H2O America

Good day and thank you for standing by. Welcome to the H2O America's fourth quarter financial results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today, Jonathan Reeder, Senior Director of Treasury and Investor Relations. Please go ahead.

Thank you, Liz. Welcome to the 2025 Financial Results and Five-Year Plan Update Conference Call for H2O America. My name is Jonathan Reeder, and I am the Senior Director of Treasury and Investor Relations for H2O America. Presenting today will be Andrew Walters, Chair of the Board and Chief Executive Officer, Ann Kelly, Chief Financial Officer and Treasurer, and Bruce Hawk, President and Chief Operating Officer. For those who would like to follow along, slides accompanying our remarks are available on our website at h20-america.com. Before we begin today, I would like to remind you that this presentation and related materials posted on our website may contain forward-looking statements. These statements are based on estimates and assumptions made by the company in light of its experience, historical trends, current conditions, and expected future results. as well as other factors that the company believes are appropriate under the circumstances. Many factors could cause the company's actual results and performance to differ materially from those expressed or implied by the forward-looking statements. For a description of some of the factors that could cause actual results to be different from statements in the presentation, we refer to you to the financial results press release and to our most recent forms, 10-K, 10-Q, and 8-K, filed with the Securities and Exchange Commission, copies of which may be obtained on our website. All forward-looking statements are made as of today, and H2O America disclaims any duty to update or revise such statements. You will have an opportunity to ask questions at the end of the presentation. This webcast is being recorded, and an archive of the webcast will be available until May 26, 2026. You can access the press release and the webcast at H2O America's website. In addition, some of the information discussed today includes the non-GAAP financial measures of adjusted net income and adjusted diluted earnings per share that may not have been calculated in accordance with generally accepted accounting principles in the United States or GAAP. These non-GAAP financial measures should be considered as a supplement to the financial information prepared on a GAAP basis rather than as an alternative to the respective GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the table in the appendix of our presentation. I will now turn the call over to Andrew.

Welcome, everyone, and thank you for joining us. I want to take a few minutes to briefly discuss some of our team's successes over the last year and where we are today as an organization before we get into what I believe is an exciting, updated five-year outlook. 2025 was another strong year, both strategically and financially, and builds upon prior year successes. I am pleased to share that we delivered full-year 2025 diluted EPS of $2.92 per share An adjusted or non-GAAP diluted EPS of $2.99 per share, which was near the top end of our upwardly narrowed $2.95 to $3 per share guidance range. Our performance in 2025 reflects continued execution of our proven growth strategy, which focuses on making much needed water infrastructure investments across our national footprint of systems, while constructively engaging our key local stakeholders in a consensus-building process to provide timely regulatory recovery while maintaining customer affordability. We will touch on these more later in the call, but some highlights during the year include. In early July, we announced the transformative deal to acquire Houston, Texas-based Quadvest for $540 million. Upon closing, Quadvest is expected to add $483.6 million of rate-making rate base plus a small complementary wholesale business. In the base business, we had a number of constructive regulatory and legislative developments in each of our states, including in California. We were able to secure another one-year deferral in our filing of a new cost of capital application, which provides certainty as the current return parameters and construct remain in place through the end of 2027. In Connecticut, legislation was passed and signed into law creating the water quality and treatment adjustment. The WQTA is the nation's first mechanism established to recover the capital investments needed to treat PFAS and other emerging contaminants. In Texas, legislation was passed and signed into law authorizing water utilities to adopt a future or hybrid test year in general rate cases. And in Maine, Regulators approved our stipulation reached with the Office of Public Advocate to consolidate our 10 districts into one, as well as established our first affordability rate for low-income customers in the state. On the CapEx front, we invested $501 million in 2025, which exceeded our upwardly revised budget of $486 million. 2025's actual spend represented a 41% increase over 2024. This record execution in 2025 bodes well as we see elevated CapEx needs for the foreseeable future across our four states as evidenced by the 31% increase in our five-year 2026 to 2030 CapEx budget to $2.7 billion. And then last month, our board increased the quarterly dividend by 4.8%. The 2026 annualized dividend is expected to be $1.76 per share compared with $1.68 per share in 2025. The $0.08 annual increase is consistent with our recent annual increase cadence and marks the 58th consecutive year of increasing the annual dividend. I would be remiss if I did not take this opportunity to again thank our former chairman and CEO, Eric Thornburg, who I'm sure is listening to this call as we speak, who retired at the end of June 2025 from the company and then from the board at the end of last month for all of his contributions over the years. Eric has been a mentor to me and helped instill the foundational strategy and culture that I believe our current team is poised to take to the next level as we enhance our executional capabilities, both operationally and financially, in progress towards the further growing and diversifying our business with the transformational QuadVest transaction. We have been active in recent years enhancing the company's capabilities by attracting highly accomplished industry leaders to our H2O America team, both at the corporate and state levels. Many have come to us from much larger, well-respected utilities, bringing with them the knowledge of these organizations' best practices. The most recent addition is Nicholas Whitley, our new Vice President of Business Development. Nick joined us at the end of 2025 from Northwest Natural Holdings, where he was the Managing Director of Business Development. Nick brings deep transaction expertise, strategic discipline, and a proven ability to scale infrastructure platforms. His leadership and experience across complex multi-jurisdictional acquisitions will be instrumental as we continue to grow responsibly and serve more communities across the country. Nick shares our commitment to culture, service, and pursuing disciplined strategic growth opportunities, and we look forward to introducing him to many of you in the future. I will now turn the call over to Ann to provide details on our full year 2025 results as well as key components of our updated five-year plan and long-term EPS growth rate target. Then Bruce will provide updates on the QuadVest deal, approval process, and connection growth, as well as discuss other regulatory and legislative developments. Ann.