12 unchanged sentences
The effectiveness of the Company's internal control over financial reporting as of December 31, 2023, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report.
−Removed: Goodin /s/ Jason L.
−Removed: Goodin Jason L.
−Removed: President and Chief Executive Officer Vice President and Chief Financial Officer
+Added: /s/ Nicole A.
+Added: President and Chief Executive Officer Vice President, Chief Financial Officer and Treasurer
MDU Resources Group, Inc.
26 unchanged sentences
This method depends largely on the ability to make reasonably dependable estimates related to the extent of progress toward completion of the contract, contract revenues, contract costs, and contract profits.
−Removed: The accounting for these contracts involves judgment, particularly as it relates to the process of estimating total costs and profit for the performance obligation.
+Added: The accounting for these contracts involves judgment, particularly as it relates to the process of determining the contract revenues and estimating total costs and profit for the performance obligation.
+Added: Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration, including liquidated damages, performance bonuses or incentives, claims, unpriced change orders and penalties or index pricing are made during the contract performance period.
+Added: The Company estimates variable consideration at the most likely amount it expects to be entitled to or expects to incur and includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.
For the year ended December 31, 2023, the Company recognized $2.8 billion of construction contract revenue.
−Removed: Given the judgments necessary to estimate total costs and profit for the performance obligations used to recognize revenue for construction contracts, auditing such estimates required extensive audit effort due to the volume and complexity of construction contracts and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures.
+Added: Given the judgments necessary to account for the Company’s construction contracts including the use of estimates to determine the transaction price, total costs and profit for the performance obligations which are used to recognize revenue for construction contracts, auditing such estimates required extensive audit effort due to the volume and complexity of construction contracts and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures.
+Added: 64 MDU Resources Group, Inc.
How the Critical Audit Matter Was Addressed in the Audit
1 unchanged sentence
• We tested the design and operating effectiveness of management's controls over construction contract revenue, including those over management’s estimation of total costs and profit for the performance obligations.
−Removed: 68 MDU Resources Group, Inc.
• We developed an expectation of the amount of construction contract revenues for certain performance obligations based on prior year markups, and taking into account current year events, applied to the construction contract costs in the current year and compared our expectation to the amount of construction contract revenues recorded by management.
5 unchanged sentences
• Tested the accuracy and completeness of the costs incurred to date for the performance obligation.
+Added: • Compared the total estimated contract revenue, including estimated variable consideration, to the consideration expected to be received based on current rights and obligations under the contracts and any modifications that were agreed upon with the customers.
+Added: • We evaluated the reasonableness of the estimated variable consideration in the contract revenue by:
+Added: ◦ Evaluating the information supporting management’s judgement as to the cause and contractual rights on the project
+Added: ◦ Testing the accuracy of the identification of the underlying costs associated with the variable consideration.
• Evaluated the estimates of total cost and profit for the performance obligation by:
20 unchanged sentences
Decisions to be made by the Commissions in the future will impact the accounting for regulated operations.
+Added: MDU Resources Group, Inc.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements.
7 unchanged sentences
and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
−Removed: MDU Resources Group, Inc.
• We evaluated the Company’s disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
8 unchanged sentences
The Company determines the fair value of its reporting units using the discounted cash flow model and the market approach.
−Removed: The determination of the fair value requires management to make significant estimates and assumptions related to forecasts of future cash flows, earnings before interest, taxes, depreciation, and amortization (EBITDA), long-term growth rates, and discount rates.
+Added: The determination of the fair value using the discounted cash flow model requires management to make significant estimates and assumptions related to forecasts of future cash flows, earnings before interest, taxes, depreciation, and amortization (EBITDA), long-term growth rates, and discount rates.
+Added: The determination of the fair value using the market approach requires management to make significant assumptions related to EBITDA multiples and rate base transaction multiples.
Changes in these assumptions could have a significant impact on either the fair value or the amount of any goodwill impairment charge.
1 unchanged sentence
The fair value of Natural Gas Distribution exceeded its carrying value as of the measurement date and, therefore, no impairment was recognized.
−Removed: We identified goodwill for Natural Gas Distribution as a critical audit matter because of the significant judgments made by management to estimate the fair value and the difference between its fair value and carrying value.
−Removed: This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasts of future cash flows, EBITDA and selection of the discount rate and long-term growth rate.
+Added: We identified goodwill for Natural Gas Distribution as a critical audit matter because of the significant estimates and assumptions management makes to estimate the fair value and the difference between its fair value and carrying value.
+Added: This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasts of future cash flows, EBITDA, and selection of the discount rate, the long-term growth rate, and EBITDA and rate base transaction multiples.
How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our audit procedures related to the forecasts of future cash flows, EBITDA, the discount rate, and the long-term growth rate, used by management to estimate the fair value of Natural Gas Distribution included the following, among others:
−Removed: • We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of Natural Gas Distribution, such as controls related to management’s forecasts of future cash flows, EBITDA and selection of the discount rate and long-term growth rate.
+Added: Our audit procedures related to the forecasts of future cash flows EBITDA, the discount rate, long-term growth rate, EBITDA and the rate base transaction multiples used by management to estimate the fair value of Natural Gas Distribution included the following, among others:
+Added: • We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of Natural Gas Distribution, such as controls related to management’s forecasts of future cash flows and EBITDA and the selection of the discount rate, long-term growth rate, EBITDA and rate base transaction multiples.
• We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts.
1 unchanged sentence
• We evaluated the impact of changes in management’s forecasts from the October 31, 2023, annual measurement date to December 31, 2023.
+Added: 66 MDU Resources Group, Inc.
• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology, discount rate, and long-term growth rate, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rate and long-term growth rate selected by management.
−Removed: • With the assistance of our fair value specialists, we evaluated the EBITDA multiples, including testing the underlying source information and mathematical accuracy of the calculations, and comparing the multiples selected by management to its guideline companies.
+Added: • With the assistance of our fair value specialists, we evaluated the EBITDA transaction multiples, including testing the underlying source information and mathematical accuracy of the calculations, and comparing the multiples selected by management to its guideline companies and transactions.
/s/ Deloitte & Touche LLP
35 unchanged sentences
Electric, natural gas distribution and regulated pipeline $ 1,789,637 $ 1,736,397 $ 1,390,992
−Removed: Non-regulated pipeline, construction materials and contracting, construction services and other 5,238,105 4,290,390 4,283,604
+Added: Non-regulated pipeline, construction services and other
+Added: 2,867,703 2,705,387 2,063,444
Total operating revenues 4,657,340 4,441,784 3,454,436
2 unchanged sentences
Electric, natural gas distribution and regulated pipeline 397,037 375,347 367,234
−Removed: Non-regulated pipeline, construction materials and contracting, construction services and other 4,604,149 3,712,037 3,675,078
+Added: Non-regulated pipeline, construction services and other
+Added: 2,573,835 2,450,347 1,842,697
Total operation and maintenance 2,970,872 2,825,694 2,209,931
Purchased natural gas sold 742,965 757,883 483,118
−Removed: Depreciation, depletion and amortization 327,826 299,214 285,100
+Added: Depreciation and amortization
+Added: 213,598 210,028 198,240
Taxes, other than income 196,046 186,173 157,991
2 unchanged sentences
Operating income 425,978 369,999 331,051
+Added: Realized gain on tax-free exchange of the retained shares in Knife River
Other income 41,672 11,228 25,724
31 unchanged sentences
Postretirement liability adjustment ( 404 ) 10,561 6,746
−Removed: Net unrealized (loss) gain on available-for-sale investments:
−Removed: Net unrealized loss on available-for-sale investments arising during the period, net of tax of $( 177 ), $( 67 ) and $ 0 in 2022, 2021 and 2020, respectively
+Added: Net unrealized gain (loss) on available-for-sale investments:
+Added: Net unrealized gain (loss) on available-for-sale investments arising during the period, net of tax of $ 46 , $( 177 ) and $( 67 ) in 2023, 2022 and 2021, respectively
173 ( 667 ) ( 252 )
Reclassification adjustment for loss on available-for-sale investments included in net income, net of tax of $ 11 , $ 31 and $ 36 in 2023, 2022 and 2021, respectively
−Removed: Net unrealized (loss) gain on available-for-sale investments ( 553 ) ( 118 ) 51
+Added: Net unrealized gain (loss) on available-for-sale investments
+Added: 216 ( 553 ) ( 118 )
Other comprehensive income (loss) ( 107 ) 10,421 7,074
6 unchanged sentences
Current assets:
−Removed: Cash and cash equivalents $ 80,517 $ 54,161
+Added: Cash, cash equivalents and restricted cash
+Added: $ 76,975 $ 70,428
Receivables, net 942,782 1,064,340
2 unchanged sentences
Prepayments and other current assets 84,082 55,123
+Added: Current assets of discontinued operations — 592,517
Total current assets 1,363,723 2,011,748
1 unchanged sentence
Property, plant and equipment 7,341,116 6,874,629
−Removed: Less accumulated depreciation, depletion and amortization 3,272,493 3,216,461
+Added: Less accumulated depreciation and amortization
+Added: 2,220,206 2,098,298
Net property, plant and equipment 5,120,910 4,776,331
5 unchanged sentences
Other 211,865 161,901
+Added: Noncurrent assets of discontinued operations — 1,685,751
Total noncurrent assets 6,469,436 7,649,033
11 unchanged sentences
Other accrued liabilities 181,471 156,031
+Added: Current liabilities of discontinued operations — 496,923
Total current liabilities 1,075,733 1,479,603
6 unchanged sentences
Other 199,675 180,603
+Added: Noncurrent liabilities of discontinued operations
Total noncurrent liabilities 3,852,193 4,594,049
7 unchanged sentences
Accumulated other comprehensive loss ( 18,384 ) ( 30,583 )
−Removed: Treasury stock at cost - 538,921 shares
−Removed: ( 3,626 ) ( 3,626 )
+Added: Treasury stock at cost - 538,921 shares at December 31, 2022
Total stockholders' equity 2,905,233 3,587,129
10 unchanged sentences
At December 31, 2020
+Added: 201,061,198 $ 201,061 $ 1,371,385 $ 1,558,363 $ ( 48,078 ) ( 538,921 ) $ ( 3,626 ) $ 3,079,105
Net income — — — 378,131 — — — 378,131
−Removed: Other comprehensive loss — — — — ( 5,976 ) — — ( 5,976 )
+Added: Other comprehensive income
+Added: — — — — 7,074 — — 7,074
Dividends declared on common stock — — — ( 174,084 ) — — — ( 174,084 )
Employee stock-based compensation — — 14,709 — — — — 14,709
+Added: Repurchase of common stock
+Added: — — — — — ( 392,294 ) ( 6,701 ) ( 6,701 )
Issuance of common stock upon vesting of stock-based compensation, net of shares used for tax withholdings — — ( 10,828 ) — — 392,294 6,701 ( 4,127 )
1 unchanged sentence
At December 31, 2021
+Added: 203,889,661 203,889 1,461,205 1,762,410 ( 41,004 ) ( 538,921 ) ( 3,626 ) 3,382,874
Net Income — — — 367,489 — — — 367,489
6 unchanged sentences
At December 31, 2022
+Added: 204,162,814 204,163 1,466,037 1,951,138 ( 30,583 ) ( 538,921 ) ( 3,626 ) 3,587,129
Net income — — — 414,707 — — — 414,707
−Removed: Other comprehensive income — — — — 10,421 — — 10,421
+Added: Other comprehensive loss
+Added: — — — — ( 107 ) — — ( 107 )
Dividends declared on common stock — — — ( 142,033 ) — — — ( 142,033 )
2 unchanged sentences
Issuance of common stock upon vesting of stock-based compensation, net of shares used for tax withholdings — — ( 7,851 ) — — 153,622 4,811 ( 3,040 )
+Added: Separation of Knife River
+Added: ( 538,921 ) ( 539 ) — ( 970,119 ) 12,306 538,921 3,626 ( 954,726 )
Issuance of common stock 65,197 65 1,268 — — — — 1,333
At December 31, 2023
+Added: 203,689,090 $ 203,689 $ 1,466,235 $ 1,253,693 $ ( 18,384 ) — $ — $ 2,905,233
The accompanying notes are an integral part of these consolidated financial statements.
8 unchanged sentences
Adjustments to reconcile net income to net cash provided by operating activities:
−Removed: Depreciation, depletion and amortization 327,826 299,214 285,100
+Added: Depreciation and amortization
+Added: 213,598 210,028 198,240
Deferred income taxes ( 4,414 ) 21,248 27,393
5 unchanged sentences
Gains on sales of assets ( 8,521 ) ( 6,631 ) ( 6,418 )
+Added: Gain on tax-free exchange of the retained shares in Knife River
+Added: ( 186,556 ) — —
Changes in current assets and liabilities, net of acquisitions:
7 unchanged sentences
Net cash provided by continuing operations 492,757 307,653 298,947
−Removed: Net cash provided by (used in) discontinued operations 214 ( 325 ) ( 1,375 )
+Added: Net cash (used in) provided by discontinued operations ( 160,130 ) 202,411 196,830
Net cash provided by operating activities 332,627 510,064 495,777
2 unchanged sentences
Acquisitions, net of cash acquired — — ( 2,500 )
−Removed: Net proceeds from sale or disposition of property and other 22,439 15,238 35,557
+Added: Net proceeds from sale or disposition of property
+Added: 16,474 11,340 14,585
+Added: Cost of removal, net of salvage value
+Added: 1,170 ( 11,780 ) ( 11,363 )
Investments 16,302 ( 4,138 ) ( 3,136 )
+Added: Net cash used in continuing operations ( 485,780 ) ( 483,003 ) ( 487,611 )
+Added: Net cash used in discontinued operations ( 55,011 ) ( 155,878 ) ( 398,267 )
Net cash used in investing activities ( 540,791 ) ( 638,881 ) ( 885,878 )
9 unchanged sentences
Tax withholding on stock-based compensation ( 3,040 ) ( 4,904 ) ( 4,126 )
−Removed: Net cash provided by (used in) financing activities 155,173 384,715 ( 145,043 )
−Removed: Increase (decrease) in cash and cash equivalents 26,356 ( 5,386 ) ( 6,912 )
−Removed: Cash and cash equivalents - beginning of year 54,161 59,547 66,459
−Removed: Cash and cash equivalents - end of year $ 80,517 $ 54,161 $ 59,547
+Added: Net cash provided by continuing operations 111,113 155,285 102,953
+Added: Net cash provided by (used in) discontinued operations 93,509 ( 112 ) 281,762
+Added: Net cash provided by financing activities 204,622 155,173 384,715
+Added: Increase (decrease) in cash, cash equivalents and restricted cash ( 3,542 ) 26,356 ( 5,386 )
+Added: Cash, cash equivalents and restricted cash - beginning of year
+Added: 80,517 54,161 59,547
+Added: Cash, cash equivalents and restricted cash - end of year *
+Added: $ 76,975 $ 80,517 $ 54,161
+Added: *Includes cash of discontinued operations of $ 10.1 million and $ 10.4 million for the years ended December 31, 2022 and 2021, respectively.
The accompanying notes are an integral part of these consolidated financial statements.
4 unchanged sentences
The consolidated financial statements of the Company include the accounts of the following businesses:
−Removed: electric, natural gas distribution, pipeline, construction materials and contracting, construction services and other.
+Added: electric, natural gas distribution, pipeline, construction services and other.
The electric and natural gas distribution businesses, as well as a portion of the pipeline business, are regulated.
−Removed: Construction materials and contracting, construction services and the other businesses, as well as a portion of the pipeline business, are non-regulated.
+Added: Construction services and other, as well as a portion of the pipeline business, are non-regulated.
For further descriptions of the Company's businesses, see Note 18.
−Removed: On August 4, 2022, the Company announced its board of directors unanimously approved a plan to pursue the separation of Knife River from the Company.
−Removed: The separation is planned as a tax-free spinoff transaction to the Company’s stockholders for U.S.
+Added: The Company announced strategic initiatives in 2022 as part of the Company's continuous review of its business.
+Added: On May 31, 2023, the Company completed the separation of Knife River, formerly the construction materials and contracting segment, which resulted in two independent, publicly traded companies, MDU Resources Group, Inc.
+Added: and Knife River.
+Added: The Company's board of directors approved the distribution of approximately 90 percent of the issued and outstanding shares of Knife River to the Company's stockholders.
+Added: Stockholders of the Company received one share of Knife River common stock for every four shares of the Company's common stock held on May 22, 2023, the record date for the distribution.
+Added: The Company retained approximately 10 percent or 5.7 million shares of Knife River common stock immediately following the separation, which was disposed of in a tax-free exchange in November 2023.
+Added: The separation of Knife River was a tax-free spinoff transaction to the Company's stockholders for U.S.
federal income tax purposes.
−Removed: As the next step of the Company’s strategic planning, on November 3, 2022, the Company announced its intention to create two pure-play publicly traded companies, one focused on regulated energy delivery and the other on construction materials, and to achieve this future structure, the board authorized management to commence a strategic review process of MDU Construction Services.
−Removed: Discontinued operations include the supporting activities of Fidelity and the assets and liabilities of the Company's discontinued operations have been classified as held for sale and are included in prepayments and other current assets, noncurrent assets - other and other accrued liabilities on the Consolidated Balance Sheets and are not material to the financial statements for any period presented.
−Removed: The results and supporting activities are shown in income (loss) from discontinued operations on the Consolidated Statements of Income.
+Added: The Company's consolidated financial statements and accompanying notes for the current and prior periods have been restated to present the results of operations and the assets and liabilities of Knife River as discontinued operations, other than certain corporate overhead costs of the Company historically allocated to Knife River, which are reflected in Other.
+Added: Also included in discontinued operations in the Consolidated Statements of Income are the supporting activities of Fidelity and certain interest expense related to financing activity associated with the Knife River separation.
+Added: The assets and liabilities of the Company's discontinued operations are included in current assets of discontinued operations, noncurrent assets of discontinued operations, current liabilities of discontinued operations and noncurrent liabilities of discontinued operations on the Consolidated Balance Sheets.
Unless otherwise indicated, the amounts presented in the accompanying notes to the consolidated financial statements relate to the Company's continuing operations.
+Added: On November 2, 2023, the Company announced its intent to pursue a tax-free spinoff of its wholly owned construction services business, MDU Construction Services.
+Added: The Company's board of directors believes a tax-free spinoff of the construction services business supports the Company's goal of enhancing value for stockholders by becoming a pure-play regulated energy delivery company.
Management has also evaluated the impact of events occurring after December 31, 2023, up to the date of issuance of these consolidated financial statements on February 22, 2024, that would require recognition or disclosure in the financial statements.
8 unchanged sentences
Estimates are used for items such as long-lived assets and goodwill;
−Removed: fair values of acquired assets and liabilities under the acquisition method of accounting;
−Removed: aggregate reserves;
property depreciable lives;
19 unchanged sentences
Recently adopted accounting standards
−Removed: ASU 2021-10 - Government Assistance In November 2021, the FASB issued guidance on modifying the disclosure requirements to increase the transparency of government assistance including disclosure of the types of assistance, an entity's accounting for the assistance and the effect of the assistance on an entity's financial statements.
