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 2015 Results. The call is being recorded. If you would like to listen to the replay of this call, it will begin this afternoon at approximately 5 o’clock PM Eastern Time and run through Thursday, March 3, 2016 on the company’s website, www.aswater.com. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] This call will be limited to an hour. As a reminder, 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. At this time, I would like to turn the call over to Eva Tang, Chief Financial Officer of American States Water Company.

Thank you, Carrie. Good afternoon and welcome, everyone. Thank you for joining us today. On the call with me today is our President and CEO, Bob Sprowls. I’ll start by reviewing our financial results. Diluted earnings for the year ended 2015 were $1.60 per share, which is $0.03 per share increase as compared to $1.57 in 2014. For the fourth quarter of 2015, diluted earnings were $0.31 per share, compared to $0.35 per share for the same period in 2014. I’ll first discuss the key items that affected our fourth quarter results. For the quarter, revenue at our Water segment decreased $830,000, due mainly to a delay in recognizing $1.4 million of Water Revenue Adjustment Mechanism or the WRAM revenue, partially offset by rate increases approved by the California Public Utilities Commission. As we discussed in our third quarter earnings call, under the accounting guidance for alternative revenue programs, we can only recognize WRAM revenue for amounts collectable within 24 months following the year in which they are recorded. Please note that the accounting guidance affects the timing of when we can recognize the WRAM revenue, but not the collectability of the WRAMs. We have just filed that with the CPUC for recovery of the 2015 WRAM balances, including the $1.4 million. Under the current CPUC amortization guidelines, we expect to collect the balances between 12 to 36 months. The $1.4 million will be recognized as revenue when it becomes collectable within 24 months. At this time, we estimate the majority of the $1.4 million will be recognized as revenue in 2016. As part of our pending water general rate case, the forecasted consumption used to set rates for 2016 through 2018 reflects state-mandated consumption levels. Therefore, we do not expect the WRAM balances during the next rate case cycle…

Thank you, Eva. Hello, everyone. I appreciate everyone joining us today. American States Water produced another year of solid financial performance in 2015, as we earned $1.60 per share. Achieved a consolidated return on equity for the year of 12.4%, increased our dividend yet again, and achieved above market returns on our common stock. Our consolidated performance reflects excellent financial results by our two first year subsidiaries Golden State Water Company, which is our regulated water and electric utility, and American States Utility Services, our contracted services business. Let me discuss some of the highlights for 2015 by business segment. Our water and electric utilities continue to invest to maintain an improved reliability of our systems. During 2015 Golden State Water invested $91 million in infrastructure; well above the $61 million we spent in 2014, a year where we experienced project delays. Of the $91 million in company funded capital expenditures, fair value electric service accounted for approximately $8 million, reflecting our electric divisions work on two large projects. We anticipate capital investments in 2016 to be approximately $85 million to $95 million, which may change once a decision is issued by the California public utility commission on our pending water rate case. While we continue to make prudent investments to maintain and improve the reliability of our systems, Golden State Water also remains very focused on cost control and this was further evidenced in 2015. Excluding depreciation expenses and supply cost, operating expenses for 2015 were relatively unchanged compared to 2014. In fact the overall staffing level at Golden State Water has declined by approximately 8% since 2011. Lastly, in October 2015 we completed an asset purchase agreement and acquired all of the operating water assets of Rural Water Company and began serving 960 new customers. Our contracted services…

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Richard Verdi of Ladenburg. Please go ahead.

Hey, Bob and Eva, good quarter and thank you for taking my call.

Thank you, Richard.

Thanks, Richard.

I just have one very quick question Bob. On the past few calls and specifically you know on the last call, you had provided some framework surrounding the ASUS group, and I should say at this way, last year on the 4Q call, you had stated that ASUS would look similar to the prior year and maybe down a little bit? Here we are and ASUS came out flat year-over-year, and on the last call you had indicated that maybe it could be down a little bit, this year versus last year. So given that it ended up being flat this year-over-year I mean could that be the case again in 2016 or could we see a modest drop in earnings in from ASUS unit this year?

Well Richard, I’ll start with some of the earning for 2015. We achieved $0.32 per share. We had included in that $0.32 million to $0.5 million sense of retroactive O&M fees for prior years, so that would lead sort of one to believe that we may go down a little bit from 2015 to 2016. However, as you know, and I think many of the folks on the call know in September, we received $50 million in government funding for new capital work at the basis we serve, which will largely be performed in 2016. So this should allow us to increase our construction revenues in 2016 from the level we achieved in 2015. We do have the $0.05 retroactive that sort of going away, but I think we can make some of that back through the construction – additional construction revenues. So we’re projecting an EPS contribution from ASUS of $0.28 to $0.32 per share for 2016.

