美国水业2026年第三季度业绩电话会摘要

核心要点

• 美国水业公司（NYSE: AWK）公布2026年第三季度调整后每股收益为2.00美元，高于2025年第三季度的1.89美元。前九个月调整后每股收益达到4.63美元，而上年同期为4.40美元。
• 管理层将2026年调整后每股收益指引收窄至6.07美元至6.12美元，处于公司最初指引区间的上半部分。
• 公司首次发布2027年独立调整后每股收益指引，为6.53美元至6.63美元，反映出管理层对相比2026年增长约8%的预期。
• 2026年前九个月，公司在资本项目和收购方面投资了28亿美元，并在10个州新增了约81,000个客户连接。
• 美国水业预计2027年将投资41亿美元（含收购）。其独立的资本计划目前预计截至2030年投资超过200亿美元，且截至2035年投资超过480亿美元。
• 管理层继续预计与Essential Utilities的拟议合并将在2027年第一季度末前完成，前提是获得剩余的批准。合并后公司的指引将在交易完成后发布。

核心财务数据

业务与经营业绩

本季度，美国水业各州管辖区域内获批的新费率推动了营收增长。运营和维护成本同比小幅增加，管理层表示这反映了在满足运营和客户需求的同时，公司保持了持续的成本控制。

在新泽西州，公司获得了6800万美元供水及污水处理年化收入增加的批准。裁决批准了9.5%的股本回报率和54%的股本占比，新费率于9月15日生效。

在伊利诺伊州，一名行政法法官建议批准9.67%的股本回报率、50%的股本结构占比以及6700万美元的增量收入，而美国水业更新后的申请额为1.04亿美元。预计将于12月18日前做出最终裁决，新费率预定于2027年1月1日生效。

截至9月，收购置业在10个州新增了约81,000个客户连接，超过了公司2%的客户增长目标。截至9月30日，美国水业在5个州还有约36,000个已签约连接，对应1.82亿美元的交易额。

公司完成了对密苏里州尼奥肖供水和污水处理系统的收购交割，各为每项服务新增5,900个连接。管理层计划在这些系统上五年内投资3500万美元。

管理层指引

美国水业预计2027年独立调整后每股收益为6.53美元至6.63美元。管理层指出，受监管资本投资的回报、近期完成的收购以及严格控制运营成本是主要盈利驱动因素。

预计2027年运维成本（O&M）变动的大约一半与通过收购增加的客户有关，包括2026年6月收购的Nexus Water Group系统。随着资本投资的持续进行，折旧、长期融资成本和一般税费预计将有所上升。

公司重申了其独立的长期目标，即每股收益和每股股息实现7%-9%的年增长。管理层表示，无论是否保留Peoples，预计均能维持7%-9%的长期每股收益增长。

2027年计划投资额为41亿美元，包括收购和更高的PFAS相关支出。2026-2035年计划增加了更换老化地下管道的投资，而PFAS以及铅铜合规支出仍保持在此前沟通的水平。

目前的独立融资计划包括2027年发行20亿至30亿美元的长期债务以及2029年寻求15亿美元的外部股权融资。

风险与关注要点

• 与Essential Utilities的合并仍需获得未完成的州级批准，但管理层继续以在2027年第一季度末前完成交割为目标。
• 2027年独立指引并不代表合并后的公司。合并后指引的时间和范围将取决于交割日期以及对Peoples业务的处理方式。
• 加州海水淡化项目的预估成本现为8.25亿美元外加建设期资金利息（AFUDC）。该申请仍有待公众评议以及监管审查和批准。
• 宾夕法尼亚州扩大的长期基础设施改进计划需要获得监管委员会的批准。管理层预计将在2027年底前做出决定。
• 在平衡基础设施需求与资本投资的时机和规模时，客户的承受能力仍是一个关键约束因素。

分析师问答集锦

管理层表示，合并后公司的2027年指引将在与Essential Utilities合并交割完成，且公司评估了Peoples的相关报告期之后提供。

关于Peoples，管理层表示将在交割后审查所有战略替代方案，包括可能保留该业务。无论是否保留Peoples，美国水业的目标都是维持7%-9%的长期每股收益增长。

