Good day, ladies and gentlemen and welcome to the Black Hills Corporation Third Quarter 2015 Earning Conference Call. My name is Malerie and I’ll be your coordinator for today. At this time, all participants are in a listen-only mode. Following the prepared remarks, there will be a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to Mr. Jerome Nichols, Director of Investor Relations of Black Hills Corporation. Please proceed, sir.

Thank you, Malerie. Good morning, everyone. Welcome to Black Hills Corporation's third quarter 2015 earnings conference call. Leading our quarterly earnings discussion today are David Emery, Chairman, President and Chief Executive Officer and Rich Kinzley, Senior Vice President and Chief Financial Officer. Before we begin today, I would like to note that Black Hills will be attending the EEI Financial Conference next week in Hollywood, Florida. You’ll find our presentation materials and webcast information on our Web site at www.blackhillscorp.com, under the Investor Relations heading. During our earnings discussion today, some of the comments we make may contain forward-looking statements as defined by the Securities and Exchange Commission and there are a number of uncertainties inherent in such comments. Although we believe that our expectations and beliefs are based on reasonable assumptions, actual results may differ materially. We direct you to our earnings release, Slide 2 of the investor presentation on our Web site and our most recent Form 10-K, Form 10-Q another document filed with the Securities and Exchange Commission for a list of some of the factors that could cause future results to differ materially from our expectations. I will now turn the call over to David Emery.

Thank you, Jerome, and good morning everyone. I will be starting on Slide 3 of the webcast deck and then we will be following a format similar to that of previous quarterly calls. I'll give an overview of the quarter and some highlights. Rich Kinzley will go over the financials from the quarter and then I'll talk a little bit about forward strategy and then we'll answer questions. Moving to Slide 5, the third quarter was another strong quarter for Black Hills Corporation. We posted solid earnings and made great progress on our growth goals for our existing businesses and we also made excellent progress towards our pending acquisition of SourceGas. Related to SourceGas on August 10th, which was less than 30 days after the deal was announced we filed joint applications for acquisition approvals in all four states. A week later, just a little over a week later, we received our Hart-Scott-Rodino antitrust clearance, we now have procedural schedules established in three of the states with the fourth state pending. The discovery process is ongoing and we still remain on track to close in the first half of 2016. Also, on the acquisition front we did close on July 1st, on our $17 million acquisition of about little less than 7,000 customers in Northwest Wyoming and notably related to that acquisition they were 100% integrated on to all of our systems and process on day 1 after close. From a business environment perspective, during the quarter we had warmer than average weather in our utility service territories, a slight positive for the electric utilities and a negative for the gas utilities and then energy commodity prices particularly oil and gas remained at very low levels. Moving on to Slide 6, utility highlights for the quarter, Black Hills Power is…

All right, thanks Dave. As Dave mentioned our core utility and utility like businesses continue to demonstrate strong performance. In the third quarter each of these businesses improved operating income compared to the third quarter of 2014, in particular our electric utilities posted strong year-over-year operating results. Our oil and gas business continued to manage through a challenging commodity price environment. Despite that challenge we posted a strong quarter. On Slide 12, we reconcile GAAP earnings to earnings as adjusted a non-GAAP measure. We do this to isolate special items and communicate earnings to better indicate our ongoing performance. In each of the first three quarters of 2015, we’ve incurred non-cash ceiling test impairments at our oil and gas business and in the second quarter of 2015 we also impaired in an equity investment at our oil and gas business. These impairments are due to low natural gas and crude oil prices and our non-cash charges that are not reflective of ongoing operational results. We also incurred external acquisition related cost in the second and third quarters of 2015 associated with the SourceGas acquisitions, such as financing and other third-party costs which were non-recurring in nature. Our third quarter as adjusted EPS reflective of ongoing operations was $0.64 per share compared to $0.61 per share in the third quarter last year and our trailing 12 months as adjusted EPS was $3.05. Slide 13 displays our third quarter revenue and operating income, on the left side of the slide you’ll note that revenue was flat in 2015 due to the lower gas utility revenues from the lower pass-through gas cost in 2015 and lower revenue from the oil and gas business due to lower receipt prices. These revenue reductions were offset by strong revenue growth at our electric utilities. On the…

Thank you, Rich. Moving onto Slide 21 forward strategy, we group our strategic goals in to four major categories and we’ve done this for a couple of years. The overall objective being an industry leader in all that we do. Those four major goals are profitable growth, valued service, better every day in a great workplace. On Slide 24, I noted this earlier but we’re making excellent progress on our acquisition of SourceGas, we’re on track for closing in the first-half of 2016 as I said earlier and we have a very experienced leadership team guiding our integration effort. Our goal on the integration is to be fully integrated by the end of the year 2016. Moving on to Slide 25, strong capital spending drives our earnings growth and we forecast the total of 1.25 billion of investment for 2015 through 2017. Our projected capital spending far exceeds depreciation driving earnings growth. It's important to note that this table on Slide 25 does not include any capital related to either the SourceGas acquisition or capital spent in the SourceGas territories post acquisition. On Slide 26 as I said earlier, we’re continuing to make great progress constructing a new turbine at the Pueblo Airport Generating Station. We commenced construction in June, we’ve spent about 27 million to-date out of the projected total of 65, construction is a little over 20% completed and we have no safety incidents to-date. On Slide 27, Monday of this week we announced that we received the necessary approvals and executed the necessary agreements to purchase 109 million 60 megawatt Peak View Wind Project in Colorado. I mentioned this earlier it will help us meet the renewable energy standard in Colorado for our Colorado electric customers. We expect construction to commence in the second quarter of ’16…

Ladies and gentlemen, we are ready to open the line for questions. [Operator Instructions] Our first question comes from the line of Dan Eggers with Credit Suisse. Your line is now open.

