Ladies and gentlemen, thank you for standing by. Welcome to the American States Water Company, AWR, conference call discussing the company's third quarter 2013 results. If you would like to listen to the replay of this call, it will begin this afternoon at approximately 5:00 p.m. Eastern time, and run through Tuesday, November 12, 2013, on the company's website, www.aswater.com. [Operator Instructions] As a reminder, this call will be recorded and will be limited to no more than 1 hour. At this time, I would like to turn the call over to Ms. Eva Tang, Chief Financial Officer of American States Water Company. Ms. Tang, the floor is yours ma'am.

Thank you, Mike. Welcome, everyone, and thank you for joining us today. On the call with me is our President and CEO, Bob Sprowls. Before we begin this presentation, please note that certain matters discussed in this conference call may be forward-looking statements intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. Please review a description of the company's risks and uncertainties in our most recent Form 10-K and Form 10-Q on file with the Securities and Exchange Commission. With that, I will now discuss the third quarter financial results. I'm pleased to report that diluted earnings for the third quarter were $0.53 per share, which was a 10.4% increase compared to $0.48 per share for the same period in 2012. Net income for the quarter increased by $2.2 million, or 11.7%, as compared to the third quarter of last year. For the quarter, water revenue at Golden State Water increased by $3 million, or 3.2%, to $93.9 million as compared to the third quarter last year, mainly due to the California Public Utilities Commission approval of our water rate case in May for rate increases effective January 2013. There was also a $1.5 million increase in revenues related to new surcharges approved by the CPUC for recovery of previously incurred cost. These surcharges increased both revenue and operating expenses, resulting in no impact to net earnings. Electric revenue increased by $300,000 to $8.8 million. Electric revenue for 2013 were based on 2012 adopted rates. We expect to have a proposed decision on our pending electric rate case early next year. Revenues for American States Utility Services decreased by $6.2 million to $28.1 million compared to the third quarter last year. The decrease in revenues was primarily due to excessive…

Thank you, Eva. Hello, everyone. In early September 2013, we completed a 2 for 1 stock split of the company's common shares and paid a 14.1% increased dividend to our shareholders. I am pleased to announce that our Board of Directors recently approved another quarterly dividend of $0.2025 per share on the common shares of the company, which will be paid on December 2, 2013 to shareholders of record at the close of business on November 15. This represents the 310th consecutive dividend payment made by the company. For our regulated water business, we continue to focus on our ongoing infrastructure improvements, operational efficiency and evaluating various cost containment measures to minimize cost to our customers while still providing the highest standard of service. In our electric division, we continue to work with the CPUC to move forward with the review of our electric general rate case. A proposed decision is expected in early 2014. Turning our attention to our Contracted Services business. As Eva mentioned earlier, we experienced lower construction activity during the third quarter of 2013 for this business segment due to unusually high rainfall in June and July at Fort Bragg, which hindered construction work for the quarter. In addition, the renewal and replacement work at Fort Bliss occurred at a slower pace during the third quarter. Also contributing to the lower third quarter earnings were higher administrative expenses in part to pursue new military base utility privatization opportunities. Due to the wet weather in the third quarter, the $58 million water and wastewater pipeline replacement project at Fort Bragg is now expected to be completed in the first quarter of 2014. Also at Fort Bragg, the backflow preventer and meter replacement project, totaling $23 million, and the $17 million infrastructure project at a new area are…

[Operator Instructions] The first question we have comes from Ryan Connors of Janney Capital Markets.

This is actually Ken Dorell for Ryan. I just have 1 question regarding the government shutdown that you alluded to in your comments. You mentioned an $8.5 million reward for new construction projects expected in 2014, but given the shutdown and kind of the piecemeal spending in place, is there any effect that you are seeing or anticipating, whether it be on 4Q project activity or just your outlook in 2014? Or is it really ancillary or separate from those concerns?

Yes. First of all, it was $18.5 million, and so far, we have not seen any impact from the government activities. The services we provide are accepted services under the Department of Defense. And as a result, they're not impacted, at least the work we're doing, is not impacted by government slowdown activities. To a degree, it may adversely impact payment at times or may delay price redeterminations, particularly contracting officers at bases or contracting officers either at bases or at the Defense Logistics Agency Energy, which is where a number of our contracting officers are. If they get furloughed, that could slow the process down a bit. Does that answer your question?

Fair enough. Yes, absolutely.

