Q2 2024 MDU Resources Group Inc Earnings Call

August 8, 2024

Jim Coleman Nicole Kivisto Barbara Youfrat Lyon Angela Perry T. Guy Heather Moore potato Edward Johnson piece E M m e g a m m n e N E C

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www.mdu.edu.au

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Unknown Executive: Please stand by; we're about to begin.

Jamie: Please stand by. We're about to begin. Hello, my name is Jamie, and I will be your conference facilitator. At this time, I would like to welcome everyone to the MDU Resources Group 2024 Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

Jamie: Hello, my name is Jamie, and I will be your conference facilitator.

Jamie: i

Jamie: Please stand by. We're about to begin.

Jamie: At this time, I would like to welcome everyone to the MDU Resources Group in 2024, second quarter earnings conference call. Online have been placed on mute to prevent any background noise.

Jamie: 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 the star, then the number 1 on your telephone keypad. If you would like to withdraw your question, press star 2 on your telephone keypad. The webcast can be accessed at www.mdu.com. Under the Investors heading, select Events and Presentations and click Q2 2024 Earnings Conference Call. After the conclusion of the webcast, a replay will be available at the same location. I would now like to turn the conference over to Jason Vollmer, Vice President, Chief Financial Officer, and Treasurer of MDU Resources Group. Thank you. Mr. Vollmer, you may begin your conference.

Jamie: 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 the star, then the number 1 on your telephone keypad. If you would like to withdraw your question, press star 2 on your telephone keypad. A webcast can be accessed at www.mdu.com. Under the Investors heading, select Events and Presentations and click Q2 2024 Earnings Conference Call. After the conclusion of the webcast, a replay will be available at the same location. I would now like to turn the conference over to Jason Vollmer, Vice President, Chief Financial Officer, and Treasurer of MDU Resources Group. Thank you. Mr. Vollmer, you may begin your conference.

Jamie: Hello, my name is Jamie and I will be your conference facilitator.

Speaker Change: At this time, I would like to welcome everyone to the MDU Resources Group 2024 Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period.

Jamie: 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 star two on your telephone keypad.

Jamie: If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad.

Jamie: If you would like to withdraw your question, press star 2 on your telephone keypad.

Jamie: The webcast can be accessed at www.mdu.com. Under the Investors' heading, select Events and Presentations and click Q2 2024 Earnings Conference Call. After the conclusion of the webcast, a replay will be available at the same location.

Jamie: The webcast can be accessed at www.mdu.com

Jamie: Under the Investors heading, select Events and Presentations and click Q2 2024 Earnings Conference Call.

Jamie: After the conclusion of the webcast, a replay will be available at the same location.

Jason Volmer: I would now like to turn the conference over to Jason Volmer, Vice President, Chief Financial Officer, and Treasurer of MDU Resources Group.

Jason Vollmer: I would now like to turn the conference over to Jason Vollmer, Vice President, Chief Financial Officer, and Treasurer of MDU Resources Group. Thank you. Mr. Vollmer, you may begin your conference.

Jason Volmer: Thank you, Mr. Volmer; you may begin your conference. Thank you, Jamie, and welcome everyone to our second quarter 2024 Earnings Conference Call. You can find our earnings release and supplemental materials for this call on our website at www.mdu.com under the Investors tab.

Jason Vollmer: Thank you, Jamie. And welcome everyone to our second quarter 2024 earnings conference call. You can find our earnings release and supplemental materials for this call on our website at www.mdu.com under the Investors tab. Leading today's discussion with me is Nicole Kivisto, President and CEO of MDU Resources. Also with us today to answer questions following our prepared remarks are Stephanie Sievert, Vice President, Chief Accounting Officer, and Controller of MDU Resources; and Jeff Thiede, President and CEO of Everest. Rob Johnson, President of WBI Energy, and Garret Senger, Chief Utilities Officer

Jason Vollmer: Thank you, Jamie, and welcome everyone to our second quarter 2024 earnings conference call. You can find our earnings release and supplemental materials for this call on our website at www.mdu.com under the Investors tab.

Nicole Cabesto: Leading today's discussion with me is Nicole Cabesto, president and CEO of MDU Resources. Also with us today to answer questions following our prepared remarks are Stephanie Severt, Vice President, Chief Accounting Officer, and Controller of MDU Resources; Jeff Thede, President and CEO of Everest; Rob Johnson, President of WBI Energy; and Garrett Sanger, Chief Utilities Officer.

Jason Vollmer: Leading today's discussion with me is Nicole Kivisto, President and CEO of MDU Resources.

Jason Vollmer: Also with us today to answer questions following our prepared remarks are Stephanie Siebert, Vice President, Chief Accounting Officer and Controller of MDU Resources, Jeff Thiede, President and CEO of Everest, Rob Johnson, President of WBI Energy, and Garret Senger, Chief Utilities Officer.

Jason Volmer: During our call, we will make certain forward-looking statements within the meeting of Section 21(e) of the Securities Exchange Act of 1934. Although the company believes that its expectations are based on reasonable assumptions, action results may differ materially. For more information about risks and uncertainties that could cause our actual results to vary from any forward-looking statements, please refer to our most recent SEC filings.

Jason Vollmer: During our call, we will make certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations are based on reasonable assumptions, actual results may differ materially. For more information about risks and uncertainties that could cause our actual results to vary from any forward-looking statements, please refer to our most recent SEC filing. We may also refer to certain non-GAAP information. For reconciliation of any non-GAAP information to the appropriate GAAP metric, please refer to our earnings release. I will provide consolidated financial results later during the call, but first, we'll turn the call over to Nicole for her formal remarks. Okay, Nicole?

Jason Vollmer: During our call, we will make certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations are based on reasonable assumptions, actual results may differ materially. For more information about risks and uncertainties that could cause our actual results to vary from any forward-looking statements, please refer to our most recent SEC filing. We may also refer to certain non-GAAP information. For a reconciliation of any non-GAAP information to the appropriate GAAP metric, please refer to our earnings release. I will provide consolidated financial results later during the call, but first, we'll turn the call over to Nicole for her formal remarks. Nicole?

Jason Vollmer: During our call we will make certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations are based on reasonable assumptions, actual results may differ materially.

Jason Vollmer: For more information about risks and uncertainties that could cause our actual results to vary from any forward-looking statements, please refer to our most recent SEC filings.

Jason Volmer: We may also refer to certain non-GAAP information. For a reconciliation of any non-GAAP information to the appropriate GAAP metric, please reference our earnings release.

Jason Vollmer: We may also refer to certain non-GAAP information. For reconciliation of any non-GAAP information to the appropriate GAAP metric, please reference our earnings release.

Jason Volmer: I will provide consolidated financial results later during the call, but first we'll turn the call over to Nicole for her more remarks.

Jason Vollmer: I will provide consolidated financial results later during the call, but first we'll turn the call over to Nicole for her formal remarks. Nicole?

Nicole Cabesto: Nicole? Thank you, Jason, and thank you everyone for spending time with us today. And for your continued interest in MDU Resources. I'm pleased to share our second quarter results with all of you. These results directly reflect the exceptional efforts and dedication of our employees, and I want to express my gratitude for their hard work.

Nicole Kivisto: Thank you, Jason, and thank you, everyone, for spending time with us today and for your continued interest in MDU resources. I'm pleased to share our second quarter results with all of you. These results directly reflect the exceptional efforts and dedication of our employees, and I want to express my gratitude for their hard work. We continue to make great progress towards finalizing the tax-free spin-off of our construction services business, Everest. During the quarter, we announced the management team who will lead Everest following the spin.

Nicole Kivisto: Thank you, Jason, and thank you everyone for spending time with us today and for your continued interest in MDU resources.

Nicole Kivisto: I'm pleased to share our second quarter results with all of you.

Nicole Kivisto: These results directly reflect the exceptional efforts and dedication of our employees, and I want to express my gratitude for their hard work.

Nicole Cabesto: We continue to make great progress towards finalizing the tax-free spin of our construction services business, Everest. During the quarter, we announced the management team who will lead Everest following the spin. This team possesses the experience and expertise necessary. We are on track to complete the spin-off later this year, and we will continue to provide updates as we reach future milestones.

Nicole Kivisto: We continue to make great progress towards finalizing the tax-free spin of our construction services business, Everest.

Nicole Kivisto: This team possesses the experience and expertise necessary to drive Everest's growth well into the future. We are on track to complete the spinoff later this year, and we will continue to provide updates as we reach future milestones. As we look ahead, we will remain focused on our core strategy with our pure play regulated energy delivery businesses, and we are well positioned for growth into the future. Our current long-term guidance forecasts 2.7 billion of regulated capital investment, driving 7% compound annual growth rate on our utility rate base, with an anticipated customer growth of 1 to 2% annually. We expect this to lead to long-term EPS growth of 6 to 8%, and we are targeting a 60 to 70% annual dividend payout ratio with no anticipated equity needs until 2027.

Nicole Kivisto: During the quarter, we announced the management team who will lead Everest following the spin.

Nicole Cabesto: As we look ahead, we will remain focused on our core strategy with our peer-play regulated energy delivery businesses, and we are well positioned for growth into the future. Our current long-term guidance forecasts 2.7 billion of regulated capital investment, driving 7% component of our budget. We expect to handle growth rates on our utility rate base with an anticipated customer growth of 1 to 2% annually. We expect us to lead to long-term EPS growth of 6 to 8%, and we are targeting a 60 to 70% annual dividend payout ratio with no anticipated equity needs until 2027.

Nicole Kivisto: As we look ahead, we will remain focused on our core strategy with our pure play regulated energy delivery businesses, and we are well positioned for growth into the future. Our current long-term guidance forecasts $2.7 billion of regulated capital investment, driving 7% compound annual growth rate on our utility rate base, with an anticipated customer growth of 1 to 2% annually. We expect this to lead to long-term EPS growth of 6 to 8%, and we are targeting a 60 to 70% annual dividend payout ratio with no anticipated equity needs until 2027.

Nicole Kivisto: As we look ahead, we will remain focused on our core strategy with our pure play regulated energy delivery businesses, and we are well positioned for growth into the future.

Nicole Kivisto: Our current, long-term guidance forecasts $2.7 billion of regulated capital investment, driving 7% compound annual growth rate on our utility rate base, with an anticipated customer growth of 1-2% annually.

Nicole Kivisto: We expect this to lead to long-term EPS growth of 6-8% and we are targeting a 60-70% annual dividend payout ratio with no anticipated equity needs until 2027.

