American Water Works Company, Inc.

Good morning and welcome to the American Waters fourth quarter and year end 2023 earnings conference call. As a reminder, this call is being recorded and is also being webcast with a accompanying slide presentation through the company's investor relations website. The audio webcast archive will be available for one year on American Waters investor relations website. I would now like to introduce your host for today's call, Aaron Musgrave, Vice President of Investor Relations. Mr. Musgrave, you may begin.

Thank you, Dave. Good morning, everyone, and thank you for joining us for today's call. 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 2023 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 diluted earnings per share. After our prepared remarks, we'll then close by answering your questions. With that, I'll turn the call over to American Waters President and CEO, Susan Hardwick.

Thanks, Aaron. Good morning, everyone. As we announced yesterday, we finished 2023 with very strong financial results that were right on plan. As shown on slide five, earnings were $4.90 per share for the year, which included $0.13 per share of favorable weather, most of which we discussed earlier in the year. Excluding the estimated weather impact earnings of $4.77 per share, we're at the midpoint of the guidance range we shared originally back in November of 2022. I'm very proud of our company's ability to stay focused on serving our customers safely and reliably through numerous economic events this past year, which gave us the ability to confidently execute on the plan we had for 2023. I'm also proud of the resilient service we consistently deliver, and especially over the past few months during a cold January and active 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 an abbreviated list of some of our key accomplishments in 2023, and John and Cheryl will add to these in their remarks. Overall, we believe the takeaway today for investors is that our strong execution in 2023 amid the challenging macro backdrop, coupled with our clear top-tier growth plan, demonstrates American Water's ability to deliver on our long-term plan. I'm very confident we will execute our plans in 2024 and beyond with the great momentum we have from 2023. Turning to slide six, as you can see, we have delivered an excellent total shareholder return. over the past five and ten years, including our growing record of significant dividend increases. We're proud of this history, which compares very favorably to other utilities. I want to acknowledge, though, that our stock and utility stocks in general did not perform nearly as well as the S&P 500 in 2023, which dampened the outperformance we've had versus the S&P 500 over the last decade or so. Relative valuations of utility stocks fell without regard to specific performance. All of that while we continued our very strong performance. I'm confident our company's fundamentals and the execution of our strategies will continue to produce superior shareholder value and very competitive total shareholder returns for years to come. Which takes us to slide seven. The comments that we'll share today are largely an affirmation of the financial plan, long-term targets, and guidance we laid out last November, highlighted by 7% to 9% EPS and dividend growth. Later, John will recap the drivers for our growth in 2024, including the increase to our EPS guidance range that we announced yesterday. Big picture, though, we believe the combination of our EPS and dividend growth, our low-risk capital plan, our ESG leadership, and the affordability of our service continues to be rewarded by investors and distinguished us from other utilities in the sector. I'll remind you that we believe the runway for our growth and for achieving these targets is very long, certainly through 2028 and our five-year plan and beyond that. This, of course, is driven by significant investments in infrastructure and acquisitions, coupled with our track record of constructive regulatory outcomes, all with a keen focus on affordability. And on top of all of that, we continue to grow organically, including in our military services business that successfully serves 18 military installations across the country. One final thought I want to leave you with as we begin 2024. American Water continues to receive tremendous support at the state and federal level for the work we do across the country. The impact we are making in communities across our 14 states to improve water and wastewater service is critical to the well-being of the citizens we are proud to serve. And as we've told you many times, we are committed to solving local infrastructure issues while at the same time driving efficiencies in our business to remain very affordable to our customers. Policymakers frequently encourage our leadership to keep growing, keep investing, and keep solving problems in their states. And this includes Pennsylvania, where we applaud the Public Utility Commission's proposal on February 1st to enhance the process around the implementation of fair market value legislation. We believe the spirit of the enhancements is to increase public awareness and establish greater procedural consistency, all in support of much needed consolidation of the commonwealth water and wastewater systems. While the business of providing these critical services can at times lead to enhancements in the way we do business, including in the regulatory construct, we have no doubt about the overwhelmingly positive support we receive from stakeholders as we pursue our company's mission. With that, I'll turn it over to Cheryl to talk more about rate-based growth, our regulatory plan, and some recent news around lead service lines. Cheryl?