Q4 2021 MDU Resources Group Inc Earnings Call

Hello, My name is Erica and I will be your conference facilitator at this time I would like to welcome everyone to the MDU resources Group 2021 at year end earnings results and 2022 guidance conference call. All lines have been placed on mute to prevent any back.

Speaker 1: Hello, my name is Erica, and I will be your conference facilitator. At this time, I would like to welcome everyone to the MDU Resources Group 2021 Year End Earnings Results and 2022 Guidance Conference Call. All lines have been placed on mute to prevent any background noise.

Ground noise. After the Speakers' remarks, there will be a question and answer period. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question press the pound key.

Speaker 1: After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound sign.

Speaker 1: This call will be available for replay beginning at 5 p.m. Eastern Time today through 1159 p.m. Eastern Time on February 24th. The conference ID number for the replay is 107707...

This call will be available for replay beginning at five P. M. Eastern time today through 11 59 P. M. Eastern time on February 24th the conference I'd number for the replay is 10770 76 again the conference I'd number for the replay.

Speaker 1: Again, the conference ID number for the replay is 107707...

Is 10770 76.

Speaker 1: The number to dial for the replay is 1-855-859-2056 or 404-537-3406. I would now like to turn the conference over to Jason Vollmer, Vice President and Chief Financial Officer of MDU Resources Group. Thank you, Mr. Vollmer.foodstained childhood with a

To dial for the replay is 18558592056 or 4045373406 I would now like to turn the conference over to Jason Vollmer, Vice President and Chief Financial Officer of MDU Resources Group.

Thank you Mr. Vollmer, you may begin your conference.

Speaker 2: Thank you, Erica. Good afternoon, everyone, and welcome to the MDU resources 2021 earnings and 2022 guidance conference call.

Thank you Erika good afternoon, everyone and welcome to the MDU resources 2021 earnings in 2022 guidance Conference call.

Speaker 2: With me today are Dave Gooden, President and CEO of MDU Resources. Dave Barney, President and CEO of Knife River Corporation. Jeff Deed, President and CEO of MDU Construction Services Group. Nicole Covisto, President and CEO of our utility group.

With me today are Dave Goodin, President and CEO of MDU resources, Dave Barney President and CEO of Knife River Corporation.

Jeff Thiede, President and CEO of MDU construction services group.

Nicole <unk>, President and CEO of our utility group.

Speaker 2: Trevor Hastings, President and CEO of WBI Energy, and Stephanie Barth, Vice President, Chief Accounting Officer and Controller of MD Resource.

Trevor Hastings, President and CEO of WBI energy, and Stephanie Barth, Vice President Chief Accounting Officer, and controller of MDU resources.

Speaker 2: Yesterday aftermarket, we issued our 2021 earnings news release. You can find the release and accompanying information at www.mdu.com in the investor relations section under the financial section.

Yesterday aftermarket we issued our 2021 earnings news release, you can find the release and the accompanying information at Www Dot MDU Dot com in the Investor Relations section under the financial section.

Speaker 2: During our call, we'll make certain forward-looking statements within the meeting of Section 21E of the Securities Exchange Act of 1934.

During our call we will make certain forward looking statements within the meaning of section 20 <unk> of the Securities Exchange Act of $19 34.

Speaker 2: Although the company believes that its expectations and beliefs are based on reasonable assumptions, actual results may differ materially.

Although the company believes that its expectations and beliefs are based on reasonable assumptions actual results may differ materially.

Speaker 2: For more information on the risks and uncertainties that could cause our actual results to vary from any forward-looking statements, please refer to our most recent SEC filings. We may also refer to the following

For more information on the risks and uncertainties that could cause our actual results to vary from any forward looking statements. Please refer to our most recent SEC filings.

We may also refer to certain non-GAAP measures.

Speaker 2: For reconciliation of any non-GAAP information to the appropriate GAAP metric, please reference our earnings release.

For a reconciliation of any non-GAAP information to the appropriate GAAP metric. Please reference our earnings release.

Speaker 2: I will start this afternoon by providing consolidated financial results for 2021, discussing individual business unit results, and providing an update on our financing plans for 2022.

I will start this afternoon by providing consolidated financial results for 2021 discussing individual business unit results and providing an update on our financing plans for 2022.

Speaker 2: before handing the call over to Dave for his full year comments and his forward look.

Before handing the call over to Dave for his full year comments and his forward look.

Speaker 2: Yesterday we announced 2021 earnings of $378.1 million or $1.87 per share compared to 2020 earnings of $390.2 million or $1.95 per share.

Yesterday, we announced 2021 earnings of $378 1 million or $1 87 per share compared to 2020 earnings of $390 2 million or $1 95 per share.

Speaker 2: EBITDA from continuing operations for the year increased 3.1 million to 859.8 million.

EBITDA from continuing operations for the year increased $3 1 million to $859 8 million.

Speaker 2: During the year, MDR resources experienced approximately 10% higher healthcare costs, which impacted each of our business lines.

During the year MDU resources experienced approximately 10% higher health care costs, which impacted each of our business lines on a consolidated basis. This increase was impacted by two to three cents per share.

Speaker 2: On a consolidated basis, this increase was impacted by 2 to 3 cents per share.

Speaker 2: The increased cost, including COVID related claims as well as general health care costs for our employees were the driver of this result.

The increased costs, including Covid related claims as well as general healthcare costs for our employees, where the driver of this result.

Speaker 2: Now for our individual business unit results. Our construction materials business reported earnings of $129.8 million for the year, down from the prior year's record of $147.3 million.

Now for our individual business unit results, our construction materials business reported earnings of $129 8 million for the year down from the prior year's record of $147 3 million.

Speaker 2: EBITDA's business decreased 11.5 million from last year to 293.4 million.

EBITDA business decreased $11 5 million from last year to $293 4 million.

Speaker 2: Results were impacted by increased material costs on asphalt oil, as well as higher fuel costs across all of our product lines.

Results were impacted by increased material costs on asphalt oil as well as higher fuel costs across all of our product lines.

Contracting revenues and margins decreased from less available paving work in certain states in the absence of a few large jobs, which were completed in the prior year.

Speaker 2: Contracting revenues and margins decreased from less available paving work in certain states and the absence of a few large jobs which were completed in the prior year.

Speaker 2: Asphalt volumes decreased 1.4% on less available paving work, impacting gross margin which decreased $4.9 million from the prior year.

Asphalt volumes decreased one 4% on less available paving work impacting gross margin, which decreased $4 $9 million from the prior year.

Speaker 2: Partially offsetting these decreases is the ready-mix product line where gross margin increased $7.7 million from volume increases in nearly all of the company's markets due to strong demand and average selling price increases of 2.3%.

Partially offsetting these decreases as theyre ready mixed product line, where gross margin increased $7 $7 million from volume increases in nearly all of the company's markets due to strong demand and average selling price increases of two 3%.

Speaker 2: Aggregate volumes increased over 8% from the prior year on strong private and public sector demand. However, the construction industry slowdowns in Hawaii, material costs in Alaska, and quarry development costs in Texas drove a $2.8 million decrease in the gross margin for the aggregate group.

Aggregate volumes increased over 8% from the prior year on strong private and public sector demand. However, the construction industry slowdowns in Hawaii material cost in Alaska and core development cost in Texas drove a $2 $8 million decrease in the gross margin for the aggregate group.

Speaker 2: Labor constraints, especially for truck drivers, resulted in isolated project delays and staffing inefficiencies across the business.

Labour constraints, especially for truck drivers resulted an isolated project delays in staffing inefficiencies across the business.

Turning to construction services results were comparable to 2020 with net income of $109 4 million for the year.

Speaker 2: Turning to construction services, results were comparable to 2020, with net income of $109.4 million for the year.

Speaker 2: Electrical and mechanical operations results, which were previously referred to as inside specialty contracting, were impacted by lower commercial and institutional workloads, which were offset in part by strong demand in the industrial and service market.

Electrical and mechanical operations results, which were previously referred to as inside specialty contracting were impacted by lower commercial and institutional workloads, which were offset in part by strong demand in the industrial and service markets.

Speaker 2: Gross margin of this business line increased 7.5 million as commercial and industrial markets benefited from favorable change orders and successful project execution.

Gross margin of this business line increased $7 5 million as commercial and industrial markets benefited from favorable change orders and successful project execution.

Speaker 2: Institutional revenues and margins decreased during the year as projects were impacted by labor and material inefficiency.

Institutional revenues and margins decreased during the year as projects were impacted by labor and material inefficiencies.

Speaker 2: Transmission and distribution operations, which were previously referred to as our outside specialty contracting business, reported gross margin of $104.3 million for the year, a decrease of $17.9 million from 2020, reflecting the absence of higher margin storm repair and fire hardening work that was completed in the prior year.

Transmission and distribution operations, which were previously referred to as our outside specialty contracting business.

Reported gross margin of $104 3 million for the year, a decrease of $17 9 million from 2020, reflecting the absence of higher margin storm repair and fire hardening work that was completed in the prior year.

Speaker 2: Workloads at this business line increased from strong utility demand, including substation and power line repair projects.

Workloads that this business line increased from strong utility demand, including substation and powerline repair projects.

Speaker 2: And now turning to our regulated energy delivery businesses. Our combined utility business reported a record net income of $103.5 million for the year compared to $99.6 million in 2020.

And now turning to our regulated energy delivery businesses, our combined utility business reported a record net income of $103 5 million for the year compared to $99 6 million in 2020.

Speaker 2: Our natural gas segment was the driver behind the increase in combined earnings reporting $51.6 million for the year, a $7.6 million improvement over 2020.

Our natural gas segment was the driver behind the increase combined increase in combined earnings reporting $51 6 million for the year, a $7 $6 million improvement over 2020.

Speaker 2: which was driven by an increase in retail sales margins from implemented rate relief in several states.

Which was driven by an increase in retail sales margins from implemented rate relief in several states.