Nicole Cabesto: Our second quarter results maintain the positive momentum we have experienced in preceding quarters. Notably, our utility business has demonstrated solid results, despite unfavorable weather, driven by strategic rate adjustments and expanding infrastructure investments. Meanwhile, our pipeline segment achieved unprecedented second quarter earnings, driven by record-breaking transportation volumes and increased storage revenues. Additionally, Everest experienced record second quarter earnings and all-time record backlog. All of these achievements across our businesses underscore our unwavering commitment to delivering safe and reliable service and sustainable growth, with our dedicated employees playing a pivotal role in our continued success.

Nicole Kivisto: Our second quarter results maintain the positive momentum we have experienced in preceding quarters. Notably, our utility business demonstrated solid results, despite unfavorable weather, driven by strategic rate adjustments and expanding infrastructure investment. Meanwhile, our pipeline segment achieved unprecedented second quarter earnings driven by record-breaking transportation volumes and increased storage revenues. Additionally, Everest experienced record second quarter earnings and an all-time record backlog.

Nicole Kivisto: Our second quarter results maintain the positive momentum we have experienced in preceding quarters. Notably, our utility business demonstrated solid results, despite unfavorable weather, driven by strategic rate adjustments and expanding infrastructure investments. Meanwhile, our pipeline segment achieved unprecedented second quarter earnings driven by record-breaking transportation volumes and increased storage revenues. Additionally, Everest experienced record second quarter earnings and an all-time record backlog.

Nicole Kivisto: Our second quarter results maintain the positive momentum we have experienced in preceding quarters. Notably, our utility business has demonstrated solid results despite unfavorable weather, driven by strategic rate adjustments and expanding infrastructure investments.

Nicole Kivisto: Meanwhile, our pipeline segment achieved unprecedented second quarter earnings, driven by record-breaking transportation volumes and increased storage revenues.

Nicole Kivisto: Additionally, Everest experienced record second-quarter earnings and all-time record backlog.

Nicole Kivisto: All of these achievements across our businesses underscore our unwavering commitment to delivering safe and reliable service and sustainable growth, with our dedicated employees playing a pivotal role in our continued success. Our businesses remain poised for compelling long-term growth prospects as we strategically position ourselves for the future. In the second quarter, our utility business faced challenges due to higher operation and maintenance expenses and cooler weather. However, strategic rate release helped offset the impact.

Unknown Executive: Please stand by, we're about to begin.

Nicole Cabesto: Our businesses remain poised for compelling long-term growth prospects as we strategically position ourselves for the future. In the second quarter, our utility business base challenges due to higher operation and maintenance expense and cooler weather. However, strategic rate release helped offset the impact. Compared to the same time period in 2023, temperatures were 37% cooler, which negatively impacted electric volumes. Our total retail customer base grew by 1.5% in line with our projected 1 to 2% growth and surpassing the national average, which reinforces our company's need to proactively manage our utility infrastructure to meet the demands of our growing customer base.

Jamie: Hello, my name is Jamie and I will be your conference facilitator.

Nicole Kivisto: Our businesses remain poised for compelling long-term growth prospects as we strategically position ourselves for the future.

Nicole Kivisto: Compared to the same time period in 2023, temperatures were 37% cooler, which negatively impacted electric volume. Our total retail customer base grew by 1.5% in line with our projected 1 to 2% growth and surpassing the national average, which reinforces our company's need to proactively manage our utility infrastructure to meet the demands of our growing customer base. Additionally, construction of the new HESKET-4 88 megawatt simple cycle combustion turbine is complete and in service as of July 8. Additionally, on July 15, we filed a natural gas rate case in Montana requesting a $9.4 million annual revenue increase. The need for the request was driven by system investments and operating cost increases.

Jamie: At this time, I would like to welcome everyone to the MDU Resources Group in 2024, Second Quarter Earnings Conference Call. Online have been placed on mute to prevent any background noise.

Nicole Kivisto: In the second quarter, our utility business faced challenges due to higher operation and maintenance expense and cooler weather.

Nicole Kivisto: However, strategic rate release helped offset the impact. Compared to the same time period in 2023, temperatures were 37% cooler, which negatively impacted electric volumes.

Nicole Kivisto: Our total retail customer base grew by 1.5% in line with our projected 1-2% growth and surpassing the national average, which reinforces our company's need to proactively manage our utility infrastructure to meet the demands of our growing customer base.

Nicole Cabesto: Additionally, construction of the new Heskett 4, 88-megawatt simple cycle combustion turban is complete and in service as of July 8th. On July 15th, we filed a natural gas rate case in Montana requesting a $9.4 million annual revenue increase. The need for the request was driven by system investments in operating cost increases. Our focus remains on delivering space and reliable electric and natural gas services to our expanding customer base, with active efforts to seek regulatory recovery for our investments.

Nicole Kivisto: Additionally, construction of the new Heskett 4 88 megawatt simple cycle combustion turbine is complete and in service as of July 8th.

Nicole Kivisto: On July 15th, we filed a natural gas rate case in Montana requesting a $9.4 million annual revenue increase. The need for the request was driven by system, investments, and operating cost increases.

Jamie: 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 than the number one on your telephone keypad. If you would like to withdraw your question, press star two on your telephone keypad.

Jamie: The webcast can be accessed at www.mdu.com. Under the Investors' Heading, select Events and Presentations and click Q2 2024 Earnings Conference Call. After the conclusion of the webcast, a replay will be available at the same location.

Nicole Kivisto: Our focus remains on delivering safe and reliable electric and natural gas services to our expanding customer base with active efforts to seek regulatory recovery for our investment. We also are excited about the increasing opportunity we see from data center construction in our service territory. We received approval on May 23 from the North Dakota Public Service Commission for an electric service agreement that will allow us to serve an additional 225 megawatt data center load near Ellendale, North Dakota.

Nicole Cabesto: We also are excited about the increasing opportunity we see from data center construction in our service territory. We received approval on May 23rd from the North Dakota Public Service Commission for an electric service agreement that will allow us to serve an additional 225-megawatt data center load near Ellendale, North Dakota. That data center addition will be built in phases, with the first phase expected to begin coming online in late 2024. Additionally, on August 5th, we filed an electric service agreement with the South Dakota Public Utilities Commission to serve a 50-megawatt data center that will be located near Leola, South Dakota.

Nicole Kivisto: We also are excited about the increasing opportunity we see from data center construction in our service territory.

Nicole Kivisto: We received approval on May 23rd from the North Dakota Public Service Commission for an electric service agreement that will allow us to serve an additional 225 megawatt data center load near Ellendale, North Dakota.

Nicole Kivisto: That data center addition will be built in phases, with the first phase expected to begin coming online in late 2024. Additionally, on August 5th, we filed an electric service agreement with the South Dakota Public Utilities Commission to serve a 50 megawatt data center that will be located near Leola, South Dakota. Including our existing data center that we serve, we now have 455 megawatts of data center load under a signed electric service agreement.

Nicole Kivisto: That data center addition will be built in phases, with the first phase expected to begin coming online in late 2024.

Nicole Kivisto: Additionally, on August 5th, we filed an electric service agreement with the South Dakota Public Utilities Commission to serve a 50-megawatt data center that will be located near Leola, South Dakota.

Nicole Cabesto: Including our existing data center that we serve, we now have 455 megawatts of data center load under signed electric service agreement. Of that total, 180 megawatts is currently online, with the balance starting to come online later this year and continuing through the next few years. Our capital investment related to these data centers is minimal, and therefore the margin received is beneficial to our earnings and overall ROE enhancement. Our customers also benefit from lower transmission expenses, and we share a portion of the margin, which results in beneficial build reductions for our customers.

Nicole Kivisto: Including our existing data center that we serve, we now have 455 megawatts of data center load under signed electric service agreements.

Nicole Kivisto: Of that total, 180 megawatts is currently online, with the balance starting to come online later this year and continuing through the next few years. Our capital investment related to these data centers is minimal, and therefore, the margin received is beneficial to our earnings and overall ROE enhancement. Our customers also benefit from lower transmission expenses, and we share a portion of the margin, which results in beneficial bill reductions for our customers.

Nicole Kivisto: Of that total, 180 megawatts is currently online, with the balance starting to come online later this year and continuing through the next few years.

Jason Volmer: I would now like to turn the conference over to Jason Volmer, Vice President, Chief Financial Officer, and Treasurer of MDU Resources Group. Thank you, Mr. Volmer, you may begin your conference. Thank you, Jamie and welcome everyone to our second quarter, 2024 Earnings Conference Call. You can find our earnings release and supplemental materials for this call on our website at www.mdu.com under the Investors tab.

Nicole Kivisto: Our capital investment related to these data centers is minimal, and therefore the margin received is beneficial to our earnings and overall ROE enhancement.

Jason Volmer: Leading today's discussion with me is Nicole Cabesto, President and CEO of MDU Resources. Also with us today to answer questions following our prepared remarks are Stephanie Severt, Vice President, Chief Accounting Officer, and Controller of MDU Resources, Jeff Thede, President and CEO of Everest, Rob Johnson, President of WBI Energy, and Garrett Sanger, Chief Utilities Officer.

Nicole Kivisto: Our customers also benefit from lower transmission expenses, and we share a portion of the margin, which results in beneficial bill reductions for our customers. This truly is a good design for our customers, our communities, and our shareholders.

Jason Volmer: During our call, we will make certain forward-looking statements within the meeting of Section 21-E of the Securities Exchange Act of 1934. Although the company believes that its expectations are based on reasonable assumptions, action results may differ materially. For more information about 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-gap information. For a reconciliation of any non-gap information to the appropriate gap metric, please reference our earnings release.

Nicole Cabesto: This truly is a good design for our customers, our communities, and our shareholders.

Nicole Kivisto: This truly is a good design for our customers, our communities, and our shareholders. In our pipeline business, we achieved record second-quarter earnings, nearly doubling compared to the same period last year. This segment is executing well on our core strategy and delivering strong results driven by strategic expansion, increased demand for transportation and storage services, and a full quarter of benefit from new transportation and storage service rates. We remain committed to investing in future expansion projects to meet increasing customer demand, including strong interest from industrial customers and power generation projects. Recently, our pipeline business completed construction of its line section 28 expansion project, which was placed in service on July 1. This project adds 137 million cubic feet of natural gas transportation capacity per day.

Nicole Cabesto: At our pipeline business, we achieved records second quarter earnings nearly doubling compared to the same period last year. This segment is executing well on our core strategy in delivering strong results, driven by strategic expansion, increased demand for transportation storage services, and a full quarter of benefit from new transportation and storage service rates. We remain committed to investing in future expansion projects to meet increasing customer demand, including strong interest from industrial customers and power generation projects. Recently, our pipeline business completed construction of its line section 28 expansion project, which was placed in service on July 1st.

