Good morning. And welcome to Otter Tail Corporation Third Quarter 2016 Earnings Conference Call. Today’s call is being recorded and there will be a question-and-answer session after the prepared remarks. I will now turn the call over to the company for opening remarks.

Good morning, everyone, and welcome to our call. My name is Loren Hanson, and I manage the Investor Relations area at Otter Tail Corporation. Last night, we announced our third quarter 2016 results. Our complete earnings release and the slides accompanying this call are available on our website at www.ottertail.com. A replay of the call will be available on our website later today. Commenting this morning will be Chuck MacFarlane, Otter Tail Corporation’s President and Chief Executive Officer; and Kevin Moug, Otter Tail Corporation’s Senior Vice President and Chief Financial Officer. Before we begin today’s call, I’d like to remind you that during the course of the call, we will be making forward-looking statements. As noted on slide two, these statements represent our current judgment or opinion of what the future holds. They are subject to risks and uncertainties that may cause actual results to differ materially from forward-looking statements made today. So please be advised about placing undue reliance on any of these statements. Our forward-looking statements are described in more detail in our filings with the Securities and Exchange Commission which we incurred you to review. 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 our President and CEO, Mr. Chuck MacFarlane. Chuck?

Good morning and thanks for joining our call. Our third quarter results reflect current business conditions, operating companies continue to execute on strategic initiatives and we remain confident that 2016 will meet our expectations. Third quarter results from continuing operations were down from last year’s third quarter by $0.05 a share and can be largely attributed to three items, cooler weather resulting in fewer degree days negatively impacted results by penny a share, providing for an estimated potential refund in our Minnesota rate case negatively impacted results by $0.03 a share and narrowed margins in our Plastic segment negatively impacted results by $0.03 a share. This was partly offset by $0.02 a share of lower corporate costs. We are managing through the impacts of the $0.05 reduction by further tightening our expenses and we are reaffirming our guidance for the remainder of 2016. Continued to maintain two platform company with the solid regulated Utility and Manufacturing businesses enhance long-term returns. Allow me to provide a brief update on both platforms. We are investing $850 million from 2016 through 2020 in utility rate base growth as shown on slide six. Slide seven shows our regulatory recovery mechanisms. We have positive regulatory constructs and relationships in each jurisdiction. Our utility rate base growth plan includes two regional transmission projects and several generation projects producing a compounded annual growth rate of 8% using 2014 as the base year. Work continues on two large transmission projects, Big Stone South to Brookings and Big Stone South to Ellendale. The map on slide eight shows a relative locations and length, both are designated as multi-value projects within the Midcontinent Independent System Operator or MISO footprint. We are 50% owner in the first project with Xcel Energy, who is the project manager. This is the 70-mile project,…

Well, good morning. Please refer to slides 12 and 13 as I discuss our third quarter results. Our net earnings decreased $408,000 quarter-over-quarter for the Electric segment. Key items contributing to this change are, an increase in retail revenues of $3.8 million related to the 9.56% interim rate increase that went into effect in April 2016 in conjunction with the rate case we filed in Minnesota, increased environmental and transmission cost recovery riders, increased conservation incentives and increased weather-normalized sales to all customer classes. These items were offset by, interim rate revenues were reduced by $2.1 million for a provision for an estimated refund in third quarter, this estimate reflects a modification in our original request and other expected outcomes from our previously mentioned Minnesota rate case. For the nine months ended September 30, 2016, a $2.3 million provision has been established for an estimated refund on interim rate revenues of $6.9 million. Milder weather in the third quarter of 2016 negatively impacted earnings per share by a penny and weather has negatively impacted earnings per share by $0.04 year-to-date. Higher operating and maintenance expenses, as well as higher depreciation and amortization expenses increased rate base investments. Other items impacting the utility’s third quarter performance are noted in our press release. Our Manufacturing segment revenues and earnings decreased quarter-over-quarter. Revenues at BTD increased by $3.7 million as a result of owning BTD Georgia for the three months in the third quarter of 2016 compared with one month in the third quarter of 2015. This was offset in part by a $2.1 million decrease in revenues at BTD’s Minnesota and Illinois plants, as they continue to be impacted by softening demand from the recreational vehicle, agricultural, and oil and gas end markets. BTD had an $800,000 increase in net income at…

[Operator Instructions] And our first question comes from the line of Paul Ridzon from KeyBanc. Your line is now open.

