Good day, ladies and gentlemen, and welcome to the Southwest Gas 2015 Year-End Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions]. As a reminder, the conference call maybe recorded. I would now like to turn the conference over to Ken Kenny, Vice President of Finance and Treasurer. You may begin.

Thank you, Nicole. Welcome to Southwest Gas Corporation 2015 Earnings Conference Call. As Nicole stated, my name is Ken Kenny, and I am Vice President, Finance and Treasurer. Our conference call is being broadcast live over the Internet. For those of you who would like to access the webcast, please visit our website at www.swgas.com, and click on the conference call link. We will have slides on the Internet, which can be accessed to follow our presentation. Today, we have Mr. John P. Hester, President and Chief Executive Officer; Mr. Roy R. Centrella, Senior Vice President and Chief Financial Officer; Mr. Justin L. Brown, Vice President Regulation and Public Affairs and other members of senior management to provide a brief overview of 2015 earnings and an outlook for 2016. Our general practice is not to provide earnings projections. Therefore, no attempt will be made to project earnings for 2016. Rather, the company will address those factors that may impact this coming year's earnings. Further, our lawyers have asked me to remind you that some of the information that will be discussed contains forward-looking statements. These statements are based on management's assumptions, which may or may not come true, and you should refer to the language in the press release, our SEC filings and also Slide number 2 presented today for a description of the factors that may cause actual results to differ from our forward-looking statements. All forward-looking statements are made as of today, and we assume no obligation to update any such statement. With that said, I'd like to turn the time over to John.

Thanks, Ken. Turning to slide three and our highlights for 2015. From a consolidated perspective first, earlier this week, our Board approved an increase in our annual dividend of $0.18 to a $1.80 per share. This is an increase of over 11% and the 10th straight year at Southwest has increased dividend shareholders. For 2015, we realized earnings per share of $2.94, slightly better than 2014 as we normalized COLI results, which Roy will talk about in a few minutes. We also submitted applications to establish a holding company structure in each of our state jurisdictions and have recently received approval on the application, we submitted in California. In the natural gas segment in particular, we saw record operating margin of $891 million at 26,000 customers during the past year, invested $438 million to serve growing customer demands and increase safety and reliability of our gas delivery infrastructure and we’re voted in top five company and brand trust for utilities. We also saw our sales moving ever closer to the end of our Arizona rate case moratorium. On the unregulated construction services side, we realized record revenues and net income of over $1 billion and $26.7 million respectively. We also completed the first full calendar year of integrated operations with the Link-Line Group of Companies that we acquired in October 2014. In addition, we reached a resolution on a previously contested Canadian industrial project that has been pending for the past few quarters. Moving to slide four, our outline for today’s call will be as follows: Roy Centrella will provide an overview of our 2015 consolidated earnings, including detail for both the natural gas operations in Centuri Construction Group. Justin Brown will follow with the review of our various regulatory activities, and I will finish with some observations on customer growth, the regional economic picture, our capital expenditure plan, growth in our dividend and expectations for 2016. With that, I will turn the call over to Roy.

Thank you, John. I’ve planned to provide a summary of our 2015 operating results and recap the primary factors impacting the change from 2014. And also comment on some expectations around 2016, so let’s move to the slides. Consolidated net income for 2015 came in at a $138 million or $2.94 per basic share that compared to $141 million or $3.04 in 2014. Our Construction Services segment showed strong improvement between years, while our gas segment results declined. Operationally, the gas segment declined was fairly modest. However, returns on investments underlying company-owned life insurance or COLI policy fell by $5.8 million between years and was the primary reason for both the overall gas segment and consolidated earnings decline. Taking that into account, 2015 compares favorably to 2014. Let’s move to slide six in the natural gas segment highlights. In addition to the items, John mentioned earlier, highlights included operating margin growth, reduced financing costs of $4.2 million between years and successes we’ve had on the regulatory front, which Justin will discuss later on. Slide seven, this slide summarizes in the gas segment. Operating margin increased by $14 million between 2014 and 2015, all operating expenses increased by $21 million or 3.3%. As a result, operating income declined by $7 million between three. Net interest deductions favorably offset the operating income decline by $4.2 million. But other income was substantially lower than last year, when COLI returns were quite favorable. That result was a decrease in the gas segment contribution to net income from $117 million in 2014, to $112 million in 2015. Now slide eight summarizes the change in operating margin between years. Customer growth contributed $8 million as the company increases customer account by 26,000 over the last 12 months. Combining rate release in California and from pipeline provided…

Thanks Roy. Slide 16 summarizes four areas to highlight our key regulatory initiatives. I will discuss each of these areas starting with an update on a general rate case activity, infrastructure recovery mechanisms, expansion projects and a couple of other recent regulatory filings and outcomes. Turning to slide 17, you may recall that our most recent California general rate case authorized post-test year attrition increases of 2.75% per year for calendar years 2015 through 2018. We made a filing in November requesting an annual increase in operating margin of $2.5 million and this request was approved in December and rates became effective January 2016. Also in California as part of the pipeline safety implementation plan docket where gas utilities were directed to modernize the transmission systems. We received approval to replace 7.1 miles of transmission pipeline and install remote control shut off valve. As part of that same docket, we also received approval to include the revenue requirement associated with that work in a future filing. Since the work was completed in 2015, we made a filing in November requesting to recover approximately $1.7 million of incremental operating margin. That filing was approved in December and new rates became effective January 2016. Moving to slide 18, we are currently in the planning and preparation stages for the next Arizona general rate case. You may recall that some of the conditions of our last rate case settlement preclude a filing in each center in April 30, 2016 and prohibit new rates from becoming effective any sooner than May 2017, as part of our next general rate case we anticipate requesting approval to continue our decoupled rate design, expand our currently approved infrastructure recovery program and update our depreciation rates as well as update our overall cost of service, including an estimated…

