American Water Works (AWK) 25 Feb 212020 Q4 Earnings call transcript

Good morning, everyone. I’m Ed Vallejo, Vice President of Investor Relations at American Water. And on behalf of our entire company, I'd like to welcome you to our Virtual 2021 Investor Day.

Let me first go over some Safe Harbor language. Today, we will be making some forward-looking statements and those statements, those projections are made with the best estimates we have on hand.

results deal and events, and or unknown that cause statements to are other implied these different may known materially numerous risks actual by since such with results they future subject factors from statements. However, the be indicated to and uncertainties posted O&M which of Investor the reconciliation release Day to The the and non-GAAP has the be of can in information financial ratio for appendix accompanying press deck, slide found been in the page website. Relations used efficiency in Investor our our earnings statements share, earnings presentation All this related during share. to to and earnings earnings and per diluted refer per

the is addition, the the per of In long-term EPS earnings presentation, anchored purposes off CAGR range of XXXX for results. our share

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include businesses group, moment. and homeowner based services speak to military services in which I'll market Our our a

Before that the of slide me strategy. let our we on move next recent the on transactions execution to illustrate comment

additional know, strengthen of and the presence where in opportunities sell signed operation. in New We're selling eager Michigan in grow. an you working agreement we're process that will further As to states operations our we our we're recently to our York, on

near other states also collection a can exploring successful where note where customers, connection total These to agreements Pennsylvania. our We investment Pennsylvania-American This currently expect for and in the that that efficiencies working was XX,XXX equivalent approval of bidder through and treatment add about would Water regulated serve the more customer we York, through growing of We're process. be value. strategy system very to of acquisitions. to best that would to acquire opportunities an share to city future. have example and grow wastewater of and in the add we're operate potential continue the part the and we would key agreement another can are I drive on

growth to X, Let's plan. our on covering Slide turn five-year our long-term story

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are side, treated year every of United there there's roughly treated through That's XX% than miles the of trillion On and X The United States. about gallons the main more country main all minutes. every a the water break water loses two XXX,XXX major States, breaks. of pipes water million X in in

States, plan of many nearly streams. need miles trillion a well-planned We and asset the gallons in risk are increase urgent and of in and rivers sewage improve side, year, upgrade pipes and replacement dire a executed our drive On to monetization, United need to of about a untreated resiliency. and renewal the through and of discharged pipes groundwater. efficiency collection those reliability into Every understand for the wastewater XXX,XXX pose are

of our potential opportunities well will as on a Bill includes systems, $X.X in Our XXXX continued Varley plan existing give reflecting increase pipeline increase to acquisition moment. XXXX detail our of as the an regulated needs acquisitions. the in capital billion, more in

a market-based about prior slower growth over businesses, potential regulated increasing businesses we from rate five This compared market-based next our our see but at plan. rather the of We of X% is expect contribute growth reflection to our not our the years, slightly growth acquisitions. to growth lower

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water taking sources. replace also significant our must wastewater footprint. more contaminants as next a well ready water investments range meet we of to enhance to pipes broader steps the as and X,XXX Over and stringent about makes our and making years, to prepared water our address be of We're needed to improve miles across quality, Every plan to facilities to upgrades be five water provider regulations.

new customer efficiencies. invest enable in our we'll enhance experience our to to Finally, employees technologies drive and

On American approximately years. the next unique in see capital. longer the thesis predictable Water's to to horizon, plan that $XX our we way deploy regulated is you investment we $XX billion because business the can over billion our spend stable and XX

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that $X to regulated aside billion $X can You for set acquisitions. we see billion

me According create infrastructure. Let every our generates high capital point economic U.S. investment invest Alliance also We the for for benefits communities. in our economies. to dollars, significant Water we out and million regional XX paying the to our jobs that local

over So XXX,XXX billion $XX.X over the the years communities the create potential five next our plan investment in about serve. to of has jobs we

scale the regulatory leveraging Slide efficiencies, Let's comes efficiencies and and our driving advantage management size and constructive When affordability. for technology, we size with and price, achieve mitigating where focused chain, XX move and culture our in not reductions, access customer's the and of on only our been business. This the but we investment our we've capital and water continuous to and how areas discuss critical to improvement. a successful, taking is cost smart a on wastewater O&M supply of supplies scale effectively in operating holistic It policies while customer can balance leveraging legislative approach our systems we down impact to bills. driving around invest through opportunities of

in our costs project. amount efforts We a improve ratio, optimize We capital understand capital money. performance a all also same to reinforce We of a focusing efficiency of projects continue employ our operational do in allows O&M more on efficiency us by value step to efficiency. to I'll large and efficiency discuss which that moment. the We our with engineering driving

