Well, good morning. I got one person to respond to that. Good morning, everybody That's much better. It's just great to be here. My name is Dave Goodin. I'm President and CEO of MDU Resources, just delighted to see a lot of familiar faces in the room, along with meeting a few new faces as well. It's really an exciting day as we think about Knife River and its about to be separation from MDU Resources here on the end of the month on May 31st. It's really delightful again to spend the day with you. We're going to be able to give you an opportunity to meet the Knife River team and have a chance to have some Q&A with them as well. Part of our presentation will have certain forward-looking statements, I would turn your attention to our fairly extensive forward-looking statement. It's really within the Section of 21E of the Securities Exchange Act. Some of our statements are based on what would be beliefs and anticipations and assumptions, but they are forward-looking. Part of my role today is certainly just to kinda set the stage for what will soon be a separate public company in the form of Knife River, separating through a tax-free distribution dividend from MDU Resources Group. Here to kinda really highlight that, as we've stood up now ready to be this separate public company, you'll get a chance to see the leadership team at Knife River. That leadership team is led by Brian Gray, who will be following me on stage. He is the President and CEO of Knife River. We also will have Sarah Stevens, she's the Director of Human Resources, also Glenn Pladsen, a Vice President of Support Services, who will talk about certain environmental, social, and governance specific to Knife River. Then we'll take about a 10-minute break, then we'll move into the financial section and have Nathan Ring, who is the Vice President and Chief Finance Officer. Then after Nathan's presentation, we'll then have Brian come up and actually have the four of them open for Q&A. So please, as we go through the presentations, would invite you to think about your questions, write them down to yourself, and then make sure that those get addressed during the Q&A session as well. Thinking about separating Knife River into its own wholly owned public company really came about as a strategic review internally in how we could best create value at MDU Resources Group. We felt that the Knife River business was certainly large enough to stand on its own, and it is. As we felt about over the MDU Resources umbrella of companies, we thought it could provide more clarity to investors, really capital allocation specific to the materials industry. We think it also has a management that's solely focused in the materials group, and we also have a board that's really well-suited with deep industry experience and experienced public company experience as well. Our board of directors that we have already announced for the Knife River Group are several that will be moving from the MDU Resources directors to Knife River, along with the addition of Bill Sandbrook, formerly U.S. Concrete President, Chairman, and CEO, along with Brian Gray, who will be the only non-independent director at Knife River. The other four, Karen Fagg, will be the chairperson of the new board. Carmona Alvarez, who has an experienced background in international aggregates, actually. Tom Everist, our longstanding materials expert on the MDU Resources Group, will be joining that, along with Patty Moss, current director at MDU Resources as well. We believe we'll have strong governance practices set up at Knife River from day one. You see the list of things here, separation of CEO and chairman, fully independent outside of the CEO. Really, we have a classified board only for a brief period of time as we transition from a public company standing up day one through the 2027 annual meeting. The Knife River team that we have assembled almost speaks for itself when you think there's over 26 years of industry experience on average among the leadership team. 26 years of experience. This is the group that's really been running Knife River as part of MDU Resources today internally. You'll get a chance to hear from them directly here today as well. Brian's been a newbie to the company at only 30 years, almost straight out of college. He's run our Northwest region prior to being named President and CEO of Knife River earlier this year, and he can talk extensively about what he's brought so far as enhancing margins and those types of things specific in the aggregate space in the Northwest region. Nathan Ring, as noted, has got 20+ years throughout many departments at MDU Resources and most recently at Knife River in business development. Karl Liepitz, who's not here today, is our current General Counsel at MDU Resources. Karl will be moving over to be the General Counsel at Knife River, bringing ready-to-go experience there as well. Trevor Hastings, who is joining us here today, he'll be the Vice President, Chief Operating Officer. Been with our corporation a mere 27 years in many different departments, most recently running our pipeline business as President and CEO there as well. We also have Sarah Stevens, that we've got be joining us on stage on the ES G portion. You can see Glenn Pladsen has got over 16 years with MDU umbrella at specific at Knife River in the IT and support services as well. John Quade, Vice President of Business Development, not here today, but he clearly business development has been part of the DNA at Knife River as it's been a roll-up strategy over these past 31 years. To say we're excited at MDU Resources to be launching and separating in a tax-free distribution Knife River is really an understatement. We feel really good about this experienced team that's ready to take this business and move it into its own business under the symbol KNF. With that, I am delighted, and please give me a round of applause if you would, the President and CEO of Knife River, Brian Gray. Brian. Good luck. Thank you, Dave. Thank Dave. Thank you, Dave, for the kind introduction. Thank you all for joining us today here in person, the New York Stock Exchange. For those that are joining us on the webinar, we very much appreciate your interest, taking time to come in and listen about the Knife River story. I'm thrilled about where we're at, where we're going, and the exciting future that we've got, and to be able to share that story with you all today. Like Dave Goodin said, my name is Brian Gray, CEO, President of Knife River. Yesterday was actually my 30th anniversary with the company. I did come right out of college at Oregon State and went to work for a family-owned company called Morse Bros. in 1993. MDU, Knife River, eventually acquired them in 1998. Started my career in the lab testing rock and doing mix designs on concrete and building asphalt mix designs and going out in the field and testing the compaction out on the highways. My roots are deep out on the operations side, and I love that side of the business. Very excited to share with you. 30 years ago, when I started, Knife River was a $50 million company. Today, at the end of last year, we're a $2.5 billion company doing work in 14 different states, and we've become a aggregates leading, vertically integrated, you know, people first company. So excited about what we've got to share with you today about the future, the opportunity for us to continue to, you know, start building shareholder value as a new, publicly independent traded company. With that, I'm gonna. Oh, I could just do this. Just really start back and give you just a little brief history of where we've been and why our history has set us up to be successful in the future. Knife River is not a new company. It was actually founded over 100 years ago. In 1945, Montana-Dakota Utilities acquired Knife River to supply coal to their power plants. In the 1990s, we stopped supplying coal and they decided to go out and start building an aggregates-based construction company. In 19... I'm sorry, 1992, they made their first acquisition in Northern California. Really the goal at that point in time was to go out and establish Knife River, build to scale, an aggregates-based company in mid-size, high-growth markets. During those first 15 years, we acquired approximately 65 companies to be really become who we are today. The family-owned company I was with at the time, Morse Bros., was one of those 65 acquisitions. We set out a goal to become to scale, and we accomplished that goal. We moved into the next phase, where we say, "Hey, let's take these 65 companies and become operationally excellent." We really kinda pushed pause on our acquisition strategy and really focused on ourselves. We branded Knife River. We looked at operational efficiencies. We looked at how can we implement best practices. We set out a goal that we wanted to have an industry-leading return on invested capital. We were focused on that goal, and during that period of time, between 2008, 2017, we improved our return on invested capital by 1,140 basis points, something that we were focused on and we accomplished. Very proud of that. Move us to the last five years. We wanted to start the merger and acquisition engine back up again. We wanted to focus on being the employer of choice. It's become a very highly competitive labor market, and we wanted Knife River to be the employer of choice and to build a scale and create ourselves, you know, up to stand on our own. Here we are at the New York Stock Exchange, weeks before actually ringing the opening bell. Once again, Knife River had a vision to start some sustainability growth, acquire more companies, and we are getting ready to be independent and publicly traded here on June 1. We set out that goal, and we accomplished it. That brings us to today, and I've been waiting for months to be able to roll out the EDGE initiative, our next goal. We've been focused on return on invested capital, but as we prepare to spin and become independent, we started looking at our peers. We started looking at ourselves in the mirror as a standalone materials supplier that's vertically integrated and realized that we want to do focus our attention on our margin improvements. Hence our new goal is what we call EDGE. I'm glad you guys all have the notebooks in front of you. I wanted, like, the big drum roll and be able to roll this out, and you guys are already talking to me about EDGE before the program started. This is something we're very proud of. EDGE simply stands for EBITDA Margin Improvement. We're going to talk a lot more about the specifics behind each one of these initiatives, but we are focused on improving our EBITDA margins. We're going to be disciplined in how we allocate capital, where and how we invest our dollars. We're gonna be disciplined in everything we do and intentional on how we operate. We're gonna continue to grow both organically and technically. That's been, like Dave mentioned, a very important part of our DNA, and we're gonna continue to do that. We also have a relentless drive to be the best in class at what we do, and we are the best in class in a lot of areas that we already operate in. About that. With that, like there are some near-term goals that we can achieve, and we've talked about those here, the EDGE 2025 expectations that we've got. We're going to continue to grow and add a strong and balanced revenue mix. We're gonna be focused on adding aggregate reserves, aggregate revenue to our overall portfolio, but we're gonna maintain to be balanced. We like the vertical integration model that we've built. You'll hear more why we like it. We feel it's resilient. We feel like it's got a good return on invested capital. We're going to remain vertically integrated. Obviously, we are very committed to improving our EBITDA margins. We see a path to get to 15%, approximately 15% by the year 2025. We generate good cash flows today at Knife River. We're gonna continue to generate those strong cash flows and maintain a strong balance sheet. Finally, we're gonna sustain, maintain that industry-leading return on invested capital. Our three-year average, 2020-2022, is 12.9%. Again, something that we're very proud of. Long term, once we achieve those goals, in the meantime, we're gonna continue to be focused on that long-term value creation for our shareholders. We are going to continue to grow our aggregate reserves and our aggregate product mix. That's a business line that we are committed to. Our entire business model revolves around and hinges on the aggregates that we've got as reserves. We see a path, and you'll hear a lot more about it, how we're going to get to above 20% EBITDA margins long term. We're committed to doing that and maintaining our number one market position in the markets that we operate in. Really, I've got four key messages. You're gonna hear a lot of stuff today. If I could ask you to take these four items away with you with clarity, that would be a success for us. The first one is we are a well-established company. We're positioned to continue growing in midsize, high-growth markets, operating in a stable and attractive industry. I talked a lot about that at the beginning. Second, Knife River is an aggregates-led, vertically integrated construction materials company with a business model that is highly resilient and generates industry-leading returns on invested capital. Third, we have a motivated, highly experienced leadership team with a strong track record of achieving its goals, now laser-focused on executing our EDGE strategy for margin improvement and long-term value creation. Fourth, we have a special, unique culture that's a little different than our national peers and regional competitors, where we truly put people first, and we live by our four core values of people, safety, quality, environment. We call that our Life at Knife. You may have actually got the Life at Knife book, and it talks a little bit more about our core values and just really who we are at Knife River. Let's start with the first one and start talking about the attractive, stable industry that we operate in. This aggregate, this business, the aggregates business is strong. It was a $31 billion business last year, addressable market last year. The foundation of this building, the foundation of America's infrastructure, it's built on aggregate. The good news is there's not an economical replacement for stone, sand, and gravel. It is a very stable, predictable business. You can see the volumes on the left. Pre-recession, those volumes peaked out at about 3 billion tons nationally. Then it went down and has come back up, but we're still the national average of consumption of aggregate. Actually, this is production of aggregate, is about 20% below peak pre-recession numbers. The bottom line in orange is Knife River's volumes. We very much mirror the national average. We too peaked out back in 2006 and come back, and we's still about 20% below where the other volumes are. Ours volumes mirror that very closely. There's capacity at Knife River. There's capacity in this industry. We've done more tonnage, I think that the economy and the tailwinds we're gonna talk about and infrastructure funding that is going to allow us to continue to see volumes rise. The chart on the right is simply taking those volumes and taking the average selling price at a national level and at Knife River level to come up with the overall revenue, I'm sorry, the overall value of the aggregate industry. Again, because this is a commodity that is one of the few commodities that I know of that during a recession, we're able to continue to have that price creep up. Because of the price increases over this long cycle, we didn't see the value drop nearly as like we did for volumes. In fact, today, the overall revenue of that business line is at the national level, 43% above the peak before the recession. The value of that, because of price increases, even though the volumes are still down 20%, the value of this industry in the aggregates is up 43%. Good news is Knife River has actually outpaced that, and we're at 49% above our peak revenue value before the recession. This industry is strong. Aggregates is here to stay in a strong industry, and I'm bullish that it's going to continue to grow. Why do I say that? It's because of the infrastructure funding that is in place. As you may have all heard, the association of, I'm sorry, this. Yeah. Association of Civil Engineers, American Society of Civil Engineers, they gave America's infrastructure a C-minus not too long ago. That's a little bit depressing. I mean, a C-minus is that the dollars we're spending right now are barely enough and not, frankly, not even enough to improve the system. It's to maintain what we've got. It's not to relieve congestion. It's not enough money to replace all the bridges. I mean, we're repairing bridges. That's the infrastructure that we've got coming. I mean, America's infrastructure is old and the American Society of Civil Engineers, lawmakers, taxpayers, they know that. That's why we're starting to see this wave of funding because it's really at a breaking point in America's, you know, infrastructure, is that we start repairing it and maintaining it, or else it's gonna get exponentially more expensive. This is a page. It's got a lot of different acts that Congress has passed. I'd say I'd point out to the one on the far right, probably the most meaningful one for our industry, for Knife River, because it's the type of work that we do is preservation work out on the highways. It consumes a lot of aggregate, ready-mix, and asphalt. It's the state local funding. Because the feds took a little bit longer than they should have, we were nervous about that at the state level. 