Speaker 2: Partially offsetting these increases was increased operation and maintenance expense, primarily higher payroll-related costs as well as health care costs we previously mentioned, and decreased credits for costs associated with meter installation due to pandemic-related replacement delays.

Partially offsetting these increases was increased operation and maintenance expense, primarily higher payroll related costs as well as health care costs. We previously mentioned.

And decreased credits were costs associated with meter installation due to pandemic related replacement delays.

Speaker 2: Electric Utilities segment reported earnings of $51.9 million compared to $55.6 million in 2020.

The electric utility segment reported earnings of $51 9 million compared to $55 6 million in 2020.

Speaker 2: Results reflect increased depreciation, depletion, and amortization expense from higher property, plant, and equipment balance.

Results reflect increased depreciation depletion and amortization expense from higher property plant and equipment balances relating to transmission projects placed into service as well as higher operation and maintenance expense.

Speaker 2: relating to transmission projects placed into service as well as higher operation and maintenance.

Speaker 2: These decreases were offset in part by increased electric retail sales margin.

These decreases were offset in part by increased electric retail sales margins.

Speaker 2: The pipeline business reported strong results with earnings of $40.9 million or increase of 11% over the prior year.

The pipeline business reported strong results with earnings of $40 $9 million or increase of 11% over the prior year.

Speaker 2: This was driven by a $7 million benefit after tax from the allowance for fund used during construction related primarily to the North Bocket Expansion Project.

This was driven by a $7 million benefit after tax from the allowance for funds used during construction related primarily to the north Bakken expansion project.

Speaker 2: as well as a 7.4% increase in transportation volumes and increase in non-regulated project work at this point.

As well as a seven 4% increase in transportation volumes and increased Nonregulated project work at this business.

Speaker 2: As a reminder, the pipeline business divested of its natural gas gathering assets in late 2020.

As a reminder, the pipeline business divested of its natural gas gathering assets in late 2020.

Speaker 2: Current year results are absent the gains on sale of the company's gas gathering assets of approximately 3.1 million as well as prior year gas gathering earnings.

Current year results are absent the gains on sale of the company's gas gathering assets of approximately $3 1 million as well as prior year gas gathering earnings.

Speaker 2: And finally, as we look to 2022 financing plans, the company expects to fund its over $700 million planned capital expenditures in 2022 through a combination of operating cash flows and the issuance of long-term debt.

And finally, as we look to 2022 financing plans the company expects to fund its over $700 million planned capital expenditures in 'twenty two through a combination of operating cash flows and the issuance of long term debt.

Speaker 2: The company does not currently expect to issue any external equity in 2022 unless needed to fund future acquisition growth. And now I'd like to turn the call over today for...

The company does not currently expect to issue any external equity in 'twenty, two unless needed to fund future acquisition growth.

And now I'd like to turn the call over to Dave for his formal remarks.

Speaker 3: And thank you, Jason. And good afternoon, everyone. And thank you for joining us here today.

And thank you, Jason and good afternoon, everyone and thank you for joining us here that to date.

Speaker 3: We are proud to be able to report the third best year of earnings in MDU resources history, although those results unfortunately did not meet our initial forecast or expectation.

We are proud to be able to report the third best year of earnings and MDU resources history, Although those results. Unfortunately did not meet our initial forecasts or expectations.

Speaker 3: Our performance throughout 2021 is a testament to our employees' commitment to delivering solid performance while facing headwinds such as pandemic-related disruptions, supply chain challenges, and inflation, all while safely and effectively providing the essential services needed across our country.

Our performance throughout 2021 is a testament to our employees commitment to delivering solid performance, while facing headwinds such as pandemic related disruptions supply chain challenges and inflation.

Safely and effectively providing the essential services needed across our country are.

Speaker 3: Our 98-year history as an organization shows our dedication to responsible fiscal management, that our combination of businesses centered on providing essential services and offers strong advantages when it comes to access to capital along with steady cash flows.

Our 98 year history as an organization chose our dedication to responsible fiscal management that our combination of businesses centered on providing essential services and offers strong advantages when it comes to access to capital along with steady cash flows.

Speaker 3: Our highly skilled and exceptionally dedicated workforce will continue executing on our growth strategy while adhering to our tagline of building a strong America.

Our highly skilled and exceptionally dedicated workforce will continue executing on our growth strategy, while adhering to our tagline of building a strong America.

Speaker 3: Starting our 2021 review with our construction material operations, revenues at this business increased 2.3% from the prior year, the result of strong demand for our aggregate and ready-mix products.

Starting our 2021 review with our construction material operations revenues at this business increased two 3% from the prior year. The result of strong demand for our aggregate and ready mix products.

Speaker 3: Our products and contracting services are in high demand for both private and public sector work, with airport, healthcare, and commercial projects driving increases in aggregate and ready-mix volumes this year, which in turn allowed us to successfully increase average selling prices for these materials.

Our products and contracting services are in high demand for both private and public sector work with airport healthcare and commercial projects driving increases in aggregate and ready mix volumes this year.

Which in turn allowed us to successfully increased average selling prices for these materials.

Speaker 3: Knife River reported 708 million in backlog as of the end of the year and currently expects over 90% of this work will be completed in the next 12 months.

Knife River reported $708 million in backlog as of the end of the year and currently expects over 90% of this work will be completed in the next 12 months.

Speaker 3: With the acquisitions completed in 2021, Knife River now has over 1.2 billion tons of aggregate reserves across its footprint that are estimated to last several decades. Knife River will continue to maintain an efficient cost structure and work diligently on increasing product line margins while providing the high quality materials and services that we are known for.

With the acquisitions completed in 2021 knife River now has over one 2 billion tons of aggregate reserves across its footprint that are estimated to last several decades knife River will continue to maintain an efficient cost structure and work diligently on increasing product line margins while.

Providing the high quality materials and services that we are known for.

Speaker 3: Having skilled employees is key to successful construction operations, and Knife River has built a state-of-the-art training center in the Pacific Northwest to hone the skills of existing team members as well as develop prospective construction employees through both classroom and hands-on training.

Having skilled employees is key to successful construction operations at knife River has built a state of the art training center in the Pacific Northwest to hone the skills of the existing team members as well as develop prospective construction employees through both classroom and hands on training.

Speaker 3: The accreditation program for the CDL Driving School at the facility, it's nearly complete, which will help provide much needed professional drivers for our operations.

The accreditation program for the CDL driving school at the facility, it's nearly complete which will help provide much needed professional drivers for our operations.

Speaker 3: The Construction Services Group had another strong year, reporting earnings comparable to those in 2020.

The.

<unk> services group had another strong year reporting earnings comparable to those in 2020.

Speaker 3: Job mix was the primary driver behind the slight decrease in earnings at this business, as several large jobs in the Las Vegas market were completed in 2020 and in early 2021.

Job mix was the primary driver behind the slight decrease in earnings at this business as several large jobs in the Las Vegas market were completed in 2020 and in early 2021.

Speaker 3: Our offerings at this business continue to be in high demand across many of our end markets, including substation and power line repair projects for our transmission and distribution operations.

Our offerings at this business continued to be in high demand across many of our end markets, including Substations and power line repair projects for our transmission and distribution operations, along with the repair and maintenance of electrical mechanical and fire suppression systems at electrical and mechanical group we have.

Speaker 3: along with the repair and maintenance of electrical, mechanical, and fire suppression systems at electrical and mechanical groups.

Speaker 3: We've seen a notable increase in demand for our renewable offerings, which includes electrical vehicle infrastructure, solar power, and energy grid optimization services. All markets where construction services excel.

<unk> seen a notable increase in demand for our renewable offerings, which includes electrical vehicle infrastructure solar power and energy grid optimization services, all markets, where construction services XL.

Speaker 3: With an all-time record backlog of work as of December 31st of $1.38 billion, we are incredibly excited to see what this next year brings for construction services.

With an all time record backlog of work as of December 31 of 138 billion. We are incredibly excited to see what this next year brings for our construction services.

Speaker 3: Both of our construction companies are well positioned to capitalize on the Infrastructure, Investment and Jobs Act, the largest infrastructure investment our nation has made in decades.

Both of our construction companies are well positioned to capitalize on the infrastructure investment and jobs Act the largest infrastructure investment our nation has made in decades.

Speaker 3: Construction materials is currently forecasting revenues to be in the range of $2.3 to $2.5 billion for 2022. And construction services is forecasting $2.2 to $2.4 billion or a combined $4.5 to $4.9 billion between the two construction businesses.

Construction materials is currently forecasting revenues to be in the range of two three to $2 5 billion for 2022.

And construction services is forecasting two two to $2 4 billion or a combined $4 five to $4 9 billion between the two construction businesses.

Speaker 3: Now I'd like to turn to our regulated energy delivery platform. Our utility companies reported record earnings for 2021, seeing the benefits of approved rate recovery in several jurisdictions, which reflects the continued investments we are making in our system to provide safe, reliable, and low-cost energy to our customers.

Now I'd like to turn to our regulated energy delivery platform. Our utility companies reported record earnings for 2021, seeing the benefits of approved rate recovery in several jurisdictions.

Which reflects the continued investments, we're making in our system to provide safe reliable and low cost energy to our customers.

Speaker 3: Looking ahead, the utility group will begin work on the repowering of the Diamond Willow Wind Farm in the state of Montana. We plan to repower with new gearboxes and refurbish existing blades versus replacing them. The blades will be removed from the turbines and recoated, saving these fiberglass blades from landfills on top of being a much more affordable option.

Looking ahead, the utility group will begin work on the Repowering of the Diamond Willow wind farm in the state of Montana.

We plan to Repower, with new gearboxes, and refurbished existing blades versus replacing them.

The blades will be removed from the turbines and re coded saving these fiberglass blades from landfills on top of being a much more affordable option.

Speaker 3: The cost of investment for the repowering will be offset by the production tax credits received on the project.

