Slide 1: Second Quarter Earnings Call
August 4, 2022 SECOND QUARTER EARNINGS CALL
Slide 2: Vision and Mission
Vision: With integrity, Building a Strong America® while being a great and safe place to work Mission: Delivering superior value to stakeholders by providing essential infrastructure and services to America 2
Slide 3: Leadership Team
LEADERSHIP TEAM A B A. Dave Goodin E. Jeff Thiede President & CEO MDU Construction Services Group President & CEO B. Jason Vollmer Vice President & CFO F. Trevor Hastings C D WBI Energy President & CEO C. Stephanie Barth Vice President, CAO & Controller G. Nicole Kivisto Utilities Group D. Dave Barn
Slide 4: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS During this presentation, we will make certain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations and beliefs are based on reasonable assumptions, actual results may dif
Slide 5: Separation Announcement
— Ss BN “3 \ 4 i =) ; ~ @ Sy y 4 : = f/ y) \ ee fA \\ Y me Nes i \\ & s i NW) Separation Announcement —— ==MDU RESOURCES | Building a Strong America’
Slide 6: Announced Plan to Separate Knife River
ANNOUNCED PLAN TO SEPARATE KNIFE RIVER MDU Resources’ Board of Directors unanimously approved a plan to separate Knife River from the Company. – Separation will result in two independent, publicly traded and well-capitalized companies. – Expected to be effected as a tax-free spinoff to MDU shareho
Slide 7: Financial Results
HEMDU RESOURCES | Building a Strong America® GROUP NC.
Slide 8: MDU Resources Group, Inc. Second Quarter Earnings
MDU RESOURCES GROUP, INC. SECOND QUARTER EARNINGS EARNINGS EPS $120 $0.60 $100.2 $0.50 $100 $0.50 $80 $0.40 $70.7 $0.35 millions $60 $0.30 $40 $0.20 $20 $0.10 $- $- 2021 2022 2021 2022 8
Slide 9: Electric & Natural Gas Utility
ELECTRIC & NATURAL GAS UTILITY SECOND QUARTER EARNINGS Reported loss of $2.9 million. EARNINGS $12 – Lower investment returns on $10 $9.6 nonqualified benefit plans impacted results. $8 – Higher O&M and lower electric retail $6 sales volumes also had a negative millions $4 impact. $2 – Benefitted
Slide 10: Pipeline
PIPELINE SECOND QUARTER EARNINGS Reported earnings of $7.1 million. EARNINGS $10 – North Bakken Expansion project had $9.2 $9 a net benefit in the quarter. $8 $7.1 – More than offset by lower investment $7 returns on nonqualified benefit plans, $6 lower non-regulated project margins, millions $5 a
Slide 11: Construction Services
CONSTRUCTION SERVICES SECOND QUARTER EARNINGS Reported record earnings of $34.5 EARNINGS million. $40 $34.5 $35 – Consistent second quarter revenue growth during the past four years. $30 $28.9 $25 – Electrical and mechanical services millions revenues increased 45%. $20 $15 All-time record reven
Slide 12: Construction Materials
CONSTRUCTION MATERIALS SECOND QUARTER EARNINGS Reported earnings of $32.6 million. EARNINGS $60 – Increased revenue due to higher $51.4 contracting workloads and higher $50 average product pricing. $40 – More than offset by inflationary $32.6 pressures and weather challenges. millions $30 Record
Slide 13: Segment Outlook
HEMDU RESOURCES | Building a Strong America® GROUP NC.
Slide 14: Electric & Natural Gas Outlook
ELECTRIC & NATURAL GAS OUTLOOK Expects to grow rate base by 5% compounded annually over the next five years. Safely meet customer demand by upgrading and expanding infrastructure and facilities. Customer base expected to continue growing by 1- 2% annually. Focused on timely regulatory recove
Slide 15: Pipeline Outlook
PIPELINE OUTLOOK Long-term customer agreements have been signed for four additional growth projects, the first of which, the Line Section 7 Expansion, was placed in service August 1, 2022 and increased system capacity by 6.7 Mmcf per day. The remaining projects are dependent on regulatory approval
Slide 16: Construction Services Outlook
CONSTRUCTION SERVICES OUTLOOK All-time record backlog of $1.92 billion, 46% higher than Q2 2021 backlog of $1.32 billion. Increased 2022 revenue guidance range by $200 million, to a range of $2.4 billion to $2.6 billion with margins slightly lower than 2021. The Infrastructure Investment and J
Slide 17: Construction Materials Outlook
CONSTRUCTION MATERIALS OUTLOOK All-time record backlog of $1.13 billion, 24% higher than Q2 2021 backlog of $912 million. Affirmed 2022 revenue guidance in the range of $2.45 billion to $2.65 billion with margins slightly lower than 2021. Long-term opportunities from the Infrastructure Investm
Slide 18: Consolidated EPS Guidance
2022 EPS GUIDANCE REVISED $1.75 - $1.90 Consolidated EPS Guidance Note: As of August 4, 2022 5 - 8% Long-Term Compound Annual Growth Rate Target 18
Slide 19: Dividend Growth
DIVIDEND $0.90 GROWTH $0.87 $0.85 Dividend increased November 2021, making 31 consecutive years of $0.80 increases Annualized Dividend $0.77 84 consecutive years of quarterly dividend payments $0.75 Annualized dividend $0.87 per share Member of S&P High-Yield $0.70 Dividend Aristocrats index
Slide 20: Separation Overview
— ==MDU RESOURCES | Building a Strong America®
Slide 21: Strategic Rationale
STRATEGIC RATIONALE Enhanced strategic focus to pursue individualized strategies specific to the industries in which each company operates. Optimized capital structures and distinct financial policies tailored to their separate business profiles and needs. Tailored capital allocation strategies with
Slide 22: Creating Two Publicly Traded Companies
CREATING TWO PUBLICLY TRADED COMPANIES 22
Slide 23: Transaction Details
TRANSACTION DETAILS • Planned as a spinoff that is tax-free to MDU Resources shareholders. Transaction • Upon completion of the spinoff, MDU Resources shareholders will retain current Structure shares of MDU Resources stock and receive a pro-rata distribution of shares of Knife River stock. Expected
Slide 24: Questions
HEMDU RESOURCES | Building a Strong America® GROUP NC.