11 of the 14 states that we operate in have passed their own transportation infrastructure funding on top of the federally approved system. Lots of work and tailwinds in the industry. I think I've established that we operate in a stable, attractive industry. Let's talk about Knife River's position in that industry. We are in five different reportable segments. We'll talk more about that. We have targeted those mid-size, high-growth markets. We're a top 10 producer of aggregate in the United States. You can see our different locations down below. 62% of our revenue is generated through our materials side of the business: aggregates, ready-mix, asphalt, cement, liquid asphalt. That's 62% of our business. 38% is contracting services. We're gonna talk a lot more about that balanced portfolio and the benefits of that. In the markets that we operate, the 34 million tons of rock that we sold last year in 2022, about 75% of that, a little greater than 75% of that, came out of sites where we enjoy a number one market position. Similarly, on our ready-mix and our asphalt, of those sales last year, about 50% of that, of those mid-size, high-growth markets that we operate in, we enjoy a number one position. Our competitors, typically speaking, are the regional family-owned companies that Knife River has been acquiring. We have very little footprint overlap with our national publicly traded industry peers. We do compete with them in small pockets, but generally speaking, this map here would be look different than our industry peers. 70% of our revenue last year came from states that are growing faster than the U.S. national population. Again, we are in attractive markets in an attractive industry. This just highlights the 70% of those states. I'll talk a little bit more about Idaho and Texas, they're some of the fastest growing states. The thing that's probably the most important is what's going on in these states. How much money are they spending in their gross state product and also in construction on the bottom. You can see the states that Knife River operates in, that the GSP for the last from 2011 to 2021 is almost 2 x that of the states that we don't operate in. Again, we are in a very attractive markets. My last slide as we kinda talk at a high level, and I'll get into more detail about our regions, just kinda how are we structurally organized. We're organized in five reportable segments. If you've seen the Form 10 by now or the 10-Q, you'll see that we've got five reportable segments, and we report by geographic location. Our first one is Pacific, that is Hawaii, California, and Alaska. And you can see their product mix. They're heavily influenced on the material side. 77% of their revenue is on material side. In the Northwest region, that is Oregon, strong presence in Oregon and Washington. In the Mountain region, that is Idaho, Wyoming, and Montana. North Central region is our home state of North Dakota, South Dakota, Minnesota, and Iowa. All other consists of three different kind of product lines or groups. We've got our Texas operations, and we actually have, you know, vertically integrated operations down there: aggregates, ready-mix, asphalt, contracting services. We also have what we call energy services. That's our liquid distribution of asphalt. Those terminals are in Wyoming and in Iowa, South Dakota, and Texas. Also in all other, which is reflective in our EBITDA margins, is our corporate services. We'll report in our form, our 10-Qs going forward. All other will be Texas, our Jebro Energy services business and our corporate services. Consolidated as a company, $2.5 billion net revenues. Of that, again, very heavily influenced on materials, 62% of aggregates, ready-mix, asphalt, cement, liquid asphalt, prestress. We've got on construction is 38%. Prestress actually is in construction. Our construction, our prestress business actually is in our construction numbers there. All right. I think, before I go to this slide, which is the next kinda that main talking point, I just wanna reiterate kinda the first main key message here is that Knife River is well-positioned in these midsize high-growth markets. We're operating in a very stable, attractive industry, and that we're set up to produce profitable growth and create this long-term value for our shareholders. That's the first bullet. The second one is really about how are we structured, and what is our business model and how is it differentiated from our competitors? I would just say that, it all starts with aggregates. You're gonna hear me say that probably two or three more times, and it truly does. I mean, the foundation of Knife River is built on our 1.1 billion tons of reserves, and we're gonna continue to grow those reserves. We like that product line. We're good in that product line, and our vertical integration model starts with that product line. The second part of our business model is to be balanced and have a balanced portfolio of all of the downstream materials and upstream materials that feed into our contracting services. I've got an infographic that will talk a little bit more about what vertical integration means to us at Knife River and why we like that resilient business model. It provides our customers a one-stop shop. It really allows them and us to capitalize on the value of the full supply chain from the beginning of aggregates through the downstream products of asphalt and ready-mix to the final laydown of those construction projects. We differentiate ourselves and our vertical integration platform. Finally, I've just talked about the choice of markets. I mean, we strive to be number one, number two in those mid-size, high growth markets, and we continue and we'll plan on to continue to grow in those markets. Really that's our business model. It's relatively simple. It's aggregates based. The foundation of our company is on stone and sand and gravel. We're vertically integrated. We're purposefully full, vertically integrated. You'll understand why we like that and the results that leads to. We are in very strong, stable markets that we have a strong position in. We need to go execute that business plan. This is again, something that I would say that is maybe a little bit unique to Knife River. We've got general managers in each strategic market area. They are not necessarily an individual product line expert. We've got product line experts that work for our region presidents and even our strategic managers, those vice presidents that are over a strategic area. I'll just use this area that I'm familiar with, Portland, Oregon. We've got a vice president that oversees all of our aggregate sites, our ready-mix, asphalt contracting services in Portland, Oregon. He has a team of experts that are operating managers report up to him. Because, I mean, we have a single source of, kind of contact for our customers, we're good community leaders. There's very few divisions and silos that are built within Knife River because of this structure. It leads to this culture that Sarah's gonna talk a little bit more about that really, people, it's an attractive place to work. We don't have problems, and Sarah again, will talk about our retention recruitment efforts because of this kind of this unique management style and going out and executing our game plan at the operations level, we are able to attract the best of the best management team. I would say our execution plan, you can sum it up in the fact that it's an operations driven, it's nimble, it has complete buy-in at the frontline level. We have a corporate staff there to support it and guide it and make sure we're holding people accountable. Our execution really is done at the region level. That leads to what we consider good financial outcomes. Because we're in construction and everything upstream from that and the strong tailwinds that I just talked about, infrastructure, we have been resilient over economic cycles. Nathan's gonna get into more details on that, but this business model has proven to be very resilient for us. It also is allows us to flex and follow the work. We've got a unique ability on our contracting services and really even the upstream materials. Some of our competitors, they really target either public works or private work, especially our regional competitors. They typically are going after either, you know, a little easier residential, non-residential commercial work that maybe is easier with lesser specifications. They're geared up. Their crews are trained to kind of work in that environment. They have a hard time flexing and transitioning and going over and chasing the public dollars. We're able in our business model to be able to flex and follow either private or public dollars. This model, being in mid-size, high growth markets, being vertically integrated and having 38% of our revenue come from a product line that's not very capital intensive, that has led to industry leading returns on invested capital and also a very strong balance sheet. This is the infographic that I was talking about. 16% of our revenue is aggregates. Upstream materials, those are our cement operations in Hawaii and Alaska. We don't produce manufacture cement. We buy it offshore, bring it in, store it in large domes, and distribute it out on all the islands in Hawaii and Alaska. It's also our liquid asphalt business that we have in California and Wyoming, Texas, Iowa and South Dakota. That's the upstream materials. We combine those materials, that raw material, aggregates, liquid asphalt, cement to then make our downstream products, which is about 33% of our revenue. That's ready-mix and asphalt. We take those materials that has markup on the aggregates that's sold to the ready-mix and asphalt. We mark that up and sell it to ourselves or to third parties, and that's our vertical integration model. The thing I like the most about this model is it allows us multiple bites at the apple. If there's a large job, and there's some large jobs coming out of the IIJA right now. Knife River is not geared up. That's not the line of business we do work in. We will go be a subcontractor for somebody that's doing a $200 million job. We'll pay for them. We'll be a subcontractor. We'll sell them aggregates to go make their own asphalt. We'll sell them asphalt to go pave with their own crews. We don't really care what piece of the apple we get, we just want a bite at it. That's the value of our vertically integration platform. Is a value for our customers, like I mentioned. I mean, we have a lot more control over the supply chain. We own 2,200 delivery vehicles, whether that's a delivery vehicle for stone, sand and gravel, dump trucks, or if it's a ready-mix truck, if it's liquid asphalt trucks, cement bulkers. We control that supply chain by being vertically integrated. It's a resilient, profitable model. How has this diversified, resilient model worked for us? These are the financial results in 2022. On the bottom, I'll just talk again just to reiterate the diversity that we've got. We've got geographic diversity. We're down in the South, we're on the West, we're up in the North Central states. I'll just tell you, from being at Knife River for 30 years, every one of those different regions has been on top. There is a cycle, and work ebb and flows throughout this geographic footprint. It's been a benefit for us to be in all those different regions. Again, we're balanced on our product portfolio, and we have a very diversified customer portfolio. We have over 13,000 customers at Knife River. Only, you know, less than 20% of our total revenue is made up by our top 15, primarily all of those being DOTs. That's resulted in a $2.5 billion revenue business. Last year, we had adjusted EBITDA of $296 million and a backlog of $819 million at the end of the year, a record backlog. Tive hree months into this year, we announced another record backlog. We are now at $959 million of contracting service work only. $959 million is where we sit at the end of this first quarter of 2023. You can see the attractive compounded annual growth rates for both revenue and EBITDA over the last five years. The number that stands out the most to me and that we're very proud of is the 12.9% three-year average on our return on invested capital. That is an industry-leading. That differentiates us, and that's something that we've been focused on and that we're proud of. There's a lot to unpack on that first, second key message. I'm gonna read it, just make sure I get it right here. Knife River's diversified business strategy of an aggregates-led, vertically integrated construction materials and contracting services company is differentiated by resilient financial results and industry-leading returns on invested capital. That brings us to our last two primary messages, and that is the next one is we are turning our attention to improving our margins. I'm gonna talk about our management team and the commitment that we have on improving our EBITDA margins, our gross profit margins, and our commitment to that through our EDGE initiative. Sarah and Glenn will come up and talk about our core values and kinda the special sauce that we have in our people-first culture. EDGE. Here is the framework of how we're going to provide near-term and short-term value to our shareholders. It stands for EBITDA margin improvement. Discipline. We're gonna be disciplined in everything that we do, how we allocate capital, how we perform work out in the field. We're gonna continue to grow both organically and inorganically. We're gonna have this relentless drive to be the best in class at those things we do. Let's start with EBITDA margin improvement. There's three levers. There's really two levers there that are the most obvious ones to pull on, we're gonna be pulling on both of them hard. The first one is our price, optimizing our value that we bring to our customers, maximizing that value of being a vertically integrated company. This is far more than sending out price increase letters annually. This is becoming much more sophisticated, much more disciplined, much more focused on our EBITDA margins. We've been driven for in the past to grow that bottom line, to grow this company to scale to where we get to where we are today. We've grown our EBITDA, but maybe it's come at an expense of some of our prices at times. We are going to be focused on maximizing our prices. Something that we'll talk a little bit more about and success that we've had in some of our regions already, that goes on materials and our bid day strategies. When we have a record backlog, you can be more strategic on bid day and improve those margins. Another way of improving our margins is our cost controls. And I mentioned back at the regions, we have a general manager, but we have these product line experts, and we are now putting them together, and cross-sectional team from all the different regions are getting together, and they're coming out to Oregon. They're going out to Texas, and they are walking our production facilities with sometimes an outside party as a consultant to help us. We're taking that