Good day and welcome to the Aqua America, Inc. Q4 FY 2015 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Brian Dingerdissen. Please go ahead, Mr. Dingerdissen.

Thank you, Valerie. Good morning, everyone. Thank you for joining us for Aqua America's Fourth Quarter and Full Year 2015 Earnings Conference Call. If you did not receive a copy of the press release, you can find it by visiting the Investor Relations section of our website at aquaamerica.com or by calling Scott Siegel at (610) 520-6361. The slides that we will be referencing can be found on our website. There will also be a webcast of this event available on our site. As a reminder, some of the matters discussed during this call may include forward-looking statements that involve risk, uncertainties and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements. Please refer to our most recent 10-Q, 10-K and other SEC filings for a description of such risk and uncertainties. During the course of this call, reference may be made to certain non-GAAP financial measures. Reconciliation of these non-GAAP to GAAP financial measures are posted in the Investor Relations section of the Company's website. Presenting today is Chris Franklin, Aqua America’s Chief Executive Officer, Rick Fox, Aqua’s Chief Operating Officer of Regulated Operations and Dave Smeltzer, the Company’s Chief Financial Officer. After the presentation, we will open the call up for questions. At this time, I would like to pass it over to Chris Franklin, Aqua’s President and Chief Executive Officer.

Okay, thanks, Brian and welcome everyone. It was very nice to see many of you in New York last month at our Analyst Day and I appreciate you joining us again this morning. Before we get into the discussion of our results of what I believe was a very solid year from our Utility operations, I want to first mention that last month was a pretty special month for this company, not many companies in the United States can boast a 130 year duration, this company was born in 1886 and celebrate a very important milestone. We are very proud of that milestone and the company continues to enjoy a very rich tradition and robust history and frankly, we are very optimistic about the company’s future. And with that said, let’s take a look at what we are going to cover on today’s call. For today’s call, I’ll start with some news from the first couple of months of 2016, then I’ll comment on the 2015 highlights, then I’ll provide an update and some of the results – on some of the results we saw last year, and then ask Rick Fox, our Chief Operating Officer to join us and talk a little bit about lead in the public drinking water supply, and then Dave Smeltzer will join us and review the company’s financial results. Finally, I’ll end the formal portion of the discussion by recapping our guidance for 2016, and of course, we then will open it up for questions. I thought I’d start with the very important mention that, just recently, you may have seen that the press release that we’re nearly complete in the filling of our senior management team. Karen Heisler was our latest appointment. We are very proud to have Karen join us. She is…

Thanks, Chris, and thank you all for joining today. After the announcement about Flint, it seems that stories about Flint and other cities are in the news almost daily. First, as you know, Aqua prides itself on environmental compliance. We strive to be and we believe we are in compliance with federal and state regulations concerning water quality. Now, concerning lead, it is important to note that there are lead components in all water systems including Aqua’s. Let me explain. Lead piping was the material of choice until the 1930s when most utilities switched to copper. Additionally, lead-based solder was not phased out until 1986 in cities that contained some lead were not phased out until 2011. The point is, lead exists, both in the pipes owned by the utility and in the pipes solder in fittings in the customers’ home. Concerning the water itself the utility is responsible for controlling the corrosiveness of water. When corrosion is controlled, it doesn’t matter as much whether or not lead exists in the piping. Utilities including Aqua add corrosion control chemicals to the water to prevent the lead and other metals from leaching into the water. Lead and Copper rule was implemented by the US EPA in 1991 and has been amended several times since. This rule governs both the corrosion controls employed by the utility and the in-home water testing that is done to confirm the effectiveness of the corrosion control. Aqua follows the protocols set forth by the Lead and Copper rule at all of our 1484 water systems and we comply with all federal and state drinking water regulations. Now I’d like to talk a little bit about our capital investment plans. In 2015, Aqua invested $364.7 million, compared to $328.6 million in 2014. This year, we expect to invest over $350 million and to invest over $1.1 billion through 2018. With that, I’d like to introduce Dave Smeltzer, Aqua’s Chief Financial Officer who will take you a little deeper into the 2015 results.

