Good morning, and welcome to The Laclede Group 2013 Third Quarter Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Scott Dudley. Please go ahead, sir.

Good morning, and welcome to our earnings conference call for the third quarter of fiscal 2013. We issued a news release this morning announcing our financial results, and you may access the release on our website at thelacledegroup.com under the News Releases tab. Today's call is scheduled for about 1 hour and will include a discussion of our results and a question-and-answer session. Prior to opening up the call for questions, the operator will provide instructions on how to join the queue to ask a question. On the call are Suzanne Sitherwood, President and CEO of The Laclede Group; Mark Waltermire, Executive Vice President and Chief Financial Officer; Steve Rasche, Senior Vice President of Finance and Accounting. Also in the room with us are Steve Lindsey, Executive Vice President and Chief Operating Officer of Distribution Operations; Mike Spotanski, Senior Vice President and Chief Integration and Innovation Officer; and Mike Pendergast, Vice President of External Affairs. Before we begin, let me cover our Safe Harbor statement and use of non-GAAP earnings measures. Today's earnings conference call, including responses during the Q&A session, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements speak only as of today, and we assume no duty to update them. Although our forward-looking statements are based on reasonable assumptions, various uncertainties and risks factors may cause future performance or results to be different than those anticipated. A description of the uncertainties and risks factors can be found in our annual report on Form 10-K and our quarterly report on Form 10-Q, which will be filed later today. In our comments, we will be discussing financial results in terms of net economic earnings, which is a non-GAAP measure used by management when evaluating the company's performance. Net economic earnings exclude from net income the after-tax impacts of fair value accounting and timing adjustments associated with energy-related transactions, as well as the impacts related to our pending acquisition. A full explanation of the adjustments and a reconciliation of net income to net economic earnings are contained in the news release we issued this morning. So with that, let me turn the call over to Suzanne.

Thank you, Scott, and let me also add my welcome to those who have joined us this morning. As usual, on our call today, we will be discussing our results and other financial matters, which Mark and Steve will cover in more detail in a few minutes. But now, I would like to review the headlines for the quarter. We reported strong earnings improvements for our Gas Utility Segment, thanks, largely to colder weather and the benefits from our increased investment and upgrades to our distribution system. However, higher utility earnings were offset by lower earnings from gas marketing due to market conditions. Overall, our operating results were good, and our net economic earnings for the year are on track to show solid growth. In addition to earnings, there have been a number of other significant developments, mainly in the regulatory arena, where we have settled several matters. First, about 2 weeks ago, Laclede Gas received approval from the Missouri Public Service Commission to purchase the assets of MGE from Southern Union. This is a major milestone that brings us closer to completing the MGE transaction as we continue to work on integration. Second, we reached agreement in our Laclede Gas rate case in late June. Concluding the case in a timely way allowed the staff in the Missouri commission to focus their resources on our request for approval of the MGE acquisition. Meanwhile, we continue to make progress in the regulatory approval process for Negasco in Massachusetts. Regarding the MGE approval, the Missouri Public Service Commission approved an agreement on July 17 that was reached by Laclede Gas and other parties for the proceeding. The agreement contains a number of important provisions and conditions that I'd like to highlight. The approval is effective July 31 and includes authorization for…

Good morning, everyone, and thank you, Suzanne for your kind words. It's been my privilege to work for such a great company with so many talented and dedicated people. I'm proud to have contributed to the success and strong reputation of Laclede, and I leave knowing that the company is in very good hands under Suzanne's leadership. I look forward to watching Laclede's continued growth and achievements for many years to come. In our news release this morning, we announced third quarter net income of $6.6 million, down from $8.4 million last year. These results reflect the impacts of activities associated with the acquisition of MGE. As is our normal practice, we'll focus today's discussion on net economic earnings, which removes from net income the impact of fair value accounting and cost we've incurred in connection with the pending MGE acquisition. This quarter's presentation also adjusts for the additional diluted impact of the shares we issued in May to support the acquisition. Our earnings news release includes a table that reconciles net income to net economic earnings. This quarter, we expanded the table to break out net economic earnings by segment. We believe this additional detail is helpful to understanding the relative performances of our Gas Utility and Gas Marketing businesses. For the third quarter, we posted consolidated net economic earnings of $8.2 million or 36% a share, which is which is down about 8% from last year. Our Gas Utility segment posted a healthy increase in earnings of about 45%, which was largely offset by lower results from Gas Marketing. Pretax acquisition cost for the quarter totaled $2.2 million, which lowered net income by $0.05 a share. Fiscal year-to-date, through June 30, total pretax acquisition costs were $8.5 million or $0.23 a share. These costs are reported in our…

