MDU Resources Group Annual Report 2021

FY2021 Annual Report · MDU Resources Group

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Our Businesses

Regulated Energy Delivery
Electric and Natural Gas Utilities
MDU Resources Group’s utility companies serve approximately 1.16 million customers.
Cascade Natural Gas Corporation distributes natural gas in Oregon and Washington.
Great Plains Natural Gas Co. distributes natural gas in western Minnesota and
southeastern North Dakota. Intermountain Gas Company distributes natural gas in
southern Idaho. Montana-Dakota Utilities Co. generates, transmits and distributes
electricity and distributes natural gas in Montana, North Dakota, South Dakota and
Wyoming. These operations also supply related value-added services.

2021 Key Statistics
Revenues (millions)
Electric
Natural gas
Net income (millions)
Electric
Natural gas
Electric retail sales (million kWh)
Natural gas distribution (MMdk)
Retail sales
Transportation sales

$349.6
$971.9

$51.9
$51.6
3,271.6

115.3
174.4

Electric and natural gas utility areas

Electric generating stations

States of operations

Construction Materials and Services
Construction Materials and Contracting
Knife River Corporation mines aggregates and markets crushed stone, sand, gravel and
related construction materials, including ready-mix concrete, cement, asphalt, asphalt oil
and other value-added products. It also performs integrated contracting services.

2021 Key Statistics
Revenues (millions)
Net income (millions)
Construction materials sales
Aggregates (million tons)
Asphalt (million tons)
Ready-mix concrete (million cubic yards)
Construction materials aggregate
reserves (billion tons)

$2,228.9
$129.8

33.5
7.1
4.3

1.2

States of operation

Market areas

Pipeline
WBI Energy provides natural gas transportation and underground storage services
through regulated pipeline systems primarily in the Rocky Mountain and northern
Great Plains regions of the United States. It also provides cathodic protection and
other energy-related services.

2021 Key Statistics
Revenues (millions)
Net income (millions)
Pipeline transportation (MMdk)

$142.6
$40.9
471.1

Company storage fields

Pipeline systems

States of operations

Interconnecting pipeline

Construction Services
MDU Construction Services Group provides a full spectrum of construction services
through its electrical and mechanical and transmission and distribution specialty
contracting services. These specialty contracting services are provided to utility,
manufacturing, transportation, commercial, industrial, institutional, renewable
and governmental customers. Its electrical and mechanical contracting services
include construction and maintenance of electrical and communication wiring
and infrastructure, fire suppression systems, and mechanical piping and services.
Its transmission and distribution contracting services include construction and
maintenance of overhead and underground electrical, gas and communication
infrastructure, as well as manufacturing and distribution of transmission line
construction equipment and tools.

2021 Key Statistics
Revenues (millions)
Net income (millions)

$2,051.6
$109.4

Construction services offices

Authorized states of operation

VA MD

AL GA

Note: The revenues and earnings noted on this page exclude discontinued operations, the Other category and intercompany eliminations.

MDU Resources Group, Inc.Years ended December 31,

Operating revenues
Operating income
Net Income
Earnings per share
Dividends declared per common share
Weighted average common shares outstanding — diluted
Total assets
Total equity
Total debt
Capitalization ratios:
Total equity
Total debt

Price/earnings from continuing operations ratio (12 months ended)
Book value per share
Market value as a percent of book value
Employees

Highlights

2021

2020

(In millions, where applicable)

$5,680.7
$ 534.2
$ 378.1
1.87
$
.855
$
202.4
$ 8,910
$ 3,383
$ 2,742

55.2%
44.8
100%
16.5x
$ 16.64

185.3%
12,826

$5,532.7
$ 544.9
$ 390.2
1.95
$
.835
$
200.6
$ 8,053
$ 3,079
$ 2,263

57.6%
42.4
100%
13.5x
$ 15.36

171.5%

12,994

Forward-looking statements: This Annual Report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements should be read with the cautionary statements and important factors included in “Part I, Forward-Looking Statements” and “Item 1A — Risk Factors” of the company’s
“2021 Form 10-K.” Forward-looking statements are all statements other than statements of historic fact, including without limitation those statements that are identified by the words
anticipates, estimates, expects, intends, plans, predicts and similar expressions.

MDU Resources Group, Inc.

MDU Resources Group, Inc.Report to Stockholders

Our results in 2021 were the

third-best in company history
with earnings of $378.1 million,
or $1.87 per share. Though this was lower
than 2020’s earnings of $390.2 million, or
$1.95 per share, it was a highly successful
year, particularly considering the
country’s changing economic conditions,
inflationary pressures, labor challenges
and the lingering effects of the pandemic.
We are proud of our team’s ability to
respond and adapt while ensuring we
continue to provide the products and
services that are essential to Building a
Strong America.®

You received a 20% one-year total
shareholder return in 2021 on your
investment in MDU Resources, and we
increased dividends for the 31st
consecutive year. This increase ensured
our continued listing on the S&P High-
Yield Dividend Aristocrats index. We
remain committed to paying dividends,
with uninterrupted payments for 84 years,
as part of the overall value you receive
from your stock ownership.

We regained a spot on the Fortune 500 in
2021. Our revenues have grown
approximately 38% over the past five years.
Demand continues to grow for the critical
infrastructure and energy our companies
provide, with extraordinary federal- and
state-level support pledged in 2021 that
will extend for years ahead. Many states
have just begun investing funds from the

2.0

$1.95

$1.87

$1.69

$1.45

$1.38

e
r
a
h
S
r
e
P
s
g
n
n
r
a
E

)
s
n
1.5
o
i
t
a
r
e
p
o
g
1.0
n
u
n
i
t
n
o
c
0.5
m
o
r
f
(

0.0

2017

2018

2019

2020

2021

American Rescue Plan Act into much-
needed infrastructure projects, and we
anticipate significant additional
opportunities for our companies from the
Infrastructure Investment and Jobs Act.
Extraordinary weather events and
infrastructure failures have led to
bipartisan recognition of and advocacy for
improvements in our country’s roads and
energy delivery systems. Our record $2.1
billion backlog of construction work at
December 31, 2021, underscores the rising
demand.

Ongoing effects in 2021 of the COVID-19
pandemic were part of increasing health
care costs across our companies. Our top
priority remains the health and safety of
our workforce, and we continue to
implement safeguards such as telework,
social distancing and additional personal
protective equipment where appropriate to
prevent the spread of the disease.

Construction materials
continues growth path

In 2021, Knife River Corporation earned
$129.8 million, compared to a record
$147.3 million in 2020. Revenues, at $2.2
billion, were comparable to the prior year.
We saw costs escalate, especially in the
latter half of the year, on equipment,
asphalt oil, fuel and labor, including health
care. While we increased our product
pricing to offset the rising costs, we
experienced margin impacts on asphalt
and asphalt-related products, aggregates
and contracting services. We expect some
of these inflationary pressures to continue
into 2022 and will continue raising prices
where possible to keep pace with cost
increases.

100

%
0
4

%
8
3

%
2
4

%
4
4

We experienced challenges with labor
shortages during the year, particularly a
lack of commercially licensed truck
drivers. We expect our new state-of-the-
%
%
8
2
6
5
art construction training center to help fill
labor needs going forward. The facility in
Oregon includes an 80,000-square-foot
heated indoor arena for training on trucks
2016

2015

2014

2013

2012

%
6
5

%
0
6

%
2
6

and heavy equipment and a
16,000-square-foot office, classroom and
lab facility, all on a 270-acre tract of
property that allows for outdoor training
as well. The center conducts classes as well
as hands-on training to develop current
and future potential employees’ skills. The
commercial driver’s license program at the
training center will be accredited soon.

Knife River continued its acquisition
program in 2021, with most activity
centered around the growing Pacific
Northwest markets. Baker Rock
Resources, Mt. Hood Rock and Oregon
Mainline Paving, all in Oregon, are
expected to be meaningful contributors to
our future operations. We continue to
explore additional strategic acquisition
opportunities that align with our footprint
and operational priorities.

Knife River continues to develop its
significant aggregate reserves in Texas. We
received permitting in 2021 to expand the
Honey Creek quarry operations northwest
of Austin. The expansion at this 570-acre
property that we purchased in 2019 is
expected to be fully operational this year,
providing more construction aggregates
for both external customers and internal
use, including asphalt and ready-mix
concrete production.

The construction materials backlog of
work at December 31 was a record $708
million, compared to $673 million at
December 31, 2020. We expect to see
substantial additional project
opportunities for Knife River as funding
from the $1.2 trillion Infrastructure
Investment and Jobs Act is distributed
across the country.

DEBT

EQUITY

11%

Construction services
results at near-record level

20 year

5 year

3 year

10 year

Earnings of $109.4 million at MDU
Construction Services Group in 2021 were
on par with 2020’s record earnings of
$109.7 million. Revenues were $2.05
billion, compared to $2.10 billion in 2020.

-8%

1 year

MDU Resources Group, Inc.

Report to Stockholders

Demand remains at an all-time high for
construction services work, with backlog a
record $1.38 billion at December 31,
compared to $1.27 billion at December 31,
2020.

with her long history with the company
and superior skills in leading projects and
teams. We continue to seek diverse
candidates to fill key roles within our
organization.

MDU Construction Services Group is the
fourth largest electrical contractor in the
United States, according to Electrical
Construction & Maintenance Magazine,
and the 10th largest specialty contractor,
according to Engineering News Record.

The pace of project bidding continues to
accelerate for this segment, and we expect
it to remain strong as this industry also
will benefit from the Infrastructure
Investment and Jobs Act. Funding to add
and improve projects such as energy
transmission and distribution systems,
data networks and renewable electric
generation sources will create more
opportunities.

Another significant area of opportunity
for our companies is electric transmission
grid hardening. We help utility companies
ensure they can deliver safe, reliable
energy to their customers by mitigating
fire and weather-related risks to the
electric grid. Typically, this involves
converting overhead power lines to
underground infrastructure, where lines
are less exposed to environmental forces.

As we strive to provide premiere services
to our customers, we have implemented
innovative practices to significantly
expand prefabrication services. We can
prebuild everything from electrical
components to complete modular
substations. This gives customers faster
and often more economical project results.

In an industry traditionally dominated by
men, we are proud to have named Michelle
Harris as president of Rocky Mountain
Contractors, a transmission and
distribution company within MDU
Construction Services Group. Michelle is
the first woman to lead one of our
construction services companies and was
selected as the best candidate for the job,

Utility finishes year
with record results

Our electric and natural gas utility
business finished 2021 with record
earnings of $103.5 million, compared to
$99.6 million in 2020. Earnings growth
from implemented rate increases, as
approved by regulators, was partly offset by
higher operating costs. This included
higher employee health care expenses,
largely attributed to impacts from
COVID-19, as well as maintenance
expenses on the Big Stone Station power
plant.

Our utility operations had 2.1% higher
electric retail sales volumes and 0.7%
higher natural gas retail sales volumes in
2021. We also saw 1.7% customer growth,
with people migrating from bigger cities
into smaller cities in and across our
eight-state service territory. We believe this
is attributable to broader workplace
acceptance of remote workforces.

In 2021, approximately 29% of the
electricity delivered from owned
generation to our customers came from
renewable sources. We continue our efforts
to retire our wholly owned coal-fired
electric generating facilities. We ceased
operations in early 2021 at Lewis and Clark
Station in Sidney, Montana, and will retire
and commence decommissioning Heskett
Station Units I and II in Mandan, North
Dakota, in the first quarter this year. We
will begin construction soon on Heskett
Station Unit IV, an 88-megawatt natural
gas-fired simple-cycle combustion turbine.
It is expected to be in service in early 2023.

We continue our focus on replacing older
natural gas distribution lines with lines
made of newer materials, such as
polyethylene and coated steel. We replaced
approximately 90 miles of lines in 2021.

Fifth year of record
volumes for pipeline

Our natural gas pipeline business, WBI
Energy, earned $40.9 million in 2021, an
increase of 11% compared to $37.0 million
in 2020. WBI Energy recorded its fifth
consecutive year of record transportation
volumes, benefiting from ongoing system
expansions and strong customer demand.

One of the largest pipeline expansion
projects in company history was
completed earlier this year. The North
Bakken Expansion was placed into service
February 1 and included construction of
approximately 100 miles of mostly 24-inch

Dennis W. Johnson
Chair of the Board

David L. Goodin
President and Chief Executive Officer

MDU Resources Group, Inc.Report to Stockholders

diameter pipeline in northwestern North
Dakota. The project included significantly
expanding one compressor station,
designing and building a new compressor
station and constructing associated
infrastructure. It has capacity to transport
250 million cubic feet of natural gas per
day from the Bakken production area and
can be increased up to 625 million cubic
feet per day through additional
compression to meet growing customer
demand.

The North Bakken Expansion project was
particularly significant for the Bakken
region because it included a nearly
three-mile horizontal directional drill
— one of the longest of its kind — crossing
under Lake Sakakawea on the Missouri
River. The project gives constrained
producers another much-needed option to
move natural gas out of the Bakken,
helping to reduce gas flaring in the region.

WBI Energy today has capacity to
transport more than 2.4 billion cubic feet
of natural gas per day, and that capacity
will continue to grow as we have a number
of additional expansion projects
underway. Pending regulatory approvals,
our Line Section 7 Expansion project in
central North Dakota is expected to be in
service by July this year. Our Wahpeton
Expansion project in eastern North
Dakota is expected to be constructed and
in service in 2024. Additional projects are
in the queue to be announced soon that
will help meet producers’ needs as
Bakken-related activity increases and the
natural gas-to-oil ratio continues to climb.

Integrity, sustainability
remain key focus areas

We refreshed our corporate vision and
mission in 2021 to emphasize the critical
products and services we provide that are
essential to Building a Strong America.®
We also honed our corporate values:
integrity, safety, respect, diversity,
inclusion, excellence, innovation and
stewardship. These are the key tenets by

which we conduct our business every day.
These values start at the top, with our
board and corporate management team,
where we set the example and emphasize
the importance of doing things right.

We have been recognized for gender
diversity within our board and
management. Our aim is always to hire
the best person for the job, and we know
diverse viewpoints and backgrounds are
important as we make these appointments.
We emphasize this across our
organization, recognizing that it takes
concerted effort to recruit women to roles
in industries that traditionally are
dominated by men.

We also deepened our focus in 2021 on
sustainability-related efforts, devoting
additional resources to collecting data,
targeting improvements and seeking
opportunities. We created an executive
management Sustainability Committee
that supports the execution of, and makes
recommendations to advance, our
environmental, social and governance
strategies, while enhancing processes,
procedures and controls for related
disclosures. The committee further
supports our board-level Environmental
and Sustainability Committee. We
encourage you to read more about these
efforts in our Sustainability Report at
www.mdu.com/sustainability.

As we look ahead at 2022, we see many
opportunities for organic growth at our
operations. We have more than $700
million in capital investments planned for
the year to grow our businesses. Our
construction operations expect abundant
longer-term opportunities from federal
and state infrastructure investments. Our
pipeline business has more potential
expansion projects under consideration
than ever before. Our utility segment
continues to focus on providing reliable,
low-cost electricity and natural gas to a
steadily growing customer base. While we
anticipate extensive opportunities, we also
expect some continued inflationary

pressures in 2022, including higher labor
costs and fuel prices. We will address these
pressures through pricing passthroughs
wherever possible and by keeping
workforce recruitment, training and
retention a priority.

We have an incredibly skilled and
dedicated team of employees who take
great pride in safely serving our customers
with essential energy and construction
products and services. Thank you for
continuing to invest in MDU Resources as
we continue Building a Strong America®.

Dennis W. Johnson
Chair of the Board

David L. Goodin
President and Chief Executive Officer

February 23, 2022

MDU Resources Group, Inc.
Board of Directors

Dennis W. Johnson
72 (21)
Dickinson, North Dakota

David L. Goodin
60 (9)
Bismarck, North Dakota

Thomas Everist
72 (27)
Sioux Falls, South Dakota

Karen B. Fagg
68 (17)
Billings, Montana

Patricia L. Moss
68 (19)
Bend, Oregon

Chair of MDU Resources Board
of Directors

President and Chief Executive
Officer of MDU Resources

Chair, president and chief executive
officer of TMI Group, an
architectural woodwork
manufacturer; former president of
the Dickinson City Commission; a
former director of Federal Reserve
Bank of Minneapolis.

Expertise: Business management,
specialty contracting, finance and
strategic planning.

Formerly president and chief
executive officer of Cascade
Natural Gas Corporation, Great
Plains Natural Gas Co.,
Intermountain Gas Company and
Montana-Dakota Utilities Co.

President and chair of The Everist
Co., formerly a construction
materials company; a former
director of Raven Industries, Inc.,
a public company.

Retired, formerly vice president
of DOWL HKM and formerly
chair, chief executive officer and
majority owner of HKM
Engineering Inc.

Expertise: Construction materials
and contracting industry, business
leadership and management.

Expertise: Engineering, natural
resource development, environment
and business management.

Formerly vice chair, president
and chief executive officer of
Cascade Bancorp and Bank of
the Cascades; a director of First
Interstate BancSystem Inc., a
public company.

Expertise: Finance, compliance
oversight, business development
and public company governance.

Dale S. Rosenthal
65 (1)
Washington, D.C.

Edward A. Ryan
68 (4)
Washington, D.C.

David M. Sparby
67 (4)
North Oaks, Minnesota

Chenxi Wang
51 (3)
Los Altos, California

Formerly strategic director of
Clark Construction Group, LLC;
a director of Washington Gas
Light Company.

Expertise: Construction,
alternative energy, infrastructure
development, risk management and
corporate strategy.

Formerly executive vice
president and general counsel of
Marriott International, a large
public company with
international operations.

Formerly senior vice president
and group president, revenue at
Xcel Energy Inc. and president
and chief executive officer of
North States Power-Minnesota.

Expertise: Corporate governance
and transactions, legal and public
company leadership.

Expertise: Public utility, renewable
energy, finance, legal and public
company leadership.

Founder and managing general
partner of Rain Capital Fund LP,
a cybersecurity-focused venture
fund; formerly chief strategy
officer of Twistlock, a security
software company.

Expertise: Technology,
cybersecurity, capital markets and
business development.

Numbers indicate age and years of service ( ) on the
MDU Resources Board of Directors as of December 31, 2021.

Audit Committee
David M. Sparby, Chair
Dale S. Rosenthal
Edward A. Ryan
Chenxi Wang

Compensation
Committee
Karen B. Fagg, Chair
Thomas Everist
Patricia L. Moss

Environmental and
Sustainability Committee
Patricia L. Moss, Chair
Karen B. Fagg
David M. Sparby
Chenxi Wang

Nominating and
Governance Committee
Edward A. Ryan, Chair
Thomas Everist
Dale S. Rosenthal

MDU Resources Group, Inc.Corporate Management

David L. Goodin
60 (39)

David C. Barney
66 (36)

Stephanie A. Barth
49 (26)

Trevor J. Hastings
48 (26)

Anne M. Jones
58 (40)

President and Chief Executive
Officer of MDU Resources

Serves on the company’s Board of
Directors and as chair of the
board of all major subsidiary
companies; formerly president
and chief executive officer of
Cascade Natural Gas
Corporation, Great Plains
Natural Gas Co., Intermountain
Gas Company and Montana-
Dakota Utilities Co.

President and Chief Executive
Officer of Knife River
Corporation

Vice President, Chief Accounting
Officer and Controller of MDU
Resources

Formerly held executive and
management positions with
Knife River.

Formerly controller of MDU
Resources and vice president,
treasurer and chief accounting
officer of WBI Energy, Inc.

President and Chief Executive
Officer of WBI Energy, Inc.

Formerly vice president of
business development and
operations support of Knife River
Corporation.

Vice President and Chief
Human Resources Officer
of MDU Resources

Formerly vice president of
human resources, customer
service and safety of Cascade
Natural Gas Corporation, Great
Plains Natural Gas Co.,
Intermountain Gas Company
and Montana-Dakota Utilities
Co.

Nicole A. Kivisto
48 (27)

Karl A. Liepitz
43 (19)

Peggy A. Link
55 (17)

Jeffrey S. Thiede
59 (18)

Jason L. Vollmer
44 (17)

President and Chief Executive
Officer of Cascade Natural Gas
Corporation, Intermountain Gas
Company and Montana-Dakota
Utilities Co.

Formerly vice president of
operations of Great Plains
Natural Gas Co. and
Montana-Dakota Utilities Co.

Vice President, General Counsel
and Secretary of MDU Resources

Serves as general counsel and
secretary of all major subsidiary
companies; formerly assistant
general counsel and assistant
secretary of MDU Resources.

Vice President and Chief
Information Officer of MDU
Resources

President and Chief Executive
Officer of MDU Construction
Services Group, Inc.

Vice President and Chief
Financial Officer of MDU
Resources

Formerly assistant vice president
of technology and cybersecurity
officer of MDU Resources.

Formerly held executive and
management positions with
MDU Construction Services
Group.

Formerly vice president, chief
accounting officer and treasurer
of MDU Resources.

Numbers indicate age and years of service ( )
as of December 31, 2021.

MDU Resources Group, Inc.Stockholder Return Comparison

Comparison of One-Year
Total Stockholder Return

(as of December 31, 2021)

29%

27%

20%

MDU
Resources

S&P 500
Index

Peer
Group

Comparison of Five-Year Total Stockholder Return (in dollars)

$100 invested December 31, 2016, in MDU Resources was worth $124.50 at year-end 2021.

$250

200

150

100

’16

’17

’18

’19

’20

’21

MDU Resources

S&P 500 Index

Peer Group

2009

2010

2011

2012

2013

250

200

150

100

Old Peer Group

New Peer Group

S&P 500 Index

MDU Resources Group, Inc.

Company Name / Index

12/31/16

12/31/17

12/31/18

12/31/19 12/31/20 12/31/21

MDU Resources Group, Inc. $100.00

$96.13

$87.83

$112.80

$103.43

$124.50

S&P 500 Index

Peer Group

100.00

121.83

116.49

153.17

181.35

233.41

100.00

112.62

106.81

140.86

142.33

180.30

Data is indexed to December 31, 2021, for
the one-year total stockholder return
comparison and December 31, 2016, for the
five-year total stockholder return
comparison for MDU Resources, the S&P
500 and the peer group. Total stockholder
return is calculated using the December 31
price for each year. It is assumed that all
dividends are reinvested in stock at the
frequency paid, and the returns of each

component peer issuer of the group are
weighted according to the issuer’s stock
market capitalization at the beginning of
the period.

The peer group issuers are Alliant Energy
Corporation, Ameren Corporation, Atmos
Energy Corporation, Black Hills
Corporation, CMS Energy Corporation,
Dycom Industries, Inc., EMCOR Group,

Inc., Evergy, Inc., Granite Construction
Incorporated, Jacobs Engineering Group
Inc., KBR, Inc., Martin Marietta Materials,
Inc., MasTec, Inc., NiSource Inc., Pinnacle
West Capital Corporation, Portland General
Electric Company, Quanta Services, Inc.,
Southwest Gas Holdings, Inc., Summit
Materials, Inc., Vulcan Materials Company
and WEC Energy Group, Inc.

MDU Resources Group, Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ______________
Commission file number 1-03480

MDU RESOURCES GROUP INC
(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of
incorporation or organization)

30-1133956

(I.R.S. Employer Identification No.)

1200 West Century Avenue
P.O. Box 5650
Bismarck, North Dakota 58506-5650
(Address of principal executive offices)
(Zip Code)

(701) 530-1000
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, par value $1.00 per share

Trading symbol(s)

Name of each exchange on which registered

MDU

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company"
in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Non-accelerated filer

☒

☐

Accelerated filer

Smaller reporting company

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒.

State the aggregate market value of the voting common stock held by non-affiliates of the registrant as of June 30, 2021: $6,339,561,129.

Indicate the number of shares outstanding of the registrant's common stock, as of February 15, 2022: 203,350,740 shares.

DOCUMENTS INCORPORATED BY REFERENCE
Relevant portions of the registrant's 2022 Proxy Statement, to be filed no later than 120 days from December 31, 2021, are incorporated by reference in
Part III, Items 10, 11, 12, 13 and 14 of this Report.

Contents

Part I

Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Items 1 and 2 Business and Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Natural Gas Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pipeline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Construction Materials and Contracting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Construction Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1A

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1B

Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 3

Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 4

Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II

Item 5

Market for the Registrant's Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 6

Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 7

Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 7A

Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 8 Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1. Basis of Presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Revenue from Contracts with Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Business Combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6. Regulatory Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7. Goodwill and Other Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8. Fair Value Measurements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9. Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10. Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11. Asset Retirement Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12. Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13. Stock-Based Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14. Accumulated Other Comprehensive Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15. Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16. Cash Flow Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 MDU Resources Group, Inc. Form 10-K

Page

Part II (continued)

17. Business Segment Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18. Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19. Jointly Owned Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20. Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21. Commitments and Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 9

Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 9A

Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 9B Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 9C

Disclosure Regarding Foreign Jurisdiction that Prevents Inspection . . . . . . . . . . . . . . . . . . . . . . . . . .

Part III

Item 10

Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 11

Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 12

Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 13

Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . .

Item 14

Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part IV

Item 15

Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 16

Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contents

Page

100

109

110

115

116

117

121

123

124

MDU Resources Group, Inc. Form 10-K 3

Definitions

The following abbreviations and acronyms used in this Form 10-K are defined below:
Abbreviation or Acronym

AFUDC

Army Corps

ASC

ASU

Audit Committee

Bcf

Big Stone Station

BSSE

Btu

CARES Act

Cascade

CDC

Centennial

Centennial Capital
Centennial's Consolidated EBITDA

CERCLA

Company

COVID-19

Coyote Creek

Coyote Station

CyROC

Dodd-Frank Act

EBITDA

EIN

EPA

ERISA

ESA

Allowance for funds used during construction

U.S. Army Corps of Engineers

FASB Accounting Standards Codification

FASB Accounting Standards Update

Audit Committee of the board of directors of the Company

Billion cubic feet

475-MW coal-fired electric generating facility near Big Stone City, South Dakota (22.7 percent
ownership)

345-kilovolt transmission line from Ellendale, North Dakota, to Big Stone City, South Dakota
(50 percent ownership)

British thermal unit

United States Coronavirus Aid, Relief, and Economic Security Act

Cascade Natural Gas Corporation, an indirect wholly owned subsidiary of MDU Energy Capital

Centers for Disease Control and Prevention

Centennial Energy Holdings, Inc., a direct wholly owned subsidiary of the Company

Centennial Holdings Capital LLC, a direct wholly owned subsidiary of Centennial

Centennial's consolidated net income from continuing operations plus the related interest
expense, taxes, depreciation, depletion, amortization of intangibles and any non-cash charge
relating to asset impairment for the preceding 12-month period

Comprehensive Environmental Response, Compensation and Liability Act

MDU Resources Group, Inc.

Coronavirus disease 2019

Coyote Creek Mining Company, LLC, a subsidiary of The North American Coal Corporation

427-MW coal-fired electric generating facility near Beulah, North Dakota (25 percent ownership)

Cyber Risk Oversight Committee

Decatherm

Dodd-Frank Wall Street Reform and Consumer Protection Act

Earnings before interest, taxes, depreciation, depletion and amortization

Employer Identification Number

United States Environmental Protection Agency

Employee Retirement Income Security Act of 1974

Endangered Species Act

Exchange Act

Securities Exchange Act of 1934, as amended

FASB

FERC

Fidelity

FIP

GAAP

GHG

Great Plains

GVTC

Financial Accounting Standards Board

Federal Energy Regulatory Commission

Fidelity Exploration & Production Company, a direct wholly owned subsidiary of WBI Holdings
(previously referred to as the Company's exploration and production segment)

Funding improvement plan

Accounting principles generally accepted in the United States of America

Greenhouse gas

Great Plains Natural Gas Co., a public utility division of Montana-Dakota

Generation Verification Test Capacity

Holding Company Reorganization

The internal holding company reorganization completed on January 1, 2019, pursuant to the
agreement and plan of merger, dated as of December 31, 2018, by and among Montana-Dakota,
the Company and MDUR Newco Sub, which resulted in the Company becoming a holding
company and owning all of the outstanding capital stock of Montana-Dakota.

IBEW

ICWU

Intermountain

IPUC

Item 8

International Brotherhood of Electrical Workers

International Chemical Workers Union

Intermountain Gas Company, an indirect wholly owned subsidiary of MDU Energy Capital

Idaho Public Utilities Commission

Financial Statements and Supplementary Data

Knife River
Knife River - Northwest

Knife River Corporation, a direct wholly owned subsidiary of Centennial

Knife River Corporation - Northwest, an indirect wholly owned subsidiary of Knife River

4 MDU Resources Group, Inc. Form 10-K

Definitions

K-Plan

kWh

LIBOR

MD&A

Mdk

Company's 401(k) Retirement Plan

Kilowatts

Kilowatt-hour
London Inter-bank Offered Rate

Management's Discussion and Analysis of Financial Condition and Results of Operations

Thousand dk

MDU Construction Services

MDU Construction Services Group, Inc., a direct wholly owned subsidiary of Centennial

MDU Energy Capital

MDUR Newco

MDUR Newco Sub

MEPP

MISO

MMBtu

MMcf

MMdk

MNPUC

MDU Energy Capital, LLC, a direct wholly owned subsidiary of the Company
MDUR Newco, Inc., a public holding company created by implementing the Holding Company
Reorganization, now known as the Company

MDUR Newco Sub, Inc., a direct, wholly owned subsidiary of MDUR Newco, which was merged
with and into Montana-Dakota in the Holding Company Reorganization

Multiemployer pension plan

Midcontinent Independent System Operator, Inc., the organization that provides open-access
transmission services and monitors the high-voltage transmission system in the Midwest United
States and Manitoba, Canada and a southern United States region which includes much of
Arkansas, Mississippi and Louisiana

Million Btu

Million cubic feet

Million dk

Minnesota Public Utilities Commission

Montana-Dakota

Montana-Dakota Utilities Co. a direct wholly owned subsidiary of MDU Energy Capital

MPPAA

MTDEQ

MTPSC

NDDEQ

NDPSC

NERC

Non-GAAP

Oil

OPUC

PCAOB

PCBs

PHMSA

Proxy Statement

PRP

RCRA

RNG

SDPUC

SEC

Securities Act

Sheridan System

SOFR

SPP

TSA

VIE

Washington DOE

WBI Energy

WBI Energy Transmission
WBI Holdings

Multiemployer Pension Plan Amendments Act of 1980

Montana Department of Environmental Quality

Montana Public Service Commission

Megawatt

North Dakota Department of Environmental Quality

North Dakota Public Service Commission

North American Electric Reliability Corporation

Not in accordance with GAAP

Includes crude oil and condensate

Oregon Public Utility Commission

Public Company Accounting Oversight Board

Polychlorinated biphenyls

Pipeline and Hazardous Material Safety Administration
Company's 2022 Proxy Statement to be filed no later than April 29, 2022

Potentially Responsible Party

Resource Conservation and Recovery Act

Renewable Natural Gas
Rehabilitation plan

South Dakota Public Utilities Commission

United States Securities and Exchange Commission

Securities Act of 1933, as amended

A separate electric system owned by Montana-Dakota

Secured Overnight Financing Rate

Southwest Power Pool, the organization that manages the electric grid and wholesale power
market for the central United States.

United Association of Journeyman and Apprentices of the Plumbing and Pipefitting Industry of
the United States and Canada

Transportation Security Administration

Variable interest entity

Washington State Department of Ecology

WBI Energy, Inc., an indirect wholly owned subsidiary of Centennial

WBI Energy Transmission, Inc., an indirect wholly owned subsidiary of WBI Holdings

WBI Holdings, Inc., a direct wholly owned subsidiary of Centennial

MDU Resources Group, Inc. Form 10-K 5

Definitions

WUTC

Wygen III

WYDEQ

WYPSC

ZRCs

Washington Utilities and Transportation Commission

100-MW coal-fired electric generating facility near Gillette, Wyoming (25 percent ownership)

Wyoming Department of Environmental Quality

Wyoming Public Service Commission

Zonal resource credits - a MW of demand equivalent assigned to generators by MISO for meeting
system reliability requirements

6 MDU Resources Group, Inc. Form 10-K

Part I

Forward-Looking Statements

This Form 10-K contains forward-looking statements within the meaning of Section 21E of the Exchange Act. Forward-looking statements are all
statements other than statements of historical fact, including without limitation those statements that are identified by the words "anticipates,"
"estimates," "expects," "intends," "plans," "predicts" and similar expressions, and include statements concerning plans, objectives, goals, strategies,
future events or performance, and underlying assumptions (many of which are based, in turn, upon further assumptions) and other statements that
are other than statements of historical facts. From time to time, the Company may publish or otherwise make available forward-looking statements of
this nature, including statements contained within Item 7 - MD&A - Business Segment Financial and Operating Data.

Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed.
The Company's expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis,
including without limitation, the impact of COVID-19 on the Company's business, management's examination of historical operating trends, data
contained in the Company's records and other data available from third parties. Nonetheless, the Company's expectations, beliefs or projections may
not be achieved or accomplished and changes in such assumptions and factors could cause actual future results to differ materially.

Any forward-looking statement contained in this document speaks only as of the date on which the statement is made and, except as required by law,
the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances that occur after the
date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not
possible for management to predict all of the factors, nor can it assess the effect of each factor on the Company's business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. All forward-
looking statements, whether written or oral and whether made by or on behalf of the Company, are expressly qualified by the risk factors and
cautionary statements in this Form 10-K, including statements contained within Item 1A - Risk Factors.

Items 1 and 2. Business and Properties

General
The Company is a regulated energy delivery and construction materials and services business. Its principal executive offices are located at
1200 West Century Avenue, P.O. Box 5650, Bismarck, North Dakota 58506-5650, telephone (701) 530-1000.

Montana-Dakota was incorporated under the state laws of Delaware in 1924. The Company was incorporated under the state laws of Delaware in
2018. Upon the completion of the Holding Company Reorganization, Montana-Dakota became a subsidiary of the Company.

The Company's mission is to deliver superior value to stakeholders by providing essential infrastructure and services to America. The Company's
strategy is to deliver superior value with a two-platform model of regulated energy delivery and construction materials and services, while pursuing
organic growth opportunities and strategic acquisitions of well-managed companies and properties. Each of the Company's platforms are comprised
of different operating segments. Most of these segments experience seasonality related to the industries in which they operate. The two-platform
approach helps balance this seasonality and the risks associated with each type of industry. Through its regulated energy delivery platform, the
Company generates, transmits and distributes electricity and provides natural gas distribution, transportation and storage services. These businesses
are regulated by state public service commissions and/or the FERC. The construction materials and services platform provides construction services
to a variety of industries, including commercial, industrial and governmental customers, and provides construction materials through aggregate
mining and marketing of related products, such as ready-mix concrete, asphalt and asphalt oil.

The Company is organized into five reportable business segments. These business segments include: electric, natural gas distribution, pipeline,
construction materials and contracting, and construction services. The Company's business segments are determined based on the Company's
method of internal reporting, which generally segregates the strategic business units due to differences in products, services and regulation. The
internal reporting of these segments is defined based on the reporting and review process used by the Company's chief executive officer.

MDU Resources Group, Inc. Form 10-K 7

Part I

MDU Energy
Capital

Centennial

Montana-Dakota
• Natural gas
• Electric

Cascade
• Natural gas

Intermountain
• Natural gas

WBI Energy
• Pipeline

Knife River
• Construction materials
& contracting

MDU Construction
Services
• Construction services

Centennial Capital
• Other

*Depicts the segment structure of the corporation; not the legal organization.

The Company, through its wholly owned subsidiary, MDU Energy Capital, owns Montana-Dakota, Cascade and Intermountain. The electric segment is
comprised of Montana-Dakota while the natural gas distribution segment is comprised of Montana-Dakota, Cascade and Intermountain.

The Company, through its wholly owned subsidiary, Centennial, owns WBI Energy, Knife River, MDU Construction Services and Centennial Capital.
WBI Energy is the pipeline segment, Knife River is the construction materials and contracting segment, MDU Construction Services is the
construction services segment, and Centennial Capital is reflected in the Other category.

The financial results and data applicable to each of the Company's business segments, as well as their financing requirements, are set forth in
Item 7 - MD&A and Item 8 - Note 17.

The Company's material properties, which are of varying ages and are of different construction types, are generally in good condition, are well
maintained and are generally suitable and adequate for the purposes for which they are used.

Human Capital Management At the core of Building a Strong America® is building a strong workforce. This means building a strong team of
employees with a focus on safety and a commitment to diversity, equity and inclusion. The Company's team was located in 41 states plus
Washington D.C. as of December 31, 2021. The number of employees fluctuates during the year due to the seasonality and the number and size of
construction projects. During 2021, the number of employees peaked in the second quarter at just over 14,700. Employees as of December 31,
2021, were as follows:

MDU Resources Group, Inc.

MDU Energy Capital

MDU Construction Services

Knife River

WBI Energy

Total

Male

Female

264

160

104

1,590

1,166

424

6,818

6,268

550

3,839

3,351

488

315

255

MDU Resources Group, Inc.

Total

12,826

11,200

1,626

2,000

4,000

6,000

8,000

Many of the Company's employees are represented by collective-bargaining agreements and the Company is committed to establishing constructive
dialogue with this representation and bargain in good faith. The majority of the collective-bargaining agreements contain provisions that prohibit work
stoppages or strikes and provide dispute resolution through binding arbitration in the event of an extended disagreement.

8 MDU Resources Group, Inc. Form 10-K

Part I

The following information is as of December 31, 2021.

Company

Montana-Dakota

Intermountain

Cascade

WBI Energy Transmission

Collective-bargaining
agreement

Number of
employees

represented Agreement status

IBEW

ICWU

IBEW

327 Effective through April 30, 2024

132 Effective through March 31, 2023

194 Effective through March 31, 2024

70 Effective through March 31, 2022

Knife River

40 various agreements

452 2 agreements in negotiations

MDU Construction Services

103 various agreements

5,488 1 agreement in negotiations

Total

6,663

Diversity, Equity and Inclusion The Company is committed to an inclusive environment that respects the differences and embraces the strengths of its
diverse employees. Essential to the Company's success is its ability to attract, retain and engage the best people from a broad range of backgrounds
and build an inclusive culture where all employees feel valued and contribute their best. To aid in the Company's commitment to an inclusive
environment, each business segment has a diversity officer who serves as a conduit for diversity-related issues and provides a voice to all employees.
The Company requires employees to participate in its Leading with Integrity training which provides training on the Company's code of conduct and
additional courses focusing on diversity, effective leadership, equal employment opportunity, workplace harassment, respect and unconscious bias.

The Company has three strategic goals related to diversity:

• Enhance collaboration efforts through cooperation and sharing of best practices to create new ways of meeting employee, customer and

shareholder needs.

• Maintain a culture of integrity, respect and safety by ensuring employees understand these essential values which are part of the Company's

vision statement.

• Increase productivity and profitability through the creation of a work environment which values all perspectives and methods of accomplishing

work.

The Company also promotes its strategic diversity goals through the following special recognition awards:

N
O
R
I
V
N
E

T A L I NTEG

W
A
R
D

The Einstein Award
recognizes the best
process improvement
ideas that contribute in a
measurable way to
improving the Company's
bottom line and are vital
to the Company's
success.

The Community Spirit
Award recognizes
employees who are
actively involved in their
community.

The Summit Award
recognizes employees who
make the Company a
better place to work.

The Environmental Integrity
Award recognizes an
employee program,
project or activity that
reflects the Company's
environmental policy and
philosophy.

The Hero Award
recognizes employees who
go above and beyond the
call of duty to save
another's life.

Building People Building a strong workforce begins with employee recruitment. The Company hires and trains employees to have the skills, abilities
and motivation to achieve the results needed for their jobs. Each job is important and part of a coordinated team effort to accomplish the
organization's objectives. The Company uses a variety of means to recruit new employees for open positions including posting on the Company's
website at www.jobs.mdu.com, which is not incorporated by reference herein. Other sources for employee recruitment include employee referrals,
union workforce, direct recruitment, advertising, social media, career fairs, job service organizations and associations connected with a variety of
professions. The Company also uses internship programs to introduce individuals to the Company's business operations and provide a possible source
of future employees. In markets where labor availability is tight, when possible, the Company uses telecommuting, guaranteed hours, flexible
schedules and work arrangements to fill open positions.

MDU Resources Group, Inc. Form 10-K 9

Part I

Building a strong workforce also requires developing employees in their current positions and for future advancement. The Company provides
opportunities for advancement through job mobility, succession planning and promotions both within and between business segments. The Company
provides employees the opportunity to further develop and grow through various forms of training, mentorship programs and internship programs,
among other things.

To attract and retain employees, the Company offers:

Compensation
Competitive salaries and wages
based on the labor markets in
which it operates.

Growth & Development
Employee growth through training in
the form of technical, professional
and leadership programs, as well as
formal and informal mentoring and
job shadowing programs to assist
employees in their job and career
goals.

Incentives
Incentive compensation
based on the Company’s
performance.

Benefits
Comprehensive benefits including
vacation, sick leave, health and
wellness programs, retirement
plans and discount programs.

The Company conducts employee surveys at least every two years to hear and gauge employee opinions on issues such as fairness, camaraderie and
pride in the workplace. Survey responses are compiled and evaluated at various levels throughout the Company to develop action plans to address
areas of concern raised by employees.

Safety The Company is committed to safety and health in the workplace. To ensure safe work environments, the Company provides training, adequate
resources and appropriate follow-up on any unsafe conditions or actions. To facilitate a strong safety culture, the Company established its Safety
Leadership Council. In addition to the Safety Leadership Council, the Company has policies and training that support safety in the workplace
including training on safety matters through classroom and toolbox meetings on job sites. The Company utilizes safety compliance in the evaluation
of employees, which includes management, and recognizes employee safety through safety award programs. Accident and safety statistical
information is gathered for each of the business segments and regularly reported to management and the board of directors.

In response to COVID-19, the Company established a task force to monitor developments related to the pandemic and implemented procedures to
protect employees. The Company adopted recommended practices and procedures by the CDC and other governmental entities, and is following the
rules and directives of applicable federal, state and local jurisdictions in which the Company operates.

Environmental Matters The Company believes it has a
responsibility to use natural resources efficiently and attempt to
minimize the environmental impact of its activities. The Company
produces GHG emissions primarily from its fossil fuel electric-
generating facilities, as well as from natural gas pipeline and
storage systems, and operations of equipment and fleet vehicles.
The Company has developed renewable generation with lower or
no GHG emissions. Governmental legislation and regulatory
initiatives regarding environmental and energy policy are
continuously evolving and could negatively impact the Company's
operations and financial results. Until legislation and regulation
are finalized, the impact of these measures cannot be accurately
predicted. The Company will continue to monitor legislative and
regulatory activity related to environmental and energy policy
initiatives. In addition, for a discussion of the Company's risks
related to environmental laws and regulations, see Item 1A - Risk
Factors.

The Company operates with three primary environmental objectives:

Minimize waste and
maximize resources.

Be a good steward of
the environment, while
providing high-quality
and reasonably priced
products and services.

Comply with or
surpass all applicable
environmental laws,
regulations and
permit requirements.

In 2021, the Company formed an executive management Sustainability Committee that supports the execution of, and makes recommendations to
advance, the Company's environmental and sustainability strategy. For more information on the Company's sustainability goals, programs and
performance, see the Company's Sustainability Report on its website, which is not incorporated by reference herein.

10 MDU Resources Group, Inc. Form 10-K

Part I

Governmental Matters The operations of the Company and certain of
its subsidiaries are subject to laws and regulations relating to air,
water and solid waste pollution control; state facility-siting regulations;
zoning and planning regulations of certain state and local authorities;
federal and state health and safety regulations; and state hazard
communication standards.

The Company strives to be in substantial compliance with applicable
regulations, except as to what may be ultimately determined with
regard to items discussed in Environmental matters in Item 8 -
Note 21. There are no pending CERCLA actions for any of the
Company's material properties. However, the Company is involved in
certain claims relating to the Portland, Oregon, Harbor Superfund Site
and the Bremerton Gasworks Superfund Site. For more information on
the Company's environmental matters, see Item 8 - Note 21.

Laws & Regulations

Air, water and
solid waste
pollution
control

Zoning and
planning
regulations -
state and local
authorities

Federal and
state health
and safety
regulations

State
facility-siting
regulations

Technology The Company uses technology in substantially all aspects of its business operations and requires uninterrupted operation of information
technology systems and network infrastructure. These systems may be vulnerable to failures or unauthorized access. The Company has policies,
procedures and processes designed to strengthen and protect these systems, which include the Company’s enterprise information technology and
operation technology groups continually evaluating new tools and techniques to reduce the risk and potential impacts of a cyber breach.

The Company created CyROC to oversee its approach to cybersecurity. CyROC is responsible for supplying management and the Audit Committee
with analyses, appraisals, recommendations and pertinent information concerning cyber defense of the Company’s electronic information and
information technology systems. A quarterly cybersecurity report is provided to the Audit Committee. For a discussion of the Company's risks related
to cybersecurity, see Item 1A - Risk Factors.

Available Information This annual report on Form 10-K, the Company's quarterly reports on Form 10-Q and current reports on Form 8-K, and any
amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge through the
Company's website as soon as reasonably practicable after the Company has electronically filed such reports with, or furnished such reports to, the
SEC. The Company's website address is www.mdu.com. The information available on the Company's website is not part of this annual report on
Form 10-K. The SEC also maintains a website where the Company's filings can be obtained free of charge at www.SEC.gov.

Electric

General The Company's electric segment is operated through its wholly
owned subsidiary, Montana-Dakota. Montana-Dakota provides electric
service at retail, serving residential, commercial, industrial and
municipal customers in 185 communities and adjacent rural areas.

The material properties owned by Montana-Dakota for use in its
electric operations include interests in 15 electric generating units at
11 facilities and two small portable diesel generators, as further
described under System Supply, System Demand and Competition,
approximately 3,500 and 4,800 miles of transmission and distribution
lines, respectively, and 83 transmission and 294 distribution
substations. Montana-Dakota has obtained and holds, or is in the
process of renewing, valid and existing franchises authorizing it to
conduct its electric operations in all of the municipalities it serves
where such franchises are required. Montana-Dakota intends to
protect its service area and seek renewal of all expiring franchises. At
December 31, 2021, Montana-Dakota's net electric plant investment
was $1.6 billion and its rate base was $1.3 billion.

Electric utility areas

States of operations

Electric generating stations

Retail electric rates, service, accounting and certain securities issuances are subject to regulation by the MTPSC, NDPSC, SDPUC and WYPSC. The
interstate transmission and wholesale electric power operations of Montana-Dakota are also subject to regulation by the FERC under provisions of the
Federal Power Act, as are interconnections with other utilities and power generators, the issuance of certain securities, accounting, cybersecurity and
other matters.

MDU Resources Group, Inc. Form 10-K 11

Part I

Through MISO, Montana-Dakota has access to wholesale energy, ancillary services and capacity markets for its interconnected system. MISO is a
regional transmission organization responsible for operational control of the transmission systems of its members. MISO provides security center
operations, tariff administration and operates day-ahead and real-time energy markets, ancillary services and capacity markets. As a member of
MISO, Montana-Dakota's generation is sold into the MISO energy market and its energy needs are purchased from that market.

The retail customers served and respective revenues by class for the electric business were as follows:

2021

2020

2019

Customers
Served

Revenues

Customers
Served

Revenues

Customers
Served

Revenues

(Dollars in thousands)

119,113 $

123,043

118,893 $

122,545

118,563 $

125,614

23,149

133,336

23,050

131,207

22,948

142,062

231

1,610

40,477

6,754

230

1,609

36,736

6,601

234

1,601

37,790

7,454

144,103 $

303,610

143,782 $

297,089

143,346 $

312,920

Residential

Commercial

Industrial

Other

Other electric revenues, which are largely transmission-related revenues, for Montana-Dakota were $46.0 million, $34.9 million and $38.8 million
for the years ended December 31, 2021, 2020 and 2019, respectively.

The percentage of electric retail revenues by jurisdiction was as follows:

North Dakota

Montana

Wyoming

South Dakota

2021

64 %

22 %

9 %

5 %

2020

64 %

22 %

9 %

5 %

2019

65 %

22 %

8 %

5 %

System Supply, System Demand and Competition Through an interconnected electric system, Montana-Dakota serves markets in portions of North
Dakota, Montana and South Dakota. These markets are highly seasonal and sales volumes depend largely on the weather. Additionally, the average
customer consumption has tended to decline due to increases in energy efficient lighting and appliances being installed. The interconnected system
consists of 14 electric generating units at 10 facilities and two small portable diesel generators. Additional details are included in the table that
follows. For 2021, Montana-Dakota's total ZRCs, including its firm purchase power contracts, were 535.0. Montana-Dakota's planning reserve margin
requirement within MISO was 530.8 ZRCs for 2021. The maximum electric peak demand experienced to date attributable to Montana-Dakota's sales
to retail customers on the interconnected system was 611,542 kW in August 2015. Montana-Dakota's latest forecast for its interconnected system
indicates that its annual peak will continue to occur during the summer. Additional energy is purchased as needed, or in lieu of generation if more
economical, from the MISO market. In 2021, Montana-Dakota purchased approximately 29 percent of its net kWh needs for its interconnected
system through the MISO market.

Through the Sheridan System, Montana-Dakota serves Sheridan, Wyoming, and neighboring communities. The maximum peak demand experienced
to date attributable to Montana-Dakota sales to retail customers on that system was approximately 69,404 kW in July 2021. Montana-Dakota has a
power supply contract with Black Hills Power, Inc. to purchase up to 49,000 kW of capacity annually through December 31, 2023. Wygen III also
serves a portion of the needs of Montana-Dakota's Sheridan-area customers.

Approximately 29 percent of the electricity delivered to customers from Montana-Dakota's owned generation in 2021 was from renewable resources.
Although Montana-Dakota's generation resource capacity has increased to serve the needs of its customers, the carbon dioxide emission intensity of
its electric generation resource fleet has been reduced by approximately 30 percent since 2005 through the addition of renewable generation.
Montana-Dakota's carbon dioxide emissions are expected to continue to decline through the retirement of aging coal-fired electric generating units,
as further discussed below.

In February 2019, Montana-Dakota announced the retirement of three aging coal-fired electric generating units. The Company ceased operations on
March 31, 2021, of Unit 1 at Lewis & Clark Station in Sidney, Montana, and commenced decommissioning in July 2021. Units 1 and 2 at Heskett
Station near Mandan, North Dakota, are being retired during the first quarter of 2022. In addition, during the first half of 2022, Montana-Dakota will
begin construction of a new 88-MW simple-cycle natural gas-fired combustion turbine peaking unit at the existing Heskett Station.

12 MDU Resources Group, Inc. Form 10-K

The following table sets forth details applicable to the Company's electric generating stations:

Generating Station

Type

Interconnected System:

North Dakota:

Coyote (b)

Heskett

Glen Ullin

Cedar Hills

Thunder Spirit

South Dakota:

Big Stone (b)

Montana:

Steam

Combustion turbine

Renewable

Steam

Lewis & Clark (c)

Steam

Fuel

Coal

Natural gas

Heat recovery

Wind

Coal

Lewis & Clark

Reciprocating internal combustion engine

Natural gas

Glendive

Miles City

Combustion turbine

Diamond Willow

Renewable

Natural gas / diesel

Wind

Portable Units (2)

Reciprocating internal combustion engine

Diesel

Sheridan System:

Wyoming:

Part I

Nameplate
Rating (kW)

2021 ZRCs (a)

2021 Net
Generation (kWh
in thousands)

103,647

86,000

89,038

7,500

19,500

155,500

94.0

—

70.9

3.4

3.7

22.2

620,045

501,446

7,325

44,771

58,221

556,575

94,111

106.5

375,130

44,000

18,700

75,522

23,150

30,000

3,650

—

18.0

68.9

21.0

5.1

3.6

64,733

3,779

16,346

2,974

92,757

750,318

417.3

2,344,116

Wygen III (b)

Steam

Coal

28,000

778,318

N/A

417.3

207,348

2,551,464

(a) Interconnected system only. MISO requires generators to obtain their summer capability through the GVTC. The GVTC is then converted to ZRCs

by applying each generator's forced outage factor against its GVTC. Wind generator's ZRCs are calculated based on a wind capacity study
performed annually by MISO. ZRCs are used to meet supply obligations within MISO.

(b) Reflects Montana-Dakota's ownership interest.
(c) Retired March 31, 2021.