−Removed: January 1, 2022 The Company determined the guidance did not have a material impact on its disclosures for the year ended December 31, 2022.
ASU 2020-04 - Reference Rate Reform In March 2020, the FASB issued optional guidance to ease the facilitation of the effects of reference rate reform on financial reporting.
5 unchanged sentences
Effective as of March 12, 2020 through December 31, 2022 For more information, see ASU 2022-06 - Reference Rate Reform:
−Removed: Deferral of Sunset Date in recently issued accounting standards not yet adopted.
−Removed: Recently issued accounting standards not yet adopted
+Added: Deferral of Sunset Date below.
ASU 2022-06 - Reference Rate Reform:
3 unchanged sentences
The amendments in this Update defer the sunset date of ASC 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in ASC 848.
−Removed: December 31, 2024 The Company has updated its credit agreements to include language regarding the successor or alternate rate to LIBOR, and a review of other contracts and agreements is on-going.
+Added: December 31, 2024 The Company has updated its credit agreements to include language regarding the successor or alternate rate to LIBOR.
The Company does not expect the guidance to have a material impact on its results of operations, financial position, cash flows or disclosures.
−Removed: Cash and cash equivalents
+Added: Recently issued accounting standards not yet adopted
+Added: ASU 2023-05 Business Combinations - Joint Venture Formations - Recognition and Initial Measurement
+Added: In August 2023, the FASB issued guidance on accounting for contributions made to a joint venture, upon formation, in a joint venture's separate financial statement in order to provide decision-useful information to investors and other allocators of capital (collectively investors) in a joint venture's financial statements and reduce diversity in practice.
+Added: The new basis of accounting will require that a joint venture, upon formation, will recognize and initially measure its assets and liabilities at fair value (with the exceptions to fair value measurement that are consistent with the business combinations guidance).
+Added: A joint venture that was formed before January 1, 2025 may elect to apply the guidance retrospectively if it has sufficient information.
+Added: Effective prospectively for all joint venture formations with a formation date on or after January 1, 2025.
+Added: The Company is currently evaluating the impact the guidance will have on its interim and annual disclosures for the year ended December 31, 2025.
+Added: ASU 2023-07 Segment Reporting - Improvements to Reportable Segment Disclosures
+Added: In November 2023, the FASB issued guidance on improving financial reporting by requiring disclosure of incremental segment information, primarily through enhanced disclosures about significant segment expenses, on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses.
+Added: Effective for fiscal year December 31, 2024 and interim periods beginning January 1, 2025, with prior periods disclosed in the period of adoption.
+Added: The Company is currently evaluating the impact the guidance will have on its disclosures for the year ended December 31, 2024 and future interim periods.
+Added: ASU 2023-09 Income Taxes - Improvements to Income Tax Disclosures an Amendment, December 2023
+Added: The FASB issued guidance to address investors requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information and effectiveness of income tax disclosures.
+Added: December 31, 2025 The Company is currently evaluating the impact the guidance will have on its disclosures for the year ended December 31, 2025.
+Added: MDU Resources Group, Inc.
+Added: Cash, cash equivalents and restricted cash
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
+Added: Restricted cash represents deposits held by the Company’s captive insurance company that is required by state insurance regulations to remain in the captive insurance company.
+Added: The Company had restricted cash of $ 28.1 million and $ 35.6 million at December 31, 2023 and 2022, respectively.
Revenue recognition
12 unchanged sentences
The method of measuring progress toward the completion of the single performance obligation is on a per-unit output method basis, with revenue recognized based on the direct measurement of the value to the customer of the goods or services transferred to date.
−Removed: For contracts governed by the Company’s utility tariffs, amounts are billed monthly with the amount due between 15 and 22 days of receipt of the
−Removed: 78 MDU Resources Group, Inc.
−Removed: invoice depending on the applicable state’s tariff.
+Added: For contracts governed by the Company’s utility tariffs, amounts are billed monthly with the amount due between 15 and 22 days of receipt of the invoice depending on the applicable state’s tariff.
For other contracts not governed by tariff, payment terms are net 30 days.
10 unchanged sentences
At this time, the segment has no material obligations for returns, refunds or other similar obligations.
−Removed: The construction materials and contracting segment generates revenue from contracting services and construction materials sales.
−Removed: This segment focuses on the vertical integration of its contracting services with its construction materials to support the aggregate-based product lines.
−Removed: This segment provides contracting services to a customer when a contract has been signed by both the customer and a representative of the segment obligating a service to be provided in exchange for the consideration identified in the contract.
−Removed: The nature of the services this segment provides generally include integrating a set of services and related construction materials into a single project to create a distinct bundle of goods and services, which the Company has determined are single performance obligations.
−Removed: The transaction price includes the fixed consideration required pursuant to the original contract price together with any additional consideration, to which the Company expects to be entitled to, associated with executed change orders plus the estimate of variable consideration to which the Company expects to be entitled, subject to the following constraint.
−Removed: The nature of this segment's contracts gives rise to several types of variable consideration.
−Removed: Examples of variable consideration include:
−Removed: liquidated damages;
−Removed: performance bonuses or incentives and penalties;
−Removed: unpriced change orders;
−Removed: and index pricing.
−Removed: The variable amounts usually arise upon achievement of certain performance metrics or change in project scope.
−Removed: The Company estimates the amount of revenue to be recognized on variable consideration using one of the two prescribed estimation methods, the expected value method or the most likely amount method, depending on which method best predicts the most likely amount of consideration the Company expects to be entitled to or expects to incur.
−Removed: Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration are made during the contract performance period.
−Removed: Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on the assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available to management.
−Removed: The Company only includes variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved.
−Removed: Changes in circumstances could impact management's estimates made in determining the value of variable consideration recorded.
−Removed: When determining if the variable consideration is constrained, the Company considers if factors exist that could increase the likelihood or the magnitude of a potential reversal of revenue.
−Removed: The Company updates its estimate of the transaction price each reporting period and the effect of variable consideration on the transaction price is recognized as an adjustment to revenue on a cumulative catch-up basis.
−Removed: Contract revenue is recognized over time using an input method based on the cost-to-cost measure of progress on a project.
−Removed: This is the preferred method of measuring revenue because the costs incurred have been determined to represent the best indication of the overall progress toward the transfer of such goods or services promised to a customer.
−Removed: Under the cost-to-cost measure of progress, the costs incurred are compared with total estimated costs of a performance obligation.
−Removed: Revenues are recorded proportionately to the costs incurred.
−Removed: The percentage of completion is determined on a performance obligation basis.
−Removed: This segment also sells construction materials to third parties and internal customers.
−Removed: The contract for material sales is the use of a sales order or an invoice, which includes the pricing and payment terms.
−Removed: All material contracts contain a single performance obligation for the delivery of a single distinct product or a distinct separately identifiable bundle of products and services.
−Removed: Revenue is recognized at a point in time when the performance obligation has been satisfied with the delivery of the products or services.
−Removed: The warranties associated with the sales are those consistent with a standard warranty that the product meets certain specifications for quality or those required by law.
−Removed: For most contracts, amounts billed to customers are due within 30 days of receipt.
−Removed: There are no material obligations for returns, refunds or other similar obligations.
The construction services segment generates revenue from specialty contracting services which also includes the sale of construction equipment and other supplies.
10 unchanged sentences
The Company estimates the amount of revenue to be recognized on variable consideration using one of the two prescribed estimation methods, the expected value method or the most likely amount method, depending on which method best predicts the most likely amount of consideration the Company expects to be entitled to or expects to incur.
−Removed: Assumptions as to
−Removed: MDU Resources Group, Inc.
−Removed: the occurrence of future events and the likelihood and amount of variable consideration are made during the contract performance period.
+Added: Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration are made during the contract performance period.
Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on the assessment of anticipated performance and all information (historical, current, and forecasted) that is reasonably available to management.
4 unchanged sentences
Contract revenue is recognized over time using the input method based on the measurement of progress on a project.
−Removed: This is the preferred method of measuring revenue because the costs incurred have been determined to represent the best indication of the overall progress toward the transfer of such goods or services promised to a customer.
+Added: This is the preferred method of measuring revenue because the costs incurred have been determined to
+Added: 76 MDU Resources Group, Inc.
+Added: represent the best indication of the overall progress toward the transfer of such goods or services promised to a customer.
Under the cost-to-cost measure of progress, the costs incurred are compared with total estimated costs of a performance obligation.
9 unchanged sentences
The Company expenses external legal fees as they are incurred.
−Removed: Business combinations
−Removed: For all business combinations, the Company preliminarily allocates the purchase price of the acquisitions to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition dates and are considered provisional until final fair values are determined or the measurement period has passed.
−Removed: The Company expects to record adjustments as it accumulates the information needed to estimate the fair value of assets acquired and liabilities assumed, including working capital balances, estimated fair value of identifiable intangible assets, property, plant and equipment, total consideration and goodwill.
−Removed: The excess of the purchase price over the aggregate fair values is recorded as goodwill.
−Removed: The Company calculated the fair value of the assets acquired in 2022 and 2021 using a market or cost approach (or a combination of both).
−Removed: Fair values for some of the assets were determined based on Level 3 inputs including estimated future cash flows, discount rates, growth rates, sales projections, retention rates and terminal values, all of which require significant management judgment and are susceptible to change.
−Removed: The discount rate used in calculating the fair value of common stock issued in a business combination is determined by using a Black-Scholes-Merton model.
−Removed: The model uses Level 2 inputs including risk-free interest rate, volatility range and dividend yield.
−Removed: The final fair value of the net assets acquired may result in adjustments to the assets and liabilities, including goodwill, and will be made as soon as practical, but no later than 12 months from the respective acquisition dates.
−Removed: Any subsequent measurement period adjustments are not expected to have a material impact on the Company's results of operations.
Receivables and allowance for expected credit losses
7 unchanged sentences
Management has reviewed the balance reserved through the allowance for expected credit losses and believes it is reasonable.
−Removed: 80 MDU Resources Group, Inc.
Details of the Company's expected credit losses were as follows:
1 unchanged sentence
distribution Pipeline Construction
−Removed: materials and
−Removed: contracting Construction
services Total
3 unchanged sentences
Current expected credit loss provision
+Added: 1,325 4,084 — 186 5,595
Less write-offs charged against the allowance 1,625 4,913 — 625 7,163
5 unchanged sentences
At December 31, 2023 $ 414 $ 1,189 $ — $ 7,967 $ 9,570
−Removed: * Includes impacts from businesses acquired.
Receivables also consist of accrued unbilled revenue representing revenues recognized in excess of amounts billed.
9 unchanged sentences
** Included in noncurrent assets - other.
+Added: MDU Resources Group, Inc.
Inventories and natural gas in storage
1 unchanged sentence
The majority of all other inventories are valued at the lower of cost or net realizable value using the average cost method.
−Removed: Inventories include production costs incurred as part of the Company's aggregate mining activities.
−Removed: These inventoriable production costs include all mining and processing costs associated with the production of aggregates.
−Removed: Stripping costs incurred during the production phase, which represent costs of removing overburden and waste materials to access mineral deposits, are a component of inventoriable production costs.
The portion of the cost of natural gas in storage expected to be used within 12 months was included in inventories.
1 unchanged sentence
(In thousands)
−Removed: Aggregates held for resale $ 199,110 $ 184,363
−Removed: Asphalt oil 68,609 57,002
−Removed: Materials and supplies 40,056 30,629
−Removed: Merchandise for resale 40,296 28,501
Natural gas in storage (current) $ 39,377 $ 22,533
+Added: Merchandise for resale 34,955 27,910
+Added: Materials and supplies 5,460 6,846
Other 7,600 6,959
Total $ 87,392 $ 64,248
−Removed: The remainder of natural gas in storage, which largely represents the cost of gas required to maintain pressure levels for normal operating purposes, was included in noncurrent assets - other and was $ 47.5 million at both December 31, 2022 and 2021.
−Removed: MDU Resources Group, Inc.
+Added: The remainder of natural gas in storage, which largely represents the cost of gas required to maintain pressure levels for normal operating purposes, was included in noncurrent assets - other and was $ 48.5 million and $ 47.5 million at December 31, 2023 and 2022, respectively.
Property, plant and equipment
Additions to property, plant and equipment are recorded at cost.
−Removed: Aggregate mining development costs are capitalized and classified as land improvements and depreciated over the lower of the estimated life of the reserves or the life of the associated improvement.
−Removed: The Company begins capitalizing development costs at a point when reserves are determined to be proven or probable and economically mineable.
−Removed: Capitalization of these costs cease when production commences.
−Removed: The cost of acquiring reserves in connection with a business combination are valued at fair value.
When regulated assets are retired, or otherwise disposed of in the ordinary course of business, the original cost of the asset is charged to accumulated depreciation.
7 unchanged sentences
AFUDC - equity $ 1,894 $ 2,165 $ 6,961
−Removed: Generally, property, plant and equipment are depreciated on a straight-line basis over the average useful lives of the assets, except for depletable aggregate reserves, which are depleted based on the units-of-production method.
−Removed: The Company uses proven and probable aggregate reserves as the denominator in its units-of production calculation.
−Removed: Exploration costs are expensed as incurred in operation and maintenance expense and production costs are either expensed or capitalized to inventory.
+Added: Generally, property, plant and equipment are depreciated on a straight-line basis over the average useful lives of the assets.
The Company collects removal costs for certain plant assets in regulated utility rates.
1 unchanged sentence
Impairment of long-lived assets, excluding goodwill
−Removed: The Company reviews the carrying values of its long-lived assets, including mining and related assets, whenever events or changes in circumstances indicate that such carrying values may not be recoverable.
+Added: The Company reviews the carrying values of its long-lived assets, whenever events or changes in circumstances indicate that such carrying values may not be recoverable.
The Company tests long-lived assets for impairment at a level significantly lower than that of goodwill impairment testing.
5 unchanged sentences
Unforeseen events and changes in circumstances could require the recognition of impairment losses at some future date.
+Added: Natural gas costs recoverable or refundable through rate adjustments
+Added: Under the terms of certain orders of the applicable state public service commissions, the Company is deferring natural gas commodity, transportation and storage costs that are greater or less than amounts presently being recovered through its existing rate schedules.
+Added: Such orders generally provide that these amounts are recoverable or refundable through rate adjustments .
+Added: Natural gas costs recoverable through rate adjustments were $ 154.3 million and $ 141.3 million at December 31, 2023 and 2022, respectively, which were included in current regulatory assets and noncurrent assets - regulatory assets on the Consolidated Balance Sheets.
+Added: Natural gas costs refundable through rate adjustments were $ 43.2 million and $ 1.0 million at December 31, 2023 and 2022, respectively, which were included in regulatory liabilities due within one year on the Consolidated Balance Sheets.
+Added: 78 MDU Resources Group, Inc.
+Added: Electric fuel and purchased power deferral
+Added: Under the terms of certain orders of the applicable state public service commissions, the Company is deferring electric fuel and purchased power costs that are greater or less than amounts presently being recovered through its existing rate schedules.
+Added: Such orders generally provide that these amounts are recoverable or refundable through rate adjustments.
+Added: Electric fuel and purchased power costs recoverable were $ 33.9 million and $ 2.7 million at December 31, 2023 and 2022, respectively, which were included in current regulatory assets on the Consolidated Balance Sheets.
+Added: Electric fuel and purchased power costs refundable was $ 4.9 million at December 31, 2022, which was included in regulatory liabilities due within one year on the Consolidated Balance Sheets.
Regulatory assets and liabilities
6 unchanged sentences
See Note 6 for more information regarding the nature and amounts of these regulatory deferrals.
−Removed: Natural gas costs recoverable or refundable through rate adjustments
−Removed: Under the terms of certain orders of the applicable state public service commissions, the Company is deferring natural gas commodity, transportation and storage costs that are greater or less than amounts presently being recovered through its existing rate schedules.
−Removed: Such orders generally provide that these amounts are recoverable or refundable through rate adjustments .
−Removed: Natural gas costs refundable through rate adjustments were $ 1.0 million and $ 6.7 million at December 31, 2022 and 2021, respectively, which were included in regulatory liabilities due within one year on the Consolidated Balance Sheets.
−Removed: Natural gas costs recoverable through rate adjustments were $ 141.3 million and $ 91.6 million at December 31, 2022 and 2021, respectively, which were included in current regulatory assets and noncurrent assets - regulatory assets on the Consolidated Balance Sheets.
−Removed: 82 MDU Resources Group, Inc.
Goodwill represents the excess of the purchase price over the fair value of identifiable net tangible and intangible assets acquired in a business combination.
12 unchanged sentences
For more information, see Notes 9 and 19.
−Removed: Government Assistance
−Removed: The Company accounts for government assistance received for capital projects by reducing the cost of the project by the amount of assistance received.
−Removed: The Company records government assistance received as taxable income and writes-up the tax basis of the asset to include the amount of the assistance received.
−Removed: Government assistance received for the years ended December 31, 2022, 2021 and 2020, was immaterial .
Variable interest entities
5 unchanged sentences
The Company's evaluation of whether it qualifies as the primary beneficiary of a VIE involves significant judgments, estimates and assumptions and includes a qualitative analysis of the activities that most significantly impact the VIE's economic performance and whether the Company has the power to direct those activities, the design of the entity, the rights of the parties and the purpose of the arrangement.
+Added: MDU Resources Group, Inc.
Joint ventures
The Company accounts for unconsolidated joint ventures using either the equity method or proportionate consolidation.
−Removed: The Company currently holds interests between 25 percent and 50 percent in joint ventures formed primarily for the purpose of pooling resources on construction contracts.
+Added: The Company currently holds interests of 50 percent in joint ventures formed primarily for the purpose of pooling resources on construction contracts.
Proportionate consolidation is used for joint ventures that include unincorporated legal entities and activities of the joint venture which are construction-related.
3 unchanged sentences
For those joint ventures accounted for under the equity method, the Company's investment balances for the joint venture is included in Investments in the Consolidated Balance Sheets and the Company’s pro rata share of net income is included in Other income in the Consolidated Statements of Income.
−Removed: The Company’s investments in equity method joint ventures were a net asset of $ 1.3 million for both December 31, 2022 and 2021, respectively.
−Removed: In 2022, 2021 and 2020, the Company recognized income (loss) from equity method joint ventures of $ 5.4 million, $ 892,000 and $( 32,000 ), respectively.
−Removed: MDU Resources Group, Inc.
+Added: The Company’s investments in equity method joint ventures were net assets of $ 6.2 million and $ 1.3 million at December 31, 2023 and 2022, respectively.
+Added: In 2023, 2022 and 2021, the Company recognized income from equity method joint ventures of $ 4.9 million, $ 5.9 million and $ 878,000 , respectively.
Derivative instruments
3 unchanged sentences
The Company does not enter into any derivatives for trading or other speculative purposes.
−Removed: During 2022, the Company did no t enter into any commodity price derivative contracts.
−Removed: During 2021, the Company entered into commodity price derivative contracts securing the purchase of 450,000 MMBtu of natural gas.
