Good afternoon, and welcome to the WEC Energy Group's Conference Call for Third Quarter 2017 Results. This call is being recorded for rebroadcast and all participants are in listen-only mode at this time. Before the conference call begins, I remind you that all statements in the presentation, other than historical facts, are forward-looking statements that involve risks and uncertainties that are subject to change at any time. Such statements are based on management's expectations at the time they are made. In addition to the assumptions and other factors referred to in connection with the statements, factors described in WEC Energy Group's latest Form 10-K and subsequent reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those contemplated. During the discussion, referenced earnings per share will be based on diluted earnings per share unless otherwise noted. After the presentation, the conference will be open to analysts for questions and answers. In conjunction with this call, a package of detailed financial information is posted at wecenergygroup.com. A replay will be available approximately two hours after the conclusion of this call. And now, it is my pleasure to introduce Mr. Gale Klappa, Chairman and Interim Chief Executive Officer of WEC Energy Group. Mr. Klappa, the floor is yours.

Sarah, thank you. Good afternoon, everyone, and thank you for joining us as we review our performance for the third quarter of this year. Now, before we dive into our update this afternoon, I'd like to take just a moment to thank you for the incredible outpouring of prayers and support and good wishes for Allen Leverett following his stroke earlier this month. I can tell you that Allen has been released from the hospital and is making progress in his recovery. I will continue to serve as Interim Chief Executive for as long as necessary, but the ultimate goal is obviously to bring Allen back. But again, your kindness and concern have meant a great deal to Allen and his family and a great deal to all of us as well. My thanks. Now, I'd like to introduce the members of our senior team who are here with me today. We have Scott Lauber, our Chief Financial Officer; Jim Schubilske, Treasurer; Susan Martin, General Counsel; Bill Guc, our Controller; and Beth Straka, Senior Vice President of Corporate Communications and Investor Relations. We'll begin with our third quarter results. As I am sure you saw from our new release this morning, we reported third quarter earnings of $0.68 a share. We delivered a solid third quarter, largely driven by effective cost controls. Our focus on cost management and efficiency gains was a major factor in offsetting the impact of mild summer weather compared to last year's third quarter. Those cool temperatures were particularly noticeable during August, which is normally one of the two warmest months in the Midwest. Next, I'd like to brief you on several developments on the regulatory front and on our capital investments. On August 10, the Wisconsin Public Service Commission unanimously approved our proposed rate settlement.…

Thank you, Gale. Our GAAP earnings were unchanged from the third quarter of 2016 at $0.68 per share. You may recall that our 2016 third quarter earnings included $0.01 of acquisition costs. Excluding these costs, our adjusted earnings were $0.69 in the third quarter of 2016. Our results were primarily driven by a return to normal weather conditions, offset by positive impact of cost control. Weather in 2016 was 43% warmer than normal in Southeastern Wisconsin. The earnings packet placed on our website this morning includes a comparison of third quarter and year-to-date 2017 and 2016 results, both GAAP and adjusted. There were no adjustments made to GAAP earnings in 2017. My focus will be on the quarter, beginning with operating income by segment and then other income, interest expense and income taxes. Referring to page 9 of the earning packet, our consolidated operating income in the third quarter of 2017 was $393.6 million compared to the adjusted $402.5 million in the third quarter of 2016, a decrease of $8.9 million. Starting with the Wisconsin segment, operating income decreased $19.4 million quarter-over-quarter. Lower margin was driven by a return to normal weather and a normal fuel recovery pattern. This was offset by operations and maintenance expense that was $39.9 million lower compared to the third quarter of 2016. Last year, we recorded $18.6 million in operations and maintenance expense related to the earnings-sharing mechanism in place at Wisconsin Electric and Wisconsin Gas. In the third quarter of 2017, Our Illinois segment recognized an operating income increase of $800,000 compared to the third quarter of 2016. The increase was primarily driven by continued investment in the gas system modernization program. As expected, operating loss in our Other States segment increased $2.1 million, driven by higher depreciation and amortization expense, resulting from…

Scott, thank you very much. We're on track and, as always, focused on delivering value for our customers and our stockholders. And operator, I believe we're ready for the Q&A portion of the call.

All right. Thank you. Now, we will take your questions. Your first question comes from Shahriar Pourreza with Guggenheim Partners.

Afternoon, guys.

Shar, how are you?

Good, how are you?

We're doing well.

Just really one question for today, with Presque Isle, you're roughly 7 million tons short of what your internal target is. Is there any sort of updates that you can provide on sort of additional coal retirements, and maybe looking at some of the assets like North Oak (18:49) or Pleasant Prairie and sort of how are you thinking about that?

Well, I can tell you that we have a generation restructuring plan under review, and we'll be able to provide you with a lot more detail when we roll out our five-year capital forecast at EEI.

Okay. Got it. I'll wait – we'll wait till EEI. Scott, definitely give our best wishes again to Allen for a speedy recovery.

Thank you very much. We appreciate it.

Thanks.

Your next question comes from Julien Dumoulin-Smith from Bank of America.

