BISMARCK, N.D., May 5, 2021 /PRNewswire/ -- MDU Resources Group,
Inc. (NYSE: MDU) today reported first quarter earnings of
$52.1 million, or 26 cents per share, compared to first quarter
2020 earnings of $25.1 million, or
13 cents per share.
"Our businesses are off to a very strong start in 2021," said
David L. Goodin, president and CEO
of MDU Resources. "We had record earnings at our construction
services and pipeline businesses, increased natural gas sales
volumes at our utility operations and a stronger start to the year
at our construction materials business. With the strong first
quarter results and our expectation of continuing robust demand for
our products and services, we are raising the lower end of our 2021
earnings guidance.
"As we continue Building a Strong America, we are
well-positioned to capitalize on a federal infrastructure funding
package and believe it will provide substantial longer-term
opportunities across our two platforms of businesses."
Business Unit Highlights
Regulated Energy
Delivery
The electric and natural gas utility earned
$46.9 million in the first quarter,
compared to $43.7 million in the
first quarter of 2020. Rate relief in several natural gas utility
jurisdictions contributed to the increase in earnings, as well as
higher natural gas sales volumes. Natural gas sales volumes were
1.8% higher and electric sales volumes were 2.2% lower compared to
the first quarter last year. The company's electric and natural gas
systems continued to perform well, providing safe and reliable
service to customers during extreme winter conditions experienced
in February across the country.
Earnings at the pipeline business were a record $8.9 million for the first quarter, compared to
$7.4 million in the first quarter
last year. The earnings increase is primarily the result of higher
customer demand for natural gas storage services. The company
continues to await approval from the Federal Energy Regulatory
Commission for its North Bakken Expansion project, a planned
pipeline extension in North Dakota
that would be able to transport 250 million cubic feet of natural
gas per day and reduce flaring in the Bakken. The project is
supported by long-term agreements with non-affiliated customers.
The company expected final regulatory approval in the first quarter
and is adjusting its construction schedule to reflect the delay,
which will result in a later in-service date for the project.
Construction Materials and Services
The construction
services business had record first quarter earnings of $29.8 million, compared to $16.8 million in first quarter 2020. Results in
2020 included a negative $6.7
million, after tax, out-of-period adjustment to correct
revenue recognition on a construction contract. The company
continues to see particularly strong demand for high tech and
utility-related construction services. Its backlog of work at
March 31 set a first quarter record
at $1.273 billion, compared to
$1.267 billion at March 31 last year.
The construction materials business experienced a seasonal loss
of $30.8 million in the first
quarter, compared to a loss of $38.2
million in the first quarter of 2020. Favorable weather
allowed for an earlier start on the construction season in certain
areas compared to last year. As previously announced, this business
during the first quarter acquired an aggregates operation in
Portland, Oregon, and also
received a key permit to expand operations at a Texas aggregate quarry. The construction
materials backlog of work at March 31
was $819 million, compared to
$905 million at March 31 last year.
Guidance
MDU Resources has raised the lower end of its
guidance and now expects earnings per share in the range of
$2.00 to $2.15 in 2021, based on these assumptions:
- Normal weather, including precipitation and temperatures,
across all company markets.
- Continued recognition as essential service providers across all
company markets.
- Electric and natural gas customer growth continuing at a rate
of 1-2% annually.
- Earnings before interest, taxes, depreciation and amortization
(EBITDA) in the range of $875 million
to $925 million.
- Construction materials revenues in the range of $2.1 billion to $2.3
billion and construction services revenues in the range of
$2.1 billion to $2.3 billion, with margins comparable to or
slightly higher than 2020.
The company plans to invest $811
million for capital projects in 2021; future acquisitions or
divestitures are not included in this amount and would be
incremental to 2021 results.
Corporate Strategy
MDU Resources' strategy is to
deliver superior value with a two-platform model, regulated energy
delivery and construction materials and services businesses, while
also pursuing organic growth opportunities and using a disciplined
approach to strategic acquisitions of well-managed companies and
properties. The company, on a consolidated basis, anticipates 5-8%
long-term compound annual growth on earnings per share.
Conference Call
MDU Resources will discuss first
quarter results on a webcast at 2 p.m.
EDT May 6. The event can be
accessed at www.mdu.com. Webcast and audio replays will be
available through May 20 at
855-859-2056, or 404-537-3406 for international callers, conference
ID 2374997.
