MDU Resources Group, Inc. (MDU) Q2 2016 Earnings Report, Transcript and Summary

Good morning. My name is Brent and I will be your conference facilitator. At this time, I would like to welcome everyone to the MDU Resources Group 2016 Second 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. This call will be available for replay beginning at 1:00 PM Eastern today through 11:59 PM Eastern on August 17th. The conference ID number for the replay is 38294454. Again, the conference ID number for the replay is 38294454. The number to dial for the replay is 1-855-859-2056 or 1-404-537-3406. I would now like to turn the conference over to Doran Schwartz, Vice President and Chief Financial Officer of MDU Resources Group. Thank you. Mr. Schwartz, you may begin your conference. Doran N. Schwartz - Chief Financial Officer & Vice President: Thank you, Brent, and welcome to everyone to our second quarter earnings release conference call. The 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, please 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 Form 10-Q. Our format today will include formal remarks by Dave Goodin, President and CEO of MDU Resources, followed by a Q&A session. Other members of our management team who will be available to answer questions during the Q&A session of the conference call 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 Montana-Dakota, Great Plains Natural Gas, Cascade Natural Gas and Intermountain Gas; Martin Fritz, President and CEO of WBI Energy; and Jason Vollmer, Vice President, Chief Accounting Officer and Treasurer for MDU Resources. And with that, I'll turn the presentation over to Dave for his formal remarks. Dave? David L. Goodin - President, Chief Executive Officer & Director: Well, thank you, Doran, and good morning. We appreciate you joining us today to discuss our second quarter results. This was a significant quarter strategically for our company as we completed our exit from the Exploration and Production business and sold our interest in the Refining business. We are now a more streamlined company with a lower risk profile and less exposure to commodity prices, and we're focused on growing our two primary continuing business lines: Construction Materials & Services and Regulated Energy Delivery, which is comprised of our regulated Utility and Pipeline and Midstream operations. These continuing operations delivered strong results for the second quarter of 2016. Consolidated earnings from continuing operations were $46.1 million or $0.24 per share compared to $25.8 million or $0.13 per share for the second quarter of 2015. This increase was led by the Construction Materials & Services businesses, which generated a combined $40.7 million in earnings for the quarter, up 50% from last year's $27.1 million. Earnings of $6.5 million for the quarter at the Regulated Energy Delivery business were 13% higher than prior year, when excluding a prior year gathering asset impairment at our Pipeline & Midstream segment. On a GAAP basis, which includes the discontinued operations of our Exploration & Production and Refining businesses, we had a consolidated loss of $109.3 million or $0.56 per share. This includes the loss on the sale during the quarter of our interest in Dakota Prairie Refining of $156.7 million; that was after tax. Last year, we had a loss of $229.8 million after-tax or $1.18 per share, largely due to a fair value impairment at the discontinued operations of our E&P business. Now I'd like to turn back to our continuing operations. Our construction materials business had record second quarter earnings of $33.7 million, which is up 67% over last year, with 9% revenue growth. Their backlog is strong at over $800 million; in fact it's $805 million. With the recently passed five-year $305 billion national transportation bill and broad based strength of the markets that we operate in, we expect to see a continued strong bidding environment for this group. Our construction services group is on pace with last year. They're focused on adding backlog, which at the end of this quarter was at $508 million, an 18% increase from last year. At our Pipeline & Midstream business, earnings were up with an increase in natural gas storage volumes of 139%, and our Utility group is seeing the benefits of their record-level investment to serve our growing customer base. Electric earnings were up 36% over last year, while natural gas distribution was impacted unfavorably by warmer-than-normal weather. As we look ahead, we'll focus on and continue to build on the momentum with Construction Materials and Services and Regulated Energy Delivery. We'll focus on the factors which we can most directly influence, those being controlling our costs, expanding our margins and growing our earnings. Now, let's take a look at how our individual businesses performed during the second quarter. Our construction materials group, Knife River, had record second quarter earnings of $33.7 million, up from $20.1 million in 2015. The stronger performance was very broad based across regions as well as product lines. This segment experienced higher earnings in all regions when compared to 2015. This increase was driven by higher margins and 9% revenue growth. Higher quarterly product sales volumes also contributed to the earnings increase, with 10% increase in aggregates, a 28% increase in asphalt, and 6% increase in ready-mix concrete sales volumes as well. Their backlog continues to remain strong with second quarter backlog of $805 million compared with last year's all-time peak backlog of $833 million. Major jobs that have been awarded to this business here in 2016 include a $63.4 million I-29 project in Iowa, $30.5 million bypass in Oregon, and a $25 million I-35 project in Minnesota. Turning to our construction service group, we had earnings of $7 million, which was really on pace with our second quarter of last year. They had higher inside electrical construction and industrial workloads and margins. These were offset by lower outside margins and lower equipment sales and rental margins, and higher SG&A costs as well. Backlog at construction services ended the second quarter at $508 million, up 18% from the $429 million that we had last year. Major projects which demonstrate this business segment's diverse capabilities include the utility-scale solar farm, a government research facility, a 345-kV transmission project, a corporate campus expansion and utility maintenance contracts along with mission critical projects. Looking ahead at our two construction businesses, we've got a combined backlog of $1.3 billion. For the year, we forecast that margins in 2016 are expected to be slightly higher at construction materials and slightly lower at construction services as compared with 2015. Now, I'd like to turn to our Regulated Energy Delivery where our combined Utility business reported earnings of $200,000 in the second quarter of 2016 compared to $500,000 in 2015. Our regulatory staff has pursued recovery of our investments, which were made to serve our growing customer base. Last year alone, Utility invested a record $464 million. Since January 1st of 2015, the Utility has implemented $75.6 million in final and interim rate relief. They currently have requested $42.8 million of rate relief in pending cases, and this includes $33.1 million in implemented interim rates. The electric utility's earnings were $8 million for the second quarter, up $2.1 million or 36% from the second quarter of 2015, primarily due to cost tracking mechanisms and successful rate