David Goodwin - President and Chief Executive Officer Jason Vollmer - Vice President, Chief Financial Officer and Treasurer.

Hello, my name is Shelby, and I'll be your conference facilitator. At this time, I would like to welcome everyone to the MDU Resources Group 2017 Third Quarter Conference Call. [Operator Instructions] This call will be available for replay beginning at 5 PM Eastern Time today through 11:59 PM Eastern Time on November 16.

The conference ID number for the replay is 88177171. The number to dial for the replay is 855-859-2056 or 404-537-3406. I would now like to turn the call over to Jason Vollmer, Vice President, Chief Financial Officer and Treasurer of MDU Resources Group. Thank you. Mr. Vollmer, you may begin your conference..

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, Great Plains 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 for MDU Resources.

Yesterday, we announced third quarter earnings of $89.6 million or $0.46 per common share from our continuing operations compared to $88.2 million or $0.45 per share in the third quarter of 2016. Our combined utility business reported $4.8 million for the quarter, up from $200,000 for the comparable quarter in 2016.

Our electric utility segment reported earnings of $15.7 million, which is an increase of $3 million over the third quarter of 2016. This business had higher electric retail sales margins from successful rate recovery and cost tracking mechanisms as well as increased sales volumes to all customer classes.

Increased operations and maintenance expense and contract service spending, partially offset this earnings increase. While our natural gas utility segment experienced a normal seasonal loss of $10.9 million for the quarter, this is an improvement over the $12.5 million loss we saw in the third quarter of last year.

The decrease in the loss was largely due to higher natural gas retail sales margins resulting from rate recovery, weather normalization, conservation adjustments as well as 2% higher retail sales volumes. Earnings at our pipeline and midstream business were $6 million for the quarter compared to last year's third quarter earnings of $6.7 million.

The decrease in the earnings reflects the absence in earnings from our investment in the Pronghorn assets, which were sold in early January of 2017.

Partially offsetting the decrease in earnings was revenues from record transportation volumes, primarily from increased off-system transformation related to our recently completed organic growth projects of that business.

Moving to our construction operations, our construction services business continues to produce exceptional earnings growth with earnings of $13.1 million in the third quarter. This is an 82% increase in earnings compared to last year on 33% higher revenues.

This quarter's increase reflects higher outside construction margins largely from construction work in areas impacted by hurricane activity. The third quarter earnings were also positively impacted by higher equipment sales and rentals and higher inside construction margins.

While achieving record revenues in the quarter, the construction services business also increases its backlog by more than 31% over last year, ending the quarter with $676 million in backlog. Our construction materials business had a solid third quarter with earnings of $63.2 million, down slightly from last year's record of $69.5 million.

The decrease in earnings reflects lower asphalt product margins due to increased competition in certain regions, resulting in lower volumes and lower construction margins due to less available work in our energy-producing states. Construction materials backlog at the end of the third quarter was $520 million, down from $580 million last year.

Now I'll turn the call over to Dave for his formal remarks.

Dave?.

in California, the California Road Repair and Accountability Act of 2017, which over the next 10 years is expected to raise $52.4 billion to fund road maintenance and rehabilitation; and also in Oregon, House Bill 2017 is an approved $5.3 billion, 10-year transportation package that is designed to relieve congestion, increase transit spending and upgrade cycling infrastructure as well.

The congestion relief efforts in this package includes plans to widen freeways, upgrade roads and bridges and improve miles of sidewalks and bike lanes. And in Minnesota, the annual bonding bill may be also a benefit.

This is a $988 million bill that will fund public works projects, including investments in state universities, hospitals, water infrastructure and local road improvements. Knife River had a solid third quarter, although down from last year's record earnings.

Due to a shortened construction season, we have lowered our revenue outlook at this business to a range of $1.7 billion to $1.8 billion.

With a strong backlog at $520 million, we're optimistic about this business going forward, and we're well positioned to take advantage of infrastructure spending projects as they are released at the state as well as the federal level.

Before I conclude and move on to our Q&A session, I do want to express my condolences to victims of the natural disasters and other tragedies that have hit many areas of our country this year.

Some of the areas we serve and that our employees call home were particularly hard-hit, including hurricanes near the Gulf Coast, fires across the West Coast as well as the tragic concert incident in Las Vegas. While our employees are all safe and accounted for, a number lost their homes to flooding or fires.

Our thoughts continue to be with our employees and communities as we find ways to help. And so, to conclude, I want to reiterate that we're pleased with our third quarter results. And based on these results and our forecast for the remainder of the year, we are narrowing our earnings guidance to a range of $1.10 to $1.20 per share.

We're also pleased about the continued returns to our shareholders, including our dividend that we have paid for in the last 79 straight years uninterrupted and increased it for the last 26 consecutive years. At MDU Resources, we are committed to operating with integrity and a focus on safety while creating superior shareholder value.

This is why we continue to build a strong America. I appreciate your interest and commitment to MDU Resources and ask that we open the lines to questions at this time.

Operator?.

[Operator Instructions] This call will be available for replay beginning at 5 PM Eastern Time today through 11:59 PM Eastern Time on November 16. The conference ID number for the replay is 88177171. And at this time, we have no questions in queue. I would now like to turn the conference back over to management for closing remarks..

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Thank you, Shelby. And as I said earlier, our continuing operations delivered strong results for the third quarter of 2017. At MDU Resources, we're committed to building a strong America and are optimistic about our opportunities for the rest of this year as well as beyond.

We appreciate your participation on the call today, and thank you for your continued interest in MDU Resources.

Shelby?.

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