#1AMERICAN WATER AMERICAN WATER Investor Presentation June 2023 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 1 of 39#2Forward-Looking Statements AMERICAN WATER 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, 2023, as filed with the SEC on April 26, 2023. 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. 2 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 2 of 39#3Business Review AMERICAN WATER 3 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 3 of 39#4Pure-Play Regulated Water and Wastewater Utility Business Washington AMERICAN WATER NATIONAL FOOTPRINT Iowa Utah California Kansas Missouri 命 Hawaii Oklahoma * Texas New York AMERICAN WATER Regulated Customer Count* 4.9% 11.2% 22.5% Pennsylvania New Jersey 5.6% 3.4M Total Ohlo Illinois Indiana West Virginia Maryland Virginia Kentucky Tennessee 9.6% Alabama Georgia Regulated Water and Wastewater Operations Military Services Group 10.7% Florida Louislana Regulated Operations* ➤ 53,500 miles of pipe ➤ 570 water treatment plants ➤ 175 wastewater treatment plants ➤ 1,100 wells and 73 dams Military Services Group Regulated-like earnings ➤ Serves 18 military installations • • 12 Army 5 Air Force • 1 Navy Customer Connections 14.6% 20.9% ■ Pennsylvania New Jersey Missouri Illinois Indiana ■California ■West Virginia ■ Other *As of December 31, 2022 4 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 4 of 39#5Highly Fragmented Water/Wastewater Industry Creates Opportunity Water Utilities AMERICAN WATER Electric Utilities Natural Gas Utilities Industry Opportunity Water 16% Investor Owned 84% Public & Other Wastewater 2% Investor Owned 98% Public & Other Water Utilities Source: EPA SDWIS Federal Reports Search www3.epa.gov/enviro/facts/sdwis American Water Footprint Ideal for industry consolidation opportunities Target 5,000-50,000 customer connections per acquisition Wastewater focus (AWK customer connections mix- 92% water & 8% wastewater) Electric Utilities Source: Form EIA-861 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# 5 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 5 of 39#6Focused on Executing the Plan and Building on Our Strengths AMERICAN WATER > Safety Safety is both a strategy & core company value. Safety is More Than "the Right Thing to Do" Performance Going beyond the minimum requirement to solidify our position as a leader in O&M excellence. Excellence is Getting the Fundamentals Right People Inclusion & empowerment pave a path for employee & company success. Employees are the Heart of Our Business H Growth Growth enables investment in critical infrastructure and communities and leads to improved affordability. Industry Leaders in Customer Growth ESG ESG affirms the values we have upheld for decades. Leading by Example ESG™ at AWK 6 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 6 of 39#7Regulated Investments to Support System Needs Capital Plan ($ in billions) $2.9 $2.6 $0.3 $0.4 $1.9 $0.1 $14-$15 $1.5 - $2.0 AMERICAN WATER $30 - $34 $3 - $4 Regulated Acquisitions $27 - $30 $2.5 $2.3 $12.5 - $13.0 $1.8 2021 2022 2023E 2023 2027 2023 - 2032 Regulated System Investments 7 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 7 of 39#8Regulated Capital Expenditures by Purpose AMERICAN WATER 2023-2032 4-6% 5-7% 5-7% 3-5% 10-12% 68-70% Infrastructure Renewal Resiliency Water Quality Operational Efficiency, Technology & Innovation System Expansion Other 8 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 8 of 39#9Investments Drive Continued Rate Base Growth ($ in billions) 8-9% CAGR for Rate Base Estimated Rate Base* AMERICAN WATER As of 12/31/2022 $23.2 $17.8 Net Utility Plant $16.3 $15.0 Less $13.7 $12.5 Advances for Construction $0.3 $11.6 $10.7 - CIAC Contributions in Aid of Construction $1.5 Net Deferred Income Taxes $3.6 $5.4 Total Estimated Rate Base $17.8 2016 2017 2018 2019 2020 2021 2022 2032 Note: annual rate base totals include New York American Water through 2021. New York's 2021 rate base was $0.5 billion. * An approximation of rate base, which includes Net Utility Plant not yet included in rate base, pending rate case filings/outcomes. 9 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 9 of 39#10Timely Recovery of Capital and Operating Costs AMERICAN WATER 2 1 American Water's Jurisdictions As of 2010 As of 2022 11 11 10 10 5 5 7 1 6 9 Revenue Stabilization Infrastructure Mechanisms Expense Mechanisms Consolidated Tariffs Fair Market Forward Looking Value Test Year Capital Recovery (2023-2027 Plan) Infrastructure Surcharge Mechanisms =45% Forward Test Years ≈30% Traditional Recovery =25% 10 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 10 of 39#11Strategies for Growth thru Regulated Acquisitions AWK Growth Outlook 7-9% EPS CAGR Target (2023-2027 Plan) Regulated Acquisitions Military Services 0.2% Group 1.5-2.5% Regulated Investment CAPEX 5-7% AMERICAN WATER Regulated Acquisition Strategy Fundamentals Continued focus on acquisitions in the target range of 5,000 to 50,000 customers; larger acquisitions where appropriate Achieve (on avg.) 55,000 to 85,000 