The cost of investment for the Repowering will be offset by the production tax credits received on the project.

Speaker 3: HESCA 1 and HESCA 2, our coal-fired generation units, are being retired during the first quarter here in 2022, which will then complete the retirements of all of our wholly owned coal generation units.

Heskett, one in Heska to our coal fired generation units are being retired during the first quarter here in 2022, which will then complete the retirements of all of our wholly owned coal generation units.

Speaker 3: utility will begin construction on the Heskett Station Unit 4. This is an 88 megawatt simple cycle natural gas fired combustion turbine, which we expect will be in service in early 2023.

<unk> will begin construction on the Heskett station unit. Four this is an 88 megawatt simple cycle natural gas fired combustion turbine.

Which we expect will be in service in early 2023.

Speaker 3: We continue to see solid customer growth with 1.7% combined customer growth in 2021. And we expect to grow our customer base between 1% and 2% annually looking forward. We also expect rate-based growth to grow 5% compounded annually over the next five years, driven primarily by investments in system infrastructure upgrades and replacements to, again, safely meet customer demand.

We continue to see solid customer growth with one 7% combined customer growth in 2021.

And we expect to grow our customer base between 1% and 2% annually looking forward.

We also expect rate base growth to grow 5% compounded annually over the next five years, driven primarily by investments in system infrastructure upgrades and replacements to again safely meet customer demand.

Speaker 3: Our pipeline business had a very strong 2021 and for the fifth consecutive year transported record volumes of natural gas through its pipeline system.

Our pipeline business had a very strong 2021 and for the fifth consecutive year transported record volumes of natural gas through its pipeline system.

Speaker 3: This is really a direct result of the organic growth projects the company completed over the last several years.

This is really a direct result of the organic growth projects. The company completed over the last several years.

Speaker 3: And here recently on February 1st of this year, WBI placed into service its North Bakken expansion project, which has the capacity to transport 250 million cubic feet of natural gas per day and can be increased up to 625 million cubic feet per day through the use of additional compression.

And here recently on February one of this year <unk> placed into service, it's north Bakken expansion project, which has the capacity to transport 250 million cubic feet of natural gas per day and can be increased up to 625 million cubic feet per day through the use of additional.

Compression.

Speaker 3: This project included approximately 100 miles of pipeline, as well as a new compressor station, along with the expansion of an existing station.

This project included approximately 100 miles of pipeline as well as a new compressor station along with the expansion of an existing station.

Speaker 3: WBI Energy and contractor Michael's Corporation completed a, get this, a 15,426 foot horizontal directional drill of a 24 inch pipeline crossing Lake Sakakawea on the Missouri River here in North Dakota. This crossing of just less than three miles is one of the longest of its kind anywhere.

WBI energy in contractor Michaels Corporation completed a get this a 15426 foot horizontal directional drill of a 24 inch pipeline crossing Lake Sakakawea on the Missouri River here in North Dakota.

This crossing of just less than three miles is one of the longest of its kind anywhere.

Speaker 3: The North Bakken expansion project brings total system capacity to more than 2.4 billion cubic feet of natural gas per day.

The north Bakken expansion projects brings total system capacity to more than two 4 billion cubic feet of natural gas per day.

Speaker 3: WBI Energy will continue preparatory work on the Wamp Inland expansion project that we announced earlier in 2021, and has additional growth organic projects in various stages of development to grow its system as it continues to work to be the pipeline of choice for its customers.

<unk> energy will continue preparatory work on the <unk> expansion project that we announced earlier in 2021.

And has additional growth organic projects in various stages of development to grow its system as it continues to work to be the pipeline of choice for its customers.

Speaker 3: Activity here in the Bakken continues to grow with a current rig count of 32 rigs as opposed to even 27 just at the end of the year, along with the ratio of gas production to oil production continuing to increase as the Bakken is being developed.

Activity here in the Bakken continues to grow with the current rig count of 32 rigs as opposed to even 27 just at the end of the year along with the ratio of gas production to oil production continuing to increase as the Bakken is being developed.

Speaker 3: That completes our individual business unit discussion. Now turning ahead and looking ahead as an overall corporation, we are initiating 2022 earnings guidance in the range of $2 to $2.15 per share, along with an EBITDA guidance range of $900 million to $950 million.

That completes our individual business unit discussion now turning ahead and looking ahead as an overall corporation.

We are initiating 2022 earnings guidance in the range of $2 to $2 15 per share along with an EBITDA guidance range of 900 million to $950 million.

Speaker 3: Future acquisitions are not included in the stated guidance and would be incremental to 2022 results.

Future acquisitions are not included in our stated guidance and would be incremental to 2022 results.

Speaker 3: I am confident in MDU resources' ability to produce significant long-term value as we execute on our business plans and explore potential acquisitions along with organic growth opportunities.

I am confident and MDU resources ability to produce significant long term value as we execute on our business plans and explore potential acquisitions, along with organic growth opportunities we.

Speaker 3: We continue to maintain a strong balance sheet, solid and stable credit ratings, along with a very good liquidity position. And for 84 consecutive years, we have continued to provide a competitive dividend to our shareholders, all while increasing it for the last 31 years.

We continue to maintain a strong balance sheet solid and stable credit ratings, along with a very good liquidity position and for 84 consecutive years. We have continued to provide a competitive dividend to our shareholders all while increasing it for the last 31 years.

Speaker 3: Just today, we also published our Refresh 2020 Sustainability Report, which can be found on our newly redesigned corporate website, located at www.mdu.com. We encourage you to review for more detail on our dedication to sustainability and our plans in this area going forward.

Today, We also published our refreshed 2020 sustainability report, which can be found on our newly redesigned corporate website located at Www Dot MDU Dot com. We encourage you to review for more detail on our dedication to sustainability and our plans in this area.

Going forward.

Speaker 3: As always, MDU resources is committed to operating with integrity, along with a focus on safety, all while creating superior shareholder value as we continue, as our tagline states, to be building a strong America. I appreciate your interest in and your commitment to MDU resources and ask now that we open the line to questions. Operator?

As always MDU resources is committed to operating with integrity, along with a focus on safety, while creating superior shareholder value as we continue.

As our tagline states to be building a strong America I appreciate your interest in and your commitment to MDU resources and ask now that we open the line to questions operator.

Speaker 1: At this time, I would like to remind everyone, if you would like to ask a question, please press star, then the number 1 on your telephone keypad. If you would like to withdraw your question, press the pound key on your telephone keypad. If you are on a speakerphone, please pick up your handset before entering your request. We'll pause for just a moment to compound if you and a raw Wiz

At this time I would like to remind everyone. If you would like to ask a question. Please press Star then the number one on your telephone keypad. If you would like to withdraw your question press the pound key on your telephone keypad, if you're on a speakerphone. Please pick up your handset before entering your request, we will pause for just a moment.

<unk> roster.

Speaker 1: Your first question comes from the line of Daryus Lasny with Bank of America.

And your first question comes from the line of <unk> <unk> with Bank of America.

Speaker 4: Hi, good afternoon, everyone. And thank you for taking my questions here. I have a couple but I just wanted to start with 2021. It looked like the full results came in a little bit below the guidance that you issued in November . And I was wondering if you could maybe just touch on what specifically developed in the last few months of the year that deviated from that updated forecast that you put out with QCIS.

Hi, good afternoon, everyone and thank you for taking my questions here.

Couple, but I just wanted to start with 2021, it looks like the full year results came in a little bit below the guidance you issued in November .

And I was wondering if you could maybe just touch on what specifically.

In the last few months of the year that.

Deviated from that updated forecast that you put out with Q3.

Speaker 3: Yeah, I'll start with that Darius and then maybe ask Jason Balmer to add a little color and we can certainly get into some of the business unit drivers there as well.

Yes, I'll start with that Darius and then maybe ask Jason Vollmer to add a little color and we can certainly get into some of the business unit drivers there as well.

Speaker 3: I would say one of the elements that we had here in the fourth quarter were continued some inflationary pressures in our business. I think in particular you would have seen in our materials business on a year-over-year basis seen some differences there. Those were some pressures that we saw in that business. Some were labor-related. Some were petroleum-related, if you will, from a fuel supply.

I would say one of the elements that we had here in the fourth quarter were continued some inflationary pressures in our business I think in particular, you would've seen in our materials business on a year over year basis seen some differences there.

Those were some pressures that we saw in that business some more labor related.

Petroleum related if you will from a fuel supply, but I'd say at a general sense. There were some inflationary pressures that lingered into the fourth quarter that kind of were beyond what we initially thought leading into that fourth quarter as well.

Speaker 3: But I'd say in a general sense there were some inflationary pressures that lingered into the fourth quarter that kind of were beyond what we initially thought leading into that fourth quarter as well.

Speaker 2: Jason, I know you noted in our comments relative to some health care costs that I'll say continue to mount throughout the year. Those were a driver that were more pronounced in the fourth quarter as well. Any other areas to kind of highlight for Darius? Yeah, I think Darius, as you look at our guidance range that we come out with too, we always talk about normal weather, right? So as we look at weather in the fourth quarter, we probably saw some differing impacts there that may have had some impacts to various business lines, whether it be our utility or construction operations.

Jason I know you noted in our comments relative to some healthcare costs that I'll say continued to amount throughout the year. Those were a driver that were more pronounced in the fourth quarter as well any other areas to kind of highlight for Darius.

Darius I know as you look at our guidance range, we come out with two we always talk about normal weather right. So as we look at weather in the fourth quarter, we probably saw some some differing impacts there that may have had some impacts to various business lines, whether it be our utility or construction operations.

Speaker 2: The other item I'd point to, in addition to the healthcare costs, is we did see some changes to our captive insurance program and some additional costs that we would have noted there and experienced in the fourth quarter. And you'll see some of those in the other segment if you're looking on the segment-by-segment review, some impacts in the fourth quarter that would have hit there, too, that were outside of what we had anticipated earlier.

