Good afternoon. My name is Kristy and I will be your conference facilitator. At this time, I would like to welcome everyone to the MDU Resources Group 2009 first quarter 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 session. (Operator Instructions) This call will be available for replay beginning at 4 pm Eastern time today, through 11:59 pm Eastern time on May 15. The conference ID number for the replay is 92032561. Again, the conference ID number for the replay is 92032561. The number to dial for the replay is 1-800-642-1687 or 706-645-9291. I would now like to turn the conference over to Vernon Raile, Executive Vice President, Treasurer and Chief Financial Officer of MDU Resources Group. Thank you. Mr. Raile, you may begin your conference.

Welcome to our earnings release conference call. Before I turn the presentation over to Terry Hildestand, our President and Chief Executive Officer, I would like to mention that this conference call is being broadcast live to the public over the Internet and slides will accompany our remarks. If you would like to review the slides go to our website at www.mdu.com and follow the link to the conference call. Our Earnings Release is also available on our website. During the course of this presentation 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 and beliefs are based on reasonable assumptions, actual results may differ materially. For a discussion of factors that may cause actual results to differ refer to Item 1A risk factors in our most recent Form 10-K and the recent of risk factors section in our most recent Form 8-K. Our format today will include formal remarks by Terry followed by a Q-and-A session. Other members of our management team who will be available to answer questions during the Q-and-A section of the conference call today are; Dave Goodin, President and CEO of Montana Dakota Great Plains Natural Gas, Cascade Natural and Intermountain Gas, John Harp, President and CEO of MDU Construction Services Group, Steve Bietz, President and CEO of WBI Holdings, Bill Schneider, President and CEO of Knife River Corporation and Doran Schwartz, Vice President and Chief Accounting Officer for MDU Resources. With that, I’ll turn the presentation over to Terry for his formal remarks.

Thank you, Vernon. Good afternoon and thank you for joining us today. MDU Resources is celebrating 85 years of operations this year. We’re pleased to have learned that were recently added to the prestigious Fortune 500 list of ranking number 473 based on revenue. In addition, we’re proud to be ranked much higher for earnings per share annual growth for the past 10 years, ranking number 47. Our corporation’s continuing growth is the result of our successful business strategy and the dedication of our hard working employees. With our diversified, balanced group of regulated and non-regulated companies providing stable cash flows, we look forward to continued growth. Our diversification strategy continues to be effective with strong operating cash flows recorded in the first quarter. We have continued our focus on closely managing cost to enhance results and have aligned our capital spending with cash generated by operations. We’re optimistic about our ability to meet our guidance targets and reaffirmed our earnings per share guidance range for the year, excluding the non-cash charge. For the first quarter, absent to non-cash charge we reported consolidated earnings of $40.4 million or $0.22 per common share. This compared with earnings of $70.9 million for the first quarter of last year or $0.39 per common share. We had strong cash flows from operations of $248 million and our balance sheet continues strong, with nearly 60% equity. These results do reflect some one-time expenses for the quarter, we had two of them. We incurred approximately $1 million after tax in severance costs at our corporate office and utility business related to the realignment of our workforce. This should benefit us on a go forward basis. In addition, our natural gas and oil production group incurred $1.3 million after tax in laying down costs of two rigs…

(Operator Instructions) Your first question comes from Paul Patterson - Glenrock Associates.

I want to touch base with you on the DD&A reduction, the expense reduction as a result of the ceiling test. Could you sort of a quantify what that impact is for this year, I guess on an annual basis?

Just to update you on that, our DD&A rate will drop roughly $0.50, our DD&A rate kind of on a go forward basis will be kind of in that $1.52 range effective April 1.

Okay and so basically we just take the Mcfe equivalent and multiply that by the production element, we’ll get an idea of what that pretax benefit of that would be; correct?

That would be correct, yes

Okay. Now, the second thing is that, obviously you guys have got lower prices here and you guys have lower production than when you guys first initiated guidance and yet you’re reiterating it. What are the offsetting factors we should be thinking about other than obviously this DD&A benefit?

DD&A was a big piece of that, Paul. In addition to that, we’re seeing the pipeline earnings up a little bit. We’re seeing increased storage. I mentioned in the script and just some minor changes from some of our other business units.

Okay. Then I guess on the production, when we’re looking at 2010, what should we be thinking about in terms of your production in E&P a year out or so?