I guess, if we step back and kind of think about the priorities around the earnings outlook, the commodity price assumptions in the E&P business are above the street, can you just explain how you kind of got to those numbers, where the sensitivities fall out and kind of why you guys have settled, decided to settle above the curve right now?

The curve changes every day and typically what we do Dan is we take a basket of multiple forecasts and try to use that to come up with a reasonable estimate for the future year. I mean, literally the curve changes every day and if we revise our forward look every time the curve changes, that's all we do. So, we try to look at several forecasts, and bank forecasts, the strip and other things, obviously weighted a little more heavily probably towards the strip than some of the other things and set a forecast at the beginning of the year that we think we can live with regardless of whether that price fluctuates up and down a little bit throughout the year.

And then, did I hear you correctly say that on the wind acquisition that there is no base rate increase for the first 10 years?

Correct, yes, the way that we are going to get recovery for that is it's basically going to flow through three different cost adjustment clauses that we have and we'll earn the same amount basically but it's going to go through the adjustment clauses, and then it's going to be up to us to decide whether we want to continue that or go in for a base rate case in year 10, I think the commission’s preference at least at this point would probably be that we do a base rate case in year 10.

Now we're going to see a distortion in your tax build because the [BDCs] [ph] being generated will bring your tax expenses down, so a part of the return is going to come on that asset through the tax line effectively?

That's correct, Dan.

And how much will that effect the tax rate for the next year or the year after if we want to try and layer in expectations?

It won't affect '16 obviously because it's going to go into service late in '16 but in '17 I don't even want to guess.

Maybe I should ask what's the right utilization rate you guys are expecting off the project?

Yes, high-30s, low-40s, right in there for our capacity [effects] [ph].

[Operator Instructions] Our next question comes from the line of Insoo Kim with RBC Capital Markets. Your line is now open.

Just back to SourceGas, are you able to give any more guidance on potential timing of the equity issuance whether it'd be before the end of the year or after?

Basically what we wanted to do is get our third quarter financials out and then essentially we're going to watch the market conditions and be prepared to go to the market. There is obviously some holiday and things in there, but we’re looking at anytime basically between a couple of weeks from now and closing would be our ideal timing. And we’re just going to evaluate market conditions and make a decision on timing as things evolve.

And regarding the financing of the deal, are you currently actively looking for buyers of your non-core E&P assets to help with the funding or is there not really a good market right now given the lower oil and gas prices?

Yes, the non-core assets in E&P aren’t going to generate I would say a material amount into that the Colorado IPP is the big thing there obviously. So we’ll opportunistically look for opportunities on the non-core E&P but it's not going to be a huge number.

Yes, it's more just cleaning up the portfolio on the labor involved in managing it all than it is about big dollars on the capital side.

Right.

And finally if the deal does close on time in the first-half of ’16, I know in ’17 you do expect some material earnings accretion, but in ’16 do you still expect some neutral to slightly accretive scenario for the ’16?

It really depends on timing Insoo and if you think about SourceGas is no different than most gas utilities that makes a huge portion of its income in the first quarter. And so if you close after the first quarter is over you have a relatively small piece of the income remaining and a relatively large piece of the expenses remaining for the year. So it's going to depend on timing if we close right after winter for example we’re going to have three quarters of a year of expenses and roughly and half a year in income.

And then just one more question if I may, at the utilities with the strong industrial growth there that you're seeing for the year is there any read-through to forecast for 2016 and potentially beyond?

Well, I think we’ve accounted for that growth in our guidance if that’s what you're asking.

Yes, I was just wondering if, I mean it's pretty - 16% industrial growth you say that is very strong and just wondering modeling out for ’16 kind of what levels we should be expecting?

Well, we’ve talked a little bit -- the biggest piece that will be continuing is really the Microsoft piece and there is quite a few public disclosures around Microsoft they have made some announcements in Cheyenne related to their plans and they are continuing with additional expansions of datacenters there in Cheyenne. So we expect that to continue for a while.

Thank you. [Operator Instructions] I am showing no further questions. I’ll turn the call back to David Emery for final remarks.

All right, well thank you everyone for attending the call this morning. We certainly appreciate your continued interest in Black Hills and for those of you who are going to be at EEI we look forward to seeing you next week. Thanks and have a great day.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program. And you may all disconnect. Everyone have a great day.