Thanks, Rick and good morning everyone. So today I’ll review the fourth quarter and full year financial results and some of the driving factors that affected the company’s performance during those periods. I’ll also provide a look at our rate activity last year and through the first couple months of 2016. So first, 2015 financial results. Our annual revenues increased 4.4% to $814 million, up from the $779.9 million in 2014. And you can see operating and maintenance expenses were up 7.2% to $309 million, compared with $288.6 million in 2014. And importantly, of that 7.2% increase, about 5.2 percentage points of that were related to acquisitions and therefore about 2% was the same-store increase in O&M expenses. As we noted in the release that went out last night, and as Chris mentioned a moment ago, due to the negative future outlook of natural gas drilling, because of lower gas prices, changes in the industry and other market conditions, the joint venture that owns and operates our Marcellus pipeline that delivers raw water to those drillers assessed the value of the pipeline. And as a result of that assessment, the joint venture recognized a non-cash impairment charge, of which $33 million or $21.4 million after-tax was Aqua’s portion of the charge amounting to $0.12 per share. Absent that, non-GAAP adjusted income from continuing operations was $223 million, which is up 4.4%, compared to the $213.9 million in 2014. GAAP income from continuing operations was almost $202 million. Adjusted income from continuing operations per share increased 5% to $1.26, compared to the $1.20 reported in 2014 and GAAP income from continuing operations per share was $1.14. Looking at revenue, as we mentioned at our Analyst Day in January, we are keeping our promise to show these waterfall charts in our earnings…

Thanks, Dave and just before I dive into our guidance slide, I’ll just mention that we continue to spend considerable time and have spent considerable time over the first eight months since I’ve been CEO on the refinement of our strategy. We continue to pursue our three-prong growth strategies, municipal acquisitions, strategic M&A and market-based activities and we will continue to focus on opportunities to leverage those core capabilities that I have discussed. Those include the ability to make capital investments prudently, the strong regulatory aspects of being able to get recovery of those investments and then of course, our ability to operate the utilities at a level of excellence to provide really long-term growth for the shareholders. I remain very confident in our direction and our strategy and I think it will produce continuing strong results. Now I’d like to take a moment with the company’s – and give you company’s guidance for the upcoming year. As we introduced at the Analyst Day last month, we expect full year earnings per share to be between $1.30 and $1.35. Our year-over-year customer growth in the range of 1.5% to 2% and we expect to invest more than $350 million in capital in 2016 and more than $1.1 billion through 2018. Ongoing rate base growth, we expect to be in the 6% to 7% range and on same-system O&M, we expect only an increase of about 1% to 2% for the full year. So with that said, I’d like to open the call now to any questions that you might have.

Thank you. [Operator Instructions] And we will move to our first question from Jonathan Reeder of Wells Fargo. Please go ahead.

Hey, good morning gentlemen. Just two clarifying questions. One, the rate base growth of 6% to 7%, Chris, just remind me, is that just from the existing systems that does not include any potential tuck-ins M&A?

That’s right, Jonathan.

Okay. And then, you highlighted the Flint in a situation and obviously it’s been getting a lot of attention from investors. Can you just discuss if you’ve seen any pick up in municipalities or other system owners coming to the table to consider either public/private partnerships or outright sales of the system to avoid getting headlines like that or avoid those kind of issues on their own systems?

Yes, it’s a really good question. So, I can’t say that we have had municipal interest that is specifically attributable to the lead in the water situation. Although, it’s hard to know what we have seen though is, considerably more interest by municipal entities in talking to us about opportunities. And so, particularly in the states where we have the legislation either pending or passed, we see a generally more interest in the municipal sector and talking to us about an exit or how value might be created by doing something together. But I – as far as the lead, I think, long-term, we may see some results from that, but not most immediately.

Okay, I mean, it’s just kind of the ongoing industry dynamics these needs have kind of been there for a while and that's what's been driving the conversations and you are enabling the legislation?

Yes, and I think, as it becomes apparent in some systems that considerably more capital would need to be spent, let’s say to be in compliance, I could see some more interest being generated in looking at alternatives, privatization in other words to address capital needs. But, I just can’t attribute any of the immediate interest from municipals to that particular issue, Jonathan.

Okay, and then, just kind of a housekeeping thing. Are the slides going to be posted on the website, I don't see them out there.

Jonathan, this is Brian. The slides are in the webcast and the PDF should be up. We are having a bit of an issue with our website. But the PDF should be up with the slides shortly.

Okay, great. Thanks so much, guys.

Thanks Jon.

Thank you. [Operator Instructions] It appears there are no further questions at this time. Mr. Chris Franklin, I’d like to turn the conference back to you for any additional or closing remarks.

All right, thank you very much. I appreciate all of you joining us today and we obviously will be happy to answer any questions you might have any time today as well. Thanks for joining us.

This concludes today’s call. Thank you for your participation.