About MDU Resources
MDU Resources Group, Inc., a
member of the S&P MidCap 400 index and the S&P High-Yield
Dividend Aristocrats index, is Building a Strong America® by
providing essential products and services through its regulated
energy delivery and construction materials and services businesses.
For more information about MDU Resources, see the company's website
at www.mdu.com or contact the Investor Relations Department at
investor@mduresources.com.
Media Contact: Laura Lueder, manager of
communications and public relations, 701-530-1095
Financial Contact: Jason Vollmer, vice president and
chief financial officer, 701-530-1755
Forward-Looking Statements
The information contained in this press release highlights
the key growth strategies, projections and certain assumptions for
the company and its subsidiaries and other matters for each of the
company's businesses. Many of these highlighted statements and
other statements not historical in nature are "forward-looking
statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934. Although the company believes that its
expectations are based on reasonable assumptions, there is no
assurance that the company's projections, including estimates for
growth and financial guidance, will in fact be achieved. Please
refer to assumptions contained in this press release, as well as
the various important factors listed in Part I, Item 1A - Risk
Factors in the company's most recent Form 10-K and subsequent
filings with the SEC.
Changes in such assumptions and factors could cause actual
future results to differ materially from growth and financial
guidance. All forward-looking statements in this press release are
expressly qualified by such cautionary statements and by reference
to the underlying assumptions. Undue reliance should not be placed
on forward-looking statements, which speak only as of the date they
are made. The company does not undertake to update forward-looking
statements, whether as a result of new information, future events
or otherwise.
Throughout this press release, the company presents financial
information prepared in accordance with GAAP, as well as EBITDA,
EBITDA from continuing operations, and adjusted gross margin, which
are considered non-GAAP financial measures. The use of these
non-GAAP financial measures should not be construed as alternatives
to earnings, operating income or operating cash flows. The company
believes the use of these non-GAAP financial measures are
beneficial in evaluating the company's financial performance due to
its diverse operations. Please refer to the "Non-GAAP Financial
Measures" section contained in this document for additional
information.
Performance
Summary
|
|
Business
Line
|
First
Quarter 2021
Earnings
|
First
Quarter 2020
Earnings
|
|
(In millions, except
per share amounts)
|
Regulated energy
delivery
|
$
|
55.8
|
|
$
|
51.1
|
|
Construction
materials and services
|
(1.0)
|
|
(21.4)
|
|
Other
|
(2.7)
|
|
(4.2)
|
|
Income from
continuing operations
|
52.1
|
|
25.5
|
|
Loss from
discontinued operations, net of tax
|
—
|
|
(.4)
|
|
Net income
|
$
|
52.1
|
|
$
|
25.1
|
|
Earnings per
share:
|
|
|
Income from continuing
operations
|
$
|
.26
|
|
$
|
.13
|
|
Discontinued
operations, net of tax
|
—
|
|
—
|
|
Earnings per
share
|
$
|
.26
|
|
$
|
.13
|
|
Consolidated
Statements of Income
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
|
(In millions, except
per share amounts)
|
Operating
revenues:
|
(Unaudited)
|
Electric, natural gas
distribution and regulated pipeline
|
$
|
442.4
|
|
$
|
418.7
|
|
Non-regulated
pipeline, construction materials and contracting, construction
services and other
|
785.5
|
|
778.7
|
|
Total operating
revenues
|
1,227.9
|
|
1,197.4
|
|
Operating
expenses:
|
|
|
Operation and
maintenance:
|
|
|
Electric, natural gas
distribution and regulated pipeline
|
94.4
|
|
87.6
|
|
Non-regulated
pipeline, construction materials and contracting, construction
services and other
|
717.3
|
|
733.4
|
|
Total operation and
maintenance
|
811.7
|
|
821.0
|
|
Purchased natural gas
sold
|
176.2
|
|
165.4
|
|
Depreciation,
depletion and amortization
|
73.7
|
|
69.2
|
|
