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Share Name | Share Symbol | Market | Type |
---|---|---|---|
MDU Resources Group Inc | NYSE:MDU | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.02 | -0.08% | 25.06 | 25.305 | 24.905 | 25.20 | 1,226,186 | 01:00:00 |
BISMARCK, N.D., Feb. 1, 2017 /PRNewswire/ -- MDU Resources Group, Inc. (NYSE: MDU) today reported 2016 earnings from continuing operations of $232.4 million, or $1.19 per share, compared to 2015 earnings from continuing operations of $175.7 million, or 90 cents per share. In the fourth quarter of 2016, earnings from continuing operations were $66.3 million, or 33 cents per share, compared to $55.7 million, or 29 cents per share, in 2015.
Including discontinued operations, primarily the exploration and production and refining businesses, MDU Resources reported 2016 earnings of $63.7 million, or 33 cents per share, compared to a loss of $623.1 million, or $3.20 per share, in 2015. In the fourth quarter of 2016, earnings including discontinued operations were $65.5 million, or 33 cents per share, compared to fourth quarter 2015's earnings of $52.4 million, or 27 cents per share.
Highlights include:
"We are building a strong America and have solid momentum going into 2017," said David L. Goodin, president and CEO of MDU Resources. "We successfully completed several strategic moves, including fully exiting from our exploration and production business, the refining business and, more recently, our interest in the Pronghorn natural gas processing plant, which have lowered our business risk profile and positioned us for future growth.
"Our continuing operations increased earnings per share by 32 percent in 2016, led by record results at our construction materials business," Goodin said. "As we move into 2017, we expect to build on our momentum through organic growth opportunities, and we are open to strategic acquisitions as they are identified by our construction materials and services and regulated energy delivery businesses. We previously announced our five-year, $1.9 billion capital plan with an additional $300 million available in 2017 and 2018 for high-value projects.
"Also in 2017, our construction materials business anticipates more projects being bid from the FAST (Fixing America's Surface Transportation) Act, and our construction services business is focused on projects with strong margins. Our utility operations continue to pursue regulatory recovery for costs associated with serving steady customer growth. Our pipeline and midstream business also continues to work on projects to serve customer growth with added capacity and improved reliability, like the Valley Expansion pipeline in eastern North Dakota and far western Minnesota that's expected to be under construction in early 2018," Goodin said.
Business Unit Results
Construction Materials and Services
The construction materials business reported record earnings of $102.7 million for 2016, up 15 percent from record earnings of $89.1 million in 2015. This business saw higher construction margins and demand in all regions except the North Central, where activity was down in North Dakota. This business benefited from a $6.7 million (after tax) reduction to a previously recorded multiemployer pension plan withdrawal liability; while 2015 earnings reflect an increase to a multiemployer pension plan withdrawal liability of $1.5 million (after tax). In addition, asphalt and aggregate volumes and margins increased. Construction materials had record year-end backlog of $538 million, which is 10 percent higher than the previous record year-end backlog of $491 million set in 2015.
Earnings at the construction services business were $33.9 million, up 43 percent from $23.8 million in 2015 on 16 percent revenue growth. The increase was driven mainly by higher construction workloads and margins in the Western Region. In the fourth quarter, this business completed the sale of one of the largest community solar projects in the United States, on which it provided turnkey engineering, procurement and construction. This business ended 2016 with backlog of $475 million, down slightly from $493 million in 2015, but sees a strong bidding environment in 2017.
Regulated Energy Delivery
The electric and natural gas utility reported earnings of $69.3 million for 2016, up 16 percent compared to $59.5 million in 2015. The increase was driven mainly by cost recovery through regulatory relief. Customer growth and colder weather in certain regions also resulted in 4 percent higher natural gas retail sales volumes. The utility's customer base grew 1.6 percent in 2016 to approximately 1.07 million customers, and it expects its customer base to continue to grow at a rate of 1 to 2 percent annually. The utility continues to seek regulatory recovery for costs associated with upgrading and expanding facilities to meet customer demand. Regulatory activity has resulted in $32.7 million in increases to final rates in 2016 and 2017 to date, including an electric rate increase of $2.7 million approved Jan. 18, 2017, by the Wyoming Public Service Commission that will take effect March 1.