Nicole Kivisto: Additionally, we have started construction on the Wahpeton Expansion Project in eastern North Dakota, which will provide approximately 20 million cubic feet of natural gas transportation capacity per day and is expected to be in service in late 2024. We are pleased to reaffirm our previously communicated regulated energy delivery guidance for 2024. We remain confident in our projected earnings guidance in the range of $170 million to $180 million. At Everest, we achieved record second quarter earnings and have an all-time record backlog of projects as of June 30th. Higher transmission and distribution revenues, along with higher electrical and mechanical data center workloads, partially offset a decrease in overall electrical and mechanical revenues from lower workloads due to the timing of projects.

Nicole Cabesto: I will provide consolidated financial results later during the call, but first we'll turn the call over to Nicole for her for more remarks. Nicole? Thank you, Jason, and thank you everyone for spending time with us today. And for your continued interest in MDU resources. I'm pleased to share our second quarter results with all of you. These results directly reflect the exceptional efforts and dedication of our employees, and I want to express my gratitude for their hard work.

Nicole Kivisto: At our pipeline business, we achieved record second quarter earnings, nearly doubling compared to the same period last year.

Nicole Cabesto: We continue to make great progress towards finalizing the tax-free spin of our construction services business Everest. During the quarter, we announced the management team who will lead Everest following the spin. This team possesses the experience and expertise necessary. We are on track to complete the spin-off later this year, and we will continue to provide updates as we reach future milestones. As we look ahead, we will remain focused on our core strategy with our peer-play regulated energy delivery businesses, and we are well positioned for growth into the future.

Nicole Kivisto: This segment is executing well on our core strategy in delivering strong results, driven by strategic expansion, increased demand for transportation and storage services, and a full quarter of benefit from new transportation and storage service rates.

Nicole Cabesto: Our current long-term guidance forecasts 2.7 billion of regulated capital investment, driving 7% component of our budget. We expect to handle growth rates on our utility rate base with an anticipated customer growth of 1 to 2% annually. We expect us to lead to long-term EPS growth of 6 to 8%, and we are targeting a 60 to 70% annual dividend payout ratio with no anticipated equity needs until 2027. Our second quarter results maintain the positive momentum we have experienced in preceding quarters.

Nicole Kivisto: We remain committed to investing in future expansion projects to meet increasing customer demand, including strong interest from industrial customers and power generation projects.

Nicole Cabesto: Notably, our utility business has demonstrated solid results, despite unfavorable weather, driven by strategic rate adjustments and expanding infrastructure investments. Meanwhile, our pipeline segment achieved unprecedented second quarter earnings, driven by record-breaking transportation volumes and increased storage revenues. Additionally, Everest experienced record second quarter earnings and all-time record backlog. All of these achievements across our businesses underscore our unwavering commitment to delivering safe and reliable service and sustainable growth with our dedicated employees playing a pivotal role in our continued success.

Nicole Kivisto: Recently, our pipeline business completed construction of its Line Section 28 expansion project, which was placed in service on July 1st.

Nicole Cabesto: This project adds 137 million cubic feet of natural gas transportation capacity per day. Additionally, we have started construction on the Wapatan expansion project in eastern North Dakota, which will provide approximately 20 million cubic feet of natural gas transportation capacity per day and is expected to be in service in late 2024.

Nicole Kivisto: This project adds 137 million cubic feet of natural gas transportation capacity per day.

Nicole Cabesto: We are pleased to reaffirm our previously communicated regulated energy delivery guidance for 2024. We remain confident in our projected earnings guidance in the range of 170 million to 180 million. At Everest, we achieved a record of second quarter earnings and have an all-time record backlog of projects as of June 30th. Higher transmission and distribution revenues, along with higher electrical and mechanical data center workloads, partially offset a decrease in overall electrical and mechanical revenues from lower workloads due to the timing of projects. Everest reported an all-time record backlog of 2.4 billion compared to 1.94 billion at the same time period last year.

Nicole Kivisto: We are pleased to reaffirm our previously communicated regulated energy delivery guidance for 2024. We remain confident in our projected earnings guidance in the range of $170 million to $180 million.

Nicole Cabesto: Additionally, construction of the new Heskett 4, 88-megawatt Simple Cycle Combustion Turban is complete and in service as of July 8th. On July 15th, we filed a natural gas rate case in Montana requesting a $9.4 million annual revenue increase. The need for the request was driven by system investments in operating cost increases. Our focus remains on delivering space and reliable electric and natural gas services to our expanding customer base with active efforts to seek regulatory recovery for our investments.

Nicole Kivisto: Everest reported an all-time record backlog of $2.4 billion compared to $1.94 billion at the same time period last year. Successfully replacing completed or near-completed projects has ensured a continuous flow of work, and the business is well positioned heading into the end of 2024. Due to lower revenues experienced on a year-to-date basis, largely due to the timing of projects, we are revising our revenue guidance for Everest to be in the range of $2.65 billion to $2.85 billion, down from previous guidance of $2.9 billion to $3.1 billion, with margins now expected to be higher than in 2023. EBITDA is still expected to be in the range of $220 million to $240 million.

Nicole Kivisto: At Everest, we achieved record second-quarter earnings and have an all-time record backlog of projects as of June 30th.

Nicole Kivisto: Higher transmission and distribution revenues, along with higher electrical and mechanical data center workloads, partially offset a decrease in overall electrical and mechanical revenues from lower workloads due to the timing of projects.

Nicole Kivisto: Everest reported an all-time record backlog of $2.4 billion compared to $1.94 billion at the same time period last year.

Nicole Cabesto: We also are excited about the increasing opportunity we see from data center construction in our service territory. We received approval on May 23rd from the North Dakota Public Service Commission for an electric service agreement that will allow us to serve an additional 225-megawatt data center load near Ellendale, North Dakota. That data center addition will be built in phases with the first phase expected to begin coming online in late 2024. Additionally, on August 5th, we filed an electric service agreement with the South Dakota Public Utilities Commission to serve a 50-megawatt data center that will be located near Leola, South Dakota.

Nicole Cabesto: Successfully replacing completed or near completed projects has ensured a continuous flow of work in the business is well positioned heading into the end of 2024.

Nicole Kivisto: Successfully replacing completed or near-completed projects has ensured a continuous flow of work, and the business is well-positioned heading into the end of 2024.

Nicole Cabesto: Due to lower revenues experienced on a year-to-date basis, largely from the timing of projects, we are revising our revenue guidance for Everest to be in the range of 2.65 billion to 2.85 billion, down from previous guidance of 2.9 billion to 3.1 billion, with margins now expected to be higher than 2023. EBITDA is still expected to be in the range of 220 million to 240 million. Looking forward, Everest is well positioned to benefit from increased bidding opportunities with the funding from the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, as well as data center construction and continued reassuring of manufacturing.

Nicole Kivisto: Due to lower revenues experienced on a year-to-date basis, largely from the timing of projects, we are revising our revenue guidance for Everest to be in the range of $2.65 billion to $2.85 billion.

Nicole Kivisto: down from previous guidance of $2.9 billion to $3.1 billion with margins now expected to be higher than 2023.

Nicole Cabesto: Including our existing data center that we serve, we now have 455 megawatts of data center load under signed electric service agreement. Of that total, 180 megawatts is currently online with the balance starting to come online later this year and continuing through the next few years. Our capital investment related to these data centers is minimal and therefore the margin received is beneficial to our earnings and overall ROE enhancement. Our customers also benefit from lower transmission expenses and we share a portion of the margin which results in beneficial build reductions for our customers.

Nicole Kivisto: EBITDA is still expected to be in the range of $220 million to $240 million.

Nicole Kivisto: Looking forward, Everest is well positioned to benefit from increased bidding opportunities. With funding from the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, as well as data center construction and continued reshoring of manufacturing, Everest expects to see increased demand for its services in the back half of 2024 and beyond. As I said previously, the spinoff of Everest is expected to be complete late this year. We plan to host an Everest Investor Day event ahead of the spinoff and will continue to keep you updated on our progress throughout the rest of the year.

Nicole Kivisto: Looking forward, Everest is well-positioned to benefit from increased bidding opportunities.

Nicole Kivisto: With the funding from the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, as well as data center construction and continued reshoring of manufacturing, Everest expects to see increased demand for its services in the back half of 2024 and beyond.

Nicole Cabesto: Everest expects to see increased demand for its services in the back half of 2024 and beyond.

Nicole Cabesto: As I said previously, the spin-off of Everest is expected to be complete late this year. We plan to host an Everest Investor Day event ahead of the spin and will continue to keep you updated on our progress throughout the rest of the year.

Nicole Kivisto: As I said previously, the spinoff of Everest is expected to be complete late this year. We plan to host an Everest Investor Day event ahead of the spin and will continue to keep you updated on our progress throughout the rest of the year.

Nicole Cabesto: This truly is a good design for our customers, our communities, and our shareholders. At our pipeline business, we achieved records second quarter earnings nearly doubling compared to the same period last year. This segment is executing well on our core strategy in delivering strong results, driven by strategic expansion, increased demand for transportation storage services, and a full quarter of benefit from new transportation and storage service rates. We remain committed to investing in future expansion projects to meet increasing customer demand including strong interest from industrial customers and power generation projects.

Nicole Cabesto: We are looking forward with great optimism, the prospects for continued customer and system growth in our electric and natural gas utilities, the strong performance of our pipeline with additional expansion projects underway, the consistent demand for additional pipeline services, and the high demand for our construction services are all very promising as we move through 2024.

Nicole Kivisto: We are looking forward with great optimism. The prospect of continued customer and system growth in our electric and natural gas utilities, the strong performance of our pipeline, with additional expansion projects underway, the consistent demand for additional pipeline services, and the high demand for our construction services are all very promising as we move through 2024. As always, MDU Resources is committed to operating with integrity and with a focus on safety. We remain dedicated to creating superior shareholder value as we continue providing essential products and services to our customers while being a great and safe place to work. I will now turn the call back over to Jason for the financial update.

Nicole Kivisto: We are looking forward with great optimism. The prospects for continued customer and system growth in our electric and natural gas utilities, the strong performance of our pipeline, with additional expansion projects underway, the consistent demand for additional pipeline services, and the high demand for our construction services are all very promising as we move through 2024. As always, MDU Resources is committed to operating with integrity and with a focus on safety. We remain dedicated to creating superior shareholder value as we continue providing essential products and services to our customers while being a great and safe place to work. I will now turn the call back over to Jason for the financial update.