I think it’s probably a little premature and certainly we are working on putting together our thoughts for next year and kind of watch what the pricing environment does between now and the end of this year and we’re going to react accordingly. So, I really don’t have a lot of good direction for you right now.

Okay and then on the Wygen plant, can you give us a little bit more of the fuel. I don’t remember seeing an actual cost that you guys are paying for it. If you could just give us a little more flavor for that?

Paul, we didn’t disclose the purchase price for that, other than I’ll say it’s competitive in the marketplace right now and we did file a certificate of public convenience and necessity with the Wyoming Public Service Commission. Actually, that was June of last year that was approved. I know that there’s some numbers that are included in that. I don’t have that in front of me right now so we have that certificate in hand which kind of shows the long term stable energy prices for our customers.

Your next question comes from Paul Ridzon - KeyBanc.

Could you kind of give a sense of the magnitude of the stimulus dollars you’re seeing, what you’re getting as far as share in the various states and then just kind of how to think about the margins for that business. How much competition is there?

Paul, the stimulus really has an impact of more than one of our businesses, the construction materials, construction services, potentially and our utility, but I think we’ll probably, Bill maybe you can address the first part of that and then John if you want to add anything that would be great.

Paul, as you probably recall, is 50% of the stimulus funds have to be obligated by July 8, which is 120 days from the March 10 of bill passage date. We’re seeing the packages come out at different rates in the states. We’ve been bidding that work and we’ve been getting some of that work. I will tell you, Paul is on the smaller projects, the margins are very tight. There are still a lot of people that are moving over from the private market and bidding very competitive prices. On the mid to larger sized projects, the margins improve and that’s of course where we’re concentrating more of our efforts, but the stimulus bills or the stimulus funds must be obligated by that July 8 date, so we’re expecting really to see the impact to us primarily in the third quarter.

On our end, on the construction services group, we’re seeing some opportunities basically with two agencies, the Bonneville Power Administration and then WAPA. In those cases we’re starting to see some transmission projects come out for bid that was a part of the stimulus package. Little early to say what the outcome is because they’re literally just on the street today and can’t really tell you about how successful we’re going to be, but we are seeing some activity in those two areas.

Your next question comes from Chris Ellinghaus - Shields &Company. Chris Ellinghaus - Shields & Company:

Yes. In Las Vegas, Chris I think you probably saw there yesterday with City Center, the Dubai World and the MGM have finally came to an agreement where that project, now is fully funded. A couple of weeks ago, the due the Dubai World had filed a lawsuit against MGM for default and poor management of the City Center project but since then that’s been resolved. So that’s good news for us. As I mentioned to you before, the work that we’re doing on there is with our fire protection company and quite frankly our terms have not been affected and our payments continue to take place. So, that was some positive news because of the potential of City Center defaulting and going into bankruptcy. On Fountain Blue; as you probably know, a few days ago Banc of America and some of the consortium group decided to file a lawsuit against Fountain Blue and Turnberry for a default in the covenants as far as the financing of that project. Interesting to note, the owner of the project has asked the banks to identify where that default came from and they can’t seem to come up with one I think the truth is they are not in default and I think that the banks are playing with fire, because this thing was fully funded from the beginning. There was never a question about financing on Fountain Blue, which is arbitrarily some banks decided to come in and quite frankly all they’re trying to do is wipe out some equity holders and reduce some bond holders potential the earnings on the servicing that debt. One thing I can tell you from the CSG level, we’ve had all three of our companies work there. We have managed our risk very well and we are looking at that project on an hourly basis. In fact, we’ve made some dramatic changes in the last two days to protect our interest and maintain our ability to be profitable. Generally speaking, the Las Vegas market obviously is in tough shape, there’s no secret there, but the thing that continues to make a difference for us in Las Vegas is that we have the best people operating in Las Vegas. Chris Ellinghaus - Shields & Company: Vern, relative to the guidance and you are not making any changes, going back to what you had for production and pricing assumptions for E&P. Did you have a wide range of assumptions in your original guidance that allowed you to not make any changes at this point, or have you had offsetting benefits that offset some pretty significant changes to the E&P assumptions?

