Good morning, and welcome to the Otter Tail Corporation’s 2014 Earnings Conference Call. Today’s call is being recorded and there will be a question-and-session after the prepared remarks. I will like to turn the call over to Mr. Loren Hanson at Otter Tail. Please go ahead.

Well 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 2014 results and also increased 2015 earnings guidance. 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; and 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?

Thank you for joining us on the call this morning. We’ve had a very good 2014 and are eager to talk about it with you. Chuck will give some of the high points of the year and he will explain how the pending divestiture of our construction companies is consistent with our strategy. Kevin, of course will address the financials. I would like to use my time to talk about the pride I have in this corporation and my belief in its future. As you know, I will be retiring as CEO in April. This is the last time I will join you on an earnings call in this capacity. So I would like to use the time to summarize something I’ve talked with you about in prior calls, our strategic journey. It may be helpful to refer to slide 4 as a strong reminder of what our strategy entails. When I came aboard as CEO in late 2011, Otter Tail Corporation was dealing with a very slowly improving national economy after a widespread downturn, as were most companies. We had identified a strategy that would narrow our portfolio of businesses, tighten and enhance oversight in our operations, and allow us to pursue investment opportunities in our electric utility. In the three years that followed, I had the privilege of working with an engaged board, a talented leadership team, and committed employees throughout the company to bring this strategy to fruition. We reduced risk by divesting companies that no longer fit our strategy. We invested in power plant environmental upgrades and reasonable transmission projects. We worked through the legislative and regulatory processes to achieve approval for environmental upgrade and transmission cost recovery riders that provide more certainty for investors and lower cost for customers. We removed unnecessary debt, stabilized and…

Jim won’t say it, but of course that he has had a strong hand in achieving the results we're reviewing with you today. We thank him for that and we're not letting him go just yet. He is CEO through the first quarter and will serve as a consultant for our strategic planning process in the second quarter. So no goodbyes just yet and he will be available to take your questions at the conclusion of the call. I do appreciate Jim's confidence in our organization and I share it. The 2014 results demonstrate we are delivering shareholder value. Consolidated revenues increased 8%. Consolidated net income and diluted earnings per share from continuing operations both improved more than 16%. And utility net income was 14% higher than in 2013. The improvement in utility net income is primarily related to cost recovery riders with the environmental upgrade project at Big Stone Plant and major transmission projects. All three states, the utility serves approved or implemented riders in 2014. Just a quick update on the environmental project. It's nearly 90% complete. It's maintaining an excellent safety record and will begin the four-month process of putting the environmental controls into service at the end of this month. You’ll recall that we now expect the project to cost $384 million, which is 22% less than the original estimate used in our advanced determination of prudence proceedings. Our share of the project is $207 million. Utility is also earning a return during the development, and construction of the midcontinent independent system operator multi-value in CapX2020 transmission projects. Two of the four projects in which we are participating will be completed in 2015. The remaining two will be completed in the 2017 to 2019 timeframe. Those two projects, Big Stone South to Brookings and Big Stone…

Well, good morning. Please move to slide 9 for an overview of 2014. As part of discussing our financial results for 2014, it's important to know we signed letters of intent to sell Aevenia and Foley companies in our Construction segment. The segment meets the criteria to be classified as held for sale and as such is being reported as discontinued operations as of December 31, 2014. I will discuss this later in my comments, but with that backdrop let me move on to our results from continuing operations. 2014 was another year of executing on our strategies. Our consolidated revenues increased across the Electric, Manufacturing and Plastics segments. We raised $25.6 million in equity under our at-the-market dividend reinvestment and other employee stock plans. And we expect to continue to use these programs as equity financing is needed during the 2015-2019 timeframe. Our strong 2014 performance and 2015 outlook allowed the Board of Directors to increase our indicated annualized dividend rate from $1.21 a common share to a $1.23 a common share in 2015. Now I will move to slide 10 for an overview of 2014 earnings from continuing operations. The Electric segment had strong performance in 2014 earning a $1.19 per share. Revenue increased 9.2% primarily due to continued rate base investments in transmission and environmental upgrade to our Big Stone Plant, and from increased pipeline and commercial sales. A $5.4 million increase in net earnings is reflective of our continued execution of the rate base growth strategies. Our Manufacturing segment’s earnings were $0.25 a share in 2014 compared with $0.32 a share in 2013. BTD’s revenues increased nearly 12% year-over-year due to higher sales to energy-related, recreational, and lawn and garden end markets. Earnings at BTD were down year-over-year due to one, an after-tax charge of $1.7…

[Operator Instructions] Our first question comes from the line of Matt Tucker with Key Banc Capital Markets. Your line is now open. Please proceed with your question.

First question, would you guys be able to give us the amounts you are receiving or any evaluation metrics on the sale of the construction businesses?

Yeah Matt, this is Kevin. We're not closed. We're continuing to work on the agreements and towards closing. So we're not yet able to disclose any metrics or expected prices on the transactions.

Okay, looking at your guidance for the Manufacturing segment. I think at the midpoint, it implies earnings growth of about 30% excluding the charge at BTD in the fourth quarter. And you’ve talked today and in the past about some of the things you're doing internally to expand the paint services. You talked a lot about market share today, gaining market share. What gives you the confidence that you will be able to do that this year?