2016 earnings at the pipeline and midstream business were $23.4 million, compared to earnings of $13.3 million in 2015. Higher customer utilization of natural gas storage services, which increased 59 percent in 2016, led to a slight increase in earnings even though this business recorded a $1.4 million (after tax) impairment in 2016 and a $10.6 million (after tax) impairment in 2015 associated with the sale of certain non-strategic assets. On Jan. 1, this business closed on the previously announced sale of its 50 percent non-operating ownership interest in the Pronghorn natural gas processing plant in North Dakota and the company received proceeds of approximately $100 million.
Discontinued Operations
The results of the company's former exploration and production and refining businesses have been reported as discontinued operations. The company has included in the "other" category any continuing results from these businesses, such as general and administrative and interest expenses. These expenses are expected to diminish over time, with an estimated impact of 1 cent per share in 2017.
2017 Earnings Guidance
MDU Resources has initiated 2017 earnings per share guidance in the range of $1.10 to $1.25.
"This range reflects what we know today about our company's operating conditions," Goodin said. "While we are optimistic about what we anticipate will be positive impacts from potential tax reform, incremental infrastructure spending and regulatory changes proposed by our country's new administration, these opportunities will be evaluated by our management team when they are enacted."
Conference Call
The company will host a webcast at 10 a.m. EST Feb. 2 to discuss 2016 earnings results and 2017 guidance. The event can be accessed at www.mdu.com. Webcast and audio replays will be available. The dial-in number for audio replay, available through Feb. 16, is 855-859-2056, or 404-537-3406 for international callers, conference ID 33818055.
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.
Contacts
Financial: Doran Schwartz, vice president and chief financial officer, 701-530-1750
Media: Laura Lueder, manager of communications and public relations, 701-530-1095
Performance Summary and Future Outlook
The following information 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 points are "forward-looking statements." There is no assurance that the company's projections, including estimates for growth and changes in earnings, will in fact be achieved. Please refer to assumptions contained in this section, as well as the various important factors listed at the end of this document under the heading "Risk Factors and Cautionary Statements that May Affect Future Results." Changes in such assumptions and factors could cause actual future results to differ materially from growth and earnings projections.
GAAP Earnings |
||||||||||||
Business Line |
Fourth Quarter 2016 Earnings |
Fourth Quarter 2015 Earnings |
2016 Earnings |
2015 Earnings | ||||||||
(In millions) | ||||||||||||
Construction materials and services |
$ |
27.6 |
$ |
22.0 |
$ |
136.6 |
$ |
112.9 |
||||
Regulated energy delivery |
37.7 |
35.6 |
92.7 |
72.8 |
||||||||
Other and eliminations* |
1.0 |
(1.9) |
3.1 |
(10.0) |
||||||||
Earnings from continuing operations |
66.3 |
55.7 |
232.4 |
175.7 |
||||||||
Loss from discontinued operations, net of tax |
(.8) |
(17.5) |
(300.4) |
(834.1) |
||||||||
Loss from discontinued operations attributable to noncontrolling interest |
— |
(14.2) |
(131.7) |
(35.3) |
||||||||
Earnings (loss) on common stock |
$ |
65.5 |
$ |
52.4 |
$ |
63.7 |
$ |
(623.1) |
||||
Earnings (loss) per share: |
||||||||||||
Earnings from continuing operations |
$ |
.33 |
$ |
.29 |
$ |
1.19 |
$ |
.90 |
||||
Discontinued operations attributable to the company, net of tax |
— |
(.02) |
(.86) |
(4.10) |
||||||||
Earnings (loss) per share |
$ |
.33 |
$ |
.27 |
$ |
.33 |
$ |
(3.20) |
||||
* Includes eliminations for the presentation of income tax adjustments between continuing and discontinued operations. |
On a consolidated basis, the following information highlights the key growth strategies, projections and certain assumptions for the company:
Capital Expenditures | |||||||||||||||
Business Line |
2016 Actual |
2017 Estimated |
2018 Estimated |
2019 Estimated |
2017 - 2021 Total Estimated | ||||||||||
(In millions) |
|||||||||||||||
Construction materials and services |
|||||||||||||||
Construction materials and contracting |
$ |
38 |
$ |
43 |
$ |
55 |
$ |
46 |
$ |
236 |
|||||
Construction services |
60 |
9 |
9 |
10 |
49 |
||||||||||
98 |
52 |
64 |
56 |
285 |
|||||||||||
Regulated energy delivery |
|||||||||||||||
Electric |
111 |
142 |
140 |
110 |
589 |
||||||||||
Natural gas distribution |
126 |
135 |
134 |
147 |
659 |
||||||||||
Pipeline and midstream |
35 |
41 |
57 |
120 |
387 |
||||||||||
272 |
318 |
331 |
377 |
1,635 |
|||||||||||
Other |
2 |
3 |
2 |
2 |
11 |
||||||||||
Additional growth capital |
— |
150 |
150 |
— |
300 |
||||||||||
Net proceeds and other* |
(57) |
(107) |
(6) |
(6) |
(133) |
||||||||||
Total capital expenditures |
$ |
315 |
$ |
416 |
$ |
541 |
$ |
429 |
$ |
2,098 |
|||||
* Excludes capital expenditures for discontinued operations and sale proceeds for the exploration and production and refining businesses. |
Capital expenditures for 2017 through 2021 include line-of-sight opportunities at the company's business units as well as additional growth capital. This additional capital is not allocated to a specific business unit and will be invested based on the risk-adjusted return potential of opportunities that are identified by the company's business development teams.
