MDU RESOURCES GROUP INC 10-K

Item 8. Financial Statements and Supplementary Data Management's Report on Internal Control Over Financial Reporting The management of MDU Resources Group, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company's internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013) . Based on our evaluation under the framework in Internal Control-Integrated Framework (2013) , management concluded that the Company's internal control over financial reporting was effective as of December 31, 2025. The effectiveness of the Company's internal control over financial reporting as of December 31, 2025, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report. /s/ Nicole A. Kivisto /s/ Jason L. Vollmer Nicole A. Kivisto Jason L. Vollmer President and Chief Executive Officer Chief Financial Officer MDU Resources Group, Inc. Form 10-K 63 Index Part II Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of MDU Resources Group, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of MDU Resources Group, Inc. and subsidiaries (the “Company”) as of December 31, 2025 and December 31, 2024, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and December 31, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Regulatory Matters—Impact of Rate Regulation on the Financial Statements—Refer to Notes 2 and 6 to the financial statements Critical Audit Matter Description The Company is subject to rate regulation by federal and state utility regulatory agencies (collectively, the “Commissions”), which have jurisdiction with respect to the rates of electric, natural gas distribution and pipeline companies. The Company’s regulated businesses account for certain income and expense items under the provisions of regulatory accounting, which requires these businesses to defer as regulatory assets or liabilities certain items that would have otherwise been reflected as expense or income, respectively, based on the expected regulatory treatment in future rates. The expected recovery, refund or future rate reduction of these deferred items generally is based on specific ratemaking decisions or precedent for each item. Accounting for the economics of rate regulation impacts multiple financial statement line items and disclosures, such as property, plant, and equipment; regulatory assets and liabilities; operating revenues; operation and maintenance expense; depreciation expense; and income taxes. 64 MDU Resources Group, Inc. Form 10-K Index Part II Rates are determined and approved in regulatory proceedings based on an analysis of the Company’s costs to provide utility service and a return on the Company’s investment in the regulated businesses. Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates. The regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. Decisions to be made by the Commissions in the future will impact the accounting for regulated operations. 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. Management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs and (2) refunds or future rate reduction to customers. Given management’s accounting judgments are based on assumptions about the outcome of future decisions by the Commissions, auditing these judgments requires specialized knowledge of accounting for rate regulation due to its inherent complexities. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others: • We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets; and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities. We tested the effectiveness of management’s controls over the initial recognition of amounts as regulatory assets or liabilities; 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. • We evaluated the Company’s disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments. • We read relevant regulatory orders issued by the Commissions for the Company and other public utilities in the Company’s significant jurisdictions, and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances. We evaluated the external information and compared to management’s recorded regulatory asset and liability balances for completeness, and for any evidence that might contradict management’s assertions. • We obtained an analysis from management regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management’s assertion that amounts are probable of recovery, or a future reduction in rates. • We inspected minutes of the board of directors to identify any evidence that may contradict management’s assertions regarding probability of recovery or refunds. We also inquired of management regarding current year rate filings and new regulatory assets or liabilities. /s/ DELOITTE & TOUCHE LLP Minneapolis, Minnesota February 20, 2026 We have served as the Company's auditor since 2002. MDU Resources Group, Inc. Form 10-K 65 Index Part II Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of MDU Resources Group, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of MDU Resources Group, Inc. and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 20, 2026, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ DELOITTE & TOUCHE LLP Minneapolis, Minnesota February 20, 2026 66 MDU Resources Group, Inc. Form 10-K Index Part II Consolidated Statements of Income Years ended December 31, 2025 2024 2023 (In thousands, except per share amounts) Operating revenues $ 1,875,066 $ 1,757,978 $ 1,803,352 Operating expenses: Purchased natural gas sold 671,466 630,403 742,965 Electric fuel and purchased power 158,995 141,148 134,779 Operation and maintenance 433,023 414,491 407,081 Depreciation and amortization 206,708 200,078 190,450 Taxes, other than income 114,497 106,216 103,133 Total operating expenses 1,584,689 1,492,336 1,578,408 Operating income 290,377 265,642 224,944 Realized gain on tax-free exchange of the retained shares in Knife River — — 186,556 Other income 28,349 41,367 33,454 Interest expense 107,749 108,347 104,624 Income before income taxes 210,977 198,662 340,330 Income taxes 19,570 17,589 10,213 Income from continuing operations 191,407 181,073 330,117 Discontinued operations, net of tax ( 1,012 ) 100,035 84,590 Net income $ 190,395 $ 281,108 $ 414,707 Earnings per share - basic: Income from continuing operations $ .94 $ .89 $ 1.62 Discontinued operations, net of tax ( .01 ) .49 .42 Earnings per share - basic $ .93 $ 1.38 $ 2.04 Earnings per share - diluted: Income from continuing operations $ .93 $ .88 $ 1.62 Discontinued operations, net of tax — .49 .41 Earnings per share - diluted $ .93 $ 1.37 $ 2.03 Weighted average common shares outstanding - basic 204,291 203,867 203,640 Weighted average common shares outstanding - diluted 205,300 204,653 203,938 The accompanying notes are an integral part of these consolidated financial statements. MDU Resources Group, Inc. Form 10-K 67 Index Part II Consolidated Statements of Comprehensive Income Years ended December 31, 2025 2024 2023 (In thousands) Net income $ 190,395 $ 281,108 $ 414,707 Other comprehensive income (loss): Reclassification adjustment for loss on derivative instruments included in net income, net of tax of $ 0 , $ 0 and $ 15 in 2025, 2024 and 2023, respectively — — 81 Postretirement liability adjustment: Postretirement liability (losses) gains arising during the period, net of tax of $( 202 ), $ 360 and $( 201 ) in 2025, 2024 and 2023, respectively ( 397 ) 1,049 ( 646 ) Amortization of postretirement liability losses included in net periodic benefit credit, net of tax of $ 168 , $ 145 and $ 78 in 2025, 2024 and 2023, respectively 355 432 242 Postretirement liability adjustment ( 42 ) 1,481 ( 404 ) Net unrealized gain on available-for-sale investments: Net unrealized gain on available-for-sale investments arising during the period, net of tax of $ 29 , $ 23 and $ 46 in 2025, 2024 and 2023, respectively 110 85 173 Reclassification adjustment for loss on available-for-sale investments included in net income, net of tax of $ 4 , $ 5 and $ 11 in 2025, 2024 and 2023, respectively 15 20 43 Net unrealized gain on available-for-sale investments 125 105 216 Other comprehensive income (loss) 83 1,586 ( 107 ) Comprehensive income attributable to common stockholders $ 190,478 $ 282,694 $ 414,600 The accompanying notes are an integral part of these consolidated financial statements. 68 MDU Resources Group, Inc. Form 10-K Index Part II Consolidated Balance Sheets December 31, 2025 2024 Assets (In thousands, except shares and per share amounts) Current assets: Cash, cash equivalents and restricted cash $ 28,212 $ 66,904 Receivables, net 258,631 274,303 Current regulatory assets 179,579 215,436 Inventories 39,052 44,940 Current environmental allowances 26,194 23,304 Prepayments and other current assets 40,768 41,372 Total current assets 572,436 666,259 Noncurrent assets: Property, plant and equipment 8,264,972 7,554,063 Less accumulated depreciation and amortization 2,304,787 2,209,771 Net property, plant and equipment 5,960,185 5,344,292 Goodwill 345,736 345,736 Regulatory assets 297,218 322,350 Investments 121,177 115,459 Environmental allowances 112,376 66,170 Other 213,078 178,552 Total noncurrent assets 7,049,770 6,372,559 Total assets $ 7,622,206 $ 7,038,818 Liabilities and Stockholders' Equity Current liabilities: Long-term debt due within one year $ 144,700 $ 161,700 Accounts payable 148,970 150,070 Regulatory liabilities due within one year 148,584 137,167 Taxes payable 44,686 43,372 Dividends payable 28,614 26,511 Accrued compensation 34,666 35,264 Current environmental obligations 24,086 19,561 Other accrued liabilities 110,917 104,953 Total current liabilities 685,223 678,598 Noncurrent liabilities: Long-term debt 2,532,155 2,130,910 Deferred income taxes 437,286 441,320 Regulatory liabilities 472,329 459,170 Asset retirement obligations 431,587 406,351 Environmental obligations 108,448 58,457 Other 182,261 173,438 Total noncurrent liabilities 4,164,066 3,669,646 Stockholders' equity: Common stock Authorized - 500,000,000 shares, $ 1.00 par value Shares issued - 204,382,821 at December 31, 2025 and 203,934,578 at December 31, 2024 204,383 203,935 Other paid-in capital 1,476,355 1,473,738 Retained earnings 1,108,894 1,029,699 Accumulated other comprehensive loss ( 16,715 ) ( 16,798 ) Total stockholders' equity 2,772,917 2,690,574 Total liabilities and stockholders' equity $ 7,622,206 $ 7,038,818 The accompanying notes are an integral part of these consolidated financial statements. MDU Resources Group, Inc. Form 10-K 69 Index Part II Consolidated Statements of Equity Years ended December 31, 2025, 2024 and 2023 Other Paid-in Capital Retained Earnings Accumu- lated Other Compre-hensive Loss Common Stock Treasury Stock Shares Amount Shares Amount Total (In thousands, except shares) At December 31, 2022 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 Other comprehensive loss — — — — ( 107 ) — — ( 107 ) Dividends declared on common stock — — — ( 142,033 ) — — — ( 142,033 ) Employee stock-based compensation — — 6,781 — — — — 6,781 Repurchase of common stock — — — — — ( 153,622 ) ( 4,811 ) ( 4,811 ) 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 ) Separation of Knife River ( 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 203,689,090 203,689 1,466,235 1,253,693 ( 18,384 ) — — 2,905,233 Net Income — — — 281,108 — — — 281,108 Other comprehensive income — — — — 1,586 — — 1,586 Dividends declared on common stock — — — ( 104,786 ) — — — ( 104,786 ) Employee stock-based compensation — — 9,572 — — — — 9,572 Issuance of common stock upon vesting of stock-based compensation, net of shares used for tax withholdings 199,147 199 ( 2,822 ) — — — — ( 2,623 ) Separation of Everus — — — ( 400,316 ) — — — ( 400,316 ) Issuance of common stock 46,341 47 753 — — — — 800 At December 31, 2024 203,934,578 203,935 1,473,738 1,029,699 ( 16,798 ) — — 2,690,574 Net income — — — 190,395 — — — 190,395 Other comprehensive income — — — — 83 — — 83 Dividends declared on common stock — — — ( 111,200 ) — — — ( 111,200 ) Employee stock-based compensation — — 6,556 — — — — 6,556 Issuance of common stock upon vesting of stock-based compensation, net of shares used for tax withholdings 396,592 396 ( 4,872 ) — — — — ( 4,476 ) Issuance of common stock 51,651 52 933 — — — — 985 At December 31, 2025 204,382,821 $ 204,383 $ 1,476,355 $ 1,108,894 $ ( 16,715 ) — $ — $ 2,772,917 The accompanying notes are an integral part of these consolidated financial statements. 70 MDU Resources Group, Inc. Form 10-K Index Part II Consolidated Statements of Cash Flows Years ended December 31, 2025 2024 2023 (In thousands) Operating activities: Net income $ 190,395 $ 281,108 $ 414,707 Less: (loss) income from discontinued operations, net of tax ( 1,012 ) 100,035 84,590 Income from continuing operations 191,407 181,073 330,117 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 206,708 200,078 190,450 Deferred income taxes ( 8,923 ) ( 16,078 ) ( 1,309 ) Provision for credit losses 6,920 6,558 7,422 Amortization of debt issuance costs 1,259 1,828 1,013 Employee stock-based compensation costs 6,556 8,423 5,505 Pension and postretirement benefit plan net periodic benefit credit ( 1,069 ) ( 3,837 ) ( 5,380 ) Unrealized (gains) on investments ( 6,575 ) ( 5,942 ) ( 7,431 ) Losses (gains) on sales of assets 25 ( 857 ) ( 347 ) Gain on tax-free exchange of the retained shares in Knife River — — ( 186,556 ) Changes in current assets and liabilities, net of acquisitions: Receivables 8,353 ( 30,310 ) 79,111 Inventories 4,342 246 ( 21,729 ) Other current assets 54,459 80,977 ( 48,492 ) Accounts payable ( 9,618 ) ( 443 ) ( 87,209 ) Other current liabilities 24,446 ( 5,252 ) 73,365 Pension and postretirement benefit plan contributions ( 3,079 ) ( 3,000 ) ( 7,643 ) Other noncurrent changes ( 1,121 ) ( 1,651 ) ( 15,554 ) Net cash provided by continuing operations 474,090 411,813 305,333 Net cash (used in) provided by discontinued operations ( 725 ) 90,505 27,294 Net cash provided by operating activities 473,365 502,318 332,627 Investing activities: Capital expenditures ( 770,394 ) ( 522,824 ) ( 484,136 ) Net proceeds from sale or disposition of property — 691 260 Cost of removal, net of salvage value ( 11,283 ) ( 5,539 ) 1,170 Investments ( 4,182 ) ( 5,155 ) ( 2,423 ) Proceeds from investment excess cash and cost basis withdrawal 5,000 9,000 20,000 Net cash used in continuing operations ( 780,859 ) ( 523,827 ) ( 465,129 ) Net cash used in discontinued operations — ( 28,858 ) ( 75,662 ) Net cash used in investing activities ( 780,859 ) ( 552,685 ) ( 540,791 ) Financing activities: Issuance of short-term borrowings — — 810,000 Repayment of short-term borrowings — ( 95,000 ) ( 433,901 ) Issuance of long-term debt 565,350 308,600 594,700 Repayment of long-term debt ( 179,466 ) ( 182,135 ) ( 568,883 ) Debt issuance costs ( 4,283 ) ( 2,456 ) ( 2,521 ) Costs of issuance of common stock ( 79 ) ( 50 ) — Dividends paid ( 108,244 ) ( 102,939 ) ( 161,316 ) Repurchase of common stock — — ( 4,811 ) Tax withholding on stock-based compensation ( 4,476 ) ( 2,623 ) ( 3,040 ) Net cash provided by (used in) continuing operations 268,802 ( 76,603 ) 230,228 Net cash provided by (used in) discontinued operations — 116,899 ( 25,606 ) Net cash provided by financing activities 268,802 40,296 204,622 Decrease in cash, cash equivalents and restricted cash ( 38,692 ) ( 10,071 ) ( 3,542 ) Cash, cash equivalents and restricted cash - beginning of year 66,904 76,975 80,517 Cash, cash equivalents and restricted cash - end of year * $ 28,212 $ 66,904 $ 76,975 MDU Resources Group, Inc. Form 10-K 71 Index Part II Supplemental cash flow information: Cash expenditures during the year for: Interest, net** $ 99,210 $ 108,242 $ 112,839 Income taxes paid, net*** $ 30,838 $ 43,572 $ 12,162 Noncash investing and financing transactions: Property, plant and equipment additions in accounts payable $ 45,338 $ 36,820 $ 46,364 Right-of-use assets obtained in exchange for new operating lease liabilities $ 14,905 $ 1,787 $ 2,265 Debt for equity exchange of retained shares in Knife River $ — $ — $ 293,239 * Includes cash of discontinued operations of $ 16.5 million for the year ended December 31, 2023. ** AFUDC - borrowed was $ 7.4 million, $ 11.0 million and $ 10.0 million for the years ended December 31, 2025, 2024, and 2023, respectively. *** Income taxes paid, including discontinued operations, were $ 30.8 million, $ 80.9 million and $ 62.5 million for the years ended December 31, 2025, 2024, and 2023, respectively. The accompanying notes are an integral part of these consolidated financial statements. 72 MDU Resources Group, Inc. Form 10-K Index Part II Notes to Consolidated Financial Statements Note 1 - Basis of Presentation The consolidated financial statements of the Company include the accounts of the following businesses: electric, natural gas distribution, pipeline and other. For further descriptions of the Company's businesses, see Note 14. On May 31, 2023, the Company completed the separation of Knife River, formerly the construction materials and contracting segment, resulting in Knife River becoming an independent, publicly-traded company. 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. 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. The Company retained approximately 10 percent or 5.7 million shares of Knife River common stock immediately following the separation, which were disposed of in a tax-free exchange in November 2023. The separation of Knife River was a tax-free spinoff transaction to the Company's stockholders for U.S. federal income tax purposes, except for cash received in lieu of fractional shares. On October 31, 2024, the Company completed the separation of Everus, its construction services business, resulting in Everus becoming an independent, publicly-traded company. The Company's board of directors approved the distribution of all the outstanding shares of Everus common stock to the Company's stockholders. Stockholders of the Company received one share of Everus common stock for every four shares of the Company's common stock held as of the close of business on October 21, 2024, the record date for the distribution. The separation of Everus was a tax-free spinoff transaction to the Company's stockholders for U.S. federal income tax purposes, except for cash received in lieu of fractional shares. 