American Water Works Company, Inc.

Good morning, and welcome to American Water's fourth quarter 2018 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. Following the earnings conference call, an audio archive of the call will be available through February 27th, 2019. U.S. callers may access the audio archive toll-free by dialing the following number, 1-877-4222. 877-344-7529. International callers may listen by dialing 1-412-317-0088. The access code for replay is 1012-8489. The online webcast will be available at American Waters Investor Relations homepage at http://www.americanwaters.com. I would now like to introduce you to the host for today's call, Ed Vallejo, Vice President of Investor Relations. Mr. Vallejo, you may begin.

Thank you, Phil, and good morning, everyone, and thank you for joining us for today's call. As usual, we'll keep the call to about an hour, and at the end of our prepared remarks, we will open the call to any of your questions. Now, during the course of this conference call, both in our prepared remarks and answers to your questions, we may make forward-looking statements that represent our expectations regarding our future performance or other future events. These statements are predictions based upon 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 other factors, as well as a more detailed analysis of our financials and other important information, is provided in the earnings release and in our December 31, 2018, Form 10-K, each as filed with the SEC. Reconciliations for non-GAAP financial information discussed on this conference call, including adjusted income, adjusted earnings per share, adjusted return on equity, and our adjusted regulated O&M efficiency ratio can be found in our earnings release and in the appendix of the slide deck for this call. Also, this slide deck has been posted to our investor relations page of our website. Now, all these statements in this call related to earnings and earnings per share referred to diluted earnings and earnings per share. And with that, I will now turn the call over to American Water's President and CEO, Susan Storey.

Thanks, Ed. Good morning, everyone, and thanks for joining us. Today, our CFO, Linda Sullivan, will cover in detail the fourth quarter and full year financial results, and our COO, Walter Lynch, will give key updates on our operations. 2018 was a very eventful year for American Water. beginning with historic tax reform, the conclusion of several key rate cases, an active acquisition year in both regulated and market-based businesses, the sale and discontinuation of a few market-based business lines, and a sharp focus on deploying smart technology and excelling at business fundamentals. Through it all, we further strengthened our low-risk and predictable growth story. We experienced continued growth in our regulated businesses from investments, acquisitions, and organic growth. Our market-based businesses achieved very strong year-over-year growth, less the keystone impairment, and provided increased cash to our overall business. Our $3.30 adjusted EPS is an 8.9% increase over adjusted 2017 EPS. We are affirming our 2019 EPS guidance range of $3.54 to $3.64 per share, and we continue our focus on achieving the top half of our 7% to 10% EPS growth care guidance through 2023. Our fundamental story at American Water remains the same, and our performance is consistent as we report another strong year of results for 2018. The capital investment we make in regulated operations continues to be the foundation for our growth. One and a half billion of the total of $2 billion that we invested in 2018 was for regulated infrastructure improvement, with almost $400 million for acquisitions, including our acquisition of Pivotal. Let me mention a few of our 2018 highlights. First and most importantly, we continue to be a safer company in which our employees work. We finished 2018 with fewer employee injuries than in any other year recorded in our company's history, but we won't be satisfied until we have zero injuries throughout our business. We continued our commitment to the highest levels of water quality, the environment, and our customer safety by leveraging new and groundbreaking technologies. We have installed additional surface water monitoring panels at all of our major surface water intakes, and we are working on a comprehensive data analytics strategy that will enhance our ability to detect issues and respond accordingly. This will enhance the protections we provide to our customers. Phases two and three of these systems scheduled for this year will utilize artificial intelligence and machine learning. We are also implementing technology tools for our frontline employees that will enhance communication and mobility to empower our people to significantly improve our customer experience. And as we invest, we work to lower O&M costs and deploy capital as efficiently as possible while also leveraging our buying power and strategic sourcing to drive cost savings. Walter will talk a bit further about these in just a moment. We also experience strong customer growth. We added 25,000 new customers in the reg business through closed acquisitions and organic growth. We have an additional 61,000 customer connections under agreement for acquisition pending regulatory approval. Our portfolio of market-based businesses also provided strong growth by leveraging our core competencies, using little to no capital, and generating healthy cash flows. We completed the $365 million acquisition of Pivotal, welcoming 650,000 new customers. In our legacy homeowner services organization, we launched partnerships with Philadelphia and Fort Wayne, Indiana, and received intent-to-award notices for new partnerships with San Francisco, Toledo, Ohio, and Pinellas County, Florida. We also added our 14th military base with the addition of Fort Leonard Wood Army Base in Missouri. And we took steps to optimize our market-based businesses, selling the majority of our contract services, and narrowing Keystone Clearwater's operations to its most predictable and profitable water transfer business. With that, I'll turn it over to Walter.