Ladies and gentlemen, thank you for standing by. Welcome to the American States Water Company Conference Call, discussing the Company’s Third Quarter 2016 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 PM Eastern Time and run through Thursday, November 10, 2016 on the Company’s website, www.aswater.com. The slides that the Company will be referring to are also available on the website. There will be an opportunity for questions later. [Operator Instructions] This call will be limited to an hour. Presenting today from American States Water Company is Bob Sprowls, President and Chief Executive Officer; and Eva Tang, Senior Vice President of Finance and Chief Financial Officer. 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 and Form 10-Q on file with the Securities and Exchange Commission. In addition, this conference call will include a discussion of certain measures that are not prepared in accordance with Generally Accepted Accounting Principles or GAAP in the United States and constitute non-GAAP financial measures under SEC rules. These non-GAAP financial measures are derived from consolidated financial information but are not presented in our financial statements that are prepared in accordance with GAAP. For more details, please refer to the press release. At this time, I will turn the call over to Robert Sprowls, President and Chief Executive Officer of American States Water Company.

Thank you, Andrew. Welcome, everyone, and thank you for joining us today. I’ll begin with some highlights for the quarter. Eva will then discuss some third quarter details and then I'll wrap it up with some updates on the general rate case. The balance rates order instituting rulemaking in California drought, ASUS dividends and then we'll both take your questions. The third quarter of 2016 was very busy for us as we achieve success in many aspects of our business. I’m pleased to report that the Company delivered higher third quarter earnings as compared to last year and raised the fourth quarter dividend by 8%. While not surprised at their continued confidence in our Company. I was very pleased to get our Board’s approval earlier this week to increase our dividend. We also continue to invest in the reliability of our water and electric systems. Golden State Water Company our utility subsidiary has invested $95 million on Company funded necessary infrastructure work for the nine months ended September 30, 2016 and as compared to $58 million for the same period last year. In fact our total spending for the third quarter and year-to-date 2016 exceeded the level of spending for the same time periods for the past three years. We expect to finish the year with approximately $105 million to $115 million in capital investment. In addition, during the quarter our contracted services business ASUS was awarded a 50-year contract by the U.S. government to operate maintain and provide construction management services for both the water and wastewater systems at Eglin Air Force Base in Florida. The initial value of the contract is estimated at approximately $510 million over the 50-year period and is subject to annual economic price adjustments. We expect to assume operation at Eglin by mid-2017 and for this new base to contribute $0.02 to $0.03 per share on an annualized basis. We’re excited about expanding our service to the U.S. government. After we complete the base transition ASUS will then be providing water and/or wastewater utility services to 10 military bases including three of largest military installations in United States. Fort Bragg, Fort Bliss and Eglin Air Force Base as well as one of the most high-profile basis Andrews Air Force Base. I will now turn the call over to Eva to review some of the details for the quarter.

Thank you, Bob. Good morning or to most of you good afternoon everyone. I’ll begin with an overview of our financial results on Slide 7. Diluted earnings for the third quarter were $0.59 per share compared to $0.56 per share for the same period in 2015. Of the $0.59 earnings per share for the quarter, $0.47 was from our Water segment, $0.02 from our Electric segment and $0.10 from our Contracted Services business. I’ll discuss major items that impacted our revenues and expenses for the quarter on the next slide. During the quarter there was a decrease of $6.7 million in water revenues. The decrease was as a result of a 2016 revenue adjustment to reflect decreases in supply cost, depreciation and other operating expenses. Based on our settlement position with the CPUC’s Office of Ratepayer Advocates for the pending water rate case, which was finalized will be retroactive to January 1, 2016. You will see the corresponding decreases in the expenses on the next slide. The adjustments on both revenues and expenses did not result in any significant impact to pretax operating income for the quarter. The 2016 water revenues also reflect our positions on litigated capital budgets and compensation related issues in the pending rate case. Bob will discuss the water rate case later in the call. Partially offsetting this revenue decrease was an increase in water consumption by a small portion of our customers that are not under conservation rates as well as new revenues generated from a water system acquired in October 2015. Water consumption was up by 12% this quarter compared to the same period last year. Revenue from electric operations for the quarter increased by approximately 2.5% due to CPUC-approved fourth-year rate increases for 2016 and rate increases generated from certain advice letters for…

Thank you, Eva. Now turning to Slide 13, as we’ve discussed in previous quarters, we filed a general rate case in mid-2014 for all of our water regions and the general office. The application will be determine rates charged to customers for the years 2016, 2017, and 2018. Golden State Water has settled with the PUC’s Office of Ratepayer Advocates on nearly all the Company’s operating expenses as well as the consumption levels used to calculate rates for years 2016 through 2018, which reflect the 2015 state-mandated conservation targets from 2015. The primary litigated issues relate to our capital budget request and compensation for managerial level employees. A proposed decision is expected in the fourth quarter of this year. Once our final decision is issued, rates will be retroactive to January 1, 2016. The adopted revenues for 2016 are expected to be lower than the 2015 adopted levels. As you may know a big part of the utilities revenue requirement is the recovery of projected expenses. Our projected expenses for 2016 in the rate case were lower than the 2015 adopted expense levels. In particular, there was a decrease in supply cost resulting from lower consumption projected. Lower depreciation expense resulting from a new depreciation study and a decrease in other operating expenses in this 2016 through 2018 rate case cycle due to our cost control efforts and improvements in operational efficiency. Because of the Company's efforts we were able the proposed necessary increases in our construction program with little to no impact on cost and rates. As a reminder in early 2016, we received CPUC approval to defer our electric, general rate case and the cost of capital proceeding for our water segment by one-year. Both are now scheduled to be file during the first quarter of 2017. Last…

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Jonathan Reeder of Wells Fargo. Please go ahead.

