NYSE: AWK

The Value of American Water in your

Portfolio

Ed Vallejo

Vice President Investor Relations

July 2014

NYSE: AWK www.amwater.com 2

July 2014

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this presentation are forward-looking statements within the meaning of the safe harbor provisions of

the Private Securities Litigation Reform Act of 1995. These forward-looking statements are predictions based on American

Water’s current expectations and assumptions regarding future events and may relate to, among other things, its future

financial performance, including earnings, growth and portfolio optimization strategies, its ability to finance current

operations and growth initiatives, trends in its industry, regulatory or legal developments, capital projects and rate

adjustments. Actual results could differ materially 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;

changes in laws, governmental regulations and policies, including environmental, health and water quality, and public

utility regulations and policies; weather conditions, patterns or events, including drought or abnormally high rainfall, strong

winds and coastal and intercoastal flooding; changes in customer demand for, and patterns of use of, water, such as may

result from conservation efforts; the company’s ability to effect significant changes to its business processes and

corresponding technology; its ability to appropriately maintain current infrastructure and manage the expansion of its

business; its ability to obtain permits and other approvals for projects; delays in project completion; changes in its capital

requirements; its ability to control operating expenses and to achieve efficiencies in its operations; 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 acquire and integrate water and wastewater systems that are complementary to its

operations and the growth of its business or dispose of assets or regulatory systems that the company determined should

no longer be part of its portfolio; cost overruns relating to improvements or the expansion of its operations; changes in

general economic, business and financial market conditions; access to sufficient capital on satisfactory terms; fluctuations

in interest rates; restrictive covenants in or changes to the credit ratings on the company’s 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 of benefit plan assets and liabilities that could increase its cost and funding requirements; migration of customers

into or out of its service territories; difficulty in obtaining insurance on acceptable terms and conditions; its ability to retain

and attract qualified employees; the incurrence of impairment charges; labor actions including work stoppages and strikes;

and civil disturbance, terrorist threats or acts, or public apprehension about future disturbances or terrorist threats or acts.

For further information regarding risks and uncertainties associated with American Water’s business, please refer to

American Water’s annual, quarterly and other SEC filings. The company undertakes no duty to update any forward-looking

statement.

NYSE: AWK www.amwater.com 3

July 2014

$14.4 Billion Total Enterprise Value

800,000 Average Trading Volume

$8.6 Billion Market Capitalization

$2.9 Billion in 2013 Revenues

89% Regulated, 11% Market Based

27% Total Shareholder Return for Last 12 Months

2.6% Current Dividend Yield

0.8 Beta

14 Million People Served

47,000 Miles of Pipeline

6,600 Employees

1,500 Communities

3.2 Million Regulated Customers

American Water: The Premier Water Services Provider

in North America

Market Statistics*

Assets

* Market data as of June 30, 2014, Source : FactSet

NYSE: AWK www.amwater.com 4

July 2014

We have delivered impressive total shareholder value

since 2008 IPO

Source: Factset, Bloomberg

Total Shareholder Return History: IPO – May 31,2014

Our Total Shareholder Return has outperformed

S&P500 and Utility Peers

As of May 31, 2014

One Year Three Year Five Year

American Water

Price Appreciation 21.4% 63.0% 181.3%

Including Dividend 24.7% 77.2% 229.6%

UTY Index

Price Appreciation 10.7% 21.1% 50.2%

Including Dividend 15.3% 37.4% 86.8%

S&P500

Price Appreciation 18.0% 44.5% 109.3%

Including Dividend 20.4% 54.2% 132.5%

A $100 dollar investment in American Water at

IPO would have increased approximately 3x

Total Shareholder Return

NYSE: AWK www.amwater.com 5

July 2014

Water Industry Basics: The US Water Industry is highly

fragmented and with limited Investor ownership

Percentage of Drinking Water Systems and

Population served by Size Class (1)

(Based on 51,988 total water systems in US)

(1) Source: EPA, Drinking and Ground Water Statistics, 2008.

System Size by Population Served

Water

Wastewater

The majority of water systems in the US are owned by capital constrained entities

NYSE: AWK www.amwater.com

July 2014

6

Investment in Water and Wastewater Industry is

urgently needed

Water: approximately one million miles of pipe in the U.S.

A major water main breaks every two minutes in the U.S.

