Core Insights - The article discusses the impact of tariffs and tight credit conditions on hiring plans across various sectors [1] - It highlights that certain channels for interest rate relief are currently obstructed, complicating the financial landscape for businesses [1] Group 1: Economic Impact - Tariffs are creating additional costs for companies, which may lead to reduced hiring and investment plans [1] - Tight credit conditions are making it difficult for businesses to secure financing, further hindering their ability to expand and hire [1] Group 2: Financial Environment - The article notes that some avenues for rate relief, such as potential cuts in interest rates, are not accessible at this time, limiting options for businesses seeking financial support [1] - The overall economic environment is characterized by uncertainty, which may affect long-term planning and growth strategies for companies [1]

Core Viewpoint - MDU Resources Group, Inc. reported second quarter financial results for 2025, highlighting sustained momentum in the pipeline segment and regulatory progress that supports the company's long-term value as a regulated energy delivery business [1][2]. Financial Performance - For the second quarter of 2025, net income was $13.7 million, a decrease from $60.4 million in the same period of 2024. Earnings per share (EPS) diluted were $0.07 compared to $0.30 in 2024 [2][21]. - Income from continuing operations was $14.1 million, down from $20.2 million year-over-year, with diluted EPS from continuing operations at $0.10, up from $0.07 [2][21]. - Operating revenues for the second quarter of 2025 were $351.2 million, compared to $344.5 million in 2024, while operating expenses increased to $320.8 million from $305.0 million [13][21]. Segment Performance Electric Utility Segment - The electric utility segment earned $10.4 million in Q2 2025, down from $15.5 million in Q2 2024, primarily due to increased operation and maintenance expenses [4][21]. - Higher payroll-related costs and expenses from a planned outage contributed to the increased costs, although these were partially offset by higher commercial sales volumes and rate relief in South Dakota [4][21]. Natural Gas Distribution Segment - The natural gas distribution segment reported a seasonal loss of $7.4 million in Q2 2025, compared to a loss of $5.0 million in 2024, driven by higher operation and maintenance expenses and unfavorable weather conditions [5][25]. - Operating revenues increased to $206.9 million in Q2 2025 from $201.5 million in 2024, with a notable increase in purchased natural gas sold [22][25]. Pipeline Segment - The pipeline segment reported earnings of $15.4 million in Q2 2025, down from $17.3 million in 2024, impacted by higher operation and maintenance expenses and the absence of a customer settlement from the previous year [8][26]. - Operating revenues for the pipeline segment increased to $56.3 million in Q2 2025 from $52.9 million in 2024, supported by higher transportation revenue from recent expansion projects [26]. Guidance and Strategic Outlook - The company narrowed its full-year earnings guidance to a range of $0.88 to $0.95 per share, reflecting midyear performance and weather impacts [6][9]. - Long-term EPS guidance remains unchanged, with an expected growth rate of 6%-8% [6][9]. Regulatory Updates - The company is actively pursuing regulatory approvals for various projects, including a General Rate Case in Wyoming requesting a $7.5 million annual increase, and applications for new projects in North Dakota and Idaho [7][22]. - Rate relief in Washington and Montana has partially offset seasonal losses in the natural gas distribution segment [5][25]. Capital Expenditures - Total capital expenditures for 2025 are estimated at $539 million, with significant investments planned in electric and natural gas distribution segments [18][22]. Other Financial Data - As of June 30, 2025, the company reported total assets of $6.946 billion and total equity of $2.732 billion, with a book value per common share of $13.37 [31]. - The market price per common share was $16.67, representing 124.7% of the book value [31].