Next, we have Heike Doerr of Robert W. Baird. Heike M. Doerr - Robert W. Baird & Co. Incorporated, Research Division: I wondered if we could talk a little bit about your thoughts on what revenue from Fort Bragg would we see in the fourth quarter, and how much of that should we be thinking about coming in the first half of 2014. If I recall correctly, the fourth quarter of last year was a pretty strong quarter for ASUS. Should we be looking for this year's fourth quarter to match that?

Yes. Heike, I would be happy to answer that question. In the fourth quarter of last year, our earnings, on an adjusted basis for the stock split from ASUS, were $0.115. And this past quarter, we had $0.06 a share versus $0.10 last year, so that was a variance of about $0.04. Looking at the fourth quarter, are we going to see a similar variance? It's possible we may see sort of the same variance in the fourth quarter that we saw on the third quarter, though we are hustling to make up some ground on some of the construction projects that were delayed because of the weather during the third quarter. As we look into 2014, of course, we do have those 3 substantial projects at Fort Bragg that are going to continue into 2014, but not for the full year. And those 3 projects are the $58 million water -- wastewater pipeline replacement project, the $23 million combination backflow preventer meter replacement project, and the $17 million infrastructure project to serve a new area of Bragg. We expect the $58 million project to be done during the first quarter of 2014, and then the other 2 projects to be done by the end of the second quarter 2014. So we will see a drop-off in earnings from these 3 projects in 2014 versus 2013 because as I said, there will be partial-year projects for 2014. However, we do expect to have a number of additional construction projects for 2014. So individually, probably not as large in size as these 3 projects. So as I previously mentioned, we do have this $18.5 million set of new construction projects, the majority of those projects, we are expecting to be completed in 2014. Assuming work on these additional projects, and if we have successful price redeterminations, we're thinking 2014 could look a lot like 2013 in terms of total earnings contribution. Of course, understand, this is -- isn't a very precise estimate as numerous factors outside of our control, including the government funding limitation, can impact the timeliness of new modifications and existing proposals at new bases. So again, looking to 2014, right now, and it is always dangerous to look 12 to 15 months down the road in this business given what's going on, but we think 2014 might look a lot like 2013. Heike M. Doerr - Robert W. Baird & Co. Incorporated, Research Division: Okay. And any new contract wins for new bases, when would be the earliest that any benefit from that would be seen?

We could see some benefit as early as 2014, might be the tail end of 2014.

Early though [ph] in '14.

Yes, might be the fourth quarter-ish. All depends on when we would get notification of the win. Right now, as of -- there's like a 6 to 9 month transition period after you get the win, so there's a little bit of start-up time there, which gives us chance to hire folks to do the work at the base, et cetera. Heike M. Doerr - Robert W. Baird & Co. Incorporated, Research Division: And how many RFPs do you have outstanding that you're waiting to hear answers on about who the contract is going to?

Well, there are many, but you have to understand, there are several phases in the RFP process. I would say, we've got 1 particular contract that's probably close to the end, the others are at various stages in the process. So we are looking at a number of bases, so we've been hitting this really hard. I would say we're at somewhere in the process in at least, I would say, 10.

[Operator Instructions] Next, we have a question from the location of Jonathan Reeder, Wells Fargo.

Appreciate the additional guidance here on ASUS, specially looking forward to 2014. That's really helpful. Bob, you said, I guess, construction expense for '14, you would say are similar to the trailing 12 months. Is that around like $75 million? Or what would that level be?

Let's see, the...

I know your guidance going into the year was like $79 million or so for 2013, but obviously, a little got shifted.

Year...

Go ahead, Eva. I mean, it's...

I think year-to-date, construction expenses is at $59 million.

That's the year-to-date number?

That's the year-to-date number, yes.

So that's -- we have to tack on the fourth quarter of last year. That's the number I don't have off the top of my head.

Well, we're looking for that, Jonathan. Fourth quarter last year, in terms of revenue, I think we had -- I don't have the cost, I have revenues. It's about, I think $30 million, $35 million in the fourth quarter for all the construction work. So I can get you that number, Jonathan.

Okay. But I mean, would you say, Bob, I mean, overall it's similar to your total construction expense, I guess, for 2014, or do you think it's going to be similar to where '13 comes in at, or?

Yes. I would say '13 would be a -- would be probably the best picture of where 2014's going to be at...

