Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
The following information includes the evaluation of disclosure controls and procedures by the Company's chief executive officer and the chief financial officer, along with any significant changes in internal controls of the Company.
Evaluation of Disclosure Controls and Procedures
The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. The Company's disclosure controls and other procedures are designed to provide reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. The Company's disclosure controls and other procedures are designed to provide reasonable assurance that information required to be disclosed is accumulated and communicated to management, including the Company's chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure. The Company's management, with the participation of the Company's chief executive officer and chief financial officer, has evaluated the effectiveness of the Company's disclosure controls and other procedures as of the end of the period covered by this report. Based upon that evaluation, the chief executive officer and the chief financial officer have concluded that, as of the end of the period covered by this report, such controls and procedures were effective at a reasonable assurance level.
Changes in Internal Controls
No change in the Company's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended December 31, 2021, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
Management's Annual Report on Internal Control Over Financial Reporting
The information required by this item is included in this Form 10-K at Item 8 - Management's Report on Internal Control Over Financial Reporting.
Attestation Report of the Registered Public Accounting Firm
The information required by this item is included in this Form 10-K at Item 8 - Report of Independent Registered Public Accounting Firm.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
MDU Resources Group, Inc. Form 10-K 115
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Part III
Item 10. Directors, Executive Officers and Corporate Governance
Information required by this item will be included in the Company's Proxy Statement, which is incorporated herein by reference.
Item 11. Executive Compensation
Information required by this item will be included in the Company's Proxy Statement, which is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Equity Compensation Plan Information
The following table includes information as of December 31, 2021, with respect to the Company's equity compensation plans:
Plan Category (a)
Number of securities to be issued upon exercise of outstanding options, warrants and rights (b)
Weighted average exercise price of outstanding options, warrants and rights (c)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by stockholders (1)
648,747 (2) $ — (3) 3,032,901 (4)(5)
Equity compensation plans not approved by stockholders
N/A N/A N/A
Total
648,747 $ — 3,032,901
(1) Consists of the Non-Employee Director Long-Term Incentive Compensation Plan and the Long-Term Performance-Based Incentive Plan.
(2) Consists of restricted stock awards and performance share awards.
(3) No weighted average exercise price is shown for the restricted stock awards or performance share awards because such awards have no exercise price.
(4) This amount includes 2,849,487 shares available for future issuance under the Long-Term Performance-Based Incentive Plan in connection with grants of restricted stock, performance units, performance shares or other equity-based awards.
(5) This amount includes 183,414 shares available for future issuance under the Non-Employee Director Long-Term Incentive Compensation Plan.
The remaining information required by this item will be included in the Company's Proxy Statement, which is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information required by this item will be included in the Company's Proxy Statement, which is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
Information required by this item about aggregate fees billed to the Company by its principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34 ), will be included in the Company's Proxy Statement, which is incorporated herein by reference.
116 MDU Resources Group, Inc. Form 10-K
Index
Part IV
Item 15. Exhibits, Financial Statement Schedules
(a) Financial Statements, Financial Statement Schedules and Exhibits
Index to Financial Statements and Financial Statement Schedules
1. Financial Statements
The following consolidated financial statements required under this item are
included under Item 8 - Financial Statements and Supplementary Data.
Page
Consolidated Statements of Income for each of the three years in the period ended December 31, 2021
68
Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2021
69
Consolidated Balance Sheets at December 31, 2021 and 2020
70
Consolidated Statements of Equity for each of the three years in the period ended December 31, 2021
71
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2021
72
Notes to Consolidated Financial Statements
73
2. Financial Statement Schedules
The following financial statement schedules are included in Part IV of this report. Page
Schedule I - Condensed Financial Information of Registrant (Unconsolidated)
Condensed Statements of Income and Comprehensive Income for each of the three years in the period ended December 31, 2021
118
Condensed Balance Sheets at December 31, 2021 and 2020
119
Condensed Statements of Cash Flows for each of the three years in the period ended December 31, 2021
120
Notes to Condensed Financial Statements
120
All other schedules have been omitted because they are not applicable or the required information is included elsewhere in the financial statements or related notes.