Taxes, other than
income
|
62.5
|
|
64.1
|
|
Electric fuel and
purchased power
|
18.6
|
|
20.6
|
|
Total operating
expenses
|
1,142.7
|
|
1,140.3
|
|
Operating
income
|
85.2
|
|
57.1
|
|
Other income
(expense)
|
3.3
|
|
(1.0)
|
|
Interest
expense
|
23.4
|
|
24.6
|
|
Income before income
taxes
|
65.1
|
|
31.5
|
|
Income
taxes
|
13.0
|
|
6.0
|
|
Income from
continuing operations
|
52.1
|
|
25.5
|
|
Loss from
discontinued operations, net of tax
|
—
|
|
(.4)
|
|
Net income
|
$
|
52.1
|
|
$
|
25.1
|
|
|
|
|
Earnings per share –
basic:
|
|
|
Income from continuing
operations
|
$
|
.26
|
|
$
|
.13
|
|
Discontinued
operations, net of tax
|
—
|
|
—
|
|
Earnings per share –
basic
|
$
|
.26
|
|
$
|
.13
|
|
Earnings per share –
diluted:
|
|
|
Income from continuing
operations
|
$
|
.26
|
|
$
|
.13
|
|
Discontinued
operations, net of tax
|
—
|
|
—
|
|
Earnings per share –
diluted
|
$
|
.26
|
|
$
|
.13
|
|
Weighted average
common shares outstanding – basic
|
200.7
|
|
200.4
|
|
Weighted average
common shares outstanding – diluted
|
201.0
|
|
200.5
|
|
Selected Cash
Flows Information
|
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
2020
|
|
(In
millions)
|
Operating
activities:
|
|
|
Net cash provided by
continuing operations
|
$
|
95.6
|
|
$
|
79.7
|
|
Net cash used in
discontinued operations
|
—
|
|
(.4)
|
|
Net cash provided by
operating activities
|
95.6
|
|
79.3
|
|
Investing
activities:
|
|
|
Net cash used in
continuing operations
|
(106.3)
|
|
(202.5)
|
|
Net cash provided by
discontinued operations
|
—
|
|
—
|
|
Net cash used in
investing activities
|
(106.3)
|
|
(202.5)
|
|
Financing
activities:
|
|
|
Net cash provided by
continuing operations
|
6.2
|
|
173.2
|
|
Net cash provided by
discontinued operations
|
—
|
|
—
|
|
Net cash provided by
financing activities
|
6.2
|
|
173.2
|
|
Increase (decrease)
in cash and cash equivalents
|
(4.5)
|
|
50.0
|
|
Cash and cash
equivalents - beginning of year
|
59.6
|
|
66.5
|
|
Cash and cash
equivalents - end of period
|
$
|
55.1
|
|
$
|
116.5
|
|
Capital
Expenditures
|
|
|
Business
Line
|
2021
Estimated
|
2022
Estimated
|
2023
Estimated
|
2021 - 2025
Total
Estimated
|
|
(In
millions)
|
Regulated energy
delivery
|
|
|
|
|
Electric
|
$
|
116
|
|
$
|
182
|
|
$
|
109
|
|
$
|
606
|
|
Natural gas
distribution
|
212
|
|
225
|
|
188
|
|
970
|
|
Pipeline
|
230
|
|
74
|
|
110
|
|
508
|
|
|
558
|
|
481
|
|
407
|
|
2,084
|
|
Construction
materials and services
|
|
|
|
|
Construction
services
|
46
|
|
34
|
|
35
|
|
187
|
|
Construction materials
and contracting
|
202
|
|
154
|
|
150
|
|
742
|
|
|
248
|
|
188
|
|
185
|
|
929
|
|
Other
|
5
|
|
4
|
|
3
|
|
19
|
|
Total capital
expenditures
|
$
|
811
|
|
$
|
673
|
|
$
|
595
|
|
$
|
3,032
|
|
|
|
|
|
|
Note: Total capital
expenditures are presented on a gross basis.
|
Capital expenditures for 2021 include line-of-sight
opportunities at the company's business segments. Future
acquisitions would be incremental to the outlined capital program.
Operating cash flows are projected to be $600 million to
$650 million in 2021.
Non-GAAP Financial Measures
The company, in addition
to presenting its earnings in conformity with GAAP, has provided
non-GAAP financial measures of EBITDA by operating segment and
EBITDA from continuing operations. The company defines EBITDA as
net income (loss) attributable to the operating segment before
interest; taxes; and depreciation, depletion and amortization; and
EBITDA from continuing operations as income (loss) from continuing
operations before interest; taxes; and depreciation, depletion and
amortization.
The company presents EBITDA by operating segment and EBITDA from
continuing operations on a consolidated basis in this news release.
The company believes EBITDA and EBITDA from continuing operations
are useful financial measures in providing meaningful information
about operational efficiency compared to the company's peers by
excluding the impacts of differences in tax jurisdictions and
structures, debt levels and capital investment. The presentation of
EBITDA and EBITDA from continuing operations also is provided for
investment professionals who use such metrics in their analyses.
