SEPTEMBER 2017 INVESTOR RELATIONS BUILDING A STRONG AMERICA

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1 SEPTEMBER 2017 INVESTOR RELATIONS

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. 2

3 With integrity, create superior shareholder value by expanding upon our expertise to be the supplier of choice in all of our markets while being a safe and great place to work. 3

4 OUR STRATEGY FOR GROWTH Regulated Energy Delivery Construction Materials & Services Completed exit of E&P business, sold interest in refining business and natural gas processing plant; lowers overall business risk profile Focused on growing earnings in our two continuing business lines Regulated energy delivery Construction materials and services Strong Balance Sheet 4

5 millions RESULTS FROM CONTINUING OPERATIONS FOR THE 6 MONTHS ENDING JUNE 30, 2017 $90 $80 $70 $60 $50 $40 EARNINGS FROM CONTINUING OPERATIONS $77.9 $79.3 $0.45 $0.40 $0.35 $0.30 $0.25 $0.20 EPS FROM CONTINUING OPERATIONS $0.40 $0.40 $30 $20 $10 $- $0.15 $0.10 $0.05 $

6 LOOKING AHEAD Utility is projecting 4% rate base growth compounded annually $1.2 billion capital program in place to facilitate growth Customer growth of 1-2% annually 160-mile, 345-kV transmission line; expected completion North Dakota Electric Integrated Resource Plan filed Includes purchase of the Thunder Spirit Wind farm expansion project 2018 Development and design of a large combined-cycle natural gas-fired facility 2025 Focused on timely regulatory recovery; $13.9 million in pending cases Pipeline has returned focus to profitable core pipeline and fee-based gathering business Valley Expansion Project; estimated cost of $55-$60 million Line Section 27 expansion project; estimated cost of $27-$30 million Charbonneau and Line Section 25 Expansions completed in Q

7 LOOKING AHEAD Construction materials working off backlog of $766 million Strong bidding environment Looking at organic growth and acquisition opportunities Anticipated new state and local infrastructure spending initiatives are expected to drive an increase in demand Revenue guidance of $1.8 billion to $1.9 billion Construction services working off backlog of $596 million Strong bidding environment Looking at organic growth and acquisition opportunities Pursue additional opportunities in renewable energy construction Revenue guidance of $1.2 billion to $1.3 billion Combined construction backlog of $1.4 billion at June 30, up approximately 4% over the end of second quarter

8 CAPITAL PROGRAM $2.2 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 millions $2,500 $2,000 $1,500 $1,000 $500 $300 $288 $389 $1,235 $ Utility Pipeline Construction Additional Growth Capital 8

9 INVESTOR RELATIONS AUGUST 2017 UTILITY ELECTRIC & NATURAL GAS

10 ELECTRIC AND NATURAL GAS 1,066,000 electric and natural gas customers in 448 communities Electric 143,000 customers 758 MW of owned generation Natural Gas 923,000 customers 10

11 STRATEGY Provide safe, reliable and economic service Focus on organic growth through investments needed to provide these services Look to expand into areas where similar operating and growth objectives exist Be one of the top performing utilities in the nation Measured by integrity, safety, employees, customer service and shareholder performance 11

12 RATE BASE GROWTH $2.0 HISTORICAL PROJECTED 12% CAGR 4% CAGR $4 +$1.2 $3 Billions $1.5 $1.0 Billions $3 $2 $2 $1.9 -$0.7 -$0.1 $2.3 $0.5 $1 $1 $ $ Rate Base Net CapEx Depreciation Deferred Taxes 2021 Rate Base 12

13 CUSTOMER GROWTH 950,000 NATURAL GAS 145,000 ELECTRIC 900, , , , , , , , , , , National Average 0.57% CAGR National Average 0.55% CAGR 13

14 THUNDER SPIRIT WIND EXPANSION In December 2016, signed 25-year power purchase agreement, with purchase option Site fully permitted and sited for a 150 MW expansion Purchased cost estimated at $85M Levelized cost of $23/MW Will increase renewable capacity from 22% to 27% In June 2017, filed with the state of North Dakota for advance determination of prudence for the purchase of this expansion 14

