2016 Earnings and 2017 Guidance Conference Call February 2, 2017

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1 2016 Earnings and 2017 Guidance Conference Call February 2, 2017 Doran N. Schwartz Vice President & Chief Financial Officer

2 Forward-Looking Statements During the course of this presentation, we will make certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of Although the company believes that its expectations and beliefs are based on reasonable assumptions, actual results may differ materially. For a discussion of factors that may cause actual results to differ, refer to Item 1A Risk Factors in the company s most recent Form 10-K and Form 10-Q.

3 Company Management Dave Goodin President & CEO of MDU Resources Dave Barney President & CEO of Knife River Corporation Jeff Thiede President & CEO of MDU Construction Services Group Nicole Kivisto President & CEO of Montana-Dakota Utilities, Great Plains Natural Gas, Cascade Natural Gas & Intermountain Gas Martin Fritz President & CEO of WBI Energy Doran Schwartz Vice President & CFO of MDU Resources Jason Vollmer Vice President, CAO and Treasurer of MDU Resources

4 2016 Earnings and 2017 Guidance Conference Call February 2, 2017 David L. Goodin President & Chief Executive Officer

5 Results From Continuing Operations Earnings Year-To-Date EPS Year-To-Date $250 $200 $150 $175.7 $232.4 $1.25 $1.00 $.75 $0.90 $1.19 $100 $.50 $50 $.25 $ $

6 millions Consolidated Results* $100 Earnings Year-To-Date $63.7 $0.50 EPS Year-To-Date $0.33 $0 ($100) $0.00 ($0.50) ($1.00) ($200) ($1.50) ($300) ($2.00) ($2.50) ($400) ($3.00) ($500) ($3.50) ($4.00) ($3.20) ($600) ($700) ($623.1) ($4.50) ($5.00) * Includes both continuing and discontinued operations

7 Highlights Construction materials and services earnings of $136.6 million; increase of 21 percent Regulated energy delivery earnings of $92.7 million; increase of 27 percent Completion of strategic exit of commodity pricesensitive businesses 2017 earnings guidance $1.10 to $1.25 per common share

8 millions Construction Materials Record annual earnings Higher construction margins and demand 2016 includes a $6.7 million (after tax) reduction to MEPP liability 2015 includes a $1.5 million (after tax) addition to MEPP liability Higher asphalt and aggregate volumes and margins Year-end backlog of $538 million vs. $491 million last year; up 10% Construction Materials & Services $110 $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 GAAP Earnings $102.7 $

9 millions Construction Services 43% increase in earnings Higher construction workloads and margins in Western Region Lower equipment sales and rental margins and lower margins in Central Region Completed one of the largest community solar projects in the United States Backlog of $475 million vs. $493 million last year $40 $35 $30 $25 $20 $15 $10 $5 $0 GAAP Earnings $23.8 $ Construction Materials & Services

10 Construction Materials & Services Outlook Approximately $1.0 billion combined backlog Expect growing demand due to $305 billion, five-year highway bill for funding of transportation and infrastructure Construction services major projects Utility-scale solar farm, government research facility, 345-kV transmission project, corporate campus expansion, utility maintenance contracts and hightech, mission-critical projects Margins in 2017 are expected to be slightly higher at construction materials and comparable at construction services vs Construction Materials & Services

11 millions Utility Electric & Natural Gas Record earnings at Electric Seeing benefits of investments $32.7 million implemented in final rates through 2016 and 2017 to date Pending: $55.4 million, which includes $43.6 million in implemented interim rates 1.6% customer growth Higher natural gas retail sales volumes Higher O&M and DD&A $80 $70 $60 $50 $40 $30 $20 $59.5 GAAP Earnings $69.3 $10 $ Utility Electric & Natural Gas

12 Utility Outlook Customer base expected to continue growing by 1-2 percent annually Future rate base growth includes: 160-mile, 345-kV transmission line; expected completion 2019 Pipeline projects to enhance system reliability and deliverability In process of completing 2017 Integrated Resource Plan and evaluating future generation and power supply portfolio, including a large-scale resource Focused on timely regulatory recovery; $55.4 million in pending cases, including $43.6 million in implemented interim rates 25-year agreement to purchase power from wind farm expansion; expands production at the wind farm to 150 MW, increasing renewable generation portfolio to 27%; option to purchase at close of construction Utility Electric & Natural Gas

13 millions Pipeline & Midstream Higher customer utilization of natural gas storage; up 59% Lower O&M expenses $1.4 million (after tax) impairment in 2016 versus $10.6 million (after tax) impairment in 2015 on sale of nonstrategic assets Lower DD&A Lower gathering and processing earnings including Pronghorn $25 $20 $15 $10 $5 $0 GAAP Earnings $23.4 $ Pipeline & Midstream

14 Pipeline & Midstream Outlook Proceeding with Valley Expansion project 38-mile pipeline, $55 million to $60 million FERC-regulated project to deliver natural gas supply to eastern ND and far western MN Construction expected to begin early 2018 with completion late that same year Charbonneau and Line Section 25 expansion project expected to be in service in second quarter 2017 On Jan 1. closed on the sale of 50% interest in Pronghorn processing plant further reducing commodity price exposure Continue to target organic projects and look for potential acquisitions that fit expertise and capabilities Pipeline & Midstream

15 millions Capital Program $1.9 billion five-year capital program Additional growth capital of $150 million in both 2017 and 2018 Additional growth capital will be allocated based on risk-adjusted return potential identified by business units $2,500 $2,000 $1,500 $1,000 $500 $0 $300 $285 $387 $1, Utility Pipeline Construction Additional Growth Capital

16 2017 EPS Guidance Consolidated $1.10 to $1.25 Note: As of February 2, 2017

17 Dividend Growth $0.80 $ Years $ consecutive years of quarterly dividend payments $0.60 $0.50 $0.40 $0.30 $0.58 Dividend increased November 2016, marking 26 consecutive years of increases $0.20 $0.10 Committed to paying a competitive dividend $ Note: Based on annualized dividends

18 Summary Strong results in 2016 Committed to stay focused on controlling costs, expanding margins, and growing earnings Optimistic about opportunities in Cap Ex plan won t require equity issuance Strong balance sheet 79 years of uninterrupted dividends

19 2016 Earnings and 2017 Guidance Conference Call February 2, 2017