Nicole Kivisto: We are looking forward with great optimism. The prospects for continued customer and system growth in our electric and natural gas utilities

Nicole Kivisto: The strong performance of our pipeline, with additional expansion projects underway, the consistent demand for additional pipeline services, and the high demand for our construction services are all very promising as we move through 2024.

Nicole Cabesto: As always, Empty Resources is committed to operating with integrity and with a focus on safety. We remain dedicated to creating superior shareholder value as we continue providing essential products and services to our customers while being a great and safe place to work.

Nicole Kivisto: As always, MDU Resources is committed to operating with integrity and with a focus on safety. We remain dedicated to creating superior shareholder value as we continue providing essential products and services to our customers while being a great and safe place to work.

Nicole Cabesto: Recently, our pipeline business completed construction of its line section 28 expansion project which was placed in service on July 1st. This project adds 137 million cubic feet of natural gas transportation capacity per day. Additionally, we have started construction on the Wapatan expansion project in eastern North Dakota which will provide approximately 20 million cubic feet of natural gas transportation capacity per day and is expected to be in service in late 2024.

Jason Volmer: I will now turn the call back over to Jason for the financial update. Jason. Thanks, Nicole, and I am pleased to share the details of our results for the second quarter. This morning we announced second quarter earnings of 60.4 million, or 30 cents per share on a GAAP basis, compared to second quarter 2023 GAAP earnings of 130.7 million, or 64 cents per share. Second quarter income from continuing operations was 60.6 million, or 30 cents per share, compared to 147.6 million, or 72 cents per share, in 2023.

Jason Vollmer: Thanks, Nicole, and I'm pleased to share the details of our results for the second quarter. This morning, we announced second quarter earnings of $60.4 million, or $0.30 per share on a gap basis, compared to second quarter 2023 gap earnings of $130.7 million, or $0.64 per share. Second quarter income from continuing operations was $60.6 million, or $0.30 per share, compared to $147.6 million, or $0.72 per share, in 2023. It's important to note that we completed the spinoff of Knife River on May 31st last year, so Knife River's results and other related impacts are reported as discontinued operations and are gap-based results for the prior year. In addition, we experienced an unrealized gain on the retained stake of Knife River shares in the second quarter of 2023.

Jason Vollmer: I will now turn the call back over to Jason for the financial update. Jason.

Jason Vollmer: Thanks, Nicole, and I'm pleased to share the details of our results for the second quarter.

Jason Vollmer: This morning we announced second quarter earnings of $60.4 million, or $0.30 per share on a gap basis, compared to second quarter 2023 gap earnings of $130.7 million, or $0.64 per share.

Jason Vollmer: Second quarter income from continuing operations was $60.6 million or $0.30 per share, compared to $147.6 million or $0.72 per share in 2023.

Nicole Cabesto: We are pleased to reaffirm our previously communicated regulated energy delivery guidance for 2024. We remain confident in our projected earnings guidance in the range of 170 million to 180 million. At Everest, we achieved a record of second quarter earnings and have an all-time record backlog of projects as of June 30th. Higher transmission and distribution revenues along with higher electrical and mechanical data center workloads partially offset a decrease in overall electrical and mechanical revenues from lower workloads due to the timing of projects.

Jason Volmer: It's important to note that we completed the spin-off of Nifer Ever on May 31st last year, so Nifer Ever results and other related impacts are reported as discontinued operations in our GAAP-based results for the prior year. In addition, we experienced an unrealized gain on the retained stake of Knife River shares in the second quarter of 2023. This gain was 90.8 million net attacks and was reported in continuing operations in 2023.

Jason Vollmer: It's important to note that we completed the spinoff of Knife River on May 31st last year, so Knife River's results and other related impacts are reported as discontinued operations and are gap-based results for the prior year.

Jason Vollmer: In addition, we experienced an unrealized gain on the retained stake of Knife River shares in the second quarter of 2023. This gain was $90.8 million net of tax and was reported in continuing operations in 2023.

Jason Vollmer: This gain was 90.8 million net of tax and was reported in continuing operations in 2023. With the completion of the Knife River spinoff, and we're continuing with the Everest spinoff, we are also reporting adjusted income from continuing operations to provide financial results that more closely correlate with and better outline the strength of our ongoing business operation. For more information on these adjustments, please reference our earnings rule.

Jason Vollmer: This gain was 90.8 million net of tax and was reported in continuing operations in 2023. With the completion of the Knife River spinoff and we're continuing on with the Everest spinoff, we are also reporting adjusted income from continuing operations to provide financial results that more closely correlate with and better outline the strength of our ongoing business operations. For more information on these adjustments, please reference our earnings rule.

Jason Volmer: With the completion of the Knife River spinoff and work continuing on the Everest spin off, we are also reporting adjusted income from continuing operations to provide financial results that more closely correlate with and better outline the strength of our ongoing business operations. For more information on these adjustments, please reference our earnings release. We experienced solid results from all of our businesses in the second quarter with adjusted income from continuing operations of 65.2 million, or 32 cents per share, compared to second quarter 2023 adjusted income from continuing operations of 60 million, or 29 cents per share.

Jason Vollmer: With the completion of the Knife River spinoff, and we're continuing on the Everest spinoff, we are also reporting adjusted income from continuing operations to provide financial results that more closely correlate with and better outline the strength of our ongoing business operations.

Nicole Cabesto: Everest reported an all-time record backlog of 2.4 billion compared to 1.94 billion at the same time period last year. Successfully replacing completed or near completed projects has ensured a continuous flow of work in the business is well positioned heading into the end of 2024. Due to lower revenues experienced on a year-to-date basis largely from the timing of projects we are revising our revenue guidance for Everest to be in the range of 2.65 billion to 2.85 billion down from previous guidance of 2.9 billion to 3.1 billion with margins now expected to be higher than 2023.

Jason Vollmer: We experienced solid results from all of our businesses in the second quarter, with adjusted income from continuing operations of $65.2 million, or $0.32 per share, compared to second quarter 2023 adjusted income from continuing operations of $60 million, or $0.29 per share. Turning to our individual businesses, our utility business reported earnings of $10.5 million for the quarter, compared to earnings of $13.1 million in the second quarter of 2023. The electric utility segment reported second quarter earnings of $15.5 million compared to $16.3 million for the same period in 2023.

Jason Vollmer: We experienced solid results from all of our businesses in the second quarter, with adjusted income from continuing operations of $65.2 million, or $0.32 per share, compared to second quarter 2023 adjusted income from continuing operations of $60 million, or $0.29 per share. Turning to our individual businesses, our utility business reported earnings of $10.5 million for the quarter compared to earnings of $13.1 million in the second quarter of 2023. The electric utility segment reported second quarter earnings of $15.5 million compared to $16.3 million for the same period in 2023.

Jason Vollmer: For more information on these adjustments, please reference our earnings release.

Jason Volmer: Turning to our individual businesses, our utility business reported earnings of 10.5 million for the quarter compared to earnings of 13.1 million in the second quarter of 2023. The electric utility segment reported second quarter earnings of 15.5 million compared to 16.3 million for the same period in 2023. The decrease was larger the result of lower volumes from a majority of our customers, including a 13% reduction in residential sales due to cooler weather. Additionally, higher operation of maintenance expense, primarily from contract service costs, also contributed to the decrease net income. The decrease was partially offset by higher retail sales revenue due to rate relief in North Dakota and Montana.

Jason Vollmer: Turning to our individual businesses, our utility business reported earnings of $10.5 million for the quarter, compared to earnings of $13.1 million in the second quarter of 2023.

Jason Vollmer: The electric utility segment reported second quarter earnings of $15.5 million compared to $16.3 million for the same period in 2023.

Nicole Cabesto: EBITDA is still expected to be in the range of 220 million to 240 million. Looking forward, Everest is well positioned to benefit from increased bidding opportunities with the funding from the Infrastructure Investment and Jobs Act and the Inflation Reduction Act as well as data center construction and continued reassuring of manufacturing. Everest expects to see increased demand for its services in the back half of 2024 and beyond. As I said previously, the spin-off of Everest is expected to be complete late this year.

Jason Vollmer: The decrease was largely the result of lower volumes from a majority of our customers, including a 13% reduction in residential sales due to cooler weather. Additionally, higher operational maintenance expenses, primarily from contract service costs, also contributed to the decreased net income. The decrease was partially offset by higher retail sales revenue due to rate relief in North Dakota and Montana. Our natural gas utility segment reported a seasonal loss of $5 million in the second quarter compared to a loss of $3.2 million in the second quarter of last year.

Jason Vollmer: The decrease was largely the result of lower volumes from a majority of our customers, including a 13% reduction in residential sales due to cooler weather.

Jason Vollmer: Additionally, higher operational maintenance expense primarily from contract service costs also contributed to the decreased net income.

Jason Vollmer: The decrease was partially offset by higher retail sales revenue due to rate relief in North Dakota and Montana.

Jason Volmer: Our natural gas utility segment reported a seasonal loss of 5 million in the second quarter compared to a loss of 3.2 million in the second quarter of last year. The increase seasonal loss was larger the result of higher operation of maintenance expense primarily higher contract service costs increased software related expenses and higher depreciation and amortization expense due to increased asset additions. The seasonal loss was partially offset by higher retail sales revenue due to rate relief in North Dakota, Idaho, and South Dakota. The pipeline business posted a record second quarter earnings of 17.3 million compared to 8.7 million in the second quarter of last year.

Jason Vollmer: Our natural gas utility segment reported a seasonal loss of $5 million in the second quarter compared to a loss of $3.2 million in the second quarter of last year.

Nicole Cabesto: We plan to host an Everest Investor Day event ahead of the spin and will continue to keep you updated on our progress throughout the rest of the year. We are looking forward with great optimism, the prospects for continued customer and system growth in our electric and natural gas utilities, the strong performance of our pipeline with additional expansion projects underway, the consistent demand for additional pipeline services and the high demand for our construction services are all very promising as we move through 2024.

Jason Vollmer: The increased seasonal loss was largely the result of higher operation and maintenance expense, primarily higher contract service costs, increased software-related expenses, and higher depreciation and amortization expense due to increased asset addition. The seasonal loss was partially offset by higher retail sales revenue due to rate relief in North Dakota, Idaho, and South Dakota. The pipeline business posted a record second-quarter earnings of $17.3 million compared to $8.7 million in the second quarter of last year.

Jason Vollmer: The seasonal loss was partially offset by higher retail sales revenue due to rate relief in North Dakota, Idaho, and South Dakota.