+Added: The Company did not enter into any commodity price derivative contracts during 2023 or 2022.
Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term.
13 unchanged sentences
Upon settlement of the liability, the Company either settles the obligation for the recorded amount or incurs a gain or loss at its non-regulated operations or incurs a regulatory asset or liability at its regulated operations.
+Added: 80 MDU Resources Group, Inc.
Stock-based compensation
The Company determines compensation expense for stock-based awards based on the estimated fair values at the grant date and recognizes the related compensation expense over the vesting period.
−Removed: The Company uses the straight-line amortization method to recognize compensation expense related to restricted stock, which only has a service condition.
+Added: The Company uses the straight-line amortization method to recognize compensation expense related to restricted stock units, which only has a service condition.
This method recognizes stock compensation expense on a straight-line basis over the requisite service period for the entire award.
−Removed: The Company recognizes compensation expense related to performance awards that vest based on performance metrics and service conditions on a straight-line basis over the service period.
−Removed: Inception-to-date expense is adjusted based upon the determination of the potential achievement of the performance target at each reporting date.
−Removed: The Company recognizes compensation expense related to performance awards with market-based performance metrics on a straight-line basis over the requisite service period.
+Added: The Company recognized compensation expense related to performance awards that vest based on performance metrics and service conditions on a straight-line basis over the service period.
+Added: Inception-to-date expense was adjusted based upon the determination of the potential achievement of the performance target at each reporting date.
+Added: The Company recognized compensation expense related to performance awards with market-based performance metrics on a straight-line basis over the requisite service period.
+Added: Outstanding performance share awards were converted to restricted stock units in connection with the completed separation of Knife River through the spinoff.
The Company records the compensation expense for performance share awards using an estimated forfeiture rate.
6 unchanged sentences
Common stock outstanding includes issued shares less shares held in treasury.
+Added: As a result of the separation, the Company retained legal ownership of 538,921 shares of the Company's common stock that were historically owned by a subsidiary of Knife River and recorded in Treasury stock at cost.
+Added: Following the separation, the 538,921 treasury shares were retired.
+Added: The 538,921 shares of treasury stock did not have an impact on weighted-average shares outstanding, as they were not outstanding prior to being retired.
Net income was the same for both the basic and diluted earnings per share calculations.
1 unchanged sentence
2023 2022 2021
−Removed: (In thousands)
+Added: (In thousands, except per share amounts)
Weighted average common shares outstanding - basic 203,640 203,358 202,076
1 unchanged sentence
Weighted average common shares outstanding - diluted 203,938 203,462 202,383
+Added: Earnings per share - basic:
+Added: Income from continuing operations
+Added: $ 2.36 $ 1.23 $ 1.20
+Added: Discontinued operations, net of tax
+Added: ( .32 ) .58 .67
+Added: Earnings per share - basic
+Added: $ 2.04 $ 1.81 $ 1.87
+Added: Earnings per share - diluted:
+Added: Income from continuing operations
+Added: $ 2.36 $ 1.23 $ 1.20
+Added: Discontinued operations, net of tax
+Added: ( .33 ) .58 .67
+Added: Earnings per share - diluted
+Added: $ 2.03 $ 1.81 $ 1.87
Shares excluded from the calculation of diluted earnings per share — 14 —
−Removed: 84 MDU Resources Group, Inc.
+Added: Dividends declared per common share
+Added: $ .6950 $ .8750 $ .8550
The Company provides deferred federal and state income taxes on all temporary differences between the book and tax basis of the Company's assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse.
6 unchanged sentences
The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income taxes.
+Added: MDU Resources Group, Inc.
+Added: Note 3 - Discontinued Operations
+Added: On May 31, 2023, the Company completed the previously announced separation of Knife River, its former construction materials and contracting segment, into a new publicly traded company.
+Added: The separation was achieved through the Company's pro-rata distribution of approximately 90 percent of the outstanding shares of Knife River to the Company's common stockholders.
+Added: To effect the separation, the Company distributed to its stockholders one share of Knife River common stock for every four shares of the Company's common stock held on May 22, 2023, the record date for the distribution, with the Company retaining approximately 10 percent, or 5.7 million shares of Knife River common stock immediately following the separation.
+Added: In the fourth quarter of 2023, the Company completed the tax-free exchange of its retained shares, reversed the associated deferred tax liability and recognized a gain of $ 186.6 million, which was reflected in continuing operations because the Company did not have continuing significant involvement in Knife River.
+Added: As a result of the separation, the historical assets and liabilities for Knife River have been classified as assets and liabilities of discontinued operations and the historical results of operations are shown in discontinued operations, net of tax, other than allocated general corporate overhead costs of the Company, which do not meet the criteria for income (loss) from discontinued operations.
+Added: The Company’s consolidated financial statements and accompanying notes for prior periods have been restated.
+Added: For the comparative periods, Knife River's operations are only reflected through May 2023, whereas 2022 and 2021 include the full twelve months from Knife River's operations.
+Added: On April 25, 2023, Knife River issued $ 425.0 million of senior notes, pursuant to an indenture, due in 2031 to qualified institutional buyers.
+Added: Knife River also entered into a new credit agreement which provided a revolving credit facility in an initial amount of up to $ 350.0 million and a senior secured term loan facility in an amount up to $ 275.0 million.
+Added: The net proceeds from the notes offering, revolving credit facility and the term loan were used to repay $ 825.0 million of Knife River's intercompany obligations owed to Centennial.
+Added: Centennial used the entirety of these proceeds from Knife River to repay a portion of its existing third-party indebtedness.
+Added: As a result of the separation, the Company retained legal ownership of 538,921 shares of the Company's common stock that were historically owned by a subsidiary of Knife River and recorded in Treasury stock at cost.
+Added: Following the separation, the 538,921 treasury shares were retired.
+Added: The Company will provide to Knife River and Knife River will provide to the Company transition services in accordance with the TSA entered into on May 31, 2023.
+Added: For the twelve months ended December 31, 2023, the Company received $ 2.9 million;
+Added: and paid $ 823,000 , for these related activities.
+Added: The majority of the transition services are expected to be provided for a period of one year, however, no longer than two years after the separation.
+Added: Separation related costs of $ 47.8 million and $ 9.0 million, net of tax, were incurred during the twelve months ended December 31, 2023 and 2022, respectively.
+Added: Separation costs incurred are presented in income (loss) from discontinued operations in the Consolidated Statements of Income.
+Added: These charges primarily relate to transaction and third-party support costs, one-time business separation fees and related tax charges.
+Added: The Company had no assets or liabilities related to the discontinued operations of Knife River on its balance sheet as of December 31, 2023.
+Added: The carrying amounts of the major classes of assets and liabilities of discontinued operations included in the Company’s Consolidated Balance Sheet at December 31, 2022 were as follows:
+Added: 82 MDU Resources Group, Inc.
+Added: December 31, 2022
+Added: Assets (In Thousands)
+Added: Current assets:
+Added: Cash and cash equivalents $ 10,090
+Added: Receivables, net 241,302
+Added: Inventories 323,277
+Added: Prepayments and other current assets 17,848
+Added: Total current assets of discontinued operations 592,517
+Added: Noncurrent assets:
+Added: Net property, plant and equipment 1,315,213
+Added: Goodwill 274,540
+Added: Other intangible assets, net 13,430
+Added: Investments 33,086
+Added: Operating lease right-of-use assets 45,872
+Added: Total noncurrent assets of discontinued operations 1,685,751
+Added: Total assets of discontinued operations $ 2,278,268
+Added: Current liabilities:
+Added: Short-term borrowings $ 208,000
+Added: Long-term debt due within one year 30,211
+Added: Accounts payable 131,608
+Added: Taxes payable 8,502
+Added: Accrued compensation 29,192
+Added: Operating lease liabilities due within one year 13,210
+Added: Other accrued liabilities 76,200
+Added: Total current liabilities of discontinued operations 496,923
+Added: Noncurrent liabilities:
+Added: Long-term debt 445,546
+Added: Deferred income taxes 175,804
+Added: Asset retirement obligations 33,015
+Added: Operating lease liabilities 32,663
+Added: Total noncurrent liabilities of discontinued operations 765,904
+Added: Total liabilities of discontinued operations $ 1,262,827
+Added: The reconciliation of the major classes of income and expense constituting pretax income (loss) from discontinued operations to the after-tax income (loss) from discontinued operations on the Consolidated Statements of Income were as follows:
+Added: 2023 2022 2021
+Added: (In thousands)
+Added: Operating revenues $ 735,263 $ 2,532,280 $ 2,226,478
+Added: Operating expenses 769,440 2,328,051 2,022,976
+Added: Operating (loss) income
+Added: ( 34,177 ) 204,229 203,502
+Added: Other income (expense) 2,381 ( 3,849 ) 693
+Added: Interest expense 37,545 38,575 23,117
+Added: (Loss) income from discontinued operations before income taxes
+Added: ( 69,341 ) 161,805 181,078
+Added: Income taxes ( 3,623 ) 45,084 45,469
+Added: Discontinued operations, net of tax $ ( 65,718 ) $ 116,721 $ 135,609
+Added: MDU Resources Group, Inc.
Note 4 - Revenue from Contracts with Customers
4 unchanged sentences
As part of the adoption of ASC 606 - Revenue from Contracts with Customers , the Company elected the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is 12 months or less.
+Added: Changes in cost estimates on certain contracts may result in the issuance of change orders, which can be approved or unapproved by the customer, or the assertion of contract claims.
+Added: The Company recognizes amounts associated with change orders and claims as revenue if it is probable that the contract price will be adjusted and the amount of any such adjustment can be reasonably estimated.
+Added: Change orders and claims are negotiated in the normal course of business and represent management’s estimates of additional contract revenues that have been earned and are probable of collection.
+Added: The Company received notification from a customer on a large project with a contract that was billed on a time and materials basis with no stated maximum price, that it is withholding payment of approximately $ 31.0 million on remaining outstanding billings, including retention.
+Added: The Company believes it has substantial defenses against these claims based upon the terms of the contract and the Company's belief that it has performed under the terms of the contract.
+Added: The Company believes collection of the remaining outstanding billings, including retention is probable and, as a result, the Company has recognized the revenue from this project in its results.
+Added: However, there is uncertainty surrounding this matter, including the potential long-term nature of dispute resolution, the Company filing a lien on the property and the broad range of possible consideration amounts as a result of negotiations and potential litigation to resolve the dispute.
Disaggregation
3 unchanged sentences
For more information on the Company's business segments, see Note 18.
−Removed: Year ended December 31, 2022 Electric Natural gas distribution Pipeline Construction materials and contracting Construction services Other Total
+Added: Year ended December 31, 2023 Electric Natural gas distribution Pipeline Construction services Other Total
(In thousands)
6 unchanged sentences
Natural gas storage — — 18,254 — — 18,254
−Removed: Contracting services — — — 1,187,721 — — 1,187,721
−Removed: Construction materials — — — 1,940,890 — — 1,940,890
−Removed: Internal sales — — — ( 593,882 ) — — ( 593,882 )
Electrical & mechanical specialty contracting — — — 2,125,536 — 2,125,536
6 unchanged sentences
84 MDU Resources Group, Inc.
−Removed: Year ended December 31, 2021 Electric Natural gas distribution Pipeline Construction materials and contracting Construction services Other Total
+Added: Year ended December 31, 2022 Electric Natural gas distribution Pipeline Construction services Other Total
(In thousands)
5 unchanged sentences
Natural gas storage — — 14,583 — — 14,583
−Removed: Contracting services — — — 1,017,471 — — 1,017,471
−Removed: Construction materials — — — 1,712,503 — — 1,712,503
−Removed: Internal sales — — — ( 501,044 ) — — ( 501,044 )
Electrical & mechanical specialty contracting — — — 1,988,729 — 1,988,729
5 unchanged sentences
Total external operating revenues $ 376,936 $ 1,273,530 $ 96,695 $ 2,694,623 $ — $ 4,441,784
−Removed: Year ended December 31, 2020 Electric Natural gas distribution Pipeline Construction materials and contracting Construction services Other Total
+Added: Year ended December 31, 2021 Electric Natural gas distribution Pipeline Construction services Other Total
(In thousands)
4 unchanged sentences
Natural gas transportation — 48,408 114,001 — — 162,409
−Removed: Natural gas gathering — — 4,865 — — — 4,865
Natural gas storage — — 14,680 — — 14,680
−Removed: Contracting services — — — 1,069,665 — — 1,069,665
−Removed: Construction materials — — — 1,659,152 — — 1,659,152
−Removed: Internal sales — — — ( 550,815 ) — — ( 550,815 )
Electrical & mechanical specialty contracting — — — 1,324,419 — 1,324,419
5 unchanged sentences
Total external operating revenues $ 349,412 $ 971,640 $ 83,066 $ 2,050,234 $ 84 $ 3,454,436
−Removed: Presented in the previous tables are sales of materials to both third parties and internal customers within the construction materials and contracting segment to highlight the focus on vertical integration as this segment sells materials to both third parties and internal customers.
−Removed: Due to consolidation requirements, the internal sales revenues must be eliminated against the construction materials product used in the contracting services to arrive at the external operating revenue total for the segment.
Contract balances
8 unchanged sentences
Contract liabilities decrease as revenue is recognized from the satisfaction of the related performance obligation.
−Removed: 86 MDU Resources Group, Inc.
The changes in contract assets and liabilities were as follows:
6 unchanged sentences
Net contract liabilities $ ( 43,574 ) $ ( 14,223 ) $ ( 29,351 )
+Added: MDU Resources Group, Inc.
December 31, 2022 December 31, 2021 Change Location on Consolidated Balance Sheets
8 unchanged sentences
Remaining performance obligations
−Removed: The remaining performance obligations, also referred to as backlog, at the construction materials and contracting and construction services segments include unrecognized revenues that the Company reasonably expects to be realized.
+Added: The remaining performance obligations, also referred to as backlog, at the construction services segment include unrecognized revenues that the Company reasonably expects to be realized.
These unrecognized revenues can include:
4 unchanged sentences
The Company has applied the practical expedient that does not require additional disclosures for contracts with an original duration of less than 12 months to certain firm transportation and non-regulated contracts.
−Removed: The Company's firm transportation contracts included in the remaining performance obligations have weighted average remaining durations of less than five years.
+Added: The Company's firm transportation and storage contracts included in the remaining performance obligations have weighted average remaining durations of less than five years and two years , respectively.
At December 31, 2023, the Company's remaining performance obligations were $ 2.6 billion.
3 unchanged sentences
and $ 529.2 million in 25 months or more.
−Removed: Note 4 - Business Combinations
−Removed: The following acquisitions were accounted for as business combinations in accordance with ASC 805 - Business Combinations.
−Removed: The results of the business combinations have been included in the Company's Consolidated Financial Statements beginning on the acquisition date.
−Removed: Pro forma financial amounts reflecting the effects of the business combinations are not presented, as none of these business combinations, individually or in the aggregate, were material to the Company's financial position or results of operations.
−Removed: The acquisitions are also subject to customary adjustments based on, among other things, the amount of cash, debt and working capital in the business as of the closing date.
−Removed: The amounts included in the Consolidated Balance Sheets for these adjustments are considered provisional until final settlement has occurred.
−Removed: In 2022 and 2021, the construction materials and contracting segment's acquisitions included:
−Removed: • Allied Concrete and Supply Co., a producer of ready-mixed concrete in California, acquired in December 2022.
−Removed: At December 31, 2022, the purchase price allocation was preliminary and will be finalized within 12 months of the acquisition date.
−Removed: • Baker Rock Resources and Oregon Mainline Paving, two construction materials companies located around the Portland, Oregon metro area, acquired in November 2021.
−Removed: As of September 30, 2022, the purchase price allocation was settled with no material adjustments to the provisional accounting.
86 MDU Resources Group, Inc.
−Removed: Hood Rock, a construction aggregates business in Oregon, acquired in April 2021.
−Removed: As of March 31, 2022, the purchase price allocation was settled with no material adjustments to the provisional accounting.
−Removed: The total purchase price for acquisitions that occurred in 2022 was $ 8.9 million, subject to certain adjustments, with cash acquired totaling $ 2.8 million.
−Removed: The purchase price includes consideration paid of $ 1.5 million, a $ 70,000 holdback liability, and 273,153 shares of common stock with a market value of $ 8.4 million as of the respective acquisition date.
−Removed: Due to the holding period restriction on the common stock, the share consideration has been discounted to a fair value of approximately $ 7.3 million.
−Removed: The amounts allocated to the aggregated assets acquired and liabilities assumed during 2022 were as follows:
−Removed: $ 1.7 million to current assets;
−Removed: $ 5.9 million to property, plant and equipment;
−Removed: $ 200,000 to goodwill;
−Removed: $ 100,000 to current liabilities;
−Removed: $ 500,000 to noncurrent liabilities - other and $ 1.2 million to deferred tax liabilities.
−Removed: The total purchase price for acquisitions that occurred in 2021 was $ 236.1 million, subject to certain adjustments, with cash acquired totaling $ 900,000 .
−Removed: The purchase price includes consideration paid of $ 235.2 million.
−Removed: The amounts allocated to the aggregated assets acquired and liabilities assumed during 2021 were as follows:
−Removed: $ 17.0 million to current assets;
−Removed: $ 179.8 million to property, plant and equipment;
−Removed: $ 50.6 million to goodwill;
−Removed: $ 2.2 million to other intangible assets;
−Removed: $ 8.7 million to current liabilities;
−Removed: $ 2.5 million to noncurrent liabilities - other;
−Removed: and $ 3.2 million to deferred tax liabilities.
−Removed: The intangible assets include non-compete agreements, customer relationships, and trade names.
−Removed: The intangible assets fair value is based on various income approach methods, including, multi-period excess earnings, relief-from-royalty and the with and without method.
−Removed: The amortizable intangible assets are being amortized using a straight-line method over a weighted average period of 5.5 years.
−Removed: During the first quarter of 2022, measurement period adjustments were made to the previously reported provisional amounts, which decreased goodwill and increased property, plant and equipment by $ 2.1 million.
−Removed: The Company issued debt to finance these acquisitions.
−Removed: Costs incurred for acquisitions are included in operation and maintenance expense on the Consolidated Statements of Income and were immaterial for the years ended December 31, 2022, 2021 and 2020.
−Removed: 88 MDU Resources Group, Inc.
Note 5 - Property, Plant and Equipment
22 unchanged sentences
Other 4,327 6,950 9
−Removed: Construction materials and contracting:
−Removed: Land 150,809 149,066 —
−Removed: Buildings and improvements 165,833 149,262 21
−Removed: Machinery, vehicles and equipment 1,492,506 1,414,260 12
−Removed: Construction in progress 88,163 50,425 —
−Removed: Aggregate reserves 592,097 584,683 *
Construction services:
5 unchanged sentences
Other 29,365 34,057 7
−Removed: Less accumulated depreciation, depletion and amortization 3,272,493 3,216,461
+Added: Less accumulated depreciation and amortization
+Added: 2,220,206 2,098,298
Net property, plant and equipment $ 5,120,910 $ 4,776,331
−Removed: * Depleted on the units-of-production method based on proven and probable aggregate reserves.
