American Water Works (AWK) 17 Feb 222021 Q4 Earnings call transcript

Good morning, and welcome to American Water's Fourth Quarter and Year-End 2021 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.

Following the earnings conference call, an audio archive of the call will be available through February 24, 2022. U.S. callers may access the audio archive toll-free by dialing (877) 344-7529. by the (XXX) replay listen access and may for code is callers dialing XXX-XXXX X the International XXXXXXX. Relations The available audio Investor for be website. X year webcast on American archive will Water's Senior introduce would I for Aaron Relations. now to Director And your Investor of like today's host call, Musgrave, Mr. Musgrave, you may begin.

us for our Good we prepared morning joining will thank your At call. open you and Tom. today's the call questions. remarks, Thanks, for the everyone, for end of

will safe performance estimates Let forward-looking based be events. me we over language. expectations making future current some and that our harbor These first or our represent expectations, predictions on our statements Today, go assumptions. future statements regarding are other

and to or implied However, from with subject events, since indicated numerous are be the statements may results statements. such they future deal cause actual factors materially other that risks, different results known these uncertainties by to and unknown

per our measure during this has accompanying presentation related earnings financial found refer our share. earnings of statements as analysis filed diluted All important the Additional provided share our the the earnings on to and the uncertainties of a release and each XXXX, earnings website. factors information December posted other per and can non-GAAP reconciliation The SEC. Investor ratio, appendix and be with as calculation O&M financials to in XX, slide in the a detailed these Form been regarding earnings information the efficiency release our earnings which XX-K, well more yesterday in in risks, the for deck, is Relations and of and page to

to EPS share with Water's off the purposes President, and last actual results, the Susan normalized turn over of XXXX CFO, CEO American And long-term CAGR is range anchored per for of I'll call results. addition, Hardwick. our reported the earnings that, the presentation, In our

morning, good Thanks, Aaron, and everyone.

to our company. way the want express who want wishes all growth want role also I I unchanged a And remains reassure in continuing shared me deliver weeks our months I commitment few the our that over an by over just to in thank from our sent this to with on is strategy is and to as journey, recovery. you started, team services military Walter in operations acquisition a for what through the to with we infrastructure, reached begin growing out you your to grow of It's of serve have invest to November of this in I execution to thoughtful our military long-term to earnings CEO. great say get thank comments regulated past few and take we footprint. support those best honor as in Before year. X% moment his privilege mode our your This X% encouragement our the for energized last last you by for and

committed best XX% to in is to end committed to dividend, going deliver. grow confidence know us we your to are quality regulated earnings. on believe higher wastewater X% focused And that, the no with And the We at provider our we what We in capability. for with now investors it. range. we XXXX our way we positioned where And and rely There we've create are and value. water That's States most is let's regulated-like high and transitioned the our are operating service do business, to forward. exactly the deliver to dividend are to that XXX% a we we on United scale get the of what secure did and as other our even to in that

excellence operational then and start X our X. of Turning share and by covering results our financial XXXX. Slides some in I'll to highlights

successfully fourth and of share the company $X.XX from support in demonstrates the business. a that months by apart Charitable the $X.XX from share. respectively, in sale per share sale XX completion increased Earnings in share revenues annual higher impact reflects on primarily per XXXX. and sale. reduced December Production, sale results costs. the per new share, and Homeowner line of $X.XX higher compared results the contribution year Market-Based per of the rates share XX, ended of the effect the period expectations gain were XXXX growth an guidance. the This XXXX. of in Regulated as operating include quarter XXXX timing somewhat labor-related per Full offset by results XXXX same HOS. proceeds also increased the per which $X.XX and the our another of results, to costs business business X.X% with the the on December by represents on the year per $X.XX is well as HOS earnings increased HOS. and Services meeting and Water $X.XX to as of a American to earnings $X.XX wages compared in of in gain from of XXXX of of year strong in earnings $X.XX XXXX, fourth per result decreased in Full because results of share regulated maintenance XXXX, over the sale XXXX share For in earnings, the depreciation quarter share, Foundation $X.XX acquisitions other growth were from compared and per to include were Parent gain before the

excellent company's that the of our ongoing side, related last safety of an I'm people challenges outcome On very to the operational pandemic. performance, years amid best year proud marked one the

capital value Ida in and the water to Related resiliency of was any We our quality in our service in not our also flooding witnessed the drinking investments. successfully Pennsylvania of Jersey, our We operations. New withstood customers' Hurricane while of aftermath areas. impacted widespread investments Maryland