The other item I would point to in addition to the healthcare costs as we did see some changes to R. R.

Captive insurance program and some additional cost that we would have noted there and experienced in the fourth quarter and Youll see some of those in the other segment. If youre looking on a segment by segment review of some impacts in the fourth quarter that would have hit their two that were outside of what we had anticipated earlier in the year.

Speaker 4: Okay, got it. Thank you for that. And moving on to the 22 outlook on the materials segment specifically, can you comment, I mean, certainly we see the the improved revenue guidance.

Okay got it thank you for that and moving onto the 'twenty two outlook.

Segment.

Segment, specifically can you comment.

We see the the <unk>.

Crude revenue guidance.

Speaker 4: Can you comment maybe just digging into that a little bit, what level of aggregate price increase or volume increase is embedded in that, at least at a high level? It sounded like some other market participants were relatively bullish on the 22 outlook. So just curious how you think about that, and in particular, how that relates to the inflationary pressures that you're seeing.

Can you comment maybe just digging into that a little bit what level of aggregate price increase or volume increase is embedded in that at least.

At a high level it sounded like some other market participants we're relatively bullish on the 'twenty two outlook. So just curious how you think about that and in particular, how that relates to the inflationary.

Pressures that Youre seeing that you commented on yet.

Speaker 3: Yep, I'll just touch on that and then give Dave that second part of the question actually over to Dave Varney Daria. So as you know, you see our guidance, you know, coming off roughly a 2.2 billion revenue year in 2021. We're low end of our guidance is 2.3 to 2.5 for the year. So spot on there, we are seeing

I'll just touch on that and then give date that second part of the question actually over to Dave Barney Darius So as you noted.

You see our guidance cut.

Coming off roughly at $2 2 billion revenue year in 'twenty one.

The low end of our guidance is.

Two three to $2 five for the year. So spot on there we are seeing expansion. If you will from a top line perspective, and then I'll ask Dave Barney to weigh in.

Speaker 3: expansion, if you will, from a top line perspective. And then I'll ask Dave Barney to weigh in as we see from a margin and also from a pricing perspective. Dave can give you a little bit of color there without getting into market by market details.

We see.

From a margin and also from a pricing perspective, Dave can give you a little bit of color there without getting into a market by market details.

Speaker 2: Dave? Thanks, Dave. Darius, we've already implemented pretty strong increases on our aggregate side for 2020, and they've been well received in the market. So we expect that to hold to the year and possibly other increases later in the year. We've also increased the ready mix prices.

Dave.

Thanks, Dave.

<unk>.

We've already implemented pretty strong increases on the aggregate side.

For 2020, and they've been well received in the market. So we expect that to hold through the year and possibly other increases later in the year.

We've also increased the ready mix prices across the board some of the largest we've seen in many years.

Speaker 5: across the board, some of the largest we've seen in many years, and they've been well received in the market too.

It's been well received in the market too.

So we expect.

Speaker 5: those pricing to hold and same thing with contracting margins. We're pushing on contracting margins.

Those mark to those pricing to hold and same thing with contracting margins, we're pushing on contracting margins.

Speaker 5: we expect to see an increase there also.

We expect to.

We see an increase there also.

Alright does that answer your question.

Speaker 4: That's it. Thank you. And if I could ask one more, and this is still staying on the material segment.

That's good thank you.

And if I can ask one more and this is still staying on the materials segment. You you touched on the pressures, particularly on the input cost side asphalt oil.

Speaker 4: You touched on the pressures, particularly on the input cost side, asphalt oil, things like that. Can you maybe speak to that a little bit as far as, again, what's embedded in the 22 guidance?

Things like that can you.

Maybe speak to that a little bit as far as again, what's embedded into 'twenty two guidance around asphalt oil are you expecting some of those pressures start to mitigate a little bit perhaps in the back half of the year, how we should be thinking about that on a year over year basis.

Speaker 4: around asphalt oil? Are you expecting some of those pressures to start to mitigate a little bit, perhaps in the back half of the year? How we should be thinking about that on a year-over-year basis? Maybe.

Yes, David.

Go ahead.

No go ahead.

Well.

Speaker 5: Well, it's probably our biggest drop in 2021 over 20. But we did have a record year in 2020. And as you might remember, in 2020, oil prices were jumping all over the place to, I think, at some point, it was a minus 20. And usually when that happens, we can buy asphalt oil at decent prices.

Probably our biggest drop in 2021 over 20, but we did have a record year in 2020 and as you might remember in 2020 oil prices were jumping all over the place too I think at some point it was minus 20, and usually when that happens and we can buy.

Asphalt oil at decent prices.

Speaker 5: and get better margins. But going forward, we expect the asphalt oil division to be

Get better margins, but going forward, we expect.

Asphalt oil division.

Speaker 5: about where they were last year, maybe a little better. They're still getting good returns, but they did have a record year in 2020.

About where they were last year, maybe a little better.

They are still getting good returns.

They did have a record year in 2020.

Okay. Thank you very much for those responses and I'll pass it along.

Thank you Darius.

Speaker 1: Your next question comes from the line of Ryan Levine with City.

Your next question comes from the line of Ryan Levine with Citi.

Speaker 6: Good afternoon. Maybe to start off on some of your comments around inflation, given the recent weakness impacting your results,

Hi, good afternoon.

Maybe to start off on some of your comments around inflation.

Given the recent weakness impacting our results.

Speaker 6: What are you embedding in your 2022 outlook, and what gives you confidence in assuming that margins for construction more broadly will be comparable?

Are you embedding in your 2022 outlook.

What gives you confidence and assuming that margins for construction.

He will be comparable to 2021.

Speaker 3: Yeah, I'll start with that, Ryan, and then maybe ask Jeff Deed. And you heard a little bit from Dave Barney already of some of the things that Knife River is doing relative to that. But they could add a little more color.

Yeah, I'll start with that right and then maybe ask Jeff Thiede.

You heard a little bit from Dave Barney already of some of the things that knife River is doing relative to that but.

They could add a little more color.

Speaker 3: You know, as we give guidance for the year, we do say margins are comparable in both services and materials as a year over year basis. We also are guiding, you know, top line to be increasing on a year over year basis there.

As we give guidance for the year.

We do say margins are comparable in both services and materials as a year over year basis. We also are guiding top line to be increasing on a year over year basis there.

Speaker 3: If you take a look actually at margins year over year at services, they were comparable to 2020 actually on a year over year basis.

If you take a look actually at margins year over year. It services. They were comparable to 2020 actually on a year over year basis.

Speaker 3: you would have also seen that margins actually slightly decreased at materials, which we talked about in the last several questions with Darius about some of the, what we saw tailing in the, I'll say he talked about the fourth quarter, but we kind of the back half of 2021, you would have seen some of those effects. And so

You would have also seen that margins actually slightly decrease that materials, which we talked about in the last several questions with areas about some of the what we saw tailing in I'll say he talked about the fourth quarter, but we kind of the back half of 2021, you would have seen some of those effects and so.

Speaker 3: You know, Dave Barney want to walk through a little bit some of the pricing adjustments that we're making in particular aggregates along with ready mix and also some construction margins that would lead us to believe margins at this point are going to be comparable. Certainly we'll update the market as we go throughout the year.

Dave Barney what to walk through a little bit some of the pricing adjustments that we're making in particular aggregates along with ready mix and also some construction margins that would lead us to believe margins at this point are going to be comparable certainly we will update the market as we go throughout the year.

Speaker 3: I'll call on Jeff Theed. Jeff helps give us confidence in services to not only with a record backlog starting the year, but to have margins comparable on a year-over-year basis. Jeff? Thanks, Dave.

I'll call on Jeff Thiede, Jeff what helps gives us confidence in services to not only with a record backlog starting the year, but to have margins comparable on a year over year basis.

Jeff Thanks.

Thanks, Dave.

Speaker 2: Now, through our estimating and project management and purchasing teams, we're in daily contact with our labor partners and suppliers to get updated costs and material availability information so we can mitigate any of the impacts due to these headwinds. We inform our customers on the supply chain and inflation challenges. Through our bid clarifications, we secure a lot of projects.

Through our estimating and project management and purchasing teams, we're in daily contact with our labor partners and suppliers to get updated costs.

Material availability information so we can mitigate any of the impacts due to these.

These headwinds.

And form our customers.

On the supply chain and inflation challenges through our bid clarifications, we secure a lot of projects.

Speaker 2: ahead of completed construction documents, and therefore we are in a design assist mode where we're asking.

Had of completing construction documents and therefore, we are in the design assist mode, where we're asking.

Speaker 2: our suppliers and getting that information to be able to not only mitigate our risk but protect our customers and update them on current cost impacts if any to Projects if you take a look at the last couple of years, we've seen increases of over almost 100 percent on on wire pvc pipe over 400 Percent so these are significant and we see these changes occurring weekly and our teams are on top

Our suppliers and getting that information to be able to not only mitigate our risk and protect our customers and update them.

Cost impacts.

Two projects did you take a look at the last couple of years, we've seen increases of over almost 100%.

On wire PVC pipe over 400%. So these are significant.

We see these changes occurring weekly and our teams are on top of it.

Speaker 3: And then I'll maybe call on Dave Varney. Dave, we do some things in the materials, particularly protection of some of our fuel costs and inputs on that side. Do you want to just touch on that for Ryan and others benefit here?

And then I'll, maybe callout, Dave Barney Dave.

We do some things that the materials, particularly protection of some of our fuel cost and input on that side you ought to just touch on that for Ryan and others benefit here.

Speaker 5: Well, if you're talking about how we get most of our fuels indexed on our contracting side, it's not protected on our ready-mix and aggregates and other materials, but we are raising those prices. You know, the one thing we look forward to, one thing we're seeing, Ryan, this year, is we're seeing a really strong bid schedule right now, so we can be a little better.

Yes.

