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October 2015 Investor Presentation – MDU Resources Group Inc.

MDU Resources Group Inc. · Oct 22, 2015 · 51 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 1
    RESOURCES Group, Inc Building a Strong America . Investor Relations October 2015 1
  2. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 2
    Diversified Natural Resources Company Building a Strong America PIPELINE 3
  3. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 3
    Our Vision 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 PIPELINE…
  4. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 4
    Positioned for Long-term Growth Building a Strong America Assets and underlying strengths of businesses provide attractive growth opportunities Focused on improving earnings and lowering operating costs across our RESOURCES…
  5. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 5
    Electric & Natural Gas Distribution Electric & Natural Gas Utilities Building a Strong America WA MT ND MN ID OR SD WY Operating in 8 states 1,034,000 electric and natural gas customers in 448 communities Electric…
  6. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 6
    Business Overview Regulated model: Low risk; franchised service areas Reliable earnings and cash flows Geographic diversity Average customer growth across eight states greater than national average Organic growth opportunities…
  7. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 7
    Rate Base & Earnings Growth 1,600 80 1,400 More than tripled rate base and 1,200 60 earnings since 2006 1,000 Projecting substantial rate base 800 40 growth going forward 600 400 20 200 0 0 (Millions) 2006 2014 (Millions) Rate…
  8. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 8
    Thunder Spirit Wind Acquisition Agreement to purchase 43 wind turbines, 107.5 MW of electric generation Electric & Natural Gas Distribution To be located near Hettinger in southwestern North Dakota Building a Strong America…
  9. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 9
    BSSE Project Proposed Midcontinent-ISO multi-value 345-kV transmission line Electric & Natural Gas Distribution Building a Strong America 160 miles from Big Stone City, SD to Ellendale, ND Projected cost 205 million for companys…
  10. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 10
    Big Stone Station Environmental Upgrade Required retrofit installation Electric & Natural Gas Distribution Building a Strong America Cost approx. 90 million for companys share Environmental cost recovery rider approved in ND and…
  11. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 11
    Additional Organic Growth Opportunities 19-MW natural gas generation near Lewis & Clark Station - 40 million 2015 Bakken region investments - 60 million Pursuing additional projects for accommodating load growth in industrial and…
  12. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 12
    Supportive Regulatory Environments Completed Cases MT natural gas rate increase request of 3 million annually; new rates of 2.5 million annually implemented May 20 WY natural gas rate increase request of 788,000 annually; new rates of…
  13. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 13
    Supportive Regulatory Environments (cont.) Pending Cases ND natural gas rate increase request of 4.3 million annually, interim increase of 4.3 million implemented for service effective April 7; 2.6 million settlement filed Aug. 26;…
  14. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 14
    Utilities Outlook Organic growth opportunities expected to result in substantial rate base growth Timely recovery positive regulatory outcomes Obtained approval and implemented 18.9 million in annual rate increases year-to-date Four…
  15. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 15
    Pipeline & Energy Services FERC regulated operations Building a Strong America 3,800 miles of pipeline 137,391 HP compression PIPELINE Over 1.4 Bcf/d system capacity 193 Bcf working storage Non-regulated operations 1,600…
  16. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 16
    Business Overview Low risk/stable returns with regulated business High quality customers Pipeline projects totaling 137,000 dkt/day completed in 2014 contributing to current and future earnings Pronghorn oil and gas gathering &…
  17. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 17
    New President & CEO Martin Fritz Extensive industry experience 15-year career with large midstream business Strong track record of business growth Bachelors degree business and economics and law degree Legal experience includes…
  18. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 18
    2015-2016 Project Updates North Badlands Expansion Project Overview 4 miles 16 loop of Garden Creek II pipeline Measurement and associated facilities Timeline Precedent and interconnect agreements executed August 2015 Sold…
  19. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 19
    2015-2016 Project Updates Northwest ND Expansion Project Overview Modify existing compression Charbonneau new unit Williston re-cylinder 47,000 mcf/day of capacity Timeline Precedent Agreement signed May 2015 Sold 8,000…
  20. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 20
    Demicks Lake Project Approx. 22 miles of 24 pipe from Demicks Lake processing plant to Northern Border North Dakota Measurement facilities at new Northern Border interconnect Demicks Lake Plant Site Projected cost 50 million -…
  21. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 21
    Dakota Prairie Refinery Process Bakken crude Products 20,000 barrels/day Building a Strong America Diesel fuel, market locally ATBs Diesel Naphtha and ATBs, rail 1/3 1/3 PIPELINE Located near Dickinson, ND Mechanically…
  22. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 22
    Outlook North Dakota Diesel Demand 90 80 70 60 50 40 30 20 10 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Third-Party Consulting Firm Actual Forecast Oil field and agriculture demand are the main…
  23. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 23
    DPR Strategically Sound Longer Term Go-live market challenges Increased crude cost due to narrowing Bakken basis differential Markets for diesel/naphtha currently depressed Decreased oil field activity reducing diesel demand…
  24. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 24
    Pipeline Outlook Be the leading Bakken pipeline and a growing midstream provider Accelerate WBIs growth Develop midstream culture Aggressively pursue Bakken growth Explore expansion into other basins Improve existing operations…
  25. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 25
    Construction Materials & Services Building a Strong America Materials & Services26
  26. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 26
    Building Momentum 140 Construction Combined Earnings 121 117 120 114 103 100 Margin expansion 80 11% earnings growth 80 73 71 on 5% revenue growth for 2014 60 48 48 compared to 2013 40 20 0 (Millions) 2007 2008 2009 2010 2011…
