Good morning, and welcome to Otter Tail Corporation's 2018 Third Quarter Earnings Conference Call. Today's call is being recorded and we will hold a question-and-answer session after the prepared remarks. I will now turn the call over to the company for their opening comments.

Good morning, everyone, and welcome to our call. My name is Loren Hanson, and I manage Otter Tail's Investor Relations area. Last night, we announced our third quarter results and revised our 2018 earnings per share guidance range. Our complete earnings release and slides accompanying this call are available on our website at 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 want to remind you that we will be making forward-looking statements during this call. 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. 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 encourage you to review. Otter Tail Corporation disclaims any duty to update or revise our forward-looking statements due to 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.

Thank you, Loren. Good morning, everyone. Last night we released the third quarter results. For the quarter, net income was $23.3 million or $0.58 a share, compared with $17.7 million or $0.45 a share last year. This is a 29% earnings per share increase year-over-year. All operating segments improved net income quarter-over-quarter, contributing to the positive results, our Electric segment have interim rates in place in North Dakota, increased transmission investments and favorable weather. Our Manufacturing segment experienced increased revenue and earnings growth both our Manufacturing and Plastic segments received a benefit of lower tax rates. Before I discuss these segment, allow me to share that Otter Tail Corporation is the member of the Edison Electric Institute joined in the third quarter with member companies to provide environmental, social and government information that gives investors and other inside into our commitment to being a good corporate citizen. On slide six through eight, you see the highlights from our ESG sustainability report and a glimpse into how our electric utilities, plant and service and resource mix are evolving due to the significant investments in low cost renewable energy and transmission that enables regional wind development. You can find our full ESG's sustainability report on our website at ottertail.com. Now allow me to briefly discuss each segment. We mentioned during our last call with Otter Tail Power reached a proposed settlement agreement with the North Dakota Public Utility Service Commission staff and interveners in the North Dakota rate case. As you'll see on slide 10, in the September hearing, the North Dakota Public Service Commission approved an overall revenue increase of $4.6 million or 3.1% and a return on equity of 9.77% on a 52.5% equity layer. This compares with our March 2018 adjusted increase request of $7.1 million or 4.8% and…

Thanks, Chuck and good morning, everyone. In the third quarter, our three operating segments delivered increased earnings from improved market conditions and continued positive impacts from tax reform. Please refer slide 20 through 22, as I discuss the third quarter results. The Electric segment net earnings increased $3.7 million quarter-over-quarter. The press release describes all the items impacting our quarterly results with key items worth mentioning are the third quarter of 2017 reflected additional accruals in our estimated rate refund liability related to the final order in the 2016 Minnesota general rate case. There were no similar items in the third quarter of 2018. Interim rates, net of estimated refunds related to our North Dakota general rate case have been in effects since January of 2018. Weather positively impact earnings per share by approximately $0.01 quarter-over-quarter and increased transmission tariff and service revenues. These items were offset in part with higher property taxes and depreciation expenses. Net earnings for the manufacturing segment increased $1.4 million quarter-over-quarter. Key elements of this improvement are BTD revenues increased $11.8 million from increased product sales to all its major end markets. $4.2 million of this increase relates to higher material costs that are pass through to customers. We also improved our revenue mix by reducing our low margin work quarter-over-quarter. BTD's Georgia plant in particular had a strong quarter due to increased sales and productivity improvements. And in addition, BTD's scrap metal revenues increased due to higher scrap volume and higher scrap sales prices. These increases were offset impart by higher cost of goods sold and operating expenses. And lower income taxes also contributed to BTD's increase in net earnings. At T.O. Plastics, revenues improved $900,000 mainly due to increased sales of horticultural containers. These increased revenues were offset impart by lower sales of…

Thank you. [Operator Instructions] Our first question comes from the line of Paul Ridzon with KeyBanc. Your line is now open.

Good morning.

Good morning, Paul.

Could you just repeat the weather impacts 2017 and year-to-date?

The weather quarter-over-quarter was favorable by a penny a share. Year-to-date weather is favorable by this is year-over-year is $0.10 a share and compared to normal in 2018 at $0.06.

So last year was $0.04 below normal year-to-date.

Yes.

And then just - I know I ask every quarter, but kind of whether you are seeing any of your customers wanting to share in your tax savings.

Paul, we have not had any requests from customers to share the tax savings and that's been across the manufacturing and plastics companies, we just haven't had that pressure. Suppose over time, one would expect that some of that wouldn't get baked into pricing on a - over a longer term basis, but certainly in 2018 we've not had any pressure for that.

Okay. Where are we in the PVC pricing cycle?

Well, I think when we look historically we would say we were in the order probably in the upper end of the pricing cycle. When we look back over this last few years, I know that this year certainly we've seen stronger prices in 2018 and even what we saw in the last half of 2017. Those conditions weren't expected to continue as we headed into 2018. But I think that there was certainly the market for whatever reasons adjusted to the higher prices that were in driven in part by the hurricane effect those continued into this year, and they've continued strong for the year. I think certainly as we go forward, we recognize we're at the higher end of the cycle and when we look out longer term that that's probably not normal, but that's going to - would expect to continue.

Thank you for the color. Appreciate it.

Thank you. [Operator Instructions] I'm not seeing any further questions. I'd now like to turn the call back to Mr. Chuck MacFarlane for any closing remarks.

Thank you. To summarize, earnings per share increased $0.13 or 29% quarter-over-quarter in part due to interim rate revenues from North Dakota, increased revenue from transmission investments and favorable weather in Otter Tail Power service area. Increased volumes and lower taxes at BTD and T.O. Plastics and improved sales margin and lower taxes at Vinyltech and Northern Pipe Products. I want to extend our appreciation to employees across our organization for their hard work and improved third quarter results. Looking ahead, we have the right long-term strategy in place supported by a targeted capital growth plan. We remain on track to deliver shareholder value in 2018 and have raised the lower end and narrowed our full year guidance to a $2 to $2.10 range. Thank you for joining our call. We appreciate your interest in Otter Tail Corporation and look forward to speaking with you next year.

Thank you. Ladies and gentlemen, this concludes today's call. You may all disconnect. And everyone have a great day.