The investment community often uses these metrics to assess the
operating performance of a company's business and to provide a
consistent comparison of performance from period to period. The
company's management uses the non-GAAP financial measures in
conjunction with GAAP results when evaluating the company's
operating results and calculating compensation packages. Non-GAAP
financial measures are not standardized; therefore, it may not be
possible to compare such financial measures with other companies'
non-GAAP financial measures having the same or similar names. The
presentation of this additional information is not meant to be
considered a substitution for financial measures prepared in
accordance with GAAP. The company strongly encourages investors to
review the consolidated financial statements in their entirety and
to not rely on any single financial measure.
The following table provides a reconciliation of consolidated
GAAP net income to EBITDA from continuing operations. The
reconciliation for each operating segment's EBITDA is included
within each operating segment's condensed income statement.
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
|
(In
millions)
|
Net income
|
$
|
52.1
|
|
$
|
25.1
|
|
Loss from discontinued
operations, net of tax
|
—
|
|
.4
|
|
Income from
continuing operations
|
52.1
|
|
25.5
|
|
Adjustments:
|
|
|
Interest
expense
|
23.4
|
|
24.6
|
|
Income
taxes
|
13.0
|
|
6.0
|
|
Depreciation,
depletion and amortization
|
73.7
|
|
69.2
|
|
EBITDA from
continuing operations
|
$
|
162.2
|
|
$
|
125.3
|
|
The discussion that follows also includes adjusted gross margin,
which is considered a non-GAAP financial measure as it relates to
the company's electric and natural gas distribution segments.
Adjusted gross margin can be used in addition to operating revenues
and operating expenses when evaluating the results of operations
for these segments. Adjusted gross margin for the electric and
natural gas distribution segments is calculated by adding back
adjustments to operating income (loss). These add-back adjustments
include operation and maintenance expense; depreciation, depletion
and amortization expense; and certain taxes, other than income.
The presentation of adjusted gross margin is intended to be a
helpful supplemental financial measure for investors' understanding
of the segments' operating performance. This non-GAAP financial
measure should not be considered as an alternative to, or more
meaningful than, GAAP financial measures such as operating income
(loss) or net income (loss). The company's adjusted gross margin
may not be comparable to other companies' gross margin
measures.
Adjusted gross margin includes operating revenues less the cost
of electric fuel and purchased power, purchased natural gas sold
and certain taxes, other than income. These taxes, other than
income, included as a reduction to adjusted gross margin relate to
revenue taxes. These segments pass on to their customers the
increases and decreases in the wholesale cost of power purchases,
natural gas and other fuel supply costs in accordance with
regulatory requirements. As such, the segments' revenues are
directly impacted by the fluctuations in such commodities. Revenue
taxes, which are passed back to customers, fluctuate with revenues
as they are calculated as a percentage of revenues. For these
reasons, period over period, the segments' operating income (loss)
is generally not impacted. The company's management believes the
adjusted gross margin is a useful supplemental financial measure as
these items are included in both operating revenues and operating
expenses. The company's management also believes that adjusted
gross margin and the remaining operating expenses that calculate
operating income (loss) are useful in assessing the company's
utility performance as management has the ability to influence
control over the remaining operating expenses.
The following tables provide reconciliations of the company's
electric and natural gas distribution segments' operating income to
adjusted gross margin.
