Good morning and welcome to Otter Tail Corporation’s Third Quarter 2015 Earnings Conference Call. Today’s call was being recorded and there will be a question-and-answer session after the prepared remarks.

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 third quarter 2015 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 are Chuck MacFarlane, Otter Tail Corporation’s President and CEO 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 include 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 will now turn the call over to Otter Tail Corporation’s President and CEO, Mr. Chuck MacFarlane. Chuck?

Good morning and thanks for joining our call. Our overall strategy is designed to support long-term stability in organic growth through rate base expansion and manufacturing investments. Slide 5 shows our rate base expansion in a compound annual growth rate of 8.6%. Slide 6 shows our regulatory framework, which continues to be constructive. Manufacturing platform leaders are guiding improvement on each of our businesses, including BTD’s Minnesota facilities expansion and the integration of our recent acquisition, both of which I will discuss shortly. I would like to begin with an update on the utility. Otter Tail Corporation’s earnings per share from continuing operations were $0.42 this quarter largely driven by strong performance of Otter Tail Power. The electric segment reported a $4 million quarter-over-quarter improvement in net income. More than half of this improvement came from increased rider recovery on rate base investments and increased weather normalized sales. The impact of warmer weather in the third quarter led to a 51% increase in cooling degree days quarter-over-quarter. This is comparatively better than last year with close to normal for the quarter. I will now provide updates on three of the capital investments shown on Slide 7. The Big Stone South to Brookings 345 Kv transmission project has the total value of $212 million and our share is $106 million. This project held a groundbreaking ceremony and construction kickoff on September 14 in Clear Lake, South Dakota. Local and state government officials, including Governor Daugaard attended. We are a 50-50 owner with Xcel Energy in this project and Xcel is the project manager. Big Stone South to Ellendale is another large regional transmission project valued at $370 million. Our share is $185 million. This project is scheduled to begin construction in 2016 and we are a 50-50 owner of MBU. Otter…

Hello, good morning. Slide 8 shows quarter-over-quarter earnings per share from continuing operations increased 16.7% from $0.36 to $0.42. We continue to deliver growing earnings from the electric segment driven by our rate base investments and we are also excited to have completed the acquisition of Impulse Manufacturing. Please move on to Slide 9 as I discuss our quarterly results. The utility net earnings increased $4.3 million quarter-over-quarter. The main drivers of this change were increased rider revenues from environmental cost recovery riders related to our AQCS project at Big Stone, our other base electric revenues grew primarily due to more sales to pipeline customers, and more revenues recoverable under the conservation incentive program riders. Warmer weather contributed $0.02 a share quarter-over-quarter. Year-over-year, weather is a drag on earnings per share of $0.05 and the impact of weather for the third quarter and year-to-date too is close to normal. And it is important to remember that Otter Tail Power Company is a winter peaking utility and a summer peaking pool. Lower plant maintenance costs related to our Hoot Lake plant which had major maintenance done in the third quarter of 2014 also contributed to improved quarter-over-quarter earnings. The lower maintenance costs were offset in part by higher employee benefit costs. Our manufacturing segment revenue decreased $3 million quarter-over-quarter mainly due to continued softness in sales to customers served by BTD in agricultural as well as oil and gas end markets. These soft end markets have impacted earnings per share by $0.04 quarter-over-quarter. Also negatively impacting BTD’s earnings is lower scrap sales due to a reduction in scrap metal prices quarter-over-quarter. Slide 11 illustrates the trend of the scrap prices since 2009. This softness in scrap metal prices continues to be plagued with extra steel capacity in the U.S. market and…

[Operator Instructions] Our first question or comment comes from the line of Matt Tucker from KeyBanc Capital Markets. Your line is open.

Actually, Grier Buchanan on for Matt. Thanks for taking my questions. First wanted to just touch on the clean power plan, appreciate that commentary. The question is how involved do you expect that your utility and peers will be in Minnesota and particularly in the Dakota’s as states formulate their compliance plans. Will this be a pretty collaborative process? I am just mainly trying to get a sense of roughly when the generation needs outside of Hoot Lake might come into focus, Chuck, I think you mentioned around two years?

Thanks, Grier. I expect a collaborative process in all the states served. In South Dakota, it’s going to be a smaller group more like that there is less fossil generating sources. There is only two companies that have facilities in South Dakota. In Minnesota, I think that the MPCA has already had outreach in North Dakota. The Department of Health has also have that. And I think people are digesting it trying to figure it out and then we will be in each of those states meeting as groups to discuss a basic framework for these state implementation plans with either the Department of Health, or MPCA need to give us states we will start to layout.

Okay, thanks. And then shifting over to manufacturing, could you – sorry if I missed this, but could you remind me when you expect to complete the planned expansions and if possible maybe speak qualitatively about which market segments you expect that might open up the most to you as a result of these facilities expansions?

I will figure back at the expansions. In Detroit Lakes, we are within a month of being complete there with all the construction activities. In Lakeville, it will go on through June where we are transitioning out of another building, if you will to get all of our facilities under one growth with raw material coming in one end, fabrication, cutting, warehousing, paint and assembly and then final finished goods stories will all be under one continuous flow, one roof, but that will take until June of 2016 to get everything moved out of the other facility.

Okay.

And Matt – sorry, Grier, Kevin. In terms of your second question, I think that the expectation particularly with the addition of paint isn’t so much new markets it’s a full expansion of being able to serve also existing customers. We have been seeing where a number of our customers are looking to have a one-stop shop from their supplier base inclusive of paint and we haven’t been able to provide that. We have had to outsource the paint here. We felt addition of the paint line in Lakeville. And so, we really expect to see our existing customers also of growth opportunities open up with them as they start to move paint opportunities to us that we haven’t previously experienced.

Yes. Hey, thanks Kevin. Yes, that was my recollection as well and I wasn’t trying to suggest that this will open up new markets for you just trying to get a sense of whether there were any specific market segments that like based on your conversations with existing customers who are for certain jobs looking for that one stop shop might open up to a bigger source of business as a result of these expansions?

Yes, Matt….

And if it’s broad based, that’s fine, like if it’s just across kind of broad-based, if the opportunities would be spread out across the business, that’s fine, I was just curious?

Yes, I would say that it’s a pretty broad-based type expectation. I mean, clearly there is probably more opportunities within some of the end markets to paint more than others just depending on type of product that we are providing for the customers and what their actual paint needs are, but there is certainly opportunities across all of our kind of existing end markets to provide that service.

Okay, thanks. Last one for me, is there anything in backlog associated with the agriculture and energy markets?

There is dollars in backlog. But as you can see, we are experienced somewhat of a downturn in the backlog when you compare it to the same time a year ago, but our backlog is reflective of the collective end markets we serve and there is backlog in there from ag.

How significant if you are able to say?

Yes, I want to be able to say that Matt or I am sorry Grier.

No problem. Okay, fair enough. That’s it for me guys. Appreciate it.

Thank you. [Operator Instructions] I am showing no additional questions or comments in the queue at this time. I would like to turn it back over to Mr. MacFarlane for any closing remarks.

Thank you. I will summarize by saying that the electric segment performance led to a solid earnings in the third quarter. Continued rate base, cost recovery of the utility, solid performance at our plastic segment and good cost management throughout the corporation reaffirm our guidance. We want to thank all of our employees for their hard work and we want to thank you for joining the call for your interest in Otter Tail Corporation. We look forward to speaking with you next quarter.