Good day, ladies and gentlemen and welcome to the Southwest Gas Holdings 2018 First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, today’s conference is being recorded. I would now like to turn the call over to Mr. Ken Kenny, Vice President of Finance and Treasurer. Sir, you may begin.

Thank you, Victor. Welcome to Southwest Gas Holdings, Inc.’s 2018 first quarter earnings conference call. As Victor stated, my name is Ken Kenny and I am the Vice President of Finance, 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, President and Chief Executive Officer; Mr. Gregory J. Peterson, Senior Vice President and Chief Financial Officer; and Mr. Justin L. Brown, Senior Vice President, General Counsel of Southwest Gas Corporation; and other members of senior management to provide a brief overview of the company’s operations and earnings ended March 31, 2018 and a full year outlook for 2018. Our general practice is not to provide earnings projections, therefore, no attempt will be made to project earnings for 2018 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 would like to turn the time over to John.

Thanks, Ken. Turning to Slide #4, first, I would like to touch on some highlights for the past year ended March 31. From a consolidated results perspective, we had record earnings per share of $4.23 and increased our dividend for the 12th straight year in a row to $2.08 a share. For the natural gas segment, we added 32,000 new customers. Net income increased by $51.5 million. We invested $591 million in capital to serve growth and improve safety and reliability of our gas distribution systems. And we issued $300 million in senior notes to facilitate ongoing capital investment. For the construction services segment, revenues increased by over $67 million. Net income grew to $34.7 million. The acquisition of New England Utility Constructors late last year is performing better than expected and we continue to be enthusiastic about the construction business performance prospects for this calendar year. Moving to Slide #5, the outline for our call today will include a financial report for the consolidated entity with segment detail provided by Greg Peterson; a report on our various regulatory efforts by Justin Brown, recently promoted to Senior Vice President and General Counsel and a wrap up by me covering customer growth and regional economic conditions, our capital expenditure plans and our expectations for 2018. With that, I will turn the call over to Greg.

Thank you, John and thank you all for joining us on today’s call. Let’s start with total company operating results on Slide 6. For the first quarter of 2018, consolidated net income was $79.1 million, or $1.63 per share, an increase of nearly $10 million, or $0.17 a share compared to the first quarter of 2017. For the 12 months ended March 2018, net income was about $204 million, or $4.23 per share, including a one-time tax reform benefit of $20 million or $0.42 a share. This was a significant increase from net income of $146 million, or $3.07 per basic share recorded in the prior year 12 months period. Let’s move to Slide 7 and look at each segment’s impact to the consolidated change in quarterly results. Natural gas operations provided a $13.4 million increase to quarterly earnings, while construction services results were down $3.7 million between the quarters. I will provide some details surrounding the changes in each segment in the following slides. Slide 8 depicts the change in earnings between 12-month periods. Contribution from the natural gas segment increased $51.4 million and contribution from construction services increased $7.3 million. Next, we will take a deeper dive into each segment, starting with the quarterly comparison of natural gas operations on Slide 9. Customer growth amounts from California attrition and the remaining incremental margin from Arizona rate relief that was effective April 2017 had a positive effect on natural gas operating margin in 2018. However, operating margin was reduced by $14 million reserve for corresponding estimated tax reform benefits that are not yet reflected in customer rates. Despite higher pension costs and general cost increases, O&M expenses declined $1.6 million between quarters as the 2017 period included incremental transitional incentive plan grants. The $10.8 million reduction in depreciation, amortization…

Thanks, Greg. As highlighted on Slide 14, I will be providing an update on several key regulatory initiatives, including rate case activities and planning, tax reform proceedings, infrastructure tracker programs and several expansion projects. Starting with rate cases on Slide 15, as Greg mentioned earlier, with the conclusion of the first quarter of 2018, we have now experienced the full 12 months of rate relief from our last Arizona rate case. The impact from this case has been a positive contributing factor to our earned return on common equity for the natural gas operations segment over the past 12 months. This is also illustrated in the appendix on Slide 43. We anticipate that this decision, which included $61 million in rate relief and the approval of several important regulatory tools, namely continuation of our fully decoupled rate design, capital tracker programs for both customer-owned yard lines and Vintage Steel Pipe replacement programs as well as approval of a property tax tracker will all continue to have a positive impact on our ability to minimize the difference between our earned and authorized rates return compared to past rate case cycles. Turning to Nevada, we are currently in the final stages of preparing our next Nevada rate case, including finalizing the deficiency that we anticipate filing. We plan to make a filing later this month, with new rates expected to become effective by January of 2019. We intend to utilize a January 2018 test year and we also intend to certify expenses and revenues through July of 2018, which will help ensure that when rates become effective at year end, they will more closely resemble the current cost of providing safe, reliable and affordable service to our customers. With respect to California, we have been on a 5-year rate case cycle historically,…