I think that question, Chris was partially addressed a little bit earlier here in terms, we’ve indicated what our assumptions are, our are range of prices and the like and we’ve still got that production to decrease and production that we had set out earlier. I think it was in the 7% to 10% range, but as Terry responded to a while ago there is a couple of factors that are offsetting this decrease in prices, the assumed prices and again that gets to the lower DD&A and then across all of our businesses. We’ve got a little bit of pickup at the pipeline on some of the storage and the like and so it’s positive at all our businesses, generally. Chris Ellinghaus - Shields & Company: One more question. Bill, can you talk about the magnitude of the headcount reduction that you’ve taken and some of the other cost measures that helped the first quarter?

Yes. I can, Chris. At the end of 2008, our headcount was down by 2,000 compared to the same time frame in 2007 and as we’ve rolled through the first quarter, of course we’re putting people back on as the season starts, but our hourly count, number of hours worked is down for the first quarter about 26% and we’ve reduced our overtime by about 46%, so we’re really watching our labor very closely coming out of the slow first quarter.

Your next question comes from Rebecca Followill - Tudor, Pickering, Holt.

John, the first one’s for you. I guess you get all the questions today. It’s on Construction Services. Can you talk a little bit about the transition to doing some of these big electric transmission lines? What kind of people you have? How much work you can really take on? Because it is kind of a different business mix, if I’m correct?

Well, we’ve done transmission work with our Groups before. What’s different is we’re trying to approach it with maybe some more specialty, and with certain type of talent to meet the challenges of the potential transmission buildup that people are talking about, but make no mistake about it, our companies have been doing transmission work for many, many years. What we’ve been looking at is transmission lines that are, say 230 KB and above, maybe a little more challenging, more steel construction with concrete foundations and different designs. We put together a small group of people and in the last couple years have purchased some specialized equipment that will help us in that area. We’re just starting to see some of that work come out. It’s not coming out as fast as people would hope, mainly because of environmental issues, sitting issues, people not certain they want a power plant at either end, be it coal-fired or what have you. So some of that’s being impacted, but I do think there’s some real opportunities for us there. Again, we’re not interested in being the biggest. We’re just interested in being profitable.

Any acquisitions that you would need to make to increase your capabilities or do have you all of it already?

Well, like some of my competitors who spent over $1 billion buying a company and for a great increase on their goodwill on their balance sheet, we’d rather do it with people and a smaller amount of capital invested, and make sure our margins fit what we need for our shareholders.

Thank you and then on construction materials, I was surprised to see a flat backlog relative to a year ago. Can you quantify how much of that might be stimulus funding?

Right now, Becca, that’s a relatively small portion. Basically, what we’ve done is that if you looked at the mix between the public and private is it shifts more towards the public as you might imagine, but we actually are given the really steep decline in industry volumes, we’re pleased the fact that the backlog is even with a year ago.

I think the questions are all stemming to the same thing, but I’m still trying to get my hands around is that we know there’s lots of stimulus funds floating around, but the timing to actually see it on your bottom line is what we struggle with. So when do we actually see it flow through? Is it third quarter or is it 2010?

It will be the third quarter, going forward. So we expect the last part of this year, 2010 and then there will be some projects, it will be less in 2010 that will of course move on into 2011.

I know you can’t tell because you don’t know what projects it’s going to be and how competitive the bidding is, but how big of a needle mover is it?

The best barometer I think I could give you Becca. The stimulus bill essentially increases public spending in the U.S. by about 10%. That kind of gives you a parameter, what that is. That’s in addition to all the public spending that’s done by the Core of Engineers and done by the Federal Highway Administration, the General Service Administration. So it’s about a 10% increase, but by and large, though given the steep falloff on the residential and the commercial side, in essence what the stimulus bill really is doing is filling the deficit left by the downturn in the private side.

Your next question comes from Andrew Levi of Incremental Capital.

Just a couple questions, please. I guess the first one, just something that you had said when you were talking about Nevada and about protecting your interest. Could you just give us a little bit more detail on that and what you mean by your interest and what you’re protecting specifically?

Well, we’re protecting our margins and making sure we’re profitable for the shareholders of MDU.

Okay, but there’s no type of financial issues that you’re talking about or anything like that?

Our financial interest is only in our contracts that we’re awarded, and the people that are working for us.

Okay. So there’s no type of write-offs or anything like that? I didn’t think there was, I just want to make sure.

No, we’re not to that point. So let’s make sure we’re clear on that.

