American Water Works Company, Inc.

Good morning and welcome to American Water's fourth quarter and year-end 2022 earnings conference call. As a reminder, this call is being recorded and is also being webcast with an accompanying slide presentation to the company's investor relations website. The audio webcast archive will be available for one year on American Water's investor relations website. I would now like to introduce your host for today's call, Maureen Duffy, Senior Vice President of Communications. Ms. Duffy, you may begin.

Thank you. Good morning, everyone, and thank you for joining us for today's call. I'm filling in today for Erin, who is a bit under the weather. At the end of our prepared remarks, we will open the call for your questions. Let me first go over some safe harbor language. Today we will be making forward-looking statements that represent our expectations regarding our future performance or other future events. These statements are predictions based on 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 factors, as well as a more detailed analysis of our financials and other important information, is provided in the fourth quarter earnings release and in our 2022 Form 10-K, each filed yesterday with the SEC. And finally, all statements during this presentation related to earnings and earnings per share refer to diluted earnings and earnings per share. Susan Hardwick, our president and CEO, will comment on our successful 2022 and our longer-term performance expectations and shareholder value. John Griffith, our executive vice president and CFO, will cover our 2022 financial results in more detail, provide an update on acquisition activity, and will close with a review of our outlook for 2023 and beyond. including financing plans. Cheryl Norton, our Executive Vice President and COO, will then discuss our capital investment plan, rate-based growth expectations, and active general rate cases before concluding with some ESG recognition we recently received. We will then close by answering your questions. With that, I'll turn the call over to American Waters President and CEO, Susan Hardwick.

Thanks, Maureen, and good morning, everyone. Thanks for joining us today. As we announced yesterday, we finished 2022 with strong financial results that were just ahead of our plan. As shown on slide five, earnings were $4.51 per share for the year, which included $0.06 per share of favorable weather we had previously discussed. Excluding weather, earnings of $4.45 per share were just above the midpoint of the guidance range we shared originally back in November of 2021. Think about what has occurred globally since November of 2021, including widespread inflation, interest rates on a significant climb upward, Russia's invasion of Ukraine, and many people returning to the office as the world began to stabilize following recurring waves of COVID outbreak. When I reflect on how much has changed in the world since November of 2021, I'm very proud of our company's ability to stay focused on serving our customers safely and reliably. which gave us the ability to confidently execute on the plan we shared a year and a half ago. I'm also proud of the resilient service we consistently deliver, and especially over the last few months during an active and bitter cold storm season across the country. I want to thank our employees for safely providing reliable service to the 14 million people we serve in their homes, businesses, and communities. You can see here on slide five a checklist of some of our key accomplishments in 2022, and John and Cheryl will add to these in their remarks. Overall, we believe the takeaway today for investors and analysts is that our strong execution in 2022 amid a challenging backdrop, coupled with our clear capital growth plan, demonstrates American Water's ability to deliver on our long-term plan. I'm very confident we can execute our plans in 2023, and beyond and with the great momentum we have from 2022. Turning to slide six, as you can see, we have delivered an exceptional total shareholder return over the past five years, including our growing record of significant dividend increases. We're very proud of this history, which also compares favorably on a three-year look back for TSR. I want to acknowledge, though, that our stock and water utility stocks in general did not perform as well in 2022 compared to the broader utility sector. Valuations of high P.E. stocks fell rapidly in the first half of 2022 as actual and expected interest rate hikes changed the landscape of investment opportunities. As a result, the P.E. multiple gap that had greatly expanded between water utilities and electric and gas utilities in recent years narrowed in 2022. All of that while we continued our very strong performance. This chart shows clearly the impact of the macro environment we have been in and how it affected valuation without regard to specific performance. And as we've seen so far in 2020 to 2023, this revaluing of the market has stabilized as many other macroeconomic drivers have stabilized, including interest rates. If this continues to hold true, I'm confident our company's fundamentals and the execution of our strategies will drive shareholder value and very competitive total shareholder returns for many years to come. Which takes us to slide seven. The comments that we'll share today are an affirmation of the financial plan, targets, and guidance we laid out last November. Later, John will recap the drivers for growth in 2023. But big picture, we believe the combination of our EPS growth, our strong dividend, and ESG premium, and the affordability of our service continues to be rewarded by investors and distinguishes us from others in the utility sector. I'll remind you that we believe the runway for our growth and for achieving these targets is very long, certainly through 2027 in our five-year plan and beyond. This is primarily, of course, due to significant investments in infrastructure and regulated acquisitions. And as we get further into the plan, see the full effect on earnings from the increased capital spending and continue our track record of success in the regulatory arena, we will deliver on our earnings growth plan and within the target range. And with that, I'll turn it over to John to cover more detail on 2022 financial results, our 23 outlook, and our financing plans. John?