new customer connections annually; $300-400M/year avg. investment Leverage water footprint to acquire wastewater systems Leadership in legislative/regulatory policy to benefit customers and advance solutions to industry challenges Continue to build robust pipeline of opportunities ESG™ at AWK 11 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 11 of 39#12Continued Focus on Customer Affordability AMERICAN WATER 0.9% $ Avg. Monthly Residential Water Bill (AWK Customers) as % of Median Household Income* 0.8% 0.7% 0.6% 0.5% 0.4% 0.3% 0.2% 0.1% 2010 2012 2014 2016 2018 2020 2021 2022 Values around Affordability ➤ Focused on keeping customer bills affordable compared to income (wallet share) ➤Culture of continuous improvement, diligent cost management, and technology enhancements helps drive affordability Supportive of state legislation on consolidated tariffs that allows customers to benefit from efficiencies of scale Continue to promote low-income assistance programs and tariffs * 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. 12 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 12 of 39#13Revenue Growth and Customer Growth Help Drive Operating Cost Efficiency AMERICAN WATER 46.1% 41.0% 39.1% Regulated O&M Efficiency Ratio* 36.6% 35.6% 34.3% 34.1% 33.7% III ≤30.0%** 2010 2012 2014 2016 2018 2020 2021 2022 2027 Target • • Efficiency Drivers: Growing Revenues & Controlling Costs In early years (thru 2016), efficiency gains were steeper as culture of cost management formed Recently, more incremental efficiency gains driven by revenue growth, cost management and technology * Non-GAAP Measure - O&M Efficiency Ratio = Adjusted Regulated O&M Expenses (O&M Expenses is most comparable GAAP measure)/Adjusted Regulated Operating Revenues (Operating Revenues is most comparable GAAP measure). This calculation assumes purchased water revenues approximate purchased water expenses. ** A reconciliation to a most comparable forward-looking GAAP measure is not available without unreasonable effort 13 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 13 of 39#14Strong Balance Sheet and Credit Ratings AWK Long-Term Senior Unsecured Ratings S&P Global A (Stable Outlook) Moody's Baa1 (Stable Outlook) Ratings and Stable Outlook affirmed at S&P / Moody's (Feb. '23/Dec. '22) Low risk business profile Strong regulatory jurisdictions ✓ Supportive financial plans Consolidated Debt Maturity Profile as of December 31, 2022 (Rounded) ($ in millions) $700 $600 $475 $450 $275 2023 2024 2025 2026 2027 Total Debt to Total Capital March 31, 2023 54% Liquidity Profile ($ in millions, rounded) AMERICAN WATER Long-Term Target <60% Available Liquidity as of 12/31/22 $1,585 $85 Credit Facility Amended on 10/26/22 ✓ Increased Credit Facility capacity by $500 million to $2.75 billion from $2.25 billion Cash $1,500* Credit ✓ Extended maturity to October 2027 ✓ Increased capacity to support growing business and capital investment plan *Includes $1,425 available commercial paper, $75 available letters of credit 14 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 14 of 39#15Delivering Exceptional Value to Shareholders 82% 30% 47% AWK Significantly Outperforms on Total Shareholder Return 10% American Water Proxy Peer Group (AWK) 5-Year 3-Year AMERICAN WATER AWK's Strong and Consistent Dividend Growth* ($ rounded) 61% 57% $2.78 $2.57 $2.36 $2.15 $1.96 25% $1.78 22% Philadelphia S&P Utility Index 500 2018 2019 2020 2021 2022 2023E (UTY) Note: TSR as of 12/30/22. Source: FactSet. * Future dividends are subject to approval of the American Water Board of Directors 15 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 15 of 39#16American Water's High Growth Outlook and ESG Leadership Widely Recognized; Long Runway Ahead "Our investments in community systems that we acquire through our regulated business will drive significant ESG impacts for decades to come." Susan Hardwick, American Water President & CEO ESG™ at AWK AMERICAN WATER Military Services 0.2% Group Regulated 1.5-2.5% Acquisitions Regulated Investment 5-7% CAPEX Bloomberg Gender-Equality Index 2022 S&P Global Ratings ESG Evaluation Score of 87 (out of 100); Highest Score Given to a U.S. Utility and 3rd Highest Globally Included in the Bloomberg Gender Equality Index for the 5th Consecutive Year Named to Newsweek's Most Trustworthy Companies in 2022 American Water Ranked #19 on Barron's 100 Most Sustainable Companies 16 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 16 of 39#17Military Services Group Provides Strategic Value Currently Serving 18 Military Installations T AMERICAN WATER 70 Additional Installation Opportunities Military Services Group Regulated-like earnings Favorable ROI opportunity Capital light/cash flow positive Positive branding B 12 Army 5 Air Force 1 Navy 15 Army 23 Air Force 19 Navy Leverage core competencies Dual wins for AWK & U.S. ESG values i O Marine Corps 13 Marine Corps 17 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 17 of 39#18Strong and Sustainable Growth Outlook for Future Kil AMERICAN WATER Earnings Growth Affirmed Target Targeting 7-9% EPS growth in our 2023-2027 plan and beyond Dividend Growth ESG Leadership Affirmed Target Targeting 7-9% dividend growth* in our 2023-2027 plan and beyond Adds to TSR Exceptional 82% Total Shareholder Return over last 5 years* ** $ Affordability Adds to TSR <=1% Avg. Monthly Residential Water Bill as % of MHI*** Regulated Investment CAPEX Regulated Acquisitions Military Services 0.2% 0 Group 1.5-2.5% 5-7% ** Future dividends are subject to approval of the American Water Board of Directors. As of 12/30/22 end date. Source: FactSet. *** Estimated Median Household Income (MHI) 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. 