Mdu Resources Group, Inc. · NYSE:MDU
Mdu Resources — Investor Day (September 2019)
53 slides from Mdu Resources's investor day presentation, Sep 12, 2019
Slide 1: Analyst & Investor Tour
SEPTEMBER 2019 ANALYST & INVESTOR TOUR
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS During the course of this presentation, we will make certain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations and beliefs are based on reasonable assumptions, actual r
Slide 3: MDU Resources is Building a Strong America
MDU Resources is Building a Strong America® ion #5 40 With integrity, create superior shareholder value by expanding upon our expertise to be the supplier of choice in all of our markets while being a safe and great place to work. Company founded in 1924 | * Headquartered in Bismarck, ND Conducting
Slide 4: Company Overview
COMPANY OVERVIEW A strong infrastructure is the heart of the American economy. It is the natural gas and electricity that power business, industry and our daily lives. It is the pipes and wires that connect our homes, factories, offices and stores to bring them to life. It is the transportation netw
Slide 5: Leadership Team
LEADERSHIP TEAM A. Dave Goodin E. Dave Barney President & CEO Knife River A B President & CEO B. Jason Vollmer F. Jeff Thiede Vice President, CFO & Treasurer MDU Construction Services Group President & CEO C. Nicole Kivisto MDU EC President & CEO C D D. Trevor Hastings WBI Energy President & CEO E F
Slide 6: 2019-23 Capital Program
2019-23 CAPITAL Utility Construction Pipeline & Midstream PROGRAM $3,000 TOTAL CAPITAL FORECAST OF $2,740* Electric and natural gas utility − System infrastructure upgrades and $2,500 $473 replacements − Natural gas combustion turbine Pipeline and midstream $2,000 − Demicks Lake project $787 mil
Slide 7: Dividend Growth
DIVIDEND $0.85 GROWTH $0.81 81 consecutive years of $0.80 quarterly dividend payments Dividend increased Annualized Dividend Rate November 2018, making 28 $0.75 consecutive years of increases $0.73 2018 annualized dividend $0.81 per share $0.70 Member of S&P High-Yield Dividend Aristocrats i
Slide 8: Utility Electric & Natural Gas
INVESTOR RELATIONS SEPTEMBER 2019 UTILITY ELECTRIC & NATURAL GAS
Slide 9: Electric and Natural Gas
ELECTRIC AND NATURAL GAS WA 217,600 Customers MT ND 110,800 Customers 205,000 Customers MN OR 21,500 Customers 75,800 Customers ID SD 368,300 Customers 69,500 Customers WY 35,100 Customers 1,103,600 electric and natural gas customers in 459 communities Electric Natural Gas 143,400 customers 96
Slide 10: Strategy
STRATEGY Grow the business by investing in the safety and reliability of our existing system Focus on organic growth first while managing operating costs Look to expand into areas where similar operating and growth objectives exist Pillars to success – Integrity, safety, employees, customers
Slide 11: Overview
Overview Expect to grow rate base 5% compounded annually over next five years Expect customer growth of 1 to 2% per year Continued work on retirement of two aging coal-fired generation facilities Additional regulatory activity BUILDING A STRONG AMERICA® 11
Slide 12: Rate Base Growth
RATE BASE GROWTH HISTORICAL PROJECTED 12% CAGR 5% CAGR $2.5 $2.0 $1.5 Billions Billions $1.0 $0.5 $0.0 2014 2015 2016 2017 2018 12
Slide 13: Customer Growth
CUSTOMER GROWTH NATURAL GAS ELECTRIC 1,000,000 144,000 1.8% CAGR 1.2% CAGR 950,000 143,000 142,000 900,000 141,000 850,000 140,000 139,000 800,000 138,000 750,000 137,000 700,000 136,000 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 National Average - 0.7% CAGR National Average - 0.9% CAGR 13
Slide 14: Electric Generation
ELECTRIC GENERATION Announced in February plans to retire aging coal-fired units – Lewis & Clark Station around the end of March 2021 – Heskett Station Units 1 & 2 around the end of March 2022 Construct simple cycle natural gas combustion turbine – 88 megawatts; located adjacent to similar turbi
Slide 15: Regulatory Update
REGULATORY UPDATE Pending cases – WA natural gas: settlement reached – WY natural gas: requested $1 million; filed May 24 – WA pipeline replacement: requested $1.6 million under annual cost recovery mechanism; filed May 31 – OR natural gas: requested pipeline replacement cost recovery mechanism; f
Slide 16: Regulatory Update
REGULATORY UPDATE 2019 potential filings – Requests for accounting deferral orders related to the coal unit retirements: ND, SD, MT – Minnesota general rate case to be filed in late September 16
Slide 17: Outlook
OUTLOOK Providing safe & reliable service is at the core of what we do Historic and future organic growth opportunities –Capital expenditures - $1.5 billion over next five years – 5% CAGR Customer growth rates of 1-2% Strong regulatory relationships Geographic diversity Focused on regula
Slide 18: Questions
y . MDU —— wees LISTED NYSE EIMDU RESOURCES | Building a Strong America® GROUP INC.