Hi, Julien. How are you?

Hey, good. Good. Again, I want to echo Shar's comments. Please do send our best to Allen, or Allen, if you're listening, all the best. Wanted to touch base quickly on the O&M reductions, clearly the team's done an incredible job year-to-date. Can you comment a little bit on the drivers of this and thoughts into the years ahead on the cadence of the reduction? And then, perhaps, in tandem with that, I'd love to hear your thoughts on recovery, from a regulatory perspective, of the latest investment you all are talking about on the wind side, just given the stayout (20:00), et cetera?

Okay. Sure. Well, I'll frame the answer for you and will let Scott provide some additional detail. But in terms of the – and the team has done a great job on O&M reduction, much of the O&M reduction that we're seeing here is from efficiency gains, not just one-time cost controls. And a lot of what we're seeing is really enabled by the fact that at the end of June of 2015 we acquired Integrys and we're ahead of plan clearly in terms of cost savings resulting from the acquisition. Most all of the cost savings that we've seen so far through the first nine months of this year, Scott, are really from our Wisconsin operations.

It's actually been Wisconsin was mainly in this third quarter, but across all the enterprise; Illinois, Wisconsin and Minnesota and Michigan, all the utilities contributed. Each one of our operations managers and vice presidents have plans in place to continue to take costs out of the business. So, we continue to see even next year taking additional cost out in future years.

And we're seeing – Scott is exactly right. I think you're going to continue to see efficiency gains and cost reductions going forward. A lot of it, I think, is going to come from the generation side of our business and we'll talk a lot more about that as we roll out the new five-year capital plan. But we see continuing good opportunity, really strong opportunity for ongoing cost reduction, Julien.

And then the second part of the question was talking about our new investment in the wind farm and those – that Forward Wind investment, we already have those costs are included in rates. So, it's already part of a purchase power agreement and we're just converting it to an asset-earning investment versus a purchase power agreement.

So rather than an O&M expense that flows through fuel, basically, we've converted that or will convert that upon closing, as Scott said, to an earning assets that will actually reduce cost for customers.

Right. So, technically, that couples back into the first question here around the cadence of costs, you've delineated yet another point into next year. In fact, actually, if I could kind of press you a little bit further, are there opportunities like this one to convert fuel expense into earning assets? This seems pretty novel.

Well, why don't we just say this, stay tuned, Julien.

There we go. Excellent. Well, all the best. I hope to see you all soon. And again, Allen, all the – best of luck with the recovery.

Perfect. Thank you so much.

Your next question comes from the line of Michael Lapides with Goldman Sachs.

Afternoon, Michael. Michael Lapides - Goldman Sachs & Co. LLC: Afternoon, Gale. I wish I could say, I'm hearing your voice under different circumstances. Always enjoy hearing your voice. Please pass along my thoughts to Allen and the family.

Thank you. Michael Lapides - Goldman Sachs & Co. LLC: I have a question. It's interesting. Wisconsin has made a lot of progress in terms of the utilities across the state, meeting the Renewable Portfolio Standards. And yet, if you did a screen of states that are still very coal-heavy, Wisconsin would show up in the top tier of U.S. states. How do you think this changes for the state as a whole and for your utilities in the state over the next five to seven years? And what do you think the types of resources are that drive that to change? And how does this fit given what – given the utilities are largely already in compliance with the Renewable Portfolio Standard?

Well, it's a good question, Michael. Let me try to give you two or three thoughts on that. First of all, I really can only speak about our utilities, which would be We Energies and Wisconsin Public Service in Green Bay. But when you look at the broader picture, remember, we have set a goal to reduce carbon emissions by essentially 40% by the year 2030 off 2005 levels. We believe we can do that without significant rate pressure because of what's occurred with the improvement and the efficiency and the cost of some renewables. Believe it or not, I mean when you when you look at just what's happened with the efficiency of the utility scale solar, I mean, even three or four years ago for Wisconsin, you might see, oh gosh, $4,000 a megawatt installed – cost of $4,000 a megawatt installed for a large utility scale solar plant in Wisconsin. That's today down to circa $1,300. So, what's going to be driving the restructuring of generation portfolios, not just in our state, but elsewhere, particularly where they're coal heavy, is really economics. And we're seeing significant economic changes that will allow us to add more renewables to our fleet. In part we're able to do that and not put pressure on rates, because we already have a state-of-the-art backbone, if you will, from the Power the Future units that we've already built and are in place. So, I think we're very well-positioned to continue to take costs out, to continue to reduce carbon emissions. But at the end of the day, I mean the company's goal is really to maintain a diverse fuel supply, less of coal – clearly, less of coal. But at the end of the day, we probably, 10 or 15 years from now, will look like a third, a third, a third. Basically, a third coal or a third fossil fuel, a third renewables, third natural gas. Does that help at all, Michael? Michael Lapides - Goldman Sachs & Co. LLC: That helps a lot. Thank you for that. I know that's a little bit of a longer-term question, so I appreciate answering that as well as you possibly can, given what's in the public domain. I have one for, Scott, and this is a question of – I mean, I think if I were to take a poll of investors, most people think coming at EEI either this year or next year or some future year, your capital budgets will move higher, there is more renewable investment coming, there is more other investment coming. I guess the question really, I'd ask you, Scott, is how much balance sheet capacity do you think the company has, whether it's for incremental rate base growth or you've shown the ability to successfully integrate another company, whether it'd be incremental M&A? How are you thinking about the strength of the balance sheet and how much room or excess capacity the current balance sheet has?

