Good morning, and welcome to American Water's Fourth Quarter and Year-End 2014 Earnings Conference Call. As a reminder, this call is being recorded and is also being webcast with the 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 March 5, 2015, by dialing 1 (412) 317-0088 for the U.S. and international callers. The access code for replay is 10059769. The online archive of the webcast will be available through March 25, 2015, by accessing the Investor Relations page of the company's website located at www.amwater.com. [Operator Instructions] I would now like to introduce your host for today's call, Mr. Ed Vallejo, Vice President of Investor Relations. Mr. Vallejo, you may begin.

Thank you, and good morning, everyone, and thank you for joining us for today's call. And as usual, we'll keep our call to about an hour; and at the end of our prepared remarks, we will have time for questions. But before we begin, I'd like to remind everyone that during the course of this conference call, both in our prepared remarks and in answers to your questions, we may make statements related to future performance. Our statements represent our most reasonable estimates. However, since these statements deal with future events, they are subject to numerous risks, uncertainties and other factors that may cause the actual performance of American Water to be materially different from the performance indicated or implied by such statements. Such risk factors are set forth in the company's SEC filings. We also encourage you to read our 10-K on file with the SEC for a more detailed analysis of our financials. We will be happy to answer any questions or provide further classifications if needed during our Q&A session. All statements in this call relating to earnings per share refer to diluted earnings per share. And now I'd like to turn the call over to American Water's President and CEO, Susan Story.

Thanks, Ed. Good morning everyone, and thanks for joining us. With me today are Linda Sullivan, our CFO, who will go over the fourth quarter and year-end financial results; and Walter Lynch, our COO and President of Regulated Operations, who will give key updates on our Regulated Business. Also joining us today is the newest member of our executive leadership team, Mike Sgro, who was announced last week as our Senior Vice President and General Counsel. Mike is a 22-year employee of the company who has a deep understanding of our business, our customers and our employees. We are excited to have him join our leadership team. So onto business, the employees of American Water delivered strong results in 2014 for both the fourth quarter and the full year. With customers at the centre of all we do we made smart and timely investments in our infrastructure to ensure the continued reliable delivery of clean and safe water and water services, and we leveraged our increasing operating efficiency gains and technology deployment to ensure continued affordability for our customers. As you can see on Slide 5, our year-over-year revenues increased 4.6% to just over $3 billion. Adjusted net income from continuing operations was at 10% to $2.43 per share. The increase in EPS is due to the successful execution of our strategy, which Walter and Linda will discuss in just a few minutes. Turning now to Slide 6, you see we delivered on our strategies in both the regulated and the market-based businesses in 2014. We made about $1 billion in infrastructure investment, which is $100 million more we originally planned. This increased investment is due to the hard work of our employees and our continuous improvement in both O&M and capital efficiency. It also demonstrates our flexibility to deliver…

Thanks Susan and good morning everyone. As Susan mentioned we are very pleased with our accomplishments in 2014. Our regulated operations achieved significant growth, continued our commitment to investing in infrastructure and through increased efficiency and effective cost management, we were able to mitigate the rate impacts to our customers. A good example of this is our recent New Jersey rate filing. Last month New Jersey American Water filed with the New Jersey Board of Public Utilities for a rate increase of slightly less than 10%. The company’s last filing was 3.5 years ago and since then the company invested more than $775 million to replace, rehabilitate and upgrade its treatment, pumping and distribution facilities statewide. By our continued focus on efficiencies, the company actually reduced its operating and maintenance expenses by more than $19 million. We estimate that every $1 in O&M expense reduction allows a capital investment of about $6 with no impact on customer bills. So that $19 million in cost reduction supported approximately $125 million in investment with no impact on customer bills. If approved, this file the typical residential customer’s average monthly water bill will increase approximately $5 to $8 per month and the majority of our waste water customers will see no increase and some will actually see a small decrease. In this filing the company filed a consolidated tax adjustment methodology as per the new BPU policy. Additionally through our DSIC filings we renewed over 160 miles of mains, valves, hydrants and other eligible assets. So you can clearly see that through cost reduction, efficiency improvement and regulatory mechanisms like DSIC we’re making the needed infrastructure improvements to ensure reliability and quality for our customers, while keeping the cost of that service affordable. Moving onto California, our subsidiary, California American Water, along with…

Thank you, Walter and good morning everyone. I will start on Slide 13. This is a new format intended to expand the transparency of our disclosure based on feedback from you and other investors by showing the contribution to earnings per share by each business segment for 2014. On the left side of the page we show our typical annual and fourth-quarter results. Adjusted EPS from continuing operation was $2.43 per share, up 10% over last year and for the quarter was $0.52 per share, up 8% over the same period last year. On the right side of the page is where we add a disclosure to show the contribution to 2014 adjusted EPS from each business segment. The regulated segment continues to be the largest contributor towards earnings at $2.45 per share. Our market based businesses contributed $0.22 per share and our parent company drag, which is primarily interest expense on the parent debt generated from the RWE acquisition of American Water was $0.24 per share. On a year-over-year basis, the adjusted EPS of each of our regulated and market based segments grew at about 10%. I trust you find this new format helpful. Now let me discuss the different components of our fourth-quarter adjusted EPS growth from continuing operations on Slide 14. Our starting point is fourth-quarter 2013 adjusted EPS from continuing operations of $0.48 per share, which excludes last year’s cost of the tender offer of $0.14. The fourth quarter of 2014 came in $0.04 above 2013 adjusted EPS at $0.52 per share. The major drivers of this $0.04 increase were first, $0.02 from higher regulated revenue, which is the net impact of authorized rate increases and incremental revenue due to acquisition, partially offset by decreased demand as we continue to experience declining usage in the 1%…

