Ladies and gentlemen, thank you for standing by. Today is May 6, 2010. Welcome to the American States Water Company conference call, discussing first quarter 2010 results. If you have not received a copy of this morning’s news release, announcing earnings for the quarter, please call 909-394-3600, Extension 651 and one will be fax or e-mail to you. If you would like to listen to the replay of this call, it will begin this afternoon at approximately 2:30 pm Pacific Time and run through Thursday, May 13, 2010. The phone number for the replay is 800-203-1112 and the conference ID number is 9324991. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a remainder, this call will be recorded and will be limited to no more than one hour. At this time, I would like to turn the call over to Eva Tang, Chief Financial Officer of American States Water Company.

Thank you, [Miranda]. Good afternoon. Thanks to everyone for joining us today. I also have Bob Sprowls, President and CEO here with me on the call. Before we start the discussion, I would like to remind you that certain matters discussed during this conference call, maybe 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. All forward-looking statements are made as of today. The company’s under no obligation to update such statements. During our presentation today, Bob and I may refer to American States Water Company as AWR, Golden State Water Company as GSWC, Chaparral City Water Company as CCWC and American States Utility Services as ASUS. With that, I would like to discuss our financial results for the first quarter of 2010. Basic and fully diluted earnings for the quarter ended March 31, 2010 were $0.46 and $0.45 per share respectively as compared to basic and fully diluted earnings of $0.28 per share for the first quarter of 2009. The $0.17 per share increase in diluted earnings for the first quarter of 2010 is due to the following items. First of all, the water gross margin increased by $828,000, or $0.03 per share, during the first quarter of 2010, primarily due to higher water revenues, water revenues for the first quarter of 2010 increased by about $1.1 million over the first quarter of 2009 water revenue. Due to the implementation in September of ‘09 of the water revenue adjustment mechanism or WRAM account for Golden State Water Region I and an increased in customer rates at Chaparral City Water Company…

Thank you, Eva and good afternoon ladies and gentlemen. I’d like to take a brief moment to address the water supply issue as currently facing the State of California. On April 13, 2010 the Metropolitan Water District of Southern California, MWD approved an allocation plan that will continue to water supply reductions to its member agencies for second year. As during the 2009 water year, MWD plans to achieve 10% reduction in deliveries, over the average deliveries for the 2004 to 2006 period, by imposing significant penalty charge for those purveyors, they don’t reduce their deliveries by the required amount. In addition, MWD plans to implement 7.5% rate increase effective January 1, 2011. To avoid the supply allocation penalties imposed by MWD during the July 1, 2009 through June 30, 2010 water year. Golden State Water implemented mandatory and voluntary water conservation and allocations in the certain of our service areas. To instant, Golden State Water customers have been successful reducing their overall water supply demand. Based on current and estimated future demand, Golden State Water Company has implemented voluntary conservation in those areas that were under mandatory conservation in 2009. Water consumption was down approximately 13% during the first three months of 2010, when compared to the same period in 2009. Though we have received some welcome rain in California and large amount of snow in this winter, several of states major reservoirs are still at levels below their historical average. Every year the California Department of Water Resources, DWR establishes the State Water project allocation or water deliveries to the State Water contractors. The Department of Water Resources generally establishes a percentage allocation of delivery requests based on a number of factors, including weather patterns, snowpack levels and reservoir levels. The DWR also much factor in the pumping…

Thank you. (Operator Instructions) We will go first to Christopher Purtill with Janney.

Just a quick question for you on the rate cases, we have the delayed region two and three case expected in September and the region one case planned for mid 2011, so I’m wondering if there is any reason to expect that there could be a delay in the region one case based on what’s happening with the review of the region two and three cases. So what’s you outlook there, are they kind of on a parallel track at the commission or could there be a delay in the region one case because of the review that two and three is going through?

Well, first of all the region one case is scheduled to be settled by the end of 2010, with rates effective January 1st of 2011.

Okay.

Okay. And it is on a different path than the region two, region three general office case. These things can only slow down, but I don’t think the two are all tied together. I think the delay in the region two, region three general office case had to do with certain complexity of issues that we should get behind this is part of that particular case. So, we are expecting the region one case to be on schedule. And just say, what we are doing mid 2011 that will be the first time that we file a complete Home State Water company rate case with rates effective 2013.

Water region.

For water regions.

And the just a bigger picture questions, can you talk a little bit about how your viewing the potential divided tax increases that could come about in 2011 and what impact, if there is any that you think it could have on the dividend policy or your payout ratio, is there a way to use those funds internally investing in capital as opposed to paying them out if investors are going to be facing this higher tax rate?