Virtually all of the current fuel requirements of Heskett station is met with coal supplied by a wholly-owned subsidiary of Westmoreland Mining LLC
under a contract that expires in March 2022. The Heskett coal supply agreement provides for the purchase of coal necessary to supply the coal
requirements of the Heskett Station at contracted pricing. Montana-Dakota estimates the Heskett coal requirement to be 40,000 tons through March
2022 for Heskett.

The owners of Coyote Station, including Montana-Dakota, have a contract with Coyote Creek for coal supply to the Coyote Station that expires
December 2040. Montana-Dakota estimates the Coyote Station coal supply agreement to be approximately 1.5 million tons per contract year. For
more information, see Item 8 - Note 21.

The owners of Big Stone Station, including Montana-Dakota, have a coal supply agreement with Peabody COALSALES, LLC to meet all of the Big
Stone Station's fuel requirements through 2022. Montana-Dakota estimates the Big Stone Station coal supply agreement to be approximately
1.5 million tons per contract year.

Montana-Dakota has a coal supply agreement with Wyodak Resources Development Corp., to supply the coal requirements of Wygen III at contracted
pricing through June 1, 2060. Montana-Dakota estimates the maximum annual coal consumption of the facility to be approximately 585,000 tons.

Montana-Dakota expects that it has secured adequate capacity available through existing baseload generating stations, renewable generation, turbine
peaking stations, demand reduction programs and firm contracts to meet the peak customer demand requirements of its customers through 2025.
Future capacity needs are expected to be met by constructing new generation resources or acquiring additional capacity through power purchase
contracts or the MISO capacity auction.

Montana-Dakota has major interconnections with its neighboring utilities and considers these interconnections adequate for coordinated planning,
emergency assistance, exchange of capacity and energy and power supply reliability.

Montana-Dakota is subject to competition resulting from customer demands, technological advances and other factors in certain areas, from rural
electric cooperatives, on-site generators, co-generators and municipally owned systems. In addition, competition in varying degrees exists between
electricity and alternative forms of energy such as natural gas.

MDU Resources Group, Inc. Form 10-K 13

Part I

Regulatory Matters and Revenues Subject to Refund In North Dakota, Montana, South Dakota and Wyoming, there are various recurring regulatory
mechanisms with annual true-ups that can impact Montana-Dakota's results of operations, which also reflect monthly increases or decreases in
electric fuel and purchased power costs (including demand charges). Montana-Dakota is deferring those electric fuel and purchased power costs that
are greater or less than amounts presently being recovered through its existing rate schedules. Examples of these recurring mechanisms include:
monthly Fuel and Purchased Power Tracking Adjustments, a fuel adjustment clause and an annual Electric Power Supply Cost Adjustment. Such
mechanisms generally provide that these deferred fuel and purchased power costs are recoverable or refundable through rate adjustments which are
filed annually. Montana-Dakota's results of operations reflect 95 percent of the increases or decreases from the base purchased power costs and also
reflect 85 percent of the increases or decreases from the base coal price, which is also recovered through the Electric Power Supply Cost Adjustment
in Wyoming. For more information on regulatory assets and liabilities, see Item 8 - Note 6.

All of Montana-Dakota's wind resources pertaining to electric operations in North Dakota are included in a renewable resource cost adjustment rider,
including the North Dakota investment in Thunder Spirit. Montana-Dakota also has a transmission tracker in North Dakota to recover transmission
costs associated with MISO and SPP, along with certain of the transmission investments not recovered through retail rates. The tracking mechanism
has an annual true-up.

In South Dakota, Montana-Dakota recovers the South Dakota investment in Thunder Spirit through an Infrastructure Rider tracking mechanism that
is subject to an annual true-up. Montana-Dakota also has in place in South Dakota a transmission tracker to recover transmission costs associated
with MISO and SPP, along with certain of the transmission investments not recovered through retail rates. This tracking mechanism also has an
annual true-up.

In Montana, Montana-Dakota recovers in rates, through a tracking mechanism, its allocated share of Montana property-related taxes assessed to
electric operations on an after-tax basis.

For more information on regulatory matters, see Item 8 - Note 20.

Environmental Matters Montana-Dakota's electric operations are subject to federal, state and local laws and regulations providing for air, water and
solid waste pollution control; state facility-siting regulations; zoning and planning regulations of certain state and local authorities; federal and state
health and safety regulations; and state hazard communication standards. The electric operations strive to be in compliance with these regulations.

Montana-Dakota's electric generating facilities have Title V Operating Permits, under the federal Clean Air Act, issued by the states in which they
operate. Each of these permits has a five-year life. Near the expiration of these permits, renewal applications are submitted. Permits continue in
force beyond the expiration date, provided the application for renewal is submitted by the required date, usually six months prior to expiration.

The Title V Operating Permits by facility for the electric business were as follows:

Facility

Wygen III *

Application Date

Issuance Date

Issuing Body

To be submitted timely in 2022

Not specified at this time

Lewis & Clark Station

Submitted timely in December 2019

May 13, 2021

Miles City

Glendive

Submitted timely in December 2020

November 5, 2021

Submitted timely in December 2020

December 9, 2021

WYDEQ

MTDEQ

* The WYDEQ determined all units at the Neil Simpson Complex, where Wygen III is situated, are to be included within a combined
Title V Operating Permit which is expected to be submitted in 2022. Wygen III is currently allowed to operate under the facility's
construction permit until the Title V Operating Permit is issued.

State water discharge permits issued under the requirements of the federal Clean Water Act are maintained for power production facilities on the
Yellowstone and Missouri rivers. These permits also have five-year lives. Montana-Dakota renews these permits as necessary prior to expiration. Other
permits held by these facilities may include an initial siting permit, which is typically a one-time, preconstruction permit issued by the state; state
permits to dispose of combustion by-products; state authorizations to withdraw water for operations; and Army Corps permits to construct water
intake structures. Montana-Dakota's Army Corps permits grant one-time permission to construct and do not require renewal. Other permit terms vary
and the permits are renewed as necessary.

Montana-Dakota's electric operations are very small-quantity generators of hazardous waste and subject only to minimum regulation under the RCRA
and when required notifies federal and state agencies of episodic generation events. Montana-Dakota routinely handles PCBs from its electric
operations in accordance with federal requirements. PCB storage areas are registered with the EPA as required.

Montana-Dakota did not incur any material environmental capital expenditures in 2021. Environmental capital expenditures are estimated to be
$4.1 million and $2.9 million in 2022 and 2023, respectively, for closure of coal ash management units at Lewis & Clark Station and Heskett
Station. Montana-Dakota does not expect to incur any material capital expenditures related to environmental compliance in 2024. Montana-Dakota's
capital and operational expenditures could also be affected by future environmental requirements, such as regional haze emission reductions. For
more information, see Item 1A - Risk Factors.

14 MDU Resources Group, Inc. Form 10-K

Part I

Natural gas utility areas

States of operations

Natural Gas Distribution

General The Company's natural gas distribution segment is operated
through its wholly owned subsidiaries, consisting of operations from
Montana-Dakota, Cascade and Intermountain. These companies sell
natural gas at retail, serving residential, commercial and industrial
customers in 338 communities and adjacent rural areas across eight
states. They also provide natural gas transportation services to certain
customers on the Company's systems.

These services are provided through distribution and transmission
systems aggregating approximately 20,900 miles and 600 miles,
respectively. The natural gas distribution operations have obtained and
hold, or are in the process of renewing, valid and existing franchises
authorizing them to conduct their natural gas operations in all of the
municipalities they serve where such franchises are required. These
operations intend to seek renewal of all expiring franchises. At
December 31, 2021, the natural gas distribution operations' net
natural gas distribution plant investment was $2.0 billion and its rate
base was $1.4 billion.

The natural gas distribution operations are subject to regulation by the IPUC, MNPUC, MTPSC, NDPSC, OPUC, SDPUC, WUTC and WYPSC regarding
retail rates, service, accounting and certain securities issuances.

The retail customers served and respective revenues by class for the natural gas distribution operations were as follows:

2021

2020

2019

Customers
Served

Revenues

Customers
Served

Revenues

Customers
Served

Revenues

(Dollars in thousands)

Residential

Commercial

Industrial

905,535 $

548,091

887,429 $

480,466

868,821 $

479,673

110,196

330,468

108,788

281,175

107,741

293,201

939

31,103

929

26,217

906

26,570

1,016,670 $

909,662

997,146 $

787,858

977,468 $

799,444

Transportation and other revenues for the natural gas distribution operations were $62.3 million, $60.3 million and $65.8 million for the years
ended December 31, 2021, 2020 and 2019, respectively.

The percentage of the natural gas distribution operations' retail sales revenues by jurisdiction was as follows:

Idaho

Washington

North Dakota

Montana

Oregon

South Dakota

Minnesota

Wyoming

2021

27 %

29 %

15 %

10 %

8 %

6 %

3 %

2 %

2020

30 %

13 %

8 %

6 %

3 %

2 %

2019

29 %

28 %

15 %

9 %

8 %

6 %

3 %

2 %

System Supply, System Demand and Competition The natural gas distribution operations serve retail natural gas markets, consisting principally of
residential and commercial space and water heating users, in portions of Idaho, Minnesota, Montana, North Dakota, Oregon, South Dakota,
Washington and Wyoming. These markets are highly seasonal and sales volumes depend largely on the weather, the effects of which are mitigated in
certain jurisdictions by weather normalization mechanisms discussed later in Regulatory Matters. Additionally, the average customer consumption
has tended to decline as more efficient appliances and furnaces are installed and as the Company has implemented conservation programs. In
addition to the residential and commercial sales, the utilities transport natural gas for larger commercial and industrial customers who purchase their
own supply of natural gas.

MDU Resources Group, Inc. Form 10-K 15

Part I

Competition resulting from customer demands, technological advances and other factors exists between natural gas and other fuels and forms of
energy. The natural gas distribution operations have established various natural gas transportation service rates for their distribution businesses to
retain interruptible commercial and industrial loads. These rates have enhanced the natural gas distribution operations' competitive posture with
alternative fuels, although certain customers have bypassed the distribution systems by directly accessing transmission pipelines within close
proximity. These bypasses do not have a material effect on results of operations.

The natural gas distribution operations and various distribution transportation customers obtain natural gas for their system requirements directly
from producers, processors and marketers. The Company's purchased natural gas is supplied by a portfolio of contracts specifying market-based
pricing and is transported under transportation agreements with WBI Energy Transmission, Northern Border Pipeline Company, Northwest Pipeline
LLC, South Dakota Intrastate Pipeline, Northern Natural Gas, Gas Transmission Northwest LLC, Northwestern Energy, Viking Gas Transmission
Company, Enbridge Westcoast Pipeline, Inc., Ruby Pipeline LLC, Foothills Pipe Lines Ltd., NOVA Gas Transmission Ltd, TC Energy Corporation and
Northwest Natural. The natural gas distribution operations have contracts for storage services to provide gas supply during the winter heating season
and to meet peak day demand with various storage providers, including WBI Energy Transmission, Dominion Energy Questar Pipeline, LLC, Northwest
Pipeline LLC and Northern Natural Gas. In addition, certain of the operations have entered into natural gas supply management agreements with
various parties. Demand for natural gas, which is a widely traded commodity, has historically been sensitive to seasonal heating and industrial load
requirements, as well as changes in market price. The Company believes supplies are adequate for the natural gas distribution operations to meet its
system natural gas requirements for the next decade. This belief is based on current and projected domestic and regional supplies of natural gas and
the pipeline transmission network currently available through its suppliers and pipeline service providers.

Regulatory Matters The natural gas distribution operations' retail natural gas rate schedules contain clauses permitting adjustments in rates based
upon changes in natural gas commodity, transportation and storage costs. Current tariffs allow for recovery or refunds of under- or over-recovered gas
costs through rate adjustments which are filed annually.

In North Dakota and South Dakota, Montana-Dakota's natural gas tariffs contain weather normalization mechanisms applicable to certain firm
customers that adjust the distribution delivery charges to reflect weather fluctuations during the November 1 through May 1 billing periods.

In Montana, Montana-Dakota recovers in rates, through a tracking mechanism, its allocated share of Montana property-related taxes assessed to
natural gas operations on an after-tax basis.

In Minnesota and Washington, Great Plains and Cascade recover qualifying capital investments related to the safety and integrity of the pipeline
systems through cost recovery tracking mechanisms.

In Oregon, Cascade has a decoupling mechanism in place approved by the OPUC until January 1, 2025, with a review to be completed by
September 30, 2024. Cascade also has an earnings sharing mechanism with respect to its Oregon jurisdictional operations as required by the OPUC.

On July 7, 2016, the WUTC approved a full decoupling mechanism where Cascade is allowed recovery of an average revenue per customer regardless
of actual consumption. The mechanism also includes an earnings sharing component if Cascade earns beyond its authorized return. On
September 15, 2021, the WUTC extended the effectiveness of the decoupling mechanism until the earlier of the rate effective date resulting from
Cascade's next general rate case or August 31, 2025.

On December 22, 2016, the MNPUC approved a request by Great Plains to implement a full revenue decoupling mechanism pilot project for three
years. The decoupling mechanism reflects the period January 1 through December 31. The MNPUC adopted the administrative law judge's
recommendation to extend the initial pilot period through the end of 2021. A final determination has not yet been made.

In Idaho, Intermountain has the authority to facilitate access for RNG producers to the Company's distribution system for the purpose of moving RNG
to the producer's end-use customers. The facilitation plan will be vital in supporting the growth and development of the RNG industry in the state of
Idaho.

For more information on regulatory matters, see Item 8 - Note 20.

Environmental Matters The natural gas distribution operations are subject to federal, state and local environmental, facility-siting, zoning and
planning laws and regulations. The natural gas distribution operations strive to be in compliance with these regulations.

The Company's natural gas distribution operations are very small-quantity generators of hazardous waste, and subject only to minimum regulation
under the RCRA. A Washington state rule defines Cascade as a small-quantity generator, but regulation under the rule is similar to RCRA. Certain
locations of the natural gas distribution operations routinely handle PCBs from their natural gas operations in accordance with federal requirements.
PCB storage areas are registered with the EPA as required. Capital and operational expenditures for natural gas distribution operations could be
affected in a variety of ways by potential new GHG legislation or regulation. In particular, such legislation or regulation would likely increase capital
expenditures for energy efficiency and conservation programs and operational and gas supply costs associated with GHG emissions compliance.
Natural gas distribution operations expect to recover the operational and capital expenditures for GHG regulatory compliance in rates consistent with
the recovery of other reasonable costs of complying with environmental laws and regulations.

16 MDU Resources Group, Inc. Form 10-K

Part I

The natural gas distribution operations did not incur any material environmental expenditures in 2021. Except as to what may be ultimately
determined with regard to the issues described in the following paragraph, the natural gas distribution operations do not expect to incur any material
capital expenditures related to environmental compliance with current laws and regulations through 2024.

Montana-Dakota has ties to six historic manufactured gas plants as a successor corporation or through direct ownership of the plant. Montana-Dakota
is investigating possible soil and groundwater impacts due to the operation of two of these former manufactured gas plant sites. To the extent not
covered by insurance, Montana-Dakota may seek recovery in its natural gas rates charged to customers for certain investigation and remediation costs
incurred for these sites. Cascade has ties to nine historic manufactured gas plants as a successor corporation or through direct ownership of the
plant. Cascade is involved in the investigation and remediation of one of these manufactured gas plants in Washington. To the extent not covered by
insurance, Cascade will seek recovery of investigation and remediation costs through its natural gas rates charged to customers.

See Item 8 - Note 21 for further discussion of certain manufactured gas plant sites.

Pipeline

General WBI Energy owns and operates both regulated and non-
regulated businesses. The regulated business of this segment, WBI
Energy Transmission, owns and operates approximately 3,700 miles of
natural gas transmission and storage lines.

WBI Energy Transmission's underground storage fields provide storage
services to local distribution companies, industrial customers, natural
gas marketers and others, and serve to enhance system reliability. Its
system is strategically located near four natural gas producing basins,
making natural gas supplies available to its transportation and storage
customers. The system has 13 interconnecting points with other
pipeline facilities allowing for the receipt and/or delivery of natural gas
to and from other regions of the country and from Canada. Under the
Natural Gas Act, as amended, WBI Energy Transmission is subject to
the jurisdiction of the FERC regarding certificate, rate, service and
accounting matters, and at December 31, 2021, its net plant
investment was $762.4 million.

The non-regulated business of this segment provides a variety of
energy-related services, including cathodic protection and energy
efficiency product sales and installation services to large end-users.

Company storage fields

Pipeline systems

States of operations

Interconnecting pipelines

A majority of the pipeline business is transacted in the Rocky Mountain and northern Great Plains regions of the United States.

System Supply, System Demand and Competition Natural gas supplies emanate from traditional and nontraditional production activities in the region
from both on-system and off-system supply sources. Incremental supply from nontraditional sources, such as the Bakken area in Montana and North
Dakota, have helped offset declines in traditional regional supply sources and supports WBI Energy Transmission's transportation and storage
services. In addition, off-system supply sources are available through the Company's interconnections with other pipeline systems. WBI Energy
Transmission continues to look for opportunities, such as the North Bakken Expansion project, to increase transportation and storage services
through system expansion and/or other pipeline interconnections or enhancements that could provide future benefits.

WBI Energy Transmission's underground natural gas storage facilities have a certificated storage capacity of approximately 350 Bcf, including
193 Bcf of working gas capacity, 83 Bcf of cushion gas and 74 Bcf of native gas. These storage facilities enable customers to purchase natural gas
throughout the year and meet winter peak requirements.

WBI Energy Transmission competes with several pipelines for its customers' transportation business and at times may discount rates in an effort to
retain market share; however, the strategic location of its system near four natural gas producing basins and the availability of underground storage
services, along with interconnections with other pipelines, enhances its competitive position.

Although certain of WBI Energy Transmission's firm customers, including its largest firm customer Montana-Dakota, serve relatively secure
residential, commercial and industrial end-users, they generally all have some price-sensitive end-users that could switch to alternate fuels.

WBI Energy Transmission transports substantially all of Montana-Dakota's natural gas, primarily utilizing firm transportation agreements, which for
2021 represented 23 percent of WBI Energy Transmission's subscribed firm transportation contract demand. The majority of the firm transportation
agreements with Montana-Dakota expire in June 2027. In addition, Montana-Dakota has a contract, expiring in July 2035, with WBI Energy
Transmission to provide firm storage services to facilitate meeting Montana-Dakota's winter peak requirements.

MDU Resources Group, Inc. Form 10-K 17

Part I

The non-regulated business of this segment competes for existing customers in the areas in which it operates. Its focus on customer service and the
variety of services it offers serve to enhance its competitive position.

Environmental Matters The pipeline operations are subject to federal, state and local environmental, facility-siting, zoning and planning laws and
regulations.

Administration of certain provisions of federal environmental laws is delegated to the states where WBI Energy and its subsidiaries operate.
Administering agencies may issue permits with varying terms and operational compliance conditions. Permits are renewed and modified, as
necessary, based on defined permit expiration dates, operational demand, facility upgrades or modifications, and/or regulatory changes. The pipeline
operations strive to be in compliance with these regulations.

Detailed environmental assessments and/or environmental impact statements as required by the National Environmental Policy Act are included in
the FERC's environmental review process for both the construction and abandonment of WBI Energy Transmission's natural gas transmission
pipelines, compressor stations and storage facilities.

The pipeline operations did not incur any material environmental expenditures in 2021 and do not expect to incur any material capital expenditures
related to environmental compliance with current laws and regulations through 2024.

Construction Materials and Contracting

States of operation

Market areas

General Knife River mines, processes and sells construction aggregates
(crushed stone, sand and gravel); produces and sells asphalt mix; and
supplies ready-mix concrete. These products are used in most types of
construction, performed by Knife River and other companies,
including roads, freeways and bridges, as well as homes, schools,
shopping centers, office buildings and industrial parks. Knife River
focuses on vertical integration of its contracting services with its
construction materials to support the aggregate-based product lines
including aggregate placement, asphalt and concrete paving, and site
development and grading. Although not common to all locations, other
products include the sale of cement, asphalt oil for various
commercial and roadway applications, various finished concrete
products and other building materials and related contracting services.

During 2021, Knife River's acquisitions included Mt. Hood Rock, a
construction aggregates business in Oregon, as well as Baker Rock
Resources and Oregon Mainline Paving, two premier construction
material companies located around the Portland, Oregon metro area.
For more information on business combinations, see Item 8 - Note 4.

Competition Knife River's construction materials products and contracting services are marketed under competitive conditions. Price is the principal
competitive force to which these products and services are subject, with service, quality, delivery time and proximity to the customer also being
significant factors. Knife River focuses on markets located near aggregate sites to reduce transportation costs which allows Knife River to remain
competitive with the pricing of aggregate products. The number and size of competitors varies in each of Knife River's principal market areas and
product lines.

The demand for construction materials products and contracting services is significantly influenced by the cyclical nature of the construction
industry. In addition, activity in certain locations may be seasonal in nature due to the effects of weather. The key economic factors affecting product
demand are changes in the level of local, state and federal governmental spending on roads and infrastructure projects, general economic conditions
within the market area that influence the commercial and residential sectors, and prevailing interest rates.

Knife River's customers are a diverse group which includes federal, state and municipal governmental agencies, commercial and residential
developers, and private parties. The mix of sales by customer class varies each year depending on available work. Knife River is not dependent on any
single customer or group of customers for sales of its products and services, the loss of which would have a material adverse effect on its
construction materials businesses.

Reserve Information Aggregate reserve estimates are calculated based on the best available data. This data is collected from drill holes and other
subsurface investigations, as well as investigations of surface features such as mine high walls and other exposures of the aggregate reserves. Mine
plans, production history and geologic data are also utilized to estimate reserve quantities. Property setbacks and other regulatory restrictions and
limitations are identified to determine the total area available for mining. Data described previously are used to calculate the thickness of aggregate
materials to be recovered.

18 MDU Resources Group, Inc. Form 10-K

Part I

Topography associated with alluvial sand and gravel deposits is typically flat and volumes of these materials are calculated by applying the thickness
of the resource over the areas available for mining. Volumes are then converted to tons by using an appropriate conversion factor. Typically, 1.5 tons
per cubic yard in the ground is used for sand and gravel deposits.

Topography associated with hard rock reserves is typically much more diverse. Therefore, using available data, a final topography map is created and
computer software is utilized to compute the volumes between the existing and final topographies. Volumes are then converted to tons by using an
appropriate conversion factor. Typically, 2 tons per cubic yard in the ground is used for hard rock quarries.

Geotechnical studies are conducted on a deposit to determine its suitability for use as construction aggregates. Drilling is performed at each site
using the most appropriate method of recovery. Cored samples are logged with detail as governed by industry standards by a registered geologist and
stored in the company's possession until delivered to the testing lab. Drilled samples may be logged by either registered geologists or internal
personnel based on the Unified Soil Classification System. The geologist's log sheets are compared against published geological maps for reference
and assistance in determining a formation's extent.

Collected samples are delivered to a certified lab for testing of the chemical and physical properties to determine the potential use of the deposit.
These tests include the determination of the mineral's hardness and soundness, its chemical reactivity and the presence of objectionable substances,
and are performed within the procedures set forth by the American Society for Testing and Materials, the American Association of State Highway and
Transportation Officials or the state or local department of transportation.

The classification and quantity of a particular deposit is further analyzed by reviewing the geological formation, test results and production processes,
along with modifying factors, to determine an expected yield of recoverable tonnage an area will produce. These results may have an effect on mine
plans and the selection of processing equipment. These results are reviewed by the qualified individual and presented to the management team.

Management assesses the risks associated with resource and reserve computations of aggregate deposits. These computations may be affected by
variability in the properties of the material, limits of the accuracy of the geotechnical data and operational difficulties in extraction of the computed
material. Additionally, management assesses the risks associated in obtaining and maintaining the various land use, mining and environmental
permits which are necessary for the properties to operate as mines. Annual reviews of mining reserves are conducted by the qualified individual and
includes procedures such as ensuring financial assumptions related to life of mine expenses are based on the most accurate estimates available.

Reserve estimates are based on analyses of the data described above by qualified internal mining engineers, operating personnel and third-party
geologists. Senior management reviews and approves the reserve estimates, including the major assumptions used in determining the estimates
including life, pricing, cost and volume, among other things, to ensure they are materially accurate. For aggregate reserve additions, management,
which includes the qualified individual, reviews the study of technical, economic and operating factors. As part of management's process of
performing due diligence on the properties, management also reviews supplemental information including a summary of the site's geotechnical
report. The Company also maintains a database of all aggregate reserves which is reconciled at least annually and reviewed and approved by the
qualified individual(s).

The Company's estimated reserves are primarily proven reserves. The reserve estimates include only salable tonnage and thus exclude waste
materials that are generated in the crushing and processing phases of the operation. Approximately 1.1 billion tons of Knife River's 1.2 billion tons
of aggregate reserves are permitted reserves. Remaining reserves are based on estimates of volumes that can be economically extracted and sold to
meet current market and product applications. The remaining reserves are on properties that are expected to be permitted for mining under current
regulatory requirements. The data used to calculate the remaining reserves may require revisions in the future to account for changes in customer
requirements and unknown geological occurrences. The remaining reserve life (years) was calculated by dividing remaining reserves by the three-year
average sales, including estimated sales from acquired reserves prior to acquisition, from 2019 through 2021. Actual useful lives of these reserves
will be subject to, among other things, fluctuations in customer demand, customer specifications, geological conditions and changes in mining
plans. The Company has reviewed its properties and has determined it does not have any individual sites that are material.

MDU Resources Group, Inc. Form 10-K 19

Part I

States of operation

Aggregate pit (202 total pits)

The following table sets forth details applicable to the Company's aggregate reserves under ownership or lease as of December 31, 2021, and sales
for the years ended December 31, 2021, 2020 and 2019:

Crushed Stone

Sand & Gravel

Number of
Sites

owned

leased

Estimated
Reserves
(000's tons)

Number of
Sites

owned leased

Estimated
Reserves
(000's tons)

—

90,290

45,096

—

16,228

—

385,920

34,048

19,288

89,643

—

Total
Estimated
Reserves
(000's tons)

13,583

126,315

45,096

28,439

76,993

72,636

24,958

Tons Sold (000's)

2021

2020

2019

Lease
Expiration

Reserve
Life
(years)

780

817

868

N/A

2,766

2,417

2,193 2028-2035

1,417

1,466

1,680 2023-2064

2,460

2,565

2,138

2028

4,133

3,528

3,654 2022-2032

3,157

3,081

2,906

N/A

1,102

1,027

986 2022-2028

13,583

36,025

—

28,439

60,765

72,636

24,958

192,192

578,112

8,467

8,063

8,567 2022-2077

53 (a)

1,667

61,070

29,969

35,715

80,358

119,612

3,651

3,689

2,914 2025-2028

1,336

1,817

984

840

1,378 2022-2029

837 2024-2085

103

Production
Area (b)

Alaska

California

Hawaii

Idaho

Minnesota

Montana

North Dakota

Oregon

South Dakota

Texas

Wyoming

Sales from
other sources

680,513 (c)

106

521,304 (c)

1,201,817 (c)

33,518 30,949 32,314

2,432

2,472

4,193

Includes estimate of three-year average sales for acquired reserves.

(a)
(b) The Company's reserve properties are in a production stage.
(c) Table reflects approximately 67.9 million tons of measured resources that are currently not permitted, but expected to be permitted in future years.

The Company's management and qualified individual perform an analysis of current and historical pricing when estimating the reasonable and
justifiable price for reserves. Current pricing is typically heavily weighted in the price assumption and is reviewed and approved by management. If
available, the Company will also compare pricing to similarly located reserves. The average price per ton in 2021 for crushed stone and sand and
gravel was $14.83 and $9.76, respectively. The price for each commodity was calculated by dividing 2021 revenues by tons sold.

20 MDU Resources Group, Inc. Form 10-K

The 1.2 billion tons of estimated aggregate reserves at December 31, 2021, are comprised of 646 million tons on properties that are owned and
556 million tons that are leased. Approximately 45 percent of the tons under lease have lease expiration dates of 20 years or more. The weighted
average years remaining on all leases containing estimated proven aggregate reserves is approximately 21 years, including options for renewal that
are at Knife River's discretion. Based on a three-year average of sales from 2019 through 2021 of leased reserves, the average time necessary to
produce remaining aggregate reserves from such leases is approximately 45 years. Some sites have leases that expire prior to the exhaustion of the
estimated reserves. The estimated reserve life assumes, based on Knife River's experience, that leases will be renewed to allow sufficient time to
fully recover these reserves.

The changes in Knife River's aggregate reserves for the years ended December 31 were as follows:

Part I

Aggregate reserves:

Beginning of year

Purchases (a)

Sales volumes (b)

Other (c)

End of year

2021

2020

2019

(000's of tons)

1,104,887

1,054,186

1,014,431

135,005

114,666

(31,086)

(6,989)

(28,477)

(35,488)

71,157

(28,121)

(3,281)

1,201,817

1,104,887

1,054,186

Includes reserves from recent business combinations.

(a)
(b) Excludes sales from other sources.
(c)

Includes property sales, revisions of previous estimates and expiring leases.

Environmental Matters Knife River's construction materials and contracting operations are subject to regulation customary for such operations,
including federal, state and local environmental compliance and reclamation regulations. Except as to the issues described later, Knife River strives
to be in compliance with these regulations. Individual permits applicable to Knife River's various operations are managed and tracked as they relate
to the statuses of the application, modification, renewal, compliance and reporting procedures.

Knife River's asphalt and ready-mix concrete manufacturing plants and aggregate processing plants are subject to the federal Clean Air Act and the
federal Clean Water Act requirements for controlling air emissions and water discharges. Some mining and construction activities are also subject to
these laws. In most of the states where Knife River operates, these regulatory programs are delegated to state and local regulatory authorities. Knife
River's facilities are also subject to the RCRA as it applies to the management of hazardous wastes and underground storage tank systems. These
programs are generally delegated to the state and local authorities in the states where Knife River operates. Knife River's facilities must comply with
requirements for managing wastes and underground storage tank systems.

Certain activities of Knife River are directly regulated by federal agencies. For example, certain in-water mining operations are subject to provisions of
the federal Clean Water Act that are administered by the Army Corps. Knife River has several such operations, including gravel bar skimming and
dredging operations, and Knife River has the associated required permits. The expiration dates of these permits vary, with five years generally being
the longest term.

Knife River's operations are also occasionally subject to the ESA. For example, land use regulations often require environmental studies, including
wildlife studies, before a permit may be granted for a new or expanded mining facility or an asphalt or concrete plant. If endangered species or their
habitats are identified, ESA requirements for protection, mitigation or avoidance apply. Endangered species protection requirements are usually
included as part of land use permit conditions. Typical conditions include avoidance, setbacks, restrictions on operations during certain times of the
breeding or rearing season, and construction or purchase of mitigation habitat. Knife River's operations are also subject to state and federal cultural
resources protection laws when new areas are disturbed for mining operations or processing plants. Land use permit applications generally require
that areas proposed for mining or other surface disturbances be surveyed for cultural resources. If any are identified, they must be protected or
managed in accordance with regulatory agency requirements.

The most comprehensive environmental permit requirements are usually associated with new mining operations, although requirements vary widely
from state to state and even within states. In some areas, land use regulations and associated permitting requirements are minimal. However, some
states and local jurisdictions have very demanding requirements for permitting new mines. Environmental impact reports are sometimes required
before a mining permit application can be considered for approval. These reports can take up to several years to complete. The report can include
projected impacts of the proposed project on air and water quality, wildlife, noise levels, traffic, scenic vistas and other environmental factors. The
reports generally include suggested actions to mitigate the projected adverse impacts.

MDU Resources Group, Inc. Form 10-K 21

Part I

Provisions for public hearings and public comments are usually included in land use permit application review procedures in the counties where
Knife River operates. After considering environmental, mine plan and reclamation information provided by the permittee, as well as comments from
the public and other regulatory agencies, the local authority approves or denies the permit application. Denial is rare, but land use permits often
include conditions that must be addressed by the permittee. Conditions may include property line setbacks, reclamation requirements, environmental
monitoring and reporting, operating hour restrictions, financial guarantees for reclamation, and other requirements intended to protect the
environment or address concerns submitted by the public or other regulatory agencies.

Knife River has been successful in obtaining mining and other land use permits so sufficient permitted reserves are available to support its
operations. For mining operations, this often requires considerable advanced planning to ensure sufficient time is available to complete the
permitting process before the newly permitted aggregate reserve is needed to support Knife River's operations.

Knife River's Gascoyne surface coal mine last produced coal in 1995 but continues to be subject to reclamation requirements of the Surface Mining
Control and Reclamation Act, as well as the North Dakota Surface Mining Act. Portions of the Gascoyne Mine remain under reclamation bond until
the 10-year revegetation liability period has expired. A portion of the original permit has been released from bond and additional areas are currently
in the process of having the bond released. Knife River intends to request bond release as soon as it is deemed possible.

Knife River did not incur any material environmental expenditures in 2021 and, except as to what may be ultimately determined with regard to the
issues described in the following paragraph, Knife River does not expect to incur any material capital expenditures related to environmental
compliance with current laws and regulations through 2024.

In December 2000, Knife River - Northwest was named by the EPA as a PRP in connection with the cleanup of a commercial property site, acquired
by Knife River - Northwest in 1999, and part of the Portland, Oregon, Harbor Superfund Site. For more information, see Item 8 - Note 21.

Mine Safety The Dodd-Frank Act requires disclosure of certain mine safety information. For more information, see Item 4 - Mine Safety Disclosures.

Construction Services

Transmission & Distribution
Electrical & Mechanical

States of Operation
Corporate Office

AL GA

WV VA

General MDU Construction Services operates in nearly every state
across the country and provides a full spectrum of construction
services through its electrical and mechanical and transmission and
distribution specialty contracting services across the country. These
specialty contracting services are provided to utilities and
manufacturing, transportation, commercial, industrial, institutional,
renewable and governmental customers. Its electrical and mechanical
contracting services include construction and maintenance of
electrical and communication wiring and infrastructure, fire
suppression systems, and mechanical piping and services. Its
transmission and distribution contracting services include construction
and maintenance of overhead and underground electrical, gas and
communication infrastructure, as well as manufacturing and
distribution of transmission line construction equipment and tools.

Construction and maintenance crews are active year round. However,
activity in certain locations may be seasonal in nature due to the
effects of weather. MDU Construction Services works with the National
Electrical Contractors Association, the IBEW and other trade
associations on hiring and recruiting a qualified workforce.

MDU Construction Services operates a fleet of owned and leased trucks and trailers, support vehicles and specialty construction equipment, such as
backhoes, excavators, trenchers, generators, boring machines and cranes. In addition, as of December 31, 2021, MDU Construction Services owned
or leased facilities in 18 states. This space is used for offices, equipment yards, manufacturing, warehousing, storage and vehicle shops.

Competition MDU Construction Services operates in a highly competitive business environment. Most of MDU Construction Services' work is obtained
on the basis of competitive bids or by negotiation of either cost-plus or fixed-price contracts. Its workforce and equipment are highly mobile,
providing greater flexibility in the size and location of MDU Construction Services' market area. Competition is based primarily on price and
reputation for quality, safety and reliability. The size and location of the services provided, as well as the state of the economy, are factors in the
number of competitors that MDU Construction Services will encounter on any particular project. MDU Construction Services believes the
diversification of the services it provides, the markets it serves in the United States and the quality and management of its workforce enable it to
effectively operate in this competitive environment.

22 MDU Resources Group, Inc. Form 10-K

Part I

Utilities and independent contractors represent the largest customer base for this segment. Accordingly, utility and subcontract work accounts for a
significant portion of the work performed by MDU Construction Services and the amount of construction contracts is dependent on the level and
timing of maintenance and construction programs undertaken by customers. MDU Construction Services relies on repeat customers and strives to
maintain successful long-term relationships with its customers. The mix of sales by customer class varies each year depending on available work.
MDU Construction Services is not dependent on any single customer or group of customers for sales of its products and services, the loss of which
would have a material adverse effect on its business.

Environmental Matters MDU Construction Services' operations are subject to regulation customary for the industry, including federal, state and local
environmental compliance. MDU Construction Services strives to be in compliance with these regulations.

The nature of MDU Construction Services' operations is such that few, if any, environmental permits are required. Operational convenience supports
the use of petroleum storage tanks in several locations, which are permitted under state programs authorized by the EPA. MDU Construction Services
has no ongoing remediation related to releases from petroleum storage tanks. MDU Construction Services' operations are conditionally exempt small-
quantity waste generators, subject to minimal regulation under the RCRA. Federal permits for specific construction and maintenance jobs that may
require these permits are typically obtained by the hiring entity, and not by MDU Construction Services.

MDU Construction Services did not incur any material environmental expenditures in 2021 and does not expect to incur any material capital
expenditures related to environmental compliance with current laws and regulations through 2024.

Item 1A. Risk Factors

The Company's business and financial results are subject to a number of risks and uncertainties, including those set forth below and in other
documents filed with the SEC. The factors and other matters discussed herein are important factors that could cause actual results or outcomes for
the Company to differ materially from those discussed in the forward-looking statements included elsewhere in this document. If any of the risks
described below actually occur, the Company's business, prospects, financial condition or financial results could be materially harmed. The following
are the most material risk factors applicable to the Company and are not necessarily listed in order of importance or probability of occurrence.

Economic Risks
The Company is subject to government regulations that may have a negative impact on its business and its results of operations and cash flows. Statutory and
regulatory requirements also may limit another party's ability to acquire the Company or impose conditions on an acquisition of or by the Company.
The Company's electric and natural gas transmission and distribution businesses are subject to comprehensive regulation by federal, state and local
regulatory agencies with respect to, among other things, allowed rates of return and recovery of investments and costs; financing; rate structures;
customer service; health care coverage and costs; taxes; franchises; recovery of purchased power and purchased natural gas costs; and construction
and siting of generation and transmission facilities. These governmental regulations significantly influence the Company's operating environment and
may affect its ability to recover costs from its customers. The Company is unable to predict the impact on operating results from future regulatory
activities of any of these agencies. Changes in regulations or the imposition of additional regulations could have an adverse impact on the Company's
results of operations and cash flows.

There can be no assurance that applicable regulatory commissions will determine that the Company's electric and natural gas transmission and
distribution businesses' costs have been prudent, which could result in the disallowance of costs in setting rates for customers. Also, the regulatory
process of approving rates for these businesses may not allow for timely and full recovery of the costs of providing services or a return on the
Company's invested capital. Changes in regulatory requirements or operating conditions may require early retirement of certain assets. While
regulation typically provides rate recovery for these retirements, there is no assurance regulators will allow full recovery of all remaining costs, which
could leave stranded asset costs. Rising fuel costs could increase the risk that the utility businesses will not be able to fully recover those fuel costs
from customers.

Approval from federal and state regulatory agencies would be needed for acquisition of the Company, as well as for certain acquisitions by the
Company. The approval process could be lengthy and the outcome uncertain, which may deter potential acquirers from approaching the Company or
impact the Company's ability to pursue acquisitions.

Economic volatility affects the Company's operations, as well as the demand for its products and services.
Unfavorable economic conditions can negatively affect the level of public and private expenditures on projects and the timing of these projects
which, in turn, can negatively affect demand for the Company's products and services, primarily at the Company's construction businesses. The level
of demand for construction products and services could be adversely impacted by the economic conditions in the industries the Company serves, as
well as in the general economy. State and federal budget issues affect the funding available for infrastructure spending.

Economic conditions and population growth affect the electric and natural gas distribution businesses' growth in service territory, customer base and
usage demand. Economic volatility in the markets served, along with economic conditions such as increased unemployment which could impact the
ability of the Company's customers to make payments, could adversely affect the Company's results of operations, cash flows and asset values.
Further, any material decreases in customers' energy demand, for economic or other reasons, could have an adverse impact on the Company's
earnings and results of operations.

MDU Resources Group, Inc. Form 10-K 23

Part I

The Company's operations involve risks that may result from catastrophic events.
The Company's operations, particularly those related to electric and natural gas transmission and distribution, include a variety of inherent hazards
and operating risks, such as product leaks; explosions; mechanical failures; vandalism; fires; pandemics; social or civil unrest; protests and riots;
natural disasters; acts of terrorism; and acts of war. These hazards and operating risks have occurred and may recur in the future which could result
in loss of human life; personal injury; property damage; environmental pollution; impairment of operations; and substantial financial losses. The
Company maintains insurance against some, but not all, of these risks and losses. A significant incident could also increase regulatory scrutiny and
result in penalties and higher amounts of capital expenditures and operational costs. Losses not fully covered by insurance could have an adverse
effect on the Company’s financial position, results of operations and cash flows.

A disruption of the regional electric transmission grid or interstate natural gas infrastructure could negatively impact the Company's business and
reputation. Because the Company's electric and natural gas utility and pipeline systems are part of larger interconnecting systems, a disruption could
result in a significant decrease in revenues and system repair costs negatively impacting the Company's financial position, results of operations and
cash flows.

The Company is subject to capital market and interest rate risks.
The Company's operations, particularly its electric and natural gas transmission and distribution businesses, require significant capital investment.
Consequently, the Company relies on financing sources and capital markets as sources of liquidity for capital requirements not satisfied by cash
flows from operations. If the Company is not able to access capital at competitive rates, including through its "at-the-market" offering program, the
ability to implement business plans, make capital expenditures or pursue acquisitions the Company would otherwise rely on for future growth may be
adversely affected. Market disruptions may increase the cost of borrowing or adversely affect the Company's ability to access one or more financial
markets. Such disruptions could include:

• A significant economic downturn.

• The financial distress of unrelated industry leaders in the same line of business.

• Deterioration in capital market conditions.

• Turmoil in the financial services industry.

• Volatility in commodity prices.

• Pandemics, including COVID-19.

• Terrorist attacks.

• Cyberattacks.

The issuance of a substantial amount of the Company's common stock, whether issued in connection with an acquisition or otherwise, or the
perception that such an issuance could occur, could have a dilutive effect on shareholders and/or may adversely affect the market price of the
Company's common stock. Higher interest rates on borrowings could also have an adverse effect on the Company's operating results.

Financial market changes could impact the Company’s pension and postretirement benefit plans and obligations.
The Company has pension and postretirement defined benefit plans for some of its current and former employees. Assumptions regarding future
costs, returns on investments, interest rates and other actuarial assumptions have a significant impact on the funding requirements and expense
recorded relating to these plans. Adverse changes in economic indicators, such as consumer spending, inflation data, interest rate changes, political
developments and threats of terrorism, among other things, can create volatility in the financial markets. These changes could impact the
assumptions and negatively affect the value of assets held in the Company's pension and other postretirement benefit plans and may increase the
amount and accelerate the timing of required funding contributions for those plans.

Significant changes in energy prices could negatively affect the Company's businesses.
Fluctuations in oil and natural gas production, supplies and prices; fluctuations in commodity price basis differentials; political and economic
conditions in oil-producing countries; actions of the Organization of Petroleum Exporting Countries; demand for oil due to the economic slowdowns;
and other external factors impact the development of oil and natural gas supplies and the expansion and operation of natural gas pipeline systems.
The Company has benefited from associated natural gas production in the Bakken, which has provided opportunities for organic growth projects.
Depressed oil and natural gas prices, however, place pressure on the ability of oil exploration and production companies to meet credit requirements
and can be a challenge if prices remain depressed long-term. Prolonged depressed prices for oil and natural gas could negatively affect the growth,
results of operations, cash flows and asset values of the Company's electric, natural gas and pipeline businesses.

If oil and natural gas prices increase significantly, customer demand could decline for utility, pipeline and construction products and services, which
could impact the Company's results of operations and cash flows. While the Company has fuel clause recovery mechanisms for its utility operations
in all of the states where it operates, higher utility fuel costs could also significantly impact results of operations if such costs are not recovered.
Delays in the collection of utility fuel cost recoveries, as compared to expenditures for fuel purchases, could also negatively impact the Company's
cash flows. High oil prices also affect the margins realized and demand for construction materials and related contracting services.

24 MDU Resources Group, Inc. Form 10-K

Part I

COVID-19 may have a negative impact on the Company's business operations, revenues, results of operations, liquidity and cash flows.
The ongoing COVID-19 pandemic has disrupted national, state and local economies. To the extent the COVID-19 pandemic adversely impacts the
Company's businesses, operations, revenues, liquidity or cash flows, it could also have a heightened effect on other risks described in this section.
The degree to which COVID-19 will impact the Company depends on future developments, including the resurgence of COVID-19 and its variants,
federal and state mandates, actions taken by governmental authorities, effectiveness of vaccines being administered, and the pace and extent to
which the economy recovers and remains under relatively normal operating conditions.

The Company's operations have experienced minor disruptions due to shortages of employees or third-party contractors and altered work operations.
Government and customer vaccine mandates could leave the Company with a shortage of vaccinated employees or reduce workforce capacity to bid
on new projects, which may further exacerbate the already tight labor markets for skilled employees or cause additional wage inflation. The Company
could also be impacted by additional costs and lost productivity associated with COVID-19 testing and tracking of employee vaccination records. If a
significant percentage of the Company's workforce are unable to work because of illness, quarantine, vaccination requirements or government
restrictions in connection with the COVID-19 pandemic, the Company's operations may be negatively impacted, potentially adversely affecting its
business, operations, revenues, liquidity and cash flows.

In response to the COVID-19 pandemic, the Company implemented a remote work environment for certain employees of the Company's workforce. As
of July 2021, many of these employees returned to their office; however, some employees have transitioned to a permanent remote work
environment. The increase in remote work and longevity of the pandemic may create increased vulnerability to cybersecurity incidents affecting the
Company’s ability to maintain secure operations.

Other factors associated with the COVID-19 pandemic that could impact the Company's businesses and future operating results, revenues and
liquidity include impacts related to the health, safety, and availability of employees and contractors; extended rise in unemployment; public and
private sector budget changes and constraints; continued flexible payment plans for utility customers; counterparty credit; costs and availability of
supplies; capital construction and infrastructure operation and maintenance programs; financing plans; pension valuations; travel restrictions; and
legal and regulatory matters, including the potential for delayed regulatory filings, accounting for the impacts of the COVID-19 pandemic and
recovery of invested capital. The economic and market disruptions resulting from COVID-19 could also lead to greater than normal uncertainty with
respect to the realization of estimated amounts, including estimates for backlog, revenue recognition, intangible assets, other investments and
provisions for credit losses.

Reductions in the Company's credit ratings could increase financing costs.
There is no assurance the Company's current credit ratings, or those of its subsidiaries, will remain in effect or that a rating will not be lowered or
withdrawn by a rating agency. Events affecting the Company's financial results may impact its cash flows and credit metrics, potentially resulting in a
change in the Company's credit ratings. The Company's credit ratings may also change as a result of the differing methodologies or changes in the
methodologies used by the rating agencies.

Increasing costs associated with health care plans may adversely affect the Company's results of operations.
The Company's self-insured costs of health care benefits for eligible employees continues to increase. Increasing quantities of large individual health
care claims and an overall increase in total health care claims could have an adverse impact on operating results, financial position and liquidity.
Legislation related to health care could also change the Company's benefit program and costs.

The Company is exposed to risk of loss resulting from the nonpayment and/or nonperformance by the Company's customers and counterparties.
If the Company's customers or counterparties experience financial difficulties, the Company could experience difficulty in collecting receivables.
Nonpayment and/or nonperformance by the Company's customers and counterparties, particularly customers and counterparties of the Company’s
pipeline, construction materials and contracting and construction services businesses for large construction projects, could have a negative impact
on the Company's results of operations and cash flows. The Company could also have indirect credit risk from participating in energy markets such as
MISO in which credit losses are socialized to all participants.

Changes in tax law may negatively affect the Company's business.
Changes to federal, state and local tax laws have the ability to benefit or adversely affect the Company's earnings and customer costs. Significant
changes to corporate tax rates could result in the impairment of deferred tax assets that are established based on existing law at the time of deferral.
Changes to the value of various tax credits could change the economics of resources and the resource selection for the electric generation business.
Regulation incorporates changes in tax law into the rate-setting process for the regulated energy delivery businesses which could create timing delays
before the impact of changes are realized.

The Company's operations could be negatively impacted by import tariffs and/or other government mandates.
The Company operates in or provides services to capital intensive industries in which federal trade policies could significantly impact the availability
and cost of materials. Imposed and proposed tariffs could significantly increase the prices and delivery lead times on raw materials and finished
products that are critical to the Company and its customers, such as aluminum and steel. Prolonged lead times on the delivery of raw materials and
further tariff increases on raw materials and finished products could adversely affect the Company's business, financial condition and results of
operations.

MDU Resources Group, Inc. Form 10-K 25

Part I

Operational Risks
Significant portions of the Company’s natural gas pipelines and power generation and transmission facilities are aging. The aging infrastructure may require
significant additional maintenance or replacement that could adversely affect the Company’s results of operations.
The Company’s energy delivery infrastructure is aging, which increases certain risks, including breakdown or failure of equipment, pipeline leaks and
fires developing from power lines, all of which have occurred and may recur in the future resulting in material costs. Aging infrastructure is more
prone to failure which increases maintenance costs, unplanned outages and the need to replace facilities. Even if properly maintained, reliability may
ultimately deteriorate and negatively affect the Company’s ability to serve its customers, which could result in increased costs associated with
regulatory oversight. The costs associated with maintaining the aging infrastructure and capital expenditures for new or replacement infrastructure
could cause rate volatility and/or regulatory lag in some jurisdictions. If, at the end of its life, the investment costs of a facility have not been fully
recovered, the Company may be adversely affected if commissions do not allow such costs to be recovered in rates. Such impacts of an aging
infrastructure could adversely affect the Company’s results of operations and cash flows.

Additionally, hazards from aging infrastructure could result in serious injury, loss of human life, significant damage to property, environmental
impacts and impairment of operations, which in turn could lead to substantial financial losses. The location of facilities near populated areas,
including residential areas, business centers, industrial sites and other public gathering places, could increase the damages resulting from these
risks. A major incident involving another natural gas system could lead to additional capital expenditures, increased regulation, and fines and
penalties on natural gas utilities. The occurrence of any of these events could adversely affect the Company’s results of operations, financial position
and cash flows.

The Company's utility and pipeline operations are subject to planning risks.
Most electric and natural gas utility investments, including natural gas transmission pipeline investments, are made with the intent of being used for
decades. In particular, electric transmission and generation resources are planned well in advance of when they are placed into service based upon
resource plans using assumptions over the planning horizon including sales growth, commodity prices, equipment and construction costs, regulatory
treatment, available technology and public policy. Public policy changes and technology advancements related to areas such as energy efficient
appliances and buildings, renewable and distributive electric generation and storage, carbon dioxide emissions, electric vehicle penetration,
restrictions on or disallowance of new or existing services, and natural gas availability and cost may significantly impact the planning assumptions.
Changes in critical planning assumptions may result in excess generation, transmission and distribution resources creating increased per customer
costs and downward pressure on load growth. These changes could also result in a stranded investment if the Company is unable to fully recover the
costs of its investments.

The regulatory approval, permitting, construction, startup and/or operation of pipelines, power generation and transmission facilities, and aggregate reserves
may involve unanticipated events, delays and unrecoverable costs.
The construction, startup and operation of natural gas pipelines and electric power generation and transmission facilities involve many risks, which
may include delays; breakdown or failure of equipment; inability to obtain required governmental permits and approvals; inability to obtain or renew
easements; public opposition; inability to complete financing; inability to negotiate acceptable equipment acquisition, construction, fuel supply, off-
take, transmission, transportation or other material agreements; changes in markets and market prices for power; cost increases and overruns; the
risk of performance below expected levels of output or efficiency; and the inability to obtain full cost recovery in regulated rates. Additionally, in a
number of states in which the Company operates, it can be difficult to permit new aggregate sites or expand existing aggregate sites due to
community resistance. Such unanticipated events could negatively impact the Company's business, its results of operations and cash flows.

Operating or other costs required to comply with current or potential pipeline safety regulations and potential new regulations under various agencies
could be significant. The regulations require verification of pipeline infrastructure records by pipeline owners and operators to confirm the maximum
allowable operating pressure of certain lines. Increased emphasis on pipeline safety and increased regulatory scrutiny may result in penalties and
higher costs of operations. If these costs are not fully recoverable from customers, they could have an adverse effect on the Company’s results of
operations and cash flows.