3. Exhibits 121
MDU Resources Group, Inc. Form 10-K 117
Index
Part IV
MDU RESOURCES GROUP, INC.
Schedule I - Condensed Financial Information of Registrant (Unconsolidated)
Condensed Statements of Income and Comprehensive Income
Years ended December 31, 2021 2020 2019
(In thousands)
Equity in earnings of subsidiaries from continuing operations $ 377,731 $ 390,527 $ 335,166
Income from continuing operations 377,731 390,527 335,166
Equity in earnings (loss) of subsidiaries from discontinued operations 400 ( 322 ) 287
Net income $ 378,131 $ 390,205 $ 335,453
Comprehensive income $ 385,205 $ 384,229 $ 331,693
The accompanying notes are an integral part of these condensed financial statements.
118 MDU Resources Group, Inc. Form 10-K
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Part IV
MDU RESOURCES GROUP, INC.
Schedule I - Condensed Financial Information of Registrant (Unconsolidated)
Condensed Balance Sheets
December 31, 2021 2020
(In thousands, except shares and per share amounts)
Assets
Current assets:
Cash and cash equivalents $ 6,159 $ 8,781
Receivables, net 6,120 4,865
Accounts receivable from subsidiaries 49,696 50,539
Prepayments and other current assets 2,528 1,612
Total current assets 64,503 65,797
Noncurrent assets
Investments 55,686 52,000
Investment in subsidiaries 3,368,537 3,069,956
Deferred income taxes 7,364 9,691
Operating lease right-of-use assets 114 56
Other 26,558 28,866
Total noncurrent assets 3,458,259 3,160,569
Total assets $ 3,522,762 $ 3,226,366
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,546 $ 2,135
Accounts payable to subsidiaries 6,133 5,412
Taxes payable 1,672 4,056
Dividends payable 44,229 42,611
Accrued compensation 4,098 7,825
Operating lease liabilities due within one year 52 40
Other accrued liabilities 7,309 6,881
Total current liabilities 66,039 68,960
Noncurrent liabilities:
Operating lease liabilities 62 16
Other 73,787 78,285
Total noncurrent liabilities 73,849 78,301
Commitments and contingencies
Stockholders' equity:
Common stock
Authorized - 500,000,000 shares, $ 1.00 par value
Shares issued - 203,889,661 at December 31, 2021 and 201,061,198 at December 31, 2020
203,889 201,061
Other paid-in capital 1,461,205 1,371,385
Retained earnings 1,762,410 1,558,363
Accumulated other comprehensive loss ( 41,004 ) ( 48,078 )
Treasury stock at cost - 538,921 shares
( 3,626 ) ( 3,626 )
Total stockholders' equity 3,382,874 3,079,105
Total liabilities and stockholders' equity $ 3,522,762 $ 3,226,366
The accompanying notes are an integral part of these condensed financial statements.
MDU Resources Group, Inc. Form 10-K 119
Index
Part IV
MDU RESOURCES GROUP, INC.
Schedule I - Condensed Financial Information of Registrant (Unconsolidated)
Condensed Statements of Cash Flows
Years ended December 31, 2021 2020 2019
(In thousands)
Net cash provided by operating activities $ 187,297 $ 226,642 $ 168,520
Investing activities:
Investments in and advances to subsidiaries ( 102,000 ) ( 67,000 ) ( 120,000 )
Advances from subsidiaries — — 17,000
Investments ( 391 ) ( 4 ) ( 236 )
Net cash used in investing activities ( 102,391 ) ( 67,004 ) ( 103,236 )
Financing activities:
Proceeds from issuance of common stock 88,767 3,385 106,848
Dividends paid ( 171,354 ) ( 166,405 ) ( 160,256 )
Repurchase of common stock ( 2,992 ) — —
Tax withholding on stock-based compensation ( 1,949 ) ( 163 ) ( 1,821 )
Net cash used in financing activities ( 87,528 ) ( 163,183 ) ( 55,229 )
Increase (decrease) in cash and cash equivalents ( 2,622 ) ( 3,545 ) 10,055
Cash and cash equivalents - beginning of year 8,781 12,326 2,271
Cash and cash equivalents - end of year $ 6,159 $ 8,781 $ 12,326
The accompanying notes are an integral part of these condensed financial statements.