expertise in those regions, and we're calling them the PIT crews. PIT crews is Process Improvement Teams, as we're taking the top talent in each region, going out to a site and doing a deep dive into their production, both in asphalt, ready-mix, and aggregates. Some exciting things already transpiring from that process that we started early this year. Discipline. This really is just being intentional about the decisions we make. We are going to be disciplined at everything that we do. Allocating capital. How are we looking at internal growth, our CapEx budgets? How do we go out and we build work? How do we be disciplined and make sure we're not losing sight of our core values as we're continuing to grow our EBITDA margins? Discipline's gonna be very much part of our DNA, as has growth. We will continue to grow, acquire companies. Because we operate in an unconsolidated market, over 5,000 aggregate companies are in the U.S. The areas that we operate in are highly fragmented, leaving a lot of opportunities for us to not only be the price leader, market leader, but also to continue our consolidation of those markets. Finally, we are best in class in areas, and I don't wanna lose focus of that, because we're proud of the things that we're doing that are already excellent. You're gonna see, some of you have actually been out to our training center in Oregon. We pride ourselves in the amount of investment we put into our team to make them world-class operators and managers. We are very good at recruitment retention, an area we want to get better at. Safety. We're better than the industry, but we want to be better. There's a strive to be excellent, best in class in all of those areas. Why am I, like, really confident, maybe overly confident about this EDGE Plan? It's because it works, and it's because I know it can work because it's very similar to a program we put in place 10 years ago back at Northwest Region. I had the privilege of going from one of those general managers in a strategic market overseeing all product lines up in Portland to becoming the region president back in 2012. If you remember back in 2012, that was in that era that Knife River was focused on our return on invested capital. We have six regions at that point in time, Knife River Northwest region was on the bottom, we did not like that. We got our management team together, we created our plan, it wasn't as crafty as EDGE, it was plan, grow, and enjoy. If you went out and talked to anybody in Oregon, most likely if it was a ready-mix driver, it was somebody in the quality control lab, it was somebody out paving roads on I-5, they probably back in that area of 2012, 2022, and probably even today, if you ask them, "What is the strategy here?" They would say, "Plan, grow, and enjoy." They knew what it was. We had a game plan. Plan. We had a plan to improve our ROI. We wanted to get above our cost of capital. We had a plan to continue to expand our reserves. We had a plan to become better planners. That sounds crazy, but when you're in our industry, having a good game plan when you go out to a job site is critically important. It saves you a lot of money. It results in job site bonuses instead of penalties. We became planners, weekly, monthly planners on our budgets, on jobs. We became very focused on hitting our financial plans. Grow. We wanted to grow our footprint in Oregon, and we wanted to grow the talent of our team. We wanted to have the best of the best, so Dave Barney, when he was CEO five years ago, could call our region and ask people to go out and help other regions. We took talent very seriously. Succession planning and building and growing and challenging our team, but it also meant growing our footprint. We had eight acquisitions during that period of time. We grew our revenue by 9.4% during that time. Because we were so focused on maximizing the value of our vertical integration that we have in Northwest Region, maximizing our pricing, lowering our costs, that resulted in a 19.4% compound annual growth rate of our EBITDA. Something, again, very proud that we're part of that. It didn't happen by accident. It was intentional. We did it with discipline. It also, if you look at the numbers here, kind of look familiar a little bit to our Knife River EDGE plan. We were at 18.6% aggregate revenue. We knew where our strengths were at. We knew which product line has the best gross profit margins. We wanted to grow our aggregate business product mix. We're up to 24.4% at the end of last year. Our EBITDA margins, this is one of the things I'm most proud about, went from 7.2% in 2012 to 17.3% last year. Plan, grow, and enjoy, I mean, there are a lot of similar aspects in our Edge plan, and I'm very confident that that framework, that roadmap that we had in the Northwest region of plan, grow, and enjoy will work the same way in all of Knife River for Edge. We're not done though. We're not done in Oregon. Why don't we transition my last four or five slides here to some specific initiatives, some tailwinds that we have in each region, along with just some Edge initiatives in each region. Staying with the Northwest region, we're very excited and, you know, getting ready to commission this month a brand-new state-of-the-art precast, pre-stress facility. We acquired a new company, about three years ago in Spokane, Washington, a pre-stress company. It was on a very old, antiquated production facility. That product line, prefabricated concrete wall panels, pre-stressed bridge girders with the infrastructure plan, because of labor shortages, because of the challenges in the supply chain of getting steel, because of the cost of steel, we're seeing Tesla buildings, you know, distribution, where they sell cars. Going from a steel building to a precast concrete building. We see concrete that's cast in place because of congestion and the challenges of getting labor to get the concrete to the projects going to prefabricated wall panels. This business for us is very strong, and we see that growing, and we see it growing in a new facility that's state-of-the-art. It's gonna have additional capacity, more automated with better profit margins. The other opportunity that we see is that we continue to be busy in our consolidation of this market in adjacent markets that we're not in necessarily in Oregon. We have a very good textbook to integrate acquisitions quickly into the Northwest region, and our phones are ringing of companies that are family-owned companies that see what we're doing in the communities, and they hear the stories from other acquired companies that say, "This is like more of a family culture at Knife River than it was the family company I just came from." People want to sell their company to Knife River. We have that opportunity in all of our regions, but specifically because of the track record and integration success we've had in the Northwest of doing that and continue doing that in the Northwest region. Let's talk a little bit about Pacific region. This is Hawaii, California, and Alaska. I would say that this is by far our most diverse region, both geographic, Hawaii and Alaska, no further explanation there, but also by product. They sell every single product that we have. Cement in Hawaii and Alaska, liquid asphalt in California, aggregates in all three states, ready-mix in all three states, asphalt in California, contracting services in California, building materials, precast concrete blocks up in Alaska. I mean, every single Prestress up in Alaska. Every product line that we have, Pacific region, has a piece of that. Very diverse region. That's led to them being one of our consistent, steady eddies that really has produced kind of, the best-in-class results. Year-over-year for a long, long standing, if you take a look at the 30-year history of Knife River, you're gonna find the Pacific regions up towards the top of that list. Now, I can tell you, that we struggled the first half, the first quarter of this year. Not half, first quarter. Heavily impacted by the weather in California. Record rains basically shut our construction crews down. Also, this region has struggled to get back to work a little bit because of COVID. It's probably been the region by far the most that's been delayed in getting those economies back started, and those are the ones that shut down a lot. Hawaii, tourism, shut down. Alaska, cruise ships shut down. California, Disneyland. I mean, these states took COVID very seriously. They're recovering now. The tailwinds that we've got is, I was in Hawaii a couple months ago, and the beaches were packed. The resort was packed. Locals are saying that the tourism dollars are back to pre-COVID levels without the international travelers coming into Hawaii yet. Strong tailwinds there. Military spending, both in Alaska, Hawaii, heavily influences our economies there. The Navy, they just let out the largest single construction project in Navy's history in Hawaii, Pearl Harbor, a $2.8 billion dry dock facility at Oahu. Knife River just got a purchase order to move a portable ready-mix batch plant on that site and begin to producing concrete for that. Good. Again, strong tailwinds in the overall economy. We're uniquely positioned in all these states. I'll talk about that. In California, we're not in San Francisco. We're not in Sacramento. We're in Stockton. We're in Chico. Well, right now, post-COVID, that's proven to be a very good spot to be. Most people may not think of Stockton as a super desirable place to live. I'm telling you that the Bay Area, the congestion, the price of land, the cost of living, is moving that development out to the outskirts of the Bay Area. That's called Stockton. That's our footprint. That's our home base in California. We skip Sacramento and go up to Chico, and so we're well-positioned. Couple of very specific key EDGE initiatives that will have an influence on our overall performance in EDGE. Two big ones. We have some large quarries. We have one very large quarry over in Oahu, and also a large quarry down in Southern California on Catalina Island. We have recognized through our PIT crews, management teams, that there are some operating efficiencies that can be implemented quickly there with a new mining plan that was gonna help us improve our reserve... or improve our EBITDA margin. The other thing is we've got great talent in the Northwest in pre-stress, best in class probably in the industry. We're gonna take that team and help our friends up in Alaska make their business more profitable in their pre-stress division. All right, I need to keep going. On our Mountain region, this is our fastest growing site or region. Idaho, Boise market is thriving right now. It's a very desirable place to live. Montana, Wyoming, very desirable place to live. There's a lot of tailwinds. Those economies, I mean, depending on which reports you look at, it's gonna put Idaho as number one or number two fastest growing states. There are jobs, it feels like daily coming out to bid in those markets. We have a very strong presence in the Mountain region. This is our by far where we do the most contracting services. If you go to Idaho, Montana, Wyoming, and you see a construction job, there's a good chance you're gonna see orange or white trucks on it. If you're a private developer, you're gonna probably see some orange or white trucks on that. We've got some good opportunities. When you have record backlog. You could be more selective at the type of work you bid and drive those margins up. Our EDGE execution of raising prices, not just on materials, but very much focused on bid margins in the Mountain region to continue to maximize that value. Also, we have, when you have record backlog, you gotta go out and execute that work. That's something that we're focused on, putting that game plan together to go out and execute the work. It's such a heavy emphasis in the Mountain region on contracting, they could use some help from the PIT crews. The PIT crews will be in Idaho, Wyoming, Montana, really looking at the operations. Those are some of the EDGE initiatives in our Mountain region. Turning to the North Central region, this is North Dakota, South Dakota, Minnesota, and Iowa. This also is kind of a hidden gem, I would say, in the United States when it comes to growth. I think many people would not realize that North Dakota was the fourth fastest growing state in 2010 to 2020. Sioux Falls, South Dakota, it's expected. You can read reports, it's expected to be one of the fastest growing cities in the nation over the next 35 years. South Dakota saw record level of permitting valuations last year. Those economies are strong. We have established operations up in Bakken. We didn't move in there and then only move back out. There's still work going on in the Bakken. In fact, the Bakken is actually kind of busy right now, and we are well-established to take advantage of that. Tailwinds in the North Central region, I would say that the area that we're most focused on in the North Central region is raising our bid margins on bid day. When you have new management come in, such as myself, it brings opportunity. When you have new initiatives come up, like the EDGE initiative, there are certain people that rise up and stand out. We have a gentleman by the name of Andy Kramer, who's overseeing our North Dakota operations, and he has embraced the EDGE initiative like I've never seen before. We've promoted him now to become our region president. With that brings renewed energy, renewed focus on bid day. The strategy that's going on, the conversations going on before we bid a job is a lot different than it was a year ago. Very excited about the EDGE initiatives in our North Central region. Finally, all other. That's corporate services. I'm not gonna talk about that, but it's also Texas, and it's our energy services, liquid asphalt distribution. Texas, I don't need to talk about the tailwinds. It's an economy of its own. It's a massive DOT budget. It's just recently by U.S. Census, named as the fastest growing state. Everybody wants to be in Texas. We're a small fish in that big pond. We're not in Dallas, we're not in Houston, we're not in San Antonio. We're in Waco, we're in College Station, and we're just now commissioning a very large, strategic, high quality reserve that's about an hour northwest of Austin, a market that's booming. That facility, called Honey Creek, is located on the rail. We can get materials to all parts of Texas. We can begin supplying our own materials to ourselves. We were not able to do that in Texas when we first went in there. We were left having to be buying from our competition. Part of that vertical integration aggregates focus plan is to open up and commission Honey Creek. We have a lot of work to do at Honey Creek to get that up and running to its full capacity. We've got opportunities to improve those volumes. We just got a second unit train that arrived last month. Our focus, probably one of the biggest EDGE initiatives for us in this region is, the Honey Creek. The other thing I would say is that, we have, the ability to leverage our relationships with our oil suppliers and continue to grow our energy services, one of our most profitable business lines. All right. That's the individual EDGE initiatives. I could talk for another hour. There's a lot more of them within the regions. I can tell you that there's a lot of conversations going on throughout the organization, and it's not at the corporate headquarters back in Bismarck, North Dakota. It's down in Stockton. It's down at Honey Creek. It's over in Oahu. These conversations around EDGE and the buy-in that we've gotten, the embracement that we've got, it's contagious. That's exciting. At the corporate level, you know, I just say that our key kind of values that we're going to drive our EDGE in the near term, one is this price alignment. We'll probably have some questions and answers around our pricing strategy. We are going to be laser-focused on that price alignment. When I say alignment, it's aligning with inflation and our current costs. It's also aligning with the value we bring our customers through that vertical integration. That price alignment, it also happens on bid day for contracting services. We are very focused on our price alignment. Second is this operational improvement. We are implementing and seeing results today to become better, sophisticated, disciplined