The backlogs at the Company's construction materials and contracting and construction services businesses may not accurately represent future revenue.
Backlog consists of the uncompleted portion of services to be performed under job-specific contracts. Contracts are subject to delay, default or
cancellation, and contracts in the Company's backlog are subject to changes in the scope of services to be provided, as well as adjustments to the
costs relating to the applicable contracts. Backlog may also be affected by project delays or cancellations resulting from weather conditions, external
market factors and economic factors beyond the Company's control, among other things. Accordingly, there is no assurance that backlog will be
realized. The timing of contract awards, duration of large new contracts and the mix of services can significantly affect backlog. Backlog at any given
point in time may not accurately represent the revenue or net income that is realized in any period. Also, the backlog as of the end of the year may
not be indicative of the revenue and net income expected to be earned in the following year and should not be relied upon as a stand-alone indicator
of future revenues or net income.

The Company's participation in joint venture contracts may have a negative impact on its reputation, business operations, revenues, results of operations,
liquidity and cash flows.
The Company enters into certain joint venture arrangements typically to bid and execute particular projects. Generally, these agreements are directly
with a third-party client; however, services may be performed by the venture, the joint venture partners or a combination thereof. Engaging in joint
venture contracts exposes the Company to risks and uncertainties, some of which are outside the Company's control.

26 MDU Resources Group, Inc. Form 10-K

Part I

The Company is reliant on joint venture partners to satisfy their contractual obligations, including obligations to commit working capital and equity,
and to perform the work as outlined in the agreement. Failure to do so could result in the Company providing additional investments or services to
address such performance issues. If the Company is unable to satisfactorily resolve any partner performance issues, the customer could terminate
the contract opening the Company to legal liability which could negatively impact the Company's reputation, revenues, results of operations, liquidity
and cash flows.

Supply chain disruptions may adversely affect Company operations.
The Company relies on third-party vendors and manufacturers to supply many of the materials necessary for its operations. Disruptions or delays in
receiving materials; price increases from suppliers or manufacturers; or inability to source needed materials could adversely affect the Company’s
results of operations, financial condition and cash flows.

Environmental and Regulatory Risks
The Company's operations could be adversely impacted by climate change.
Severe weather events, such as tornadoes, hurricanes, rain, drought, ice and snowstorms, and high and low temperature extremes, occur in regions in
which the Company operates and maintains infrastructure. Climate change could change the frequency and severity of these weather events, which
may create physical and financial risks to the Company. Such risks could have an adverse effect on the Company's financial condition, results of
operations and cash flows.

Severe weather events may damage or disrupt the Company's electric and natural gas transmission and distribution facilities, which could result in
disruption of service and ability to meet customer demand and increase maintenance or capital costs to repair facilities and restore customer service.
The cost of providing service could increase if the frequency of severe weather events increases because of climate change or otherwise. The
Company may not recover all costs related to mitigating these physical risks.

Increases in severe weather conditions or extreme temperatures may cause infrastructure construction projects to be delayed or canceled and limit
resources available for such projects resulting in decreased revenue or increased project costs at the construction materials and contracting and
construction services businesses. In addition, drought conditions could restrict the availability of water supplies, inhibiting the ability of the
construction businesses to conduct operations.

Utility customers’ energy needs vary with weather conditions, primarily temperature and humidity. For residential customers, heating and cooling
represent the largest energy use. To the extent weather conditions are affected by climate change, customers’ energy use could increase or decrease.
Increased energy use by its utility customers due to weather may require the Company to invest in additional generating assets, transmission and
other infrastructure to serve increased load. Decreased energy use due to weather may result in decreased revenues. Extreme weather conditions,
such as uncommonly long periods of high or low ambient temperature in general require more system backup, adding to costs, and can contribute to
increased system stress, including service interruptions. Weather conditions outside of the Company's service territory could also have an impact on
revenues. The Company buys and sells electricity that might be generated outside its service territory, depending upon system needs and market
opportunities. Extreme temperatures may create high energy demand and raise electricity prices, which could increase the cost of energy provided to
customers.

Climate change may impact a region’s economic health, which could impact revenues at all of the Company's businesses. The Company's financial
performance is tied to the health of the regional economies served. The Company provides natural gas and electric utility service, as well as
construction materials and services, for some states and communities that are economically affected by the agriculture industry. Increases in severe
weather events or significant changes in temperature and precipitation patterns could adversely affect the agriculture industry and, correspondingly,
the economies of the states and communities affected by that industry.

The insurance industry may be adversely affected by severe weather events which may impact availability of insurance coverage, insurance premiums
and insurance policy terms.

The Company may be subject to litigation related to climate change. Costs of such litigation could be significant, and an adverse outcome could
require substantial capital expenditures, changes in operations and possible payment of penalties or damages, which could affect the Company's
results of operations and cash flows if the costs are not recoverable in rates.

The price of energy also has an impact on the economic health of communities. The cost of additional regulatory requirements to combat climate
change, such as regulation of carbon dioxide emissions under the federal Clean Air Act, requirements to replace fossil fuels with renewable energy or
credits, or other environmental regulation or taxes could impact the availability of goods and the prices charged by suppliers, which would normally
be borne by consumers through higher prices for energy and purchased goods, and could adversely impact economic conditions of areas served by
the Company. To the extent financial markets view climate change and emissions of GHGs as a financial risk, this could negatively affect the
Company's ability to access capital markets or result in less competitive terms and conditions.

MDU Resources Group, Inc. Form 10-K 27

Part I

The Company's operations are subject to environmental laws and regulations that may increase costs of operations, impact or limit business plans, or expose
the Company to environmental liabilities.
The Company is subject to environmental laws and regulations affecting many aspects of its operations, including air and water quality, wastewater
discharge, the generation, transmission and disposal of solid waste and hazardous substances, aggregate permitting and other environmental
considerations. These laws and regulations can increase capital, operating and other costs; cause delays as a result of litigation and administrative
proceedings; and create compliance, remediation, containment, monitoring and reporting obligations, particularly relating to electric generation,
permitting and environmental compliance for construction material facilities, and natural gas transmission and storage operations. Environmental
laws and regulations can also require the Company to install pollution control equipment at its facilities, clean up spills and other contamination and
correct environmental hazards, including payment of all or part of the cost to remediate sites where the Company's past activities, or the activities of
other parties, caused environmental contamination. These laws and regulations generally require the Company to obtain and comply with a variety of
environmental licenses, permits, inspections and other approvals and may cause the Company to shut down existing facilities due to difficulties in
assuring compliance or where the cost of compliance makes operation of the facilities uneconomical. Although the Company strives to comply with
all applicable environmental laws and regulations, public and private entities and private individuals may interpret the Company's legal or regulatory
requirements differently and seek injunctive relief or other remedies against the Company. The Company cannot predict the outcome, financial or
operational, of any such litigation or administrative proceedings.

Existing environmental laws and regulations may be revised and new laws and regulations seeking to protect the environment may be adopted or
become applicable to the Company. These laws and regulations could require the Company to limit the use or output of certain facilities; restrict the
use of certain fuels; prohibit or restrict new or existing services; replace certain fuels with renewable fuels; retire and replace certain facilities; install
pollution controls; remediate environmental impacts; remove or reduce environmental hazards; or forego or limit the development of resources.
Revised or new laws and regulations that increase compliance and disclosure costs and or restrict operations, particularly if costs are not fully
recoverable from customers, could adversely affect the Company's results of operations and cash flows.

Initiatives related to global climate change and to reduce GHG emissions could adversely impact the Company's operation, costs of or access to capital and
impact or limit business plans.
Concern that GHG emissions contribute to global climate change has led to international, federal, state and local legislative and regulatory proposals
to reduce or mitigate the effects of GHG emissions. The Company’s primary GHG emission is carbon dioxide from fossil fuels combustion at
Montana-Dakota's electric generating facilities, particularly its coal-fired facilities. Approximately 42 percent of Montana-Dakota's owned generating
capacity and approximately 69 percent of the electricity it generated in 2021 was from coal-fired facilities.

Treaties, legislation or regulations to reduce GHG emissions in response to climate change may be adopted that affect the Company's utility and
pipeline operations by requiring additional energy conservation efforts or renewable energy sources, limiting emissions, imposing carbon taxes or
other compliance costs; as well as other mandates that could significantly increase capital expenditures and operating costs or reduce demand for
the Company's utility services. If the Company’s utility operations do not receive timely and full recovery of GHG emission compliance costs from
customers, then such costs could adversely impact the results of operations and cash flows. Significant reductions in demand for the Company's
utility services as a result of increased costs or emissions limitations could also adversely impact the results of operations and cash flows.

The Company monitors, analyzes and reports GHG emissions from its other operations as required by applicable laws and regulations. The Company
will continue to monitor GHG regulations and their potential impact on operations.

Due to the uncertain availability of technologies to control GHG emissions and the unknown obligations that potential GHG emission legislation or
regulations may create, the Company cannot determine the potential financial impact on its operations.

There have also been recent efforts to discourage the investment community from investing in equity and debt securities of companies engaged in
fossil fuel related business and pressuring lenders to limit funding to such companies. Additionally, some insurance carriers have indicated an
unwillingness to insure assets and operations related to certain fossil fuels. Although the Company has not experienced difficulties in accessing the
capital markets or insurance; such efforts, if successfully directed at the Company, could increase the costs of or access to capital or insurance and
interfere with business operations and ability to make capital expenditures.

Other Risks
The Company's various businesses are seasonal and subject to weather conditions that could adversely affect the Company's operations, revenues and cash
flows.
The Company's results of operations could be affected by changes in the weather. Weather conditions influence the demand for electricity and
natural gas and affect the price of energy commodities. Utility operations have historically generated lower revenues when weather conditions are
cooler than normal in the summer and warmer than normal in the winter, particularly in jurisdictions that do not have weather normalization
mechanisms in place. Where weather normalization mechanisms are in place, there is no assurance the Company will continue to receive such
regulatory protection from adverse weather in future rates.

Adverse weather conditions, such as heavy or sustained rainfall or snowfall, storms, wind and colder weather may affect the demand for products and
the ability to perform services at the construction businesses and affect ongoing operation and maintenance and construction activities for the
electric and natural gas transmission and distribution businesses. In addition, severe weather can be destructive, causing outages and property

28 MDU Resources Group, Inc. Form 10-K

Part I

damage, which could require additional remediation costs. The Company could also be impacted by drought conditions, which may restrict the
availability of water supplies and inhibit the ability of the construction businesses to conduct operations. As a result, unusual or adverse weather
conditions could negatively affect the Company's results of operations, financial position and cash flows.

Competition exists in all of the Company's businesses.
The Company's businesses are subject to competition. Construction services' competition is based primarily on price and reputation for quality, safety
and reliability. Construction materials products are marketed under highly competitive conditions and are subject to competitive forces such as price,
service, delivery time and proximity to the customer. The electric utility and natural gas businesses also experience competitive pressures as a result
of consumer demands, technological advances and other factors. The pipeline business competes with several pipelines for access to natural gas
supplies and for transportation and storage business. New acquisition opportunities are subject to competitive bidding environments which impact
prices the Company must pay to successfully acquire new properties and acquisition opportunities to grow its business. The Company's failure to
effectively compete could negatively affect the Company's results of operations, financial position and cash flows.

The Company's operations may be negatively affected if it is unable to obtain, develop and retain key personnel and skilled labor forces.
The Company must attract, develop and retain executive officers and other professional, technical and skilled labor forces with the skills and
experience necessary to successfully manage, operate and grow the Company's businesses. Due to the changing workforce demographics and a lack
of younger employees who are qualified to replace employees as they retire and remote work opportunities, among other things, competition for these
employees is high. In some cases competition for these employees is on a regional or national basis. At times of low unemployment or economic
downturns, it can be difficult for the Company to attract and retain qualified and affordable personnel. A shortage in the supply of skilled personnel
creates competitive hiring markets, increased labor expenses, decreased productivity and potentially lost business opportunities to support the
Company's operating and growth strategies. Additionally, if the Company is unable to hire employees with the requisite skills, the Company may be
forced to incur significant training expenses. As a result, the Company's ability to maintain productivity, relationships with customers, competitive
costs, and quality services is limited by the ability to employ, retain and train the necessary skilled personnel and could negatively affect the
Company's results of operations, financial position and cash flows.

The Company's construction materials and contracting and construction services businesses may be exposed to warranty claims.
The Company, particularly its construction businesses, may provide warranties guaranteeing the work performed against defects in workmanship and
material. If warranty claims occur, they may require the Company to re-perform the services or to repair or replace the warranted item, at a cost to
the Company and could also result in other damages if the Company is not able to adequately satisfy warranty obligations. In addition, the Company
may be required under contractual arrangements with customers to warrant any defects or failures in materials the Company purchased from third
parties. While the Company generally requires suppliers to provide warranties that are consistent with those the Company provides to customers, if
any of the suppliers default on their warranty obligations to the Company, the Company may nonetheless incur costs to repair or replace the defective
materials. Costs incurred as a result of warranty claims could adversely affect the Company's results of operations, financial condition and cash
flows.

The Company is a holding company and relies on cash from its subsidiaries to pay dividends.
The Company's investments in its subsidiaries comprise the Company's primary assets. The Company depends on earnings, cash flows and dividends
from its subsidiaries to pay dividends on its common stock. Regulatory, contractual and legal limitations, as well as their capital requirements, affect
the ability of the subsidiaries to pay dividends to the Company and thereby could restrict or influence the Company's ability or decision to pay
dividends on its common stock, which could adversely affect the Company's stock price.

Costs related to obligations under MEPPs could have a material negative effect on the Company's results of operations and cash flows.
Various operating subsidiaries of the Company participate in 69 MEPPs for employees represented by certain unions. The Company is required to
make contributions to these plans in amounts established under numerous collective bargaining agreements between the operating subsidiaries and
those unions.

The Company may be obligated to increase its contributions to underfunded plans that are classified as being in endangered, seriously endangered or
critical status as defined by the Pension Protection Act of 2006. Plans classified as being in one of these statuses are required to adopt RPs or FIPs
to improve their funded status through increased contributions, reduced benefits or a combination of the two. Based on available information, the
Company believes that approximately 28 percent of the MEPPs to which it contributes are currently in endangered, seriously endangered or critical
status.

The Company may also be required to increase its contributions to MEPPs if the other participating employers in such plans withdraw from the plans
and are not able to contribute amounts sufficient to fund the unfunded liabilities associated with their participation in the plans. The amount and
timing of any increase in the Company's required contributions to MEPPs may depend upon one or more factors including the outcome of collective
bargaining; actions taken by trustees who manage the plans; actions taken by the plans' other participating employers; the industry for which
contributions are made; future determinations that additional plans reach endangered, seriously endangered or critical status; newly-enacted
government laws or regulations and the actual return on assets held in the plans; among others. The Company could experience increased operating
expenses as a result of required contributions to MEPPs, which could have an adverse effect on the Company's results of operations, financial
position or cash flows.

MDU Resources Group, Inc. Form 10-K 29

Part I

In addition, pursuant to ERISA, as amended by MPPAA, the Company could incur a partial or complete withdrawal liability upon withdrawing from a
plan, exiting a market in which it does business with a union workforce or upon termination of a plan. The Company could also incur additional
withdrawal liability if its withdrawal from a plan is determined by that plan to be part of a mass withdrawal.

Technology disruptions or cyberattacks could adversely impact the Company's operations.
The Company uses technology in substantially all aspects of its business operations and requires uninterrupted operation of information technology
and operation technology systems, including disaster recovery and backup systems and network infrastructure. While the Company has policies,
procedures and processes in place designed to strengthen and protect these systems, they may be vulnerable to physical and cybersecurity failures or
unauthorized access, due to:

• hacking,

• human error,

• theft,

• sabotage,

• malicious software,

• ransomware,

• third-party compromise,

• acts of terrorism,

• acts of war,

• acts of nature or

• other causes.

Although there are manual processes in place, should a compromise or system failure occur, interdependencies to technology may disrupt the
Company's ability to fulfill critical business functions. This may include interruption of electric generation, transmission and distribution facilities,
natural gas storage and pipeline facilities and facilities for delivery of construction materials or other products and services, any of which could
adversely affect the Company's reputation, business, cash flows and results of operations or subject the Company to legal or regulatory liabilities and
increased costs. Additionally, the Company's electric generation and transmission systems and natural gas pipelines are part of interconnected
systems with other operators’ facilities; therefore, a cyber-related disruption in another operator’s system could negatively impact the Company's
business.

The Company’s accounting systems and its ability to collect information and invoice customers for products and services could be disrupted. If the
Company’s operations are disrupted, it could result in decreased revenues and remediation costs that could adversely affect the Company's results of
operations and cash flows.

The Company is subject to cybersecurity and privacy laws, regulations and security directives of many government agencies, including TSA, FERC
and NERC. NERC issues comprehensive regulations and standards surrounding the security of bulk power systems and continually updates these
requirements, as well as establishing new requirements with which the utility industry must comply. As these regulations evolve, the Company may
experience increased compliance costs and may be at higher risk for violating these standards. Experiencing a cybersecurity incident could cause the
Company to be non-compliant with applicable laws and regulations, causing the Company to incur costs related to legal claims, proceedings and
regulatory fines or penalties.

The Company, through the ordinary course of business, requires access to sensitive customer, supplier, employee and Company data. While the
Company has implemented extensive security measures, including limiting the amount of sensitive information retained, a breach of its systems
could compromise sensitive data and could go unnoticed for some time. Such an event could result in negative publicity and reputational harm,
remediation costs, legal claims and fines that could have an adverse effect on the Company's financial results. Third-party service providers that
perform critical business functions for the Company or have access to sensitive information within the Company also may be vulnerable to security
breaches and information technology risks that could adversely affect the Company.

The Company’s information systems experience ongoing and often sophisticated cyberattacks by a variety of sources with the apparent aim to breach
the Company's cyber-defenses. Although the incidents the Company has experienced to date have not had a material effect on its business, financial
condition or results of operations, such incidents could have a material adverse effect in the future as cyberattacks continue to increase in frequency
and sophistication. The Company is continuously reevaluating the need to upgrade and/or replace systems and network infrastructure. These
upgrades and/or replacements could adversely impact operations by imposing substantial capital expenditures, creating delays or outages, or
experiencing difficulties transitioning to new systems. System disruptions, if not anticipated and appropriately mitigated, could adversely affect the
Company.

30 MDU Resources Group, Inc. Form 10-K

General risk factors that could impact the Company's businesses.
The following are additional factors that should be considered for a better understanding of the risks to the Company. These factors may negatively
impact the Company's financial results in future periods.

Part I

• Acquisition, disposal and impairments of assets or facilities.

• Changes in present or prospective electric generation.

• Population decline and demographic patterns in the Company's areas of service.

• The cyclical nature of large construction projects at certain operations.

• Labor negotiations or disputes.

• Succession planning.

• Inability of contract counterparties to meet their contractual obligations.

• The inability to effectively integrate the operations and the internal controls of acquired companies.

Item 1B. Unresolved Staff Comments

The Company has no unresolved comments with the SEC.

Item 3. Legal Proceedings

SEC regulations require the Company to disclose certain information about proceedings arising under federal, state or local environmental provisions
if the Company reasonably believes that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to SEC regulations,
the Company has adopted a threshold of $1.0 million for purposes of determining whether disclosure of any such proceedings is required.

For information regarding legal proceedings required by this item, see Item 8 - Note 21, which is incorporated herein by reference.

Item 4. Mine Safety Disclosures

For information regarding mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act and Item 104 of
Regulation S-K, see Exhibit 95 to this Form 10-K, which is incorporated herein by reference.

MDU Resources Group, Inc. Form 10-K 31

Part II

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities

The Company's common stock is listed on the New York Stock Exchange under the symbol "MDU."

As of December 31, 2021, the Company's common stock was held by approximately 9,900 stockholders of record.

The Company depends on earnings and dividends from its subsidiaries to pay dividends on common stock. The Company has paid uninterrupted
dividends to stockholders for 84 consecutive years with an increase in the payout amount for the last 31 consecutive years. The declaration and
payment of dividends is at the sole discretion of the board of directors, subject to limitations imposed by agreements governing the Company's
indebtedness, federal and state laws, and applicable regulatory limitations. For more information on factors that may limit the Company's ability to
pay dividends, see Item 8 - Note 12.

The following table includes information with respect to the Company's purchase of equity securities:

ISSUER PURCHASES OF EQUITY SECURITIES

Period

October 1 through October 31, 2021

November 1 through November 30, 2021

December 1 through December 31, 2021

Total

(a)
Total Number
of Shares
(or Units)
Purchased (1)

(b)
Average Price Paid
per Share
(or Unit)

—

41,925

372

42,297

—

$28.98

$30.85

$29.00

(d)
Maximum Number (or
Approximate Dollar
Value) of Shares (or
Units) that May Yet Be
Purchased Under the
Plans or Programs (2)

—

(1) Represents shares of common stock purchased on the open market in connection with annual stock grants made to the Company's non-employee directors and for

those directors who elected to receive additional shares of common stock in lieu of a portion of their cash retainer.

(2) Not applicable. The Company does not currently have in place any publicly announced plans or programs to purchase equity securities.

Item 6.

Reserved.

32 MDU Resources Group, Inc. Form 10-K

Part II

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation

The Company is Building a Strong America® by providing essential infrastructure and services through its regulated energy delivery and construction
materials and services businesses. The Company and its employees work hard to keep the economy of America moving with the products and services
provided, which include powering, heating and connecting homes, factories, offices and stores; and building roads, highways, data infrastructure and
airports.

The Company's two-platform business model, regulated energy delivery and construction materials and services, are each comprised of different
operating segments. Most of these segments experience seasonality related to the industries in which they operate. The two-platform approach helps
balance this seasonality and the risks associated with each type of industry. The Company is authorized to conduct business in nearly every state and
during peak construction season has employed over 16,000 employees. The Company’s organic investments are strong drivers of high-quality
earnings and continue to be an important part of the Company’s growth. Management believes the Company is well positioned in the industries and
markets in which it operates.

The Company continues to effectively execute its strategy while managing the ongoing effects of the COVID-19 pandemic. Since early 2020, the
Company has maintained its business continuity plans as well as a task force to monitor developments related to the pandemic allowing the Company
to continue to provide safe and reliable services. Most of the Company's products and services are considered essential to its country and
communities and, as a result, operations have generally continued throughout the pandemic.

Certain of the Company's supply vendors are facing production and staffing challenges as they work to achieve production capacity and lead times
consistent with pre-pandemic levels. Coupled with other challenges of the pandemic, these vendors are also experiencing strong demand from the
residential construction market, some industrial segments and some utility infrastructure investments. In addition, freight markets continue to have
challenges with driver shortages; strong demand for consumer goods; extended lead times; and costs for vehicles, driver retention and recruitment.
The Company has implemented measures to proactively order supplies and work with additional suppliers to ensure work continues without delays;
however, the Company has experienced some delays on delivery of certain materials as well as cost pressures from supply chain disruptions and
commodity price inflation.

The situation surrounding COVID-19 and the potential impacts on the Company and the economy remain fluid. A number of factors could directly
impact the Company and the economy, including a widespread resurgence in COVID-19 infections, whether due to the spread of variants of the virus
or otherwise; the rate of vaccinations; vaccine mandates; labor constraints; the strength of the global supply chain; and the rate in which
governments are re-opening businesses or, in certain jurisdictions, reversing re-opening decisions. Due to the uncertainty of the economic outlook
resulting from the COVID-19 pandemic, the Company continues to monitor the situation closely. Although there have been logistical and other
challenges as a result of COVID-19, there were no material adverse impacts on the Company's results of operations for the years ended December 31,
2021 or 2020. The Company will continue to adjust its business in response to the pandemic while positioning for potential opportunities to
enhance its competitive position. For more information specific to each of the Company's business segments, see the following discussions in each
business segment's Outlook section. For more information on the possible impacts, see Item 1A - Risk Factors.

MDU Resources Group, Inc. Form 10-K 33

Part II

Consolidated Earnings Overview
The following table summarizes the contribution to the consolidated income by each of the Company's business segments.

Years ended December 31,

Electric

Natural gas distribution

Pipeline

Construction materials and contracting

Construction services

Other

Income from continuing operations

Income (loss) from discontinued operations, net of tax

Net income

Earnings per share - basic:

Income from continuing operations

Discontinued operations, net of tax

Earnings per share - basic

Earnings per share - diluted:

Income from continuing operations

Discontinued operations, net of tax

Earnings per share - diluted

2021

2020

2019

(In millions, except per share amounts)

51.9 $

55.6 $

51.6

40.9

129.8

109.4

(5.9)

44.0

37.0

147.3

109.7

(3.1)

54.8

39.5

29.6

120.4

93.0

(2.1)

377.7

390.5

335.2

(.3)

378.1 $

390.2 $

335.5

1.87 $

1.95 $

—

1.87 $

1.95 $

1.87 $

1.95 $

—

1.87 $

1.95 $

1.69

—

1.69

—

1.69

2021 compared to 2020 The Company's consolidated earnings decreased $12.1 million.

Negatively impacting the Company's earnings was a decrease in gross margin across most product lines at the construction materials and contracting
business resulting from labor constraints; increased material costs, including asphalt oil and fuel; higher equipment, repair and maintenance costs;
and less available paving work in certain regions. The decrease was partially offset by higher AFUDC for the construction of the North Bakken
Expansion project and higher earnings due to increased natural gas transportation volumes at the pipeline business. Also positively impacting
earnings were higher adjusted gross margins at the electric and natural gas businesses, largely a result of approved rate relief in certain jurisdictions,
partially offset by higher operations and maintenance expenses.

2020 compared to 2019 The Company's consolidated earnings increased $54.7 million.

The Company's earnings were positively impacted by increased earnings across all of the Company's businesses in 2020. The construction materials
and contracting business experienced an increase in gross margin, primarily resulting from favorable weather conditions and higher realized materials
margins on asphalt and asphalt-related products and ready-mix concrete, as well as most other product lines. The construction services business also
experienced an increase in gross margin as a result of higher specialty contracting workloads, partially due to the businesses acquired, as well as
hospitality projects, high-tech projects and natural disaster recovery work. The pipeline business experienced increased transportation volumes and
revenues, largely related to organic growth projects, as well as higher storage-related revenues as a result of stronger demand for storage services. In
addition, approved rate recovery positively impacted earnings at the electric and natural gas distribution businesses.

A discussion of key financial data from the Company's business segments follows.

Business Segment Financial and Operating Data
Following are key financial and operating data for each of the Company's business segments. Also included are highlights on key growth strategies,
projections and certain assumptions for the Company and its subsidiaries and other matters of the Company's business segments. Many of these
highlighted points are "forward-looking statements." For more information, see Part I - Forward-Looking Statements. There is no assurance that the
Company's projections, including estimates for growth and changes in earnings, will in fact be achieved. Please refer to assumptions contained in
this section, as well as the various important factors listed in Item 1A - Risk Factors. Changes in such assumptions and factors could cause actual
future results to differ materially from the Company's growth and earnings projections.

For information pertinent to various commitments and contingencies, see Item 8 - Notes to Consolidated Financial Statements. For a summary of the
Company's business segments, see Item 8 - Note 17.

34 MDU Resources Group, Inc. Form 10-K

Part II

Electric and Natural Gas Distribution
Strategy and challenges The electric and natural gas distribution segments provide electric and natural gas distribution services to customers, as
discussed in Items 1 and 2 - Business Properties. Both segments strive to be top performing utility companies measured by integrity, employee
safety and satisfaction, customer service and shareholder return, while providing safe, environmentally responsible, reliable and competitively priced
energy and related services to customers. The Company is focused on cultivating organic growth while managing operating costs and monitoring
opportunities for these segments to retain, grow and expand their customer base through extensions of existing operations, including building and
upgrading electric generation, transmission and distribution, and natural gas systems, and through selected acquisitions of companies and properties
with similar operating and growth objectives at prices that will provide stable cash flows and an opportunity to earn a competitive return on
investment. The continued efforts to create operational improvements and efficiencies across both segments promotes the Company's business
integration strategy. The primary factors that impact the results of these segments are the ability to earn authorized rates of return, the cost of
natural gas, cost of electric fuel and purchased power, weather, climate change initiatives, competitive factors in the energy industry, population
growth and economic conditions in the segments' service areas.

The electric and natural gas distribution segments are subject to extensive regulation in the jurisdictions where they conduct operations with respect
to costs, timely recovery of investments and permitted returns on investment. The Company is focused on modernizing utility infrastructure to meet
the varied energy needs of both its customers and communities while ensuring the delivery of safe, environmentally responsible, reliable and
affordable energy. The segments continue to invest in facility upgrades to be in compliance with existing and known future regulations. To assist in
the reduction of regulatory lag in obtaining revenue increases to align with increased investments, tracking mechanisms have been implemented in
certain jurisdictions, as further discussed in Items 1 and 2 - Business Properties and Item 8 - Note 20.

The segments are also subject to extensive regulation including certain operational and environmental compliance, cybersecurity, permit terms and
system integrity. The natural gas segment recently implemented procedure changes issued by PHSMA that were effective July 1, 2021. Both
segments are faced with the ongoing need to actively evaluate cybersecurity processes and procedures related to its transmission and distribution
systems for opportunities to further strengthen its cybersecurity protections. Implementation of enhancements and additional requirements is
ongoing.

To date, many states have enacted and others are considering, mandatory clean energy standards requiring utilities to meet certain thresholds of
renewable and/or carbon-free energy supply. The current presidential administration has made climate change a focus, including consideration for
legislation on clean energy standards and GHG emission, and the Company expects that to continue. Over the long-term, the Company expects
overall electric demand to be positively impacted by increased electrification trends, including electric vehicle adoption, as a means to address
economy-wide carbon emission concerns and changing customer conservation patterns. These initiatives could result in increased costs to produce
electricity and procure natural gas. To date, the impact of these initiatives on the Company is unknown. The Company will continue to monitor the
progress of these initiatives and assess the potential impacts they may have on its stakeholders, business processes, results of operations, cash flows
and disclosures.

Revenues are impacted by both customer growth and usage, the latter of which is primarily impacted by weather, as well as impacts associated with
commercial and industrial slow-downs, including economic recessions, and energy efficiencies. Very cold winters increase demand for natural gas
and to a lesser extent, electricity, while warmer than normal summers increase demand for electricity, especially among residential and commercial
customers. Average consumption among both electric and natural gas customers has tended to decline as more efficient appliances and furnaces are
installed, and as the Company has implemented conservation programs. Natural gas weather normalization and decoupling mechanisms in certain
jurisdictions have been implemented to largely mitigate the effect that would otherwise be caused by variations in volumes sold to these customers
due to weather and changing consumption patterns on the Company's distribution margins, as further discussed in Items 1 and 2 - Business
Properties.

In February 2021, a prolonged period of unseasonably cold temperatures in the central United States significantly increased the demand for electric
and natural gas services and contributed to increased market prices. The Company's transmission settlement process with SPP helped offset the
increased energy costs to electric customers during the cold-weather event. Further, in some jurisdictions the Company utilized natural gas in storage
to lessen the impact of high natural gas costs. Overall, Montana-Dakota and Great Plains incurred approximately $44.0 million in increased natural
gas costs in order to maintain services for its customers. These extraordinary natural gas costs were recorded as regulatory assets as they are
expected to be recovered from customers. Montana-Dakota and Great Plains have received approval for the recovery of purchased gas adjustments
related to the cold-weather event in all jurisdictions impacted, including out-of-cycle purchased gas adjustment requests in most jurisdictions. The
approval in Minnesota is subject to a prudence review by the MNPUC, which is pending, with an order to be issued on or before August 29, 2022.
For a discussion of the Company's most recent cases by jurisdiction, see Item 8 - Note 20.

The electric and natural gas distribution segments continue to face increased lead times on delivery of certain raw materials and equipment used in
electric transmission and distribution system and natural gas pipeline projects. Long lead times are attributable to increased demand for steel
products from pipeline companies as they continue pipeline system safety and integrity replacement projects driven by PHMSA regulations, as well
as delays in the manufacturing of electrical equipment as a result of the COVID-19 pandemic, including delays in shipping times and issuance of
permits for large and heavy loads. The Company did not experience significant impacts from these delays for the year ended December 31, 2021.

MDU Resources Group, Inc. Form 10-K 35

Part II

However, the Company continues to monitor the material lead times and is working with manufacturers to proactively order such materials and
working with additional suppliers to help mitigate the risk of any delays.

The ability to grow through acquisitions is subject to significant competition and acquisition premiums. In addition, the ability of the segments to
grow their service territory and customer base is affected by regulatory constraints, the economic environment of the markets served and competition
from other energy providers and fuels. The construction of new electric generating facilities, transmission lines and other service facilities is subject
to increasing costs and lead times, extensive permitting procedures, and federal and state legislative and regulatory initiatives, which may
necessitate increases in electric energy prices.

Earnings overview - The following information summarizes the performance of the electric segment.

Years ended December 31,

2021

2020

2019

Variance

2021 vs. 2020 2020 vs. 2019

Operating revenues

Electric fuel and purchased power

Taxes, other than income

Adjusted gross margin

Operating expenses:

Operation and maintenance

Depreciation, depletion and amortization

Taxes, other than income

Total operating expenses

Operating income

Other income

Interest expense

Income before income taxes

Income tax benefit

Net income

(In millions)

$ 349.6 $ 332.0 $ 351.7

74.1

66.9

86.6

274.7

264.5

124.9

121.3

125.7

66.8

16.7

63.0

16.8

58.7

16.1

208.4

201.1

200.5

66.3

63.4

4.6

26.7

44.2

7.2

26.7

43.9

64.0

3.4

25.3

42.1

(7.7)

(11.7)

(12.7)

51.9 $

55.6 $

54.8

5.3 %

10.8 %

33.3 %

3.9 %

3.0 %

6.0 %

(.6) %

3.6 %

4.6 %

(5.6) %

(22.7) %

— %

(3.5) %

7.3 %

4.3 %

.3 %

(.9) %

(36.1) %

111.8 %

— %

.7 %

(34.2) %

(6.7) %

5.5 %

4.3 %

(7.9) %

1.5 %

Adjusted gross margin is a non-GAAP financial measure. For additional information and reconciliation of the non-GAAP adjusted gross margin
attributable to the electric segment, see the Non-GAAP Financial Measures section later in this Item.

Operating statistics

Revenues (millions)

Retail sales:

Residential

Commercial

Industrial

Other

Transportation and other

Retail sales (million kWh)

Residential

Commercial

Industrial

Other

2021

2020

2019

$ 123.0 $ 122.6 $ 125.6

133.3

131.2

142.1

40.5

36.7

6.8

6.6

37.8

7.4

303.6

297.1

312.9

46.0

34.9

38.8

$ 349.6 $ 332.0 $ 351.7

1,164.8 1,170.9 1,177.9

1,433.0 1,419.4 1,499.9

589.4

532.1

549.4

84.4

82.1

87.1

3,271.6 3,204.5 3,314.3

Average cost of electric fuel and purchased power per kWh

.021 $

.019 $

.023

2021 compared to 2020 Electric earnings decreased $3.7 million as a result of:
• Adjusted gross margin increased $10.2 million attributable to:

◦ Higher transmission revenues of $3.3 million.
◦ Higher transmission interconnect upgrades of $2.4 million.
◦ Higher MISO revenue of $2.0 million.
◦ Higher demand revenues of $1.5 million.

36 MDU Resources Group, Inc. Form 10-K

Part II

◦

Increased retail sales volumes of 2.1 percent, largely as a result of increased industrial and commercial sales volumes, offset in part by lower
residential sales volumes, as the impacts of the COVID-19 pandemic began to reverse and businesses reopened.

• Operation and maintenance increased $3.6 million.

◦ Primarily the result of:

• Higher planned maintenance outage costs of $2.1 million at Big Stone Station and $800,000 higher maintenance fees at Thunder Spirit.
• Higher other miscellaneous expenses.

◦ Partially offset by lower payroll-related costs of $700,000, which includes lower employee incentive accruals, offset in part by higher health

care costs.

• Depreciation, depletion and amortization increased $3.8 million largely resulting from:

◦
◦

Increased property, plant and equipment balances, primarily related to transmission projects placed in service.
Increased amortization of plant retirement and closure costs of $1.7 million recovered in operating revenues, as discussed in Item 8 - Note 6.

• Taxes, other than income was comparable to the same period in the prior year.

• Other income decreased $2.6 million.

◦ Primarily due to:

• The absence of an out-of-period adjustment of $2.5 million in 2020 as a result of previously overstated benefit plan expenses.
• Lower returns on certain of the Company's benefit plan investments of $1.3 million.

◦ Partially offset by increased interest income associated with higher contributions in aid of construction.

• Interest expense was comparable to the same period in the prior year.

• Income tax benefit decreased $4.0 million largely resulting from:

◦ Lower production tax credits of $2.1 million related to the expiration of the 10-year credit-qualifying period on certain facilities and less wind

generation.

◦ Lower excess deferred tax amortization.

2020 compared to 2019 Electric earnings increased $800,000 as a result of:
• Adjusted gross margin in 2020 was comparable to that of 2019.

◦ Positively impacted by higher rates of $2.8 million, including approved rate relief resulting in $2.0 million additional revenue.
◦ Offset by lower retail sales volumes of 3.3 percent across all customer classes due to warmer weather and slow-downs as a result of the

COVID-19 pandemic.

• Operation and maintenance expense decreased $4.4 million.

◦ Largely due to:

• Lower generation station expenses of $3.5 million.
• Lower payroll and other employee-related costs of approximately $1.5 million.

◦ Partially offset by increased bad debt expense of $500,000 as a result of the COVID-19 pandemic, as discussed later.

• Depreciation, depletion and amortization increased $4.3 million largely from:

Increased asset base driven by capital expenditures, which include transmission projects.

◦
◦ Higher depreciation rates implemented from a Montana rate case of $1.2 million.

• Taxes, other than income increased $700,000 from higher property taxes in certain jurisdictions.

• Other income increased $3.8 million largely attributable to:

◦ An out-of-period adjustment of $2.5 million in the fourth quarter of 2020 as a result of previously overstated benefit plan expenses.
◦ The absence of the write-down of a non-utility investment in the second quarter of 2019 for $1.2 million.
◦ Lower 2020 pension expense.

• Interest expense increased $1.4 million driven by higher short-term debt balances.

• Income tax benefit decreased $1.0 million, largely due to higher income before income taxes.

MDU Resources Group, Inc. Form 10-K 37

Part II

Earnings overview - The following information summarizes the performance of the natural gas distribution segment.

Years ended December 31,

2021

2020

2019

Variance

2021 vs. 2020 2020 vs. 2019

Operating revenues

Purchased natural gas sold

Taxes, other than income

Adjusted gross margin

Operating expenses:

Operation and maintenance

Depreciation, depletion and amortization

Taxes, other than income

Total operating expenses

Operating income

Other income

Interest expense

Income before income taxes

Income tax expense

Net income

* NM - not meaningful

(In millions)

$ 971.9 $ 848.2 $ 865.2

542.0

448.1

477.6

34.7

32.4

30.3

395.2

367.7

357.3

194.1

185.4

185.0

86.0

25.9

84.6

24.6

79.6

23.5

306.0

294.6

288.1

89.2

8.1

37.3

60.0

8.4

73.1

13.5

36.8

49.8

5.8

69.2

7.2

35.5

40.9

1.4

51.6 $

44.0 $

39.5

14.6 %

21.0 %

7.1 %

7.5 %

4.7 %

1.7 %

5.3 %

3.9 %

22.0 %

(40.0) %

1.4 %

20.5 %

44.8 %

17.3 %

(2.0) %

(6.2) %

6.9 %

2.9 %

.2 %

6.3 %

4.7 %

2.3 %

5.6 %

87.5 %

3.7 %

21.8 %

11.4 %

Adjusted gross margin is a non-GAAP financial measure. For additional information and reconciliation of the non-GAAP adjusted gross margin
attributable to the natural gas distribution segment, see the Non-GAAP Financial Measures section later in this Item.

Operating statistics

Revenues (millions)

Retail sales:

Residential

Commercial

Industrial

Transportation and other

Volumes (MMdk)

Retail sales:

Residential

Commercial

Industrial

Transportation sales:

Commercial

Industrial

Total throughput

2021

2020

2019

$ 548.1 $ 480.5 $ 479.7

330.4

281.2

293.2

31.1

26.2

26.5

909.6

787.9

799.4

62.3

60.3

65.8

$ 971.9 $ 848.2 $ 865.2

65.6

44.7

5.0

65.5

44.2

4.8

69.4

49.1

5.2

115.3

114.5

123.7

1.9

2.0

2.2

172.5

158.0

163.9

174.4

160.0

166.1

289.7

274.5

289.8

Average cost of natural gas per dk

4.70 $

3.91 $

3.86

2021 compared to 2020: Natural gas distribution earnings increased $7.6 million as a result of:
• Adjusted gross margin increased $27.5 million.

◦ Largely as a result of:

• Approved rate relief in certain jurisdictions of $15.9 million.
• Increased retail sales volumes of 0.7 percent across all customer classes, including the benefit of weather normalization and decoupling

mechanisms in certain jurisdictions.

• Increased transportation volumes of 9 percent, primarily to electric generation customers.
• Higher non-regulated project revenues of $1.7 million.
• Increased basic service charges due to customer growth and increased per unit average rates of $1.5 million each.

38 MDU Resources Group, Inc. Form 10-K

Part II

• Operation and maintenance increased $8.7 million.

◦ Primarily due to:

• Higher payroll-related costs of $4.3 million, largely related to health care costs and straight-time payroll.
• Decreased credits of $2.4 million for costs associated with the installation of meters partially from delaying meter replacements for safety

measures implemented as a result of the COVID-19 pandemic.

• Higher expenses for materials, new software, insurance and vehicle fuel.

◦ Partially offset by:

• The absence of the write-off of an abandoned project in the third quarter of 2020 for $1.2 million.
• Decreased bad debt expense of $1.0 million as the impacts of the COVID-19 pandemic began to subside.

• Depreciation, depletion and amortization increased $1.4 million.

◦ Largely from increased property, plant and equipment balances from growth and replacement projects placed in service.
◦ Partially offset by decreased depreciation rates in certain jurisdictions of $4.0 million.

• Taxes, other than income increased $1.3 million resulting from:
◦ Higher property taxes in certain jurisdictions of $700,000.
◦ Higher payroll taxes driven by increased payroll-related costs.

• Other income decreased $5.4 million primarily related to:

◦ The absence of an out-of-period adjustment of $4.4 million in 2020 as a result of previously overstated benefit plan expenses.
◦ Decreased interest income related to the recovery of purchased gas cost adjustment balances in certain jurisdictions.

• Interest expense increased $500,000, primarily from lower AFUDC borrowed.

• Income tax expense increased $2.6 million due to higher income before income taxes.

2020 compared to 2019 Natural gas distribution earnings increased $4.5 million as a result of:
• Adjusted gross margin increased $10.4 million.

◦ Largely the result of:

• Approved rate recovery of $6.8 million in certain jurisdictions.
• Higher basic service charges of $2.1 million due to customer growth of 2 percent.
• Increased property tax tracker revenue of $1.7 million, which offsets the property tax expense below.

◦ Slightly offset by decreased retail sales volumes of 7.4 percent across all customer classes due to warmer weather and slow-downs as a result

of the COVID-19 pandemic, largely offset by weather normalization and decoupling mechanisms in certain jurisdictions.

• Operation and maintenance increased $400,000.

◦ Primarily related to:

• Increased contract services, largely $1.2 million for the write-off of an abandoned project in the third quarter of 2020.
• Increased software expenses.

◦ Partially offset by lower employee-related costs of $1.6 million as a result of the COVID-19 pandemic.

• Depreciation, depletion and amortization increased $5.0 million, primarily from an increase in asset base driven by capital expenditures, which

include system safety and reliability enhancements and other growth projects.

• Taxes, other than income increased $1.1 million due to:

◦ Higher property taxes in certain jurisdictions of $1.7 million.
◦ Partially offset by lower payroll taxes.

• Other income increased $6.3 million.

◦ Largely driven by:

• An out-of-period adjustment of $4.4 million in the fourth quarter of 2020 as a result of previously overstated benefit plan expenses.
• Lower 2020 benefit plan expenses of approximately $2.2 million.
• The absence of the write-down of a non-utility investment of approximately $800,000 in the second quarter of 2019.

◦ Partially offset by a decrease in interest income of $1.5 million related to the recovery of purchased gas cost adjustment balances.

• Interest expense increased $1.3 million, primarily attributable to increased long-term debt balances, partially offset by lower short-term

borrowings.

• Income tax expense increased $4.4 million as a result of:

◦ Higher income before income taxes.
◦ Permanent tax adjustments.

MDU Resources Group, Inc. Form 10-K 39

Part II

Outlook The Company continues to assess the impacts of the COVID-19 pandemic on its operations and is committed to providing safe and reliable
service while ensuring the health and safety of its employees, customers and the communities in which it operates. In 2020, the Company instituted
certain measures to help protect its employees from exposure to COVID-19 and to curb potential spread of the virus in customer homes and facilities,
including suspension of disconnects due to nonpayment of bills, and continued to adjust and reduce these measures in 2021. In April 2020, the
Company waived late payment fees to help customers experiencing financial hardships. As of October 2021, the Company had reinstated
disconnects in all states of operation and late payment fees in a majority of states. As a consequence of the suspended disconnects and waived late
fees, the Company's cash flows and collection of receivables have been affected but impacts have not been material. The Company experienced some
impacts to its commercial and industrial electric and natural gas loads associated with reduced economic activity due to the COVID-19 pandemic
and oil price impacts, as further discussed below, which began to transition back to historic levels in 2021. The Company filed requests for the use
of deferred accounting for costs related to the COVID-19 pandemic in all of the jurisdictions in which it operates and has since withdrawn its
applications in three of those jurisdictions. The Company has deferred an immaterial amount of costs related to the pandemic to date.

The Company expects these segments will grow rate base by approximately 5 percent annually over the next five years on a compound basis.
Operations are spread across eight states where the Company expects customer growth to be higher than the national average. In 2021 and 2020,
these segments experienced retail customer growth of approximately 1.7 percent and 1.8 percent, respectively, and the Company expects customer
growth to continue to average 1 percent to 2 percent per year. This customer growth, along with system upgrades and replacements needed to supply
safe and reliable service, will require investments in new and replacement electric and natural gas systems. On July 1, 2021, the Company filed in
North Dakota, and provided a courtesy copy to South Dakota, an integrated resource plan for the electric segment, which included the Company's
plans for future resources to meet customer demand. This integrated resource plan was filed in Montana on September 15, 2021.

These segments are exposed to energy price volatility and may be impacted by changes in oil and natural gas exploration and production activity.
Rate schedules in the jurisdictions in which the Company's natural gas distribution segment operates contain clauses that permit the Company to file
for rate adjustments for changes in the cost of purchased gas. Although changes in the price of natural gas are passed through to customers and
have minimal impact on the Company's earnings, the natural gas distribution segment's customers benefit from lower natural gas prices through the
Company's utilization of storage and fixed price contracts. During the third and fourth quarters of 2021, the Company experienced increased natural
gas prices and expects this trend to continue through the winter due to the increase in demand outpacing the supply. The Company will continue to
monitor natural gas prices, as well as oil and natural gas production levels.

In February 2019, the Company announced the retirement of three aging coal-fired electric generating units, resulting from the Company's analysis
showing that the plants are no longer expected to be cost competitive for customers. The Company ceased operations on March 31, 2021, of Unit 1
at Lewis & Clark Station in Sidney, Montana, and commenced decommissioning in July 2021. Units 1 and 2 at Heskett Station near Mandan, North
Dakota, are being retired during the first quarter of 2022. In addition, during the first half of 2022, the Company will begin construction of Heskett
Unit 4, an 88-MW simple-cycle natural gas-fired combustion turbine peaking unit at the existing Heskett Station near Mandan, North Dakota.

The Company is one of four owners of Coyote Station and cannot make a unilateral decision on the plant's future; therefore, the Company could be
negatively impacted by decisions of the other owners. State implementation of pollution control plans to improve visibility at Class I areas, such as
national parks, under the EPA's Regional Haze Rule could require the owners of Coyote Station to incur significant new costs. If the owners decide to
incur such costs, the costs could, dependent on determination by state regulatory commissions on approval to recover such costs from customers,
negatively impact the Company's results of operations, financial position and cash flows. The NDDEQ submitted a draft state implementation plan to
the EPA and federal land managers of the National Park Service, the United States Fish and Wildlife Service and the United States Forest Service for
consultation, and the federal land managers have submitted comments back to the NDDEQ for review. North Dakota determined it is not reasonable
to require controls during this planning period. The emissions modeling conducted for the combined western state agencies affected by the Regional
Haze Rule was delayed and has subsequently delayed the NDDEQ state implementation plan process. Therefore, the NDDEQ's state implementation
plan, which was due to the EPA by July 2021, is anticipated to be submitted to EPA in the first half of 2022. Additionally, in September 2021,
Otter Tail Power Company filed its 2022 Integrated Resource Plan in Minnesota and North Dakota which included its intent to start the process of
withdrawal from its 35 percent ownership interest in Coyote Station with an anticipated exit from the plant by December 31, 2028. The joint owners
continue to collaborate in analyzing data and weighing decisions that impact the plant and each company's employees, customers and communities
served.

The Company continues to monitor legislation related to clean energy standards that may impact its segments. The current presidential
administration is considering changes to the federal Clean Air Act, some of which were amended by the previous presidential administration. The
content and impacts of the changes under consideration are uncertain and the Company continues to monitor for potential actions by the EPA. In
Oregon, the Climate Protection Program Rule was approved in December 2021, which requires natural gas companies to reduce GHG emissions 50
percent below the baseline by 2035 and 90 percent below the baseline by 2050, which may be achieved through surrendering emissions allowances,
investing in additional customer conservation and energy efficiency programs, purchasing community climate investment credits, and purchasing low
carbon fuels such as renewable natural gas. The Company expects the compliance costs for these regulations to be recovered through customer rates.
In Washington, the Climate Commitment Act signed into law in May 2021 requires natural gas distribution companies to reduce overall GHG
emissions 45 percent below 1990 levels by 2030, 70 percent below 1990 levels by 2040 and 95 percent below 1990 levels by 2050, which may
be achieved through increased energy efficiency and conservation measures, purchased emission allowances and offsets, and purchases of low
carbon fuels. The Washington DOE has begun the Climate Commitment Program rule-making process and is expected to publish a final rule in the

40 MDU Resources Group, Inc. Form 10-K

Part II

fall of 2022. The Company has begun reviewing compliance options and expects the compliance costs for these regulations will be recovered through
customer rates.

The Company continues to be focused on the regulatory recovery of its investments by filing for rate adjustments to seek recovery of operating costs
and capital investments, as well as reasonable returns as allowed by regulators. The Company's most recent cases by jurisdiction are discussed in
Item 8 - Note 20.

Pipeline
Strategy and challenges The pipeline segment provides natural gas transportation, underground storage and energy-related services, as discussed in
Items 1 and 2 - Business Properties. The segment focuses on utilizing its extensive expertise in the design, construction and operation of energy
infrastructure and related services to increase market share and profitability through optimization of existing operations, organic growth and
investments in energy-related assets within or in close proximity to its current operating areas. The segment focuses on the continual safety and
reliability of its systems, which entails building, operating and maintaining safe natural gas pipelines and facilities. The segment continues to
evaluate growth opportunities including the expansion of natural gas facilities; incremental pipeline projects; and expansion of energy-related
services leveraging on its core competencies. In support of this strategy, the following were organic growth projects for the Company in 2021 and
2020:

• The North Bakken Expansion project in western North Dakota, construction began in July of 2021 and was placed in service in February of
2022. The project has capacity to transport 250 MMcf of natural gas per day and can be increased to 625 MMcf per day with additional
compression.

• Phase II of the Line Section 22 Expansion project in the Billings, Montana, area was placed in service in September of 2020. The completion

of Phase I and II increased capacity by 22.5 MMcf per day.

• The Demicks Lake Expansion project in McKenzie County, North Dakota, was placed in service in February of 2020 and increased capacity by

175 MMcf per day.

In April 2020 and November 2020, the Company completed the sales of its regulated and non-regulated natural gas gathering assets, respectively.
With the completion of these sales, the Company has exited the natural gas gathering business.

