Hello, everyone. My name is [ Bo ] and I will be your conference facilitator today. At this time, I would like to welcome everyone to the MDU Resources Group 2024 First Quarter Earnings Conference Call. [Operator Instructions] The webcast can be accessed at www.mdu.com under the Investors heading. Select Events & Presentations and click Q1 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 Mr. Jason Vollmer, Vice President, Chief Financial Officer and Treasurer of MDU Resources Group. Mr. Vollmer, please go ahead.

Thank you, Bo, and welcome, everyone, to our first 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; Jeff Thiede, President and CEO of Everus; Rob Johnson, President of WBI Energy; and Garret Senger, our Chief Utilities Officer. 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 the risks and uncertainties that could cause our actual results to vary from any forward-looking statements, please refer to our most recent SEC filings. We may also refer to certain non-GAAP information. For reconciliation of any non-GAAP information to the appropriate GAAP metric, please reference our earnings release. I will provide a consolidated financial results later during the call. But first, I'll turn the call over to Nicole for her formal remarks. Nicole?

Thank you, Jason, and thank you, everyone, for spending time with us today and for your continued interest in MDU Resources. I am pleased to report we had a solid start to our 100th year as a company, marked by strong performance from all of our businesses. This strong performance is a direct result of our employees' dedication and hard work providing essential services to our customers. It shows an exciting time in MDU Resources as we continue to make meaningful progress towards the planned tax-free spinoff of our Construction Services business recently rebranded as Everus. I'm proud of our employees, both past and present to have built these businesses to be capable of standing on their own and enabling us to accomplish our stated goal of transforming MDU Resources into a pure-play regulated energy delivery company. We expect this spinoff to significantly enhance the value of both businesses and are on track to complete the spinoff of Everus late this year. Looking to the future, we are excited to focus on our core strategy. This core strategy emphasizes customers and communities, operational excellence, returns focused and employee-driven. As a pure-play regulated business, we will be able to pursue strategy specific to regulated energy business models and optimize our capital structure and financial policy. The strong first quarter results continue the momentum we observed in 2023, reflecting outstanding performance across all companies. New rates implemented at our electric, natural gas and pipeline businesses had a positive result, and we expect regulatory activity to remain busy for our utility group. At our Construction Services business, Everus has very strong momentum with an all-time record backlog. Our businesses continue to have exciting long-term growth opportunities as we look to the future. Diving in just a little deeper, I'd like to start with…

Thank you, Nicole, and I'm pleased to share the details of our outstanding results for the first quarter. This morning, we announced first quarter earnings of $100.9 million or $0.49 per share on a GAAP basis compared to first quarter 2023 GAAP earnings of $38.3 million or $0.19 per share. First quarter income from continuing operations was $100.9 million or $0.49 per share compared to $83.8 million or $0.41 per share in 2023. Important to note that with the spinoff of Knife River completed May 31 of last year, Knife River results and other related impacts are reported as discontinued operations in our GAAP-based results for the prior year. With the completion of the Knife River spinoff and work continuing on the Everus spinoff, we are also reporting adjusted income from continuing operations to provide financial results to more closely correlate with and better outline the strength of our ongoing business operations. For more information on these adjustments, please see the first table in our earnings release. We experienced strong results from all of our businesses in the quarter with adjusted income from continuing operations of $106.6 million or $0.52 per share compared to the first quarter 2023 adjusted income from continuing operations of $87.1 million or $0.43 per share. Turning to our individual businesses. Our utility business reported earnings of $58 million for the quarter compared to earnings of $55.5 million for the first quarter of 2023. Electric Utility reported first quarter earnings of $17.9 million compared to $16.6 million for the same period in 2023. Increase was largely the result of higher retail sales revenue due to rate relief in North Dakota and Montana and the addition of a new data center customer in mid-2023. The increase was partially offset by lower residential volumes and higher operation and…

[Operator Instructions] We'll go first this afternoon to Ryan Levine of Citi.

To start off on the Everus business mix or backlog mix. What percentage is data centers now? And are there other key buckets that we should be looking at as meaningful drivers of your growth in the coming years?