18 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 18 of 39#19AMERICAN WATER First Quarter/YTD 2023 Results 19 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 19 of 39#20Successful First Quarter 2023 Results Earnings Per Share $0.91 $0.87 2022 ■Q1 2023 AMERICAN WATER Q1/YTD Highlights ✓ 2023 Q1 EPS of $0.91 driven by higher revenue on increased rate base Issued approximately $1.7 billion in common stock ✓ Invested well over $500 million of capital in infrastructure improvements in the quarter ✓ New rates effective in PA, IL, VA, and MO; IN case filed on 3/31/23; WV case filed on 5/1/23 ✓ Over $550M of acquisitions under agreement, including Towamencin, PA and Granite City, IL ✓ ESG leadership and transparency continues - 3rd annual ID&E Summary and ESG Data Summary published in April 20 20 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 20 of 39#21Details of First Quarter 2023 EPS $0.87 0.31 AMERICAN WATER (0.11) (0.06) (0.04) $0.91 (0.04) (0.02) Q1 2022 Revenue O&M Depreciation LT Financing* ST Debt Financing Other, net Q1 2023 ~75% of inflationary costs incl. in revenue from recent rate cases Investment Growth *Reflects $(0.02) per share of share count dilution. Also reflects impact of avoided interest from equity financing of $0.02 per share. 21 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 21 of 39#222023 EPS Guidance and Long-Term Targets Affirmed AWK EPS Growth Triangle 7-9% EPS CAGR Target Business Mix 100% Regulated and Regulated-Like Earnings Regulated Acquisitions Military Services 0.2% Group 1.5-2.5% AMERICAN WATER 2023 EPS Guidance ➤ Affirming 2023 EPS Guidance Range of $4.72 to $4.82 • Higher revenues from investments in rate base and acquisitions drive EPS growth Successful equity issuance in March Long-Term Financial Targets Attractive, Long-Term Sustainable Shareholder Returns Regulated Investment CAPEX • EPS Growth 7-9% • Dividend Growth 7-9% • 5-7% ESG Leadership Premium + . Customer Affordability + Rate Base Growth 8-9% Dividend Payout Ratio 55-60% ➤Debt to Capital <60% 22 22 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 22 of 39#23Financing Recap - 2023 Equity Issuance Raised ~$1.7 Billion Proceeds from Common Stock Issuance Closing Date Securities Issued Size Public Offering Price File-to-Offer Discount Use of Proceeds March 3, 2023 Common Stock Total Debt to Total Capital 12,650,000 Shares $135.50/Share 3.5% Repaid outstanding commercial paper obligations and for general corporate purposes March 31, 2023 54% Executed our Plan to Issue in 2023 a Significant Portion of Expected $2B of Equity Need in Five-Year Plan (2023-2027) AMERICAN WATER Long-Term Target <60% 23 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 23 of 39#24Strong Outlook for Acquisitions in 2023 and Beyond Under Agreement As of March 31, 2023 48,200 Customer Connections 27 Acquisitions in 9 States, $481M PA MO IL NJ VA CA IA WV N N 2 2 IN 1 3333 6 4 Sign Purchase Agreement Towamencin Township, PA Wastewater Continues our Wastewater execution in Pennsylvania $104 million purchase price öööÅ 6,300 customer connections Signed March 23, 2023 AMERICAN WATER Closed As of March 31, 2023 1,400 Customer Connections 5 Acquisitions in 2 States, $3M + Expected close mid-year 2024, pending regulatory approval Granite City, IL Wastewater $83 million purchase price =26,000 customer connections Signed April 6, 2023 >$550M Now Under Agreement 1.3 million Customer Connections in Pipeline Receive Appraisals and Pursue Regulatory Approvals Close Transaction, with Customers Billed at their Historical or Modified Rates Regulated Acquisitions: Typical Fair Market Value Process Upon Next Rate Case, Move Customers onto Applicable AW Utility Rates 24 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 24 of 39#25Strong Cap Ex Growth to Start 2023 Drives Improved Water Quality, Reliability, and Earnings Growth AWK EPS Growth Triangle 7-9% EPS CAGR Target Business Mix 100% Regulated and Regulated-Like Earnings Regulated Acquisitions Military Services 0.2% Group 1.5-2.5% AMERICAN WATER Capital Investment $2.9B $0.4B Regulated Acquisitions $538M $437M $5M $3M $2.5B Regulated System Investments Regulated Investment CAPEX 5-7% $535M $432M Q1 2022 Q1 2023 2023E 25 25 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 25 of 39#26General Rate Case and Regulatory Updates AMERICAN WATER CALIFORNIA AMERICAN WATER INDIANA AMERICAN WATER WEST