Ladies and gentlemen, thank you for standing by. Welcome to the American States Water Company Conference Call discussing the company's fourth quarter and full year 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 Thursday, March 6, 2014, 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 conference over to Eva Tang, Chief Financial Officer of American States Water Company.

Thank you, Laura. Welcome, everyone, and thank you for joining us today. On the call with me is our President and CEO, Bob Sprowls. Before I begin the presentation, please note certain matters discussed during 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 on file with the Securities and Exchange Commission. With that, I will now discuss the fourth quarter financial results. I'm pleased to report that diluted earnings of fourth quarter were $0.30 per share, which was 11.1% increase compared to $0.27 per share for the same period in 2012. Net income increased by $1.5 million, an increase of 14.5% over the same period of last year. For the quarter, water revenues at Golden State Water increased by $5.3 million or about 8% to $72.9 million as compared to 2012. Out of the $5.3 million increase, $2.5 million was due to the rate increases as a result of the California Public Utilities Commission's approval of our water general rate case in 2013. The remaining $2.8 million of the increase resulted from new surcharges billed to customers during the fourth quarter of 2013, with the corresponding increase in various operating expenses for recovery of previously incurred costs. These surcharges had no impact to net earnings. Electric revenue increased by $1.1 million for the quarter, due entirely to surcharges approved by the CPUC for the recovery of previously incurred costs in connection with our efforts in procurement of renewable energy resources. Again, these surcharges had a corresponding increase in operating expenses, resulting in no impact to net earnings. Excluding these surcharges, electric revenue remained unchanged as a…

Thank you, Eva. Good afternoon, ladies and gentlemen. Again, thank you for joining us today. I'm very pleased with our operating and financial performance for the year. In 2013, the company was able to achieve solid financial results, announced a significant dividend increase and invested nearly $100 million in utility infrastructure. Our contracted service business continues to make significant contributions to the company's earnings. ASUS accounted for 24% of the company's consolidated revenues in 2013. With ASUS's contribution, as well as steady growth from our utility subsidiary, Golden State Water, the company had grown its revenues from continuing operations from $312.2 million in 2008 to $472.1 million in 2013, a 5-year compound annual growth rate of 8.6%. Our net income from continuing operations had grown at a compound annual growth rate of 19.2% over the same 5-year period, from $26 million in 2008 to $62.7 million in 2013. With that, I'd like to discuss 2 recent announcements pertaining to our water segment. As we announced last Friday, Golden State Water, along with 3 other Class A water companies in California, have reached an agreement with the California Public Utilities Commission to defer the cost of capital application for 1 year. The cost of capital applications are normally filed every 3 years. As part of the agreement, the 4 water companies will forgo any adjustments to the authorized return on equity in 2015, including any changes that would otherwise have applied due to the water cost of capital adjustment mechanism. Our currently authorized 9.43% return on equity, 55% equity ratio and 8.34% return on rate base will apply through 2015. As a reminder, the water cost of capital adjustment mechanism adjusts the return on equity between the 3-year cost of capital proceedings only if there is a positive or negative change…

[Operator Instructions] And our first question comes from Ryan Connors of Janney Montgomery Scott.

This is actually Ken Dorell in for Ryan. My first question is regarding the ASUS segment. We appreciate you breaking out the different projects and price redeterminations, but just at a 10,000-foot level, when you -- activity or revenue kind of came down across the year 2013. In other words, at more normalized levels, as we look into 2014, I was hoping you could just help us frame expectations for the year compared to 2013?

