Good day, ladies and gentlemen, and welcome to the Southwest Gas Holdings 2017 Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, today’s program is being recorded. And now, I would like to introduce your host for today’s program, Ken Kenny, Vice President of Finance and Treasurer.

Thank you, Jonathan. Welcome to Southwest Gas Holdings, Inc. 2017 third quarter earnings conference call. As Jonathan stated, my name is Ken Kenny, and I am the Vice President of 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.swgasholdings.com and click on the conference call link. We have slides on the Internet which can be accessed to follow our presentation. Today, we have Mr. John P. Hester, Southwest’s President and Chief Executive Officer; Mr. Roy R. Centrella, Senior Vice President and Chief Financial Officer and Mr. Justin L. Brown, Vice President, Regulation and Public Affairs and other members of senior management to provide a brief overview of the company's operations and earnings ended September 30, 2017, and an outlook for the remainder of 2017. Our general practice is not to provide earnings projections, therefore, no attempt will be made to project earnings for 2017. 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 on slide 3, in the press release and also our SEC filings 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 4, looking at the third quarter, some of the highlights from a consolidated results perspective include recorded net income of $10.2 million for the quarter or $0.21 earnings per share, the elimination of cumulative voting, a special shareholder meeting we convened on October 17 and acquisition of the 3.4% non-controlling interest in the Centuri construction group previously held by the prior owners of Link-Line. In the natural gas segment, highlights included an operating income increase of $15 million over last year's third quarter, the addition of 32,000 customers for the year ended September 30 and as of earlier this week, we now serve over 2 million customers across Arizona, California and Nevada. Also last week, we submitted an application to the Public Utility Commission of Nevada to expand our service territory to serve Mesquite, Nevada. And at our Centuri Construction Group this past quarter, we experienced solid third quarter financial results. We increased the capacity of our credit and term loan facility to $450 million and again, just earlier this week, we completed our acquisition of a utility infrastructure company called Neuco that does business in New England. Moving to slide 5, on today's call, Roy Centrella will provide an overview of third quarter consolidated earnings as well as segment details for our natural gas operations and construction services groups. Justin Brown will provide an overview of our various regulatory activities and I will close with a report on regional economic conditions, our capital expenditure plans and our 2017 expectations. I’ll now turn the call over to Roy.

Thank you, John. Today, I’ve planned to cover third quarter financial results and provide a little background on the Neuco acquisition, which we just completed. Let’s start things on slide 6 with a look at consolidated operating results. During the third quarter of 2017, we had consolidated net income of $10.2 million or $0.21 per basic share compared to $2.5 million or $0.05 per share earned in the third quarter last year. During the 12-month periods, our earnings improved from $153 million or $3.22 per basic share to $163 million or $3.42 per share. Next, we'll look at the relative contributions of each segment, the change in earnings starting on slide 7. The natural gas operations segment experienced a loss of $4 million this quarter, a marked improvement from the last year's third quarter loss of 12.4 million, principally as a result of impacts from our Arizona general rate case order, which became effective this past April. Construction Services had strong quarterly results but experienced a slight decline in net income to 14.3 million from 14.9 million. The next slide breaks down the change in earnings between 12 month periods. Gas segment net income increased $14.5 million, while construction services experienced a net decrease of $4.1 million. We’ll now look at each segments starting with natural gas operations on slide 9. This waterfall chart provides the breakdown of the major components of the improved results. Operating margin increased $6.4 million as a result of customer growth and rate relief in Arizona and California. We added 32,000 net new customers over the last 12 months, a growth rate of 1.6%. Depreciation and property tax expense declined 8.7 million between periods, primarily due to lower depreciation rates in Arizona. And O&M costs were flat between periods as decreases in employee related benefit…

Thanks, Roy. We continue to remain focused on timely rate relief through both traditional rate cases and our various tracker programs as well as opportunities to reinvest in our system to ensure safe and reliable service to our customers. We've seen several new developments in these areas over the quarter, including continued progress on our capital investment tracker programs in Arizona and Nevada as well the recent filing John mentioned in his comments in Nevada, requesting to expand our distribution system to service. Let's start with an update on rate relief in slide 16. With the Arizona Corporation Commission's April decision, we anticipated the rate relief to be allocated between 2017 and 2018 with approximately 45 million being realized in 2017 and 16 million in 2018. As such, the completion of the third quarter, we are now halfway through realizing the full benefit of the approved rate relief that we would have expected to see over full 12-month period. One such benefit is the contribution to improved earned returns over the same period as compared to our overall authorized return for gas operations. Turning to Nevada, we are currently in a test period and still plan to file our next gen -- Nevada general rate case by June 2018 with new rates expected to become effective by January, 2019. With respect to California, we are currently on a five year rate cycle, which means we were scheduled to file a rate case this year since our last rate case was filed in 2012. However, the commission granted a two year extension so that we are now targeting a September 2019 date for our next California rate case filing. In the meantime, we will continue to make annual adjustments to margins through 2020 as part of our annual 2.75% attrition filings.…