Notes to Condensed Financial Statements
Note 1 - Summary of Significant Accounting Policies
Basis of presentation The condensed financial information reported in Schedule I is being presented to comply with Rule 12-04 of Regulation S-X. The information is unconsolidated and is presented for the parent company only, MDU Resources Group, Inc. (the Company) as of and for the years ended December 31, 2021, 2020 and 2019. In Schedule I, investments in subsidiaries are presented under the equity method of accounting where the assets and liabilities of the subsidiaries are not consolidated. The investments in net assets of the subsidiaries are recorded on the Condensed Balance Sheets. The income from subsidiaries is reported as equity in earnings of subsidiaries on the Condensed Statements of Income. The material cash inflows on the Condensed Statements of Cash Flows are primarily from the dividends and other payments received from its subsidiaries and the proceeds raised from the issuance of equity securities. The consolidated financial statements of the Company reflect certain businesses as discontinued operations. These statements should be read in conjunction with the consolidated financial statements and notes thereto of the Company.
Earnings per common share Please refer to the Consolidated Statements of Income of the registrant for earnings per common share. In addition, see Item 8 - Note 2 for information on the computation of earnings per common share.
Note 2 - Debt At December 31, 2021, the Company had no long-term debt maturities. For more information on debt, see Item 8 - Note 9.
Note 3 - Dividends The Company depends on earnings and dividends from its subsidiaries to pay dividends on common stock. Cash dividends paid to the Company by subsidiaries were $ 188.1 million, $ 228.4 million and $ 177.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.
120 MDU Resources Group, Inc. Form 10-K
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Part IV
Exhibits
Incorporated by Reference
Exhibit Number Exhibit Description Filed Herewith Form Period Ended Exhibit Filing Date File Number
3(a) Amended and Restated Certificate of Incorporation of MDU Resources Group, Inc.
8-K 3.2 5/8/19 1-03480
3(b) Amended and Restated Bylaws of MDU Resources Group, Inc.
8-K 3.1 2/15/19 1-03480
4(a) Indenture, dated as of December 15, 2003, between MDU Resources Group, Inc. and The Bank of New York, as trustee
S-8 4(f) 1/21/04 333-112035
4(b) First Supplemental Indenture, dated as of November 17, 2009, between MDU Resources Group, Inc. and the Bank of New York Mellon, as trustee
10-K 12/31/09 4(c) 2/17/10 1-03480
*4(c) Fifth Amended and Restated Credit Agreement, dated as of December 19, 2019, among Centennial Energy Holdings, Inc., U.S. Bank National Association, as Administrative Agent, and The Several Financial Institutions party thereto
10-K 12/31/19 4(c) 2/21/20 1-03480
*4(d) Montana-Dakota Utilities Co. Amended and Restated Credit Agreement, dated December 19, 2019, among Montana-Dakota Utilities Co., Various Lenders, and Wells Fargo Bank, National Association, as Administrative Agent
10-K 12/31/19 4(d) 2/21/20 1-03480
4(e) Centennial Energy Holdings, Inc. Note Purchase Agreement, dated December 20, 2012, among Centennial Energy Holdings, Inc. and various purchasers of the notes
10-Q 6/30/19 4(a) 8/2/19 1-03480
4(f) Montana-Dakota Utilities Co. Note Purchase Agreement, dated July 24, 2019, among Montana-Dakota Utilities Co. and various purchasers of the notes
