MDU Resources — Third Quarter 2026 Earnings Summary

Financial Performance

• Consolidated net income for the three months ended September 30, 2026, was $14.0 million, a decrease from $18.4 million in the same quarter of 2025.
• Diluted earnings per share (EPS) were $0.07 for the quarter, down from $0.09 in 2025.
• Adjusted net income for the quarter was $16.6 million, compared to $18.4 million in 2025; adjusted diluted EPS was $0.08, down from $0.09.
• For the nine months ended September 30, 2026, consolidated net income was $116.1 million, up from $114.1 million in 2025.
• Nine-month diluted EPS was $0.55, down from $0.56 in 2025; adjusted diluted EPS was $0.57, up from $0.56.
• Operating revenues for the quarter were $347.8 million, compared to $315.1 million in 2025.
• Operating revenues for the nine months were $1,329.0 million, down from $1,341.1 million in 2025.
• Net cash provided by operating activities for the nine months was $347.6 million, down from $392.8 million in 2025.
• Net cash used in investing activities for the nine months was $344.3 million, compared to $359.8 million in 2025.
• Total debt as of September 30, 2026, was $2,595 million, up from $2,353 million in 2025.
• Total equity was $2,971 million, up from $2,723 million in 2025.
• Capitalization ratios showed total equity at 53.4% and total debt at 46.6% as of September 30, 2026.

Guidance and Future Outlook

• MDU Resources reaffirmed full-year 2026 guidance, expecting earnings per share to be in the range of $0.93 to $1.00.
• The company's long-term earnings-per-share growth objective remains 6% to 8%.
• Expected 2026 results assume normal weather, economic and operating conditions, continued customer growth, successful execution of capital investment programs, and constructive regulatory outcomes.
• The Bakken East Pipeline is expected to be constructed during the 2028-2030 seasons, with the first phase (Bakken to central North Dakota) targeting completion in late 2029 and the second phase (to Mapleton) targeting late 2030.
• The Line Section 32 Expansion Project targets a late-2028 in-service date, subject to regulatory approvals.

Business Segments and Product Lines

• Electric Utility: Net income increased to $26.5 million in Q3 2026 from $21.5 million in 2025 (a 23.6% increase).
  • New rates contributed $7.1 million in revenue for the quarter.
  • Badger Wind Farm contributed $3.2 million in earnings for the quarter.
  • Total retail electric sales volumes increased 9.3%, with sales to data center customers increasing 18.4%.
• Natural Gas Distribution: Reported a seasonal net loss of $20.7 million in Q3 2026, compared to a loss of $18.2 million in 2025.
  • New rates contributed $6.5 million in additional revenue.
  • Retail sales volumes increased 7.1%, and customer growth was 1.5% year over year.
  • Results were negatively impacted by a $2.1 million net of tax loss related to the discontinued Knott Landfill renewable natural gas project and higher operation and maintenance expenses.
• Pipeline: Net income decreased to $13.1 million in Q3 2026 from $16.8 million in 2025.
  • Results were impacted by higher operation and maintenance expenses, advisory costs for the Bakken East Pipeline, and lower interruptible transportation volumes.
  • Offsetting factors included higher demand revenue from short-term contracts and growth projects (Minot Expansion and Line Section 22 Expansion).
• Other: Reported a net loss of $4.9 million in Q3 2026, compared to a loss of $1.7 million in 2025, primarily due to higher claims experience at the captive insurer.

Market and Competitive Landscape

• Growing demand from large-load customers, including data centers, continues to provide opportunities for increased electric sales.
• The company follows a cost causation principle where infrastructure and service costs for large-load customers are assigned through contracts, tariffs, and regulatory approvals.
• The Bakken East Pipeline is designed to create a new pathway for Bakken natural gas to serve customers in central and eastern North Dakota, supporting state economic development.
• The company operates a more than 3,800-mile natural gas pipeline network and storage system.

Risks and Challenges

• The Natural Gas Distribution segment faced higher operation and maintenance expenses, including payroll-related costs.
• The Pipeline segment faced higher operation and maintenance expenses, advisory costs for the Bakken East Pipeline that did not qualify for capitalization, and lower storage-related activity.
• The "Other" segment faced higher claims experience at the captive insurer.
• Forward-looking statements are subject to risks including regulatory approvals, economic conditions, and unforeseeable factors detailed in the company's Form 10-K.

Management Commentary and Tone

• CEO Nicole A. Kivisto stated the company continued to execute its "CORE strategy" with strong electric utility performance and advancement of strategic growth initiatives.
• Management highlighted that electric utility earnings benefited from new rates, Badger Wind Farm, and higher retail sales volumes.
• Management noted that natural gas distribution and pipeline results were affected by the decision to discontinue the Knott Landfill project and advisory costs associated with Bakken East.
• Management expressed confidence that the Bakken East project positions the company well for long-term growth and that employees remain the foundation for safely serving customers.

Other Key Points

• Bakken East Pipeline: The board reached a positive final investment decision on September 30, 2026. The estimated capital investment range was narrowed to $2.8 billion to $3.1 billion (previously $2.7 billion to $3.2 billion). The project is a 350-mile pipeline with an initial capacity of 1.4 billion cubic feet of natural gas per day.
• Regulatory Updates:
  • North Dakota: Interim rates reflecting a $26.3 million annual increase became effective September 1, 2026, pending a rate case requesting $34.5 million.
  • Montana: A settlement agreement for a $10.0 million annual increase was filed; interim rates of $10.4 million have been in effect since April 1, 2026.
  • Wyoming: Final rates reflecting a $5.8 million annual increase became effective April 1, 2026.
  • Idaho: Final rates reflecting a $13.0 million annual increase are in effect since January 1, 2026.
  • Oregon: A $12.2 million annual increase was approved, effective October 31, 2026.
  • Washington: A rate case requests $25.1 million in year one and $18.1 million in year two; currently pending.
  • Minnesota: A rate case filed October 30, 2026, requests a $4.5 million annual increase with an interim request of $3.9 million.
  • FERC: WBI Energy filed a rate case seeking a $31 million annual revenue increase; rates were suspended on June 30, 2026, with a potential effective date of December 1, 2026.
• Capital Expenditures: Estimated 2026 capital expenditures are $594 million total ($102 million Electric, $327 million Natural Gas Distribution, $165 million Pipeline).
• Discontinued Projects: The company discontinued development of the Knott Landfill renewable natural gas project, resulting in a $2.7 million loss (net of tax $0.6 million).
• Conference Call: A webcast of the earnings call was scheduled for November 5, 2026, at 2 p.m. ET.