MDU Resources Group, Inc.
5 unchanged sentences
Natural gas costs recoverable through rate adjustments Up to 1 year
+Added: $ 98,844 $ 141,306
+Added: Electric fuel and purchased power deferral Up to 1 year
Conservation programs Up to 1 year
Cost recovery mechanisms Up to 1 year
−Removed: Decoupling Up to 1 year 1,801 9,131
+Added: Environmental compliance programs Up to 1 year
Other Up to 1 year
2 unchanged sentences
Cost recovery mechanisms Up to 25 years
+Added: 85,944 67,171
+Added: Environmental compliance programs - 66,806 —
+Added: Natural gas costs recoverable through rate adjustments Up to 2 years
Plant costs/asset retirement obligations Over plant lives 46,009 44,462
−Removed: Manufactured gas plant sites remediation - 26,624 26,053
−Removed: Plant to be retired - 21,525 50,070
+Added: Manufactured gas plant site remediation - 26,127 26,624
Taxes recoverable from customers Over plant lives 12,249 12,330
Long-term debt refinancing costs Up to 37 years
−Removed: Natural gas costs recoverable through rate adjustments Up to 2 years — 5,186
+Added: Plant to be retired - 772 21,525
Other Up to 15 years
2 unchanged sentences
Regulatory liabilities:
−Removed: Electric fuel and purchased power deferral Up to 1 year $ 4,929 $ —
−Removed: Conservation programs Up to 1 year 4,126 12
+Added: Natural gas costs refundable through rate adjustments Up to 1 year
+Added: $ 43,161 $ 955
+Added: Provision for rate refund Up to 1 year
+Added: Cost recovery mechanisms Up to 1 year
+Added: Margin sharing Up to 1 year
Taxes refundable to customers Up to 1 year
+Added: Conservation programs Up to 1 year
Refundable fuel & electric costs Up to 1 year
−Removed: Natural gas costs refundable through rate adjustments Up to 1 year 955 6,700
+Added: Electric fuel and purchased power deferral Up to 1 year
Other Up to 1 year
2 unchanged sentences
Taxes refundable to customers Over plant lives 193,578 203,222
+Added: Environmental compliance programs - 61,941 —
Cost recovery mechanisms Up to 18 years
−Removed: Accumulated deferred investment tax credit Up to 19 years 13,594 12,696
+Added: 21,791 14,025
+Added: Accumulated deferred investment tax credit Over plant lives 15,740 13,594
Pension and postretirement benefits ** 6,044 7,376
5 unchanged sentences
** Recovered as expense is incurred or cash contributions are made.
−Removed: As of December 31, 2022 and 2021, approximately $ 242.5 million and $ 296.6 million, respectively, of regulatory assets were not earning a rate of return but are expected to be recovered from customers in future rates.
−Removed: These assets are largely comprised of the unfunded portion of pension and postretirement benefits, asset retirement obligations, accelerated depreciation on plant retirement and the estimated future cost of manufactured gas plant site remediation.
−Removed: In the last half of 2021 and in 2022, the Company has experienced higher natural gas costs due to increase in demand outpacing the supply along with the impact of global events.
−Removed: This increase in natural gas costs experienced in certain jurisdictions has been partially offset by the recovery of prior period natural gas costs being recovered over a period longer than the normal one-year period.
88 MDU Resources Group, Inc.
+Added: As of December 31, 2023 and 2022, approximately $ 194.3 million and $ 242.5 million, respectively, of regulatory assets were not earning a rate of return but are expected to be recovered from customers in future rates.
+Added: These assets are largely comprised of the unfunded portion of pension and postretirement benefits, asset retirement obligations, certain pipeline integrity costs, the estimated future cost of manufactured gas plant site remediation and the costs associated with environmental compliance.
+Added: The Company is subject to environmental compliance regulations in certain states which require natural gas distribution companies to reduce overall GHG emissions to certain thresholds as established by each applicable state.
+Added: Compliance with these standards may be achieved through increased energy efficiency and conservation measures, purchased emission allowances and offsets and purchases of low carbon fuels.
+Added: Emission allowances are allocated by the respective states to the Company at no cost, of which a portion is required to be sold at auction.
+Added: The Company expects the compliance costs for these regulations and the revenues from the sale of the allocated emissions allowances will be passed through to customers in rates and has, accordingly, deferred the environmental compliance costs as a regulatory asset and proceeds from the sale of allowances as a regulatory liability.
+Added: In the last half of 2021 through 2022, the Company experienced high natural gas costs due to increase in demand outpacing the supply along with the impact of global events.
+Added: Additionally, in December 2022 and January 2023, natural gas prices significantly increased across the Pacific Northwest from multiple price-pressuring events including wide-spread below-normal temperatures and higher natural gas consumption;
+Added: reduced natural gas flows due to pipeline constraints, including maintenance in West Texas;
+Added: and historically low regional natural gas storage levels.
+Added: For a discussion of the Company's most recent cases by jurisdiction, see Note 20.
In February 2019, the Company announced the retirement of three aging coal-fired electric generating units.
The Company accelerated the depreciation related to these facilities in property, plant and equipment and recorded the difference between the accelerated depreciation, in accordance with GAAP, and the depreciation approved for rate-making purposes as regulatory assets.
−Removed: Requests were filed with the NDPSC and SDPUC, and subsequently approved, to offset the savings associated with the cessation of operations of these units with the amortization of the deferred regulatory assets.
+Added: Requests were filed with the NDPSC, MTPSC and SDPUC, and subsequently approved, to offset the savings associated with the cessation of operations of these units with the amortization of the deferred regulatory assets.
The Company ceased operations of Lewis & Clark Station in March 2021 and Units 1 and 2 at Heskett Station in February 2022.
−Removed: The Company subsequently reclassified the costs being recovered for these facilities from plant retirement to cost recovery mechanisms in the previous table and began amortizing the associated plant retirement and closure costs in the jurisdictions where requests were filed, as previously discussed.
−Removed: The Company expects to recover the regulatory assets related to the plant retirements in future rates.
+Added: The Company subsequently reclassified the costs being recovered for these facilities from plant retirement to cost recovery mechanisms in the previous table and began amortizing the associated plant retirement and closure costs.
If, for any reason, the Company's regulated businesses cease to meet the criteria for application of regulatory accounting for all or part of their operations, the regulatory assets and liabilities relating to those portions ceasing to meet such criteria would be removed from the balance sheet and included in the statement of income or accumulated other comprehensive loss in the period in which the discontinuance of regulatory accounting occurs.
+Added: Note 7 - Environmental Allowances and Obligations
+Added: Beginning in 2023, the Company's natural gas distribution segment acquires environmental allowances as part of its requirement to comply with environmental regulations in certain states.
+Added: Allowances are allocated by the respective states to the Company at no cost and additional allowances are required to be purchased as needed based on the requirements in the respective states.
+Added: The segment records purchased and allocated environmental allowances at weighted average cost under the inventory method of accounting.
+Added: Environmental allowances are included in prepayments and other current assets and noncurrent assets - other on the Consolidated Balance Sheets.
+Added: At December 31, 2023, the Company had $ 72.7 million of environmental allowances.
+Added: Environmental compliance obligations, which are based on GHG emissions, are measured at the carrying value of environmental allowances held plus the estimated value of additional allowances necessary to satisfy the compliance obligation.
+Added: Environmental compliance obligations are included in current liabilities - other accrued liabilities and noncurrent liabilities - other on the Consolidated Balance Sheets.
+Added: At December 31, 2023, the Company accrued $ 66.8 million in compliance obligations.
+Added: The Company recognizes revenue from the sale of emissions allowances allocated under the environmental programs when the allowances are sold at auction.
+Added: The revenues associated with the sale of these allowances are deferred as a component of the respective jurisdiction’s regulatory liability for environmental compliance.
+Added: At December 31, 2023, the Company received $ 61.9 million for the sale of emissions allowances.
+Added: As environmental allowances are surrendered, the segment reduces the associated environmental compliance assets and liabilities from the Consolidated Balance Sheets.
+Added: The expenses and revenues associated with the Company’s environmental allowances and obligations are deferred as regulatory assets and liabilities.
+Added: For more information on the Company’s regulatory assets and liabilities, see Note 6.
+Added: MDU Resources Group, Inc.
Note 8 - Goodwill and Other Intangible Assets
−Removed: The changes in the carrying amount of goodwill were as follows:
−Removed: Balance at January 1, 2022 Goodwill
−Removed: the Year Measurement Period
−Removed: Adjustments Balance at December 31, 2022
−Removed: (In thousands)
−Removed: Natural gas distribution $ 345,736 $ — $ — $ 345,736
−Removed: Construction materials and contracting 276,426 238 ( 2,124 ) 274,540
−Removed: Construction services 143,224 — — 143,224
−Removed: Total $ 765,386 $ 238 $ ( 2,124 ) $ 763,500
−Removed: Balance at January 1, 2021 Goodwill Acquired
−Removed: During the Year Measurement Period
−Removed: Adjustments Balance at December 31, 2021
−Removed: (In thousands)
−Removed: Natural gas distribution $ 345,736 $ — $ — $ 345,736
−Removed: Construction materials and contracting 226,003 50,640 ( 217 ) 276,426
−Removed: Construction services 143,224 — — 143,224
−Removed: Total $ 714,963 $ 50,640 $ ( 217 ) $ 765,386
+Added: The carrying amount of goodwill at the natural gas distribution and construction services segments, which remained unchanged, was $ 345.7 million and $ 143.2 million, respectively, at both December 31, 2023 and 2022.
+Added: No impairments of goodwill have been recorded in these periods.
+Added: At October 31, 2023, the fair value substantially exceeded the carrying value at the Company's construction services reporting unit.
+Added: The Company's annual impairment testing indicated the natural gas distribution reporting units fair value is not substantially in excess of its carrying value ("cushion").
+Added: Based on the Company's assessment, the estimated fair value of the natural gas distribution reporting unit exceeded its carrying value, which includes $ 345.7 million of goodwill, by approximately 4 percent as of October 31, 2023.
+Added: The decrease in the natural gas distribution reporting unit's cushion from the prior year was primarily attributable to the risk adjusted cost of capital increasing from 6.4 percent in 2022 to 6.7 percent 2023, which directly correlates with the treasury rates at the date of the test.
+Added: The natural gas distribution reporting unit is at risk of future impairment if projected operating results are not met or other inputs into the fair value measurement model change.
Other amortizable intangible assets at December 31 were as follows:
2 unchanged sentences
Less accumulated amortization 8,446 6,356
−Removed: 15,266 19,090
Noncompete agreements 292 552
Less accumulated amortization 292 544
−Removed: Other 5,280 12,601
−Removed: Less accumulated amortization 4,076 10,848
Total $ 2,004 $ 4,102
−Removed: The previous tables include goodwill and intangible assets associated with the business combinations completed during 2022 and 2021.
−Removed: For more information related to these business combinations, see Note 4.
−Removed: MDU Resources Group, Inc.
Amortization expense for amortizable intangible assets for the years ended December 31, 2023, 2022 and 2021, was $ 2.1 million, $ 2.2 million and $ 2.5 million, respectively.
3 unchanged sentences
Amortization expense $ 1,888 $ 116 $ — $ — $ — $ —
−Removed: At October 31, 2022, the fair value substantially exceeded the carrying value at the Company's reporting units with goodwill, with the exception of the natural gas distribution reporting unit.
−Removed: The Company's annual impairment testing indicated the natural gas distribution reporting units fair value is not substantially in excess of its carrying value ("cushion").
−Removed: Based on the Company's assessment, the estimated fair value of the natural gas distribution reporting unit exceeded its carrying value, which includes $ 345.7 million of goodwill, by approximately 8 percent as of October 31, 2022.
−Removed: The decrease in the natural gas distribution reporting unit's cushion from the prior year was primarily attributable to the risk adjusted cost of capital increasing from 5.0 percent in 2021 to 6.4 percent 2022, which directly correlates with the treasury rates at the date of the test.
−Removed: The natural gas distribution reporting unit is at risk of future impairment if projected operating results are not met or other inputs into the fair value measurement model change.
Note 9 - Fair Value Measurements
5 unchanged sentences
These investments, which totaled $ 66.2 million and $ 78.0 million at December 31, 2023 and 2022, respectively, are classified as investments on the Consolidated Balance Sheets.
−Removed: The net unrealized losses on these investments for the year ended December 31, 2022, were $ 14.1 million.
−Removed: The net unrealized gains on these investments for the years ended December 31, 2021 and 2020, were $ 7.2 million and $ 13.1 million, respectively.
+Added: The net unrealized gain on these investments for the year ended December 31, 2023, was $ 7.5 million.
+Added: The net unrealized loss on these investments for the year ended December 31, 2022 was $ 11.3 million.
+Added: The net unrealized gain on these investments for the year ended December 31, 2021 was $ 5.8 million.
The change in fair value, which is considered part of the cost of the plan, is classified in other income on the Consolidated Statements of Income.
+Added: In 2023, the Company withdrew $ 20.0 million of its cost basis, which reduced investments on the Consolidated Balance Sheets at December 31, 2023.
The Company did not elect the fair value option, which records gains and losses in income, for its available-for-sale securities, which include mortgage-backed securities and U.S.
9 unchanged sentences
Total $ 11,755 $ 45 $ 478 $ 11,322
+Added: 90 MDU Resources Group, Inc.
December 31, 2022 Cost Gross
4 unchanged sentences
Total $ 11,536 $ 2 $ 708 $ 10,830
−Removed: 92 MDU Resources Group, Inc.
The Company's assets measured at fair value on a recurring basis were as follows:
11 unchanged sentences
Total assets measured at fair value $ — $ 84,014 $ — $ 84,014
−Removed: * The insurance contracts invest approximately 63 percent in fixed-income investments, 15 percent in common stock of large-cap companies, 8 percent in common stock of mid-cap companies, 6 percent in common stock of small-cap companies, 6 percent in target date investments and 2 percent in cash equivalents.
+Added: * The insurance contracts invest approximately 60 percent in fixed-income investments, 15 percent in common stock of large-cap companies, 8 percent in target date investments, 7 percent in common stock of mid-cap companies, 5 percent in common stock of small-cap companies, 3 percent in cash equivalents, 1 percent in high yield investments and 1 percent in international investments.
Fair Value Measurements at December 31, 2022, Using
18 unchanged sentences
Though the Company believes the methods used to estimate fair value are consistent with those used by other market participants, the use of other methods or assumptions could result in a different estimate of fair value.
+Added: MDU Resources Group, Inc.
The Company applies the provisions of the fair value measurement standard to its nonrecurring, non-financial measurements, including long-lived asset impairments.
1 unchanged sentence
The Company reviews the carrying value of its long-lived assets, excluding goodwill, whenever events or changes in circumstances indicate that such carrying amounts may not be recoverable.
−Removed: The Company performed a fair value assessment of the assets acquired and liabilities assumed in the business combinations that occurred during 2022 and 2021.
−Removed: For more information on these Level 2 and Level 3 fair value measurements, see Notes 2 and 4.
−Removed: MDU Resources Group, Inc.
The Company's long-term debt is not measured at fair value on the Consolidated Balance Sheets and the fair value is being provided for disclosure purposes only.
6 unchanged sentences
Note 10 - Debt
+Added: Due to the Knife River separation, Centennial repaid all of its outstanding debt in the second quarter of 2023, which was funded by the Knife River repayment and the Company entering into various new debt instruments.
+Added: Refer to Note 3 for additional information related to the repayment of debt associated with the Knife River separation.
Certain debt instruments of the Company's subsidiaries contain restrictive and financial covenants and cross-default provisions.
17 unchanged sentences
Commercial paper/Revolving credit agreement (e) $ — $ — $ 231.6 $ — 12/19/24
+Added: MDU Resources Group, Inc.
+Added: Revolving credit agreement
+Added: $ 150.0 $ — $ — $ — 5/29/24
+Added: MDU Resources Group, Inc.
+Added: Revolving credit agreement
+Added: $ — $ — $ 8.9 5/31/28
(a) The commercial paper program is supported by a revolving credit agreement with various banks (provisions allow for increased borrowings, at the option of Montana-Dakota on stated conditions, up to a maximum of $ 250.0 million).
3 unchanged sentences
(d) Certain provisions allow for increased borrowings, up to a maximum of $ 125.0 million.
−Removed: (e) The commercial paper program is supported by a revolving credit agreement with various banks (provisions allow for increased borrowings, at the option of Centennial on stated conditions, up to a maximum of $ 700.0 million).
−Removed: At December 31, 2022 and 2021, there were no amounts outstanding under the revolving credit agreement.
−Removed: The respective commercial paper programs are supported by revolving credit agreements.
−Removed: While the amount of commercial paper outstanding does not reduce available capacity under the respective revolving credit agreements, Montana-Dakota and Centennial do not issue commercial paper in an aggregate amount exceeding the available capacity under their credit agreements.
−Removed: The commercial paper borrowings may vary during the period, largely the result of fluctuations in working capital requirements due to the seasonality of certain operations of the Company's subsidiaries.
+Added: (e) Centennial repaid all of its outstanding debt in the second quarter of 2023, which was funded by the Knife River repayment and the Company entering into various new debt instruments.
+Added: The commercial paper program was supported by a revolving credit agreement with various banks (provisions allow for increased borrowings, at the option of Centennial on stated conditions, up to a maximum of $ 700.0 million).
+Added: At December 31, 2022, there was no amount outstanding under the revolving credit agreement.
+Added: (f) Certain provisions allow for increased borrowings, up to a maximum of $ 250.0 million.
+Added: Montana-Dakota's commercial paper programs are supported by a revolving credit agreement.
+Added: While the amount of commercial paper outstanding does not reduce available capacity under the revolving credit agreement, Montana-Dakota does not issue commercial paper in an aggregate amount exceeding the available capacity under their credit agreement.
+Added: The commercial paper and revolving credit agreement borrowings may vary during the period, largely the result of fluctuations in working capital requirements due to the seasonality of certain operations of Montana-Dakota.
+Added: 92 MDU Resources Group, Inc.
Short-term debt
−Removed: MDU Energy Capital On October 21, 2022, MDU Energy Capital entered into a $ 11.5 million term loan agreement with a SOFR-based variable interest rate and a maturity date of July 21, 2023.
−Removed: The agreement contains customary covenants and provisions, including a covenant of MDU Energy Capital not to permit, at any time, the ratio of total debt to total capitalization to be greater than 70 percent.
−Removed: The covenants also include certain restrictions on the sale of certain assets, loans and investments.
+Added: Cascade On January 20, 2023, Cascade entered into a $ 150.0 million term loan agreement with a SOFR-based variable interest rate and a maturity date of January 19, 2024.
+Added: On December 5, 2023, Cascade paid down $ 100.0 million of the outstanding balance.
+Added: Intermountain On January 20, 2023, Intermountain entered into a $ 125.0 million term loan agreement with a SOFR-based variable interest rate and a maturity date of January 19, 2024.
+Added: In March, April and May 2023, Intermountain paid down $ 20.0 million, $ 30.0 million, and $ 30.0 million, respectively, of the outstanding balance.
