Essential Utilities, Inc.

Good day and welcome to the Essential Utilities, Inc.'s full year 2021 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brian Dingerdissen. Please go ahead, sir.

Thank you, Madison. Good morning, everyone, and thank you for joining us for Essential Utilities 2021 full year earnings call. I am Brian Dingerdissen, head of investor relations. If you did not receive a copy of the press release, you can find it by visiting the investor relations section of our website at essential.co. The slides we will be referencing in the webcast of this event can also be found there. 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 10-Q, 10-K, and other SEC filings for a description of such risk and uncertainties. During 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 in the investor relations section of the company's website. For our agenda for today's call, we will start with Chris Franklin, our chairman and CEO, who will discuss the highlights from 2021 and provide a company update. Next, Dan Schuller, our CFO, will discuss our financial results. Chris will then provide an update on our growth strategy, a summary of our guidance, and finally conclude the presentation portion before opening the call for questions. With that, I will turn the call over to Chris Franklin.

Hey, thanks, Brian, and good morning, everyone. I know today's a busy day with a lot of news in the market, so I'm going to get right to it. Let's start with a quick look at our 2021 highlights. We had another strong year and happy to report earnings per share of $1.67 in 2021. which was the midpoint of our 2021 guidance. This represents growth really in line with our five to seven long-term guidance that we've provided. Our water and natural gas segments were both focused on infrastructure improvements and combined we replaced over 470 miles of main and invested over a billion dollars in infrastructure improvements. and in a moment, I'll talk about another example of the importance of this continued investment in infrastructure. Our municipal acquisition strategy remains strong. We announced the closing of two acquisitions last year, adding $36.3 million in rate base. And in 2021 alone, we signed asset purchase agreements for six deals, totaling $141.5 million in purchase price. And now we're working diligently on the closing and integration of plans and plans for the eight pending acquisitions that total over $471 million in purchase price. Our total rate base increased by 7.6% from $8 billion in 2020 to over $8.6 billion in 2021. And finally, I'm pleased to tell you that last year we continued to make significant progress on our ESG initiatives. while also receiving strong public recognition for our important work. And I'll give you more detail on this in the upcoming slides. Now, this slide is pretty dramatic looking. In 2021, there was a national focus really on infrastructure. Our industry and our company continue to play a critical role in the renewal of water, wastewater, and natural gas infrastructure. We recognize that It's our responsibility, frankly, to provide our customers and our communities with a well-maintained infrastructure that is critical for safety and reliability. You might recall in previous calls we've talked about some of the operational challenges that were brought on by external events. Think about the outages in Texas that came as a result of winter storm Uri and the flooding of our plant and our facilities from Hurricane Ida in southeastern Pennsylvania. I was very proud that in each of those instances, our operations teams met each of those challenges and overcame them. But most recently, and this is the picture you see here, you'll remember this from the national news, a bridge collapsed in the Pittsburgh area and it was right inside of our natural gas service territory. You may have seen this in the news, but as President Biden, who was already scheduled to be in town, visited the site of the collapse. The collapse did impact one of our large 16-inch gas mains, which was connected to the bridge. I am really happy to be able to report, though, that our quick action, our quick response in isolation of that impacted section of the pipe resulted in only minimal disruption to a very small group of our customers. Really important. There were no injuries associated with the gas main that was damaged, and I just continue to be so impressed at the professionalism of our team that was able to act so quickly to ensure the safety of the public while also allowing our system to continue to serve the rest of our customers that depend on our service to heat their homes and fuel their appliances. Even though there were some weather-related issues that were out of our control, we continuously improve our systems and make them safer and stronger and more resilient. Now, in addition to some of the projects we highlighted throughout the year, like our solar field project in Illinois and our new state-of-the-art lab in Bryn Mawr, our efforts to replace infrastructure really should be highlighted as well. In 2021, I mentioned that we replaced over 470 miles of gas and water main and anticipate that over the next three years, we're going to replace about 1,400 miles of pipeline. These are major accomplishments. Earlier this month, we reaffirmed our ESG commitments. So as of year end 2021, The company made strong progress in aligning the racial makeup of our workforce with that of our customer base. We ended 2021 with people of color making up 15% of our overall workforce. Our overall three-year goal is to achieve a target of 17%, which really nicely reflects the population of the customers that we serve. Last year, nearly 11% of our spending on goods and services was through the use of diverse suppliers. Our goal in this area is to achieve 15% over the next three years. And as a reminder, you can find all the details on our commitments in our proxy statement as they are all tied to our executive compensation. The company remains on track to make progress towards substantially reducing our Scope 1 and Scope 2 greenhouse gas emissions. This is largely achievable through the extensive gas pipeline replacement program and our renewable energy purchases, accelerated methane leak detection, and a number of other planned initiatives. Since making these commitments, the company has already achieved an estimated 7% reduction in Scope 1 and 2 emissions from that 2019 baseline. And that's toward our overall commitment of a reduction of 60% by 2035. This is right on pace with the plan we originally announced. The company also reaffirmed our industry-leading multi-year plan to ensure that finished water, the water we send to our customers, does not exceed 13 parts per trillion of PFOA, PFAS, and PFNA compounds across all states served by our water utility. Now, we're not aware of any other similar commitment across the industry and our peer companies. We were pleased to make the Newsweek and Statista's America's Most Responsible Companies list for 2022. Really proud of this. This is one of the more notable rankings and continues to add credibility and recognition to our already strong ESG profile. I really have to compliment our ESG team for their continued strong advances in the ESG ratings, which really transcends level in the company and includes most of us here who are all focused on making progress. Capping off a strong 2021, MSCI upgraded Essential from BBB to an A. Sustainalytics made a major upgrade for us, 23.3, giving us a score stronger than many of our peers. CDP, or the Carbon Disclosure Project, maintained our B- grade. That's even after we incorporated our gas utility into the disclosure for the first time. And finally, our ISS scores remain the best overall in our proxy peer group. These strong ESG scores result from the company's strong focus on ESG and our well-designed and well-executed ESG work. The result of this work is tied to incentive compensation and highlighted in our award-winning ESG microsite. This is really strong work we've done. Finally, last week we filed an 8 , which amended our corporate bylaws, adding a notice requirement for shareholders. Our Board took this action after our normal annual review of governance policies. This amendment aligns our shareholder notice policy with more than 80% of companies in the S&P 500. With that, let me turn it over to Dan to talk about our financial results.