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 and Everus as discontinued operations, other than certain corporate overhead costs of the Company historically allocated to Knife River and Everus, which are reflected in Other. 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 and Everus separations. 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. For more information on discontinued operations, see Note 3. Management has also evaluated the impact of events occurring after December 31, 2025, up to the date of issuance of these consolidated financial statements on February 20, 2026, that would require recognition or disclosure in the financial statements. Principles of consolidation The consolidated financial statements were prepared in accordance with GAAP and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation, except for certain transactions related to regulated operations in accordance with GAAP. For more information on intercompany revenues, see Note 14. The statements also include the Company's ownership interests in the assets, liabilities and expenses of jointly owned electric transmission and generating facilities. See Note 16 for additional information. MDU Resources Group, Inc. Form 10-K 73 Index Part II Use of estimates The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates are used for items such as long-lived assets and goodwill; property depreciable lives; tax provisions; revenue recognized using the cost-to-cost measure of progress for contracts; expected credit losses; environmental and other loss contingencies; regulatory assets expected to be recovered in rates charged to customers; costs on construction contracts; unbilled revenues; actuarially determined benefit costs; asset retirement obligations; lease classification; present value of right-of-use assets and lease liabilities; and the valuation of stock-based compensation. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised. Consequently, operating results can be affected by revisions to prior accounting estimates. Note 2 - Significant Accounting Policies New accounting standards The following table provides a brief description of the accounting pronouncements applicable to the Company and the potential impact on its financial statements and/or disclosures: Standard Description Effective date Impact on financial statements/disclosures Recently adopted accounting standards ASU 2023-09 Income Taxes - Improvements to Income Tax Disclosures an Amendment, December 2023 In December 2023, 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. December 31, 2025 The Company has adopted the guidance prospectively and disclosures have been updated to ensure compliance with the new guidance. See Note 13. ASU 2024-01 Compensation - Stock Compensation In March 2024, the FASB issued Improvements to GAAP through an example to demonstrate application of the scope of paragraph 718-10-15-3 to determine whether profits interest and similar awards should be accounted in Compensation - Stock Compensation. December 31, 2025 The Company has evaluated and did not have a material impact from the scope clarification in the new guidance. See Note 12 for additional information on Stock Compensation. Recently issued accounting standards not yet adopted ASU 2024-03 Disaggregation of Income Statement Expenses In November 2024, the FASB issued guidance to improve the disclosures about a public business entity's expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, selling, general, and administrative; and research and development). Effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact the guidance will have on its disclosures for the year ended December 31, 2027. ASU 2025-05 Measurement of Credit Losses for Accounts Receivable and Contract Assets In July 2025, the FASB issued guidance on applying a practical expedient when estimating expected credit losses on current accounts receivable and/or current contract assets arising from transactions under ASC Topic 606 - Revenue from Contracts with Customers. Effective for annual reporting periods beginning after December 15, 2025. The Company is currently evaluating the impact the guidance will have on its results of operations, financial position, cash flows, and disclosures for the year ended December 31, 2026. ASU 2025-06 Targeted Improvements to the Accounting of Internal-Use Software In September 2025, the FASB issued guidance on accounting for capitalization of development costs for internal-use software under ASC Subtopic 350-40 and the transition approaches to use. Effective for annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact the guidance will have on its results of operations, financial position, cash flows, and disclosures for the year ended December 31, 2028. ASU 2025-10 Accounting for Government Grants Received By Business Entities In December 2025, the FASB issued guidance on accounting for government grants received by business entities that are related to an asset (purchase, construction, or acquisition of a long-lived asset or inventory) or income (reimbursements to a business entity for operating expenses). Effective for annual reporting periods beginning after December 15, 2028. The Company is currently evaluating the impact the guidance will have on its results of operations, financial position, cash flows, and disclosures for the year ended December 31, 2029. 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. 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. The Company had restricted cash of $ 15.5 million and $ 16.7 million at December 31, 2025 and 2024, respectively. 74 MDU Resources Group, Inc. Form 10-K Index Part II Revenue recognition Revenue is recognized when a performance obligation is satisfied by transferring control over a product or service to a customer. Revenue is measured based on consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties. The Company is considered an agent for certain taxes collected from customers. As such, the Company presents revenues net of these taxes at the time of sale to be remitted to governmental authorities, including sales and use taxes. The electric and natural gas distribution segments generate revenue from the sales of electric and natural gas products and services, which includes retail and transportation services. These segments establish a customer's retail or transportation service account based on the customer's application/contract for service, which indicates approval of a contract for service. The contract identifies an obligation to provide service in exchange for delivering or standing ready to deliver the identified commodity; and the customer is obligated to pay for the service as provided in the applicable tariff. The product sales are based on a fixed rate that includes a base and per-unit rate, which are included in approved tariffs as determined by state or federal regulatory agencies. The quantity of the commodity consumed or transported determines the total per-unit revenue. The service provided, along with the product consumed or transported, are a single performance obligation because both are required in combination to successfully transfer the contracted product or service to the customer. Revenues are recognized over time as customers receive and consume the products and services. 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. 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. At this time, the segment has no material obligations for returns, refunds or other similar obligations. The pipeline segment generates revenue from providing natural gas transportation and underground storage services, as well as other energy-related services to both third parties and internal customers, largely the natural gas distribution segment. The pipeline segment establishes a contract with a customer based upon the customer’s request for firm or interruptible natural gas transportation or storage service(s). The contract identifies an obligation for the segment to provide the requested service(s) in exchange for consideration from the customer over a specified term. Depending on the type of service(s) requested and contracted, the service provided may include transporting or storing an identified quantity of natural gas and/or standing ready to deliver or store an identified quantity of natural gas. Natural gas transportation and storage revenues are based on fixed rates, which may include reservation fees and/or per-unit commodity rates. The services provided by the segment are generally treated as single performance obligations satisfied over time simultaneous to when the service is provided and revenue is recognized. Rates for the segment’s regulated services are based on its FERC approved tariff or customer negotiated rates, and rates for its non-regulated services are negotiated with its customers and set forth in the contract. For contracts governed by the company’s tariff, amounts are billed on or before the ninth business day of the following month and the amount is due within 12 days of receipt of the invoice. For other contracts not governed by the tariff, payment terms are net 30 days. At this time, the segment has no material obligations for returns, refunds or other similar obligations. The Company recognizes all other revenues when services are rendered or goods are delivered. Legal costs The Company generally expenses external legal fees as they are incurred unless it has specific circumstances to defer, such as probable recovery in a rate proceeding. Receivables and allowance for expected credit losses Receivables consist primarily of trade receivables from the sale of goods and services net of expected credit losses. The Company's trade receivables are all due in 12 months or less. The total balance of receivables past due 90 days or more was $ 3.6 million at both December 31, 2025 and 2024. MDU Resources Group, Inc. Form 10-K 75 Index Part II The Company's expected credit losses are determined through a review using historical credit loss experience, changes in asset specific characteristics, current conditions and reasonable and supportable future forecasts, among other specific account data, and is performed at least quarterly. The Company develops and documents its methodology to determine its allowance for expected credit losses at each of its reportable business segments. Risk characteristics used by the business segments may include customer mix, knowledge of customers and general economic conditions of the various local economies, among others. Specific account balances are written off when management determines the amounts to be uncollectible. Management has reviewed the balance reserved through the allowance for expected credit losses and believes it is reasonable. Details of the Company's expected credit losses were as follows: Electric Natural gas distribution Pipeline Total (In thousands) At December 31, 2022 $ 375 $ 1,615 $ 2 $ 1,992 Current expected credit loss provision 1,645 5,777 — 7,422 Less write-offs charged against the allowance 1,994 7,355 2 9,351 Credit loss recoveries collected 388 1,152 — 1,540 At December 31, 2023 414 1,189 — 1,603 Current expected credit loss provision 1,891 4,667 — 6,558 Less write-offs charged against the allowance 2,218 5,709 — 7,927 Credit loss recoveries collected 386 1,219 — 1,605 At December 31, 2024 473 1,366 — 1,839 Current expected credit loss provision 2,197 4,723 — 6,920 Less write-offs charged against the allowance 2,559 5,782 — 8,341 Credit loss recoveries collected 395 1,136 — 1,531 At December 31, 2025 $ 506 $ 1,443 $ — $ 1,949 Receivables also consist of accrued unbilled revenue representing revenues recognized in excess of amounts billed. Accrued unbilled revenue within the electric and natural gas distribution segments was $ 128.1 million and $ 143.2 million at December 31, 2025 and 2024, respectively. Inventories and natural gas in storage Natural gas in storage is generally valued at lower of cost or market using the last-in, first-out method or lower of cost or net realizable value using the average cost or first-in, first-out method. The majority of all other inventories are valued at the lower of cost or net realizable value using the average cost method. The portion of the cost of natural gas in storage expected to be used within 12 months was included in inventories. Inventories at December 31 consisted of: 2025 2024 (In thousands) Natural gas in storage (current) $ 34,333 $ 40,073 Fuel stock 4,719 4,867 Total $ 39,052 $ 44,940 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 $ 47.8 million and $ 48.5 million at December 31, 2025 and 2024, respectively. 76 MDU Resources Group, Inc. Form 10-K Index Part II Property, plant and equipment Additions to property, plant and equipment are recorded at cost. 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. With respect to the retirement or disposal of all other assets, the resulting gains or losses are recognized as a component of income. The Company is permitted to capitalize AFUDC on regulated construction projects and to include such amounts in rate base when the related facilities are placed in service. In addition, the Company capitalizes interest, when applicable, on certain contracting services projects associated with its other operations. The amount of AFUDC for the years ended December 31 was as follows: 2025 2024 2023 (In thousands) AFUDC - borrowed $ 7,425 $ 10,964 $ 10,035 AFUDC - equity $ 2,301 $ 2,251 $ 1,894 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. These amounts are recorded as regulatory liabilities on the Consolidated Balance Sheets. Impairment of long-lived assets, excluding goodwill 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. Long-lived assets or groups of assets that are evaluated for impairment at the lowest level of largely independent identifiable cash flows at an individual operation or group of operations collectively serving a local market. The determination of whether an impairment has occurred is based on an estimate of undiscounted future cash flows attributable to the assets, compared to the carrying value of the assets. If impairment has occurred, the amount of the impairment recognized is determined by estimating the fair value of the assets and recording a loss if the carrying value is greater than the fair value. The impairments are recorded in operation and maintenance expense on the Consolidated Statements of Income. No impairment losses were recorded in 2025, 2024 or 2023. Unforeseen events and changes in circumstances could require the recognition of impairment losses at some future date. Regulatory assets and liabilities The Company is subject to various state and federal agency regulations. The accounting policies followed by the Company are generally subject to the Uniform System of Accounts of the FERC as well as the provisions of ASC 980 - Regulated Operations . These accounting policies differ in some respects from those used by the Company's non-regulated businesses. The Company accounts for certain income and expense items under the provisions of regulatory accounting, which requires the Company to defer as regulatory assets or liabilities certain items that would have otherwise been reflected as expense or income, respectively. The Company records regulatory assets or liabilities at the time the Company determines the amounts to be recoverable in current or future rates. Regulatory assets and liabilities are being amortized consistently with the regulatory treatment established by the FERC and the applicable state public service commission. See Note 6 for more information regarding the nature and amounts of these regulatory deferrals. Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net tangible and intangible assets acquired in a business combination. Goodwill is required to be tested for impairment annually, which the Company completes in the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. The Company has determined that the reporting units for its goodwill impairment test are its operating segments, or components of an operating segment, that constitute a business for which discrete financial information is available and for which segment management regularly reviews the operating results. As of December 31, 2025, the only operating segment with goodwill was the natural gas distribution segment. For more information on the Company's operating segments, see Note 14. MDU Resources Group, Inc. Form 10-K 77 Index Part II Goodwill impairment, if any, is measured by comparing the fair value of each reporting unit to its carrying value. If the fair value of a reporting unit exceeds its carrying value, the goodwill of the reporting unit is not impaired. If the carrying value of a reporting unit exceeds its fair value, the Company must record an impairment loss for the amount that the carrying value of the reporting unit, including goodwill, exceeds the fair value of the reporting unit. For the years ended December 31, 2025, 2024 and 2023, the carrying amount of goodwill at the natural gas distribution segment, was $ 345.7 million. There have been no impairment losses recorded. Investments The Company's investments include the cash surrender value of life insurance policies, insurance contracts, mortgage-backed securities and U.S. Treasury securities. The Company measures its investment in the insurance contracts at fair value with any unrealized gains and losses recorded on the Consolidated Statements of Income. The Company has not elected the fair value option for its mortgage-backed securities and U.S. Treasury securities and, as a result, the unrealized gains and losses on these investments are recorded in accumulated other comprehensive loss. For more information, see Notes 8 and 15. Variable interest entities The Company evaluates its arrangements and contracts with other entities to determine if they are VIEs and if so, if the Company is the primary beneficiary. GAAP provides a framework for identifying VIEs and determining when a company should include the assets, liabilities, noncontrolling interest and results of activities of a VIE in its consolidated financial statements. A VIE should be consolidated if a party with an ownership, contractual or other financial interest in the VIE (a variable interest holder) has the power to direct the VIE's most significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. A variable interest holder that consolidates the VIE is called the primary beneficiary. Upon consolidation, the primary beneficiary generally must initially record all of the VIE's assets, liabilities and noncontrolling interests at fair value and subsequently account for the VIE as if it were consolidated. 