VIRGINIA AMERICAN WATER VIRGINIA AMERICAN WATER Rate Cases in Progress • Rate case filed 7/1/22 • Will establish rates for the period 2024-2026 Three-year capital investment of $462 million • Rates expected to be effective 1/1/24 • Rate case filed 3/31/23 . Capital Investment of $875 million Rates expected to go into effect over three steps in Jan. 2024, May 2024, and May 2025 Rate case filed 5/1/23 O Capital Investment of $340 million • Rates expected to go into effect 2/25/24 Completed Rate Cases in 2023 • General Rate Case • Additional authorized revenues of $11 million Effective 4/24/23 • General Rate Case Federal PFAS Update On March 14, 2023, the United States Environmental Protection Agency (EPA) announced the proposed National Primary Drinking Water Regulation for six per- and polyfluoroalkyl substances (PFAS). American Water submitted oral comments on May 4 and submitted written comments on May 24 to the EPA on its proposed PFAS regulation, as the EPA develops its final rule, expected by the end of 2023. American Water is currently part of Multi-District Litigation against multiple PFAS manufacturers because we firmly believe that the ultimate responsibility for the cleanup of these contaminants should fall to the polluters. American Water will advocate to ensure all water and wastewater utility providers, regardless of ownership, have equal access to any and all Federal and/or state funding related to treating PFAS. American Water believes an investment in excess of $1 billion of capital to install additional treatment facilities over a 3 to 5-year period could be possible in order to comply with the rule as proposed. Additionally, American Water also believes annual operating expenses related to testing and treatment could be near $50 million in today's dollars. These are preliminary estimates dependent upon multiple factors including the final rule and effective date, as well as the Company's system-by-system engineering analyses. MISSOURI AMERICAN WATER • Additional authorized revenues of $95 million, including $51M for infrastructure surcharges previously approved •Effective 5/28/23 Other Regulatory Updates In California, related to the Monterey Water Supply Project, the amended Pure Water Monterey Expansion water purchase agreement was signed by the parties following an Order issued by the CPUC. Cal Am will be allowed standard ratemaking treatment for the construction funding of the pumps and pipes that were built to support the expansion. In Indiana, Senate Bill 180 passed allowing for consolidated rates in wastewater systems via Indiana's Service Enhancement Improvement recovery mechanism. 26 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 26 of 39#27Rate Filings Summary ($ in millions) Rate Filings Completed* Effective since January 1, 2023 $66 $339 $273 Requested Revenue in Pending Base Rate Proceedings AMERICAN WATER $125 $5 $130 Rate Cases (Includes Step Increases) Infrastructure Charges Total Rate Cases ** Infrastructure Charges Total *Annualized revenue increase for rates effective since January 1, 2023 **Excludes revenue already approved through infrastructure mechanisms 22 27 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 27 of 39#28Appendix AMERICAN WATER 28 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 28 of 39#29Forward-Looking Statements AMERICAN WATER Certain statements made, referred to or relied upon in this presentation including, without limitation, with respect to 2023 earnings guidance, the Company's long-term financial, growth and dividend targets, future capital needs and the timing and amount of the Company's future public equity issuances, the ability to achieve the Company's strategies and goals, including with respect to its ESG focus, the outcome of the Company's pending acquisition activity, the amount and allocation of projected capital expenditures; and estimated revenues from rate cases and other government agency authorizations, are 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. In some cases, these forward-looking statements can be identified by words with prospective meanings such as "intend," "plan," "estimate," "believe," "anticipate," "expect," "predict," "project," "propose," "assume," "forecast," "outlook," "likely," "uncertain," "future," "pending," "goal," "objective," "potential," "continue," "seek to," "may," "can," "will," "should" and "could" and or the negative of such terms or other variations or similar expressions. 