Okay and then going back to I guess April 20, Moody’s downgraded some of your debt and your Commercial Paper. Could you just kind of go over some of the reasons why you think they ended up doing that and if you think Moody’s has any concerns overall going forward? I have one more question.

I’ll touch on that a little bit. As you are aware, a couple of weeks ago Moody’s downgraded us from an A3 to a BAA1, so it’s from an A minus equivalent to a BBB plus equivalent. One of the things according to Moody’s, from their perception at least, we have increased our business risk as a result of the growth in our non-regulated businesses over the last several years. So they felt this at the unregulated businesses they’re more at risk given this downturn in the economy and the low energy prices that we’re currently experiencing, but terms of our borrowing and the like, MDU hasn’t really noticed any significant difference in terms of both the availability of credit as well as the cost of our short term borrowings. It’s possible we haven’t issued any long term debt in the last several months, but going forward it might have a slight effect on that, but again when you get to a BBB credit, I mean that’s still a fairly decent credit rating, BBB plus.

I guess looking out, obviously your hedge numbers for natural gas, none of us know what the price of natural gas is going to be going forward and actually today it’s up. So, I guess it’s a positive thing, but if there wasn’t a marked improvement, obviously I guess your cash flow would continue to suffer. There’s not going to be a need for any equity in 2010, 2011, if things don’t improve, if you want to keep the ratings, of course?

Again we have maintained a conservative leverage position. I think right now we’re at about 41% debt or just about 60% equity, so that’s a fairly strong balance sheet. In terms of from a cash flow perspective or in terms of equity needs, absent any acquisitions or any unplanned for organic growth type projects, we think any equity needs that we would have like for the remainder of 2009 would be minimal, if any at all is required. Again, we’ve got strong operating cash flows and as we’ve indicated, we plan to live within our operating cash flows in terms of funding our capital expenditures. Should mention too that, in terms of current maturities of long term debt, we’ve only got about $29 million that’s going to be coming due for the rest of 2009, and if you take a look at 2010 I think that number jumps up to, it’s probably in that $90 million area and for 2011 I think it’s, again probably closer to that $50 million area or thereabouts. So we have very limited amounts of maturities in terms of debt coming due over the next couple years and so we feel we’re in excellent shape here.

One last question. Just regarding the stimulus, and just to understand your comments. Are you guys basically saying you’re almost guaranteed to get significant dollars from the stimulus or is it not a guarantee and you’re going to have to kind of work for it?

Well, nobody is handing us anything. It’s all being competitively bid like the regular Federal Highway, Bill but we are getting some of this work and as we indicated, it’s very positive given the downturn in the private arena, but there’s a lot of money that will be coming out to bid here throughout the second and third quarters. So we’re very optimistic about us getting our fair share, but nobody is going to hand it to us.

Your next question comes from John Hanson - Praesidis Asset Management.

In the E&P area, you mentioned you’ve got an operated well came online. Did you give any information in terms of some of the specifics on that?

John, I’m not quite sure I’m following you. You said an operated well?

I think that’s what you said, you were cutting in and out a little bit in that part of the opening segment, but you were saying something about you have some wells that had just now come online in that area?

I think what you may be referring to, Terry mentioned I think we have 28 operated Bakken wells that we’ve drilled since we started drilling here a little over a year ago and from those operated wells we’ve got about 1700 barrels on a net basis of oil coming to us and then we’ve got other non-operated interest in there for another about 450 net barrels. I think that may be what you’re referring to.

I thought you mentioned something about April, I think there were some wells that were starting to come off confidential and some information is starting to become available. I don’t know if you had any well results or costs, or things like that we could kind of help gauge what the latest look looks like from those?

Yes, John the first well came on in April of last year. We started drilling at the end of the year before, it came on in April. As you know, we split our interest to manage the risk in there, we’ll take the ones that we’re operating, we’ll take varying ownership interest along with other producers in that area, but after everyone share and the leases are paid, our net proceeds from our operated wells are around 1700 barrels. Now, we have one rig continuing to drill up in the Bakken and we’ll continue to drill for the remainder of the year and we’re concentrating that down in the South end. So those results will be coming out as we complete those wells.

What kind of costs are you seeing up in that way, in terms of cost to drill some of those kind of wells as you’re getting more experience?

