1) Financial Performance & Earnings Growth
- Adjusted earnings for Q2 2026 were $1.61 per share, up from $1.49 in Q2 2025, representing over 8% growth.
- Year-to-date adjusted earnings reached $2.62 per share, compared to $2.51 in the same period last year.
- The company affirmed its full-year adjusted EPS guidance range of $6.02 to $6.12, projecting continued 8% growth for 2026.

2) Regulatory Strategy & Rate Cases
- American Water has successfully completed three rate cases in West Virginia, Maryland, and Pennsylvania, recovering nearly 100% of capital investments.
- In Pennsylvania, a recent order approved a $75 million annualized revenue increase, lower than the requested $160 million.
- The company is actively pursuing general rate cases in six jurisdictions, with ongoing discussions in New Jersey and Illinois.

3) Capital Investments & Acquisitions
- Year-to-date capital investments totaled $1.8 billion, focusing on infrastructure renewal and customer service improvements.
- The acquisition of systems from Nexus Water Group was completed ahead of schedule, adding 47,000 new customer connections.
- Approximately 57,000 customer connections are under agreement across six states, totaling $236 million in potential revenue.

4) Merger Progress & Integration
- The proposed merger with Essential Utilities has received approvals from Kentucky, Ohio, and Virginia, with positive public support noted.
- The merger is expected to close by the end of Q1 2027, with ongoing integration planning between the two companies.
- The merger aims to demonstrate substantial public benefit, which is a key requirement for approval in Pennsylvania.

5) Challenges & Future Outlook
- The company faces regulatory challenges in Pennsylvania regarding rate case frequency and affordability discussions.
- There is potential for legislative changes to expand the DSIC mechanism, which currently allows for recovery of about 40% of capital expenditures.
- The earnings call did not provide specific details on the impact of the Missouri rate case or the potential benefits of the new forecast year legislation.

Bottom line: American Water is on track for solid earnings growth in 2026, supported by strategic regulatory maneuvers and significant capital investments. The merger with Essential Utilities is progressing well, promising further operational efficiencies and customer benefits, although regulatory challenges remain a focus.