Jason Vollmer: The pipeline business posted a record second quarter earnings of $17.3 million compared to $8.7 million in the second quarter of last year.

Jason Volmer: The earnings increase was driven by all-time record transportation volumes, which was primarily from organic growth projects placed in service in November of 2023 and March of 2024. New transportation and storage service rates were effective August 1st of 2023, and higher storage-related revenue also drove the earnings increase. The pipeline business also received proceeds from a customer settlement, which was reported in other income. These increases were offset in part by higher operation of maintenance expense, primarily payroll related costs. The business also incur higher depreciation expense due to organic growth projects placed in service, as we mentioned earlier.

Jason Vollmer: The earnings increase was driven by all-time record transportation volumes, which was primarily from organic growth projects placed in service in November of 2023 and March of 2024. New transportation and storage service rates were effective August 1st of 2023, and higher storage-related revenue also drove the earnings increase. The pipeline business also received proceeds from a customer settlement, which was reported in other income.

Nicole Cabesto: As always, empty resources is committed to operating with integrity and with a focus on safety. We remain dedicated to creating superior shareholder value as we continue providing essential products and services to our customers while being a great and safe place to work.

Jason Vollmer: New transportation and storage service rates were effective August 1st of 2023.

Jason Volmer: I will now turn the call back over to Jason for the financial update Jason. Thanks, Nicole, and I am pleased to share the details of our results for the second quarter. This morning we announced second quarter earnings of 60.4 million or 30 cents per share on a gap basis compared to second quarter 2023 gap earnings of 130.7 million or 64 cents per share. Second quarter income from continuing operations was 60.6 million or 30 cents per share compared to 147.6 million or 72 cents per share in 2023.

Jason Vollmer: And higher storage-related revenue also drove the earnings increase.

Jason Vollmer: The pipeline business also received proceeds from a customer settlement, which was reported in other income.

Jason Vollmer: These increases were offset in part by higher operation and maintenance expenses, primarily payroll-related costs. The business also incurred higher depreciation expense due to organic growth projects placed in service, as we mentioned earlier. Everest reported lower second-quarter revenues due to timing of projects. However, electrical and mechanical revenues were impacted by lower workloads in the commercial, industrial, and service markets. These revenue decreases were partially offset by higher workloads in data center projects within the commercial market, as well as higher institutional workloads, primarily from government and education projects.

Jason Vollmer: These increases were offset in part by higher operation and maintenance expenses, primarily payroll-related costs. The business also incurred higher depreciation expense due to organic growth projects placed in service, as we mentioned earlier. Everest reported lower second-quarter revenues due to the timing of projects. However, electrical and mechanical revenues were impacted by lower workloads in the commercial, industrial, and service markets. These revenue decreases were partially offset by higher workloads in data center projects within the commercial market, as well as higher institutional workloads, primarily from government and education projects.

Jason Vollmer: These increases were offset in part by higher operation and maintenance expense, primarily payroll related costs. The business also incurred higher depreciation expense due to organic growth projects placed in service as we mentioned earlier.

Jason Volmer: Everest reported lower second quarter revenues due to timing of projects. Electrical mechanical revenues were impacted by lower workloads in the commercial, industrial, and service markets. These revenue decreases were partially offset by higher workloads in data center projects within the commercial market, as well as higher institutional workloads primarily from government and education projects. Transmission and distribution revenues increased with higher demand in both the utility and transportation markets. Utility workloads increased, primarily related to transmission, telecommunication, and substation projects, offset by decreased distribution project workloads. Transportation workloads increased due to traffic signalization and street lighting projects, offset by decreased workloads for government and electric projects.

Jason Vollmer: Everest reported lower second quarter revenues due to timing of projects. Electrical and mechanical revenues were impacted by lower workloads in the commercial, industrial, and service markets.

Jason Volmer: It's important to note that we completed the spin-off of Nifer ever on May 31st last year so Nifer ever results and other related impacts are reported as discontinued operations in our gap-based results for the prior year. In addition, we experienced an unrealized gain on the retained stake of knife river shares in the second quarter of 2023. This gain was 90.8 million net attacks and was reported in continuing operations in 2023. With the completion of the knife river spinoff and work continuing on the Everest spin off, we are also reporting adjusted income from continuing operations to provide financial results that more closely correlate with and better outline the strength of our ongoing business operations.

Jason Vollmer: These revenue decreases were partially offset by higher workloads in data center projects within the commercial market, as well as higher institutional workloads primarily from government and education projects.

Jason Vollmer: Transmission and distribution revenues increased with higher demand in both the utility and transportation market. Utility workloads increased, primarily related to transmission, telecommunication, and substation projects, offset by decreased distribution project workloads. Transportation workloads increased due to traffic signalization and street lighting projects, offset by decreased workloads for government and electric projects.

Jason Vollmer: Transmission and distribution revenues increased with higher demand in both the utility and transportation markets. Utility workloads increased, primarily related to transmission, telecommunication, and substation projects, offset by decreased distribution project workloads. Transportation workloads increased due to traffic signalization and street lighting projects, offset by decreased workloads for government and electric projects.

Jason Vollmer: Transmission and distribution revenues increased with higher demand in both the utility and transportation markets.

Jason Vollmer: Utility workloads increased, primarily related to transmission, telecommunication, and substation projects, offset by decreased distribution project workloads.

Jason Vollmer: Transportation workloads increased due to traffic signalization and street lighting projects, offset by decreased workloads for government and electric projects.

Jason Volmer: While revenue was lower due to timing of projects, Everest reported a record second quarter earnings of 39 million compared to earnings of 38.6 million for the same period in 2023. Operating income as a percentage of revenue remains strong as a result of project efficiencies during the quarter. Higher other income and lower interest expense more than offset the decrease in operating income compared to the second quarter of 2023.

Jason Vollmer: While revenue was lower due to the timing of projects, Everest reported a record second quarter earnings of $39 million compared to earnings of $38.6 million for the same period in 2023. Operating income as a percentage of revenue remains strong as a result of project efficiencies during the quarter. Higher other income and lower interest expense more than offset the decrease in operating income compared to the second quarter of 2023. And, as Nicole mentioned, backlog for the quarter was an all-time record level of $2.4 billion, with electrical and mechanical backlog up 34%, partially offset by transmission and distribution backlog, which is down 15% compared to the same period at June 30 of 2023.

Jason Vollmer: While revenue was lower due to the timing of projects, Everest reported record second-quarter earnings of $39 million compared to earnings of $38.6 million for the same period in 2023. Operating income as a percentage of revenue remains strong as a result of project efficiencies during the quarter. Higher other income and lower interest expense more than offset the decrease in operating income compared to the second quarter of 2023. And, as Nicole mentioned, backlog for the quarter was an all-time record level of $2.4 billion, with electrical and mechanical backlog up 34%, partially offset by transmission and distribution backlog, which is down 15% compared to the same period at June 30 of 2023.

Jason Vollmer: While revenue was lower due to timing of projects, Everest reported record second quarter earnings of $39 million compared to earnings of $38.6 million for the same period in 2023.

Jason Volmer: For more information on these adjustments, please reference our earnings release. We experienced solid results from all of our businesses in the second quarter with adjusted income from continuing operations of 65.2 million or 32 cents per share compared to second quarter 2023 adjusted income from continuing operations of 60 million or 29 cents per share. Turning to our individual businesses are utility business reported earnings of 10.5 million for the quarter compared to earnings of 13.1 million in the second quarter of 2023.

Jason Vollmer: Operating income as a percentage of revenue remains strong as a result of project efficiencies during the quarter.

Jason Vollmer: Hire other income and lower interest expense more than offset the decrease in operating income compared to the second quarter of 2023.

Jason Volmer: And as Nicole mentioned, backlog for the quarter was an all-time record level of 2.4 billion, with electrical and mechanical backlog up 34%, partially offset by transmission and distribution backlog, which is down 15% compared to the same period at June 30 of 2023.

Jason Vollmer: And as Nicole mentioned, backlog for the quarter was an all-time record level of 2.4 billion, with electrical and mechanical backlog up 34%, partially offset by transmission and distribution backlog, which is down 15% compared to the same period at June 30 of 2023.

Jason Volmer: The electric utility segment reported second quarter earnings of 15.5 million compared to 16.3 million for the same period in 2023. The decrease was larger the result of lower volumes from a majority of our customers, including a 13% reduction in residential sales due to cooler weather. Additionally, higher operation of maintenance expense primarily from contract service costs also contributed to the decrease net income. The decrease was partially offset by higher retail sales revenue due to rate relief in North Dakota and Montana.

Jason Volmer: Finally, MDU Resources continues to maintain a strong balance sheet and ample access to working capital to finance our operations through our peak seasons. Business momentum remains strong as we close up the second quarter of 2024, and we continue to provide updates regarding our 2024 guidance and outlook as we progress throughout the year.

Jason Vollmer: Finally, MDU Resources continues to maintain a strong balance sheet and ample access to working capital to finance our operations through our peak season. Business momentum remains strong as we close out the second quarter of 2024, and we will continue to provide updates regarding our 2024 guidance and outlook as we progress throughout the year. That summarizes our financial highlights for the second quarter, and we appreciate your interest in and commitment to MD Resource. And we'll ask now that we open the line to questions. Jamie? Thank you.

Jason Vollmer: Finally, MDU Resources continues to maintain a strong balance sheet and ample access to working capital to finance our operations through our peak season. Business momentum remains strong as we close out the second quarter of 2024, and we will continue to provide updates regarding our 2024 guidance and outlook as we progress throughout the year. That summarizes our financial highlights for the second quarter, and we appreciate your interest in and commitment to MD Resource. And I would ask now that we open the line to questions. Jamie? Thank you.

Jason Vollmer: Finally, MDU Resources continues to maintain a strong balance sheet and ample access to working capital to finance our operations through our peak seasons.

Jason Vollmer: Business momentum remains strong as we close out the second quarter of 2024, and we will continue to provide updates regarding our 2024 guidance and outlook as we progress throughout the year.

Jason Volmer: That summarizes our financial highlights for the second quarter, and we appreciate your interest in and commitment to MDU Resources.

Jason Vollmer: That summarizes our financial highlights for the second quarter, and we appreciate your interest in and commitment to MDU Resources.

Jamie: And what asks now that we open the line to questions. Jamie. Thank you.

Jamie: Thank you. 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, you may press star 2 on your telephone keypad. If you are on a speakerphone, please pick up your handset before entering your request. We will pause for just a moment to compile the Q&A roster. Your first question will come from the line of Brent Thielman with D.A. Davidson

Jamie: 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, you may press star two on your telephone keypad. If you're on a speaker phone, please pick up your handset before entering your request. We will pause for just a moment to compile the Q&A roster.