Slide 19: Pipeline & Midstream
INVESTOR RELATIONS SEPTEMBER 2019 PIPELINE & MIDSTREAM
Slide 20: Strategy Statement
STRATEGY STATEMENT Building upon our core strengths and expertise, WBI Energy will become a leader in the Mid-Continent and Rocky Mountain regions in meeting North America’s energy needs 20
Slide 21: WBI Energy Assets and Operations
WBI ENERGY ASSETS AND OPERATIONS Regulated (Approx. 90%) – Approx. 4,000 miles of pipe – Over 1.8 Bcf/d system capacity – 13 Interconnecting points – Largest storage field in N. America Non-regulated (Approx. 10%) – Gas gathering – Cathodic protection – Energy management 21
Slide 22: WBI in the Bakken
WBI Energy Transmission Non-WBI Transmission Pipeline Gas storage field Pipeline Interconnect Non-WBI Gas Plants WBI in the Bakken Service to 23 of 30 natural gas plants 6 Bakken interconnects WBI moves over 50% of Bakken gas More takeaway capacity needed 22
Slide 23: Demicks Lake Projects
Demicks Lake Projects Demicks Lake Demicks Lake Expansion CapEx $30 Million CapEx $9 to $12 Million 175,000 dkt/day design 175,000 dkt/day design capacity capacity 10-year term 10-year term In-service fall 2019 In-service early 2020 23
Slide 24: Demicks Lake Construction
DEMICKS LAKE CONSTRUCTION 24
Slide 25: Line Section 22 Expansion
Line Section 22 Expansion CapEx $12-15 Million 22,500 dkt/day design capacity 10-year terms In-service late 2019 25
Slide 26: Line Section 22 Construction
LINE SECTION 22 CONSTRUCTION 26
Slide 27: Bakken - Gas Pipelines and Gas IP Rates
BAKKEN- GAS PIPELINES AND GAS IP RATES 27
Slide 28: North Bakken Expansion
Tioga, ND NORTH BAKKEN EXPANSION Compression to be added @ existing Tioga compressor station Original project design: 200,000 dkt/day Williston, ND Current design: 300,000 dkt/day Supporting 10-year contracts Stanley, ND In FERC pre-filing process, working toward filing final certificate ear
Slide 29: Questions
‘MDU LISTED NYSE
Slide 30: Construction Materials
INVESTOR RELATIONS SEPTEMBER 2019 CONSTRUCTION MATERIALS
Slide 31: About Us
ABOUT US Top 10 aggregate producer Vertically integrated materials/construction Operations in 15 states 5,700 employees Strong backlog of work Growing through M&A
Slide 32: Growing Our Operations
GROWING OUR OPERATIONS Honey Creek Deposits
Slide 33: Acquisitions
ACQUISITIONS Six in last 17 months Growth in existing market areas – 500 new employees – 78M tons aggregate reserves* – 15 ready-mix plants – 6 asphalt plants * Not including yet-to-be-permitted Honey Creek deposits in Texas
Slide 34: Acquisition Strategy
ACQUISITION STRATEGY Aggregate focus Vertically integrated Contiguous to existing operations New platforms require a market leading presence in the area Diversified and growing economy
Slide 35: Highlights
HIGHLIGHTS Acquisitions contributing to bottom line State economies strong overall 2Q earnings $29.2M ― 20% increase from 2Q 2018 Record backlog of $1.04B – 42% increase from 2Q 2018
Slide 36: Outlook
OUTLOOK Benefit from record backlog Increased 2019 revenue forecast to $2.0 billion to $2.2 billion Actively pursuing growth through strategic M&A, greenfield
Slide 37: Questions
LISTED NYSE
Slide 38: Construction Services
