How American Water Grows Earnings

AMERICAN WATER Rate Base Calculation* ($ in millions) $10.0 $10.7 $11.7 Estimated Rate Base* $13.0 $12.5 As of 12/31/2015 As of 12/31/2016 As of 12/31/2017 As of 12/31/2018 As of 6/30/2019 *An approximation of rate base, which includes Net Utility Plant not yet included in rate base pending rate case filings/outcomes **Anchored off of 2017 rate base *** Includes the regulatory liability established to normalize the impact of tax rate changes under the Tax Cuts and Jobs Act As of 6/30/2019 Net Utility Plant $17.6 Less Advances for Construction $0.2 CIAC - Contributions in Aid of Construction $1.3 Net Deferred income taxes* *** $3.1 $4.6 Total Estimated Rate Base $13.0 ≈7-8%** Expected Rate base CAGR through 2023 37

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