Slide 1: 2020 Earnings & 2021 Guidance Call
FEB. 4, 2021 2020 EARNINGS & 2021 GUIDANCE CALL JASON VOLLMER Vice President & Chief Financial Officer
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: Mission statement
“ 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.
Slide 4: 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 5: Company Overview
COMPANY OVERVIEW Infrastructure is our business, and we are Building a Strong America®. Powering and connecting homes, factories, offices and stores. Building roads, highways, data infrastructure and airports. MDU Resources keeps our economy moving. High-quality Portfolio of Businesses1 Diversified
Slide 6: Full-Year Earnings
FULL-YEAR EARNINGS EARNINGS EPS $450 $2.50 $390.2 $400 $335.5 $1.95 $350 $2.00 $1.69 $300 $1.50 $250 millions $200 $1.00 $150 $100 $0.50 $50 $- $0.00 2019 2020 2019 2020
Slide 7: Electric & Natural Gas Utility
ELECTRIC & NATURAL GAS UTILITY EARNINGS Earnings of $99.6 million EARNINGS – Approved rate relief had positive $120 impacts at both electric and natural $99.6 gas $100 $94.3 – Lower operation and maintenance $80 expense at electric millions – Out-of-period adjustments on benefit $60 plan expense h
Slide 8: Pipeline
PIPELINE EARNINGS Earnings of $37.0 million EARNINGS – Higher transportation revenues from $40 $37.0 completed organic growth projects $35 and higher storage revenue from $29.6 $30 strong demand for storage services contributed to the increase. $25 – Higher transportation rates and the millions $2
Slide 9: Construction Services
CONSTRUCTION SERVICES EARNINGS Record earnings of $109.7 million – Higher workloads and margins at both EARNINGS $120 inside and outside specialty contracting $109.7 lines had a positive impact on earnings $100 $93.0 – Partially offsetting the increase was higher selling, general and $80 administr
Slide 10: Construction Materials
CONSTRUCTION MATERIALS EARNINGS Record earnings of $147.3 million – Earnings were positively impacted by EARNINGS higher realized materials pricing and $160 $147.3 increased contracting margins $140 – Higher margins from asphalt and $120.4 $120 asphalt-related products largely due to lower energy
Slide 11: 2020 Earnings & 2021 Guidance Call
FEB. 4, 2021 2020 EARNINGS & 2021 GUIDANCE CALL DAVE GOODIN President & Chief Executive Officer
Slide 12: 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 growth is expected to average 1-2% annually Multiple ongoing rate cases at both electric a
Slide 13: Pipeline Outlook
PIPELINE OUTLOOK North Bakken Expansion project – Expected to start construction in the second quarter of 2021 and be in service late this year – Designed to transport 250 million cubic feet of natural gas per day and will reduce natural gas flaring in the Bakken Organic growth opportunities inc
Slide 14: Construction Services Outlook
CONSTRUCTION SERVICES OUTLOOK Record year-end backlog of $1.27 billion, up from $1.14 billion in 2019 2021 revenue guidance established with a range of $2.1 billion to $2.3 billion with margins comparable to or slightly higher than 2020 Continues to see both inside and outside specialty contra
Slide 15: Construction Materials Outlook
CONSTRUCTION MATERIALS OUTLOOK Ended the year with $673 million in backlog, compared to $693 million in 2019 2021 revenue guidance established with a range of $2.1 billion to $2.3 billion with margins comparable to or slightly higher than 2020 1.1 billion tons of aggregate reserves Evaluatin
Slide 16: 2021 EPS Guidance Initiated
2021 EPS GUIDANCE INITIATED Consolidated EPS Guidance $1.95 – $2.15 Consolidated EBITDA Guidance $875 million - $925 million 5 - 8% Long-Term Compound Annual Growth Rate Target Note: As of February 4, 2021 16
Slide 17: Dividend Growth
DIVIDEND $0.90 GROWTH $0.85 $0.85 83 consecutive years of quarterly dividend payments Dividend increased $0.80 November 2020, making 30 Annualized Dividend consecutive years of increases $0.75 $0.75 Annualized dividend $0.85 per share Member of S&P High-Yield $0.70 Dividend Aristocrats index
Slide 18: Questions
INVESTOR RELATIONS QUESTIONS
Slide 19: Reconciliation of EBITDA Guidance
RECONCILIATION OF EBITDA GUIDANCE Low High Income from continuing operations $393.0 $434.0 Adjustments: Interest expense 95.0 95.0 Income taxes 90.0 99.0 Depreciation, depletion and amortization 297.0 297.0 EBITDA from continuing operations $875.0 $925.0
Slide 20: Reconciliation of 2020 EBITDA
RECONCILIATION OF 2020 EBITDA ($ in millions) For the year ended December 31, 2020 Construction Construction Other & Electric Natural Gas Pipeline Total Services Materials Eliminations Income from $55.6 $44.0 $37.0 $109.7 $147.3 $(3.1) $390.5 Continuing Ops. Adjustments: Interest Expense 26.7 36.8 7