谈及2027年营收的可预见性，管理层表示，预计增长的大部分已经获得了费率裁决结果的支持，特别是在宾夕法尼亚州和新泽西州（两者合计占业务的40%-45%左右）。伊利诺伊州和肯塔基州的费率决定将提供额外贡献。

管理层表示，其再融资假设既没有对利率下降过于激进，也没有对利率上升过于保守。管理层还指出，提高后的资本计划并不意味着对监管滞后产生了新的担忧。

业绩电话会完整文本

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完整财报电话会议逐字稿

管理层陈述

Operator

Good morning, and welcome to American Water's Third Quarter 2026 Earnings Conference Call. As a reminder, this call is being recorded and is also being webcast with an accompanying slide presentation through the company's Investor Relations website. The audio webcast archive will be available for 1 year on American Water's Investor Relations website.

I would now like to introduce your host for today's call, Aaron Musgrave, Vice President of Investor Relations. Mr. Musgrave, you may begin.

Aaron Musgrave

Good morning, everyone, and thank you for joining us for today's call. At the end of our prepared remarks, we will open the call for your questions.

Let me first go over some safe harbor language. Today, we'll be making forward-looking statements that represent our expectations regarding our future performance or other future events. These statements are predictions based on our current expectations, estimates and assumptions. However, since these statements deal with future events, they are subject to numerous known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results indicated or implied by such statements.

Additional information regarding these risks, uncertainties and factors as well as a more detailed analysis of our financials and other important information is provided in the third quarter earnings release and Form 10-Q each filed yesterday with the SEC. This call will include a discussion of non-GAAP financial information. A reconciliation of our historical adjusted earnings per share to GAAP earnings per share and other disclosures related to our non-GAAP financial information can be found in the appendix of the slides for this call which are available on our Investor Relations website.

And finally, all statements during this presentation related to earnings and earnings per share refer to diluted adjusted earnings and earnings per share.

With that, I'll turn the call over to American Water's President and CEO, John Griffith.

John Griffith

Thanks, Aaron, and good morning, everyone. Turning to Slide 5. I wanted to start today by saying again how excited we are about our proposed merger with Essential Utilities, which we announced 1 year ago this week. We are combining 2 top-notch teams who share similar values and a deep commitment to our customers, shareholders and communities. I also continue to believe this combination creates a value proposition that is uniquely compelling in the utility sector. We expect to capitalize on the strategic rationale and financial benefits of the merger to drive growth and value creation, which ultimately will benefit all of our stakeholders. We greatly appreciate the support we've received over the last 12 months as we have moved through the approval process.

On that front, I'm pleased to share that we have continued to achieve great progress in the third quarter related to the merger. You may recall, as part of the update we provided with Q2 earnings, we achieved our first 3 state approvals during the first half of the year in Kentucky, Ohio and Virginia. Since midyear, we've also now reached constructive settlements in 3 states Pennsylvania, Texas and North Carolina. These are key milestones as they demonstrate a collaborative process in each state where many stakeholders have come together and supported the value our merger will bring to the communities we serve.

It's also worth noting that settlement discussions are ongoing in New Jersey, and we expect an order in Illinois soon following the ALJ's favorable recommendation in September.

Finally, the federal Hart-Scott-Rodino waiting period expired in mid-August, satisfying that closing condition of the merger. Given these positive developments, we continue to expect the merger to close by the end of the first quarter of 2027.

So with that update, and as we turn to Slide 6, the rest of our remarks today will pertain to our stand-alone results, plan and outlook. Today's financial plan update that we'll share is in largely the same format as usual for us with minor differences around the edges. While we realize the shelf life of this stand-alone content likely won't be long, we want to share this update to illustrate that our stand-alone business plan remains strong. And as I said earlier, represents a uniquely compelling investment thesis in the industry.

Moving to Slide 6. I'll start by covering some highlights of the third quarter and first 9 months of the year. As we announced yesterday, we delivered solid financial results in the third quarter that were in line with our expectations, adding to an already successful 2026. Adjusted earnings were $2 per share for the third quarter compared to $1.89 per share for the same period last year.

In the first 9 months of 2026, adjusted earnings were $4.63 per share compared to $4.40 per share in the same period of 2025. Our results reflect the strong execution of our plan in 2026, which David and Cheryl will discuss further in their remarks. With these results, combined with our outlook for the rest of the year, we now expect to achieve the top half of our initial EPS guidance range for 2026, which we've narrowed to $6.07 to $6.12 per share.