Based on the current level of capital expenditures and other key assumptions in the 2017 financial forecast, the company is not planning to issue equity this year. Estimated operating cash flows from operations are $425 million to $475 million in 2017.
Construction Materials and Services | |||||||||||||
Construction Materials and Contracting |
|||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||
December 31, |
December 31, | ||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||
(Dollars in millions) | |||||||||||||
Operating revenues |
$ |
398.3 |
$ |
426.3 |
$ |
1,874.3 |
$ |
1,904.3 |
|||||
Operating expenses: |
|||||||||||||
Operation and maintenance |
352.0 |
385.8 |
1,595.4 |
1,652.3 |
|||||||||
Depreciation, depletion and amortization |
14.1 |
16.9 |
58.4 |
65.9 |
|||||||||
Taxes, other than income |
8.1 |
7.9 |
41.8 |
40.1 |
|||||||||
374.2 |
410.6 |
1,695.6 |
1,758.3 |
||||||||||
Operating income |
24.1 |
15.7 |
178.7 |
146.0 |
|||||||||
Earnings |
$ |
13.9 |
$ |
14.8 |
$ |
102.7 |
$ |
89.1 |
|||||
Sales (000's): |
|||||||||||||
Aggregates (tons) |
6,299 |
6,213 |
27,580 |
26,959 |
|||||||||
Asphalt (tons) |
1,244 |
1,238 |
7,203 |
6,705 |
|||||||||
Ready-mixed concrete (cubic yards) |
815 |
869 |
3,655 |
3,592 |
|||||||||
Construction Services |
|||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||
December 31, |
December 31, | ||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||
(In millions) | |||||||||||||
Operating revenues |
$ |
250.5 |
$ |
238.5 |
$ |
1,073.3 |
$ |
926.4 |
|||||
Operating expenses: |
|||||||||||||
Operation and maintenance |
215.2 |
214.5 |
965.3 |
838.5 |
|||||||||
Depreciation, depletion and amortization |
3.9 |
3.5 |
15.3 |
13.4 |
|||||||||
Taxes, other than income |
9.3 |
7.1 |
39.0 |
31.1 |
|||||||||
228.4 |
225.1 |
1,019.6 |
883.0 |
||||||||||
Operating income |
22.1 |
13.4 |
53.7 |
43.4 |
|||||||||
Earnings |
$ |
13.7 |
$ |
7.2 |
$ |
33.9 |
$ |
23.8 |
The combined construction materials and services businesses reported earnings of $136.6 million for 2016, compared to $112.9 million in 2015. The increase in earnings reflects higher construction workloads and margins in the Western Region at the services business. Also contributing to the increase were higher construction margins and workloads; a $6.7 million (after tax) reduction to a previously recorded multiemployer pension plan withdrawal liability, while 2015 earnings reflect an increase to a multiemployer pension plan withdrawal liability of $1.5 million (after tax); and higher asphalt and aggregate volumes and margins at the materials business. These increases were partially offset by higher income taxes at the materials business and lower equipment sales and rental margins at the services business.