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. Derivative instruments The Company enters into commodity price derivative contracts in order to minimize the price volatility associated with customer natural gas costs at its natural gas distribution segment. These derivatives are not designated as hedging instruments and are recorded in the Consolidated Balance Sheets at fair value. Changes in the fair value of these derivatives along with any contract settlements are recorded each period in regulatory assets or liabilities in accordance with regulatory accounting. The Company does not enter into any derivatives for trading or other speculative purposes. The Company did not have any material commodity price derivative contracts at December 31, 2025 or 2024. Leases Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The Company recognizes leases with an original lease term of 12 months or less in income on a straight-line basis over the term of the lease and does not recognize a corresponding right-of-use asset or lease liability. The Company determines the lease term based on the non-cancelable and cancelable periods in each contract. The non-cancelable period consists of the term of the contract that is legally enforceable and cannot be canceled by either party without incurring a significant penalty. The cancelable period is determined by various factors that are based on who has the right to cancel a contract. If only the lessor has the right to cancel the contract, the Company will assume the contract will continue. If the lessee is the only party that has the right to cancel the contract, the Company looks to asset, entity and market-based factors. If both the lessor and the lessee have the right to cancel the contract, the Company assumes the contract will not continue. The discount rate used to calculate the present value of the lease liabilities is based upon the implied rate within each contract. If the rate is unknown or cannot be determined, the Company uses an incremental borrowing rate, which is determined by the length of the contract, asset class and the Company's borrowing rates, as of the commencement date of the contract. 78 MDU Resources Group, Inc. Form 10-K Index Part II Asset retirement obligations The Company records the fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the Company capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, the Company either settles the obligation for the recorded amount or incurs a regulatory asset or liability. 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. The Company uses the straight-line amortization method to recognize compensation expense related to RSUs, 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. The Company recognized compensation expense related to PSAs that vest based on performance metrics and service conditions on a straight-line basis over the service period. Inception-to-date expense was adjusted based upon the determination of the potential achievement of the performance target at each reporting date. The Company recognizes compensation expense related to PSAs with market-based performance metrics on a straight-line basis over the requisite service period. Outstanding PSAs were converted to RSUs in connection with the completed separation of Knife River through the spinoff. The Company records the compensation expense for RSUs and PSAs using an estimated forfeiture rate. The estimated forfeiture rate is calculated based on an average of actual historical forfeitures. The Company also performs an analysis of any known factors at the time of the calculation to identify any necessary adjustments to the average historical forfeiture rate. At the time actual forfeitures become more than estimated forfeitures, the Company records compensation expense using actual forfeitures. Earnings per share Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing net income by the total of the weighted average number of shares of common stock outstanding during the year, plus the effect of nonvested PSAs and RSUs, as well as potentially issuable shares pursuant to FSAs using the treasury stock method. Common stock outstanding includes issued shares less shares held in treasury. As a result of the 2023 Knife River 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. Following the separation, the 538,921 treasury shares were retired. 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. A reconciliation of the weighted average common shares outstanding used in the basic and diluted earnings per share calculations follows: 2025 2024 2023 (In thousands, except per share amounts) Weighted average common shares outstanding - basic 204,291 203,867 203,640 Effect of dilutive PSAs, RSUs, and FSAs 1,009 786 298 Weighted average common shares outstanding - diluted 205,300 204,653 203,938 Earnings per share - basic: Income from continuing operations $ .94 $ .89 $ 1.62 Discontinued operations, net of tax ( .01 ) .49 .42 Earnings per share - basic $ 0.93 $ 1.38 $ 2.04 Earnings per share - diluted: Income from continuing operations $ .93 $ .88 $ 1.62 Discontinued operations, net of tax — .49 .41 Earnings per share - diluted $ 0.93 $ 1.37 $ 2.03 Shares excluded from the calculation of diluted earnings per share — — — Dividends declared per common share $ .5400 $ .5100 $ .6950 MDU Resources Group, Inc. Form 10-K 79 Index Part II Income taxes 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. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Excess deferred income tax balances associated with the Company's rate-regulated activities have been recorded as regulatory liabilities. These regulatory liabilities are expected to be reflected as a reduction in future rates charged to customers in accordance with applicable regulatory procedures. The Company uses the deferral method of accounting for investment tax credits and amortizes the credits on regulated electric and natural gas distribution plant over various periods that conform to the ratemaking treatment prescribed by the applicable state public service commissions. The Company records uncertain tax positions in accordance with accounting guidance on accounting for income taxes on the basis of a two-step process in which (1) the Company determines whether it is more-likely-than-not that the tax position will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of the tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Tax positions that do not meet the more-likely-than-not criteria are reflected as a tax liability. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income taxes. Note 3 - Discontinued Operations On May 31, 2023, the Company completed the separation of Knife River, its former construction materials and contracting segment, into a new independent publicly-traded company. 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. 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. In November 2023, the Company completed the tax-free exchange of its retained shares 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. The separation of Knife River was a tax-free spinoff transaction to the Company's stockholders for U.S. federal income tax purposes, except for cash received in lieu of fractional shares. On October 31, 2024, the Company completed the separation of Everus, its former construction services segment, into a new independent, publicly-traded company. The Company's board of directors approved the distribution of all the outstanding shares of Everus common stock to the Company's stockholders. Stockholders of the Company received one share of Everus common stock for every four shares of the Company's common stock held as of the close of business on October 21, 2024, the record date for the distribution. The separation of Everus was a tax-free spinoff transaction to the Company's stockholders for U.S. federal income tax purposes, except for cash received in lieu of fractional shares. As a result of the separations, the historical results of operations are shown in discontinued operations, net of tax, except for allocated general corporate overhead costs of the Company, which did not meet the criteria for discontinued operations. The Company’s consolidated financial statements and accompanying notes for prior periods have been restated. For the comparative periods, Everus' operations are only reflected through October 2024 compared to the full year in 2023 and Knife River's operations are only reflected through May 2023. On April 25, 2023, Knife River issued $ 425.0 million of senior notes, pursuant to an indenture, due in 2031 to qualified institutional buyers. 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. 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. Centennial used the entirety of these proceeds from Knife River to repay a portion of its existing third-party indebtedness. As a result of the separation of Knife River, 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. Following the separation of Knife River, the 538,921 treasury shares were retired. 80 MDU Resources Group, Inc. Form 10-K Index Part II The Company provided to Knife River and Knife River provided to the Company transition services in accordance with the transition services agreement entered into on May 31, 2023. For the twelve months ended December 31, 2024 and 2023, the Company received $ 1.5 million and $ 2.9 million, respectively; and paid $ 159,000 and $ 823,000 , respectively, for these related activities. All transition services were completed as of October 2024. The Company provided and will provide to Everus and Everus provided and will provide to the Company transition services in accordance with the transition services agreement entered into on October 31, 2024. For the twelve months ended December 31, 2025 and 2024, the Company received $ 7.9 million, which include certain software costs and $ 727,000 , respectively; and paid $ 49,000 and $ 47,000 , respectively, for these related activities. The transition services are expected to be complete as of March 2026. Separation related costs of $ 1.0 million, $ 41.7 million and $ 58.6 million net of tax, were incurred during the twelve months ended December 31, 2025, 2024 and 2023, respectively. Certain separation costs incurred are presented in discontinued operations, net of tax in the Consolidated Statements of Income. These charges primarily relate to transaction and third-party support costs, one-time business separation fees and related tax charges. The Company had no assets or liabilities related to the discontinued operations of Everus on its balance sheet as of December 31, 2025 or 2024. The reconciliation of the major classes of income and expense constituting pretax income from discontinued operations to the after-tax income from discontinued operations on the Consolidated Statements of Income were as follows: 2025 2024 2023 (In thousands) Operating revenues $ 2 $ 2,377,332 $ 3,589,251 Operating expenses 1,160 2,241,162 3,422,393 Operating (loss) income ( 1,158 ) 136,170 166,858 Other income — 12,446 10,599 Interest expense — 7,118 47,229 (Loss) income from discontinued operations before income taxes ( 1,158 ) 141,498 130,228 Income tax (benefit) expense ( 146 ) 41,463 45,638 Discontinued operations, net of tax $ ( 1,012 ) $ 100,035 $ 84,590 Note 4 - Revenue from Contracts with Customers Revenue is recognized when a performance obligation is satisfied by transferring control over a product or service to a customer. Revenue is measured based on consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties. The Company is considered an agent for certain taxes collected from customers. As such, the Company presents revenues net of these taxes at the time of sale to be remitted to governmental authorities, including sales and use taxes. 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. MDU Resources Group, Inc. Form 10-K 81 Index Part II Disaggregation In the following table, revenue is disaggregated by the type of customer or service provided. The Company believes this level of disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The table also includes a reconciliation of the disaggregated revenue by reportable segments. For more information on the Company's business segments, see Note 14. Year ended December 31, 2025 Electric Natural gas distribution Pipeline Other Total (In thousands) Residential utility sales $ 137,673 $ 654,793 $ — $ — $ 792,466 Commercial utility sales 187,097 436,431 — — 623,528 Industrial utility sales 38,066 44,183 — — 82,249 Other utility sales 7,537 — — — 7,537 Natural gas transportation — 66,978 191,542 — 258,520 Natural gas storage — — 23,270 — 23,270 Other 74,159 62,894 14,185 722 151,960 Intersegment eliminations ( 553 ) ( 345 ) ( 74,992 ) ( 722 ) ( 76,612 ) Revenues from contracts with customers 443,979 1,264,934 154,005 — 1,862,918 Other revenues ( 6,202 ) 18,196 154 — 12,148 Total external operating revenues $ 437,777 $ 1,283,130 $ 154,159 $ — $ 1,875,066 Year ended December 31, 2024 Electric Natural gas distribution Pipeline Other Total (In thousands) Residential utility sales $ 140,054 $ 646,049 $ — $ — $ 786,103 Commercial utility sales 171,760 399,087 — — 570,847 Industrial utility sales 42,883 42,588 — — 85,471 Other utility sales 7,910 — — — 7,910 Natural gas transportation — 60,645 174,623 — 235,268 Natural gas storage — — 23,690 — 23,690 Other 59,288 40,703 13,139 195 113,325 Intersegment eliminations ( 72 ) ( 130 ) ( 69,222 ) ( 195 ) ( 69,619 ) Revenues from contracts with customers 421,823 1,188,942 142,230 — 1,752,995 Other revenues ( 7,417 ) 12,033 367 — 4,983 Total external operating revenues $ 414,406 $ 1,200,975 $ 142,597 $ — $ 1,757,978 Year ended December 31, 2023 Electric Natural gas distribution Pipeline Other Total (In thousands) Residential utility sales $ 136,274 $ 724,600 $ — $ — $ 860,874 Commercial utility sales 170,321 442,507 — — 612,828 Industrial utility sales 43,063 45,205 — — 88,268 Other utility sales 7,270 — — — 7,270 Natural gas transportation — 52,465 145,297 — 197,762 Natural gas storage — — 18,254 — 18,254 Other 54,508 15,141 13,874 119 83,642 Intersegment eliminations ( 138 ) ( 301 ) ( 62,533 ) ( 119 ) ( 63,091 ) Revenues from contracts with customers 411,298 1,279,617 114,892 — 1,805,807 Other revenues ( 10,261 ) 7,619 187 — ( 2,455 ) Total external operating revenues $ 401,037 $ 1,287,236 $ 115,079 $ — $ 1,803,352 82 MDU Resources Group, Inc. Form 10-K Index Part II Remaining performance obligations The remaining performance obligations at the pipeline segment include firm transportation and storage contracts with fixed pricing and fixed volumes. 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. The Company's firm transportation and storage contracts included in the remaining performance obligations have weighted average remaining durations of less than four years and one year , respectively. At December 31, 2025, the Company expects to recognize revenue in future periods from remaining performance obligations, as follows: 12 months or less Next 13-24 months 25 months or more Total (In Millions) $ 86.8 $ 79.1 $ 365.6 $ 531.5 Note 5 - Property, Plant and Equipment Property, plant and equipment at December 31 was as follows: 2025 2024 Weighted Average Depreciable Life in Years (Dollars in thousands, where applicable) Electric: Generation $ 1,329,301 $ 1,014,906 49 Distribution 585,328 546,121 45 Transmission 701,287 662,466 65 CWIP 62,415 81,316 0 Other 190,049 176,007 14 Natural gas distribution: Distribution 3,202,171 2,955,435 54 Transmission 147,118 146,710 54 Storage 44,427 43,700 37 General 234,752 229,034 13 CWIP 82,858 74,207 0 Other 292,428 282,007 15 Pipeline: Transmission 1,200,423 1,173,259 46 Storage 64,230 61,369 53 CWIP 47,044 29,629 0 Other 76,994 73,749 17 Other: Land and other 4,147 4,148 NM Less accumulated depreciation and amortization 2,304,787 2,209,771 Net property, plant and equipment $ 5,960,185 $ 5,344,292 NM - not meaningful MDU Resources Group, Inc. Form 10-K 83 Index Part II Note 6 - Regulatory Matters Regulatory assets & liabilities The following table summarizes the individual components of unamortized regulatory assets and liabilities as of December 31: Estimated Recovery or Refund Period * 2025 2024 (In thousands) Regulatory assets: Current: Environmental compliance programs Up to 1 year $ 78,784 $ 76,964 Conservation programs Up to 1 year 29,148 19,123 Natural gas costs recoverable through rate adjustments Up to 1 year 22,897 91,091 Decoupling mechanisms Up to 1 year 17,091 6,767 Cost recovery mechanisms Up to 1 year 13,460 5,114 Electric fuel and purchased power deferral Up to 1 year 6,902 9,662 Other Up to 1 year 11,297 6,715 179,579 215,436 Noncurrent: Pension and postretirement benefits ** 135,222 142,064 Cost recovery mechanisms Up to 23 years 63,328 76,542 Plant costs/asset retirement obligations Over plant lives 48,352 47,042 Manufactured gas plant site remediation - 28,411 27,964 Taxes recoverable from customers Over plant lives 12,250 12,221 Covid-19 deferred costs Up to 3 years 3,761 4,167 Long-term debt refinancing costs Up to 37 years 1,799 2,011 Electric fuel and purchased power deferral - — 4,349 Other Up to 13 years 4,095 5,990 297,218 322,350 Total regulatory assets $ 476,797 $ 537,786 Regulatory liabilities: Current: Environmental compliance Up to 1 year $ 89,306 $ 72,387 Natural gas costs refundable through rate adjustments Up to 1 year 47,130 45,427 Margin sharing Up to 1 year 3,946 4,156 Taxes refundable to customers Up to 1 year 2,301 2,163 Provision for rate refund Up to 1 year 1,780 3,677 Conservation programs Up to 1 year 733 2,082 Cost recovery mechanisms Up to 1 year 115 1,720 Other Up to 1 year 3,273 5,555 148,584 137,167 Noncurrent: Plant removal and decommissioning costs Over plant lives 224,313 217,603 Taxes refundable to customers Over plant lives 176,665 185,402 Cost recovery mechanisms Up to 16 years 41,323 30,354 Accumulated deferred investment tax credit Over plant lives 22,663 18,788 Pension and postretirement benefits ** 4,776 4,862 Other Up to 12 years 2,589 2,161 472,329 459,170 Total regulatory liabilities $ 620,913 $ 596,337 Net regulatory position $ ( 144,116 ) $ ( 58,551 ) * Estimated recovery or refund period for amounts currently being recovered or refunded in rates to customers. ** Recovered as expense is incurred or cash contributions are made. 84 MDU Resources Group, Inc. Form 10-K Index Part II As of December 31, 2025 and 2024, approximately $ 174.3 million and $ 181.2 million, respectively, of regulatory assets were not earning a rate of return but are expected to be recovered from customers in future rates. These assets are largely comprised of the unfunded portion of pension and postretirement benefits, asset retirement obligations, certain pipeline integrity costs and the estimated future cost of manufactured gas plant site remediation. 