XXXX customers. work our serve to $X.X replacements infrastructure regulated business of improvements, Our achieved other better billion and system in

these regulatory leveraging by hard made along to supply continue work the on scale achieving capital bills the size customer successes investments, and affordable and business, we focusing we by pandemic. outcomes with to keep of efficiencies, chain our our operating and As throughout constructive

discussed and component we our in you acquisitions strategies. to key growth affordability XXXX, customer regulated of a continue with be As

acquisitions we new encouraged than bit have approximately progress fluctuate currently course, XX,XXX on have will about our York our New we through totals finally, talk are under While XX,XXX Cheryl And X more that -- states the of pleased last And HOS welcomed to new annual and executed customer results that connections start we sales to know connections of lower we we we agreement targets. but are acquisitions acquisition acquisitions year-to-year, year. are that year, are currently a in these the successfully covering about operations. later. customer and Michigan on our

our can from As the divestitures where we shareholders. and customers, employees outlined into serve will regulated in our business thus we proceeds these drive for and redeploy customers efficiencies and best November, we create value

top sector return Slide the and our for investors, a the combination to now. many to We as an by on our growth, EPS ESG of believe dividend our securing total Turning in place X. continues shareholder utility be performer years premium rewarded

our the shareholders this out deliver expect on the on come. to see very competitive excellent for you history plans of X delivered to in of return XXX% we years, our exceptional As long-term total Based past we our we've slide, a shareholder years dividend strategies, an over continue laid to total executing on can including have growth. return to many

here. Moving few to a Slide points X. I want to emphasize just

ratings. investment level believe how We current of credit plan, and our that supportive the to intend continue both to is finance it, of our we

complement financial with you, our the our affirm rating a shift operate industry. Moody's X Day regulated-like the XXX% that to profile. X recognition As to of that we've S&P of are in our Investor proud ratings credit solid We're year to coupled both our jurisdictions. our regulatory regulated agreed with told our only and to A They in presentation. both business They at is that. following in S&P and metrics earnings, part decision good constructive due was last our This affirmed

value we will to Our of we and for ultimately work continue benefit strong hard is the our customers. maintaining at credit profile it something

on end other the to ended is $XXX I'll back After we puts million HOS path debt, were to than metric. proceeds XX% of to by on our yet good XX%. a better XXXX at be initial capital deployed. thing where adding and debt is total the of about X-year total This out to of the we this point goal XXXX, X% sales roughly At slide plan. total of end us The our our

we and how And investments billion when turn in disciplined X over on to a in clearly more people we base of and benefit and our will On helping XX X years are environmental in values to in look out state, these is over the our and communities. Slides increased $XX an again, next term. recovery scale of of provide each recap to affordability. key everyday estimated footprint the size as balance November. strategies to and XX investments X a spend and to our the of water economic we to customer serve we business. years able laid a to long comes base, while improving services economies advantage, customer the Because regulatory in work. to how investment billion across $XX Slide We'll to support installations local map customer important ahead November, especially This geographic through approximately of likely of to group, plan affordability drinking wastewater those while XXXX, for million it $XX regulated time military earnings management our investments, XX demonstrates stable diversity we billion the cost systems As These Including our competitive Slide be some related these the laid states. next capital to out significant into our generate to there's for strategic strategy capital back large military integrated let's another the the regional customers. XX, maintain and the of and that consistent The services demonstration are XX our ESG spread in we're ramp-up we in and capital our billion a through the affordability. $XX the XX

Turning XX. to XX Slides and

in compared XXXX for our at as ahead earnings to look XXXX. outlook Let's

some earnings range As we drivers yesterday, per helpful parts. XXXX are share would thought were guidance affirming moving per to several year-over-year it of be share. we the release We there share to $X.XX $X.XX our of in since details our shared

recoverable be on rate costs are rate see 'XX, along in filing of labor may this our pressures regulated several reflects outside $X.XX chemical cases with 'XX XX, range that general to Slide fact can year the cost that earnings $X.XX not you in As of a we case. growth significant and

