Good day, and welcome to today's webcast. My name is Mandy, and I'll be your web event specialist today. [Operator Instructions] It is now my pleasure to turn the webcast over to Scott Dudley, Managing Director of Investor Relations. Mr. Dudley, the floor is yours.

Thank you. Good morning, and welcome to the earnings conference call for our second quarter of fiscal 2014. We issued a news release this morning announcing our financial results, and you may access the release on our website at thelacledegroup.com, and that will be under the News Releases tab. Our call today's 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 today are Suzanne Sitherwood, President and CEO; and Steve Rasche, Executive Vice President and CFO. Also in the room with us are Steve Lindsey, Executive Vice President and Chief Operating Officer of Distribution Operations; and Mike Spotanski, Senior Vice President and Chief Integration and Innovation Officer. Before we begin, let me cover our Safe Harbor statement and the 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 quarterly report on Form 10-Q, which will be filed later today. In our comments, we'll be discussing financial results in terms of net economic earnings, operating margin, and operating cash flow, which are 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 the acquisition, divesture and restructuring activities, including one-time cost related to the integration of MGE and cost related to the acquisition of Alabama Gas Corporation. Operating margin adjust 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. Operating cash flows exclude the effects of temporary changes in working capital, such as timing differences in the regulatory recovery of certain costs and the timing of cash payments for income taxes. A full explanation of the adjustments and a reconciliation of these non-GAAP measures to their GAAP counterparts is contained in the news release we issued this morning. So with that, I will now turn the call over to Suzanne.

Thank you, Scott. Let me add my welcome to those who have joined this morning. Steve Rasche will follow me and will review our operating results and update you on the other financial matters in a moment. I would like to begin where we left off last quarter by discussing the successes we continue to have in the pursuit of our strategic imperatives. As you know, one of the most impactful strategies contributing to our growth is the acquisitions of other gas companies. We have already began to realize that growth through the acquisition and integration of Missouri Gas Energy or MGE. I will update you on how well the MGE integration is going. But first, I would like to say a few words about our second transaction announced 3 weeks ago to acquire Alabama Gas Corporation, or Alagasco from Energen Corp. Since the announcement, we've spoken with many members of the financial community, analysts, investors, rating agencies and others. We are pleased to have the opportunity to discuss the details of the acquisition, including the compelling strategic rationale. Throughout the conversations, we heard consistent support for, and a positive reaction to, the deal to acquire Alagasco. I have often said that Laclede isn't interested in growth for growth's sake, but rather we want to create value through the acquisitions and investments we make. We clearly saw great value in acquiring Alagasco and we have been pleased that others share that viewpoint. As with the MGE acquisition, the strategic rationale for Alagasco was compelling. Let me briefly cover the 4 key reasons why this is such an attractive deal. First, it fits our growth strategy to expand in the area we know best, natural gas local distribution companies. It leverages our core competencies and regional expertise, while adding to the…

Thanks, Suzanne, and good morning, everyone. Let's review the operating results for our fiscal second quarter ended March 31, and give you a few updates on other initiatives. But before diving into the financial statements, let me also pick up on the point that Suzanne just mentioned, the impact of weather on our quarterly financial results and our outlook for the year. It is no surprise that we just completed a very cold winter, the 10th coldest in the last 120 years in Missouri and this cold weather presented opportunities for our Gas Marketing business due to increased price volatility and widening basis differentials that occurred as the winter progressed and industry-wide gas inventories declined. The winter also produced some opportunities and some challenges for our Gas Utility. Not in terms of operations, as our system and our teams showed its resilience in the face of the waves of Artic air, but in terms of higher operating cost for repairs and maintenance work and higher bad debt expenses. As I walk through the operating results, I'll highlight particular areas that were impacted by the unusual weather this quarter. And as Suzanne mentioned, we estimate the overall lift in the quarter to be approximately $6.6 million or $0.20 per fully diluted share. With that said, looking at our second quarter income statement, total operating revenues were nearly $695 million, with Gas Utility revenues up 79%, due largely to the addition of Missouri Gas Energy and weather. Gas Marketing volumes were up more than 21%. Operating margin, which looks at earnings contribution of revenue after gas costs and gross receipts tax, showed similar increases. Consolidated operating margin for the quarter was $192 million, up $78 million from last year. This increase was driven by a 60% growth in utility margins, and a…

