Good afternoon. My name is Kerry, and I will be your conference facilitator. At this time I would like to welcome everyone to the MDU Resources Group 2009 third quarter conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer period. (Operator Instructions) This call will be available for replay beginning at 4:00 pm Eastern Time today through 11:59 pm Eastern Time on November 13. The conference ID number for the replay is 32816963. Again, the conference ID number for the replay is 32816963. 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 Hildestad, 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’d like to view 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 and 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 as well as our Form 10-Q and the 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 session of the conference call today are Bill Schneider, President and CEO of Knife River Corporation; Steve Bietz, President and CEO of WBI Holdings; Dave Goodin, President and CEO of Montana Dakota Great Plans Natural Gas, Cascade Natural Gas and Intermountain Gas; John Harp, President and CEO of MDU Construction Services Group; 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. Terry.

Thank you, Vernon. Good afternoon, I would like to thank all of you on the call and on the webcast for joining us today. We appreciate your interest in MDU Resources. Pleased to report that we had a very good third quarter. Consolidated earnings were $92.4 million or $0.50 per common share compared to $118.2 million or $0.64 per common share for the third quarter of 2008. Consolidated earnings for the nine month ended September 30, excluding the first quarter non-cash charge related to low natural gas and oil prices were $188 million or $1.02 per share. This compares to $304.4 million or $1.66 per share for the first nine months of 2008. Based on our year-to-date results and our outlook for the remainder of the year, we are increasing our 2009 earnings guidance. We now project earnings per common share to be $1.25 to $1.40 for 2009, excluding the first quarter non-cash charge. In addition, considering the recent rebound in oil and natural gas prices, we’ve increased our estimated capital expenditures for the year by approximately $45 million; substantially all of this increase is allocated to our energy group. Now moving our discussion to individual operating results, earnings at our construction materials and contracting business increased 42% to $47.5 million. The growth reflects higher volumes, end margins for asphalt and liquid asphalt oil, higher margins for aggregates, and higher realization of continued cost reduction strategies. We certainly have benefited from the stimulus spending, although through September, only about 8% of the $7.9 billion stimulus package funding available in our states for operations has been spent. The bidding environment remains very competitive. However, we’re pleased with the projects included in our backlog. We continue to add energy related projects recently adding a wind project in North Dakota, and we have…

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

What impact on the DD&A rate will the Bakken sale have?

At this point our DD&A rate on a go forward basis is expected to be similar to what it was in the third quarter of this…

So, no big impact?

No.

Construction Materials, how much stimulus spending is related to the backlog? How much backlog is related to stimulus?

Right now I would say I don’t have the exact figures, but it would be in the neighborhood of 25% to 30%. Paul Ridzon – KeyBanc: 25% to 30%?

Yes.

Your next question comes from Paul Paterson - Glenrock Associates.

The cost cutting that you guys have done is really quite impressive. How sustainable is it I guess. Is there any amount of that is being deferred in to future years and or could you just it elaborate a little bit on that, what the outlook is on that, I mean clarify a little bit on that?

We have looked at cost cutting across, really all of the business units, including corporate and we have made cost reductions that we think are sustainable there that are going to position us very well as this economy turns around, so for the most part, the cost cutting, certainly in the SG&A area is sustainable. Bill, I don’t know if you want elaborate on that, we have some direct costs related to people out in the field as far as our overall employee count, but the SG&A costs are sustainable cuts.

I would add to what Terry said is structurally our cost cut structure is going to maintain itself on a go forward basis. The vast majority we have cut about $102 million of worth cost out of in the first nine months compared to last year and we expect that number to grow. The vast majority of that, Paul, will continue to one area we’ll have some exposure on a go forward basis on cost cutting will be on diesel prices going in to next year, but we have at least half of our consumption on track, so right now we’re thinking this is very sustainable in terms of what our cost cuts have been thus far.

With respect to the E&P business. What were the actual proceeds that the gain that you guys got. I know that if earnings, but what was the benefit from selling those 45,000 acres?

We have not disclosed the financial terms of the transaction.

I think there was a little bit of an upward track in terms of the CapEx in the business. Do we have any favor for what you are seeing, or what your expectation now is for 2010 production, vis-à-vis 2009?

We’re working on that right now. All of the business units are putting their plans together, and we’ll come out with that guidance when we release earnings in January.

The depreciation decrease in the construction materials business what with out come, the DD&A decrease?

The decrease we sold a substantial amount of assets in the last quarter of last year.

The Sanish communication issue, what if you find there is some communication. What does that mean, then and does that mean basically that you don’t see much of an opportunity there?

I think realistically that formation of there is going to very from area-to-area. I think we have drilled three Sanish wells to date and two of those have been very solid wells. We like the results from those wells and we plan to continue to test next year and kind of as we go forward, we’ll keep working on that.