Centennial On March 18, 2022, Centennial entered into a $ 100.0 million term loan agreement with a SOFR-based variable interest rate and a maturity date of March 17, 2023.
−Removed: The agreement contains customary covenants and provisions, including a covenant of Centennial not to permit, at any time, the ratio of total debt to total capitalization to be greater than 65 percent.
−Removed: The covenants also include certain restrictions on the sale of certain assets, loans and investments.
+Added: On March 17, 2023, Centennial amended the agreement to extend the maturity date to September 15, 2023.
+Added: On May 31, 2023, Centennial repaid the full balance outstanding under the term loan agreement.
On December 19, 2022, Centennial entered into a $ 135.0 million term loan agreement with a SOFR-based variable interest rate and a maturity date of December 18, 2023.
−Removed: The agreement contains customary covenants and provisions, including a covenant of Centennial not to permit, at any time, the ratio of total debt to total capitalization to be greater than 65 percent.
−Removed: The covenants also include certain restrictions on the sale of certain assets, loans and investments.
+Added: On May 31, 2023, Centennial repaid the full balance outstanding under the term loan agreement.
MDU Resources Group, Inc.
+Added: On May 1, 2023, the Company entered into a $ 75.0 million term loan agreement with a SOFR-based variable interest rate and a maturity date of November 1, 2023.
+Added: On May 31, 2023, the Company repaid the full balance outstanding under the term loan agreement.
+Added: On May 31, 2023, the Company entered into a $ 150.0 million revolving credit agreement with a SOFR-based variable interest rate and a maturity date of May 29, 2024.
+Added: At December 31, 2023, the Company had no amount outstanding.
+Added: The agreement contains customary covenants and provisions, including a covenant of the Company not to permit, at any time, the ratio of total debt to total capitalization to be greater than 65 percent.
+Added: The covenants also include certain restrictions on the sale of certain assets, loans and investments.
+Added: As discussed in Note 3, the Company retained 10 percent of the shares of Knife River with the intent to monetize its investment and provide proceeds to the Company.
+Added: On November 6, 2023, the Company entered into a $ 310.0 million term loan agreement which was used to facilitate the tax-free debt for equity exchange.
+Added: This term loan was repaid through a noncash exchange of the Company's shares in Knife River for $ 293.2 million and the remaining balance of this term loan was repaid in cash on November 10, 2023.
Long-term debt
2 unchanged sentences
(In thousands)
−Removed: Senior Notes due on dates ranging from May 15, 2023 to June 15, 2062
+Added: Senior Notes due on dates ranging from July 15, 2024 to June 15, 2062
4.46 % $ 1,882,000 $ 1,848,500
1 unchanged sentence
5.94 % 144,200 349,050
+Added: Term Loan Agreements due on May 31, 2025 and September 3, 2032
+Added: 6.51 % 196,300 7,000
Credit agreements due on October 13, 2027 and November 30, 2027
2 unchanged sentences
7.32 % 35,000 35,000
−Removed: Term Loan Agreement due on September 3, 2032
−Removed: 3.64 % 7,000 7,700
−Removed: Other notes due on dates ranging from March 1, 2024 to January 1, 2061
+Added: Other notes due on dates ranging from May 31, 2028 to November 30, 2038
2.21 % 980 1,614
4 unchanged sentences
Net long-term debt $ 2,236,904 $ 2,317,848
−Removed: Montana-Dakota Montana-Dakota's revolving credit agreement supports its commercial paper program.
+Added: Montana-Dakota On October 18, 2023, Montana-Dakota amended and restated its revolving credit agreement to increase the borrowing capacity to $ 200.0 million and extend the maturity date to October 18, 2028.
+Added: Montana-Dakota's revolving credit agreement supports its commercial paper program.
Commercial paper borrowings under this agreement are classified as long-term debt as they are intended to be refinanced on a long-term basis through continued commercial paper borrowings.
2 unchanged sentences
Montana-Dakota's ratio of total debt to total capitalization at December 31, 2023, was 51 percent.
−Removed: Cascade On November 30, 2022, Cascade amended and restated its revolving credit agreement to extend the maturity date to November 30, 2027.
−Removed: Any borrowings under the revolving credit agreement are classified as long-term debt as they are intended to be refinanced on a long-term basis through continued borrowings.
+Added: MDU Resources Group, Inc.
+Added: Cascade Any borrowings under the revolving credit agreement are classified as long-term debt as they are intended to be refinanced on a long-term basis through continued borrowings.
The credit agreement contains customary covenants and provisions, including a covenant of Cascade not to permit, at any time, the ratio of total debt to total capitalization to be greater than 65 percent.
Other covenants include restrictions on the sale of certain assets, limitations on indebtedness and the making of certain investments.
−Removed: On June 15, 2022, Cascade issued $ 50.0 million of senior notes under a note purchase agreement with maturity dates ranging from June 15, 2032 to June 15, 2052, at a weighted average interest rate of 4.50 percent.
+Added: On November 29, 2023, Cascade issued $ 100.0 million of senior notes under a note purchase agreement with a maturity date of November 30, 2033 and an interest rate of 6.39 percent.
The agreement contains customary covenants and provisions, including a covenant of Cascade not to permit, at any time, the ratio of debt to total capitalization to be greater than 65 percent.
1 unchanged sentence
Cascade's ratio of total debt to total capitalization at December 31, 2023, was 54 percent.
−Removed: Intermountain On October 13, 2022, Intermountain amended and restated its revolving credit agreement to increase the borrowing capacity to $ 100.0 million and extend the maturity date to October 13, 2027.
−Removed: Any borrowings under the revolving credit agreement are classified as long-term debt as they are intended to be refinanced on a long-term basis through continued borrowings.
+Added: Intermountain Any borrowings under the revolving credit agreement are classified as long-term debt as they are intended to be refinanced on a long-term basis through continued borrowings.
The credit agreement contains customary covenants and provisions, including a covenant of Intermountain not to permit, at any time, the ratio of total debt to total capitalization to be greater than 65 percent.
Other covenants include restrictions on the sale of certain assets, limitations on indebtedness and the making of certain investments.
−Removed: On June 15, 2022, Intermountain issued $ 40.0 million of senior notes under a note purchase agreement with maturity dates ranging from June 15, 2052 to June 15, 2062, at a weighted average interest rate of 4.68 percent.
+Added: On November 29, 2023, Intermountain issued $ 25.0 million of senior notes under a note purchase agreement with a maturity date of November 30, 2033 and an interest rate of 6.19 percent.
The agreement contains customary covenants and provisions, including a covenant of Intermountain not to permit, at any time, the ratio of debt to total capitalization to be greater than 65 percent.
1 unchanged sentence
Intermountain's ratio of total debt to total capitalization at December 31, 2023, was 57 percent.
+Added: Centennial On June 9, 2023, Centennial repaid the full balances outstanding on all its long-term senior note debt, which aggregated $ 455.0 million.
MDU Resources Group, Inc.
−Removed: Centennial Centennial's revolving credit agreement supports its commercial paper program.
−Removed: Commercial paper borrowings under this agreement are classified as long-term debt as they are intended to be refinanced on a long-term basis through continued commercial paper borrowings.
−Removed: Centennial's revolving credit agreement contains customary covenants and provisions, including a covenant of Centennial not to permit, as of the end of any fiscal quarter, the ratio of total consolidated debt to total consolidated capitalization to be greater than 65 percent.
−Removed: Other covenants include restricted payments, restrictions on the sale of certain assets, limitations on subsidiary indebtedness, minimum consolidated net worth, limitations on priority debt and the making of certain loans and investments.
−Removed: On March 23, 2022, Centennial issued $ 150.0 million of senior notes under a note purchase agreement with maturity dates ranging from March 23, 2032 to March 23, 2034, at a weighted average interest rate of 3.71 percent.
−Removed: The agreement contains customary covenants and provisions, including a covenant of Centennial not to permit, at any time, the ratio of debt to total capitalization to be greater than 60 percent.
−Removed: Other covenants include restrictions on the sale of certain assets, limitations on indebtedness and the making of certain investments.
−Removed: Centennial's ratio of total debt to total capitalization, as defined by its debt covenants, at December 31, 2022, was 46 percent.
−Removed: Certain of Centennial's financing agreements contain cross-default provisions.
−Removed: These provisions state that if Centennial or any subsidiary of Centennial fails to make any payment with respect to any indebtedness or contingent obligation, in excess of a specified amount, under any agreement that causes such indebtedness to be due prior to its stated maturity or the contingent obligation to become payable, the applicable agreements will be in default.
−Removed: WBI Energy Transmission On December 22, 2022, WBI Energy Transmission amended its uncommitted note purchase and private shelf agreement to increase capacity to $ 350.0 million with an expiration date of December 22, 2025.
−Removed: On December 22, 2022, WBI Energy Transmission issued $ 40.0 million in senior notes under the private shelf agreement with a maturity date of December 22, 2030, at an interest rate of 6.67 percent.
+Added: On May 31, 2023, the Company entered into a $ 200.0 million revolving credit agreement with a SOFR-based variable interest rate and a maturity date of May 31, 2028.
+Added: Any borrowings under the revolving credit agreement are classified as long-term debt as they are intended to be refinanced on a long-term basis through continued borrowings.
+Added: The credit agreement contains customary covenants and provisions, including a covenant of the Company not to permit, at any time, the ratio of total debt to total capitalization to be greater than 65 percent.
+Added: The covenants also include certain restrictions on the sale of certain assets, loans and investments.
+Added: On May 31, 2023, the Company entered into a $ 375.0 million term loan agreement with a SOFR-based variable interest rate and a maturity date of May 31, 2025.
+Added: On November 15, 2023, the Company paid down $ 185.0 million of this term loan.
+Added: The term loan agreement contains customary covenants and provisions, including a covenant of the Company not to permit, at any time, the ratio of total debt to total capitalization to be greater than 65 percent.
+Added: The covenants also include certain restrictions on the sale of certain assets, loan and investments.
+Added: WBI Energy Transmission WBI Energy Transmission has a $ 350.0 million uncommitted note purchase and private shelf agreement with an expiration date of December 22, 2025.
WBI Energy Transmission had $ 235.0 million of notes outstanding at December 31, 2023, which reduced the remaining capacity under this uncommitted private shelf agreement to $ 115.0 million.
6 unchanged sentences
Long-term debt maturities $ 61,319 $ 347,700 $ 140,700 $ 66,800 $ 219,900 $ 1,468,161
+Added: 94 MDU Resources Group, Inc.
Note 11 - Leases
Most of the leases the Company enters into are for equipment, buildings, easements and vehicles as part of their ongoing operations.
−Removed: The Company also leases certain equipment to third parties through its utility and construction services segments.
+Added: The Company also leases certain equipment to third parties through its utility and construction services businesses.
The Company determines if an arrangement contains a lease at inception of a contract and accounts for all leases in accordance with ASC 842 - Leases.
6 unchanged sentences
To date, the Company does not have any residual value guarantee amounts probable of being owed to a lessor, financing leases or material agreements with related parties.
−Removed: 96 MDU Resources Group, Inc.
The following tables provide information on the Company's operating leases at and for the years ended December 31:
15 unchanged sentences
Thereafter 25,724
−Removed: Total 143,944
Less discount 16,187
1 unchanged sentence
Lessor accounting
−Removed: The Company leases certain equipment to third parties through its utility and construction services segments, which are considered short-term operating leases with terms of less than 12 months.
+Added: The Company leases certain equipment to third parties through its utility and construction services businesses, which are considered short-term operating leases with terms of less than 12 months.
The Company recognized revenue from operating leases of $ 46.0 million, $ 47.9 million and $ 50.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.
At December 31, 2023, the Company had $ 9.4 million of lease receivables with a majority due within 12 months or less.
+Added: MDU Resources Group, Inc.
Note 12 - Asset Retirement Obligations
−Removed: The Company records obligations related to retirement costs of natural gas distribution lines, natural gas transmission lines, natural gas storage wells, decommissioning of certain electric generating facilities, reclamation of certain aggregate properties, special handling and disposal of hazardous materials at certain electric generating facilities, natural gas distribution facilities and buildings, and certain other obligations as asset retirement obligations.
+Added: The Company records obligations related to retirement costs of natural gas distribution lines, natural gas transmission lines, natural gas storage wells, decommissioning of certain electric generating facilities, special handling and disposal of hazardous materials at certain electric generating facilities, natural gas distribution facilities and buildings, and certain other obligations as asset retirement obligations.
A reconciliation of the Company's liability, which the current portion is included in other accrued liabilities on the Consolidated Balance Sheets, for the years ended December 31 was as follows:
2 unchanged sentences
Liabilities incurred 533 1,315
−Removed: Liabilities acquired — 1,805
Liabilities settled ( 6,633 ) ( 7,529 )
3 unchanged sentences
* Includes $ 18.9 million and $ 21.8 million in 2023 and 2022, respectively, recorded to regulatory assets.
−Removed: MDU Resources Group, Inc.
The 2022 revisions in estimates consist principally of updated asset retirement obligation costs associated with natural gas distribution and transmission lines at the natural gas distribution segment.
3 unchanged sentences
The Company depends on earnings and dividends from its subsidiaries to pay dividends on common stock.
−Removed: The Company has paid quarterly dividends for 85 consecutive years with an increase in the dividend amount for the last 32 consecutive years.
+Added: The Company has paid quarterly dividends for 86 consecutive years.
For the years ended December 31, 2023, 2022 and 2021, dividends declared on common stock were $ .6950 , $ .8750 and $ .8550 per common share, respectively.
4 unchanged sentences
The following discusses the most restrictive limitations.
−Removed: Pursuant to a covenant under its revolving credit agreement, Centennial may only declare or pay distributions if, as of the last day of any fiscal quarter, the ratio of Centennial's average consolidated indebtedness as of the last day of such fiscal quarter and each of the preceding three fiscal quarters to Centennial's Consolidated trailing 12 month EBITDA does not exceed 3.5 to 1.
−Removed: In addition, certain credit agreements and regulatory limitations of the Company's subsidiaries also contain restrictions on dividend payments.
+Added: Certain credit agreements and regulatory limitations of the Company's subsidiaries also contain restrictions on dividend payments.
The most restrictive limitation requires the Company's subsidiaries not to permit the ratio of funded debt to capitalization to be greater than 65 percent.
Based on this limitation, approximately $ 1.3 billion of the net assets of the Company's subsidiaries, which represents common stockholders' equity including retained earnings, would be restricted from use for dividend payments at December 31, 2023.
−Removed: The Company currently has a shelf registration statement on file with the SEC, under which the Company may issue and sell any combination of common stock and debt securities.
−Removed: The Company may sell such securities if warranted by market conditions and the Company's capital requirements.
+Added: The Company may sell any combination of common stock and debt securities if warranted by market conditions and the Company's capital requirements.
Any public offer and sale of such securities will be made only by means of a prospectus meeting the requirements of the Securities Act and the rules and regulations thereunder.
2 unchanged sentences
This agreement, as amended, allows the offering, issuance and sale of up to 6.4 million shares of the Company's common stock in connection with an “at-the-market” offering.
−Removed: The common stock may be offered for sale, from time to time, in accordance with the terms and conditions of the agreement.
−Removed: As of December 31, 2022, the Company had capacity to issue up to 3.6 million additional shares of common stock under the "at-the-market" offering program.
−Removed: Details of the Company's "at-the-market" offering activity for the years ended December 31 was as follows:
−Removed: (In millions)
−Removed: Shares issued — 2.8
−Removed: Net proceeds * $ ( 0.1 ) $ 88.8 **
−Removed: * Net proceeds include issuance costs of $ 149,000 and $ 1.2 million for
−Removed: the years ended December 31, 2022 and 2021, respectively.
−Removed: ** Net proceeds were used for capital expenditures.
+Added: On August 10, 2023, the Company terminated the distribution agreement.
+Added: Prior to the termination, the Company had capacity to issue up to 3.6 million additional shares of common stock under the "at-the-market" offering program.
+Added: The Company was not subject to any termination penalties related to the termination of the distribution agreement.
+Added: The Company had no issuances of shares under the "at-the-market" offering program for both the twelve months ended December 31, 2023 and 2022.
The K-Plan provides participants the option to invest in the Company's common stock.
3 unchanged sentences
At December 31, 2023 and 2022, there were no shares outstanding.
+Added: 96 MDU Resources Group, Inc.
Note 14 - Stock-Based Compensation
−Removed: The Company has stock-based compensation plans under which it is currently authorized to grant restricted stock and other stock awards.
+Added: The Company has stock-based compensation plans under which it is currently authorized to grant restricted stock units and other stock awards.
As of December 31, 2023, there were 3.0 million remaining shares available to grant under these plans.
The Company either purchases shares on the open market or issues new shares of common stock to satisfy the vesting of stock-based awards.
−Removed: 98 MDU Resources Group, Inc.
+Added: Separation of Knife River
+Added: In connection with the completed separation of Knife River through the spinoff, the provisions of the existing compensation plans required adjustments to the number and terms of outstanding employee time-vested restricted stock units and performance share awards to preserve the intrinsic value of the awards immediately prior to the separation.
+Added: The outstanding awards will continue to vest over the original vesting period, which is generally three years from the grant date.
+Added: However, the outstanding performance share awards will no longer be subject to performance-based vesting conditions.
+Added: The number of performance share awards were first adjusted for performance.
+Added: The combined performance factors were determined based on the performance of the Company as of December 31, 2022.
+Added: Outstanding awards at the time of the spinoff were converted into awards of the holder’s employer following separation.
+Added: The Company incurred $ 204,000 of incremental compensation expense related to the conversion of the restricted stock units, which is being recognized in expense over the remaining service periods of the applicable awards.
+Added: There was no incremental compensation expense related to the conversion of the performance share awards.
Total stock-based compensation expense (after tax) was $ 5.7 million, $ 7.7 million and $ 10.6 million in 2023, 2022 and 2021, respectively.
−Removed: The Company uses the straight-line amortization method to recognize compensation expense related to restricted stock, which only has a service condition.
−Removed: The Company recognizes compensation expense related to performance awards with market-based performance metrics on a straight-line basis over the requisite service period.
+Added: The Company uses the straight-line amortization method to recognize compensation expense related to restricted stock units, which only has a service condition.
+Added: The Company recognized compensation expense related to performance awards with market-based performance metrics on a straight-line basis over the requisite service period.
As of December 31, 2023, total remaining unrecognized compensation expense related to stock-based compensation was approximately $ 11.3 million (before income taxes) which will be amortized over a weighted average period of 1.6 years.
Non-employee directors receive shares of common stock in addition to and in lieu of cash payment for directors' fees.
−Removed: There were 40,800 shares with a fair value of $ 1.2 million, 41,925 shares with a fair value of $ 1.2 million and 45,273 shares with a fair value of $ 1.1 million issued to non-employee directors during the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: Restricted stock awards
−Removed: In February 2022 and 2021, key employees were granted restricted stock awards under the long-term performance-based incentive plan.
