Good morning. My name is Patrick and I will be your conference operator today. At this time I would like to welcome everyone to the 2015 Q2 Earnings Conference Call. [Operator Instructions] Thank you. I would now like to turn the call over to Scott Dudley, Managing Director, Investor Relations. Scott, please go ahead sir.

Thank you and good morning, welcome to our earnings conference call for the second quarter. We issued a news release this morning announcing our financial results and you may access that release on our website at thelacledegroup.com, and you can find that under the News Releases tab. Today's call is scheduled for about an hour and will include a discussion of our results, as well as the question-and-answer session. And prior to opening up the call for questions, the operator will repeat the instructions for you can join the queue to ask a question. Presenting on the call today are Suzanne Sitherwood, President and CEO; and Steve Rasche, Executive Vice President and CFO. Also joining us in the room this morning is Steve Lindsey, Executive Vice President and Chief Operating Officer of Distribution Operations. 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 risk factors may cause future performance or results to be different than those anticipated. A description of the uncertainties and risk factors can be found in our Annual Report on Form 10-K, and 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 and operating margin which are non-GAAP measures 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 acquisition, divestiture and restructuring activities, and those include costs associated with the acquisition and integration of Missouri Gas Energy and Alabama Gas Corporation. Operating margin adjusts operating income to include only those costs that are directly passed on to customers and collected through revenues, which are the wholesale cost of natural gas and propane and gross receipts taxes. A full explanation of the adjustments and a reconciliation of these non-GAAP measures to their GAAP counterparts are contained in the news release that we issued this morning. So with that, let me turn the call over to Suzanne.

Thank you, Scott. And I welcome those who've joined us this morning. We are off to a solid start in the first half of fiscal 2015. We continue to implement our growth strategy by integrating to transformative and accretive acquisitions, while pursuing the other growth initiatives we’ve outlined previously. I would like to take a few minutes to review the headlines of our results and achievements to-date. Steve Rasche will follow me with a more detailed discussion of our operating results and financial conditions as well as our expectation for this year and beyond. This morning we reported second quarter net economic earning of $2.25 per share, up more than 40% of a $1.58 per share last year. For the first half of fiscal 2015, net economic earnings were 3.31 per share up from 2.68 per share a year ago. These significant increases in first year earnings reflect the growth of our Gas Utility business largely from addition of Alagasco and fiscal 2015, and also from growth and cost efficiencies at our Missouri utilities between gas and the Missouri Gas Energy. With this strong year-to-date performance, we remain on track for achieving our full year 2015 earning goals, as well as our long term growth deposits. Our strategy has been and remains to transform our business and perceive growth in four areas. First, we have consistently worked to grow our core Gas Utility business through pipeline infrastructure investment and organic growth initiatives. Second, as we've demonstrated we are growing to acquire other gas utilities and successfully integrating them to create value for investors, customers, and the communities we serve. Third, we are working to further leverage our natural gas industry expertise to optimize our current and future investments and gas supply assets across both our regulated utilities and our gas…

Thanks Suzanne and good morning everyone. Let's start with the review of our operating results for the second quarter of fiscal year 2015. Looking at the income statement, total operating revenues were $877 million, operating margin or earnings contribution after gas cost and gross receipts tax of $308 million was $116 million or 60% higher than last year. Our business segment, Gas Utility margins of $306 million were up $131 million in the prior year, with approximately $126 million of that total due to the addition of Alagasco. The remaining $5 million was the result of higher MGE margins reflecting the usage base component added to the rate design, as well as incremental business revenues at both Laclede and MGE and modest customer growth. These pluses were offset in part by lower asset optimization margins. Weather was definitely a factor in understanding these operating results, as this quarter was about 10% warmer than last year's record cold, a still 6% colder than normal. Gas marketing generated a quarterly operating margin of $2.1 million down from $16.8 million a year ago. This decline reflects a return to closer to normal weather and market conditions in the Midwest reducing industry wide price volatility and basis differential, that is price differences between supply in consuming regions. Moving down to P&L, operating and maintenance expenses of $104 million were up $32 million from last year. That increase is principally due to the addition of Alagasco which added $34 million and that increase was partially offset by lower operating expenses across the rest of the company reflecting the benefit of cost savings initiatives and the timing of certain expenses. Depreciation and amortization of $30 million was up $12 million from last year essentially the addition of Alagasco and similarly taxes other than income of just…