Thanks, Justin. Turning to Slide 20, as I mentioned at the outset of the call, in the most recent 12-month period we had 32,000 net new customers. And just earlier this week reached 2 million customer mark. Moving to slide 21, regional economic picture for our service territories continues to be strong. Unemployment rates declined across the board year-on-year and we continue to see new job creation in our service territories. On Slide 22, we continue to deploy a robust capital expenditure plan for the three-year period ended 2019, we expect to invest upwards of $1.8 billion to serve new growth and replace aging infrastructure. An important part of our capital expenditure plan is the support of regulatory climate we see in each of our states as regulators look for us to continue investing in safety and reliability as well as fostering economic growth. Turning to Slide 23, ultimately the capital reinvested in our gas transmission and distribution system translates into new rate base through a variety of regulatory activities. With our planned capital expenditures, we project a compound annual growth rate in rate phase for Southwest Gas of 9% over the next three years. Moving to Slide 24, we provide an update on our 2017 expectations for natural gas operations. We expect operating margin to increase by nearly 3%. Operating income is expected to increase by 12% to 14%. Interest expense is expected to increase by $2 million to $3 million over 2016 levels and our previously communicated expectations are reaffirmed. Finally, on Slide 25, refined expectations for Centuri Construction Group include an anticipated increase in revenues of 3% to 5%, operating income equal to nearly 5% of revenues, net interest deductions of $7.5 million and note that our expectations generally exclude 2017 impacts from the Neuco acquisition as fourth quarter earnings will be offset by acquisition costs. I’ll now turn the call to Ken.

Thanks, John. That concludes our prepared presentation. For those of you who have access to our slides, we have also provided an appendix with slides that include other pertinent information about Southwest Gas Holdings Inc. and its subsidiaries, and can be reviewed at your convenience. Our operator Jonathan will now explain the process for asking questions.

[Operator Instructions] Our first question comes from the line of Chris Sighinolfi from Jefferies.

Yeah guys, this is Josh stepping in for Chris. Can you guys give us any color around how the proposed tax reform bill would affect your business going forward?

Sure Josh, this is Roy. As you know the proposed bills keep changing. But based on the one that’s floating around today, one of the things on the utility side is there is somewhat of a favorable carve out for our industry where we would be allowed to continue ducting interest expense provided that we use the more customary tax depreciation rates for capital expenditures. And so we think that’s a pretty favorable outcome for the industry that would allow rate base to be a little bit higher level than it would otherwise and have a positive impact on our earnings going forward. The lower tax rate would result in some excess deferred taxes which we would flow back to customer. We expect to flow back to customers over a lengthy period of time. So basically I view it on the utility side as neutral short run positive long run. On the Centuri side of the business, we would be able to but the lower rates that would result in a reduction in our deferred tax balance, which currently sits at about $30 million is sort of one-time reset there that would be favorable. And then going forward, well, we would have maybe a short run positive impact for contracts that are currently in existence, we would expect that would influence our pricing going forward and we would in the competitive environment give most of that benefit to customers.

Our next question comes from the line of Ryan Levine from Citi.

Given our recent acquisition, what you be able to share with us the organic growth profile for that asset on a standalone basis?

Just for Neuco?

Yes.

The Neuco properties in New England that we work - customers that we work with there have a very strong growth opportunity, very similar to what we've seen in some of our other large service territory. Certainly we expected that business can grow similarly with what we've seen in Centuri probably in the 8% to 10% range, if I had to number out there.

And then on cash reform, given the certain proposed house bill, how do you envision that impacting your construction service spending program or our capital structure?

At the Centuri, you know, because as an unregulated entity they would get to reset their deferred tax balance, currently we have about $30 million in deferred taxes at Centuri, those would reset to the new rates. So we’d have sort of a one-time pay per gain if you will for that rest. And then going forward, the contracts that are currently in existence might have a bit of a short-term favorable impact until those have to be renegotiated. At which time I would think given the competitive environment we're in, most of those benefits would be at least shared with the customers if not provided directly to them.

And then lastly on the Senate Bill 151 expansion to Mesquite is there any more color you can provide around the CapEx amount that will be associated with that growth initiative.

This is Justin. The initial cost for the approach main and the distribution network that we're proposing is, is the capital cost of that $30 million that I mentioned. And then to the extent you have customers that choose to access the system, there would probably be some incremental associated with that. But that's just going to be a function of the potential number of customers wanting to access the system. The distribution network we're proposing as part of the filing is pretty robust in terms of making sure that the citizens of Mesquite have fairly equal access. So I would say that good chunk of it is represented in that 30 million and then you have the potential for incremental beyond that based on different hookups.

And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to Ken Kenny for any further remarks.

Thank you, Jonathan. This concludes our conference call and we appreciate your participation and the interest in Southwest Gas Holdings Inc. Thank you. Have a good day now.

Thank you ladies and gentlemen for your participation in today's conference, this does conclude the program. You may now disconnect. Good day.