+Added: There were 50,717 shares with a fair value of $ 950,000 , 40,800 shares with a fair value of $ 1.2 million and 41,925 shares with a fair value of $ 1.2 million issued to non-employee directors during the years ended December 31, 2023, 2022 and 2021, respectively.
+Added: Restricted stock units
+Added: In February 2023, 2022 and 2021, key employees were granted restricted stock units under the long-term performance-based incentive plan authorized by the Company's compensation committee.
+Added: The compensation committee has the authority to select the recipients of awards, determine the type and size of awards, and establish certain terms and conditions of unit award grants.
The shares vest over three years , contingent on continued employment.
Compensation expense is recognized over the vesting period.
−Removed: At December 31, 2022, the number of outstanding shares granted was 188,499 with a weighted average grant-date fair value of $ 27.54 per share.
−Removed: Performance share awards
−Removed: Since 2003, key employees of the Company have been granted performance share awards each year under the long-term performance-based incentive plan authorized by the Company's compensation committee.
−Removed: The compensation committee has the authority to select the recipients of awards, determine the type and size of awards, and establish certain terms and conditions of award grants.
−Removed: Share awards are generally earned over a three-year vesting period and tied to financial metrics.
Upon vesting, participants receive dividends that accumulate during the vesting period.
−Removed: Target grants of performance shares outstanding at December 31, 2022, were as follows:
−Removed: Grant Date Performance
−Removed: Period Target Grant
−Removed: February 2021 2021-2023 281,129
+Added: As previously discussed, adjustments were made to the number of restricted stock units to preserve the intrinsic value of the awards in connection with the spinoff of Knife River and outstanding performance share awards were converted to restricted stock units.
+Added: Target grants of restricted stock units outstanding at December 31, 2023, were as follows:
+Added: Grant Date Performance Period Target Grant of Shares
February 2022 2022-2024 403,088
−Removed: Under the market condition for these performance share awards, participants may earn from zero to 200 percent of the apportioned target grant of shares based on the Company's total stockholder return relative to that of the selected peer group.
−Removed: Compensation expense is based on the grant-date fair value as determined by Monte Carlo simulation.
−Removed: The blended volatility term structure ranges are comprised of 50 percent historical volatility and 50 percent implied volatility.
+Added: February 2023/ July 2023 2023-2025 470,212
+Added: Historical performance share awards
+Added: In February 2022 and 2021 key employees were granted performance share awards under the long-term performance-based incentive plan authorized by the Company's compensation committee.
+Added: The compensation committee has the authority to select the recipients of awards, determine the type and size of awards, and establish certain terms and conditions of award grants.
+Added: Upon vesting, participants receive dividends that accumulate during the vesting period.
+Added: Share awards were generally earned over a three-year vesting period and tied to financial metrics.
+Added: However, as previously discussed in connection with the spinoff of Knife River, the outstanding performance share awards were converted to restricted stock units.
+Added: As a result, there were no outstanding performance shares at December 31, 2023.
+Added: MDU Resources Group, Inc.
+Added: Under the market condition for these performance share awards, participants could earn from zero to 200 percent of the apportioned target grant of shares based on the Company's total stockholder return relative to that of the selected peer group.
+Added: Compensation expense was based on the grant-date fair value as determined by Monte Carlo simulation.
+Added: The blended volatility term structure ranges were comprised of 50 percent historical volatility and 50 percent implied volatility.
Risk-free interest rates were based on U.S.
Treasury security rates in effect as of the grant date.
−Removed: Assumptions used for grants applicable to the market condition for certain performance shares issued in 2022, 2021 and 2020 were:
−Removed: 2022 2021 2020
+Added: Assumptions used for initial grants applicable to the market condition for certain performance shares issued in 2022 and 2021 were:
Weighted average grant-date fair value $ 36.25 $ 37.96
1 unchanged sentence
35.37 % - 46.35 %
−Removed: 15.30 % - 15.97 %
Risk-free interest rate range .71 % - 1.68 %
.02 % - 0.20 %
−Removed: 1.45 % - 1.62 %
Weighted average discounted dividends per share $ 2.93 $ 3.16
−Removed: Under the performance conditions for these performance share awards, participants may earn from zero to 200 percent of the apportioned target grant of shares.
−Removed: The performance conditions are based on the Company's compound annual growth rate in earnings from continuing operations before interest, taxes, depreciation, depletion and amortization and the Company's compound annual growth rate in earnings from continuing operations.
+Added: Under the performance conditions for these performance share awards, participants could earn from zero to 200 percent of the apportioned target grant of shares.
+Added: The performance conditions were based on the Company's compound annual growth rate in earnings from continuing operations.
The weighted average grant-date fair value per share for the performance shares applicable to these performance conditions issued in 2022 and 2021 was $ 27.73 and $ 27.35 , respectively.
−Removed: The fair value of the performance shares that vested during the years ended December 31, 2022, 2021 and 2020, was $ 7.6 million, $ 13.7 million and $ 9.7 million, respectively.
−Removed: MDU Resources Group, Inc.
−Removed: A summary of the status of the performance share awards for the year ended December 31, 2022, was as follows:
+Added: The fair value of the performance shares that vested during the years ended December 31, 2022 and 2021, was $ 7.6 million and $ 13.7 million, respectively.
+Added: A summary of the status of the restricted stock units and performance share awards for the year ended December 31, 2023, was as follows:
+Added: Performance Share Awards
+Added: Restricted Stock Units
Shares Weighted
+Added: Fair Value Number of Shares
+Added: Fair Value **
Nonvested at beginning of period 565,545 $ 32.32 188,499 $ 27.54
−Removed: Granted 284,416 31.99
−Removed: Performance shares earned/unearned ( 22,750 ) 31.63
−Removed: Vested 251,168 36.60
+Added: Granted pre-separation of Knife River
+Added: — 432,557 30.42
+Added: Adjustments for performance
+Added: ( 114,543 ) —
+Added: ( 1,858 ) 30.47 ( 5,532 ) 30.43
+Added: Non-vested pre-separation of Knife River
+Added: 449,144 615,524
+Added: Adjustments related to the Knife River separation*
+Added: ( 449,144 ) 562,944
+Added: Granted post-separation of Knife River
+Added: — 21,159 22.48
+Added: Vested shares
+Added: — ( 326,327 ) 18.68
Nonvested at end of period — 873,300 $ 21.16
+Added: * Includes the conversion adjustments to preserve the intrinsic value of the awards and the cancellation of outstanding awards held by employees that transferred to Knife River, which were replaced with awards issued by Knife River as part of the separation.
+Added: ** Weighted average grant-date fair values post-separation of Knife River reflects the Company's adjusted stock price due to the separation.
+Added: 98 MDU Resources Group, Inc.
Note 15 - Accumulated Other Comprehensive Loss
9 unchanged sentences
Other comprehensive income (loss) before reclassifications — 12,007 ( 667 ) 11,340
+Added: Amounts reclassified to accumulated other comprehensive loss from a regulatory asset — ( 3,265 ) — ( 3,265 )
Amounts reclassified from accumulated other comprehensive loss 413 1,819 114 2,346
2 unchanged sentences
Other comprehensive income (loss) before reclassifications — ( 646 ) 173 ( 473 )
−Removed: Amounts reclassified to accumulated other comprehensive loss from a regulatory asset — ( 3,265 ) — ( 3,265 )
Amounts reclassified from accumulated other comprehensive loss 81 242 43 366
Net current-period other comprehensive income (loss) 81 ( 404 ) 216 ( 107 )
+Added: Amounts reclassified related to the separation of Knife River 44 12,262 — 12,306
At December 31, 2023 $ — $ ( 18,042 ) $ ( 342 ) $ ( 18,384 )
40 unchanged sentences
Postretirement $ 28,953 $ 30,228
+Added: Environmental compliance 28,873 —
Compensation-related 27,363 19,867
Operating lease liabilities 14,242 13,914
−Removed: Asset retirement obligations 9,687 8,696
−Removed: Legal and environmental contingencies 8,526 8,603
Customer advances 8,312 7,615
−Removed: Payroll tax deferral — 6,940
+Added: Legal and environmental contingencies 4,881 8,265
Other 29,753 24,024
4 unchanged sentences
Purchased gas adjustment 34,618 33,567
+Added: Environmental compliance 16,221 —
Operating lease right-of-use-assets 14,116 13,667
4 unchanged sentences
Net deferred income tax liability $ 458,548 $ 455,499
−Removed: As of December 31, 2022 and 2021, the Company had various state income tax net operating loss carryforwards of $ 176.0 million and $ 164.8 million, respectively, and federal and state income tax credit carryforwards, excluding alternative minimum tax credit carryforwards, of $ 35.7 million and $ 35.6 million, respectively.
−Removed: The state credits include various regulatory investment tax credits of approximately $ 35.1 million and $ 35.0 million at December 31, 2022 and 2021, respectively.
+Added: As of December 31, 2023 and 2022, the Company had various state income tax net operating loss carryforwards of $ 816,000 and $ 785,000 , respectively, and state income tax credit carryforwards, excluding alternative minimum tax credit carryforwards, of $ 33.7 million and $ 35.1 million, respectively.
The state income tax credit carryforwards are due to expire between 2025 and 2037.
1 unchanged sentence
100 MDU Resources Group, Inc.
−Removed: Form 10-K 101
The following table reconciles the change in the net deferred income tax liability from December 31, 2022, to December 31, 2023, to deferred income tax expense:
1 unchanged sentence
Change in net deferred income tax liability from the preceding table $ 3,049
−Removed: Deferred taxes associated with other comprehensive loss ( 3,507 )
Excess deferred income tax amortization ( 8,383 )
−Removed: Other ( 3,500 )
+Added: Deferred taxes associated with other comprehensive loss ( 46 )
Deferred income tax expense for the period $ ( 4,414 )
8 unchanged sentences
11,677 2.2 9,268 3.1 9,971 3.5
+Added: Tax-free debt for equity exchange ( 38,967 ) ( 7.2 ) — — — —
Federal renewable energy credit
( 15,175 ) ( 2.8 ) ( 15,343 ) ( 5.1 ) ( 13,914 ) ( 4.9 )
−Removed: Tax compliance and uncertain tax positions
−Removed: 1,080 .2 ( 477 ) ( .1 ) ( 3,543 ) ( .7 )
−Removed: Nonqualified benefit plans 2,827 .6 ( 1,881 ) ( .4 ) ( 2,443 ) ( .5 )
Excess deferred income tax amortization ( 8,383 ) ( 1.6 ) ( 9,008 ) ( 3.0 ) ( 10,295 ) ( 3.6 )
1 unchanged sentence
Total income tax expense $ 59,473 11.0 $ 49,761 16.6 $ 43,544 15.2
+Added: The Company's effective tax rate for 2023 differs from the U.S.
+Added: federal statutory rate of 21 percent due primarily to the permanent difference on the gain on the Knife River retained shares due to the tax-free treatment of the disposition of the shares through the debt-for-equity exchange that was completed in November 2023, the impact of credits and deductions provided by law, and excess deferred income tax amortization.
+Added: The debt-for equity exchange included an exchange of the approximately 10 percent of Knife River retained shares owned by the Company.
The Company and its subsidiaries file income tax returns in the U.S.
−Removed: federal jurisdiction, and various state, local and foreign jurisdictions.
+Added: federal jurisdiction, and various state and local jurisdictions.
The Company is no longer subject to U.S.
−Removed: federal or non-U.S.
−Removed: income tax examinations by tax authorities for years ending prior to 2019.
−Removed: With few exceptions, as of December 31, 2022, the Company is no longer subject to state and local income tax examinations by tax authorities for years ending prior to 2019.
+Added: federal, non-U.S., state or local income tax examinations by tax authorities for years ending prior to 2020.
For the years ended December 31, 2023, 2022 and 2021, total reserves for uncertain tax positions were not material.
14 unchanged sentences
Right-of-use assets obtained in exchange for new operating lease liabilities $ 46,181 $ 39,158 $ 44,490
−Removed: Debt assumed in connection with a business combination $ — $ 10 $ —
−Removed: Accrual for holdback payment related to a business combination $ 70 $ — $ 2,500
−Removed: Stock issued in connection with a business combination $ 7,304 $ — $ —
+Added: Debt for equity exchange of retained shares in Knife River
+Added: $ 293,239 $ — $ —
MDU Resources Group, Inc.
+Added: Form 10-K 101
Note 18 - Business Segment Data
7 unchanged sentences
This segment also provides non-regulated cathodic protection services.
−Removed: The construction materials and contracting segment mines, processes and sells construction aggregates (crushed stone and sand and gravel);
−Removed: produces and sells asphalt;
−Removed: and supplies ready-mix concrete.
−Removed: This segment's aggregate reserves provide the foundation for the vertical integration of its contracting services with its construction materials to support its aggregate-based product lines including heavy-civil construction, asphalt paving, concrete construction and site development and grading.
−Removed: Although not common to all locations, the segment also includes the sale of cement, liquid asphalt modification and distribution, various finished concrete products, merchandise and other building materials and related contracting services.
−Removed: This segment operates in the central, southern and western United States, including Alaska and Hawaii.
The construction services segment provides a full spectrum of construction services through its electrical and mechanical and transmission and distribution specialty contracting services across the United States.
1 unchanged sentence
Its electrical and mechanical contracting services include construction and maintenance of electrical and communication wiring and infrastructure, fire suppression systems, and mechanical piping and services.
−Removed: Its transmission and distribution contracting services include construction and maintenance of overhead and underground electrical, gas and communication infrastructure, as well as manufacturing and distribution of transmission line construction equipment and tools.
+Added: Its transmission and distribution contracting services include construction and maintenance of overhead and underground electrical, gas and communication infrastructure, as well as manufacturing and supplying transmission and distribution line construction equipment and tools.
The Other category includes the activities of Centennial Capital, which, through its subsidiary InterSource Insurance Company, insures various types of risks as a captive insurer for certain of the Company's subsidiaries.
1 unchanged sentence
Centennial Capital also owns certain real and personal property.
−Removed: In addition, the Other category includes certain assets, liabilities and tax adjustments of the holding company primarily associated with corporate functions, as well as costs associated with the announced strategic initiatives.
−Removed: Also included are certain general and administrative costs (reflected in operation and maintenance expense) and interest expense, which were previously allocated to the refining business and Fidelity and do not meet the criteria for income (loss) from discontinued operations.
−Removed: Discontinued operations include the supporting activities of Fidelity other than certain general and administrative costs and interest expense as described above.
+Added: In addition, the Other category includes certain assets, liabilities and tax adjustments of the holding company primarily associated with corporate functions, as well as the gain on the tax-free exchange of the retained shares in Knife River and costs associated with certain strategic initiatives.
+Added: Also included are certain general and administrative costs (reflected in operation and maintenance expense) and interest expense, which were previously allocated to the refining business, Fidelity and Knife River and do not meet the criteria for income (loss) from discontinued operations.
+Added: Discontinued operations includes Knife River's operations and its associated separation costs and interest on debt facilities repaid in connection with the Knife River separation.
+Added: For the comparative periods below, Knife River's operations are only reflected through May 2023, whereas 2022 and 2021 include the full year from Knife River's operations.
+Added: Discontinued operations also includes the supporting activities of Fidelity other than certain general and administrative costs and interest expense as described above.
The information below follows the same accounting policies as described in Note 2.
10 unchanged sentences
Pipeline 13,457 10,764 13,126
−Removed: Construction materials and contracting 2,533,713 2,228,306 2,177,585
Construction services 2,854,246 2,694,623 2,050,234
−Removed: Other — 84 ( 55 )
2,867,703 2,705,387 2,063,444
1 unchanged sentence
102 MDU Resources Group, Inc.
−Removed: Form 10-K 103
2023 2022 2021
8 unchanged sentences
Pipeline 329 515 481
−Removed: Construction materials and contracting 1,016 624 417
Construction services 143 4,627 1,403
2 unchanged sentences
Total Intersegment operating revenues $ 71,314 $ 69,762 $ 65,865
−Removed: Depreciation, depletion and amortization:
+Added: Depreciation and amortization:
Electric $ 64,253 $ 67,802 $ 66,750
1 unchanged sentence
Pipeline 26,811 26,857 20,569
−Removed: Construction materials and contracting 117,798 100,974 89,626
Construction services 23,148 21,468 20,270
Other 4,086 4,435 4,586
−Removed: Total depreciation, depletion and amortization $ 327,826 $ 299,214 $ 285,100
+Added: Total depreciation and amortization
+Added: $ 213,598 $ 210,028 $ 198,240
Operating income (loss):
2 unchanged sentences
Pipeline 69,162 55,466 48,078
−Removed: Construction materials and contracting 194,295 191,077 214,498
Construction services 190,541 164,644 145,754
5 unchanged sentences
Pipeline 13,270 10,102 6,705
−Removed: Construction materials and contracting 30,121 19,218 20,577
Construction services 10,057 165 ( 130 )
6 unchanged sentences
Pipeline 12,409 10,522 9,672
−Removed: Construction materials and contracting 42,601 43,459 47,431
Construction services 46,968 42,298 36,322
1 unchanged sentence
Total income tax expense $ 59,473 $ 49,761 $ 43,544
−Removed: 104 MDU Resources Group, Inc.
−Removed: 2022 2021 2020
−Removed: (In thousands)
Net income (loss):
4 unchanged sentences
166,312 138,501 143,298
+Added: MDU Resources Group, Inc.
+Added: Form 10-K 103
+Added: 2023 2022 2021
+Added: (In thousands)
Non-regulated operations:
Pipeline 1,142 ( 59 ) 1,327
−Removed: Construction materials and contracting 116,220 129,755 147,325
Construction services 142,444 129,460 112,176
8 unchanged sentences
Pipeline 115,903 61,923 234,803
−Removed: Construction materials and contracting 181,917 417,524 191,635
Construction services 35,096 36,413 29,140
4 unchanged sentences
Pipeline 1,045,704 961,893 913,945
−Removed: Construction materials and contracting 2,268,970 2,161,653 1,798,493
Construction services 1,106,570 1,126,323 845,262
5 unchanged sentences
Pipeline 1,218,387 1,108,141 1,051,868
−Removed: Construction materials and contracting 2,489,408 2,347,696 2,028,476
Construction services 259,849 245,111 225,758
Other 31,654 36,705 36,717
−Removed: Less accumulated depreciation, depletion and amortization 3,272,493 3,216,461 3,133,831
+Added: Less accumulated depreciation and amortization
+Added: 2,220,206 2,098,298 2,119,074
Net property, plant and equipment $ 5,120,910 $ 4,776,331 $ 4,506,079
−Removed: (a) Capital expenditures for 2022, 2021 and 2020 include noncash transactions such as capital expenditure-related accounts payable, the issuance of the Company's equity securities in connection with an acquisition, AFUDC and accrual of holdback payments in connection with acquisitions totaling $ 1.7 million, $ 38.7 million and $( 15.7 ) million, respectively.
+Added: (a) Capital expenditures for 2023, 2022 and 2021 include noncash transactions such as capital expenditure-related accounts payable and AFUDC totaling $ 13.1 million, $( 3.8 ) million and $ 30.6 million, respectively.
(b) Includes allocations of common utility property.