recovery, along with production tax credits associated with our 107.5-megawatt Thunder Spirit Wind Farm that went into operation late last year. With that addition, renewable energy now accounts for 20% of the utility's generation capacity. Rate relief at the natural gas utilities was more than offset by weather that was 8% to 29% warmer across the service territory compared to the previous year. This resulted in a larger seasonal second quarter loss of $7.8 million as compared to our loss of $5.4 million last year. The Utility also had higher O&M and depreciation, depletion and amortization costs due to the increased plant additions. Looking ahead, the Utility expects its 1.05 million customer base to continue to grow by between 1% and 2% annually. Over the next five years, we also expect to invest nearly $1.5 billion to maintain safe and reliable service across our eight-state service territory. As a result, we also expect the rate base to grow at a 7% compounded annually over these next five years. Its anticipated investments include 160-mile 345-transmission line that is expected to be completed in 2019. Construction of this project actually began this past June. Other investments include additional generation and pipeline projects to enhance the reliability, deliverability of its system. The Utility's five-year CapEx forecast does not include any impact from the Clean Power Plan, given the uncertainty surrounding the plan. Now, earnings at our Pipeline & Midstream business were $6.3 million, up from last year's second quarter earnings of $3.4 million. Earnings were 20% higher than last year when excluding the prior-year $1.5 million after-tax impairment of coalbed natural gas gathering assets. This business had higher utilization of natural gas storage service and volumes transported to storage as customers took advantage of seasonal basis differential. Earnings also reflect lower O&M expense, primarily the absence in 2016 of $1.9 million after-tax impairment of those gathering assets and lower payroll costs. Offsetting the increases were lower gathering and processing volumes at our Pronghorn facility, in which we have a 50% interest. The Pronghorn volumes were affected by a number of wells that were temporarily shut-in due to completion work on a new well pad. In June 2016, the company launched an open season to obtain capacity commitments on a proposed pipeline, with the primary purpose of delivering natural gas supply to eastern North Dakota and far-western Minnesota. An open season seeking capacity commitments on a approximately 38-mile pipeline closed here on July 15. Initial interest in that project has been promising, and the company will be working with those parties to execute binding precedent agreements over the next several weeks. The Valley Expansion Project will connect Viking Gas Transmission Company pipeline near Felton, Minnesota to the company's existing pipeline near Mapleton, North Dakota. And as initially designed, the pipeline will be able to transport some 40,000 million cubic feet of natural gas per day. With minor enhancements, it will also be able to transport significantly more volume if required, based on capacity requested during the open season or as needed in the future as the region's needs grow. Cost of the expansion project is estimated at $50 million. Following the receipt of adequate capacity commitments and necessary permits and regulatory approvals, construction of new pipeline could begin in early 2018 with completion expected late that very same year. The Pipeline & Midstream group has also completed the Northwest North Dakota Expansion Project in June, which included modification of existing compression and a new unit along with recylindering. Other expansion projects are underway in North Dakota. North Badlands, which has 70,000 dekatherms per day of capacity under contract, completed construction on June 29, a month ahead of schedule. The line was placed into service on August 1 here in 2016. We also have Line Section 25 expansion project and our Charbonneau compression expansion projects involving additional compression, which alone will add a combined 62,000 dekatherms per day of capacity and are scheduled for completion in the second quarter of 2017. As a result of lower natural gas prices and wider seasonal basis spreads, interruptible storage service injections increased to 10 million dekatherms, a significant increase from the 1.6 million dekatherms of last year. Now, I'd like to turn to our earnings guidance. With the recent sales of our Exploration & Production and Refining businesses, results from these operations have been reported as discontinued operations. Any continuing results such as interest costs and certain G&A expenses that remain from the remaining debt from the Exploration & Production and Refining businesses have been included in the continuing operations in the Other category until they've been repaid. To reflect this change, MDU Resources is providing guidance in two GAAP-based formats. One guidance range reflects only continuing operations, and the other includes discontinued operations. The continuing operations range is similar to the company's previously reported adjusted earnings guidance that both excluded results from the Exploration & Production and Refining businesses. The discontinued operations guidance range includes the results from the Exploration & Production and Refining business as well as associated write-downs, including the $156.7 million after-tax impairment on the Refining business here in the second quarter of 2016. Earnings from continuing operations are expected to be in the range of $1.00 to $1.15 per share for 2016. Including discontinued operations, earnings per share for 2016 are expected to be in the range of $0.15 to $0.30. Another important piece to our shareholder return is our dividend. We have paid a dividend now for 78 straight years and have increased it for the last 25 consecutive years. In today's low interest rate environment and investors' search for yield, our dividend is an important as ever as a source of value to shareholders, complementing stock price appreciation through our focus on growing our earnings and cash flows. And so to wrap things up, we are focused on strengthening our financial performance and growing our two primary business lines, the first being Construction Materials & Services and the second being Regulated Energy Delivery. We have had a strong first half of the year from these continuing operations. The combined backlog at our construction businesses is strong at approximately $1.3 billion. Our Utility is working safely to serve an increasing base of customers while earning a return on its $1.5 billion five-year capital program, driving 7% average annual growth in rate base. At our Pipeline & Midstream business closed its open season on the Valley Expansion Project here on July 15. Again, initial interest in the project has been promising and the company is expected to make further announcements here in the near future. Our $369 million capital investment plan for the year includes $272 million at the Utility, which won't require issuing equity here in 2016. And as I mentioned, we continue to provide a competitive dividend to our shareholders. We remain committed to operating with integrity and a focus on safety while creating superior shareholder value. Again, I appreciate your interest and commitment to MDU Resources. And we'd be happy to open the lines now to field any questions that any of you might have. Operator?