Moving on to some of our other key accomplishments so far in 2026, we've continued our track record of regulatory execution this year with new rates reflecting investments in infrastructure for the benefit of customers. We've also invested $2.8 billion in capital projects and acquisitions year-to-date, again, reflecting great work by our teams to complete work that will enable us to better serve our customers and to grow business.

As we've said, growing to scale in our states benefits our operating efficiency and long-term customer affordability. And as Cheryl will review, we continue to build momentum with our business development platform with nearly 81,000 customer connections added through September across 10 states.

Overall, we're well on our way to executing our capital plan for 2026 and have already achieved our target of 2% customer growth. These efforts aligned squarely with our mission to provide safe, clean, reliable and affordable service to our customers.

Slide 7 highlights that we are initiating our stand-alone adjusted earnings guidance for 2027 of $6.53 to $6.63 per share, reflecting 8% stand-alone EPS growth over 2026. David will cover guidance in further detail.

Turning to Slide 8, and as we update our existing 5-year plan today, we are again affirming our long-term targets, including 7% to 9% EPS and dividend per share growth. I want to emphasize that we expect to achieve consistent EPS growth through 2031 and beyond.

As a regulated water and wastewater utility, rate base growth, regulatory and capital execution, expense management and operational excellence are the key drivers of growth for our company. We also continue to value very highly our Military Services Group. The work that our MSG team performs to serve the military on our 19 installations is highly rewarding and continues to bring organic revenue growth opportunities. We and our MSG leadership team are looking forward to submitting a bid in the coming months to serve another U.S. Army base that is expected to seek utility privatization proposals.

The capital investment needs in our systems and for the broader water and wastewater industry are vast. Our commitment to solving problems for our current and future customers is unwavering including addressing PFAS, lead and copper and aging infrastructure, among other challenges. These catalysts are embedded in the foundation of our growth strategy and strongly position us to achieve consistent earnings growth for many years to come.

With that, I'll hand it over to David to cover our financial and regulatory update in further detail. David?

David Bowler

Thanks, John, and good morning, everyone. Starting on Slide 10, I'll provide some further insights into our financial results for the quarter.

Consolidated earnings were $2 per share compared to $1.89 per share in 2025 which is on track with our plans for the year. Revenues were higher due to new authorized rates to recover investment across our states while depreciation, financing cost and general taxes increased as expected. Importantly, as I mentioned last quarter, O&M costs have modestly increased period-over-period, highlighting our continued focus on cost control while supporting operational and customer needs.

Slide 11 shows our financial results for the year thus far. Consolidated earnings were $4.63 per share compared to $4.40 per share in 2025, which is also on track with our plans for the year. The various drivers here are similar to the quarterly drivers. Year-to-date results, coupled with additional revenue will earn in several states in Q4 gives us confidence we'll achieve our narrow guidance for the year.

Slide 12 covers the latest regulatory activity in our states. In New Jersey, we received a final order in the case that approved a $68 million annualized increase in water and wastewater revenues with an approved return on equity of 9.5% and an equity component of 54%. We believe this was a constructive outcome and new rates were implemented on September 15.

On active cases, you can see we have general rate cases in progress in 5 jurisdictions. To highlight a few of these cases, in Illinois, we received a proposed order from the Administrative Law Judge on October 23 recommending a 9.67% return on equity and a 50% equity layer. From a total equity return standpoint, the proposed level would be slightly favorable to our current authorized level, which is comprised of 9.84% ROE and a 49% equity layer. The proposed incremental revenue of $67 million compares to our updated request of $104 million. Final order in this case is expected no later than December 18 with new rates to be implemented January 1, 2027.

In Missouri, our case is progressing as expected, and the procedural schedule calls for testimony to be filed in November with rebuttal due in January. Outside of the general rate cases, I want to highlight 2 important regulatory matters not on this page.

First, in Pennsylvania. On September 1, we followed our third water long-term infrastructure improvement plan, covering proposed distribution, system improvement charge investments for the period of January 2027 through December 2031. This LTIP filing request, inclusion of additional categories of eligible property for recovery within the quarterly DSIC filings, which we believe is aligned with the recent comments from the commission. We expect a decision from the commission by the end of 2027.