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 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 as a result of the factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, and subsequent filings with the SEC, and because of factors such as: the decisions of governmental and regulatory bodies, including decisions to raise or lower customer; the timeliness and outcome of regulatory commissions' and other authorities' actions concerning rates, capital structure, authorized return on equity, capital investment, system acquisitions and dispositions, taxes, permitting, water supply and management, and other decisions; changes in customer demand for, and patterns of use of, water and energy, such as may result from conservation efforts, or otherwise; a loss of one or more large industrial or commercial customers due to adverse economic conditions, or other factors; limitations on the availability of the Company's water supplies or sources of water, or restrictions on its use thereof, resulting from allocation rights, governmental or regulatory requirements and restrictions, drought, overuse or other factors; changes in laws, governmental regulations and policies, including with respect to the environment, health and safety, data and consumer privacy, security and protection, water quality and water quality accountability, contaminants of emerging concern, public utility and tax regulations and policies, and impacts resulting from U.S., state and local elections and changes in federal, state and local executive administrations; the Company's ability to collect, distribute, use, secure and store consumer data in compliance with current or future governmental laws, regulation and policies with respect to data and consumer privacy, security and protection; weather conditions and events, climate variability patterns, and natural disasters, including drought or abnormally high rainfall, prolonged and abnormal ice or freezing conditions, strong winds, coastal and intercoastal flooding, pandemics (including COVID-19) and epidemics, earthquakes, landslides, hurricanes, tornadoes, wildfires, electrical storms, sinkholes and solar flares; the outcome of litigation and similar governmental and regulatory proceedings, investigations or actions; the risks associated with the Company's aging infrastructure, and its ability to appropriately improve the resiliency of, or maintain and replace, current or future infrastructure and systems, including its technology and other assets, and manage the expansion of its businesses; exposure or infiltration of the Company's technology and critical infrastructure systems, including the disclosure of sensitive, personal or confidential information contained therein, through physical or cyber attacks or other means; the Company's ability to obtain permits and other approvals for projects and construction of various water and wastewater facilities; changes in the Company's capital requirements; the Company's ability to control operating expenses and to achieve operating efficiencies; the intentional or unintentional actions of a third party, including contamination of the Company's water supplies or the water provided to its customers; the Company's ability to obtain and have delivered adequate and cost-effective supplies of pipe, equipment (including personal protective equipment), chemicals, power and other 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 critical to or used in the Company's business operations; the Company's ability to successfully meet its operational growth projections, either individually or in the aggregate, and capitalize on growth opportunities, including, among other things, with respect to acquiring, closing and successfully integrating regulated operations, the Company's Military Services Group entering into new military installation contracts, price redeterminations and other agreements and contracts with the U.S. government, and realizing anticipated benefits and synergies from new acquisitions; risks and uncertainties following the completion of the sale of the Company's former Homeowner Services Group ("HOS"), including the Company's ability to receive contingent consideration provided for in the HOS sale as well as amounts due, payable and owing to the Company under the seller note when due and the ability of the Company to redeploy successfully and timely the net proceeds of this transaction into the Company's Regulated Businesses; risks and uncertainties associated with contracting with the U.S. government, including ongoing compliance with applicable government procurement and security regulations; cost overruns relating to improvements in or the expansion of the Company's operations; the Company's ability to successfully develop and implement new technologies and to protect related intellectual property; the Company's ability to maintain safe work sites; the Company's exposure to liabilities related to environmental laws and similar matters resulting from, among other things, water and wastewater service provided to cthe ability of energy providers, state governments and other third parties to achieve or fulfill their greenhouse gas emission reduction goals, including without limitation through stated renewable portfolio standards and carbon transition plans; changes in general economic, political, business and financial market conditions; access to sufficient debt and/or equity capital on satisfactory terms and when and as needed to support operations and capital expenditures; fluctuations in inflation or interest rates and the Company's ability to address or mitigate the impacts thereof; the ability