Good morning.

Good morning.

You indicated that horticultural should have an up fourth quarter?

Correct.

And what is driving that?

Well, typically, Paul, this is Kevin and thanks for the question. We -- the fourth quarter for hort typically is the strong quarter for that business as customers look to get their pre-season orders out in advance of the upcoming season sales for the following year. And so there were a number of trade shows that occurred later in the third quarter this year that we were at and based on the traditional seasonality of when hort orders come in we expect that they should be stronger in the fourth quarter.

Okay. The weakness in the PVC pipe, is that leading over into the fourth quarter from what you can see?

Yeah. We would expect that these compressed margins would continue on into the fourth quarter as well.

Is it stabilizing, is it continuing to decline or do you have a read on that?

Yes, Paul, we would, I think it’s, there’s probably more downside pressure to sales prices, but we -- as we looked at the third quarter and where sales prices were compared to a year ago, and as they head into the fourth quarter they look to be holding flat or stabilized. But I would tell you that just with a declining resin market there certainly could be more downside pressure on them. But we attempted to kind of address that and bake that into the risks as we finish the year as we look into our guidance as well.

And then at the Electric segment, what -- how the weather in the fourth quarter of 2015, as I recall it was mild.

I believe that’s, the, we had a pretty mild winter overall in 2015 and into the first quarter of 2016.

In the fourth quarter you should continue to collect income rates, offset by -- offset partially by refund, is that the way -- right way to look at it?

Yes.

Okay. Thank you very much for your answers.

Thanks for the questions, Paul.

[Operator Instructions] And our next question comes from the line Stephanie Tsao from S&P Global. Your line is now open.

Hi. Good morning.

Good morning.

Hi.

I had some questions just on your comments on wind and solar. You mentioned that the Chamber of Commerce actually requested more wind capacity. Could you just go into a little bit more color on that? And then you mentioned that a solar cost, which you do expect to drop further, can you just talk about how low do you or what range do you expect solar costs to be?

Okay. Thanks for the questions, Stephanie. The first, it is not the Chamber of Commerce, it was the Minnesota Department of Commerce who acts as the consumer advocate and to a certain degree the analytical arm of the Minnesota Public Utilities Commission. So the -- and they indicate, they run the same capacity planning models that we run and they anticipate -- their system selected an additional amount of wind over what we believe in our or put in our resource plan, indicating they anticipate lower cost energy from wind in the out years, beyond the five-year plan and so they recommended that we included an additional 200 megawatts in the time frame after the initial five years starting in 2023. And on the solar question, we don’t expect them to come -- the cost come down as rapidly as they have in the past. But we do believe that they will come on parity, possibly in the 2020 timeframe with other resources, particularly wind, if there is not a PTC renewal for wind.

That’s all.

Thank you.

I am seeing no further questions in the queue at this time. I would like to turn the call back over to Mr. Chuck MacFarlane.

Well, thank you. To summarize, the Manufacturing segment earnings were in line with expectations, given continued market softness in the agriculture, oil and gas, and recreational vehicle end markets. And we believe BTD is in a good position to enhance earnings when market conditions improve. Pipe sales volumes remain strong and the utility remains solid, and is working through its growth plan. It continues to focus on transmission build out, a constructive outcome for the Minnesota rate case and the opportunity to build wind, solar and natural gas generation as outlined in our 2016 resource plan. We reaffirm our 2016 earnings guidance of $1.50 per share to $1.65 per share. Thank you for joining our call and for your interest in Otter Tail Corporation and we look forward to speaking with you next quarter.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program. You may now disconnect. Everyone have a great day