BISMARCK, N.D., May 2, 2024 /PRNewswire/ -- Pipeline has record first quarter earnings, up 82%. Utility first quarter earnings up 4%. Everus reports 8% earnings increase, record first quarter EBITDA and all-time record backlog. 2024 guidance affirmed: Regulated energy delivery earnings in the range of $170 million to $180 million; Everus revenues of $2.9 billion to $3.1 billion with EBITDA of $220 million to $240 million. MDU Resources Group, Inc. (NYSE:MDU) today reported strong first quarter results from its utility, pipeline and construction services businesses, and it affirmed its 2024 guidance. "Thanks to the continued dedication and hard work of our employees providing essential services to our customers, we finished the first quarter with strong performance across our businesses," said Nicole A. Kivisto, president and CEO of MDU Resources. "Our regulated pipeline business had outstanding results, with record first quarter transportation volumes and strong demand for its storage services; rate relief and higher electric retail sales volumes contributed to strong utility results; and Everus closed the quarter with record EBITDA and all-time record backlog. With our strong first quarter results, we are affirming our guidance for 2024." The following table summarizes the company's first quarter results: Three months ended March 31, 2024 2023 (In millions, except per share amounts) Net income 100.9 38.3 Earnings per share, diluted 0.49 0.19 Income from continuing operations1 100.9 83.8 Earnings per share from continuing operations, diluted1 0.49 0.41 Adjusted income from continuing operations2,3 106.6 87.1 Adjusted earnings per share from continuing operations, diluted2,3 0.52 0.43 Regulated energy delivery earnings 73.1 63.8 Construction services Revenue 625.7 754.3 Earnings 28.2 26.1 EBITDA3 46.9 43.5 1 MDU Resources has reported results and the transaction costs and certain interest expenses associated with the spinoff in 2023 of its construction materials and contracting business as discontinued operations. MDU Resources' prior period results have been restated to reflect the spinoff. 2 Adjusted income from continuing operations excludes costs associated with MDU Resources' strategic initiatives. 3 Adjusted income from continuing operations, adjusted earnings per share from continuing operations and EBITDA are non-GAAP financial measures. Additional explanation is provided in the "Non-GAAP Financial Measures" section of this news release.   "We continue to work toward finalizing the spinoff of Everus Construction Group, expected late this year, as we strive to become a pure-play regulated energy delivery business and shift our focus to our CORE strategy," Kivisto said. Additional information about MDU Resources' CORE strategy can be found in the company's March 13 investor day presentation at www.mdu.com. Regulated Energy Delivery HighlightsElectric and Natural Gas UtilityThe electric and natural gas utility earned $58.0 million in the first quarter of 2024, compared to $55.5 million in the first quarter of 2023. Results were driven by: Approved rate relief in certain electric and natural gas jurisdictions. Electric retail sales volumes increasing 8% compared to first quarter 2023, primarily from electricity usage at a data center that began operating in the company's service territory in mid-2023. Natural gas retail sales volumes decreasing 7% compared to first quarter 2023, largely related to warmer weather across the company's service territory. The utility, which serves 1.2 million customers, experienced 1.4% customer growth when compared to the first quarter of 2023. Regulatory update: On Aug. 15, 2023, the utility filed with the South Dakota Public Utilities Commission an electric rate case requesting a revenue increase of $3 million, or 17.3%, and a natural gas rate case requesting a revenue increase of $7.4 million, or 11.2%. The requests are pending decisions by the commission. On March 1, 2024, the utility implemented interim electric rates that increase annual revenue $2.7 million, or 15.4%, and interim natural gas rates that increase annual revenue $7.4 million, or 11.2%. The interim rates are subject to refund based on the commission's decisions in the cases. On Oct. 2, 2023, the utility filed with the North Dakota Public Service Commission an electric service agreement request to serve an additional data center that is expected to be online in mid-2024 in the utility's service territory. The request is pending a decision by the commission. On Nov. 1, 2023, the utility filed with the North Dakota Public Service Commission a natural gas rate case requesting a revenue increase of $11.6 million, or 7.5%. The utility implemented interim natural gas rates effective Jan. 1, 2024, increasing