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. 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. 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. The compliance costs for these regulations and the revenues from the sale of the allocated emissions allowances are passed through to customers in rates and the Company has, accordingly, deferred the environmental compliance costs as a regulatory asset and proceeds from the sale of allowances as a regulatory liability. 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 written off and included in the statement of income or accumulated other comprehensive loss in the period in which the discontinuance of regulatory accounting occurs. Regulatory proceedings The Company regularly reviews the need for electric and natural gas rate changes in each of the jurisdictions in which service is provided. The Company files for rate adjustments to seek recovery of operating costs and capital investments, as well as reasonable returns as allowed by regulators. Certain regulatory proceedings and cases may also contain recurring mechanisms that can have an annual true-up. Examples of these recurring mechanisms include: infrastructure riders, transmission trackers, renewable resource cost adjustment riders, as well as weather normalization and decoupling mechanisms. 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. The following table summarizes the Company's significant regulatory proceedings and cases by jurisdiction: Segment State Filing Date Annual Revenue Increase (%) * Annual Revenue Increase (in millions) * ROE Status Key Drivers and Additional Information General Rate Cases Pending Electric Wyoming June 30, 2025 18.6 % $ 5.8 9.7 % Settlement agreement filed January 23, 2026 Final rates requested to be effective April 1, 2026 • Increases in operation and maintenance expense • Investments made since the last rate case • Corresponding depreciation on those infrastructure investments • Settlement includes a stipulation to withdraw the requested Reliability and Safety Rider Electric Montana September 30, 2025 20.2 % $ 14.1 10.8 % Pending • Investments, including Badger Wind Farm • Corresponding depreciation on those investments • Increased operation and maintenance expense Natural Gas Distribution Oregon November 25, 2025 15.8 % $ 16.4 10.4 % Pending • Rate base growth • Growth in operations and maintenance expense • Growth in depreciation expense associated with new investments in rate base MDU Resources Group, Inc. Form 10-K 85 Index Part II Segment State Filing Date Annual Revenue Increase (%) * Annual Revenue Increase (in millions) * ROE Status Key Drivers and Additional Information General Rate Cases Finalized Natural Gas Distribution Washington March 29, 2024 7.9 % 2.6 % $ 29.8 $ 10.8 9.5 % Approved February 24, 2025 Final rates effective March 5, 2025 $ 3.7 M revenue reduction effective June 1, 2025 Final rates effective March 1, 2026, subject to provisional plant review • Multi-year rate case • Infrastructure investments necessary to provide safe and reliable service • Higher operating costs due to inflation • $ 3.7 M revenue reduction was driven by forecasted plant that was not placed in service by December 31, 2024 Natural Gas Distribution Idaho May 30, 2025 4.2 % $ 13.0 9.5 % Approved Final rates effective January 1, 2026 • Increased operating expenses • Costs associated with plant additions • Revenues necessary to produce a fair rate of return to enable continued safe and reliable service Natural Gas Distribution Montana July 15, 2024 8.6 % $ 7.3 9.6 % Approved Interim rates of $ 7.7 M effective February 1, 2025 Final rates effective November 1, 2025 • Investments in system upgrades pipeline replacement projects enhancing the reliability, safety and integrity of the natural gas system • Increased costs to operate and maintain that system Natural Gas Distribution Wyoming October 31, 2024 11.7 % $ 2.1 9.65 % Approved Final rates effective August 1, 2025 • Investments in system upgrades and pipeline replacement projects enhancing the reliability, safety and integrity of the natural gas system • Increased costs to operate and maintain that system * Annual revenue increase and percent increase for general rate cases pending and general rate cases finalized, reflects the final approved amount or the amount reflected in the most recent settlement agreement, if applicable. Segment State Filing Date Annual Revenue Increase (in millions) Status Key Drivers and Additional Information Other Filings Electric North Dakota July 15, 2025 $ 7.2 Approved Rates effective November 1, 2025 Transmission Cost Adjustment Rider • Allows recovery of transmission costs, including capital investments, and associated revenue Natural Gas Distribution Wyoming August 15, 2025 N/A Pending System Safety and Integrity Rider • Would allow Montana-Dakota to recover costs and expenses associated with a pipeline replacement program Electric Montana September 30, 2025 N/A Pending Systems Management Cost Adjustment Mechanism • Recovery of transmission and wildfire related costs Electric North Dakota October 31, 2025 $ 25.3 Approved Rates effective February 1, 2026 Renewable Resource Cost Adjustment • Allows for annual adjustments for recent projected capital costs and related expenses for projects determined to be recoverable • Update includes Badger Wind Farm Electric South Dakota October 31, 2025 $ 1.1 Pending Infrastructure Rider • Allows annual adjustments for recent projected capital costs and related expenses for projects determined to be recoverable • Update includes Badger Wind Farm Note 7 - Environmental Allowances and Obligations The Company's natural gas distribution segment acquires environmental allowances as part of its requirement to comply with environmental regulations in certain states. 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. The segment records purchased and allocated environmental allowances at weighted average cost under the inventory method of accounting. Environmental allowances are included as Current environmental allowances and Environmental allowances in current and noncurrent assets on the Consolidated Balance Sheets. 86 MDU Resources Group, Inc. Form 10-K Index Part II 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. Environmental compliance obligations are included as Current environmental obligations and Environmental obligations in current and noncurrent liabilities on the Consolidated Balance Sheets. The Company recognizes revenue from the sale of emissions allowances allocated under the environmental programs when the allowances are sold at auction. The revenues associated with the sale of these allowances are deferred as a component of the respective jurisdiction’s regulatory liability for environmental compliance. As environmental allowances are surrendered, the segment reduces the associated environmental compliance assets and liabilities from the Consolidated Balance Sheets. The expenses and revenues associated with the Company’s environmental allowances and obligations are deferred as regulatory assets and liabilities and recognized as a component of purchased natural gas sold as recovered in customer rates. For more information on the Company’s regulatory assets and liabilities, see Note 6. Note 8 - Fair Value Measurements 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. The fair value ASC establishes a hierarchy for grouping assets and liabilities, based on the significance of inputs. The estimated fair values of the Company's assets and liabilities measured on a recurring basis are determined using the market approach. The Company measures its investments in certain fixed-income and equity securities at fair value with changes in fair value recognized in income. The Company anticipates using these investments, which consist of insurance contracts, to satisfy its obligations under its unfunded, nonqualified defined benefit and defined contribution plans for executive officers and certain key management employees and invests in these fixed-income and equity securities for the purpose of earning investment returns and capital appreciation. These investments, which totaled $ 67.4 million and $ 59.3 million at December 31, 2025 and 2024, respectively, are classified as Investments on the Consolidated Balance Sheets. The net unrealized gain on these investments for the year ended December 31, 2025, 2024, and 2023 was $ 6.6 million, $ 5.9 million, and $ 7.4 million, respectively. 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. In the second quarter of 2025 the Company withdrew $ 5.0 million of cash in excess of 125 percent of the full funding amount, which had no effect on the cost basis of the investments held. In the first quarter of 2024 the Company withdrew $ 9.0 million of its cost basis, which reduced Investments on the Consolidated Balance Sheets. 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. Treasury securities. These available-for-sale securities are recorded at fair value and are classified as Investments on the Consolidated Balance Sheets. Unrealized gains or losses are recorded in Accumulated other comprehensive loss on the Consolidated Balance Sheets. Details of available-for-sale securities were as follows: December 31, 2025 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Mortgage-backed securities $ 8,539 $ 28 $ 204 $ 8,363 U.S. Treasury securities 3,992 33 — 4,025 Total $ 12,531 $ 61 $ 204 $ 12,388 December 31, 2024 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Mortgage-backed securities $ 7,933 $ 4 $ 383 $ 7,554 U.S. Treasury securities 3,945 80 1 4,024 Total $ 11,878 $ 84 $ 384 $ 11,578 MDU Resources Group, Inc. Form 10-K 87 Index Part II The Company's assets measured at fair value on a recurring basis were as follows: Fair Value Measurements at December 31, 2025, Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at December 31, 2025 (In thousands) Assets: Money market funds $ — $ 9,839 $ — $ 9,839 Insurance contracts* — 67,409 — 67,409 Available-for-sale securities: Mortgage-backed securities — 8,363 — 8,363 U.S. Treasury securities — 4,025 — 4,025 Total assets measured at fair value $ — $ 89,636 $ — $ 89,636 * The insurance contracts invest approximately 57 percent in fixed-income investments, 18 percent in common stock of large-cap companies, 10 percent in target date investments, 7 percent in common stock of mid-cap companies, 4 percent in common stock of small-cap companies, 3 percent in cash equivalents, and 1 percent in international investments. Fair Value Measurements at December 31, 2024, Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at December 31, 2024 (In thousands) Assets: Money market funds $ — $ 12,879 $ — $ 12,879 Insurance contracts* — 59,282 — 59,282 Available-for-sale securities: Mortgage-backed securities — 7,554 — 7,554 U.S. Treasury securities — 4,024 — 4,024 Total assets measured at fair value $ — $ 83,739 $ — $ 83,739 * The insurance contracts invest approximately 58 percent in fixed-income investments, 17 percent in common stock of large-cap companies, 8 percent in target date investments, 8 percent in common stock of mid-cap companies, 4 percent in common stock of small-cap companies, 4 percent in cash equivalents, and 1 percent in international investments. The Company's money market funds are valued at the net asset value of shares held at the end of the period, based on published market quotations on active markets, or using other known sources including pricing from outside sources. The estimated fair value of the Company's mortgage-backed securities and U.S. Treasury securities are based on comparable market transactions, other observable inputs or other sources, including pricing from outside sources. The estimated fair value of the Company's insurance contracts are based on contractual cash surrender values that are determined primarily by investments in managed separate accounts of the insurer. These amounts approximate fair value. The managed separate accounts are valued based on other observable inputs or corroborated market data. 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. The Company applies the provisions of the fair value measurement standard to its nonrecurring, non-financial measurements, including long-lived asset impairments. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. 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. 88 MDU Resources Group, Inc. Form 10-K Index Part II 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. The fair value was categorized as Level 2 in the fair value hierarchy and was based on discounted future cash flows using current market interest rates. The estimated fair value of the Company's Level 2 long-term debt at December 31 was as follows: 2025 2024 (In thousands) Carrying Amount $ 2,676,855 $ 2,292,610 Fair Value $ 2,385,170 $ 1,963,396 The carrying amounts of the Company's remaining financial instruments included in current assets and current liabilities approximate their fair values. Note 9 - Debt 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. 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 and its subsidiaries contain restrictive and financial covenants and cross-default provisions. In order to borrow under the respective debt agreements, the Company and its subsidiaries must be in compliance with the applicable covenants and certain other conditions. Intermountain was not in compliance with its minimum interest coverage ratio for the period ended September 30, 2025, which constituted an event of default under the terms of the Intermountain NPAs. In addition, the event of default under the terms of the Intermountain NPAs constituted a cross-default under the terms of certain NPAs of MDU Energy Capital and revolving credit agreements held by the Company and Intermountain. Subsequent to September 30, 2025, Intermountain and MDU Energy Capital obtained waivers for this non-compliance from the holders of a majority of their respective outstanding notes, and Intermountain and the Company obtained waivers from the lenders of the revolving credit agreements, which collectively cured the impact of any events of default. The Company and its subsidiaries were in compliance with applicable covenants at December 31, 2025. In the event the Company or its subsidiaries do not comply with the applicable covenants and other conditions, alternative sources of funding may need to be pursued. Credit facilities Montana-Dakota's commercial paper program is supported by a revolving credit agreement. 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 the credit agreement. 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. 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. The Company's borrowings under revolving credit agreements are classified as long-term debt as they are intended to be refinanced on a long-term basis through continued borrowings. All of the credit agreements contain customary covenants and provisions, including covenants not to permit, as of the end of any fiscal quarter, the ratio of funded debt to total capitalization (determined on a consolidated basis) 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. Montana-Dakota On December 11, 2025, Montana-Dakota amended and restated its revolving credit agreement to extend the maturity date from October 18, 2028 to December 11, 2030. This amendment sets forth the terms and conditions under which the syndicate of lenders would make loans to or for the benefit of Montana-Dakota. These terms and conditions outline the pricing level and applicable facility fee for borrowings or letters of credit under the agreement. Montana-Dakota's revolving credit agreement supports its commercial paper program. Cascade On December 11, 2025, Cascade amended and restated its revolving credit agreement to extend the maturity date from June 20, 2029 to December 11, 2030. This amendment sets forth the terms and conditions under which the syndicate of lenders would make loans to or for the benefit of Cascade. These terms and conditions outline the pricing level and applicable facility fee for borrowings or letters of credit under the agreement. 