operators and really look at our costs. And we're doing that not just out in the operations, but also back at the corporate headquarters. As we've become an independent company, we're gonna be looking closely to how do we optimize our scale as it relates to our overhead costs. Finally, you know, it's balanced and part of, you know, profitable growth through our vertical integration. We're going to continue to increase our aggregate reserves. We're gonna continue to increase our top line. It's all through our balanced vertical integration approach. We are committed to that. At the same time, we are very committed to staying who we are at Knife River. Yes, this is a new chapter in our history, we're going out to be publicly independent, you know, publicly traded, independent company. We are focused on maintaining the core values of who we are: people, safety, quality environment. That brings me to the next section here, as I have the privilege of introducing Sarah Stevens and Glenn Pladsen. They're gonna talk about our core values. We call it Life at Knife. You can look at it through this fun little book that we give to our new hires. This one's specially made for you guys. We have one for our new hires. Talks about the Life at Knife. The Life at Knife is how do we embrace, how do we live our core values of people, safety, quality environment. Some people, you know, Knife River's ESG section. It is our ESG section, but it's also just the DNA, and it's the fabric of who we are at Knife River of people, safety, quality, and environment. With that, I invite Sarah Stevens up to the stage. Sarah's been in the Knife River Northwest region for 17 years as our director of HR. I've had the privilege of asking her to step into a corporate-wide position of Director of HR. Sarah Stevens, welcome. Thank you. Thank you, Brian. My name is Sarah Stevens, I'm the Director of HR for Knife River. When you work in human resources at a people-first company, it truly does bring home the importance of our team members in everything we do. I'd like to start out by defining again what we mean by people first, then provide some context around how we believe our commitment to our team truly has a bottom-line impact. First, as Brian said, we promote a culture we call the Life at Knife. The Life at Knife is how we as a company and we as individuals at this company live our values of people, safety, quality, and environment. We intentionally list people first because that's where it all starts. In the busiest part of our construction season, we have over 5,700 people working for Knife River. We need to be able to count on each other because our success depends on one another. We have been very vocal in advertising our values and what Knife River believes with the goal of attracting and retaining people who share those values. We think the concept of values alignment leads to a more engaged workforce, it doesn't just happen without some extra effort. Those efforts include our coaching philosophy and our commitment to being good communicators. Our coaching philosophy includes the belief that it is better to coach than to supervise for the coach and for the players. It's more natural, it's easier to coach the performance you wanna see. Coaches also work hard to win and recruit the best talent. We developed the six C's of coaching to help our leaders embrace this coaching philosophy. The six C's are care, communication, consistency, challenge, commitment, and culture. They're all about building meaningful relationships and chemistry, getting to know your players on and off the field, listening to your team, treating everyone fairly and with respect, and coaching your players to grow. Our supervisors work hard to create a culture of enjoyment at work. We spend a lot of time at work. We should be enjoying it. We believe this is reflected in our workforce recruitment and retention efforts. In the last few years, especially, we have made a concerted effort to improve our communications. Two major initiatives have been our My Life at Knife discussions and our Life at Knife app. The My Life at Knife discussions are essentially performance reviews, but they can be held at any time, and they can be requested by team members of their coach. It's designed to give a clearer picture into employees' roles in the organization, what they wanna do, and how they can get there. It has helped us expand our succession planning efforts by getting better visibility into people's career goals. Our Life at Knife communications app has been an excellent tool to help us reach out to employees for communications and for information they need to help them do their job. Because of the nature of our work, only about 40% of employees have access to computers and company emails. Through the app, it gives us a platform to reach just about everyone. We currently have about 80% of our employees active on the app. Since launching these communications efforts, we have seen company-wide engagement improve, and the percentages on this screen here show an increase in positive responses of agree and strongly agree to favorable communications, engagement, and culture questions from before we implemented these initiatives to after. Better communication has led to better engagement and a strong culture. That's important because it makes work more enjoyable. It also supports our retention efforts. Switching to retention, you can see that our turnover rates are considerably lower than the industry average and the U.S. average. Lower turnover means we spend less time and less money onboarding new hires. Our employees also stay with us longer than the industry average. We believe our culture plays a significant role in that, and having longer-tenured employees has a positive impact on safety and quality results. We find our highest exposure for incidents is people's first year of employment. So we focus job-specific training to help with that, but we see our safety numbers improve after that first year. The better our retention and tenure, the less we spend on hiring new employees and the more able we are to focus on safely delivering quality products and services. We are proud of our people-first philosophy, and that, of course, means all people. We have adopted a strategy that we are one team stronger together. This has been an outreach effort with three key messages. We treat each other with respect and professionalism, we embrace the diverse backgrounds and viewpoints of our team, and we continue learning from each other to keep improving. We believe that additional viewpoints offer more ideas and better results. To help with this outreach effort, we've partnered with the National Association of Minority Contractors to offer scholarships to the Knife River Training Center for historically underrepresented groups. In partnership, we have $250,000 from an Oregon Economic Development grant to invest in training underrepresented students in the construction trade. We also have spent a significant amount of time recruiting minorities, females, veterans, and individuals with disabilities to come and work for Knife River. We reached out directly over 1,700 x to organizations connecting with underrepresented individuals in the last year as just one part of our outreach efforts. While we can continually improve, our efforts to hire people who historically haven't been knocking on our door have been working. We exceed the affirmative action plan benchmarks in every geographic area where we operate in employing females, minorities, and veterans. Our recruitment efforts are focused on our culture more and more every year. Even though our retention numbers are better than average, we still have a number of jobs to fill each year, and we're having success building applicant pools during this recruitment process. For example, in 2022, we hired almost 1,700 people out of the nearly 10,000 that applied. This competitive hiring process allows us to be selective in assembling the best team possible. We have found that showcasing our values really helps with recruitment. We post regularly to social media about the Life at Knife. Our employees are some of our best ambassadors. We have employees sharing our social media posts. We have employee referral programs that have brought us really great candidates. Career days and job fairs are also really big for us, especially high schools and trade school students who are not interested in going to college, but wanna get started on their careers right away. From February of last year through March of this year, nearly 800 students and educators have been to our training center. Just in April and May alone, we've doubled that number. Another nearly 800 have visited for career expos, where they get to receive hands-on learning opportunities on equipment, they engage in leadership development activities, and they network with current Knife River employees. Our newest recruitment tool is a pretty awesome investment we made to attract people to the construction industry. The Knife River Training Center opened its doors last year and has been a huge success. The training center sits on 230 acres in Oregon and includes an 80,000 sq ft dome, which is the size of two football fields. The dome is attached to a classroom building that has multiple classrooms and meeting spaces. The idea is to provide hands-on education in a real-world environment that is a safe space for learning. Knife River experts provide training at the center for our employees, for the public, and for other companies. We want to attract as many people as possible to our industry and the good-paying jobs that we provide. Since we opened our doors in February of last year, through the first quarter of this year, we've provided training to over 2,000 people already. That would be through CDL school, coursework, equipment operations, leadership development. On top of that, an additional 3,500 people have used the center for other events, meetings, youth education experiences, things like that. One example I'd like to highlight is our Knife River CDL training course. We started last year, and 100 students have successfully completed it. In 2022, our success rate was 97% passed their CDL exam. So far this year, 100% have passed their exam. 25% are minority students. We believe we offer a better program than other trucking schools, and the results in these passing exams are evidence of this. We keep our student-to-teacher ratio to 2 or 3 to 1, which allows us to focus on the individual needs of the students. Our instructors have gone through in-depth instructor development courses, applying the latest adult learning theories, and we have a more interactive training method. Our facility uses a closed circuit road network, which allows the students to learn how to operate a commercial motor vehicle on a closed road, with no other drivers on the road. This allows them to become more comfortable in the learning phase, so they can concentrate on applying the skills they learned in the classroom out in the field. We have a dedicated backing range, which allows the students to learn how to use a combination vehicle in a closed area while being coached by an instructor. At the same time, they're being filmed, and the footage of their maneuvers, are emailed to them that day, so they can see how the vehicle reacts. This allows them to associate what is going on with the vehicle with what the instructor is saying. We've teamed up with a local community college to offer this training as one of their courses. Together, we offer this training to more than just Knife River employees. We have made this course available to everyone, including disadvantaged business entities and underrepresented population groups. There are scholarships and grants available to eliminate that barrier for students. Now I'd like to play a short video for you about the training center. The Knife River Training Center is an investment in two of the world's most precious resources, people and the future. We want to develop individuals' talents so they can grow in their careers and build the next generation of America's roads, bridges, buildings, and more. The center sits on 230 acres and is designed to build real skills through both education and experience. From the classroom to hands-on training in real-world settings, the Knife River Training Center is a facility like no other. Five high-tech classrooms and conference spaces provide the starting point for your learning experience. From CDL classes to equipment operation to leadership development, our training building is where the education begins. The rooms are equipped with state-of-the-art AV equipment and are customizable to fit groups of just about any size. What we learn in the classroom, we want to quickly apply in the field. Rain or shine, we have the space to do that. Our 80,000 sq ft dome includes a dirt arena for truck and equipment training, as well as a concrete viewing platform and a video production studio to assist in learning. The huge dome provides an all-weather venue for many types of training or events. Outside, we have built a haul road with a super elevation to develop driving skills, and we have plenty of space for equipment training as well. All of our training is done in real-world environments, but behind closed gates and away from live traffic to enhance safety and build confidence. To add to the experience at the center, we have a professional kitchen and on-site catering. In addition to providing great food, this helps us keep our groups together for a totally immersive experience. At the end of the day, we've got a relaxing place to unwind, catch up, and have a little fun. The training center is open to anyone looking to build their skills, not just to current or future Knife River team members. Any of the facilities are also available to rent for groups looking to host a meeting or event in a truly unique environment. At the Knife River Training Center, we believe that building people's skills will build strong careers and strong communities. The training center is truly an awesome environment. We'd love to have you all get out there sometime for a visit, it is really a state-of-the-art, spectacular place to be. My name is Glenn Pladsen. I'm the Vice President of Support Services, I'm gonna share with you a little bit more of our story of our core values, I'm gonna start with safety or continue the conversation with safety. Sarah talked about our people-first philosophy. She also talked about our industry-leading recruiting and retention statistics. None of that happens if you're not a safe place to work. We focus on safety, we are really very fortunate that the construction industry is getting safer every year. If we look at the last decade, we've seen a recordable some safety statistics. A recordable injury rate in the construction industry has decreased about 30%, that's really through focus on safety, improvements in equipment and PPE, there's been a lot of consolidation in the industry. Some of the smaller players are now part of larger companies like Knife River. Even as the industry metrics are getting better, Knife River's continue to be even better than that. Just some statistics. If we look at the last three years, just the average for Knife River, our recordable injury rate is 18% less than our industry comparisons. Our lost time accident rate is 40% less. Our incidents per million miles driven is 23% less, and our EMR, our experience modification rating, which is an insurance industry work comp-based metric, is 40% less than our industry peers. We're a safe place to work, and that's really what it takes if you want to keep people and you wanna have our own team members be the best voice in recruiting their friends and family. How do we do that, right? It's the question. We really take a building block approach to safety. The first starts with training. We focus on standard training, right? MSHA, OSHA, FMCSA training. We don't try to overwhelm our team members with it. We give them to them in bites. We start on new hire orientation. We focus on safety. When the first day they're on the job site, our task training. We do daily job hazard analysis. We do weekly toolbox talks. We do annual refreshers. We do spring kickoffs. You kinda get the point, right? We continue to build a culture of safety. That's our core. We also have very specialized safety programs. I'll