Matt, this is Chuck. Just a couple of and on the changes of the increase I think in manufacturing or year-over-year to go to the midpoint. We’ve approximately 14% -- or $0.14 improvement. And what we see in that is the [indiscernible] lease writedown should improve $0.05 of that. We’ve logistics improvements of $0.03. And then with the paint line and returning to more historic return on sales numbers for BTD, we would envision another $0.06 to sort of walk you from one to the other. The logistics cost, just to give you a feel we had three sites in Minnesota. The one facility at [indiscernible] was not near either our Lakeville or our Detroit Lakes’ locations. And we were hauling finished parts and child parts and whatnot to and from that location. In our optimization plan, we're going to you know eliminate that facility and we’ve already leased it out and we’ll be expanding at both the Lakeville and DL sites to cover that. So you know it’s not hugely dependent on a large amount of new revenues coming in to BTD. It is more a function of improving the return on sales to a more historic numbers or levels.

Are you seeing growth in end-market demand for the manufacturing segments or is it really as you kind of said you know the growth is going to be more driven by what you're doing internally?

We're seeing growth in certain end markets and we're seeing certain end markets contract a little bit. The energy and ag markets are soft, the law and garden, RV horticulture and others are improving.

And do you guys have the weather impact on the fourth quarter or the degree days versus normal at electric?

For just the fourth quarter or for the year, because the year is in there.

Well, the year is in there. The fourth quarter would be helpful and then if also for the full year do you have an estimate for the impact on earnings or margin versus normal weather?

You know in terms of from 13 to 14 you know right now I think there is -- the weather is relatively neutral in terms of planning for normal weather compared to where we were at slightly below that. And I am just trying to look at something here on your fourth quarter. Yeah man, it is in the press release in terms of fourth quarter as well on page 4.

Okay thanks, sorry I missed that. One more from me. You cited strong growth from pipeline and commercial customers in electric in 14. Are you seeing any impact on demand from your pipeline customers in particular since the decline in energy prices began?

Matt, this Chuck. The majority of our pipeline sales are associated with you know Canadian oil. While we think the production is maintaining its level, but one thing we watch is the differential between the Brent and the West Texas pricing. And if there is a significant premium to the Brent, that will allow us more real flexibility if you will. And as those have come closer together, we're seeing strong or continued load on the pipeline company.

[Operator Instructions]. And we’ve a follow-up from the line of Matt Tucker. Your line is now open. Please proceed with your follow-up.

Hey guys, just a couple of more. It looks like the 2014 electric CapEx came in a little bit lower than anticipated and I think 2015 moved up a bit. Could you just touch on the movement there?

The 2014 was primarily driven by the projects coming in lower than expected. We had contingencies built into that capital budget and that has been lower. We’ve not seen a significant delay in any of those. We’ll be starting the large Big Stone to Ellendale, and Big Stone South to Brookings projects are slightly behind, but there hasn't been a lot of capital expended. If you see that slide, it’s percent complete. I think you would look, we didn’t mention a number in there because they are still in development. But those are probably in the area of 5% of the capital dollars have been spent on those two. But primarily the reduction in 14 is projects coming in lower than expected cost.

And could you please comment on 2014 utility customer growth and your expectations for customer growth going forward?

Yeah, the expectations going forward is we’ve approximately 2.5% revenue growth. That is largely or almost all driven by known industrial and commercial additions. The year-over-year residential growth is essentially flat. It was up slightly in 14, but we don't expect a lot of growth sort of in the base amount. It is just known industrial and commercial customers in ‘15.

And then just in terms of your plastics outlook. And you talked about you know seeing some margin pressure, and I think you’ve been talking about that for a while. Does your guidance assume that margins continue to get squeezed or is it kind of assumed the current margins for the rest of the year?

Yeah Matt, I mean this is the Kevin. And as we head into ’15, you know we certainly will expect that there is, kind of where we're at to slightly declining as we head into ‘15.

How do you see the decline in energy prices impacting the plastic segment either from a demand perspective or from a cost perspective?

Yeah you know from a demand perspective, we do see slightly increased volumes here in 2015 as we head into the year. From a pricing perspective either you know as we head into the year, there has been some announcements around potential increases in resin prices again. Whether you know there looks to be that they may not fully take effect. But you know, so there is really you know we're expecting you know increased volumes, slightly increased volumes year-over-year. And then kind of given where we finish the year in terms of our resin pricing, and as we head into the year we expect those margins as we said to kind of continue to be tightened like we finished the year. And potentially there is additional risk, they could tighten up further.

[Operator Instructions]. And with no further questions in the queue, I would like to turn the call over to you, Jim McIntyre for closing remarks.

Well thank you, Nicholas. Planning, people, processes and operational excellence drive over performance. Over the last three plus years, we successfully executed our strategy, and accomplished what we said we're going to do and more. We’ve rationalized our business strategy and made it simpler, easier to understand with far less risk and have successfully delivered increasing shareholder value for each of those years. The lessons learned from the past server Otter Tail Corporation well and will not be easily displaced or forgotten. I am optimistic about Otter Tail’s performance not only in 2015, but in the years to follow. I’ve confidence in Chuck MacFarlane’s leadership as the incoming CEO and then the organization based on the strength of its people and commitment to excellence. While this is my last call on behalf of the corporation, we appreciate your continued interest and look forward to your joining us for our second quarter call. Thank you very much.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Have a good day, everyone.