Pipeline segment reports record first quarter earnings, up 13.9% Natural gas distribution earnings up 11.5% 2025 guidance affirmed; earnings per share in the range of $0.88 to $0.98 Strong start to the year supports company's transition to a pure-play regulated energy delivery businessBISMARCK, N.D., May 8, 2025 /PRNewswire/ -- MDU Resources Group, Inc. (NYSE: MDU) today announced its financial results for the first quarter of 2025, reporting solid performance across its regulated energy delivery segments ...

Company Overview - MDU Resources Group Inc. is a member of the S&P SmallCap 600 index, providing electric and natural gas distribution services to over 1.2 million customers in the Pacific Northwest and Midwest [2] - The company operates a natural gas pipeline network exceeding 3,800 miles, ensuring reliable energy delivery across the Northern Plains [2] - MDU Resources has a legacy of over a century, focusing on delivering safe, reliable, affordable, and environmentally responsible energy solutions [2] Upcoming Events - MDU Resources will webcast its first quarter 2025 earnings conference call on May 8 at 2 p.m. ET, with results released before U.S. financial markets open [1] - The webcast can be accessed through the company's website under the "Investors" section, with a replay available post-event [1]

Group 1 - The core focus of the investment group "Energy Profits in Dividends" is to generate a 7%+ income yield by investing in energy stocks while minimizing principal loss risk [1] - The leader of the group emphasizes income generation through energy stocks and closed-end funds (CEFs), while also managing risk through options [1] - The group has been covering both traditional and renewable energy sectors since 2010, targeting international companies that have a competitive advantage and offer strong dividend yields [1]

Company Structure and Segments - The Company executed the separation of Knife River, its construction materials and contracting business, on May 31, 2023, resulting in Knife River becoming an independent, publicly-traded company[19]. - The Company completed the separation of Everus, its construction services business, on October 31, 2024, resulting in Everus becoming an independent, publicly-traded company[19]. - As of December 31, 2024, the Company was organized into three reportable business segments: electric, natural gas distribution, and pipeline[20]. - The Company operates through three reportable business segments: electric, natural gas distribution, and pipeline, with Montana-Dakota being a key subsidiary in these segments[20][22]. Workforce and Culture - The Company had 2,052 employees as of December 31, 2024, focusing on building a strong workforce with an emphasis on safety and integrity[24]. - As of December 31, 2024, the Company had 2,052 employees, with 702 employees represented by collective-bargaining agreements[24][27]. - The Company emphasizes a "CORE" strategy prioritizing customers, operational excellence, and employee-driven culture to achieve industry-leading performance[18]. - The Company is committed to safety and health in the workplace, with established policies and training to support a strong safety culture[32]. Financial Performance - In 2024, Montana-Dakota served 145,686 customers, generating total revenues of $355.7 million, an increase from $347.6 million in 2023[45]. - The natural gas distribution operations served 1,065,593 customers across eight states, with total revenues of $1,095.3 million in 2024, a decrease from $1,212.3 million in 2023[74]. - Residential customer revenues decreased from $726.1 million in 2023 to $651.8 million in 2024, while commercial revenues also saw a decline from $441.2 million to $400.8 million[74]. - Transportation and other revenues for natural gas distribution operations increased to $105.8 million in 2024 from $75.3 million in 2023[74]. - The total retail electric revenues for 2024 were $355.7 million, an increase from $347.6 million in 2023, with residential customers generating $139.9 million in revenues[45]. Environmental Initiatives - Approximately 38% of the electricity delivered to customers from Montana-Dakota's owned generation in 2024 was from renewable resources[49]. - The carbon dioxide emission intensity of Montana-Dakota's electric generation resource fleet has been reduced by approximately 38% since 2005[49]. - The Company has developed renewable generation with lower or no GHG emissions as part of its environmental responsibility initiatives[34]. - The company expects to incur environmental-related capital expenditures of $13.1 million, $21.6 million, and $15.9 million in 2025, 2026, and 2027, respectively[88]. - In 2024, the EPA published final rules related to GHG emissions, which may impact the company's business processes and future projects[105]. Capital Investments and Expenditures - Montana-Dakota's net electric plant investment was $1.8 billion and its rate base was $1.5 billion as of December 31, 2024[42]. - The natural gas distribution operations' net plant investment was $2.6 billion, with a rate base of $2.0 billion as of December 31, 2024[73]. - WBI Energy Transmission's net plant investment was $984.2 million as of December 31, 2024[93]. - Montana-Dakota incurred approximately $2.6 million in capital expenditures in 2024 for environmental compliance and coal ash management[71]. - The natural gas distribution operations incurred $13.2 million in capital expenditures in 2024 for infrastructure supporting multiple RNG facilities[88]. Regulatory and Compliance - Montana-Dakota's electric operations are subject to various regulatory mechanisms that can impact its results, including monthly fuel and purchased power tracking adjustments[61]. - The pipeline operations did not incur any material capital expenditures related to compliance with environmental laws in 2024 and have no planned expenditures for 2025[106]. - The company expects to recover operational and capital expenditures for GHG regulatory compliance in rates consistent with other reasonable costs[87]. - Montana-Dakota is investigating potential soil and groundwater impacts from historic manufactured gas plants, which may lead to recovery costs through natural gas rates[89]. Customer and Market Insights - The percentage of electric retail revenues by jurisdiction for 2024 was 65% from North Dakota, 21% from Montana, 9% from Wyoming, and 5% from South Dakota[46]. - The percentage of retail sales revenues by jurisdiction in 2024 showed Washington at 34%, Idaho at 29%, and North Dakota at 12%[76]. - Montana-Dakota's firm transportation agreements with WBI Energy Transmission represented 19% of the subscribed firm transportation contract demand in 2024[99].