hit on a couple. We have our Top Drum and Top Wheel. It's very specific to our fleet. Top Drum is our ready-mix. Top Wheel is our non-ready-mix fleet. Top Drum has essentially become the industry standard for training concrete delivery drivers that is licensed through the NRMCA. The National Ready Mixed Concrete Association, they provide that to their members as a standard for training ready-mix drivers. In addition to what we have in place, those building blocks that I talked about, the training, we also have our three Ts. Another one of our safety programs. Those three Ts stand for tools, training, and time. It's really a commitment. It's a commitment by Knife River to provide the right tools for the job, commitment to provide the right training, so that the employees know how to use those tools and do the job safely. What we ask back is that they take the time. We ask them to take the time to use the tools and to use the training appropriately. Another one of those building blocks that we have is our cardinal rules. The cardinal rules are 10 non-negotiable rules that we have. Anytime there's a violation of those rules, there's discipline that comes with it. We wrap that all around in our KNF Cares program, this is a fairly new initiative, and this includes our fleet, this includes our construction operations and our plant sites. The KNF Cares is an observation and communications program. It really is trying to teach our team members to see. Try to teach them to see unsafe acts, unsafe environments, and then giving them the comfort level to communicate, to talk to their team members, to talk to their coaches about it. We found this is a great way for them to embrace safety and be part of that. We've also found that it doesn't just apply to work, it applies at home as well. Safety is one of our key differentiators, and it's really a benefit from recruiting and retention. It also is a benefit from jobs. There are certain jobs that companies are not allowed to bid on if they don't meet a certain safety threshold, and we do. That opens more doors for more opportunities for us. As I shift to our next core value around quality. If people, when they think of quality in a construction, you know, context, they think of the quality of products and services we deliver, and that's true with us as well. You can see a very small sample of awards that we have received for work we did last year. This is from industry groups, it's from customers, it's from communities. We do a good job, and we get recognized for it. Probably more importantly, we achieve many of our quality bonuses on our jobs for the types of work and the quality we provide on the job site. Quality is really just a portion of how we think of our core value. Quality is really embedded in everything we do. Let me give you a couple of examples. I talked about that Top Drum training program, right, for our ready-mix drivers. There's a component of that Top Drum program that's focused on customer service. A lot of times, the last impression that a customer has is when that material is delivered to the job site. We wanna make sure that ready-mix driver is comfortable being an ambassador of Knife River to that customer. If we think about our plants, we have a very high standard in housekeeping in our plants, on our job sites, in our equipment. If you have a clean environment, an organized environment, you have more pride of ownership from the team members, and truthfully, it's a safer place to work. If you talk, think about the recruitment and retention conversation that Sarah just had, we really focus on that quality of engagement for new recruits and make sure their onboarding experience is very comforting, right? We want them to be part of that family. We really try to build quality into everything we do, and if you think of the EDGE initiative that Brian talked about, that excellence, that last E in EDGE, that's really where we come, our quality approach of both products, services, and our internal focus. Now, as we move into our final core value of the environment and really how Knife River approaches our sustainability world. We are fortunate that a lot of the materials that we work with are very recyclable. Let me give an example. Asphalt, as we do maintenance on a highway, we pull asphalt off that highway, repair the highway, then you put new asphalt down. That asphalt, we call it RAP, recycled asphalt products, is 100% recyclable. We can take that asphalt and reuse it in new mixes. Our usage of RAP varies from year to year, kind of the types of work we get, but in the last three years, on average, we're consuming and replacing about 900,000 tons a year of that recycled product. Concrete's the same. When concrete gets demolished or reused, we can re-crush that and reuse it both either in the ready mix or as base material. Water is another precious resource that we very focus our recycling efforts on. All the water that we capture from washing our aggregates can get reused in the washing process. Any water we capture in our ready-mix wash operations can also get reused in the products or in the washing process. Now, one of the challenges we do have is moving our materials when it comes to the environment and sustainability footprint. They're big, they're heavy, and they take a lot of trucks to do it, as Brian talked about our trucking fleet. We've got a couple different areas of focus. One is we call it Shut Down and Save. It's our fuel conservation program. How do we minimize the amount of fuel we use when we're not actually delivering that product? The second is we tend to think of alternative means of getting the product to market, primarily rail and barge. According to the Association of American Railroads, rail is about 3x-4x more fuel efficient for delivering product than trucks. Through our use of rail and barges, we eliminate about 100,000 truck deliveries a year from our own fleet. When we do deliver product, and we do consume fuel, we're migrating to renewable diesel. Last year, we used about 4 million gallons of renewable diesel in our fleet, about 18% of our total fuel consumption. This year, we'll do about 6 million gallons, primarily on the West Coast, where the fuel's readily available. We've seen great success both from a fuel efficiency and engine maintainability. Knife River is doing a lot on the sustainability standpoint, but we can't do it alone. We really rely on our partners to be successful. Just give you a couple examples, are partners of our suppliers. We were very quick to adopt as the cement industry came out with a lower carbon footprint cement. We made modifications to our mix designs and our operations to adopt that as to the extent that we can. We work with our equipment manufacturers, as Cat and Deere and others release hybrid construction equipment vehicles, we will support them through field testing, and we'll support them by bringing that into our fleet. On the screen, you'll see a brand-new Cat loader. This is a hybrid machine. A bit more expensive when you purchase it, but we see the fuel cost savings offset that initial purchase price very quickly. I mentioned renewable diesel. We're looking forward to when that's more widely available, so we can use that in our fleets throughout the rest of our operation outside the West Coast. We also partner with our customers. We are seeing more and more of our customers now not only bidding and managing projects to a financial budget, they're also managing that to a carbon budget. We're working to develop EPDs or product, environmental product declarations. Those of you that aren't familiar with it, think of it as an ingredients list of a product, but instead of ingredients, it's a greenhouse gas contribution from raw materials up through production. We're investing in the creation of these for many of our products to help our customers really understand what that carbon footprint's gonna be on their job. We're also positioned very well for any federal work through the Federal Buy Clean Initiative to support that. This is an investment that a lot of our local and smaller competitors just aren't, I'll say savvy enough or able to do, both financially as well as really understanding what their supply chain looks like and are they capturing all the information to help develop that EPD. Another investment we made is in a company called Blue Planet. They are in the process of being able to create synthetic limestone based on emissions from industrial sources, so refineries, ethanol plants and so forth. This synthetic limestone can be used in the production of ready-mix. That carbon that is the core source of that synthetic limestone is essentially encapsulated forever. Not only does this encapsulate that carbon or reduce the overall carbon footprint, it also saves on aggregate resources 'cause it's a replacement for aggregate in that ready mix. The third group that we partner with is really the group that's represented here today. It's an investment community. We really wanna be transparent in our carbon footprint. Our first step in doing that, or one of the steps in doing that, is in 2021, we developed processes and made system modifications to allow us to capture the information that supports our Scope 1 and Scope 2 emission calculations. 2022, we used that year to capture the information and get baseline. Earlier this year, we had a third-party audit firm came in, they verified our process, they verified our data, they verified our calculations, we're gonna be able to share that really through our Knife River sustainability, our first Knife River sustainability report that will be published next year. We look at the challenges around climate change and sustainability as being real. We're taking steps to address them. Probably more importantly, we're looking at those as opportunities. Really across our organization, we're positioned well against, specifically against our smaller competitors to be able to take advantage of some of the things we're seeing in the market. With that, I know we've been up here a long time. I appreciate all your patience. We're gonna take about a 10-minute break, seven-minute break, whatever that timeframe is. Grab some refreshments, a bio break. We'll come back, and then Nathan will come up and talk through some of our financial highlights. Someone give me the cue. Go. Thumbs up? All right, very good. Well, good morning. Thanks again for participating today. This is exciting for Knife River, right? A pivotal, exciting time as we go forward. What you're gonna hear from me is really kind of that same disciplined approach to our strategic initiatives and the EDGE Plan. Before I get into that, though, just a quick reintroduction. My name is Nathan Ring, and as mentioned earlier, I've been with Knife River, MDU Resources for about 20 years. Served a number of positions, as Dave Goodin said. One of them was with him at MDU Resources as Chief Accounting Officer, and here most recently, Vice President of Business Development. I have served some time in the field. I was a controller for Knife River in Idaho, California. Actually even served with one of our other sister companies as a corporate controller for CSG. I think that the important point there is all those various responsibilities and backgrounds have provided a perspective of the financial and operational aspects of our company. With that, honored to be here as CFO, take you through the financial slides and really to work with this team to take Knife River public and onto the next phase, exciting. There's a few things that I'd like to cover today. First, we're gonna go through the financials, fairly high level, fairly brief. Secondly, I want to talk about our resiliency. We've got this vertical integration diversified approach that's been mentioned a couple times. I'm gonna share with you what that means to us. Third point is this disciplined approach to capital allocation, really the disciplined use of our cash for capital allocation purposes. I wanna talk about our margins. We know we've got inflation headwinds, but we've got pricing strategies that we've put in place that in the near term have helped us, and they're creating long-term margin expansion for us as well. All that's gonna lead into guidance and then our long-term targets that we've got set out there. A lot to share with you over the next 20 minutes, and then we'll get on to Q&A. Let's get started. Again, like I mentioned, let's start off with a few financial highlights. I know you have access to the Form 10, so that got finalized, I think, about a week ago with the SEC. If you haven't noticed, about two days ago, we had our Knife River's first quarter 10-Q. Plenty of financial information out there. I'm gonna hit on these four charts just because they kind of weave throughout the conversation here in my presentation. The first one is top line growth, there you can see we're giving you the gross revenues, internal and net revenues. Let's focus on the net revenues numbers for a moment. You can see 2018, $1.926 billion. Over that five-year period, we grew to by 2022, $2.535 billion. That's a 7% compound average growth rate. Brian mentioned it earlier in his slide. What's encouraging and exciting for us is we've been able to translate that top-line growth into EBITDA growth at 6 percentage points higher. When you look at the adjusted EBITDA section, $185 million in 2018 growing to $296 million in 2022, a 13% compound average growth rate on the EBITDA side. I'm calling this adjusted EBITDA. As you probably noticed in the back of your booklets, there's an adjustment schedule there. This is a, you know, a non-GAAP measure, we make sure to give you the calculations for that. The next chart relates to CapEx, really they're focusing on our commitment to our maintenance capital and the consistency of that CapEx, the consistency of that investment. It does look a little uneven, this is really two components. This is our maintenance CapEx, which is fairly consistent, we also have growth CapEx in here, not mergers and acquisitions, just organic growth CapEx. That's part of the unevenness that you see historically. Then for the cash flow component, we've kept this fairly straightforward. We're looking at adjusted EBITDA less CapEx to give you the cash flows. Really, all that said, I mean that's the financial piece, and then you'll kinda see this weave throughout, but really strong top line, bottom line growth, committed investment to our CapEx, ultimately producing strong cash flows, strong balance sheet, and a resiliency. Resiliency. We've talked about this a bit today. It is part of why we have the solid growth. I wanna go through some of these pieces again. You heard it from Brian. First, gross revenue, our geographic mix. You can see they're fairly spread out. Again, high growth, mid-sized markets. They each have their own local dynamics. We saw this play out in the first quarter, didn't we? If you take a look at our first quarter results, there were a couple regions that were impacted by weather that was near record levels, a few 3x, 4 x higher than last year. However, we did have a couple other regions that what? Got off to a strong start and offset that, actually, our adjusted EBITDA in the first quarter was better than the prior year. We've got the geographic mix that helps with our diversity. The other one is the customer concentration. This was also mentioned. Here we're taking a look at the larger customers really, right? Top 15 customers, less than 20%. Brian mentioned this, though. When you get into that, and we've got this in the Form 10, you get into the details, eight of those customers are Department of Transportations. Okay, that's stable, reliable customer public works growth. The other thing I'll note on the customer concentration is no one customer more than 5% of gross revenue. Okay, that shows the diversity in our customer mix. A number of customers, low concentration. The next group of circles down below there, we get into the products. Our product lines, they're related, they're vertically integrated, they kinda have their own dynamics. They're fairly well spread with one exception there, and that's contracting services. Talk a little bit about contracting services and the diversity that we have there. First, let's just talk about the duration of these. 