Your next question comes from Becca Followill - Tudor Pickering Holt.

Two questions for you. One on the stimulus spend, we’ve heard this consistently that only a fraction of it has been spent so far. What will it take to get that moving?

We think that these states are going to increase their stimulus significantly. There was a lot of jockeying around last yea, or excuse me, earlier this year in terms of which projects should get out the gate, but I think the states, the DOTs have hit stride, and as you know, they also have a deadline, two years for this money to be spent, so we think that clock is going to move things along rapidly for next year.

What’s the hard debt line, Bill?

It was three years for the total stimulus bill, and we’re I think at leased nine months into it, so it will be towards the end of ‘11, first part of ‘12. So ‘10 and ‘11 are going to be the big years.

So that’s the deadline for all funds to be spent or all projects to be let?

For the projects to be let there will probably be some work that will tail into ‘12 and maybe some ‘13, but keep in kind, Becca, most of these projects are overlay projects. At least two-thirds of the stimulus money is going to worth overly, and that work can be done fairly rapidly.

So if I had to, like put your feet to the fire, and say how much was going to be spent in 2010, what would you say?

Well, the total spent for transportation and infrastructure is $46 billion, and that’s nationwide. As Terry indicated in his opening remarks, in our states that we operate in, there’s $7 billion to $8 billion of that $45 billion, $56 billion. We’ve only seen 8% of that money has been spent is this year. So if you just evenly split it up between ‘10 and the ‘11, we’d see roughly about 45% of that money being spent over the next two years.

You think it’s realistic that could happen?

We absolutely do. Yes.

On the E&P side, big pull back in CapEx this year, understandably giving commodity prices a little bit of ramp up now, but your productions declining by 7% to 10% this year. What level of CapEx do you need in order to keep production flat?

Becca, I think it somewhat depends on when you’re drilling, and when the wells come on line, but kind of maybe as a rule of thumb, I’d say in the neighborhood of $300 million a year would keep production flat.

You’re 200 this year?

Yes.

Your next question comes from David Parker - R.W. Baird.

Maybe a follow onto point she was drilling down on in the stimulus funds. Thinking about this lay down work we’re going to talk about, understanding that the Construction Material is somewhat seasonal. Does this change that in any way, the kind of work that you’re going to be doing in the next couple of years?

If you look at our volumes for the first nine months of the year, I mean, generally, the acreage in ready-mix have been down, but our asphalts and construction has been up very nicely, and we expect that’s going to continue as the stimulus ramps up next year and in the following year, but it won’t allow us, because of the conditions on the temperatures of the asphalt when it’s laid down, we’re not going to really be able to stretch out the season.

A question about an alternative to Big Stone, and Terry you talked about maybe a natural gas fire plant or something anyways that could be replaced. So it looks like we’ll get a decision soon, but assuming we went with natural gas, remind me when you need have new generation online to meet customer needs.

Currently, we have capacity agreements in place to take us through 2015, so we’re covered through that period of time, Dave. In addition to that, we’ve also got some ongoing projects that we’ve noted so far as Diamond Willow expansion, the Cedar Hills, and then our recent format addition. So we’re really covered to 2015, but we’ll see incremental generation added between now then as well.

As you add more wind, does that then accelerate that need to have more natural gas in our system, or how would you think of that, Dave?

Well, the wind is really an energy resource, and only about 20% of the nameplate is really a capacity resource. So we need both energy and capacity so it’s really a combination of, the renewable resources, gas would need to back that, and then until the next base load resource is added, we’ll have those capacity agreement that’s noted earlier are already in place.

One last question, since you got the last night to go-ahead the work on the Montana Alberta line, does that mean fourth quarter that project rolls in to backlog?

Yes, it will be in the fourth quarter numbers.

Your timing on Terry mentioned in his comments about a water treatment facility. Is that something we may hear about in the next three months or six months, or what’s the timing on some of these new projects these projects?

That work is actually under construction right now.

Your next question comes from Chris Ellinghaus - Shields & Co. Chris Ellinghaus - Shields & Co.: It’s pretty obvious, where earnings were headed for the year. Is there a reason for the still fairly wide guidance range?

Chris, we did narrow it up significantly. I think it was previously $1.05 to $1.13 we narrowed it to $0.15. I think just a matter of allowing ourselves some room there are some variables in there. I mean, weather, economy, oil and gas prices and the like probably as in a whole lot of variability, but we’re comfortable with that $0.15 range. Chris Ellinghaus - Shields & Co.: Have you got any comments about the impact of weather in the fourth quarter, or in the third quarter, I’m sorry?