  27. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 27
    Business Overview Construction Materials Building a Strong America Top 10 U.S. aggregate and sand and gravel producer Increasingly valuable aggregate reserves totaling 1.1 billion tons in strategic locations Vertically integrated…
  28. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 28
    Strong Markets Operations in 10 of the Top 16 Markets Rank State Rank State Ranked by Business 1 ND 9 NY Insider in 7 categories: 2 CO 10 OR GDP per capita 3 DC 11 CA Unemployment rate 4 TX 12 FL Avg. weekly wages 5 WA 13 WY 6 MA…
  29. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 29
    Economic Indicators Year-over-year data June 2014 June 2015 Housing Starts 8.8% 29.9% Building Permits 8.6% 29.4% Total Construction Spending 5.5% 12.0% Pvt. Construction Spending 9.2% 13.7% Pub. Construction Spending (2.9%) 8.0%…
  30. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 30
    South Region TXDOT letting budget for 2015 and 2016 is 7 billion TX Prop 1 in Texas provides additional 1.7 billion to State Highway Fund in 2015 Recently secured 27 million highway project in Waco Large LNG projects moving forward…
  31. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 31
    North Central Region ND MN ND approved 1.1 billion surge bill to fund infrastructure improvements, on top of 2.2 billion SD DOT road budget IA NE Working on two 24 million highway jobs in the Bakken Iowa passed 10-cent gas tax…
  32. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 32
    Pacific Region AK CA 5.3 billion light rail system under construction through 2018 in Hawaii Hawaiian ready-mix market looking up as residential construction grows HI Northern California markets are improving, with At a glance…
  33. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 33
    Intermountain Region MT Montana and Idaho are experiencing strong housing recovery ID WY 28 million project at Mountain Home AFB in Idaho Idaho passed 7-cent gas tax increase (94 million/year) At a glance Wyoming passed 10-cent…
  34. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 34
    Northwest Region WA Washington passed 16-year, 16 billion tax and fee increase OR Oregon railroad work growing Subdivisions and tech industry in Central Oregon 5 billion LNG project in Coos Bay is moving forward At a glance…
  35. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 35
    Growing Backlog 900 Record 833 800 764 730 700 636 600 Backlog (millions) 500 400 300 200 100 0 2012 2013 2014 2015 Note: As of June 30 Building a Strong America Materials & Contracting 36
  36. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 36
    Positive Momentum Building a Strong America 80 79.9 70 60 59.9 Earnings (millions) 50 Materials & Contracting 50.9 40 30 32.4 20 10 0 2012 2013 2014 * 6/30/2015 TTM* Earnings *Adjusted earnings.…
  37. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 37
    Business Overview Construction Services Building a Strong America Ranked No. 10 on The Top 600 Specialty Contractors List 2014 second consecutive year of record earnings 429 million backlog at June 30, 2015 Highly skilled…
  38. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 38
    Outside Project Success Building a Strong America Capital Electric Line Builders Building on past success Secured Transource project Expanding customer base Loy Clark 5-year contract extension on a master service agreement…
  39. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 39
    Inside Project Success Building a Strong America Mission critical Current: Northwest, Las Vegas & Midwest Solar & renewables Government facilities U.S. Department of Defense top contractor Healthcare Mission Critical…
  40. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 40
    Industrial Project Success Building a Strong America Petrochemical refinery industry Turnarounds Capital projects Maintenance Power generation & distribution Automotive Instrumentation & controls Services 41
  41. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 41
    Equipment Success Building a Strong America Wagner-Smith Equipment Completed new Burleson facility Additional manufacturing capacity Services 42
  42. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 42
    Financial Success Building a Strong America Operating company Recent wins Capital Electric Construction Governmental facility Oregon Electric Group Various mission critical projects Bombard Electric Commercial & residential solar…
  43. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 43
    Positive Momentum Building a Strong America 60 500 459 54.5 429 50 52.2 400 40 325 Earnings (millions) Backlog (millions) 38.4 300 305 36.8 30 200 20 100 10 Services 0 0 2012 2013 2014 6/30/2015 TTM*…
  44. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 44
    Construction Outlook 1.3 billion combined work backlog as of June 30 Record construction materials group backlog of 833 million Construction services backlog 108 million higher than first quarter, positioning for stronger 2016 Revenue…
  45. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 45
    Fidelity Exploration & Production Marketing process continues Assuming a sale transaction by year end 2015 Continuing focus on maximizing value of company and lowering cost structure General and administrative costs are 25% lower…
  46. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 46
    Consolidated Results - Adjusted YTD June 30 Building a Strong America Adjusted Earnings Adjusted EPS RESOURCES (millions) 69.6 0.36 56.5 0.29 2014 2015 2014 2015 Reconciliation 2014 2015 GAAP earnings 110.4 (535.9)…
  47. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 47
    Strong Financial Position 2014 Building a Strong America 61% Equity / 39% Debt RESOURCES 6,000 5,000 Debt/Equity (Millions) 4,000 3,000 2,000 1,000 0 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014…
  48. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 48
    Credit & Liquidity At June 30, 2015 (Millions) Capacity Outstanding Available Commercial Paper Programs 825 585 240 40% Revolving Credit Agreements 165 42 97 * Construction Total Exploration 990 627 337 24% & Production…
  49. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 49
    Dividend Growth 78 consecutive years of 0.73 quarterly dividend payments Dividend increased November 2014, 0.51 marking 24 consecutive years of increases Committed to paying a competitive dividend 2005 2006 2007 2008 2009 2010…
  50. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 50
    Outlook Positioned for long-term growth Building a Strong America Utility growth opportunities expected to result in substantial rate base RESOURCES growth Driven by customer and load growth higher than national averages Timely…
  51. October 2015 Investor Presentation – MDU Resources Group Inc. – slide 51
    RESOURCES Group, Inc . Building a Strong America 52

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