I think what you mention was the qualified dividend preferential rate expired 1.1.2010 or at the end of this year. So, I don’t think it will affect AWR the issuer of the dividend ties more of the shareholders who investing our side. So, to that end I don’t think that will impact on dividend policy controller (inaudible).

Yeah, I agree Eva, we have no plans to change our policy, and we’re very proud of the fact that we’ve increased our dividends for I think going on 56 consecutive years. We’re one of the few companies with a record like that and we take that very seriously. So, we do recognize that shareholder may have to pay more tax on the dividends they received, but at this point we have no plans to change our policy. And we generally focus on a payout ratio of about 60%, which already were maybe towards lower end of the utility industry, but we feel that we can still continue to increase our dividend and be in that 60% range.

Okay, just one house keeping item, is there anyway that you can breakout the water supply cost in terms of purchased water and power?

I mean that will be broken out of course in the Q that we file tomorrow.

Right, you’ll have detailed information in the Q tomorrow.

(Operator Instructions) Your next question comes from the line of Vishal Khetriwal with Longbow Research.

Could you give us some color on the overall profitability of the military base business if you exclude the special construction work that you do?

Well, a difficult question to answer, because the construction work has been very helpful in terms of driving the profitability and there is a lot of construction work to be done at the various military bases and then I know we come in and we say that ASUS did better than last year because of increased construction work, but that’s a key component to the profitability of the business. So we really haven’t given any guidance on ASUS and also we’re hesitant to discus margins on the construction business component, but it is a business that the construction component there is plenty of work to be done, particularly at Fort Bragg that’s a business, that particular base has got quite a backlog of construction work and we’re just trying to get some contract modifications to get going there.

But just equitable adjustment that you noticed in recently and you know the more, but and you will see more of these down the line, these must be improving the profitability of the business in general like excluding the special contract construction which is more in which there is a lot of variance?

Yes, the REAs are way to sort of compensate us for a variety of things. Fort Bragg, we got an REA because we took over more inventories there than what was included in the original RFP and the same could be said for Fort Bliss so for both of those bases we do have like as a larger amount of assets that we’re managing than what was included in the RFP. The REAs that we’ve gotten at Fort Jackson had to do with some emergency work that we had done there and we sort to had a internal debate whether to do the emergency work ahead of getting contract modifications, the plan is to get contract modifications before we go loud and do something that isn’t in the contract, but we have an emergency situation you want to be sure and take care of those things first, so we do feel like we’ve learned a lot in terms of getting understanding how to operate this business.

Vishal, for the first quarter our construction activity increased compared to last year, the same period of time, so our revenue of construction actually increased as a result, but our construction expenses, if you look at earnings really is actually pretty flat something for the last year and mainly because during this quarter we have a lot of firm fixed contract to which we actually incurred higher margin during the first quarter, because when you guys are line that you can help labors and cost contentment methodology, so hopefully that’s helpful to your question.

We are focused internally when we look at the profitability of the various revenue stream at ASUS. We are focused on trying to be profitable not only on the construction side, but also on the operations and mid side. One of the key components that being profitable on the O&M side is getting timely price redeterminations and that’s been a little bit of a problem for us, as we try to go through this first round of price redetermination.

Okay and just my last question, could you give us any update on the status of bids for additional military base contracts and are you seeing more contracts opening up for bidding?

Well, the government is moving fairly slowly in the privatization of the military bases and you tend to divide the Department of Defense into the various branches of the military, the Army, the Air Force and the Navy. It seems like the Army and the Air Force had headed down the path hereof sort of getting on board with the military privatization activity or the Navy has not, but there are still plenty of Army bases and Air Force bases to privatize so there is a more work to be gotten out there, but it is sort of slow going. It is not like we’re well, Fort Meade was contract that went to one of our competitors, but my knowledge that’s the last base, only base that’s been let our since probably in the last year, there is a lot more bases to be done, it’s just slow going.

We have no further questions at this time. (Operator Instructions) It appears we have no further question from the phone audience. I will turn the conference back over to Mr. Sprowls for any additional or closing remarks.

Thanks, Miranda. I just want to mention that our shareholder meeting is on May 27 and the company would like to encourage all shareholders who have not already voted their proxies to do so. Again, thank you all for your participation today and for your continued interest and investment in American States Water Company.

Thank you. This concludes today’s American States Water Company conference call. Ladies and gentlemen we do have a correction to the replay number for today’s call. The corrected phone number to dial-in on 888-203-1112, again that is the corrected number, it is 888-203-1112 and again that replay will be starting approximately at 2.30 pm Pacific Time today and the conference ID that you’ll need is 9324991, so again the dial-in number 888-203-1112, conference ID number 9324991. You may also access the replay at www.aswater.com. Thank you for your participation. You may now disconnect.