Thanks, Justin. Turning to Slide 21, customer growth continues to be robust across our service territory as we added 32,000 new customers in the past year. We expect this continued growth trend to remain over the balance of this year and into 2019 and 2020. Moving to Slide 22, we present some quantitative detail illustrating growth prospects across our service territory. We expect population growth in Arizona, California and Nevada over the coming several years to exceed the national average and from a job’s perspective, we saw continued low unemployment rates, along with positive employment growth. On Slide 23, we provide our expectations regarding capital expenditures and financings. In 2017, we invested $560 million to serve growth and update our gas distribution systems and look to ramp up these investments over the next few years, spending upwards of $2 billion for the 3-year period ended 2020. The capital expenditures will be funded through a combination of internal cash flows, newly issued debt and equity issuances under our equity shelf program. Turning to Slide 24, we show the growth in our rate base that we expect as a result of our capital expenditure program. Over the 3-year period ended December 2020, we anticipate rate base growing from $3.2 billion to $4.5 billion of compounded annualized growth rate of 12%. Moving to Slide 25, we provide a number of factors that we believe will influence our year end results for 2018. First, in the gas operations segment, as detailed on a prior slide, we expect continued robust customer growth of approximately 1.6%. Also, as previously mentioned, our growing capital expenditures will require incremental financing activity as detailed on Slide 23. As of the conclusion of the first quarter, we have not fully realized the full year rate relief from our last Arizona…

Thanks, John. That concludes our prepared presentation. For those who have accessed our slides, we have also provided an appendix with slides that includes other pertinent information about Southwest Gas Holdings and its two business segments. These slides can be reviewed at your convenience. Our operator, Victor, will now explain the process for asking questions.

[Operator Instructions] And our first question comes from the line of Paul Ridzon from KeyBanc. You may begin.

Good afternoon or good morning wherever you are. In California, what’s happening to the tax reform in 2018?

Yes, Paul, this is Justin. The Commission has not opened any proceeding dealing with that particular year. As part of our decision last year, our rate case cycle went out through 2018 as part of the old rate case and so the extension only addressed tax years 2019 and 2020. So we have been currently having informal discussions with the Commission in that regard, but they have yet to open any formal proceeding regarding ‘18.

Are you occurring anything in California?

Yes, we are.

Okay. And then for financing, you talk about a $150 million equity shelf you anticipate that will get you through 2020, if I am reading this properly?

Yes, we certainly have the ability under the equity shelf. We still have $99 million remaining, which we will use to finance any needs.

Okay, thank you. That’s my questions.

[Operator Instructions] Our next question comes from the line of Aga Zmigrodzka.

Hello. This is Aga Zmigrodzka from UBS. Could you please provide more color on the revised higher construction guidance? Thank you.

Certainly, the construction guidance, again, as we have gotten through the first quarter and this is the time when we start to enter into contracts with our customers and they start to distribute the workout to us and so based on that and other factors, we have kind of increased that guidance. As you remember, we increased both the revenue guidance from 5% to 7% to 6% to 8% now as well as the operating income percentage from 5% to 5.5% and now it’s 5.25% to 5.75%. So, it includes all of our expectations based on the information we have now for calendar year 2018.

Perfect. Thank you. My second question is regarding Arizona and the impact from taxes. So when you made a filing proposing to refund approximately $12 million to customers, what’s exactly included in this filing? Does it include other components to bring you closer to your allowed ROE? Thank you.

Yes, again, this is Justin. Essentially, what we did as part of our various tracker programs that we have, we are required to make an earnings test filing each year demonstrating our earned return versus what they have authorized. And so what we did with the tax reform as we essentially use that same earnings test approach and essentially used 2017 as a proxy year estimated the impact of tax reform and then whatever margin exceeded what our authorized return was, that’s how we came to the $12 million proposed refund amount.

Perfect. Thank you. That’s all from my end.

And I am showing no further questions. I would like to turn the call back to Mr. Ken Kenny for closing remarks.

Thank you, Victor. This concludes our conference call and we appreciate your participation and interest in Southwest Gas Holdings Inc. Please have a great day. Thanks.