Thanks, Justin. Slide 24 provides a breakdown of our customer growth over the past few years. As I previously mentioned, surplus gas added 26,000 customers in 2015. 23,000 of those customers were new meter sets with the balance generally coming from previously unoccupied homes. We now serve 1.956 million customers and anticipate continuing to experience approximately 1.5% customer growth for the foreseeable future. On slide 25, you can see a graph illustrating the decline in the unemployment rate that we’ve seen in the states in which we operate over the past several years. And then on slide 26, you see a table detailing the job creation observed across states we serve as a regional economy continues to improve. Turning to slide 27. As we continue to invest in facilities to serve customer growth and increase the safety and reliability of gas delivery systems, our gas utility plant has grown at a rate of 5.6% over the past few years. Moving to slide 28, the growth in our gas utility plant is the result of continuing to invest in infrastructure to serve our customers. This past year, we invested $438 million to serve our customers and we expect to invest an additional $460 million in 2016. Over the coming three-year period, our capital expenditures should range from between $1.4 billion and $1.6 billion, the exact magnitude of Southwest's prospective capital expenditures will impart the function of our continuing collaborative discussions with our regulators regarding accelerated type replacement activity. Slide 29 provides additional detail in how we see our 2016 capital expenditures breaking down between growth and other categories. As we’ve indicated in previous conference calls, we continue to expect to see the portion of our capital expenditures associated with tracking mechanisms to grow overtime. Turning to slide 30, as I mentioned…

Thanks John. That concludes our prepared presentation for those of you who have access to our slides, we have also provided an appendix of slides which includes other important information about Southwest Gas it can be reviewed at your convenience. Our operator Nicole will now explain the process for asking questions.

Thank you. [Operator Instructions]. Our first question comes from the line of Matt Tucker of KeyBank Capital Markets. Your line is now open.

Hey guys, congrats on a nice quarter.

Thanks Matt.

First, I just want to ask about the Centuri guidance, the 3% to 7% revenue growth. I guess I mean first, growth of any kinds obviously a good thing in this environment, it is about slower than the growth that you saw in '15. I think even on an organic basis. Is that largely because of just how strong the fourth quarter was with the weather being unusually favorable. Or any other reasons why you couldn't see similar growth next year.

Your observation is correct. That weather at year end especially the month of December, the warmest December on record from the whole eastern half of the United States and we have a lot of business in the Midwest and in the Eastern areas, where we were able to extend our season. If you look at sort of the guidance we have put out in the third quarter, it was higher but I was assumed off of a lower base. And I think you will see that this current guidance now with the higher base of revenues. It's pretty consistent with where we think we were going to be at following the end of the third quarter.

Okay, thanks. And then a couple of questions on the upcoming Arizona rate case. You mentioned, you're likely to request an expansion of infrastructure tracking mechanism. Is that - would that be an expansion the company-owned yard line program or are you looking to expand beyond that?

Yeah Matt, it's Justin. It's actually both, so currently the COYL program provides if you recall under phase I to replace lines that are leaking after leak survey that was expanded to phase II to replace the lines that are not leaking under certain situations. And so I think there is kind of a natural next phase which would be kind of more of a targeted approach. So we're going to look at doing something like that as well as consistent with what we've done in Nevada looking to expand it to include other kind of ageing infrastructure vintage still pipe or plastic pipe where would the case maybe.

Got it. Thanks, Justin. And then you've mentioned you'll be requesting a 20% plus rate based increase I guess not too surprising given the duration of the rate freeze you've been. But I guess could you comment on potential customer build impacts, I think in the past you'd said with the deprecation study rates there may come down and kind of offset what you'd be requesting in terms of rate increase. Is that still the case?

Yes, it is.

Perfect. And then just last question, the expected increase - the expected debt financing and increasing in interest expense. Does that factor in the extension of bonus deprecation?

Yes, it does even with the bonus depreciation we're projecting roughly 60% to 70% of CapEx to be covered by internally generated funds over the three-year cycle. and so we will need some external financing, I might recall we have an existing equity shale programs that still has about $65 million left on it which we can draw on in addition to raising going out into the debt capital market.

Great. Thanks guys.

Okay. Thank you Matt.

Thank you. And I am showing no further questions at this time. I'd like to hand the call back to management for any closing remarks.

All right. Thank you Nicole. This concludes our conference call. And we appreciate your participation and interest in Southwest Gas Corporation. Thank you all.

Ladies and gentlemen, thank you for participating in today's conference. That does conclude today's program. You may all disconnect. Have a great day, everyone.