Good morning and welcome to the Otter Tail Corporation’s Second Quarter 2014 Conference Call. Today’s call is being recorded and there will be a question-and-answer session after the prepared remarks. I would now like to turn the conference over to your host Mr. Loren Hanson. Mr. Hanson, you may begin.

Good morning everyone and welcome to our call. My name is Loren Hanson and I manage the Investor Relations area at Otter Tail. Last night, we announced our second quarter 2014 results. Our complete earnings release and slides accompanying this earnings call are available on our website at www.ottertail.com. A replay of the call will be available on our website later today. With me on the call today is Jim McIntyre, Otter Tail Corporation’s CEO; Chuck MacFarlane, Otter Tail Corporation’s President and Chief Operating Officer, Kevin Moug, Otter Tail Corporation’s Senior Vice President and Chief Financial Officer. Before we begin, I would like to remind you that during the course of this call, we will be making forward-looking statements. These forward-looking statements are covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and includes statements regarding Otter Tail Corporation’s future financial and operating results, or other statements that are not historical facts. Please be advised that actual results could differ materially from those stated or implied by our forward-looking statements, due to certain risks and uncertainties, including those described in our most recent Form 10-K and subsequent quarterly reports on Form 10-Q. Otter Tail Corporation disclaims any duty to update or revise our forward-looking statements, as a result of new information, future events, developments or otherwise. For opening remarks, I would now like to turn the call over to Otter Tail Corporation’s CEO, Mr. Jim McIntyre. Jim?

Good morning and thanks for joining our call today. As I pointed out in our news release yesterday, our strong 2014 first quarter performance has continued in the second quarter. Consolidated net income from continuing operations is up more than 30% this year compared with second quarter last year. And you recall that it was up 40% the first quarter compared with first quarter last year. Consistent execution of our strategy to grow the utilities rate base and to improve the operational and financial performance of the manufacturing and infrastructure companies under Varistar is paying off. We intend to build on that strategy. Since we talked with you in May, we’ve completed our annual strategic planning work. It’s another step in the strategic journey that brought us from $0.95 per share from continuing operations in 2011, as Slide 4 shows, to a non-GAAP basis of $1.31 in 2012 and $1.54 in 2013, and reflects the recent current analyst consensus of $1.75 for 2014. For the past several years, our strategy is focused on rebuilding and better aligning our businesses, achieving operational excellence and developing our talent. It has been an incremental process, as the slide shows, and has resulted in a markedly different revitalized Corporation. It better reflects our targeted overall moderate risk profile and our shareholder base. We've dramatically improved earnings-per-share. We’ve made operational excellence a central focus in all of our operating companies and we've made good progress in developing our talent. Rather than fixing problems from the past, we have turned to optimizing opportunities in the future. We intend to achieve a 4% to 7% average annual growth rate earnings based on 2013 non-GAAP results of $1.54 per share. We have two platforms - Otter Tail Power Company and the manufacturing and infrastructure companies under Varistar. Both…

Thanks, Jim. As Jim said, we continue to see excellent results from our capital investments at the utility and strategic focus on operational excellence at the manufacturing infrastructure companies under Varistar. Allow me to provide second quarter highlights from each of the two platforms. We've talked with you in previous quarters about our capital investment to grow rate base at the utilities. Slide 7 provides a review for the next five years. Investments are in replacement projects, large transmission projects, environmental upgrades at our power plant. We’ve also previously shared Slide 8. It shows that we have the benefit of a constructive regulatory environment that provides retirement recovery of our investments in fair return. In fact, we expect two-thirds of our five-year capital expenditures to be recovered through riders. The remaining one-third is maintenance capital expenditures, the majority of which is effectively in rate base at current depreciation level. I won’t outline each of the projects shown on Slide 9 today because we discussed each of them last quarter. But here's an update on a few of the projects. North Dakota Public Service Commission has granted a route permit for the North Dakota section of the 345 KV Big Stone area transmission project, called Big Stone South to Ellendale. This is one of two projects we are involved with that has been deemed the multi-value project by MISO, the Midcontinent Independent System Operator. We expect to receive our ruling on our request for route permit for the South Dakota in early August. Construction activities should start in the first quarter of 2015. Work is proceeding as planned on other transmission projects. Slide 10 identifies our generation projects. Construction of the nearly $400 million air quality control system at Big Stone plant to meet EPA's regional haze rules surpassed the halfway…

Well good morning. Please refer to Slide 15 as I discuss our second quarter results. Our electric segment continued to perform well in the second quarter with revenues up 12% and net income up 44% compared with the same quarter a year ago. The increase in earnings is primarily a result of environmental and transmission cost recovery riders as we continue to see the positive financial impact from our rate base investment strategy. Electric segment revenues and earnings also increased due to increased sales to pipeline and commercial customers. Over the past three years, the utility has experienced a growth rate in retail electric sales of about 1.3%, and is projected to grow around 1.7% over the next 3 to 4 years. This growth is driven in part by increased sales to industrial customers, primarily the pipelines. Increase in operating and maintenance expenses and interest costs are fully explained in the earnings release. Our manufacturing segment revenues and earnings increased from the second quarter of 2013 due to increased revenues at BTD as a result of higher sales to energy-related recreational and lawn and garden end-markets. While BTD experienced a growth in gross margin dollars quarter over quarter, they were impacted by additional tooling costs incurred to repair and refurbish several dies. T.O. Plastics earnings continued to be impacted as a result of a customer electing to produce a product on its own starting in 2014. Our plastic segment earnings decreased $500,000 between the quarters. This was mainly attributable to lower margins from increased cost of PVC resin and slightly higher operating costs. The increased resin costs were not able to be fully passed on in sales prices due to competitive market conditions. Our construction segment continues to see significant improvement with increased revenues and earnings over the second quarter…

(Operator Instructions) Our first question is from Matt Tucker with KeyBanc Capital. Matt Tucker – KeyBanc Capital Markets: Hey guys, good morning. Congrats on a strong quarter. First question on the EPA regulations, I realize it’s pretty early and there aren't a lot of moving parts. But it seems like you've identified some capital opportunities tied to that. Could these opportunities present an upside to your current five-year rate base growth guidance?