So of But from mentioned see proceeds we we're the HOS earnings talked in of about before. in in that to the cycle will as the benefit regulatory from offset New And any revenue that XXXX, operations. sales will from material redeployment interest not from we've back we and XXXX I've loss York. previously, in share agreement HOS note income the the helping HOS earnings on

financial reiterate XX, on forth just we confident long-term EPS including that. set targets we November, I'll beyond believe in Finally, are well XXXX, and that to X% growth through we Slide in X% the

points want and in an namely our on American been very industry of U.S. of want of accolades. highlight many is communities ESG impact a transformational now, important story, our what our I in has ESG runway Next, ESG about efforts we're an ESG cover I Today, years the aspect decades-long proud I those Water underappreciated about across to think leader for -- as few recognized XX. Slide to

regulated area. opportunity acquired growth an entire triangle XX and We systems. are serve ESG our strategy our -- communities growth impact or impactful ESG-related this each we environmental in change the acquisition in highlights lead required future. reality for within positioned social serve has But the through significant integrated the our will to is Slide for initiatives

in as badge XX. awareness this and externally of aspect begin continue internally in communications story, on and you'll the see for highlight see the and It And we you hand. ESG S from to as E drop impact appropriate ESG key of order highlight the integration our you'll hear newly see created to to shown G to our water both all do. at of values ESG of Slide the as principles in to appear will badge As topic the our part we us that shift raise

that serves XX on state. customers because with Let over me Indiana of Water's close just This million in X a ESG Water, story X which story of example Slide American impact comes American from investment. of

of with few you to town I'm significant number A Sheridan from small another that wastewater some Sheridan. a in Indiana issues years compliance EPA of As ago, U.S. happens know, be hours the originally in town called small Indiana, to facing system. a from environmental its was related just

important to with listed us, X.X often our opportunities development I issues. impact restrictions light. just acquisition And of can with occurred turn that so the many Cheryl issue over a an Sure, when you connections, million to became 'XX have to see there for customer opportunity, solve on me one. slide, means because strategies we is operating make to fast you'll business -- was bigger growth you positive we environmental positive let and facing you very the changes partnered its The Cheryl? it us the different As our see hear of detail. it you runway socially. noncompliance if financial it long than talk town but see community about forward in the pipeline also those issues. a In can future, that, it as hope see as and to a in greater of cover And today, environmentally to that means which

Susan. Thanks,

review Before for our Slide triangle turn into we to to foundations goals success XXXX. dive XX year, in our cover to this financial growth operational key and let's

that fundamentals The to principles earlier, Striving to health, order customers. be talk our to to start the regarding growth and in employees' few a But which we that and contribute leader to teams. the difference go as employees Residential We to company, equitable commitment excellence our and and to transparency is safety, success American recognition of clean share This XXXX governance, the strategy. be a excellence. to delivering the exceptional they water the Customer ability well. operational is affirmation the serve. Jersey customer upheld us Satisfaction and affordable about being run helps our ranked enables From long with leading service. high-performing Illinois is more company's and collaborative serve over for Power smarter, right these we believe people our our safe, We to it in can environmental Study mentioned we've equity, culture and our and the our Susan ways to As commitment critical culture the This values employee decades. Utility requirements empowered we we for New Water high-performance industry operational customers positive of spirit them provide ESG unwavering building a of indicator an J.D. a customers well work day. must for inspires for to I'll feel strengths make in for get a an other leadership is within minimum creating with which testament but foundational sustainability know and to of commitment achieved us ESG, the minutes. services of means our every beyond with included Water communities our of where for only valued, environmental #X good truly corporate are our to a just engagement our

to of of XX. need XXXX. capital each regulated the in business first expressing execute of achieving billion territories capital the hundreds our leaders year. $X.X my start we we Turning our second additional in investments XXXX their feat infrastructure business reallocated a and This to We goal by acquisitions witnessed safely projects of I small efficiently gratitude capital It's is across need. less response the of capital Slide want teams the true no in for to our a to investments in in for XXXX to half especially year. to as half of when midyear years like allocated and