15 BIG STONE SOUTH TO ELLENDALE MISO multi-value 345-kV transmission line; 160 miles from Big Stone City, SD, to Ellendale, ND All necessary easements secured Recovery through MISO tariff Expected completion

16 ELECTRIC REGULATORY MECHANISMS Fuel Clause Adjustment MT ND SD WY Transmission Rider Environmental/ Renewable Rider Generation Rider Property Tax Tracker Interim Rate Relief Forecasted Test Period Forward Year Test Period 16

17 NATURAL GAS REGULATORY MECHANISMS Purchased Gas Adjustment MN MT ND SD WY ID WA OR Full Decoupling Weather Normalization Full Fixed General Service Rate Pipeline Replacement / Integrity Tracker Property Tax Tracker Earnings Sharing Interim Rate Relief Forecasted Test Period Forward Year Test Period Historical Test Period 17

18 INVESTOR RELATIONS AUGUST 2017 PIPELINE & MIDSTREAM

19 WBI ENERGY ASSETS Regulated operations Approx. 4,000 miles of pipe Over 1.5 Bcf/d system capacity 193 Bcf working storage Non-regulated operations Gas gathering Cathodic protection Energy management 19

20 OUR STRENGTHS High-quality customers Low risk, stable returns with regulated business 75% of revenue backed by firm capacity commitments Five-year average term remaining Bakken hometown advantage Experienced, talented team Complete design, engineer, construct, operate capability Back office 20

21 WBI ENERGY STRATEGY Leverage our strengths to be the pipeline of choice in the Bakken Organic growth in Tier 1 Bakken acreage Low-cost provider Competitors use us to construct gas pipelines Build for 5x-7x EBITDA Only one rate case needed in 15 years 21

22 2017 ORGANIC GROWTH CHARBONNEAU & LINE SECTION 25 EXPANSIONS Project Overview Adds 62,000 dk/day of capacity with additional compression on existing system in NW ND: New station near Tioga New unit at Williston Two new units at Charbonneau Timeline In service second quarter

23 ORGANIC GROWTH VALLEY EXPANSION PROJECT Project Overview 38-mile pipeline, approximately $55 million - $60 million, FERC-regulated project to deliver natural gas supply to eastern ND and far western MN Timeline 2016 open season successful 2017 FERC approval process, design, right-ofway acquisition, procurement Construction in 2018 Target in-service late 2018 WBI Energy - Existing WBI Energy - Permitting WBI Energy - Proposed Non-WBI Energy 23

24 2018 ORGANIC GROWTH LINE SECTION 27 EXPANSION Project Overview Approximately 13 miles of new pipeline and associated facilities Project, as designed, will increase capacity by over 200,000 dekatherms per day Estimated construction costs of $27-$30 million Timeline Target in-service fall

25 INVESTOR RELATIONS AUGUST 2017 CONSTRUCTION MATERIALS

26 WHO WE ARE One of the top U.S. aggregate producers 5th sand and gravel 1.0B tons of reserves Operations in 15 states 5,000 employees in peak season $1.8B-$1.9B in revenue projected for

27 KNIFE RIVER STRATEGY Success through People, Safety, Quality, Environmental Focused on solid ROI Provide strong cash returns Take advantage of vertical integration Grow operations through M&A and greenfield

28 KNIFE RIVER STRENGTHS Aggregates Vertical integration Advantage over competition Adds margin Safety, Quality, Environmental leader Recruiting/retention Good reputation Share resources between regions Geographic diversity 28

29 PRODUCTS Aggregates Asphalt Building materials Cement Liquid asphalt Prestress/Precast Ready-mix concrete 29

30 SERVICES General contractor Subcontractor Aggregate laydown Asphalt paving Concrete construction Site development Underground utilities Railroad work Bridges Marine construction 30