Okay. Now, your award of $18.5 million for 2014 or for the next 12 months doesn't sound all that high. So I mean, I guess from our perspective, it doesn't seem all that unusual. Is that -- I mean, how does that compare to, I guess, your ongoing expectations for construction work that's kind of possible, where you don't have these necessarily very large projects like the ones that you're wrapping up right now, but more of the smaller kind of cats and dogs. Can you still get to $75 million, $80 million per year in construction expense? Or would you expect that to kind of tick down then in '15?

Well, '15 is -- that's aways out there in this business. And we are going to, as you know, have the benefit in the first quarter and the second quarter of the larger projects at Bragg. But the sense is that we'll have enough other construction work to kind of offset as that sort of drops off in '14. As we get to '15, it's a little more difficult to predict whether that same level of earnings and construction will continue. Just because we don't know where the government's going to be at 12 months from now on funding issues, et cetera. It could be very positive, but it could also be difficult. So '15 is much more difficult to predict at this point. I think we're comfortable saying '14 could look a lot like '13. In '15, there's a -- it could look like '14 as well, but it would -- there, we have to see some additional modifications that come through and additional asset transfers, that sort of thing.

Jonathan, the $18.5 million is at the fiscal year end. We do receive modification from government throughout the years, so it would be on top of that. And we have subcontract from prime contractors on the base, like housing contractor on the base. If they need to do something, they would come to us. Those kinds of are -- a little bit hard to predict, and we have works coming from last year that we still have to finish, continue next year. So the work to be done is not just that $18.5 million-plus those big projects. There are other projects come along during the years.

And the $18.5 million this year is comparable to a number like $7 million to $8 million last year. But that's not to say we're going to see a $10 million ramp-up, it just -- these projects that come at the end of the fiscal year. This year $18.5 million, last year, I think it was between $7 million and $8 million. But there's a lot that goes on sort of between fiscal year end as well. So we don't want you to say, "Oh, I'm going to get $10 million more work to be done there," but at least it's a higher number than it was last year.

Right. Which helps to offset some of the large project kind of completion thing.

That's right, that's right.

Okay. Yes, that kind of commentary is helpful. I guess the other thing that kind of jumped out as I was going through the Q, you talked about the 9-month results for ASUS and saying some of the, I guess, year-over-year decrease was due to lower profit margins on certain construction projects compared to 2012. In general, I mean, how should we think about, I guess, the margins on the construction business? Have -- are they being compressed at all or is that just kind of a one-off thing for some of those projects?

I think, at this point, the margins are not being compressed. I think in 2012, though, we had extra margin. I think the standard margins are -- that's what we're going to see going forward.

Okay. So 2012 were just a little higher-than-normal?

Yes. I think what we had there was we had the -- because of the economy, our subcontractors were really hungry. And as a result, we made a little more money on some of those projects than is standard, and that hasn't been the case in 2013.

Got you. And then kind of last question, I'll let someone else jump in. If we're trying to get to kind of a year-to-date ongoing EPS number, you're at $1.31, but then we would need to back out, I guess, the kind of $3 million onetime recovery in Q1. The Q2, $835,000 kind of renewable energy cost recovery thing, and then, I guess, the $1.4 million from the employee benefit program tax benefit in Q3, is that kind of accurate? Am I missing something?

Yes.

Yes. I mean, that tax benefit though, we are going to -- it's going to be, what, $300,000 a year going forward. So we may want -- may not want to take the full...

Entire.

The entire $1.4 million out. You may just want to take $1.1 million out. Of course, that is bottom line. Since it's tax benefit, it's bottom line impact.

Right, okay. So you booked $1.5 million, I think, in Q3, so maybe take out $1.2 million, is that, I guess, the way to look at it?

Yes, I think the run rate on that is going to be $300,000 per year...

And Jonathan, the construction cost for ASUS fourth quarter is about $23 million last year.

$23 million? Okay. So I guess it's -- yes, right, in the low 70s then?

Yes.

Well, with no further questions at this time, we will go ahead and conclude our question-and-answer session. I would now like to turn the conference back over to Bob Sprowls for any closing remarks. Sir?

Okay. Thank you, Mike. Again, I just wanted to thank all of you for your participation today and for your continued interest and investment in American States Water Company. Everyone have a great day and a great holiday season.

You also have a great day, sir, and also to Ms. Tang. This concludes today's American States Water Company Conference Call. As a reminder, this call will be archived on our website beginning Tuesday, November 5, 2013, at 5:00 p.m. Eastern time and will run through Tuesday, November 12, 2013. Again, we thank you, all, for your participation. At this time, you may disconnect your lines. Thank you, and take care, everyone.