90%, I think we share this with you in the public documents, 90% of our jobs are done within 12 months. Okay? That creates a lower risk. The other part is the majority of our projects are less than $5 million. Now there are some, to be fair, that are larger than that, but most of them are less than $5 million. You take those two components. That says job-wise, no one job in terms of its duration or size is creating more risk. There's diversity there. The last point to make here is that we can flex, and you're gonna hear more about this in a bit. From 60% public works, which was in 2007, up to 90%, we have the ability to shift as the market shifts. A lot of diversity there with our geography, our customers, our product lines, and even our revenue within the contracting services. It's creating that resiliency, which really does create the next question: Does it actually work? Okay, what if there's a softening in the market? How will Knife River respond to that? Don't like talking about the past. None of us do. Particularly a period that was difficult for all industries, right? We all saw top line, bottom line growth impacted by this. On this chart, we're showing that compared to the industry or our peers, which we note below, we fared better in this time frame. Let's talk about what the numbers are here. You can see on the left side, revenue growth. We're talking between 2007 to 2012, what happened there? Knife River did see a decline in 18% in that time frame. Our peer group median, however, was a 38% decline over that period. You can see they were as low as 43% for some of them, 23% the peer range. Along with that, on the EBITDA margin side, We were at 480 basis points lower over that time frame, again, 2007 to 2012. Our peer is 840 basis points lower, 760 to a range of 1,460. The point being is that the diversity we had that I talked about on the last slide, it does produce resiliency. If we get the question, "Hey, what happens? If we get into a downturn here, how will you perform?" We have a stable portfolio to support us. Enough about the past, let's move on to the future. Growth. There's four categories I wanna get into on this slide. Before I do, there's one that's missing which is still important. It's not necessarily considered growth, but it's an important use of our capital, and that's our maintenance CapEx. We will continue to maintain our fleet, our fixed assets. It's an important part, as I mentioned earlier, about equivalent to depreciation year in, year out. That's a part of the use of our cash. Other than that, we're gonna have a disciplined investment approach for sustainable growth. First, the organic column, what are you gonna do there? Well, which will be similar as you'll see to the inorganic, we're gonna look to create or sustain our leadership market position. That's important to us. What do I mean by that? One of the key things we're talking about today is our aggregate reserves. We're gonna look to supplement. I mean, we've got 30 years + of aggregate reserves, 1.1 billion tons. We're gonna look to do this on a go-forward basis. You can see the bottom bullet point there, that'll start increasing the product mix as it relates to aggregates. The last point I wanna make is that with the maintenance and the growth CapEx, we're looking at 5% of revenue per year with those two combined. The next group, inorganic growth. Here we're getting into acquisitions. Really a similar story, right? I mean, we're gonna look for attractively, and I'll get more into this in the next slide, but attractive deals. Along with that, we're gonna look for the same metrics, creating or supplementing our market leadership, midsize high-growth markets. Again, looking to increase that product mix that includes our aggregates. Those two very similar. The last one, a little bit different. Portfolio optimization, what do we mean there? There are times when an asset strategically maybe doesn't fit, it's underperforming. This is where we'll take a look at potentially divesting of that asset, might do a swap or optimize. What I mean by that is, would this asset make more sense in another market? Does it make sense to invest and increase its capacity or capability? A few different options there under the optimization column. All that said, we're talking about maintenance, organic, inorganic, and portfolio optimization. They all will be done with maintaining a strong balance sheet. That's important to us. What I mean by that first is that we are going to look to a targeted average leverage of 2.5x EBITDA to debt. That can flex throughout the year, I know. When we start getting ready for the season, the work season, our net working capital flexes up. We do get above 2.5x. When the accounts receivable are collected, the inventory rolls off, we get down below 2.5x. Throughout an annualized basis, we're focused on 2.5x to have that strong balance sheet. You can also see, focused on liquidity, have a $350 million revolver to support our working capital needs on an annualized basis. The next slide gets into some of the details. This is probably the area I'm most familiar with coming from the acquisition side of the house. We've got what we call an established framework for investment. Remember, we're made up of 80 some acquisitions over the course of our history. Brian talked about the phases. You know, that first phase where we did almost, well, not all, but most of the acquisitions. Then we got to that second phase. We looked inward, we branded, got best practices, and focused on return on invested capital. From an acquisition standpoint, we're really into that third phase where we're saying we're continuing to acquire, but we're gonna continue to focus on return on invested capital and integrating best practices immediately. What does that mean? There's three items here that relates to that. Disciplined approach. We're gonna look to make sure it does have a strategic fit, creating that market leadership position in materials-based businesses. Returns-focused. We're looking for margins, and really, we're looking for long-term return on invested capital with our acquisitions. The last bullet point there is a bottoms-up approach. Okay, what does that mean? It really means that there's a number of ways you can do acquisitions, corporate-led, regional-led. We've done both, and we've learned that regionally-led acquisitions actually gets you to synergy sooner and return on invested capital. Our regions actually lead the negotiations, lead the due diligence, and ultimately the integration. Of course, in my role with corporate oversight and help, it's an important process that we've gone through to help us get to return on invested capital sooner. Let's talk about a few recent acquisitions and investments we did under this established framework. 2018, which is when we kind of reignited our acquisition program, we did the Sweetman acquisition. Sioux Falls market, a strong growing market. This checks almost all the boxes, right? It was a materials aggregate-based company, midsize, high-growth market. You can see what we brought in there. 55 million tons of reserves. Along with that, significant growth since acquisition. The Baker deal that we just did a year or so ago here, similar concept to it, right? It increased our position in the market. It gave us it supplemented the aggregate reserves we had in that marketplace. You can see we added 88 million tons of reserves, four asphalt plants. Since acquisition, has performed very well for us. Both of those fit what we're talking about, materials-focused, disciplined approach, and they were a bottoms-up approach. The next are, I'll call them inorganic growth, recent investments. Brian talked about the pre-stress facility that we have out in Washington. We did do an acquisition. That immediately actually started producing results. You can see the two bullet points there. We increased our scale because we already had pre-stressed operations in Oregon. The two combined increased our scale, brought in a best-in-class team, immediately started seeing benefits of that. With this state-of-the-art facility that's coming online this year, we plan to see this investment do increased margins and increased return on invested capital. Honey Creek was talked about as well. You can see there, materials focused, organic led. This was a bit of an acquisition. We purchased the reserves, obviously, we built out the facility. 50 million tons of reserves. The key thing to remember here in Texas is that there was a time when we purchased a lot of our reserves from third parties, which doesn't necessarily fit that vertically integrated approach we're talking about. We've made changes with this reserve and others to put us in a position where we're using our aggregates internally. Significant for the vertically integration in Texas and allowing us to sell to third parties on rail. All that said, you can see that we've got a framework that we've put in place. We've proven that we can do this with some marquee acquisitions, and they're providing return on invested capital. Now let's take a look at return on invested capital. We're talking about lot about this, okay? Similar to the does res-diversity create resiliency? Does a disciplined approach to where you're investing, how you're investing, does it actually produce returns on invested capital that are industry-leading? What we've done here is we've picked operating income over average invested capital. Reason we've gone with operating income, partly that is comparable to EBIT. It's a fairly easy number to calculate. We've used a three-year period. You've got that information available in the Form 10. Kinda helps mute the impact in the industry of acquisitions. For the three-year average, you can see there 2020 to 2022. Brian mentioned this as well in his slides. 12.9% return on invested capital. Compare that to our peer group, you can see the peer group listed below there. Their median, 7.2%, you can see the range, 2.7%-10.5%. That does tell us that as we saw in the previous slide, diversity creating resiliency, disciplined approach to our capital allocation is creating returns on invested capital. Now, we have seen, returns impacted recently by, a lot of other industries have as well, inflation. That's impacted our margins. We recognize that like a lot of industries, I mean, we're seeing some of our costs, raw input costs, over 10% more this year than in the past. They were in the low single digits on increases. With that, we've made some changes to help offset the impacts of inflation. We've put in place this pricing strategy that Brian talked about earlier. How is that performing for us? Is it allowing us to achieve the returns we know we're capable of? Here we've got three of our main product lines, and let's just talk a little bit about what's happening here. As we all know, I mean, in 2021, the inflation process started, might be short term, and then in 2022, very clear that it's a little bit more than people thought it would be. We started putting in place a pricing strategy to help mitigate that. You can see in the first quarter of 2022, which is a comparison to the first quarter of 2021, a 7% increase on aggregates, 8% on ready-mix, and then 18% on asphalt. Of course, asphalt oil was rising quite a bit at that time. You can see that each of the quarters, and then what we give you in Q1, 2023 is the comparison then over Q1, 2022. 7% increase in Q1 2022 over the last year, another 10% over in Q1 2023 on the aggregate side. 17% on ready-mix and 33% on asphalt. We've put in place this pricing strategy. We're starting to see the benefits of it, you saw in our results, started to have an impact on margins in 2022, and it's creating the opportunity for margin expansion as we go into 2023. That's three of our product lines. What about contracting services? We see contracting services margins getting eroded by inflation as well. What are you seeing there? On the next slide, the chart on the right, we talk about the contracting services. As you recall, I mean, 90% of their work gets done in a 12-month period. To be fair, there is a bit of a lag between when we price jobs and when we see the results of that pricing. As we take a look here, we're seeing margins increase, right? We're taking a look at. What we've presented to you, Q1, 2021, $665 billion. That's our backlog. Q1, 2022, $778, up to the record for the first quarter. Q1, 2023, $959. That's a record for us. Along with that, what you're seeing in these three periods is that the margin for those three points in time is increasing. We're actually seeing margin improvement in our backlog compared to last year related to the pricing strategy or the bidding strategy that we've put in place. The full impact, as you can see in that third bullet point, of additional margin tailwinds from repriced contracting expected in the second half of 2023 and 2024. What are we actually seeing then for EBITDA margins? Are they improving? A quick snapshot here looking at Q4, which is really where it took place for us. It started to take hold for us. You can see Q1, 2022, our EBITDA margin, 12.2%. Getting into two-one, 9.5%. Saw a dip there. Saw a dip at the beginning part of 2022 and 2022. As we got to the end of that year, particularly in the fourth quarter, we see our margins coming back up 12.5% for that particular quarter compared to the prior quarters. All told, these strategic initiatives we're putting in place, the pricing strategy we've put in place, it's helping improve those margins. It's really leading us to talking about the support for our guidance going into 2023 and targets we've got going beyond. Before I get into the numbers, which I think you're familiar with, let's talk again about the expected drivers. Pricing strategy to align with our costs. Get paid for what we provide. It's very important for that. Brian talked about it. The second one, discipline. Operational discipline, our targeted bid strategy, a focus on cost. You heard about the PIT crew, how we're gonna utilize best practices throughout our regions. Infrastructure tailwinds, very important to us. I mean, there's a great opportunity for our company with what's coming. You heard about the crumbling infrastructure. You heard about our ability to flex up on public works, creating an opportunity for us to take advantage of that. Of course, the record backlog of $959 million. All that said, we're reiterating our guidance for May 4th, $2.5 billion-$2.7 billion on revenue. EBITDA, $300 million-$350 million. Capital expenditures for the year, $125 million. That's for this year. Looking forward, we're providing some more targets that we expect to look forward to. Before I get into the numbers, let's talk about the key drivers here. We've already talked about pricing strategy, bid strategy, PIT crew. We've covered all those benefits of scale and focus on mix of aggregates. All of those have been discussed. Those are all important drivers for what we're talking about on this slide. The key assumptions, again, the product mix, normal economic environment. We're basically saying no further rapid rise in inflation. Let's see if that pays off. Of course, in these numbers, there's no material mergers and acquisitions included as well. The numbers again, 11.7% in EBITDA margin in 2022. We're looking forward to approximately 15% by 2025, and a long-term vision to get that EBITDA margin up to 20%. CapEx, you can see $178 last year, $178 by 2025, continuing with that 5%-7% of revenue for maintenance and growth CapEx. That covers my part of the presentation. Again, I hope you walk away with we've got this diversity that's creating resiliency, this disciplined approach to our capital investment, creating return on invested capital, and then all these strategic initiatives that we're putting in place to create margin growth and opportunity and ultimately shareholder value. Again, I really appreciate all of you being here. I'm gonna turn it back over to Brian for closing comments. Brian. Okay. Yeah. Speaker's worst nightmare. I've gotten, like, five texts from the people on the webinar. I appreciate you letting me know my mic was on the entire break. I apologize for all the feedback. It's off. Maybe it's back on now, probably. Anyway, I did get a question during the break. It was one of my easier questions. It's like, "How can a guy get so excited about rock?" You always like this. I just say that, yeah, there's a lot of exciting things going on at Knife River right now. I couldn't