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The board of directors of American Water (NYSE:AWK) has adopted a policy to distribute to its stockholders a portion of the net cash provided by its operating activities as regular quarterly dividends, rather than retaining that cash for other purposes.
The company’s cash dividend policy reflects its basic judgment that it is in the best interest of its stockholders to distribute to them a portion of the cash generated by American Water’s business. In order to fund construction expenditures, acquisitions (including tuck-in acquisitions) and principal and interest payments on the company’s indebtedness, and pay dividends at the level currently anticipated under this dividend policy, the company expects that it will need additional financing from external sources. In the company’s judgment, its dividend policy, which is consistent with utility industry practice, will enable American Water to attract financing required to fund capital expenditures and acquisitions.
For further information about American Water’s dividend policy, please see the company’s current filings with the U.S. Securities and Exchange Commission.
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