Thank you. Your first question comes from the line of Brent Thielman with D.A. Davidson. Please go ahead. Brent Edward Thielman - D.A. Davidson & Co.: Hi. Good morning. Nice quarter. David L. Goodin - President, Chief Executive Officer & Director: Hi. Thank you, Brent. Good to talk with you this morning. Brent Edward Thielman - D.A. Davidson & Co.: Yeah. First question I guess would be on the construction materials, you had a really nice growth here in the quarter when a lot of your peers have been kind of blaming weather for causing delays in their respective businesses. Was this just not an issue this quarter? Or is it just a function of the underlying demand being that good? David L. Goodin - President, Chief Executive Officer & Director: Brent, I'm going to have Dave Barney weigh in on that, because he can't wait to tell you how Knife River's doing. David C. Barney - President & Chief Executive Officer, Knife River Corporation, MDU Resources Group, Inc.: Good morning, Brent. Brent Edward Thielman - D.A. Davidson & Co.: Hey, Dave. David C. Barney - President & Chief Executive Officer, Knife River Corporation, MDU Resources Group, Inc.: Yeah, we did – we were impacted by weather in our Central Texas operations, but the bigger impact was that Eastern Texas operations. But I don't know, we just have so much work there, it was a good year. We're ahead of last year. They have a strong DOT budget there. I believe we're going to continue to be strong in Texas for the coming years. So, it did have an impact, but not like I guess other companies did. Brent Edward Thielman - D.A. Davidson & Co.: Got it. Okay. And then you're holding on to the revenue outlook there. Is it you're just trying to be conservative for any kind of quarterly nuances or are there any potential holes in work schedules here in the second half? David C. Barney - President & Chief Executive Officer, Knife River Corporation, MDU Resources Group, Inc.: We'll always have our lows here and there in different regions, we are in 17 states. So we're going to have lows here and there but, overall, we're looking really strong and we haven't had any of the benefits yet, Brent, from the FAST Act, which passed earlier this year. So we're looking forward to that in 2017 and the bid schedule looks good. So I think we're set up for the coming years. Brent Edward Thielman - D.A. Davidson & Co.: Well, that's great. One more if I could. Now that you guys have exited the E&P, Refinery businesses, how are you evaluating kind of M&A going forward versus kind of internal organic business development versus thinking about growing the dividend? David L. Goodin - President, Chief Executive Officer & Director: Yeah. Great question, Brent. So as you know us, historically we've been an acquisitive company, it's really how Knife River and in particular the CSG were born and grown. Certainly the Utility has had acquisitions in the past and we've had probably some modest ones, certainly at the Pipeline & Midstream business. Very much as we think about our CapEx over the next five years and we've talked about that in past calls, it's very line of sight. We don't have baked in there unidentified M&A activity. It's very line of sight, so you might view that as organic primarily. That doesn't mean we're not interested in M&A activity. Again, there's a history there within our organization, but we also recognize our current financial situation and some of the write-downs that we've taken on the balance sheet. The balance sheet is important to us. It underpins the credit ratings, it underpins our access to capital that our construction businesses have access to they might not otherwise have. So, you kind of roll all of that together and then I think the last part of the question was how are we thinking about the dividend and how does that play into this? We think that's important. I commented a little bit in the script on that. Important way to return shareholder values; has for 78 straight years, uninterrupted, 25 increasing. And we view that as a very important part of returning shareholder value. So we put that all into play and again, I think you should take away from that historically acquisitive, primarily organic over these next five years with not a lot of fluff baked in of unidentified M&A. Brent Edward Thielman - D.A. Davidson & Co.: Okay. Thanks, I'll turn it over. David L. Goodin - President, Chief Executive Officer & Director: Okay. Thanks, Brent.

