MDU Resources Group, Inc. (NYSE:MDU) announced a consolidated loss for 2012 of $1.4 million, or 1 cent per common share, compared to 2011 earnings of $212.3 million, or $1.12 per share. Adjusted earnings were $216.8 million, or $1.15 per common share for 2012 compared to 2011 adjusted earnings of $225.2 million, or $1.19 per share. Refer to the Non-GAAP Financial Measures and Reconciliation of GAAP to Adjusted Earnings section beginning on page 15 of this press release.
The company reported a consolidated loss for the fourth quarter of $61.2 million, or 32 cents per share, compared to 2011 fourth quarter earnings of $60.8 million or 32 cents per share. Adjusted earnings were $76.0 million, or 40 cents per common share, compared to $73.9 million, or 39 cents per share in 2011.
"Our businesses are strong and our 2012 adjusted earnings reflect it," said David L. Goodin, president and CEO of MDU Resources. "Our construction businesses are seeing markets improve with earnings growth of 47 percent compared to last year."
The construction businesses reported their highest annual earnings since 2009 with 2012 earnings totaling $70.8 million, up $22.8 million from last year. The construction materials business saw an increase in the private construction market and a strengthening of markets in the Intermountain and North Central regions, as well as higher ready-mixed concrete and asphalt oil margins and volumes. The construction services business also saw strong growth, with record earnings at its inside electric business in Oregon and its specialty equipment manufacturing and rental business. The combined construction business backlog at year-end was approximately $731 million, $39 million higher than a year ago.The exploration and production business, like many independent companies in the sector, uses the full-cost method of accounting. Under this method, the company is required to perform a quarterly ceiling test comparing its capitalized costs to the after-tax, discounted expected cash flow from its economic proved oil and natural gas reserves. The price used in the test is based on the average of the trailing 12 months. This test resulted in total after-tax write-downs for the year of $246.8 million. The write-downs were largely driven by the lower natural gas price environment in 2012. Other factors affecting the write-downs include certain capital associated with non-economic 2012 exploratory activity. The write-downs are noncash and do not affect cash flows.
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