Thank you, Steve. Before going to questions, I want to mention a couple of important leadership changes. First at Laclede Group, one of our senior leaders had made the decision to retire. Mary Kullman, our Senior Vice President and Chief Administrative Officer and Corporate Secretary has announced that she will retire effective June 1. Mary has been with Laclede for 25 years and has served as Corporate Secretary for 17 of those years. In 2013 she had given responsibility for Human Resources, in addition to her other duties including audit, enterprise with management, facility, governance and corporate standards. On behalf of all of us in the Laclede family, I want to acknowledge Mary's leadership and contribution to our company and to wish her all the best in her future endeavors. But please know we have a strong succession plan in place to ensure us new transition of Mary's role going forward. Second, as we announced in the news release back in February, Dudley Reynolds retired as President and Chief Operating Officer of Alagasco on March 31. Dudley served Alagasco with distinction over a 35 year career including as President and COO since 2003. On behalf of our employees and the entire leadership team, we thank Dudley for his outstanding service to Alagasco and our customers. On March 11, we announced Ken Smith a 34 year Veteran of Alagasco was named President. Ken’s background and experience including serving as an officer over the last 17 years make him a very qualified person to lead Alagasco. We look forward to his contribution to the company’s further growth and future success. In conclusion, we are indeed off to a great start in the first half of fiscal 2015, we continue to transform our company and pursue growth integration of our acquisition, pipeline infrastructure investments and other organic growth initiatives. Gas supply asset optimization and investments and innovations in emerging market. And we continue to deliver results in line with our great target. We look forward to seeing many of you at the AGA Financial Forum later this month and to continuing our dialog. And with that thought, we are now ready for questions.

[Operator Instructions] Your first question comes from the line of Dan Eggers, Credit Suisse.

Good morning guys.

Good morning.

I was wondering if you could kind of follow-up unfortunately there were couple of accidents industrywide this year both in urban and Suburban settings. When you guys look at your capital program, are you seeing more call or more need to maybe accelerate even beyond what you’re doing right now just as you’ve seen some of these incidents across the industry?

Dan I will let Steve Lindsey talk about that because he's taken a very strong leadership position on national front – and the leadership more broadly and tightly tied into your question.

Thanks Dan, this is Steve Lindsey. I think the focus that we have on safety and all of our distribution systems is not laboring. So I think the approach we are taking is the right approach. It is a risk based approach that talks about from a replacement perspective, it’s not just about miles of pipe, but the types of pipes that we’re replacing as well as the maintenance history on those pipes. So I think our program is good. I think we will continue to accelerate. I think we have opportunities in Alabama, other areas that we’re focusing on around this pipeline safety in general are leaks per mile average leak response time. So I think it’s broader than just pipeline replacement but I think our focus is right and you will continue to see that type of acceleration as we move forward of our three utilities.

Dan, this is Steve Rasche, I would add that in our as we think about our longer-term capital plan there is clearly headroom in even the $300 million annually that we can spend to increase our pipeline replacement program and we’re pretty much running at a good pace at Laclede. We’ve been at that for a number of years, we continue to ramp up a little bit more MGE and we’re working with folks on in Alabama to get to the right pace in Alabama. It will take us a little bit to get there because there is a lot of engineering and hard work that goes behind the scenes to make sure that we got the right approach that can sustainable for a number of years.

And one final data point I guess I will give you in the first year of our ownership of MGE we replaced more miles in that first year than the previous three years combined. So I think that’s a pretty good indication of our focus on.

It’s such an important topic for our industry and I would like to also close with a comment. I know from purposes of capital investment, it’s very important that I will also say under Steve Lindsey’s leadership over the last couple of years and we significantly improved our safety metrics and we’ve taken an approach that is our first priority and our industry as a first priority and we’ve seen significant movements in our metrics as Steve Lindsey has taken the position. I'm very proud of that fact. I have to brag a little bit.