Your next question comes from the line of Matt Tucker with KeyBanc Capital. Please go ahead.

Good morning. Congrats on a nice quarter. David L. Goodin - President, Chief Executive Officer & Director: Hey. Good morning, Matt. Thanks, appreciate visiting this morning.

First question. Could you talk about overall, in the first half how the results have been tracking versus your internal expectations? Given you've left the guidance intact, should we assume that you're kind of just down the middle of the Fairway so far? And then within that, on a segment by segment basis, are there certain segments where the results and/or your expectations have been tracking positively or negatively versus your initial expectations? David L. Goodin - President, Chief Executive Officer & Director: Yeah, that's – I'll try to catch part of that, Matt, because it's pretty broad based. So yes, we left the earnings guidance in place. And you think through the first half of the year, certainly Knife is off to a great start, and combined construction, a little over $40 million in earnings there. Some offsets to that, though: weather at the Utility that affected the natural gas side of the business really offset the nice pick-up we had on the electric side. When you think about – at the Pipeline & Midstream business, we didn't anticipate maybe holding basis differentials that have held wide as they've done. That's been a nice supplement, you might say, to Martin and the business over there. Clearly, when you think about the earnings, continuing operations, $1.00 to $1.15, it's pretty wide range when you think about that. There's certainly some variables when we think about the back half of the year, one being project execution. Really important that $1.3 billion at the two construction companies, much of that will be worked off in the back half of the year. So project execution, then weather and timing; so we've got weather – Mr. Barney and Mr. Thiede are hoping for a nice fall and – so they can continue to stay in the field and do a lot of work. That's actually counter-productive for Nicole in that 800,000 – 900,000 customers we've got on the natural gas side. So there's a bit of an offset, might have (25:18) hedge there. So yes, we left the guidance intact. We do like how the business performed in the first quarter and second quarter, and look forward to sharing more results here at the end of third quarter.

