Mdu Resources Group, Inc. · NYSE:MDU
Mdu Resources — 2020 AGA Financial Forum
35 slides from Mdu Resources's conference presentation, May 19, 2020
Slide 1: American Gas Association – May 2020 Investor Relations
AMERICAN GAS ASSOCIATION – MAY 2020 INVESTOR RELATIONS
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 #53 460 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 Conductin
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: COVID-19 – Our Response
COVID-19 – OUR RESPONSE Our products and services considered essential – Operations permitted to proceed with increased social distancing measures for our more than 14,000 employees Health and safety of employees, customers and communities a priority – Implemented work from home policies where a
Slide 6: First Quarter Earnings
FIRST QUARTER EARNINGS EARNINGS EPS $50 $0.30 $40.9 $0.25 $40 $0.21 $0.20 $30 $25.1 millions $0.15 $0.13 $20 $0.10 $10 $0.05 $0 $0.00 2019 2020 2019 2020 6
Slide 7: 2020 EPS Guidance Updated
2020 EPS GUIDANCE UPDATED $1.50 - $1.70 Consolidated EPS Guidance Note: As of May 7, 2020 5 - 8% Long-Term Compound Annual Growth Rate Target 7
Slide 8: Earnings Contributions
EARNINGS CONTRIBUTIONS TRAILING TWELVE MONTHS AS OF MARCH 31, 2020 EARNINGS Regulated Energy 36% Construction 64% EBITDA Regulated Construction Energy 54% 46% 8
Slide 9: Capital Expenditures
CAPITAL EXPENDITURES Electric and natural gas utility − System infrastructure upgrades and $900.00 $20 replacements $800.00 − Natural gas combustion turbine $700.00 $154 Pipeline $70 $20 $600.00 (millions) − North Bakken expansion $500.00 $304 $157 Construction materials and services $157 $400
Slide 10: Financial Position
STRONG FINANCIAL Strong liquidity position POSITION – $431.8 million of available borrowing capacity Liquidity (As of March 31, 2020) – $116.5 million of cash $116.5 Available – Issued a $75 million term loan at Montana-Dakota in April to $431.8 provide additional financial flexibility Borrowed* C
Slide 11: Dividend Growth
DIVIDEND $0.85 GROWTH $0.83 82 consecutive years of $0.80 quarterly dividend payments Dividend increased November 2019, making 29 $0.75 Annualized Dividend $0.75 consecutive years of increases Annualized dividend $0.83 per share $0.70 Member of S&P High-Yield Dividend Aristocrats index $0.65
Slide 12: Utility Electric & Natural Gas
UTILITY ELECTRIC & NATURAL GAS
Slide 13: Electric and Natural Gas
ELECTRIC AND NATURAL GAS 1,125,000 CUSTOMERS WA 800 MW 222,150 Customers 16.8% Rate Base MT ND OWNED GENERATION 111,600 Customers 206,500 Customers OR 12.4% Rate Base MN 37.7% Rate Base 8,100 77,600 Customers 5.1% Rate Base ID 22,100 Customers 1.3% Rate Base SD MILES OF TRANSMISSION 379,400 Customer
Slide 14: Customer Growth Rates
CUSTOMER GROWTH RATES Combined Utility 1,150,000 1.33% 5-Year CAGR 1,100,000 1,050,000 1,000,000 950,000 900,000 850,000 800,000 750,000 700,000 2015 2016 2017 2018 2019 14
Slide 15: Regulatory Update
REGULATORY UPDATE Pending Cases – MN natural gas: Formal hearing held March 10-11 in St. Paul, MN. Request for $2.8 million annual increase. This matter is still pending with the MNPUC – ND advance determination of prudence for natural gas combustion turbine filed Aug. 28; formal hearing was held
Slide 16: Transitioning Our Electric Resources
TRANSITIONING OUR ELECTRIC RESOURCES BASED ON NAME PLATE RATING 11% 27% 28% 31% 20% Forecasted 2013 2018 46% 2023 69% 27% 41% Coal Gas Renewables 16
Slide 17: Utility Electric & Natural Gas Outlook
UTILITY ELECTRIC & NATURAL GAS OUTLOOK Safely meet customer demand by upgrading and expanding infrastructure and facilities Customer base expected to continue growing by 1-2% annually Expects to grow rate base by 5% compounded annually over the next five years Focused on timely regulatory re
Slide 18: Pipeline
MDU . LISTED == MDU RESOURCES | Building a Strong America’ NW GROUP INC,
Slide 19: WBI Energy Assets and Operations
WBI ENERGY ASSETS AND OPERATIONS 4,000 MILES OF PIPE OVER 2.2 BCF/D SYSTEM CAPACITY 14 INTERCONNECTING POINTS 335 EMPLOYEES LARGEST STORAGE FIELD IN N. AMERICA 19
Slide 20: 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 24 of 31 natural gas plants 6 Bakken interconnects WBI moves over 50% of Bakken gas More takeaway capacity needed 20
Slide 21: Upcoming Growth Projects
WBI Energy-Transmission Non-WBI Transmission Pipeline Gas storage field Demicks Lake Projects Pipeline Interconnect Expansion Projects Upcoming Growth Projects Project In-Service Date North Bakken Expansion 2021 Completed Growth Projects Project In-Service Date MMcf/d Demicks Lake Project 2019 175 L
Slide 22: Pipeline Outlook
PIPELINE OUTLOOK North Bakken Expansion project – FERC application filed in February 2020 – Expected to start construction in early 2021 – Expected to be in service late 2021 Organic growth opportunities including potential industrial related projects due to low natural gas prices Profitably g
Slide 23: Construction Services
MDU LISTED = MDU RESOURCES | Building a Strong America: INW74= GROUP.
