American Water Works Company, Inc.

Good morning and welcome to American Water's fourth quarter and year-end 2019 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 26th of 2020. U.S. callers may access the audio archive Toll free by dialing 1-877-344-7529. International callers may listen in by dialing 1-412-317-0088. The access code for replay is 101-385-92. The audio webcast archive will be available for one year on American Waters Investor Relations website at ir.amwater.com slash events. I would now like to introduce your host for today's call, Ed Vallejo, Vice President of Investor Relations. Mr. Vallejo, you may begin.

Thank you, Chuck, and good morning, everyone, and thank you for joining us for today's call. As usual, at the end of our prepared remarks, we will open the call for 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 in our December 31st, 2019, for 10K, each as filed with the SEC. Reconciliations for non-GAAP financial information discussed in this conference call, including adjusted net 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. All statements in this call and related to earnings and earnings per share refer 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 Story.

Thanks, Ed. Good morning, everyone, and thanks for joining us. Today, our COO and CEO-elect, Walter Lynch, will give key updates on our operations, and our CFO, Susan Hardwick, will cover the fourth quarter and full-year financial results. As you know, this is my last earnings call, and I'm excited to say something I've had the privilege of repeating on every earnings call since May of 2014. Yet again, American Water employees delivered strong results, as we continue to grow our business and execute on our strategies. I've said many times that very few people get the opportunity and privilege of working with our heroes every day, and I do. The amazing people of American Water consistently deliver outstanding service and results, and they do so with incredibly inspiring commitment and dedication to our customers and to our communities. Now let me highlight just a few of our 2019 accomplishments. We continued our strong financial performance. Adjusted earnings were up 9.4% year over year, with strong growth in both our regulated and market-based businesses. We added 67,000 customer connections in our regulated business in 2019 through both closed acquisitions and organic growth. And just over the past seven weeks, in 2020, we have closed an additional 5,100 customer connections. Walter will cover this in detail, but we closed on a total of 21 acquisitions in eight different states in 2019. We are proud to truly be providing solutions across the United States. We want communities to be better because we're there, and we're excited to welcome our new customers and our new employees to the American Water family. And in addition to these closed acquisitions, we will welcome more than 44,000 new customer connections already under agreement over the next several months. Our growth wouldn't be possible without being customer obsessed and being the best at the fundamentals of delivering safe, reliable, and affordable water and wastewater services to our customers. We invested about $1.9 billion in 2019, with $1.7 billion going into our existing regulated infrastructure and $235 million for regulated acquisitions. We work to be as efficient as possible in both our O&M costs and in our capital projects work, and by leveraging our buying power and strategic sourcing to keep customer bills affordable. We continue to implement practical technology tools for our frontline employees to enhance their ability to serve our customers more effectively. And we're also working on customer interfaces that deliver a highly personalized, and satisfying customer experience. Moving to our market-based businesses, Homeowner Services continued its strong performance, most recently launching a partnership with the San Francisco Public Utilities Commission. This represents about 100,000 potential new customers for that business. And as you know, we were extremely honored in 2019 to be awarded the Department of Defense contracts for water and wastewater systems at both Joint Base San Antonio in Texas and the United States Military Academy at West Point in New York. We now provide water and wastewater services on 16 military bases across the U.S., and it is a true honor to serve the men and women who serve our country. We also announced in November an agreement to sell our New York American Water subsidiary to Liberty Utilities Company, and in December we completed the sale of our Keystone operations. Moving to slide six. With our continued strong performance and our commitment to the disciplined execution of our strategies, we are affirming our 2020 EPS guidance initiated this past December of $3.79 to $3.89 per share and our long-term five-year growth of 7% to 10%. And for the sixth year in a row, our Board of Directors approved a dividend increase that is at the high end of our long-term growth. We remain a regulated water utility at our core with a low risk and predictable growth story further enhanced with a strong ESG performance record. We plan to invest $20 to $22 billion in capital over the next 10 years. This includes replacing pipe, pumps, and plants, and it also includes investing in critical resiliency and asset hardening projects related to climate variability. Again, this will be balanced by our continuing O&M and capital cost efficiency efforts, constructive regulatory and legislative policy, and technology deployment. The successful execution of our strategies has enabled us to achieve a five-year total shareholder return of 156% compared to the S&P 500's five-year TSR of 74%. Strong financial performance is a direct outcome of our steadfast focus on and execution of the fundamentals of our business. Moving to slide seven, let me talk just a moment about how we deliver results. It is our firm belief that companies do well by doing good. Just last month, we were named to the Global 100 Index as one of the world's 100 most sustainable companies. American Water ranked 16th, fourth among only 17 total U.S. companies of any sector making the list, and the only U.S.-based utility. We were also just named for the third year in a row to Barron's 100 most sustainable companies as the highest ranked utility. We are extremely proud of these recognitions as they validate from external sources our deep commitment to be an ESG leader. This slide lists several of our most recent 2019 and 2020 ESG recognitions. We know that investors are actively searching for companies who deliver strong financial results while they also fully engage and develop employees, continually improve customer experiences, protect the planet, and make communities stronger because they're there. When these things are in the fabric of your culture and you also excel at the fundamentals of your business, long-term financial sustainability follows. And this is why we are confident in our business and our growth for the future. With that, I will turn the call over to Walter to give a more detailed update on our regulated business.