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. MDU Resources Group, Inc. Form 10-K 89 Index Part II Intermountain On December 11, 2025, Intermountain amended and restated its revolving credit agreement to extend the maturity date from June 20, 2029 to December 11, 2030. This amendment sets forth the terms and conditions under which the syndicate of lenders would make loans to or for the benefit of Intermountain. These terms and conditions outline the pricing level, pricing level change date and applicable facility fee for borrowings or letters of credit under the agreement. Upon the pricing level change date, Intermountain is required under the agreement to deliver financial statements and officers compliance certificate to the assigned administrative agent. 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. MDU Resources Group, Inc. On December 11, 2025, the Company amended and restated its revolving credit agreement to extend the maturity date from May 31, 2028 to December 11, 2030. This amendment sets forth the terms and conditions under which the syndicate of lenders would make loans to or for the benefit of MDU Resources Group, Inc. These terms and conditions outline the pricing level and applicable facility fee for borrowings or letters of credit under the agreement. 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 following table summarizes the outstanding revolving credit facilities of the Company and its subsidiaries: Company Debt-to-Total Capitalization Ratio Provisions for Increased Borrowings, up to a maximum of: Facility Limit Amount Outstanding at December 31, 2025 Amount Outstanding at December 31, 2024 Letters of Credit at December 31, 2025 Expiration Date (In millions) Montana-Dakota Utilities Co. 55 % $ 250.0 $ 200.0 $ 132.0 $ 81.4 $ — 12/11/30 Cascade Natural Gas Corporation 50 % $ 225.0 $ 175.0 $ 96.5 $ 64.6 $ 2.2 12/11/30 Intermountain Gas Company 52 % $ 225.0 $ 175.0 $ 67.3 $ 105.1 $ — 12/11/30 MDU Resources Group, Inc. 49 % $ 250.0 $ 200.0 $ 32.9 $ — $ 1.0 12/11/30 Long-term debt Long-term Debt Outstanding Long-term debt outstanding was as follows: Weighted Average Interest Rate at December 31, 2025 2025 2024 (In thousands) Senior notes due on dates ranging from July 15, 2026 to June 15, 2062 4.76 % $ 2,010,000 $ 1,947,000 Term loan agreements due on dates ranging from January 29, 2027 to April 1, 2039 4.68 % 310,900 65,600 Credit agreements due on December 11, 2030 5.17 % 196,700 169,700 Commercial paper supported by revolving credit agreement 4.00 % 132,000 81,400 Medium-term notes due on dates ranging from September 15, 2027 to March 16, 2029 7.32 % 35,000 35,000 Other notes due on November 30, 2038 6.00 % 329 346 Less unamortized debt issuance costs 8,074 6,436 Total long-term debt 2,676,855 2,292,610 Less current maturities 144,700 161,700 Net long-term debt $ 2,532,155 $ 2,130,910 Montana-Dakota On July 11, 2024, Montana-Dakota issued $ 125.0 million of senior notes under a NPA with maturity dates of July 11, 2039 and July 11, 2054, at a weighted average interest rate of 5.96 percent. The agreement contains customary covenants and provisions, including a covenant of Montana-Dakota not to permit, at any time, the ratio of total debt to capitalization to be greater than 65 percent. The covenants also include certain restrictions on the sale of certain assets, loans and investments. 90 MDU Resources Group, Inc. Form 10-K Index Part II On October 28, 2025, Montana-Dakota entered into a NPA to issue $ 250.0 million of senior notes, with maturity dates of October 28, 2035, October 28, 2040, and February 2, 2056, at a weighted average interest rate of 5.96 percent. On October 28, 2025, Montana-Dakota issued $ 150.0 million in senior notes under the NPA with the remaining $ 100.0 million issued on February 2, 2026. The agreement contains customary covenants and provisions, including a covenant of Montana-Dakota not to permit, at any time, the ratio of total debt to capitalization to be greater than 65 percent. Other covenants include a minimum interest coverage ratio and restrictions on the sale of certain assets. On December 30, 2025, Montana-Dakota entered into a $ 250.0 million term loan agreement with a SOFR-based variable interest rate and a maturity date of January 29, 2027. On February 3, 2026, Montana-Dakota paid down $ 100.0 million of the outstanding balance under the term loan agreement. The agreement contains customary covenants and provisions, including a covenant of Montana-Dakota not to permit, at any time, the ratio of total debt to capitalization to be greater than 65 percent. The covenants also include certain restrictions on the sale of certain assets, loans, and investments. Intermountain On July 15, 2025, Intermountain entered into a NPA to issue a total of $ 50.0 million of senior notes, with a maturity date of July 15, 2055, at an interest rate of 6.39 percent. On July 15, 2025, Intermountain issued $ 25.0 million in senior notes under the NPA with the remaining $ 25.0 million issued on November 14, 2025. This NPA is one of three distinct Intermountain NPAs that contain certain customary covenants, including a minimum interest coverage ratio. WBI Energy Transmission On January 15, 2026, WBI Energy Transmission extended its $ 350.0 million uncommitted note purchase and private shelf agreement from December 22, 2025 to December 22, 2028, unless either party terminates such issuance right. WBI Energy Transmission had $ 235.0 million of notes outstanding at December 31, 2025, which reduced the remaining capacity under this uncommitted private shelf agreement to $ 115.0 million. The principal amount and interest rate of any series of shelf notes will be determined at the applicable time of issuance and purchase. On December 22, 2025, WBI Energy Transmission entered into a NPA to issue a total of $ 20.0 million of senior notes, with a maturity date of December 22, 2045, at an interest rate of 6.29 percent. This agreement contains customary covenants and provisions, including a covenant of WBI Energy Transmission not to permit, as of the end of any fiscal quarter, the ratio of total debt to total capitalization to be greater than 55 percent. Other covenants include a limitation on priority debt, restrictions on the sale of certain assets and the making of certain investments. On April 1, 2024, WBI Energy Transmission entered into a $ 60.0 million term loan agreement with an interest rate of 4.52 percent and a maturity date of April 1, 2039, with the principal to be repaid in equal annual installments of $ 4.0 million each, beginning March 2025 and continuing through the maturity date. The agreement contains customary covenants and provisions, including a covenant of WBI Energy Transmission not to permit, at any time, the ratio of total debt to total capitalization to be greater than 65 percent. The covenants also include certain restrictions on the sale of certain assets, loans and investments. WBI Energy Transmission's ratio of total debt to total capitalization at December 31, 2025 was 39 percent. Schedule of Debt Maturities Long-term debt maturities, which excludes unamortized debt issuance costs and discount, for the five years and thereafter following December 31, 2025, were as follows: 2026 2027 2028 2029 2030 Thereafter (In thousands) Long-term debt maturities $ 144,700 $ 274,700 $ 79,700 $ 74,700 $ 475,400 $ 1,635,729 Note 10 - Asset Retirement Obligations 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. MDU Resources Group, Inc. Form 10-K 91 Index Part II 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: 2025 2024 (In thousands) Balance at beginning of year $ 406,647 $ 385,154 Liabilities incurred* 7,474 2,721 Liabilities settled ( 2,867 ) ( 5,271 ) Accretion expense** 20,883 19,655 Revisions in estimates ( 221 ) 4,388 Balance at end of year $ 431,916 $ 406,647 * 2025 includes $ 4.8 million for the future decommissioning of Badger Wind Farm. ** Includes $ 20.9 million and $ 19.6 million in 2025 and 2024, respectively, recorded to regulatory assets. The 2024 revisions in estimates consist principally of updated asset retirement obligation costs resulting from decommissioning studies performed for electric generating facilities at the electric segment. The Company believes that largely all expenses related to asset retirement obligations at the Company's regulated operations will be recovered in rates over time and, accordingly, defers such expenses as regulatory assets. For more information on the Company's regulatory assets and liabilities, see Note 6. Note 11 - Equity The Company depends on earnings and dividends from its subsidiaries to pay dividends on common stock. The Company has paid quarterly dividends for 88 consecutive years. For the years ended December 31, 2025, 2024 and 2023, dividends declared on common stock were $ .5400 , $ .5100 and $ .6950 per common share, respectively. Dividends on common stock are paid quarterly to the stockholders as of the record date. For the years ended December 31, 2025, 2024 and 2023, the dividends declared to common stockholders were $ 110.3 million, $ 103.9 million and $ 141.5 million, respectively. The declaration and payment of dividends of the Company is at the sole discretion of the board of directors. In addition, the Company's subsidiaries are generally restricted to paying dividends out of capital accounts or net assets. The following discusses the most restrictive limitations. 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 $ 1.5 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, 2025. 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. At-the-Market Offering Program On August 7, 2025, the Company entered into an EDA pursuant to which it may issue, offer, and sell, from time to time, up to an aggregate gross sales price of $ 400.0 million of shares of its common stock through an ATM offering program, which includes the ability to enter into FSAs. Since the establishment of the ATM offering program, the Company did not issue common stock pursuant to the EDA nor enter into any FSAs related to the EDA. Equity Forward Sale Agreements On December 5, 2025, the Company completed a follow-on public offering of 10,152,284 shares of the Company's common stock at a public offering price of $ 19.70 per share. In addition, on December 23, 2025, the underwriters exercised their option to purchase 1,522,842 additional shares of common stock. Pursuant to the FSAs entered into in connection with the offering, the Company has discretion to settle the FSAs on one or more settlement dates prior to December 6, 2027, subject to certain price adjustments as set forth in the FSAs as well as adjustments for transaction and other associated fees. The FSAs will be physically settled with shares of common stock issued by the Company, unless the Company elects to settle the FSAs in net cash or net shares, subject to certain conditions. If the Company elects to physically settle the FSAs, the Company will physically issue shares of common stock to the banking counterparties at the then-applicable forward sale price and receive proceeds at that time. 92 MDU Resources Group, Inc. Form 10-K Index Part II At December 31, 2025, the Company could have settled all of its outstanding FSAs with physical delivery of 11,675,126 shares of common stock to the banking counterparties in exchange for cash of approximately $ 221.1 million. If the FSAs had been net cash or net share settled at December 31, 2025, the Company estimates that the counterparties, in aggregate, would have been entitled to a net settlement of $ 6.8 million or 349,596 shares, respectively. The forward price used to determine amounts due at settlement is calculated based on the public offering price, subject to transaction and other associated fees, adjusted by the overnight bank funding rate, less a spread, and less expected dividends on the Company's common stock during the period the FSAs are outstanding. The FSAs are indexed to the Company's stock and meets the other requirements for equity classification. As a result of the equity classification, no gain or loss is recognized in earnings associated with the subsequent changes in fair value of the FSAs. Stockholders' equity equal to cash proceeds net of deferred issuance costs will be recorded upon settlement. FSAs earnings per share dilution Prior to settlement, the potentially issuable shares pursuant to the FSAs will be reflected in the Company's diluted earnings per share calculation using the treasury stock method. Share dilution occurs when the average market price of the Company's stock during the reporting period is higher than the then-applicable forward sale price at the end of the reporting period. For more information on earnings per share, see Note 2. The K-Plan provides participants the option to invest in the Company's common stock. For the years ended December 31, 2025, 2024 and 2023, the K-Plan purchased shares of common stock on the open market. At December 31, 2025, there were 2.4 million shares of common stock reserved for original issuance under the K-Plan. The Company currently has 2.0 million shares of preferred stock authorized to be issued with a $ 100 par value. At December 31, 2025 and 2024, there were no shares outstanding. Note 12 - Stock-Based Compensation The Company has stock-based compensation plans under which it is currently authorized to grant RSUs and other stock awards. As of December 31, 2025, there were 1.7 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. Separations of Knife River and Everus In connection with the completed separations of Knife River and Everus through spinoffs, the provisions of the existing compensation plans required adjustments to the number and terms of outstanding employee time-vested RSUs and PSAs to preserve the intrinsic value of the awards immediately prior to each separation. The outstanding awards will continue to vest over the original vesting period, which is generally three years from the grant date. The outstanding PSAs in place at the time of the Knife River spinoff were modified to no longer be subject to performance-based vesting conditions. The number of PSAs were first adjusted for performance. The combined performance factors were determined based on the performance of the Company as of December 31, 2022. Outstanding awards at the time of the spinoffs were converted into awards of the holder’s employer following each separation. The Company incurred $ 1.7 million of incremental compensation expense related to the conversion of the RSUs associated with the Everus spinoff, of which $ 536,000 and $ 854,000 were recognized in 2025 and 2024, respectively, and the remainder will be recognized in expense over the remaining service period of the applicable awards. Total stock-based compensation expense (after tax) was $ 5.9 million, $ 7.1 million and $ 5.1 million in 2025, 2024 and 2023, respectively. The Company uses the straight-line amortization method to recognize compensation expense related to RSUs, which only has a service condition. The Company recognizes compensation expense related to PSAs with market-based and performance metrics on a straight-line basis over the requisite service period. As of December 31, 2025, total remaining unrecognized compensation expense related to stock-based compensation was approximately $ 8.7 million (before income taxes) which will be amortized over a weighted average period of 1.3 years. Stock awards Non-employee directors receive shares of common stock in addition to and in lieu of cash payment for directors' fees. There were 51,651 shares with a fair value of $ 1.1 million, 46,341 shares with a fair value of $ 850,000 and 50,717 shares with a fair value of $ 950,000 issued to non-employee directors during the years ended December 31, 2025, 2024 and 2023, respectively. MDU Resources Group, Inc. Form 10-K 93 Index Part II Restricted stock units In February 2025, 2024 and 2023, key employees were granted RSUs under the long-term performance-based incentive plan authorized by the Company's compensation committee. 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. Upon vesting, participants receive dividends that accumulate during the vesting period. As previously discussed, adjustments were made to the number of RSUs to preserve the intrinsic value of the awards in connection with the spinoffs of Knife River and Everus and outstanding PSAs in place at the time of the Knife River spinoff were converted to RSUs. Target grants of RSUs outstanding at December 31, 2025, were as follows: Grant Date Performance Period Target Grant of Shares February 2024/ June 2024 2024-2026 648,885 February 2025 2025-2027 126,910 A summary of the status of the RSUs for the year ended December 31, 2025, was as follows: RSUs Number of Shares Weighted Average Grant-Date Fair Value * Nonvested at beginning of period 1,240,517 $ 12.56 Granted 126,910 16.83 Forfeited ( 49,399 ) 12.12 Non-vested 1,318,028 Vested shares ( 542,233 ) 12.90 Nonvested at end of period 775,795 $ 12.89 * Weighted average grant-date fair values post-separation of Everus reflects incremental fair value related to modifying the awards and the Company's adjusted stock price due to the separation. Performance share awards In February 2025, key employees were granted PSAs under the long-term performance-based incentive plan authorized by the Company's compensation committee. 