−Removed: (c) Includes assets not directly assignable to a business (i.e.
−Removed: cash and cash equivalents, certain accounts receivable, certain investments and other miscellaneous current and deferred assets).
−Removed: MDU Resources Group, Inc.
−Removed: Form 10-K 105
+Added: (c) Includes assets of discontinued operations in 2022 and 2021 and assets not directly assignable to a business (i.e.
+Added: cash, cash equivalents and restricted cash, certain accounts receivable, certain investments and other miscellaneous current and deferred assets).
A reconciliation of reportable segment operating revenues and assets to consolidated operating revenues and assets is as follows:
11 unchanged sentences
Total consolidated assets $ 7,833,159 $ 9,660,781 $ 8,910,435
+Added: 104 MDU Resources Group, Inc.
Note 19 - Employee Benefit Plans
10 unchanged sentences
Effective January 1, 2013, post-65 coverage was replaced by a fixed-dollar subsidy for retirees and spouses to be used to purchase individual insurance through a healthcare exchange.
−Removed: 106 MDU Resources Group, Inc.
+Added: In connection with the previously discussed separation of Knife River on May 31, 2023, Knife River's pension plan, including the associated assets and liabilities, was transferred to Knife River and therefore is no longer reflected as part of the Company.
+Added: Also in connection with the separation, a remeasurement of the Company's postretirement plan and the Company's unfunded, non-qualified defined benefit plan were performed and the applicable liabilities from the plans relating to transferring employees were transferred to Knife River.
Changes in benefit obligation and plan assets and amounts recognized in the Consolidated Balance Sheets at December 31 were as follows:
8 unchanged sentences
Plan participants' contributions — — 479 566
−Removed: Actuarial gain ( 85,303 ) ( 12,140 ) ( 18,401 ) ( 12,802 )
+Added: Actuarial loss/(gain)
+Added: 5,395 ( 76,130 ) ( 215 ) ( 13,083 )
Benefits paid ( 21,616 ) ( 22,114 ) ( 3,479 ) ( 3,426 )
10 unchanged sentences
Noncurrent assets - other $ — $ — $ 39,644 $ 36,325
−Removed: Other accrued liabilities — — 1,044 544
Noncurrent liabilities - other 27,028 36,255 — —
8 unchanged sentences
Total $ 140,232 $ 141,207 $ ( 3,765 ) $ ( 5,235 )
+Added: MDU Resources Group, Inc.
+Added: Form 10-K 105
Employer contributions and benefits paid in the preceding table include only those amounts contributed directly to, or paid directly from, plan assets.
1 unchanged sentence
For more information on regulatory assets and liabilities, see Note 6.
−Removed: In 2022 and 2021, the actuarial gain recognized in the benefit obligation was primarily the result of an increase in the discount rate.
+Added: In 2023, the actuarial loss recognized in the benefit obligation was primarily the result of a decrease in the discount rate.
+Added: In 2022, the actuarial gain recognized in the benefit obligation was primarily the result of an increase in the discount rate.
For more information on the discount rates, see the table below.
7 unchanged sentences
Fair value of plan assets $ 248,558 $ 242,031
−Removed: MDU Resources Group, Inc.
−Removed: Form 10-K 107
The components of net periodic benefit cost (credit), other than the service cost component, are included in other income on the Consolidated Statements of Income.
17 unchanged sentences
Net (gain) loss 187 2,369 ( 265 ) ( 604 ) ( 4,141 ) ( 2,811 )
−Removed: Amortization of actuarial loss ( 1,310 ) ( 1,286 ) ( 1,155 ) ( 281 ) ( 135 ) ( 306 )
+Added: Amortization of actuarial (loss) gain
+Added: ( 292 ) ( 1,310 ) ( 1,286 ) 108 ( 281 ) ( 135 )
Amortization of prior service credit — — — 78 125 100
4 unchanged sentences
Net (gain) loss 1,826 9,757 ( 5,116 ) ( 107 ) 11,920 ( 6,292 )
−Removed: Amortization of actuarial gain (loss) ( 5,373 ) ( 6,731 ) ( 6,017 ) 500 110 19
+Added: Amortization of actuarial (loss) gain
+Added: ( 2,801 ) ( 5,373 ) ( 6,731 ) 304 500 110
Amortization of prior service credit
4 unchanged sentences
Total recognized in net periodic benefit credit, accumulated other comprehensive loss and regulatory assets or liabilities $ ( 1,660 ) $ 3,183 $ ( 15,133 ) $ ( 3,748 ) $ 4,333 $ ( 11,985 )
+Added: 106 MDU Resources Group, Inc.
Weighted average assumptions used to determine benefit obligations at December 31 were as follows:
4 unchanged sentences
Expected return on plan assets 6.50 % 6.50 % 6.00 % 6.00 %
−Removed: Rate of compensation increase N/A N/A 3.00 % 3.00 %
Weighted average assumptions used to determine net periodic benefit cost (credit) for the years ended December 31 were as follows:
4 unchanged sentences
Expected return on plan assets 6.50 % 6.00 % 6.00 % 5.50 %
−Removed: Rate of compensation increase N/A N/A 3.00 % 3.00 %
The expected rate of return on pension plan assets is based on a targeted asset allocation range determined by the funded ratio of the plan.
2 unchanged sentences
The expected return on plan assets for other postretirement benefits reflects insurance-related investment costs.
−Removed: 108 MDU Resources Group, Inc.
Health care rate assumptions for the Company's other postretirement benefit plans as of December 31 were as follows:
5 unchanged sentences
The Company contributes a flat dollar amount to the monthly premiums which is updated annually on January 1.
−Removed: The Company does no t expect to contribute to its defined benefit pension plans in 2023 due to an additional $ 20.0 million contributed to the plans in 2019 creating prefunding credits to be used in future years.
+Added: The Company expects to contribute to its defined benefit pension plans in 2024 the minimum funding requirement of $ 3.3 million.
The Company expects to contribute approximately $ 22,000 to its postretirement benefit plans in 2024.
18 unchanged sentences
The Company's practice is to periodically review and rebalance asset categories based on its targeted asset allocation percentage policy.
+Added: MDU Resources Group, Inc.
+Added: Form 10-K 107
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.
14 unchanged sentences
The fair value of the underlying investments held by the commingled funds, separate accounts and common collective trusts is generally based on quoted prices in active markets.
−Removed: MDU Resources Group, Inc.
−Removed: Form 10-K 109
Though the Company believes the methods used to estimate fair value are consistent with those used by other market participants, the use of other methods or assumptions could result in a different estimate of fair value.
10 unchanged sentences
companies ( 2 ) — — ( 2 )
−Removed: International companies — 467 — 467
Collective and mutual funds (a) 84,761 88,219 — 172,980
−Removed: Corporate bonds — 81,363 — 81,363
−Removed: Municipal bonds — 5,904 — 5,904
Government securities 30,162 33,141 — 63,303
−Removed: Pooled separate accounts (b) — 3,241 — 3,241
−Removed: Investments measured at net asset value (c) — — — 5,562
+Added: Investments measured at net asset value (b)
Total assets measured at fair value $ 114,921 $ 128,557 $ — $ 248,558
−Removed: (a) Collective and mutual funds invest approximately 29 percent in corporate bonds, 24 percent in common stock of large-cap U.S.
−Removed: companies, 16 percent in common stock of international companies, 7 percent cash and cash equivalents, 7 percent in U.S.
+Added: (a) Collective and mutual funds invest approximately 51 percent in corporate bonds, 15 percent in common stock of international companies, 11 percent in common stock of large-cap and mid-cap U.S.
+Added: companies, 7 percent cash and cash equivalents, 7 percent in U.S.
Government securities and 9 percent in other investments.
−Removed: (b) Pooled separate accounts are invested 100 percent in cash and cash equivalents.
−Removed: (c) In accordance with ASC 820 - Fair Value Measurements, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy.
+Added: (b) In accordance with ASC 820 - Fair Value Measurements, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy.
The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items presented in the Consolidated Balance Sheets.
+Added: 108 MDU Resources Group, Inc.
Fair Value Measurements
16 unchanged sentences
Total assets measured at fair value $ 117,678 $ 119,376 $ — $ 242,031
−Removed: (a) Collective and mutual funds invest approximately 37 percent in corporate bonds, 19 percent in common stock of international companies, 16 percent in common stock of large-cap U.S.
−Removed: companies, 9 percent in U.S.
+Added: (a) Collective and mutual funds invest approximately 29 percent in corporate bonds, 24 percent in common stock of large-cap U.S.
+Added: companies, 16 percent in common stock of international companies, 7 percent cash and cash equivalents, 7 percent in U.S.
Government securities and 17 percent in other investments.
2 unchanged sentences
The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items presented in the Consolidated Balance Sheets.
−Removed: 110 MDU Resources Group, Inc.
The estimated fair values of the Company's other postretirement benefit plans' assets are determined using the market approach.
16 unchanged sentences
companies 2,369 — — 2,369
−Removed: Collective and mutual funds (a) 5 5 — 10
−Removed: Insurance contract (b) — 69,548 — 69,548
+Added: Insurance contract (a)
+Added: — 72,303 — 72,303
Total assets measured at fair value $ 2,369 $ 76,865 $ — $ 79,234
−Removed: (a) Collective and mutual funds invest approximately 29 percent in corporate bonds, 24 percent in common stock of large-cap U.S.
−Removed: companies, 16 percent in common stock of international companies, 7 percent in cash and cash equivalents, 7 percent in U.S.
−Removed: Government securities and 17 percent in other investments.
−Removed: (b) The insurance contract invests approximately 69 percent in corporate bonds, 13 percent in U.S.
−Removed: Government securities, 14 percent in common stock of large-cap U.S.
−Removed: companies and 4 percent in common stock of small-cap U.S.
+Added: (a) The insurance contract invests approximately 60 percent in corporate bonds, 16 percent in common stock of large-cap U.S.
+Added: companies, 15 percent in U.S.
+Added: Government securities, 5 percent in common stock of small-cap U.S.
+Added: companies and 4 percent in other investments.
+Added: MDU Resources Group, Inc.
+Added: Form 10-K 109
Fair Value Measurements
8 unchanged sentences
companies 2,583 — — 2,583
−Removed: International companies — 1 — 1
Collective and mutual funds (a) 5 5 — 10
Insurance contract (b) — 69,834 — 69,834
−Removed: Investments measured at net asset value (c) — — — 3
Total assets measured at fair value $ 2,588 $ 74,052 $ — $ 76,640
−Removed: (a) Collective and mutual funds invest approximately 37 percent in corporate bonds, 19 percent in common stock of international companies, 16 percent in common stock of large-cap U.S.
−Removed: companies, 9 percent in U.S.
+Added: (a) Collective and mutual funds invest approximately 29 percent in corporate bonds, 24 percent in common stock of large-cap U.S.
+Added: companies, 16 percent in common stock of international companies, 7 percent in cash and cash equivalents, 7 percent in U.S.
Government securities and 17 percent in other investments.
1 unchanged sentence
companies, 13 percent in U.S.
−Removed: Government securities, 5 percent in common stock of small-cap U.S.
−Removed: companies and 11 percent in other investments.
−Removed: (c) In accordance with ASC 820 - Fair Value Measurements, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy.
−Removed: The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items presented in the Consolidated Balance Sheets.
−Removed: MDU Resources Group, Inc.
−Removed: Form 10-K 111
+Added: Government securities and 4 percent in common stock of small-cap U.S.
Nonqualified benefit plans
11 unchanged sentences
Components of net periodic benefit cost:
−Removed: Service cost $ — $ — $ 58
Interest cost 2,740 1,681 1,505
10 unchanged sentences
Nonqualified benefits $ 5,584 $ 5,726 $ 5,795 $ 5,807 $ 5,481 $ 21,962
+Added: 110 MDU Resources Group, Inc.
In 2012, the Company established a nonqualified defined contribution plan for certain key management employees.
11 unchanged sentences
** Investments of life insurance are carried on plan participants (payable upon the employee's death).
−Removed: 112 MDU Resources Group, Inc.
Defined contribution plans
10 unchanged sentences
Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are between 65 percent and 80 percent funded, and plans in the green zone are at least 80 percent funded.
+Added: MDU Resources Group, Inc.
+Added: Form 10-K 111
EIN/Pension Plan Number Pension Protection Act Zone Status FIP/RP Status Pending/Implemented Contributions Surcharge Imposed Expiration Date
14 unchanged sentences
No 2,149 1,854 1,353 No 12/6/2026
−Removed: IBEW Local 648 Pension Plan 316134845 - 001
−Removed: Yellow as of 2/28/2022
−Removed: Yellow as of 02/28/2021
−Removed: Implemented 915 706 526 No 9/1/2024
IBEW Local 683 Pension Fund Pension Plan 341442087 - 001
10 unchanged sentences
No 8,020 6,304 4,345 No 9/30/2024
−Removed: Pension Trust Fund for Operating Engineers 946090764 - 001
−Removed: Yellow Yellow Implemented 2,484 2,495 2,680 No 3/31/2023 - 6/15/2026
Sheet Metal Workers Pension Plan of Southern CA, AZ, and NV 956052257 - 001
−Removed: Green Yellow Implemented 3,400 2,615 3,255 No 6/30/2024
−Removed: Western Conference of Teamsters Pension Plan 916145047 - 001
Green Green No 3,631 3,400 2,615 No 6/30/2024
2 unchanged sentences
* Plan includes contributions required by collective bargaining agreements which have expired but contain provisions automatically renewing their terms in the absence of a subsequent negotiated agreement.
−Removed: MDU Resources Group, Inc.
−Removed: Form 10-K 113
The Company was listed in the plans' Forms 5500 as providing more than 5 percent of the total contributions for the following plans and plan years:
2 unchanged sentences
Edison Pension Plan 2022 and 2021
+Added: Eighth District Electrical Pension Fund 2022
+Added: Electrical Workers Local No.
+Added: 26 Pension Fund 2022
IBEW Local 82 Pension Plan 2022 and 2021
1 unchanged sentence
IBEW Local 212 Pension Trust Fund 2022 and 2021
−Removed: IBEW Local 357 Pension Plan A 2021 and 2020
+Added: IBEW Local 357 Pension Plan A 2021
IBEW Local 648 Pension Plan 2022 and 2021
IBEW Local 683 Pension Fund Pension Plan 2022 and 2021
−Removed: IBEW Local Union No 226 Open End Pension Fund 2020
Idaho Plumbers and Pipefitters Pension Plan 2022 and 2021
−Removed: International Union of Operating Engineers Local 701 Pension Trust Fund 2021 and 2020
−Removed: Minnesota Teamsters Construction Division Pension Fund 2021 and 2020
+Added: National Electrical Benefit Fund 2022
Pension and Retirement Plan of Plumbers and Pipefitters Local 525 2022 and 2021
−Removed: Southwest Marine Pension Trust 2021 and 2020
+Added: Sheet Metal Workers Pension Plan of Southern CA, AZ, and NV 2022
+Added: Western States Insulators and Allied Workers' Pension Plan 2022
The Company also contributes to a number of multiemployer other postretirement plans under the terms of collective-bargaining agreements that cover its union-represented employees.
5 unchanged sentences
Note 20 - Jointly Owned Facilities
−Removed: The consolidated financial statements include the Company's ownership interests in three coal-fired electric generating facilities (Big Stone Station, Coyote Station and Wygen III) and one major transmission line (BSSE).
+Added: The consolidated financial statements include the Company's ownership interests in three coal-fired electric generating facilities (Big Stone Station, Coyote Station and Wygen III) and two major transmission lines (BSSE and JETx).
Each owner of the jointly owned facilities is responsible for financing its investment.
22 unchanged sentences
Less accumulated depreciation — —
+Added: Utility plant in service $ 66,852 $ 66,238
+Added: Construction work in progress 127 273
+Added: Less accumulated depreciation 13,728 12,477
$ 53,251 $ 54,034
+Added: MDU Resources Group, Inc.
+Added: Form 10-K 113
Note 21 - Regulatory Matters
6 unchanged sentences
The Company is unable to predict the ultimate outcome of these matters, the timing of final decisions of the various regulators and courts, or the effect on the Company's results of operations, financial position or cash flows.
−Removed: Intermountain filed a request with the IPUC for a natural gas general rate increase on December 1, 2022.
−Removed: The request is for an increase of $ 11.3 million annually or 3.2 percent above current rates.
−Removed: The requested increase is primarily to recover investments made since the last rate case in 2016 and the depreciation, operation and maintenance expenses and taxes associated with the increased investments.
−Removed: The IPUC has up to seven months to issue a decision on the request, which is currently pending.
−Removed: Intermountain defers the difference between the actual cost of gas spent to serve customers and the amount approved to be recovered from customers and annually prepares a true-up pursuant to the purchased gas adjustment tariff.
−Removed: On December 27, 2022, Intermountain filed an application with the IPUC for an out-of-cycle cost of gas adjustment requesting an increase in rates of approximately $ 56.5 million annually or approximately 17.1 percent above current rates.
−Removed: The primary reason for the requested increase was to mitigate the under-collection balance due to the significant increase in the commodity price for natural gas.
−Removed: On January 30, 2023, the request was approved with rates effective February 1, 2023.
−Removed: MDU Resources Group, Inc.
−Removed: Form 10-K 115
−Removed: Great Plains defers the difference between the actual cost of gas spent to serve customers and that recovered from customers on a monthly basis.
−Removed: Annually, Great Plains prepares a true-up pursuant to the purchased gas adjustment tariff.
−Removed: On August 30, 2021, the MNPUC issued an order to allow Great Plains recovery of an out-of-cycle cost of gas adjustment of $ 8.8 million over a period of 27 months.
−Removed: The order was effective September 1, 2021, and was subject to a prudence review by the MNPUC.
−Removed: The requested increase was for the February 2021 extreme cold weather, primarily in the central United States, and market conditions surrounding the natural gas commodity market.
−Removed: On October 19, 2022, the MNPUC issued a final order disallowing $ 845,000 of the gas costs.
−Removed: These costs, which were deferred as a regulatory asset in natural gas costs recoverable through rate adjustments, were then recorded to expense as they were no longer recoverable from customers.
−Removed: On November 8, 2022, Great Plains filed a request for reconsideration, which was denied by the MNPUC on January 6, 2023.
−Removed: On June 1, 2022, Great Plains filed an application with the MNPUC for a decrease in its depreciation and amortization rates of approximately $ 1.2 million annually or a decrease from a combined rate of 4.5 percent to 2.8 percent.
−Removed: Great Plains requested the rates be retroactive to January 1, 2022.
−Removed: On November 8, 2022, the MNPUC approved a decrease of $ 1.0 million annually with rates retroactive to January 1, 2022.
−Removed: On November 4, 2022, Montana-Dakota filed an application with the MTPSC for an electric general rate increase of approximately $ 10.5 million annually or 15.2 percent above current rates.
−Removed: The requested increase is primarily to recover investments made since the last rate case, including the Heskett 4 gas turbine, increases in operation and maintenance expenses, and increases in property taxes.