Okay. That’s very helpful. Thank you for that. I guess, I’d say thank you, guys. Good quarter. I appreciate it.

Thank you, Rich.

Thank you.

[Operator Instructions] Our next question comes from Jonathan Reeder of Wells Fargo. Please go ahead.

Hey, good afternoon or good morning, I guess for you guys, Bob and Eva. Thanks for the guidance. First off Bob on ASUS that’s always helpful. Did I miss in your remarks that you said you had a settlement in water general rate case, is that accurate, or do I hear wrong?

That’s correct. We had settled a number of our operating expenses. The outstanding items that we have remaining in the case that we went to hearings on was the entire capital budget and management compensation. So it’s largely a capital related item.

Did you settle though the capital budget and compensation issues, or those are still kind of litigated?

Yes, we litigated that during the summer and we’re – that’s now been turned over to the Administrative Law Judge to decide the outcome for those two items.

Okay. Sorry, I was confused if you had said you had gotten a comprehensive settlement now at this point. But – okay, so we’re expecting an outcome you said in Q2, is that right?

We believe so, yes.

Okay. And so with the new rates affective at the water utility, do you expect like your full-year 2016, if it has to be higher, lower, about the same as the $1.19 and $1.15 given your operating efficiencies or I think allowing the sub to earn above the allowed ROE in 2015?

Yes, that’s a difficult question to answer without completely knowing what the rate case is going to come out with. We, as you know put it on our forecasted operating expenses and really without knowing where the decision comes out It’s difficult to project whether it will be higher or slightly lower than 2015.

Okay. But it might be kind of similar, it sounds like more than likely.

Yes, it could be similar. It’s – we’ve done just a great job in controlling expenses and the folks at this company- what I’ve learned in my tenure as CEO was, you have to do is ask these folks to do things and they go and do it. And I couldn’t be more impressed with what our organization has done over the last four or five years, so…

You make it sound so easy, Bob.

You’re welcome.

I’m sure it’s not that easy. But…

It’s easier for me than it is for them, I guess.

Right. Do you think there’s opportunities and realize additional efficiencies over this next GRC cycle?

I believe there are, yes. I mean as you know, it gets a little tougher each time. But we’ve got some very innovative people at this company and they really have done a great job.

The other thing that I think as Bob mentioned are 2015 for Golden State Water or 2015 operating expenses excluding the depreciation in supply cost. This is basically not changed much from last year. So we’ll continue to try to do our best to control our cost, I think that’s where the efficiency comes from.

Ultimately, when we do a great job controlling costs, it does, in fact, ultimately go back to our customers in the form of lower rate increases and that’s really important to us too. So, I mean, that’s – we’re very focused on making sure our water rates are affordable.

Right. And would you expect the GRC filing, does it kind of contemplate those flat costs in 2015, or is that how you’re kind of saying this depends on where the expense levels shakeout given how you ended the year?

Well, it does depend on where these expense levels shakeout in terms of whether we can do better than that. I mean, it’s a – it will be a challenge, but, again, we have a lot of capability at the company to take on those challenges.

All right. And then my last question, Eva, do you have what your authorized weighted average rate base was for 2015? And then what the GRC requests for 2016 is?

We – for the 2016, as what we currently have stipulated, it was $725 million for 2016. That’s filed with the PUC as our position right now. But as Bob mentioned, we are contesting on – the OIA is contesting the capital expenditure. So the $725 million rate base is our position at this point.

Is that just for water, or does that include that electric portion too?

Just water.

Okay.

We filed the rate case that had virtually no increase in rate.

Right.

All we want to do here is maintain the system and well hopefully that will play with the Administrative Law Judge. We’re not sure whether it will or it well ORA. We’re always apart with ORA on the CapEx budget. So it was little hard to me that they weren’t a little easier to deal with on that, but particularly given that we have basically a flat rate.

Okay. And then what was your authorized 2015 water rate base? How is that compared to the 7.25 you have requested?

Not sure, I have that number. I think the 2015 authorized rate base is about 700 range. I can get you that number from our position, Jonathan.

Okay. All right, great. That would be appreciated. And that’s all I have today. Thanks so much for the time.

Thank you, Jonathan.

[Operator Instructions] Seeing no further questions. This concludes our question-and-answer session. I’d now like to turn the conference back over to Bob Sprowls for any closing remarks.

Thank you, Carrie. I just want to wrap up today by thanking all of you for your participation on the call today and your continued interest and investment in American States Water Company. So, thank you very much.

This conclude today’s American States Water Company conference call. Thank you for attending today’s presentation. You may now disconnect your lines. Have a great day.