Core Insights - MDU Resources Group, Inc. has signed a purchase agreement to acquire a 49% ownership interest in the Badger Wind Farm, representing 122.5 MW of its total 250 MW generation capacity, pending regulatory approval [1][2][3] Group 1: Acquisition Details - The estimated cost for MDU to purchase this stake in the Badger Wind Farm is $294 million [3] - MDU previously executed a Power Purchase Agreement (PPA) for 150 MW of the Badger Wind Farm's output, which will be reduced to 27.5 MW upon closing of the ownership purchase [3] Group 2: Strategic Importance - The investment aligns with MDU's 2024 Integrated Resource Plan (IRP), which identified the need for additional generation capacity to meet future energy demands [2] - This acquisition is part of MDU's five-year capital expenditure plan and is considered the least-cost option for customers [2][3] Group 3: Impact on Generation Mix - The addition of the Badger Wind Farm is expected to change MDU's nameplate generation mix, increasing the share of renewables from 29% to 39%, while reducing coal from 31% to 26% and gas from 40% to 35% [4] Group 4: Regulatory Considerations - MDU has filed an Advance Determination of Prudence (ADP) with the North Dakota Public Service Commission to ensure the prudence of this investment [4]

Group 1 - MDU Resources Group Inc. has elected Darrel T. Anderson as vice chair of its board of directors, effective immediately [1][2] - Anderson has been an independent director since 2023 and has extensive experience in the regulated utility industry, previously serving as president and CEO of IDACORP and Idaho Power Company [2] - The election of Anderson is part of a planned succession process, reflecting the company's commitment to governance best practices [2] Group 2 - MDU Resources Group Inc. is a member of the S&P SmallCap 600 index and provides essential products and services through its regulated electric and natural gas distribution and pipeline segments [4] - The company serves over 1.2 million customers across eight states and is celebrating its 100th anniversary [4] - MDU Resources operates in the Pacific Northwest and Midwest, focusing on infrastructure that delivers natural gas and electricity [4]

Financial Data and Key Metrics Changes - The company reported full-year earnings of $281.1 million or $1.37 per share on a GAAP basis for 2024, compared to $414.7 million or $2.03 per share in 2023 [22] - Income from continuing operations for 2024 was $181.1 million or $0.88 per share, down from $330.1 million or $1.62 per share in 2023 [23] - Adjusted income from continuing operations for 2024 was $184.4 million or $0.90 per share, a 22% increase compared to $150.8 million or $0.74 per share in 2023 [24] Business Line Data and Key Metrics Changes - The Electric Utility segment reported earnings of $74.8 million in 2024, up from $71.6 million in 2023, primarily due to higher retail sales revenue from rate relief [25] - The Natural Gas segment reported earnings of $46.9 million in 2024, down from $48.5 million in 2023, attributed to higher operation and maintenance expenses [26] - The Pipeline segment achieved record earnings of $68 million in 2024, compared to $46.9 million in 2023, driven by record transportation volumes and increased storage revenue [27][28] Market Data and Key Metrics Changes - The combined retail customer base grew by 1.4% in 2024, indicating a need for proactive management of utility infrastructure [11] - The company experienced a 6.8% growth in rate base in 2024 [11] Company Strategy and Development Direction - The company aims to be a pure-play regulated energy delivery business, focusing on continued growth and operational excellence [9][18] - A capital investment of $3.1 billion is anticipated over the next five years, targeting 7% to 8% utility rate base growth and 1% to 2% annual customer growth [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth prospects, citing strong performance in electric and natural gas utilities and pipeline services [20] - The company is focused on delivering safe and reliable services while seeking regulatory recovery for investments [14] Other Important Information - The company completed the spin-off of Everus Construction Group and Knife River, with results reported as discontinued operations [6] - The company initiated 2025 earnings per share guidance in the range of $0.88 to $0.98 per share, reflecting strong performance across segments [17] Q&A Session Summary Question: Change in guidance around equity issuance - Management clarified that there is no real change in the guidance regarding equity issuance, with no expected equity issuance in 2025 [34] Question: Northwest North Dakota gas potential pipeline expansion - Management indicated that the project is to serve a natural gas-fired electric generating station, with capital increases anticipated in 2028 [38] Question: Breakdown of 2025 guidance - Management discussed potential drivers for reaching the high end of the guidance range, including strong storage performance and rate relief [58][60] Question: Bakken East nonbinding MOU - Management confirmed that they are evaluating results from the open season and will move towards binding commitments based on customer interest [68]

Year-End Earnings Call February 6, 2025 1 Legal Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws. Other than statements of historical facts, all statements which address activities, events or developments that the company anticipates will or may occur in the future, including, but not limited to, such things as estimates for growth, stockholder value creation, our CORE strategy, capital expenditures, financial guida ...

