Jason Vollmer: Thank you, Nicole, and I’m pleased to share the details of our outstanding results for the first quarter. This morning, we announced first quarter earnings of $100.9 million or $0.49 per share on a GAAP basis compared to first quarter 2023 GAAP earnings of $38.3 million or $0.19 per share. First quarter income from continuing operations was $100.9 million or $0.49 per share compared to $83.8 million or $0.41 per share in 2023. Important to note that with the spin-off of Knife River completed May 31 of last year, Knife River results and other related impacts are reported as discontinued operations in our GAAP-based results for the prior year. With the completion of the Knife River spin-off and work continuing on the Everus spin-off, we are also reporting adjusted income from continuing operations to provide financial results to more closely correlate with and better outline the strength of our ongoing business operations.
For more information on these adjustments, please see the first table in our earnings release. We experienced strong results from all of our businesses in the quarter with adjusted income from continuing operations of $106.6 million or $0.52 per share compared to the first quarter 2023 adjusted income from continuing operations of $87.1 million or $0.43 per share. Turning to our individual businesses. Our utility business reported earnings of $58 million for the quarter compared to earnings of $55.5 million for the first quarter of 2023. Electric Utility reported first quarter earnings of $17.9 million compared to $16.6 million for the same period in 2023. Increase was largely the result of higher retail sales revenue due to rate relief in North Dakota and Montana and the addition of a new data center customer in mid-2023.
The increase was partially offset by lower residential volumes and higher operation and maintenance expense, primarily contract services costs. Our natural gas utility reported earnings of $40.1 million in the first quarter compared to $38.9 million in the first quarter of 2023. The increase was largely the result of interim rate relief in North Dakota and South Dakota and higher interest income and increased transportation revenue, primarily to serve electric generation and industrial customers. These increases were offset in part by a 7% decrease in retail sales volumes to all customer classes due to warm weather, which was partially mitigated by weather normalization and decoupling mechanisms. Also impacting earnings was higher depreciation expense from increased asset additions and higher operation and maintenance expenses.
The pipeline earned record first quarter earnings of $15.1 million compared to $8.3 million in the first quarter last year. The earnings increase was driven by record transportation volumes for the first quarter as a result of organic growth projects placed in service in November of 2023 and March of 2024 and increased contracted volume commitments from the North Bakken expansion project beginning in February of last year. New transportation and storage rates effective August 1 of last year and higher storage-related revenue also helped drive the increase in earnings. This increase was offset in part by higher operation and maintenance expense and higher interest expense both from increased debt balances and higher interest rates. Everus reported first quarter earnings of $28.2 million compared to earnings of $26.1 million in the same period in 2023.
EBITDA for the first quarter increased $3.4 million compared to last year to a first quarter record of $46.9 million. The increase in earnings was the result of strong demand for institutional work for government and health care projects. Margin increases largely in the utility market due to efficiencies in labor and equipment utilization also had benefited the quarter. Everus also had higher selling, general and administrative costs, including increased rent expense, higher payroll-related costs, increased professional services expense as well as decreased other income related to joint ventures. Backlog for the quarter was an all-time record, as Nicole mentioned previously, of $2.18 billion, with transmission and distribution up 7% and electrical and mechanical backlog up 3% when compared to the same period in 2023.
Finally, MDU Resources continues to maintain a strong balance sheet and ample access to working capital to finance operations throughout our peak seasons. Business momentum is strong as we closed out the first quarter of 2024, and we will continue to provide updates regarding our 2024 guidance and outlook as we progress throughout the year. That summarizes financial highlights for the quarter. We appreciate your interest in and commitment to MDU Resources and ask now that we open the line to questions. Bo?
Operator: [Operator Instructions] We’ll go first this afternoon to Ryan Levine of Citi.
Ryan Levine: To start off on the Everus business mix or backlog mix? What percentage is data centers now? And are there other key buckets that we should be looking at as meaningful drivers of your growth in the coming years?
Nicole Kivisto: Yes, Ryan. Thanks for the question. I’ll turn it over to Jeff.
Jeff Thiede: Thanks for the question, Ryan. Our backlog really has been built upon our success in our diversified businesses in all the markets that we serve, but primarily in the commercial area, which is data centers. We’re doing data centers for a multitude of major clients, so that we all know about confidential clients, of course. But we have negotiated, semi-negotiated and been able to add to our backlog significantly and then get repeat business, primarily due to our performance, our safety, our productivity and our quality. And we see this as one of the strongest drivers for us going forward.
Ryan Levine: Is there any percentage numbers you’re able to share or any maybe high-level color around the magnitude of that market for you? And even geographically, there are certain states that you’re more levered to there?
Jason Vollmer: Ryan, this is Jason. I’ll start off on the percentage of numbers. We don’t typically break it out that way. We break it out between the T&D market and the E&M market. So this certainly would be part of the E&M space, as Jeff is talking about here. But I’ll let Jeff weigh in on geographic diversity and maybe what we’re seeing in that market. But no percentages as far as what we’ve been able to disclose at this point as far as just data center builds. But Jeff, you may want to address the geographic markets.
Jeff Thiede: Right? We’re in Ohio, of course, and there’s a tremendous amount of data center growth there. We’re in the Southwest and the Pacific Northwest. Those are the primary areas of our data center work, and you complement that with the health care work we’re doing, the institutional work, the renewables contributing to our record backlog. And of course, our backlog is also up in the T&D space, where we’re doing grid hardening, undergrounding of electrical services and transportation contributing to our record backlog.
