Well good morning ladies and gentlemen. And welcome to the California Water Service Group Fourth Quarter and Year End 2013 Earnings Results Conference Call. Today’s conference is being recorded. And I will now turn the meeting over to Mr. Thomas Smegal, Vice President, Chief Financial Officer and Treasurer. Please go ahead, sir.

Thanks Kelbie. Welcome everyone to the fourth quarter and year end 2013 earnings call for California Water Service Group. With me today are Martin Kropelnicki, President and CEO, and Paul Townsley, Vice President of Regulatory Matters and Corporate Relations. As a reminder a replay of today’s proceedings will be available beginning today February 27, 2014, through April 28, 2014, at 188-820-311-12 or 171-945-708-20 the replay pass code is 1339013. Before looking at this quarter and year end results, we would like to take a few moments to cover forward-looking statements. During the course of the call, the company may make certain forward-looking statements. Because these statements deal with future events, there are subject to various risks and uncertainties, and actual results could differ materially from the company’s current expectations. Because of this, the company strongly advices all current shareholders as well as interested parties to carefully read and understand the company’s disclosures on risks and uncertainties found in our form 10-K, 10-Q and other reports filed from time-to-time with the Securities and Exchange Commission. Now let’s get looking at this quarter’s forward-looking statements. I’m going to do a quick review of some of the financial highlights from the fourth quarter and then spend a little bit more time on year-end results. Quarter results, fourth quarter revenue we recorded $133.7 million, which was up 10% or $12.2 million. Rate increases added $3.8 million. The effect of our pension and conservation balancing accounts increased revenue by $1.4 million. Usage combined with the effect of the RAM and MCBA mechanisms increased our revenue with $7 million including a $0.5 million of unbilled revenue approval. The fourth quarter production costs were $50.4 million that’s up 21.4% or $9.5 million, primary drivers here increased wholesale water prices and increases in the quantity of water produced.…

Thank you Tom. As management previously reported on October 30th of last year we filed a rate case settlement with the California Public Utilities Commission. This settlement was signed by our California Water Service Company, the Office of Ratepayer Advocates and by 10 other parties. On January 6th of this year the rate case evidentiary record was closed with filing of briefs by various parties to the case. And the hearing officer to the case now has the settlement agreement and all the other evidence before him and will be writing a proposed decision for Commissioner Action. Since the final decision has been delayed past the January 1st, 2014 date for newer rates to go into effect California Water Service Company has approval to retroactively charge customers the new rates once the commission, approved by the commission back to January 14th once the final rate decision is made. I would also like to update you on the status of our cost of capital application with the California Public Utilities Commission. Last week we announced that the commission approved our request for a one-year delay in the filing of our 2014 cost of capital filing, which was to be filed by March 31st of this year. As part of the commission’s approval California Water Service Company and the three other affected Class A water companies agreed to forgo filing a cost of capital adjustment mechanism this year. As a result of the approval, California Water Service will continue to be authorized a 9.43% return on equity as was most recently approved by the commission. And we along with the other three respected water companies will file our cost of capital applications in March 2015. You may have heard the California, the California PUC has a new Commissioner Mike Picker, Commissioner Picker…

Thanks Paul. So now I’m going to summarize major balance sheet items for the year-end. Our net utility plant at of the year is $1.516 billion as compared to $1.457 billion in 2012. We added $116 million in company funded CapEx. Our target for 2013 was $110 and $130 million. We came out at the lower end of our range due to a lot of participation by our engineering and operations groups in the of the California GRC activity over the course of 2013. We are estimating that same range of $110 to $130 million for company funded CapEx in 2014. Our cash at the end of year we had $27.4 million. And our total borrowings on our line of credits, was $46.8 million up $16.8 million for the group and $30 million for the company. One of the regulatory asset side the RAM, MCBA combined balance at the end of year is $44.5 million is down $1.2 million from the end of 2012. Collections are very strong on the surcharges with $35.3 million collected in 2013 versus $25.3 in 2012. However higher purchased water cost have increased the MCBA balance in 2013. So the increase in the balances is due to a lag and purchased water offset rate increases. And so significant changes we’ve talked about on these calls from time-to-time and the RAM is really only expected after we get the effective rates from our 2012 GRC process. And we look forward to that coming in to next year or two as those rates go, go through the system. And now I’m going to turn it over to Martin for some general comments.

Thanks Tom. Good morning everyone. There’s for areas that I want to cover today. One, I’d like to give some color and commentary about my impression of the earnings for the quarter, including the capital program. Two, briefly talk about what we’re expecting in Q1 as we wait for the conclusion of the rate case in California. Three, giving update on the drought and what’s happening here in California. And then four, talk about a new board member that was elected to the California Water Service Group Board yesterday. First talking about earnings, as Tom mentioned earnings for the quarter were $0.12 and $1.2 for the full year. The results achieved by California Water Service Group were better than expected driven by three primary areas. One we had a $0.13 pickup and in earnings per share due to tax related items. Two, you had positive variance from operations which is really driven by the company’s execution of a tighter budget and operational control that was $0.03. And then three we had to $0.02 pick up on the revenue accrual which is outside of around at year-end driven by the dry weather in California so there’s more accrued revenue as we ended 2013. It’s worth noting that the $0.03 budget actual variance from operations is after we absorb the $3.8 million of healthcare cost that Tom mentioned. Backing up the tax credits core earnings for the company were $0.89 a share versus our internal target of $0.84 a share. The 6% better than expected core earnings was driven by tighter budget and operational control and enhanced reporting from the financial planning and analysis team. As well as the organization’s ability to stay focused on budget management. Overall the management team at California Water Service Group executed well during 2013, which is…

[Operator Instructions]. And we’ll go to Spencer Joyce with Hilliard Lyons. Spencer Joyce – Hilliard Lyons: Good morning guys.