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We to to solutions similar in in continue support investments to water challenges. and critical engage policymakers wastewater efforts with

important Finally, efficiencies these leverage cost large plays large base. part, able We're customer bill customer minimize of our investments again, our customer a needed an And impact. customer investment. over impact spread to bill for the to this base minimizing

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continue We through efficiencies to drive chain. our supply

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to Slide Moving XX.

continue business. You progress driving steady and our can make see to efficiencies that in we

our past with XXXX. O&M we've XX.X% a XX.X% O&M from confident XX%. And that to XX hit in by new challenged efficiency ratio has ability years, ourselves Over our to We're gone target. target efficiency the below of

welcomed could with only controlling to our that That that great and higher we affordable were and expenses only our perspective, put Since X%. of of in the expenses costs our for employees work rate time, customers. they connections adjusted increased growth annual to bills compound a at Just than customer be our into while slightly keeping done XXX,XXX commitment are O&M approximately just today XXXX.

milestone flow business. capital-light services positive Homeowner are businesses in they they’re that testament home ongoing our customers, now approximately and cash our serving million the reaching customers, and businesses, fostering us is programs dedication and overall growth regulated X.X help protection to quality commitment to the a serves to our with to provide customer warranty our delivering complimentary sector. in market-based Our innovation business,

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the to my it next conclude I'll before slide Bill. over and turn turning Let's remarks to

on we have clear what focused do strategy We a best.

Our future proven on success. success is based our

Our long-term to and opportunities efficiencies and perspective and has create where starts our mass, critical water value, provide we solutions. wastewater informed it our business leverage drive by strategy operating increase can

regulated Our the experience efficiencies that of and and balance their our customers through remains cost strategic management. We'll investment focus through our investment innovation. enhance to growth foundation continue on we'll technology, and

market-based cash how And ESG enhanced who customer at our how to regulated we business flow, compliment to do, it. we the do but ourselves it's experience. and we finally, core not free businesses plan the continue results, what will in future. challenge through our It's Our today That's are we operating just an and of philosophy.

Bill turn over strategic to Let the me to about our talk now call growth.

Midwest Chief Bill the many Hi. role, Vice Water. Walter. I've at leadership positions Thanks, Water, Varley, for I'm COO. President Prior Senior current Officer Jersey President New American my and of and to for divisions our Deputy Northeast held company, Growth American including

our at look the take let's utility I general. industry a in the Before of landscape strategy, review growth

are The than the consolidated on perspective and systems compare in XX,XXX And Our the are more fragmentation municipal of industry community community ample a To reasons. gas comprised bring electric or the is approximately which of utilities, systems of is highly that U.S. XX,XXX water the XX,XXX people XX% fragmented, X,XXX to system. and side, efficiencies the there for less. serve consolidate which more significant systems industry's systems than and two for This States across water population sector. systems. with is approximately by United water of those approximately that X,XXX are more systems wastewater in utilities, served XX% opportunities population put even provides water entire

volume First, these the available. illustrate opportunities large numbers

Second, the may of investment, affordability. distributed not be impact priorities customer. facing can of to many capital smaller of competing be This rates readily And these challenges due our these spread This invested to to capital or larger help a Because infrastructure we're we small across investment significant the able affordability us water must infrastructure part operational costs communities or are already that require significantly capital existing required funds and systems scale, because for may and maintain of also amount near our on over available. our are opportunity large many and much base, a side customer Opportunities are customers. can the cost efficiencies. gives wastewater drive leverage footprint. our

Let's move to the next slide.

competitive a base. customer scale, our include large Beyond other advantages

systems Let for spread base infrastructure. to water across When improvements required system, system New customer Jersey to me costs the These example their large Jersey purchase Jersey. for make customer of XXX,XXX scale timeframe. connections. rates the the their take a acquiring Haddonfield, New New daunting and base capital short aging Water compliance was an able customer Water important you to throughout million connections where and both to investment over wastewater costs role to through This significantly to necessary in a water a over prior need improvements played over of capital an XX,XXX wastewater invest the American American we're New maintain town faced their Jersey, and $XX Haddonfield would increased have

acquisitions. work as us far footprint capital relevant town of to to decided accelerate our is Haddonfield, the and the themselves. experience Deep were scale rate expertise do enables in program. impacts it than Our time, if the was had ability utility same the in less At also to other leverage

about solutions with continuous Technology We our passionate have finding also and culture our along improvement, improvement capabilities benefits. of employees and and of our culture added are serving purchasing a customers continuous bring

