The paragraph is the introduction to American Water’s First Quarter 2025 Earnings Conference Call. The operator introduces Aaron Musgrave, Vice President of Investor Relations, who outlines the structure of the call, including a segment for questions after prepared remarks. He mentions that they will discuss forward-looking statements, which involve predictions based on current expectations but are subject to various risks and uncertainties. Relevant details about these risks are available in their recent earnings release and SEC filings. The call will also cover key topics such as year-to-date highlights, 2025 earnings per share (EPS) guidance, long-term targets, and a dividend increase, which will all be addressed by John Griffith, the company's President.

In the second paragraph of the article, the leadership team at American Water discusses their strong financial performance in the first quarter of 2025, highlighting an earnings per share increase to $1.05, up 11% from the previous year. They reaffirm their full-year earnings guidance, projecting an 8% EPS growth in 2025 compared to 2024. The results included a $0.03 per share increase due to an amendment of a seller note. The company has effectively executed its regulatory and capital plans, with new rates implemented in several states and ongoing infrastructure investments. They achieved a significant settlement in Missouri's general rate case and passed Future Test Year legislation through collaborative efforts. The paragraph emphasizes the company's solid financial start and strategic achievements.

The paragraph discusses the company's commitment to infrastructure investments and the affirmation of strong credit ratings by S&P and Moody’s, reflecting a positive outlook. The company reaffirms its long-term earnings and dividend growth targets of 7% to 9%, driven by rate-based growth of 8% to 9%, and highlights its capital growth plan and strong execution as key differentiators. The Board has approved an 8.2% increase in the quarterly cash dividend, reflecting consistent growth over the past decade. The company aims to maintain a 7% to 9% annual dividend growth rate, aligning with its earnings growth target. Additionally, it mentions Susan’s retirement, acknowledging her contributions as she steps down after the upcoming Annual Shareholders Meeting.

The paragraph provides an update on a utility company's financial performance and regulatory developments. David Bowler reports that the company's consolidated earnings per share increased by $0.10 compared to the previous year, driven by rate increases, acquisitions, and customer growth. Operating costs and depreciation have also risen as expected. Regarding regulatory updates, notable developments occurred in Missouri and Virginia. In Missouri, a settlement was reached for an annual revenue increase of $63 million, while in Virginia, the Commission approved a settlement related to a general rate case.

The paragraph discusses regulatory and financial updates for a water and wastewater utility company. The company received approval for a $15 million annual revenue increase and a 9.7% return on equity. Active cases in Iowa and Hawaii show expected progress, with final orders anticipated soon. A new rate case in California will aim to recover $750 million for infrastructure investments. Legislative updates include Missouri allowing future Test Year requests for utilities starting in 2026, and Indiana enabling more favorable cost recovery for infrastructure improvements. These developments are seen as positive for the company's regulatory and business environment in Missouri and Indiana.

The paragraph outlines a range of financial and legislative achievements for a utility company, highlighting the passage of Virginia Senate Bill 850 that enables utilities to recover additional infrastructure costs. It also underscores the company's steady 2025 financial outlook and EPS guidance representing 8% annual growth, unhindered by recent tariff announcements. The company successfully issued long-term debt of $800 million with strong investor demand, maintaining a debt-to-capital ratio of 58%. Both S&P and Moody’s affirmed the company’s credit ratings, reflecting a strong financial position and effective cost management strategies.

The paragraph discusses the company's strong financial and operational position, highlighting its diverse regulatory environment across 14 states and stable financial performance. It mentions the expectation of maintaining favorable FFO-to-debt ratios to support current or higher credit ratings. Cheryl Norton then addresses the company's capital program, noting a successful start with $518 million invested in the first quarter, aiming for $3.3 billion by 2025. The program is expected to increase the regulated rate base by 8% to 9% annually. Despite investor inquiries, the company has not altered its plans for investments, even as PFAS and lead/copper regulations are finalized. If necessary, funds will be redirected to other system needs like pipe replacement.

The paragraph discusses the limited impact of tariffs on American Water's capital and operating expenses due to its predominantly domestic supply chain. It mentions that despite uncertainties, the company remains resilient, with a strong capital investment plan and low-risk nature positioning it well in the utility sector. The paragraph also highlights growth opportunities through acquisitions, particularly in Pennsylvania, where the company has received approvals for acquiring water and wastewater systems. American Water is focusing on regulated acquisition opportunities and system upgrades, exemplified by the recent acquisition of the East Dunkard Water System.

The paragraph discusses the challenges facing water systems in the U.S., including non-compliance with regulations, the need for significant investment in infrastructure, and the benefits of consolidation in the industry. Pennsylvania American Water has improved a non-compliant system by addressing numerous violations, and the company is expanding its reach with agreements in West Virginia and New Jersey. The paragraph concludes with infrastructure grades from the American Society of Civil Engineers and an EPA investment estimate of $625 billion over 20 years, which the company believes is underestimated. It highlights the increasing strain on water systems due to aging infrastructure, extreme weather, and regulatory costs, emphasizing the critical need for industry consolidation.

The paragraph discusses a financial plan and future outlook for investments in water and wastewater services, indicating a need for $36-37 billion over the next decade to ensure safety and reliability. It stresses the importance of collaboration between public and private sectors to promote public health, economic investment, and job creation in the U.S. Following this, during a Q&A session, Richard Sunderland from JPMorgan asks about potential changes to the company's equity issuance strategy due to recent share price increases, to which David Bowler responds that there are no plans to adjust the timeline. Sunderland also inquires about M&A opportunities in the context of a potential recession affecting municipal finances, and John Griffith states that they anticipate a steady flow of acquisition opportunities.

The paragraph is from a conference call or investor presentation in which various participants discuss the potential reasons for selling assets, such as economic conditions or retiring operators. Anthony Crowdell from Mizuho asks about a planned rate case in California and the timing of a cost of capital proceeding. David Bowler responds by stating that the company is required to file a rate case every three years in California and has not disclosed the percentage increase they will request. He also mentions that the cost of capital proceeding has been delayed until 2026, and the current rate of 10.2% will remain until the end of 2025. John Griffith clarifies that the filing for a new cost of capital will occur in 2026, to be effective in January 2027. Crowdell thanks them, and the call proceeds to the next question from UBS.

In the paragraph, Gregg Orrill inquires about an update on a California desalination project. John Griffith responds, noting that they obtained major permit approvals in late 2022, including from the California Coastal Commission, and they plan to start construction this year. This project is separate from their rate case dealings. The conversation then shifts to Paul Zimbardo from Jefferies, who asks about legislative progress in three states and potential benefits in stronger returns and incremental capital. David Bowler answers, stating that while they haven't quantified the opportunities, the future Test Year in Missouri and similar developments in other states are expected to improve earned returns. The session concludes shortly after.

This summary was generated with AI and may contain some inaccuracies.