Sure, Ken, and I'd be happy to. When we look at 2014, probably the best place to start is with 2013. Excluding the onetime tax benefit of $0.03 that Eva talked about, our earnings from ASUS were $0.27 for 2013. As you know, there are several variables that impact this business, and it's difficult to predict earnings for ASUS. With that said, let me talk a little bit about 2014 and maybe emphasize what I talked about earlier. As we have mentioned, we do have these 3 projects that we have discussed at Fort Bragg. And though the projects were a bit delayed in 2013, they do carry over into 2014. And just as a reminder, we've got the $58 million water and wastewater project, and that's expected to be completed during the second quarter; the $23 million combination backflow preventer meter replacement project, now also expected to be completed in the second quarter; and then we've got the $16.5 million infrastructure project to serve the new area of Fort Bragg, and that's expected to be done in the second quarter as well. Though you'll see a dropoff in the earnings from these 3 projects in 2014 versus 2013 because they'll be partial-year projects in 2014, we do expect to have a number of additional construction projects for 2014, though individually, probably not as large in size. Also, as I mentioned, ASUS was awarded approximately $18.5 million in new construction projects, and the majority of which are expected to be completed during 2014. So assuming work on these additional projects and also assuming that we have some successful price redetermination, we think 2014, in total, could look a lot like 2013. Though please understand that this isn't a very precise estimate, as numerous factor outside of our control, including government funding limitations, can impact the timeliness of new modifications in existing proposals at the new bases. So again, we're expecting 2014 to look a lot like 2013.

Great, understood. I appreciate the color. And just finally, looking at the cost of capital adjustment filing, I guess, to just stay out this year, I'm just kind of -- I'm curious to get your rationale on foregoing the determination, as well as the ROE index adjustment mechanism. Our understanding is that the mechanism kind of serves as a way to reduce the lag in between filings. So as you said, interest rates haven't necessarily come up to the 100-basis-point threshold, but if, say, 50 basis points, what kind of led to your decision to stay out? Did you not think that it'd be worth foregoing the resources to get a marginal increase in ROE? Or do you -- I'm just kind of curious to get the rationale there.

Yes. We kind of looked back to when we filed for our last cost of capital application and sort of looked at the interest rates that were in place then, compared them to what's in place now, didn't see much of a difference. There is a -- when you go through this process, it's a hotly debated, hotly contested discussion on cost of capital, and we generally just didn't think that -- we didn't think the authorized ROE would change much coming out of that. And there's no guarantee that it would even go up. And we also analyzed the adjustment mechanism and whether we thought that was going to trigger. And my sense was that it would not. So there was that kind of view. And I suppose, having to notice customers about expected increase in -- if we go in and, let's say, ask for 10.5, we would have to notice our customers about a projected rate increase. And it's a difficult time to do that given drought situations, et cetera. But it was ultimately driven by the fact that we didn't feel that we were going to get a substantial increase in our authorized ROE coming out of it.

Great, and just to add to that, Ken, 4-month ended -- I mean, you mentioned from October to September. So from October to January, the Moody's Aa bond 3-year rate, just on average, I think, is at 4.5%. So our benchmark is 3.93%, so we'd have to hit 4.93% for the 12 months ended September in order to trigger.

Which means you have to have 50 basis points on -- probably on top of that for the last 6 months of the measurement period before it's triggered. And so we didn't see that happening. Of course, we would have liked to be able to keep the adjustment mechanism, but -- and our request to the commission was to include that, but the response back from the commission was, "We'll let you defer, but you don't get the adjustment mechanism." So we thought about it long and hard and determined that, that was okay.

And the next question will come from Jonathan Reeder of Wells Fargo.

Actually, those previous 2 questions were kind of the questions I was thinking of, so I don't think I have anything else at this point.

Okay, Jonathan.

Okay, Jonathan.

[Operator Instructions]

I might amplify my response on the cost of capital. The company is going to be filing its 3-year rate case in July, and so I did mention to you that we would have to notice customers on the cost of capital, and that would be a few months before noticing them on the rate case application. So a lot of things really rolled into that cost of capital deferral decision.

And we are showing no further questions at this time. I would like to conclude the question-and-answer session and turn it back over to management for any closing remarks.

Great. Well, I just wanted to wrap up the call today by just thanking everyone for their participation today and for their continued interest and coverage of the company. I think we've got a real good, strong company here, and we're glad you folks are interested in following us. So thank you very much.

This concludes today's American States Water Company Conference Call. As a reminder, the call will be archived on our website and can be replayed beginning Thursday, February 27, 2014, at 5:00 p.m. Eastern Time, 2:00 p.m. Pacific Time, and will run through Thursday, March 6, 2014. After logging on to the website, click the Investors button at the top of the page. The archive is located just above the Stock Quote section. Thank you for your participation. You may now disconnect.