annual revenue $10.1 million, or 6.5%. The interim rates are subject to refund based on the commission's decision in the case. On March 29, 2024, the utility filed with the Washington Utilities and Transportation Commission a multiyear natural gas rate case requesting an annual revenue increase of $43.8 million, or 11.6%, effective March 1, 2025, and $11.7 million, or 2.8%, effective March 1, 2026. The request is pending a decision by the commission. The utility expects to file natural gas rate cases in Montana, Oregon and Wyoming in 2024. The company's new Heskett Unit IV, an 88-megawatt natural gas-fired electric generating facility near Mandan, North Dakota, is expected to be online in the second quarter. PipelineThe pipeline had record first quarter earnings of $15.1 million, up 82% compared to $8.3 million in first quarter 2023. Results were driven by: Record first quarter transportation volumes, primarily from expansion projects that were placed in service in late 2023 and early 2024. Higher revenue from new transportation and storage rates, as approved by the Federal Energy Regulatory Commission, that were effective Aug. 1, 2023. Strong demand for natural gas storage services. The pipeline business has a number of growth projects, including: The Line Section 27 expansion project in northwestern North Dakota, which was placed in service March 1, 2024, and added 175 million cubic feet of natural gas transportation capacity per day. The Line Section 28 expansion project, which is expected to add 137 million cubic feet of natural gas transportation capacity per day and serve a natural gas-fired power plant in northwestern North Dakota. Construction of the project began in April 2024 and is expected to be in service in the third quarter of 2024. The Wahpeton expansion project in eastern North Dakota, which is expected to add approximately 20 million cubic feet of natural gas transportation capacity per day. Construction is expected to begin in June, with the project expected to be in service in late 2024. A number of future expansions that are in early planning stages. Construction Services HighlightsEverus had revenues of $625.7 million and earnings of $28.2 million in the first quarter, compared to record quarterly revenues of $754.3 million and earnings of $26.1 million in the first quarter of 2023. The business also had record EBITDA of $46.9 million in the first quarter, compared to EBITDA of $43.5 million in the first quarter of 2023. Results were driven by: Higher demand for utility-related transmission and underground work. Strong demand for institutional-related electrical and mechanical work, particularly government and health care projects. Margin improvement from efficiency gains on projects and increased transmission and distribution workloads. The absence of certain hospitality-related projects that were completed in late 2023. Higher selling, general and administrative costs. Everus' backlog was an all-time record $2.18 billion at March 31, compared to $2.10 billion as of March 31, 2023. As previously announced, MDU Resources is working toward a tax-free spinoff of Everus into a separate, publicly traded company. The spinoff is expected to be complete in late 2024. Discontinued Operations and Adjusted EarningsOn May 31, 2023, MDU Resources completed the spinoff of Knife River Corporation, which became an independent, publicly traded company. MDU Resources has reported Knife River's results and the transaction costs and certain interest expenses associated with the spinoff as discontinued operations, and MDU Resources' prior period results have been restated to reflect the spinoff. MDU Resources is reporting adjusted income from continuing operations and adjusted earnings per share that exclude the costs associated with its strategic initiatives. Adjusted income from continuing operations and adjusted earnings per share are non-GAAP measures. The "Non-GAAP Financial Measures" section of this news release explains the earnings adjustments. More information about MDU Resources' strategic initiatives can be found on the company's website at www.mdu.com. GuidanceBecause of MDU Resources' ongoing strategic initiatives, the company is providing guidance for 2024 results by business. Guidance does not include transaction costs associated with the strategic initiatives or costs associated with standing up the construction services business as a public company. For 2024, MDU Resources expects: Earnings from its regulated energy delivery businesses in the range of $170 million to $180 million. Construction services revenues in the range of $2.9 billion to $3.1 billion, with margins comparable to 2023, and EBITDA of $220 million to $240 million. The expected 2024 results are based on these