Jamie: And I would ask now that we open the line to questions. Jamie?

Jamie: If you are on a speakerphone, please pick up your handset before entering your request. We will pause for just a moment to compile the Q&A roster.

Brent Thielman: Your first question will come in the line of Brent Dealman with DA Davidson. Thank you. Just had a question in regards to Everest and maybe a discussion of the quality of the backlog being added at that business, maybe how the mix of what you're doing is shifted. From a couple of years ago, and you know, what degree that's influencing that the margin profile you expect going forward. Yeah, absolutely.

Jason Volmer: The pipeline business posted a record second quarter earnings of 17.3 million compared to 8.7 million in the second quarter of last year. The earnings increase was driven by all time record transportation volumes, which was primarily from organic growth projects placed in service in November of 2023 and March of 2024. New transportation and storage service rates were effective August 1st of 2023 and higher storage related revenue also drove the earnings increase. The pipeline business also received proceeds from a customer settlement, which was reported in other income. These increases were offset in part by higher operation of maintenance expense primarily payroll related costs. The business also incur higher depreciation expense due to organic growth projects placed in service as we mentioned earlier.

Jamie: Your first question will come from the line of Brent Thielman with D.A. Davidson.

unknown: Thank you. I just had a question regarding Everest and maybe a discussion about the quality of the backlog being added to that business, maybe how the mix of what you're doing is shifted from a couple of years ago, and you know, to what degree that's influencing the margin profile you expect going forward.

Brent Thielman: Thank you. I just had a question regarding Everest and maybe a discussion about the quality of the backlog being added to that business, maybe how the mix of what you're doing is shifted from a couple of years ago, and you know, to what degree that's influencing the margin profile you expect going forward.

unknown: Thank you. Just had a question in regards to Everest and maybe a discussion about the quality of the backlog being added at that business, maybe how the mix of what you're doing has shifted.

unknown: from a couple of years ago, and to what degree that's influencing the margin profile you expect going forward.

Jeff Thiede: Yeah, absolutely. I'll ask Jeff to take that question.

Jeffrey Thiede: Yeah, absolutely. I'll ask Jeff to take that question.

Jeff Thede: I'll ask Jeff to take that question.

Jeff Thede: Thanks for the question, Brent. Yeah, the data center work is one of the most significant larger areas of our backlog. We don't really break down our backlog of market sector levels, but you know, you take a look at our list. As I have in front of me, it's very diversified. So data centers, semiconductors, and industrial work are all contributing to our record levels of backlog. As far as our margins, we're still seeing a competitive market, but margins are comparable. And we look for that margin up with through executing these projects and exercising our operational excellence initiatives that we have to continue our growth.

Jeff Thiede: Yeah, absolutely. I'll ask Jeff to take that question. Jeff?

Jeff Thiede: Thanks for the question, Brent. Yeah, the data center work is one of the most significant and largest areas of our backlog. We don't really break down our backlog by market sector levels, but you know, you take a look at our list. As I have in front of me, it's very diversified. So data centers, semiconductors, and industrial work are all contributing to our record levels of backlog. As far as our margins are concerned, we're still seeing a competitive market, but margins are comparable, and we look for that margin uplift through executing these projects and exercising our operational excellence initiatives that we have to be able to continue our growth.

Jeffrey Thiede: Thanks for the question, Brent. Yeah, the data center work is one of the most significant and largest areas of our backlog. We don't really break down our backlog by market sector levels, but you know, you take a look at our list. As I have in front of me, it's very diversified. So data centers, semiconductors, and industrial work are all contributing to our record levels of backlog. As far as our margins are concerned, we're still seeing a competitive market, but margins are comparable, and we look for that margin uplift through executing these projects and exercising our operational excellence initiatives that we have to be able to continue our growth.

Jeff Thiede: Thanks for the question, Brent. The data center work is one of the most significant, largest areas of our backlog. We don't really break down our backlog at market sector levels, but you take a look at our list.

Jeff Thiede: As I have in front of me, it's very diversified. So data centers, semiconductors, industrial.

Jason Volmer: Everest reported lower second quarter revenues due to timing of projects. Electrical mechanical revenues were impacted by lower workloads in the commercial, industrial and service markets. These revenue decreases were partially offset by higher workloads in data center projects within the commercial market, as well as higher institutional workloads primarily from government and education projects. Transmission and distribution revenues increased with higher demand in both the utility and transportation market. Utility Workloads increased, primarily related to transmission, telecommunication and substation projects offset by decreased distribution project workloads Transportation Workloads increased due to traffic signalization and street lighting projects offset by decreased workloads for government and electric projects.

Jeff Thiede: work as all contributing to our record levels of backlog. As far as our margins, we're still seeing a competitive market.

Jeff Thiede: But margins are comparable, and we look for that margin uplift through executing these projects, and exercising our operational excellence initiatives that we have to be able to continue our growth.

Jeff Thede: And I appreciate that, Jeff. Maybe this is a quick follow-up, maybe to what degree are some of the other sectors of the construction economy working against you. Obviously, data centers and industrial are strong. Imagine utility ads as well. and you've seen more slack in other areas of the economy that's sort of working against you. Are you able to navigate that? You know, we really do a good job with pivoting from one market to the next. If you take a look at our commercial area in the hospitality area in the country, most notably Las Vegas. We had a white-hot market, and we anticipated some of those projects coming to successful completion.

Jeffrey Thiede: And appreciate that, Jeff. Maybe just as a quick follow-up, maybe to what degree are some of the other sectors of the construction economy working against you? Obviously, data centers and industrial are strong. I imagine utility is as well. Are you? Are you seeing more slack in other areas of the economy that's sort of working against you? Are you able to navigate it? You know, we really do a good job with

Jeff Thiede: And I appreciate that, Jeff. Maybe just as a quick follow-up, to what degree are some of the other sectors of the construction economy working against you? Obviously, data centers and industrial are strong. I imagine utility is important as well. Are you? Are you seeing more slack in other areas of the economy that's sort of working against you? Are you able to handle that? You know, we really do a good job with them.

Jeff Thiede: I appreciate that, Jeff. Maybe just as a quick follow-up, maybe to what degree are some of the other sectors of the construction economy?

Speaker Change: Working against you, obviously, data centers and industrial are strong. I imagine utility is as well. Are you seeing more slack in other areas of the economy that's sort of working against you? Or are you able to navigate that?

Jason Volmer: While revenue was lower due to timing of projects Everest reported a record second quarter earnings of 39 million compared to earnings of 38.6 million for the same period in 2023. Operating income as a percentage of revenue remains strong as a result of project efficiencies during the quarter. Higher other income and lower interest expense more than offset the decrease in operating income compared to the second quarter of 2023.

Jeffrey Thiede: You know, we really do a good job with pivoting from one market to the next, if you take a look at our commercial area in the hospitality industry in the country, most notably Las Vegas. We had a white hot market, and we anticipated some of those projects coming to successful completion. So we've deployed some of those resources into other areas of the country, and most notably, we have been able to pick up some additional data center work with those key performers in our business.

Jeff Thiede: You know, we really do a good job with pivoting from one market to the next, if you take a look at our commercial area in the hospitality industry in the country, most notably Las Vegas. We had a white hot market, and we anticipated some of those projects coming to successful completion. So we've deployed some of those resources into other areas of the country, and most notably, we have been able to pick up some additional data center work with those key performers in our business.

Jeff Thiede: We really do a good job with pivoting from one market to the next, if you take a look at

Jeff Thiede: our commercial area in the hospitality area in the country, most notably Las Vegas. We had a white hot market and we anticipated

Jeff Thede: So we've deployed some of those resources into other areas of the country and, most notably, been able to pick up some additional data center work with those keep performers in our business.

Jeff Thiede: Some of those projects coming to successful completion. So we've deployed some of those resources into other areas of the country and Most notably being able to pick up some additional data center work with those key performers in our business

Jason Volmer: And as Nicole mentioned, backlog for the quarter was an all time record level of 2.4 billion with electrical and mechanical backlog up 34% partially offset by transmission and distribution backlog, which is down 15% compared to the same period at June 30 of 2023. Finally, MDU Resources continues to maintain a strong balance sheet and ample access to working capital to finance our operations through our peak seasons. Business momentum remains strong as we close up the second quarter of 2024 and we continue to provide updates regarding our 2024 guidance and outlook as we progress throughout the year.

Jamie: And 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 star two on your telephone keypad. If you're on a speaker phone, please pick up your handset before entering your request.

Jamie: And 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 star two on your telephone keypad. If you're on a speakerphone, please pick up your handset before entering your request. Your next question comes from the line of Ryan Levine with Citi. Please go ahead.

Ryan Levine: Very good, thank you.

Jamie: And 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 star two on your telephone keypad. If you're on a speakerphone, please pick up your handset before entering your request.

Jason Volmer: That summarizes our financial highlights for the second quarter and we appreciate your interest in and commitment to MDU Resources.

Ryan Levine: Next question comes from the line of Ryan Levine with City, please go ahead. Hi everybody. Good start off. Good for you. Maybe I'll start off on Everest. What's causing some of the timing delay for revenues in the quarter, and is that targeted in certain segments, the business, or certain geographic locations?

Jamie: Your next question comes from the line of Ryan Levine with Citi. Please go ahead.

unknown: That's it, Ryan. Good, how are you? I'm going to start off on Everest.

Ryan Levine: Absolutely, Brian. Good, how are you? I'm going to start off on Everest.

unknown: What do you think is causing some of the timing delay for revenues in the quarter? And is that targeted at certain segments, the business, or certain geographic locations?

Ryan Levine: What do you think is causing some of the timing delay for revenues in the quarter? And is that targeted at certain segments, the business, or certain geographic locations?

Jamie: And what asks now that we open the line to questions. Jamie. Thank you.

Speaker Change: Hi, everybody. Good afternoon, Ryan.

Jamie: At this time, I would like to remind everyone if you would like to ask a question, please press star than the number one on your telephone keypad. If you would like to withdraw your question, you may press star two on your telephone keypad. If you're on a speaker phone, please pick up your handset before entering your request. We will pause for just a moment to compile the Q&A roster.

Ryan Levine: Let's start off on Everest. What's causing some of the timing delay for revenues in the quarter, and is that targeted in certain segments of the business or certain geographic locations?