Electric
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
|
(In millions)
|
Operating
income
|
$
|
13.9
|
|
$
|
14.9
|
|
Adjustments:
|
|
|
Operating
expenses:
|
|
|
Operation and
maintenance
|
31.3
|
|
30.7
|
|
Depreciation,
depletion and amortization
|
16.1
|
|
15.5
|
|
Taxes, other than
income
|
4.7
|
|
4.3
|
|
Total
adjustments
|
52.1
|
|
50.5
|
|
Adjusted gross
margin
|
$
|
66.0
|
|
$
|
65.4
|
|
Natural Gas
Distribution
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
|
(In millions)
|
Operating
income
|
$
|
53.6
|
|
$
|
50.0
|
|
Adjustments:
|
|
|
Operating
expenses:
|
|
|
Operation and
maintenance
|
51.2
|
|
46.0
|
|
Depreciation,
depletion and amortization
|
22.5
|
|
20.8
|
|
Taxes, other than
income
|
7.0
|
|
6.1
|
|
Total
adjustments
|
80.7
|
|
72.9
|
|
Adjusted gross
margin
|
$
|
134.3
|
|
$
|
122.9
|
|
Regulated Energy
Delivery
|
|
|
|
|
Electric
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
% Change
|
|
(In
millions)
|
Operating
revenues
|
$
|
84.8
|
|
$
|
86.1
|
|
(2)
|
%
|
Electric fuel and
purchased power
|
18.6
|
|
20.6
|
|
(10)
|
%
|
Taxes, other than
income
|
.2
|
|
.1
|
|
100
|
%
|
Adjusted gross
margin
|
66.0
|
|
65.4
|
|
1
|
%
|
Operating
expenses:
|
|
|
|
Operation and
maintenance
|
31.3
|
|
30.7
|
|
2
|
%
|
Depreciation,
depletion and amortization
|
16.1
|
|
15.5
|
|
4
|
%
|
Taxes, other than
income
|
4.7
|
|
4.3
|
|
9
|
%
|
Total operating
expenses
|
52.1
|
|
50.5
|
|
3
|
%
|
Operating
income
|
13.9
|
|
14.9
|
|
(7)
|
%
|
Other income
(expense)
|
.5
|
|
(.4)
|
|
225
|
%
|
Interest
expense
|
6.5
|
|
6.8
|
|
(4)
|
%
|
Income before
taxes
|
7.9
|
|
7.7
|
|
3
|
%
|
Income tax
benefit
|
(2.8)
|
|
(3.7)
|
|
24
|
%
|
Net income
|
$
|
10.7
|
|
$
|
11.4
|
|
(6)
|
%
|
Adjustments:
|
|
|
|
Interest
expense
|
6.5
|
|
6.8
|
|
(4)
|
%
|
Income tax
benefit
|
(2.8)
|
|
(3.7)
|
|
24
|
%
|
Depreciation,
depletion and amortization
|
16.1
|
|
15.5
|
|
4
|
%
|
EBITDA
|
$
|
30.5
|
|
$
|
30.0
|
|
2
|
%
|
Operating
Statistics
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
2020
|
Retail sales (million
kWh):
|
|
|
Residential
|
334.9
|
|
330.6
|
|
Commercial
|
361.8
|
|
375.8
|
|
Industrial
|
144.5
|
|
153.0
|
|
Other
|
19.2
|
|
20.4
|
|
|
860.4
|
|
879.8
|
|
Average cost of
electric fuel and purchased power per kWh
|
$
|
.019
|
|
$
|
.021
|
|
|
|
|
|
|
|
|
The electric business reported net income of $10.7 million in the first quarter of 2021,
compared to $11.4 million for the
same period in 2020. The decrease in net income was driven by
higher operating expenses, primarily payroll-related costs and
depreciation, depletion and amortization expense from transmission
projects placed in service. Partially offsetting the decrease was
higher other income, the result of increased investment returns on
certain benefit plans. Adjusted gross margin increased from higher
transmission revenues and higher revenues associated with
transmission interconnect upgrades, which was partially offset by a
2.2% decrease in electric retail sales volumes, primarily from
lower commercial and industrial volumes.
The electric business's EBITDA increased $500,000 in the first quarter of 2021, compared
to 2020, primarily the result of higher other income and higher
adjusted gross margin partially offset by higher operation and
maintenance expense, as previously discussed.