10-Q 9/30/19 4(a) 11/1/19 1-03480
4(g) MDU Resources Group, Inc. Description of Securities Registered Pursuant to Section 12 of the Securities and Exchange Act of 1934
10-K 12/31/19 4(g) 2/21/20 1-03480
*4(h) WBI Energy Transmission, Inc. Amended and Restated Note Purchase and Private Shelf Agreement, effective as of September 12, 2013, among Prudential Investment Management, Inc. and certain investors described therein
10-K 12/31/20 4(h) 2/19/21 1-03480
4(i) Amendment No. 1 to WBI Energy Transmission, Inc. Amended and Restated Note Purchase and Private Shelf Agreement, dated May 17, 2016, among Prudential Investment Management, Inc. and certain investors described therein
10-K 12/31/20 4(i) 2/19/21 1-03480
4(j) Amendment No. 2 to WBI Energy Transmission, Inc. Amended and Restated Note Purchase and Private Shelf Agreement, dated July 26, 2019 and effective May 16, 2019, among Prudential Investment Management, Inc. and certain investors described therein
10-K 12/31/20 4(j) 2/19/21 1-03480
+10(a) MDU Resources Group, Inc. Supplemental Income Security Plan, as amended and restated May 10, 2017
10-Q 6/30/17 10(d) 8/4/17 1-03480
+10(b) MDU Resource Group, Inc. Director Compensation Policy, as amended May 12, 2021
10-Q 6/30/21 10(b) 8/5/21 1-03480
+10(c) Deferred Compensation Plan for Directors, as amended May 15, 2008
10-Q 6/30/08 10(a) 8/7/08 1-03480
+10(d) Non-Employee Director Stock Compensation Plan, as amended May 12, 2011
10-Q 6/30/11 10(a) 8/5/11 1-03480
+10(e) MDU Resources Group, Inc. Non-Employee Director Long-Term Incentive Compensation Plan, as amended May 17, 2012
10-Q 6/30/12 10(a) 8/7/12 1-03480
+10(f) MDU Resources Group, Inc. Long-Term Performance-Based Incentive Plan, as amended February 11, 2016
10-K 12/31/15 10(f) 2/19/16 1-03480
+10(g) MDU Resources Group, Inc. Executive Incentive Compensation Plan, as amended November 12, 2020, and Rules and Regulations, as amended November 12, 2020
10-K 12/31/20 10(h) 2/19/21 1-03480
MDU Resources Group, Inc. Form 10-K 121
Index
Part IV
Incorporated by Reference
Exhibit Number Exhibit Description Filed Herewith Form Period Ended Exhibit Filing Date File Number
+10(h) Form of Performance Share Award Agreement under the Long-Term Performance-Based Incentive Plan, as amended February 14, 2019
10-K 12/31/18 10(k) 2/22/19 1-03480
+10(i) Form of Performance Share Award Agreement under the Long-Term Performance-Based Incentive Plan, as amended February 13, 2020
10-K 12/31/19 10(k) 2/21/20 1-03480
+10(j) Form of Performance Share Award Agreement under the Long-Term Performance-Based Incentive Plan, as amended February 11, 2021
10-K 12/31/20 10(l) 2/19/21 1-03480
+10(k) Form of Performance Share Award Agreement under the Long-Term Performance-Based Incentive Plan, as amended February 17, 2022
X
+10(l) Restricted Stock Unit Award Agreement under the Long-Term Performance-Based Incentive Plan, as amended February 11, 2021
10-K 12/31/20 10(n) 2/19/21 1-03480
+10(m) Restricted Stock Unit Award Agreement under the Long-Term Performance-Based Incentive Plan, as amended February 17, 2022
X
+10(n) Form of MDU Resources Group, Inc. Indemnification Agreement for Section 16 Officers and Directors, dated May 15, 2014
8-K 10.1 5/15/14 1-03480
+10(o) Form of Amendment No. 1 to Indemnification Agreement, dated May 15, 2014
8-K 10.2 5/15/14 1-03480
+10(p) MDU Resources Group, Inc. Section 16 Officers and Directors with Indemnification Agreements Chart, as of February 6, 2021