The segment is exposed to energy price volatility which is impacted by the fluctuations in pricing, production and basis differentials of the energy
market's commodities. Legislative and regulatory initiatives on increased pipeline safety regulations and environmental matters such as the reduction
of methane emissions could also impact the price and demand for natural gas.

The pipeline segment is also subject to extensive regulation including certain operational and environmental compliance, cybersecurity, permit terms
and system integrity. The Company continues to actively evaluate cybersecurity processes and procedures, including changes in the industry's
cybersecurity regulations, for opportunities to further strengthen its cybersecurity protections. Implementation of enhancements and additional
requirements is ongoing. The pipeline segment recently implemented procedural changes for additional regulations to strengthen the safety of natural
gas transmission and storage facilities and hazardous liquid pipelines issued by PHSMA that were effective July 1, 2021. The segment reviews and
secures existing permits and easements, as well as new permits and easements as necessary, to meet current demand and future growth
opportunities on an ongoing basis. Groups opposing natural gas pipelines could also cause negative impacts on the segment with increased costs,
potential delays to project completion or cancellation of prospective projects.

The segment regularly experiences extended lead times on raw materials that are critical to the segment's construction and maintenance work. Long
lead times on materials could delay maintenance work and construction projects potentially causing lost revenues and/or increased costs. Current
national supply chain challenges did not have significant impacts to the procurement of raw materials for the year ended December 31, 2021.
However, the Company is actively monitoring the situation and working with its manufacturers and suppliers to help mitigate the risk of delays.

The segment focuses on the recruitment and retention of a skilled workforce to remain competitive and provide services to its customers. The
industry in which it operates relies on a skilled workforce to construct energy infrastructure and operate existing infrastructure in a safe manner. A
shortage of skilled personnel can create a competitive labor market which could increase costs incurred by the segment. Competition from other
pipeline companies can also have a negative impact on the segment.

MDU Resources Group, Inc. Form 10-K 41

Part II

Earnings overview - The following information summarizes the performance of the pipeline segment.

Years ended December 31,

2021

2020

2019

Variance

2021 vs. 2020 2020 vs. 2019

Operating revenues

Operating expenses:

Operation and maintenance

Depreciation, depletion and amortization

Taxes, other than income

Total operating expenses

Operating income

Other income

Interest expense

Income before income taxes

Income tax expense

Net income

Operating statistics

Transportation volumes (MMdk)

Natural gas gathering volumes (MMdk)

Customer natural gas storage balance (MMdk):

Beginning of period

Net injection (withdrawal)

End of period

(In millions)

$ 142.6 $ 143.9 $ 140.4

(.9) %

2.5 %

2.3 %

(5.5) %

(1.6) %

— %

(2.6) %

224.1 %

(7.9) %

13.0 %

24.7 %

10.5 %

(5.1) %

2.4 %

(3.0) %

(3.2) %

15.4 %

141.7 %

5.6 %

21.5 %

6.9 %

25.0 %

61.3

20.5

12.7

59.9

21.7

12.9

94.5

48.1

49.4

9.4

7.0

2.9

7.6

50.5

44.7

9.6

7.7

63.1

21.2

13.3

97.6

42.8

1.2

7.2

36.8

7.2

40.9 $

37.0 $

29.6

2021

2020

2019

471.1

438.6

429.7

—

8.6

13.9

25.5

16.2

(2.5)

9.3

23.0

25.5

13.9

2.3

16.2

2021 compared to 2020 Pipeline earnings increased $3.9 million as a result of:
• Revenues decreased $1.3 million.

◦ Primarily decreased gathering revenues of $4.9 million due to the sale of the Company's natural gas gathering assets in 2020.
◦ Partially offset by:

• Increased transportation volumes and demand revenue of $1.8 million largely from organic growth projects, as previously discussed, and

short-term discounted contracts.

• Increased non-regulated project revenues of $1.4 million.

• Operation and maintenance increased $1.4 million due to:

◦ The absence of the gain on sale of the Company's natural gas gathering assets of $1.5 million in 2020, offset partially by lower operating

expenses related to the natural gas gathering assets.

◦ Partially offset by lower payroll-related costs.

• Depreciation, depletion and amortization decreased $1.2 million.

◦ Primarily related to lower expense of $1.6 million due to the sale of the Company's natural gas gathering assets in 2020, as previously

discussed.

◦ Slightly offset by increased property, plant and equipment balances related to organic growth projects.

• Taxes, other than income was comparable to the same period in the prior year.

• Other income increased $6.5 million.

◦ Primarily due to:

• Higher AFUDC of $7.3 million for the construction of the North Bakken Expansion project.
• The absence of the write-off of unrecovered gas costs and project expenses of $1.2 million in 2020.

◦ Partially offset by:

• The absence of a positive impact of $700,000 related to the sale of the Company's regulated gathering assets in 2020.
• The absence of an out-of-period adjustment of $500,000 in 2020 as a result of previously overstated benefit plan expenses.
• Lower returns on certain of the Company's benefit plan investments.

42 MDU Resources Group, Inc. Form 10-K

• Interest expense decreased $600,000.

◦ Primarily due to:

• Higher AFUDC of $1.5 million for the construction of the North Bakken Expansion project.
• Lower average interest rates.

◦ Partially offset by higher debt balances.

• Income tax expense increased $1.9 million.

◦ Largely a result of:

• Higher income before income taxes.
• The absence of the reversal of excess deferred taxes of $1.5 million associated with the sale of the Company's gas gathering assets in

Part II

2020.

◦ Partially offset by permanent tax adjustments and an energy efficiency tax benefit.

2020 compared to 2019 Pipeline earnings increased $7.4 million as a result of:
• Revenues increased $3.5 million.

◦ Primarily the result of:

• Increased transportation volumes and demand revenue of $6.2 million largely from organic growth projects, as previously discussed.
• Increased storage-related revenues of $4.6 million as a result of stronger demand for storage services.
• Additional revenues of $2.4 million primarily from increased rates effective May 1, 2019, due to the FERC rate case finalized in

September 2019.

◦ Partially offset by:

• Lower non-regulated project revenues of $5.3 million.
• Lower volumes associated with the sale of the Company's natural gas gathering assets in 2020 and lower gathering rates resulting in a

decrease in revenues of $4.3 million.

• Operation and maintenance decreased $3.2 million.

◦ Largely driven by:

• Decreased non-regulated project costs of $3.7 million associated with lower non-regulated project revenue.
• A $1.5 million gain on the sale of the Company's non-regulated natural gas gathering assets in 2020.

◦ Partially offset by higher payroll-related costs.

• Depreciation, depletion and amortization increased $500,000.

◦ Primarily due to:

• Additional expense of $1.3 million associated with increased property, plant and equipment balances as a result of organic growth projects

that have been placed into service.

• Higher depreciation rates effective May 1, 2019, due to the FERC rate case finalized in September 2019.

◦ Partially offset by lower expense of $1.5 million due to the sale of the Company's natural gas gathering assets in 2020.

• Taxes, other than income decreased $400,000.

◦ Driven by lower expense due to the sale of the Company's natural gas gathering assets in 2020.
◦ Partially offset by higher property taxes in certain jurisdictions of $300,000.

• Other income increased $1.7 million.

◦ As a result of:

• Higher AFUDC of $1.1 million.
• A positive impact of $700,000 related to the sale of the Company's regulated gathering assets.
• An out-of-period adjustment of $500,000 in the fourth quarter of 2020 as a result of previously overstated benefit plan expenses.

◦ Partially offset by a write-off of unrecovered gas costs and project expenses of $1.2 million.

• Interest expense increased $400,000, primarily from higher debt balances to finance organic growth projects.

• Income tax expense increased $500,000.

◦ Directly resulting from higher income before income taxes.
◦ Largely offset by the reversal of excess deferred taxes of $1.5 million associated with the sale of the Company's regulated natural gas gathering

assets.

Outlook The Company continues to manage the impacts of the COVID-19 pandemic on its operations and is committed to providing safe, reliable
and compliant service while ensuring the health and safety of its employees, customers and the communities in which it operates. Overall, the
pipeline business has experienced some impacts due to COVID-19 and does not expect significant delays to its regulatory filings or projects due to
the pandemic.

In February 2021, the FERC issued a revised notice of inquiry seeking new information and stakeholder perspectives regarding the certification of
new interstate natural gas facilities. The FERC issued the original notice of inquiry seeking stakeholder perspectives on this topic in April 2018. The
FERC also took a step toward reforming the way in which it analyzes GHG emissions for purposes of natural gas pipeline certificates by including a
quantitative analysis of the GHG emissions associated with a pipeline replacement project. At this time, no accepted methodology for a GHG

MDU Resources Group, Inc. Form 10-K 43

Part II

significance calculation has been established. A technical conference led by FERC Staff discussing methods natural gas companies may use to
mitigate the effects of direct and indirect GHG emissions was held on November 19, 2021. No clear guidance resulted from the conference and
comments regarding various questions raised at the conference were due to the FERC on January 7, 2022. On February 18, 2022, the FERC issued
two policy statements. The first is an updated certificate policy statement which will apply in pending and future certificate proceedings and is
intended to explain how the FERC will consider applications to construct new interstate natural gas transportation facilities to determine whether a
project is in the public convenience and necessity. This updated policy statement includes increased focus on the project purpose and need and
environmental impacts. This update also focuses on impacts to landowners and environmental justice communities. The second is an interim policy
statement which explains how the FERC will assess the impacts of natural gas infrastructure projects on climate change in its reviews under the
National Environmental Policy Act and Natural Gas Act. Under the interim version of the policy statement, the FERC will proceed with the
preparation of an environmental impact statement if a project may result in emissions of 100,000 metric tons per year of carbon dioxide equivalents
or more. Comments are due on the interim policy statement by April 4, 2022. The Company continues to monitor and assess these initiatives and the
potential impacts they may have on its business processes, current and future projects, results of operations and disclosures.

The Company has continued to experience the effect of associated natural gas production in the Bakken, which has provided opportunities for
organic growth projects and increased demand. The completion of organic growth projects has contributed to the volumes of natural gas the Company
transports through its system. Although low oil prices slowed 2020 drilling activities and led to the shut-in of certain wells, the recovery of oil prices
has allowed producers to bring wells back online and support new drilling. Associated natural gas production in the Bakken has returned to near pre-
pandemic levels and is expected to grow due to new oil wells and increasing gas to oil ratios.

The national record levels of natural gas supply has moderated the pressure on natural gas prices and minimized price volatility. While the Company
believes there will continue to be varying pressures on natural gas production levels and prices, the long-term outlook for low natural gas prices
continues to provide growth opportunity for industrial supply related projects and seasonal pricing differentials provide opportunities for storage
services.

The Company continues to focus on growth and improving existing operations through organic projects in all areas in which it operates, which
includes additional organic growth projects with local distribution companies and industrial customers in various stages of development.

In January 2019, the Company announced the North Bakken Expansion project, which includes construction of a new pipeline, compression and
ancillary facilities to transport natural gas from core Bakken production areas near Tioga, North Dakota, to a new connection with Northern Border
Pipeline in McKenzie County, North Dakota. Long-term take or pay customer contracts support the project at an amended design capacity of 250
MMcf per day, which can be readily expanded to meet forecasted natural gas growth levels and customer needs. In February 2020, the Company
filed with the FERC its application for this project. In June 2021, the Company received a FERC order issuing a certificate of public convenience and
necessity for the project and in July 2021, the FERC granted the Company a notice to proceed with construction. Construction began in July 2021
and the project was placed into service on February 1, 2022.

In July 2021, the Company announced plans for a natural gas pipeline expansion project in eastern North Dakota. The Wahpeton Expansion project
consists of 60 miles of pipe and ancillary facilities and is designed to increase capacity by 20 MMcf per day, which is supported by long-term
customer agreements with Montana-Dakota and its utility customers. Construction is expected to begin in early 2024, depending on regulatory
approvals, with an anticipated completion date later in 2024. On September 22, 2021, the Company filed with the FERC a request to initiate the
pre-filing review process and received FERC approval of the pre-filing request on September 27, 2021.

Construction Materials and Contracting
Strategy and challenges The construction materials and contracting segment provides an integrated set of aggregate-based construction services, as
discussed in Items 1 and 2 - Business Properties. The segment focuses on high-growth strategic markets located near major transportation corridors
and desirable mid-sized metropolitan areas; strengthening the long-term, strategic aggregate reserve position through available purchase and/or lease
opportunities; enhancing profitability through cost containment, margin discipline and vertical integration of the segment's operations; development
and recruitment of talented employees; and continued growth through organic and strategic acquisition opportunities.

A key element of the Company's long-term strategy for this business is to further expand its market presence in the higher-margin materials business
(rock, sand, gravel, asphalt oil, asphalt concrete, ready-mix concrete and related products), complementing and expanding on the segment's
expertise. The Company's continued acquisition activity supports this strategy.

As one of the country's largest sand and gravel producers, the segment continues to strategically manage its approximately 1.2 billion tons of
aggregate reserves in all its markets, as well as take further advantage of being vertically integrated. The segment's vertical integration allows it to
manage operations from aggregate mining to final lay-down of concrete and asphalt, with control of and access to permitted aggregate reserves being
significant. The Company's aggregate reserves are naturally declining and as a result, the Company seeks acquisition opportunities to replace the
reserves. In the fourth quarter of 2021, the Company acquired Baker Rock Resources, an aggregates and asphalt supplier located in Beaverton,
Oregon. The acquisition included approximately 80 million tons of proven aggregate reserves. In the first quarter of 2021, the Company received the
necessary permitting to expand its operation capabilities at its Honey Creek quarry near Austin, Texas. Honey Creek contains an estimated 50 million
tons of proven aggregate reserves.

44 MDU Resources Group, Inc. Form 10-K

Part II

The construction materials and contracting segment faces challenges that are not under the direct control of the business. The segment operates in
geographically diverse and highly competitive markets. Competition can put negative pressure on the segment's operating margins. The segment is
also subject to volatility in the cost of raw materials such as diesel fuel, gasoline, asphalt oil, cement and steel. Such volatility can have an impact
on the segment's margins, including fixed-price construction contracts that are particularly vulnerable to the volatility of energy and material prices.
The Company has and will continue to increase its product pricing to keep pace with rising costs. Other variables that can impact the segment's
margins include adverse weather conditions, the timing of project starts or completion and declines or delays in new and existing projects due to the
cyclical nature of the construction industry and governmental infrastructure spending. Accordingly, operating results in any particular period may not
be indicative of the results that can be expected for any other period.

The segment also faces challenges in the recruitment and retention of employees. Trends in the labor market include an aging workforce and
availability issues. Most of the markets the segment operates in saw an increase in labor shortages in 2021, largely truck drivers, causing increased
labor-related costs. The Company continues to monitor the labor markets and expects labor costs to continue to increase based on the increased
demand for services and, to a lesser extent, the recent escalated inflationary environment in the United States. If labor costs continue to increase, it
could negatively impact gross margin as the segment continues to face increasing pressure to control costs. The increase in labor shortages also
impacts the segments ability to recruit and train a skilled workforce to meet the needs of increasing demand and seasonal work. In order to help
attract new workers to the construction industry and enhance the skills of its current employees, the Company has completed a training facility in
Oregon. The training facility offers hands-on training for heavy equipment operators and truck drivers, as well as leadership and safety training.

Earnings overview - The following information summarizes the performance of the construction materials and contracting segment.

Years ended December 31,

2021

2020

2019

% change

2021 vs. 2020 2020 vs. 2019

Operating revenues

Cost of sales:

(In millions)

$ 2,228.9 $ 2,178.0 $ 2,190.7

2.3 %

(.6) %

Operation and maintenance

1,794.8 1,733.1 1,798.3

Depreciation, depletion and amortization

Taxes, other than income

Total cost of sales

Gross margin

Selling, general and administrative expense:

Operation and maintenance

Depreciation, depletion and amortization

Taxes, other than income

96.8

47.7

84.8

46.0

74.3

44.1

1,939.3 1,863.9 1,916.7

289.6

314.1

274.0

88.6

89.9

86.3

4.2

5.7

4.8

4.9

3.1

4.6

Total selling, general and administrative expense

98.5

99.6

94.0

Operating income

Other income

Interest expense

Income before income taxes

Income tax expense

Net income

191.1

214.5

180.0

1.3

19.2

20.6

1.6

23.8

173.2

194.7

157.8

43.4

47.4

37.4

$ 129.8 $ 147.3 $ 120.4

3.6 %

14.2 %

3.7 %

4.0 %

(7.8) %

(1.4) %

(12.5) %

16.3 %

(1.1) %

(10.9) %

62.5 %

(6.8) %

(11.0) %

(8.4) %

(11.9) %

(3.6) %

14.1 %

4.3 %

(2.8) %

14.6 %

4.2 %

54.8 %

6.5 %

6.0 %

19.2 %

(50.0) %

(13.4) %

23.4 %

26.7 %

22.3 %

Operating statistics

Revenues

Gross margin

2021

2020

2019

2021

2020

2019

Aggregates

Asphalt

Ready-mix concrete

Other products*

Contracting services

444.0 $

406.6 $

418.8

47.8 $

50.6 $

(In millions)

339.8

584.4

344.2

349.9

547.0

355.6

332.8

526.0

384.8

1,017.5

1,069.7

1,054.1

37.6

66.1

59.6

78.5

—

42.5

58.4

78.8

83.8

—

46.8

35.5

46.3

73.0

72.4

—

Intracompany eliminations

(501.0)

(550.8)

(525.8)

* Other products includes cement, asphalt oil, merchandise, fabric, spreading and other products that individually are not considered

to be a major line of business for the segment.

$ 2,228.9 $ 2,178.0 $ 2,190.7

289.6 $

314.1 $

274.0

MDU Resources Group, Inc. Form 10-K 45

Part II

Sales (thousands):

Aggregates (tons)

Asphalt (tons)

Ready-mix concrete (cubic yards)

Average sales price:

Aggregates (per ton)

Asphalt (per ton)

Ready-mix concrete (per cubic yard)

2021

2020

2019

33,518

30,949

32,314

7,101

7,202

4,267

4,087

6,707

4,123

13.25 $

13.14 $

12.96

47.86 $

48.58 $

49.62

136.94 $

133.86 $

127.58

2021 compared to 2020 Construction materials and contracting's earnings decreased $17.5 million as a result of:
• Revenues increased $50.9 million.

◦ Largely the result of:

• Higher aggregate sales volumes from the recent acquisitions contributed $20.1 million and strong demand for airport, commercial and
health care work in Oregon added $16.3 million. Also contributing was an additional $1.6 million due to a few large projects in South
Dakota. These increases were partially offset by lower volumes in Texas of $2.0 million driven by lower energy-related sales volumes.

• Higher ready-mix concrete volumes from increased commercial and residential demand in Texas contributed $8.2 million, strong demand
in Oregon added $7.8 million and recent acquisitions contributed an additional $4.5 million. Ready-mix concrete revenues also benefited
from an increase in average sales price in all regions. These increases were partially offset by decreased sales of $14.8 million due to
lower demand in Hawaii as a result of the overall slowdown of the travel industry from COVID-19.

◦ Partially offset by:

• Decreased contracting revenues partially due to less available paving work in certain regions of $60.0 million and the absence of a few

large jobs in 2020 of $17.5 million. These decreases were offset in part by strong demand for health care, agency and commercial work in
Oregon of $28.8 million.

• Decreased asphalt volumes primarily due to less available highway paving work in the public sector of $26.2 million in certain regions was

partially offset by strong demand in Oregon.

• Gross margin decreased $24.5 million.

◦ Primarily due to:

• Lower margins in other product lines, primarily due to higher asphalt oil material costs of $15.1 million, along with repair and

maintenance costs of $2.6 million.

• Higher fuel costs of $13.3 million across all product lines.
• Lower contracting services margins resulting from less available paving work of $8.2 million, as previously discussed, and the absence of a

few large jobs for $5.2 million. These margins were also impacted by higher fuel costs, as previously discussed.

• Lower asphalt margins resulting from less available paving work of $5.3 million, as previously discussed.
• Lower aggregates margins resulting from reduced work in Hawaii due to the overall slowdown of the travel industry resulting from

COVID-19 of $4.0 million, startup costs of $1.3 million associated with new aggregate sites in Texas and $600,000 higher material costs
in Alaska. These decreases were partially offset by higher margins due to strong demand in Oregon of $1.7 million and South Dakota of
$1.9 million along with the effects of recent acquisitions.

• Labor constraints, especially truck drivers, which resulted in isolated project delays and staffing inefficiencies across the business.
◦ Partially offset by an increase in ready-mix concrete margins of $7.7 million due in part to higher average pricing in all regions and higher

volumes in most regions.

• Selling, general and administrative expense decreased $1.1 million.

◦ Largely the result of:

• The recovery of prior bad debt expense of $1.6 million.
• Higher gains on asset sales of $900,000.

◦ Offset in part by:

• Increased payroll-related costs of $900,000, primarily for higher health care costs.
• Higher acquisition costs of $700,000.
• An increase in miscellaneous taxes, license and governmental fees.

• Other income increased $500,000, primarily resulting from an out-of-period adjustment in 2020 as a result of previously overstated benefit plan

expenses.

• Interest expense decreased $1.4 million.

◦ Primarily resulting from lower average interest rates of $2.8 million.
◦ Offset in part by higher average debt balances.

• Income tax expense decreased $4.0 million as a result of lower income before income taxes.

46 MDU Resources Group, Inc. Form 10-K

Part II

2020 compared to 2019 Construction materials and contracting's earnings increased $26.9 million as a result of:
• Revenues decreased $12.7 million.

◦ Largely from lower contracting revenues partially due to lower materials pricing as a result of decreased energy-related costs.
◦ Partially offset by higher material sales on most product lines due to an early start to the season, favorable weather conditions in certain

regions and additional revenues associated with the businesses acquired.

• Gross margin increased $40.1 million.

◦ Largely resulting from:

• An increase to asphalt and asphalt-related product margins by $21.3 million overall due to lower fuel and material costs.
• Strong pricing for ready-mix concrete in most markets resulting in 1.9 percent higher margins.
• Contracting bid margins positively impacted gross margin partially resulting from lower direct costs associated with having a longer

construction season due to favorable weather conditions.

• Lower fuel costs across all product lines.

◦ Partially offset by lower gains on asset sales in certain regions of approximately $6.8 million.

• Selling, general and administrative expense increased $5.6 million due to:

◦ Higher payroll-related costs of $2.2 million.
◦ An increase in amortization of intangible assets associated with the businesses acquired.

• Other income decreased $800,000, largely resulting from an out-of-period adjustment to benefit expense in the fourth quarter of 2020 as a result

of previously overstated benefit plan expenses.

• Interest expense decreased $3.2 million driven by lower average debt balances in 2020 along with lower average interest rates.

• Income tax expense increased $10.0 million, directly resulting from higher income before income taxes.

Outlook The Company continues to assess the impacts of the COVID-19 pandemic on its operations and is committed to the health and safety of its
employees, customers and the communities in which it operates. In 2021, the Company continued to implement safety measures developed in 2020
for its employees that were not able to work from home and experienced some inefficiencies and additional costs in relation to these measures,
including delays in the ability to obtain permits from government agencies and, for the most part, has been able to continue business processes with
minimal interruptions. The Company also continues to monitor job progress and service work and at this time has not experienced significant delays,
cancellations or disruptions due to the pandemic. The American Rescue Plan Act approved by the United States Congress in the first quarter of
2021 provides $1.9 trillion in COVID-19 relief funding for states, schools and local governments. States are beginning to move forward with
allocating these funds based on federal criteria and state needs, and in some cases, funding of infrastructure projects could positively impact the
segment. Additionally, the bipartisan infrastructure proposal, known as the Infrastructure Investment and Jobs Act, was approved by the United
States Congress in the fourth quarter of 2021. This initiative is providing long-term opportunities by designating $119 billion for the repair and
rebuilding of roads and bridges across the Company's footprint. The Company continues to monitor the progress of these legislative items.

The segment's vertically integrated aggregate-based business model provides the Company with the ability to capture margin throughout the sales
delivery process. The aggregate products are sold internally and externally for use in other products such as ready-mix concrete, asphaltic concrete
and public and private construction markets. The contracting services and construction materials are sold in connection with street, highway and
other public infrastructure projects, as well as private commercial, industrial and residential development projects. The public infrastructure projects
have traditionally been more stable markets as public funding is more secure during periods of economic decline. The public projects are, however,
dependent on federal and state funding such as appropriations to the Federal Highway Administration. Spending on private development is highly
dependent on both local and national economic cycles, providing additional sales during times of strong economic cycles.

During 2021 and 2020, the Company made strategic purchases and completed several acquisitions that support the Company's long-term strategy to
expand its market presence. In the second quarter of 2021, the Company acquired Mt. Hood Rock, a construction aggregates business located in
Portland, Oregon. In the fourth quarter of 2021, the Company acquired Baker Rock Resources, a construction materials company located in
Beaverton, Oregon, and Oregon Mainline Paving, an asphalt paving company located in McMinnville, Oregon. The acquisition of Baker Rock
Resources complements the segment's Portland Metro operations and replenishes aggregate reserves in a market with high demand. Oregon Mainline
Paving also supports the segment's vertically integrated business model. The Company continues to evaluate additional acquisition opportunities. For
more information on the Company's business combinations, see Item 8 - Note 4.

The construction materials and contracting segment's backlog remained strong at December 31, 2021, at $708 million, as compared to backlog at
December 31, 2020, of $673 million. A significant portion of the Company's backlog relates to street and highway construction. Period over period
increases or decreases cannot be used as an indicator of future revenues or net income. The Company expects to complete an estimated
$665 million of backlog at December 31, 2021, during the next 12 months. Factors noted in Item 1A - Risk Factors can cause revenues to be
realized in periods and at levels that are different from originally projected.

MDU Resources Group, Inc. Form 10-K 47

Part II

Construction Services
Strategy and challenges The construction services segment provides electrical and mechanical and transmission and distribution specialty
contracting services, as discussed in Items 1 and 2 - Business Properties. The construction services segment focuses on safely executing projects;
providing a superior return on investment by building new and strengthening existing customer relationships; ensuring quality service; effectively
controlling costs; retaining, developing and recruiting talented employees; growing through organic and strategic acquisition opportunities; and
focusing efforts on projects that will permit higher margins while properly managing risk. The growth experienced by the segment in recent years is
due in part to its ability to support national customers in most of the regions in which it operates.

The construction services segment faces challenges, which are not under direct control of the business, in the highly competitive markets in which it
operates. Competitive pricing environments, project delays, changes in management's estimates of variable consideration and the effects from
restrictive regulatory requirements have negatively impacted revenues and margins in the past and could affect revenues and margins in the future.
Additionally, margins may be negatively impacted on a quarterly basis due to adverse weather conditions, as well as timing of project starts or
completions; disruptions to the supply chain due to transportation delays, raw material cost increases and shortages, and closures of businesses or
facilities; declines or delays in new projects due to the cyclical nature of the construction industry; and other factors. Current national supply chain
challenges did not have significant impacts to the procurement of project materials for the year ended December 31, 2021. However, the Company
is actively monitoring the situation and working with its manufacturers and suppliers to help mitigate the risk of delays and price increases. These
challenges may also impact the risk of loss on certain projects. Accordingly, operating results in any particular period may not be indicative of the
results that can be expected for any other period.

The need to ensure available specialized labor resources for projects also drives strategic relationships with customers and project margins. These
trends include an aging workforce and labor availability issues, as well as increasing duration and complexity of customer capital programs. In 2021,
the markets the segment operates in saw an increase in labor shortages which caused increased labor-related costs while the segment continues to
face increasing pressure to reduce costs and improve reliability. The Company continues to monitor the labor markets and expects labor costs to
continue to increase based on the increased demand for services and, to a lesser extent, the recent escalated inflationary environment in the United
States. Due to these and other factors, the Company believes overall customer and competitor demand for labor resources will continue to increase,
possibly surpassing the supply of industry resources.

Earnings overview - The following information summarizes the performance of the construction services segment.

Years ended December 31,

2021

2020

2019

Variance

2021 vs. 2020 2020 vs. 2019

Operating revenues

Cost of sales:

(In millions)

$ 2,051.6 $ 2,095.7 $ 1,849.3

(2.1) %

13.3 %

Operation and maintenance

1,725.5 1,747.5 1,555.4

Depreciation, depletion and amortization

Taxes, other than income

Total cost of sales

Gross margin

Selling, general and administrative expense:

Operation and maintenance

Depreciation, depletion and amortization

Taxes, other than income

15.8

62.4

15.7

74.2

15.0

58.8

1,803.7 1,837.4 1,629.2

247.9

258.3

220.1

92.9

98.1

87.0

4.5

4.8

7.8

4.8

2.0

4.7

Total selling, general and administrative expense

102.2

110.7

93.7

Operating income

Other income

Interest expense

Income before income taxes

Income tax expense

Net income

* NM - not meaningful

145.7

147.6

126.4

2.6

3.5

2.0

4.1

1.9

5.3

144.8

145.5

123.0

35.4

35.8

30.0

$ 109.4 $ 109.7 $

93.0

(1.3) %

.6 %

(15.9) %

(1.8) %

(4.0) %

(5.3) %

(42.3) %

— %

(7.7) %

(1.3) %

30.0 %

(14.6) %

(.5) %

(1.1) %

(.3) %

12.4 %

4.7 %

26.2 %

12.8 %

17.4 %

12.8 %

2.1 %

18.1 %

16.8 %

5.3 %

(22.6) %

18.3 %

19.3 %

18.0 %

48 MDU Resources Group, Inc. Form 10-K

Part II

Operating Statistics

Business Line

2021

2020

2019

2021

2020

2019

Revenues

Gross margin

(In millions)

Electrical & mechanical

Commercial

Industrial

Institutional

Renewables

Service & other

Transmission & distribution

Utility

Transportation

Intrasegment eliminations

553.2 $

741.5 $

505.8

59.8 $

48.4 $

457.5

123.1

12.3

374.8

158.8

5.4

344.1

274.7

10.4

188.4

121.0

139.3

51.3

6.2

1.2

25.1

41.3

23.8

1.1

21.5

41.9

32.8

11.9

1.6

25.0

1,334.5

1,401.5

1,274.3

143.6

136.1

113.2

630.5

103.1

733.6

(16.5)

592.5

530.3

111.8

66.0

92.4

11.9

106.7

100.0

15.5

6.9

704.3

596.3

104.3

122.2

106.9

(10.1)

(21.3)

—

$ 2,051.6 $ 2,095.7 $ 1,849.3

247.9 $

258.3 $

220.1

2021 compared to 2020 Construction services earnings decreased $300,000 as a result of:
• Revenues decreased $44.1 million.

◦ Largely due to:

• The completion of several large commercial projects in early 2021 and 2020 in the Las Vegas market of $129.0 million.
• Decreased institutional projects of $15.0 million from less available work and the completion of a larger project.
• The completion of a significant industrial project of $43.0 million.
• Decreased demand for electric transportation projects which includes traffic signalization and street lighting.

◦ Partially offset by:

• Higher industrial work due to the number of projects awarded and progress on significant projects of $96.0 million.
• Increased service work of $37.0 million related to the repair and maintenance of electrical, mechanical and fire protection systems.
• Strong demand for utility projects including the progress on substations of $21.0 million and power line repair of $3.0 million.

• Gross margin decreased $10.4 million.

◦ Largely due to:

• The absence of higher margin utility projects in 2020 negatively impacted gross margin by $15.0 million, which includes storm power line

repair and fire hardening work.

• Decreased transportation margins, largely the completion of a higher margin project of $5.1 million.
• Institutional projects, primarily the recognition of reduced margins of $9.4 million from lower margin work in 2021 and the impacts of a
job loss of $8.4 million related to change order disputes which resulted in a significant job recognizing higher labor and material costs.

◦ Partially offset by:

• Increased industrial margins primarily due to a change order settlement of $10.0 million on a significant project.
• The absence of a job loss in 2020 of $8.9 million related to a large commercial project.
• An increase in the amount of service work awarded and the progress on that work.

• Selling, general and administrative expense decreased $8.5 million.

◦ Largely due to:

• Lower bad debt expense of $7.0 million, largely due to changes in estimates related to expected credit losses.
• Lower amortization expense of $3.2 million.

◦ Offset in part by:

• Higher office expenses of $1.3 million.
• Increased payroll-related costs.

• Other income increased $600,000, largely related to increased earnings on investments.

• Interest expense decreased $600,000, largely related to decreased debt balances due to lower working capital needs and increased cash

collections.

• Income tax expense decreased $400,000 as a result of lower income before income taxes.

2020 compared to 2019 Construction services earnings increased $16.7 million as a result of:
• Revenues increased $246.4 million as a result of:

◦

Increased electrical and mechanical workloads, largely from higher revenues of $71.4 million due to the addition of PerLectric, Inc. and
increased customer demand for high-tech, hospitality and industrial projects. These increases were partially offset by decreased institutional
projects.

MDU Resources Group, Inc. Form 10-K 49

Part II

◦

Increased transmission and distribution workloads as a result of strong demand for utility projects including storm-related power line repair
and wildfire restoration work and increased demand for utility transportation projects.

• Gross margin increased $38.2 million.

◦ Primarily resulting from a higher volume of work resulting in an increase in revenues, as previously discussed.
◦ Partially offset by an increase in operation and maintenance expense as a direct result of the expenses related to the increased workloads.

• Selling, general and administrative expense increased $17.0 million, largely resulting from:

Increased costs of $8.3 million associated with the addition of PerLectric, Inc. operations.
◦
Increased allowance for uncollectible accounts of $3.6 million.
◦
◦ Higher payroll-related costs of $3.1 million and office expenses.

• Other income was comparable to the same period in the prior year.

• Interest expense decreased $1.2 million, primarily from lower debt balances due to lower working capital needs as a result of payroll tax deferrals

and increased cash collections.

• Income tax expense increased $5.8 million, directly resulting from higher income before income taxes.

Outlook The Company continues to assess the impacts of the COVID-19 pandemic on its operations and is committed to the health and safety of its
employees, customers and the communities in which it operates. In 2021, the Company continued to implement safety measures developed in 2020
for its employees that were not able to work from home and experienced some inefficiencies in relation to these measures but, for the most part, has
been able to continue pre-pandemic business processes. The Company continues to monitor job progress and service work for delays, cancellations
and disruptions due to the pandemic and expects possible disruptions to continue in 2022. Despite the challenges presented by the COVID-19
pandemic, the Company believes there are long-term growth opportunities and demand for construction services. The American Rescue Plan act
approved by the United States Congress in the first quarter of 2021 provides $1.9 trillion in COVID-19 relief funding for states, schools and local
government including broadband infrastructure. States are beginning to move forward with allocating these funds based on federal criteria and state
needs, and in some cases, funding of infrastructure projects could positively impact the segment. Additionally, the bipartisan infrastructure proposal,
known as the Infrastructure Investment and Jobs Act, was approved by the United States Congress in the fourth quarter of 2021. These include
investments for upgrades to electric and grid infrastructure, transportation systems, airports and electric vehicle infrastructure, all industries this
segment supports. The Company will continue to monitor the progress of these legislative items.

The Company continued to have bidding opportunities in both specialty contracting markets in 2021 as evidenced by the segment's backlog.
Although bidding remains highly competitive in all areas, the Company expects the segment's relationship with existing customers, skilled workforce,
quality of service and effective cost management will continue to provide a benefit in securing and executing profitable projects in the future. The
Company has also seen rapidly growing needs for services across the electric vehicle charging, wind generation and energy storage markets that
complement existing renewable project work performed by the Company.

The construction services segment's backlog at December 31 was as follows:

2021

2020

(In millions)

Electrical & mechanical

1,109 $

1,059

Transmission & distribution

276

214

1,385 $

1,273

The increase in backlog at December 31, 2021, as compared to backlog at December 31, 2020, was largely attributable to the new project
opportunities that the Company continues to be awarded across its diverse operations, particularly within the institutional, renewable and power
utility markets. The increases in backlog have been offset by decreases in the commercial, industrial and transportation markets due to the timing of
project completions. Period over period increases or decreases cannot be used as an indicator of future revenues or net income. The Company
expects to complete an estimated $1.2 billion of the backlog at December 31, 2021, during the next 12 months. Factors noted in Item 1A - Risk
Factors can cause revenues to be realized in periods and at levels that are different from originally projected. Additionally, the Company continues to
further evaluate potential acquisition opportunities that would be accretive to earnings of the Company and continue to grow the segment's backlog.

50 MDU Resources Group, Inc. Form 10-K

Part II

Other

Years ended December 31,

2021

2020

2019

Variance

2021 vs. 2020 2020 vs. 2019

Operating revenues

Operating expenses:

Operation and maintenance

Depreciation, depletion and amortization

Taxes, other than income

Total operating expenses

Operating loss

Other income

Interest expense

Loss before income taxes

Income tax benefit

Net loss

* NM - not meaningful

(In millions)

13.7 $

11.9 $

16.6

15.1 %

(28.3) %

15.2

12.2

15.6

4.6

2.7

2.1

19.9

15.0

17.8

24.6 %

70.4 %

— %

32.7 %

(21.8) %

28.6 %

— %

(15.7) %

(6.2)

(3.1)

(1.2)

(100.0) %

(158.3) %

(6.1)

(3.5)

(.2)

(.4)

1.9

(2.2)

(.1)

— %

(62.5) %

(74.3) %

50.0 %

(55.6) %

(57.9) %

(59.1) %

(5.9) $

(3.1) $

(2.1)

(90.3) %

(47.6) %

Included in Other is insurance activity at the Company's captive insurer and general and administrative costs and interest expense previously
allocated to the exploration and production and refining businesses that do not meet the criteria for income (loss) from discontinued operations.

Other was negatively impacted in 2021 as a result of higher insurance claims experience at the captive insurer and depreciation expense as
compared to 2020. Premiums for the captive insurer were also higher in 2021 compared to 2020, which impacts both operating revenues and
operation and maintenance expense.

Other was negatively impacted in 2020 as a result of higher insurance claims as compared to 2019, whereas 2019 had higher insurance premiums
which increased both operating revenues and operation and maintenance expense.

Intersegment Transactions
Amounts presented in the preceding tables will not agree with the Consolidated Statements of Income due to the Company's elimination of
intersegment transactions. The amounts related to these items were as follows:

Years ended December 31,

2021

2020

2019

(In millions)

Intersegment transactions:

Operating revenues

77.6 $

77.0 $

Operation and maintenance

Purchased natural gas sold

18.7

58.9

19.1

57.9

77.1

21.1

56.0

For more information on intersegment eliminations, see Item 8 - Note 17.

Liquidity and Capital Commitments
At December 31, 2021, the Company had cash and cash equivalents of $54.2 million and available borrowing capacity of $380.0 million under the
outstanding credit facilities of the Company's subsidiaries. The Company expects to meet its obligations for debt maturing within 12 months and its
other operating and capital requirements from various sources, including internally generated funds; credit facilities and commercial paper of the
Company's subsidiaries, as described later in Capital resources; and the issuance of debt and equity securities if necessary.

MDU Resources Group, Inc. Form 10-K 51

Part II

Cash flows

Years ended December 31,

2021

2020

2019

Net cash provided by (used in)

Operating activities

Investing activities

Financing activities

(In millions)

$ 495.8 $ 768.4 $ 542.3

(885.9)

(630.2)

(603.9)

384.7

(145.1)

74.1

12.5

54.0

66.5

Increase (decrease) in cash and cash equivalents

(5.4)

(6.9)

Cash and cash equivalents -- beginning of year

59.6

66.5

Cash and cash equivalents -- end of year

54.2 $

59.6 $

Operating activities

Years ended December 31,

2021

2020

2019

Variance

2021 vs. 2020 2020 vs. 2019

Income from continuing operations

$ 377.7 $ 390.5 $ 335.2

(12.8) $

(In millions)

Adjustments to reconcile net income to net cash provided by operating activities

350.9

276.2

309.7

Receivables

Inventories

Other current assets

Accounts payable

Other current liabilities

Pension & postretirement benefit plan contributions

Other noncurrent changes

Net cash provided by (used in) discontinued operations

(60.0)

(42.3)

(2.8)

(112.2)

(7.2)

9.3

(72.0)

31.6

(38.3)

15.3

(17.6)

16.0

35.6

30.1

51.3

(.5)

(.4)

(25.6)

(55.4)

30.3

(17.7)

(.3)

(1.4)

74.7

(57.2)

(35.1)

(103.6)

(.7)

(53.2)

(.1)

(85.7)

1.1

55.3

(33.5)

109.4

(16.5)

69.9

(14.1)

(15.7)

25.2

48.0

(1.9)

Net cash provided by operating activities

$ 495.8 $ 768.4 $ 542.3

(272.6) $

226.1

The changes in cash flows from operating activities generally follow the results of operations as discussed in Business Segment Financial and
Operating Data and are also affected by changes in working capital. The decrease in cash flows provided by operating activities from 2021 to 2020
was largely driven by an increase in natural gas purchases and the related unbilled revenues at the natural gas distribution business, as discussed in
Item 8 - Notes 2 and 6, partially offset by the associated deferred taxes and increased payables. Also contributing to the decrease was the payment
of previously deferred CARES Act taxes and the timing of income tax payments across all of the Company's businesses, as well as the timing of
insurance claim payments in relation to receipt of insurance reimbursement at the construction services business. In addition, higher asphalt oil
inventory balances due to higher material costs and tank storage balances and higher aggregate inventory balances as a result of production at the
businesses acquired at the construction materials and contracting business contributed to the decrease. Partially offsetting the decrease in cash
flows provided by operating activities were higher bonus depreciation related to acquisitions at construction materials and contracting business.

The increase in cash flows provided by operating activities from 2020 to 2019 was reflective of the increased earnings across all businesses. The
increase in cash flows provided by operating activities was largely driven by stronger collection of accounts receivable at the construction services
business and decreased receivables at the construction materials and contracting business as compared to the prior period as a result of lower
contracting revenues. Also contributing to the increase in cash flows provided by operating activities was the decrease in natural gas purchases in
2020 as a result of milder temperatures and lower gas costs and recovery of purchased gas cost adjustment balances at the natural gas distribution
business. The Company also benefited from the deferral of payroll taxes related to the CARES Act and the absence of pension contributions at all of
its businesses. Partially offsetting these increases was higher cash needs due to decreased bonus depreciation for tax purposes taken on qualified
property in 2020 as compared to 2019 and a decrease in deferred taxes as a result of the purchased gas cost adjustment recorded in 2019.

52 MDU Resources Group, Inc. Form 10-K

Part II

Investing activities

Years ended December 31,

2021

2020

2019

Variance

(In millions)

Capital expenditures

(659.4) $

(558.0) $

(576.1)

(101.4) $

Acquisitions, net of cash acquired

(237.7)

(106.0)

(55.6)

Net proceeds from sale or disposition of property and other

15.2

35.6

29.8

Investments

(4.0)

(1.8)

(2.0)

(131.7)

(20.4)

(2.2)

18.1

(50.4)

5.8

Net cash used in investing activities

(885.9) $

(630.2) $

(603.9)

(255.7) $

(26.3)

2021 vs. 2020 2020 vs. 2019

The increase in cash used in investing activities from 2021 to 2020 was primarily the result of higher cash used in acquisition activity at the
construction materials and contracting business, partially offset by decreased acquisition activity at the construction services business. In addition,
increased capital expenditures in 2021 at the pipeline business, largely related to the North Bakken Expansion project, and the construction
materials and contracting business contributed to the increase, partially offset by lower capital expenditures at the electric and natural gas
distribution businesses related to reduced electric transmission and distribution projects and reduced natural gas meters and mains.

The increase in cash used in investing activities from 2020 to 2019 was primarily related to additional cash needs for acquisition activity in 2020
compared to 2019 at the construction businesses, increased capital expenditures in 2020 at the electric business and lower proceeds on asset sales
in 2020 at the construction materials and contracting business. Partially offsetting these increases were decreased capital expenditures in 2020 at
the construction materials and contracting business, proceeds on the natural gas gathering asset sales at the pipeline business and higher proceeds
on asset sales in 2020 at the construction services businesses.

Financing activities

Years ended December 31,

2021

2020

2019

Variance

2021 vs. 2020 2020 vs. 2019

Issuance of short-term borrowings

Repayment of short-term borrowings

Issuance of long-term debt

Repayment of long-term debt

Debt issuance costs

Proceeds from issuance of common stock

Dividends paid

Repurchase of common stock

Tax withholding on stock-based compensation

50.0 $

75.0 $ 170.0

(25.0) $

(In millions)

(100.0)

(25.0)

(170.0)

554.0

117.4

604.0

(25.0)

(148.6)

(468.9)

(.9)

(.5)

(4.5)

88.8

3.4

106.8

(171.3)

(166.4)

(160.3)

(6.7)

(4.2)

—

(.4)

—

(3.0)

(75.0)

436.6

123.6

(.4)

85.4

(4.9)

(6.7)

(3.8)

(95.0)

145.0

(486.6)

320.3

4.0

(103.4)

(6.1)

—

2.6

Net cash provided by (used in) financing activities

$ 384.7 $

(145.1) $

74.1

529.8 $

(219.2)

The increase in cash flows provided by financing activities from 2021 to 2020 was largely the result of increased long-term borrowings for
acquisitions at the construction materials and contracting business, and increased long-term borrowings, net of repayments, associated with capital
expenditures at the pipeline, electric and natural gas distribution businesses. The construction services business also increased its long-term
borrowings as a result of increased working capital needs. In addition, net proceeds from the issuance of common stock under the Company's "at-the-
market" offering during 2021 also contributed to the increase in cash flows from financing activities. Partially offsetting these increases were
decreased short-term borrowings during 2021 at the natural gas distribution business. Montana-Dakota repaid $50 million of short-term borrowings
during the first quarter of 2021 related to short-term borrowings during 2020. Montana-Dakota also issued $50 million of short-term borrowings
during the first quarter of 2021 related to financing the higher natural gas purchases, as previously discussed, which was repaid prior to the end of
the year.

The increase in cash flows used in financing activities from 2020 to 2019 was largely the result of a decrease in net long-term and short-term debt
borrowings in 2020 as compared to 2019 due to lower working capital needs. In addition, the Company had decreased net proceeds of
$103.5 million in 2020 due to the absence of common stock issuance under its "at-the-market" offering and 401(k) plan.

Defined benefit pension plans
The Company has noncontributory qualified defined benefit pension plans for certain employees. Plan assets consist of investments in equity and
fixed-income securities. Various actuarial assumptions are used in calculating the benefit expense (income) and liability (asset) related to the
pension plans. Actuarial assumptions include assumptions about the discount rate and expected return on plan assets. At December 31, 2021, the
pension plans' accumulated benefit obligations exceeded these plans' assets by approximately $38.4 million. Pretax pension income reflected in the
Consolidated Statements of Income for the years ended December 31, 2021 and 2020, was $1.7 million and $684,000, respectively. Pretax
pension expense reflected in the Consolidated Statements of Income for the year ended December 31, 2019, was $2.5 million. The Company's

MDU Resources Group, Inc. Form 10-K 53

Part II

pension income is currently projected to be approximately $2.3 million in 2022. Funding for the pension plans is actuarially determined. The
Company has no minimum funding requirements for its defined benefit pension plans for 2022 due to an additional contribution of $20.0 million in
2019, which created prefunding credits to be used in future periods. There were no minimum required contributions for the years ended
December 31, 2021 and 2020, and the minimum required contributions for the year ended December 31, 2019, was approximately $4.9 million.
For more information on the Company's pension plans, see Item 8 - Note 18.

Capital expenditures
The Company's capital expenditures for 2019 through 2021 and as anticipated for 2022 through 2024 are summarized in the following table.

Capital expenditures:

Electric

Actual*

Estimated

2019

2020

2021

2022

2023

2024

(In millions)

99 $ 115 $

$ 165 $ 116 $

Natural gas distribution

207

193

170

248

232

207

Pipeline

235

159

106

Construction materials and contracting

190

191

418

189

166

172

Construction services

Other

Total capital expenditures

$ 636 $ 648 $ 936

$ 726 $ 719 $ 616

* Capital expenditures for 2021, 2020 and 2019 include noncash transactions such as capital expenditure-related

accounts payable, AFUDC and accrual of holdback payments in connection with acquisitions totaling $38.7 million,
$(15.7) million and $4.8 million, respectively.

The 2021 capital expenditures include the completed business combinations at the construction materials and contracting segment, as discussed in
Item 8 - Note 4, and the North Bakken Expansion project at the pipeline segment. The 2021 capital expenditures were funded by internal sources,
equity issuance and borrowings under credit facilities and issuance of commercial paper of the Company's subsidiaries. The Company has included
in the estimated capital expenditures for 2022 through 2024 the Wahpeton Expansion and additional growth projects at the pipeline segment and
construction of Heskett Unit 4, as previously discussed in Business Segment Financial and Operating Data.

Estimated capital expenditures for the years 2022 through 2024 include those for:

• System upgrades

• Routine replacements

• Service extensions

• Routine equipment maintenance and replacements

• Buildings, land and building improvements

• Pipeline and natural gas storage projects

• Power generation and transmission opportunities

• Environmental upgrades

• Other growth opportunities

The Company continues to evaluate potential future acquisitions and other growth opportunities that would be incremental to the outlined capital
program; however, they are dependent upon the availability of economic opportunities and, as a result, capital expenditures may vary significantly
from the estimates in the preceding table. The Company continuously monitors its capital expenditures for project delays and changes in economic
viability and adjusts as necessary. It is anticipated that all of the funds required for capital expenditures for the years 2022 through 2024 will be
funded by various sources, including internally generated funds; credit facilities and commercial paper of the Company's subsidiaries, as described
later; and issuance of debt and equity securities if necessary.

54 MDU Resources Group, Inc. Form 10-K

Part II

Capital resources
The Company requires significant cash to support and grow its businesses. The primary sources of cash other than cash generated from operating
activities are cash from revolving credit facilities, cash from the issuance of long-term debt and cash from equity markets.

Debt resources
Certain debt instruments of the Company's subsidiaries, including those discussed later, contain restrictive and financial covenants and cross-default
provisions. In order to borrow under the debt agreements, the subsidiary companies must be in compliance with the applicable covenants and certain
other conditions, all of which the subsidiaries, as applicable, were in compliance with at December 31, 2021. In the event the subsidiaries do not
comply with the applicable covenants and other conditions, alternative sources of funding may need to be pursued. As of December 31, 2021, the
Company had investment grade credit ratings at all entities issuing debt. For more information on the covenants, certain other conditions and cross-
default provisions, see Item 8 - Note 9.

The following table summarizes the outstanding revolving credit facilities of the Company's subsidiaries at December 31, 2021:

Company

Facility

Montana-Dakota Utilities Co.

Commercial paper/Revolving credit agreement (a)

Cascade Natural Gas Corporation

Revolving credit agreement

Intermountain Gas Company

Revolving credit agreement

Centennial Energy Holdings, Inc.

Commercial paper/Revolving credit agreement (e)

Facility
Limit

Amount
Outstanding

Letters
of Credit

Expiration
Date

175.0

100.0 (b) $

85.0 (d) $

(In millions)

64.9 $

71.0 $

56.5 $

600.0

385.4 $

—

12/19/24

2.2 (c)

—

6/7/24

12/19/24

(a) The commercial paper program is supported by a revolving credit agreement with various banks (provisions allow for increased borrowings, at the option of Montana-

Dakota on stated conditions, up to a maximum of $225.0 million). There were no amounts outstanding under the revolving credit agreement.

(b) Certain provisions allow for increased borrowings, up to a maximum of $125.0 million.
(c) Outstanding letter(s) of credit reduce the amount available under the credit agreement.
(d) Certain provisions allow for increased borrowings, up to a maximum of $110.0 million.
(e) The commercial paper program is supported by a revolving credit agreement with various banks (provisions allow for increased borrowings, at the option of Centennial

on stated conditions, up to a maximum of $700.0 million). There were no amounts outstanding under the revolving credit agreement.

The respective commercial paper programs are supported by revolving credit agreements. While the amount of commercial paper outstanding does
not reduce available capacity under the respective revolving credit agreements, Montana-Dakota and Centennial do not issue commercial paper in an
aggregate amount exceeding the available capacity under their credit agreements. The commercial paper borrowings may vary during the period,
largely the result of fluctuations in working capital requirements due to the seasonality of certain operations of the Company's subsidiaries. Any
borrowings under its commercial paper and revolving credit agreements are classified as long-term debt as they are intended to be refinanced on a
long-term basis through continued borrowings.