business. Walter every dollar costs, customer capital $X O&M remove of As without mentioned, for invest bills. from the can we can of increasing We

or acquire water footprint. our ability our systems to is wastewater near advantage within Another

where equipment, is an And wastewater had strategy. We've Our customer the we our is wastewater water It's connections, XX% a X%. to relationships and services. Pennsylvania, we Exeter, opportunity operational in and expertise, to infrastructure, with multiple communities personnel, business successful Illinois, connections. operations example, up while already our provide a transition tremendous states presents make operations, adjacent And within wastewater Scranton XX,XXX natural important approximately of have acquire respectively. water acquisitions This wastewater only piece and services. we for wastewater because added with customer we and water executed in XX,XXX existing growth X,XXX of it

next legislative drive to Let's slide how wastewater solutions. helps and and now and water regulatory policy see move also the

and existing benefit state to on regulators which future continue legislators with we and policies, We customers. engage believe

historically latest include the of base is rate now systems, water XX on tariffs Let's wastewater turn fair fair our consolidated we enables the The quality, legislation case. book talk value in examples, purchaser out The about three and value was market of form than of serve reasonable. value legislation to Fair and as the some appraised value Virginia value market receive as system, is accountability. then earns to legislation have deemed value appraised value commission the enact for states fair legislation, the XX around legislation. market the included market rather communities water fair a or as Iowa. their footprint the West states long in within

quality operations share legislation, example water directly XX is systems, standards. tariffs, costs those in customer same now that accountability to This it integrate across Next providers them into legislation the as which holds and minimizing to bill we is communities, purchase consolidated customer customers our states. benefits the base, all allows a have water The bigger us legislation last and impact.

and responding with enact programs, same all to across This asset in systems. requires management violations notices was first New The to of way Act. this Water Jersey the cybersecurity the act Quality capital programs, Accountability state

across program asset in year to program slightly and of remain Water, establish our footprint our replacement our is XXX management positioned rate Because requires systems meet to these help pipe reliability. well it Additionally, At requirements. infrastructure New ensure XXX all pipe to a we over Jersey American maximum replacement years.

similar seen have as and other legislations, adopt states Indiana Missouri. such We

XX you on XXXX, acquisition our updating customer customer connections. XXX connections. Let's acquisitions states, XXX,XXX water XXX,XXX in XX wastewater totaling now we acquisitions, customers. attention totaling XXX and shift Since over XX,XXX XXXX, XX we've completed were were added XX,XXX XX the acquisitions, Of completed our activities. acquisitions adding In have to approximately connections.

to customer our customer start wastewater over of focus connections. good acquisitions our were the to added in customer include six connections XX,XXX increase We're XX,XXX approximately total total not attributed of states, wastewater. growth. connections agreement with XX,XXX Regarding XXXX in to XX,XXX This a over off a does organic XX acquisitions under representing

communities. include or needs, compliance a services to have and proactively community quality how we that opportunities of pipeline you businesses, our As engage range increased provide name past developing our it to social target to just economic see, opportunity not XX% financial needs, from first operational to can provide solutions million. pipeline, customer we've is the evaluation. to XX,XXX be to quality, Once This conduct increasingly five-year to When the where growth, and focused customer identified, Other we the also challenges are solutions. communities see year, been with we but for for we criteria on that Then our programs, X,XXX potential connections. systems we enhancing water residents the of to overall can by XXX,XXX X.X few. whether over development burdensome optimal wastewater for over local look evaluate use life connections evaluation looking and

the that size next on can some growth list is these five right also the is we're see our here over our on but are years. as of also you can working the one deals multiple targets contingent not increasing. clearly deals potential of any the deal, see You shows across on footprint. And This

general the to assessment, months in can of a take complete, case. final rate discuss the of of bid This part timeline a procurement a several XX base. minimum final usually and opportunity process development close as then agreements base process from rate acquisition Let's and inclusion approval and robust regulatory the take moment and of years rate inclusion to to process, approval, community a with in starts the to

target engage our our as communities growth competitive in our EPS acquisitions. advantages position well pipeline, Our increased proactive to approach to to achieve and related

of New in this bidder collection successful treatment a York, New wastewater the for York. quiet Pennsylvania Pennsylvania, January to the year, city Regarding Water of system American was

