American Water Works Company, Inc.

Good morning and welcome to American Water's first quarter 2024 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. 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, Aaron Musgraves, Vice President of Investor Relations. Mr. Musgrave, you may begin.

Thank you, Betsy. 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 first quarter earnings release and in our March 31st Form 10-Q, 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 Water's President and CEO, Susan Hardwick.

Thanks, Aaron. Good morning, everyone. As we announced yesterday, we started 2024 with solid financial results. As shown on slide five, earnings were 95 cents per share for the quarter compared to 91 cents last year. The increased results were as we expected and put us on track to achieve our full year earnings guidance, which we are pleased to affirm. First quarter 2024 results included two cents per share of additional interest income from the February 2024 amendment of the seller note related to the sale of HOS, which reflected the higher interest rate and the successful earn out of the $75 million contingent consideration as we detailed in our February call. Here you can also see a recap of some of our other key accomplishments so far in 2024, and John and Cheryl will add to these in their remarks. As we announced in late February, we completed a successful long-term debt issuance of $1.4 billion. This delivered on the highest priority in our 2024 financing plan. We also invested well over $600 million of capital in infrastructure this quarter. In addition, we completed a large acquisition and filed general rate cases in several states in accordance with the traditional process of earning a return on the capital investments we have made. We did all of this while keeping customer bills affordable and staying true to our high value for quality service and sustainable operations, which we highlighted in our disclosures we published in early April, as noted on this slide. The other significant news so far in 2024 for us and the water industry as a whole came on April the 10th when the EPA announced the final national primary drinking water regulation for six PFAS chemicals. Chair will elaborate further on the PFAS water quality standards, but I want to reiterate that we fully support the EPA's efforts to protect drinking water quality. I want to again assure our customers, regulators, investors, and other stakeholders that American Water has the expertise to tackle this issue head on. And in fact, we have demonstrated that in many locations for some time now. Turning to slide six. This quarter, we are again affirming our long-term targets for both earnings and dividend growth at 79%. This affirmation is based upon clear, top-tier capital growth plan and our strong regulatory and operational execution that I believe is a positive differentiator from our peers. As we've done in the past, we expect to consistently deliver on our annual and long-term plans, growing earnings and dividends at an industry-leading pace over the next five years and beyond. Moving on to slide seven, as we announced yesterday, our board of directors approved an increase in the company's quarterly cash dividend from 70.75 cents per share to 76.5 cents per share, an 8.1% increase. We have grown our dividend consistently over the last five years, significantly outpacing virtually all of our utility peers while maintaining a consistent payout ratio of less than 60%. Looking ahead, we continue to expect to grow our dividend at 79% per year on average, which is in line with our compelling 79% EPS growth target. Our board and management team understand and appreciate how important the dividend component of our total shareholder return is to our investors. And with that, let me turn it over to Cheryl to talk more about PFAS, recent regulatory updates, affordability, and rate-based growth. Cheryl?