The Bakken wells, we’ve seen some reductions in costs up there. If you look at the 1,280 acre spacing unit wells, costs in those currently are probably in that $5 million to $5.5 million range and that’s down from probably $7 million about a year ago.

Alright, let me move to another area. On the Construction Services, the backlog now is a little bit lower than what it was a year ago. Are we starting to see some bottoming out in that backlog at this point in time, just in a general sense?

We dropped about a little over $50 million from the December quarter to the March quarter and a lot of the burn-off is coming in the Las Vegas market, but we’re also finding some other opportunities in some other markets in the country that we’ve been able to pick up some work. To answer your question looking at a long term, I think we really need to kind of concentrate on what these credit markets finally end up doing. Because I talk in the engineering groups and watching architectural groups and their forecasting is really predicated on the credit markets coming back to some normalcy based on what we’ve seen in the past, before I can give you the defined answer if we bottom out or if we’re going to start to move up. I think there’s still a little uncertainty there.

(Operator Instructions) Your next question comes from Paul Ridzon - KeyBanc.

Do you have an update on the Left Bridge to Great Falls line?

It’s basically the status quo, still waiting on that three member judge in Alberta to make their decision on the first segment of that line. That decision could happen tomorrow or it could happen six months from now. They kind of operate on their own time clock and that we’re still optimistic to that project will get approved and will get built. Believe me, I wished it was right now because we would like to take advantage of that opportunity.

Terry, last time we talked, you kind of indicated that some potential acquisition targets hadn’t recalibrated their valuation metrics to the current market. Are you seeing that correct?

Paul, we continue to look at projects. We’re very cautious on everything we look at, based on realistic assumptions of what the values are. So probably just a general statement is it’s been difficult for people to realize maybe what new values that they should be receiving for their companies. We think it will probably get better over the next few months, but we continue to look at all our business units but again, we’ll be real cautious if and when we do anything.

Any notable trends to look at here with regards to counterparty credit getting paid after jobs are done or--?

We watch that very close, Paul on an ongoing basis. I can say our days outstanding are down this quarter from the previous quarter. Again, that’s what we do. We’re keeping a very close eye on receivables. As you can see the cash flow generated from the first quarter is at very high levels, up substantially from the previous year. That’s part of the reason.

Lastly, the 10% you referenced that the stimulus should do to highway spending. Any part of that is going to have any parasitic impacts that you see?

I’m not sure I understand your question, Paul. Could you explain that a little bit more?

Well, because of resource allocation or any other factors, could the stimulus bill displace some highway work that otherwise would have been done?

Good question, Paul. It’s mandated in the stimulus bill that states cannot replace our projects that they had originally intended with state funds with the new federal stimulus. This has to be new money and then the other thing is which is good news in some states that are having some budget problems, is there are no matching funds necessary for the stimulus. So we expect it all to hit the streets.

Your final question comes from James Bellessa - Davidson & Company. James Bellessa - Davidson & Company: The Construction Materials & Contracting segment backlog did stay the same year-over-year, but it’s up nicely since the year end. Can you give us some color as to why and exactly what kind of increases you’ve been seeing there or what kind of projects you’ve been adding onto?

Well, as indicated in some of the earlier answers, Jim is that we’ve seen a good pickup on the private work side. Some of the states our backlogs have picked up substantially. We’ve been doing more and more interstate work, Jim. We picked up some sizable contracts, particularly in the Mountain region and up in the Northwest and of course, as also as indicated earlier, those mid-sized to larger projects are the contracts that we’re really focusing in on. James Bellessa - Davidson & Company: You said private work side, but really did you mean public work side?

Public, excuse me. I’m sorry. I misspoke. Yes the public work side. The private as you know is slow from the residential and commercial side.

(Operator Instructions) This call will be available for replay beginning at 4:00 pm Eastern time today through 11:59 pm Eastern time on May 15. The conference ID number for the replay is 92032561. At this time, there are no further questions. I would now like to turn the conference back over to management for closing remarks.

Thank you. This is a difficult time in the economy. We believe we’re well-positioned. We have good, strong cash flows. We have a solid balance sheet. We’re certainly committed to paying a competitive dividend. As the year goes on, we’ll update you with our guidance as we typically do. With that, we appreciate your participation today. Thank you very much.

This concludes today’s MDU Resources Group conference call. Thank you for your participation. You may now disconnect.