Good day, and welcome to the Northwest Natural Gas Third Quarter 2017 Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator instructions] Please note, this event is being recorded. At this time, I would like to turn the conference over to Nikki Sparley. Please go ahead.

Thank you, Brian. Good morning, everyone, and welcome to our third quarter 2017 earnings call. As a reminder, some of the things that will be said this morning contain forward-looking statements. They are based on management's assumptions, which may or may not occur. For a complete listing of our cautionary statements, you should refer to the language at the end of our press release and also our SEC filings for additional information. We expect to file our 10-Q later today. As mentioned, this teleconference is being recorded and will be available on our website following the call. Please note, these conference calls are designed for the financial community. If you are an investor and have additional questions after the call, please contact me directly at 503-721-2530. Media may contact Melissa Moore at 503-220-2436. Speaking this morning are David Anderson, President and Chief Executive Officer; and Frank Burkhartsmeyer, Senior Vice President and Chief Financial Officer. David and Frank have some prepared remarks, and then will be available along with other members of our executive team to answer your questions. With that, I will turn it over to David for his opening remarks.

Thanks, Nikki, and good morning, everyone and welcome to our third quarter earnings call. The company continues to operate very well in my opinion. So far, this year net income has increased about $4 million compared to last year. The utility reported solid results with another quarter of strong customer growth. We also continue to see positive momentum in the local job market in the housing sector. For example, over the 12 months ended September, Oregon's total employment grew 3.9%. That is the second fastest rate amongst all 50 states. Over the last 12 months, Oregon's average monthly unemployment rate was about 4% or a decline of 1% from the prior year. During that same period, home sales were down about 2% in the Portland area and average home prices increased by nearly 10%. In our Washington service territory average home prices over the past 12 months increased about 11% and home sales were up just over 1%. Meanwhile permits increased about 6% during the time -- during that time in the Portland Vancouver area, signaling construction remains strong on the heels of a very healthy 2016. All these positive indicators translated in nearly 12,700 new customers connecting to our system over the last year for a growth rate of around 1.8%. During the quarter, we also filed for our third consecutive rate reductions through our annual purchase gas adjustment. As a result, for the upcoming heating season, Oregon residential customers will see a 6% drop in their rates and Washington customers will see a 3% reduction. Over the last three years, Oregon customers have seen a cumulative rate decrease of 15% on top of annual bill credits. Washington customers have experienced an 18% decrease. As a result, customers are paying less for their natural gas now than they did…

Thank you, David and good morning, everyone. I'll start with a review of the quarter and year-to-date results and wrap up with cash flows in 2017 guidance. First of all, I'd like to remind you that our earnings are seasonal with approximately 70% of our utility margin generated during the cooler first and fourth quarters with a loss generally in the third quarter as there is minimal heating load. In addition, please note I will describe individual earnings drivers on an after-tax basis, using a statutory tax rate of 39.5%, which is very close to our effective tax rate of 39.4% for the nine months ended September 30 and our expected annual rate of about 40% for 2017. Turning to results, for the third quarter of 2017, we reported a net loss of $8.5 million compared to an $8 million loss for the third quarter of 2016. Results for the quarter reflect an $800,000 decrease in our utility segment net income, partially offset by a slight improvement in the gas storage and other segment. The utility's third quarter performance reflected a $1.7 million increase an O&M expense from higher payroll and benefit costs as well as costs related to upgrading our employee safety equipment. Partially offsetting these costs was a $1 million increase in margin primarily from customer growth. Our gas storage net income for the quarter increased slightly, mainly reflecting lower operating expenses offset by lower revenues. Turning now to our year-to-date financial results, for the first nine months of 2017, we reported net income of $34.5 million, compared to $30.6 million for the same period last year, an increase of $3.9 million. Results were driven by $5.1 million increase in utility's net income, partially offset by a $1.3 million decrease in our gas storage segment. The utility's increased…

Thanks Frank. Before we open the call up for questions, I wanted to update you on two significant priorities for us this year. As we've discussed in the past, we believe Northwest Natural has an important role to play in helping our region move to a low carbon renewable energy future. Today natural gas is the cleanest energy option to reliably meter our region's biggest energy needs. In fact, Northwest Natural delivers more energy in Oregon over a year than any other utility in the state, yet the use of natural gas in our customer's homes, businesses and industry accounts for only 8% of Oregon's total greenhouse gas emissions. While we think that's a pretty efficient starting point, we believe we can do better. It's why we've rolled out a voluntary carbon savings goal. We're identifying new areas where we can proactively reduce emissions using our existing infrastructure, which is one of the most modern tightest pipeline systems in the nation. One example of using our system in new ways is the renewable natural gas project we're partnering on with the City of Portland. As announced in April, the city believes this project is the single largest climate action efforts to date. The project includes the city building renewable natural gas production facility to convert biogas from Portland's largest waste water treatment plant to our pipeline quality standards. Once clean, a portion of renewable natural gas will be used to fuel heavy-duty vehicles locally, while the rest will be delivered through Northwest Natural's existing pipeline system. Northwest Natural is building and will maintain the vehicle fueling station for the city. Currently, we're in the process of installing the fueling station and expected to be operational by the end of the year. We are proud to be part of this effort…

Great. Thank you, Brian. I guess our 14 minutes of prepared remarks were just as complete as they needed to be. So, we appreciate everybody joining us today. We'll go ahead and close the call down now. As always reach out to Nikki if you have any specific questions. Thanks everybody for joining us today. Have a good Friday and have a good weekend. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.