Fourth quarter earnings for the combined construction materials and services businesses were $27.6 million, compared to $22.0 million in 2015. The increase in earnings reflects higher construction workloads and margins in the Western Region at the services business, a $6.7 million (after tax) reduction to a previously recorded multiemployer pension plan withdrawal liability in 2016 at the material business, as well as higher aggregate volumes and margins. These increases were partially offset by higher income taxes, lower ready-mixed concrete volumes and margins and lower other product line margins at the materials business.
The following information highlights the key growth strategies, projections and certain assumptions for the construction segments:
Regulated Energy Delivery | |||||||||||||
Electric |
|||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||
December 31, |
December 31, | ||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||
(Dollars in millions, where applicable) | |||||||||||||
Operating revenues |
$ |
83.4 |
$ |
70.0 |
$ |
322.3 |
$ |
280.6 |
|||||
Operating expenses: |
|||||||||||||
Fuel and purchased power |
20.8 |
22.5 |
75.5 |
86.2 |
|||||||||
Operation and maintenance |
30.5 |
22.6 |
115.2 |
87.7 |
|||||||||
Depreciation, depletion and amortization |
12.4 |
9.5 |
50.2 |
37.6 |
|||||||||
Taxes, other than income |
2.7 |
2.0 |
12.9 |
11.1 |
|||||||||
66.4 |
56.6 |
253.8 |
222.6 |
||||||||||
Operating income |
17.0 |
13.4 |
68.5 |
58.0 |
|||||||||
Earnings |
$ |
10.4 |
$ |
9.1 |
$ |
42.2 |
$ |
35.9 |
|||||
Retail sales (million kWh): |
|||||||||||||
Residential |
296.9 |
288.0 |
1,132.5 |
1,173.9 |
|||||||||
Commercial |
402.2 |
382.8 |
1,491.8 |
1,499.6 |
|||||||||
Industrial |
142.3 |
146.3 |
544.2 |
550.3 |
|||||||||
Other |
23.5 |
23.1 |
90.0 |
92.2 |
|||||||||
864.9 |
840.2 |
3,258.5 |
3,316.0 |
||||||||||
Average cost of fuel and purchased power per kWh |
$ |
.023 |
$ |
.025 |
$ |
.021 |
$ |
.024 |
|||||
Natural Gas Distribution |
|||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||
December 31, |
December 31, | ||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||
(Dollars in millions) | |||||||||||||
Operating revenues |
$ |
266.0 |
$ |
264.4 |
$ |
766.1 |
$ |
817.4 |
|||||
Operating expenses: |
|||||||||||||
Purchased natural gas sold |
157.8 |
162.5 |
431.5 |
499.0 |
|||||||||
Operation and maintenance |
41.5 |
40.0 |
158.1 |
153.5 |
|||||||||
Depreciation, depletion and amortization |
15.8 |
20.5 |
65.4 |
64.8 |
|||||||||
Taxes, other than income |
11.8 |
12.3 |
46.1 |
46.3 |
|||||||||
226.9 |
235.3 |
701.1 |
763.6 |
||||||||||
Operating income |
39.1 |
29.1 |
65.0 |
53.8 |
|||||||||
Earnings |
$ |
22.2 |
$ |
19.8 |
$ |
27.1 |
$ |
23.6 |
|||||
Volumes (MMdk) |
|||||||||||||
Sales: |
|||||||||||||
Residential |
22.0 |
20.7 |
56.2 |
54.0 |
|||||||||
Commercial |
14.4 |
13.4 |
38.9 |
37.6 |
|||||||||
Industrial |
1.2 |
1.1 |
4.2 |
4.0 |
|||||||||
37.6 |
35.2 |
99.3 |
95.6 |
||||||||||
Transportation: |
|||||||||||||
Commercial |
.6 |
.6 |
1.8 |
1.8 |
|||||||||
Industrial |
37.6 |
44.5 |
145.8 |
152.4 |
|||||||||
38.2 |
45.1 |
147.6 |
154.2 |
||||||||||
Total throughput |
75.8 |
80.3 |
246.9 |
249.8 |
|||||||||
Degree days (% of normal)* |
|||||||||||||
Montana-Dakota/Great Plains |
95 |
% |
88 |
% |
89 |
% |
88 |
% | |||||
Cascade |
97 |
% |
89 |
% |
87 |
% |
83 |
% | |||||
Intermountain |
100 |
% |
95 |
% |
96 |
% |
89 |
% | |||||
* Degree days are a measure of the daily temperature-related demand for energy for heating. |
The combined utility businesses reported earnings of $69.3 million in 2016, compared to $59.5 million in 2015. This increase in earnings reflects higher electric retail sales margins, largely due to approved final and interim rate increases reduced in part by decreased electric sales volumes to residential customers. Also contributing to higher earnings were higher natural gas retail sales margins resulting from increased retail sales volumes to all customer classes, due to customer growth and colder weather in certain regions, and final and interim rate increases. Partially offsetting these increases were higher operation and maintenance expense, largely related to higher contract services and higher payroll-related costs, higher depreciation, depletion and amortization due to increased plant additions, and lower other income, primarily lower allowance for funds used during construction. Certain of the higher operation and maintenance expense, higher depreciation, depletion and amortization expense and higher production tax credits in 2016, due to increased capital investments at the electric utility, are potentially recoverable and/or refundable through the rate recovery process.