Total equity as a percent of total capitalization was 55 percent and 58 percent at December 31, 2021 and 2020, respectively. This ratio is
calculated as the Company's total equity, divided by the Company's total capital. Total capital is the Company's total debt, including short-term
borrowings and long-term debt due within 12 months, plus total equity. This ratio is an indicator of how the Company is financing its operations, as
well as its financial strength.

Certain of the Company's debt instruments use LIBOR as a benchmark for establishing the applicable interest rate. LIBOR is the subject of recent
national, international and other regulatory guidance and proposals for reform. These reforms and other pressures may cause LIBOR to disappear
entirely or to perform differently than in the past. The Company has been proactive to anticipate the reform of LIBOR by updating its credit
agreements to include language regarding the successor or alternate rate to LIBOR. The Company continues to evaluate the impact the reform will
have on its debt instruments and, at this time, does not anticipate a significant impact.

Montana-Dakota Montana-Dakota's objective is to maintain acceptable credit ratings in order to access the capital markets through the issuance of
commercial paper. Historically, downgrades in credit ratings have not limited, nor are currently expected to limit, Montana-Dakota's ability to access
the capital markets. If Montana-Dakota were to experience a downgrade of its credit ratings in the future, it may need to borrow under its credit
agreement and may experience an increase in overall interest rates with respect to its cost of borrowings. Prior to the maturity of the credit
agreement, Montana-Dakota expects that it will negotiate the extension or replacement of this agreement. If Montana-Dakota is unable to
successfully negotiate an extension of, or replacement for, the credit agreement, or if the fees on this facility become too expensive, which Montana-
Dakota does not currently anticipate, it would seek alternative funding.

On March 8, 2021, Montana-Dakota entered into a $50.0 million term loan agreement with a LIBOR-based variable interest rate and a maturity date
of March 7, 2022. At December 31, 2021, Montana-Dakota had no amount outstanding under the 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 total capitalization to be
greater than 65 percent. The covenants also include certain restrictions on the sale of certain assets, loans and investments.

MDU Resources Group, Inc. Form 10-K 55

Part II

On September 15, 2021, Montana-Dakota entered into a $125.0 million note purchase agreement with maturity dates ranging from September 15,
2051 to September 15, 2061, at a weighted average interest rate of 3.23 percent. On September 15, 2021 and December 15, 2021, Montana-
Dakota issued $75.0 million and $50.0 million, respectively, in senior notes under the note purchase 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 total capitalization to be
greater than 65 percent.

Centennial Centennial's objective is to maintain acceptable credit ratings in order to access the capital markets through the issuance of commercial
paper. Historically, downgrades in Centennial's credit ratings have not limited, nor are currently expected to limit, Centennial's ability to access the
capital markets. If Centennial were to experience a downgrade of its credit ratings in the future, it may need to borrow under its credit agreement and
may experience an increase in overall interest rates with respect to its cost of borrowings. Prior to the maturity of the Centennial credit agreement,
Centennial expects that it will negotiate the extension or replacement of this agreement, which provides credit support to access the capital markets.
In the event Centennial is unable to successfully negotiate this agreement, or in the event the fees on this facility become too expensive, which
Centennial does not currently anticipate, it would seek alternative funding.

On December 23, 2021, WBI Energy Transmission entered into a $50.0 million note purchase agreement with a maturity date of December 23,
2041, at an interest rate of 3.67 percent. 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 55 percent.

Equity Resources
The Company currently has a shelf registration statement on file with the SEC, under which the Company may issue and sell any combination of
common stock and debt securities. The Company may sell such 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. For more information on the Company's equity, see Item 8 - Note 12.

In August 2020, the Company amended the Distribution Agreement dated February 22, 2019, with J.P. Morgan Securities LLC and MUFG Securities
Americas Inc., as sales agents. This agreement, as amended, allows the offering, issuance and sale of up to 6.4 million shares of the Company's
common stock in connection with an “at-the-market” offering. The common stock may be offered for sale, from time to time, in accordance with the
terms and conditions of the agreement. As of December 31, 2021, the Company had capacity to issue up to 3.6 million additional shares of
common stock under the "at-the-market" offering program. Proceeds from the sale of shares of common stock under the agreement have been and
are expected to be used for general corporate purposes, which may include, among other things, working capital, capital expenditures, debt
repayment and the financing of acquisitions.

Details of the Company's "at-the-market" offering activity for the years ended December 31 was as follows:

Shares issued

Net proceeds *

Issuance costs

2021

2020

(In millions)

2.8

88.8 $

1.2 $

—

* Net proceeds were used for capital expenditures.

Dividend restrictions
For information on the Company's dividends and dividend restrictions, see Item 8 - Note 12.

56 MDU Resources Group, Inc. Form 10-K

Material cash requirements
For more information on the Company's contractual obligations on long-term debt, operating leases and purchase commitments, see
Item 8 - Notes 9, 10 and 21. At December 31, 2021, the Company's material cash requirements under these obligations were as follows:

Part II

Less than 1
year

1-3 years

3-5 years

(In millions)

More than 5
years

Total

Long-term debt maturities*

148.1 $

716.5 $

318.6 $

1,564.9 $

2,748.1

Estimated interest payments**

Operating leases

Purchase commitments

98.6

38.6

589.9

178.7

47.2

342.1

157.3

19.0

186.1

835.8

44.0

731.7

1,270.4

148.8

1,849.8

875.2 $

1,284.5 $

681.0 $

3,176.4 $

6,017.1

* Unamortized debt issuance costs and discount are excluded from the table.

** Represents the estimated interest payments associated with the Company's long-term debt outstanding at

December 31, 2021, assuming current interest rates and consistent amounts outstanding until their respective
maturity dates over the periods indicated in the table above.

Material short-term cash requirements of the Company include repayment of outstanding borrowings and interest payments on those agreements,
payments on operating lease agreements, payment of obligations on purchase commitments and asset retirement obligations. At December 31,
2021, the current portion of asset retirement obligations was $10.6 million and was included in other accrued liabilities on the Consolidated
Balance Sheets.

Material long-term cash requirements of the Company include repayment of outstanding borrowings and interest payments on those agreements,
payments on operating lease agreements, payment of obligations on purchase commitments and asset retirement obligations. At December 31,
2021, the Company had total liabilities of $468.7 million related to asset retirement obligations that are excluded from the table above. Due to the
nature of these obligations, the Company cannot determine precisely when the payments will be made to settle these obligations. For more
information, see Item 8 - Note 11.

Not reflected in the previous table are $1.7 million in uncertain tax positions at December 31, 2021.

The Company has no minimum funding requirements for its defined benefit pension plans for 2022 due to an additional contribution of
$20.0 million in 2019.

The Company's MEPP contributions are based on union employee payroll, which cannot be determined in advance for future periods. The Company
may also be required to make additional contributions to its MEPPs as a result of their funded status. For more information, see Item 1A - Risk
Factors and Item 8 - Note 18.

New Accounting Standards
For information regarding new accounting standards, see Item 8 - Note 2, which is incorporated herein by reference.

Critical Accounting Estimates
The Company has prepared its financial statements in conformity with GAAP. The preparation of its financial statements requires management 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. Management reviews these
estimates and assumptions based on historical experience, changes in business conditions and other relevant factors believed to be reasonable under
the circumstances.

Critical accounting estimates are defined as estimates that require management to make assumptions about matters that are uncertain at the time
the estimate was made and changes in the estimates could have a material impact on the Company's financial position or results of operations. The
Company's critical accounting estimates are subject to judgments and uncertainties that affect the application of its significant accounting policies
discussed in Item 8 - Note 2. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised.
Consequently, the Company's financial position or results of operations may be materially different when reported under different conditions or when
using different assumptions in the application of the following critical accounting estimates.

MDU Resources Group, Inc. Form 10-K 57

Part II

Goodwill
The Company performs its goodwill impairment testing annually in the fourth quarter. In addition, the test is performed on an interim basis whenever
events or circumstances indicate that the carrying amount of goodwill may not be recoverable. Examples of such events or circumstances may
include a significant adverse change in business climate, weakness in an industry in which the Company's reporting units operate or recent
significant cash or operating losses with expectations that those losses will continue.

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. For more information on the Company's operating segments, see Item 8 - Note 17. 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, 2021, 2020 and 2019, there were no impairment losses recorded. At October 31, 2021, the fair value substantially exceeded the
carrying value at all reporting units; therefore, the Company did not perform additional sensitivity analyses to determine what impact changes in
estimates would have on the fair value of the reporting units.

Determining the fair value of a reporting unit requires judgment and the use of significant estimates which include assumptions about the Company's
future revenue, profitability and cash flows, amount and timing of estimated capital expenditures, inflation rates, risk adjusted cost of capital,
operational plans, and current and future economic conditions, among others. The fair value of each reporting unit is determined using a weighted
combination of income and market approaches. The Company believes that the estimates and assumptions used in its impairment assessments are
reasonable and based on available market information.

The Company uses a discounted cash flow methodology for its income approach. Under the income approach, the discounted cash flow model
determines fair value based on the present value of projected cash flows over a specified period and a residual value related to future cash flows
beyond the projection period. Both values are discounted using a rate which reflects the best estimate of the risk adjusted cost of capital at each
reporting unit. The risk adjusted cost of capital varies by reporting unit and was in the range of 5 percent to 9 percent in 2021, 4 percent to
8 percent for 2020 and 4 percent to 9 percent for 2019.

Under the market approach, the Company estimates fair value using various multiples derived from enterprise value to EBITDA for comparative peer
companies for each respective reporting unit. These multiples are applied to operating data for each reporting unit to arrive at an indication of fair
value. In addition, the Company adds a reasonable control premium when calculating the fair value utilizing the peer multiples, which is estimated
as the premium that would be received in a sale in an orderly transaction between market participants. The Company used a 15 percent control
premium for the years ended December 31, 2021, 2020 and 2019.

The Company uses significant judgment in estimating its five-year forecast. The assumptions underlying cash flow projections are in sync as
applicable with the Company's strategy and assumptions. Future projections are heavily correlated with the current year results of operations. Future
results of operations may vary due to economic and financial impacts. The long-term growth rates used in the five-year forecast are developed by
management based on industry data, management's knowledge of the industry and management's strategic plans. The long-term growth rate varies
by reporting unit and was 1 percent to 3 percent in 2021, 2020 and 2019.

Business combinations
The Company accounts for acquisitions on the Consolidated Financial Statements starting from the date of the acquisition, which is the date that
control is obtained. The acquisition method of accounting requires acquired assets and liabilities assumed be recorded at their respective fair values
as of the date of the acquisition. The excess of the purchase price over the fair value of the assets acquired and liabilities assumed is recorded as
goodwill. The estimation of fair values of acquired assets and liabilities assumed by the Company requires significant judgment and requires various
assumptions. Although independent appraisals may be used to assist in the determination of the fair value of certain assets and liabilities, the
appraised values may be based on significant estimates provided by management. The amounts and useful lives assigned to depreciable and
amortizable assets compared to amounts assigned to goodwill, which is not amortized, can affect the results of operations in the period of and
periods subsequent to a business combination.

In determining fair values of acquired assets and liabilities assumed, the Company uses various observable inputs for similar assets or liabilities in
active markets and various unobservable inputs, which includes the use of valuation models. Fair values are based on various factors including, but
not limited to, age and condition of property, maintenance records, auction values for equipment with similar characteristics, recent sales and
listings of comparable properties, data collected from drill holes and other subsurface investigations and geologic data. The Company primarily uses
the market and cost approaches in determining the fair value of land and property, plant and equipment. A combination of the market and income
approaches are used for aggregate reserves and intangibles, primarily a discounted cash flow model. The Company must develop reasonable and
supportable assumptions to evaluate future cash flows. The process is highly subjective and requires a large degree of management judgement.
Assumptions used may vary for each specific business combination due to unique circumstances of each transaction. Assumptions may include
discount rate, time period, terminal value and growth rate. The values generated from the discounted cash flow model are sensitive to the
assumptions used. Inaccurate assumptions can lead to deviations from the values generated.

58 MDU Resources Group, Inc. Form 10-K

Part II

There is a measurement period after the acquisition date during which the Company may adjust the amounts recognized for a business combination.
Any such adjustments are recorded in the period the adjustment is determined with the corresponding offset to goodwill. These adjustments are
typically based on obtaining additional information that existed at the acquisition date regarding the assets acquired and the liabilities assumed. The
measurement period ends once the Company has obtained all necessary information that existed as of the acquisition date, but does not extend
beyond one year from the date of the acquisition. Once the measurement period has ended, any adjustments to assets acquired or liabilities assumed
are recorded in income from continuing operations.

Regulatory accounting
The Company is subject to rate regulation by state public service commissions and/or the FERC. Regulatory assets generally represent incurred or
accrued costs that have been deferred and are expected to be recovered in rates charged to customers. Regulatory liabilities generally represent
amounts that are expected to be refunded to customers in future rates or amounts collected in current rates for future costs.

Management continually assesses the likelihood of recovery in future rates of incurred costs and refunds to customers associated with regulatory
assets and liabilities. Decisions made by the various regulatory agencies can directly impact the amount and timing of these items. Therefore,
expected recovery or refund of these deferred items generally is based on specific ratemaking decisions or precedent for each item. If future recovery
of costs is no longer probable, the Company would be required to include those costs in the statement of income or accumulated other
comprehensive loss in the period in which it is no longer deemed probable. The Company believes that the accounting subject to rate regulation
remains appropriate and its regulatory assets are probable of recovery in current rates or in future rate proceedings. At December 31, 2021 and
2020, the Company's regulatory assets were $476.5 million and $447.9 million, respectively, and regulatory liabilities were $445.1 million and
$459.5 million, respectively. At December 31, 2021 and 2020, regulatory assets in recovery were $367.7 million and $324.6 million, respectively,
and regulatory assets not in recovery were $108.8 million and $123.3 million, respectively.

Revenue recognition
Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services. The recognition of revenue requires the Company to make estimates and
assumptions that affect the reported amounts of revenue. The accuracy of revenues reported on the Consolidated Financial Statements depends on,
among other things, management's estimates of total costs to complete projects because the Company uses the cost-to-cost measure of progress on
construction contracts for revenue recognition.

To determine the proper revenue recognition method for contracts, the Company evaluates whether two or more contracts should be combined and
accounted for as one single contract and whether the combined or single contract should be accounted for as more than one performance obligation.
This evaluation requires significant judgment and the decision to combine a group of contracts or separate the combined or single contract into
multiple performance obligations could change the amount of revenue and profit recorded in a given period. For most contracts, the customer
contracts with the Company to provide a significant service of integrating a complex set of tasks and components into a single project. Hence, the
Company's contracts are generally accounted for as one performance obligation.

The Company recognizes construction contract revenue over time using an input method based on the cost-to-cost measure of progress for contracts
because it best depicts the transfer of assets to the customer which occurs as the Company incurs costs on the contract. Under the cost-to-cost
measure of progress, the costs incurred are compared with total estimated costs of a performance obligation. Revenues are recorded proportionately
to the costs incurred. This method depends largely on the ability to make reasonably dependable estimates related to the extent of progress toward
completion of the contract, contract revenues and contract costs. Since contract prices are generally set before the work is performed, the estimates
pertaining to every project could contain significant unknown risks such as volatile labor, material and fuel costs, weather delays, adverse project site
conditions, unforeseen actions by regulatory agencies, performance by subcontractors, job management and relations with project owners. Changes in
estimates could have a material effect on the Company's results of operations, financial position and cash flows. For the years ended December 31,
2021 and 2020, the Company's total construction contract revenue was $3.0 billion and $3.1 billion, respectively.

Several factors are evaluated in determining the bid price for contract work. These include, but are not limited to, the complexities of the job, past
history performing similar types of work, seasonal weather patterns, competition and market conditions, job site conditions, work force safety,
reputation of the project owner, availability of labor, materials and fuel, project location and project completion dates. As a project commences,
estimates are continually monitored and revised as information becomes available and actual costs and conditions surrounding the job become
known. If a loss is anticipated on a contract, the loss is immediately recognized.

Contracts are often modified to account for changes in contract specifications and requirements. The Company considers contract modifications to
exist when the modification either creates new or changes the existing enforceable rights and obligations. Generally, contract modifications are for
goods or services that are not distinct from the existing contract due to the significant integration of services provided in the context of the contract
and are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and the measure of
progress for the performance obligation to which it relates, is recognized as an adjustment to revenue on a cumulative catch-up basis.

MDU Resources Group, Inc. Form 10-K 59

Part II

The Company's construction contracts generally contain variable consideration including liquidated damages, performance bonuses or incentives,
claims, unapproved/unpriced change orders and penalties or index pricing. The variable amounts usually arise upon achievement of certain
performance metrics or change in project scope. The Company estimates the amount of revenue to be recognized on variable consideration using
estimation methods that best predict the most likely amount of consideration the Company expects to be entitled to or expects to incur. The
Company includes variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative
revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. Changes in circumstances could
impact management's estimates made in determining the value of variable consideration recorded. The Company updates its estimate of the
transaction price each reporting period and the effect of variable consideration on the transaction price is recognized as an adjustment to revenue on
a cumulative catch-up basis.

The Company believes its estimates surrounding the cost-to-cost method are reasonable based on the information that is known when the estimates
are made. The Company has contract administration, accounting and management control systems in place that allow its estimates to be updated
and monitored on a regular basis. Because of the many factors that are evaluated in determining bid prices, it is inherent that the Company's
estimates have changed in the past and will continually change in the future as new information becomes available for each job.

Pension and other postretirement benefits
The Company has noncontributory defined benefit pension plans and other postretirement benefit plans for certain eligible employees. Various
actuarial assumptions are used in calculating the benefit expense (income) and liability (asset) related to these plans. Costs of providing pension and
other postretirement benefits bear the risk of change, as they are dependent upon numerous factors based on assumptions of future conditions.

The Company makes various assumptions when determining plan costs, including the current discount rates and the expected long-term return on
plan assets, the rate of compensation increases, actuarially determined mortality data and health care cost trend rates. In selecting the expected
long-term return on plan assets, which is considered to be one of the key variables in determining benefit expense or income, the Company considers
historical returns, current market conditions, the mix of investments and expected future market trends, including changes in interest rates and
equity and bond market performance. Another key variable in determining benefit expense or income is the discount rate. In selecting the discount
rate, the Company matches forecasted future cash flows of the pension and postretirement plans to a yield curve which consists of a hypothetical
portfolio of high-quality corporate bonds with varying maturity dates, as well as other factors, as a basis. The Company's pension and other
postretirement benefit plan assets are primarily made up of equity and fixed-income investments. Fluctuations in actual equity and bond market
returns, as well as changes in general interest rates, may result in increased or decreased pension and other postretirement benefit costs in the
future. Management estimates the rate of compensation increase based on long-term assumed wage increases and the health care cost trend rates
are determined by historical and future trends.

The Company believes the estimates made for its pension and other postretirement benefits are reasonable based on the information that is known
when the estimates are made. These estimates and assumptions are subject to a number of variables and are expected to change in the future.
Estimates and assumptions will be affected by changes in the discount rate, the expected long-term return on plan assets, the rate of compensation
increase and health care cost trend rates. A 50 basis point change in the assumed discount rate and the expected long-term return on plan assets
would have had the following effects at December 31, 2021:

Pension Benefits

Other
Postretirement Benefits

2021

2020

2021

2020

Part II

Service cost

Interest cost

Plan participants' contributions

Actuarial (gain) loss

Benefits paid

Benefit obligation at end of year

Change in net plan assets:

Fair value of plan assets at beginning of year

Actual return on plan assets

Employer contribution

Plan participants' contributions

Benefits paid

—

9,819

12,093

—

1,600

1,862

641

(12,140)

27,737

(12,802)

1,532

2,437

752

2,203

(23,542)

(23,636)

(3,996)

(4,383)

411,497

437,360

73,460

86,155

383,834

365,264

101,639

12,817

42,206

1,398

—

476

641

94,587

10,249

434

752

(23,542)

(23,636)

(3,996)

(4,383)

Fair value of net plan assets at end of year

373,109

383,834

100,158

101,639

Funded status - over (under)

Amounts recognized in the Consolidated Balance Sheets at December 31:

Noncurrent assets - other

Other accrued liabilities

Noncurrent liabilities - other

Benefit obligation assets (liabilities) - net amount recognized

Amounts recognized in accumulated other comprehensive loss:

Actuarial loss

Prior service credit

Total

Amounts recognized in regulatory assets or liabilities:

Actuarial (gain) loss

Prior service credit

Total

(38,388) $

(53,526) $

26,698 $

15,484

— $

—

— $

—

45,863 $

36,769

544

622

38,388

53,526

18,621

20,663

(38,388) $

(53,526) $

26,698 $

15,484

25,976 $

27,527 $

2,367 $

—

(290)

25,976 $

27,527 $

2,077 $

5,557

(634)

4,923

(8,228)

(6,808)

142,166 $

154,013 $

(14,727) $

—

(5,193)

142,166 $

154,013 $

(19,920) $

(15,036)

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 2021, the actuarial gain recognized in the benefit obligation was primarily the result of an increase in the discount rate. In 2020, the actuarial
loss recognized in the benefit obligation was primarily the result of a decrease in the discount rate. For more information on the discount rates, see
the table below. Unrecognized pension actuarial 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.

The pension plans all 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:

Projected benefit obligation

Accumulated benefit obligation

Fair value of plan assets

2021

2020

(In thousands)

411,497 $

437,360

411,497 $

437,360

373,109 $

383,834

MDU Resources Group, Inc. Form 10-K 101

Part II

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

2021

2020

2019

2021

2020

2019

Components of net periodic benefit cost (credit):

(In thousands)

Service cost

Interest cost

Expected return on assets

Amortization of prior service credit

Recognized net actuarial loss

Net periodic benefit cost (credit), including amount capitalized

Less amount capitalized

Net periodic benefit cost (credit)

Other changes in plan assets and benefit obligations recognized in

accumulated comprehensive loss:

— $

1,600 $

1,532 $

9,819

12,093

15,225

1,862

2,437

(19,576)

(19,949)

(18,236)

(5,098)

(5,019)

—

(1,398)

1,142

2,986

(4,804)

(1,398)

8,017

7,172

(1,740)

—

(684)

—

5,548

2,537

287

353

(3,010)

(2,161)

(1,721)

—

150

156

113

(1,740)

(684)

2,537

(3,160)

(2,317)

(1,834)

Net (gain) loss

Amortization of actuarial loss

Amortization of prior service credit

(265)

934

(1,286)

(1,155)

—

(144)

(904)

—

(2,811)

(135)

100

Total recognized in accumulated other comprehensive loss

(1,551)

(221)

(1,048)

(2,846)

(259)

(306)

101

(464)

(127)

(110)

100

(137)

Other changes in plan assets and benefit obligations recognized in

regulatory assets or liabilities:

Net (gain) loss

Amortization of actuarial gain (loss)

Amortization of prior service credit

(5,116)

4,546

189

(6,292)

(3,793)

(8,168)

(6,731)

(6,017)

(4,644)

110

(242)

—

1,298

1,297

Total recognized in regulatory assets or liabilities

(11,847)

(1,471)

(4,455)

(4,884)

(2,477)

(7,113)

Total recognized in net periodic benefit cost (credit), accumulated
other comprehensive loss and regulatory assets or liabilities

(15,138) $

(2,376) $

(2,966) $

(10,890) $

(5,258) $

(9,084)

Weighted average assumptions used to determine benefit obligations at December 31 were as follows:

Discount rate

Expected return on plan assets

Rate of compensation increase

Pension Benefits

Other
Postretirement Benefits

2021

2020

2021

2020

2.64 %

6.00 %

N/A

2.30 %

6.00 %

N/A

2.66 %

5.50 %

3.00 %

2.30 %

5.50 %

3.00 %

Weighted average assumptions used to determine net periodic benefit cost (credit) for the years ended December 31 were as follows:

Discount rate

Expected return on plan assets

Rate of compensation increase

Pension Benefits

Other
Postretirement Benefits

2021

2.30 %

6.00 %

N/A

2020

2.96 %

6.25 %

N/A

2021

2.30 %

5.50 %

3.00 %

2020

3.00 %

5.75 %

3.00 %

The expected rate of return on pension plan assets is based on a targeted asset allocation range determined by the funded ratio of the plan. As of
December 31, 2021, the expected rate of return on pension plan assets is based on the targeted asset allocation range of 35 percent to 45 percent
equity securities and 55 percent to 65 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 equity securities and 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.

102 MDU Resources Group, Inc. Form 10-K

Part II

Health care rate assumptions for the Company's other postretirement benefit plans as of December 31 were as follows:

Health care trend rate assumed for next year

Health care cost trend rate - ultimate

Year in which ultimate trend rate achieved

2021

2020

7.0 %

4.5 %

2031

7.0 %

4.5 %

2031

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 does not expect to contribute to its defined benefit pension plans in 2022 due to an additional $20.0 million contributed to the plans
in 2019 creating prefunding credits to be used in future years. The Company expects to contribute approximately $601,000 to its postretirement
benefit plans in 2022.

The following benefit payments, which reflect future service, as appropriate, and expected Medicare Part D subsidies at December 31, 2021, are as
follows:

Years

2022

2023

2024

2025

2026

Pension
Benefits

Other
Postretirement
Benefits

Expected
Medicare
Part D Subsidy

(In thousands)

24,644 $

4,393 $

24,766

24,897

24,739

24,571

4,522

4,572

4,612

4,642

2027-2031

117,413

17,867

157

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. The estimated fair value of the pension plans' Level 2 pooled separate accounts are determined using observable
inputs in active markets or the net asset value of shares held at year end, or other observable inputs. Some of these securities are valued using
pricing from outside sources.

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.

MDU Resources Group, Inc. Form 10-K 103

Part II

The fair value of the Company's pension plans' assets (excluding cash) by class were as follows:

Assets:

Cash equivalents

Equity securities:

U.S. companies

International companies

Collective and mutual funds (a)

Corporate bonds

Municipal bonds

U.S. Government securities

Pooled separate accounts (b)

Investments measured at net asset value (c)

Fair Value Measurements
at December 31, 2021, Using

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

(In thousands)

Significant
Unobservable
Inputs
(Level 3)

Balance at
December 31,
2021

— $

4,637 $

— $

4,637

7,483

—

167,093

—

7,113

—

1,279

41,383

125,167

7,507

1,902

3,088

—

7,483

1,279

208,476

125,167

7,507

9,015

3,088

6,457

Total assets measured at fair value

181,689 $

184,963 $

— $

373,109

(a) Collective and mutual funds invest approximately 37 percent in corporate bonds, 19 percent in common stock of international companies, 16 percent in common

stock of large-cap U.S. companies, 9 percent in U.S. Government securities and 19 percent in other investments.

(b) Pooled separate accounts are invested 100 percent in cash and cash equivalents.
(c)

In accordance with ASC 820 - Fair Value, 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
statement of financial condition.

Assets:

Cash equivalents

Equity securities:

U.S. companies

International companies

Collective and mutual funds (a)

Corporate bonds

Municipal bonds

U.S. Government securities

Investments measured at net asset value (b)

Fair Value Measurements
at December 31, 2020, Using

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

(In thousands)

Significant
Unobservable
Inputs
(Level 3)

Balance at
December 31,
2020

— $

7,841 $

— $

7,841

12,844

—

177,397

—

11,177

—

1,727

55,788

92,809

10,126

2,695

—

12,844

1,727

233,185

92,809

10,126

13,872

11,430

Total assets measured at fair value

201,418 $

170,986 $

— $

383,834

(a) Collective and mutual funds invest approximately 36 percent in corporate bonds, 24 percent in common stock of international companies, 18 percent in common

(b)

stock of large-cap U.S. companies, 8 percent in cash equivalents, 5 percent in U.S. Government securities and 9 percent in other investments.
In accordance with ASC 820 - Fair Value, 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
statement of financial condition.

The estimated fair values of the Company's other postretirement benefit plans' assets are determined using the market approach.

104 MDU Resources Group, Inc. Form 10-K

Part II

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.

The fair value of the Company's other postretirement benefit plans' assets (excluding cash) by asset class were as follows:

Assets:

Cash equivalents

Equity securities:

U.S. companies

International companies

Collective and mutual funds (a)

Insurance contract (b)

Investments measured at net asset value (c)

Fair Value Measurements
at December 31, 2021, Using

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

(In thousands)

Significant
Unobservable
Inputs
(Level 3)

Balance at
December 31,
2021

— $

4,281 $

— $

4,281

2,332

—

93,447

—

2,332

93,447

Total assets measured at fair value

2,336 $

97,819 $

— $

100,158

(a) Collective and mutual funds invest approximately 37 percent in corporate bonds, 19 percent in common stock of international companies, 16 percent in common

stock of large-cap U.S. companies, 9 percent in U.S. Government securities and 19 percent in other investments.

(b) The insurance contract invests approximately 58 percent in corporate bonds, 13 percent in U.S. Government securities, 13 percent in common stock of large-cap

(c)

U.S. companies, 5 percent in common stock of small-cap U.S. companies and 11 percent in other investments.
In accordance with ASC 820 - Fair Value, 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
statement of financial condition.

Assets:

Cash equivalents

Equity securities:

U.S. companies

International companies

Collective and mutual funds (a)

Insurance contract (b)

Investments measured at net asset value (c)

Fair Value Measurements
at December 31, 2020, Using

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

(In thousands)

Significant
Unobservable
Inputs
(Level 3)

Balance at
December 31,
2020

— $

3,517 $

— $

3,517

1,850

—

147

96,103

—

1,850

157

96,103

Total assets measured at fair value

1,860 $

99,769 $

— $

101,639

(a) Collective and mutual funds invest approximately 36 percent in corporate bonds, 24 percent in common stock of international companies, 18 percent in common

stock of large-cap U.S. companies, 8 percent in cash equivalents, 5 percent in U.S. Government securities and 9 percent in other investments.

(b) The insurance contract invests approximately 67 percent in corporate bonds, 10 percent in common stock of large-cap U.S. companies, 12 percent in U.S.

(c)

Government securities, 4 percent in common stock of small-cap U.S. companies, 1 percent in cash equivalents and 6 percent in other investments.
In accordance with ASC 820 - Fair Value, 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
statement of financial condition.

MDU Resources Group, Inc. Form 10-K 105

Part II

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:

Projected benefit obligation

Accumulated benefit obligation

2021

2020

(In thousands)

92,918 $

101,242

92,918 $

101,242

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:

2021

2020

2019

(In thousands)

Components of net periodic benefit cost:

Service cost

Interest cost

Recognized net actuarial loss

— $

58 $

1,912

1,164

2,606

1,192

109

3,473

764

Net periodic benefit cost

3,076 $

3,856 $

4,346

Weighted average assumptions used at December 31 were as follows:

Benefit obligation discount rate

Benefit obligation rate of compensation increase

Net periodic benefit cost discount rate

2021

2020

2.39 %

1.97 %

N/A

1.97 %

2.73 %

Net periodic benefit cost rate of compensation increase

N/A

The amount of future benefit payments for the unfunded, nonqualified defined benefit plans at December 31, 2021, are expected to aggregate as
follows:

Nonqualified benefits

6,877 $

6,890 $

7,354 $

7,537 $

7,609 $

31,983

2022

2023

2024

2025

2026

2027-2031

(In thousands)

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 2021, 2020 and 2019 were $2.4 million, $1.8 million and $1.6 million,
respectively.

The amount of investments that the Company anticipates using to satisfy obligations under these plans at December 31 was as follows:

Investments

Insurance contract*

Life insurance**

Other

Total investments

2021

2020

(In thousands)

109,603 $

100,104

38,356

39,779

10,190

8,917

158,149 $

148,800

* For more information on the insurance contract, see Note 8.

** Investments of life insurance are carried on plan participants (payable upon the

employee's death).

106 MDU Resources Group, Inc. Form 10-K

Part II

Defined contribution plans
The Company sponsors various defined contribution plans for eligible employees and the costs incurred under these plans were $45.4 million in
2021, $50.1 million in 2020 and $51.8 million in 2019.

Multiemployer plans
The Company contributes to a number of MEPPs under the terms of collective-bargaining agreements that cover its union-represented employees.
The risks of participating in these multiemployer plans are 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 some of its MEPPs, 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 these plans is outlined in the following table. Unless otherwise noted, the most recent Pension Protection Act zone
status available in 2021 and 2020 is for the plan's year-end at December 31, 2020, and December 31, 2019, 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, plans in the red zone are
generally less than 65 percent funded, plans in the yellow zone are between 65 percent and 80 percent funded, and plans in the green zone are at
least 80 percent funded.

Pension Fund

EIN/Pension
Plan Number

Pension Protection Act
Zone Status

2021

2020

FIP/RP Status
Pending/
Implemented

Contributions

2021

2020

2019

(In thousands)

Surcharge
Imposed

Expiration Date
of Collective
Bargaining
Agreement

Edison Pension Plan

936061681-001

Green

No $ 18,331 $ 16,121 $ 12,252

IBEW Local 212 Pension

Trust

316127280-001

Green as of
4/30/2021

Green as of
4/30/2020

1,733

1,521

1,110

IBEW Local 357 Pension

Plan A

886023284-001

Green

6,485

9,913 10,162

IBEW Local 82 Pension

Plan

316127268-001

Green as of
6/30/2021

Green as of
6/30/2020

Idaho Plumbers and

Pipefitters Pension Plan

826010346-001

Green as of
5/31/2021

Green as of
5/31/2020

1,353

1,373

1,662

1,528

1,370

1,307

National Electrical

Benefit Fund

Pension and Retirement
Plan of Plumbers and
Pipefitters Local 525

Pension Trust Fund for
Operating Engineers

Sheet Metal Workers
Pension Plan of
Southern CA, AZ, and
NV

Southern California

IBEW-NECA Pension
Trust Fund

Western Conference of

530181657-001

Green

No 14,361 14,484 12,679

886003864-001

Green

4,345

6,266

4,747

946090764-001

Yellow

Implemented

2,495

2,680

2,598

956052257-001

Yellow

Implemented

2,615

3,255

2,119

956392774-001

Yellow as of
6/30/2021

Yellow as of
6/30/2020

Implemented

2,746

1,714

1,477

12/31/2023

6/1/2025

5/31/2024

12/3/2023

3/31/2023

5/31/2021-
5/31/2026 *

9/30/2024

6/15/2022-
6/30/2023

6/30/2024

6/30/2022-
5/31/2026

12/31/2023-
12/31/2025

Teamsters Pension Plan

916145047-001

Other funds

Total contributions

Green

3,006

3,025

2,814

23,390 23,722 19,598

$ 82,388 $ 85,444 $ 72,525

Plan includes contributions required by collective bargaining agreements which have expired but contain provisions automatically renewing their terms in the absence
of a subsequent negotiated agreement.

MDU Resources Group, Inc. Form 10-K 107

Part II

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

Edison Pension Plan

IBEW Local 82 Pension Plan

IBEW Local 124 Pension Trust Fund

IBEW Local 212 Pension Trust Fund

IBEW Local 357 Pension Plan A

IBEW Local 648 Pension Plan

IBEW Local 683 Pension Fund Pension Plan

IBEW Local Union No 226 Open End Pension Fund

Idaho Plumbers and Pipefitters Pension Plan

International Union of Operating Engineers Local 701 Pension Trust Fund

Minnesota Teamsters Construction Division Pension Fund

Pension and Retirement Plan of Plumbers and Pipefitters Local 525

Southwest Marine Pension Trust

Year Contributions to Plan Exceeded More Than 5 Percent
of Total Contributions (as of December 31 of the Plan's Year-End)

2020 and 2019

The Company also contributes to a number of multiemployer other postretirement plans under the terms of collective-bargaining agreements that
cover its union-represented employees. These plans provide benefits such as health insurance, disability insurance and life insurance to retired union
employees. Many of the multiemployer other postretirement plans are combined with active multiemployer health and welfare plans. The Company's
total contributions to its multiemployer other postretirement plans, which also includes contributions to active multiemployer health and welfare
plans, were $66.1 million, $63.8 million and $59.5 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Amounts contributed in 2021, 2020 and 2019 to defined contribution multiemployer plans were $54.8 million, $54.2 million and $49.2 million,
respectively.

108 MDU Resources Group, Inc. Form 10-K

Note 19 - 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) and one major transmission line (BSSE). 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.

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:

Part II

Ownership
Percentage

2021

2020

(In thousands)

Big Stone Station:

22.7 %

Utility plant in service

157,259 $

155,967

Construction work in progress

Less accumulated depreciation

571

104

47,293

45,435

110,537 $

110,636

BSSE:

50.0 %

Utility plant in service

107,424 $

107,442

Construction work in progress

Less accumulated depreciation

—

4,506

2,682

102,918 $

104,760

Coyote Station:

25.0 %

Utility plant in service

157,764 $

159,784

Construction work in progress

Less accumulated depreciation

784

323

109,202

108,852

49,346 $

51,255

Wygen III:

25.0 %

Utility plant in service

66,357 $

66,101

Construction work in progress

Less accumulated depreciation

108

232

11,383

10,038

55,082 $

56,295

Note 20 - Regulatory Matters
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 following paragraphs summarize the Company's significant open regulatory proceedings and cases by
jurisdiction. 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.

MNPUC
Great Plains defers the difference between the actual cost of gas spent to serve customers and that recovered from customers on a monthly basis.
Annually, Great Plains prepares a true-up pursuant to the purchased gas adjustment tariff. On August 30, 2021, the MNPUC issued an order to allow
Great Plains recovery of an out-of-cycle cost of gas adjustment of $8.8 million over a period of 27 months. The order was effective September 1,
2021, and is subject to a prudence review by the MNPUC. The requested increase was for the February 2021 extreme cold weather, primarily in the
central United States, and market conditions surrounding the natural gas commodity market. The MNPUC prudence review is pending with an order
to be issued on or before August 29, 2022.

NDPSC
Montana-Dakota has a renewable resource cost adjustment rate tariff that allows for annual adjustments for recent projected capital costs and related
expenses for projects determined to be recoverable under the tariff. On November 1, 2021, Montana-Dakota filed an annual update to its renewable
resource cost adjustment requesting to recover a revised revenue requirement of approximately $12.4 million annually, not including the prior period
true-up adjustment. The update reflects a decrease of approximately $2.0 million from the revenues currently included in rates. On January 26,
2022, the NDPSC approved the decrease with rates effective February 1, 2022.

MDU Resources Group, Inc. Form 10-K 109

Part II

SDPUC
On March 11, 2021, Montana-Dakota filed an informational update to the infrastructure rider rate tariff with the SDPUC related to the retirement of
Unit 1 at Lewis & Clark Station. The filing includes the annual revenue requirement offset by the related amortization of the accelerated depreciation
on the plant, net of excess deferred income taxes, and the decommissioning costs projected to be incurred in 2021 resulting in no impact to
customers. On November 15, 2021, the SDPUC approved the request.

WUTC
On September 30, 2021, Cascade filed an application with the WUTC for a natural gas rate increase of approximately $13.7 million annually or
approximately 5.1 percent above current rates. The requested increase was primarily to recover investments made in infrastructure upgrades, as well
as to recover 2021 wage increases. The WUTC has 11 months to render a final decision on the rate case. This matter is pending before the WUTC.

FERC
On September 1, 2021, Montana-Dakota filed an update to its transmission formula rate under the MISO tariff for its multi-value project for
$13.4 million, which was effective January 1, 2022.

Note 21 - 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, 2021 and 2020, the Company accrued liabilities which have not been discounted, including liabilities held for sale, of
$37.0 million and $41.5 million, respectively. At December 31, 2021 and 2020, the Company also recorded corresponding insurance receivables of
$14.1 million and $17.5 million, respectively, and regulatory assets of $21.2 million and $21.3 million, respectively, related to the accrued
liabilities. The accruals are for contingencies resulting from litigation, production taxes, royalty claims 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. 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
Portland Harbor Site In December 2000, Knife River - Northwest was named by the EPA as a PRP in connection with the cleanup of the riverbed site
adjacent to a commercial property site acquired by Knife River - Northwest from Georgia-Pacific West, Inc. along the Willamette River. The riverbed
site is part of the Portland, Oregon, Harbor Superfund Site where the EPA wants responsible parties to share in the costs of cleanup. The EPA
entered into a consent order with certain other PRPs referred to as the Lower Willamette Group for a remedial investigation and feasibility study. The
Lower Willamette Group has indicated that it has incurred over $115.0 million in investigation related costs. Knife River - Northwest has joined with
approximately 100 other PRPs, including the Lower Willamette Group members, in a voluntary process to establish an allocation of costs for the site.
Costs to be allocated would include costs incurred by the Lower Willamette Group as well as costs to implement and fund remediation of the site.

In January 2017, the EPA issued a Record of Decision adopting a selected remedy which is expected to take 13 years to complete with a then
estimated present value of approximately $1 billion. Corrective action will not be taken until remedial design/remedial action plans are approved by
the EPA. In 2020, the EPA encouraged certain PRPs to enter into consent agreements to perform remedial design covering the entire site and
proposed dividing the site into multiple subareas for remedial design. Certain PRPs executed consent agreements for remedial design work and
certain others were issued unilateral administrative orders to perform design work. Knife River - Northwest is not subject to either a voluntary
agreement or unilateral order to perform remedial design work. In February 2021, the EPA announced that 100 percent of the site's area requiring
active cleanup is in the remedial design process. Site-wide remediation activities are not expected to commence for a number of years.

Knife River - Northwest was also notified that the Portland Harbor Natural Resource Trustee Council intends to perform an injury assessment to
natural resources resulting from the release of hazardous substances at the site. It is not possible to estimate the costs of natural resource damages
until an assessment is completed and allocations are undertaken.

110 MDU Resources Group, Inc. Form 10-K

Part II

At this time, Knife River - Northwest does not believe it is a responsible party and has notified Georgia-Pacific West, Inc., that it intends to seek
indemnity for liabilities incurred in relation to the above matters pursuant to the terms of their sale agreement.

The Company believes it is not probable that it will incur any material environmental remediation costs or damages in relation to the above
referenced matter.

Manufactured Gas Plant Sites Claims have been made against Cascade for cleanup of environmental contamination at manufactured gas plant sites
operated by Cascade's predecessors and a similar claim has been made against Montana-Dakota for a site operated by Montana-Dakota and its
predecessors. Any accruals related to these claims are reflected in regulatory assets. For more information, see Note 6.

Demand has been made of Montana-Dakota to participate in investigation and remediation of environmental contamination at a site in Missoula,
Montana. The site operated as a former manufactured gas plant from approximately 1907 to 1938 when it was converted to a butane-air plant that
operated until 1956. Montana-Dakota or its predecessors owned or controlled the site for a period of the time it operated as a manufactured gas
plant and Montana-Dakota operated the butane-air plant from 1940 to 1951, at which time it sold the plant. There are no documented wastes or by-
products resulting from the mixing or distribution of butane-air gas. Preliminary assessment of a portion of the site provided a recommended
remedial alternative for that portion of approximately $560,000. However, the recommended remediation would not address any potential
contamination to adjacent parcels that may be impacted from historic operations of the manufactured gas plant. An environmental assessment was
started in 2020, which is estimated to cost approximately $823,000. The environmental assessment report is expected to be submitted to the
MTDEQ in 2022. 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. Montana-Dakota has accrued costs of $419,000 for the remediation and
investigation costs, and has incurred costs of $505,000 as of December 31, 2021. Montana-Dakota received notice from a prior insurance carrier
that it will participate in payment of defense costs incurred in relation to the claim. On December 9, 2021, Montana Dakota filed an application with
the MTPSC for deferred accounting treatment for costs associated with the investigation and remediation of the site. This matter is pending before
the MTPSC.

A claim was made against Cascade for contamination at the Bremerton Gasworks Superfund Site in Bremerton, Washington, which was received in
1997. A preliminary investigation has found soil and groundwater at the site contain impacts requiring further investigation and cleanup. The EPA
conducted a Targeted Brownfields Assessment of the site and released a report summarizing the results of that assessment in August 2009. The
assessment confirmed that impacts have affected soil and groundwater at the site, as well as sediments 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. Current estimates for the cost to complete the
remedial investigation and feasibility study are approximately $7.6 million of which $5.3 million has been incurred as of December 31, 2021. Based
on the site investigation, preliminary remediation alternative costs were provided by consultants in August 2020. The preliminary information
received through the completion of the data report allowed for the projection of possible costs for a variety of site configurations, remedial measures
and potential natural resource damage claims of between $13.6 million and $71.0 million. At December 31, 2021, Cascade has accrued
$2.3 million for the remedial investigation and feasibility study, as well as $17.5 million for remediation of this site. The accrual for remediation
costs will be reviewed and adjusted, if necessary, after the completion of the feasibility study. In April 2010, Cascade filed a petition with the WUTC
for authority to defer the costs incurred in relation to the environmental remediation of this site. The WUTC approved the petition in September
2010, subject to conditions set forth in the order.

A claim was made against Cascade for impacts at a site in Bellingham, Washington. Cascade received notice from a party in May 2008 that Cascade
may be a PRP, along with other parties, for impacts from a manufactured gas plant owned by Cascade and its predecessor from about 1946 to
1962. 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 other PRPs
developed a cleanup action plan and completed public review in 2020. Development of design documents is anticipated to be completed by the end
of 2022 with the remedy construction expected to occur in 2023. Cascade believes its proportional share of any liability will be relatively small in
comparison to other PRPs. The plant manufactured gas from coal between approximately 1890 and 1946. In 1946, shortly after Cascade's
predecessor acquired the plant, the plant converted to a propane-air gas facility. There are no documented wastes or by-products resulting from the
mixing or distribution of propane-air gas. 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.

MDU Resources Group, Inc. Form 10-K 111

Part II

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; royalties; information technology; and construction materials. Certain of these contracts are subject to variability in
volume and price. The commitment terms vary in length, up to 38 years. The commitments under these contracts as of December 31, 2021, were:

Purchase commitments

589,898 $

200,667 $

141,383 $

99,545 $

86,628 $

731,679

2022

2023

2024

2025

2026

Thereafter

(In thousands)

These commitments were not reflected in the Company's consolidated financial statements. Amounts purchased under various commitments for the
years ended December 31, 2021, 2020 and 2019, were $849.3 million, $666.0 million and $686.5 million, respectively.

Guarantees
Certain subsidiaries of the Company have outstanding guarantees to third parties that guarantee the performance of other subsidiaries of the
Company. These guarantees are related to construction contracts, insurance deductibles and loss limits, and certain other guarantees. At
December 31, 2021, the fixed maximum amounts guaranteed under these agreements aggregated $134.8 million. Certain of the guarantees also
have no fixed maximum amounts specified. The amounts of scheduled expiration of the maximum amounts guaranteed under these agreements
aggregate to $28.6 million in 2022; $45.2 million in 2023; $50.2 million in 2024; $800,000 in 2025; $800,000 in 2026; $200,000 thereafter;
and $9.0 million, which has no scheduled maturity date. There were no amounts outstanding under the previously mentioned guarantees at
December 31, 2021. In the event of default under these guarantee obligations, the subsidiary issuing the guarantee for that particular obligation
would be required to make payments under its guarantee.

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, 2021, the fixed maximum amounts guaranteed under these letters of credit
aggregated $25.7 million. The amounts of scheduled expiration of the maximum amounts guaranteed under these letters of credit aggregate to
$25.2 million in 2022 and $500,000 in 2023. There were no amounts outstanding under the previously mentioned letters of credit at
December 31, 2021. In the event of default under these letter of credit obligations, the subsidiary guaranteeing the letter of credit would be
obligated for reimbursement of payments made under the letter of credit.

In addition, Centennial, Knife River and MDU Construction Services have issued guarantees to third parties related to the routine purchase of
maintenance items, materials and lease obligations for which no fixed maximum amounts have been specified. These guarantees have no scheduled
maturity date. In the event a subsidiary of the Company defaults under these obligations, Centennial, Knife River or MDU Construction Services
would be required to make payments under these guarantees. Any amounts outstanding by subsidiaries of the Company were reflected on the
Consolidated Balance Sheet at December 31, 2021.

In the normal course of business, Centennial has surety bonds related to construction contracts and reclamation obligations of its subsidiaries. In the
event a subsidiary of Centennial does not fulfill a bonded obligation, Centennial would be responsible to the surety bond company for completion of
the bonded contract or obligation. A large portion of the surety bonds is expected to expire within the next 12 months; however, Centennial will likely
continue to enter into surety bonds for its subsidiaries in the future. At December 31, 2021, approximately $934.4 million of surety bonds were
outstanding, which were not reflected on the Consolidated Balance Sheet.

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, 2021, 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 $31.5 million.

112 MDU Resources Group, Inc. Form 10-K

Part II

Definitions

The following abbreviations and acronyms used in Notes to Consolidated Financial Statements are defined below:
Abbreviation or Acronym
AFUDC

Allowance for funds used during construction

ASC

ASU

Big Stone Station

BSSE

Btu

Cascade

Centennial

FASB Accounting Standards Codification

FASB Accounting Standards Update

475-MW coal-fired electric generating facility near Big Stone City, South Dakota (22.7 percent
ownership)

345-kilovolt transmission line from Ellendale, North Dakota, to Big Stone City, South Dakota
(50 percent ownership)

British thermal unit

Cascade Natural Gas Corporation, an indirect wholly owned subsidiary of MDU Energy Capital

Centennial Energy Holdings, Inc., a direct wholly owned subsidiary of the Company

Centennial Capital

Centennial Holdings Capital LLC, a direct wholly owned subsidiary of Centennial

Centennial's Consolidated EBITDA

Company

COVID-19

Coyote Creek

Coyote Station

EBITDA

EIN

EPA

FASB

FERC

Fidelity

FIP

GAAP

Great Plains

IBEW

Intermountain

Knife River

MDU Resources Group, Inc.

Coronavirus disease 2019

Coyote Creek Mining Company, LLC, a subsidiary of The North American Coal Corporation

427-MW coal-fired electric generating facility near Beulah, North Dakota (25 percent ownership)

Earnings before interest, taxes, depreciation, depletion and amortization

Employer Identification Number

United States Environmental Protection Agency

Financial Accounting Standards Board

Federal Energy Regulatory Commission

Fidelity Exploration & Production Company, a direct wholly owned subsidiary of WBI Holdings
(previously referred to as the Company's exploration and production segment)
Funding improvement plan

Accounting principles generally accepted in the United States of America

Great Plains Natural Gas Co., a public utility division of Montana-Dakota

International Brotherhood of Electrical Workers

Intermountain Gas Company, an indirect wholly owned subsidiary of MDU Energy Capital

Knife River Corporation, a direct wholly owned subsidiary of Centennial

Knife River - Northwest

Knife River Corporation - Northwest, an indirect wholly owned subsidiary of Knife River

K-Plan

LIBOR

Company's 401(k) Retirement Plan
London Inter-bank Offered Rate

MDU Construction Services

MDU Construction Services Group, Inc., a direct wholly owned subsidiary of Centennial

MDU Energy Capital

MDU Energy Capital, LLC, a direct wholly owned subsidiary of the Company

MEPP

MISO

MMBtu

MNPUC

Multiemployer pension plan

Million Btu

Minnesota Public Utilities Commission

Montana-Dakota

Montana-Dakota Utilities Co. a direct wholly owned subsidiary of MDU Energy Capital

MTDEQ

MTPSC

MW
NDPSC

PRP

SDPUC

SEC

Montana Department of Environmental Quality

Montana Public Service Commission

Megawatt

North Dakota Public Service Commission

Potentially Responsible Party

Rehabilitation plan

South Dakota Public Utilities Commission

United States Securities and Exchange Commission

MDU Resources Group, Inc. Form 10-K 113

Part II

Securities Act

SOFR

VIE

Securities Act of 1933, as amended

Secured Overnight Financing Rate

Variable interest entity

Washington DOE

Washington State Department of Ecology

WBI Energy Transmission

WBI Energy Transmission, Inc., an indirect wholly owned subsidiary of WBI Holdings

WBI Holdings

WUTC

Wygen III

WBI Holdings, Inc., a direct wholly owned subsidiary of Centennial

Washington Utilities and Transportation Commission

100-MW coal-fired electric generating facility near Gillette, Wyoming (25 percent ownership)

114 MDU Resources Group, Inc. Form 10-K

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Part II

None.

Item 9A. Controls and Procedures

The following information includes the evaluation of disclosure controls and procedures by the Company's chief executive officer and the chief
financial officer, along with any significant changes in internal controls of the Company.

