American Water Works' Strategic Initiatives and Community Engagement

Strategic Growth Plans and Objectives

American Water Works aims to lead in dividend growth through successful strategic initiatives, consistent execution of annual and long-term plans, and substantial capital investments. These efforts are designed to ensure steady earnings growth and shareholder value, with a focus on recoverable investments and modest bill increases.

""American Water continues to be an industry leader in dividend growth, which is a result of our successful execution of key strategic initiatives," said M. Susan Hardwick, President and Chief Executive Officer, American Water." --- (AWK, press release, 2024/05/01)

"And while we do this, we make sure we execute on our growth strategy and deliver shareholder value, including paying a dividend, which we have faithfully done for 80 straight years and we have raised that dividend for 56 consecutive years." --- (SJW, earning call, 2024/Q2)

"As we've done in the past, we expect to consistently deliver on our annual and long term plans, growing earnings and dividends at an industry leading pace over the next five years and beyond." --- (AWK, earning call, 2024/Q1)

"Any strategic combination or acquisition we decide to undertake may also impact our ability to finance our business, affect our compliance with regulatory requirements, and impose additional burdens on our operations." --- (SJW, sec filing, 2024/Q1)

"We expect at least 75% of capital investments over the next five years to be recoverable through infrastructure mechanisms and through the use of forward test years, which is the key to driving modest bill increases and to unlocking a more consistent annual earnings growth pattern for the long term." --- (AWK, earning call, 2024/Q1)

Sustainability and Environmental Initiatives

American Water Works promotes environmental sustainability through grants, community engagement, and high-impact projects. Their initiatives include education, watershed protection, and volunteerism, supported by a $1 million award for ESG projects. They emphasize sustainable operations while maintaining affordable customer bills and quality service.

""We are pleased to announce the recipients of this grant which allows organizations across the state to promote environmental sustainability through education, watershed protection and volunteerism," said Rich Svindland President of Missouri American Water." --- (AWK, press release, 2024/05/03)

"This Earth Day, join us and the Environmental Protection Agency (EPA) and treat every day like Earth Day by adopting the following tips: Join a community cleanup event Turn off the water to brush your teeth and shave Collect rainwater to use in your garden Use reusable drinking bottles Grow an organic garden Run full loads of laundry and dishes Missouri American Water is a proud community partner to organizations promoting environmental sustainability." --- (AWK, press release, 2024/04/22)

"The total award of $1 million will support high-impact projects and initiatives that further American Water's commitment to supporting ESG (environment, social and governance), as well as inclusion, diversity and equity." --- (AWK, press release, 2024/04/30)

"His experience and expertise span across various industries, from energy generation to waste management, underscoring his commitment to environmental protection and efficient operations." --- (AWK, press release, 2024/05/14)

"We did all of this while keeping customer bills affordable and staying true to our high value for quality service and sustainable operations, which we highlighted in our disclosures we published in early April as noted on this slide." --- (AWK, earning call, 2024/Q1)

Community Outreach and Support Programs

American Water Works' community outreach includes developing affordable housing, supporting community events, beautifying neighborhoods, and restoring historic sites. They fund workforce training, small business incubation, and housing repairs. Their mission involves strategic investments in community programs, personal outreach to address water quality concerns, and supporting first responders.

"Community projects will focus on developing and maintaining affordable homeownership housing for residents, supporting community engagement through events and initiatives, installing decorative board ups at abandoned properties to beautify North Camden, and restoring the 290-year-old historic Benjamin Cooper House and transforming it into a museum for community use." --- (AWK, press release, 2024/05/20)

""This grant supports a range of community programs and projects designed to address existing socioeconomic and housing challenges and create more opportunities for Salem residents through workforce training, a small business incubation program, and efforts to preserve and maintain the neighborhood's housing stock through proactive repairs." Since 2010, New Jersey American Water has provided approximately $12 million in grants to community initiatives in its service areas through the Neighborhood Revitalization Tax Credit program." --- (AWK, press release, 2024/05/20)

""Our mission extends to nurturing the very fabric of the communities we serve through strategic investments in programs, organizations, and initiatives that create tangible benefits for residents."" --- (AWK, press release, 2024/05/20)

"As part of this commitment, we attempted personal outreach to every customer who raised a water quality concern during the public hearings to better understand and resolve their issues." --- (AWK, press release, 2024/07/23)

""At American Water, we strive not only to provide our customers with safe, reliable water and wastewater services but also to support organizations and individuals – like our many dedicated first responders – working to make our communities better places to live, work and play," said Pennsylvania American Water President Justin Ladner." --- (AWK, press release, 2024/07/19)

Regulatory Compliance and Impact

American Water Works maintains compliance with all regulatory standards, actively replacing lead service lines at no cost to customers and promoting awareness. The company supports policies that protect communities from PFAS contamination, ensuring high operational standards to avoid fines and lawsuits, reflecting a strong commitment to regulatory compliance and community impact.

"Water quality remains compliant with all regulatory standards, and company continues to replace lead service lines at no direct cost to customers; New map to raise further awareness and encourage customers to report service line material to identify lead lines for replacement." --- (AWK, press release, 2024/04/29)

"I think the broader operating issue is for companies like Cal Water or for Essential or AQUA [ph] or SJW or Middlesex, any of us that are publicly traded companies, you fall out of compliance and the regulator finds the hell out of you, or you end up getting sued by somebody, right, so we generally operate to the highest standards possible would be associated with that." --- (CWT, earning call, 2024/Q1)

"Maine Regulatory Affairs The rates approved in the Biddeford Saco division by the April 5, 2022 stipulated agreement, which authorized a rate increase of $6,313, or 72.5% went into effect on July 1, 2022." --- (SJW, sec filing, 2024/Q1)

"At times, the Defense Contract Auditing Agency and/or the Defense Contract Management Agency may, at the request of a contracting officer, perform audits/reviews of contractors for compliance with certain government guidance and regulations, such as the Federal Acquisition Regulations and Defense Federal Acquisition Regulation Supplements." --- (AWR, sec filing, 2024/Q1)

"The Company supports sound policies and compliance with the NPDWR by all water utilities, while protecting customers and communities from the costly burden of monitoring and mitigating PFAS contamination in water systems." --- (AWK, sec filing, 2024/Q1)

Financial Performance and Future Outlook

American Water Works anticipates funding future debt maturities through a mix of external debt and operational cash flows, reflecting a strategic approach to financial stability. The company’s forward-looking statements and quarterly financial insights underscore a cautiously optimistic outlook for sustained performance.

"Let me first go over some safe harbor language. Today, we will be making forward-looking statements that represent our expectations regarding our future performance or other future events." --- (AWK, earning call, 2024/Q1)

"John Griffith: Thank you, Cheryl. And good morning, everyone. Turning to Slide 15, I'll provide some further insights into our financial results for the quarter." --- (AWK, earning call, 2024/Q1)

"The Company expects to fund future maturities of long-term debt through a combination of external debt and, to the extent available, cash flows from operations." --- (AWK, sec filing, 2024/Q1)