The combined utility businesses' fourth quarter earnings were $32.6 million, compared to $28.9 million in 2015. The increase in earnings reflects higher electric retail sales margins due to approved rate recovery and increased volumes, as well as higher natural gas retail margins, largely the result of increased volumes due to colder weather and approved final and interim rate increases. Partially offsetting these increases were higher operation and maintenance expense and lower other income, as previously discussed.
The following information highlights the key growth strategies, projections and certain assumptions for the utility segments:
Pending Cases:
The company is requesting rate increases totaling $55.4 million in annual revenue, which includes $43.6 million in implemented interim rates. Cases pending are:
Pipeline and Midstream |
|||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||
December 31, |
December 31, | ||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||
(Dollars in millions) | |||||||||||||
Operating revenues |
$ |
35.8 |
$ |
36.9 |
$ |
141.6 |
$ |
154.9 |
|||||
Operating expenses: |
|||||||||||||
Operation and maintenance |
18.3 |
15.8 |
61.4 |
84.7 |
|||||||||
Depreciation, depletion and amortization |
6.4 |
6.2 |
24.9 |
28.0 |
|||||||||
Taxes, other than income |
3.0 |
2.6 |
11.9 |
12.2 |
|||||||||
27.7 |
24.6 |
98.2 |
124.9 |
||||||||||
Operating income |
8.1 |
12.3 |
43.4 |
30.0 |
|||||||||
Earnings |
$ |
5.1 |
$ |
6.7 |
$ |
23.4 |
$ |
13.3 |
|||||
Transportation volumes (MMdk) |
68.1 |
79.7 |
285.3 |
290.5 |
|||||||||
Natural gas gathering volumes (MMdk) |
5.1 |
6.8 |
20.0 |
33.4 |
|||||||||
Customer natural gas storage balance (MMdk): |
|||||||||||||
Beginning of period |
35.3 |
19.3 |
16.6 |
14.9 |
|||||||||
Net injection (withdrawal) |
(8.9) |
(2.7) |
9.8 |
1.7 |
|||||||||
End of period |
26.4 |
16.6 |
26.4 |
16.6 |
The pipeline and midstream business reported earnings of $23.4 million, compared to $13.3 million in 2015. The earnings increase reflects lower operation and maintenance expense, primarily the absence in 2016 of impairments of natural gas gathering assets of $10.6 million (after tax), lower payroll costs and material costs, partially offset by a fair value impairment of $1.4 million (after tax) associated with the Pronghorn sale. Also contributing to the increase were lower depreciation, depletion and amortization expense, largely due to the sale of certain non-strategic natural gas gathering assets in the fourth quarter of 2015, and higher storage services earnings. Partially offsetting these increases were lower gathering and processing earnings due to the sale of certain non-strategic assets, as previously discussed, and lower earnings at Pronghorn.
Fourth quarter earnings were $5.1 million, compared to $6.7 million in 2015. The decrease in earnings is primarily the result of a $1.4 million (after tax) fair value impairment associated with the sale of Pronghorn, as previously discussed. The business also experienced lower gathering and processing earnings due to lower natural gas gathering volumes, primarily due to the sale of certain non-strategic assets, as previously discussed, offset by higher storage services earnings.
