Essential Utilities, Inc.

Essential Utilities Q1 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brian Dingerdissen. Sir, please go ahead.

Thank you, Katie. Good morning, everyone, and thank you for joining us for our first quarter 2021 earnings call. I am Brian Dingerdissen, Vice President, Head of Investor Relations, and if you did not receive a copy of the press release, you can find it by visiting the Investor Relations section of our website. The slides that we will be referencing in the webcast of this event can also be found on our website. As a reminder, some of the matters discussed during this call may include forward-looking statements that involve risk, uncertainties, and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements. Please refer to our most recent 10Q, 10K, and other SEC filings for a description of such risk and uncertainties. During the course of this call, reference may be made to certain non-GAAP financial measures. A reconciliation of these non-GAAP to GAAP financial measures is included at the end of the presentation and also posted on the company's website. After the presentation, we will open the call up for questions. Here is our agenda for today. We'll start with Chris Franklin, our chairman and CEO, who will provide a company update. Next, Dan Shuler, our CFO, will discuss our financial results. Chris will then conclude the presentation portion with an update on our municipal acquisition program and a review of our 2021 guidance. At the conclusion of the call, we will open it up for questions. With that, I will now turn it over to Chris Franklin.

Hey, thanks, Brian, and good morning, everyone. Thanks for joining us. Let's start out with a look at some of our first quarter highlights. The first quarter marked our one-year anniversary already as essential utilities and the one-year closing of PEOPLES. We had a strong first quarter. And on a GAAP basis, earnings per share was 72 cents for the quarter, up 19.6%. And Dan will get into the details of that in just a few moments. We invested approximately $178 million in infrastructure improvements through our systems in the first quarter, first three months of the year, as compared to $172.2 million at the same time last year. Our seven pending acquisitions, totaling 450.5 million in purchase price, really shows the strength of our municipal acquisition strategy. Also, yesterday was our annual meeting of shareholders, and I'm pleased to report that all items on the ballot were voted in accordance with management's recommendations. The meeting was also one of transition, Our long-time board member and friend, former CEO Nick DeBenedictus, stepped down from the board to comply with the board's age policy. And Wendy Franks, who represented CPPIB since the acquisition of Peoples, was replaced by Edwina Kelly. Wendy Franks left CPPIB to take another position with a different firm. And we also then expect to add a well-qualified director in the coming months to bring the board back to nine members again. As a reminder, our current eight-member board has a strong diversity, which includes three women, two people of color, and a board, all of which have diverse cognitive and experiential backgrounds. Should also note that if you haven't had a chance to review our proxy, I'd encourage you to do so. We spend a lot of time and energy around that proxy. It's informative and very easy to read. All right. I'm excited to announce that in March we opened a brand new state-of-the-art environmental laboratory on our Bryn Mawr campus here. The new lab is just one example of our commitment to operational excellence and our mission to protect the public health and ensure high-quality water. The new two-story building will more than double the size of the previous lab, which did us great service over 70 years. This new lab, though, will allow us to adapt to the dynamic regulatory environment that requires additional sampling and equipment necessary for drinking water and wastewater operations. It also has the capacity to accommodate the increasing needs as we add customers and systems through acquisition. The lab employs a professional staff of 20, including microbiologists and chemists, who perform about 300,000 tests on 30,000 water samples each year. These scientists use 50 different analytical methods for 240 different water quality parameters. It's a busy group. The lab is certified by the Pennsylvania Department of Environmental Protection and four other state environmental and health regulatory agencies. And as we've gone from measuring in parts per million when I was new in the business to now parts per trillion, a million-fold increase in detection levels, we feel confident that we will be able to deliver water that is safe, and the wastewater we treat and return to our rivers, lakes, and streams is pristine. Now, as announced a year ago, we set a company-wide standard of 13 parts per trillion to uniformly address the presence of the contaminants PFOA, PFOS, and PFNA, which are all part of that PFAS family of chemicals. As I think you're aware, the EPA's non-enforceable health advisory level for PFAS and PFOA is still at 70 parts per trillion. And although an enforceable federal standard is still probably years away, our laboratory is one of two labs accredited and the only utility certified to test PFAS in Pennsylvania. Our commitment to making the necessary capital investment where source water exceeds 13 parts per trillion is for the safety and health of our customers we serve. And our new lab is integral to this important work. Now, in light of the ESG guidance that we announced earlier this year, I'd like to highlight two solar field projects in Illinois that are in the final stages of completion You can see the pictures here. The Manteno solar field project was completed and became operational at the end of February. This nearly one megawatt solar field will supply approximately 85% of the power needed to operate the wastewater plant. We estimate that the project will save between $20,000 and $25,000 annually in operating costs. Very good for the customers. The Danville solar plant project spans eight acres and is anticipated to become operational in the second quarter of the year. This is a 2.1 megawatt solar field and will supply approximately 70% of the power needed to operate that water plant. And we estimate this project will save between $110,000 and $140,000 annually in operating costs. So in total now, we have six solar fields across our footprint. It's projects like these that allow increased reliability and lower emissions while also achieving cost savings. As we switch to renewable energy options throughout our footprint, we'll continue to improve the company's already aggressive target to reduce Scope 1 and Scope 2 emissions by 60% over the next 15 years. With that, let me hand it over to Dan to talk about our financial results.