Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| We built a really strong case based on capital investment and we feel good about that case and the process |
| Just last month, Moody's affirmed our solid Baa1 investment grade credit rating and stable outlook and noted our improved FFO to debt ratio |
| Because we make prudent investments and have skilled and dedicated employees working on these cases, we're very confident in obtaining constructive outcomes again in 2024, as we did in 2023 |
| I'm very proud of our company's ability to stay focused on serving our customers safely and reliably through numerous economic events this past year, which gave us the ability to confidently execute on the plan we had for 2023 |
| I'm also proud of the resilient service we consistently deliver, and especially over the past few months during a cold January and active storm season across the country |
| So we feel very, very good about the underlying credit here |
| Big picture, though, we believe the combination of our EPS and dividend growth, our low-risk capital plan, our ESG leadership, and the affordability of our service continues to be rewarded by investors and distinguishes us from other utilities in the sector |
| Overall, we believe the takeaway today for investors is that our strong execution in 2023 amid the challenging macro backdrop coupled with our clear top-tier growth plan demonstrates American Water's ability to deliver on our long-term plan |
| I'm very confident we will execute our plans in 2024 and beyond with the great momentum we have from 2023 |
| As you can see, we have delivered an excellent total shareholder return over the past five and ten years, including our growing record of significant dividend increases |
| We're proud of this history, which compares very favorably to other utilities |
| Extending the New York contract is a significantly positive credit move and as I mentioned in my comments, the company is currently making an acquisition with new equity funding from their owners as well as cash on their balance sheet |
| I'm confident our company's fundamentals and the execution of our strategies will continue to produce superior shareholder value and very competitive total shareholder returns for years to come, which takes us to slide seven |
| We think this is a great benefit from a cash flow perspective |
| We are very confident that Act 12 fair market value legislation will remain in place and continue to have strong support |
| As you know, we have a strong track record of closing acquisitions |
| As we announced yesterday, we finished 2023 with very strong financial results that were right on plan |
| Our pipeline of more than 1.3 million customer connections with meaningful contributions from across our platform continues to be a strong leading indicator that supports this piece of our rate-based growth outlook |
| And on top of all of that, we continue to grow organically, including in our military services business that successfully serves 18 military installations across the country |
| American Water continues to receive tremendous support at the state and federal level for the work we do across the country |
| We are proactively investing in our capabilities across our platform to bolster our system-wide contribution to acquisitions to support this growth and are confident in meeting our 2% long-term target |
| American Water is pleased to see the continued growth of the HOS business under its new ownership, including the service contract extension with New York City, as well as the significant acquisition recently announced by HOS, which will be funded with new equity from HOS's owners |
| We think, again, our cases are different in that they are about investment only, and we're confident in our ability to continue to work through that case as well |
| To wrap up, slide 18 is a summary of our continued strong financial condition, which we further solidified in 2023 |
| As I said in November, though, we are in a position of strength on a number of fronts in dealing with this challenge |
| The only thing I would add, Shar, is just that we have been making really good progress in that space and we'll continue to be focused on removing our lead service lines and the customer lead service line where they exist |
| So Pentyvania is no different than any other state in terms of our approach to it, and we'll continue to work the process there like we always do and we think Pennsylvania again, is a very constructive state, and we're confident in our ability to work through that case |
| Turning to slide 16, you will see we continue to be set up for strong growth through acquisitions |
| We believe the high degree of visibility to our capital investment plan, combined with the low-risk nature of the plan, uniquely positions American Water in the utility sector and is fundamental to our investment thesis |
| Again, as Cheryl said, on a go-forward basis, we are treating and we're preparing to treat, and we're confident in our ability to do that on a go-forward basis |
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| I want to acknowledge, though, that our stock and utility stocks in general did not perform nearly as well as the S&P 500 in 2023, which dampened the outperformance we've had versus the S&P 500 over the last decade or so |
| While having moderated somewhat, the current higher interest rate environment continues to be challenging |
| In closing, it's important for investors to understand that the ever-changing regulatory environment is leading to significant industry challenges, including those related to lead and PFAS, but also with issues like cyber-security, for example |
| I mean we have some very bad outcomes, regulatory outcomes on the electric and gas side in the states |
| We see that as just another area that may be difficult for some of these smaller systems to be able to manage, both from an investment standpoint as well as an expertise standpoint |
| Certainly, there is noise around the electric and gas industry cases there |
| There are a few probably that have conceptual problem with what fair market value legislation was intended to do |
| So I'm just wondering how -- if there is any lesson learned from what happened in December and if you've incorporated that into the current timing? And then secondly, on PFAS, so we're seeing some lawsuits against investor-owned utilities on the back of PFAS |
| I think the litigation environment around this is probably not surprising |
| District Court for the District of South Carolina against manufacturers of certain PFAS, like 3M and DuPont, for damages |
| In the fourth quarter, we also had higher costs of about $0.10 per share related to waste disposal, equipment repairs, tank painting, and other maintenance costs across our footprint |
| We don't really see, again, any issues here |
| what sort of impact do you think it will have on the deal activity? And would you say the proposed RRR will make it tougher for AWK to deliver on the M&A CapEx placeholders? Susan Hardwick I think we'll have to see how it plays out and how ultimately it gets worked from a procedural standpoint |
| As far as the PFAS stuff, I do believe that there -- we've seen some lawsuits out there, Angie, as you mentioned |
| You have a case there where we're already seeing some noise around it |
| It's not terribly material |
| And as Carol said, we're just not experiencing other issues currently in that case |
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