Two trillion gallons of treated water lost every year at a cost of $2.6

billion

Wastewater: approximately 800 thousand miles of sewer mains

900 billion gallons of untreated sewage discharged each year

By 2020, 44% of U.S. pipe infrastructure to be classified as poor,

very poor, or life elapsed

NYSE: AWK www.amwater.com 7

July 2014

All Other

Iowa

New York

Virginia

Tennessee

Kentucky

West Virginia

California

Indiana

Illinois

Missouri

Pennsylvania

New Jersey

57,566195,824

361,864

369,892378,635

483,876549,892

644,865

1.2 million

1.2 million1.5 million

2.1 million

2.5 million

States Where We Operate(approximate population served by state )*

American Water: Our Regulated Business

* Population data for FY 2013

State

FY 2013

Revenues

($ mm)

% of

Total

New Jersey $638.0 24.6%

Pennsylvania 571.2 22.0%

Missouri 264.8 10.2%

Illinois 261.7 10.1%

California 209.5 8.1%

Indiana 199.2 7.7%

West Virginia 124.2 4.8%

Other 325.3 12.5%

Total Regulated Business $2,593.9 100%

NYSE: AWK www.amwater.com 8

July 2014

Our Market Based Business generate complementary

opportunities for growth

Regulated Like Except not as Capital Intensive

Lines of Business

• Homeowner Services (HOS)

• Contract Operations

• Military Services Group (MSG)

• Municipal/Industrial (CSG)

• Biosolids / Terratec

• Modest competition

• Strong/consistent margins

• Controllable risk

• Growing market

• Capitalizes on AW strengths

Note: MBB segment also includes two non-regulated contracts for NJ concessions which are not included in this presentation

NYSE: AWK www.amwater.com 9

July 2014

Regulated Investment – CapEx

(4-5%)

MBB

(<1%)

Our Long Term Plan is based on Regulated Growth

Opportunities while leveraging Market Based Businesses

Regulated Investment – CapEx (3-5%)

Regulated Acquisitions (1-2%)

Long-term Plan 2015 - 2018

Other

Shale (0-2%)

Market Based (2-3%)

Note: * Net of Declining Usage

Regulated Growth: 4%-7%

Market Based Growth: 2%-5%

NYSE: AWK www.amwater.com 10

July 2014

Transparent Dividend Practice

* Source: Thomson Reuters, Time Period: 2009 – 2013 Dividend Paid CAGR

Peer companies include: AWR, WTR, CWT, ATO, GAS, WGL, GXP, WR, OGE, AEE, POR, LNT, EDE, SCG, POM, HE, IDA, TE, CMS, UNS, PNM.

2008 2009 2010 2011 2012 2013 2014

$0.20 $0.21

$0.22

$0.23 $0.25

$0.28

$0.31

April 2014, increased 2014 quarterly cash

dividend to shareholders by 11% to $0.31

CAGR 8%

Top quartile Dividend CAGR Growth compared to water and utilities peers*

Dividend Practice

• Future dividend

increases aligned with

normalized EPS

growth

• Payout ratio between

50-60 percent of net

income

NYSE: AWK www.amwater.com 11

July 2014

American Water’s Investor Relations effort goes Digital –

download the AW App for your Apple or Android devices

• Search for “AWK IR” to download App

• All American Water

information in one place

NYSE: AWK www.amwater.com 12

July 2014

Why American Water is the right investment for you

Our Mission: Safe, Clean, Affordable and Reliable Water

Services to Highly Satisfied Customers

• Innovation Development Process: NPXpress Patent

• Operations in over 40 states, Regulated Presence in 16 states

• 5 Year EPS CAGR (2009 – 2013) approximately 16%

• 20x better industry avg (drinking water quality)

• 150x better industry avg (drinking water reporting & monitoring)

• Dividend growth correlated w/ EPS growth & Payout of 50%-60%

• Free cash flow positive by 2017

• Regulated like & Asset light • Homeowner Services, Military, Municipal & Biosolids

• Operational Efficiency 35% by 2018 • 5 Year Capex $5.8 Bn (Reg. $5.5 Bn), avg 2% annual bill increase

Market Based Businesses Build Adjacencies & Provide

Growth Opportunities

Commitment to Environmental Stewardship

Industry Leading 7-10% Long Term EPS Growth

Transparent Dividend Practice & No Planned Equity Offerings

Commitment To Innovation

Operational Excellence Maximizes Investments &

Minimizes Bill Increases

NYSE: AWK www.amwater.com 13

July 2014

Investor Relations Contacts:

Ed Vallejo

Vice President – Investor Relations

Edward.vallejo@amwater.com

Durgesh Chopra

Director – Investor Relations

Durgesh.chopra@amwater.com

Tel: 856-566-4005

Fax: 856-782-2782