be more excited to be part of it. I couldn't be more proud to be part of the leadership team. Really proud of the people out in the field to make all of this happen. I appreciate the speakers today sharing their vision, the history, the vision for the future of Knife River. It is a very opportunistic time for Knife River. It's very exciting for us to be doing what we're doing, being in a vertically integrated aggregates-led company in a very attractive industry. You know, this vertical integration that Nathan talked about, the resiliency, the industry-leading return on invested capital, how that is feeding into our growth, and that we're gonna continue to execute our growth strategy. We're laser-focused. Our management team is on the EDGE. That's all while we kind of get to have this option, you know, culture to embrace our core values and our people-first culture. There is a lot of excitement at Knife River. There's a lot of opportunities, for us to continue to provide profitable growth and really provide long-term, short-term, near-term, value for our shareholders. With that, we're gonna open it up for question and answers. I'm gonna ask Zane to come up and just kinda give a little bit of a lay of the land on Q&A. We have a lunch prepared, I think it's coming in at 12:45. You know, we've got about 35-45 minutes for Q&A. Zane, with that, we'll do that. I invite the speakers to come back up, Nathan Ring and Sarah Stevens and, Glenn Pladsen to join me to help answer questions. Thank you again for joining us and more to come. First off, thank you, Brian, for the introduction there. I'm Zane Karimi. I'm the Head of Investor Relations of Knife River. A lot of you guys are familiar with the process. Please, let's limit this to i question and one follow-up for the team here. The plan is I will walk around, pass the microphone around, and if there are no questions from the crowd, we will go to the web. Without further questions, as we are getting situated, questions from the crowd. Also, please introduce yourself as well as the firm that you're with. Yeah, thanks. Brent Thielman with D.A. Davidson. Thanks for the presentation. It's fantastic to the team. Brian, the Northwest division is already in excess of that 15+% EBITDA margin target. Obviously, fantastic work there. I guess my question is: what are your expectations for each of the operating regions? Can all these regions get to 15+% EBITDA margins in their current structure today? I have a follow-up. Appreciate that, Brent. There's more to come in the Northwest region. They're far from being done. I think that region is set up for success, and I think there'll be more EBITDA margin that's gonna continue to come from the Northwest. I think there's multiple ways for us to win at Knife River. That's one of the benefits of being geographically diverse, benefits of being product line diverse, and having the customer base and being able to flex between private and public. Right now, in the near term, we see a large influence of infrastructure dollars coming, and that we can take advantage of that being 38% in contracting services company-wide, and really being in contracting services in every one of our regions. That provides us an opportunity to pull through into the other upstream materials. I think every region, I listed two or three opportunities that are very specific near term, line of sight opportunities to improve our EBITDA margins. There's a lot more than that. I could go through every one of those regions, but I think, Brent, that I'd say that, yes, there's opportunities. The expectation is that we get to above 15% in all of those regions. Long term, we're above 20%. I think there is line of sight to be able to do that. Great. Then on the acquisition strategy, seems like it's gonna be a piece of this going forward. Talked a little bit about the strategic rationale of what you're looking for. Can you elaborate a little more on the financial expectations and rationale? Do you need these deals to be accretive in year one and anything more there, Nathan? Thank you. Yeah, thanks for the question. A couple things with the approach we're gonna use with our acquisitions, and really I think you're after how much cash we use for them. There's two things I'd look at there. First, historically, I hit a couple marquee acquisitions, but historically, our acquisitions are usually in that $30 million range or less. The amount of cash that we need year in, year out for those size acquisitions, we can cover that with the cash flow produced from the operations. That's generally what we have. Now, sometimes we do have these marquee acquisitions that come along, like I mentioned on the slide. You know, we'll see what happens when those come. I mean, they come along every 3 years. If we take a look at the cash flows available at that time and what's happening in the markets, we would take a look at how we would finance that. For the most part, our acquisitions historically have been small enough to fit within our cash flow needs. Brian Biros with Thompson Research Group. Thank you for the presentation today. Starting with the contracting services, can you touch on just kind of the strategy there and kind of the integration with the other segments and products? If kind of the approach is more to get a larger piece of the pie and get more revenue, or if it's to pull through products at a, an EBI-- a better margin standpoint. Is there a way you can quantify kind of the full integration between that? Yeah. Our contracting services, you could look at us as really a preservation, maintenance, heavy highway, civil contracting company that really specializes in paving. We like to go out and pave highways, runways, whatever it might be. 70%, approximately 70% of the asphalt that we produce at Knife River, we sell to our contracting services. We really target, kinda those maintenance preservation projects, $2 million-$5 million. We'll go out and do some larger multi-year projects, but that's a small percent of what we actually do. They pull through obviously the aggregates on the upstream side. Our liquid asphalt business certainly benefits from the asphalt that's produced to go into the contracting services. Does that give you a little more color on that? Yeah. Yeah, it does. Thank you. Follow-up on the end market mix. You guys provided a pretty wide range. Is that more externally driven or is it internally decisions, "Hey, we wanna go after X end market because we see a better runway or we see better margins at the moment." Just how does that work when you, when you shift at such a large range? Large range on what? On public versus- Oh. You're talking on public versus private, the- Yeah. The flex between- Okay. Yeah. Yeah, that's one of the unique abilities that Knife River has, is to be able to flex between those two. There really is nuances, both on private work and public work. I mean, large public paving contractors that do heavy civil, large jobs, they typically aren't geared, trained, equipped really to go perform driveways and parking lots as well, and vice versa. We've been, I think Nathan in his slide showed that we were as low as 60% public work, 40% private. And we've been as high as a little bit above 90%. Really that is we're following the most profitable work that's available out there. If we see that the private market is starting to pick back up, lots of residential, driving a lot of, you know, non-res commercial, and there's better margins in that type of work, we can flex and go back there. Our default is always heavily, I mean, more focused towards public infrastructure. That's the type of work that we do. Most of the asphalt that we produce and lay down really goes into roads and highways. There's very little as far as the percentage that's used in parking lots and driveways. Okay. Thanks. Greg Bayliss from 59 North Capital. Just kind of following up on end market dynamics. You just talked, you know, about how obviously we're seeing some slowdown in the residential market, potentially some slowdown in non-resi. How you guys expect to kind of navigate those challenges, offset potentially with the IIJA coming through, and any way to kind of better help us get comfortable that what could potentially be soft on one side doesn't affect the other side, both from a material side, but also from the contracting services. Thanks. Yeah. I think in Form 10, we list kind of a breakdown of our backlog. I think, right now our current backlog is a record backlog, $959 million. Only 6% of that backlog is actually got ties to residential. As far as the contracting services, not a lot of exposure on residential. Certainly on ready-mix, that's probably where we have the most exposure to residential, we're seeing a softening of that right now. You saw our volumes down first quarter this year. Part of that's weather, part of it is residential. The good news is, we like higher specification work. Our teams are very comfortable. We've got great drivers that understand quality control. We go out and bid the higher specification non-residential work. You'll see Knife River trucks a lot of times on the higher specification hospitals, airport projects, kind of the more technical work than just residential. We probably have less exposure to residential than our regional family-owned competitors in those mid-size, you know, high growth markets. Yeah, I think... Is there anything else on there? Obviously, IIJA is starting to ramp, but what are you guys seeing from funds flowing? Is it kind of in full force at this point? Any way to kind of give us a sense for how y'all states are exposed to that IIJA versus the national average, as well as kind of state budget strength in your regions versus the national average? I think the biggest impact to Knife River really are the local state funding packages. We operate in 14 states. 11 of those states have fairly recently, within the last, you know, Oregon's was in 2017, and they were one of the first ones. Recent passage of additional infrastructure funding. Passing the IIJA Act, probably the best part of that, really the most influential part of that is to secure the matching dollars in the STIP, the Surface Transportation Investment Act. The states, local jurisdictions, they know they've got the federal partners with the funds available to go out and do that. you know, I would say that we've been trying to find, you know, more transparent information of where is the IIJA Act. I think there's been a lot of conversation like, you know, are we seeing the impact of that? We certainly are seeing the impact of that. I think that's helping lead to our record backlog, but I think we're also just at the very beginning of that runway. I would say there's one recent report I got this week from Caltrans. Caltrans has a biweekly update. Their portion of IIJ money that got dedicated towards transportation projects, the stuff, the work that we do, was $14.8 billion. That's the total IIJ investment in California for transportation projects that we would be bidding on. As of the end of January of this year, they're at $3.3 billion spend of that $14.8 billion. There's risk of me giving you that one statistic and asking, "Well, what about all the other states?" Trust me, we've been looking for a similar report from our DOTs, and I just tell you that it's a convoluted budgeting process, between local jurisdictions that run their budgets through the DOTs, the DOTs that get federal funding from different packages. That's a data point. We are looking at other data points. The other thing I'd say is that there are some larger projects that are part of the IIJA Act that will be coming out. These are these massive $200 million-$500 million projects. We benefit from that, as a material supplier. You're not going to be seeing Knife River Contracting Services Group that does, you know, the 38% of our revenue bidding a $200 million project. We'll be bidding that as a subcontractor, providing our paving services, the stuff that we do well, and that we know we can perform well at a good profit margins. We'll bid that as a subcontract to one of the larger guys, or we'll supply materials to them. We are seeing more of those opportunities, which says to me that, you know, we're still just now getting to the beginning of that larger glut of work, business coming in through the pipeline through the IIJA Act. Thank you. Justin Bergner with Gabelli Funds. In regards to your M&A, can you provide some perspective as to the multiples you paid for recent acquisitions? Are the 2023 deals then very recent? 'Cause I don't think I saw them referenced yet in the Justin, yeah. Thank you. In terms of the multiples, it does depend, and I'll go over the 2018 to recent period, the part that I've been involved in. Those multiples, of course, vary dependent upon which product line you're talking about. If you're talking about the aggregate side, we can see multiples anywhere from 7x to 10 x, depending upon what market you're looking at. Then, of course, as you go downstream from there, the multiples reduce to where those midstream markets, which I'd call asphalt and ready-mix, you'd probably see anywhere from 6x to 8x, depending upon their location. Then when you get into contracting services, depending on those markets, you could see 4x or 5x up to 6x. It's a blended amount. The acquisition that was referenced, or that I referenced, one was 2018. That was Sweetman, and then Baker was 2021. Only other color I'd provide on that is, I think, you know, our business model, midsize, higher growth markets, versus the metropolitan markets. I think we do benefit from having, you know, a little bit more of the mid-range to lower end of the multiples that we see in the legacy larger metropolitan sites. Those typically are a little bit higher multiples. Just one follow-up question there. It looks like you're coming out a little over 2 x net debt to EBITDA, if I did my math correctly. Do you expect to sort of average 2.5 x across the cycle or is that more of a ceiling? 