Thank you, Steve. As we hit the halfway point in fiscal 2014, including the critical winter heating season that just ended, I'm pleased with our performance and operating results and our achievements in a number of areas tied to our strategy and objectives for the year. Clearly, the acquisition of Alagasco is significant, and we're excited to move forward with gaining approvals, financing the transaction and closing the deal. We've reached a fair and reasonable agreement in our MGE rate case in a timely way without having go through an 11-month fully litigated process. The integration of MGE continues according to plan, and we are achieving the cost synergies and other operating efficiencies we targeted at the beginning of the process. We are continuing to pursue opportunities in emerging technologies, and are actively working with a number of potential clients for our Spire natural gas vehicle fueling solutions. Meanwhile, our flagship station at Lambert-St. Louis Airport, which began commercial operations in December, continues to experience growth in volumes and traffic that has even exceeded our expectations. Our investment and pipeline replacement continues and is expected to ramp up in the second half of the year as we endeavor to catch up, if you will, for the construction delays caused by cold weather. And, overall we're on track to meet our original earnings guidance for 2014. And as we shared, we believe there is good visibility into the path to achieve or exceed our targeted earnings growth rate. Now, we're ready to take questions.

[Operator Instructions] And your first question comes from the line of Dan Fidell with U.S. Capital Advisors.

Just a few questions on my side. I guess, first, just on Alagasco. Can you just kind of give us the way forward a little bit in terms of next steps? Certainly know the timing, you're hoping to get this thing closed obviously as soon as possible, but can you tell us what should be looking out for here in the next several months?

Yes, sure, Dan. I don't think that anything has really changed since the last time we talked about it. We do expect to close in 2014, and we're working hard to make that a September end close. But we did make the filing and -- so that the pace will continue as described.

Okay, great. Just wondering, separately on the CapEx spend, noticed it was overall up a bit with the accelerated pipe spend at MGE which was expected. Can you just talk a little bit about now that the pass [ph] the MGE rate case -- sorry, your expectations for the pipe spend at both MGE and Laclede going forward?

Dan, this is Steve. In our plan for the year for capital spend, which is $185 million, still remains on plan, and we would expect that you will see a ramp up of that spending during the next 2 quarters, which are really the good months for us to do a lot of that -- a lot of that construction. And you are right that it will be the pipeline replacement, both at Laclede, which is at a run rate, and also at MGE, which we are ramping up that will drive that spend this year. And we still expect roughly 60% of that total spend to be ISRS recoverable.

Great. And just last question for me. I don't know if you're able to answer or not, but better to ask you anyway. You had mentioned the union settlement going on right now, that you think you have, maybe, an agreement that's being looked at now by the unions. I guess, just -- can you give us any additional color on kind of what's involved in that settlement? What your expectations are for -- how this will play out and the potential impact to you guys?

Now, Dan, as I mentioned in my opening remarks, the MGE rate case and the union negotiations were part of what we built into our integration planning, and you are right. I'm not really at liberty to talk about the particulars of that, but I would like to reiterate that our philosophy, in terms of benefit and compensation, is to be consistent with all of our employees, and that's very important to us that we went into those negotiations with that premise.

You next question comes from the line of Sarah Akers with Wells Fargo.

As we think about full year EPS, do you have any plans to use the weather benefit as an opportunity to pull forward some O&M spend into 2014?

Sarah, this is Steve, great question. Clearly, we're looking at the back half of the year and reacting as we normally do to weather. As you might recall, a couple of years ago, when we had the warmest winter on record, we did a good job of managing our O&M spend to make sure that we could recover whatever we lost in terms of operating margin in the Gas Utility. And I think that we're clearly looking at the back half of the year and as Dan asked a second ago, one of the things that we clearly want to recover is the pace on our capital spend. So we're clearly redeploying resources to do that. And as you would expect, we're always looking at our spend for the rest of the year and we're modifying it, changing plans as we get the opportunity. It's important to remember that summer weather does impact our business. If it's extremely hot, that clearly impacts the commodity market, but it also impacts our construction schedule, as would a wet summer. So we continue to be very flexible to make sure that we can meet our commitments and meet our longer-term plan, which is to manage our cost to keep them under control, which we've been able to do last couple of years and meet our accelerated pipeline replacement program.

Got it. And then a follow up to Dan's questions on Alagasco. When do you expect you'll have a chance to do more of a deep dive on the synergy and investment opportunities at Alagasco?

Sarah, as you know, it's hard to believe it's only been a short period of time since we made that announcement and so I guess as we move forward and learn more, we will provide more information. But at this point in time, it's just not available. We will provide more for sure.

And operator, do we have any further questions on the phone?

There are no further questions.

Okay, great. Thank you all for joining us today, and we will be available throughout the day for any follow-up questions or discussions. Thanks for participating. Bye, bye.

Thanks again to all of our participants for joining us today. We hope you found this webcast presentation informative. This concludes our webcast, and you may now disconnect. Have a great day.