Water are currently this customer potential communities in American shows plays a the for lives we were and XX,XXX in agreement the We of working through providing it an but process, enhancing solutions connections, of serve. role also how customers the equivalent

customers and increased our engagement and regulatory and policy in increased benefit Let's customers focus By larger by raised meet an move to positioned to X% achieve to our our on where XX,XXX acquisitions firmly which targets. capital appropriate, range consideration has on for development the our of to X,XXX tend through on plan, to been water focus to well a last executing added regulated on as believe proactive in slide. to target acquisitions our system a on water We target X.X%. X% footprint, continuing In we've to are of X.X% a opportunity from more we executing wastewater summary, fundamentals, acquisition approach. acquisitions or pipeline are near legislative fundamentals, a to growth continued this our

to it over ESG. Now to I'll turn Cheryl talk about

Water I'm morning, Thank everyone. Environmental and of Cheryl of you, Bill; Norton, good and Jersey American Chief Officer American New Water. President

we I a earlier, Illinois. March lab example My X, central the I ago, employees. Officer. with Belleville, value relate been the across My base and gather to on years. hired grateful become constantly bring American And journey states of you and ESG in are, manner for find Water guide leading have here stakeholder It's Walter investors. I've We with at at each know began for opportunity my path customers, me categorize matters much social to integral culture our the as in directly challenges the our what to we people valuable into those me start key simply is spent direct result to of of The to a and or that role. wide on future, when years me principles the what at a throughout mentioned, internal about teach externally understand and stakeholders. and to regulatory are and talk confirm across American will who've States a possible. operate of do. a with which you business. stewardship. months was Walter roots XX our not in in unique range that My In of and on been engagement, others My quality, Water, brings customers. temporary that excited we operational just inform is me our perspective experience Virginia. reports I'm their water corporate our commitment governance, I've and environmental, industry it's most the internally the give who a I've the American a to employees external and is to as areas Bill our do the be coming which ESG taken even that to Missouri well and workforce, We The It's also we to today, the and American willing by West path continued our Environmental us. its do includes business and Water the Kentucky, American the Operating we about We to gave Water, multiple as to me I throughout areas, and these of what I'll and various group today get I'm self success has employee I've Officer evolving infrastructure development things areas Chief strategy. As business. priorities. used values I'm worked worked the on our our to and as ESG various and for reconnect I responsible those in technician our to whole together allow overlapping roles Jersey, over topics Living helping in with research how by do at Chief to legislative with is our broad amazing microbiology familiar the At career us is environmental of can back New given a makes business build allowed it. the three multiple ESG our five the core to Illinois, we sum Water become importance a is here the efforts. business reporting mentoring to operations perspective ESG and places experienced information stakeholder how business leadership that all American that is to but with helps a that here as honored to said few as great years, efforts American success. work. The strategy, Water. and that across talk we Water fun environments the topics who

that Let's some data of that been the pillar progress talk represents the social about making. we've the and

in improvements at attraction, continues diversity and American as areas such retention and inclusion with development. on Water focus Our talent

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zero a tirelessly other long-term safe. of each injuries work have target our employees to and We keep

history, performance great this recorded XX, in that's represents performance was best and the that XX injuries too the company's despite safety improvement XXXX Our many.

an employees good Our zero focus years, We continue. have which of is average. our so the do, has injuries, importance we driven But XXXX. industry hours for in hours on will our safety to teams workplace our reduction increased focus the target understand better a for to injuries five leader than XX we've developing from isn't for past and XX% work training industry over the annual still we XX and XX% all to and enough, being get

statistic XXX,XXX completed almost that addition was of COVID-XX due our considering hours training, is employees significant to in safety than XXXX, that done a training. During virtually. training important of This other to more all

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is the by water. reminder, majority used consumed pump vast a to utilities energy water As of

In X% XX% XX% electricity emissions of is of and water. water, to transport of and the electricity the greenhouse of our around our all total in pumping fact, gas U.S. consumption used over roughly treatment the the for are of related

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the trends In residential to related continue national fixtures to addition, we'll of from ongoing use water and declining appliances. benefit

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as a events, Our events, history of systems projects of to of total and weather scarcity, improvement flooding contamination water XX% shows related to more resiliency our maintain approximately each year on supplies our frequency our Recent to by capital as service address target spend ever. the X% is on the We severity makes XXXX. than continuous these stress risks important investment well customers. resiliency that the and and

in Another preparedness our key resiliency factor of employees. is the

plans and include drills. our response our We approach the to only contractors continue builds strengthen emergency workforce through partners our beyond with incident This and our we go relationships and it planning not preparedness. We trust communities valuable training and workforce emergency community stronger, serve. often in and response makes management

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to be apart this in sets way Our our whatever knowledge, In we holding for long-term goal are company XX% this to role. prepared our is frank, further to measuring arise. us by goals new help To in event are from improve performance ESG designed American Water proven high leadership in sector, and to our standard. others our a extreme the us may leader be the will ourselves solidify closing only

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Now, over I'd it Susan. like to to turn

you Vice you, person, American morning. to we in Good of Susan hopefully Chief look Thank to good doing Officer President with forward be Executive Financial it's and I'm this this Cheryl. And certainly Water. soon. morning, Hardwick, virtually very

just heard our my You various from colleagues, have of the elements strategy.