The following information highlights the key growth strategies, projections and certain assumptions for this segment:
Other | |||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||
December 31, |
December 31, | ||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||
(In millions) | |||||||||||||
Operating revenues |
$ |
1.9 |
$ |
2.1 |
$ |
8.6 |
$ |
9.2 |
|||||
Operating expenses: |
|||||||||||||
Operation and maintenance |
.3 |
3.6 |
6.6 |
15.4 |
|||||||||
Depreciation, depletion and amortization |
.5 |
.5 |
2.1 |
2.1 |
|||||||||
Taxes, other than income |
— |
— |
.1 |
.1 |
|||||||||
.8 |
4.1 |
8.8 |
17.6 |
||||||||||
Operating income (loss) |
1.1 |
(2.0) |
(.2) |
(8.4) |
|||||||||
Earnings (loss) |
$ |
.3 |
$ |
(3.4) |
$ |
(3.2) |
$ |
(15.0) |
Included in Other are operation and maintenance expense 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.
The loss decreased $11.8 million in 2016 compared to 2015, primarily the result of lower operation and maintenance expense and interest expense previously allocated to the exploration and production business, due to the sale of this business which included the repayment of long-term debt. The absence in 2016 of a foreign currency translation loss including effects of the sale of the company's remaining interest in the Brazilian Transmission Lines also contributed to the decreased loss.
Fourth quarter earnings were $300,000 in 2016, compared to a loss of $3.4 million in 2015. The increase primarily resulted from lower operation and maintenance expense and interest expense previously allocated to the exploration and production business, as previously discussed. Also contributing to the increase was lower operation and maintenance expense due to the absence in 2016 of a corporate asset impairment.
Discontinued Operations | |||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||
December 31, |
December 31, | ||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||
(In millions) | |||||||||||||
Loss from discontinued operations before intercompany eliminations, net of tax |
$ |
(.1) |
$ |
(18.2) |
$ |
(303.2) |
$ |
(829.9) |
|||||
Intercompany eliminations* |
(.7) |
.7 |
2.8 |
(4.2) |
|||||||||
Loss from discontinued operations, net of tax |
(.8) |
(17.5) |
(300.4) |
(834.1) |
|||||||||
Loss from discontinued operations attributable to noncontrolling interest |
— |
(14.2) |
(131.7) |
(35.3) |
|||||||||
Loss from discontinued operations attributable to the company, net of tax |
$ |
(.8) |
$ |
(3.3) |
$ |
(168.7) |
$ |
(798.8) |
|||||
* Includes eliminations for the presentation of income tax adjustments between continuing and discontinued operations. |
The results of operations for the exploration and production and refining businesses, except certain general and administrative costs and interest expense that do not meet the criteria for income (loss) from discontinued operations (recorded in "Other") are included in income (loss) from discontinued operations.
The company's discontinued operations reported a loss of $168.7 million for 2016, compared to a loss of $798.8 million in 2015. The decreased loss is primarily due to the completion of the sales of the company's exploration and production and refining businesses. The decreased loss was largely the result of the absence in 2016 of a noncash write-down of oil and natural gas properties of $315.3 million (after tax) and fair value impairments of the exploration and production business's assets held for sale of $475.4 million (after tax), partially offset by a fair value impairment of the refining business of $156.7 million (after tax) in 2016.
The company's discontinued operations reported a loss of $800,000 in the fourth quarter of 2016, compared to a loss of $3.3 million in 2015, due to the completion of the sales of the exploration and production and refining businesses.
Risk Factors and Cautionary Statements That May Affect Future Results
The information in this release includes certain forward-looking statements, including earnings per share guidance and statements by the president and CEO of MDU Resources, 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, actual results may differ materially. Following are important factors that could cause actual results or outcomes for the company to differ materially from those discussed in forward-looking statements.
For a further discussion of these risk factors and cautionary statements, refer to Item 1A – Risk Factors in the company's most recent Form 10-K and Form 10-Q.