If you're talking about how we most of our fuels indexed on our contracting side.

Predicted on our ready mix in <unk>.

Aggregates.

Other materials, but.

We are raising those prices the one thing we look forward to.

One thing we're seeing Ryan this year. So we're seeing a really strong bid schedule right. Now so we can be a little more picky about margins and what jobs. We go after and.

Speaker 5: picky about our margins and what jobs we go after. And we're expecting to see that to even increase as we see in late quarter.

We're expecting to see that you are going to increase as we see in late late quarter.

Sure.

Speaker 5: Q3 when we start to see the infrastructure bill start to come into play. So with the bid schedule looking strong as it is, I would expect our margins to start pushing up.

Q3, when we start to see the infrastructure bill starting to come into play so with the Vince schedule looking strong as it is I would expect our margins to start pushing out.

Speaker 6: Thanks for all the color. Maybe switching gears to some of the West Coast investment opportunities or project opportunities.

Alright, thanks for all the color.

Maybe switching gears to <unk>.

Some of the west coast investment opportunities or project opportunities.

Speaker 6: Can you comment on if you're still doing wildfire hardening work today, and then maybe going forward or even historically, what the cost per mile of the undergrounding work that MDU has done?

Can you comment on if youre still doing wildfire hardening work today, and then maybe going forward or even historically, what the cost per mile of the underground work that MDA has done has been.

Speaker 3: Jeff, I think Ryan's referring to one of the long-standing customers we have on the West Coast and one of your key customers. You want to kind of provide a little color around both the hardening and also maybe some of the undergrounding opportunities.

Jeff I think Ryan is referring to what are the longstanding customers we have on the west coast.

One of your key customers you had to kind of provide a little color around both the hardening and also maybe some of the underground opportunities.

Absolutely.

Speaker 2: Yeah, since 2018 campfire, PGA has been providing and doing undergrounding of power lines in Butte County Ridge. We are seeing the initial stages of our customers are obtaining the right-of-way access and providing the engineering.

Since 2018 campfire pge's.

Abiding and doing under grounding of power lines and the accounting Ridge.

<unk> seen in the initial stages of.

Our customers obtaining the right of way access and providing engineering.

Speaker 2: Right now, we don't have any of that work in our backlog, but we are incredibly well positioned with our field leadership, our management, we have the equipment. In addition to that, we have great feedback on our scorecard from PG&E, which puts us in an exceptional position to be able to compete and get a good part of this work. We've got a track record working for many, many years, even more than decades on...

Right now we don't have any of that work backlog, but we are incredibly well positioned with our <unk>.

Field leadership, our management, we have the equipment. In addition that we have great feedback on our scorecard from PGE, which puts us in an exceptional position to be able to compete and get a good part of this work we've got a track record of working for many many years even more than decades.

<unk>.

Speaker 2: with this customer and we think that we're gonna capture our share and it'll be a positive impact to our financial results.

With this customer.

We think that we're going to capture our share.

Will there be a positive impact.

Our financial results.

Speaker 6: Just to follow up on that, so you're saying none of the work that's currently being done is being done by MDU? That is correct, we don't have any of the work currently. Uh, no anything changes, thanks for having us.

Just to follow up on that so youre, saying none of the work that's currently being done in Spain.

<unk>.

That is correct, we don't have any of the work currently.

Okay.

I appreciate the color. Thank you.

Thanks for that Brian .

As a follow up Jeff.

Speaker 2: PG&E is not the only customer that is doing this work, but we've got the capabilities in other marketplaces. And even in southern part of the state of California, we are working on an opportunity with our company on doing some of this undergrounding work. So we've got the experience, got the personnel, the capacity. And we look forward to having that added to our backlog in the near future.

<unk> is not the only customer that is doing this work when we've got capabilities in other marketplaces and even in southern part of the state of California. We are working on an opportunity with our company on doing some of this underground work. So we've got the experience that the personnel and the capacity.

And we look forward to having that added to our backlog in the near future.

I appreciate it thanks.

Speaker 3: Thanks, Ryan. Hi, everybody.

Thanks Ryan.

Operator.

At this time I would like to remind everyone. If you would like to ask a question. Please press Star then the number one on your telephone keypad. If you would like to withdraw your question press the pound key on your telephone keypad.

Speaker 1: At this time I would like to remind everyone if you would like to ask a question please press star then the number one on your telephone keypad. If you would like to withdraw your question press the pound key on your telephone.

Speaker 1: If you're on a speakerphone, please pick up your handset before entering your request. Our next question comes from the line of Brian Russo with Sidoti.

Speakerphone, please pick up your handset before entering your request. Your next question comes from the line of Brian Russo with Sidoti.

Hi, good afternoon.

Hi, Brian Good afternoon to you as well.

Speaker 7: Hey, just to follow up on the undergrounding, would all the work fall in the materials segment in terms of the actual trenching or is there also work?

Hey, just to follow up on the under grounding.

All the work fall in the material.

Segment in terms of the actual trenching or is there also work.

Speaker 7: opportunities in the services sector as well with the electrical side of things.

Opportunities in the service sector services sector as well.

The electrical side of things.

Speaker 3: Yep, Brian , I'll start there and if Jeff wants to add, he sure can. But really, it will be centered almost exclusively with our construction services group, which does the outside T&D work for utilities, G&T co-ops, etc. So it would rest almost entirely within services and as Jeff responded to the earlier question about the undergrounding and saying we really

Brian I'll start there and if Jeff wants to add Easter occurred, but really it will be centered almost exclusively with our construction services group, which does.

I would say the T&D work for utilities, G&P co ops et cetera. So it would rest almost entirely within the services and <unk>.

Jeff responded to the earlier question about the underground and saying we really.

Speaker 3: don't have much if any of that in our record backlog, anything there would be incremental to the 1.38 billion in backlog today.

Don't have much if any of that.

And our record backlog anything there would be incremental to the 1.38 billion in backlog today.

Speaker 7: Okay, so you actually own and operate the trenching equipment.

Okay, So you actually own and operate the trenching equipment.

Speaker 3: We would have that capability, trenching, directional drilling, etc. And that would be done by our crews associated with in-service. There may be times where we third-party contract that depending on our own availability, but we would either do it internally or in concert with the subcontractor. Is that fair to say, Jeff, or would you like to add more color to that?

We would have that capability <unk> directional drilling et cetera, and that would be done by our crews associated within services. There may be times, where we third party contract that the bidding on our own availability, but we would either do it internally or in concert with the subcontractor is that fair to say, Jeff or did I lose you.

You like to add more color to that.

Speaker 2: Well, that's correct, Dave. And these stretches are deep and wide and include.

That's correct Dave.

These trenches are deep and wide and include.

Speaker 2: a lot of junction boxes and vaults that we could see Knife River's participation and working with us collaboratively to be able to flex our financial strength and our capabilities muscles to be able to pick up this work for not only PG&E but other utilities that are gonna provide these bid opportunities.

A lot of junction boxes.

Faults.

We could see.

<unk> participation in working with us collaboratively to be able to.

Flex, our financial strength, and our capabilities muscles to be able to pick up this work for not only <unk>, but other utilities that are going to provide these bid opportunities.

Okay, Great and then just a follow up on the margin question.

Margins.

Material materials segment comparable to 2021.

When you average the entire year, but is there going to be some unique kind of.

Profile, both the year over year margins outs.

Outside of <unk>.

It's a normal seasonality.

The business given how you're raising.

<unk> prices or how you burn off the backlog that maybe hasnt been able to.

Capture the price increases.

Implemented thus far in that.

Right.

Implementing.

The year.

I will look like.

Got it.

Speaker 3: Yeah, I think your question revolves around how are we thinking of the full year in 2022? And again, at this point, we're saying comparable on a year over year basis. And you would have seen

Yes.

I think your question revolves around how are we thinking of the full year in 2022 and again at this point, we're seeing comparable on a year over year basis than you would have seen.

Speaker 3: As we guided the street last year, we started the year in materials to margins being comparable to actually slightly increasing on a year-over-year basis based on 20. But as we went through that year, we started to see a lot of changes in materials, and

As we guided the street last year, we started the year in materials to margins being comparable to actually slightly increasing our year over year basis based on 'twenty, but as we went through that year. We actually went to comparable to then slightly decreasing by the end of the year again some of the inflationary.

Speaker 3: We actually went to comparable to then slightly decreasing by the end of the year. Again, some of the inflationary impacts that we touched on.

Impacts that we touched on earlier right now with the commentary you heard from Dave Barney talking about.

Speaker 3: Right now with commentary heard from Dave Barney talking about, you know, advancements in pricing both the materials and particularly ready mix.

Advancements in pricing, both in materials, and particularly ready mix and that those are being I think Dave's words were well received if you will.

Speaker 3: and that those are being, I think Dave's words were well received if you will. I think that gives us some confidence to say let's start the year looking at comparable margins annually year over year and then obviously we'll update each quarter as the year unfolds.

That gives us some confidence to say, let's start the year looking at comparable margins annually year over year, and then obviously, we will update each quarter as the year unfolds.

Okay.

Okay and it was actually helpful. Brian .

Speaker 2: And then you mentioned- It was helpful, Brian ? Your pause leads me to believe I was more confusing than helping. Well, it seems that the margin erosion-

Pause leads me to believe I was more confusing than helping.

Well it seems that the margin erosion.

Speaker 7: was more significant in the second half of 2021 versus the first half of 2020, 2021, just given the direction and the rapid rise in the price of oil and labor shortages that kind of snowballed as we went through the year. So I'm just curious, is the margin improvement to equate to comparable?

Was more significant.

Significant in the second half of 2021 versus the first half of 2000 22021, just given the direction and the rapid.

Rise in the price of oil.

Labor shortages that kind of snowballs as we went through the year. So I'm just curious.

Is the margin improvement to equate to comparable full year over year margins more heavily weighted towards the second half of 2022.