31 EARNINGS GROWTH $120.0 KNIFE RIVER EARNINGS Four years of strong growth 33% CAGR 2015 and 2016 recorded back-to-back years of record earnings millions $100.0 $80.0 $60.0 $89.1 $102.7 $40.0 $50.9 $51.5 $20.0 $32.4 $ * 2015* 2016* *Includes MEPP Withdrawal Liability 31

32 EARNINGS COMPARISON YTD 2016 vs. YTD 2017 Year-to-date results impacted by slower start than 2016 due to weather-related delays across many areas of operation Delays impacted product sales volumes, particularly asphalt products and project margins Focused on 3 rd quarter Annual peak construction season millions $80 $70 $60 $50 $40 $30 $20 $10 $- $(10) $(20) $(30) Earnings by Quarter $69.5 $33.7 $21.2 $7.3 ($14.5) ($19.9) Q1 Q2 Q3 Q

33 CONSTRUCTION BACKLOG AS OF JUNE 30 $900.0 $800.0 $700.0 $730.0 $764.0 $833.0 $805.0 $766.0 $600.0 millions $500.0 $400.0 $300.0 $200.0 $100.0 $

34 INFRASTRUCTURE OPPORTUNITIES California Road Repair and Accountability Act of 2017 Over the next ten years, this bill is expected to raise $52.4 billion Funds allocated to road maintenance and rehabilitation Oregon HB 2017 $5.3 billion, ten-year transportation funding package Improve infrastructure by reducing congestion, increasing alternate transportation and investing in road maintenance Minnesota Bonding Bill $988 million bill will fund public works projects including investments in state universities and hospitals, water infrastructure and local road improvements Federal Spending Focus on infrastructure spending has potential to drive demand for construction materials 34

35 INVESTOR RELATIONS AUGUST 2017 CONSTRUCTION SERVICES

36 CONSTRUCTION SERVICES Outside Power lines Substations Excavation & underground utilities Inside Electrical Mechanical Fire suppression Industrial Refinery mechanical Automotive Water treatment Equipment & supply Equipment & tools Rental and sales Local resources, national strength Ranked 13 th on ENR s Top 600 Specialty Contractors List 36

37 STRATEGY Go & Grow Organically Grow existing market share Leverage renewable expertise Add satellite operations in growing markets Secure selective large projects Acquisition Expand services and geographic locations 37

38 OUTSIDE COMPANIES International Line Builders OR, CA, WA, ID Loy Clark Pipeline OR, CA, WA, ID Rocky Mountain Contractors MT, ND, ID Capital Electric Line Builders MO, IA, OK, AK, IL, OH Lone Mountain Excavation NV PROJECT TYPES AND SERVICES Transmission Distribution Substations Electric utilities Gas Communications Traffic signal Water, storm, sewer 38

39 INSIDE COMPANIES Bell Electrical Contractors St. Louis, MO Bombard Electric, Bombard Mechanical, Desert Fire Protection, Lone Mountain Excavation NV, CA Capital Electric Construction Kansas City, MO Duro Electric Denver, CO ESI Electrical Cincinnati, Dayton, Cleveland, OH On Electric Group OR, WA, CA PROJECT TYPES AND SERVICES Design build/assist Preconstruction Mission critical Health care Hospitality and gaming Stadiums, arenas Historical renovations Semiconductor Research and laboratories Mixed-use mid-rise & high-rise Service and maintenance Renewables 39

40 INDUSTRIAL COMPANIES USI Industrial Turnarounds Capital projects Maintenance Wagner Industrial Electric Refineries Automotive Mission critical 40

41 EQUIPMENT & SUPPLY Increased capacity Equipment and tools National footprint Six strategic locations One-day service 41

42 REVENUE GROWTH $700.0 YEAR-TO-DATE REVENUES ENDING JUNE 30 Record year-to-date revenues at the end of second quarter 2017 of $635.9 million Increased revenue guidance to a range of $1.2B to $1.3B millions $600.0 $500.0 $400.0 $300.0 $511.0 $555.9 $462.1 $542.0 $635.9 $200.0 $100.0 $