Natural Gas
Distribution
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
% Change
|
|
(In
millions)
|
Operating
revenues
|
$
|
350.4
|
|
$
|
326.6
|
|
7
|
%
|
Purchased natural gas
sold
|
202.2
|
|
190.5
|
|
6
|
%
|
Taxes, other than
income
|
13.9
|
|
13.2
|
|
5
|
%
|
Adjusted gross
margin
|
134.3
|
|
122.9
|
|
9
|
%
|
Operating
expenses:
|
|
|
|
Operation and
maintenance
|
51.2
|
|
46.0
|
|
11
|
%
|
Depreciation,
depletion and amortization
|
22.5
|
|
20.8
|
|
8
|
%
|
Taxes, other than
income
|
7.0
|
|
6.1
|
|
15
|
%
|
Total operating
expenses
|
80.7
|
|
72.9
|
|
11
|
%
|
Operating
income
|
53.6
|
|
50.0
|
|
7
|
%
|
Other
income
|
1.7
|
|
.3
|
|
NM
|
|
Interest
expense
|
9.2
|
|
9.2
|
|
—
|
%
|
Income before
taxes
|
46.1
|
|
41.1
|
|
12
|
%
|
Income tax
expense
|
9.9
|
|
8.8
|
|
13
|
%
|
Net income
|
$
|
36.2
|
|
$
|
32.3
|
|
12
|
%
|
Adjustments:
|
|
|
|
Interest
expense
|
9.2
|
|
9.2
|
|
—
|
%
|
Income tax
expense
|
9.9
|
|
8.8
|
|
13
|
%
|
Depreciation,
depletion and amortization
|
22.5
|
|
20.8
|
|
8
|
%
|
EBITDA
|
$
|
77.8
|
|
$
|
71.1
|
|
9
|
%
|
* NM - not
meaningful
|
Operating
Statistics
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
Volumes
(MMdk)
|
|
|
Retail
sales:
|
|
|
Residential
|
28.8
|
|
27.7
|
|
Commercial
|
18.6
|
|
18.8
|
|
Industrial
|
1.5
|
|
1.5
|
|
|
48.9
|
|
48.0
|
|
Transportation
sales:
|
|
|
Commercial
|
.7
|
|
.7
|
|
Industrial
|
43.9
|
|
45.6
|
|
|
44.6
|
|
46.3
|
|
Total
throughput
|
93.5
|
|
94.3
|
|
Average cost of
natural gas per dk
|
$
|
4.13
|
|
$
|
3.97
|
|
|
|
|
|
|
|
|
The natural gas distribution business reported net income of
$36.2 million in the first quarter of
2021, compared to $32.3 million for
the same period in 2020. The increase in net income was primarily
higher adjusted gross margin due to approved rate relief in certain
jurisdictions, benefits from weather normalization and decoupling
mechanisms, and a 1.8% increase in natural gas retail sales
volumes, primarily to residential customers. Other income also
increased during the quarter, the result of higher investment
returns on certain benefit plans. Partially offsetting the increase
in net income was higher operation and maintenance expense,
primarily higher payroll-related costs. Depreciation, depletion and
amortization expense also increased during the quarter, the result
of growth and replacement projects placed in service.
The natural gas distribution business's EBITDA increased
$6.7 million in the first quarter of
2021, compared to 2020, primarily the result of higher adjusted
gross margin and higher other income, partially offset by higher
operation and maintenance expense, as previously discussed.
Pipeline
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
% Change
|
|
(In millions)
|
Operating
revenues
|
$
|
36.1
|
|
$
|
35.8
|
|
1
|
%
|
Operating
expenses:
|
|
|
|
Operation and
maintenance
|
15.1
|
|
15.0
|
|
1
|
%
|
Depreciation,
depletion and amortization
|
5.2
|
|
5.8
|
|
(10)
|
%
|
Taxes, other than
income
|
3.3
|
|
3.6
|
|
(8)
|
%
|
Total operating
expenses
|
23.6
|
|
24.4
|
|
(3)
|
%
|
Operating
income
|
12.5
|
|
11.4
|
|
10
|
%
|
Other
income
|
.9
|
|
—
|
|
NM
|
|
Interest
expense
|
2.0
|
|
1.9
|
|
5
|
%
|
Income before
taxes
|
11.4
|
|
9.5
|
|
20
|
%
|
Income tax
expense
|
2.5
|
|
2.1
|
|
19
|
%
|
Net income
|
$
|
8.9
|
|
$
|
7.4
|
|
21
|
%
|
Adjustments:
|
|
|
|
Interest
expense
|
2.0
|
|
1.9
|
|
5
|
%
|
Income tax
expense
|
2.5
|
|
2.1
|
|
19
|
%
|
Depreciation,
depletion and amortization
|
5.2
|
|
5.8
|
|
(10)
|
%
|
EBITDA
|
$
|
18.6
|
|
$
|
17.2
|
|
8
|
%
|
* NM - not
meaningful
|
Operating
Statistics
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
Transportation volumes
(MMdk)
|
110.8
|
|
111.7
|
|
Natural gas gathering
volumes (MMdk)
|
—
|
|
3.3
|
|
|
|
|
Customer natural gas
storage balance (MMdk):
|
|
|
Beginning of
period
|
25.5
|
|
16.2
|
|
Net
withdrawal
|
(20.3)
|
|
(12.4)
|
|
End of
period
|
5.2
|
|
3.8
|
|
The pipeline business reported net income of $8.9 million in the first quarter of 2021,
compared to $7.4 million for the
same period in 2020. The increase in net income was driven by
higher demand for the company's storage services. Other income also
increased during the quarter, the result of higher allowance for
funds used during construction and higher investment returns on
certain benefit plans.