Next, in California, we submitted an application to the commission last week related to the desalination facilities we are constructing to help serve our Monterey area customers. Our filing updated the project cost estimates, introduced a low-cost financing framework and outlined the rate-making proposal for the desalination facilities reflective of the lengthy approval and permitting process and legal challenges, plus escalation of labor, construction, material and financing costs. The application has updated the total cost estimate to $825 million plus AFUDC. This application remains subject to public comment and commission review and approval.

Slide 13 includes some considerations regarding our outlook for 2027 and our newly established stand-alone EPS guidance range of $6.53 to $6.63 per share. First, as you would expect, our growth will be driven by the returns on the capital invested to serve our customers. Recently completed regulated acquisitions that are being incorporated into active or just completed rate cases will also drive growth next year.

Critical to the growth strategy is our ability to prudently manage operating costs necessary to serve our customers. The focus on operating cost efficiencies goes to the heart of the customer affordability construct we want to protect, which is closely in line with the interest of regulators and ultimately investors. It's worth noting that approximately half of the O&M variance we expect in 2027 is for expenses to serve customers added through acquisitions, including Nexus, which we closed in June 2026. The remaining O&M expected variance is modest and in line with our strong cost management culture.

The increases in depreciation, long-term financing and general taxes are driven by our continued capital investments in our systems and the annual growth in these categories is consistent with many of our prior plans. As noted, the 2027 EPS guidance here is on a stand-alone basis, and we'll issue guidance on a combined company basis in the near term after closing the transaction.

Slide 14 provides a look at our balance sheet and liquidity profile. On September 14, we completed a long-term debt issuance of $500 million at 5.55% that attracted strong demand. Our debt-to-capital ratio as of September 30 was 58%, and we project that our debt-to-capital ratio at year-end will improve while we settle the remaining equity forward shares in the fourth quarter. And of course, due to the all-stock nature of the merger with Essential, we expect our debt-to-capital ratio to improve further once we complete the merger.

I want to echo John's comments from the top that we expect to capitalize on the combined company's size, scale and fundamentals which ultimately will benefit our customers, employees, investors and other stakeholders.

From this position of balance sheet strength, Slide 15 provides a review of our current stand-alone 5-year financing plan that will fund our capital plan. The amount of equity needs in our 5-year plan covering 2026 to 2030 remains unchanged with $1.5 billion anticipated in 2029. The level and timing of anticipated external equity is tied to our need to fund growth and maintain our strong financial position. Since we're already in alignment with our targets for debt-to-cap and dividend payout, and we will be even in a stronger position in 2027, we have the flexibility to adjust these plans and respond to market conditions as they change for the benefit of our customers and investors alike.

Finally, I'll note that our current financing plan for calendar year 2027 includes $2 billion to $3 billion of long-term debt financing.

With that, I'll turn it over to Cheryl to talk more about our capital program, affordability and recent acquisition activity.

Cheryl Norton

Thanks, David, and good morning, everyone. On Slide 17, I'll begin my remarks with a discussion of our long-term capital plan. Since the shelf life would be short for a new 10-year stand-alone capital investment plan, I'll focus today on the upward pressure we're seeing on infrastructure investment needs in our current 5- and 10-year plans. Then once we close the merger, we'll provide a combined company investment plan for 2027 through 2036.

So beginning with 2027, we expect our investment level to be $4.1 billion, inclusive of acquisitions. This includes an increase in investment in PFAS compared to 2026. From 2026 to 2035, we now expect to invest more than $20 billion through 2030 and more than $48 billion through 2035. As always, this level of investment reflects the result of our consistent risk-based project planning analyzed in conjunction with the key variable of customer affordability.

The increase in the current 5-year plan is a result of investment to address aging underground pipes. Accelerating the replacement of aging underground pipe is one of the crucial investments we will be making for decades to come to continue delivering safe and clean water and ensure reliability of service to our customers.

Meeting compliance requirements for EPAs PFAS and lead and copper rules remains embedded in our long-term capital plan at similar levels as we previously shared.

Slide 18 covers our approach to valuing the affordability of our services to customers. As I just mentioned, we remain very focused on balancing customer affordability and the magnitude of the necessary system investments in our plans. The state and national dialogue in the U.S. on utility bill affordability continues to be significant.