Spencer how are you? Spencer Joyce – Hilliard Lyons: Doing well. Thanks for taking my call, just wanted to ask a quick question here about the delay in getting the rate case rates into effect. You all mentioned that delay would weigh a little bit on the first quarter but is it safer to assume that we’ll see all of that made up by the end of 2014 or could there potentially be some still over into ‘15?

Let me take the first crack at that. Spencer it really depends upon when the final decision comes out of the commission. And the key here is that we think that we’ve given the judge everything he needs to write a decision within the timeframe that he has. Typically judge has been given about 2.5, 2.5 months to write a decision. And so it’s our expectation that, that will be done in the first half of the year. Now obviously the commission is an animal into itself and so there could be other reasons for delay or speeding up with that process. But there’s really an uncertainty, if for some reason that were delayed until very late in the year. There might be – the revenue might trickle into 2015 instead of 2014.

Okay at this point if we were base casing it we would say, most likely we’ll get things wrapped up and see the benefit in ‘14 but just not something we can say with certainty.

And that’s the best way to say it I think.

Yeah I think our expectation is, again the settlement process was supposed to be a total of six weeks it was 25 which was a massive, massive user resources within, within the company but we got the settlement done and we got it signed. And we’re running about 100 days behind essentially. So as Paul said we had to take in early January where the briefs had be filed. So you push out a little bit that would put us sometime in Q2. And Q2 assuming they stay on track and on schedule, which won’t be too bad but it does mean that we’ll have a significant effect in Q1 as we wait for the commission to wrap up the rate case. Spencer Joyce – Hilliard Lyons: Okay thanks a lot for the color there. Just one more broader question. I know from, well on a regular basis we talk about or at least ask you all about the potential for an acquisition outside of California, maybe materially moving into another state. And can you talk a little bit of about how the landscape there may have changed to what the current plans are. And that could include sort of expansion there in Hawaii or just say anything else you may be able to give us on the region?

Sure the company’s philosophy hasn’t changed. And we don’t comment on any type of M&A activities but inside the company we do have a business development team that is full time. And we’re always out there actively looking. In Hawaii right now I think we’re staying put, we’re really focused on getting those rate cases done. We rolled up a number of companies in 2008 and then brought those systems up to compliance. And now we’re working to get those rates established, to recoup the costs and getting all those plants up to compliance. So we’re always out there looking, obviously we like to be in states where the regulation’s good. We try to focus on being a very good operator, the water quality, the environment etcetera. Hence Hawaii was a nice bid for us. I think the other thing that the company has done very well that I think is, become a core competitive frankly is conservation. And as Paul and I’ve moved over and met with people in Hawaii, the commissioners elected official, except the conservation comes up alive. And we feel we have a very good blueprint in California for conservation. And we think that depending on what happens with the water supplies in the state that becomes a key core competency that make us very attractive. Other systems in other states, so we’re always out there looking obviously our balance sheet’s strong, our credit our S&P credit scores are strong. And we’ll continue to be out there looking, but it has to be an acquisition that would make sense for the company and for the stockholders of California Water Service Group. Spencer Joyce – Hilliard Lyons: Okay. Thanks a lot guys. That’s all I had.

Spencer have a good day.

Our next question will come from Heike Doerr with Baird. Heike Doerr – Robert W. Baird: Good morning. Congrats on a solid earnings report.

Hey Heike. Heike Doerr – Robert W. Baird: Quick question can you give us a refresher on the way the ROE metrics gets rebound to the Moody’s bond. And that how often that happens and how or if there’s any way that we can be tracking future changes.

So Heike, what’s called the water cost to capital mechanism is a mechanism which is for the two years after the adjudication of a new cost to capital. So we have an adopted cost of capital in 2012. And then the Moody’s AA index what happened is that band of 100 basis points and if it swings up or down a 100 basis points. Then there’s a half adjustment of the ROE. So in the case of 2013 we had 112 basis points negative to the Moody’s AA bond index. So we had a 56 basis point reduction to the ROE. And that’s where we get from 9.99% to 9.43%. And so that happens in the two years subsequent to a cost of capital decision. So it would have happened in 2013 and it would have happened in for 2014 we did not trigger for 2014. And so it’s not going to happen again until after the time file and get approval of rates, of cost of equity and cost of debt rates. Now filing in 2015 with rates expected to be in place in 2016. Heike Doerr – Robert W. Baird: So we wouldn’t expect any change to your allowed ROE in the next 18 months?

That is correct. Heike Doerr – Robert W. Baird: Got it. Okay, thanks. That’s helpful.

Thank you.

And gentlemen, we have no further questions.

Okay well as a last point everyone thank you all for being on the call. We will be filing the form 10-K later today. So obviously more and more detail in there. And thank you all for your continued interest in California Water Service Group. We look forward to talking with you again with our first quarter results in April. Thanks.

Thank you and again ladies and gentlemen that does conclude our conference for today. We thank you all for your participation.