Consolidated the XXXX. in $X.XX Solutions to share depreciation the Keystone in required fourth XXXX, compared the fourth as per Results results share. quarter our of XXXX $X.XX York share, from share were $X.XX market-based means per XXXX, and two per per on XXXX. the the by per Parent of increase in increased you that per not our an per the share. company our $X.XX quarter before set through financial same the But for of and results share XXXX, assets In disposal a quarter held per results. increased to in benefit to results of period the related as what improved of from compared $X.XX same longer-term of earnings of New plan. sale, translate me share now the recorded $X.XX period regulated of the financial business me $X.XX pending business Let for accounting fourth let take sale we loss into outlook, share in highlights Clearwater to strong get XXXX reflect the

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the to very I'll be remarks. call to do back that, to for some able are Walter turn And closing We proud over with that.

successful performance financial the outcome you, Susan. and our of Proven Thank strategies. an predictable execution is of

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good than civic are corporate our All it's just affirmation Water, engagement, an transparency three charitable foundational words, upheld it for decades, operational excellence, engagement, the safety values sustainability, involvement and American we've and includes much of to environmental active leadership employee and For it's strategy. broader governance. and community and equality,

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success. increase next of X% invest year's of our to the $X.X billion plan, long-term an the strategy Our we're safety CAGR expect EPS diversity. utility We CAGR, our billion EPS high-performing continue we in fundamental $XX.X has over about presentation to dividend in the as we'll X% range increase at X.X% we acquisitions, and continue with the remains, X.X% last regulated investment sector. our focused ability long-term in And XX%. growth a champion inclusion on top or strategic leader XX% we confident and range, the end a culture, to today's and path an We're five in provided of for plan affirming plan of years, you to to now transparent growth hope of to potential high to

water you your for this take is about internationally frequently financially best. important. to that's I'd their about It’s and at companies us, we questions, Before our offer are But thought, for employees successful recognized perform nationally strong success and for team enabling performance being on excited doing a critical country people and us. leading investing we work. and about helping of you this journey future wastewater and in people, thank communities, our about It's with solve challenges. our its We're extraordinary

I our back take for we to information like about in session. Vallejo question-and-answer break, to quick Ed Before a turn would it participating

this to At that members time now in provided a the you, we five wish instructions community break. Thank the ask question, minute please in of investment a Walter. a using take dial We’ll for previous e-mail.

to XXXX American Water's back welcome virtual gentlemen, Day. Investor and Ladies

now today's [Operator Seaport comes from Storozynski with And Instructions] session. first the question ahead. go Please will begin Angie question-and-answer Global. We

needs. so is Susan, question first equity you. about Thank my

years exactly You would plan, so – million ATM me consider guys about an do you and how which have again, ATM? you talk see not roughly please that equity in $XXX an to

need so the need $XXX we Hey, indicated philosophy equity scheduled, million, we generally so roughly plan, in on that's the an about the of update question. in year's this of talked plan $XXX our I And Yes, the bit and have on this would Angie. year at middle say line had in it’s with the recall that we million sort the or plan. XXXX little the of we my as $XXX. requirements were being to Thanks for about still where timeframe. up and of capital I good $XXX morning, last the this is the five XXXX, issue million sort

into terms So the it comes requirements. in that's sort of plan when of expected

fit we you're do of I sort in decided don't the just using know to like it look again, I made we you methodology and haven't it, decided, program this, may today, to the ATM we some on it's and little saying and use program that. continue of certainly better issue it haven't yet, generally really place do considering really we'll just a have haven't or to a sort but get right, a middle whether profile to speaking, tool, it We like we best decisions one are method the We an other five years block tell at would market. I any on keep we of in

such And it this that the accelerate? is assumption already. coming addressed with of have – so contributions acquisitions extent Good. guys from secured? to second regulated increased you it is of already growth the that feel that me even improved acquisitions. utility portion have if business going pipeline deals earnings question, forgive of you you your But And contributions been growth that the just Or backlog is the pace of base, has associated the an larger to like growth

take I'm that are to you? going Angie, how question. Walter here,

the seconds, let XX in section, apologizing any me start with was just to me XX the So the webcast, tell you it my if by issues for of you missed let fabulous.