available discussed are capital. we've infrastructure additional and many As across utilize adjusted times, needs quickly business the the to teams the significant, our

us each expect between to changing adjust for can X to You these to conditions. shift continue business capital year buckets

a in of focusing from billion our of to XXXX, in ahead $X.X step-up $X projects be on regulated infrastructure Looking our XXXX variety in footprint. we'll investments billion across

in few smaller As we've ones. out, told though, before, but rather at few projects that very Hopewell, dollar of include projects stand intake and A major pipeline $X terms of water there planned and treatment for plant improvements for for plant water million are magnitude, you XXXX million our $XX pipe at our Pennsylvania. Virginia work treatment Pittsburgh, in treatment Hays Mine hundreds

our We're continued related through our we plus regulated base billion billion $XX expectations the want which over X% rate our investment earnings to XX. to to base the our $XX of acquisitions. growing across systems, of Moving highlight briefly rate We affirming growth growth. add next which X% to base, with decade, also execution the drives to rate aligns Slide needs

our by filings. Turning for very XX. XXXX cases filed in general the the a Illinois. investments summary New to recovery cases These of Shown driven are Slide rate of case Jersey here in those filings since states combined. rate is XXXX X capital extensive totaling is and than cases. last billion made already in $X busy more We we've year

including revenues our in million $XXX to since see upgrading in $XX surcharges. X XXXX and expect infrastructure rate of our million cases XXXX. deferred excess for have total general is $XXX which the cases step XX this X proceedings. includes to of from of revenues on million income Virginia, annualized almost West in includes and This active that infrastructure increases, million, infrastructure these from rates revenue agreed year, Already million January taxes filings the $XXX magnitude request surcharge have also reduction we last you we new accumulated including We since where To Slide to case. we in from bring a date, invested $XXX annualized that conclusion can show

For infrastructure we the the file additional expect remainder in rate last general the cases. roll investment and to of to year, since acquisitions cases

is to because very many over execution affordability years. see priorities that and the our our confident we Slide have on skilled where focus outcomes On regulatory in cases, continues. plan we've you these As key and XX, these working the times customer in on always, we're business employees on dedicated make as demonstrated prudent to for growth investments constructive can

household as Our to with our efficiencies, affordable bills coupled and continued efforts, deliver customer of capital cost customers. growth emphasis very for on our most percentage a have of income

on customers' $XX the $XX to average are range per Our bills in month. of currently

continuously our to our operating we grow As bill time. over hard efficiencies footprint, we are limit to ways at looking we improve as increases work

Turning to Slide XX.

We continue the in states with we and to work where constructively regulators operate. legislators

the customers there see As communities seek solutions and to they that options our legislation wastewater believe multiple more slide, on of water and will pieces you were as benefit last year can enacted we give challenges.

highlight just me Let X.

year. First, systems Quality requirements Act additional Water stronger enhancements Jersey, The reporting prolonged with state's requirements the of in for requirements and cybersecurity last violations. was include New data, the management and asset strengthened enforcement Accountability sale for plans

national the operational Given see we water bills cyber on as that infrastructure, to of state and we an exists also in set standards continue important our for by saw Similar all to step legislation other Indiana utilities. taken consider states and the news Missouri, this legislation threats New Jersey.

enacted where market we saw states in important the in more This states. of tool for operate. community value XX is legislation now we Second, exists fair

It's the programs, programs distributed have the that to our we law by customers. more and with and states In by low assistance want X weeks state American increase we X The $XXX,XXX customers impact alone, are in less program hope possible at working Act. note identify made interest state financing to projects available to we passed were invest Plan revolving Rescue package the can addition funds Meaning in are also can revolving infrastructure our implementing a that customer to bills. great Finally, historical to currently that the state our XXXX made of savings I through to Pennsylvania funded new the nearly where in program. need an directly we these continues. use became funds. in are bipartisan first level we