Slide 24: Construction Services
CONSTRUCTION SERVICES 8,000 EMPLOYEES AT PEAK 42 STATES OF OPERATION 6 OUTSIDE CONSTRUCTION COMPANIES 12 INSIDE CONSTRUCTION COMPANIES Ranked 12th on ENR’s Top 600 Specialty Contractors List 24
Slide 25: Revenue Growth
REVENUE GROWTH FOR QUARTER ENDED MARCH 31 $600.0 $500.0 19.0% CAGR $514.7 $400.0 $420.9 millions $344.1 $300.0 $299.6 $256.0 $200.0 $100.0 $0.0 2016 2017 2018 2019 2020 25
Slide 26: Earnings Growth
EARNINGS GROWTH FOR QUARTER ENDED MARCH 31 $20.0 $20.0 $16.8 $15.1 millions $10.0 $7.4 $6.0 $0.0 2016 2017 2018 2019 2020 26
Slide 27: Customer Satisfaction: Backlog
CUSTOMER SATISFACTION: BACKLOG AS OF MARCH 31 $1,400 $1,200 $1,270 $1,000 $1,022 $800 millions $600 $675 $530 $529 $400 $200 $0 2016 2017 2018 2019 2020 27
Slide 28: Outlook
OUTLOOK Record quarterly revenues of approximately $515 million, up 22% from first quarter 2019 All-time record backlog of nearly $1.3 billion as of March 31, up 24% from first quarter 2019 2020 revenue guidance in a range of $1.85 billion to $2.05 billion Continues to see both inside and ou
Slide 29: Construction Materials
CONSTRUCTION i ‘ i i i i ils MDU RESOURCES GROUP, WC MDU LISTED Building a Strong America’ nwa
Slide 30: Construction Materials
CONSTRUCTION MATERIALS NEARLY 6,000 EMPLOYEES AT PEAK SEASON 15 STATES OF OPERATION 1.1 BILLION TONS OF RESERVES TOP 10 U.S AGGREGATE PRODUCER 30
Slide 31: Construction Backlog
CONSTRUCTION BACKLOG AS OF MARCH 31 $1,000.0 $900.0 $943 $905 $800.0 $831 $700.0 $725 $692 $600.0 millions $500.0 $400.0 $300.0 $200.0 $100.0 $0.0 2016 2017 2018 2019 2020 31
Slide 32: Revenue Growth
REVENUE GROWTH FOR QUARTER ENDED MARCH 31 $300.0 $250.0 $262.2 $227.2 $200.0 $210.0 $213.4 $200.9 millions $150.0 $100.0 $50.0 $0.0 2016 2017 2018 2019 2020 32
Slide 33: Outlook
OUTLOOK Record first quarter revenues of $262 million, up 15% from first quarter 2019 First quarter backlog of $905 million, down slightly from the prior year’s record first quarter backlog of $943 million 2020 revenue guidance range lowered slightly to $2.1 billion to $2.3 billion 1.1 billi
Slide 34: Questions
INVESTOR RELATIONS QUESTIONS
Slide 35: Appendix: Reconciliation of Non-GAAP Financial Measures: EBITDA
APPENDIX RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: EBITDA Trailing Twelve-Month Ended March 31, 2020 (dollars in millions) Construction Construction Electric Natural Gas Pipeline Total Services Materials Income from $50.6 $35.4 $30.1 $89.8 $116.6 $319.6 continuing ops. Adjustments: Interest Exp