'Cause if you're coming out 2 x, I guess there's not too much further capacity for M&A or for larger M&A. Yeah. In terms of the timing of when we're spending is at the peak, really, of our working capital needs. This, you talked the May-June timeframe, yeah, you're right, it's above 2.5 x. Then as we go throughout the year, get through the working season and get to that November-December timeframe, we'll see that 2.5x, where it goes above that. It'll go below that towards the end of the year. Throughout the annualized portion of the year, through the whole year, we're targeting 2.5x. Thank you. Hi, Mike Dudas, Vertical Research Partners. Following up on your discussion on acquisitions when you spoke during the presentation about it was more regionally based on how you kind of look at to find opportunities. From the corporate standpoint, are you agnostic relative to what regions? Are there regions that you find more mid-growth areas that you would anticipate maybe putting some more attention towards? You know, obviously, Texas kinda shows up like you would think that's where you'd wanna put more assets. Is that something that you're looking to do? Just a little bit of sense of, you know, relative to your current markets, what areas you think you'd wanna, whether it's from acquisition or even organically, put your capital towards growing your business. Yeah. I'd say that corporate we are certainly involved in that strategy and that analysis and, you know, the modeling is done at the corporate level. We present the models to our board of directors, and they approve those. There's certainly a fair amount of governance and oversight at the corporate level, and strategy that happens at that level. Yes, we are looking within our footprint, both the states that we currently operate in, those 14 states, and the adjacent states where we can have those synergies and, you know, integrate the new acquisitions, whether it's a bolt-on or a new platform operation, hopefully to one of our existing regions. We certainly, within that footprint, we are looking at, you know, long-term budgets, federal funding budgets, state DOT budgets, population growth, some of the macroeconomics at the corporate level. We certainly have some strategies. Conversations are going on that would be focused more in certain regions than others. However, at the, at the kind of the integration level, the due diligence level, once we've decided that this is an area we wanna go into, and we've got disciplined, you know, allocation of that capital, that's when it really, the regions get much more involved. They bring their list of opportunities. I'd say we've been very successful at a lot of our acquisitions have been non-brokered acquisitions, that, again, back to the multiple level, sometimes allows us to be in a sweeter spot there. We have strong local relationships with our competitors. Those can come to us as opportunities to be acquired. I think it's a multifaceted approach to how we look at our M&A, both at the regional level and at the corporate level. Anything you wanna add? The other thing I'd add is just, I think you're wondering about is there a particular region or that we would focus on or others that we wouldn't? I would point to our history. If you look at the last five years that we've done acquisitions, each region has had either an acquisition or more, in the case of the Northwest region, or a major organic growth project. It's an indication that we are looking for opportunities in all of them. There wasn't one region that got excluded from opportunities that were brought forward. It is, as Brian said, managed from the corporate process in terms of determining what projects will actually get approved and go forward. To follow up now that you'll be a fully public company in a couple weeks, do you think that'll be helpful in your negotiations with some of the families to buy you know, using some equity? Is that something that you would consider given, you know, obviously with cost of capital, et cetera, is that something that might be helpful to maybe get execute some of these transactions that maybe you wouldn't have in past? Yeah. I think as we look forward, like I said, most of our deals are in that $30 million range. We'll see what, you know, what makes sense at that time in terms of financing. Most of the time it is a cash transaction for us. Having said that, we have done, you know, one or two stock transactions with MDU Resources stock in the past. Depending upon the circumstances at that time, you know, we would look at all available financing. Hi. Anirudh Reddy from Newtyn Management, thank you for the presentation. I was just wondering, do you guys track the ROIC separately between construction and materials? If so, what your targets are for both of those sectors. You want to? Yeah. The way that we look at the return on investing capital is much the way that we analyze the company from an SEC standpoint, from his decision-making standpoint, which is by the region. We really do look at it more from a regional perspective and analyze what the returns would be there. When we're preparing to do a deal, going back to your question, we will look at the metrics of that particular deal at that time and determine its return on invested capital. Once it's brought in, if it was materials or ready-mix, it becomes part of that region, and we start analyzing the region overall. Gotcha. Thank you. I would just, you know, add that, you know, we look at return on net assets internally. We don't disclose those numbers. I think it's fair to say that the barriers of entry, the cost of getting into construction, you can go out and rent, lease, equipment, is relatively low compared to asphalt plants ready-mix. Those are relatively low compared to the cost of permitting and purchasing reserves and building an aggregate crushing facility. Just from a level of, you know, capital investment, you know, the amount, it's definitely more on the aggregate side, less on the downstream, and probably the least amount on our contracting service. I think that could lead to, you know, the conclusions of your question. Got it. Thank you. Steve. Hi, Steve D'Ambrisi from Granite Lane. Just, you had mentioned that your reserve life was around 30 years. You know, I think if you look at some of the public peers, the larger guys, it's like 50-70 years. Is there either, like, a difference in how you report reserves versus your public comps or, you know, is there a target reserve life that you look towards? I mean, we've talked a lot about acquisitions, just wanted to know how that kind of- Yeah, good observation. So if you looked at where our reserves are at, 62% of our reserves are on the West Coast. They're in the Pacific region, Northwest region, and that's because the barriers of entry in those regions and the permitting, the lag, the time, the difficulty of getting those sites permitted can be seven to 10 years. So it's really... I think if you look at our footprint, you go into the North Central region, much easier, faster, quicker to get permits. Therefore, we don't need to have as many of those on our balance sheet. So I think if you look... And because we also operate in the midsize, you know, markets, that versus a metropolitan market, if you're gonna be in Atlanta, you're gonna be in a metropolitan market. You need to put as many reserves as you possibly can on your balance sheet. Our business model's a little bit different than those. We've been at above 1 billion tons of reserves for I think we looked at this. Last 20 years. Yeah. Yeah. Last 20 years. We've really kind of been between like, you know, high 900s to 1.1 billion. It's just really stayed flat. We've been selling 34 million tons, up to, you know, higher than 45 million tons, back in 2006. We've been selling a lot of rock, and it's been staying pretty flat. That tells us that we are either doing one of two things. We're out acquiring new companies, which is part of it, but one of the things that we're really good at, Knife River, because of our community involvement, because of the relationships we have with local jurisdictions, we've had great success expanding the reserves that we already have permitted. We go out and acquire a company. They told us they only had, you know, 10 million tons of rock left, theoretically. We go in there, we do some drilling, we talk to our neighbors, we go talk to local jurisdictions, and we can expand that to maybe 20 or 30 million tons. We've got a really good track record of expanding our existing sites and getting a, you know, additional reserves to our balance sheet. We don't have to carry that burden, that cost. Probably one of the reasons why we have a more favorable return on invested capital as well. Okay, that's helpful. Just to follow up on that, like, you know, just kind of two parts. Of the, you know, $178 million or, like, CapEx that you guys are doing, can you just break that out, roughly between what's maintenance and what's growth? Of the maintenance portion of it, like how much is expanding mines, that type of thing, and like what's like a, is it like a F&D type metric that you know. Yep. -target? Yep. Yeah. What'll be probably most helpful is looking over the last couple years in terms of the difference between how much of our CapEx is maintenance and how much of that is growth. Generally speaking for us, it's around 70% in those years has been maintenance CapEx, the rest has been growth. In terms of looking at organic projects that we've done here recently, I would point to Honey Creek was one, and so that was considered organic, as part of acquisition, part organic. When we're looking at reserves, I'll usually consider that organic growth, not maintenance capital. Maintenance, we're mainly talking about the fleet and the fixed assets to plants. When we get into these reserve expansions, generally speaking, that falls into the growth category. Okay, folks, we have time for maybe one or two questions from the crowd. Otherwise, we will go to a web question or two before we have to wrap up. I think there was... Was there one over here? Oh, no. Thanks. One more here. Help me understand where the emphasis on smaller markets sort of dovetails with your overall strategy, as a, you know, company. Is there any structural reasons why these smaller markets might have slightly lower margins than some of the larger markets where some of your aggregates peers compete? Yeah. I'd say we're not focused on small rural markets. I'd say that we're focused on mid-size, high growth markets. Minneapolis, we're on the outskirts into St. Cloud. I think we're seeing urban sprawl, I mentioned it from the Bay Area going into Stockton. You could look at Portland, Oregon. We have operations 20 miles out on the perimeter. Baker Rock was in Portland, Oregon. I mean, it was, basically, you know, miles away from the Nike campus and Intel, and very strategic acquisition. Prior to that, we were trucking materials 15-20 miles to get to those projects. When you're trucking 15-20 miles or railing or barging, that cost of transportation certainly does eat into your margins. We're not focused, I wouldn't say, in the future of small markets. You know, as part of our footprints, part of our DNA, it's been strategic. They're less volatile markets. I think if you went and looked at the recession, that having those more mid-sized markets scattered throughout a larger footprint versus being in one large site in one metropolitan market, serve to be less volatile, better resiliency. Also, I think it has again led to our higher returns on invested capital. That being said, we're focused on our margin improvement. Part of that margin improvement is we can control that ourself in those mid-size, high growth markets. Part of that also is increasing our aggregate portfolio. I mean, as increase that product mix that the 16% of aggregate revenue last year, you can see that to begin to creep up. That's our higher margin materials. We're focused on improving those margins. Acquisitions, the Baker Rock, Sweetman certainly helped our margins, and we'll look for those opportunities as well. It's a holistic approach of balancing our return on invested capital and margins, we're continually looking at that. I wouldn't consider Knife River as small, rural country pumpkins out there, looking for reserves. We certainly are on the outskirts of some bigger, larger metropolitan markets, and they're high growth markets from you saw from the, you know, the states that we operate in. Last question. Thanks for the question, guys. Bobby Jain, Millennium. You guys have laid out about 330 basis points of EBITDA margin expansion between 2022 and 2025. On slide 48, I see, you know, some key near-term drivers, pricing, targeted bid strategy, et cetera. Can you just help us understand the 330 basis points, how much roughly comes from each of the drivers you have on the slide? Thanks. Yeah. I think as we take a look at some of those strategic initiatives that we're looking to help us drive the margins, we've talked about pricing strategy. That'd probably be about 50% of what we're looking at. We're looking at cost controls, that would be another portion of it. One of the key things to keep in mind is that we don't have any large M&A in that. That's really gonna come from the top line growth, managing our costs, for the next couple years here to achieve that. [audio distortion] of the growth that we're expecting over the next two years in terms of the margin growth, that's related. 50% is related to our pricing strategy. A portion of it is cost, and then we also will be looking at product mix as well. Thank you from the floor for all the questions and involvement today. Brian, any closing remarks? No questions for the webinar? We have- Oh. another dozen or so. Are we transitioning that or are we done or is that it? Tony, can you- I mean, either way. Sure. Yep. Thank you. Five minutes. You bet. I can wrap it up in five minutes, no problem. We've had a number of questions come in via the webcast here too. Most of them have been answered or asked and answered from the room already. We do have a couple of new ones. One is, "What are your ESG priorities? Is recycling a risk or an opportunity for the group? Glenn, I'll let you take that one. Sure. I'll probably start with the second question. I think I hit on some of the recycling. Our industry benefits from the ability to recycle a lot of our products. I talked about our recycled asphalt products. In the last 3 years, we're averaging about 900,000 tons of usage of that recycled asphalt. We recycle our concrete back in base material or into the product, the ready-mix product itself. We recycle petroleum products through our energy services division. We recycle water. We are very focused on minimizing our footprint to the overall environment. That's a component of our overall ESG strategy. You know, we talk a lot about in our MDU Resources Sustainability Report, we highlight by business unit all the good things each division is doing. Knife River is broken out in a lot of the activities that we're doing around our ESG footprint. Specifically as it relates to transparency in our carbon footprint, I did mention that we are tracking the inputs to be able to calculate our Scope 1 and Scope 2 emissions. We're really trying to get a handle on that baseline and then utilize that information to understand where we're gonna go forward. I'd just add that being geographically diverse, that vision looks different in different parts of the country than it does probably in California, Oregon, and Washington, some of the states that I'm most familiar with. Having lived and managed the Northwest region, we're looking at this very much as an opportunity for us to continue to expand our profit margins and get paid for this type of work that we're doing. We are using all renewable diesel in Oregon. We are looking at alternative mix designs that uses lower carbon for cement. There's a lot of research going on in this area and, you know, kind of being at the ground zero of that conversation, I think I'll have the ability to have some influence in some of the other parts of the country that are just now beginning to have conversations around environmental, you know, product declarations, renewable diesel. I think that's one of the benefits we have of being from the Northwest, is hit the ground running on that conversation. Okay. One more, that here isn't a duplicate yet. "I recognize you have a unique training facility, but can you speak to how that impacts you locally as well as if it impacts your competitors? Well, perfect. Okay. Sarah. Yes. You know, it affects upskilling the whole workforce, the broader workforce. It's good for our industry. Getting more youth interested in the construction industry is a huge benefit. Improving safety, through training is gonna elevate the industry, more broadly. That's good for us. We also, we bring in our trainers or bring in employees from other regions to come to the training center and get in-depth instructor development trained, and then they go out into their regions and provide the training. We're actually able to use our training center to elevate our trainers and reach our broader footprint. Locally partnering with other industry related industries, Papé, John Deere, Cat, allows for other partnerships to develop. There's synergies around that, which has been great for us and them. Also partnering with NAMC, National Association of Minority Contractors, increasing the diversity that we get into our workforce is a great benefit as well. Perfect. Tony, are we good on that? No more? We're good on that. Okay. I can look over my shoulder and see lunch is just about ready here. Yeah, I see lunch over there too. Thank you all for joining us here in person, on the webinar. It is super exciting times at Knife River. What I would pledge to all of you is that Knife River, as we spin into an independent, publicly traded company, is that we're going to be transparent. We are going to be available. As you probably will find out at lunch today, we like to talk about what we do for a living. We're excited about what we do for a living. We'll be having investor days out in our operations. I mean, we want to show you in person what we do for a living and why the Life at Knife is special, and why we feel like we have the opportunity for you as a shareholder to create substantial long-term, near-term value as a shareholder of Knife River. Thank you for attending today. Please join us for lunch afterwards. We've got management from MDU. We've got Trevor Hastings, our soon to be Chief Operating Officer. Love to have more conversations. Webinar, I'll promise to turn off my microphone as soon as I step off the stage. Thank you all for joining us today. Welcome.