to comply with affirmative or negative covenants in the current or future indebtedness of the Company or any of its subsidiaries, or the issuance of new or modified credit ratings or outlooks or other communications by credit rating agencies with respect to the Company or any of its subsidiaries (or any current or future indebtedness thereof), which could increase financing costs or funding requirements and affect the Company's or its subsidiaries' ability to issue, repay or redeem debt, pay dividends or make distributions; fluctuations in the value of, or assumptions and estimates related to, its benefit plan assets and liabilities, including with respect to its pension and other post-retirement benefit plans, that could increase expenses and plan funding requirements; changes in federal or state general, income and other tax laws, including (i) future significant tax legislation or regulations; and (ii) the availability of, or the Company's compliance with, the terms of applicable tax credits and tax abatement programs; migration of customers into or out of the Company's service territories and changes in water and energy consumption resulting therefrom; the use by municipalities of the power of eminent domain or other authority to condemn the systems of one or more of the Company's utility subsidiaries, or the assertion by private landowners of similar rights against such utility subsidiaries; any difficulty or inability to obtain insurance for the Company, its inability to obtain insurance at acceptable rates and on acceptable terms and conditions, or its inability to obtain reimbursement under existing or future insurance programs and coverages for any losses sustained; the incurrence of impairment charges, changes in fair value and other adjustments related to the Company's goodwill or the value of its other assets; labor actions, including work stoppages and strikes; the Company's ability to retain and attract highly qualified and skilled employees and/or diverse 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 speak only as of the date of this presentation. American Water does not have or undertake 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. 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 construed as exhaustive. 29 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 29 of 39#30Non-GAAP Financial Information AMERICAN WATER This presentation includes adjusted regulated O&M efficiency ratios, both historical and forward-looking, which exclude from their calculation (i) estimated purchased water and other revenues and purchased water expenses, (ii) the impact of the Freedom Industries chemical spill in 2014 and certain related settlement activities recognized in 2016 and 2018, (iii) the estimated impact in 2012 and 2014 of weather, (iv) as to operating revenues, the amortization of excess accumulated deferred income taxes, and (v) the allocable portion of non-O&M support services costs, mainly depreciation and general taxes. Also, an alternative presentation of these ratios has been provided for each of 2010, 2012, 2014 and 2016, which includes a pro forma adjustment for the impact of the Tax Cuts and Jobs Act of 2017, and includes for 2012, 2014 and 2016 the impact of our implementation of Accounting Standards Update 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit, on January 1, 2018. These items were excluded from the O&M efficiency ratio calculation as they are not reflective of management's ability to increase the efficiency of our regulated businesses. For that reason, these adjusted regulated O&M efficiency ratios constitute "non-GAAP financial measures" under SEC rules. We evaluate our operating performance using these ratios and believe that the presentation of them is useful to investors because the ratios directly measure improvement in the operating performance and efficiency of our regulated businesses. These ratios are derived from our consolidated financial information but are not presented in our consolidated financial statements prepared in accordance with GAAP. These non-GAAP financial measures supplement and should be read in conjunction with our GAAP disclosures and should be considered as an addition to, and not a substitute for, any GAAP measure. These ratios (i) are not accounting measures based on GAAP; (ii) are not based on a standard, objective industry definition or method of calculation; (iii) may not be comparable to other companies' operating measures; and (iv) should not be used in place of the GAAP information provided elsewhere in this presentation. Management is unable to present a reconciliation of adjustments to the components of the forward-looking adjusted regulated O&M efficiency ratio without unreasonable effort because management cannot reliably predict the nature, amount or probable significance of all the adjustments for future periods; however, these adjustments may, individually or in the aggregate, cause each of the non-GAAP financial measure components of the forward-looking ratios to differ significantly from the most directly comparable GAAP financial measure. Set forth in this appendix are tables that reconcile each of the components of our historical adjusted regulated O&M efficiency ratios to its most directly comparable GAAP financial measure. All references throughout this presentation to EPS or earnings per share refer to diluted EPS attributable to common shareholders. 