We already sessions state underway. the engaging both efforts and legislative at many in are level as XX are federal

in Turning to on talking leverage want acquisition piece advantages. our to Slide the on our very our by triangle. focus and about start I growing focused can acquisition states where We're XX strategies. sharpened our we of growth competitive

a only is regulatory things. few target For range We to challenges not greater footprint we but environments and constructive of mass critical XX,XXX affordability X,XXX in solve cost where to we customers a we us, in this as acquisitions This mass. through customer the the promote policies. voice grow means and legislative and have help state, will regulatory existing each helpful and industry critical have efficiencies, to

acquisitions an footprint. also where ample for water wastewater opportunities have existing We we have service

to we've for results strategies, Slide that to at Now XX look covered and expectations our the turn XXXX XXXX. our let's

we million were new was short pleased customers XX,XXX X to welcome in acquisitions of target year. for $XXX XXXX, across the states While our planned our of

also Harbor second of year. mid as agreements year. more customer of in weeks from XXXX representing the about agreements, the Protection the XX,XXX this Some to of expect to XX, XX number. close maintained the signed connections which those are XX,XXX which as agreement to a we very includes as are Egg connections in about This COVID quarter of said, That of first cautious light York, X,XXX Of well XXXX. is first for approximately in X is includes to connections signed for Pennsylvania, of Act customer customer connections starting late in Water under acquisitions customer which solutions XX,XXX represents needs agreement, their we XX,XXX a sale systems this close with this that assistance. we It under December under year Jersey evaluating approach City as X,XXX federal Infrastructure strong municipalities due New and another potential expect was possible to

future. will Importantly, we in this legislation benefit municipalities the other by believe

In The in of in of falling the customers acquisition, opportunities on is including end bids agreement and see over pipeline phase. the You'll accepted slide, pathway accepted at of part to the also the X we XXXX, goal between the XX,XXX under $XXX XXXX. phase states million is acquisitions total, of had our representing bids York.

recognize multiple have communities unique opportunities advantages. also competitive We our that with

We teams our confident goal very XXXX. we meet solutions investments in can with many communities. that investments, Combined in have $X.X infrastructure billion great regulated place offer to great of our with we're of

XX. Slide to Turning

the Group our Military growth business. complete of military MSG, important and then contracts on X country serve those XX-year installations or serving operating the installations projects, bidder Our an Florida, This base triangle focuses We remains Services additional in XX will revenues contract. part on the currently optimizing which we beyond summer. and our across the including expect are business on installations announce through actively bidding Mayport Station winning Naval regulated-like and

to X other bids are XXXX. awarded expected The active be in

these majority we remarks. to can Susan? for our The there record be and think ahead. which some it closing other the now track could of based Susan in back in our on turn X, over growing XX the nearly opportunities we successful I'll Beyond business. years win expertise

Thanks, Cheryl.

confident begin our states Q&A, we our want slide, beyond. the am in this grow reiterate And the throughout to call we the I beginning the in to said serve have the goals what and I'm plan in to Turning final and to we of today. Slide here XXXX in I that office our at have XX. in at place place before achieve and we business, teams right confident bases our corporate I

team's continue execution. and earnings goals of to has Nothing dividend our on growth our record that and determination has regarding year-over-year. consistently team ability delivered changed Our

financial with We back water over X-year long-term exceptional total take have, to for standards you raised without and we're and bar turn it Q&A we for in why And of as any begin operator of part and initiated us. shareholder November. targets operating may the wastewater That's industry consistently our performance leadership to the question, excellence, I'll XXX%. ESG return our by the last reaffirming that, in have questions evidenced

the Goldman from And [Operator question first Insoo comes Kim Instructions] Sachs. with

role And luck an Susan all, new that. at I X definitely good the of best this and of Walter wish do think luck and I in first important definitely

Thank We Insoo. certainly you, appreciate that.

side, had -- on on I I billion you needs. I talked question think about, of First I just $X.X that Day, the at think your to wanted verify financial plan, the X-year the Analyst equity just think,

that thinking in it's should equity still trade thoughts around confirm want that, And that or converts? potential unit related whether the that's of? to Just number equity to case, be types and of right the that, for is issuances, we if any