MDU Resources Group, Inc. |
||||||||||||
Three Months Ended |
Twelve Months Ended | |||||||||||
December 31, |
December 31, | |||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||
(In millions, except per share amounts) | ||||||||||||
(Unaudited) | ||||||||||||
Operating revenues |
$ |
1,016.1 |
$ |
1,016.8 |
$ |
4,128.8 |
$ |
4,014.0 |
||||
Operating expenses: |
||||||||||||
Fuel and purchased power |
20.8 |
22.5 |
75.5 |
86.2 |
||||||||
Purchased natural gas sold |
140.0 |
144.8 |
382.8 |
450.1 |
||||||||
Operation and maintenance |
655.8 |
678.6 |
2,893.3 |
2,805.2 |
||||||||
Depreciation, depletion and amortization |
53.1 |
57.1 |
216.3 |
211.8 |
||||||||
Taxes, other than income |
34.9 |
31.9 |
151.8 |
140.9 |
||||||||
904.6 |
934.9 |
3,719.7 |
3,694.2 |
|||||||||
Operating income |
111.5 |
81.9 |
409.1 |
319.8 |
||||||||
Other income |
1.3 |
12.8 |
5.0 |
18.4 |
||||||||
Interest expense |
20.5 |
22.3 |
87.9 |
91.2 |
||||||||
Income before income taxes |
92.3 |
72.4 |
326.2 |
247.0 |
||||||||
Income taxes |
25.8 |
16.5 |
93.1 |
70.6 |
||||||||
Income from continuing operations |
66.5 |
55.9 |
233.1 |
176.4 |
||||||||
Loss from discontinued operations, net of tax |
(.8) |
(17.5) |
(300.4) |
(834.1) |
||||||||
Net income (loss) |
65.7 |
38.4 |
(67.3) |
(657.7) |
||||||||
Loss from discontinued operations attributable to noncontrolling interest |
— |
(14.2) |
(131.7) |
(35.3) |
||||||||
Dividends declared on preferred stocks |
.2 |
.2 |
.7 |
.7 |
||||||||
Earnings (loss) on common stock |
$ |
65.5 |
$ |
52.4 |
$ |
63.7 |
$ |
(623.1) |
||||
Earnings (loss) per common share – basic: |
||||||||||||
Earnings before discontinued operations |
$ |
.34 |
$ |
.29 |
$ |
1.19 |
$ |
.90 |
||||
Discontinued operations attributable to the company, net of tax |
— |
(.02) |
(.86) |
(4.10) |
||||||||
Earnings (loss) per common share – basic |
$ |
.34 |
$ |
.27 |
$ |
.33 |
$ |
(3.20) |
||||
Earnings (loss) per common share – diluted: |
||||||||||||
Earnings before discontinued operations |
$ |
.33 |
$ |
.29 |
$ |
1.19 |
$ |
.90 |
||||
Discontinued operations attributable to the company, net of tax |
— |
(.02) |
(.86) |
(4.10) |
||||||||
Earnings (loss) per common share – diluted |
$ |
.33 |
$ |
.27 |
$ |
.33 |
$ |
(3.20) |
||||
Dividends declared per common share |
$ |
.1925 |
$ |
.1875 |
$ |
.7550 |
$ |
.7350 |
||||
Weighted average common shares outstanding – basic |
195.3 |
195.3 |
195.3 |
194.9 |
||||||||
Weighted average common shares outstanding – diluted |
195.9 |
195.3 |
195.6 |
195.0 |
December 31, |
||||||||
2016 |
2015 |
|||||||
(Unaudited) |
||||||||
Other Financial Data |
||||||||
Book value per common share |
$ |
11.78 |
$ |
12.83 |
||||
Market price per common share |
$ |
28.77 |
$ |
18.32 |
||||
Dividend yield (indicated annual rate) |
2.7% |
4.1% |
||||||
Price/earnings from continuing operations ratio (12 months ended) |
24.2x |
20.4x |
||||||
Market value as a percent of book value |
244.2% |
142.8% |
||||||
Net operating cash flow (12 months ended)* |
$ |
462 |
$ |
662 |
||||
Total assets* |
$ |
6,284 |
$ |
6,565 |
||||
Total equity* |
$ |
2,316 |
$ |
2,521 |
||||
Total debt* |
$ |
1,790 |
$ |
1,796 |
||||
Capitalization ratios: |
||||||||
Total equity |
56.4% |
58.4% |
** |
|||||
Total debt |
43.6 |
41.6 |
** |
|||||
100.0% |
100.0% |
* |
In millions |
** |
Includes noncontrolling interest |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/mdu-resources-reports-2016-earnings-initiates-guidance-for-2017-300400767.html
SOURCE MDU Resources Group, Inc.
Copyright 2017 PR Newswire
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