Yeah. That's a good question, Michael. And when we look at it, we're looking at it in a couple of metrics, we look at our holding company debt as a percent of total debt, keeping it under 30%, but remember that's funding the equity, that's making good utility return investments. So we're looking at that. And we look at our FFO to debt at that 16 to 19 range, and looking at our plans and the plan we talk about at EEI, we'll roll it out, we're going to be comfortable in those ranges with no additional shares being issued. Michael Lapides - Goldman Sachs & Co. LLC: Got it. Okay, guys. Thank you. Much appreciated, guys.

Take care, Michael.

Your next question comes from Dan Jenkins with State of Wisconsin Investment Board.

Hi. Good afternoon.

Dan, you're back?

Yeah.

About that life coach stuff I was offering you, now that I'm sitting in for Allen, be happy to try to guide you, because I know you probably got a little off-track in the last year or so.

Yeah, I've just been kind of lost in the woods.

Yeah. Exactly. So, any help I can give you, just let me know.

Okay. I appreciate that. And I would also like to echo the best wishes to Allen in his recovery.

Thank you, Dan. We'll certainly pass your goodwill along.

Okay. I had a question kind of around the current tax reform proposals and debate in terms of, have you thought at all about – I know you have amount of (28:28) maturities in – I think $550 million in June in next year, along with $800 million or so of short-term debt. Have you thought at all about there's been some proposals to eliminate interest deduction, but grandfathering in current debt. Has there been any thought of doing any pre-funding of any of those maturities or short-term debt to try to lock in the deductibility of those interest expenses?

Dan, we thought, first of all, you might buy up all the non-deductible stuff. No, that's not true. Let me say this, that the whole picture related to interest deductibility, bonus depreciation, the whole picture is pretty murky right now. I mean, we've obviously had some very good discussions with the tax writing people in the House. Of course, Paul Ryan is very involved in the crafting of the legislation. But it is just way too early to think about a pre-funding or think about any change in our plan. We're going to have to see, first of all, whether tax reform actually gets completed and then what the real details are. And there's some thought that there might be an optional election on interest deductibility with a trade-off on another tax deduction item. We just have to see. At this point, I think anything that – I mean we're obviously looking at the landscape, but anything that I might tell you would be pure speculation until we really understand the details, I understand the House passed a budget today which raises the percentage possibility that tax reform will actually take place. But we're just going to have to see the details and then we'll figure out where to go.

Okay. And then I was wondering if you could just give us a little more color on, particularly the industrial demand picture. I noticed that was down again and that should be less impacted by weather than the other classes. Other than the Foxconn and the mines, what you're seeing from your other industrial customer demand?

We'll be happy to do that. And I'll ask Scott to chime in as well. Let me just say this – and you've heard me say this before. On a very short-term basis, I'm quite skeptical of our ability to weather normalize accurately. And you are correct, industrial demand should be less weather sensitive than any other group of customers, but there's still some weather sensitivity. So, I think we need to look over a much longer period of time than just one quarter versus a comparison to another quarter where it was 43% warmer than normal. So, I wouldn't be overly-concerned, one way or another, about one quarter's results. But we are seeing some, what Scott calls, green shoots in three or four specific industry sectors and we'll let Scott tell you about those.

Yeah. So – exactly, Gale. So, as we mentioned before, we track this information on a daily and quarterly basis, looking at this. And we're starting to see a couple areas of some growth. We have basically four sectors; the food and food products sector, the paper products area, actually rubber and plastics, and another sector that just kind of showed up this quarter is fabricating metal. So encouraged by what we're starting to see in these individual sectors and hopefully that growth continues as we move forward here.

And for what it's worth, and Scott and I have talked about this, the Foxconn demand growth – the demand growth we'll see from Foxconn and demand growth we'll see from Haribo and several of the other really good economic development projects that have come to fruition, we haven't yet put those in our numbers. So, for example, Foxconn, I wouldn't think, would affect our industrial sales until probably 2020. And then, they'll ramp up, obviously, from the start. But our projections today really do not include any of those recent developments. Correct, Scott?

Yeah. That is correct. We're still just being very conservative to make sure that we have the appropriate efficiency gains to be able to do our capital investments, but there's potential upside here.

And it wouldn't surprise you that Scott and Allen are being very conservative.

Okay. Thank you.

You're welcome, Dan.

And there are no further questions at this time.

All right. Thank you very much. That concludes our conference call for today. We really appreciate you participating. If you have any additional questions, feel free to contact Beth Straka. Her direct line, 414-221-4639. Again, thank you very much, everyone. Take care.