Ladies and gentlemen, thank you for standing by. Welcome to the American States Water Company Conference Call discussing the company's Second Quarter 2015 Results. This call is being recorded. If you would like to listen to the replay of this call, it will begin this afternoon at approximately 5 p.m. Eastern Time and run through August 12, 2015, on the company's website, www.aswater.com. After today’s presentation, there will be an opportunity to ask question. [Operator Instructions] This call will be limited to an hour. As a reminder, certain matters discussed during these conference call maybe 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. At this time, I will turn the call over to Eva Tang, Chief Financial Officer of American States Water Company.

Welcome, everyone, and thank you for joining us today. On the call with me is our President and CEO, Bob Sprowls. I'll start with our quarterly financial result. For the second quarter of 2015, diluted earnings were $0.41 per share, compared to $0.39 per share for the same period in 2014. While earnings at our Water segment remained flat for the quarter, earnings for the Electric segment decreased by $0.01, earnings at our Contracted Services segment increased by $0.02, and our parent company’s earnings increased by $0.01. I will now discuss major items impacting the comparability of the two periods. For the quarter Water revenue increased about $1.3 million to $87.6 million as compared to the same period in 2014. The increase is primarily due to the third year rate increases and increases generated from revenue recovery on capital projects approved through advice letter filings. These increases were partially offset by an $842,000 decrease in surcharges during the quarter to recover previously incurred costs approved by the California Public Utilities Commission or the CPUC. Most of these surcharges were implemented in 2013 and expired during 2014. The decrease in revenue from these surcharges is offset by a corresponding decrease in operating expenses, largely in administrative and general expense, resulting in no impact to pretax operating income. As a reminder, a change in build consumption, which decreased 13% during the second quarter as compared to Q2 last year, does not have a significant impact on the company’s revenues or Water gross margins due to the CPUC authorized Water Revenue Adjustment Mechanism or the WRAM. The WRAM mechanism is in place for all of our Water service areas, excluding the effect of surcharges our Water gross margin approximately authorized Water margin approved by the CPUC. We expect Water consumption to continue decreasing…

Thank you Eva. I appreciate everyone joining us today. The company delivered solid earnings in the second quarter. During the quarter, we implemented water conservation measures and through the month of July, all of our service areas are meeting the mandated reductions. In addition, we continue to support our positions in the general rate case application that we filed with the CPUC for the water segment of Golden State Water. We also recently received the CPUC's approval to acquire all of the operating water assets of Rural Water Company. Let me address the drought situation in California. As you're aware, on April, 1st of this year, the Governor of California issued an executive order, directing mandatory conservation measures to achieve a statewide 25% reduction in urban water use as compared to 2013 levels. State Water Resources Control Board adopted emergency regulations in early May of this year to meet the governor’s executive order. The State Board also set reductions, which vary by area, depending on the historical per capita water use for the area in order to achieve the 25% reduction goal. In June 2015, Golden State Water filed updated drought response actions with CPUC for each service area to meet the new mandates. In July, the CPUC approved the filings. As a result, all of our water service areas have implemented our mandatory water conservation and rationing plan, which outlines restrictions for outdoor irrigation for water customers. If these restrictions are deemed insufficient to achieve the water use reductions, water allocations and additional mandatory rationing maybe implemented. Through the month of July, each of our service areas are meeting the mandatory reductions. During the second quarter, billed water consumption decreased by 13% as compared to the same period in 2014, due to our customers’ conservation efforts. As Eva mentioned,…

[Operator Instructions] The first question comes from Jonathan Reeder from Wells Fargo. Please go ahead.

Good afternoon, Eva and Bob. With the WRAM in place to protect your margins at the utility, I was just wondering if you could give us a little bit of guidance how we should be thinking about the distribution of GSWC’s adopted gross margin throughout 2015? Such as maybe what percentages fall in each quarter?

Jonathan, we usually just look back three to five years history to determine that allocation. So if you look through the quarterly sales in the past few years and average those out, that should give you pretty good allocations for the quarter.

Do you have any idea like roughly what percentage of the margin, I guess, remains for Q3 and Q4, is it 50% greater than that?

We think more than 50% because the third quarter is our highest sales quarter in summer. First is the lowest usually and then…

Third will be greater than the second, and fourth will be greater than first. So it’s more than 50% of the last half of the year.

Half of the year, yes.

Okay. Fourth is greater than the first still. Okay. That’s helpful. And then have your expectation for ASUS increase the bid now for 2015 due to these favorable changes in the cost estimates for the projects, or are we still thinking about maybe $0.26 or so, I think that’s what you cited last, Bob, kind of for the full year expectation?

Yeah. We think that $0.26 is still a pretty good number for the entire year. And you will recall we got to that $0.26 by taking last year’s $0.31 and backing out about a nickel fourth of sort of items that were not perspective but were impacted by prior year as well. But we had a retroactive price, re-determination for instance that contributed I believe $0.03.

Correct. Yeah. Okay. And then just kind of last question. On that front with the projects that I guess, you booked those favorable changes, were those like -- at all those multi-year large projects, were they some of the projects that were awarded? I think it was at the end of September of last year. When did those projects kind of get completed just kind of wondering a little more detail on that?

Jonathan, I think majority of our current projects are not multi-year projects. We finished quite a few multi-year projects last year. So most of the projects, we are currently working on is probably 12 to 18 months project I would say.

Okay. And then the next kind of update on, where you stand with the projects we should be thinking Q3, that’s when the government I guess kind does the budget.

Yes. That’s usually in sort of that September -- late September timeframe, early October, the amount of additional capital work that we can do, sort of through the next 12 months, next 12 to 15 months.

And we usually work with them, what kind of projects and we can do on the base and September 30 is really when funding comes down that we would know which paths to go forward.

Yeah. I mean that’s consistent with the government’s budget. I’m sure there is more dollars being asked more than we’re going to get but it's usually a very sizable chunk. Last year, I think we got $27 million, yes.

Okay. And then are there any -- I guess, kind of large multi-year project somewhere to the three that you recently completed that might be in the near future or nothing you are aware of at this point?

Yeah. Nothing we are of at this point. There are a lot of small projects that we are working on and that should keep a good solid revenue stream.

Okay. Great. I appreciate the additional clarity. Thanks.

Thank you, Jonathan.

Thank you.

[Operator Instructions] This concludes the question-and-answer session. I’d now like to turn the conference back over to Bob Sprowls for closing remarks.

Thank you, Danielle. Again, thank you all for your participation today and for your continued interest and investment in American States Water Company. Everyone have a good day.

Thank you.

Thank you. This concludes today's American States Water Company Conference Call.