66.7 Grand Total $102.0

(a) The revenues granted in the amount of $186K are based on a four-year phase-in of equal percentage increases each year. (b) The revenues authorized includes $18.2 million for water operations and $151K for wastewater operations. (c) Michigan does not require a formal rate case proceeding as water is not regulated in Michigan. (d) An increase of $3.4 million for water customers is effective on 7/20/2016 and an increase of $1.1 million for wastewater customers is effective on 7/22/2016.

NYSE: AWK www.amwater.com

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Rate Base Calculation

Rate Base as of June 30, 2016(1)

($ in millions) Net Utility Plant $14,254 Less Advances for Construction 309 CIAC – Contributions in Aid of Construction 1,187 Net Deferred income taxes 2,430 Deferred investment tax credits 23 Sub Total $3,949 Rate Base TOTAL $10,305

(1) An approximation of rate base, which includes Net Utility Plant not yet included in rate base pending rate case filings/outcomes.

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Reconciliation Tables: Adjusted Return on Equity(1)

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(1) American Water’s allowed return on equity averages 9.9%

2015 2016 Net Income $449 $492 Adjustments: Loss from discontinued operations 5 Adjusted Net Income from Continuing Operations $454 $492 Stockholders' equity $5,053 $5,153 Adjustments: Loss from discontinued operations 5 Adjusted Stockholders' Equity $5,058 $5,153 Adjusted Return on Equity 8.98% 9.55% For the 12 Months Ended June 30

*Calculation assumes purchased water revenues approximate purchased water expenses.

Reconciliation Table: Regulated Segment O&M Efficiency Ratio

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Regulated Segment O&M Efficiency Ratio A Non-GAAP Financial Measure (Unaudited)

($ in millions)

2010 2011 2012 2013 2014 2015 6/30/2016 Total Operations and Maintenance Expense $1,272 $1,280 $1,330 $1,289 $1,350 $1,404 $1,443 Less: Operations and Maintenance Expense – Market Based Operations Operations and Maintenance Expense – Other (61) (69) (57) (57) (51) (49) (43) Total Regulated Operations and Maintenance Expense $1,095 $1,092 $1,131 $1,105 $1,112 $1,095 $1,089 Less: Allocation of non-O&M costs to Regulated O&M expense 29 31 35 35 39 35 32 Regulated Purchased Water Expense 100 99 110 111 122 117 116 Impact of West Virginia Freedom Industries Chemical Spill

• 10
• Estimated impact of weather (mid-point of range)
• 4

(2) (2)

• Adjusted Regulated Operations and Maintenance Expense (a)

$966 $962 $982 $961 $943 $943 $941 Total Operating Revenues $2,535 $2,642 $2,854 $2,879 $3,011 $3,159 $3,249 Less: Operating Revenues – Market Based Operations 275 303 307 303 355 434 476 Operating Revenues – Other (25) (30) (18) (18) (18) (18) (18) Total Regulated Operating Revenues $2,286 $2,369 $2,565 $2,594 $2,674 $2,743 $2,791 Less: Regulated Purchased Water expense* 100 99 110 111 122 117 116 Plus: Impact of West Virginia Freedom Industries Chemical Spill

• 1
• Estimated impact of weather (mid-point of range)
• (43)

15 17

• Adjusted Regulated operating revenues (b)

$2,186 $2,270 $2,412 $2,498 $2,570 $2,626 $2,675 Regulated O&M Efficiency Ratio (a)/(b) 44.2% 42.4% 40.7% 38.5% 36.7% 35.9% 35.2% 12 Months Ended 237 257 256 241 289 358 397 FY FY FY FY FY FY

NYSE: AWK www.amwater.com

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Adjusted Diluted EPS from Continuing Operations

Diluted Earnings Per Common Share 2010 2011 2012 2013 2014 2015 Net Income - GAAP $ 1.53 $ 1.75 $ 2.01 $ 2.06 $ 2.35 $2.64 Less: Income/(Loss) from discontinued

• perations

$ 0.07 $ 0.03 ($ 0.09) ($ 0.01) ($ 0.04) Income from continuing operations per diluted common share - GAAP $ 1.46 $ 1.72 $ 2.10 $ 2.07 $2.39 $2.64 Add: 2013 Debt Tender Offer $ 0.23 Freedom Industries Chemical Spill in West Virginia $ 0.06 Tax Impact ($0.09) ($0.02) Adjusted diluted EPS from Continuing Operations (Non-GAAP) $ 1.46 $ 1.72 $ 2.10 $ 2.21 $ 2.43 $2.64

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NYSE: AWK www.amwater.com

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2016 Closed and Pending Acquisitions

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Closed Acquisitions State

• No. of

Acquisitions Water Customers Wastewater Customers Total Customers California 1 175 175 Iowa 1 730 730 Illinois 3 319 340 659 Missouri 3 234 350 584 New Jersey 1 5,315 5,315 New York 1 93 93 Total 10 1,551 6,005 7,556 Pending Acquisitions State

• No. of

Acquisitions Water Customers Wastewater Customers Total Customers California 3 2,063 2,063 Kentucky 1 107 107 New Jersey 1 11,000 11,000 New York 5 360 360 Pennsylvania 2 34,100 34,100 West Virginia 1 215 215 Total 13 13,638 34,207 47,845