30 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 30 of 39#31State Legislation & Regulation Enable Growth AMERICAN WATER Fair Market Value 11 Consolidated Tariffs 11 Forward Looking Test 9 Year Infrastructure Mechanisms 10 CA MO ΙΑ IL IN KY WV { ≤ N N N MD MD Z ₁ = = = ₤ WV MO > N B N Z CA J = HI ΙΑ TN IL WANN KY ΙΑ NJ PA IL PA IN TN VA KY VA IN MO WV Water Quality Accountability Legislation IN, MO, NJ 3 31 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 31 of 39#32Closed Acquisitions March 31, 2023 AMERICAN WATER STATE NUMBER OF SYSTEMS WATER CUSTOMER CONNECTIONS WASTEWATER CUSTOMER CONNECTIONS TOTAL CUSTOMER CONNECTIONS Missouri 4 Indiana 1 600 200 Total 5 800 600 1,200 200 600 1,400 22 32 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 32 of 39#33Acquisitions Under Agreement March 31, 2023 NUMBER STATE WATER CUSTOMER CONNECTIONS OF SYSTEMS AMERICAN WATER WASTEWATER CUSTOMER CONNECTIONS TOTAL CUSTOMER CONNECTIONS Pennsylvania 6 100 27,900 28,000 Missouri 4 1,000 900 1,900 Illinois 3 1,500 1,200 2,700 New Jersey 3 1,600 5,200 6,800 Virginia 3 1,600 1,400 3,000 California 3 1,300 1,300 Iowa 2 100 100 200 West Virginia 2 3,700 500 Indiana 1 100 4,200 100 Total 27 27 10,900 37,300 48,200 33 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 33 of 39#34Rates Effective Since... ($ in millions) January 1, 2023 AMERICAN WATER Rate Cases & Step Increases Date Effective Annualized Revenue Increases Infrastructure Charges Date Effective Annualized Revenue Increases Illinois 1/1/2023 $67(a) West Virginia (DSIC) 1/1/2023 $7 Pennsylvania (DSIC) 1/1/2023 3 California, Step Increase 1/1/2023 13 Missouri (WSIRA) 1/16/2023 14 Pennsylvania 1/28/2023 138(b) Indiana (SEI) 3/8/2023 6(e) Indiana (DSIC) 3/23/2023 20 Virginia 4/24/2023 11(c) New Jersey (DSIC) 4/29/2023 16 Sub-Total $66 Missouri 5/28/2023 44(d) Total $339 Sub-Total $273 a) The Company's Illinois subsidiary was authorized additional annualized revenues of $67.1 million, excluding reductions in revenues for infrastructure surcharges in the amount of $18.3 million. b) The Company's Pennsylvania subsidiary was authorized additional annualized revenues of $138 million, excluding reductions in revenues for infrastructure surcharges in the amount of $24.3 million. c) On April 24, 2023, the Company's Virginia subsidiary was authorized additional annualized revenues of $10.75 million. Interim rates were effective May 1, 2022, and the difference between interim and final Commission approved rates are subject to refund with interest within 90-days of the date of the Order. d) The Company's Missouri subsidiary was authorized additional annualized revenues of $44.3 million, excluding reductions in revenues for infrastructure surcharges in the amount of $50.7 million. e) The Company's Indiana subsidiary was authorized additional annualized revenues of $5.5 million, 80% of which will be collected now, the remaining 20% will be collected in the next rate case, with carrying 34 costs. Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 34 of 39#35Pending Rate Case Filings AMERICAN WATER ($ in millions) Rate Cases Filed California (a) Indiana (b) Docket/Case Number Date Filed Requested Revenue Increase ROE Requested Rate Base Case No. A.22-07-001 7/1/2022 $37 NA $921 Cause No. 45870 3/31/2023 43 10.60% 1,614 West Virginia (c) Docket No. 23-0383-W-42T 5/1/2023 45 10.50% 995 Sub-Total $125 $3,530 Infrastructure Charges Filed Kentucky (QIP) New Jersey (WSIC) Case No. 2023-00030 3/1/2023 5/15/2023 $4 1 Sub-Total $5 Total $130 $30 6 $36 $3,566 a) The Company's California subsidiary has requested additional annualized revenues of $55.8 million for test year 2024. This excludes the proposed step rate and attrition rate increase for 2025 and 2026 of $19.5 million and $19.8 million. The total revenue requirement request, based on present rates effective at the time of filing, for the three year rate case cycle is $95.1 million. The Company updated its filing in January 2023 to incorporate a decoupling proposal, the revised requested additional annualized revenues for the test year 2024 is $36.5 million. This excludes the proposed step rate and attrition rate increase for 2025 and 2026 of $20.1 million and $19.8 million. The total revenue requirement request for the three year rate case cycle, incorporating updates to present rate revenues and forecasted demand, is $76.4 million. b) The Company's Indiana subsidiary has requested additional annualized revenues of $43.2 million for Step 1 proposed to effective Jan 2024, this excludes the $40.5 million for infrastructure surcharges. This excludes the proposed step 2 and 3 rate increase proposed to be effective in May 2024 and May 2025 in the amount of $18.1 million and $25.4 million, respectively. The total revenue requirement request, based on present rates effective at the time of filing, for the three step rate case cycle is $86.7 million. c) The Company's West Virginia subsidiary has requested additional annualized revenues of $44.9 million, this excludes the $6.9 million for infrastructure surcharges. 