So ask again. and go to I back would at look you it

X.X% with the growing them identify a Varley we it have, been the pipeline truly at hard then Bill State the working to X.X%, the reflection teams and opportunities that's work have that that of So of to our up we part really that right And pipeline. that to growing through X.X%, confident X.X% that's believe for we're to growth the triangle. the increase now, so supports pipeline reason that

asset mean, Okay. And in expectations should you just plan includes he the from really comment it on proceeds seems lastly, sales, your Also New on if on any color when haven't as going could so like what's transaction changed York? that. the this close. more financing to I

Yes.

interest about of the Susan with the and going can system York sale there. then start the believe sell it's the the me service New we there Water talk still to working in – Liberty. of customers work best still structurally towards Let we as We on with American public what's that. commission Yes, we're

that As a council on completed the takeover, and the X, to is be special directed public study you know April on a governor a study to February of complete X. by feasibility

work date work outcome that degree. impact confident that remain sale may our we to while So and the the in timing some of of the

here. I'd proceed And side, Angie just add on the quickly

the plan. compared to the proceeds, a and proceeds from increased source about this for in if of you sale have We prior tax plan obviously will after equity of that's sort expectation growth on it $XXX our tax to position million We increased is kind more we of as And to just our coming is that around estimates proceeds – tax. there help feel refine really the transaction, here. like we finance driven after the by continue

So we did from about increase an million plan. prior at the $XXX

still Jersey acquisition doesn't hasn't on question website. seem promise, I on the it posted adjustments, ruled mean, the [indiscernible] right, I the last And like New

Yes, Angie, they have not ruled on yet. it

Thank you.

question Durgesh Evercore go from Chopra our comes ISI. today Please And next ahead. with

Walter the Hey, listen I XX promise and go XX good to morning, and back seconds. to to

Thanks, Durgesh.

I going just back Just to to of little want to – a that understand the X.X% sort bit just X.X%, better.

were gives sort charge earlier. the team you you confidence something to versus X% targeting you're But, the that So, base he seeing growth recently rate of higher a I pipeline mean, today, there of and or I there. completing proven of – large gives X% sort base, obviously base has in in in successful that X% you confidence? know the increase here Bill that that's right, acquisitions. is that is that record a What track of a

York New perfect of it's a example them water if you identifying to We're pipeline want as city you both best also the And that. we really Yes, business. grow I led adjacent doubled job serve to doing our we and combination of thanks across States think pipeline. a opportunities in wastewater. working and wastewater almost of at and and practices that look where Bill, team last wastewater, the our advantage of through take that's and know the opportunities States over increased with a pursuing it's tremendous in and and to the But Well, the water where on scale water the things customers. here focusing But really we still areas customers where of the we it in by year Durgesh. at we also focusing serve working look States our can

want all increase is you those pipeline, really but deliver it's really on it's So back a Bill, the if that's about why acquisitions. you anything there to have to pipeline add. to have pipeline, there, a to the is

how Yes. Hi, you doing? Durgesh, are

Bill. Good Thanks.

financial a quality, the development, not wastewater for the at to evaluation discipline too. Durgesh, look conditions, are at a community pipeline we're In part are compliance looking it's take of water the approach needs looking just we and what and

is didn't we're solutions pipeline and of the So process through. And I that business on systematic actually the to of looking wastewater asset that our – if water a side, go also is has the think by liability. that side. the at the But now it's aspect view they our they value, we is XX% on increasing is sitting realization proactive communities an before and which realize approach, potential the

combine think you our the what all So, I pipeline, us factors a confidence that's the gives with approach, discipline increasing

just Is going long-term the And so thoughts down, sort opportunities that? maybe come of there Understood. are seeing growth intentional, forward? less Walter on that has rate helpful. or talk you your market-based That's can just through then you super business, that

really the faster We regulated and moved X%, business to the X% of a clip at that a it's to it acquisitions growing and from X% reflection particularly identified. regulated we

are outstanding, in confident in we three and we very the for there military military, in and won five provide the near-term to two the In the ability the our men continue women confident military. that, homeowner in to businesses, as you both our what's we're market-based expect where still last the know, really we're to that's driving So be awarded in and services. awards service great

confident the we're contribute in to of success both organization. our and they businesses So

competencies, service what military installations. core the flow free So complimentary great we provide extend for do on they we're and and to able the very a our and the side cash to XX particularly provide

it. Got

So essentially side it's regulator the business. on more of the focusing

now. higher have growth regulated a You acquisitions

based business result market of is that And lower a the growth. so, end

Understood. Okay.