Speaker 7: full year over year margins more heavily weighted toward the second half of 2020.

Speaker 3: Yeah, I'd say more full year versus full year as we're thinking about it today.

Yes, I'd say more full year versus full year as we're thinking about it today.

Speaker 7: Okay. Okay. You mentioned that that weather may have had an impact, you know, across the businesses. Obviously, it was very warm in the mid and upper Midwest during the fourth quarter, especially in December . Can you kind of maybe break out, you know, what the weather impact was versus normal and then, you know, quantitatively or qualitatively comment on how it impacted the individual sectors, you know, utility versus construction.

Okay, you mentioned weather.

<unk> had an impact across the businesses, obviously it was very warm.

Mid and upper Midwest during the fourth quarter, especially in December can you kind of maybe break out what the weather impact was versus normal and then.

<unk>.

Quantitatively or qualitatively comment on how it impacted the individual sectors utility versus construction.

Speaker 2: Yeah, this is Brian . Brian , this is Jason. I can give a quick high level idea of some of those. And certainly, Nicole or others can weigh in here, too, with what they saw from impacts. So we did see a

Yes. This is Bryan Bryan as Jayson I can give a quick high level idea of some of those and certainly nicole or or others can weigh in here too with what they saw from impacts, but we did see a.

Speaker 2: a fairly warmer than normal fourth quarter, I would say. Now, in many cases, we have that mitigated with, at least on the gas side of the business, with weather normalization or decoupling mechanisms that can be helpful in that regard.

A fairly.

Warmer than normal fourth quarter I would say now in many cases, we have that mitigated with at least on the gas side of the business with weather normalization or decoupling mechanisms that can be helpful in that in that regard.

Speaker 2: It can impact the pipeline business as well a little bit from storage and how much gets pulled out of storage or moved. We did see some cold snaps during that timeframe too, so it's hard to really gauge exactly what the impact would be. From a gas perspective, I feel like we're pretty well insulated in most cases just given the price protections we have on that side. We are a bit more exposed in electric. So you'll see on the electric side where we were down a bit.

It can impact that.

Pipeline business as well a little bit from storage and how much gets pulled out of storage or moved we did see some cold snaps during that timeframe to.

It's hard to really gauge.

Gauge exactly what the impact would be from a gas perspective, I feel like we're pretty well insulated in most cases, just given the the.

Price protections, we have on that side, we are a bit more exposed and electric so youll see on the electric side, where we were down a bit.

Speaker 2: for the year there. Still a very good year for the utility all the way across. But you know that was probably some impact for some.

For the year, there is still a very good year for the utility all the way across but that was probably some impact for some.

Speaker 2: warmer than normal temperatures that we would have seen in the fourth quarter of the year.

Warmer than normal temperatures that we would've seen in the fourth quarter of the year. Other places you know we always talk about precipitation can have some impacts to and I know.

Speaker 2: Other places, we always talk about precipitation can have some impacts too.

Speaker 2: Depends on the footprint, but for the materials business, we had some areas that probably had quite a bit more rain in the fourth quarter than they would have on a comparable basis the year before. Those are some of the impacts that we saw. It's a mix of temperatures and precipitation, probably depending on which part of the business it is. At the end of the day, we deal with these things every year. We've got variability in weather. We plan for normal weather, but there's really no such thing as normal weather. We just need to manage through that, and I think our team did a very good job of doing that.

Depends on the footprint, but for the materials business, we had some areas that probably had quite a bit more ran in the fourth quarter than they would have on a comparable basis the year before.

So those are some of the impacts that we saw so the mix of temperatures and precipitation probably depending on which part of the business that is end of the day. We deal with these things every year, we've got variability in weather, we plan for normal weather.

But there's really no such thing as normal weather. So we just need to manage through that and I think our team did a very good job of doing that.

Speaker 7: Great. And the 5 to 8 percent long-term EPSK, is that still off of the

Okay great.

8%.

Long term EPS CAGR is that still off of the.

Sure.

2020 base.

Speaker 3: Yep, Brian , this is Dave. Yes, that would be 2020 would still be the year that we would have as a base for the five to 8%. Again, we saw the results that we just reported for 2021. But I'm confident that that five to 8% it's a long term EPS growth. It's not necessarily year over year growth, but long term, we still view that as valid which we reaffirmed here today.

Yep.

Brian This is Dave yes that would be 2020 would still be the year that we would.

<unk> as a base for the 5% to 8% again, we saw the results that we just reported for 2021.

But I am confident that that 5% to 8%. It's a long term EPS growth its not necessarily year over year growth, but long term, we still view that as a valid which we've reaffirmed here today.

Speaker 7: Okay, and then lastly, you mentioned, I think in the services segment, you know, backlog is obviously

Okay, and then lastly, you mentioned I think in the services segment backlog is obviously very strong in.

Speaker 7: very strong and bidding is active, but are you seeing any hesitancy or delays in projects in your services and markets?

Bidding is active but are you seeing.

Any hesitancy or delays in projects.

Projects in your services and markets.

Speaker 7: inflationary pressures or you know uncertainty regarding tax credits, etc.

You too.

Inflationary pressures or <unk>.

Uncertainty regarding tax credits et cetera.

Speaker 3: Yeah, Jeff, do you want to take Brian's question?

Yes, Jeff do you want to take Brian's question.

Speaker 2: Yes, thank you, Brian . We're not seeing any project delays reflective of our backlog that's increased. The challenge is going to be making sure we find capable labor in the regions where we're seeing an increase in opportunities, which is Ohio. Ohio's very busy right now in a number of areas from institutional to commercial work. We've got a great company there, and we're looking at building up our resources in that area.

Yes. Thank you, Brian we're not seeing any project delays reflective of our backlog. That's increased challenges is going to be making sure. We find capable labor in the regions, where we're seeing an increase in opportunities, which is Ohio, Ohio is very busy.

Busy right now in a number of areas from institutional.

The commercial work, we've got a great company there.

Looking at building up our resources in that area.

Speaker 2: Even though Las Vegas isn't as busy as it was in the last couple of years, there are a number of projects that we're well positioned for and in pre-construction, so there's some timing of getting those projects up and running.

Even though Las Vegas as busy as it was in the last couple of years. There are a number of projects that we are well positioned foreign and pre construction. So there is some timing.

Getting those projects up and running.

And.

Speaker 2: that will complement the other backlog that we see in the West Coast region as well. So while we've got a great record backlog right now, it's all about execution, and our company is focused on safety and operational excellence and teamwork, and exceeding the customer's expectations.

That will complement the other backlog that we see.

In the West Coast region as well so.

While we've got great record backlog right now, it's all about execution.

Our company is focused on safety and operational excellence and teamwork.

Exceeding our customers' expectations.

Okay, great. Thank you very much.

Thank you for the questions Brian .

Speaker 1: Our next question comes from the line of Andrew Levy with Height Edge. Hey, can you guys hear me? I can hear you, Andy. How are you?

Your next question comes from the line of Andrew Levy with Hite.

Hey can you guys hear me.

I can hear you Andy how are you doing.

I'm glad we got you.

Doing well.

Rob.

Speaker 8: So I guess you guys have a bunch of stuff going on, whether it's higher oil prices, higher labor prices. Can you just throw some.

So.

Yes, you guys have.

A bunch of stuff going on whether it's higher oil prices.

Thanks.

Could you just also talk about.

Speaker 8: So I guess the Fed's talking about raising rates 100 basis points in the short run and you know maybe 150 or more this year.

Well I guess the fed is talking about.

Rates 100 basis points in the short run.

Maybe 150 or more.

Speaker 8: What do you guys have incorporated in your kind of guidance for the various businesses and communities? What do you guys have incorporated in your guidance for the various businesses and communities?

Sure.

What do you guys have incorporated.

Paul.

Barry.

And can you just explain how the interest.

Interest rates.

May or may not have a thank you.

Thank you.

Speaker 2: Andy, this is Jason, I can definitely take that. So we, you know, we've been, we've been through the rate ups and downs here for, for, you know, several times or even as

Hey, Andy This is Jason I can definitely take that so.

We've been.

<unk> been through the rate ups and downs here for for several times or even as recently as 19 rates were quite a bit higher and then certainly COVID-19 hit and we saw the fed cut.

Speaker 2: recently as 19 rates were quite a bit higher and then certainly COVID hit and we saw the Fed cut rates pretty quickly there. You know you followed us for a long time. We have a mix of long term debt where we lock those in fixed rate type instruments to try to de-risk as we are entering into longer term long life projects and also the working capital needs that we have throughout the business. So we certainly have some interest rate front if we saw a jump up in.

Cut rates pretty quickly there.

You followed us for a long time, we have a mix of long term debt, where we lock those in fixed rate type of instruments to try to de risk as we are entering into longer term long life projects and also the working capital needs that we have throughout the business. So.

Certainly have some sensitivity in interest rate front, if we saw a jump up in <unk>.

Speaker 2: short term rates, we could have some impact to our commercial paper programs, for example. We've got lots of liquidity there, we feel good about that. We actually have built into our plan

Short term rates, we could have some impact to our commercial paper programs. For example, we've got lots of liquidity. There we feel good about that we actually have built into our plan for 2022 some increased.

Speaker 2: You can pick your point where you think the Fed is going to go with it this year. And you know, we've seen anywhere from.

<unk>.

You can pick your point, where you think the fed is going to go that this year, we've seen anywhere from a couple of increases the six or seven increases we probably didn't build in the high end of that range, but we probably didn't build and the low end of that range either.

Speaker 2: couple increases to six or seven increases and we probably didn't build in the high end of that range but we probably didn't build in the low end of that range either.

Speaker 8: Okay, and then just on the oils, I have a couple questions.

Okay, and then and then just on the oil all of a couple of questions.

Speaker 8: so I won't get cut off. But not as many as Brian , though. Keep going. You're fine. You're good. So just on the oil side, we have $90 oil.