Hi, Bob and Eva hope you all are doing well. Bob I want to touch on your ASUS comments and around the construction expenditures expected for 2017. I know it's still kind of a moving target. But can you just I guess offer some guidance what's baked into your 2017 full year estimate. Is it a similar level of expenditures to 2016 or does it indeed represent a decrease?

Yes. It’s a lot like 2016. So it won’t really represent a decrease.

Okay. So similar to 2016 and then I guess the incremental drivers of like the $0.03 higher in the midpoint would be the partial year of Eglin as well as some of those price re-determinations?

Yes. That’s exactly right.

Okay. And then for the CapEx on the regulated utility side, you said you're expecting $105 million to $115 million in 2016 does that mean the request for GRC for like $90 million a year. Does that mean as front-end loaded or how should we interpret that?

Well, we’re pretty focused on getting the dollar spent in 2016. We're really not going to know about 2017 and 2018 until we get a decision. But we feel like, we need to be spending dollars on pipe replacement. We didn’t feel like we are getting sort of too far out in front of our [skis] on that. It just felt like we need to get going. I’m a little disappointed here that we haven't gotten our rate case decision by now and it does make it little difficult for us plan capital when we don't have that. But we’ve been out replacing pipe like we should and we think the PUC was favorably on that.

Okay. I mean the GRC contemplates only about $90 million a year and so you're expecting this year to be ahead of that pace and that's I guess within the backdrop of the remaining contested issue being on the appropriate level of CapEx or presumably the interveners arguing for something less than $90 million and you're actually spending more than $90 million?

Yes. That's correct. The interveners are arguing for a lesser amount than the $90 million.

We also have to see with dollar amount Jonathan which is about $70 million that above or beyond the $90 million average. And when we project the rate case is really start projecting from 2015 and 2017 and 2018. So I think we are working on the state project, once the decision issued we will look to see our plan going forward. We think the way we are doing right now it will help us with our second and third year earnings test as well.

Yes. Eva absolutely pointed out, we had to final this case in mid-2014 and so we had included forecasts for 2015, 2016, 2017 and 2018. So it all sort of goes into a big part I guess and so we are taking a hard look at spending and we do feel pretty comfortable that what we're standing the additional dollars are important projects. If we get a little bit ahead of the adopted rate base, we'll just live with that till the next rate case.

Okay. And then I appreciate the fact you're trying to adjust kind of reported revenues and expenses in line with the settlement there, but I guess if you could just maybe discuss like what could still cause potentially the margins of the year-to-date earnings to be overstated and how that exactly could flow through? I mean I guess if the final outcome isn’t until 2017 would have presumably not ever get restated in 2016 or just be a special item in 2017 or if you get that proposed decision before year end would it get restated in 2016?

And Jonathan when proposed decision issued that we will have to assess every item on that proposed decision. Still a long way between proposed decision to the final decision, but we may have to adjust it, right now we don't know what the outcome will be from the proposed decision. We will have to assess the potential contingent law, let’s say that for accounting purposes.

Right. I guess where the areas be where I guess potentially the margins could come in I mean is it on the tax benefit side or something of the repairs tax benefits increased in 2016 versus 2015 and those kind of get clawed back or where would it potentially come from given the items that you have already settled?

I think the one big item is the CapEx, so I will request about $90 million a year on average and ORA position is far less than that. That could be potential adjustment to our revenue requirements depends on where the Judge ended on his decision.

Okay, because of the rate base of that.

Yes, because on the return on the CapEx and less deprecation, so capital expenditure definitely is the one big item.

Okay. And if that came in lower a bit more you requested that would lower the revenues you’ve recorded thus far?

Yes. Good statement.

Okay. And then just last question. I know in the release you cited the deal you did last year I think it was the Rural Water Company, what was the size of that?

It was about a 1,000 Customers so wasn’t excessively large, but it little bit helps as they say.

Okay. Was there a dollar amount that you disclosed on it or no?

I think we discussed that. $1.7 million for the purchase and got that fully recovered.

Okay. Excellent. Thank you for the additional info.

Yes. Thanks Jonathan.

Thank you. End of Q&A

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Bob Sprowls for any closing remarks.

Thank you, Andrew. Yes, I just want to wrap up today by just thanking everyone again for your participation today and for your interest in the Company. And Eva and I both look forward to speaking with you next quarter. So thank you very much.

Thank you.

As a reminder this call will be archived on our website beginning Thursday, November 3, 2016 at 5 PM Eastern Time and will run through Friday, November 11, 2016. This concludes today's American States Water Company conference call. Thank you for your participation. You may now disconnect.