Yes, Ryan. Thanks for the question. I'll turn it over to Jeff.

Thanks for the question, Ryan. Our backlog really has been built upon our success in our diversified businesses in all the markets that we serve, but primarily in the commercial area, which is data centers. We're doing data centers for a multitude of major clients, so that we all know about confidential clients, of course. But we have negotiated, semi-negotiated and been able to add to our backlog significantly and then get repeat business, primarily due to our performance, our safety, our productivity and our quality. And we see this as one of the strongest drivers for us going forward.

Is there any percentage numbers you're able to share or any maybe high-level color around the magnitude of that market for you? And even geographically, there are certain states that you're more levered to there?

Ryan, this is Jason. I'll start off on the percentage of numbers. We don't typically break it out that way. We break it out between the T&D market and the E&M market. So this certainly would be part of the E&M space, as Jeff is talking about here. But I'll let Jeff weigh in on geographic diversity and maybe what we're seeing in that market. But no percentages as far as what we've been able to disclose at this point as far as just data center builds. But Jeff, you may want to address the geographic markets.

Right. We're in Ohio, of course, and there's a tremendous amount of data center growth there. We're in the Southwest and the Pacific Northwest. Those are the primary areas of our data center work, and you complement that with the healthcare work we're doing, the institutional work, the renewables contributing to our record backlog. And of course, our backlog is also up in the T&D space, where we're doing grid hardening, undergrounding of electrical services and transportation contributing to our record backlog.

And then in terms of the low growth outlook for -- on the electric side of the business, what trends are you seeing? Are you seeing any acceleration in electricity demand growth in your service territories? And any implications that has for your capital budgets?

Yes, Ryan, I'll let Garret answer that question in terms of what kind of data center. I commented on my -- in my script in terms of the various ones that we have in the queue, but we're continuing to get calls as they come in related to data centers. So Garret, do you want to expand on that at all?

Just that we have in front of -- this is Garret Senger, and thank you for the question. We had in front of the North Dakota Public Service Commission and additional data center requests that we hope to have in place for the second quarter that should be approved by then. And this as Nicole mentioned, continued interest across our territory, and we pursue those as they come in.

Great. And in terms of electricity demand growth, that was, I guess, more broad than just that 1 customer type? Or are you see any changes to your longer-term outlook due to commercial activity or other growth in your service territories?

We've seen an average increase annually in terms of customers in that 1% range in total customers. There's also an industrial commercial loads. There's -- maybe a couple of years down the road, there's interest there as well as expanding in terms of operations. And '24 really is the data center growth as well as just normal growth in our residential market.

And then maybe just, Ryan, 1 thing to clarify in terms of the data center growth that we've had, that is the way we're serving those customers is not from our generation. So just to be clear there, we've got 0 investment right now in these data centers and get the margin, which is obviously a benefit to the company as well as to our ROE tying it back to ROE enhancement. And then we also have a benefit that's given back to our customers in terms of the sharing of the transmission expense across the MISO market. And so we do see right now the way we have modeled these data centers within our system, it doesn't require us to build generation. So I just wanted to clarify that.

[Operator Instructions] Again, the webcast can be accessed at www.mdu.com under the Investors heading. Select Events & Presentations and click Q1 2024 Earnings Conference call. After the conclusion of the webcast, a replay will be available at that same location. And ladies and gentlemen, it appears we have no further questions this afternoon, Ms. Kivisto. I'd like to hand things back to you, ma'am for any closing comments.

All right. Thank you very much, and we want to thank everyone for your time and interest in MDU Resources. We are certainly optimistic about our growth opportunities and the future of our regulated energy delivery businesses as well as the outlook for Everus and the planned spinoff later this year. We thank you again for your time. We appreciate your continued interest and support of MDU Resources. And with that, I'll turn the call back over to you, operator.

Ms. Kivisto, thank you. Ladies and gentlemen, that does conclude today's MDU Resources Group conference call. Again, thank you for your participation, and you may now disconnect.