Maybe I will ask the Steve's collectively one more question on this if you think about $300 million and respectively more to be done in Alabama, does that mean that there is prospectively upside to the annual CapEx budget or is this is more Alabama’s rising Laclede may be catching a more normal stride?

It’s a great question, if you think about the $300 million for this year there is probably 20 odd million dollars of spend which is directly related to several facility relocations which will not recur and also some integration capital as we bring MGE into the Laclede IT platform. So we clearly create some headroom as we go into fiscal 2016 to replace that with pipeline replacement. But then I would agree and I think we’ve been very clear in how we approach, how we operate all our utilities that if we see a clear path to accelerate the capital on pipeline replacement program further. We clearly have the ability to do that, it’s really a matter of getting the plan in place and making sure that we can mitigate it well to our folks inside the company as well as to our communities.

And relative to a year-over-year comparison if you will just as two Missouri utility, we’ll spend roughly about $20 million more dollars on pipeline replacement, which is about a 17% increase from last year so that kind of just scale perspective as our increase just in the Missouri Utilities alone.

Okay, got it. I guess one other question just with the integration studies you’re coming to a close on Alagasco. Can you just maybe discuss what you guys were surprised to the positive and to the negative towards would have expected before you did the acquisition and how are those opportunities scaling up in total versus which you guys had originally expected?

Yes I guess maybe not a surprise but to get to your positive point and well what we’ve found is from a cultural standpoint the Alagasco employees and the way that they go about their work is consistent with the way that we think about doing our work and our culture in Missouri. So pulling these two teams together and having total under these functional areas they have been very well managed and the teams have quickly went about their work and that’s not always the case. When you’re trying to pull two companies together and our process again is to have coverage and to find that factored solution for our customers and so again it’s not and that is why surprised I think, I found that to be very positive and that was across all the team. And from a challenge perspective honestly there have been no surprises. I think we mentioned before that Steve Lindsey and I knew that company pretty well from the industry and working next door for a long time. There will be milestone opportunities around technology and so forth that we'll have to work our way through. But for that teams are often running and the plans are coming as we expect as pluses and minuses across all of them, but generally speaking they are hitting the mark and leadership team here all have to make determination and we’ve really started implementing some and we will have to make determination of what’s round two, what’s round three, what’s round four. More to come there.

And one other thing I’ll add Dan is, this is Steve Lindsey. I think one of the things not again as Suzanne mentioned not surprising was the strong focus I think a recent example of that was Alagasco ordered the JD Power business study for the south which says very strongly about their commitments to customers at all levels. As well as the employees I think one of the things we found is that you have a strong level of employees throughout the organization and a very strong bench, which again is not a surprise, but it’s a nice thing to have.

Very, good thank you guys.

Thanks Dan.

Thank you, Dan.

[Operator Instructions] Our next question is from Spencer Joyce of Hilliard Lyons.

Good morning folks. Thanks for taking my call.

Good morning Spencer.

First off nice quarter here, I think Alagasco seems to be going fairly well for you. Steve first one for you and I apologize to get down here kind of in the minutia right of the bat, but can you give us that gross receipt tax number I think you may have mentioned it very early in your comments and I was distracted here for a second. Just that tax number, we should net out to get a better gross margin number for the utility?

Yes Spencer if you go back, if you have our press release and you go back to the final page of the press release, there’s a reconciliation of the operating margin to GAAP and that gross receipt tax number for the quarter, which I think is what you’re asking for is $44.1 million.

Okay, perfect, perfect. And sorry I missed that there in the release. On the CapEx side, I know you all reiterated the $300 million is that still split kind of 85 Alabama, 205 Missouri, and then maybe 10 on the non-reg side?

Yes I think that’s still a pretty good split, we continue to actively manage that Steve and I have manage the whole group and we meet regularly looking at it both individual projects and where opportunities are. But I think that’s a fair depiction we may shift there is probably a little bit of shift inside Missouri maybe a little bit more and at Laclede, a little bit less at MGE this year. But that's really, you would expect us to kind of look at the opportunities and move the capital around wherever it makes sense.