Thanks, Mark, and good morning, everyone. Let me give you a quick status update on our permanent financing, and then let's take a quick view into 2014. First, looking at our financing for the MGE acquisition. We've made great progress and are targeting to have all the permanent financing in place by the time we close the transaction. First, as most of you know, we've successfully issued just over 10 million shares of Laclede Group common stock in late May, with cash proceeds of approximately $428 million. Those proceeds are in additional to our normal seasonal accumulation of cash and investments of approximately $128 million, putting the company in a very strong cash position at the end of the quarter. We've also made great progress on our expanded credit facilities with our syndicate of financial institutions. We are targeting new 5-year facilities at both the utility and the group level, sized to meet the needs of our new larger business. We anticipate completing the process and closing these facilities concurrent with the closing of the MGE acquisition. And then finally, long-term debt. Our goal is to issue approximately $450 million in first mortgage bonds at the gas company level. As Suzanne mentioned earlier, the commission's agreement granted Laclede Gas the authority to issue these bonds to support the acquisition. And subject to market conditions, we hope to have them in place by the close of the MGE deal. And as a reminder, we have already largely hedged our interest rate exposure for these bonds so that we've been insulated from the recent run-up in interest rates. Based on current market, we anticipate the weighted average interest rate of our new debt to be approximately 3.25%. And a final comment on permanent financing. At this point, we retained $525 million of…

Thank you, Steve. So to summarize, our core Gas Utility segment delivered another good quarter with higher earnings. Overall, The Laclede Group remains in a strong position financially, with excellent cash flow and solid balance sheet. We have satisfactorily concluded a number of regulatory matters, most notably the approval of the MGE acquisition. The financing, closing and integration planning for the transaction are all tracking according to plan, and we look forward to completing the purchase of MGE around the 1st of September. And so with that, I like to turn it back over to operator Chad, and we'll take your questions.

[Operator Instructions] Our first question comes today from Dan Fidell with U.S. Capital Advisors.

First, my congrats to Mark as well on a -- just a fine career, and all the best to you as you go forward, sir. Very much enjoyed working with you over the years.

Same here. I've really appreciated working with you as well and hopefully we'll stay in touch.

Yes, absolutely. Just a few questions on my side for the quarter. I guess, first, you'd mentioned that you would continue to kind of evaluate the marketing model. With the pull in, I guess, it's looking like closer to $0.15 to $0.20 per share on a run rate into next year after the pull-down and with the dilution. Should we take that to infer that on a go-forward basis that the marketing might not necessarily be a core asset going forward? Or are you just sort of content to kind of let it be modestly profitable going forward?

At this point, Dan, I would say we're fairly content. As I've tried -- when I've made the rounds to speak to everyone, they provide a niche in that the way that they serve customers is inconsistent with the regulatory tariff structure. And there's customers out there, like power generation and others, that would like to take natural gas service but were not able to do that through our conventional tariff. So as of now, we'd like to continue to provide those services, and we'll continue to watch the business model and continue to challenge them.

Got you. And then just shifting gears here quickly. Question, I guess, for Mark or Steve, just assuming the expected interest rate you assume on the debt yet to be issued around 3.25%, is that about in line with what your previous expectations were heading into the merger and in terms of where you thought you'd issue?

Hey, Dan, this is Steve. Yes, it's spot on. It may be a few basis points higher because we -- as you know, we originally announced the deal in a different debt environment. But we made sure to hedge most of our interest rate exposure in late January and early February so that's paid a tremendous dividend. So I think we're spot on.

Great. And then just a separate question on the pipeline replacement kind of program at MGE. Can you just sort of talk about what they're spending now and your expectations going forward? And what you need to be able to do that? Can you do that on your own? Or is asking for an upsized kind of spending plan required as part of a rate case?

Dan, like in the -- let me talk about the first part of the question. Which is there's been, from a capital standpoint, their forecast for 2013 is about $17 million of ISRS qualified capital. And that's fairly consistent with what we've seen over the last 2 years. Let me turn it to Steve to talk about our thoughts going forward.

Sure. Dan, this is the other Steve, Steve Lindsey. And what we've seen at MGE is about a 3-year consistent replacement program, about 18 miles. As you know, here at Laclede, we consistently accelerate for the past 4 years. I don't know that we have enough right now to give guidance in terms of how much, but we do plan to continue an accelerated program at MGE.

And Dan, I would just add. We can -- based on what we looked with our cash flows and the like, we can support that program readily as we upgrade -- as we increase the amount of mileage we put in the ground.

That's great. And you don't require any pre-approval to kind of move that program up? You already have, essentially, approval to do pipe replacement? You can just sort of accelerate then on your own. Is that correct?