Fortunately, we've been focused on customer affordability for many, many years. So within the current national dialogue, we start from a place of strength relative to other utility bills. We believe the average residential water bill across our footprint will continue to be affordable for most of our customers for many years to come. We'll continue to focus on managing costs on behalf of our customers and proactively designing and seeking approval for customer assistance programs and tariffs. And we'll continue to advocate on behalf of customers when polluters create problems with cost of service, such as with the PFAS credits we've given this year.

Turning to Slide 19. We successfully invested in many needed capital projects across our footprint in the first 9 months of 2026. We've deployed $2.8 billion this year to renew our infrastructure, improve resiliency, address water quality challenges and remediate for PFAS and lead as well as add new systems. As we said before, we strategically choose to operate in a diverse set of regulatory environments that we believe have been and will remain supportive of water and wastewater utility investments and consolidation.

Concluding on Slide 20, we've had an excellent year of growth through acquisitions across 10 states as we've already surpassed our 2% customer additions growth with a quarter of the year to go. Along with the Nexus Water Group Systems, we closed on 8 other systems, which in total added approximately 81,000 customer connections across our footprint. Just last month, we were excited to close on the water and wastewater systems in Neosho, Missouri adding 5,900 connections each. That system needs critical capital investments, and we're planning on investing $35 million over the next 5 years to improve the quality of water and wastewater treatment for our customers there.

As of September 30, we had approximately 36,000 customer connections under agreement across 5 states totaling $182 million. We have line of sight on signing asset purchase agreements in many other communities, which gives us confidence in our acquisition strategy going into 2027.

With that, I'll turn it back over to our operator and begin Q&A and take any questions you might have.

Operator

[Operator Instructions]

Our first question today comes from Shar Pourreza from Wells Fargo.

分析师问答

Shahriar Pourreza

Just firstly, as you're going through sort of the critical paths of the merger, and obviously, congrats on sort of the achievement so far. I guess when can investors expect like kind of updated guidance on the merged company? Will you provide like a '27 consolidated guidance figure on the first quarter call after the close? Or do we need to wait until now come with Peoples Gas?

David Bowler

Shar, this is David. It will be after we close, sometime after we close depending on when that is in the first quarter. We'll need some time to understand at least for '27. A big chunk of the earnings and Peoples is in the first quarter. So we'll provide guidance once we sort through the time period pretty close for Peoples and then after close.

Shahriar Pourreza

Okay. Perfect. And then just, I guess, maybe just what's the status on Peoples? I mean, is there sort of any chance you kind of retain that asset, just given the size of the transaction? And then just any sense on time line there would be great. It's been kind of quiet.

John Griffith

Shar, it's John here. So as we've said all along on Peoples, we'll review strategic alternatives after we close the merger. Peoples is a terrific company with an excellent management team. We look forward to going through that.

Shahriar Pourreza

Got it. So just to clarify, there is a chance or retaining the asset could also be part of the review, correct or not?

John Griffith

Yes. I'd say as a matter of strategic review, we can think of everything as being on the table.

Operator

Our next question comes from Nicholas Campanella from Barclays.

Nicholas Campanella

I appreciate all the updates. Good progress on the merger. Maybe as we just kind of get ready for '27, just there's been a few dynamics that have played out this year. WTRG, did skip, I think, their water filing. How does that kind of impact the accretion outlined on the original merger? And do you kind of see that as absorbable as you line up the plan in '27 for the 7% to 9%?

David Bowler

Nick, this is Dave. As I just said, we'll come out and update guidance for '27 once we get the merger closed and provide you an update at that point.

Nicholas Campanella

Okay. And then maybe just if I was thinking about the base plan. Is the interest rate impact on the $1.4 billion debt coming due in '29 kind of assumed at current rates today in the 7% to 9% that you put out there? And then typically, I think you would kind of roll out to 2031, but understand that the merger is still pending. What would equity needs look like for the base business at AWK on a more kind of formal roll forward?

David Bowler

Yes. I'll say, from an interest rate perspective, we are not overly aggressive on rates going down and not overly conservative on rates going up. So I'd say, right down the middle of the fairway on our refinances. And then from a long-term perspective, we just affirmed 7% to 9% on a stand-alone basis. So we didn't roll forward 2031 given that we're about to close the merger, and we'll provide a full update at that point.