assumptions: Normal weather for the remainder of the year, including precipitation and temperatures, across all company markets. Normal economic and operating conditions. Continued availability of necessary equipment and materials. Electric and natural gas customer growth continuing at a rate of 1%-2% annually. No planned equity issuances. Conference CallMDU Resources' management will discuss on a webcast at 2 p.m. EST today the company's first quarter results. The webcast can be accessed at www.mdu.com under the "Investors" heading. Select "Events & Presentations," and click on "Q1 2024 Earnings Conference Call." A replay of the webcast will be available at the same location. About MDU ResourcesMDU Resources Group, Inc., a member of the S&P MidCap 400 index, provides essential products and services through its regulated energy delivery and construction services businesses. Founded in 1924, the company is celebrating its 100th anniversary, learn more at www.mdu.com/100th-anniversary. For more information about MDU Resources, visit www.mdu.com or contact the Investor Relations Department at Media Contact: Laura Lueder, manager of communications and public relations, 701-530-1095Financial Contact: Brent Miller, assistant treasurer, 701-530-1730 Forward-Looking Statements The information in this news 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 the company's projections, including estimates for growth, shareholder value creation and financial guidance or other proposed strategies such as the pursuit of a tax-free spinoff of its construction services business and proposed future structure of a pure-play regulated energy delivery company will be achieved. Please refer to assumptions contained in this news 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 Securities and Exchange Commission. 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 news 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. Except as required by law, the company does not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise. Throughout this news release, the company presents financial information prepared in accordance with GAAP, as well as EBITDA by operating segment, EBITDA from continuing operations, adjusted EBITDA from continuing operations, 2024 EBITDA guidance, adjusted income from continuing operations, and adjusted earnings per share from continuing operations, which are considered non-GAAP financial measures. The use of these non-GAAP financial measures should not be construed as alternatives to earnings, earnings per share, 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, its impacts related to the non-recurring costs associated with strategic initiatives. Please refer to the "Non-GAAP Financial Measures" section contained in this document for additional information. Consolidated Statements of Income Three Months Ended March 31, 2024 2023 (In millions, except per share amounts) Operating revenues: (Unaudited) Electric, natural gas distribution and regulated pipeline $        586.0 $        673.9 Non-regulated pipeline, construction services and other 627.8 756.2 Total operating revenues 1,213.8 1,430.1 Operating expenses: Operation and maintenance: Electric, natural gas distribution and regulated pipeline 105.7 102.0 Non-regulated pipeline, construction services and other 566.2 694.5 Total operation and maintenance 671.9 796.5 Purchased natural gas sold 258.6 371.0 Depreciation and amortization 55.8 52.3 Taxes, other than income 59.0 67.4 Electric fuel and purchased power 32.6 24.4 Total operating expenses 1,077.9 1,311.6 Operating income 135.9 118.5 Other income 13.8 10.4 Interest expense 28.7 24.0 Income before income taxes 121.0 104.9 Income tax expense 20.1 21.1 Income from continuing operations 100.9 83.8 Discontinued operations, net of tax — (45.5) Net income $        100.9 $          38.3 Earnings per share – basic: Income from continuing operations $            .50 $            .41 Discontinued operations, net of tax — (.22) Earnings per share – basic $            .50 $            .19 Earnings per share – diluted: Income from continuing operations $            .49 $            .41 Discontinued operations, net of tax — (.22) Earnings per share – diluted $            .49 $            .19 Weighted average common shares outstanding – basic 203.8 203.6 Weighted average common shares outstanding – diluted 204.2 203.9   Selected Cash Flows Information1 Three Months Ended March 31, 2024 2023 (In millions) Net cash provided by (used in) operating activities $        165.1 $        (43.6) Net cash used in investing activities (117.3) (151.0) Net cash provided by (used in) financing activities (35.5) 207.3 Increase in cash and cash equivalents 12.3 12.7 Cash and cash equivalents - beginning of year