Exactly.

range clarification, that? And EPS correct that about American, quick does then am one the XXXX I guidance just York Susan, include New not

plan we XXXX. we sell to sometime in haven't it as obviously Well, it filled yet,

So specifically there'll be identified the it. an any of to to some We've as it adjustment sort results guidance. related in not XXXX XXXX’s to or impact

the New the I what it So XXXX’s would sometime American Water York just is contemplates of sale and year. say guidance it during is

Thanks Okay. guys, appreciate much the time.

Durgesh. Thanks

Thanks, Durgesh.

Goldman question ahead. Sachs. Kim Insoo our from comes from And Please next today go

Hi, can hear you me? guys

can. We

We Insoo. can

the don't have Maybe you. the military starting Thank little bases I describe utilities, related I sorry with the see you if I'm to Texas, had expansion? not and that water State mentioned in winter played maybe you're couple that, in you missed you off Got down that that I for you Texas, earlier, given in how regular storms issues of currently you're a it. these not but experience in your bit a potential this out know there, know State, do it. just infrastructure could if you a But about of opportunity

don't clock around the Joint and military Base bases, We Antonio really we main And for folks breaks experienced within where I've teams I'm and And we service they've to systems, work on do military those and so done Fort many challenges then folks our the And proud say, water of you’re our to them. so while the Insoo. regulated continue provide other in provide to thanks more and we're we running wastewater the have proud service. San have of kept Texas. our two water Hood. bases got Yes, right, operations really,

withstand down cold of periods really the and as bit and extended mean, because is there different Texas they're not weather, to far As little designed there. that's Texas been down design operations, the construction in a challenge I

like And to tend Northeast. system hits, Many much a that a them are pipes so And very freeze at when of homes the the number of like lot pace. really The storm perspectives. they ground challenges a deep. and are in are a are of quicker not from above it they buried not insulated the

there. lot contributed issues what a to So of really down that's the

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of really constructed again, to of I'm operations systems designed extended are again, bases. our weather. in And withstand cold proud So military periods and Texas as two our

expansion look Got growth could that an opportunity it. that do guess, opportunity, increasing this think you interesting you as from be municipal your rate? I towards

and us want we grow – where operate ability a environment, many five-year at a to times a and to assess business for the over state, got regulatory good continually We we've to good customers roughly XX,XXX environment, to we've to least a said us period. enter for have

bottle down we'll methodology. So using assess though down communities a the we've to But coming that different water. of helped our people are responded of and well, really as this and efforts who country, entry the aid customers. even we're of they're of in We're proud by proud there continue company again really a in the not we our as points that states because to there shipping that's

given of and Administration side you've if embedded XX spend do Understood. just what think as water and Biden quality five sense your much of upside how infrastructure then on And could, plan water opportunities you type initially, one and the I on any in to exist? more, focused that well, year

there'll We believe we for get think be going to we're We there's low access infrastructure the I bill. revolving loans don't any to municipalities. funds, money going to out going Yes, to working that. the be be think interest believe there's free access an to and state to

side. working the on side, get do get On water we're to wastewater access the but on access wastewater side, we the

last the like benefit going customers the and five-year But low interest are can invest customers plan we to increase from resilient. in – of other to continue is in we're need systems our a So the areas billion can sure to X.X invest we an plan loans. year. our our that over make through last And

so you Thank much. it. Got

Thank you.

Please Ryan next from Today's Instructions] comes of America. Bank go with question Greenwald [Operator ahead.

Good Appreciate morning, everyone. the time.

Good morning.

additional on earnings slightly So lower It considerations XXXX by to predominantly the driven relative the adjusted there? weather any there or base. implies is the to this XXXX. Is equity other rebasing the

don't off the we as certainly timing guidance. at results. at actual Well, to all. release And simply that I growing Ryan, mean, our XXXX we available of of us had for this we're XXXX view rebasing

about on So we've rate very five is that years. growth as to talked growth the X% over of of strong XXXX, continues focus XX% long-term to

is that's So of that is million reiteration our equity a focus our in continued with long-term There couple and hundred the plan, obviously guidance. more of more.

the So a and result year, last just additional dilution then built in incrementally obviously equity. there of was some as dilution plan more

year, your then acquisition get states Got and all points now as sale you continue the assess you any operations focal opportunities. considering guys And New it. other to to – right to of maybe this proceeds, divesting work enough. you're finance Fair for the through that York regulated of some use

now in Yes, and most that, we that. can not we'll to efficient we continually just any We're provide continue where And want operate that. and grow. to best for operations we say service, Ryan thanks do position assess the to continue customer to where

it. Got for Thanks the time.