−Removed: On January 24, 2023, the MTPSC approved Montana-Dakota's request for an interim increase of approximately $ 1.7 million or 2.7 percent above current rates, subject to refund, effective February 1, 2023.
−Removed: The MTPSC has 9 months to render a final decision on the rate case.
−Removed: The matter is pending before the MTPSC with a hearing scheduled for June 20, 2023.
−Removed: On May 16, 2022, Montana-Dakota filed an application with the NDPSC for an electric general rate increase of approximately $ 25.4 million annually or 12.3 percent above current rates.
−Removed: The requested increase is primarily to recover investments in production, transmission and distribution facilities and the associated depreciation, operation and maintenance expenses and taxes associated with the increased investment.
−Removed: On July 14, 2022, the NDPSC approved an interim rate increase of approximately $ 10.9 million annually or 5.3 percent above current rates, subject to refund, for service rendered on and after July 15, 2022.
−Removed: The lower interim rate increase is largely due to excluding the recovery of Heskett Unit 4, which is expected to be in service in the summer of 2023.
−Removed: The matter is pending before the NDPSC with a hearing scheduled for May 1, 2023.
+Added: On November 1, 2023, Montana-Dakota filed a request with the NDPSC for a natural gas general rate increase of approximately $ 11.6 million annually or 7.5 percent above current rates.
+Added: The requested increase is primarily to recover investments in system upgrades and pipeline replacement projects enhancing the reliability, safety and integrity of the natural gas system, as well as increased costs to operate and maintain that system.
+Added: On December 13, 2023, the NDPSC approved an interim rate increase of approximately $ 10.1 million annually or 6.5 percent above current rates, subject to refund, for service rendered on and after January 1, 2024.
+Added: This matter is pending before the NDPSC.
Montana-Dakota has a renewable resource cost adjustment rate tariff that allows for annual adjustments for recent projected capital costs and related expenses for projects determined to be recoverable under the tariff.
−Removed: On November 1, 2022, Montana-Dakota filed an annual update to its renewable resource cost adjustment requesting to recover a revenue requirement of approximately $ 17.9 million annually, which was revised to $ 17.0 million annually on January 31, 2023.
−Removed: The update reflects a decrease of approximately $ 1.0 million from the revenues currently included in rates.
−Removed: On February 22, 2023, this matter was approved by the NDPSC with rates effective March 1, 2023.
−Removed: On March 24, 2022, Cascade filed a request for tariff revision with the WUTC to rectify an inadvertent IRS normalization violation resulting from its tariff established in 2018 that passes back to customers the reversal of plant-related excess deferred income taxes through an annual rate adjustment.
−Removed: This request was made in response to the issuances of an IRS private letter ruling to another Washington utility with the same annual rate adjustment tariff, which addressed its normalization violations.
−Removed: The private letter ruling concluded the tariff to refund excess deferred income taxes without corresponding adjustments for other components of rate base or changes in depreciation or income tax expense, is an impermissible methodology under the IRS normalization and consistency rules.
−Removed: Cascade's request proposes a similar remedy through the tariff to recover the excess amounts refunded to customers while this tariff has been in place, and revises the method going forward to reflect excess deferred income taxes in rates in the same manner as other components of rate base from its most recent general rate case.
−Removed: Cascade requested recovery of the excess refunded to customers of approximately $ 3.3 million and elimination of the currently deferred but not yet refunded balance.
−Removed: A multi-party settlement was filed with the WUTC on October 21, 2022.
−Removed: On January 23, 2023, the WUTC denied recovery of the excess refunded to customers, but approved the tariff revision going forward to rectify the inadvertent normalization violation.
−Removed: On February 1, 2023, Cascade filed a motion for clarification with the WUTC on the currently deferred but not yet refunded balance.
−Removed: On September 1, 2022, Montana-Dakota filed an update to its transmission formula rate under the MISO tariff for its multi-value project and network upgrade charges for $ 15.4 million, which was effective January 1, 2023.
+Added: On October 31, 2023, Montana-Dakota filed an annual update to its renewable resource cost adjustment requesting to recover a revenue requirement of approximately $ 21.0 million annually, which was revised to $ 19.5 million on January 29, 2024.
+Added: The update reflects an increase of approximately $ 4.2 million from the revenues currently included in rates.
+Added: The NDPSC approved the renewable resource cost adjustment on February 7, 2024, with rates effective March 1, 2024.
+Added: On August 15, 2023, Montana-Dakota filed a request with the SDPUC for an electric general rate increase of approximately $ 3.0 million annually or 17.3 percent above current rates.
+Added: The requested increase is primarily to recover investments in system upgrades and pipeline replacement projects enhancing the reliability, safety and integrity of the natural gas system, as well as increased costs to operate and maintain that system.
+Added: On January 26, 2024, Montana-Dakota filed a notice of intent to implement interim rates of $ 2.7 million annually or 15.4 percent above current rates, which reflects the removal of Heskett Unit 4 due to the project delay caused by unforeseen operational setbacks.
+Added: The interim rates, subject to refund, will be effective March 1, 2024.
+Added: This matter is pending before the SDPUC.
+Added: On August 15, 2023, Montana-Dakota filed a request with the SDPUC for a natural gas general rate increase of approximately $ 7.4 million annually or 11.2 percent above current rates.
+Added: The requested increase is primarily to recover investments and the associated depreciation, operation and maintenance expenses and taxes associated with the increased investment.
+Added: On January 26, 2024, Montana-Dakota filed a notice of intent to implement interim rates, subject to refund, effective March 1, 2024.
+Added: This matter is pending before the SDPUC.
On January 27, 2023, WBI Energy Transmission filed a general rate case with the FERC for increases in its transportation and storage services rates that also includes a Greenhouse Gas Cost Recovery Mechanism for anticipated future costs.
−Removed: New rates will be in effect no later than August 1, 2023.
+Added: In August 2023, the Company reached a rate case settlement agreement with its customers and FERC staff and the agreed-upon rates were placed into effect as of August 1, 2023.
+Added: The settlement agreement did not include a Greenhouse Gas Cost Recovery Mechanism.
+Added: On October 17, 2023, the Administrative Law Judge certified the Company's rate case settlement agreement to the FERC for final approval.
+Added: On November 27, 2023, the request was approved by FERC.
+Added: On August 31, 2023, Montana-Dakota filed an update to its transmission formula rate under the MISO tariff for its multi-value project and network upgrade charges for $ 15.2 million, which was updated to $ 15.4 million on November 16, 2023.
+Added: Rates were effective January 1, 2024.
114 MDU Resources Group, Inc.
8 unchanged sentences
At December 31, 2023 and 2022, the Company accrued liabilities which have not been discounted of $ 22.5 million and $ 31.9 million, respectively.
−Removed: At December 31, 2022 and 2021, the Company also recorded corresponding insurance receivables of $ 10.4 million and $ 14.1 million, respectively, and regulatory assets of $ 20.9 million and $ 21.2 million, respectively, related to the accrued liabilities.
+Added: At December 31, 2023 and 2022, the Company also recorded corresponding insurance receivables of $ 202,000 and $ 10.0 million, respectively, and regulatory assets of $ 21.6 million and $ 20.9 million, respectively, related to the accrued liabilities.
The accruals are for contingencies resulting from litigation and environmental matters.
4 unchanged sentences
Environmental matters
−Removed: Portland Harbor Site In December 2000, Knife River - Northwest was named by the EPA as a PRP in connection with the cleanup of the riverbed site adjacent to a commercial property site acquired by Knife River - Northwest from Georgia-Pacific West, Inc.
−Removed: along the Willamette River.
−Removed: The riverbed site is part of the Portland, Oregon, Harbor Superfund Site where the EPA wants responsible parties to share in the costs of cleanup.
−Removed: The EPA entered into a consent order with certain other PRPs referred to as the Lower Willamette Group for a remedial investigation and feasibility study.
−Removed: The Lower Willamette Group has indicated that it has incurred over $ 115.0 million in investigation related costs.
−Removed: Knife River - Northwest has joined with approximately 100 other PRPs, including the Lower Willamette Group members, in a voluntary process to establish an allocation of costs for the site.
−Removed: Costs to be allocated would include costs incurred by the Lower Willamette Group as well as costs to implement and fund remediation of the site.
−Removed: In January 2017, the EPA issued a Record of Decision adopting a selected remedy which is expected to take 13 years to complete with a then estimated present value of approximately $ 1 billion.
−Removed: Corrective action will not be taken until remedial design/remedial action plans are approved by the EPA.
−Removed: In 2020, the EPA encouraged certain PRPs to enter into consent agreements to perform remedial design covering the entire site and proposed dividing the site into multiple subareas for remedial design.
−Removed: Certain PRPs executed consent agreements for remedial design work and certain others were issued unilateral administrative orders to perform design work.
−Removed: Knife River - Northwest is not subject to either a voluntary agreement or unilateral order to perform remedial design work.
−Removed: In February 2021, the EPA announced that 100 percent of the site's area requiring active cleanup is in the remedial design process.
−Removed: Site-wide remediation activities are not expected to commence for a number of years.
−Removed: Knife River - Northwest was also notified that the Portland Harbor Natural Resource Trustee Council intends to perform an injury assessment to natural resources resulting from the release of hazardous substances at the site.
−Removed: It is not possible to estimate the costs of natural resource damages until an assessment is completed and allocations are undertaken.
−Removed: At this time, Knife River - Northwest does not believe it is a responsible party and has notified Georgia-Pacific West, Inc., that it intends to seek indemnity for liabilities incurred in relation to the above matters pursuant to the terms of their sale agreement.
−Removed: The Company believes it is not probable that it will incur any material environmental remediation costs or damages in relation to the above referenced matter.
Manufactured Gas Plant Sites Claims have been made against Cascade for cleanup of environmental contamination at manufactured gas plant sites operated by Cascade's predecessors and a similar claim has been made against Montana-Dakota for a site operated by Montana-Dakota and its predecessors.
7 unchanged sentences
However, the recommended remediation would not address any potential contamination to adjacent parcels that may be impacted from historic operations of the manufactured gas plant.
−Removed: An environmental assessment was started in 2020, which is estimated to cost approximately $ 1.8 million.
−Removed: The environmental assessment report is expected to be submitted to the
−Removed: MDU Resources Group, Inc.
−Removed: Form 10-K 117
−Removed: MTDEQ in 2024.
+Added: An environmental assessment, which was started in 2020 and is still underway, is estimated to cost approximately $ 1.8 million.
Montana-Dakota and another party agreed to voluntarily investigate and remediate the site and that Montana-Dakota will pay two-thirds of the costs for further investigation and remediation of the site.
−Removed: Montana-Dakota has accrued costs of $ 725,000 for the remediation and investigation costs, and has incurred costs of $ 922,000 as of December 31, 2022.
+Added: Montana-Dakota has accrued costs of $ 610,000 for the remediation and investigation costs, and has incurred costs of $ 1.0 million as of December 31, 2023.
Montana-Dakota received notice from a prior insurance carrier that it will participate in payment of defense costs incurred in relation to the claim.
15 unchanged sentences
The WUTC approved the petition in September 2010, subject to conditions set forth in the order.
+Added: MDU Resources Group, Inc.
+Added: Form 10-K 115
A claim was made against Cascade for impacts at a site in Bellingham, Washington.
3 unchanged sentences
The other PRPs developed a cleanup action plan and completed public review in 2020.
−Removed: The development of the remediation design is underway, with the Draft Pre-Remedial Design Investigation Data Report submitted to Washington Ecology in early 2023.
+Added: The development of the remediation design is underway, with the Pre-Remedial Design Investigation Data Report submitted to Washington Ecology on June 28, 2023.
The remedy construction is expected to occur following the approval of the final design.
10 unchanged sentences
natural gas transportation and storage;
−Removed: asphalt oil supply;
−Removed: information technology;
−Removed: and construction materials.
+Added: and information technology.
Certain of these contracts are subject to variability in volume and price.
15 unchanged sentences
$ 300,000 in 2028;
−Removed: $ 1.7 million thereafter;
−Removed: and $ 11.5 million, which has no scheduled maturity date.
−Removed: There were no amounts outstanding under the previously mentioned guarantees
−Removed: 118 MDU Resources Group, Inc.
−Removed: at December 31, 2022.
+Added: and $ 0 thereafter.
+Added: There were no amounts outstanding under the previously mentioned guarantees at December 31, 2023.
In the event of default under these guarantee obligations, the subsidiary issuing the guarantee for that particular obligation would be required to make payments under its guarantee.
−Removed: Certain subsidiaries have outstanding letters of credit to third parties related to insurance policies and other agreements, some of which are guaranteed by other subsidiaries of the Company.
+Added: The Company and certain subsidiaries have outstanding letters of credit to third parties related to insurance policies and other agreements, some of which are guaranteed by other subsidiaries of the Company.
At December 31, 2023, the fixed maximum amounts guaranteed under these letters of credit aggregated $ 33.9 million.
−Removed: The amounts of scheduled expiration of the maximum amounts guaranteed under these letters of credit aggregate to $ 29.5 million in 2023 and $ 500,000 in 2024.
+Added: The amounts of scheduled expiration of the maximum amounts guaranteed under these letters of credit aggregate to $ 33.9 million in 2024.
There were no amounts outstanding under the previously mentioned letters of credit at December 31, 2023.
−Removed: In the event of default under these letter of credit obligations, the subsidiary guaranteeing the letter of credit would be obligated for reimbursement of payments made under the letter of credit.
−Removed: In addition, Centennial, Knife River and MDU Construction Services have issued guarantees to third parties related to the routine purchase of maintenance items, materials and lease obligations for which no fixed maximum amounts have been specified.
+Added: In the event of default under these letter of credit obligations, the Company or subsidiary guaranteeing the letter of credit would be obligated for reimbursement of payments made under the letter of credit.
+Added: In addition, Centennial and MDU Construction Services have issued guarantees to third parties related to the routine purchase of maintenance items, materials and lease obligations for which no fixed maximum amounts have been specified.
These guarantees have no scheduled maturity date.
−Removed: In the event a subsidiary of the Company defaults under these obligations, Centennial, Knife River or MDU Construction Services would be required to make payments under these guarantees.
+Added: In the event a subsidiary of the Company defaults under these obligations, Centennial or MDU Construction Services would be required to make payments under these guarantees.
Any amounts outstanding by subsidiaries of the Company were reflected on the Consolidated Balance Sheet at December 31, 2023.
3 unchanged sentences
however, Centennial will likely continue to enter into surety bonds for its subsidiaries in the future.
−Removed: At December 31, 2022, approximately $ 1.3 billion of surety bonds were outstanding, which were not reflected on the Consolidated Balance Sheet.
+Added: At December 31, 2023, approximately $ 313.0 million of surety bonds were outstanding, which were not reflected on the Consolidated Balance Sheet.
+Added: 116 MDU Resources Group, Inc.
Variable interest entities
8 unchanged sentences
Note 23 - Subsequent Events
−Removed: On January 20, 2023, Cascade entered into a $ 150.0 million term loan agreement with a SOFR-based variable interest rate and a maturity date of January 19, 2024.
−Removed: The agreement contains customary covenants and provisions, including a covenant of Cascade not to permit, at any time, the ratio of total debt to total capitalization to be greater than 65 percent.
−Removed: The covenants also include certain restrictions on the sale of certain assets, loans and investments.
−Removed: On January 20, 2023, Intermountain entered into a $ 125.0 million term loan agreement with a SOFR-based variable interest rate and a maturity date of January 19, 2024.
−Removed: The agreement contains customary covenants and provisions, including a covenant of Intermountain not to permit, at any time, the ratio of total debt to total capitalization to be greater than 65 percent.
−Removed: The covenants also include certain restrictions on the sale of certain assets, loans and investments.
+Added: On January 19, 2024, Cascade made the final $ 50.0 million repayment on the $ 150.0 million term loan agreement which Cascade had entered into on January 20, 2023, with a SOFR-based variable interest rate and a maturity date of January 19, 2024.
+Added: On January 19, 2024, Intermountain made the final $ 45.0 million repayment on the $ 125.0 million term loan agreement which Intermountain had entered into on January 20, 2023, with a SOFR-based variable interest rate and a maturity date of January 19, 2024.
MDU Resources Group, Inc.
6 unchanged sentences
Big Stone Station 475-MW coal-fired electric generating facility near Big Stone City, South Dakota (22.7 percent ownership)
−Removed: BSSE 345-kilovolt transmission line from Ellendale, North Dakota, to Big Stone City, South Dakota (50 percent ownership)
−Removed: Btu British thermal unit
+Added: BSSE 345-kV transmission line from Ellendale, North Dakota, to Big Stone City, South Dakota (50 percent ownership)
Cascade Cascade Natural Gas Corporation, an indirect wholly owned subsidiary of MDU Energy Capital
−Removed: Centennial Centennial Energy Holdings, Inc., a direct wholly owned subsidiary of the Company
+Added: Centennial CEHI, LLC, a direct wholly owned subsidiary of the Company, formally known as Centennial Energy Holdings, Inc.
+Added: prior to the separation of Knife River from the Company.
+Added: References to Centennial's historical business and operations refer to the business and operations of Centennial Energy Holdings, Inc.
Centennial Capital Centennial Holdings Capital LLC, a direct wholly owned subsidiary of Centennial
2 unchanged sentences
Coyote Station 427-MW coal-fired electric generating facility near Beulah, North Dakota (25 percent ownership)
−Removed: EBITDA Earnings before interest, taxes, depreciation, depletion and amortization
+Added: EBITDA Earnings before interest, taxes, depreciation and amortization
EIN Employer Identification Number
10 unchanged sentences
IRS Internal Revenue Service
−Removed: Knife River Knife River Corporation, a direct wholly owned subsidiary of Centennial
−Removed: Knife River - Northwest Knife River Corporation - Northwest, an indirect wholly owned subsidiary of Knife River
+Added: 345-kV transmission line from Jamestown, North Dakota to Ellendale, North Dakota (50 percent ownership)
+Added: Knife River Established as Knife River Corporation prior to the separation from the Company, a direct wholly owned subsidiary of Centennial.
+Added: Knife River refers to Knife River Corporation, during the period prior to separation, now known as "KRC Materials, Inc." Following the separation Knife River refers to Knife River Holding Company, now known as Knife River Corporation.
K-Plan Company's 401(k) Retirement Plan
4 unchanged sentences
MISO Midcontinent Independent System Operator, Inc., the organization that provides open-access transmission services and monitors the high-voltage transmission system in the Midwest United States and Manitoba, Canada and a southern United States region which includes much of Arkansas, Mississippi and Louisiana
−Removed: MMBtu Million Btu
MNPUC Minnesota Public Utilities Commission
1 unchanged sentence
a direct wholly owned subsidiary of MDU Energy Capital
−Removed: MTDEQ Montana Department of Environmental Quality
MTPSC Montana Public Service Commission
3 unchanged sentences
SDPUC South Dakota Public Utilities Commission
+Added: 118 MDU Resources Group, Inc.
SEC United States Securities and Exchange Commission
Securities Act Securities Act of 1933, as amended
−Removed: 120 MDU Resources Group, Inc.
SOFR Secured Overnight Financing Rate
9 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.