Absolutely. Finally on the O&M that may have been delayed a bit in Q2. Can you give us kind of round sense of the quantity there, I mean you were thinking maybe $1 million to $2 million over the back half of the fiscal year here or maybe closer to 3, 4, 5?

Yes, let me answer the question a little bit differently, because clearly there was some timing in O&M. If you look at the run rate for the first six months of the year, we've been averaging about $100 million a quarter in O&M and in the back half of the year, I think that that range or maybe a $1 million or $2 million higher is the right way to think about a run rate. So the run rate of expenses aren't going to change and normally if you were to look at other periods for legacy liquid, you would see a little bit more of a seasonality in the expenses. So I think they are going to be a little bit flattish, maybe tick up $1 million or $2 million on average per quarter over the last few quarters. And that really kind of covers the seasonality or about the timing of some of those expenses.

Okay. Perfect, yes, that works. That's all I had. Thanks, good quarter.

At this time, we have no further questions in queue - I’m sorry, we do have one question, it just came in from Tim Winter.

Good morning guys and congratulations on a great quarter. I just wanted to follow up on the yesterday's filings, I just reading the releases, is there any issue there you resubmitted request was there, was the background there?

This is Steve Lindsey. I don’t think they were any issues other than just the normal process that you go through with the Public Service Commission staff and LPC. So, we continue to be confident that the borrowings that we recently resubmitted will be approved and moved forward. In addition, it’s an example of - as we continue to move forward how we are making that part of our normal business both sides of the state. And then from a second perspective on ISRS, we do have some legislation that we are working on currently to try to extend the period of the filing requirement and that’s moving forward in both sides of the chambers as the Missouri legislature and we’re hopeful that we’ll have some type of bill out of into this session.

Okay. So when do you expect the resubmitted request to be approved and when did you originally expected to be approved?

The Missouri staff has made a recommendation to approve this at the beginning of this month early May. So again we're working with the LPC to resolve a few issues and we hope to have that into effect probably sometime late this month.

And Tim probably 30 to 45 days slide from what we would have normally expected but again nothing that. I think on balance it isn't going to impact us much because we're able to clarify and crystallize the capital. So we slit a little bit in timing but we picked up a little bit more in absolute dollars, so in all kind of net sales.

Okay. And then I just wondered if you could give us some sort of guidance given the rate redesign and the acquisitions for compared quarters versus historical and you are in a very strong $3.31 right now for the six months. How should we think about the rest of the fiscal year?

Tim this is Steve. I can take that. We spoke about this the last couple of quarters and I don’t think our view of the timing of earning has changed a lot with the rate adjustment at MGE adding a little bit of usage basis, still largely fixed but a little bit of usage and then Alagasco which is a much more seasonal pattern. We would expect to have above level of earnings in the third quarter and then a loss in the fourth quarter. The last time that we talked about - talked about the earnings in particular, we gave a range for the third quarter between 4% and 6% of full year earnings with a loss of between 9% and 11% in the fourth quarter. So you're right, if you do the math, we're at 3.31 and so on balance we will be a little bit in the red in the back six months of the year that will all be focused at least as best as we can tell. In the fourth quarter and that's because in our service territories that's - as you know, is a pretty warrant period, so the actual gas usage is fairly low.

Great, Steve. Thank you so much.

Our next question comes from Felix Carmen from Visium Asset Management.

Thank you. Congratulations on a great quarter, very strong quarter. Just a quick follow up question, looks like in the other segment we had a tax benefit. Can you guys just quantify what that tax benefit was and if that was part of the initial expectation to form second quarter?

Yes, I will handle that Felix. The tax adjustment in the other category which is really not the business segment, it's really the accumulation of everything else. It was cumulative six month adjustment to make sure that the income tax impacts benefits of the interest were in the right business segment. So, instead of focusing on the quarter, I would encourage you to look at the six month numbers that really gives you a better true picture of how to think about the other segment over the six month period rather than looking at the various in the first three and the second three months.

Okay. Got it. Thank you.

And presenters at this time, there are no further questions in the audio queue.

Thank you. And we look forward to seeing everyone at the AGA.

Thanks everyone.

And this does conclude today's conference call. All lines may disconnect at this time. Thank you for joining.