2019 Investor Day

AMERICAN WATER American Water's Historical Adjustments to GAAP Recurring transactions typically included in our annual guidance, * some of which can result in quarterly variability: Acquisition related expenses Five Year History of Adjustments, where material, to GAAP results for reporting purposes: Gain on Sale of a Business Line or Segment * Compensation adjustments which are typically timing and driven by accounting standards * Impairments of a Business Line or Segment * Legal settlements and associated activities * Debt Extinguishments * Insurance expense variability primarily driven by claims activity * Land sales within the regulated footprint * Legal expense variability * Tax adjustments which are largely timing in nature, driven by accounting standards * Certain Regulatory outcomes that are not unusual or precedent setting * Material tax law changes Consolidated Adjusted EPS Diluted earnings per share (GAAP): Net income attributable to common shareholders Adjustments: Gain on sale of portion of Contract Services Group contracts Income tax impact Net adjustment Keystone Impairment Income tax impact Net loss attributable to noncontrolling interest Net adjustment Freedom Industries Settlement Activities Income tax impact Net adjustments For the Nine Months Ended September 30, For the Twelve Months Ended December 31, 2019 2018 2017 2016 2015 2014 2013 $2.89 $3.15 $2.38 $2.62 $2.64 $2.39 $2.07 (0.08) 0.02 (0.06) 0.31 (0.08) (0.01) 0.22 (0.02) (0.11) (0.12) 0.01 0.03 0.05 0.36 (0.14) 0.06 (0.02) (0.01) (0.08) (0.07) 0.22 0.04 Early Debt Extinguishment at Parent Income tax impact Net adjustments 0.03 (0.01) 0.02 0.19 (0.05) 0.14 Impact of re-measurement from the TCJA 0.07 0.70 Total net adjustments (0.01) 0.15 0.65 0.22 0.04 0.14 Adjusted diluted earnings per share (non-GAAP) $2.88 $3.30 $3.03 $2.84 $2.64 $2.43 $2.21 64

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