you. Thank

Ryan. Thanks

from with go Verity please HSBC ahead. And our next question Mitchell today comes London,

helpful, got question Good presentation. you've since morning, you I efficiency. Thank only X.X% much on for I've Really the on a Actually XX, say noticed everyone. very XXXX. Slide

you can that? less me is deliver that So or quite they that consumers you use happens XX% scare really Are water, an if more what ambitious and actually target use actually water time? that than confident

Thank efficiency water water. you think across customers for that the question. deliver And We board. yes, very than confident we're actually a that. think the it's we less it's lot can using We more our

So for example, system, in out within detection of by to our efforts be or water that systems. leak distribution able water non-revenue more unaccounted improving that our for we our will recover

going is the we reduce in amount by to loss have And pick in this usage the fixtures so we that so make on a up really more be space decline appliances, that can and do continue We we the it we perspective. based we're that in of system. water to from a capital improvements leakage driven think looking but and residential at holistic the

or managing? How do or going to you're we to update is it of Are much be long-term on an a basis track give going how more target? us you an annual

it. technology just And we get around have annual we're picture in calls the path is at to target, it we where a some but using of long-term on provide future updates do about a to clearer you Yes, we're may plan our talk to with help probably there.

thank you. Great,

targeted and that's for technology maybe leveraging old to investment said that Cheryl Yes. replacing and and to Those And us more continue pipe Verity. it's to main the out areas there. worn really area, key about that are improve in also prone in identify two breaks leaks to

Thanks.

Please Wells question from ahead. comes go Reeder with Fargo. our Jonathan And next today

Hey, I one have most just of but been throw answered will and mine team Walter and out more asked there.

cause pushback of and given recommendation pending the kind final case, your in Just settlement. ALJ rate the PaPUC’s curious decision supporting the what

you want to jump that can take Susan, or I in?

I guess, the just We a just with of settlement maybe could did did the agreement. start word that bit one. news. here either Well, commission just get approve we

And they actually settlement as we the issued submitted. Pennsylvania in was ago. now just So did an order approve moments have it

question, Any it’s other Jonathan, timely.

and presentation great yes, update. Yes, appreciate the

Thanks Jonathan.

Thanks Jonathan

And our Please Advisors. today go with Capital comes ahead. U.S. from next Followill question Becca

you guys? side for different morning, in Good a et the guys. M&A regulations. anything host environmental that that provide Is there might cetera, more might Biden The Administration stringent reviewing munis, further water the works regulations is of facilitate on help for

Becca. for thanks question, the Yes,

we out there limits. on but standards, health the and monitored advisory have a really focus it's XX areas area the for PFAS the up time think a one again, enacted Administration. limit limit parts is stringent I of per think one time or of some EPA Biden the the and Many to for states been be there's to take it's that more I going And MCLs, contaminants. I EPA trillion. some into coming but with science to would they'll know maybe of And keen that? they is Cheryl, at to by look want again is that think strategy likes other will And as to going make you communities. as for to the to there I focus play their on EPA. a our there solutions to a acquisition think provide we going be to add emerging area that, be continue that's key establish here focus continue anything

fully it, we're see the ramp that Walter. going regulatory I to that think covers I environment up. anticipate

works that on Thank basis, state that facilitate passed the of is yet going type has legislation there any not be the in been that's from to emerging you. then it's help also something would that introduced? second like a And question looks M&A,

start Well, let that have two other that in New me started Accountability with Act adopted. Quality Water states Jersey

is I being within other states think that in considered footprint. our

are that the for again, out primarily investor-owned, of that across some that look challenges and about that pipe would establishes Midwest standards uniform around operate discussions rates, of many legislation. in municipally-owned in we've have the replacement I there, whether the sector, cybersecurity, a asset had So management where the states that plans. around long-term we And the been or that's in instrumental

So I say, think Water to should to about it's a for we wake up American call talk maybe many selling assistance. municipalities

you. Thank Great.

you. Thank

concludes this gentlemen, I Walter to Lynch back remarks. question-and-answer any and like our would Ladies the over closing session. conference turn for to

Okay. Thanks Racco.

and today, on do work our your and We First, hope of we transparent in and our value clients. behalf thanks discussions say the us for you stock. joining let open participation give company the in you and our me investment your confidence

Thanks have and you be happy safe. they'll please additional for us any them. you. If the Thank call again IR answer questions, joining team stay please to and

all for you, attending thank We today's thank now Today's And has you conference sir. concluded. presentation.

disconnect. may You now