The pipeline business's EBITDA increased $1.4 million in the first quarter of 2021,
compared to 2020, primarily from higher storage-related
revenues, as previously discussed.
Construction
Materials and Services
|
|
|
|
|
Construction
Services
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
% Change
|
|
(In
millions)
|
Operating
revenues
|
$
|
518.5
|
|
$
|
514.7
|
|
1
|
%
|
Cost of
sales:
|
|
|
|
Operation and
maintenance
|
427.2
|
|
436.2
|
|
(2)
|
%
|
Depreciation,
depletion and amortization
|
4.0
|
|
3.9
|
|
3
|
%
|
Taxes, other than
income
|
19.4
|
|
23.4
|
|
(17)
|
%
|
Total cost of
sales
|
450.6
|
|
463.5
|
|
(3)
|
%
|
Gross
margin
|
67.9
|
|
51.2
|
|
33
|
%
|
Selling, general and
administrative expense:
|
|
|
|
Operation and
maintenance
|
24.6
|
|
23.9
|
|
3
|
%
|
Depreciation,
depletion and amortization
|
1.3
|
|
1.9
|
|
(32)
|
%
|
Taxes, other than
income
|
1.7
|
|
1.6
|
|
6
|
%
|
Total selling, general
and administrative expense
|
27.6
|
|
27.4
|
|
1
|
%
|
Operating
income
|
40.3
|
|
23.8
|
|
69
|
%
|
Other
income
|
.2
|
|
.1
|
|
100
|
%
|
Interest
expense
|
.9
|
|
1.2
|
|
(25)
|
%
|
Income before
taxes
|
39.6
|
|
22.7
|
|
74
|
%
|
Income tax
expense
|
9.8
|
|
5.9
|
|
66
|
%
|
Net income
|
$
|
29.8
|
|
$
|
16.8
|
|
77
|
%
|
Adjustments:
|
|
|
|
Interest
expense
|
.9
|
|
1.2
|
|
(25)
|
%
|
Income tax
expense
|
9.8
|
|
5.9
|
|
66
|
%
|
Depreciation,
depletion and amortization
|
5.3
|
|
5.8
|
|
(9)
|
%
|
EBITDA
|
$
|
45.8
|
|
$
|
29.7
|
|
54
|
%
|
The construction services business reported net income of
$29.8 million in the first
quarter of 2021, compared to $16.8 million for the same period in 2020.
The increase in net income was driven by higher outside specialty
contracting workloads and margins from strong utility customer
demand. Inside specialty contracting workloads decreased from lower
customer demand for refinery projects. High-tech project demand
remained strong for the inside electrical contracting business
throughout the quarter. Income tax expense increased as a result of
higher taxable income.
The prior year results included a negative $6.7 million out-of-period adjustment, after tax,
made to correct revenue recognition on a project.
The construction services business's EBITDA increased
$16.1 million in the first quarter of
2021, compared to 2020, primarily a result of the previously
discussed increase in outside specialty contracting workloads and
strong margins across the segment.