And didn't always today in billion out in equity X of $X.X Yes. we anticipating that of still is absolutely but the laid our out we in. I've years. call that it -- it call, as this of Insoo, plan. specifically is the What middle The of still still we're you're And current right. November sort characterized sort

in 'XX So time you the can frame, think. expect it I 'XX,

at just $X to looking effectively We at of still issue are We over execute are to able here. The billion in of starts think size in certainly options. there the terms get lots size. of tools interesting place to be

the we to do a thought could in want we best think time through sort to how that easily I spend. we issue but make the sure issue, with that single of

Again, So a of roughly X the sort staging middle time. I look sort as we of years, of at that said. in period that over of may

So no need change still basics out in to figure the final issue the it. change timing, I the sort that total, in strategy are think exactly no But on we'll unchanged. the of how

so the finding you're both someone whatnot. the it And experience type looking just there far? profile that CFO, on makes mostly process it. any you whether you just in with have is or for, the utilities it's of external? CFO of And looking industry then internally or the sense. Got are thoughts permanent That any

good a question. Yes, it's

And to about. Korn engaged regulated expect Ferry the help do we've us search search. as We have to business, We highly the is very this a with move quickly. talked

have list So in our around certainly, that been the will of have on utility certainly individuals potential be or high candidates. experience, industry

with Durgesh The Chopra comes Evercore next from ISI. question

congrats your my and Susan, wishes on best for also appointment, Walter.

Thank you. Appreciate it.

Okay.

thing X just So I wanted clarify. to

I 'XX that think growth now? did you but the starting effectively X% to just guys X% EPS this, point, from to on on Aaron move rate touched XXXX

our 'XX. has of here to results. most off off of And it anchored anchor recent It normalized actual the our is typically practice been

and affirming are are here we about we as long-term of 'XX. talking So plans, off guidance anchoring

but I you've Okay. I Anything thoughts then of strategy, your the Excellent. remarks, the in been I Susan, any on know but touched you just differently? and would the And big -- that this you same. picture think, part and do And parcel also there. strategy hear being you

in the We quite to the obviously I think No. it strong. confident made in out said some November we're laid we plan plan. And her the came strategy at on absolutely out think plan. think execute committed to very the changes November, is we in that plan. this with I in our ability Cheryl is outset, We are right and demonstrated when remarks, and we We as

Excellent.

then progresses? to are if this And should I Any back as Jersey on X the the last you on? just things, jump be may, for we anything focused how rate case watch I'll case New Okay. that queue. about you in and just are that specifically follow-up, investors filed anything feeling this drivers? What

it think X that just lot large since years I'll second. We've last Cheryl Yes. us. for or case the certainly, a of a case, case, I investments in it But in was ago. believe comment let not, it's got a

we it's jurisdiction. in jurisdiction effective important We and have very New case, large think a for Jersey us. So very be can been the

our we're would Cheryl, ability add have to case, the case we want work to typical but and optimistic that? very of anything through filed sort about effectively. you to it this So we issues expect in

in are pretty as No, capital the us, amount said, invested the think Susan, it's standard really, as the great the us, really for feel that system. will we we've strong you past, process through just a team filed a strong the case go have main we've filing is like And in and I important and case I for but it drivers the we of case, investments. with

The next from question with Storozynski Seaport. comes Angie

congratulations. Susan,

Thank Angie. you,

I just wanted up on follow to equity. the

But those of have right equity. is the some just also you core mean, Could that to that to match understand consider way of get funding avoid of to of out on an I equity liquidity that comment I this you incremental you're with now a overhang smaller, maybe either equity to and monetize spend. trying less There forward. way? assets So could the you the plenty the

good Angie. for us. but response equity forward this of the mention is question, Insoo's Yes. specifically didn't It's question, list in a I certainly, And options to on

the the should our billion. in is right this other in jurisdictions. considered things position, obviously, those that some able York creating that those think We we in us in we with we creating are At if We'll covered are the the amount of equity, that do transactions. HOS to creating New be of And exit to the equity there We be strategic the have remarks see today lowers essentially in to us to for contemplated plan laid Those $X.X invest out in evaluations be things – here in doing. the and have continue our assets Michigan. of were right November we aimed though, marketplace. set are do to to at current executed proceeds invested all for and in,

for as unless it. think prematurely to want have out, middle that, an plan, the to goes in don't dilution me carry match got there's sort in supports I – that we overhang And the heard times, of with issue know anticipation laid the associated with say I the that for need you've us the again, the to many we've plan. of while and it equity I that issue investments as it

at timed changes on that. at look plan, options dramatic we make that appropriate. this any in think adjustments So we'll best communicate to make the we And would sure point. to don't anticipate plan certainly we any We'll absolutely that do is to But I how have we it continue it.