Yes, basically, they're operating under the same ISRS mechanism that we are here in the State of Missouri, which basically provides that you can work up to a percentage cap based on a 3-year run rate. So they have some definite upside and headroom for accelerator placement.

Great. Very helpful. And then just a quick question, if you could, maybe just clarify a little bit of the recovery of the roughly 50% cost to achieve beginning in 2015. Can you just talk about how that recovery's going to work or just as you see it as part of the agreement?

Dan, this is Steve. Yes, the approval is pretty fresh, and so we're working through it right now. The way that the mechanism will work is that, first of all, we have to evaluate the cost that we plan, and that we'll ultimately incur up to the time of the next rate case. Actually, we have a 5-year window, but we anticipate getting it done before then. I evaluate those costs as cost driven solely by the transaction, and then those that would drive synergies going forward. The agreement allows us to defer half of those costs. And then, in the next general rate case, after the moratorium period for both MGE and for Laclede, we would certainly propose, and the agreement allows us to propose a 5-year amortization of those costs in the ensuing 5 years with the effective date of that rate case once it has been concluded. That's what we would consider to be the O&M cost or the operations and maintenance cost component of integration. There will certainly be a level of capital costs and are probably more likely targeted to integration of the information technology platforms. And we have the option, and will likely take the option, of just treating those as normal capital costs going forward as we implement those enhancements to our system to bring MGE fully into our system.

Our next question comes from Sarah Akers with Wells Fargo.

And congrats to Mark and Steve.

Sarah, thank you.

Just looking at the utility O&M. It looks like it was up almost 11% year-over-year for the quarter, assuming there's acquisition-related costs in there. But can you give us a sense of the underlying O&M trend that you saw in the quarter for the utility?

Yes, Sarah, if you look at the quarter, the O&M cost is about $5.5 million higher than the prior year. Of that, $1.5 million is transaction cost in the quarter. And so the rest, as Mark mentioned in his prepared remarks, are driven by slightly higher employee and benefit-related costs and a few extra outside services cost. If you were to look at the full year, the entire increase in operating and maintenance cost is driven by the transaction costs. In fact, they stand within a couple of hundred thousand dollars on a base of $130 million of being flat to last year. And so there is a little bit of timing associated with the third quarter versus the earlier 2 quarters, and especially when we get to this time of the year, we tend to look at the run rates on the year. And we're very satisfied that we've been able to keep our operations and maintenance costs in line.

Okay, so we should look at the year-to-date as more representative as to what you're seeing and what you expect in the future?

Yes, I'd say it's a fair way to look at it.

Great. And then just one follow-up to Dan's question on Gas Marketing. After the 40% decline in '14 versus '13, can we expect that to level off there? Or might we see continued pressure post-'14?

Sarah, at this point, I'd say that -- this is Mark. Yes, I think we can see it leveling off right about there, barring any other changes in the marketplace. We will continue to see pursue other business as we go forward. And obviously, MGE will offer us some other opportunities to go and try to grow that business as well, so...

[Operator Instructions] Our next question comes from Selman Akyol with Stifel. Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division: And I would also like to add my congratulations, both to Mark and Steve. Real quickly, in the quarter, you talked about weather and ISRS. And I was just wondering, can you specify which was the larger -- the benefit within the quarter?

Weather was a significantly higher contributor than ISRS. Or as you know, Selman, you live in the service territory, we had a significantly cooler quarter this quarter than we did with 100-plus degree temperatures a year ago. Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division: And then, the other is just -- is there any update on the other initiatives for fueling stations, et cetera or anything, development during the quarter on that?

Yes, from a fire perspective on the fueling station, I've got Mike Spotanski here. And so I'll give him a moment to share his little success a bit here.

I think, Selman, thank you for asking. I appreciate it. We are in construction mode on the Lambert fueling facility. We're targeting for a late-fall, early-winter opening there, and we're continuing to build the customer base out there. We're also continuing to talk with the customers that we've identified before in the areas of trucking, transit and waste. We've got a number of customers that we're talking with. As you know, our model is that end-to-end model, and those stations can be very complicated as you custom design for an individual customer. So there's a lot of prework that we're doing with those. But we've got 2 or 3 that are pursuing -- or that are progressing very well, and we'll have some news soon, hopefully.

[Operator Instructions] There appears no further questions at this time, so I'd like to hand the call back over to management for any closing remarks.

Well, great. Thank you, all, for joining us today. And we'll be around throughout the day for follow-up questions as needed. Thanks for joining us today.

Thank you. The conference is now concluded. Thank you for attending. You may now disconnect.