Core Insights - MDU Resources Group Inc. reported fourth-quarter 2024 operating earnings per share (EPS) of 34 cents, which was below the Zacks Consensus Estimate of 38 cents by 10.5%, but showed a year-over-year improvement of 9.7% [1] - Adjusted earnings for 2024 were 90 cents per share, reflecting a 21.6% increase from 74 cents in 2023 [1] Revenue Performance - Fourth-quarter total operating revenues increased by 7.1% to $535.5 million from $499.9 million in the same period of 2023 [2] - Total revenues for 2024 were $1.76 billion, down 2.5% from $1.80 billion in 2023 [2] Expense and Income Analysis - Total operating expenses were approximately $441 million, up 7% from $412 million in the year-ago quarter [3] - Operating income reached $94.5 million, a 7.5% increase from $87.9 million in the previous year [3] - Interest expenses decreased to $28 million, down 2.1% year over year [3] Cash Flow and Financial Position - As of December 31, 2024, cash and cash equivalents were $66.9 million, down from $77 million as of December 31, 2023 [4] - Net cash provided by operating activities for 2024 was $502.3 million, compared to $332.6 million in the prior year [4] Future Guidance - For 2025, MDU Resources expects earnings in the range of 88-98 cents per share, with the Zacks Consensus Estimate at 98 cents, which is at the higher end of the company's guidance [5] - The company anticipates annual customer growth in electric and natural gas sectors of 1-2% [5] - Planned investments for 2025 are $533 million, with a total of $3.06 billion earmarked for the 2025-2029 period [5] Market Position - MDU Resources currently holds a Zacks Rank 1 (Strong Buy) [6]

Financial Performance - Net income for 2024 was $281.1 million, a decrease of 32.2% from $414.7 million in 2023[2] - The company reported a net income of $55.2 million for Q4 2024, down from $170.7 million in Q4 2023, with income from continuing operations at $70.5 million compared to $136.2 million in the previous year[26] - Adjusted income from continuing operations for Q4 2024 was $70.5 million, an increase from $64.0 million in Q4 2023, while adjusted earnings per share rose to $0.34 from $0.31[26] - The natural gas distribution business reported a net income of $46.9 million for the full year, down from $48.5 million in 2023, primarily due to higher operation and maintenance expenses[32] - The Other segment's net income for the full year was $91.4 million, down 63% from $247.7 million in 2023, largely due to the absence of a prior year gain related to the tax-free exchange of retained shares in Knife River[39] Revenue and Earnings Growth - Regulated energy delivery earnings increased by 13.6% year-over-year, totaling $189.7 million[3] - The electric utility segment's earnings increased by 4.5% year-over-year, totaling $74.8 million[8] - The pipeline segment achieved record earnings of $68.0 million, up 45.0% year-over-year[8] - Operating revenues for the pipeline business increased by 19% to $211.8 million in 2024, compared to $177.6 million in 2023[34] - The pipeline business reported a 37% increase in operating income for the full year, reaching $94.5 million, up from $69.2 million in 2023[34] Capital Investment and Future Expectations - MDU Resources plans a capital investment of $533 million for 2025[11] - For 2025, the company expects earnings per share to be in the range of $0.88 to $0.98[11] - The company anticipates a long-term compound annual growth of 7% to 8% on utility rate base and 1% to 2% on customer growth annually[11] Operational Metrics - Record annual pipeline transportation volumes rose by 8.1% year-over-year[3] - The utility rate base grew by 6.8% year-over-year[3] - Transportation volumes for the pipeline business increased to 613.2 MMdk for the full year, compared to 567.2 MMdk in 2023[34] - The company experienced a 4% increase in retail sales volumes in the natural gas distribution segment, primarily driven by residential and commercial customers[31] Cost and Expense Management - Operating revenues for the electric business decreased by 7% to $99.0 million in Q4 2024, while total operating expenses fell by 8% to $78.3 million[27] - Costs attributable to strategic initiatives for 2024 amounted to $4.4 million, net of tax, compared to $1.1 million in Q4 2023[26] - The average cost of electric fuel and purchased power per kWh decreased to $0.021 in Q4 2024 from $0.027 in Q4 2023[27] - The average cost of natural gas per dk increased to $6.04 in Q4 2024 from $5.65 in Q4 2023[29] Asset and Equity Position - Total assets as of December 31, 2024, were $7,039 million, with total equity of $2,691 million and total debt of $2,293 million[42] - The book value per common share was $13.19, while the market price per common share was $18.02, reflecting a market value of 136.6% of book value[42] Corporate Actions - MDU Resources completed the spinoff of Everus Construction Group on October 31, 2024, reporting related results as discontinued operations[9] - The company completed the separations of Knife River and Everus into independent publicly-traded companies, impacting historical results shown in discontinued operations[36]