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. Upon vesting, participants receive dividends that accumulate during the vesting period. Entitlement to performance shares is established by either the market condition or the performance metrics and service condition relative to the designated awards. Target grants of PSAs outstanding at December 31, 2025, were as follows: Grant Date Performance Period Target Grant of Shares February 2025 2025-2027 296,128 94 MDU Resources Group, Inc. Form 10-K Index Part II Under the market condition for these PSAs, 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. Compensation expense is based on the grant-date fair value as determined by Monte Carlo simulation. The blended volatility term structure ranges are 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. Assumptions used for initial grants applicable to the market condition for certain PSAs issued in 2025 were: 2025 Weighted average grant-date fair value $ 17.23 Blended volatility range 26.53 % - 27.75 % Risk-free interest rate range 4.40 % - 4.58 % Weighted average discounted dividends per share $ 1.30 Under the performance condition for these PSAs, participants could earn from zero to 200 percent of the apportioned target grant of shares. The performance condition was based on the Company's cumulative earnings per share growth. The weighted average grant-date fair value per share for the PSAs applicable to this performance condition issued in 2025 was $ 16.83 . A summary of the status of the PSAs for the year ended December 31, 2025, was as follows: PSAs Number of Shares Weighted Average Grant-Date Fair Value Nonvested at beginning of period — $ — Granted 296,128 17.03 Forfeited — — Vested shares — Nonvested at end of period 296,128 $ 17.03 Note 13 - Income Taxes The components of income before income taxes from continuing operations for each of the years ended December 31 were as follows: 2025 2024 2023 (In thousands) United States $ 210,977 $ 198,662 $ 340,330 Income before income taxes from continuing operations $ 210,977 $ 198,662 $ 340,330 Income tax expense (benefit) from continuing operations for the years ended December 31 was as follows: 2025 2024 2023 (In thousands) Current: Federal $ 25,971 $ 30,412 $ 8,271 State 2,522 3,255 3,251 28,493 33,667 11,522 Deferred: Income taxes: Federal ( 13,970 ) ( 17,321 ) ( 3,331 ) State 1,171 ( 1,805 ) ( 125 ) Investment tax credit - net 3,876 3,048 2,147 ( 8,923 ) ( 16,078 ) ( 1,309 ) Total income tax expense $ 19,570 $ 17,589 $ 10,213 MDU Resources Group, Inc. Form 10-K 95 Index Part II Components of deferred tax assets and deferred tax liabilities at December 31 were as follows: 2025 2024 (In thousands) Deferred tax assets: Environmental compliance $ 49,750 $ 33,730 Pension and postretirement 23,443 25,508 Compensation-related 16,249 15,651 Customer advances 10,590 9,719 Cost recovery mechanisms 10,077 7,402 Legal and environmental contingencies 5,474 5,317 Other 17,989 20,386 Total deferred tax assets 133,572 117,713 Deferred tax liabilities: Basis differences on property, plant and equipment 451,595 426,493 Pension and postretirement 47,931 48,355 Cost recovery mechanisms 18,109 19,245 Environmental compliance 17,173 17,260 Legal and environmental contingencies 6,399 6,300 Purchased gas adjustment 5,137 20,441 Other 23,695 19,931 Total deferred tax liabilities 570,039 558,025 Valuation allowance 819 1,008 Net deferred income tax liability $ 437,286 $ 441,320 As of December 31, 2025 and 2024, the Company had various state income tax net operating loss carryforwards of $ 819,000 and $ 1.0 million, respectively, and state income tax credit carryforwards, excluding alternative minimum tax credit carryforwards, of $ 28.5 million and $ 31.6 million, respectively. The state income tax credit carryforwards are due to expire between 2027 and 2039. Changes in tax regulations or assumptions regarding current and future taxable income could require additional valuation allowances in the future. The following table reconciles the change in the net deferred income tax liability from December 31, 2024, to December 31, 2025, to deferred income tax benefit: 2025 (In thousands) Change in net deferred income tax liability from the preceding table $ ( 4,034 ) Effects of rate-regulated accounting ( 4,890 ) Deferred taxes associated with other comprehensive income 1 Deferred income tax benefit for the period $ ( 8,923 ) 96 MDU Resources Group, Inc. Form 10-K Index Part II Total income tax expense differs from the amount computed by applying the statutory federal income tax rate to income before taxes. The reasons for this difference were as follows: Year ended December 31, 2025 Amount % U.S. federal statutory tax rate $ 44,305 21.0 State and local income taxes, net of federal income tax effect * 2,917 1.4 Tax credits Federal renewable energy credit ( 19,324 ) ( 9.2 ) Other ( 1,938 ) ( 0.9 ) Nontaxable or nondeductible Items ( 265 ) ( 0.1 ) Other Effects of rate-regulated accounting ( 5,169 ) ( 2.5 ) Other ( 956 ) ( 0.4 ) Total income tax expense and effective tax rate $ 19,570 9.3 * In 2025, state income taxes in Oregon and Montana made up the majority (greater than 50%) of the tax effect in this category. Years ended December 31, 2024 2023 Amount % Amount % Computed tax at federal statutory rate $ 41,719 21.0 $ 71,469 21.0 Increases (reductions) resulting from: State income taxes, net of federal income tax 4,047 2.0 3,605 1.1 State investment tax credit, net of federal income tax 2,400 1.2 1,545 0.5 Executive compensation 2,111 1.1 564 0.2 Federal renewable energy credit ( 16,871 ) ( 8.5 ) ( 15,175 ) ( 4.5 ) Excess deferred income tax amortization ( 8,121 ) ( 4.1 ) ( 8,383 ) ( 2.5 ) State tax rate change ( 2,317 ) ( 1.2 ) ( 9 ) — Research and development tax credit ( 1,465 ) ( 0.7 ) ( 1,985 ) ( 0.6 ) Nonqualified benefit plans ( 1,142 ) ( 0.6 ) ( 1,313 ) ( 0.4 ) Tax-free debt for equity exchange — — ( 38,967 ) ( 11.4 ) Other ( 2,772 ) ( 1.4 ) ( 1,138 ) ( 0.3 ) Total income tax expense $ 17,589 8.8 $ 10,213 3.1 The Company's effective tax rate for 2025 differs from the U.S. federal statutory rate of 21 percent due primarily to the impact of credits and deductions provided by law and the effects of rate-regulated accounting, primarily the amortizations of excess deferred income taxes and deferred investment tax credits. Income taxes paid (net of refunds) for the year ended December 31, 2025, was $ 30.8 million, consisting of $ 27.7 million in federal income taxes and $ 3.1 million in state income taxes. Income taxes paid (net of refunds) in Montana of $ 1.8 million exceeded 5 percent of total income taxes paid (net of refunds). The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and local jurisdictions. The Company is no longer subject to U.S. federal, non-U.S., state or local income tax examinations by tax authorities for years ending prior to 2021. Total reserves for uncertain tax positions were not material. The Company recognizes interest and penalties accrued relative to unrecognized tax benefits in income tax expense. MDU Resources Group, Inc. Form 10-K 97 Index Part II Note 14 - Business Segment Data The Company's reportable segments are those that are based on the Company's method of internal reporting, which generally segregates the strategic business activities due to differences in products, services and regulation. The internal reporting of these operating segments is defined based on the reporting and review process used by the Company's CODM, the chief executive officer. The Company's operations are located within the United States. The Company’s CODM regularly reviews discrete financial information of each reportable segment and uses net income to assess performance of each reportable segment. The CODM uses this information to assess performance and make decisions about resources to be allocated to each reportable segment, including capital and personnel. The information provided to the CODM is prepared at the reportable segment level in quarterly financial packages and on a more summarized basis monthly. Budget and forecast information is also provided to the CODM at the reportable segment level. The electric segment generates, transmits and distributes electricity in Montana, North Dakota, South Dakota and Wyoming. The natural gas distribution segment distributes natural gas in those states, as well as in Idaho, Minnesota, Oregon and Washington. These operations also supply related value-added services. The pipeline segment provides natural gas transportation and underground storage services through a FERC regulated pipeline system primarily in the Rocky Mountain and northern Great Plains regions of the United States. This segment also provides non-regulated energy-related services, including cathodic protection. 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. The function of the captive insurer is to fund the self-insured layers of the insured Company's general liability, automobile liability, pollution liability and other coverages. Centennial Capital also owns certain personal property. 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. Also included are certain general and administrative costs (reflected in operation and maintenance expense) and interest expense, which were previously allocated to Knife River, Everus, Fidelity and the refining business and did not meet the criteria for discontinued operations. Discontinued operations includes the results of operations for Knife River and Everus and certain associated separation costs, including interest on certain debt facilities repaid in connection with the separations. For the comparative periods below, Everus' operations are only reflected through October 2024 compared to the full year in 2023 and Knife River's operations are only reflected through May 2023. Discontinued operations also includes the supporting activities of Fidelity other than certain general and administrative costs and interest expense as described above. 98 MDU Resources Group, Inc. Form 10-K Index Part II The information below follows the same accounting policies as described in Note 2. Information on the Company's segments as of December 31 and for the years then ended was as follows: Year ended December 31, 2025 Electric Natural gas distribution Pipeline Other Consolidated (In thousands) Operating revenues: External operating revenues $ 437,777 $ 1,283,130 $ 154,159 $ — $ 1,875,066 Intersegment operating revenues 553 345 74,992 722 76,612 Operation and maintenance: External operation and maintenance 110,731 240,911 81,619 ( 238 ) 433,023 Intersegment operation and maintenance 553 345 133 722 1,753 Purchased natural gas sold: External purchased natural gas sold — 671,466 — — 671,466 Intersegment purchased natural gas sold — 74,859 — — 74,859 Electric fuel and purchased power 158,995 — — — 158,995 Depreciation and amortization 69,608 104,976 32,124 — 206,708 Taxes, other than income 18,805 81,467 14,225 — 114,497 Other income: External other income 7,470 15,792 3,488 1,599 28,349 Intersegment other income — — 243 4,992 5,235 Interest expense: External interest expense 31,790 59,587 11,679 4,693 107,749 Intersegment interest expense — — 4,992 243 5,235 Income tax expense (benefit) ( 9,578 ) 9,604 19,932 ( 388 ) 19,570 Income (loss) from continuing operations 64,896 56,052 68,178 2,281 191,407 Discontinued operations, net of tax — — — ( 1,012 ) ( 1,012 ) Net income $ 64,896 $ 56,052 $ 68,178 $ 1,269 $ 190,395 Capital expenditures (a) $ 422,929 $ 298,553 $ 59,348 $ — $ 780,830 Assets $ 2,367,067 (b) $ 3,909,046 (b) $ 1,196,959 $ 149,134 (c) $ 7,622,206 Property, plant and equipment $ 2,868,379 (b) $ 4,003,754 (b) $ 1,388,691 $ 4,148 $ 8,264,972 Accumulated depreciation and amortization $ 734,674 (b) $ 1,194,279 (b) $ 373,020 $ 2,814 $ 2,304,787 (a) Capital expenditures include noncash transactions such as capital expenditure-related accounts payable and AFUDC totaling $( 10.8 ) million. (b) Includes allocations of common utility property for the Electric and Natural gas distribution segments. (c) Other includes assets not directly assignable to a business (i.e. cash, cash equivalents and restricted cash, certain accounts receivable, certain investments and other miscellaneous current and deferred assets). MDU Resources Group, Inc. Form 10-K 99 Index Part II Year ended December 31, 2024 Electric Natural gas distribution Pipeline Other Consolidated (In thousands) Operating revenues: External operating revenues $ 414,406 $ 1,200,975 $ 142,597 $ — $ 1,757,978 Intersegment operating revenues 72 130 69,222 195 69,619 Operation and maintenance: External operation and maintenance 94,897 231,087 75,456 13,051 414,491 Intersegment operation and maintenance 72 130 324 195 721 Purchased natural gas sold: External purchased natural gas sold — 630,403 — — 630,403 Intersegment purchased natural gas sold — 68,898 — — 68,898 Electric fuel and purchased power 141,148 — — — 141,148 Depreciation and amortization 66,524 101,958 29,362 2,234 200,078 Taxes, other than income 17,605 76,042 12,175 394 106,216 Other income: External other income 8,205 25,509 5,850 1,803 41,367 Intersegment other income — — 655 14,798 15,453 Interest expense: External interest expense 30,058 63,185 10,862 4,242 108,347 Intersegment interest expense — — 4,633 10,820 15,453 Income tax expense (benefit) ( 2,414 ) 7,974 17,470 ( 5,441 ) 17,589 Income from continuing operations 74,793 46,937 68,042 ( 8,699 ) 181,073 Discontinued operations, net of tax — — — 100,035 100,035 Net income $ 74,793 $ 46,937 $ 68,042 $ 91,336 $ 281,108 Capital expenditures (a) $ 110,812 $ 286,152 $ 126,806 $ 1,728 $ 525,498 Assets $ 1,976,912 (b) $ 3,730,532 (b) $ 1,151,317 $ 180,057 (c) $ 7,038,818 Property, plant and equipment $ 2,480,816 (b) $ 3,731,093 (b) $ 1,338,006 $ 4,148 $ 7,554,063 Accumulated depreciation and amortization $ 716,736 (b) $ 1,139,223 (b) $ 351,045 $ 2,767 $ 2,209,771 (a) Capital expenditures include noncash transactions such as capital expenditure-related accounts payable and AFUDC totaling $ 7.1 million. (b) Includes allocations of common utility property for the Electric and Natural gas distribution segments. (c) Other includes assets of discontinued operations and assets not directly assignable to a business (i.e. cash, cash equivalents and restricted cash, certain accounts receivable, certain investments and other miscellaneous current and deferred assets). 100 MDU Resources Group, Inc. Form 10-K Index Part II Year ended December 31, 2023 Electric Natural gas distribution Pipeline Other Consolidated (In thousands) Operating revenues: External operating revenues $ 401,037 $ 1,287,236 $ 115,079 $ — $ 1,803,352 Intersegment operating revenues 138 301 62,533 119 63,091 Operation and maintenance: External operation and maintenance 92,521 219,481 70,386 24,693 407,081 Intersegment operation and maintenance 138 301 431 119 989 Purchased natural gas sold: External purchased natural gas sold — 742,965 — — 742,965 Intersegment purchased natural gas sold — 62,102 — — 62,102 Electric fuel and purchased power 134,779 — — — 134,779 Depreciation and amortization 64,253 95,300 26,811 4,086 190,450 Taxes, other than income 16,695 75,207 10,822 409 103,133 Realized gain on tax-free exchange of the retained shares in Knife River — — — 186,556 186,556 Other income: External other income 5,815 20,867 3,675 3,097 33,454 Intersegment other income — — 217 13,431 13,648 Interest expense: External interest expense 28,064 57,601 9,428 9,531 104,624 Intersegment interest expense — — 3,842 9,806 13,648 Income tax expense (benefit) ( 1,019 ) 6,927 12,409 ( 8,104 ) 10,213 Income (loss) from continuing operations 71,559 48,520 47,375 162,663 330,117 Discontinued operations, net of tax — — ( 457 ) 85,047 84,590 Net income $ 71,559 $ 48,520 $ 46,918 $ 247,710 $ 414,707 Capital expenditures (a) $ 109,805 $ 274,836 $ 115,903 $ ( 2,825 ) $ 497,719 Assets $ 1,955,644 (b) $ 3,532,142 (b) $ 1,045,704 $ 1,299,669 (c) $ 7,833,159 Property, plant and equipment $ 2,369,039 (b) $ 3,462,187 (b) $ 1,218,387 $ 31,654 $ 7,081,267 Accumulated depreciation and amortization $ 660,438 (b) $ 1,068,037 (b) $ 328,010 $ 19,890 $ 2,076,375 (a) Capital expenditures include noncash transactions such as capital expenditure-related accounts payable and AFUDC totaling $( 13.6 ) million. (b) Includes allocations of common utility property for the Electric and Natural gas distribution segments. (c) Other includes assets of discontinued operations and assets not directly assignable to a business (i.e. 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: 2025 2024 2023 (In thousands) Operating revenues reconciliation: Total reportable segment operating revenues $ 1,950,956 $ 1,827,402 $ 1,866,324 Other revenue 722 195 119 Elimination of intersegment operating revenues ( 76,612 ) ( 69,619 ) ( 63,091 ) Total consolidated operating revenues $ 1,875,066 $ 1,757,978 $ 1,803,352 Asset reconciliation: Total reportable segment assets $ 7,507,105 $ 6,892,959 $ 6,564,962 Other assets 310,165 525,258 1,847,432 Elimination of intersegment receivables ( 195,064 ) ( 379,399 ) ( 579,235 ) Total consolidated assets $ 7,622,206 $ 7,038,818 $ 7,833,159 MDU Resources Group, Inc. Form 10-K 101 Index Part II Note 15 - Employee Benefit Plans Pension and other postretirement benefit plans The Company has noncontributory qualified defined benefit pension plans and other postretirement benefit plans for certain eligible employees. The Company uses a measurement date of December 31 for all of its pension and postretirement benefit plans. Prior to 2013, defined benefit pension plan benefits and accruals for all nonunion and certain union plans were frozen and on June 30, 2015, the remaining union plan was frozen. These employees were eligible to receive additional defined contribution plan benefits. Effective January 1, 2010, eligibility to receive retiree medical benefits was modified at certain of the Company's businesses. Employees who had attained age 55 with 10 years of continuous service by December 31, 2010, were provided the option to choose between a pre-65 comprehensive medical plan coupled with a Medicare supplement or a specified company funded Retiree Reimbursement Account, regardless of when they retire. All other eligible employees must meet the new eligibility criteria of age 60 and 10 years of continuous service at the time they retire to be eligible for a specified company funded Retiree Reimbursement Account. Employees hired after December 31, 2009, will not be eligible for retiree medical benefits. In 2012, the Company modified health care coverage for certain retirees. 