Slide 1: 2018 Earnings and 2019 Guidance Conference Call
FEBRUARY 6, 2019 2018 EARNINGS AND 2019 GUIDANCE CONFERENCE CALL JASON VOLLMER Vice President, Chief Financial Officer & Treasurer ® BUILDING A STRONG AMERICA®
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. BUILDING A STRONG AMERICA® 3
Slide 4: Leadership Team
LEADERSHIP TEAM A B A. Dave Goodin E. Trevor Hastings President & CEO WBI Energy President & CEO B. Jason Vollmer Vice President, CFO & Treasurer F. Nicole Kivisto C D Utilities Group President & CEO C. Dave Barney Knife River President & CEO G. Stephanie Barth Vice President, CAO & Controller D. Je
Slide 5: Results from Continuing Operations
RESULTS FROM CONTINUING OPERATIONS YEAR-END 2018 EARNINGS EPS $320 $1.60 $284.2* $1.45* $269.4 $1.38 $270 $1.40 $1.20 $220 $1.00 millions $170 $0.80 $120 $0.60 $0.40 $70 $0.20 $20 $0.00 2017 2018 2017 2018 * Light gray area reflects a $39.5 million benefit, or 20 cents per share, resulting from tax
Slide 6: Consolidated Operations
CONSOLIDATED OPERATIONS* YEAR-END 2018 EARNINGS EPS $300 $280.4** $272.3 $1.60 $1.43** $1.39 $250 $1.40 $1.20 $200 $1.00 millions $150 $0.80 $100 $0.60 $0.40 $50 $0.20 $0 $0.00 2017 2018 2017 2018 * Includes both continuing and discontinued operations ** Light gray area reflects a $39.5 million bene
Slide 7: Electric & Natural Gas Utility
ELECTRIC YEAR-END 2018 & NATURAL GAS UTILITY Earnings Reported combined earnings of $84.7 million $100 – Higher electrical retail sales volumes to all $95 major customer classes $90 – Higher natural gas distribution retail sales margins millions $85 – Earnings offset by higher depreciation, $84.7
Slide 8: Pipeline & Midstream
PIPELINE & MIDSTREAM YEAR-END 2018 Earnings Reported earnings of $28.5 million $30 $28.5** – Increased transportation revenues and volumes from organic growth projects $25 – Increase in earnings was driven by a tax $20.5* benefit of $4.2 million in the third quarter $20 millions related to a final
Slide 9: Construction Services
CONSTRUCTION SERVICES YEAR-END 2018 Reported record earnings of $64.3 million Earnings $70 – Higher outside specialty contracting workloads, $64.3 largely from higher equipment sales and rentals and increased power line recovery work $60 related to natural disasters $53.3* – Lower income taxes due
Slide 10: Construction Materials
CONSTRUCTION MATERIALS YEAR-END 2018 Earnings Reported earnings of $92.6 million $130 $123.4* – Higher aggregate and asphalt product $120 workloads and margins and lower income $110 taxes due to the enactment of the TCJA $100 – Earnings offset by higher selling, general and $92.6 $90 administratio
Slide 11: 2018 Earnings and 2019 Guidance Conference Call
2018 EARNINGS AND 2019 GUIDANCE CONFERENCE CALL DAVE GOODIN President & Chief Executive Officer ® BUILDING A STRONG AMERICA®
Slide 12: Electric and Natural Gas Utility Outlook
ELECTRIC AND NATURAL GAS UTILITY OUTLOOK Customer base expected to continue growing by 1-2 percent annually Big Stone South to Ellendale joint-venture transmission line – In-service as of February 5, 2019 – Project cost is estimated to be approximately $130 million Focused on timely regulatory
Slide 13: Pipeline & Midstream Outlook
PIPELINE & MIDSTREAM OUTLOOK 14-mile Demicks Lake project; estimated cost of $30 million – Will increase capacity by 175 million cubic feet per day – Expected to be in-service in fall 2019 Line Section 22 Expansion project; estimated cost of $12 million to $15 million – Will increase capacity by
Slide 14: Construction Services Outlook
CONSTRUCTION SERVICES OUTLOOK Backlog up 33 percent to $939 million, from $708 million in 2017 – Record all-time backlog 2019 revenue guidance range of $1.35 billion to $1.50 billion – Margins comparable to 2018 Strong demand for utility construction equipment it manufactures and electrical tr
Slide 15: Construction Materials Outlook
CONSTRUCTION MATERIALS OUTLOOK Backlog of $706 million, up 45 percent from $486 million in 2017 – Record year-end backlog 2019 revenue guidance range of $2.0 billion to $2.15 billion – Margins comparable to or slightly higher than 2018 Evaluating additional acquisition opportunities that will
Slide 16: 2019 EPS Guidance
2019 EPS GUIDANCE Consolidated 1.35 to 1.55 $ $ Note: As of February 6, 2019 BUILDING A STRONG AMERICA® 16
Slide 17: Capital Program
2019-2023 Utility Construction Pipeline & Midstream CAPITAL $3,000 TOTAL CAPITAL FORECAST OF $2,642* PROGRAM Electric and natural gas utility $2,500 • System infrastructure upgrades and $435 replacements Construction materials and $2,000 services $727 millions • Equipment and plant replacements
Slide 18: Dividend Growth
DIVIDEND GROWTH $0.85 81 consecutive years of $0.81 quarterly dividend $0.80 payments Dividend increased $0.75 November 2018, ANNUALIZED DIVIDEND RATE making 28 consecutive years of increases $0.70 $0.69 2018 annualized dividend $0.81 per $0.65 share Member of S&P High- $0.60 2012 2013 2014
Slide 19: Questions
QUESTIONS ® BUILDING A STRONG AMERICA®