Thanks, Linda. Last year we began concluding each of our earnings call by highlighting initiatives or recent news that maybe outside of what we would typically covered during this call. This quarter we are going to highlight American Water’s Activity in the Shell Energy Market which is based on our ability to provide water services in a sustainable, environmentally responsible manner to our customers into the communities we are privileged to serve. On the regulated side of our business, our Pennsylvania American Water subsidiary currently have 45 active connections to the Shell Energy Well. We sold 604 million gallons of water to gas producers in 2014. While most energy companies have reduced their 2015 CapEx spending projections, many of these companies have delivery commitments to midstream pipelines and so they should continue to drill in 2015 to make those commitments. The E&T companies we partnered continue to rely on us as a primary source of water for Shell Gas development activities in Western Pennsylvania. The overall oil and gas activity in the state increased only about 10% in 2014 over 2013 but our water sales have increased at a much greater rate. The increase in 2014 revenues was due to a number of infrastructure improvement projects that became operational during the latter part of the year. The same factors are expected to support similar performance in water sales for Pennsylvania American in 2015. Consistently, the Marcellus and Utica are considered by the E&P companies as their lower cost gas place to develop and they should remain so. Further, a large number of our regulated water services followed in the Marcellus wet gas region, which historically has been more profitable than the dry gas area. In our market-based business, focused on Shell, we're exploring longer-term water supply plans with key producers.…

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from James Ward of Macquarie Capital. Please go ahead.

Could you give us a bit more color on acquisitions of wastewater systems and roughly how many anticipate for the next year or two?

This is Walter, I’ll take that question. It’s one of our strategic focus areas as growing on the wastewater side and we've been in discussions with a number of municipalities and just that acquiring the wastewater systems and you can see from some of the acquisitions we have done over the last year, that has really hold. We are going to continue to have those discussions primarily at the state level, the state teams are focused on having those discussions and convincing the municipality that there's a benefit to becoming part of American Water and we've been pretty successful there, but it is a key focus area for us and we are going to continue to have those discussions and hope so of acquiring the systems.

So just to get a sense number-wise, do you see it probably coming along the same pace, do you see an acceleration, just trying to -- from a modeling perspective trying to get a sense of how many you would see going forward.

So far, I mean we are adding about two-thirds wastewater and one-third water. It shows I think the opportunity that we have within the marketplace that wastewater is a prime opportunity for us to continue to grow. So we think it would be continuing on that way, maybe it’s half to two-thirds on the wastewater side but it's hard to give numbers at this point.

Sure, okay. Thank you very much. And my second question can be a bigger picture, on 7% to 10% EPS range how do you see over the next few years, particularly may be on ’15 where do you see things shaping up, a little bit closer to the higher or lower end.

As always, we give our guidance range to be the 255 to 265.

Fair enough. Okay. Congratulations again guys thanks a lot.

[Operator Instructions] Our next question comes from Brian Chan of Bank of America. Please go ahead.

Just a general quick questions, some of the other utilities out there that report this quarter have made a few comments on bonus depreciation, I don’t think I heard any comments from you guys on that regard but just any color you can give on how we should think about that for you guys going forward.

Remember, we are in a net operating loss position. So we are currently evaluating the bonus depreciation deduction for 2014 and its impact on each state as well as the overall NOL utilization of the company and we have until September 2015 to make the final decision there.

Okay great. I will take a look at that point and what you have decided to do. Thank I appreciate it.

Operator, are there any other questions, if not I can go to closing?

At this time, I see no further questions.

Well, just in closing I just want to recognize and pay tribute to our outgoing investor relations VP Edward Vallejo. Ed has headed up our IR functions since our IPO back in 2008 and I think he is the very best in the entire utility industry. So same leadership skill, financial acumen, customer focus and knowledge and experience let us to promote him to his new position of VP of Financial Strategy planning and decision support. In his new role, Ed will have all of the state and division finance directors reporting to him as well as overall responsibility for financial strategy and planning and he will lead our newly formed revenue analytics group. Despite this big new job, he has continued in the IR VP role to help us through the transition. Just to remind you of what is taking place in Ed tenure, check out the total shareholder return in the market Cap chart from the slide which you see. As you can see we are very proud of what Ed has done only to be a cliff but what he is going to do for us in his new role, thanks Ed we are happy you are part of our team. And he did not know I was going to do this! But you should see his face right now. So with that thanks everybody for participating. We appreciate it and we will talk to you again in the couple or three months.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.