Thanks, Dave. That was a broad question and your response was very helpful. I wanted to ask about the Construction Services margins trending a bit lower this year, although it's nice to finally see the strong backlog growth translate into revenue. But it looks like you've also brought down your expectations for the full-year margins, so I guess was there anything specific in the second quarter that weighed on margins? And at this point, is it fair to assume that given what's in the backlog, we shouldn't really expect you to be able to hit those kind of peak 7% to 8% type margins that you saw a few years ago? Jeffrey S. Thiede - President & Chief Executive Officer, MDU Construction Services Group, Inc.: Hey, Matt. This is Jeff. Our margin pressure is really driven from our outside business lines and our equipment business. We've got slower work releases out from our customers and our backlog really has picked up, our margin looks to be stable. It has increased slightly in our backlog. And then our smaller project work also where we don't record backlog, but it is higher margin, has also been a little bit slower. So we continue to work on execution and building backlog with selected projects. We have a number of significant projects that are not reported in backlog, but we are in pre-construction. So we're looking to execute and finish out the year stronger than the first half.

Thanks, Jeff. And I guess a follow-up to that, for both Construction segments, your bookings were down a little bit year-over-year, backlog ticked down a bit sequential. Are you seeing any slowdown in terms of bidding activity or opportunities? It sounds like you're not. Or should we just chalk that up to kind of lumpiness? David L. Goodin - President, Chief Executive Officer & Director: I'll maybe ask Dave Barney to catch on that first, and then follow on with Jeff. David C. Barney - President & Chief Executive Officer, Knife River Corporation, MDU Resources Group, Inc.: Hey, Matt. You know, we're not concerned about our backlog. We just did quite a bit more work in the second quarter than we did last year, burned through more of our backlog, so we see the backlog out – our backlog's not a concern. You'll see it growing. Like I said, with the FAST Act coming up really into play into 2017 and beyond, we're not concerned with that. We'll be fine with our backlog. David L. Goodin - President, Chief Executive Officer & Director: Jeff? Jeffrey S. Thiede - President & Chief Executive Officer, MDU Construction Services Group, Inc.: Yeah. This is Jeff. So our backlog is down from the previous quarter, but you have to go back to June 2009, since we've been in that $508 million range. So we like where we're positioned in our equipment business. We have seen slower transmission and equipment rental sales, also construction side of the transmission & distribution. So we've increased our capabilities with our equipment business and when the market improves, we'll be able to capture that revenue and margin, and improve the results.

Great. Thanks, guys. And just last question from me, I believe your Utility customer growth expectations have changed from the last quarter. I believe you were saying 1.5% to 2.0% and you're now saying 1% to 2%, so if you could just comment on what's driving the change there, please? Nicole A. Kivisto - President and CEO, Montana - Dakota Utilities, Great Plains Natural Gas, Cascade Natural Gas & Intermountain Gas: Yeah, Matt. This is Nicole. Essentially, what we did is took a look at our year-over-year data and when you look June-to-June, our customer growth rate across our brands ranges from 1.3% to 1.8%. So we did decide to move that range to 1% to 2% to accommodate year-over-year fluctuations. We still feel very comfortable that as you look ahead, we're going to grow within that 1% to 2% range. And when you do compare that to the national average, what we've been seeing, that's around 0.55%. And so we still feel very comfortable that our system is growing above the national average, but we did revise that down to accommodate year-over-year changes.

Thanks, Nicole. I'll jump back in the queue. David L. Goodin - President, Chief Executive Officer & Director: Okay. Thank you, Matt.

Your next question comes from the line of Brent Thielman with D. A. Davidson. Please go ahead. Brent Edward Thielman - D.A. Davidson & Co.: Thanks. Just a follow-up maybe more for Doran, but with a different company today, different risk profile, how are you thinking about kind of appropriate leverage ratio ranges going forward? Doran N. Schwartz - Chief Financial Officer & Vice President: Yeah, that's a good question, Brent. Here's how I would think about it. As we think about our, for example debt-to-cap ratio, I would say that over time you could expect that to move up, in part because of how we're investing at the company. As we put more of the investment, as David mentioned, $272 million at the Utility this year out of about $370 million, that does have a higher debt-to-cap target, more of a regulated target, as allowed by regulators of around 50/50. And so by definition that will allow us to use a bit more debt to fund the growth that we see at the Utility. So I would see that as we move forward and more of our debt then would be at the regulated operations which is an indication that even with the ratio moving up, that's not necessarily an indication that the balance sheet is weaker. So I think as we invest going forward with the organic plan that Dave had talked about, we'll probably be able to utilize a little bit more debt on the balance sheet, primarily at the regulated operations. I will tell you that our balance sheet is very important to us. Discipline is important to us. We like our credit rating right now at BBB+ and the access to lower-cost, both long-term and short-term debt that we have the benefits from as a result of that, and so we remain committed to that as well, but that's how I see the balance sheet going forward. Brent Edward Thielman - D.A. Davidson & Co.: Very helpful. Thank you. David L. Goodin - President, Chief Executive Officer & Director: Thank you, Brent.