Jeff Thede: Yeah, go ahead, Jeff. Thanks for the question, Ryan. Primarily in our electrical and mechanical segments, some of our new project starts haven't perfectly aligned with large project completions, mostly in a commercial hospitality market. Las Vegas related project timing is the key. Nevertheless, we have several significant projects that are in pre-construction with some of those same people that came off of those projects and at white-hot Las Vegas market. And these people have been redeployed and mobilized on site. We started some initial construction phases, and we're in final stages of completing some final budgets that are going to result in increases to our contract values and therefore our backlog.

Jeff Thiede: Thanks for the question, Ryan. Primarily in our electrical and mechanical segment, some of our new project starts haven't perfectly aligned with large project completions, mostly in the commercial hospitality market, Las Vegas related. Project timing is the key. Nevertheless, we have several significant projects that are in pre-construction with some of those same people that came off of those projects in that white-hot Las Vegas market. And these people have been redeployed and mobilized on site.

Jeffrey Thiede: Thanks for the question, Ryan, primarily in our electrical and mechanical segment. Some of our new project starts haven't perfectly aligned with large project completions, mostly in the commercial hospitality market, Las Vegas related. Project timing is the key. Nevertheless, we have several significant projects that are in pre-construction with some of those same people that came off of those projects in that white-hot Las Vegas market. And these people have been redeployed and mobilized on site.

Jeff Thiede: Yeah, go ahead, Jeff.

Jeff Thiede: Thanks for the question, Ryan.

Jeff Thiede: primarily in our electrical and mechanical segments, some of our

Jeff Thiede: A new project starts haven't perfectly aligned with large project completions, mostly in a commercial hospitality market.

Brent Thielman: Your first question will come in the line of Brent dealman with DA Davidson. Thank you. Just had a question in regards to Everest and maybe a discussion of the quality of the backlog being added at that business, maybe how the mix of what you're doing is shifted. From a couple of years ago, and you know, what degree that's influencing that the margin profile you expect going forward. Yeah, absolutely.

Jeff Thiede: Las Vegas related. Project timing is the key. Nevertheless, we have several significant projects that are in pre-construction with some of those same people that came off of those.

Jeff Thiede: Projects in that white-hot Las Vegas market.

Jeff Thiede: We've started some initial construction phases, and we're in the final stages of completing some final budgets that are going to result in increases to our contract values and, therefore, our backlog. Our data center, our manufacturing, our health care, our solar work, and our institutional projects are all areas of focus. And as these projects build momentum, we'll see results reflected in future quarters. Confidence in our guidance ranges, especially given our record backlog and coming off of a record Q2 performance. And really, market availability for our projects that fit right into our wheelhouse and are backed up by some of the funding that we've seen from the IIJA, IRA, and the CHIPS Act.

Jeffrey Thiede: We've started some initial construction phases, and we're in the final stages of completing some final budgets that are going to result in increases to our contract values and, therefore, our backlog. Our data center, our manufacturing, our healthcare, our solar work, and our institutional projects are all areas of focus. And as these projects build momentum, we'll see results reflected in future quarters. Confidence in our guidance ranges, especially given our record backlog and coming off of a record Q2 performance. And really, market availability for our projects that fit right into our wheelhouse and are backed up by some of the funding that we've seen from the IIJA, IRA, and the CHIPS Act.

Jeff Thiede: And these people have been redeployed and mobilized on-site. We've started some initial construction phases and we're in the final stages of completing some final budgets that are going to result in increases to our contract values and therefore our backlog.

Jeffrey Thiede: I'll ask Jeff to take that question. Thanks for the question, Brent. Yeah, the data center work is one of the most significant larger areas of of our backlog. We don't really break down our backlog of market sector levels, but you know, you take a look at our list. As I have in front of me, it's very diversified. So data centers, semiconductors, industrial work is all contributing to our record levels of backlog.

Jeff Thede: Our data center or manufacturing or health care or solar work or institutional projects are all areas of focus. And as these projects build momentum, we'll see results reflected in future quarters. I'm confident in our guidance ranges, especially given our record backlog and coming up of a record queue to performance and really the market availability for our projects that fit right into our wheelhouse. And backed up by some of the funding that we've seen from the I.I.J.A., IRA, and the CHIPS Act.

Jeff Thiede: Our data center, our manufacturing, our healthcare, our solar work, our institutional projects are all areas of focus.

Jeff Thiede: And as these projects build momentum, we'll see results reflected in future quarters.

Jeff Thiede: Competence in our Guidance Ranges.

Jeff Thiede: is especially given our record backlog and coming off of a record Q2 performance and really the market availability for our projects that fit right into our wheelhouse and backed up by some of the funding that we've seen from the IIJA, IRA and the CHIPS Act.

Jeffrey Thiede: As far as our margins, we're still seeing a competitive market, but margins are comparable. And we look for that margin up with through executing these projects and exercising our operational excellence initiatives that we have to continue our growth.

Jeff Thede: Even that response, you know what's enabling to be a higher margin profile for the current year, if there are these type of issues. That comes down to project execution; a lot of our projects, we do an exhaustive job of planning, and when we get good and favorable weather, and we get a schedule that helps support our production rates, and of course, safety is always at the top of our list when it comes to planning, those contribute to favorable margins going forward.

Jeffrey Thiede: Given that response, what's it enabling to be a higher margin profile for the current year if there's these type of issues? A couple

Jeff Thiede: Given that response, what's it enabling to be a higher margin profile for the current year if there's these type of issues? A couple

Speaker Change: Given that response, what's it enabling to be a higher margin profile for the current year if there's these type of issues?

Jeffrey Thiede: And I appreciate that Jeff. Maybe this is a quick follow up, maybe to what degree are some of the other sectors of the construction economy working against you. Obviously data centers and industrial are strong. Imagine utility ads as well, and you've seen more slack in other areas of the economy that's sort of working against you. Are you able to navigate that? You know, we really do a good job with pivoting from one market to the next.

Jeff Thiede: That comes down to project execution. A lot of our projects, we do an exhausting job of planning. And when we get good and favorable weather, and we get a schedule that helps support our production rates, and, of course, safety is always at the top of our list when it comes to planning, those contribute to favorable margins going forward.

Jeffrey Thiede: That comes down to project execution. A lot of our projects, we do an exhaustive job of planning, and when we get good and favorable weather, and we get a schedule that helps support our production rates, and, of course, safety is always at the top of our list when it comes to planning, those contribute to favorable margins going forward.

Jeff Thiede: That comes down to project execution. A lot of our projects we do an exhaustive job of planning and when we get good

Jeff Thiede: and Favorable Weather. And we get a schedule that helps support our production rates. And of course, safety is always at the top of our list when it comes to planning. Those contribute to favorable margins going forward.

Jeffrey Thiede: If you take a look at our commercial area in the hospitality area area in the country most notably Las Vegas. We had a white hot market and we anticipated some of those projects coming to successful completion. So we've deployed some of those resources into other areas of the country and most notably been able to pick up some additional data center work with those keep performers in our business.

Jeff Thede: And then specifically to the Ohio Data Center opportunity, is the upcoming PGM workshops related to the Amazon ISA having any impact on the pace of your Ohio Data Center growth? Not specifically, we have so much data center work there.

Jeff Thiede: And then specifically to the Ohio Data Center opportunity, are the upcoming PJM workshops related to the Amazon ISA having any impact on the pace of your Ohio Data Center growth?

Jeffrey Thiede: And then specifically to the Ohio Data Center opportunity, are the upcoming PJM workshops related to the Amazon ISA having any impact on the pace of your Ohio Data Center growth?

Jeff Thiede: And then specifically to the Ohio Data Center opportunity, is the upcoming PJM workshops related to the Amazon ISA having any impact on the pace of your Ohio Data Center growth?

Jeff Thiede: Not specifically, I'll tell you; we have so much data center work there. We're also looking at a semiconductor facility to be able to capitalize on the other three regions in the country where we support this confidential client. So to answer your question specifically, we haven't seen any of that impacting our current and future workload.

Jeffrey Thiede: Not specifically, I'll tell you we have so much data center work there. We're also looking at a semiconductor facility to be able to capitalize on the other three regions in the country where we support this confidential client. So to answer your question specifically, we haven't seen any of that impacting our current and future workload.

Jeff Thede: And we're also looking at a semiconductor facility to be able to capitalize on the other three regions in the country, or we support this confidential client. So they have your questions specifically. They haven't seen any of that impacting our current and our future workload. We're very strong in that market. We've got a great company, and we've been able to grow that part of our business at a very fast rate.

Jeff Thiede: Not specifically, but I'll tell you we have so much data center work there. We're also looking at a semiconductor facility.

Jeff Thiede: to be able to capitalize on the other three regions in the country where we support this confidential client. So to answer your question specifically, we haven't seen any of that impacting our current and our future workload.

Jamie: And 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 star two on your telephone keypad. If you're on a speaker phone, please pick up your handset before entering your request.

Jeffrey Thiede: We're very strong in that market. We've got a great company. We've been able to grow that part of our business at a very fast rate.

Jeff Thiede: We're very strong in that market. We've got a great company. We've been able to grow that part of our business at a very fast rate.

Jason Volmer: And then last question in terms of the targeted spin next quarter, given that we're only a few months away, do any updated thoughts around if MDU plans to retain any equity stake in the potential spin co or any updated thoughts around financing into that event. Yeah, Ryan, this is Jason and I can I can feel that question. Certainly we're excited about the progress for making on the future spin of the Everest business here. Things are going along well in that regard. We are planning a late 2024 spin as you indicated here. So kind of think fourth quarter timeframe for that.

Jeff Thiede: And then last question, in terms of the targeted spin next quarter, given that we're only a few months away, do you have any updated thoughts around if MDU plans to retain any equity stake in the potential spinco, or any updated thoughts around finance?

Ryan Levine: And then last question, in terms of the targeted spin next quarter, given that we're only a few months away, do you have any updated thoughts around if MDU plans to retain any equity stake in the potential spinco, or any updated thoughts around finance?

Ryan Levine: Next question comes from the line of Ryan Levine with city, please go ahead. Hi everybody. Good start off. Good for you.

Jeff Thiede: to

Speaker Change: And then last question, in terms of the targeted spin next quarter, given that we're only a few months away, do you have any updated thoughts around if MDU plans to retain any equity stake in the potential spin co? Or any updated thoughts around financing?

Jeffrey Thiede: Maybe I'll start off on Everest. What's causing some of the timing delay for revenues in the quarter and is that targeted in certain segments, the business or certain geographic locations? Yeah, go ahead, Jeff. Thanks for the question, Ryan. Primarily in our electrical and mechanical segments, some of our new project starts haven't perfectly aligned with large project completions, mostly in a commercial hospitality market Las Vegas related project timing is the key. Nevertheless, we have several significant projects that are in pre construction with some of those same people that came off of those projects and at white hot Las Vegas market.

unknown: into that event. Yeah, Ryan, this is Jason. I can I can feel it.