Okay.

Not as many as Brian .

Can you go and you find out you are good.

Yes.

Pro forma oil fall.

Yes.

Dull.

Speaker 8: Can you just dive into it for us a little bit and give us a little bit more detail on what's incorporated into guidance? You talked about on the third quarter call that the spike in oil. I don't know if it's the third quarter call, but maybe.

Can you.

Yes.

<unk> guided to a little bit and give us a little bit more detail.

Kind of what's incorporated into guidance I know you talked about one four quarter coral call with the spike in oil.

The fourth quarter call, but maybe conversations we had.

Speaker 8: you know, was an issue. And again, now you've had another spike in oil, and maybe that's, you know, what's affected, you know, made the guidance lower. But how should we think about, you know, where we're at at $90 relative to what you have in your guidance, and if, you know, oil went up another $10, you know, what could that do, or if it went down $50, what it could do, just at a very high level. I know you can't be...

What was it this year.

Any spike in oil maybe that's.

Made the guidance lower.

How should we think about.

Where we're at at $90 relative to what you have in your guidance.

Oil went up another $10 what could that do Arthur went down $50.

We could do it to stay at a.

Very high level I know you can't be completely.

Speaker 3: And then I have some other questions. Yeah, sure, Andy. I'll start with that and then queue up Dave Barney, because Dave, it's really his business that's the most primarily affected by that. And Dave did talk earlier about how

Sure.

Yeah sure Andy I'll start with that and then queue up Dave Barney because Dave.

His business Thats.

Most primarily affected by that and Dave did talk earlier about how.

Speaker 3: You know, they because they use quite a bit of diesel in our construction activities within Knife River. We also use diesel in our quarries, you know, whether it's just the horsepower needed to excavate, load and you know, etc. right throughout the crushing operation and the refining operation of our aggregate. It's kind of chartered out there, you know.

Yes.

They used quite a bit of diesel at our construction activities with at knife River. We also use diesel in our core easier to whether its just the horsepower needed to excavate load et cetera, right throughout the crushing operation in the refining operation of our aggregates. So Dave did touch on earlier that.

Speaker 3: Dave did touch on earlier that, you know, a lot a lot of our construction contracts have indices associated with them relative to fuel pricing. And so feeling there's a bill there where

A lot of our construction contracts have index indices associated with them relative to fuel pricing and so feeling there is.

Speaker 3: We're kind of making allowances for that. And there's also contractual language so far as prices go up, prices go down, there's adjustments with the, you know, the owner of the contract, which is typically a state or a federal or a local municipality type situation, where we have some exposure there would be more on the, you know, delivery of ready mix and just the general trucking outside of the construction activities.

We're we're kind of making allowances for that and there is also contractual language. So far as prices go up prices go down theres adjustments with the.

The owner of the contract, which is typically a state or federal or local municipality type.

Situation, where we have some exposure there would be more on the <unk>.

Delivery of ready mix and just the general trucking outside of the construction activities. Dave said, there could be some exposure there I would say, we generally use strip pricing going forward as kind of a baseline there.

Speaker 3: Dave said there could be some exposure there. I would say we generally use strip pricing going forward as kind of a baseline there.

Speaker 3: But also Dave did touch on some of our pricing adjustments that we're making, particularly ready mix, he talked about aggregates, and it could be delivery of those products too. And so

But also Dave did touch on some of our pricing adjustments that we're making particularly ready mix he talked about aggregates and it could be delivery of those products too and so.

Speaker 3: I think we certainly continued learning price and cause and effect last year and some of that.

I think we certainly continued learning price and cause in effect last year and some of that.

Speaker 3: I'll say we got caught by that we're making some adjustments have been making some adjustments now that we'll see more pronounced here in 2022 from a from a pricing and a recovery. I don't know, Dave, do you have anything to color add there? Or did I kind of speak well enough or anything you want to add?

I will say.

We got caught by that we're making some adjustments have been making some adjustments now that we'll see more pronounced here in 2022 from a from a pricing and a recovery.

Dave do you have anything to color AD there did I kind of.

Speak well enough or anything you want to add.

No I think.

Speaker 5: Covered most of it Dave, you know fuel is a concern as we continue to see you know oil prices raise It's a concern but that is one of the reasons why we've seen some of our bigger increases on our prices this year is to make sure we capture that fuel this year that we weren't able to last year.

Covered most of the day fuel is a concern as we continue to see.

Oil prices raise it's a concern but that is one of the reasons why we've seen some of our bigger increases on our prices. This year is to make sure we capture that fueled this year.

Werent able to last year.

Speaker 8: This is a bigger picture question.

Okay.

And then this is kind of like a bigger picture question.

Yes.

Speaker 8: discussed a few years ago. If you look at your stock price, going back to like 2018, you're up a few percent from that.

Okay.

Few years ago.

If you want your stock price.

Going back to late 2018.

We're up a few percent.

Speaker 8: You know the market's up, you know, whatever that big number is Look at some of your comps

The market's Bob whatever that big number.

We get some of your comps.

Speaker 8: On the construction side, their stocks are up considerably since then. We have these kind of pretty good businesses.

On the construction side there is.

Considerably.

You have kind of a well.

Pretty good businesses.

We trade at a.

Can he multiple.

Oh.

Speaker 8: I don't know, she goes by consensus 12 times, 12 and a half.

I don't think today.

Goodbye can stand for.

12 P M.

Brian .

Thank you.

Okay.

Speaker 8: You guys gotta start thinking about that that's not really working for the shareholder.

You guys tend to start thinking about what.

Thats not really working for the shareholder.

Speaker 8: Because if you look at kind of multiples and where things are, have been kind of transacting at, whether it's on the construction materials side, services side.

Because if you look at kind of multiples where things have been transacted, yet whether it's in construction materials.

Yes.

Service in flight.

Speaker 8: gas LDCs, utilities, you get what I'm saying.

Gas LDC utility.

You get what I'm, saying.

Continued.

Speaker 8: But isn't it time to kind of break this thing up?

But isn't it time to terminal breakthrough spinel.

Speaker 8: because I understand that you've been doing this for a long time, but the market is not giving you any credit for it. What thoughts are you kind of giving on that? I understand that you don't have a strategic review or anything like that.

Because I understand that you've been doing this for a long time, but the market is not giving you any credit for it.

What parts are you getting on that.

I understand that you don't have a strategic review or anything like that going on.

Speaker 8: But whether it's in the boardroom or whatever it may be, there must be some type of conversation, especially after today, and really quite honestly after the third quarter, where I think the last two quarters the stock has been down 6% after each print.

Whether it's in the board room or whatever it may be there must be some type of conversation.

Lastly, after today really quite honestly after the fourth quarter.

I think the last two quarters the bank has been down 6% after each print.

Speaker 8: And then, yeah, any kind of color or thoughts that you'd like to kind of give on that because it's really got to be a concern if you were a shareholder.

And then.

And any kind of color on it.

I would like to give on that because it's really got to be concerned with shareholders.

Speaker 3: Yeah, Andy, appreciate the question. And it's not a new question coming from you either as we've had kind of this ongoing

Yes, Andy I appreciate the question and it's not a new question coming from you either as we've had kind of this ongoing.

Speaker 3: commentary about our business mix. You know, I would say certainly there's a day reaction to the market today and we fully acknowledge that it was a miss from a street perspective and so the market reacted today as maybe not.

The commentary about our business mix.

I would say.

Certainly there is a day reaction to the market today, and we fully acknowledge that it was a miss from a street perspective and so.

The market reacted today is maybe not.

Speaker 3: I would point you to the fact though that as we think about our essential nature and essential services that our businesses provide, we still feel that they're the right mix of businesses to date. Granted, we have had in the last two quarters some surprises, if you will, around the earnings release date.

Unanticipated on our part I would point you to the fact, though that as we think about our essential nature and central services that our businesses provide we still feel that they are the right mix of businesses to date.

Granted we have had in the last two quarters. Some surprises if you will around the earnings release date.

Speaker 3: I would also point out that we've had, you know, some surprises on the other side in certain other quarters not so far preceding that. And there was positive reaction to the marketplace in those times. So you know, I think your question is a point in time. I will say it's an ongoing review that we have of our businesses. It's not something that we just do every, you know, so often that we think about it, but it's an ongoing aspect. You know, we've...

I would also point out that we've had.

Some surprises on the other side and certain other quarters, not so far preceding that and there was positive reaction to the marketplace and those time so.

I think your question is a point in time.

We'll say it's ongoing review that we have all of our businesses.

It's not something that we just do every so often that we think about it but it's ongoing aspect.

Speaker 3: in back in time and you would know this history as well as anybody. We exited oil and gas exploration, some refining, some gas processing, and really centered on these two platforms of business.OO Public Bitcoins

And back in time, and you would know this history as well as anybody we exited oil and gas exploration some refining some gas processing and really centered on these two platforms of business and so.

Speaker 3: You know, I think ultimately, yes, the market is important, the reaction to our central services, and it's important that we perform at the end of the day too. And I think that will then be, you know, seen in the marketplace as well. And so

I think ultimately yes, the market is important the reaction to our essential services and it's important that we performed at the end of the day, two and I think that will then be.

Seen in the marketplace as well and so we like how we're shaping up 2022 with the guidance here as well I think there is some very positives there whether it be topline revenue growth at construction.

Speaker 3: We like how we're shaping up 2022 with the guidance here as well. I think there's some very positives there, whether it be top line revenue growth at construction.

Speaker 3: services, construction materials. We're coming off a record performance at utility group along pipeline 50 year of construction record transport volumes there too.

Services construction materials, we're coming off a record performance at utility group along pipeline fifth year of construction.

Transport volumes there too so.

Speaker 3: Your question I think is fair, but I would also say that we, again, we like these businesses, but it's something that we need to just have an ongoing discussion from an internal perspective as if it's the right mix or not. And today we feel it still is.