Matt, this is Chuck. We have not identified any capital additions due to the EPA in our five-year forecast. We do foresee the replacement for Hoot Lake which is set to close in 2020, beyond the five year timeframe in here, we anticipate that will be a natural gas resource out coming in service in the spring of 2022. But that was planned prior to any of the EPA rules -- proposed rules. Matt Tucker – KeyBanc Capital Markets: I guess you did mention some potential for additional renewables. Would those potentially fall within the five-year plan, or are they just not probably large enough to move the needle?

Well, from a basis of what we’re required under a renewable standard in Minnesota renewable objective, out through 2025 we need to only add about approximately another 20 MW of wind to meet those requirements. Should the carbon rules come down based on -- if you can get credit for additional renewables we will of course put that in our next integrated resource plan calculations, it’s a plan we do for commissions every two to three years. But it's unlikely we would adjust that until we see the final rules. In addition, we do anticipate we will be adding some solar late in the period due to the 1.5% renewable -- solar standard in the state of Minnesota. Matt Tucker – KeyBanc Capital Markets: On the plastics side, you mentioned you would expect the PVC resin prices to continue growing. It seems like demand has been pretty strong year to date. You've seen pretty strong revenue growth. Do you expect the revenue growth to remain strong in the second half of the year or to kind of moderate? And I guess does the outlook for increased resin prices kind of go hand-in-hand with demand remaining strong?

Yeah, Matt, this is Kevin. The demand, the volumes that we’re expecting to see in the last half of the year continue to be strong. What we’re seeing happening right now is there has been a now and other $0.02 per pound of price increase announced for resin here as we head into the last half of the year. That's on top of the resin price increases incurred -- that occurred in the first six months of the year. And so really the volumes are strong, in terms of we’re just not -- given the conditions we’re in, not able to get the full price of those resin increases passed on into sales. We’re certainly trying to do what we can but competitive market conditions will ultimately dictate what we can get pass-through. So that's what's really driving the somewhat softening of the guidance from last quarter. Matt Tucker – KeyBanc Capital Markets: And then on manufacturing, could you talk about the extent to which the stronger guidance reflects the first-half results coming in stronger than you expected, as opposed to stronger outlook for the second half, or is it the combination of both?

Kevin again, it's probably a combination of both, that’s probably little or so towards the stronger first half results. Matt Tucker – KeyBanc Capital Markets: And maybe a little color on specifically what's been driving the stronger than expected results?

BTD has seen particularly in the second quarter a good strong revenue growth coming from our – the end markets that we talked about in my scripted comments. As BTD looks out through the rest of the year, they continue to see good strong performance in those end markets. As it relates to TO, we’re basically holding TO kind of to where they were originally expected to be at the beginning of the year and end of the first quarter of the year is based on where they are at in their current business cycle and within the end markets that they are serving.

(Operator Instructions) And it looks like we have a follow-up question from Mr. Matt Tucker with KeyBanc. Matt Tucker – KeyBanc Capital Markets: I just saved one on the construction side. If you could just talk a little bit about the end markets where you are seeing the most activity and where you've been successful recently, I know you kind of called out at Aevenia the North Dakota T&D work. So I guess maybe specifically at Foley, what's been contributing to the better results there?

Sure, in terms of -- we did talk about Aevenia in the Bakken, the continued growth that we see in that region, as it relates to the Foley we continue to see work in industrial type projects across our mix of businesses that we look at there and we certainly do water – wastewater, we do industrial, power plants, some hospital work, we’re seeing a fair amount of work on the industrial side this year. Matt Tucker – KeyBanc Capital Markets: Thanks, and your backlog in the construction segment was down a bit sequentially and year over year. Based on bidding activity, do you think that that could be higher by year end?

Yeah, there is a potential that it could be higher based on the activity that we’re seeing and working on in terms of bids. Even though the backlog is down 10 million, when we look at the first half of the year of actual revenues at Foley and then look at what they have in their backlog the last half of the year, we’re pretty comfortable with the revenue forecasts that are on -- that we’re looking at to support the guidance that we have for Foley. And I’d make a similar comment for Aevenia as well. Aevenia’s backlogs typically do not – we typically only have backlog for the current year that we’re doing work in but there's a fair amount of time and materials work that Aevenia is doing as well, and so collectively and across this segment we feel good about the backlog and to support the revenue forecast for 2014.

Thank you. I am not showing any further questions. Mr. McIntyre, please proceed with any closing remarks.

Well I just would make a couple additional comments. We are pleased with our first quarter and the second quarter, we had two strong quarters back to back. And we are positioned to deliver another year of increased earnings and profitability to our shareholders, with the capital investments at the utility and a strategic focus of operational excellence at our manufacturing and infrastructure companies. The visibility of our earnings from utility as well as from our manufacturing and infrastructure companies is becoming increasingly apparent to us and we’re pleased that our quarterly reports and our calls with you, are more routine in that regard and that there's few surprises and that we’re able to have a consistency of earnings that we’re sharing with you. But we do think we’re poised to have a good solid second half of the year and we continue to work hard to not only this year but position ourselves for success into 2015 and beyond. With that, unless there is any further questions, I would thank you for joining our call and for your interest in Otter Tail Corporation. We look forward to speaking with you next quarter.