Jason Vollmer: into that event. Yeah, Ryan, this is Jason. I can, I can feel that.

Jason Vollmer: Yeah, Ryan, this is Jason. I can feel that question. Certainly, we're excited about the progress we're making on the future spin-off of the Everest business here. Things are going along well in that regard. We are planning a late 2024 spin-off, as you indicated here. So kind of think fourth quarter timeframe for that.

Speaker Change: into that event.

Jason Vollmer: Yeah, Ryan, this is Jason. I can feel that question. Certainly, we're excited about the progress we're making on the future spin of the Everest business here.

Jason Vollmer: Things are going along well in that regard. We are planning a late 2024 spin as you indicated here. So kind of think fourth quarter time frame for that.

Jason Vollmer: We will be having an investor day, as Jeff and Nicole mentioned here a little bit as well, prior to that. So stay tuned for dates and times where we'll put those out publicly here so we can get those held in the future. But overall, as we think about how we look to structure this business, we want to make sure that Everest is well capitalized and able to compete well within its space and also ensure that the MDU Resources companies left behind here will be strong and be able to continue to grow without any left-behind liabilities from that business.

Jason Volmer: We will be having an investor day, as Jeff and Nicole mentioned here a little bit as well prior to that. So stay tuned for dates and times where we'll put those out publicly here, so we get those held in the future. But overall, as you think about how we look to structure this business, we want to make sure that Everest is well capitalized and able to compete well within its space. And also ensure that the MD resources companies left behind here will be, you know, strong and be able to continue to grow without any left behind the liabilities from that business.

Jason Vollmer: We will be having an investor day as Jeff and Nicole mentioned here a little bit as well prior to that. So stay tuned for dates and times where we'll put those up publicly here so we get those held in the future. But overall, as we think about how we look to structure this business, we want to make sure that Everest is well capitalized and able to compete well within its space.

Jeffrey Thiede: And these people have been redeployed and mobilized on site, we started some initial construction phases and we're in final stages of completing some final budgets that are going to result in increases to our contract values and therefore our backlog. Our data center or manufacturing or health care or solar work or institutional projects are all areas of focus. And as these projects build momentum, we'll see results reflected in future quarters. I'm confident in our guidance ranges, especially given our record backlog and coming up of a record queue to performance and really the market availability for our projects that fit right into our wheelhouse.

Jason Vollmer: and also ensure that the MDU resources companies.

Jason Vollmer: left behind here will be strong and be able to continue to grow without any left behind liabilities from that business. So we're excited about the opportunity for both these businesses. With the Knife River transaction, as you mentioned, we had retained a stake in that business. We are maintaining flexibility here.

Jason Vollmer: So we're excited about the opportunity for both these businesses. With the Knife River transaction, as you mentioned, we retained a stake in that business. We are maintaining flexibility here to ensure that both businesses are set up to be very strong going forward, but we've not made a final decision on that at this point yet. We will, as we finalize our Form 10 and make that a public document later this year, have pro forma financial statements that will walk through the capital structure for the Everest business and certainly would address any retained stake potential in that document as well. But that's not something that we have made a final decision on or disclosed publicly at this point in time yet. Thanks.

Jason Volmer: So we're excited about the opportunity for both these businesses with the night for ever transactions. You mentioned we had retained a stake in that business. We are maintaining flexibility here to ensure that both businesses are set up to be very strong going forward. But we've not made a final decision on that at this point yet. We will, as we finalize our form 10 and make that a public document later this year. Have performed a financial statements they will walk through the capital structure for the Everest business and certainly would address any retained stake potential. In that document as well, but that's not something that we have made a final decision on as well as publicly at this point in time yet.

Jason Vollmer: to ensure that both businesses are set up to be very strong going forward.

Jason Vollmer: But we have not made a final decision on that at this point yet. We will as we finalize our Form 10 and make that a public document later this year.

Jason Vollmer: have pro forma financial statements that will walk through the capital structure for the Everest business and certainly would address any retained stake potential in that document as well. But that's not something that we have made a final decision on or disclosed publicly at this point in time yet.

Jeffrey Thiede: And backed up by some of the funding that we've seen from the I.I.J.A., IRA and the chips act. Even that response, you know what's enabling to be a higher margin profile for the current year, if there's these type of issues. That comes down to project execution, a lot of our projects, we do an exhaustive job of planning and when we get good and favorable weather and we get a schedule that helps support our production rates and of course safety is always at the top of our list when it comes to planning those contribute to favorable margins going forward.

Ryan Levine: Thanks for the time. Thank you.

Jamie: This marks the last call for questions. If you would like to ask a question, press the star then the number one on your telephone keypad.

Jamie: This marks the last call for questions. If you would like to ask a question, press the star, then the number 1 on your telephone keypad. The webcast can be accessed at www.mdu.com. Under the Investors heading, select Events and Presentations, and click Q2 2024 earnings conference call. After the conclusion of the webcast, a replay will be available at the same location. At this time, there are no further questions. I would now like to turn the conference back over to management for closing remarks.

Speaker Change: Thanks for your time.

Speaker Change: Thank you.

Jamie: This marks the last call for questions. If you would like to ask a question, press the star, then the number 1 on your telephone keypad.

Jamie: The webcast can be accessed at www.mdu.com. Under the investors heading, select Events and Presentations and click Q2 2024 Earnings Conference Call. After the inclusion of the webcast, every play will be available at the same location.

Jamie: The webcast can be accessed at www.mdu.com.

Jamie: Under the Investors heading, select Events and Presentations and click Q2 2024 Earnings Conference Call. After the conclusion of the webcast, a replay will be available at the same location.

Unknown Executive: At this time, there are no further questions.

Jason Volmer: I would now like to turn the conference back over to management for closing remarks. All right. Thank you. And I'd like to thank all of you for taking the time to join us on our second quarter conference call. We are certainly optimistic about our growth opportunities in our future regulated energy delivery projects and excited about the strong demand and performance of Everest as we look to spend that business later this year. We thank you again for your interest and support of MDU Resources.

Jeffrey Thiede: And then specifically to the Ohio Data Center opportunity is the upcoming PGM workshops related to the Amazon ISA having any impact on the pace of your Ohio Data Center growth? Not specifically, we have so much data center work there. And we're also looking at a semiconductor facility to be able to capitalize on the other three regions in the country or we support this confidential client. So they have your questions specifically. They haven't seen any of that impacting our current and our future workload. We're very strong in that market. We've got a great company and we've been able to grow that part of our business at a very fast rate.

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

Nicole Kivisto: All right, thank you. And I'd like to thank all of you for taking the time to join us on our second quarter conference call. We are certainly optimistic about our growth opportunities in our future regulated energy delivery projects and excited about the strong demand and performance of Everest as we look to spin that business later this year. We thank you again for your interest and support of MDU Resources. And with that, I'll turn the call back over to you, operator. Thank you. This concludes today's program.

unknown: All right, thank you. And I'd like to thank all of you for taking the time to join us on our second quarter conference call. We are certainly optimistic about our growth opportunities in our future regulated energy delivery projects and excited about the strong demand and performance of Everest as we look to spin that business later this year. We thank you again for your interest and support of MDU Resources. And with that, I'll turn the call back over to you, operator. Thank you. This concludes.

unknown: All right, thank you. And I'd like to thank all of you for taking the time to join us on our second quarter.

Speaker Change: Conference Call.

unknown: We are certainly optimistic about our growth opportunities.

unknown: and our future regulated energy delivery projects and excited about the strong demand and performance of Everest.

unknown: as we look to spin that business later this year.

Unknown Executive: And with that, I'll turn the call back over to you, operator.

unknown: We thank you again for your interest and support of MDU resources. And with that, I'll turn the call back over to you, operator.

Unknown Executive: Thank you.

unknown: Thank you. This concludes today's MDU 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.

Jamie: Thank you. This concludes today's MDU 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.

Unknown Executive: This concludes today's MDU Resources Group conference call. Thank you for your participation.

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

Unknown Executive: You may now disconnect. Today's MDU Resources Group conference call. Thank you for your participation.

Speaker Change: Thanks for watching, and don't forget to like, share, and subscribe to our channel.

Ryan Levine: And then last question in terms of the targeted spin next quarter, given that we're only a few months away, do any updated thoughts around if MDU plans to retain any equity stake in the potential spin co or any updated thoughts around financing into that event.

unknown: This concludes today's MDU Resources Group conference call. Thank you for your participation.

Dariusz Lozny: www.dariuszlozny.com www.dariuszlozny.com

Jason Volmer: Yeah, Ryan, this is Jason and I can I can feel that question. Certainly we're excited about the progress for making on the future spin of the Everest business here. Things are going along well in that regard.

Jason Volmer: We are planning a late 2024 spin as you indicated here. So kind of think fourth quarter timeframe for that. We will be having an investor day as Jeff and Nicole mentioned here a little bit as well prior to that. So stay tuned for dates and times where we'll put those out publicly here so we get those held in the in the future. But overall, as you think about how we look to structure this business, we want to make sure that Everest is well capitalized and able to compete well within its space.

Jason Volmer: And also ensure that the MD resources companies left behind here will be, you know, strong and be able to continue to grow without any left behind the liabilities from that business. So we're excited about the opportunity for both these businesses with the night for ever transactions. You mentioned we had retained a stake in that business. We are maintaining flexibility here to ensure that both businesses are set up to be very strong going forward. But we've not made a final decision on on that at this point yet.

Jason Volmer: We will as we finalize our form 10 and make that a public document later this year. Have performed a financial statements they will walk through the capital structure for the Everest business and certainly would address any retained stake potential. In that document as well, but that's not something that we have made a final decision on as well as publicly at this point in time yet.

Ryan Levine: Thanks for the time. Thank you.

Jamie: This marks the last call for questions if you would like to ask a question, press the star then the number one on your telephone keypad. The webcast can be accessed at www.mdu.com. Under the investors heading, select events and presentations and click Q2 2024 earnings conference call. After the inclusion of the webcast, every play will be available at the same location.

Jamie: At this time, there are no further questions.

Unknown Executive: And with that, I'll turn the call back over to you operator. Thank you.

Unknown Executive: This concludes today's MDU Resources Group conference call. Thank you for your participation. You may now disconnect.

Unknown Executive: Today's MDU Resources Group conference call. Thank you for your participation.

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