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, 2022, 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.
122 MDU Resources Group, Inc. Form 10-K
Index
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, 2022, 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)
754,044 (2) $ — (3) 2,635,636 (4)(5)
Equity compensation plans not approved by stockholders
N/A N/A N/A
Total
754,044 $ — 2,635,636
(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 2,493,022 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 142,614 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.
MDU Resources Group, Inc. Form 10-K 123
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, 2022
72
Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 202 2
73
Consolidated Balance Sheets at December 31, 2022 and 2021
74
Consolidated Statements of Equity for each of the three years in the period ended December 31, 2022
75
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2022
76
Notes to Consolidated Financial Statements
77
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, 2022
125
Condensed Balance Sheets at December 31, 2022 and 2021
126
Condensed Statements of Cash Flows for each of the three years in the period ended December 31, 2022
127
Notes to Condensed Financial Statements
127
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 128
124 MDU Resources Group, Inc. Form 10-K
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, 2022 2021 2020
(In thousands)
Operating revenues $ — $ — $ —
Operating expenses 14,323 — —
Operating loss ( 14,323 ) — —
Other income — — —
Interest expense — — —
Loss before income taxes ( 14,323 ) — —
Income taxes ( 1,623 ) — —
Equity in earnings of subsidiaries from continuing operations 379,976 377,731 390,527
Income from continuing operations 367,276 377,731 390,527
Equity in earnings (loss) of subsidiaries from discontinued operations 213 400 ( 322 )
Net income $ 367,489 $ 378,131 $ 390,205
Comprehensive income $ 377,910 $ 385,205 $ 384,229
The accompanying notes are an integral part of these condensed financial statements.
MDU Resources Group, Inc. Form 10-K 125
Index
Part IV
MDU RESOURCES GROUP, INC.
Schedule I - Condensed Financial Information of Registrant (Unconsolidated)
Condensed Balance Sheets
December 31, 2022 2021
(In thousands, except shares and per share amounts)
Assets
Current assets:
Cash and cash equivalents $ 19,486 $ 6,159
Receivables, net 4,410 6,120
Accounts receivable from subsidiaries 53,285 49,696
Prepayments and other current assets 3,237 2,528
Total current assets 80,418 64,503
Noncurrent assets
Investments 50,206 55,686
Investment in subsidiaries 3,581,754 3,368,537
Deferred income taxes 12,668 7,364
Operating lease right-of-use assets 72 114
Other 2,068 26,558
Total noncurrent assets 3,646,768 3,458,259
Total assets $ 3,727,186 $ 3,522,762
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,354 $ 2,546
Accounts payable to subsidiaries 4,402 6,133
Taxes payable 572 1,672
Dividends payable 45,246 44,229
Accrued compensation 4,312 4,098
Operating lease liabilities due within one year 42 52
Other accrued liabilities 17,907 7,309
Total current liabilities 74,835 66,039
Noncurrent liabilities:
Operating lease liabilities 30 62
Other 65,192 73,787
Total noncurrent liabilities 65,222 73,849
Commitments and contingencies
Stockholders' equity:
Common stock
Authorized - 500,000,000 shares, $ 1.00 par value
Shares issued - 204,162,814 at December 31, 2022 and 203,889,661 at December 31, 2021
204,163 203,889
Other paid-in capital 1,466,037 1,461,205
Retained earnings 1,951,138 1,762,410
Accumulated other comprehensive loss ( 30,583 ) ( 41,004 )
Treasury stock at cost - 538,921 shares
( 3,626 ) ( 3,626 )
Total stockholders' equity 3,587,129 3,382,874
Total liabilities and stockholders' equity $ 3,727,186 $ 3,522,762
The accompanying notes are an integral part of these condensed financial statements.
126 MDU Resources Group, Inc. Form 10-K
Index
Part IV
MDU RESOURCES GROUP, INC.