Construction
Materials and Contracting
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
% Change
|
|
(In
millions)
|
Operating
revenues
|
$
|
265.7
|
|
$
|
262.2
|
|
1
|
%
|
Cost of
sales:
|
|
|
|
Operation and
maintenance
|
243.2
|
|
250.7
|
|
(3)
|
%
|
Depreciation,
depletion and amortization
|
22.3
|
|
19.6
|
|
14
|
%
|
Taxes, other than
income
|
9.8
|
|
9.5
|
|
3
|
%
|
Total cost of
sales
|
275.3
|
|
279.8
|
|
(2)
|
%
|
Gross
margin
|
(9.6)
|
|
(17.6)
|
|
45
|
%
|
Selling, general and
administrative expense:
|
|
|
|
Operation and
maintenance
|
21.7
|
|
22.4
|
|
(3)
|
%
|
Depreciation,
depletion and amortization
|
1.1
|
|
1.0
|
|
10
|
%
|
Taxes, other than
income
|
2.5
|
|
2.3
|
|
9
|
%
|
Total selling, general
and administrative expense
|
25.3
|
|
25.7
|
|
(2)
|
%
|
Operating
loss
|
(34.9)
|
|
(43.3)
|
|
19
|
%
|
Other
expense
|
(.1)
|
|
(1.1)
|
|
91
|
%
|
Interest
expense
|
4.7
|
|
5.2
|
|
(10)
|
%
|
Loss before income
taxes
|
(39.7)
|
|
(49.6)
|
|
20
|
%
|
Income tax
benefit
|
(8.9)
|
|
(11.4)
|
|
22
|
%
|
Net loss
|
$
|
(30.8)
|
|
$
|
(38.2)
|
|
19
|
%
|
Adjustments:
|
|
|
|
Interest
expense
|
4.7
|
|
5.2
|
|
(10)
|
%
|
Income tax
benefit
|
(8.9)
|
|
(11.4)
|
|
22
|
%
|
Depreciation,
depletion and amortization
|
23.4
|
|
20.6
|
|
14
|
%
|
EBITDA
|
$
|
(11.6)
|
|
$
|
(23.8)
|
|
51
|
%
|
Operating
Statistics
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
Sales
(000's):
|
|
|
Aggregates
(tons)
|
4,808
|
|
4,217
|
|
Asphalt
(tons)
|
294
|
|
227
|
|
Ready-mixed concrete
(cubic yards)
|
732
|
|
704
|
|
The construction materials and contracting business reported a
seasonal loss of $30.8 million in the
first quarter of 2021, compared to a loss of $38.2 million in the same period in 2020. The
decreased loss was the result of higher gross margin from increased
materials pricing as well as higher contracting margins. Favorable
weather in certain regions allowed for an early start to the
construction season, which drove increases in material revenues.
Selling, general and administrative expense decreased during the
quarter, the result of lower bad debt expenses, offset in part by
increased payroll-related costs.
The construction materials and contracting business's EBITDA
increased $12.2 million in the first
quarter of 2021, compared to 2020. The increased EBITDA was the
result of higher gross margins, as previously discussed.
Other
|
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
% Change
|
|
(In
millions)
|
Operating
revenues
|
$
|
3.3
|
|
$
|
3.0
|
|
10
|
%
|
Operating
expenses:
|
|
|
|
Operation and
maintenance
|
2.3
|
|
2.0
|
|
15
|
%
|
Depreciation,
depletion and amortization
|
1.2
|
|
.7
|
|
71
|
%
|
Total operating
expenses
|
3.5
|
|
2.7
|
|
30
|
%
|
Operating income
(loss)
|
(.2)
|
|
.3
|
|
NM
|
|
Other
income
|
.1
|
|
.1
|
|
—
|
%
|
Interest
expense
|
.1
|
|
.3
|
|
(67)
|
%
|
Income (loss) before
income taxes
|
(.2)
|
|
.1
|
|
NM
|
|
Income tax
expense
|
2.5
|
|
4.3
|
|
(42)
|
%
|
Net loss
|
$
|
(2.7)
|
|
$
|
(4.2)
|
|
36
|
%
|
* NM - not
meaningful
|
The net loss for Other reflects income tax adjustments related
to the consolidated company's annualized estimated tax rate and
higher depreciation, depletion and amortization expense in 2021 for
software placed in service. General and administrative costs and
interest expense previously allocated to the exploration and
production and refining businesses that do not meet the criteria
for income (loss) from discontinued operations also are included in
Other.
Other Financial
Data
|
|
|
|
March 31,
|
|
2021
|
|
2020
|
|
|
(In millions, except
per share amounts)
|
|
(Unaudited)
|
Book value per common
share
|
$
|
15.41
|
|
$
|
14.15
|
|
Market price per
common share
|
$
|
31.61
|
|
$
|
21.50
|
|
Dividend yield
(indicated annual rate)
|
2.7%
|
|
3.9%
|
|
Price/earnings from
continuing operations ratio (12 months ended)
|
15.2x
|
|
13.4x
|
|
Market value as a
percent of book value
|
205.1
|
|
151.9%
|
|
Total
assets
|
$
|
8,069
|
|
$
|
7,851
|
|
Total
equity
|
$
|
3,100
|
|
$
|
2,837
|
|
Total debt
|
$
|
2,303
|
|
$
|
2,455
|
|
Capitalization
ratios:
|
|
|
Total equity
|
57.4%
|
|
53.6%
|
|
Total debt
|
42.6
|
|
46.4
|
|
|
100.0%
|
|
100.0%
|
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/mdu-resources-doubles-first-quarter-earnings-narrows-eps-guidance-301284940.html
SOURCE MDU Resources Group, Inc.