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. Changes in benefit obligation and plan assets and amounts recognized in the Consolidated Balance Sheets at December 31 were as follows: Pension Benefits Other Postretirement Benefits 2025 2024 2025 2024 Change in benefit obligation: (In thousands) Benefit obligation at beginning of year $ 255,350 $ 275,586 $ 35,675 $ 39,590 Service cost — — 397 505 Interest cost 13,212 12,799 1,847 1,837 Plan participants' contributions — — 384 412 Actuarial loss (gain) 3,080 ( 11,040 ) ( 355 ) ( 3,420 ) Benefits paid ( 21,516 ) ( 21,995 ) ( 2,924 ) ( 3,249 ) Benefit obligation at end of year 250,126 255,350 35,024 35,675 Change in net plan assets: Fair value of plan assets at beginning of year 230,626 248,558 78,765 79,234 Actual return on plan assets 19,197 1,152 7,118 2,297 Employer contribution 3,365 2,911 66 71 Plan participants' contributions — — 384 412 Benefits paid ( 21,516 ) ( 21,995 ) ( 2,924 ) ( 3,249 ) Fair value of net plan assets at end of year 231,672 230,626 83,409 78,765 Funded status - (under) over $ ( 18,454 ) $ ( 24,724 ) $ 48,385 $ 43,090 Amounts recognized in the Consolidated Balance Sheets at December 31: Noncurrent assets - other $ 203 $ — $ 48,385 $ 43,090 Noncurrent liabilities - other 18,657 24,724 — — Benefit obligation (liabilities) assets - net amount recognized $ ( 18,454 ) $ ( 24,724 ) $ 48,385 $ 43,090 Amounts recognized in accumulated other comprehensive loss: Actuarial loss (gain) $ 12,814 $ 13,228 $ ( 800 ) $ ( 809 ) Prior service credit — — ( 13 ) ( 37 ) Total $ 12,814 $ 13,228 $ ( 813 ) $ ( 846 ) Amounts recognized in regulatory assets or liabilities: Actuarial loss (gain) $ 134,065 $ 139,962 $ ( 3,472 ) $ ( 1,478 ) Prior service credit — — ( 169 ) ( 1,303 ) Total $ 134,065 $ 139,962 $ ( 3,641 ) $ ( 2,781 ) 102 MDU Resources Group, Inc. Form 10-K Index Part II Employer contributions and benefits paid in the preceding table include only those amounts contributed directly to, or paid directly from, plan assets. Amounts related to regulated operations are recorded as regulatory assets or liabilities and are expected to be reflected in rates charged to customers over time. For more information on regulatory assets and liabilities, see Note 6. In 2025, the actuarial loss recognized in the benefit obligation was primarily the result of a decrease in the discount rate. In 2024, 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. Unrecognized pension actuarial gains and losses in excess of 10 percent of the greater of the projected benefit obligation or the market-related value of assets are amortized over the average life expectancy of plan participants for frozen plans. The market-related value of assets is determined using a five-year average of assets. All but one of the pension plans have accumulated benefit obligations in excess of plan assets. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for these plans at December 31 were as follows: 2025 2024 (In thousands) Projected benefit obligation $ 250,126 $ 255,350 Accumulated benefit obligation $ 250,126 $ 255,350 Fair value of plan assets $ 231,672 $ 230,626 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. Prior service credit is amortized on a straight-line basis over the average remaining service period of active participants. These components related to the Company's pension and other postretirement benefit plans for the years ended December 31 were as follows: Pension Benefits Other Postretirement Benefits 2025 2024 2023 2025 2024 2023 Components of net periodic benefit cost (credit): (In thousands) Service cost $ — $ — $ — $ 397 $ 505 $ 534 Interest cost 13,212 12,799 13,521 1,847 1,837 1,956 Expected return on assets ( 14,581 ) ( 16,113 ) ( 17,194 ) ( 5,168 ) ( 5,315 ) ( 5,361 ) Amortization of prior service credit — — — ( 1,158 ) ( 1,318 ) ( 1,318 ) Recognized net actuarial loss (gain) 4,774 4,149 3,093 ( 320 ) ( 288 ) ( 504 ) Net periodic benefit cost (credit), including amount capitalized 3,405 835 ( 580 ) ( 4,402 ) ( 4,579 ) ( 4,693 ) Less amount capitalized — — — — — 107 Net periodic benefit cost (credit) 3,405 835 ( 580 ) ( 4,402 ) ( 4,579 ) ( 4,800 ) Other changes in plan assets and benefit obligations recognized in accumulated comprehensive loss: Net (gain) loss ( 14 ) 401 187 ( 119 ) 71 ( 604 ) Amortization of actuarial (loss) gain ( 400 ) ( 359 ) ( 292 ) 82 130 108 Amortization of prior service credit — — — 49 45 78 Total recognized in accumulated other comprehensive loss ( 414 ) 42 ( 105 ) 12 246 ( 418 ) Other changes in plan assets and benefit obligations recognized in regulatory assets or liabilities: Net (gain) loss ( 1,523 ) 3,520 1,826 ( 2,186 ) ( 472 ) ( 107 ) Amortization of actuarial (loss) gain ( 4,374 ) ( 3,790 ) ( 2,801 ) 238 158 304 Amortization of prior service credit — — — 1,109 1,273 1,273 Total recognized in regulatory assets or liabilities ( 5,897 ) ( 270 ) ( 975 ) ( 839 ) 959 1,470 Total recognized in net periodic benefit credit, accumulated other comprehensive loss and regulatory assets or liabilities $ ( 2,906 ) $ 607 $ ( 1,660 ) $ ( 5,229 ) $ ( 3,374 ) $ ( 3,748 ) MDU Resources Group, Inc. Form 10-K 103 Index Part II Weighted average assumptions used to determine benefit obligations at December 31 were as follows: Pension Benefits Other Postretirement Benefits 2025 2024 2025 2024 Discount rate 5.23 % 5.41 % 5.28 % 5.43 % Expected return on plan assets 6.50 % 6.50 % 6.00 % 6.00 % Weighted average assumptions used to determine net periodic benefit cost (credit) for the years ended December 31 were as follows: Pension Benefits Other Postretirement Benefits 2025 2024 2025 2024 Discount rate 5.41 % 4.84 % 5.43 % 4.85 % Expected return on plan assets 6.50 % 6.50 % 6.00 % 6.00 % 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. As of December 31, 2025, the expected rate of return on pension plan assets is based on the targeted asset allocation range of 40 percent to 50 percent equity securities and 50 percent to 60 percent fixed-income securities and the expected rate of return from these asset categories. The expected rate of return on other postretirement plan assets is based on the targeted asset allocation range of 10 percent to 20 percent equity securities and 80 percent to 90 percent fixed-income securities and the expected rate of return from these asset categories. The expected return on plan assets for other postretirement benefits reflects insurance-related investment costs. Health care rate assumptions for the Company's other postretirement benefit plans as of December 31 were as follows: 2025 2024 Health care trend rate assumed for next year (pre-65/post-65) 9.5 %/ 7.00 % 8.5 %/ 6.25 % Health care cost trend rate - ultimate 4.5 % 4.5 % Year in which ultimate trend rate achieved (pre-65/post-65) 2036/2035 2035/2034 The Company's other postretirement benefit plans include health care and life insurance benefits for certain retirees. The plans underlying these benefits may require contributions by the retiree depending on such retiree's age and years of service at retirement or the date of retirement. The Company contributes a flat dollar amount to the monthly premiums which is updated annually on January 1. The Company expects to contribute to its defined benefit pension plans in 2026 the minimum funding requirement of $ 3.8 million. The Company expects to contribute approximately $ 10,000 to its postretirement benefit plans in 2026. The following benefit payments, which reflect future service, as appropriate, and expected Medicare Part D subsidies at December 31, 2025, are as follows: Years Pension Benefits Other Postretirement Benefits Expected Medicare Part D Subsidy (In thousands) 2026 $ 21,910 $ 3,223 $ 33 2027 $ 21,730 $ 3,159 $ 26 2028 $ 21,390 $ 3,079 $ 19 2029 $ 21,090 $ 2,947 $ 13 2030 $ 20,630 $ 2,838 $ 10 2031-2035 $ 95,250 $ 13,410 $ 15 104 MDU Resources Group, Inc. Form 10-K Index Part II Outside investment managers manage the Company's pension and postretirement assets. The Company's investment policy with respect to pension and other postretirement assets is to make investments solely in the interest of the participants and beneficiaries of the plans and for the exclusive purpose of providing benefits accrued and defraying the reasonable expenses of administration. The Company strives to maintain investment diversification to assist in minimizing the risk of large losses. The Company's policy guidelines allow for investment of funds in cash equivalents, fixed-income securities and equity securities. The guidelines prohibit investment in commodities and futures contracts, equity private placement, employer securities, leveraged or derivative securities, options, direct real estate investments, precious metals, venture capital and limited partnerships. The guidelines also prohibit short selling and margin transactions. The Company's practice is to periodically review and rebalance asset categories based on its targeted asset allocation percentage policy. 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. The fair value ASC establishes a hierarchy for grouping assets and liabilities, based on the significance of inputs. The estimated fair values of the Company's pension plans' assets are determined using the market approach. The carrying value of the pension plans' Level 2 cash equivalents approximates fair value and is determined using observable inputs in active markets or the net asset value of shares held at year end, which is determined using other observable inputs including pricing from outside sources. The estimated fair value of the pension plans' Level 1 and Level 2 equity securities are based on the closing price reported on the active market on which the individual securities are traded or other known sources including pricing from outside sources. The estimated fair value of the pension plans' Level 1 and Level 2 collective and mutual funds are based on the net asset value of shares held at year end, based on either published market quotations on active markets or other known sources including pricing from outside sources. The estimated fair value of the pension plans' Level 2 corporate and municipal bonds is determined using other observable inputs, including benchmark yields, reported trades, broker/dealer quotes, bids, offers, future cash flows and other reference data. The estimated fair value of the pension plans' Level 1 U.S. Government securities are valued based on quoted prices on an active market. The estimated fair value of the pension plans' Level 2 U.S. Government securities are valued mainly using other observable inputs, including benchmark yields, reported trades, broker/dealer quotes, bids, offers, to be announced prices, future cash flows and other reference data. All investments measured at net asset value in the tables that follow are invested in commingled funds, separate accounts or common collective trusts which do not have publicly quoted prices. The fair value of the commingled funds, separate accounts and common collective trusts are determined based on the net asset value of the underlying investments. 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. 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. MDU Resources Group, Inc. Form 10-K 105 Index Part II The fair value of the Company's pension plans' assets by class were as follows: Fair Value Measurements at December 31, 2025, Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at December 31, 2025 (In thousands) Assets: Cash equivalents $ — $ 3,993 $ — $ 3,993 Equity securities: U.S. companies 14 — — 14 Collective and mutual funds (a) 86,424 78,216 — 164,640 U.S. Government securities 36,744 26,281 — 63,025 Total assets measured at fair value $ 123,182 $ 108,490 $ — $ 231,672 (a) Collective and mutual funds invest approximately 35 percent in corporate bonds, 30 percent in U.S. Government securities, 13 percent in common stock of international companies, 12 percent in common stock of large-cap and mid-cap U.S. companies, and 10 percent in other investments. Fair Value Measurements at December 31, 2024, Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at December 31, 2024 (In thousands) Assets: Cash equivalents $ — $ 4,512 $ — $ 4,512 Equity securities: U.S. companies ( 2 ) — — ( 2 ) Collective and mutual funds (a) 72,777 93,606 — 166,383 U.S. Government securities 33,616 25,857 — 59,473 Investments measured at net asset value (b) — — — 260 Total assets measured at fair value $ 106,391 $ 123,975 $ — $ 230,626 (a) Collective and mutual funds invest approximately 39 percent in corporate bonds, 19 percent in U.S. Government securities, 17 percent in other investments, 15 percent in common stock of international companies, 9 percent in common stock of large-cap and mid-cap U.S. companies, and 1 percent cash and cash equivalents. (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. The estimated fair values of the Company's other postretirement benefit plans' assets are determined using the market approach. The estimated fair value of the other postretirement benefit plans' Level 2 cash equivalents is valued at the net asset value of shares held at year end, based on published market quotations on active markets, or using other known sources including pricing from outside sources. The estimated fair value of the other postretirement benefit plans' Level 1 and Level 2 equity securities is based on the closing price reported on the active market on which the individual securities are traded or other known sources including pricing from outside sources. The estimated fair value of the other postretirement benefit plans' Level 2 insurance contract is based on contractual cash surrender values that are determined primarily by investments in managed separate accounts of the insurer. These amounts approximate fair value. The managed separate accounts are valued based on other observable inputs or corroborated market data. 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. 106 MDU Resources Group, Inc. Form 10-K Index Part II The fair value of the Company's other postretirement benefit plans' assets by asset class were as follows: Fair Value Measurements at December 31, 2025, Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at December 31, 2025 (In thousands) Assets: Cash equivalents $ — $ 5,513 $ — $ 5,513 Equity securities: U.S. companies 2,833 — — 2,833 Insurance contract (a) — 74,655 — 74,655 Plan assets (b) — — — 408 Total assets measured at fair value $ 2,833 $ 80,168 $ — $ 83,409 (a) The insurance contract invests approximately 37 percent in corporate bonds, 36 percent in U.S. Government securities, 20 percent in common stock of large-cap U.S. companies, 6 percent in common stock of small-cap U.S. companies and 1 percent in other investments. (b) Deposits held by service providers or claims processors. Fair Value Measurements at December 31, 2024, Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at December 31, 2024 (In thousands) Assets: Cash equivalents $ — $ 4,373 $ — $ 4,373 Equity securities: U.S. companies 2,880 — — 2,880 Insurance contract (a) — 71,512 — 71,512 Total assets measured at fair value $ 2,880 $ 75,885 $ — $ 78,765 (a) The insurance contract invests approximately 41 percent in corporate bonds, 28 percent in U.S. Government securities, 19 percent in common stock of large-cap U.S. companies, 6 percent in common stock of small-cap U.S. companies and 6 percent in other investments. Nonqualified benefit plans In addition to the qualified defined benefit pension plans reflected in the table at the beginning of this note, the Company also has unfunded, nonqualified defined benefit plans for executive officers and certain key management employees that generally provide for defined benefit payments at age 65 following the employee's retirement or, upon death, to their beneficiaries for a 15-year period. In February 2016, the Company froze the unfunded, nonqualified defined benefit plans to new participants and eliminated benefit increases. Vesting for participants not fully vested was retained. The projected benefit obligation and accumulated benefit obligation for these plans at December 31 were as follows: 2025 2024 (In thousands) Projected benefit obligation $ 49,598 $ 52,007 Accumulated benefit obligation $ 49,598 $ 52,007 MDU Resources Group, Inc. Form 10-K 107 Index Part II The components of net periodic benefit cost are included in other income on the Consolidated Statements of Income. These components related to the Company's nonqualified defined benefit plans for the years ended December 31 were as follows: 2025 2024 2023 (In thousands) Components of net periodic benefit cost: Interest cost $ 2,588 $ 2,568 $ 2,740 Recognized net actuarial loss 276 365 273 Net periodic benefit cost $ 2,864 $ 2,933 $ 3,013 Weighted average assumptions used at December 31 were as follows: 2025 2024 Benefit obligation discount rate 4.94 % 5.26 % Benefit obligation rate of compensation increase N/A N/A Net periodic benefit cost discount rate 5.26 % 4.73 % Net periodic benefit cost rate of compensation increase N/A N/A The amount of future benefit payments for the unfunded, nonqualified defined benefit plans at December 31, 2025, are expected to aggregate as follows: 2026 2027 2028 2029 2030 2031-2035 (In thousands) Nonqualified benefits $ 5,620 $ 5,810 $ 5,550 $ 5,170 $ 4,560 $ 19,870 In 2012, the Company established a nonqualified defined contribution plan for certain key management employees. In 2020, the plan was frozen to new participants and no new Company contributions will be made to the plan after December 31, 2020. Vesting for participants not fully vested was retained. A new nonqualified defined contribution plan was adopted in 2020, effective January 1, 2021, to replace the plan originally established in 2012 with similar provisions. Expenses incurred under these plans for 2025, 2024 and 2023 were $ 4.7 million, $ 4.0 million and $ 2.7 million, respectively. The amount of investments that the Company anticipates using to satisfy obligations under these plans at December 31 was as follows: 2025 2024 (In thousands) Investments Insurance contracts* $ 67,409 $ 59,282 Life insurance** 31,290 30,834 Other 9,839 12,879 Total investments $ 108,538 $ 102,995 * For more information on the insurance contracts, see Note 8. ** Investments of life insurance are carried on plan participants (payable upon the employee's death). Defined contribution plans The Company sponsors a defined contribution plan for eligible employees and the costs incurred under this plan were $ 19.1 million in 2025, $ 10.7 million in 2024 and $ 17.0 million in 2023. 