Schedule I - Condensed Financial Information of Registrant (Unconsolidated)
Condensed Statements of Cash Flows
Years ended December 31, 2022 2021 2020
(In thousands)
Net cash provided by operating activities $ 242,199 $ 187,297 $ 226,642
Investing activities:
Investments in and advances to subsidiaries ( 45,000 ) ( 102,000 ) ( 67,000 )
Investments ( 885 ) ( 391 ) ( 4 )
Net cash used in investing activities ( 45,885 ) ( 102,391 ) ( 67,004 )
Financing activities:
Proceeds from issuance of common stock ( 149 ) 88,767 3,385
Dividends paid ( 176,915 ) ( 171,354 ) ( 166,405 )
Repurchase of common stock ( 3,525 ) ( 2,992 ) —
Tax withholding on stock-based compensation ( 2,398 ) ( 1,949 ) ( 163 )
Net cash used in financing activities ( 182,987 ) ( 87,528 ) ( 163,183 )
Increase (decrease) in cash and cash equivalents 13,327 ( 2,622 ) ( 3,545 )
Cash and cash equivalents - beginning of year 6,159 8,781 12,326
Cash and cash equivalents - end of year $ 19,486 $ 6,159 $ 8,781
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, 2022, 2021 and 2020. 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, 2022, 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 $ 242.1 million, $ 188.1 million and $ 228.4 million for the years ended December 31, 2022, 2021 and 2020, respectively.
MDU Resources Group, Inc. Form 10-K 127
Index
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. Second Amend ment and Resta t e ment Note Purchase and Private Shelf Agreement, effective as of Dece mber 22 , 20 22 , among Prudential Investment Management, Inc. and certain investors described therein
X
+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 11, 2022
10-Q 6/30/22 10(b) 8/5/22 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
+10(h) 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(i) 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(j) Form of Performance Share Award Agreement under the Long-Term Performance-Based Incentive Plan, as amended February 17, 2022
10-K 12/31/21 10(k) 2/23/22 1-03480
128 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
+10(k) 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(l) Restricted Stock Unit Award Agreement under the Long-Term Performance-Based Incentive Plan, as amended February 17, 2022
10-K 12/31/21 10(m) 2/23/22 1-03480
+10(m) Restricted Stock Unit Award Agreement under the Long-Term Performance-Based Incentive Plan, as amended February 16, 2023
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 1, 2023
X
+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) 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(u) MDU Resources Group, Inc. 401(k) Retirement Plan, as amended January 1, 2022
10-K 12/31/21 10(w) 2/23/22 1-03480
+10(v) MDU Resources Group, Inc. 401(k) Retirement Plan, as amended August 17, 2022
10-Q 9/30/22 10(a) 11/3/22 1-03480
+10(w) MDU Resources Group, Inc. 401(k) Retirement Plan, as amended December 28, 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
+10(z) Cooperation Agreement, dated as of January 24, 2023, by and among Keith A. Meister, Corvex Management LP and MDU Resources Group, Inc.
8-K 10.1 1/24/23 1-03480
+10(aa) Retention Agreement for Jeffrey S. Thiede, dated February 17, 2023
X
+10(ab) David C. Barney Offer Letter, dated February 17, 2023
X
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
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
MDU Resources Group, Inc. Form 10-K 129
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Part IV
Incorporated by Reference
Exhibit Number Exhibit Description Filed Herewith Form Period Ended Exhibit Filing Date File Number
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.
130 MDU Resources Group, Inc. Form 10-K
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 24, 2023 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 24, 2023
David L. Goodin
(President and Chief Executive Officer)
/s/ Jason L. Vollmer Chief Financial Officer February 24, 2023
Jason L. Vollmer
(Vice President and Chief Financial Officer)
/s/ Stephanie A. Barth Chief Accounting Officer February 24, 2023
Stephanie A. Barth
(Vice President, Chief Accounting Officer and Controller)
/s/ Dennis W. Johnson Director February 24, 2023
Dennis W. Johnson
(Chair of the Board)
/s/ German Carmona Alvarez Director February 24, 2023
German Carmona Alvarez
/s/ Thomas Everist Director February 24, 2023
Thomas Everist
/s/ Karen B. Fagg Director February 24, 2023
Karen B. Fagg
/s/ Patricia L. Moss Director February 24, 2023
Patricia L. Moss
/s/ Dale S. Rosenthal Director February 24, 2023
Dale S. Rosenthal
/s/ Edward A. Ryan Director February 24, 2023
Edward A. Ryan
/s/ David M. Sparby Director February 24, 2023
David M. Sparby
/s/ Chenxi Wang Director February 24, 2023
Chenxi Wang
MDU Resources Group, Inc. Form 10-K 131