Evaluation of Disclosure Controls and Procedures
The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. The Company's disclosure
controls and other procedures are designed to provide reasonable assurance that information required to be disclosed in the reports that the Company
files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and
forms. The Company's disclosure controls and other procedures are designed to provide reasonable assurance that information required to be
disclosed is accumulated and communicated to management, including the Company's chief executive officer and chief financial officer, to allow
timely decisions regarding required disclosure. The Company's management, with the participation of the Company's chief executive officer and chief
financial officer, has evaluated the effectiveness of the Company's disclosure controls and other procedures as of the end of the period covered by
this report. Based upon that evaluation, the chief executive officer and the chief financial officer have concluded that, as of the end of the period
covered by this report, such controls and procedures were effective at a reasonable assurance level.

Changes in Internal Controls
No change in the Company's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred
during the three months ended December 31, 2021, that has materially affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.

Management's Annual Report on Internal Control Over Financial Reporting
The information required by this item is included in this Form 10-K at Item 8 - Management's Report on Internal Control Over Financial Reporting.

Attestation Report of the Registered Public Accounting Firm
The information required by this item is included in this Form 10-K at Item 8 - Report of Independent Registered Public Accounting Firm.

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

MDU Resources Group, Inc. Form 10-K 115

Part III

Item 10. Directors, Executive Officers and Corporate Governance

Information required by this item will be included in the Company's Proxy Statement, which is incorporated herein by reference.

Item 11. Executive Compensation

Information required by this item will be included in the Company's Proxy Statement, which is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters

Equity Compensation Plan Information
The following table includes information as of December 31, 2021, with respect to the Company's equity compensation plans:

Plan Category

(a)
Number of securities to
be issued upon exercise
of outstanding options,

warrants and rights

(b)
Weighted average
exercise price of
outstanding options,
warrants and rights

(c)
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))

Equity compensation plans approved by stockholders (1)

648,747 (2) $

Equity compensation plans not approved by stockholders

Total

N/A

648,747

— (3)

N/A

—

3,032,901 (4)(5)

N/A

3,032,901

(1) Consists of the Non-Employee Director Long-Term Incentive Compensation Plan and the Long-Term Performance-Based Incentive Plan.
(2) Consists of restricted stock awards and performance share awards.
(3) No weighted average exercise price is shown for the restricted stock awards or performance share awards because such awards have no exercise price.
(4) This amount includes 2,849,487 shares available for future issuance under the Long-Term Performance-Based Incentive Plan in connection with grants of

restricted stock, performance units, performance shares or other equity-based awards.

(5) This amount includes 183,414 shares available for future issuance under the Non-Employee Director Long-Term Incentive Compensation Plan.

The remaining information required by this item will be included in the Company's Proxy Statement, which is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information required by this item will be included in the Company's Proxy Statement, which is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

Information required by this item about aggregate fees billed to the Company by its principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34),
will be included in the Company's Proxy Statement, which is incorporated herein by reference.

116 MDU Resources Group, Inc. Form 10-K

Part IV

Item 15. Exhibits, Financial Statement Schedules

(a) Financial Statements, Financial Statement Schedules and Exhibits

Index to Financial Statements and Financial Statement Schedules

1. Financial Statements

The following consolidated financial statements required under this item are
included under Item 8 - Financial Statements and Supplementary Data.

Page

Consolidated Statements of Income for each of the three years in the period ended

December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Comprehensive Income for each of the three years in the
period ended December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Balance Sheets at December 31, 2021 and 2020 . . . . . . . . . . . . . . . . . .

Consolidated Statements of Equity for each of the three years in the period ended

December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Cash Flows for each of the three years in the period

ended December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Financial Statement Schedules
The following financial statement schedules are included in Part IV of this report.

Schedule I - Condensed Financial Information of Registrant (Unconsolidated)

Condensed Statements of Income and Comprehensive Income for each of the three

years in the period ended December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Condensed Balance Sheets at December 31, 2021 and 2020 . . . . . . . . . . . . . . . . . . . .

Condensed Statements of Cash Flows for each of the three years in the period ended
December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notes to Condensed Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

118

119

120

All other schedules have been omitted because they are not applicable or the required information is included elsewhere in the financial statements
or related notes.

3. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

121

MDU Resources Group, Inc. Form 10-K 117

Part IV

MDU RESOURCES GROUP, INC.
Schedule I - Condensed Financial Information of Registrant (Unconsolidated)
Condensed Statements of Income and Comprehensive Income

Years ended December 31,

2021

2020

2019

Equity in earnings of subsidiaries from continuing operations
Income from continuing operations
Equity in earnings (loss) of subsidiaries from discontinued operations

Net income

Comprehensive income

(In thousands)
$ 377,731 $ 390,527 $ 335,166
377,731 390,527 335,166
287
$ 378,131 $ 390,205 $ 335,453
$ 385,205 $ 384,229 $ 331,693

(322)

400

The accompanying notes are an integral part of these condensed financial statements.

118 MDU Resources Group, Inc. Form 10-K

MDU RESOURCES GROUP, INC.
Schedule I - Condensed Financial Information of Registrant (Unconsolidated)
Condensed Balance Sheets

Part IV

December 31,

Assets
Current assets:

Cash and cash equivalents
Receivables, net
Accounts receivable from subsidiaries
Prepayments and other current assets

Total current assets
Noncurrent assets
Investments
Investment in subsidiaries
Deferred income taxes
Operating lease right-of-use assets
Other

Total noncurrent assets

Total assets

Liabilities and Stockholders' Equity
Current liabilities:

Accounts payable
Accounts payable to subsidiaries
Taxes payable
Dividends payable
Accrued compensation
Operating lease liabilities due within one year
Other accrued liabilities

Total current liabilities
Noncurrent liabilities:

Operating lease liabilities
Other

Total noncurrent liabilities
Commitments and contingencies
Stockholders' equity:

(In thousands, except shares and per share amounts)

2021

2020

6,159 $
6,120
49,696
2,528
64,503

8,781
4,865
50,539
1,612

65,797

55,686

52,000
3,368,537 3,069,956
9,691
56
28,866
3,458,259 3,160,569
$ 3,522,762 $ 3,226,366

7,364
114
26,558

2,546 $
6,133
1,672
44,229
4,098
52
7,309
66,039

62
73,787
73,849

2,135
5,412
4,056
42,611
7,825
40
6,881

68,960

16
78,285

78,301

Common stock
Authorized - 500,000,000 shares, $1.00 par value
Shares issued - 203,889,661 at December 31, 2021 and 201,061,198 at December 31, 2020

Other paid-in capital
Retained earnings
Accumulated other comprehensive loss
Treasury stock at cost - 538,921 shares

Total stockholders' equity

Total liabilities and stockholders' equity

The accompanying notes are an integral part of these condensed financial statements.

203,889

201,061
1,461,205 1,371,385
1,762,410 1,558,363
(48,078)
(3,626)
3,382,874 3,079,105
$ 3,522,762 $ 3,226,366

(41,004)
(3,626)

MDU Resources Group, Inc. Form 10-K 119

Part IV

MDU RESOURCES GROUP, INC.
Schedule I - Condensed Financial Information of Registrant (Unconsolidated)
Condensed Statements of Cash Flows

Years ended December 31,

Net cash provided by operating activities
Investing activities:

Investments in and advances to subsidiaries
Advances from subsidiaries
Investments

Net cash used in investing activities
Financing activities:

Proceeds from issuance of common stock
Dividends paid
Repurchase of common stock
Tax withholding on stock-based compensation

Net cash used in financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents - beginning of year

Cash and cash equivalents - end of year

2021

2020

2019

(In thousands)

187,297 $

226,642 $

168,520

(102,000)
—
(391)
(102,391)

(67,000)
—
(4)

(120,000)
17,000
(236)

(67,004)

(103,236)

88,767
(171,354)
(2,992)
(1,949)
(87,528)
(2,622)
8,781
6,159 $

3,385
(166,405)
—
(163)

(163,183)
(3,545)
12,326

106,848
(160,256)
—
(1,821)

(55,229)
10,055
2,271

8,781 $

12,326

The accompanying notes are an integral part of these condensed financial statements.

Notes to Condensed Financial Statements
Note 1 - Summary of Significant Accounting Policies
Basis of presentation The condensed financial information reported in Schedule I is being presented to comply with Rule 12-04 of Regulation S-X.
The information is unconsolidated and is presented for the parent company only, MDU Resources Group, Inc. (the Company) as of and for the years
ended December 31, 2021, 2020 and 2019. In Schedule I, investments in subsidiaries are presented under the equity method of accounting where
the assets and liabilities of the subsidiaries are not consolidated. The investments in net assets of the subsidiaries are recorded on the Condensed
Balance Sheets. The income from subsidiaries is reported as equity in earnings of subsidiaries on the Condensed Statements of Income. The material
cash inflows on the Condensed Statements of Cash Flows are primarily from the dividends and other payments received from its subsidiaries and the
proceeds raised from the issuance of equity securities. The consolidated financial statements of the Company reflect certain businesses as
discontinued operations. These statements should be read in conjunction with the consolidated financial statements and notes thereto of the
Company.

Earnings per common share Please refer to the Consolidated Statements of Income of the registrant for earnings per common share. In addition, see
Item 8 - Note 2 for information on the computation of earnings per common share.

Note 2 - Debt At December 31, 2021, the Company had no long-term debt maturities. For more information on debt, see Item 8 - Note 9.

Note 3 - Dividends The Company depends on earnings and dividends from its subsidiaries to pay dividends on common stock. Cash dividends paid to
the Company by subsidiaries were $188.1 million, $228.4 million and $177.1 million for the years ended December 31, 2021, 2020 and 2019,
respectively.

120 MDU Resources Group, Inc. Form 10-K

Exhibits

Exhibit
Number

Exhibit Description

3(a)

3(b)

4(a)

4(b)

*4(c)

*4(d)

4(e)

4(f)

4(g)

*4(h)

4(i)

4(j)

+10(a)

+10(b)

+10(c)

+10(d)

+10(e)

+10(f)

+10(g)

Amended and Restated Certificate of Incorporation of MDU
Resources Group, Inc.

Amended and Restated Bylaws of MDU Resources Group, Inc.

Indenture, dated as of December 15, 2003, between MDU
Resources Group, Inc. and The Bank of New York, as trustee

First Supplemental Indenture, dated as of November 17,
2009, between MDU Resources Group, Inc. and the Bank of
New York Mellon, as trustee

Fifth Amended and Restated Credit Agreement, dated as of
December 19, 2019, among Centennial Energy Holdings,
Inc., U.S. Bank National Association, as Administrative Agent,
and The Several Financial Institutions party thereto

Montana-Dakota Utilities Co. Amended and Restated Credit
Agreement, dated December 19, 2019, among Montana-
Dakota Utilities Co., Various Lenders, and Wells Fargo Bank,
National Association, as Administrative Agent

Centennial Energy Holdings, Inc. Note Purchase Agreement,
dated December 20, 2012, among Centennial Energy
Holdings, Inc. and various purchasers of the notes

Montana-Dakota Utilities Co. Note Purchase Agreement, dated
July 24, 2019, among Montana-Dakota Utilities Co. and
various purchasers of the notes

MDU Resources Group, Inc. Description of Securities
Registered Pursuant to Section 12 of the Securities and
Exchange Act of 1934

WBI Energy Transmission, Inc. Amended and Restated Note
Purchase and Private Shelf Agreement, effective as of
September 12, 2013, among Prudential Investment
Management, Inc. and certain investors described therein

Amendment No. 1 to WBI Energy Transmission, Inc. Amended
and Restated Note Purchase and Private Shelf Agreement,
dated May 17, 2016, among Prudential Investment
Management, Inc. and certain investors described therein

Amendment No. 2 to WBI Energy Transmission, Inc. Amended
and Restated Note Purchase and Private Shelf Agreement,
dated July 26, 2019 and effective May 16, 2019, among
Prudential Investment Management, Inc. and certain investors
described therein

MDU Resources Group, Inc. Supplemental Income Security
Plan, as amended and restated May 10, 2017

MDU Resource Group, Inc. Director Compensation Policy, as
amended May 12, 2021

Deferred Compensation Plan for Directors, as amended
May 15, 2008

Non-Employee Director Stock Compensation Plan, as
amended May 12, 2011

MDU Resources Group, Inc. Non-Employee Director Long-
Term Incentive Compensation Plan, as amended May 17,
2012

MDU Resources Group, Inc. Long-Term Performance-Based
Incentive Plan, as amended February 11, 2016

MDU Resources Group, Inc. Executive Incentive
Compensation Plan, as amended November 12, 2020, and
Rules and Regulations, as amended November 12, 2020

Part IV

Filed
Herewith

Form

8-K

S-8

Incorporated by Reference

Period
Ended Exhibit

Filing
Date

File
Number

3.2

5/8/19

1-03480

3.1

4(f)

2/15/19

1-03480

1/21/04 333-11203

10-K 12/31/09

4(c)

2/17/10

1-03480

10-K 12/31/19

4(c)

2/21/20

1-03480

10-K 12/31/19

4(d)

2/21/20

1-03480

10-Q

6/30/19

4(a)

8/2/19

1-03480

10-Q

9/30/19

4(a)

11/1/19

1-03480

10-K 12/31/19

4(g)

2/21/20

1-03480

10-K 12/31/20

4(h)

2/19/21

1-03480

10-K 12/31/20

4(i)

2/19/21

1-03480

10-K 12/31/20

4(j)

2/19/21

1-03480

10-Q

6/30/17

10(d)

8/4/17

1-03480

10-Q

6/30/21

10(b)

8/5/21

1-03480

10-Q

6/30/08

10(a)

8/7/08

1-03480

10-Q

6/30/11

10(a)

8/5/11

1-03480

10-Q

6/30/12

10(a)

8/7/12

1-03480

10-K 12/31/15

10(f)

2/19/16

1-03480

10-K 12/31/20

10(h)

2/19/21

1-03480

MDU Resources Group, Inc. Form 10-K 121

Part IV

Exhibit
Number

+10(h)

+10(i)

+10(j)

+10(k)

+10(l)

Exhibit Description

Form of Performance Share Award Agreement under the Long-
Term Performance-Based Incentive Plan, as amended
February 14, 2019

Form of Performance Share Award Agreement under the Long-
Term Performance-Based Incentive Plan, as amended
February 13, 2020

Form of Performance Share Award Agreement under the Long-
Term Performance-Based Incentive Plan, as amended
February 11, 2021

Form of Performance Share Award Agreement under the
Long-Term Performance-Based Incentive Plan, as amended
February 17, 2022

Restricted Stock Unit Award Agreement under the Long-Term
Performance-Based Incentive Plan, as amended February 11,
2021

+10(m) Restricted Stock Unit Award Agreement under the Long-Term
Performance-Based Incentive Plan, as amended February 17,
2022

+10(n)

+10(o)

+10(p)

+10(q)

+10(r)

+10(s)

+10(t)

+10(u)

+10(v)

+10(w)

Form of MDU Resources Group, Inc. Indemnification
Agreement for Section 16 Officers and Directors, dated
May 15, 2014

Form of Amendment No. 1 to Indemnification Agreement,
dated May 15, 2014

MDU Resources Group, Inc. Section 16 Officers and Directors
with Indemnification Agreements Chart, as of February 6,
2021

MDU Resources Group, Inc. Nonqualified Defined
Contribution Plan, as amended and restated November 12,
2020

MDU Resources Group, Inc. Deferred Compensation Plan
Adoption Agreement, as amended August 12, 2021

MDU Resources Group, Inc. Deferred Compensation Plan
Document, dated November 12, 2020

Instrument of Amendment to the MDU Resources Group, Inc.
401(k) Retirement Plan, dated December 17, 2020

MDU Resources Group, Inc. 401(k) Retirement Plan, as
restated April 1, 2020

MDU Resources Group, Inc. 401(k) Retirement Plan, as
amended January 1, 2021

MDU Resources Group, Inc. 401(k) Retirement Plan, as
amended January 1, 2022

+10(x)

Employment Letter for Jeffrey S. Thiede, dated May 16, 2013

+10(y)

Jason L. Vollmer Offer Letter, dated September 20, 2017

31(a)

31(b)

Subsidiaries of MDU Resources Group, Inc.

Consent of Independent Registered Public Accounting Firm

Certification of Chief Executive Officer filed pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer filed pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer and Chief Financial
Officer furnished pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002

Mine Safety Disclosures

122 MDU Resources Group, Inc. Form 10-K

Incorporated by Reference

Filed
Herewith

Form

Period
Ended Exhibit

Filing
Date

File
Number

10-K 12/31/18

10(k)

2/22/19

1-03480

10-K 12/31/19

10(k)

2/21/20

1-03480

10-K 12/31/20

10(l)

2/19/21

1-03480

10-K 12/31/20

10(n)

2/19/21

1-03480

8-K

10.1

5/15/14

1-03480

10.2

5/15/14

1-03480

10-K 12/31/20

10(q)

2/19/21

1-03480

10-K 12/31/20

10(r)

2/19/21

1-03480

10-Q

9/30/21

10(c)

11/4/21

1-03480

8-K

10.2

11/12/20

1-03480

10-K 12/31/20

10(u)

2/19/21

1-03480

10-Q

3/31/20

10(a)

5/8/20

1-03480

10-Q

3/31/21

10(a)

5/6/21

1-03480

10-K 12/31/13 10(ab)

2/21/14

1-03480

8-K

10.1

9/21/17

1-03480

Part IV

Incorporated by Reference

Filed
Herewith

Form

Period
Ended Exhibit

Filing
Date

File
Number

Exhibit
Number

Exhibit Description

101.INS XBRL Instance Document - the instance document does not
appear in the Interactive Data File because its XBRL tags are
embedded within the Inline XBRL document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

* Schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted
schedule and/or exhibit will be furnished as a supplement to the SEC upon request.

+ Management contract, compensatory plan or arrangement.

MDU Resources Group, Inc. agrees to furnish to the SEC upon request any instrument with respect to long-term debt that MDU Resources
Group, Inc. has not filed as an exhibit pursuant to the exemption provided by Item 601(b)(4)(iii)(A) of Regulation S-K.

Item 16. Form 10-K Summary

None.

MDU Resources Group, Inc. Form 10-K 123

Part IV

Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

MDU Resources Group, Inc.

Date:

February 23, 2022

By:

/s/ David L. Goodin

David L. Goodin

(President and Chief Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant in the capacities and on the date indicated.

Signature

/s/ David L. Goodin

David L. Goodin

(President and Chief Executive Officer)

/s/ Jason L. Vollmer

Jason L. Vollmer

(Vice President and Chief Financial Officer)

/s/ Stephanie A. Barth

Stephanie A. Barth

(Vice President, Chief Accounting Officer and Controller)

Title

Date

Chief Executive Officer and Director

February 23, 2022

Chief Financial Officer

February 23, 2022

Chief Accounting Officer

February 23, 2022

Director

February 23, 2022

/s/ Dennis W. Johnson

Dennis W. Johnson
(Chair of the Board)

/s/ Thomas Everist

Thomas Everist

/s/ Karen B. Fagg

Karen B. Fagg

/s/ Patricia L. Moss

Patricia L. Moss

/s/ Dale S. Rosenthal

Dale S. Rosenthal

/s/ Edward A. Ryan

Edward A. Ryan

/s/ David M. Sparby

David M. Sparby

/s/ Chenxi Wang

Chenxi Wang

124 MDU Resources Group, Inc. Form 10-K

March 25, 2022

Fellow Stockholders:

I invite you to join me, along with our Board of Directors and senior management team, for our annual meeting
at 11 a.m. CDT May 10, 2022, at 909 Airport Road in Bismarck, North Dakota. Please check our website at
www.mduproxy.com for additional information about our meeting.

During the meeting, we will hear the results of stockholder voting on the items outlined in this Proxy Statement,
including election of our Board of Directors, the advisory vote to approve the compensation paid to our named
executive officers, and approval of our independent auditors. I encourage you to promptly follow the instructions
on your notice or proxy card to vote your shares on these items.

I look forward to sharing information with you at the meeting about how 2021 was our third-best earnings in
company history, as well as our outlook for 2022. Despite challenges from the lingering pandemic and mounting
inflationary pressures, our team in 2021 completed one of our largest-ever pipeline expansion projects and
retired a coal-fired electric generation facility, and in February 2022 retired two more coal-fired electric
generation facilities. We also acquired three construction materials companies and ended the year with a
combined record $2.1 billion backlog of construction work, with particularly strong demand for construction
services.

In addition to continuing to provide essential products and services that are critical to Building a Strong
America®, we also renewed our focus in 2021 on environmental, social and governance practices. We have
created an executive management Sustainability Committee that supports the execution of, and makes
recommendations to advance, the corporation’s environmental and sustainability strategy. We also republished
our 2020 Sustainability Report in a format we believe you will find easier to consume. We completed a climate
scenario analysis specific to our utility’s electric generation resources following the Task Force on Climate-
related Financial Disclosure framework, and that report also is published on our website. I will tell you more
about these enhanced ESG efforts at our annual meeting, and you can find the reports on our website at
www.mdu.com/sustainability.

I appreciate your continued investment in MDU Resources and look forward to visiting with you May 10. We
remain committed to providing you with the long-term returns you expect.

Sincerely,

David L. Goodin
President and Chief Executive Officer

MDU Resources Group, Inc. Proxy Statement

(This page is intentionally left blank.)

MDU Resources Group, Inc. Proxy Statement

Proxy Statement

1200 West Century Avenue

Mailing Address:
P.O. Box 5650
Bismarck, North Dakota 58506-5650
(701) 530-1000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 10, 2022

March 25, 2022

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of MDU Resources Group, Inc. will be held at 909 Airport Road, Bismarck,
North Dakota 58504, on Tuesday, May 10, 2022, at 11:00 a.m., Central Daylight Saving Time, for the following purposes:

Items of
Business

1. Election of directors;

2. Advisory vote to approve the compensation paid to the company’s named executive officers;

3. Ratification of the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm for

2022; and

4. Transaction of any other business that may properly come before the meeting or any adjournment(s) thereof.

Record Date

The board of directors has set the close of business on March 11, 2022, as the record date for the determination of stockholders
who will be entitled to notice of, and to vote at, the meeting and any adjournment(s) thereof.

Meeting
Attendance

All stockholders as of the record date of March 11, 2022, are cordially invited to attend the annual meeting. You must request an
admission ticket to attend. If you are a stockholder of record and plan to attend the meeting, please contact MDU Resources
Group, Inc. by email at CorporateSecretary@mduresources.com or by telephone at 701-530-1010 to request an admission ticket.
A ticket will be sent to you by mail.

If your shares are held beneficially in the name of a bank, broker, or other holder of record, and you plan to attend the annual
meeting, you will need to submit a written request for an admission ticket by mail to: Investor Relations, MDU Resources Group,
Inc., P.O. Box 5650, Bismarck, ND 58506 or by email at CorporateSecretary@mduresources.com. The request must include
proof of stock ownership as of March 11, 2022, such as a bank or brokerage firm account statement or a legal proxy from the
bank, broker, or other holder of record confirming ownership. A ticket will be sent to you by mail.

Requests for admission tickets must be received no later than May 3, 2022. You must present your admission ticket and state-
issued photo identification, such as a driver’s license, to gain admittance to the meeting.

We are actively monitoring the public health and travel safety concerns relating to COVID-19. You are encouraged to vote in
advance of the meeting using one of the voting methods set forth on page 79 In the event it is not possible or advisable to hold
our annual meeting as currently planned, we will issue a press release and make a public filing with the Securities and Exchange
Commission (SEC) announcing any changes to the annual meeting. We will also post information on our company website at
www.mduproxy.com. For additional information, see Public Health Concerns on page 82.

Proxy
Materials

This Proxy Statement will first be sent to stockholders requesting written materials on or about March 25, 2022. A Notice of
Availability of Proxy Materials (Notice) will also be sent to certain stockholders on or about March 25, 2022. The Notice contains
basic information about the annual meeting and instructions on how to view our proxy materials and vote online.

By order of the Board of Directors,

Karl A. Liepitz

Secretary

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May 10, 2022.
The 2022 Notice of Annual Meeting and Proxy Statement and 2021 Annual Report to Stockholders
are available at www.mduproxy.com.

MDU Resources Group, Inc. Proxy Statement

Proxy Statement

TABLE OF CONTENTS

PROXY STATEMENT SUMMARY

EXECUTIVE COMPENSATION (continued)

Page

Annual Meeting Information . . . . . . . . . . . . . . . . . . . . . .

Company Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Business Performance Highlights . . . . . . . . . . . . . . . . . .

Financial Performance Highlights . . . . . . . . . . . . . . . . .

Corporate Governance Practices . . . . . . . . . . . . . . . . . . .

Compensation Highlights . . . . . . . . . . . . . . . . . . . . . . . . .

Sustainability Highlights . . . . . . . . . . . . . . . . . . . . . . . . .

BOARD OF DIRECTORS

Item 1. Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . .

Director Nominees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Board Evaluations and Process for Selecting Directors

Board Skills and Diversity Matrix . . . . . . . . . . . . . . . . . .

CORPORATE GOVERNANCE

Director Independence . . . . . . . . . . . . . . . . . . . . . . . . . . .

Oversight of Sustainability . . . . . . . . . . . . . . . . . . . . . . . .

Stockholder Engagement . . . . . . . . . . . . . . . . . . . . . . . . .

Board Leadership Structure . . . . . . . . . . . . . . . . . . . . . . .

Board’s Role in Risk Oversight . . . . . . . . . . . . . . . . . . . .

Board Meetings and Committees . . . . . . . . . . . . . . . . . .

Stockholder Communications with the Board . . . . . . . .

Additional Governance Features . . . . . . . . . . . . . . . . . . .

Corporate Governance Materials . . . . . . . . . . . . . . . . . . .

Related Person Transaction Disclosure . . . . . . . . . . . . .

Compensation Committee Report . . . . . . . . . . . . . . . . . . . . .

Executive Compensation Tables . . . . . . . . . . . . . . . . . . . . . .

Summary Compensation Table . . . . . . . . . . . . . . . . . . .

Grants of Plan-Based Awards . . . . . . . . . . . . . . . . . . . . .

Outstanding Equity Awards at Fiscal Year-End . . . . . .

Option Exercises and Stock Vested . . . . . . . . . . . . . . . .

Pension Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nonqualified Deferred Compensation . . . . . . . . . . . . . .

Potential Payments upon Termination or

Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CEO Pay Ratio Disclosure . . . . . . . . . . . . . . . . . . . . . . . .

AUDIT MATTERS

Item 3. Ratification of the Appointment of

Deloitte & Touche LLP as the Company’s Independent

Registered Public Accounting Firm for 2022 . . . . . . . . .

Annual Evaluation and Selection of Deloitte &

Touche LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Audit Fees and Non-Audit Fees . . . . . . . . . . . . . . . . . . .

Policy on Audit Committee Pre-Approval of Audit

and Permissible Non-Audit Services . . . . . . . . . . . . .

Audit Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INFORMATION ABOUT THE ANNUAL MEETING

Who Can Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

COMPENSATION OF NON-EMPLOYEE DIRECTORS

Notice and Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Director Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . .

How to Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Revoking Your Proxy or Changing Your Vote . . . . . . . .

Discretionary Voting Authority . . . . . . . . . . . . . . . . . . . .

Voting Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Proxy Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Electronic Delivery of Proxy Statement . . . . . . . . . . . .

Householding of Proxy Materials . . . . . . . . . . . . . . . . . .

MDU Resources Group, Inc. 401(k) Plan . . . . . . . . . .

Annual Meeting Admission and Guidelines . . . . . . . . .

Conduct of the Meeting . . . . . . . . . . . . . . . . . . . . . . . . .

Stockholder Proposals, Director Nominations, and

Other Items of Business for 2023 Annual Meeting

SECURITY OWNERSHIP

Security Ownership Table . . . . . . . . . . . . . . . . . . . . . . . .

Hedging Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Greater than 5% Beneficial Owners . . . . . . . . . . . . . . . .

Delinquent Section 16(a) Reports . . . . . . . . . . . . . . . . .

EXECUTIVE COMPENSATION

Item 2. Advisory Vote to Approve the Compensation Paid

to the Company’s Named Executive Officers . . . . . . . . . . .

Information Concerning Executive Officers . . . . . . . . . . . . . .

Compensation Discussion and Analysis . . . . . . . . . . . . . . . . .

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2021 Compensation Framework . . . . . . . . . . . . . . . . . . .

2021 Compensation for Our Named

Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Compensation Governance . . . . . . . . . . . . . . . . . . . . . . .

MDU Resources Group, Inc. Proxy Statement

Page

Proxy Statement

PROXY STATEMENT SUMMARY

To assist you in reviewing the company’s 2021 performance and voting your shares, we call your attention to key elements of our 2022
Proxy Statement. The following is only a summary and does not contain all the information you should consider. You should read the entire
Proxy Statement carefully before voting. For more information about these topics, please review the full Proxy Statement and our 2021
Annual Report to Stockholders.

■ Annual Meeting Information

Meeting Information

Summary of Stockholder Voting Matters

Time and Date

Voting Matters

11:00 a.m.
Central Daylight Saving Time
Tuesday, May 10, 2022

Place

MDU Service Center
909 Airport Road
Bismarck, ND 58504

Item 1. Election of Directors

Item 2. Advisory Vote to Approve the Compensation Paid to
the Company’s Named Executive Officers

Item 3. Ratification of the Appointment of Deloitte &

Touche LLP as the Company’s Independent
Registered Public Accounting Firm for 2022

Board Vote
Recommendation

FOR Each Nominee

FOR

See Page

Who Can Vote
If you held shares of MDU Resources Group, Inc. common stock at the close of business on March 11, 2022, you are entitled to vote at
the annual meeting. You are encouraged to vote in advance of the meeting using one of the following voting methods.

How to Vote

Registered Stockholders

If your shares are held directly with our stock registrar, you can vote any one of four ways:

: By Internet:

) By Telephone:

Go to the website shown on the Notice of Availability of Proxy Materials (Notice) or Proxy Card, if you
received one, and follow the instructions.

Call the telephone number shown on the Notice or Proxy Card, if you received one, and follow the
instructions given by the voice prompts.

Voting via the Internet or by telephone authorizes the named proxies to vote your shares in the same
manner as if you marked, signed, dated, and returned the Proxy Card by mail. Your voting instructions
may be transmitted up until 11:59 p.m. Eastern Time on May 9, 2022.

* By Mail:

If you received a paper copy of the Proxy Statement, Annual Report, and Proxy Card, mark, sign, date,
and return the Proxy Card in the postage-paid envelope provided.

In Person:

Attend the annual meeting, or send a personal representative with an appropriate proxy, to vote by
ballot at the meeting.

Beneficial Stockholders

If you held shares beneficially in the name of a bank, broker, or other holder of record (sometimes referred to as holding shares “in street
name”), you will receive voting instructions from said bank, broker, or other holder of record. If you wish to vote in person at the meeting, you
must obtain a legal proxy from your bank, broker, or other holder of record of your shares and present it at the meeting.

MDU Resources Group, Inc. Proxy Statement 1

Proxy Statement

■ Company Overview

MDU Resources is Building a Strong America

A strong infrastructure is the heart of our country’s economy. It is the natural gas and electricity that power business, industry, and our
daily lives. It is the pipes and wires that connect our homes, factories, offices and stores to bring them to life. It is the transportation
network of roads, highways, and airports that keeps our economy moving. Infrastructure is our business. We provide essential products
and services through our two lines of business: regulated energy delivery and construction materials and services.

Our Vision
With integrity, Building a Strong America® while being a great and safe place to work.

Our Mission

Deliver superior value to stakeholders by providing essential infrastructure and services to America.

Our Integrity Code

Commitment to Integrity

We will conduct business legally and ethically with our best
skills and judgment.

Commitment to Shareholders

We will act in the best interests of our corporation and protect
its assets.

Commitment to Employees

We will work together to provide a safe and positive workplace.

Commitment to Customers, Suppliers
and Competitors

We will compete in business only by lawful and ethical means.

Commitment to Communities

We will be a responsible and valued corporate citizen.

Our Strategy

Deliver superior value with a two-platform model of regulated energy delivery and construction materials and services, while pursuing
organic growth opportunities and strategic acquisitions of well-managed companies and properties.

Our Businesses

Electric and Natural Gas Utilities

Pipeline

Our utility companies serve more than 1.16 million
customers across eight states.

We provide natural gas transportation as well as
underground natural gas storage.

Construction Materials and Contracting

Construction Services

Knife River Corporation is a Top 10 producer of
aggregates in America, has approximately 1.2 billion
tons of aggregate reserves, and employs more than
5,000 people during peak construction season.

MDU Construction Services Group, Inc. is one of
the largest electrical contractors in the United
States, with more than 6,800 employees at the end
of 2021.

2 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

■ Business Performance Highlights

Throughout 2021 all our business segments performed well despite changing economic conditions, escalating inflationary pressures, and
challenges presented by the COVID-19 pandemic. Our overall performance in 2021 was consistent with our long-term strategy as we
focused on growing our regulated energy delivery and construction materials and services businesses. In addition to our 2021 financial
performance highlighted on the next page, our significant accomplishments include:

Regulated Energy Delivery

■ Investing in Electric Generation. The electric segment retired three aging coal-fired electric generation units and, during the first half of
2022, intends to begin construction of a new 88-megawatt simple-cycle natural gas-fired combustion turbine peaking unit at the
Heskett Station near Mandan, North Dakota.

■ North Bakken Expansion. The pipeline segment put the North Bakken Expansion project into service on February 1, 2022. The expansion
has capacity to transport 250 million cubic feet (MMcf) of natural gas per day from the Bakken production area in North Dakota, with
the potential to be increased up to 625 MMcf per day through additional compression if needed to meet growing customer demand.
Construction of the North Bakken Expansion project began in July 2021 following approval from the Federal Energy Regulatory
Commission.

■ Wahpeton Expansion. The pipeline segment announced plans in July 2021 for a natural gas pipeline expansion project in eastern North

Dakota. The Wahpeton Expansion project consists of constructing 60 miles of pipeline and ancillary facilities and is designed to
increase capacity by 20 MMcf per day of natural gas. Construction is expected to begin in early 2024 pending regulatory approval.

Construction Materials & Services

■ Acquisitions. The construction materials and contracting segment acquired Mt. Hood Rock in April 2021 and Baker Rock Resources and
Oregon Mainline Paving in November 2021. Mt. Hood Rock, located near Portland, Oregon, provides construction aggregates in the
eastern Portland area. Baker Rock, headquartered in Beaverton, Oregon, has construction aggregates in key growth locations
surrounding the Portland metro area. Oregon Mainline Paving, located in McMinnville, Oregon, is one of the state’s largest asphalt
paving contractors and provides greater reach for the company’s paving operations in the Northwest.

■ Honey Creek Quarry Expansion. In the first quarter of 2021, the construction materials and contracting segment received the necessary

permitting to expand its operation capabilities at its Honey Creek quarry near Austin, Texas. Honey Creek enables the segment to supply
a significant portion of the aggregate materials used for its local construction activity and production of ready-mix concrete and asphalt
products, along with third-party sales in its Texas market.

■ Market Leader.

¨ The construction services segment ranked No. 10 on a list of top specialty contractors in the nation according to Engineering News-
Record (ENR), up from No. 11 in 2020. ENR ranks the 600 largest specialty contractors in the country based on annual revenues.

¨ Electrical Construction & Maintenance Magazine named MDU Construction Services Group No. 4 in its 2021 Top 50 Electrical

Contractors list. The leading industry publication annually ranks the 50 largest electrical contractors in the country based on annual
revenue.

Performance from Continuing Operations

Electric Distribution

Retail Sales (million kWh)

Customers

Natural Gas Distribution

Retail Sales (MMdk)

Transportation (MMdk)

Customers

2017

2018

2019

2020

2021

3,306.5

142,901

3,354.4

143,022

3,314.3

143,346

3,204.5

3,271.6

143,782

144,103

112.6

144.5

112.6

149.5

123.7

166.1

114.5

160.0

115.3

174.4

938,867

957,727

977,468

997,146

1,016,670

Pipeline Transportation (MMdk)

312.5

351.5

429.7

438.6

471.1

Construction Materials and Contracting Revenues (millions)

$1,812.5

$1,925.9

$2,190.7

$2,178.0

$2,228.9

Construction Services Revenues (millions)

$1,367.6

$1,371.5

$1,849.3

$2,095.7

$2,051.6

MDU Resources Group, Inc. Proxy Statement 3

Proxy Statement

■ Financial Performance Highlights

■ The company achieved our third-best earnings in company history through strong performance from operations at both our regulated
energy delivery and construction materials and services businesses resulting in earnings of $378.1 million, or $1.87 per share,
compared to 2020 earnings, the company’s second-best annual earnings, of $390.2 million, or $1.95 per share.

■ Our return on invested capital in 2021 was 8.0%.

■ The chart below shows our earnings per share from continuing operations and compound annual growth rate (CAGR) of 9.5% over the

last five years.

* MDU Resources Group, Inc. reported 2017 earnings from continuing operations of $1.45 per share which
included a non-recurring benefit of 20 cents per share attributable to the federal Tax Cuts and Jobs Act
that was signed into law on December 22, 2017.

■ Returned $173 million to stockholders through dividends during 2021:

¨ Increased annual dividend for the 31st straight year to 85.5 cents per share paid during 2021;
¨ Paid uninterrupted dividends for 84 straight years; and
¨ Member of the elite S&P High-Yield Dividend Aristocrats Index which recognizes companies within the S&P Composite 1500 Index

that have followed a managed dividend policy of consistently increasing dividends annually for at least 20 years.

■ Listed on the 2021 Fortune 500.

■ Member of the S&P MidCap 400.

■ Maintained BBB+ stable credit rating from Standard & Poor’s and Fitch rating agencies.1

31 Years

of Consecutive

Dividend Increases

Dividends Paid
$810 Million
Over the Last 5 Years

84 Years

of Uninterrupted

Dividend Payments

1 A securities rating is not a recommendation to buy, sell, or hold securities, and it may be revised or withdrawn at any time by the rating
agency.

4 MDU Resources Group, Inc. Proxy Statement

Earnings per Share from Continuing OperationsCAGR = 9.5%$1.19$1.25$1.38$1.69$1.95$1.87$0.2020162017*2018201920202021$0.00$0.25$0.50$0.75$1.00$1.25$1.50$1.75$2.00Proxy Statement

■ Corporate Governance Practices

MDU Resources is committed to strong corporate governance aligned with stockholder interests. The board, through its nominating and
governance committee, regularly monitors leading practices in governance and adopts measures that it determines are in the best interests
of the company and its stockholders. The following highlights our corporate governance practices and policies. See the sections entitled
“Corporate Governance” and “Executive Compensation” for more information on the following:

ü Annual Election of All Directors

ü Standing Committees Consist Entirely of Independent

Directors

ü Majority Voting for Directors

ü Active Investor Outreach Program

ü No Shareholder Rights Plan

ü One Class of Stock

ü Succession Planning and Implementation Process

ü Stock Ownership Requirements for Directors and Executive

Officers

ü Separate Board Chair and CEO

ü Anti-Hedging and Anti-Pledging Policies for Directors and

Executive Officers

ü Executive Sessions of Independent Directors at Every

Regularly Scheduled Board Meeting

ü No Related Party Transactions by Our Directors or Executive

Officers

ü Annual Board and Committee Self-Evaluations

ü Compensation Recovery/Clawback Policy

ü Risk Oversight by Full Board and Committees

ü Annual Advisory Approval on Executive Compensation

ü Environmental and Social Oversight by Full Board and

Board Committee

ü Mandatory Retirement for Directors at Age 76

ü Proxy Access for Stockholders

ü Directors May Not Serve on More Than Three Public Boards

Including the Company’s Board

ü All Directors are Independent Other Than Our CEO

ü Strong Gender Diversity on Board

Recognition for Gender Diversity

MDU Resources was recognized in 2021 for gender diversity on its board of directors:

•

by 50/50 Women on BoardsTM as a “3+” company for having three or more women on its board; and

by the Women’s Forum of New York as a 2021 Corporate Champion with at least 40% of board seats
held by women.

MDU Resources Group, Inc. Proxy Statement 5

Proxy Statement

Director Nominees

The board recommends a vote FOR the election of each of the following nominees for director. Nine directors stand for re-election.
Additional information about each director’s background and experience can be found beginning on page 16.

Name

Director
Since

Age

Thomas Everist

1995

Primary Occupation

Board Committees

President and chair of The Everist Company,
an investment and land development company,
formerly engaged in aggregate, concrete, and
asphalt production

• Compensation
• Nominating and Governance

Karen B. Fagg

2005

Former vice president of DOWL LLC, dba
DOWL HKM, an engineering and design firm

• Compensation (Chair)
• Environmental and Sustainability

David L. Goodin

2013

Dennis W. Johnson

2001

Patricia L. Moss

2003

Dale S. Rosenthal

2021

President and chief executive officer,
MDU Resources Group, Inc.

Chair, president, and chief executive officer of
TMI Group Incorporated, manufacturers of
casework and architectural woodwork

Former president and chief executive officer of
Cascade Bancorp, a financial holding
company, subsequently merged into First
Interstate Bank

Former senior executive, including strategic
director, division president of Clark Financial
Group, and chief financial officer of Clark
Construction Group, a building and civil
construction firm

Executive officer

Chair of the board

• Compensation
• Environmental and Sustainability (Chair)

• Audit
• Nominating and Governance

Edward A. Ryan

2018

Former executive vice president and general
counsel of Marriott International

• Audit
• Nominating and Governance (Chair)

David M. Sparby

2018

Chenxi Wang

2019

Former senior vice president and group
president, revenue, of Xcel Energy and
president and chief executive officer of its
subsidiary, NSP-Minnesota

Founder and managing general partner of Rain
Capital Fund, L.P., a cybersecurity-focused
venture fund

• Audit (Chair)
• Environmental and Sustainability

• Audit
• Environmental and Sustainability

Independence
The board has determined that all
director nominees, other than
Mr. Goodin, meet the independence
standards set by the NYSE and SEC.

Tenure
The average tenure of the director
nominees is approximately 11.7 years,
which reflects a balance of company
experience and new perspectives.

Diversity
The board is committed to having a diverse
and broadly inclusive membership.

Gender
Four director nominees are women.

Yrs of
Service

0-4

5-10

11+

89%

Nominee Independence

6 MDU Resources Group, Inc. Proxy Statement

44%

Race/Ethnicity

One director nominee is ethnically diverse.

11%

Proxy Statement

■ Compensation Highlights

The company’s executive compensation is based on providing market competitive compensation opportunities to attract top talent
focused on achievement of short and long-term business results. Our compensation program is structured to align compensation with the
company’s financial performance as a substantial portion of our executive compensation is directly linked to performance incentive awards.

■ Over 80% of our chief executive officer’s target compensation and over 69% of our other named executive officers’ target compensation

are at risk.

■ 100% of our named executive officers’ annual incentive and 75% of their long-term incentive are performance-based and tied to

performance against pre-established, specific, measurable financial goals. Time-vesting restricted stock units represent 25% of our
named executive officers’ long-term incentive and require the executive to remain employed with the company through the vesting
period.

■ We require our executive officers to own a significant amount of company stock based upon a multiple of their base salary.

■ In February 2022, the board approved a performance modifier for the 2022 annual incentive award program for executive officers
based upon the company’s achievement of certain measures to attract, retain, and develop a diverse and inclusive workforce.

2021 Named Executive Officer Target Pay Mix

At the 2021 Annual Meeting, the company’s advisory vote
to approve executive compensation received support from
over 95% of the common stock represented at the
meeting and entitled to vote on the matter.

MDU Resources Group, Inc. Proxy Statement 7

Proxy Statement

Key Features of Our Executive Compensation Program

What We Do

þ Pay for Performance - Annual incentive and the performance share award portion of the long-term incentive are tied to performance

measures set by the compensation committee and comprise the largest portion of executive compensation.

þ Independent Compensation Committee - All members of the compensation committee meet the independence standards under the

New York Stock Exchange listing standards and the Securities and Exchange Commission rules.

þ Independent Compensation Consultant - The compensation committee retains an independent compensation consultant to evaluate

executive compensation plans and practices.

þ Competitive Compensation - Executive compensation reflects executive performance, experience, relative value compared to other
positions within the company, relationship to competitive market value compensation, business segment economic environment,
and the actual performance of the overall company and the business segments.

þ Annual Cash Incentive - Payment of annual cash incentive awards is based on overall company performance measured in terms of
earnings per share in addition to business segment performance measured in terms of pre-established annual financial measures
for business segment executives.

þ Long-Term Equity Incentive - Long-term incentive awards may be earned at the end of a three-year period. Payment of performance
share awards, which represent 75% of the executive's long-term incentive, are based on the achievement of pre-established
performance measures. Payment of time-vesting restricted stock unit shares, which represent 25% of the executive's long-term
incentive, are based on retention of the executive at the end of the three-year period. All long-term incentives are paid through
shares of common stock which encourages stock ownership by our executives.

þ Balanced Mix of Pay Components - The target compensation mix represents a balance of annual cash and long-term equity-based

compensation.

þ Mix of Financial Goals - Use of a mixture of financial goals to measure performance prevents overemphasis on a single metric.
þ Annual Compensation Risk Analysis - Risks related to our compensation programs are regularly analyzed through an annual

compensation risk assessment.

þ Stock Ownership and Retention Requirements - Executive officers are required to own, within five years of appointment or promotion,
company common stock equal to a multiple of their base salary. Our CEO is required to own stock equal to six times his base
salary, and the other named executive officers are required to own stock equal to three times their base salary. The executive
officers also must retain at least 50% of the net after-tax shares of stock vested through the long-term incentive plan for the earlier
of two years or until termination of employment. Net performance shares must also be held until share ownership requirements are
met.

þ Clawback Policy - If the company’s audited financial statements are restated due to any material noncompliance with the financial
reporting requirements under the securities laws, the compensation committee may, or shall if required, demand repayment of
some or all incentives paid to our executive officers within the last three years.

What We Do Not Do

ý Stock Options - The company does not use stock options as a form of incentive compensation.
ý Employment Agreements - Executives do not have employment agreements entitling them to specific payments upon termination or

a change of control of the company.

ý Perquisites - Executives do not receive perquisites that materially differ from those available to employees in general.
ý Hedge Stock - Executives are not allowed to hedge company securities.
ý Pledge Stock - Executives are not allowed to pledge company securities in margin accounts or as collateral for loans.
ý No Dividends or Dividend Equivalents on Unvested Shares - We do not provide for payment of dividends or dividend equivalents on

unvested share awards.

ý Tax Gross-Ups - Executives do not receive tax gross-ups on their compensation.

8 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

■ Sustainability Highlights

MDU Resources is an essential infrastructure company and manages
its business with a long-term view toward sustainable operations,
focusing on how economic, environmental, and social impacts help
the corporation continue Building a Strong America®. We integrate
sustainability efforts into our business strategy because these efforts
directly affect long-term business viability and profitability. Our focus
on sustainability helps ensure we are a good corporate citizen while
creating opportunities to increase revenues and profitability, create a
competitive advantage, and attract a skilled and diverse workforce.
Highlights of our commitment to sustainability are set forth below.

Enhanced Sustainability Reporting

We recently republished our 2020 Sustainability Report highlighting
our significant efforts regarding environmental, social and governance
(ESG) oversight and reporting, initiatives and goals, which can be
found at www.mdu.com/sustainability. The information on our website
is not part of this Proxy Statement and is not incorporated by
reference into this Proxy Statement.

We have also published a summary of our Task Force on Climate-
related Financial Disclosure (TCFD) aligned climate scenario analysis
with respect to our electric generation resources. The company applied
a net-zero by 2050 target for purposes of completing this analysis, a
summary of which can be found on our website.

Reporting Frameworks

To better serve our investors and other stakeholders, we report environmental, social, governance, and sustainability (ESG/sustainability)
metrics relevant and important to our operations in the frameworks that provide our stakeholders more uniform and transparent data and
information, allowing for comparison with our peers and other companies operating in our industries. For our applicable industries, we
report ESG/sustainability metrics using frameworks developed by the Sustainability Accounting Standards Board (SASB), the reporting
templates developed by the Edison Electric Institute (EEI) and the American Gas Association (AGA), and we continue to incorporate
guidance from the TCFD into our reporting as summarized below:

Reporting Frameworks

Business Segment

SASB

AGA

EEI / AGA

TCFD

Construction Materials and Contracting

Construction Services

Pipeline

Electric and Natural Gas Utilities

We continue to enhance and expand our disclosure of the company’s governance, strategy, risk management,
and metrics and targets related to climate risk in accordance with guidance from the TCFD.

MDU Resources Group, Inc. Proxy Statement 9

Proxy Statement

Governance of Environmental and Social Responsibility

MDU Resources is committed to strong corporate governance practices in all areas, including governance of environmental and social
responsibility. For more information on the company’s governance practices and policies, see the “Corporate Governance” section in this
Proxy Statement. Below is an overview of our governance practices related to the oversight of environmental and social responsibility:

The board of directors is ultimately responsible for oversight
responsibility with respect to environmental, health, safety, and
other social sustainability matters applicable to the company.

The environmental and sustainability committee is a standing
committee of the board and meets quarterly in conjunction with the
regular board meetings. The committee assists the board in fulfilling
its oversight responsibilities with respect to environmental, social,
and other sustainability matters, including climate change risks,
health, safety, and other social sustainability matters.

The management policy committee is comprised of the business unit
presidents and senior company officers. The committee meets
monthly, or more frequently as warranted, and is responsible for the
management of risks and pursuit of opportunities related to
environmental and social sustainability matters, including climate
change, health, safety, and other social sustainability matters.

The executive sustainability committee, created in 2021, is comprised
of corporate and business unit senior executives and supports
execution of the company’s environmental and sustainability strategy
and establishes, maintains, and enhances the processes,
procedures, and controls for the company’s environmental and
sustainability disclosures.

Board of Directors

⇓

Environmental and Sustainability
Committee of the Board

⇓

Management Policy Committee

⇓

Executive Sustainability Committee

Environmental Stewardship

MDU Resources operates with three primary environmental goals: (1) minimize waste and maximize resources; (2) be a good steward of the
environment while providing high-quality and reasonably priced products and services; and (3) comply with or surpass all applicable
environmental laws, regulations, and permit requirements. We strive to meet these goals through established operational practices and by
leading or participating in a number of programs. Highlights of our environmental stewardship include:

■ Carbon Footprint. We are working to better understand our carbon footprint. Effective January 1, 2022, we began tracking our Scope 1
and Scope 2 carbon emissions across the company. For more information on establishing our carbon emissions baseline, anticipated
future reporting, and emission reduction goals, see our Sustainability Report.

■ Retirement of Coal Facilities. In February 2019, we announced the retirement of three aging coal-fired electric generating units. We

ceased operations on March 31, 2021, of Unit 1 at Lewis & Clark Station in Sidney, Montana, and commenced decommissioning in July
2021. Units 1 and 2 at Heskett Station near Mandan, North Dakota, were retired during the first quarter of 2022. With the retirement of
these facilities, the company will no longer wholly own any coal-fired units.

10 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Electric segment
reduced its GHG
emissions intensity
by approximately
30% since 2005.

■ Reduce Electric Segment Greenhouse Gas Emissions. Our electric segment

strives to reduce its greenhouse gas (GHG) emissions intensity. We intend to
achieve this reduction primarily through the continued diversity of our electric
generating fleet, including the retirement of aging coal-fired generating units.
As of December 31, 2021, the electric segment reduced its GHG emissions
intensity by approximately 30% since 2005.

■ Renewable Energy.

☐ Approximately 29% of our electric generation resource
nameplate capacity at December 31, 2021, was from
renewable resources.

☐ Approximately 29% of the electricity delivered to customers
from our company-owned generation in 2021 was from
renewable resources.

■ Methane Emissions. We began documenting our natural gas utility distribution and pipeline businesses’ methane emissions in 2021. For
more information on our methane emissions, reporting timeline, and anticipated plans for setting future emission reduction goals, see
our Sustainability Report. In addition, our natural gas distribution companies are founding partners of the EPA’s Natural Gas Star
Methane Challenge Program. The commitment includes company-wide implementation of best management practices to reduce
methane emissions.