108 MDU Resources Group, Inc. Form 10-K Index Part II Multiemployer plans The Company contributes to a MEPP under the terms of a collective-bargaining agreement that covers its union-represented employees. The risks of participating in this multiemployer plan is different from single-employer plans in the following aspects: • Assets contributed to the MEPP by one employer may be used to provide benefits to employees of other participating employers • If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers • If the Company chooses to stop participating in its MEPP, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability The Company's participation in this plan is outlined in the following table. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2025 and 2024 is for the plan's year-end status at December 31, 2024, and December 31, 2023, respectively. The zone status is based on information that the Company received from the plan and is certified by the plan's actuary. Among other factors, a plan in the red zone is generally less than 65 percent funded, a plan in the yellow zone is between 65 percent and 80 percent funded, and a plan in the green zone is at least 80 percent funded. EIN/Pension Plan Number Pension Protection Act Zone Status FIP/RP Status Pending/Implemented Contributions Surcharge Imposed Expiration Date of Collective Bargaining Agreement Pension Fund 2025 2024 2025 2024 2023 (In thousands) Idaho Plumbers and Pipefitters Pension Plan 826010346 - 001 Green as of 5/31/2025 Green as of 5/31/2024 No $ 1,553 $ 1,434 $ 1,690 No 3/31/2027 Total contributions $ 1,553 $ 1,434 $ 1,690 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: Pension Fund Year Contributions to Plan Exceeded More Than 5 Percent of Total Contributions (as of December 31 of the Plan's Year-End) Idaho Plumbers and Pipefitters Pension Plan 2024 and 2023 MDU Resources Group, Inc. Form 10-K 109 Index Part II Note 16 - Jointly Owned Facilities 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), two major transmission lines (BSSE and JETx), and a wind turbine farm (Badger Wind Farm). Each owner of the jointly owned facilities is responsible for financing its investment. The Company's share of the jointly owned facilities operating expenses was reflected in the appropriate categories of operating expenses (electric fuel and purchased power; operation and maintenance; and taxes, other than income) in the Consolidated Statements of Income. In December 2025, the Company completed the acquisition of a 49 percent undivided ownership interest in Badger Wind Farm for approximately $ 294.0 million, located near Wishek, ND, and placed the asset in service. The purchase was recorded as an asset acquisition to Net, property, plant and equipment on the Company's Consolidated Balance Sheet. The completed transaction secures 122.5 MW of the project's total 250 MW generation capacity for the Company and follows the NDPSC's Advance Determination of Prudence and Certificate of Public Convenience and Necessity approvals, confirming the project is a prudent, cost-effective investment for customers. The Company previously executed a PPA for 150 MW of output from the project, which included the option to purchase the 49 percent ownership interest. With the closing now complete, the PPA has been reduced to 27.5 MW. At December 31, the Company's share of the cost of utility plant in service, construction work in progress and related accumulated depreciation for the jointly owned facilities was as follows: Ownership Percentage 2025 2024 (In thousands) Badger Wind Farm: 49.0 % Utility plant in service $ 299,823 $ — CWIP — — Less accumulated depreciation — — $ 299,823 $ — Big Stone Station: 22.7 % Utility plant in service $ 157,270 $ 155,302 CWIP 1,372 318 Less accumulated depreciation 59,756 55,327 $ 98,886 $ 100,293 BSSE: 50.0 % Utility plant in service $ 111,043 $ 111,043 CWIP — — Less accumulated depreciation 12,439 10,359 $ 98,604 $ 100,684 Coyote Station: 25.0 % Utility plant in service $ 163,060 $ 160,343 CWIP 110 755 Less accumulated depreciation 117,122 115,133 $ 46,048 $ 45,965 JETx: 50.0 % Utility plant in service $ — $ — CWIP 12,674 6,112 Less accumulated depreciation — — $ 12,674 $ 6,112 Wygen III: 25.0 % Utility plant in service $ 67,664 $ 67,851 CWIP 84 97 Less accumulated depreciation 14,351 15,340 $ 53,397 $ 52,608 110 MDU Resources Group, Inc. Form 10-K Index Part II Note 17 - Commitments and Contingencies The Company is party to claims and lawsuits arising out of its business and that of its consolidated subsidiaries, which may include, but are not limited to, matters involving property damage, personal injury, and environmental, contractual, statutory and regulatory obligations. The Company accrues a liability for those contingencies when the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Company does not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is probable or reasonably possible and which are material, the Company discloses the nature of the contingency and, in some circumstances, an estimate of the possible loss. Accruals are based on the best information available, but in certain situations management is unable to estimate an amount or range of a reasonably possible loss including, but not limited to when: (1) the damages are unsubstantiated or indeterminate, (2) the proceedings are in the early stages, (3) numerous parties are involved, or (4) the matter involves novel or unsettled legal theories. At December 31, 2025 and 2024, the Company accrued liabilities which have not been discounted of $ 26.1 million and $ 24.1 million, respectively. At December 31, 2025 and 2024, the Company also recorded corresponding receivables of $ 1.6 million and $ 24,000 , respectively, and regulatory assets of $ 23.2 million and $ 22.9 million, respectively, related to the accrued liabilities. The accruals are for contingencies resulting from litigation, regulatory and environmental matters. This includes amounts that have been accrued for matters discussed in Environmental matters within this note. The Company will continue to monitor each matter and adjust accruals as might be warranted based on new information and further developments. In January 2026, the Company received a final order on a regulatory commission complaint for $ 2.0 million, with $ 250,000 suspended on the condition that the Company complete additional compliance actions outlined in the order. At December 31, 2025, the Company had $ 1.75 million included in accrued liabilities for this matter. Management believes that the outcomes with respect to probable and reasonably possible losses in excess of the amounts accrued, net of insurance recoveries, while uncertain, either cannot be estimated or will not have a material effect upon the Company's financial position, results of operations or cash flows. Unless otherwise required by GAAP, legal costs are expensed as they are incurred. Environmental matters 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. Any accruals related to these claims are reflected in regulatory assets. For more information, see Note 6. A claim was made against Montana-Dakota for contamination at a manufactured gas plant site in Missoula, Montana. 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. An environmental assessment was started in 2020 and is still underway. In July 2022, the MTPSC approved Montana-Dakota's application for deferred accounting treatment of costs associated with the investigation and remediation of the site. In 1997, a claim was made against Cascade for contamination at the Bremerton Gasworks Superfund Site in Bremerton, Washington. The EPA conducted a Targeted Brownfields Assessment of the site which confirmed contamination at the site and in the adjacent Port Washington Narrows. In April 2010, the Washington DOE issued notice it considered Cascade a PRP for hazardous substances at the site. In May 2012, the EPA added the site to the National Priorities List of Superfund sites. Cascade entered into an administrative settlement agreement and consent order with the EPA regarding the scope and schedule for a remedial investigation and feasibility study for the site. The preliminary information received through the completion of the data report in August 2020, allowed for the projection of possible costs for a variety of site configurations, remedial measures and potential natural resource damage claims between $ 13.6 million and $ 71.5 million. The accrual for remediation costs will be reviewed and adjusted, if necessary, after the completion of the feasibility study. In September 2010, the WUTC approved the petition filed by Cascade regarding deferral of remediation costs, subject to conditions set forth in the order. A significant portion of the costs incurred to date have been recovered by insurance. MDU Resources Group, Inc. Form 10-K 111 Index Part II A claim was made against Cascade for impacts at a manufactured gas plant site in Bellingham, Washington. Cascade received notice from a party in May 2008 that Cascade may be a PRP, along with other parties. Other PRPs reached an agreed order and work plan with the Washington DOE for completion of a remedial investigation and feasibility study for the site. A feasibility study prepared for one of the PRPs in March 2018 identifies five cleanup action alternatives for the site with estimated costs ranging from $ 8.0 million to $ 20.4 million with a selected preferred alternative having an estimated total cost of $ 9.3 million. The development of the remediation design is underway, with the Pre-Remedial Design Investigation Data Report and Engineering Design Report submitted to Washington Ecology in June 2023 and November 2024, respectively. The remedy construction is expected to commence in 2028 following the approval of the final design. Cascade believes its proportional share of any liability will be relatively small in comparison to other PRPs. Cascade has recorded an accrual for this site for an amount that is not material. The Company has received notices from and entered into agreements with certain of its insurance carriers that they will participate in the defense for certain contamination claims subject to full and complete reservations of rights and defenses to insurance coverage. To the extent these claims are not covered by insurance, the Company intends to seek recovery of remediation costs through its natural gas rates charged to customers. Details of the estimates for remedial investigations, feasibility studies and remediation, as well as incurred and accrued costs at these manufactured gas plant sites were as follows: December 31, 2025 Total Estimated Costs Total Incurred Costs Total Accrued Costs (In thousands) Montana-Dakota - Missoula MGP (a) $ 2,042 $ 1,232 $ 810 Cascade - Bremerton MGP (b) $ 34,730 $ 12,772 $ 21,958 (a) Total estimated, incurred and accrued costs for Montana-Dakota's two-thirds share of the ongoing remedial investigation and remediation of the Missoula site. (b) Total estimated, incurred and accrued costs for the ongoing remedial investigation, feasibility study and remediation of the Bremerton site. Purchase commitments The Company has entered into various commitments largely consisting of contracts for natural gas and coal supply; purchased power; natural gas transportation and storage; and information technology. Certain of these contracts are subject to variability in volume and price. The Company's purchase commitments decreased from those reported in the 2024 Annual Report due to a decrease in electric supply contracts as a result of the Company's purchase of a 49 percent undivided ownership interest Badger Wind Farm on December 31, 2025. The commitment terms vary in length, up to 34 years. The commitments under these contracts as of December 31, 2025, were: 2026 2027 2028 2029 2030 Thereafter (In thousands) Purchase commitments $ 610,505 $ 249,341 $ 165,751 $ 119,053 $ 113,147 $ 542,117 These commitments were not reflected in the Company's consolidated financial statements. Amounts purchased under various commitments for the years ended December 31, 2025, 2024 and 2023, were $ 873.5 million, $ 841.7 million and $ 1.0 billion, respectively. Guarantees 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, 2025, the fixed maximum amounts guaranteed under these letters of credit aggregated $ 3.2 million, all of which have scheduled expiration of the maximum amounts in 2026. There were no amounts outstanding under the previously mentioned letters of credit at December 31, 2025. 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. In the normal course of business, the Company and its subsidiaries have surety bonds. In the event the Company or its subsidiaries do not fulfill a bonded obligation, the Company or its subsidiaries would be responsible to the surety bond company for completion of the bonded contract or obligation. At December 31, 2025, approximately $ 13.4 million of surety bonds were outstanding, which were not reflected on the Consolidated Balance Sheet. 112 MDU Resources Group, Inc. Form 10-K Index Part II Leases Most of the leases the Company enters into are for equipment, buildings, easements and vehicles as part of their ongoing operations. The Company also leases certain equipment to third parties through its utility business. 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. The recognition of leases requires the Company to make estimates and assumptions that affect the lease classification and the assets and liabilities recorded. The accuracy of lease assets and liabilities reported on the Consolidated Financial Statements depends on, among other things, management's estimates of interest rates used to discount the lease assets and liabilities to their present value, as well as the lease terms based on the unique facts and circumstances of each lease. Lessee accounting The leases the Company has entered into as part of its ongoing operations are considered operating leases and are recognized on the Consolidated Balance Sheets as noncurrent assets - other, current liabilities - other accrued liabilities and noncurrent liabilities - other. The corresponding lease costs are included in operation and maintenance expense on the Consolidated Statements of Income. Generally, the leases for equipment have a term of five years or less and buildings and easements have a longer term of up to 35 years or more. 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. The following tables provide information on the Company's operating leases at and for the years ended December 31: 2025 2024 2023 (In thousands) Lease costs: Short-term lease cost $ 1,683 $ 1,549 $ 1,646 Operating lease cost 3,279 3,069 2,871 Variable lease cost 705 819 676 $ 5,667 $ 5,437 $ 5,193 2025 2024 2023 (Dollars in thousands) Weighted average remaining lease term 19.09 years 12.65 years 15.35 years Weighted average discount rate 6.17 % 6.08 % 4.88 % Cash paid for amounts included in the measurement of lease liabilities $ 3,271 $ 3,063 $ 2,868 The reconciliation of future undiscounted cash flows to operating lease liabilities presented on the Consolidated Balance Sheet at December 31, 2025, was as follows: (In thousands) 2026 $ 4,104 2027 3,191 2028 2,740 2029 2,657 2030 2,488 Thereafter 45,890 Total 61,070 Less discount 27,311 Total operating lease liabilities* $ 33,759 *The Company's increase in operating lease liabilities in 2025 is primarily due to the Company's 49 percent share of Badger Wind Farm leases. MDU Resources Group, Inc. Form 10-K 113 Index Part II Lessor accounting The Company leases certain equipment to third parties through its utility businesses, which are considered short-term operating leases with terms of less than 12 months. Lease revenue was not material for the years ended December 31, 2025, 2024 and 2023, respectively. Variable interest entities The Company evaluates its arrangements and contracts with other entities to determine if they are VIEs and if so, if the Company is the primary beneficiary. Fuel Contract Coyote Station entered into a coal supply agreement with Coyote Creek that provides for the purchase of coal necessary to supply the coal requirements of the Coyote Station for the period May 2016 through December 2040. Coal purchased under the coal supply agreement is reflected in Inventories on the Consolidated Balance Sheets and is recovered from customers as a component of electric fuel and purchased power. The coal supply agreement creates a variable interest in Coyote Creek due to the transfer of all operating and economic risk to the Coyote Station owners, as the agreement is structured so that the price of the coal will cover all costs of operations, as well as future reclamation costs. The Coyote Station owners are also providing a guarantee of the value of the assets of Coyote Creek as they would be required to buy the assets at book value should they terminate the contract prior to the end of the contract term and are providing a guarantee of the value of the equity of Coyote Creek in that they are required to buy the entity at the end of the contract term at equity value. Although the Company has determined that Coyote Creek is a VIE, the Company has concluded that it is not the primary beneficiary of Coyote Creek because the authority to direct the activities of the entity is shared by the four unrelated owners of the Coyote Station, with no primary beneficiary existing. As a result, Coyote Creek is not required to be consolidated in the Company's financial statements. At December 31, 2025, the Company's exposure to loss as a result of the Company's involvement with the VIE, based on the Company's ownership percentage, was $ 23.5 million. 114 MDU Resources Group, Inc. Form 10-K Index Part II Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.