The third quarter actually it impacted us negatively in some of the businesses, Construction Materials; we had some wet weather that hurt us down in some of Bill’s markets. I’d have to say that it was cooler than normal, and it really was a negative impact to some of the regulated business as well. Now the fourth quarter is starting out cool, so that benefits one of our businesses, and would hurt the other, so we’ve got a nice diversity there. Chris Ellinghaus - Shields & Co.: Given where it looks like the year is going to come out, you’re going to maybe all get pretty close to doubling on earnings. Do you feel like that trend, given the stimulus spending and what you see in your backlog is going to continue into ‘10?

We think that the stimulus as stated earlier, Chris, is going to really be a nice boost. The other thing that we’re watching I wish I could give you a real clearer today, but I can’t, but as we’re watching the reauthorization of the highway Bill, there’s some recent momentum, of course, Congressmen over start shares that the House Transportation Committee wants to take the old bill of $286 billion and raises up to $500 billion for the next six year bill. We’re actually starting to see more and more support for that. Funding issue was the challenge, but we’ve seen a few ideas pop up actually here in the last week or so, so Chris, we think if there’s traction between the House and the Senate on a bigger Highway Bill along with the stimulus, we think the next couple of years could be pretty strong for us. Chris Ellinghaus - Shields & Co.: You said you were kind of approaching maybe a half hedging your diesel for next year. What kind of costs you’re looking at next year versus this year?

Right now, as you know the current prices on diesel is right around depending on the part of the country, but between $2.70 to maybe $2.85 a gallon, and although that’s up from earlier in the year, that’s probably a number that will be fairly steady, we think going into next year. Chris Ellinghaus - Shields & Co.: One last thing, last year in the fourth quarter, you had a pretty high corporate and other number. What was in there, versus sort of the run rate you’ve had this year?

You’re talking and the earnings segment? Chris Ellinghaus - Shields & Co.: Yes, in the fourth quarter it was like triple normal.

Basically, the most significant portion of that relates to our Brazilian transmission line, the earnings there from, and let me just, you’re talking in terms of the earnings on that, Chris? Chris Ellinghaus - Shields & Co.: Yeah, I’m just trying to think is that a number that is non-recurring?

For the nine months, it’s pretty much the same. I mean… Chris Ellinghaus - Shields & Co.: Yes, this year you’re kind of running at like $1.8 million a quarter, but in the fourth quarter it was closer to six. I’m assuming that’s a non-recurring benefit in the fourth quarter last year.

Well, we had some savings on some safety. We had some lower costs in connection with safety, so we were able to reverse some accruals in connection with that.

Your next question comes from Faisel Khan - Citigroup.

Quick question on the E&P side, the realized price excluding your hedges of 234, it seems kind of low given the way basis is coming in the quarter. I was just wondering if there is anything else that impacted that.

No, there was nothing abnormal there for the quarter.

Specifically, on the higher asphalt volumes, what was the driver behind that?

The stimulus spending.

Just stimulus spending?

Yes.

Your next question comes from Paul Ridzon - KeyBanc.

Just for clarification, is the 8% on the stimulus funds, what’s been actually, checks cut, or is that what has been contracted?

That’s actually what’s been spent, Paul, thus far by the states.

Do you have a sense of how much has been contracted?

The obligation level is the term that the Federal government uses, and that’s substantially greater than that. Do you remember the specific number; 70-some percent has actually been obligated.

70% of the 45?

Yes.

Your next question comes from Jim Harmon - Barclays Capital.

Two quick questions, when you talk about stimulus spending and the $7 billion to $8 billion range, what percentage of that are you exposed to? What percentage do you hope to get?

Jim, the $7 billion, $8 billion are all in the states that we operate in, and so we’ll be exposed to every bit of that. Our hit rate right now is what we call our success rate on the jobs that we bid, it depends, market-to-market, but it’s somewhere in the 20% to 25% range.

Are you bidding against much larger players, or are you the number one or number two player, so you have a better chance of getting more of that business under your belt?

Jim, here again it varies from market-to-market, but in many of the states that we operate in, we are definitely in the top one or two category.

The second question is related to the asphalt business. It seems profitable. It looks profitable. Can you give us some idea as to what percentage of profits came from asphalt this year, and maybe what percentage came from last year, either in the percentage or preferably absolute dollar amount.

Jim, nice try, but it’s not working, my friend. I’m not going to tell you that.

This marks the last call for questions. (Operator instructions) This call will be available for replay beginning at 4:00 PM Eastern Time through 11:59 pm Eastern Time until November, 13. The conference ID number for the replay is 32816963 again the conference ID number for the replay is 32816963. Your final question comes from Paul Ridzon - KeyBanc.

Just on that hit rate, does that imply we could see $1.4 billion to $2 billion flow in to backlog?

That’s a possibility over the next couple of years.

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 all for participating on the call. As you can see our business model is working well, and we have opportunities in each of the business segments. Our balance sheet is very strong. We’re well positioned for growth. We think there are good opportunities going forward. We will provide our 2010 guidance with our year end report made in January, again, thanks for listening in. Good bye.

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