35 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 35 of 39#36Regulatory Information - Top 10 States CALIFORNIA ILLINOIS INDIANA KENTUCKY Authorized Rate Base* $667,632(g) $1,642,200 $1,182,170 ROE 9.20% (a) 9.78% 9.80% Equity 55.39% (a) 49.00% 53.41% (b) 48.90% Effective Date of Rate Case 1/1/2021(g) 1/1/2023 5/1/2020 6/28/2019 AMERICAN WATER MISSOURI $443,654 9.70% $2,318,849(c) 9.75% (d) 50.00%(e) 5/28/2023 NEW JERSEY PENNSYLVANIA TENNESSEE VIRGINIA WEST VIRGINIA Authorized Rate Base* $4,146,492 $5,141,180(c) $132,015 $275,038(c) $734,028 ROE 9.60% 10.00% (d) 10.00% 9.70% 9.80% Equity 54.56% 55.20%(e) 34.38% 40.73% 47.97% Effective Date of Rate Case 9/1/2022 1/28/2023 11/1/2012 4/24/2023(f) 2/25/2022 *Rate Base stated in $000s a) On March 22, 2018, Decision 18-03-035 set the authorized cost of capital for 2018 through 2020. A separate Cost of Capital case sets the rate of return outside of a general rate proceeding. d) 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. The ROE is the Company's view of the ROE allowed in the case; however, the ROE was not disclosed in the Order or the applicable settlement agreement. 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) e) f) 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. Interim rates were effective May 1, 2022 and received final Order April 24, 2023. 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. 36 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 36 of 39#37American Water's GHG Emissions Profile Water's G Providing Services to 14M People with a Light GHG Footprint AMERICAN WATER American Water Co. A Co. B • Scope 1: Direct Emissions Scope 2: Stationary Co. C . Fleet Vehicles 76,000 MT Co. D Refrigerants Co. E Indirect Emissions Purchased Power from Electric Providers 459,000 MT Co. F Co. G 2021 Scope 1 and 2 Subtotal First Time Disclosure 535,000 MT Co. H Co. I Co. J • Scope 3 (2021): Purchased Goods and Services Capital Goods Co. K Up and Down 506,000 MT 1 Value Chain Fuel & Energy-Related Activities Business Travel Co. L Co. M 11M 1 Represents initial estimate based upon work with third party consultant, including identification of significant scope 3 categories Co. N 7M Co. O 5M Co. P 5M 20% Category 1: Co. Q 4M Purchased goods and services Co. R 2M Scope 2 44% Scope 3 49% Category 2: Co. S 0.7M Capital goods AWK 0.5M 49% Category 3: 31% Fuel & energy-related activities Scope 1:7% 28M 26M 25M 36M Category 6: Business Travel (<1% of Scope 3) ■2021 Scope 1 and Scope 2 MT CO2e (Rounded) * Chart represents emissions for the top 20 U.S. utilities by market cap, sorted by emissions 83M 78M 57M 43M AWK emissions are only 0.1% of the total emissions generated by the top 20 utilities* ESG™ at AWK 37 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 37 of 39#38Science-Based Goals for Scope 1 and 2 GHG Emissions Reductions - Aligned with Paris Agreement • • AMERICAN WATER Medium-term: By 2035, reduce absolute Scope 1 and 2 emissions by 50% (2020 baseline¹) Long-term: Achieve Net Zero Scope 1 and 2 emissions by 2050 Medium- and long-term goals are science-based and aligned with the Paris Agreement Complements existing short-term target of reducing absolute Scope 1 and 2 emissions by 40% by 2025 (2007 baseline) Our focus: invest to improve sustainability while prioritizing customer affordability, resiliency & environmental justice American Water's Path to GHG Emissions Reduction in 2035 +6% Customer Growth 1 & Increased Energy Use ~$150M-$300M Total Capital Investment 10° (40-45%) Greening of Electric Grid 2 (5-7%) Renewable Energy (5-7%) Water Use & Efficiency (3-5%) Pumping & Operational (1-3%) Fleet & Building Efficiency Efficiency ■Scope 2 Emissions MT CO2e (Rounded) 854,000 Scope 1 Emissions MT CO2e (Rounded) 545,000 790,000 481,000 273,000 64.000 2007 64.000 2020 2035 Target 2050 Target 1 Includes organic growth; annual adjustments to baseline will occur to incorporate growth through acquisitions 2 Assumes States' renewable portfolio standards will be achieved and power providers will fulfill stated carbon transition plans 38 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 38 of 39#39Investor Relations Contacts Aaron Musgrave, CPA Vice President, Investor Relations [email protected] AMERICAN WATER Jack Quinn, CPA Senior Manager, Investor Relations [email protected] Janelle McNally Senior Manager, Investor Relations & ESG [email protected] Kelley Uyeda Analyst, Investor Relations & ESG [email protected] Upcoming Events Q2 2023 Earnings Call Q3 2023 Earnings Call July 27, 2023 (projected) November 2, 2023 (projected) 39 Case No. 2022-00432 Bluegrass Water's Response to PSC 3-25 Exhibit PSC 3-25(b) - Part 1 of 2 Page 39 of 39