Your question I think is fair, but I would also say that we again, we like these businesses, but it's something that we need to just have an ongoing discussion from an internal perspective is if it's the right mix or not and today, we feel it still is.

Speaker 9: Yeah, but, you know, again, maybe it's better to debate.

Yes.

Again, maybe extended debate.

Speaker 8: when we get to the BAML conference or something. But just like very simplistically, like so, your stock closed to $26.60 on July 6th, 2018.

When we get to the BMO conference or something but just take 90 simplistically.

So your stock close to $26.

On July .

2018, I just picked a point in time.

Speaker 8: And now we're going to start the $27.18.

And now you start to $27 18.

Speaker 8: So the stock's gone up less than $1 in that time frame.

So the stock's going to lift in the dollar.

That timeframe.

Speaker 8: And so that's, you know, it's not really a good look for no better way to put it. And you know, I'm being brutally honest.

And so that's all.

Good luck for no better way to put it being brutally honest.

Speaker 8: because obviously I think very highly of you guys, and you know, I can see you guys' friends, and I mean all that, but at the same time, you know, as a potential investor,

Obviously, I think very highly of you guys.

Guys trend I mean, all of that and at the same time.

<unk>.

Potential investor.

Yes.

Speaker 8: an issue and like I just think you guys gotta look long and hard.

It's this year and I just think you guys got to look long and hard at kind of what's going on because as you pointed out you actually.

Speaker 8: what's going on because as you pointed out you actually have you know five really good businesses maybe a stick

Five really good.

Great.

Speaker 8: but five really, really good businesses that are, I can tell you are worth more than $27.

Really really good.

I can tell you are worth more than $27 per share.

Speaker 8: But for whatever reason, no fault of yours, it's just kind of the way the market looks and things. Unfortunately, the market's never wrong. It doesn't seem to wanna do that. And then if you add in the volatility and then look at actually who's covering you, which are the utility analysts for the most...

But for whatever reason no fault of yours kind of the way the market.

Unfortunately, the market's never wrong on.

It doesn't seem to want to do that and then if you add in the volatile volatility and then we can actually who is covering you which are it seems to be utility analysts for the most part dabble in another thing.

Speaker 8: dabble in other things, it just doesn't seem to be working. So I just kind of wanted to get that out there. Heard what you guys just said. You don't need to respond to that, but it's just.

It doesn't work.

I'm, just kind of wanted to get that out there.

But your guidance that youll need to respond to that.

Okay.

Speaker 8: as a friend and as a former shareholder would really want you to take it closer.

Yes.

As a friend.

Former shareholder would really want you to take a close look at.

Speaker 3: Yeah, no thanks Andy for the commentary. You know I would probably just add on to that and then maybe your next question, but certainly there's a dividends returned to the shareholders pretty consistently and increasing over that same period of time. Not that that's the sole reason to be invested in us, but certainly not to be omitted from the discussion here. So did you have a third question in there Andy? I just want to make sure that we capture that. I'm done. I'm done. OK, thank you. Alright, well thank you. Yep, operator.

Thank you.

Yes, no. Thanks, Andy for the commentary and I would probably just add onto that and then maybe your next question, but certainly there is.

Dividends returned to the <unk>.

Shareholders pretty consistently and increasing over that same period of time that that is the sole reason to be invested in us, but certainly not to be omitted from the discussion here. So did.

Did you have a third question in there Andy I just wanted to make sure that we capture that I am done.

Okay, alright, well thank you.

Operator.

Speaker 1: We do have an additional question in queue from Daryush Lasneh with Bank of America.

You do have an additional question in queue from Dara <unk> with bank of America.

Speaker 4: Oh, hey, guys, thank you for for letting one more question in here. I just wanted to follow up on

Oh, Hey, guys. Thank you for letting one more question in here I just wanted to follow up on I think it was a.

Speaker 4: I think it was a response to one of Ryan's questions earlier, commenting on a strong bid schedule that's allowing you to be somewhat picky as far as the specific jobs that you're selecting and the expectation that that might pick up later on in the year. Can you just maybe elaborate on that a little bit? What are the specific drivers of that stretch that you're seeing right now?

Thanks to one of Brian's questions earlier, commenting on a strong bid schedule, but that's allowing you to be somewhat picky as.

As far as in a job that you are selecting and the expectation that that might pick up later on in the year.

Can you just maybe elaborate on that a little bit.

Are there specific drivers of that strength that youre seeing right now.

Speaker 3: Well, let's start with Dave Barney with our materials and then after that, we'll flip it over to Jeff. So Dave, would you start?

Well, let's start with Dave Barney with our materials and then after that it was flip it over to Jeff So Dave would you start.

Territories.

Speaker 5: Right now, we're in most of our markets, like I said. Our bid schedule is strong. Last year, our North Central Division, which is Minnesota, North Dakota, Iowa, South Dakota, and South Dakota.

Right now.

And most of our markets like I said.

Our units scheduled strong last year.

Our Central Division, which is Minnesota and North Dakota.

South Dakota.

Speaker 5: It was a little weak in that region. And we're seeing a really good bid schedule there. And

It was a little weak in those those more in that region.

Seeing a really good bid schedule there and.

Speaker 5: In most of our markets we are, Idaho, Montana.

And most of our markets, we are Idaho, Montana.

Speaker 5: So we can be a little more picky and pick and choose what jobs or what margins. We think we can wait and get better margins if we're patient. So that's what our plan is this year. And so I would expect we do have that carry over from last year.

So we can be a little more picky.

And pick and choose what jobs are margins.

Think we can wait and.

Better margins, if we're patient.

So that's.

Our plan is this year.

So I would expect we do have that carryover from last year.

Speaker 5: that we weren't able to catch most of this inflation on, but I would expect as we go forward, we will see better margins.

That we werent able to catch most of this inflation, but.

I would expect as we go forward, we will see better margins.

Speaker 3: And then, Jeff, would you touch on the strong bid schedule that you're seeing relative to services?

And then Jeff could you touch on the strong bid schedule that you are seeing relative to services.

Okay.

Speaker 8: Yes, we continue to see demand for our business in the TD segment, which is

Yes, we continue to see demand for our business in the T&D segment, which is.

Speaker 8: covers the power gas communications, fiber optics.

Covers the power gas communications fiber optics.

Speaker 8: That is continuing to remain strong in the Midwest, Rocky Mountain, and the western regions. Also got high demand for our wire stringing equipment and our tools. Our electrical and mechanical group bid opportunities are very strong in mid-Atlantic. We're very close to securing a significant project there. Not reflected in the baton yet, but we've been told we're going to get the project that will help us in that area of the country.

<unk> has continued to remain strong in the Midwest Rocky Mountain and the western regions.

Also got high demand for our wire stringing equipment or tools.

Electrical mechanical group bid opportunities.

Strong in mid Atlantic, we're very close to securing a significant projects there.

And the backlog yet but.

We've been told we're going to get the project that will help us in that area of the country.

Speaker 8: Ohio, as I mentioned, particularly Columbus, continue to provide increased level of mission critical institutional manufacturing projects.

Ohio, as I mentioned, particularly Columbus continue to provide increased level of mission critical institutional and manufacturing projects.

Speaker 8: and in the Midwest, Rocky Mountain, Southwest, Las Vegas regions, and also the western part of the country, commercial, institutional, and renewables, and service work, we're seeing still good, good, good opportunities. Challenges labor, of course, and materials, as I've mentioned, the supply chain, but again, our teams are communicating like they never have before with our suppliers and our customers.

In the Midwest, Rocky Mountain and southwest Las Vegas regions and also the western part of the country.

<unk> institutional in renewables and service.

Still good good.

<unk>.

Challenges labor of course and materials as I've mentioned the supply chain.

Again, our teams are communicating like they never have before with our suppliers and our customers.

And we're all over that.

Speaker 8: challenging and we look forward to going into this year with record momentum and back a lot.

Challenging.

We look forward to going into this year with record momentum backlog.

Darius was that helpful.

Speaker 4: That was very helpful. I appreciate you letting me ask one more question here. Thank you.

That was very helpful. I. Appreciate you letting me ask one more question here. Thank you very much you bet.

Speaker 3: You bet. Thank you. Operator, are there any more questions in the queue?

Ed. Thank you operator are there any more questions in the queue.

Speaker 1: This marks the last call for questions. If you would like to ask a question, please press star, then the number one on your telephone keypad. This call will be available for replay beginning at 5 p.m. Eastern time today through 11 59 p.m. Eastern time on February 24th. The conference ID number for the replay is 1077078.

This marks the last call for questions. If you would like to ask a question. Please press Star then the number one on your telephone keypad. This call will be available for replay beginning at five PM Eastern time today through 11, 59 PM Eastern time on February 24 at the Con.

<unk> number for the replay is 107707 again the conference I'd number for the replay is 10770 76.

Speaker 1: Again, the conference ID number for the replay is 107707...

Speaker 1: At this time, there are no further questions. I would now like to turn the conference back over to management for closing remarks.

At this time there are no further questions I would now like to turn the conference back over to management for closing remarks.

Speaker 3: Thank you, operator, and thank you all for taking the time to join us here on our 2021 earnings and 2022 guidance call today. We are committed to building a strong America and are optimistic about our opportunities in front of us in 2022 and beyond. And as always, we appreciate your continued interest in MDU resources and thank you for your participation here today. And with that, we'll turn this call back over to the operator.

Thank you operator, and thank you all for taking the time to join US here on our 2021 earnings in 2022 guidance call today.

We are committed to building a strong America and are optimistic about our opportunities in front of us in 2022 and beyond and as always we appreciate your continued interest in MDU resources and thank you for your participation here today and with that I will turn this call back over to the operator.

Speaker 1: This concludes today's NDU Resources Group conference call. Thank you for your participation. You may now disconnect.

This concludes today's MDU resources Group Conference call. Thank you for your participation you may now disconnect.

Okay.

Yes.