■ Reducing Carbon Dioxide Emissions. Our pipeline segment, WBI Energy, continually evaluates the efficiency and effectiveness of its

operating facilities and proactively maintains a program to replace existing facilities with newer, more fuel-efficient and lower-emitting
equipment. Since 2011, it has replaced 15 natural gas-fired compressor engines reducing the amount of potential natural gas
consumed by more than 250 million cubic feet per year. In addition, WBI Energy’s efforts to replace legacy facilities with lower-emitting
equipment and install electric-driven compression where feasible have resulted in reductions and savings of potential GHG emissions at
these facilities of approximately 14,000 and 10,500 metric tons of carbon dioxide equivalent, respectively. These projects also reduced
nitrogen oxide emissions by more than 800 tons per year.

■ Increasing Transportation Capacity Assists in Reducing Natural Gas Flaring. WBI Energy’s North Bakken Expansion project, completed in
early 2022, provides needed pipeline capacity to transport increasing levels of associated natural gas from processing plants in the
Bakken production area to markets in the Midwest. The addition of processing and transportation capacity assists in reducing associated
natural gas flaring in the Bakken production area to meet natural gas capture targets established by the state of North Dakota.

■ Renewable Natural Gas. Renewable natural gas (RNG) is biogas that is produced from a number of non-geologic sources and can provide
benefits such as energy diversity, economic revenues or savings, improved air quality, and reductions in GHG emissions. Our natural gas
utilities actively review, evaluate, and pursue potential RNG development opportunities.

☐ Montana-Dakota Utilities Co. produces RNG from the Billings Regional Landfill in Montana. The project came online at the end of

2010 and has produced approximately 1.48 million dekatherms of RNG through year-end 2021. The RNG is supplied to the vehicle
fuel market generating renewable identification numbers (RINs). In 2021, the Billings Landfill Plant produced approximately 1.38
million RINs.

☐ In Idaho, Intermountain Gas Company supports development of RNG projects and to date has provided pipeline services for three

dairy digesters to transport and sell RNG.

☐ Washington and Oregon have enacted policies allowing natural gas distribution utilities to supply RNG to customers. Cascade Natural

Gas Corporation is committed to developing RNG programs for its customers under these policies.

MDU Resources Group, Inc. Proxy Statement 11

Percent of Renewable Electric GenerationResource Nameplate Capacity0%4%11%22%29%Proxy Statement

■ Water Management and Recycling.

☐ Water withdrawals at our electric generating facilities will be significantly reduced with the retirement of our wholly-owned coal-fired

electric generating units.

☐ Knife River Corporation uses water to produce aggregates and concrete as well as for dust control across various product lines.

Substantially all water recovered while washing materials is reused in the washing process. In an engineering study of water usage at
a recently permitted quarry in Texas, it was estimated that 79% of all water used is recycled for further use at the facility.

■ Environmental Recognitions.

☐ Cascade Natural Gas Corporation ranked at the top of the list of 31 utilities named as 2021 Environmental Champions

on Earth Day according to a national survey conducted by Escalent, a top human behavior and analytics firm.

☐ Intermountain Gas Company received the 2021 ENERGY STAR® Market Leader Award for its efforts to promote energy-
efficient residential construction and help homebuyers and residents experience the quality, comfort, and value that
come with living in an ENERGY STAR-certified home or apartment.

■ Renewable Diesel. In 2021, a number of Knife River Corporation’s West Coast operations piloted renewable diesel fuel in their on-road

and off-road fleets. Engine performance, engine maintenance, and fuel efficiency results were positive during the pilot, and Knife River
is beginning to utilize renewable diesel in more locations where feasible. Knife River used an estimated 1.7 million gallons of renewable
diesel in 2021.

■ Environmental-Related Investments. Knife River Corporation has invested in Blue Planet Systems Corporation to pursue the use of
synthetic aggregates in ready-mix concrete. Blue Planet is testing methods of creating synthetic limestone, using carbon dioxide
captured from existing sources. The synthetic limestone could then be used as a component of concrete. In addition to sequestering
carbon dioxide through this process, the use of synthetic limestone would prolong the life of natural aggregate sources.

■ Warm-Mix Asphalt. Knife River Corporation produces and places warm-mix asphalt in applications where warm-mix asphalt is allowed.
Warm-mix asphalt is produced at cooler temperatures than traditional hot-mix asphalt methods, which reduces the amount of fuel
needed in the production process, thereby reducing emissions and fumes.

■ Recycling. Knife River Corporation continues its long-standing practice of recycling and reusing building materials. Recycling conserves
natural resources, uses less energy, reduces waste disposal at local landfills, and ultimately costs less for our customers. Knife River
recycles or reuses asphalt pavement, pre-consumer asphalt shingles, refined fuel oil, demolition concrete, returned concrete at ready-mix
plants, fly ash, slag, silica fume and other cement-replacement materials, and dimension stone reject material.

■ Energy Efficiency. Our utility companies actively pursue programs to increase energy efficiency and conservation for electric and natural
gas customers. This includes partnering with local community action agencies in providing low-income assistance for utility customers
and offering residential and commercial incentive programs that promote installation of energy-efficient electric and natural gas
equipment.

■ LED Conversion Program. In 2017, Montana-Dakota Utilities Co. started an LED conversion program for street-lighting and other outdoor

lighting owned by the company throughout its service territory to reduce energy usage and help reduce emissions. The project concluded
in early 2021 with more than 25,585 energy-saving LED lights installed, resulting in approximately 17.6 million kilowatt hours in
annual energy savings, which is the equivalent of approximately 13,775 metric tons of carbon dioxide emissions reduced annually.

12 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Social Responsibility

MDU Resources knows that it operates at the discretion of various stakeholders, including customers, stockholders, employees, regulators,
lawmakers, and the communities where we do business. It is these stakeholders who allow us to conduct our business and are vital to our
success. MDU Resources remains committed to maintaining the trust of these stakeholders by operating with integrity and being a good
corporate citizen. Below are highlights of our social responsibility programs relating to our employees, stockholders, communities, and
customers.

■ Our Employees and Human Capital Management. At the core of Building a Strong America® is building a strong workforce. At MDU

Resources, this means building a strong team of employees with a focus on integrity and safety and a commitment to diversity, equity,
and inclusion. Our team included 12,826 employees located in 41 states plus Washington D.C. as of December 31, 2021. Our number
of employees peaked in the second quarter at just over 14,700. Our 2020 Employer Information Report EEO-1 is available on our
website at www.mdu.com/careers. The information on our website is not part of this Proxy Statement and is not incorporated by
reference into this Proxy Statement.

☐ Diversity, Equity, and Inclusion. MDU Resources is committed to an inclusive environment that respects
the differences and embraces the strengths of our diverse employees. Essential to the company’s
success is its ability to attract, retain, and engage the best people from a broad range of backgrounds
and build an inclusive culture where all employees feel valued and contribute their best. To aid in the
company’s commitment to an inclusive environment, each business segment has a diversity officer who
serves as a conduit for diversity-related issues and provides a voice for all employees. The company
requires employees to participate in training on the company’s code of conduct and additional courses
focusing on diversity, effective leadership, equal employment opportunity, workplace harassment,
respect, and unconscious bias. To further our commitment to social responsibility with a focus on
advancing diversity and inclusion in the workplace, our chief executive officer signed the CEO Action
for Diversity and Inclusion pledge. The company has three strategic goals related to diversity:

• Enhance collaboration efforts through cooperation and sharing of best practices to create new ways of meeting employee,

customer, and stockholder needs;

• Maintain a culture of integrity, respect, and safety by ensuring employees understand these essential values which are part of the

company’s vision statement; and

• Increase productivity and profitability through the creation of a work environment which values all perspectives and methods of

accomplishing the work.

☐ Executive Compensation and Diversity, Equity, and Inclusion. In February 2022, the board approved a performance modifier for the

2022 annual incentive award program for executive officers based upon the company’s achievement of certain measures to attract,
retain, and develop a diverse and inclusive workforce (the “DEI Modifier”). The DEI Modifier includes a focus on representation of
diverse employees in executive succession plans, outreach efforts to attract diverse candidates for open positions at the company,
implementing enhanced diversity, equity, and inclusion training and mentoring for new employees, and development of enhanced
employee data dashboards to further support the company’s efforts to attract, retain, and develop a diverse and inclusive workforce.

☐ Building People. Building a strong workforce begins with employee recruitment. The company uses a variety of means to recruit new
employees for open positions including posting on the company’s website, employee referrals, union workforce, direct recruitment,
advertising, social media, career fairs, job service organizations, and associations connected with a variety of professions. The
company also utilizes internship programs to introduce individuals to the company’s business operations and provide a possible
source of future employees. Building a strong workforce also requires developing employees in their current positions and for future
advancement. The company provides opportunities for advancement through job mobility, succession planning, and promotions both
within and between business segments. The company provides employees the opportunity to further develop and grow through
various forms of training, mentorship programs, and internship programs, among other things.

☐ Safety. The company is committed to safety and health in the workplace. To ensure safe work environments, the company provides
training, adequate resources, and appropriate follow-up on any unsafe conditions or actions. The company has policies and training
that support safety in the workplace, including training on safety matters through classroom and toolbox meetings on job sites. In
response to COVID-19, the company established a task force to monitor developments related to the pandemic and implemented
procedures to protect employees. The company adopted recommended practices from the Centers for Disease Control and Prevention
and is following directives of each state and local jurisdiction in which the company operates.

MDU Resources Group, Inc. Proxy Statement 13

Proxy Statement

☐ Knife River Training Center. While labor challenges continue to impact many construction companies, Knife River Corporation is

actively engaged in attracting, training, and retaining the next generation of employees to the construction industry. The company
recently finished building a training center on a 270-acre tract of property in the Pacific Northwest that is designed to enhance the
skills of current employees as well as to recruit and teach skills to new employees. The Knife River training center features an
80,000-square-foot heated indoor arena for training on trucks and heavy equipment and an attached 16,000-square-foot office,
classroom, and lab facility. The training center conducts classes that help students build skills through both classroom education
and hands-on experience. In addition to developing participants’ talents, the training center helps showcase construction as a career
of choice.

☐ Ethics Reporting. MDU Resources’ employees are encouraged to ask questions or report concerns to their supervisor. If employees
have concerns that something may be unethical or illegal within the company, they are encouraged to report their concerns to a
human resources representative, a company executive, or their compliance officer. For those wishing to remain anonymous, MDU
Resources also has an anonymous reporting hotline. Employees, customers, and other stakeholders can report confidentially and
anonymously through this third-party telephone and internet-based reporting system any concerns about possible unethical or illegal
activities. Reports are carefully considered and investigated. Summaries of the reports and investigative results are provided to the
audit committee of the board of directors.

■ Our Stockholders. MDU Resources’ management is committed to acting in the best interest of the corporation, protecting its assets, and
serving the long-term interests of the company’s stockholders. This includes protecting our tangible interests, such as property and
equipment, as well as intangible assets, such as our reputation, information, and intellectual property. For information on our
stockholder outreach program, see “Stockholder Engagement” in the section entitled “Corporate Governance” of this Proxy Statement.

■ Our Communities.

☐ Community Health and Safety. The pipeline and natural gas utility companies’ pipeline integrity and safety management programs

provide guidelines for the continual evaluation of their pipeline systems using risk-based criteria that allows our companies to take
proactive measures to ensure public safety and protect the environment. In addition, the pipeline safety management systems are
comprehensive, continuous improvement programs designed to promote a culture dedicated to employee and public safety and
environmental protection while maintaining the safety and reliability of our natural gas distribution, transmission, and storage
facilities.

☐ Charitable Giving. MDU Resources is proud of its record of

supporting qualified organizations that enhance quality of life.
Our philanthropic goal is to be a “neighbor of choice.” The MDU
Resources Foundation was incorporated in 1983 to support the
corporation’s charitable efforts and has contributed more than
$40 million to worthwhile organizations. In 2021, the MDU
Resources Foundation contributed $2.1 million to charitable
organizations. In addition to contributions through the
Foundation, our business segments and companies regularly
make charitable donations and in-kind donations to the
communities where they do business averaging approximately
$500,000 per year.

☐ Volunteerism. We encourage and support community volunteerism by our employees. The MDU Resources Foundation contributes a
$750 grant to an eligible nonprofit organization after an employee or group of employees volunteer a minimum of 25 hours to the
organization during non-company hours during a calendar year. Eligible organizations are local 501(c) nonprofit organizations
providing services in categories of civic and community activities, culture and arts, education, environment, and health and human
services. In 2021, the foundation granted $89,250 under this program, matching over 6,999 employee volunteer hours.

☐ Education. We encourage support of educational institutions by all employees. The MDU Resources Foundation matches contributions
up to $750 to educational institutions by employees. In addition, the Foundation maintains two separate scholarship programs,
which includes funding scholarship programs at institutions of higher education and scholarships for employee family members.

14 MDU Resources Group, Inc. Proxy Statement

■ Our Customers.

☐ Our utility companies consistently rank high in customer satisfaction. In the J.D. Power 2021 Gas Utility Residential

Customer Satisfaction StudySM, Intermountain Gas Company ranked first, Cascade Natural Gas Corporation second, and
Montana-Dakota Utilities Co. fourth among mid-size natural gas utilities in the West Region.

Proxy Statement

☐ While our utility companies have made substantial
investments in their facilities, retail prices remain
competitive providing value to customers. Since
2016, our utility companies’ residential electric
retail prices increased an average of 0.4% annually
and residential natural gas prices increased an
average of 1.8% annually. In comparison, the
consumer price index (CPI) increased an average
of 2.5% annually over the same period. While the
cost of purchased natural gas increased in 2021,
residential prices are still below the CPI and a
value to customers.

☐ We strive to be our customers’ supplier of choice in

all our markets by seeking competitive cost
advantages and providing high-quality products and
services.

The company believes in corporate social responsibility and the fundamental commitment to its stakeholders: customers, employees, suppliers,
communities, and stockholders. With the company’s origin and rich history in providing electric and natural gas utility service to rural
communities in North Dakota, South Dakota, Montana, and Wyoming, our utility companies have long operated under the motto “In the
Community to Serve®.” With the addition of our construction businesses to our legacy of regulated energy delivery businesses, we define our
purpose as “Building a Strong America®” in recognition of our mission to deliver value to our stakeholders.

MDU Resources Group, Inc. Proxy Statement 15

Proxy Statement

BOARD OF DIRECTORS

ITEM 1. ELECTION OF DIRECTORS

The board currently consists of nine directors. All of the nominees are current directors of MDU Resources Group, Inc. All of the nominees
are standing for election to the board at the 2022 annual meeting to hold office until the 2023 annual meeting and until their successors
are duly elected and qualified.

The board has affirmatively determined all the director nominees, other than David L. Goodin, our president and chief executive officer, are
independent in accordance with New York Stock Exchange (NYSE) rules, our governance guidelines, and our bylaws.

Our bylaws provide for a majority voting standard for the election of directors. See “Additional Information - Majority Voting” below for
further detail.

Each of the director nominees has consented to be named in this Proxy Statement and to serve as a director, if elected. We do not know of
any reason why any nominee would be unable or unwilling to serve as a director, if elected. If a nominee becomes unable to serve or will not
serve, proxies may be voted for the election of such other person nominated by the board as a substitute or the board may choose to reduce
the number of directors.

Information about each director nominee’s share ownership is presented under “Security Ownership.”

The shares represented by the proxies received will be voted for the election of each of the nine nominees named below unless you indicate
in the proxy that your vote should be cast against any or all the director nominees or that you abstain from voting. Each nominee elected as
a director will continue in office until his or her successor has been duly elected and qualified or until the earliest of his or her resignation,
retirement, or death.

The nine nominees for election to the board at the 2022 annual meeting, all proposed by the board upon recommendation of the
nominating and governance committee, are listed below with brief biographies. The nominees’ ages are current as of December 31, 2021.

The board of directors recommends that the stockholders

vote FOR the election of each nominee.

16 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Director Nominees

Thomas Everist
Age 72

Independent Director Since 1995
Compensation Committee
Nominating and Governance Committee

Key Contributions to the Board: With a 44-year career in the construction materials and mining industry,
Mr. Everist brings critical knowledge of the construction materials and contracting industry to the board.
Mr. Everist also contributes strong business leadership and management capabilities and insights through
his role as president and chair of his companies for over 34 years. His experience on the board of another
public company further enhances his contributions to the board.

Career Highlights

• President and chair of The Everist Company, Sioux Falls, South Dakota, an investment and land development company, since April

2002. Prior to January 2017, The Everist Company was engaged in aggregate, concrete, and asphalt production.

• Managing member of South Maryland Creek Ranch, LLC, a land development company, since June 2006; president of SMCR, Inc., an
investment company, since June 2006; and managing member of MCR Builders, LLC, which provides residential building services to
South Maryland Creek Ranch, LLC, since November 2014.

• Director and chair of Everist Genomics, Inc., Ann Arbor, Michigan, a company that provided solutions for personalized medicines, from

May 2002 to July 2021, and chief executive officer from August 2012 to December 2012.

• President and chair of L.G. Everist, Inc., Sioux Falls, South Dakota, an aggregate production company, from 1987 to April 2002.

Other Leadership Experience

• Director of publicly traded Raven Industries, Inc., Sioux Falls, South Dakota, a general manufacturer of electronics, flow controls, and

engineered films, from May 1996 to November 2021, and chair from April 2009 to May 2017.

• Director and compensation committee chair of Bell, Inc., Sioux Falls, South Dakota, a manufacturer of folding cartons and packages,

since April 2011.

• Director and audit committee chair of Showplace Wood Products, Inc., Sioux Falls, South Dakota, a custom cabinets manufacturer,

since January 2000.

• Director of Angiologix Inc., Mountain View, California, a medical diagnostic device company, from July 2010 through October 2011

when it was acquired by Everist Genomics, Inc.

• Member of the South Dakota Investment Council, the state agency responsible for investing state funds, from July 2001 to June 2006.

Karen B. Fagg
Age 68

Independent Director Since 2005
Compensation Committee
Environmental and Sustainability Committee

Key Contributions to the Board: Through her management experience and knowledge in the fields of engineering,
environment, and energy resource development, including four years as director of the Montana Department of
Natural Resources and Conservation and over eight years as president, chief executive officer, and chair of her
own engineering and environmental services company, as well as her service on a number of Montana state and
community boards, Ms. Fagg contributes experience in responsible natural resource development with an
informed perspective of the construction, engineering, and energy industries.

Career Highlights

• Vice president of DOWL LLC, dba DOWL HKM, an engineering and design firm, from April 2008 until her retirement in December 2011.

• President of HKM Engineering, Inc., Billings, Montana, an engineering and environmental services firm, from April 1995 to June 2000,

and chair, chief executive officer, and majority owner from June 2000 through March 2008. HKM Engineering, Inc. merged with
DOWL LLC in April 2008.

• Employed with MSE, Inc., Butte, Montana, an energy research and development company, from 1976 through 1988, and vice president

of operations and corporate development director from 1993 to April 1995.

• Director of the Montana Department of Natural Resources and Conservation, the state agency charged with promoting stewardship of

Montana’s water, soil, energy, and rangeland resources; and administering several grant and loan programs, from 1989 through 1992.

Other Leadership Experience

• Director and finance committee chair of the Montana State Fund, the state’s largest workers’ compensation insurance company, from

March 2021 to present; Director of SCL Health Montana Regional Board from January 2020 to present, including a term as chair; and
member of Carroll College Board of Trustees from 2005 through 2010 and August 2019 to present.

• Former member of several regional, state, and community boards, including director of St. Vincent’s Healthcare from October 2003 to
October 2009 and January 2016 through December 2019, including a term as chair; director of the Billings Catholic Schools Board
from December 2011 through December 2018, including a term as chair; the First Interstate BancSystem Foundation from June 2013
to 2016; the Montana Justice Foundation from 2013 into 2015; Montana Board of Investments from 2002 through 2006; Montana
State University’s Advanced Technology Park from 2001 to 2005; and Deaconess Billings Clinic Health System from 1994 to 2002.

MDU Resources Group, Inc. Proxy Statement 17

Proxy Statement

David L. Goodin
Age 60

Director Since 2013
President and Chief Executive Officer

Key Contributions to the Board: Serving as president and chief executive officer of MDU Resources Group, Inc.
since 2013, Mr. Goodin is the only officer of the company that serves on our board. With 30 years of operating
and leadership positions with our utility operations and nine years in his current position, he brings utility
industry experience to the board as well as extensive knowledge of our company and its business operations.
He contributes valuable insight into management’s views and perspectives and the day-to-day operations of the
company.

Career Highlights

• President and chief executive officer and a director of the company since January 4, 2013.

• Prior to January 4, 2013, served as chief executive officer and president of Intermountain Gas Company, Cascade Natural Gas

Corporation, Montana-Dakota Utilities Co., and Great Plains Natural Gas Co.

• Began his career in 1983 at Montana-Dakota Utilities Co. as a division electrical engineer and served in positions of increasing
responsibility until 2007 when he was named president of Cascade Natural Gas Corporation; positions included division electric
superintendent, electric systems manager, vice president-operations, and executive vice president-operations and acquisitions.

Other Leadership Experience

• Member of the U.S. Bancorp Western North Dakota Advisory Board since January 2013.

• Director of Sanford Bismarck, an integrated health system dedicated to the work of health and healing, and Sanford Living Center, from

January 2011 through December 2021.

• Board member of the BSC Innovations Foundation, an extension of Bismarck State College providing curriculum to Saudi Arabia

industries, since August 1, 2018.

• Former board member of numerous industry associations, including the American Gas Association, the Edison Electric Institute, the

North Central Electric Association, the Midwest ENERGY Association, and the North Dakota Lignite Energy Council.

Dennis W. Johnson
Age 72

Independent Director Since 2001
Chair of the Board

Key Contributions to the Board: With over 47 years of experience in business management, manufacturing,
and finance, holding positions as chair, president, and chief executive officer of TMI Group Incorporated for 40
years, as well as his prior service as a director of the Federal Reserve Bank of Minneapolis, Mr. Johnson brings
operational, management, strategic planning, specialty contracting, and financial knowledge and insight to the
board. Mr. Johnson also contributes significant knowledge of local, state, and regional issues involving North
Dakota, the state where we are headquartered and have significant operations, resulting from his service on
several state and local organizations.

Career Highlights

• Chair of the board of the company effective May 8, 2019; and vice chair of the board from February 15, 2018 to May 8, 2019.

• Chair, president, and chief executive officer of TMI Group Incorporated as well as its two wholly owned subsidiary companies, TMI
Corporation and TMI Transport Corporation, manufacturers of casework and architectural woodwork in Dickinson, North Dakota;
employed since 1974 and serving as president or chief executive officer since 1982.

Other Leadership Experience

• Member of the Bank of North Dakota Advisory Board of Directors since August 2017.

• President of the Dickinson City Commission from July 2000 through October 2015.

• Director of the Federal Reserve Bank of Minneapolis from 1993 through 1998.

• Served on numerous industry, state, and community boards, including the North Dakota Workforce Development Council (chair); the

Decorative Laminate Products Association; the North Dakota Technology Corporation; and the business advisory council of the Steffes
Corporation, a metal manufacturing and engineering firm.

• Served on North Dakota Governor Sinner’s Education Action Commission; the North Dakota Job Service Advisory Council; the North
Dakota State University President’s Advisory Council; North Dakota Governor Schafer’s Transition Team; and chaired North Dakota
Governor Hoeven’s Transition Team.

18 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Patricia L. Moss
Age 68

Independent Director Since 2003
Compensation Committee
Environmental and Sustainability Committee

Other Current Public Boards:
--First Interstate BancSystem, Inc.
--Aquila Group of Funds

Key Contributions to the Board: With substantial experience in the finance and banking industry, including
service on the boards of public banking and investment companies, Ms. Moss contributes broad knowledge of
finance, business development, human resources, and compliance oversight, as well as public company
governance, to the board. Through her business experience and knowledge of the Pacific Northwest, Ms. Moss
also provides insight on state, local, and regional economic and political issues where a significant portion of
our operations and the largest number of our employees are located.

Career Highlights

• President and chief executive officer of Cascade Bancorp, a financial holding company, Bend, Oregon, from 1998 to January 3, 2012;
chief executive officer of Cascade Bancorp’s principal subsidiary, Bank of the Cascades, from 1998 to January 3, 2012, serving also as
president from 1998 to 2003; and chief operating officer, chief financial officer and secretary of Cascade Bancorp from 1987 to 1998.

Other Leadership Experience

• Member of the Oregon Investment Council, which oversees the investment and allocation of all state of Oregon trust funds, from

December 2018 to March 2021.

• Director of First Interstate BancSystem, Inc., since May 30, 2017.

• Director of Cascade Bancorp and Bank of the Cascades from 1993, and vice chair from January 3, 2012 until May 30, 2017 when

Cascade Bancorp merged into First Interstate BancSystem, Inc., and became First Interstate Bank.

• Chair of the Bank of the Cascades Foundation Inc. from 2014 to July 31, 2018; co-chair of the Oregon Growth Board, a state board

created to improve access to capital and create private-public partnerships, from May 2012 through December 2018; and a member of
the Board of Trustees for the Aquila Group of Funds, whose core business is mutual fund management and provision of investment
strategies to fund shareholders, from January 2002 to May 2005 (one fund) and from June 2015 to present (currently three funds).

• Former director of the Oregon Investment Fund Advisory Council, a state-sponsored program to encourage the growth of small businesses

in Oregon; the Oregon Business Council, with a mission to mobilize business leaders to contribute to Oregon’s quality of life and
economic prosperity; the North Pacific Group, Inc., a wholesale distributor of building materials, industrial, and hardwood products; and
Clear Choice Health Plans Inc., a multi-state insurance company.

Dale S. Rosenthal
Age 65

Independent Director Since 2021
Audit Committee
Nominating and Governance Committee

Key Contributions to the Board: With 22 years of experience with an integrated construction company, serving in
senior executive positions as strategic director, division president, and chief financial officer, Ms. Rosenthal
contributes expertise in construction, alternative energy, real estate and infrastructure development, risk
management, and corporate strategy. Ms. Rosenthal also brings public board experience with a regulated
public utility company.

Career Highlights

• Strategic director of Clark Construction Group, LLC, a vertically integrated construction company headquartered in Bethesda, Maryland,

from January 2017 to December 2017; division president of Clark Financial Services Group, leveraging Clark’s core turnkey construction
expertise into alternative energy development, from April 2008 to December 2016; chief financial officer and senior vice president of
Clark Construction Group, LLC, from April 2000 to April 2008; and established a Clark subsidiary, Global Technologies Group, which
developed and built data centers for early internet service providers. Ms. Rosenthal joined Clark Construction in 1996.

• Led financing teams for several tax-credit financed housing developers and was instrumental in identifying new sources of funding and

innovative tax structures for complex transactions.

Other Leadership Experience

• Director of Washington Gas Light Company, formerly publicly traded and now a subsidiary of AltaGas Ltd., since October 2014, and

chair of the audit committee since July 2018. Washington Gas is a regulated public utility company that sells and delivers natural gas in
the District of Columbia and surrounding metropolitan areas.

• Board advisor of Langan Engineering & Environmental Services, a provider of an integrated mix of engineering and environmental

consulting services in support of land development projects, corporate real estate portfolios, and the oil and gas industry, since March
2020.

• Member, Board of Trustees of Cornell University since June 2017, serving on the finance and building and properties committees.

• Director of Transurban Chesapeake LLC, a company that develops and operates toll roads in the Mid-Atlantic region, since August 2021.

MDU Resources Group, Inc. Proxy Statement 19

Proxy Statement

Edward A. Ryan
Age 68

Independent Director Since 2018
Audit Committee
Nominating and Governance Committee

Key Contributions to the Board: As a former executive vice president and general counsel for a large public
company with international operations, Mr. Ryan contributes expertise to the board in the areas of corporate
governance, acquisitions, risk management, legal, compliance, and labor relations. Mr. Ryan also brings
senior leadership, transactional, and public company experience.

Career Highlights

• Advisor to the chief executive officer and president of Marriott International from December 2017 to December 31, 2018.

• Executive vice president and general counsel of Marriott International from December 2006 to December 2017; senior vice president
and associate general counsel from 1999 to November 2006; and assumed responsibility for all corporate transactions and corporate
governance in 2005. Mr. Ryan joined Marriott International as assistant general counsel in May 1996.

• Private law practice from 1979 to 1996.

Other Leadership Experience

• Director of C&O Canal Trust, a non-profit partner of the Chesapeake & Ohio Canal National Historical Park, that works in conjunction
with the National Park Service and local communities for park preservation highlighting the park’s historical, natural and cultural
heritage, while embracing the principles of diversity, equity, and inclusion in its work, since January 2022.

• Director and finance committee member of Goodwill of Greater Washington, D.C., a non-profit organization whose mission is to transform
lives and communities through education and employment, since January 2015, including a term as chair from January 2020 through
December 2021, vice chair from January 2019 through December 2019, and chair of the finance committee from January 2018
through December 2019.

David M. Sparby
Age 67

Independent Director Since 2018
Audit Committee
Environmental and Sustainability Committee

Key Contributions to the Board: With over 32 years of public utility management and leadership experience with
a large public utility company, including positions as senior vice president and as chief financial officer,
Mr. Sparby provides a broad understanding of the public utility and natural gas pipeline industries, including
renewable energy expertise. His lengthy senior leadership experience with a public company also contributes
to the board.

Career Highlights

• Senior vice president and group president, revenue, of Xcel Energy and president and chief executive officer of its subsidiary, NSP-

Minnesota, from May 2013 until his retirement in December 2014; senior vice president and group president, from September 2011 to
May 2013; chief financial officer from March 2009 to September 2011; and president and chief executive officer of NSP-Minnesota
from 2008 to March 2009. He joined Xcel Energy, or its predecessor Northern States Power Company, as an attorney in 1982 and held
positions of increasing responsibility.

• Attorney with the State of Minnesota, Office of Attorney General, from 1980 to 1982, during which period his responsibilities included

representation of the Department of Public Service and the Minnesota Public Utilities Commission.

Other Leadership Experience

• Board of Trustees of Mitchell Hamline School of Law from July 2011 to July 2020.

• Board of Trustees of the College of St. Scholastica since July 2012, including service as chair effective September 2020.

20 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Chenxi Wang
Age 51

Independent Director Since 2019
Audit Committee
Environmental and Sustainability Committee

Key Contributions to the Board: Having significant technology and cybersecurity expertise through her
management and leadership positions with several organizations, Ms. Wang contributes knowledge to the
board on technology and cybersecurity issues. As the founder and managing general partner of a cybersecurity-
focused venture fund, Ms. Wang also provides knowledge regarding capital markets and business development.

Career Highlights

• Founder and managing general partner of Rain Capital Fund, L.P., a cybersecurity-focused venture fund aiming to fund early-stage,
transformative technology innovations in the security market with a goal of supporting women and minority entrepreneurs, since
December 2017.

• Chief strategy officer at Twistlock, an automated and scalable cloud native cybersecurity platform, from August 2015 to February 2017.

• Vice president, cloud security & strategy of CipherCloud, a cloud security software company, from January 2015 to August 2015.

• Vice president of strategy of Intel Security, a company focused on developing proactive, proven security solutions and services that

protect systems, networks, and mobile devices, from April 2013 to January 2015.

• Principal analyst and vice president of research at Forrester Research, a market research company that provides advice on existing and

potential impact of technology, from January 2007 to April 2013.

• Assistant research professor and associate professor of computer engineering at Carnegie Mellon University from September 2001

through August 2007.

Other Leadership Experience

• Technical Board of Advisors of Secure Code Warriors, a Sydney-based cybersecurity company, since June 2019.

• Board of directors of OWASP Global Foundation, a nonprofit global community that drives visibility and evolution in the safety and

security of the world’s software, from January 2018 to December 2019, including a term as vice chair.

• Recipient of the 2019 Investor in Women Award by Women Tech Founders Foundation, an organization dedicated to advancing women

in the tech industry.

• Board of advisors of Keyp GmbH, a Munich-based software company with a mission to provide enterprises convenient access to the

digital identity ecosystem, from December 2017 to August 2019.

Additional Information - Majority Voting
A majority of votes cast is required to elect a director in an uncontested election. A majority of votes cast means the number of votes cast
“for” a director’s election must exceed the number of votes cast “against” the director’s election. “Abstentions” and “broker non-votes” do
not count as votes cast “for” or “against” the director’s election. In a contested election, which is an election in which the number of
nominees for director exceeds the number of directors to be elected and which we do not anticipate, directors will be elected by a plurality
of the votes cast.

Unless you specify otherwise when you submit your proxy, the proxies will vote your shares of common stock “for” all directors nominated by
the board of directors. If a nominee becomes unavailable for any reason or if a vacancy should occur before the election, which we do not
anticipate, the proxies will vote your shares in their discretion for another person nominated by the board.

Our policy on majority voting for directors contained in our corporate governance guidelines requires any proposed nominee for re-election as
a director to tender to the board, prior to nomination, his or her irrevocable resignation from the board that will be effective, in an
uncontested election of directors only, upon:

• receipt of a greater number of votes “against” than votes “for” election at our annual meeting of stockholders; and

• acceptance of such resignation by the board of directors.

Following certification of the stockholder vote, the nominating and governance committee will promptly recommend to the board whether or
not to accept the tendered resignation. The board will act on the nominating and governance committee’s recommendation no later than 90
days following the date of the annual meeting.

Brokers may not vote your shares on the election of directors if you have not given your broker specific instructions on how to vote. Please
be sure to give specific voting instructions to your broker so your vote can be counted.

MDU Resources Group, Inc. Proxy Statement 21

Proxy Statement

Board Evaluations and Process for Selecting Directors

Our corporate governance guidelines require that the board, in coordination with the nominating and governance committee, annually
reviews and evaluates the performance and functioning of the board and its committees.

The board evaluation process includes the following steps:

1 QUESTIONNAIRES
During 2021, each director completed an anonymous written questionnaire with the
opportunity to provide comments. In addition, committee members completed a
separate written questionnaire directed to the operation of the respective committees.

2 INDIVIDUAL DIRECTOR INTERVIEWS
The chair of the nominating and governance committee then conducted individual
interviews with each director.

3 BOARD SUMMARY AND FEEDBACK
The results of the written questionnaires were anonymously aggregated and provided
to the board and each committee. The chair of the nominating and governance
committee summarized and shared input from the individual interviews in an
executive session of the board. Key strengths and opportunities for improvement of
the board and each committee were also reviewed in connection with this process.

4 BOARD SUCCESSION
As part of the annual board evaluation process, the nominating and governance
committee evaluates our directors considering the current needs of the board and the
company. This evaluation supports the nominating and governance committee’s
consideration of board succession and potential director recruitment throughout the
year.

Director Qualifications, Skills, and Experience
Director nominees are chosen to serve on the board based on their qualifications, skills, and experience, as discussed in their biographies,
and how those characteristics supplement the resources and talent on the board and serve the current needs of the board and the company.
Our governance guidelines provide that directors are not eligible to be nominated or appointed to the board if they are 76 years or older at
the time of the election or appointment. The board does not have term limits on the length of a director’s service.

In making its nominations, the nominating and governance committee also assesses each director nominee by a number of key
characteristics, including character, success in a chosen field of endeavor, background in publicly traded companies, independence, and
willingness to commit the time needed to satisfy the requirements of board and committee membership. Although the committee has no
formal policy regarding diversity, the board is committed to having a diverse and broadly inclusive membership. In recommending director
nominees the committee considers diversity in gender, ethnic background, geographic area of residence, skills, and professional experience.

22 MDU Resources Group, Inc. Proxy Statement

Board Skills and Diversity Matrix

Skills & Expertise
EXECUTIVE MANAGEMENT/PUBLIC COMPANY

Served as CEO or other senior executive of an organization
or as a director of another publicly traded company

ACCOUNTING/FINANCE

Experience in the preparation and review of financial
statements and financial reports

CAPITAL MARKETS

Experience overseeing company financings, investments,
capital structures, and financial strategy

INFORMATION TECHNOLOGY/CYBERSECURITY

Oversight of or significant background working with
information technology systems, data management, and/or
cybersecurity risks

RISK MANAGEMENT AND COMPLIANCE

Regulatory and compliance expertise or experience in the
identification, assessment, and mitigation of risks facing our
company

INDUSTRY EXPERIENCE

Experience in our businesses and related industries,
including public utilities, natural gas pipelines, construction,
and aggregate mining

LEGAL/CORPORATE GOVERNANCE

Experience in dealing with complex legal and public
company governance issues

ENVIRONMENT/SCIENCE

Experience addressing environmental and sustainability
issues relating to our businesses

GOVERNMENT/REGULATORY/PUBLIC AFFAIRS

Background or experience in governmental regulations and
public policy issues affecting our businesses

Gender/Age/Tenure

Gender

Age

Tenure

Race/Ethnicity/Nationality

African American/Black

Alaskan Native or Native American

Asian

Hispanic/Latinx

Native Hawaiian or Pacific Islander

White (not Hispanic or Latinx origins)

Two or more Races or Ethnicities

LGBTQ

Proxy Statement

Everist Fagg Goodin Johnson Moss Rosenthal Ryan Sparby Wang

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MDU Resources Group, Inc. Proxy Statement 23

Proxy Statement

Independence
The board has determined that all
director nominees, other than
Mr. Goodin, meet the independence
standards set by the NYSE and SEC.

Tenure
The average tenure of the director
nominees is approximately 11.7 years,
which reflects a balance of company
experience and new perspectives.

Diversity
The board is committed to having a diverse
and broadly inclusive membership.

Gender
Four director nominees are women.

89%

Nominee Independence

Yrs of
Service

0-4

5-10

11+

44%

Race/Ethnicity

One director nominee is ethnically diverse.

11%

Board Composition and Refreshment
The nominating and governance committee is committed to ensuring that the board reflects a diversity of experience, skills, and
backgrounds to serve the company’s governance and strategic needs. In recognition of the company’s commitment to diversity, the company
was recognized in 2021 by 50/50 Women on Boards™ as a “3+” company for having three or more women on its board of directors and
also by the Women’s Forum of New York as a 2021 Corporate Champion with at least 40% of board seats held by women.

Each of the nominees has been nominated for election to the board of directors upon recommendation by the nominating and governance
committee and each has decided to stand for election.

In evaluating the needs of the board and the company, the nominating and governance committee focuses on identifying board candidates
that will add gender and ethnic diversity along with relevant industry and leadership experience to the board as well as a background and
core competencies in the fields of technology, cybersecurity, and public company governance. To support this process, the nominating and
governance committee engaged an independent global search firm in 2021 to assist with identifying, evaluating, and recruiting a diverse
pool of potential director candidates. Potential director nominees were also brought to the attention of the nominating and governance
committee by board members, management, organizations, and database searches.

The nominating and governance committee and independent global search firm continue to identify individuals as potential board of director
candidates, particularly individuals with industry experience to support the company’s strategy to grow its two business platforms of
regulated energy delivery and construction materials and services.

By tenure, if the nominees are elected, the board will be comprised of four directors who have served from 0-4 years, one director who has
served from 5-10 years, and four directors who have served over 11 years. The nominating and governance committee believes this mix of
director tenures provides a balance of experience and institutional knowledge with fresh perspectives.

24 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

CORPORATE GOVERNANCE AND THE BOARD OF DIRECTORS

Director Independence

The board of directors has adopted guidelines on director independence that are included in our corporate governance guidelines. Our
guidelines require that a substantial majority of the board consists of independent directors. In general, the guidelines require that an
independent director must have no material relationship with the company directly or indirectly, except as a director. The board determines
independence on the basis of the standards specified by the NYSE, the additional standards referenced in our corporate governance
guidelines, and other facts and circumstances the board considers relevant. Based on its review, the board has determined that all directors,
except for our chief executive officer Mr. Goodin, have no material relationship with the company and are independent.

In determining director independence, the board of directors reviewed and considered information about any transactions, relationships, and
arrangements between the non-employee directors and their immediate family members and affiliated entities on the one hand, and the
company and its affiliates on the other, and in particular the following transactions, relationships, and arrangements:

Charitable contributions by the company and the MDU Resources Foundation (Foundation) to nonprofit organizations where a director
or immediate family member served as an officer or director of the organization. The company and the Foundation made charitable
contributions to six such nonprofit organizations that collectively totaled $28,800. None of the contributions made to any of the
nonprofit entities exceeded 2% of the relevant entity’s consolidated gross revenues.

The board has also determined that all members of the audit, compensation, and nominating and governance committees of the board are
independent in accordance with our guidelines and applicable NYSE and Securities Exchange Act of 1934 rules.

Oversight of Sustainability

We are an essential infrastructure company and manage our business with a long-term view toward sustainable operations, focusing on how
economic, environmental, and social impacts help the company continue Building a Strong America®. We are committed to strong corporate
governance in all areas, including governance of environmental and social responsibility.

Board of Directors. The board of directors is ultimately responsible for oversight with respect to environmental, health, safety, and other
social sustainability matters applicable to the company.

Environmental and Sustainability Committee of the Board. In recognition of its responsibility for oversight with respect to environmental, health,
safety, and other social sustainability matters, the board of directors in May 2019 formed the environmental and sustainability committee as
a standing committee of the board with particular focus on our environmental, workplace health, safety, human capital, and other social
sustainability programs and performance. The environmental and sustainability committee assists the board in fulfilling its oversight
responsibilities with respect to environmental and social sustainability matters, including oversight and review of:

• Employee, customer, and contractor safety;

• Climate change risks;

• Compliance with environmental, health, and safety laws;

• Human capital management;

• Integration of environmental and social principles into company strategy; and

• Significant public disclosures of environmental and sustainability matters.

Additional oversight responsibilities of our environmental and sustainability committee are discussed on page 32.

Management Policy Committee. The company’s management policy committee is comprised of the presidents of the business units and senior
company officers. The management policy committee meets monthly, or more frequently as warranted, and is responsible for the
management of risks and pursuit of opportunities related to environmental and social sustainability matters, including climate change,
health, safety, and other social sustainability matters.

MDU Resources Group, Inc. Proxy Statement 25

Proxy Statement

Executive Sustainability Committee. In 2021, the company established an executive sustainability committee, which is comprised of corporate
and business unit senior executives. The committee is co-chaired by our vice president, chief accounting officer and controller and a
business segment president. The executive sustainability committee responsibilities include:

• Supporting execution of, and making recommendations to advance, the company’s environmental and sustainability strategy; and

• Establishing, maintaining, and enhancing the processes, procedures, and controls for the company’s environmental and sustainability

disclosures.

For information on our sustainability reporting, as well as highlights of our environmental stewardship and social responsibility, see
“Sustainability Highlights” in the Proxy Summary.

Stockholder Engagement

The company has an active stockholder outreach program. We believe in providing transparent and timely information to our investors and
understand the need to align our priorities with those of our key stakeholders. Each year we routinely engage directly or indirectly with our
stockholders, including our largest institutional stockholders. Management regularly attends and presents at investor and financial
conferences and holds one-on-one meetings with investors. During 2021, the company held meetings, conference calls, and webcasts with
over 200 stockholders and investment firms, including meetings or telephone conferences with a number of our largest institutional
investors. Our active stockholder outreach program includes:

WHO WE ENGAGE

HOW WE ENGAGE

WHO PARTICIPATES

∙
∙
∙
∙
∙
∙

Institutional Investors

Sell-Side Analysts

Retail Stockholders

Pension Funds

Holders of Bonds

One-on-One and Group Meetings

∙
Quarterly Earnings Conference Calls
∙
∙ Written and Electronic Communications
Company-Hosted Events and Presentations
∙
∙ Webcasts with Over 200 Stockholders and

Rating Agencies/Firms

Investment Firms

Industry and Sell-Side Presentations and

∙

Conferences

KEY ENGAGEMENT RESOURCES

Annual Proxy Statement

Quarterly Earnings Webcasts

∙ MDU Resources Website at investor.mdu.com
∙
∙
∙
∙

Annual Stockholder Meeting

Annual Report

Sustainability Report

Public Events and Presentations

SEC Filings

Disclosures to Various Ratings Assessors

Press Releases

∙
∙
∙
∙
∙

∙
∙
∙
∙
∙
∙

∙

Executive Management

Investor Relations

Senior Leadership

Subject Matter Experts

Board Members

KEY TOPICS OF ENGAGEMENT

Company Strategy

Executive Compensation

Operational and Financial Updates

Impact of COVID-19 Pandemic

Sustainability

Environmental, Social, and Corporate

Governance Practices

Capital Expenditure Forecast/Capital
Allocation

OUTCOMES OF STOCKHOLDER ENGAGEMENT

Expanded disclosure of financial metrics for our business segments to
help investors better understand key business drivers

Enhanced Sustainability Reporting

∙

Completed a TCFD-aligned electric generation climate scenario
analysis

Created an executive sustainability committee to support execution
of the company’s environmental and sustainability strategy

26 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Board Leadership Structure

The board separated the positions of chair of the board and chief executive officer in 2006, and our bylaws and corporate governance
guidelines currently require that our chair be independent. The board believes this structure provides balance and is currently in the best
interest of the company and its stockholders. Separating these positions allows the chief executive officer to focus on the full-time job of
running our business, while allowing the chair to lead the board in its fundamental role of providing advice to and independent oversight of
management. The chair meets and confers regularly between board meetings with the chief executive officer and consults with the chief
executive officer regarding the board meeting agendas, the quality and flow of information provided to the board, and the effectiveness of
the board meeting process. The board believes this split structure recognizes the time, effort, and energy the chief executive officer is
required to devote to the position in the current business environment as well as the commitment required to serve as the chair, particularly
as the board’s oversight responsibilities continue to grow and demand more time and attention. The fundamental role of the board of
directors is to provide oversight of the management of the company in good faith and in the best interests of the company and its
stockholders. Having an independent chair is a means to ensure the chief executive officer is accountable for managing the company in
close alignment with the interests of stockholders including with respect to risk management as discussed below. An independent chair is in
a position to encourage frank and lively discussions including during regularly scheduled executive sessions consisting of only independent
directors and to assure that the company has adequately assessed all appropriate business risks before adopting its final business plans and
strategies. The board believes that having separate positions and having an independent outside director serve as chair is the appropriate
leadership structure for the company at this time and demonstrates our commitment to good corporate governance.

Board’s Role in Risk Oversight

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks,
including economic risks, strategic risks, operational risks, environmental and regulatory risks, competitive risks, climate and weather
conditions, pension plan obligations, cyberattacks or acts of terrorism, and third party liabilities. The board, as a whole and through its
committees, has responsibility for the oversight of risk management. In its risk oversight role, the board of directors has the responsibility to
satisfy itself that the risk management processes designed and implemented by management are adequate for identifying, assessing, and
managing risk. Management is responsible for identifying material risks, implementing appropriate risk management and mitigation
strategies, and providing information regarding material risks and risk management and mitigation to the board.

The board believes establishing the right “tone at the top” and full and open communication between management and the board of
directors are essential for effective risk management and oversight. Our chair meets regularly with our chief executive officer to discuss
strategy and risks facing the company. The chair of the board and chairs of each of the board’s standing committees meet quarterly with our
chief executive officer, chief financial officer, and general counsel to discuss risks and presentations to the board regarding risks. Senior
management attends the quarterly board meetings and is available to address questions or concerns raised by the board on risk
management-related and any other matters. Each quarter, the board of directors and its applicable committees receive presentations from
senior management on enterprise risk management issues and strategic matters involving our operations. Senior management annually
presents an assessment to the board of critical enterprise risks that threaten the company’s strategy and business model, including risks
inherent in the key assumptions underlying the company’s business strategy for value creation. Periodically, the board receives presentations
from external experts on matters of strategic importance to the board. At least annually, the board holds strategic planning sessions with
senior management to discuss strategies, key challenges, and risks and opportunities for the company.

MDU Resources Group, Inc. Proxy Statement 27

Proxy Statement

The Board

While the board is ultimately responsible for risk oversight at our company, our standing board committees assist
the board in fulfilling its oversight responsibilities in certain areas of risk.

Audit Committee

Compensation Committee

Nominating and Governance
Committee

Environmental and
Sustainability Committee

Risk Oversight Responsibilities

ü Financial Reporting

ü Executive Compensation

ü Board Organization

ü Environmental

ü Internal Controls

ü Incentive Plans

ü Board Membership and

Structure

ü Health and Safety

ü Cybersecurity

ü Conflicts of Interest

Assessment

ü Succession Planning

ü Social Sustainability

ü Compliance with Legal and

Regulatory Requirements ü Director Compensation

Policy

ü Corporate Governance

ü Climate Change Risks

Management

The management policy committee meets monthly, or more frequently as warranted, to receive reports from each
business unit on safety, operations, business development, and to discuss the company’s challenges and
opportunities. Reports are also provided by the company’s financial, human resources, legal, and enterprise
information technology departments. Special presentations are made by other employees on matters that affect
the company’s operations. The company has also developed a robust compliance program to promote a culture of
compliance, consistent with the right “tone at the top,” to mitigate risk. The program includes training and
adherence to our code of conduct and legal compliance guide. We further mitigate risk through our internal audit
and legal departments.

• Audit Committee. The audit committee assists the board in fulfilling its oversight responsibilities with respect to risk management in a

general manner and specifically in the areas of financial reporting, internal controls, cybersecurity, compliance with legal and regulatory
requirements, and related person transactions, and, in accordance with NYSE requirements, discusses with the board policies with
respect to risk assessment and risk management and their adequacy and effectiveness. The audit committee receives regular reports on
the company’s compliance program, including reports received through our anonymous reporting hotline. It also receives reports and
regularly meets with the company’s external and internal auditors. During its quarterly meetings in 2021, the audit committee received
presentations or reports from management on cybersecurity and the company’s mitigation of cybersecurity risks as well as assessment and
mitigation reports on other compliance and risk-related topics. The entire board was present for the presentations and had access to the
reports. This opens the opportunity for discussions about areas where the company may have material risk exposure, steps taken to
manage such exposure, and the company’s risk tolerance in relation to company strategy. The audit committee reports regularly to the
board of directors on the company’s management of risks in the audit committee’s areas of responsibility.

• Compensation Committee. The compensation committee assists the board in fulfilling its oversight responsibilities with respect to the

management of risks arising from our compensation policies and programs.

• Nominating and Governance Committee. The nominating and governance committee assists the board in fulfilling its oversight

responsibilities with respect to the management of risks associated with board organization, board membership and structure, succession
planning for our directors and executive officers, and corporate governance.

28 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

• Environmental and Sustainability Committee. The environmental and sustainability committee assists the board in fulfilling its oversight

responsibilities with respect to the management of risks related to environmental, human capital management, health, safety, and other
social and sustainability matters that fundamentally affect the company’s business interests and long-term viability. The environmental
and sustainability committee responsibilities include reviewing significant risks and exposures to the company regarding current and
emerging environmental and social sustainability matters, including climate change risks, and discussing with management and
overseeing actions taken by the company in response thereto. The environmental and sustainability committee also reviews the company’s
efforts to integrate social, environmental, and economic principles, including climate change, greenhouse gas emissions management,
energy, water, and waste management, product and service quality, reliability, customer care and satisfaction, public perception, and
company reputation, into the company’s strategy and operations.

Board Meetings and Committees

During 2021, the board of directors held four regular meetings and one special meeting. Each director attended at least 75% of the
combined total meetings of the board and the committees on which the director served during 2021, in each case, during the time period
which each director served. Directors are encouraged to attend our annual meeting of stockholders. All directors participated in person or by
teleconference at our 2021 Annual Meeting of Stockholders.

The board has standing audit, compensation, nominating and governance, and environmental and sustainability committees which meet at
least quarterly. The table below provides current committee membership.

Name

Thomas Everist

Karen B. Fagg

Patricia L. Moss

Dale S. Rosenthal

Edward A. Ryan

David M. Sparby

Chenxi Wang

C - Chair

● - Member

Audit
Committee

Compensation
Committee

Nominating and
Governance Committee

Environmental and
Sustainability Committee

●

●
C

●

●
C

●

Below is a description of each standing committee of the board. The board has affirmatively determined that each of these standing
committees consists entirely of independent directors pursuant to rules established by the NYSE, rules promulgated under the Securities
and Exchange Commission (SEC), and the director independence standards established by the board. The board has also determined that
each member of the audit committee and the compensation committee is independent under the criteria established by the NYSE and the
SEC for audit committee and compensation committee members, as applicable.

Nominating and Governance Committee

Met Four Times in 2021

The nominating and governance committee met four times during 2021. The current committee members are Edward A. Ryan, chair,
Thomas Everist, and Dale S. Rosenthal.