of also side? on sort pressures funding. M&A then are you Okay. secondly, exacerbate municipal then those municipally-owned that inflationary any pressures the same that if with at regulated I'm the that seeing on face for assuming And you that could because any actually help And how, need might their and all, systems

So you if on comment could these.

process. in the weigh to the active the impact potentially Cheryl we side, let here I'll in inflation on municipals. though, on Yes, regulatory Largely, are

So through the the impacts hopefully reflecting cost impacts we'll Obviously, to our in be it regulatory current customers. business process.

the very impacts course on or do into the those We've best again, able And think, maintain hold to down. pretty we've chain successfully. going over so future and we to of side our we down. certainly done cost to year successful increases So those supply the the cost been be hold

So any us real or should customer the impacts mitigated. ultimately to be

a them and On for is over good it's side them municipal driver the edge it the think I to potentially question. push to to want privatize, a

municipals to certainly thoughts in -- sort see reaction seen that around ask But yet. her are are on we'll any direct some know I those -- I impacts change additional of any what real don't dialogue these if some Cheryl we've pressures. that see or conversations on of to have think yet the I’ll We'll with some comment we'll topic. that.

putting of own think The to is better think thing systems adds pressure. piles and find I solution absolutely things just onto also systems. as we a significant regulatory municipal absolutely Susan that pipe operating yet they're the for Angie, anticipated to a try right more that, environment that, and add those more pressure chemicals systems on I to to that piece load is but those X that directly push of availability now. kind a their municipal just that right of Yes, haven't result it's feeling can big inflation seen But And the adding the in just load. like this and than

well, October you've if strategy in sticking -- that I announced know announced, in I back said may, that you're you November. or you with Okay. And that the Susan, back

utilities? you value water given there strategic some step Now could of pullback in the other utilities -- you is -- but as transactions create that actually through think unfortunately, back, well, recent taking water involving any do larger public a valuations

in answer going a Angie, outset. I question here. confident We're very to say Well, this I'm at that's difficult just the to said what plan.

We have a long record execution. track of

We execution do. for this against what to plan, for and have this we're intending and that's prepare continued to plan prepare

how about the We looking strategy thinking and are always it evolves. and

we're to it. execute to against to plenty continue and plan, with do We of going have work this

question next America. The Instructions] [Operator comes from Julien Dumoulin-Smith of Bank with

connect. best my Susan. opportunity and congratulations, to All Walter the to Appreciate here

look Absolutely. it. So perhaps forward to to off kick here. I

So your relative far back I Where that confidence can, there to as them conversation, confidence. have most as that continued of come that On in have answered. know your all think stand if process indicated and your does just I to involvement this I in? Chester, you been

It's comment by But to Obviously, changed way, a continuing has to to much. system. go is, lots Cheryl? question, what Julien. I'm Yes. going on Cheryl which, great our ask there not current on, the on particular thinking And that actually

believe good community. strong We the best RFP and to to highest really receiver it's thing us came bid on believe bid we to is for in close that that that the And on the hasn't system a really Julien. able it very to Yes, deal. decide changed, we the And the be bid. with in puts up the spot what

a prepared states, about think any thinking that the here, but and to the there's Susan, your to. of X -- I you Fair enough. but legislative state out enter on I looking at Excellent. the if different it fingerprint variety can, remarks exit highlighted I strategy your remarks I in on of that what there. But top that covered for in really company last matter? et know here, strategically, you maybe earlier, revised I that the mean, in putting as know of any or was different geographies thought process? on revised efforts I M&A, of And terms questions thinking new entry, fingerprints is you're you kind about looking know put Q&A you're cetera,

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not So it's changed. an ongoing it has process, and

also question-and-answer call. concludes which our for concludes conference session, Thank very This much you attending. today's

disconnect. now may You