Operator

Our next question comes from Paul Zimbardo from Jefferies.

Paul Zimbardo

I'll try maybe a slightly different way. In terms of the long-term EPS guidance, should we think about that 2027 stand-alone as the baseline for that? Or will it be the new pro forma 2027 guidance that you'll be giving later?

David Bowler

Yes, I think the way we -- Paul, the way we've positioned this and said it before that you can think about 7% to 9% for us in the long term, any way you slice it. So we're not establishing a new baseline year for '27. Just we've consistently been at 8% or above the last few years and you think about 7% to 9% over the long term for us.

Paul Zimbardo

Okay. Understood. And then I know you mentioned I saw the filing too. If you could help unpack a little bit that California desalination project a little bit more. Is the $825 million in the updated forecast and just overall, how to think about that project and the scope of the overall plan?

David Bowler

Yes. We've got the project in our forecast. You can think about the full cost in our 5- and 10-year forecast period. So...

Operator

Our next question comes from Anthony Crowdell from Mizuho.

Anthony Crowdell

Just 2 quick ones. On Slide 13, you gave the walk through the 2027, the revenue component of $1.70 to $1.80. Just how much of that is already locked in from rate decisions? And how much are you still waiting for that decisions? How much is that still up in the air? And I have one follow-up.

David Bowler

I'd say the vast majority of it is locked in when you think about the timing of the PA and New Jersey cases this year coming in the fourth -- late in the third quarter. We've got new rates that we're expecting in Illinois. We just got the proposed decision there. Obviously, we need the final order there. We've got a Kentucky case. We'll have new rates going into '27. But with New Jersey and Pennsylvania representing 40% to 45% of the business, a fair amount of it is locked in.

Anthony Crowdell

Great. And then I think I'm going to jump on the same question thread as the earlier questions. Just once the merger approvals go through, do you wait until an earnings call when you give us the revised update or just is it just a method? Is it an 8-K after the approval that we get the new guidance?

David Bowler

Yes. It will depend on when we get the approval and final approval. So I'll leave it at that. We'll come back to you as soon as we get the approval.

Operator

Our next question comes from Gregg Orrill from UBS.

Gregg Orrill

Yes. So the capital plan to 2030 is now $20 billion plus. And on the Slide 17, you talked about some of the factors there, including sort of energy and chemicals, et cetera. Are you communicating something new there? Or -- and do you see a regulatory implication for that, like a regulatory lag issue that you're highlighting as a risk?

David Bowler

No. Gregg, we're not seeing any regulatory lag issues that we're highlighting as a risk here. As we updated our plan here internally. It's on the, I'd say, north side of the $19 billion to $20 billion, which is why we went to $20 billion plus. And we just did not roll forward the full plan, but we wanted to just indicate that it was in the $20 billion range and not the $19 billion to $20 billion range.

Operator

[Operator Instructions] Our next question comes from Richard Sunderland from Truist.

Richard Sunderland

I'll ask another question on the sort of guidance and outlook post close. Understanding gas is under a strategic review after you acquire Essential, how are you thinking about incorporating gas or not incorporated gas into that long-term view, just any flavor for kind of a with gas plan or without gas plan or offering both? Any guidance there would be helpful.

John Griffith

Rich, it's John here. I think as we said a year ago when we signed the merger and we retained the view today that we anticipate maintaining our long-term EPS growth at 7% to 9% with or without Peoples. So that remains the case today.

Richard Sunderland

Understood. And then turning to this Pennsylvania LTIP filing, could you speak a little bit more to kind of a process and evaluation between now and I think I heard by year-end '27 decision, is this essentially kind of you need that permission to opine by in order? Or are there other paths maybe including settlement to resolve the expanded capital eligibility element of that in particular?

David Bowler

Yes. This is David. Yes, the filing did go through the typical process for the LTIP review, which occurs every 5 years. The commission will have to make a ruling on that filing. And as this plays out, it may look a little different, may feel a little different because of the expansion. Normally, we'd see the approval, I think on a faster time line. We just said by the end of '27 allowing for a little bit longer of a time line for this review to see where we end up.

Operator

And as there are no further questions at this time, this will conclude our question-and-answer session. We thank you for attending today's conference call. You may now disconnect your lines.