43 EARNINGS COMPARISON YTD 2016 vs. YTD 2017 Construction services year-todate earnings at the end of the second quarter increased 52% year over year Higher earnings in all service lines Worked through projects resulting in revenue growth, while still increasing backlog $25 $20 $15 $10 $5 $13.0 $19.8 $

44 CONSTRUCTION BACKLOG AS OF JUNE 30 $700 $600 $596 millions $500 $400 $300 $447 $386 $429 $508 $200 $100 $

45 FINANCIAL OVERVIEW DORAN SCHWARTZ Vice President & Chief Financial Officer

46 RESULTS FROM CONTINUING OPERATIONS SECOND QUARTER 2017 EARNINGS EPS $50 $0.30 $45 $40 $35 $30 $46.1 $43.8 $0.25 $0.20 $0.24 $0.22 millions $25 $20 $15 $0.15 $0.10 $10 $5 $0.05 $ $

47 CONSOLIDATED RESULTS SECOND QUARTER 2017 EARNINGS EPS $60 $0.30 $40 $20 $40.6 $0.20 $0.10 $0.21 $- $- millions $(20) $(40) $(60) $(80) $(0.10) $(0.20) $(0.30) $(0.40) $(100) $(109.3) $(0.50) $(0.56) $(120) $(0.60)

48 ELECTRIC & NATURAL GAS UTILITY SECOND QUARTER 2017 Reported earnings of $5.0 million 19 percent higher natural gas retail sales volumes and higher retail sales margins Partially offset by decoupling and weather normalization in certain jurisdictions Since Jan. 1, 2017, the utility has received approval on final rate increases totaling $33 million in annual revenue $13.9 million in pending cases millions $6 $5 $4 $3 $2 $1 $0 Earnings $5.0 $

49 PIPELINE & MIDSTREAM SECOND QUARTER 2017 Reported earnings of $5.3 million Decrease reflects absence of earnings from Pronghorn assets Transportation volumes up 7 percent compared to second quarter 2016 Lower interest expense due to the repayment of long-term debt millions $7 $6 $5 $4 $3 $6.3 Earnings $5.3 $2 $1 $

50 CONSTRUCTION MATERIALS SECOND QUARTER 2017 Reported earnings of $21.2 million Weather-related delays and increased competition Lower asphalt product volumes and margins Increasing material costs and lower construction margins Backlog of $766 million Decreased revenue guidance from a range of $1.85B to $1.95B to $1.8B to $1.9B millions $35 $30 $25 $20 $15 $10 $5 Earnings $33.7 $

51 CONSTRUCTION SERVICES SECOND QUARTER 2017 Reported an increase in earnings of $5.4 million, a 77 percent from $7 million in 2016 Higher inside workloads and margins Higher outside margins Increase in number and size of projects moved into full construction Backlog of $596 million, up 17 percent from last year Increased revenue guidance from a range of $1.0B to $1.1B to $1.2B to $1.3B millions $14 $12 $10 $8 $6 $4 $2 $0 Earnings $12.4 $

52 SOUND FINANCIAL POSITION $6,000 57% Equity / 43% Debt As of June 30, 2017 $5,000 $4,000 millions $3,000 $2,000 $1,000 $0 12/31/ /31/ /31/ /31/ /31/ /30/2017 Equity Debt 52

53 FUNDING PLAN FOR 2017 Based on current estimates, the company s gross capital expenditures for its continuing operations and dividends are expected to be funded with operating cash flows, asset sales and small debt issuances No expected equity issuance in 2017 to fund capital expenditures or dividends Maintain commitment to a strong balance sheet Current ratings for the company are BBB+/Stable 53

54 DIVIDEND GROWTH $0.90 $ Years $ consecutive years of quarterly dividend payments $0.70 $0.60 $0.50 $0.58 Dividend increased November 2016, marking 26 consecutive years of increases $0.40 $0.30 Committed to paying a competitive dividend $0.20 $0.10 $ Note: Based on annualized dividends 54

55 QUESTIONS AND ANSWERS