Financial Data and Key Metrics Changes - The company reported income from continuing operations of $82.5 million or $0.40 per share for Q1 2025, a 10.4% increase compared to the same period last year [4] - First quarter earnings were $82 million or $0.40 per diluted share, compared to $100.9 million or $0.49 per diluted share in Q1 2024 [12] - The natural gas utility segment reported earnings of $44.7 million, an 11.5% increase from $40.1 million in Q1 2024 [14] Business Line Data and Key Metrics Changes - The electric utility segment reported earnings of $15 million, down from $17.9 million in the same period last year, despite a 25% increase in retail electric volumes [12][39] - The pipeline segment achieved record first quarter earnings of $17.2 million, up from $15.1 million in Q1 2024, driven by growth projects and increased demand for services [9][15] Market Data and Key Metrics Changes - The utility experienced a 1.4% combined retail customer growth compared to a year ago, aligning with the projected annual growth rate of 1% to 2% [5] - The company signed electric service agreements for 580 megawatts of data center load, with 180 megawatts currently online and an additional 100 megawatts expected to come online later this year [7] Company Strategy and Development Direction - The company is focused on a core strategy emphasizing customer and community engagement, operational excellence, and employee-driven initiatives, with a capital investment plan of $3.1 billion over the next five years [11] - The company anticipates a long-term EPS growth rate of 6% to 8% while targeting a 60% to 70% annual dividend payout ratio [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term potential of the Bakken region, highlighting the increasing gas-to-oil ratio and the need for takeaway capacity [22][24] - The company remains committed to wildfire prevention and has seen legislative support in three of its operating states, which will help limit liability and enhance mitigation efforts [6][58] Other Important Information - The company plans to reestablish an ATM program to meet future equity needs as part of its capital investment strategy [16] - The company is affirming its earnings per share guidance in the range of $0.88 to $0.98 for the full year [10] Q&A Session Summary Question: Are the tariffs from large customers not accretive for new resources? - Management indicated that the current capital-light strategy for data centers is beneficial, as it allows for shared costs with large customers, which in turn benefits retail customers [18][19] Question: How might disruptions in the Bakken affect North Dakota? - Management believes in the long-term viability of the Bakken, noting that while oil prices fluctuate, the increasing gas production will provide benefits for the pipeline business and utility customers [22][24] Question: How does the company view housing starts in relation to economic sensitivity? - Management noted that customer growth has remained stable within the 1% to 2% range, even during economic fluctuations, with Idaho being a particularly strong growth area [28][30] Question: What are the next steps for the Bakken East project? - Management stated that conversations with customers are ongoing, and they are encouraged by the feedback received, but further steps will depend on route design and customer needs [48][49] Question: How will recent wildfire legislation impact mitigation plans? - Management indicated that the legislation will help formalize existing mitigation plans and limit liability, while prevention remains the top priority [58][59] Question: What is the anticipated size of the ATM program? - Management has not yet determined the size of the ATM program but plans to size it appropriately to meet future needs [60] Question: What is the starting point for the long-term growth rate? - Management clarified that the long-term growth rate guidance is based on the adjusted 2024 number or the 2025 range provided earlier this year [63]

Financial Data and Key Metrics Changes - The company reported income from continuing operations of $82.5 million or $0.40 per share for Q1 2025, a 10.4% increase compared to the same period last year [4][13] - First quarter earnings were $82 million compared to $100.9 million for Q1 2024, indicating a decrease in overall earnings [13] - The natural gas utility segment reported earnings of $44.7 million, an 11.5% increase year over year [14] Business Line Data and Key Metrics Changes - The electric utility segment reported earnings of $15 million, down from $17.9 million in Q1 2024, despite a 25% increase in retail electric volumes [13][14] - The pipeline segment achieved record first quarter earnings of $17.2 million, up from $15.1 million in the previous year, driven by growth projects and increased demand [9][15] - The natural gas distribution segment's rate relief contributed significantly to its quarterly results, with new rates effective in Washington and Montana [7][8] Market Data and Key Metrics Changes - The utility experienced a 1.4% combined retail customer growth compared to a year ago, aligning with the projected annual growth rate of 1% to 2% [5] - The company signed a purchase agreement to acquire a 49% interest in the Badger Wind Farm, contingent on regulatory approvals [5] Company Strategy and Development Direction - The company is focused on a core strategy emphasizing customer and community engagement, operational excellence, and employee-driven initiatives [12] - A capital investment of $3.1 billion is anticipated over the next five years, with a target of 7% to 8% compound annual utility rate base growth [12] - The company is committed to maintaining a 60% to 70% annual dividend payout ratio while targeting long-term EPS growth of 6% to 8% [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth prospects of the Bakken region, despite potential short-term disruptions due to oil prices [24][25] - The company remains proactive in wildfire prevention and has seen legislative support that limits liability, enhancing operational certainty [6][60] Other Important Information - The company plans to reestablish an ATM program to meet future equity needs as part of its capital investment strategy [16] - The anticipated filing of a general rate case in Idaho is expected in the second quarter of 2025 [9] Q&A Session Summary Question: Are the tariffs from large customers not accretive for new resources? - Management indicated that the capital-light strategy for data centers is beneficial, as it allows for shared costs with large customers, providing benefits to the retail customer base [18][19] Question: Thoughts on potential disruptions to the Bakken region? - Management believes in the long-term viability of the Bakken play, citing increasing gas production and industrial demand as positive indicators [24][25] Question: Impact of housing starts on service areas? - Management noted that customer growth has remained stable within the 1% to 2% range, with Boise being a particularly strong growth area [30][32] Question: Clarification on accounting restatements? - Management explained that the restated numbers primarily reflect the separation of discontinued operations and some ongoing costs related to previous separations [33][34] Question: Confidence in the Bakken East project development? - Management expressed optimism based on ongoing customer conversations and feedback, while noting that the project is not currently in the five-year capital forecast [48][49] Question: Role of recent tariffs in the Bakken East project's attractiveness? - Management stated that while tariffs could impact costs, they do not foresee them derailing the project [55][57] Question: Impact of wildfire legislation on mitigation plans? - Management highlighted that existing proactive measures will be formalized through new legislation, which will help limit liability [58][60] Question: Size of the anticipated ATM program? - Management has not yet determined the size of the ATM program but indicated it would be sized to meet future needs starting in 2026 [61][62] Question: Clarification on long-term growth rate starting point? - Management clarified that the long-term growth rate is based on adjusted 2024 numbers or the 2025 range provided earlier [63][64]