Thank you. This marks the last call for questions. This call will be available for replay beginning at 1:00 PM Eastern today to 11:59 PM Eastern on August 17. The conference ID number for the replay is 38294454, again the conference ID number for the replay is 38294454. Your next question comes from the line of Matt Tucker with KeyBanc Capital. Please go ahead.

Thanks. Just a couple follow-ups from me. It looks like the CapEx plan this year for Pipeline & Midstream went up by $20 million. Could you discuss what drove that? Martin A. Fritz - President & Chief Executive Officer, WBI Holdings, Inc., MDU Resources Group, Inc.: Yeah. Hey, Matt. It's Martin. We have a Line Section 25 expansion project that we're going to be filing with FERC here. And so we're starting off on that. And that is what is driving it. That's going to be compression at basically three locations: Charbonneau, Williston and Tioga. And so that's what's driving the capital increase.

Thanks, Martin. And then last question, another kind of broader, open-ended question: now that you've sold the Refinery and the E&P business, how do you think about MDU's overall exposure to oil prices, whether it be the Construction businesses, Utility customer growth, Midstream? How do you think about that now? David L. Goodin - President, Chief Executive Officer & Director: Well, certainly the exit of the E&P and Refining, there's a lot less exposure directly with commodity prices. I mention to folks, I look at WTI maybe three times a week and not three times a day as I used to. But when we think about – we'll still have exposure to just kind of the general economies that surround the E&P business. I mean again, North Dakota, the Bakken is in our backyard. We enjoyed some very nice customer growth, investment opportunity at the Utility. We moved organically Knife River into that market and enjoyed some strong workloads there. And so while we have some exposure there, I'll point out – as Dave mentioned, Knife's in 17 different states, so there's some exposure there. But at the same time, it is not all eggs in one basket. And so I think it's more economic risk, it's not direct price commodity risk. And then actually there's some things up in Dave's business, he goes through a lot of diesel every year running those big, heavy equipment around. We actually see some benefit with lower commodity prices and actually asphalt oil business can be favorable in certain kind of markets like that too. So, there's certainly some exposure, probably all companies have from an economic perspective, but it's a lot less direct affected from an income statement with commodities.

Great. Thanks, Dave. Appreciate the color. David L. Goodin - President, Chief Executive Officer & Director: Okay. Hey thanks, Matt.

Your next question comes from the line of George Register with Register Financial. Please go ahead.

Good morning, Dave and Doran. Nice quarter. David L. Goodin - President, Chief Executive Officer & Director: Hey. Good morning, George.

As you explained earlier, Dave, that you're a fairly diversified company, really much more than just a utility, so my question is, has there been any serious consideration to restructuring MDU? And has there been any steps taken to move in that direction? I appreciate the question. David L. Goodin - President, Chief Executive Officer & Director: Yeah, thanks for the question, George. I would say this last quarter was pretty important strategically that we've done some of those things you just talked about. I mean the exit of the E&P and the Refining were very conscious decisions on our part. And we think strategically that makes us a much less volatile company and less exposed to commodity. And we really are centered on two platform business, that being Regulated Energy Delivery. That's through Nicole and Martin's business, along with Construction Materials & Service, Dave and Jeff's business. And so we think those are two great platforms. They can complement each other. And we think they're very core to MDU Resources.

Okay. Thank you. David L. Goodin - President, Chief Executive Officer & Director: Yep. Thank you, George.

Thank you. This marks the last call for questions. This call will be available for replay beginning at 1:00 PM Eastern today through 11:59 PM Eastern on August 17. The conference ID number for the replay is 38294454. Again, the conference ID number for the replay is 38294454. At this time, there are no further questions. I would now like to turn the conference back over to management for closing remarks. David L. Goodin - President, Chief Executive Officer & Director: Thank you, Brent. Appreciate everybody again participating on our call here this morning. As noted earlier, our continuing operations delivered strong results for the second quarter of 2016. We're committed to continue building on this momentum by focusing on those factors that we can most directly influence, those being controlling costs, expanding margins, along with growing earnings. We appreciate you being on that call here today and we thank you for your continued interest in MDU Resources. Thank you and we'll turn it back to the operator. Brent?

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