INVESTOR RELATIONS SEPTEMBER 2019 CONSTRUCTION SERVICES
Slide 39: Earnings
EARNINGS $50.0 YTD as of June 30 $42.8 $40.0 $30.0 $29.2 millions $20.0 $19.8 $11.8 $13.0 $10.0 $0.0 2015 2016 2017 2018 2019
Slide 40: Backlog
BACKLOG $1,400 As of June 30 $1,200 $1,148 $1,000 $888 millions $800 $596 $600 $508 $429 $400 $200 $0 2015 2016 2017 2018 2019
Slide 41: Our Locations
OUR LOCATIONS Licensed to operate in 43 states Currently staffing at record levels with over 6,500 employees
Slide 42: Las Vegas Presence
LAS VEGAS PRESENCE 1,741 employees Diverse services across 4 companies –Electrical –Mechanical –Fire suppression –Civil/excavation
Slide 43: Las Vegas Leadership
LAS VEGAS LEADERSHIP Ken Kefalas Angelo Iannucci Steve Schmal Stefan Hoffman President & President President President CSG Regional President
Slide 44: Founded in 1980
Founded in 1980 Acquired in 2006 167 employees 3 locations
Slide 45: Team
TEAM Steve Schmal Craig Gutierrez Sean Zuzik Trapper Schmal President Vice president Superintendent Construction manager 13 years at DFP 23 years at DFP 16 years at DFP 11 years at DFP
Slide 46: Allegiant Raiders Stadium
ALLEGIANT RAIDERS STADIUM Stadium stats Desert Fire Protection work 65,000 seats 1.5 million square feet of fire 10 levels sprinkler coverage $1.9 billion estimated 13,500 sprinkler heads total cost, including 213 fire hose valves practice facility 3 fire department Home to NFL Raide
Slide 47: Resorts World
RESORTS WORLD 3 hotels 3,400 rooms 100,000 square feet of gaming space
Slide 48: Project Experience
DECATUR BLVD. 19 Las Vegas Project Experience 17 159 VALLEY VIEW BLVD. 27 1. Bally’s 93 25. MGM Grand 15 ST. LOUIS AVE. 2. Bellagio95 26. MSG Sphere SAHARA AVE. 3. Caesars Convention Center 27. Nellis Air Force Base 21 4. Caesars Palace 28. New York-New York 8 5 37 5. Circus Circus 29. Paris 39 DESE
Slide 49: MARYLAND PKWY.
DECATUR BLVD. 19 17 159 VALLEY VIEW BLVD. 27 1. Bally’s 93 25. MGM Grand 15 ST. LOUIS AVE. 2. Bellagio95 26. MSG Sphere SAHARA AVE. 3. Caesars Convention Center 27. Nellis Air Force Base 21 4. Caesars Palace 28. New York-New York 8 5 37 5. Circus Circus 29. Paris 39 DESERT INN RD. 35 6. City Center
Slide 50: MARYLAND PKWY.
DECATUR BLVD. 19 17 159 VALLEY VIEW BLVD. 27 1. Bally’s 93 25. MGM Grand 15 ST. LOUIS AVE. 2. Bellagio95 26. MSG Sphere SAHARA AVE. 3. Caesars Convention Center 27. Nellis Air Force Base 21 4. Caesars Palace 28. New York-New York 8 5 37 5. Circus Circus 29. Paris 39 DESERT INN RD. 35 6. City Center
Slide 51: MARYLAND PKWY.
DECATUR BLVD. 19 17 159 VALLEY VIEW BLVD. 27 1. Bally’s 93 25. MGM Grand 15 ST. LOUIS AVE. 2. Bellagio95 26. MSG Sphere SAHARA AVE. 3. Caesars Convention Center 27. Nellis Air Force Base 21 4. Caesars Palace 28. New York-New York 8 5 37 5. Circus Circus 29. Paris 39 DESERT INN RD. 35 6. City Center
Slide 52: MARYLAND PKWY.
DECATUR BLVD. 19 17 159 VALLEY VIEW BLVD. 27 1. Bally’s 93 25. MGM Grand 15 ST. LOUIS AVE. 2. Bellagio95 26. MSG Sphere SAHARA AVE. 3. Caesars Convention Center 27. Nellis Air Force Base 21 4. Caesars Palace 28. New York-New York 8 5 37 5. Circus Circus 29. Paris 39 DESERT INN RD. 35 6. City Center
Slide 53: Questions
7MDU LISTED Building a Strong America® NYSE MDU RESOURCES GROUPE