Hello. My name is Jessa and I will be your conference facilitator. At this time, I would like to welcome everyone to the MDU Resources Group 2019 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 5 P.M. Eastern Time today through 11:59 P.M. Eastern Time on November 13th. The conference ID number for the replay is 1536787. Again, the conference ID number for the replay is 1536787. The number to dial for the replay is 1-855-859-2056 or 404-537-3406. I would now like to turn the conference over to Jason Vollmer, Vice President Chief Financial Officer and Treasurer of MDU Resources Group. Thank you. Mr. Vollmer, you may begin your conference.

Thank you, Jessa. I'd like to welcome everyone to our third quarter 2019 earnings conference call. This conference call is being broadcast live to the public over the Internet and slides will accompany our remarks. If you would like to view the slides you can find them on the Events & Presentations page under the Investors tab of our website at www.mdu.com. 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 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, please refer to Item 1A Risk Factors in our most recent Form 10-K. For our call today, I will discuss the key financial highlights and then turn the presentation over to Dave Goodin, President and CEO of MDU Resources for his formal remarks. After Dave's remarks we will open the line for questions. In addition to Dave and myself members of our management team who will be available to answer questions today are Dave Barney, President and CEO of Knife River Corporation; Jeff Thiede, President and CEO of MDU Construction Services Group; Nicole Kivisto, President and CEO of Cascade Natural Gas Intermountain Gas and Montana-Dakota Utilities; Trevor Hastings, President and CEO of WBI Energy; and Stephanie Barth, Vice President Chief Accounting Officer and Controller of MDU Resources. Yesterday we announced third quarter earnings of $137.6 million or $0.69 per share compared to third quarter 2018 earnings of $107.3 million or $0.55 per share. Our combined utility business reported earnings of $700,000 for the third quarter, down from $3.4 million in the third quarter of…

Well, thank you, Jason, and good afternoon, everyone. Yesterday, we reported third quarter earnings of $0.69 per share compared to $0.55 per share last year. Our year-to-date earnings are 24% higher than this time last year and we are on track and well positioned to deliver earnings within our narrowed 2019 guidance of $1.50 to $1.60 earnings per share. This strong performance is a direct example of the value of our two-platform business model. During the quarter our more than 15,000 employees came together and helped us to execute on our operating plan and report strong operational and financial results. With these employees our companies continue to complete infrastructure projects across various industries and geographic markets. Not only do our shareholders benefit as we continue Building a Strong America, but so does our nation because a strong infrastructure is the heart of our economy. We continue to focus on organic growth and infrastructure improvements at our regulated energy delivery companies. Our utility had a full quarter seeking and implementing regulatory recovery for costs associated with upgrading and expanding our facilities to safely serve our growing customer base. In the third quarter, the electric utility implemented new rates in the state of Montana. This settlement finalized earlier this year will increase annual revenues by a total of $9.3 million with $9 million of which became effective in September of this year and the balance effective one year later. We also received approval from the state of North Dakota for an increase to our transmission cost adjustment rate. Our electric utility completed its filing for an advance determination of prudence with the state of North Dakota to own and operate an 88-megawatt simple-cycle natural gas-fired combustion turbine. This facility, if approved, will be in service by 2023 and is expected to cost…

[Operator Instructions] Your first question comes from the line of Ryan Levine from Citi. Please go ahead.

Good afternoon. What percentage of construction material and service EBITDA year-over-year growth was driven by acquisition?

I appreciate that question Ryan. We'll start off with Dave Barney on the materials segment. And then after that we'll move over to Jeff and talk about services. Dave, would you be able to respond to Ryan?

Yes, I can do that. Hi, Ryan, how are you doing? About 36% of the growth on EBITDA was from new acquisitions.

Jeff?

Yes. Thanks, Ryan. We closed the transaction for Pride on September 17, so we essentially had two weeks of their performance. So not an impact for this quarter. We're excited about this acquisition. We think it's a great fit as a division of OEG Inc. and we expect successful results from Pride Electric in the future.

Great. Are you able to quantify what the longer-term financial impact of the Pride Electric deal is? Or are you limited in your disclosure?

Yes. We're not going to disclose that at this time and we think it's a great company. And the services that they complement us in the Pacific Northwest will be a contributor that's for sure.

Okay. And then, on that vein, in construction services what are you -- what are the characteristics you're looking for in potential future acquisitions?

We have a strategy called go and grow. And we look to grow our companies organically. But as far as acquisitions, which is our second choice, we look for areas of the country that we are not currently located in with services that are same or similar to what we provide such as mechanical, electrical, equipment inside and outside. So we've got a lot of areas of the country that we cover and we are strategically looking at other markets where we can find companies that fit our culture and performance.

Is there a certain characteristic size or scope that would fit in the MDU umbrella?

We have a range of companies in the $30 million to $200 million range of revenue. And of course, it's going to be about performance, safety and their financial, as well as the ability to fit in with our team.

Okay, great. Thank you.

Thank you, Ryan. Appreciate the questions.

[Operator Instructions] This call will be available for replay beginning at 5 PM Eastern Time today through 11:59 PM Eastern Time on November 13. The conference ID number for the replay is 1536787. Again, the conference ID number for the replay is 1536787. 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, Jessa. Our focus here at MDU Resources has been to produce significant long-term value as we execute on our business plans, organic growth projects, along with acquisitions. And again, we're doing just that. We continue to maintain a strong balance sheet, solid credit ratings and a good liquidity position. And for 81 consecutive years, we have continued to provide a competitive dividend for our shareholders while increasing it for the last 28 years. We are committed to Building a Strong America, as well as ensuring the safety of our more than 15,000 employees are executing on many, many projects and opportunities ahead of us this year and beyond. We again appreciate your participation on the call today and thank you for your continued interest in MDU Resources. Operator?

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