10-K 12/31/20 10(q) 2/19/21 1-03480
+10(q) MDU Resources Group, Inc. Nonqualified Defined Contribution Plan, as amended and restated November 12, 2020
10-K 12/31/20 10(r) 2/19/21 1-03480
+10(r) MDU Resources Group, Inc. Deferred Compensation Plan Adoption Agreement, as amended August 12, 2021
10-Q 9/30/21 10(c) 11/4/21 1-03480
+10(s) MDU Resources Group, Inc. Deferred Compensation Plan Document, dated November 12, 2020
8-K 10.2 11/12/20 1-03480
+10(t) Instrument of Amendment to the MDU Resources Group, Inc. 401(k) Retirement Plan, dated December 17, 2020
10-K 12/31/20 10(u) 2/19/21 1-03480
+10(u) MDU Resources Group, Inc. 401(k) Retirement Plan, as restated April 1, 2020
10-Q 3/31/20 10(a) 5/8/20 1-03480
+10(v) MDU Resources Group, Inc. 401(k) Retirement Plan, as amended January 1, 2021
10-Q 3/31/21 10(a) 5/6/21 1-03480
+10(w) MDU Resources Group, Inc. 401(k) Retirement Plan, as amended January 1, 2022
X
+10(x) Employment Letter for Jeffrey S. Thiede, dated May 16, 2013
10-K 12/31/13 10(ab) 2/21/14 1-03480
+10(y) Jason L. Vollmer Offer Letter, dated September 20, 2017
8-K 10.1 9/21/17 1-03480
21 Subsidiaries of MDU Resources Group, Inc.
X
23 Consent of Independent Registered Public Accounting Firm
X
31(a) Certification of Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31(b) Certification of Chief Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32 Certification of Chief Executive Officer and Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
95 Mine Safety Disclosures
X
122 MDU Resources Group, Inc. Form 10-K
Index
Part IV
Incorporated by Reference
Exhibit Number Exhibit Description Filed Herewith Form Period Ended Exhibit Filing Date File Number
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
* Schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted
schedule and/or exhibit will be furnished as a supplement to the SEC upon request.
+ Management contract, compensatory plan or arrangement.
MDU Resources Group, Inc. agrees to furnish to the SEC upon request any instrument with respect to long-term debt that MDU Resources Group, Inc. has not filed as an exhibit pursuant to the exemption provided by Item 601(b)(4)(iii)(A) of Regulation S-K.
Item 16. Form 10-K Summary
None.
MDU Resources Group, Inc. Form 10-K 123
Index
Part IV
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MDU Resources Group, Inc.
Date: February 23, 2022 By: /s/ David L. Goodin
David L. Goodin
(President and Chief Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the date indicated.
Signature Title Date
/s/ David L. Goodin Chief Executive Officer and Director February 23, 2022
David L. Goodin
(President and Chief Executive Officer)
/s/ Jason L. Vollmer Chief Financial Officer February 23, 2022
Jason L. Vollmer
(Vice President and Chief Financial Officer)
/s/ Stephanie A. Barth Chief Accounting Officer February 23, 2022
Stephanie A. Barth
(Vice President, Chief Accounting Officer and Controller)
/s/ Dennis W. Johnson Director February 23, 2022
Dennis W. Johnson
(Chair of the Board)
/s/ Thomas Everist Director February 23, 2022
Thomas Everist
/s/ Karen B. Fagg Director February 23, 2022
Karen B. Fagg
/s/ Patricia L. Moss Director February 23, 2022
Patricia L. Moss
/s/ Dale S. Rosenthal Director February 23, 2022
Dale S. Rosenthal
/s/ Edward A. Ryan Director February 23, 2022
Edward A. Ryan
/s/ David M. Sparby Director February 23, 2022
David M. Sparby
/s/ Chenxi Wang Director February 23, 2022
Chenxi Wang
124 MDU Resources Group, Inc. Form 10-K