The nominating and governance committee is governed by a written charter and provides recommendations to the board with respect to:

• board organization, membership, and function;

• committee structure and membership;

• succession planning for our executive management and directors; and

• our corporate governance guidelines.

The nominating and governance committee assists the board in overseeing the management of risks in the committee’s areas of
responsibility.

MDU Resources Group, Inc. Proxy Statement 29

Proxy Statement

The committee identifies individuals qualified to become directors and recommends to the board the director nominees for the next annual
meeting of stockholders. The committee also identifies and recommends to the board individuals qualified to become our principal officers
and the nominees for membership on each board committee. The committee oversees the evaluation of the board and management.

In identifying nominees for director, the committee consults with board members, management, executive search firms, consultants,
organizational representatives, and other individuals likely to possess an understanding of our business and knowledge concerning suitable
director candidates.

In evaluating director candidates, the committee, in accordance with our corporate governance guidelines, considers an individual’s:

• background, character, and experience, including experience relative to our company’s lines of business;

• skills and experience which complement the skills and experience of current board members;

• success in the individual’s chosen field of endeavor;

• skill in the areas of accounting and financial management, banking, business management, human resources, marketing, operations,

public affairs, law, technology, risk management, and governance;

• background in publicly traded companies, including service on other public company boards of directors;

• geographic area of residence;

• business and professional experience, skills, gender, and ethnic background, as appropriate in light of the current composition and needs

of the board;

• independence, including any affiliation or relationship with other groups, organizations, or entities; and

• compliance with applicable law and applicable corporate governance, code of conduct and ethics, conflict of interest, corporate

opportunities, confidentiality, stock ownership and trading policies, and other policies and guidelines of the company.

In addition, our bylaws contain requirements that a person must meet to qualify for service as a director.

The nominating and governance committee assesses these considerations annually in connection with the nomination of directors for
election at the annual meeting of stockholders. The committee seeks a collective background of board members to provide a portfolio of
experience and knowledge that serves the company’s governance and strategic needs and best perpetrates our long-term success. Directors
should have demonstrated experience and knowledge that is relevant to the board’s oversight role of the company’s business. The
nominating and governance committee also considers the board’s diversity in recommending nominees, including diversity of experience,
expertise, ethnicity, gender, and geography. The composition of the current board and the board nominees reflects diversity in business and
professional experience, skills, ethnicity, gender, and geography.

Audit Committee

Met Eight Times in 2021

The audit committee is a separately-designated committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange
Act of 1934 and is governed by a written charter.

The audit committee met eight times during 2021. The current audit committee members are David M. Sparby, chair, Dale S. Rosenthal,
Edward A. Ryan, and Chenxi Wang. The board of directors determined that Mr. Sparby and Ms. Rosenthal are “audit committee financial
experts” as defined by SEC rules, and all audit committee members are financially literate within the meaning of the listing standards of the
NYSE. All members also meet the independence standard for audit committee members under our director independence guidelines, the
NYSE listing standards, and SEC rules.

The audit committee assists the board of directors in fulfilling its oversight responsibilities to the stockholders and serves as a
communication link among the board, management, the independent registered public accounting firm, and the internal auditors. The
committee reviews and discusses with management and the independent auditors, before filing with the SEC, the annual audited financial
statements and quarterly financial statements. The audit committee also:

30 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

• assists the board’s oversight of:

◦

the integrity of our financial statements and system of internal controls;

the company’s compliance with legal and regulatory requirements and the code of conduct;

discussions with management regarding the company’s earnings releases and guidance;

the independent registered public accounting firm’s qualifications and independence;

the appointment, compensation, retention, and oversight of the work of the independent registered public accounting firm;

the performance of our internal audit function and independent registered public accounting firm; and

◦ management of risk in the audit committee’s areas of responsibility, including cybersecurity, financial reporting, legal and regulatory

compliance, and internal controls.

• arranges for the preparation of and approves the report that SEC rules require we include in our annual proxy statement. See the section

entitled “Audit Committee Report” for further information.

Compensation Committee

Met Five Times in 2021

During 2021, the compensation committee met five times. The compensation committee consists entirely of independent directors within
the meaning of the company’s corporate governance guidelines and the NYSE listing standards and who meet the definitions of non-
employee directors for purposes of Rule 16-b under the Exchange Act. Current members of the compensation committee are Karen B. Fagg,
chair, Thomas Everist, and Patricia L. Moss.

The compensation committee is governed by a written charter and assists the board of directors in fulfilling its responsibilities relating to the
company’s compensation policies and programs. It has direct responsibility for determining compensation for our Section 16 officers and for
overseeing the company’s management of compensation risk in its areas of responsibility. The compensation committee also reviews and
recommends any changes to director compensation policies to the board of directors. The authority and responsibility of the compensation
committee is outlined in the compensation committee’s charter.

The compensation committee uses analysis and recommendations from outside consultants, the chief executive officer, and the human
resources department in making its compensation decisions. The chief executive officer, the chief human resources officer, and the general
counsel regularly attend compensation committee meetings. The committee meets in executive session as needed. The processes and
procedures for consideration and determination of compensation of the Section 16 officers as well as the role of our executive officers are
discussed in the “Compensation Discussion and Analysis.”

The compensation committee has sole authority to retain compensation consultants, legal counsel, or other advisers to assist in its duties.
The committee is directly responsible for the appointment, compensation, and oversight of the work of such advisers. The compensation
committee retained an independent compensation consultant, Meridian Compensation Partners, LLC (Meridian), to conduct a competitive
analysis on executive compensation for 2021 and an analysis of CEO pay and performance. Prior to retaining an adviser, the compensation
committee considered relevant factors to ensure the adviser’s independence from management. Annually the compensation committee
conducts a potential conflicts of interest assessment raised by the work of any compensation consultant and how such conflicts, if any,
should be addressed. The compensation committee requested and received information from Meridian to assist in its potential conflicts of
interest assessment. Based on its review and analysis, the compensation committee determined in 2021 that Meridian was independent
from management. Meridian does not provide any services other than consultation services to the compensation committee on executive and
director compensation matters. Meridian reports directly to the compensation committee and not to management. Meridian participated in
executive sessions with the compensation committee without members of management present.

The board of directors determines compensation for our non-employee directors based upon recommendations from the compensation
committee. In 2021, the compensation committee retained Meridian to conduct an analysis of the company’s compensation for non-
employee directors.

MDU Resources Group, Inc. Proxy Statement 31

Proxy Statement

Environmental and Sustainability Committee

Met Four Times in 2021

The environmental and sustainability committee was formed by the board of directors in May 2019 and met four times during 2021. The
committee is governed by a written charter and consists entirely of independent directors within the meaning of the company’s corporate
governance guidelines and the listing standards of the NYSE. The current members of the committee are Patricia L. Moss, chair, Karen B.
Fagg, David M. Sparby, and Chenxi Wang.

The environmental and sustainability committee oversees and provides recommendations to the board with respect to the company’s
policies, strategies, public policy positions, programs, and performance related to environmental, workplace health, safety, human capital,
and other social sustainability matters that fundamentally affect the company’s business interests and long-term viability. The
environmental and sustainability committee:

• reviews significant risks and exposures regarding current and emerging environmental and social sustainability matters, including climate

change risks, and discusses with management and oversees actions taken by the company in response to such risks and exposures;

• reviews the company’s environmental and social sustainability strategies, policies, and performance;

• reviews human capital management related to the company’s operations, including employee recruitment and retention, training,

wellness, gender pay equity, diversity, and inclusion;

• reviews any fatality, serious injury, or illness involving an employee, customer, contractor, or third-party occurring in connection with the

company’s operations;

• reviews any material noncompliance by the company with environmental, health, and safety laws and regulations;

• reviews the company’s efforts to integrate social, environmental, and economic principles, including climate change, greenhouse gas

emissions management, energy, water and waste management, product and service quality, reliability, customer care and satisfaction,
public perception, and company reputation with and into the company’s strategy and operations;

• reviews the company’s communication strategy and significant public disclosures relating to environmental and social sustainability

matters;

• considers and advises the compensation committee on the company’s performance with respect to incentive compensation metrics

relating to environmental and social sustainability matters;

• reports to, advises, and makes recommendations to the board on environmental and social sustainability matters affecting the company;

and

• reviews stockholder proposals related to environmental and social sustainability matters.

Stockholder Communications with the Board

Stockholders and other interested parties who wish to contact the board of directors or any individual director, including our non-employee
chair or non-employee directors as a group, should address a communication in care of the secretary at MDU Resources Group, Inc.,
P.O. Box 5650, Bismarck, ND 58506-5650. The secretary will forward all communications.

Additional Governance Features

Board and Committee Evaluations
Our corporate governance guidelines provide that the board of directors, in coordination with the nominating and governance committee,
will annually review and evaluate the performance and functioning of the board and its committees. The self-evaluations are intended
to facilitate a candid assessment and discussion by the board and each committee of its effectiveness as a group in fulfilling its
responsibilities, its performance as measured against the corporate governance guidelines, and areas for improvement. The board and
committee members are provided with a questionnaire to facilitate discussion with follow-up interviews by the chair of the nominating and
governance committee. The results of the evaluations are reviewed and discussed in executive sessions of the committees and the board of
directors. For more detail on our board evaluation process, see “Board Evaluations and Process for Selecting Directors” in the section
entitled “Board of Directors.”

32 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Executive Sessions of the Independent Directors
The non-employee directors meet in executive session at each regularly scheduled quarterly board of directors meeting. The chair of the
board presides at the executive session of the non-employee directors.

Director Resignation Upon Change of Job Responsibility
Our corporate governance guidelines require a director to tender his or her resignation after a material change in job responsibility. In 2021,
no directors submitted resignations under this requirement.

Majority Voting in Uncontested Director Elections
Our corporate governance guidelines require that in uncontested elections (those where the number of nominees does not exceed the
number of directors to be elected), director nominees must receive the affirmative vote of a majority of the votes cast to be elected to our
board of directors. Contested director elections (those where the number of director nominees exceeds the number of directors to be
elected) are governed by a plurality of the vote of shares present in person or represented by proxy at the meeting.

The board has adopted a director resignation policy for incumbent directors in uncontested elections. Any proposed nominee for re-election
as a director shall, before he or she is nominated to serve on the board, tender to the board his or her irrevocable resignation that will be
effective, in an uncontested election of directors only, upon (i) such nominee’s receipt of a greater number of votes “against” election than
votes “for” election at our annual meeting of stockholders; and (ii) acceptance of such resignation by the board of directors.

Director Overboarding Policy
Our bylaws and corporate governance guidelines state that a director may not serve on more than two other public company boards.
Currently, all of our directors are in compliance with this policy.

Board Refreshment
Recognizing the importance of board composition and refreshment for effective oversight, the nominating and governance committee
annually considers the composition and needs of the board of directors, reviews potential candidates, and recommends to the board
nominees for appointment or election. The nominating and governance committee and the board are committed to identifying individuals
with diverse backgrounds whose skills and experiences will enable them to make meaningful contributions to shaping the company’s
business strategy and priorities. To further board refreshment efforts, the nominating and governance committee engaged an independent
global search firm in 2021 to assist with identifying, evaluating and recruiting a diverse pool of potential director candidates. As part of its
consideration of director succession, the nominating and governance committee from time to time reviews, including when considering
potential candidates, the appropriate skills and characteristics required of board members. The board considers diversity of skills, expertise,
race, ethnicity, gender, age, education, geography, cultural background, and professional experiences in evaluating board candidates for
expected contributions to an effective board. Independent directors may not serve on the board beyond the next annual meeting of
stockholders after attaining the age of 76. Given the breadth of our businesses, we believe the mandatory retirement age allows us to benefit
from experienced directors, with industry expertise, company institutional knowledge and historical perspective, stability, and comfort with
challenging company management, while maintaining our ability to refresh the board through the addition of new members. Mr. Sparby and
Mr. Ryan joined the board in 2018; Ms. Wang joined the board in 2019; and Ms. Rosenthal joined the board in 2021.

Our corporate governance guidelines include our policy on consideration of director candidates recommended to us. We will consider
candidates that our stockholders recommend in the same manner we consider other nominees. Stockholders who wish to recommend a
director candidate may submit recommendations, along with the information set forth in the guidelines, to the nominating and governance
committee chair in care of the secretary at MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506-5650.

Stockholders who wish to nominate persons for election to our board at an annual meeting of stockholders must follow the applicable
procedures set forth in Section 2.08 or 2.10 of our bylaws. Our bylaws are available on our website. See “Stockholder Proposals, Director
Nominations, and Other Items of Business for 2023 Annual Meeting” in the section entitled “Information about the Annual Meeting” for
further details.

Prohibitions on Hedging/Pledging Company Stock
The director compensation policy prohibits directors from hedging their ownership of common stock, pledging company stock as collateral
for a loan, or holding company stock in an account that is subject to a margin call. The executive compensation policy prohibits executives
from hedging their ownership of common stock, pledging company stock as collateral for a loan, or holding company stock in an account
that is subject to a margin call.

MDU Resources Group, Inc. Proxy Statement 33

Proxy Statement

Code of Conduct
We have a code of conduct and ethics, which we refer to as the Leading With Integrity Guide. It applies to all directors, officers, and
employees. The Leading With Integrity Guide defines our values, our culture, and our commitments to stakeholders while setting
expectations of employee conduct for legal and ethical compliance. We also have a Vendor Code of Conduct setting forth our expectations of
vendors including ethical business practices, workplace safety, environmental stewardship, and compliance with applicable laws and
regulations. Our Vendor Code of Conduct is available on our company website, which is not part of this proxy statement and is not
incorporated by reference into this proxy statement.

We intend to satisfy our disclosure obligations regarding amendments to, or waivers of, any provision of the code of conduct that applies to
our principal executive officer, principal financial officer, and principal accounting officer, and that relates to any element of the code of
ethics definition in Regulation S-K, Item 406(b), and waivers of the code of conduct for our directors or executive officers, as required by
NYSE listing standards, by posting such information on our website.

Proxy Access
Our bylaws allow stockholders to nominate directors for inclusion in our proxy statement subject to the following parameters:

Ownership Threshold:

3% of outstanding shares of our common stock

Nominating Group Size:

Up to 20 stockholders may combine to reach the 3% ownership threshold

Holding Period:

Continuously for three years

Number of Nominees:

The greater of two nominees or 20% of our board

We believe these proxy access parameters reflect a well-designed and balanced approach to proxy access that mitigates the risk of abuse
and protects the interests of all of our stockholders. Stockholders who wish to nominate directors for inclusion in our Proxy Statement in
accordance with proxy access must follow the procedures in Section 2.10 of our bylaws. See “Stockholder Proposals, Director Nominations,
and Other Items of Business for 2023 Annual Meeting.”

Cybersecurity Oversight
The audit committee reviewed reports and received presentations at each of its regular quarterly meetings in 2021 concerning cybersecurity-
related issues including information security, technology risks, and risk mitigation programs. All members of the board of directors received
copies of reports and were present during the presentations. In 2014, the board established a Cyber Risk Oversight Committee (CYROC)
consisting of the company’s chief information officer and chief financial officer as well as financial and information technology leaders from
each of the company’s business segments. The CYROC provides management and the audit committee with analyses, appraisals,
recommendations, and pertinent information concerning cyber defense of the company’s electronic information, information technology, and
operation technology systems. The company has implemented a cybersecurity training and compliance program to facilitate initial and
continuing education for employees who have contact or potential contact with the company’s data. External reviews are conducted to
assess company information security programs and practices, including incident management, service continuity, and information security
compliance programs. The company has not had an indication of a material cybersecurity breach and has not incurred any expenses,
penalties, or settlements arising from a material cybersecurity breach. The company maintains a cyber liability insurance policy providing
insurance coverage within the policy limits for liability losses and business interruption events arising from a material cybersecurity breach.
The audit committee receives periodic briefings concerning cybersecurity, information security, technology risks, and risk mitigation
programs.

Corporate Governance Materials

Stockholders can see our bylaws, corporate governance guidelines, board committee charters, and Leading With Integrity Guide on our
website. The information on our website is not part of this Proxy Statement and is not incorporated by reference as part of this Proxy
Statement.

Corporate Governance Materials

Website

• Bylaws

investor.mdu.com/governance/governance-documents

• Corporate Governance Guidelines

investor.mdu.com/governance/governance-documents

• Board Committee Charters for the Audit, Compensation,
Nominating and Governance, and Environmental and
Sustainability Committees

investor.mdu.com/governance/governance-documents

• Leading With Integrity Guide

www.mdu.com/about-us/integrity

34 MDU Resources Group, Inc. Proxy Statement

Related Person Transaction Disclosure

The board of directors’ policy for the review of related person transactions is contained in our corporate governance guidelines. The policy
requires the audit committee to review any proposed transaction, arrangement or relationship, or series thereof:

Proxy Statement

• in which the company was or will be a participant;

• the amount involved exceeds $120,000; and

• a related person had or will have a direct or indirect material interest.

Prior to the company entering into a related person transaction that would be required to be disclosed under the SEC rules, the audit
committee will, after a reasonable prior review and consideration of the material facts and circumstances, make a determination or
recommendation to the board and appropriate officers of the company with respect to the transactions as the audit committee deems
appropriate. The committee will prohibit any such related person transaction if it determines it to be inconsistent with the best interests of
the company and its stockholders.

Related persons are directors, director nominees, executive officers, holders of 5% or more of our voting stock, and their immediate family
members. Related persons are required promptly to report to our general counsel all proposed or existing related person transactions in
which they are involved.

We had no related person transactions in 2021.

MDU Resources Group, Inc. Proxy Statement 35

Proxy Statement

COMPENSATION OF NON-EMPLOYEE DIRECTORS

Director Compensation for 2021

MDU Resources’ non-employee directors are compensated for their service according to the MDU Resources Group Inc. Director
Compensation Policy. Only one company employee, David L. Goodin, the company’s president and chief executive officer, serves as a
director. Mr. Goodin receives no additional compensation for his service on the board. Director compensation is reviewed annually by the
compensation committee. The committee’s independent consultant provided an analysis of the company’s director compensation for 2021.
The analysis included research on market trends in director compensation as well as a review of director compensation practices of
companies in our compensation peer group. The independent compensation consultant, Meridian Compensation Partners, LLC, prepared a
report on director compensation which indicated the company’s average annual cash and equity compensation for the company’s non-
employee directors was below the 25th percentile of the company’s peer group. The compensation committee and board concurred with the
independent compensation consultant’s recommendations and adjusted the annual compensation of non-executive directors effective
June 1, 2021 as follows:

Base Cash Retainer

Additional Cash Retainers:

Non-Executive Chair

Audit Committee Chair

Compensation Committee Chair

Nominating and Governance Committee Chair

Environmental and Sustainability Committee Chair
Annual Stock Grant1 - Directors (other than Non-Executive Chair)
Annual Stock Grant2 - Non-Executive Chair

Prior to June 1, 2021

Effective June 1, 2021

$85,000

$100,000

95,000

20,000

15,000

125,000

150,000

112,500

20,000

15,000

140,000

165,000

1 The annual stock grant is a grant of shares of company common stock equal in value to $140,000.
2 The annual stock grant is a grant of shares of company common stock equal in value to $165,000.

There are no meeting fees paid to directors.

36 MDU Resources Group, Inc. Proxy Statement

The following table outlines the compensation paid to our non-employee directors for 2021.

Name

Thomas Everist

Karen B. Fagg

Mark A. Hellerstein3

Dennis W. Johnson

Patricia L. Moss

Dale S. Rosenthal4

Edward A. Ryan5

David M. Sparby

Chenxi Wang

John K. Wilson3

Fees Earned or
Paid in Cash
($)

93,750

108,750

35,417

198,958

102,500

65,417

108,750

113,750

93,750

41,667

Stock
Awards
($)1

140,000

58,333

165,000

140,000

93,333

140,000

58,333

Proxy Statement

All Other
Compensation
($)2

5,103

3,703

3,643

5,103

2,603

5,103

103

3,643

Total
($)

238,853

252,453

97,393

369,061

245,103

158,819

253,853

258,853

233,853

103,643

1 Directors receive an annual payment of $140,000 in company common stock, except the non-executive chair who receives $165,000 in company
common stock, under the MDU Resources Group, Inc. Non-Employee Director Long-Term Incentive Compensation Plan. Directors serving less than
a full year receive a prorated stock payment based on the number of months served. All stock payments are measured in accordance with generally
accepted accounting principles for stock-based compensation in Accounting Standards Codification Topic 718. The grant date fair value is based
on the purchase price of our common stock on the grant date of November 16, 2021, which was $28.98 per share. The amount paid in cash for
fractional shares is included in the amount reported in the stock awards column to this table.

2 Includes group life insurance premiums and charitable donations made on behalf of the director as applicable. Amounts for life insurance

premiums reflect prorated amounts for directors serving less than a full year based on the number of months served.

3 Messrs. Hellerstein and Wilson did not stand for reelection to the board. Their terms expired on May 11, 2021, the date of the company’s 2021

Annual Meeting of Stockholders.

4 Ms. Rosenthal was elected to the board on May 11, 2021 at the 2021 Annual Meeting of Stockholders.

5 Mr. Ryan elected to receive shares of our common stock in lieu of $43,500 of his fees earned in cash. He received a total of 1,411 shares of

company common stock which was purchased during 2021 on March 31, June 30, September 30, and December 31 at market prices of $31.30,
$31.03, $30.03, and $30.85, respectively.

Other Compensation
In addition to liability insurance, we maintain group life insurance in the amount of $100,000 on each non-employee director for the
benefit of their beneficiaries during the time they serve on the board. The annual cost per director is $103.20. Directors who contribute to
the company’s Good Government Fund may designate, dependent on the amount of their contribution, up to four charities to receive
donations from the company to match the director’s contributions to the Good Government Fund. Directors are reimbursed for all reasonable
travel expenses, including spousal expenses in connection with attendance at meetings of the board and its committees. Perquisites, if any,
were below the disclosure threshold in 2021.

Deferral of Compensation
Directors may defer all or any portion of the annual cash retainer and any other cash compensation paid for service as a director pursuant to
the Deferred Compensation Plan for Directors. Deferred amounts are held as phantom stock with dividend accruals and are paid out in cash
over a five-year period after the director leaves the board. For directors who participated in the post-retirement income plan for directors
before its termination in May 2001, the net present value of each director’s benefit was calculated and converted into phantom stock which
will be paid pursuant to the Deferred Compensation Plan for Directors.

MDU Resources Group, Inc. Proxy Statement 37

Proxy Statement

Stock Ownership Policy
Our director stock ownership policy contained in our corporate governance guidelines requires each director to beneficially own our common
stock equal in value to five times the director’s annual cash base retainer. Shares acquired through purchases on the open market and
received through our Non-Employee Director Long-Term Incentive Compensation Plan are considered in ownership calculations as well as
other beneficial ownership of our common stock by a spouse or other immediate family member residing in the director’s household. A
director is allowed five years commencing January 1 of the year following the year of the director’s initial election to the board to meet the
requirements. The level of common stock ownership is monitored with an annual report made to the compensation committee of the board.
All directors are in compliance with the stock ownership policy or are within the first five years of their election to the board. For further
details on our director’s stock ownership, see the section entitled “Security Ownership.”

38 MDU Resources Group, Inc. Proxy Statement

SECURITY OWNERSHIP

Security Ownership Table

The table below sets forth the number of shares of our common stock that each director, each named executive officer, and all directors and
executive officers as a group owned beneficially as of February 28, 2022. Unless otherwise indicated, each person has sole investment and
voting power (or share such power with his or her spouse) of the shares noted.

Proxy Statement

Name1

David C. Barney

Thomas Everist

Karen B. Fagg

David L. Goodin

Dennis W. Johnson

Nicole A. Kivisto

Patricia L. Moss

Dale S. Rosenthal

Edward A. Ryan

David M. Sparby

Jeffrey S. Thiede

Jason L. Vollmer

Chenxi Wang

All directors and executive officers as a group (18 in number)

Shares of
Common Stock
Beneficially Owned

Percent
of Class

88,294 2,3

662,256

87,931
296,021 2
120,170 4
89,204 2,5

88,816

3,220

31,823

30,559
100,733 2
48,912 2

12,609
1,800,586 2,6

* Less than one percent of the class. Percent of class is calculated based on 203,350,740 outstanding shares as of February 28, 2022.
1 The table includes the ownership of all current directors, named executive officers, and other executive officers of the company without naming

them.

2 Includes full shares allocated to the officer’s account in our 401(k) retirement plan.
3 The total includes 687 shares owned by Mr. Barney’s spouse.
4 Mr. Johnson disclaims all beneficial ownership of the 163 shares owned by his spouse.
5 The total includes 531 shares owned by Ms. Kivisto’s spouse.
6 Includes shares owned by a director’s or executive’s spouse regardless of whether the director or executive claims beneficial ownership.

Hedging Policy

The company’s Director Compensation Policy and its Executive Compensation Policy prohibit our directors and executives from hedging their
ownership of company stock. The Director Compensation Policy applies to all directors who are not full-time employees of the company. The
Executive Compensation Policy applies to the executives of the company designated as an officer for purposes of Section 16 of the
Securities Exchange Act of 1934 as well as all other executives of the company and its subsidiaries who participate in its Long-Term
Performance-Based Incentive Plan and its Executive Incentive Compensation Plan. Under the policies, directors and executives are
prohibited from engaging in transactions that allow them to own stock technically but without the full benefits and risks of such ownership,
including, but not limited to, zero-cost collars, equity swaps, straddles, prepaid variable forward contracts, security futures contracts,
exchange funds, forward sale contracts, and other financial transactions that allow the director or executive to benefit from the devaluation
of the company’s stock.

The company policies also prohibit directors, executives, and related persons from holding company stock in a margin account, with certain
exceptions, or pledging company securities as collateral for a loan. Company common stock may be held in a margin brokerage account only
if the stock is explicitly excluded from any margin, pledge, or security provisions of the customer agreement. “Related person” means an
executive officer’s or director’s spouse, minor child, and any person (other than a tenant or domestic employee) sharing the household of a
director or executive officer as well as any entities over which a director or executive officer exercises control.

MDU Resources Group, Inc. Proxy Statement 39

Proxy Statement

Greater Than 5% Beneficial Owners

Based solely on filings with the SEC, the table below shows information regarding the beneficial ownership of more than 5% of the
outstanding shares of our common stock.

Title of Class

Common Stock

Name and Address
of Beneficial Owner

The Vanguard Group

100 Vanguard Blvd.

Malvern, PA 19355

BlackRock, Inc.

55 East 52nd Street

New York, NY 10055

State Street Corporation

State Street Financial Center

One Lincoln Street

Boston, MA 02111

Amount and Nature
of Beneficial Ownership

22,537,128 1

Percent
of Class

11.08%

18,020,281 2

8.90%

13,751,230 3

6.76%

1 Based solely on the Schedule 13G, Amendment No. 10, filed on February 9, 2022, The Vanguard Group reported sole dispositive power
with respect to 22,262,310 shares, shared dispositive power with respect to 274,818 shares, and shared voting power with respect to
96,425 shares.

2 Based solely on the Schedule 13G, Amendment No. 13, filed on February 1, 2022, BlackRock, Inc. reported sole voting power with

respect to 17,090,854 shares and sole dispositive power with respect to 18,020,281 shares as the parent holding company or control
person of BlackRock Life Limited; Aperio Group, LLC; BlackRock Advisors, LLC; BlackRock (Netherlands) B.V.; BlackRock Fund
Advisors; BlackRock Institutional Trust Company, National Association; BlackRock Asset Management Ireland Limited; BlackRock
Financial Management, Inc.; BlackRock Asset Management Schweiz AG; BlackRock Investment Management, LLC; BlackRock
Investment Management (UK) Limited; BlackRock Asset Management Canada Limited; BlackRock (Luxembourg) S.A., BlackRock
Investment Management (Australia) Limited; BlackRock Advisors (UK) Limited; and BlackRock Fund Managers Ltd.

3 Based solely on the Schedule 13G, filed on February 11, 2022, State Street Corporation reported shared voting power with respect to

13,355,385 shares and shared dispositive power with respect to 13,751,230 shares as the parent holding company or control person of
SSGA Funds Management, Inc.; State Street Global Advisors, Limited; State Street Global Advisors, LTD; State Street Global Advisors
Europe Limited; State Street Global Advisors, Australia, Limited; State Street Global Advisors Asia, Limited; and State Street Global
Advisors Trust Company.

Delinquent Section 16(a) Reports

Section 16 of the Securities Exchange Act of 1934, as amended, requires officers, directors, and holders of more than 10% of our common
stock to file reports of their trading in our equity securities with the SEC. Based solely on a review of Forms 3, 4, and 5, and any
amendments to these forms furnished to us during and with respect to 2021, or written representations that no Forms 5 were required, all
such reports were timely filed, except for Forms 4 for David L. Goodin, David C. Barney, Stephanie A. Barth, Trevor J. Hastings, Anne M.
Jones, Nicole A. Kivisto, Karl A. Liepitz, Margaret (Peggy) A. Link, Jeffrey S. Thiede, and Jason L. Vollmer in February 2021 related to the
award of restricted stock units that vest on December 31, 2023.

40 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

EXECUTIVE COMPENSATION

ITEM 2. ADVISORY VOTE TO APPROVE THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE
OFFICERS

In accordance with Section 14A of the Securities Exchange Act of 1934 and Rule 14a-21(a), we are asking our stockholders to approve, in
an advisory vote, the compensation of our named executive officers as disclosed in this Proxy Statement pursuant to Item 402 of Regulation
S-K. As discussed in the Compensation Discussion and Analysis, the compensation committee and board of directors believe the current
executive compensation program directly links compensation of the named executive officers to our financial performance and aligns the
interests of the named executive officers with those of our stockholders. The compensation committee and board of directors also believe
the executive compensation program provides the named executive officers with a balanced compensation package that includes an
appropriate base salary along with competitive annual and long-term incentive compensation targets. These incentive programs are designed
to reward the named executive officers on both an annual and long-term basis if they attain specified goals.

Our overall compensation program and philosophy for 2021 was built on a foundation of these guiding principles:

• we pay for performance, with nearly 58% of our 2021 total target direct compensation for the named executive officers in the form of

performance-based incentive compensation;

• we review competitive compensation data for the named executive officers, to the extent available, and incorporate internal equity in the

final determination of target compensation levels;

• we align executive compensation and performance by using annual performance incentives based on criteria that are important to

stockholder value, including earnings, earnings per share, and earnings before interest, taxes, depreciation, and amortization (EBITDA);
and

• we align executive compensation and performance by using long-term performance incentives based on total stockholder return relative to

our peer group and financial measures important to company growth.

We are asking our stockholders to indicate their approval of our named executive officer compensation as disclosed in this Proxy Statement,
including the Compensation Discussion and Analysis, the executive compensation tables, and narrative discussion. This vote is not intended
to address any specific item of compensation, but rather the overall compensation of our named executive officers for 2021. Accordingly,
the following resolution is submitted for stockholder vote at the 2022 Annual Meeting of Stockholders:

“RESOLVED, that the compensation paid to the company’s named executive officers, as disclosed pursuant to Item 402 of
Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion of this Proxy
Statement, is hereby approved.”

As this is an advisory vote, the results will not be binding on the company, the board of directors, or the compensation committee and will
not require us to take any action. The final decision on the compensation of the named executive officers remains with the compensation
committee and the board of directors, although the board and compensation committee will consider the outcome of this vote when making
future compensation decisions. We intend to hold this advisory vote every year until at least the next stockholder advisory vote on the
frequency of this vote.

The board of directors recommends a vote “for” the approval, on a non-binding

advisory basis, of the compensation of the company’s named executive officers,

as disclosed in this Proxy Statement.

Approval of the compensation of the named executive officers requires the affirmative vote of a majority of the common stock present in
person or represented by proxy at the meeting and entitled to vote on the proposal. Abstentions will count as votes against this proposal.
Broker non-vote shares are not entitled to vote on this proposal and, therefore, are not counted in the vote.

MDU Resources Group, Inc. Proxy Statement 41

Proxy Statement

INFORMATION CONCERNING EXECUTIVE OFFICERS

Information concerning the executive officers, including their ages as of December 31, 2021, present corporate positions, and business
experience during the past five years, is as follows:

Name

David L. Goodin

David C. Barney

Stephanie A. Barth

Trevor J. Hastings

Anne M. Jones

Age

Nicole A. Kivisto

Karl A. Liepitz

Margaret (Peggy) A. Link

Jeffrey S. Thiede

Jason L. Vollmer

Present Corporate Position and Business Experience

Mr. Goodin was elected president and chief executive officer of the company and a director
effective January 4, 2013. For more information about Mr. Goodin, see the section entitled
“Item 1. Election of Directors.”

Mr. Barney was elected president and chief executive officer of Knife River Corporation
effective April 30, 2013, and president effective January 1, 2012.

Ms. Barth was elected vice president, chief accounting officer and controller of the company
effective September 30, 2017. Prior to that, she was controller of the company effective
May 30, 2016, and served as vice president, treasurer and chief accounting officer of WBI
Energy, Inc. effective January 1, 2015, and controller effective September 30, 2013.

Mr. Hastings was elected president and chief executive officer of WBI Energy, Inc. effective
October 16, 2017. Prior to that, he was vice president-business development and operations
support of Knife River Corporation effective January 11, 2012.

Ms. Jones was elected vice president and chief human resources officer effective
November 11, 2021. Prior to that, she was vice president-human resources of the company,
vice president-human resources, customer service, and safety at Montana-Dakota Utilities Co.,
Great Plains Natural Gas Co., Cascade Natural Gas Corporation, and Intermountain Gas
Company effective July 1, 2013, and director of human resources for Montana-Dakota Utilities
Co. and Great Plains Natural Gas Co. effective June 2008.

Ms. Kivisto was elected president and chief executive officer of Montana-Dakota Utilities Co.,
Cascade Natural Gas Corporation, and Intermountain Gas Company effective January 9, 2015.
Prior to that, she was vice president of operations for Montana-Dakota Utilities Co. and Great
Plains Natural Gas Co. effective January 3, 2014, and vice president, controller and chief
accounting officer for the company effective February 17, 2010.

Mr. Liepitz was elected vice president, general counsel and secretary effective February 6,
2021. Prior to that, he was assistant general counsel and assistant secretary effective
January 1, 2017, and senior attorney and assistant secretary effective January 9, 2016. He
held legal positions of increasing responsibility with the company since August 2003.

Ms. Link was elected vice president and chief information officer effective December 1, 2017.
Prior to that, she was chief information officer effective January 1, 2016, assistant vice
president-technology and cybersecurity officer effective January 1, 2015, and director shared
IT services effective June 2, 2009.

Mr. Thiede was elected president and chief executive officer of MDU Construction Services
Group, Inc. effective April 30, 2013, and president effective January 1, 2012.

Mr. Vollmer was named vice president and chief financial officer effective November 23, 2020.
Prior to that, he was vice president, chief financial officer and treasurer effective
September 30, 2017, vice president, chief accounting officer and treasurer effective
March 19, 2016, treasurer and director of cash and risk management effective November 29,
2014, and manager of treasury services and risk management effective June 30, 2014.

42 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Discussion and Analysis describes how our named executive officers were compensated for 2021 and how their 2021
compensation aligns with our pay-for-performance philosophy. It also describes the oversight of the compensation committee and the
rationale and processes used to determine the 2021 compensation of our named executive officers including the objectives and specific
elements of our compensation program.

The Compensation Discussion and Analysis contains statements regarding corporate performance targets and goals. The targets and goals
are disclosed in the limited context of our compensation programs and should not be understood to be statements of management’s
expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.

Our Named Executive Officers for 2021 were:

David L. Goodin

President and Chief Executive Officer (CEO)

Jason L. Vollmer

Vice President and Chief Financial Officer (CFO)

David C. Barney

President and Chief Executive Officer - Construction Materials and Contracting Segment

Jeffrey S. Thiede

President and Chief Executive Officer - Construction Services Segment

Nicole A. Kivisto

President and Chief Executive Officer - Electric and Natural Gas Distribution Segments

Executive Summary

Compensation Committee Responsibilities and Objectives
The compensation committee is responsible for designing and approving our executive compensation program and setting compensation
opportunities for our named executive officers. The objectives of our executive compensation policy for executive officers are to:

• recruit, motivate, reward, and retain high performing executive talent required to create superior shareholder value;

• reward executives for short-term performance as well as for growth in enterprise value over the long-term;

• ensure effective utilization and development of talent by working in concert with other management processes - for example, performance

appraisal, succession planning, and management development;

• help ensure that compensation programs do not encourage or reward excessive or imprudent risk taking; and

• provide a competitive package relative to industry-specific and general industry comparisons and internal equity, as appropriate.

During 2020 the compensation committee engaged Meridian Compensation Partners, LLC (Meridian) to review our executive compensation
plans and practices. Based on this review and recommendations from Meridian, the compensation committee made the following changes to
our executive compensation practices for 2021.

MDU Resources Group, Inc. Proxy Statement 43

Proxy Statement

Prior Executive Compensation Practice

Annual
Incentive for
MDU
Resources
Group, Inc.
Corporate
Officers

The annual cash incentive award for
corporate executives was based on the
achievement of the performance measures
for each business segment executive and
weighted by each business segment’s
invested capital relative to the company’s
total invested capital.

Revised Executive
Compensation Practice

Rationale for Change

100% MDU Resources earnings per
share

• Aligns the award with overall
corporate responsibility.

Long-Term
Incentive

100% Performance Share Awards

25% Time-vesting Restricted Stock
Units
75% Performance Share Awards

Three performance measures including:
- Relative Total Stockholder Return
- EBITDA Growth
- Earnings Growth

Two performance measures including:
- Relative Total Stockholder Return
- Earnings Growth

• Eliminates complex weighting based
on invested capital to determine
payouts.

Awarding 25% of the long-term
incentive as time-vesting restricted
stock units adds a retention tool to the
long-term incentives while still
emphasizing performance through
75% performance share awards.

Eliminates the potential redundancy of
two profit-related performance
measures.
Earnings as a bottom-line performance
measure is simple and a
comprehensive profit metric.

Peer group of 21 companies for evaluation
of relative Total Stockholder Return.

Peer group expanded to selected
companies within the S&P MidCap 400
reflective of the size, value, and risk
profile of MDU Resources.

A larger, stable group lessens
aberrations.

Total Stockholder Return of MDU
Resources and peer group companies
based on single beginning and ending
period stock prices.

Total Stockholder Return of MDU
Resources and peer group companies
based on a 20-day average stock price
for beginning and ending points.

Eliminates potential aberrations due to
single day spikes or declines in stock
prices.

The above revised executive compensation practices are designed to achieve the objectives outlined in our executive compensation policy
and directly linked to our business strategy to ensure officers are focused on elements that drive our business strategy and create
stockholder value.

2022 Executive Compensation Preview
In February 2022, the board approved a performance modifier for the 2022 annual incentive award program for executive officers based
upon the company’s achievement of certain measures to attract, retain, and develop a diverse and inclusive workforce (the “DEI Modifier”).
The DEI Modifier includes a focus on representation of diverse employees in executive succession plans, outreach efforts to attract diverse
candidates for open positions at the company, implementing enhanced diversity, equity, and inclusion training and mentoring for new
employees, and development of enhanced internal employee data dashboards to further support the company’s efforts to attract, retain, and
develop a diverse and inclusive workforce.

44 MDU Resources Group, Inc. Proxy Statement

Pay for Performance
To ensure management’s interests are aligned with those of our stockholders and the performance of the company, the majority of the CEO’s
and the other named executive officers’ compensation is dependent on the achievement of company performance targets. The charts below
show the target pay mix for the CEO and average target pay mix of the other named executive officers, including base salary and the annual
and long-term incentives.

Proxy Statement

Annual Base Salary
We provide our executive officers with base salary at a sufficient level to attract and retain executives with the knowledge, skills, and
abilities necessary to successfully execute their job responsibilities. Consistent with our compensation philosophy of linking pay to
performance, our executives receive a relatively smaller percentage of their overall target compensation in the form of base salary. In
establishing base salaries, the compensation committee considers each executive’s individual performance, the scope and complexities of
their responsibilities, internal equity, and whether the base salary is competitive as measured against the base salaries of similarly situated
executives in our compensation peer group and market compensation data.

Annual Cash Incentive Awards
The 2021 annual cash incentive awards for our executive officers are linked to performance by rewarding achievement of financial goals and
ensuring our executive officers are focused and accountable for our growth and profitability. Each executive was assigned a target annual
incentive award based on a percentage of the executive’s base salary. The actual annual cash incentive realized was determined by
multiplying the target award by the payout percentage associated with the achievement of the executive’s performance measures.

Eighty percent of the annual cash incentive award for our business segment executives was based on specific business segment financial
performance measures selected by the compensation committee. The other 20% of the business segment executives’ annual incentive
award was based on the achievement of overall company earnings per share (EPS) as adjusted and as described under the Annual Cash
Incentives section in this Proxy Statement. These measures incentivize our business segment executives to focus on the success and
performance of the company and the individual business segments.

The annual cash incentive award for corporate executives (including our CEO and CFO) was 100% based on the company’s EPS as adjusted
and as described under the Annual Cash Incentives section in this Proxy Statement. This incentivizes the corporate executives to assist the
business segments in their success and further links executive pay with the performance of the company.

The following chart shows the percentage payout of the annual incentive target realized by our CEO compared to earnings per share from
continuing operations for the last five years and demonstrates the alignment between our financial performance and realized annual cash
incentive compensation.

MDU Resources Group, Inc. Proxy Statement 45

Proxy Statement

The percent of target paid for years 2017 through 2020 was based on adding each business segment’s results weighted by its average
invested capital compared to the company’s total average invested capital. The percent of target paid for 2021 was solely based on the
company’s EPS.

See the “Annual Incentives” section within this Compensation Discussion and Analysis for further details on our company’s annual cash
incentive program.

Long-Term Equity-Based Incentive Awards
In February 2021, the compensation committee and the board approved grants of performance shares and restricted stock units which are
eligible to vest into company stock plus dividend equivalents at the end of 2023. The performance shares, which comprise 75% of the
award, will vest based on the achievement of two equally weighted performance measures, namely the company’s total stockholder return
relative to a group of peer companies established for long-term incentive purposes and earnings growth over the performance period. The
restricted stock units, which comprise 25% of the award, enhance alignment with stockholders and are a retention tool and will vest at the
end of 2023 as long as the executive remains continuously employed with the company.

The long-term incentive granted in 2019 by the compensation committee and approved by the board in the form of performance shares
vested at the end of 2021. Performance measures associated with the 2019-2021 performance period include earnings from continuing
operations growth, earnings before interest, taxes, depreciation, and amortization (EBITDA) from continuing operations growth, and total
stockholder return (TSR) relative to our peer group. Earnings growth and EBITDA growth may be adjusted as described in the Vesting of
2019-2021 Performance Share Awards section of this Proxy Statement. These performance measures were selected to align pay and long-
term performance goals.

Long-Term Performance Measures
for the 2019 - 2021 Performance Period

TSR Ranking

14th

Ranking out of 22

Target Ranking = 12th out of 22
Weighting = 50%

Weighted Vesting = 35.6%

Earnings Growth

12.1%

Compound Annual
Growth Rate

Target Growth = 6.5%
Weighting = 25%

Weighted Vesting = 50.0%

Total Vesting of 135.6%

EBITDA Growth

11.5%

Compound Annual
Growth Rate

Target Growth = 6.5%
Weighting = 25%

Weighted Vesting = 50.0%

See the “Long-Term Incentives” section within this Compensation Discussion and Analysis for further details on the company’s long-term
incentive program.

With the majority of our executive officers’ compensation dependent on the achievement of robust performance measures set by the
compensation committee, we believe there is substantial alignment between executive pay and the company’s performance.

46 MDU Resources Group, Inc. Proxy Statement

% of Target PaidEPSCEOAnnual Incentive Payout173.7%98.0%163.2%151.5%56.1%CEO % of Target PaidEPS (from continuing operations)201720182019202020210%80%160%240%$0.00$0.50$1.00$1.50$2.00$2.50$3.00
Proxy Statement

Stockholder Advisory Vote (“Say on Pay”)
At our 2021 Annual Meeting of Stockholders, 95.9% of the votes cast on the “Say on Pay” proposal approved the compensation of our
named executive officers. The compensation committee viewed the 2021 vote as an expression of the stockholders’ general satisfaction with
the company’s executive compensation programs. The compensation committee reviewed and considered the 2021 vote on “Say on Pay” in
setting compensation for 2022 by continuing to link performance-based annual and long-term incentives to company financial performance
and stockholder value.

Compensation Practices
Our practices and policies ensure alignment between the interests of our stockholders and our executives as well as effective compensation
governance.

What We Do

þ Pay for Performance - Annual incentive and the performance share award portion of the long-term incentive are tied to performance

measures set by the compensation committee and comprise the largest portion of executive compensation.

þ Independent Compensation Committee - All members of the compensation committee meet the independence standards under the

New York Stock Exchange listing standards and the Securities and Exchange Commission rules.

þ Independent Compensation Consultant - The compensation committee retains an independent compensation consultant to evaluate

executive compensation plans and practices.

þ Balanced Mix of Pay Components - The target compensation mix represents a balance of annual cash and long-term equity-based

compensation.

compensation risk assessment.

What We Do Not Do

a change of control of the company.

unvested share awards.

ý Tax Gross-Ups - Executives do not receive tax gross-ups on their compensation.

MDU Resources Group, Inc. Proxy Statement 47

Proxy Statement

2021 Compensation Framework

Compensation Decision Process for 2021
For 2021, the compensation committee made recommendations to the board of directors regarding compensation of all executive officers,
and the board of directors then approved the recommendations. The CEO’s role in the process includes the assessment of executive officer
performance and recommending base salaries for the executive officers other than himself. The CEO attended all compensation committee
meetings but was not present during discussions of his compensation. As it relates to decisions associated with compensation of executive
officers for 2021, the compensation committee performed the following activities:

August 2020

November 2020

February 2021

February 2022

Received the market analysis
from Meridian regarding
executive base salaries and
incentives to establish the
2021 salary grade structure and
incentive guidelines.

Approved the 2021 salary and
incentive compensation targets
as recommended by the CEO for
each executive officer other
than himself.

Approved the 2021
performance metrics for annual
and long-term incentives.

Certified the achievement of
performance metrics and
incentive payouts for the 2021
annual incentive and
2019-2021 performance share
award.

Determined and approved 2021
salary and incentive
compensation for the CEO
based on recommendations
from Meridian.

Approved the 2021-2023 grant
of share awards under the Long-
Term Performance Based
Incentive Plan.

Compensation Policies and Practices as They Relate to Risk Management
The company completed an annual risk assessment of our 2021 compensation programs. The conclusion of the 2021 risk assessment was
that our compensation policies and practices do not create risks which could have a material adverse effect on the company. After review
and discussion of the assessment with the general counsel, chief human resources officer, and the CEO, the compensation committee
concurred with management’s assessment.

In assessing the risks arising from our compensation policies and practices, the company identified the following practices designed to
prevent excessive risk taking:

• Business management and governance practices:

◦

the use of human capital management systems and processes to attract, recruit, train, develop and retain employees to achieve short-
and long-term objectives;

risk management is a specific performance competency included in the annual performance assessment of executives;

◦ board oversight on capital expenditure and operating plans promotes careful consideration of financial assumptions;

◦ board approval on business acquisitions above a specific dollar amount or on any transaction involving the exchange of company

common stock;

◦ employee integrity training programs and anonymous reporting systems;

◦ quarterly risk assessment reports at audit committee meetings; and

◦ prohibitions on holding company stock in an account that is subject to a margin call, pledging company stock as collateral for a loan,

and hedging of company stock by executive officers and directors.

• Executive compensation practices:

◦ active compensation committee review of all executive compensation programs as well as comparison of company performance to its

peer group;

◦

initial determination of a position’s salary grade to be at or near the 50th percentile of base salaries paid to similar positions at peer
group companies and/or relevant industry companies;

◦ consideration of peer group and/or relevant industry practices to establish appropriate target compensation;

48 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

◦ a balanced compensation mix of base salary as well as annual and long-term incentives tied primarily to the company’s financial and

stock performance;

◦ use of interpolation for annual and long-term incentive awards to avoid payout cliffs;

◦ compensation committee negative discretion to adjust any annual incentive award payment downward;

◦ use of caps on annual incentive awards with a combined maximum of 200% of target for MDU Resources executives and the regulated

energy delivery businesses and a combined maximum of 240% of target for construction materials and services businesses;

◦ use of caps on long-term incentive stock grant awards with a maximum of 200% of target;

◦ ability to clawback incentive payments in the event of a financial restatement;

◦ use of performance shares and restricted stock units, rather than stock options or stock appreciation rights, as an equity component of

incentive compensation;

◦ use of performance shares for 75% of the long-term incentive award opportunity with relative total stockholder return and earnings

growth performance measures;

◦ use of restricted stock units for 25% of the long-term incentive award opportunity to serve as a retention tool;

◦ use of three-year performance periods for performance shares and restricted stock units to discourage short-term risk-taking;

◦ substantive annual incentive goals measured primarily by earnings per share for all Section 16 officers in addition to segment earnings

or segment EBITDA for business segment presidents, which are measures important to stockholders and encourage balanced
performance;

◦ use of financial performance metrics that are readily monitored and reviewed;

◦

regular review of companies in the compensation and long-term incentive peer groups to ensure appropriateness and industry match;

◦ stock ownership requirements for the board and for executives participating in the MDU Resources Long-Term Performance-Based

Incentive Plan;

◦ mandatory holding periods of net after-tax company stock awards to executives until stock ownership requirements are achieved and

mandatory holding periods for 50% of any net after-tax shares of stock earned under the long-term incentive awards until the earlier of
(1) the end of the two-year period commencing on the date any stock earned under such award is issued, and (2) the executive’s
termination of employment; and

◦ use of independent consultants to assist in establishing pay targets and compensation structure.

Components of Compensation
Our executive compensation program is designed to promote sustained long-term profitability and create stockholder value. The components
of our executive officers’ compensation are selected to drive financial and operational results as well as align the executive officer’s interests
with those of our stockholders. Pay components and performance measures are considered by the compensation committee as fundamental
financial measures of successful company performance and long-term value creation. The components of our 2021 executive compensation
included:

MDU Resources Group, Inc. Proxy Statement 49

Proxy Statement

Component

Payments

Purpose

How Determined

How it Links to Performance

Base Salary

Assured

Annual Cash
Incentive

Performance
Based

At Risk

Performance
Shares

Performance
Based

At Risk

Provides sufficient, regularly paid
income to attract and retain
executives with the knowledge,
skills, and abilities necessary to
successfully execute their job
responsibilities and reflects the
individual role, responsibilities,
performance, and experience of
each named executive officer and
the importance of the role to the
company.

Provides an opportunity to earn
annual incentive compensation to
ensure focus on annual financial
and operating results and to be
competitive from a total
remuneration standpoint.

Provides an opportunity to earn
long-term compensation to ensure
focus on long-term value creation
and the company’s strategic
objectives and to be competitive
from a total remuneration
standpoint.

Time-Vesting
Restricted
Stock Units

Retention
Based

At Risk

Provides an opportunity to earn
long-term compensation as long
as the executive remains an
employee of the company through
the vesting period.

Base salary is a means to
attract and retain talented
executives capable of driving
success and performance.

Annual incentive performance
measures are tied to the
achievement of financial
goals aimed to drive the
success of the company and
the individual business
segments.

Fosters ownership in
company stock and aligns the
executive’s interests with
those of stockholders in
increasing long-term
stockholder value.

Fosters continued leadership
in the company to achieve
company objectives through
retention of key executives
as well as aligning the
executive’s interests with
those of stockholders in
increasing long-term
stockholder value.

Based on analysis by the
compensation consultant to be
within range of the 50th
percentile of salary survey data
and recommendation from the
CEO for executives other than
himself and analysis of peer
company and industry
compensation information. Base
salary for the CEO is determined
after consideration of input from
the independent compensation
consultant.

Annual cash incentives are
calculated as a percentage of
base salary with payout based on
the achievement of performance
measures established by the
compensation committee.

Performance share awards
represent 75% of total long-term
incentive award recommended by
the CEO and approved by the
compensation committee for
executives other than himself and
determined by the compensation
committee based on input from
the independent compensation
consultant for the CEO. Vesting
of the awards is based on the
company’s achievement of
financial measures established by
the compensation committee as
well as total stockholder return in
comparison to the company’s
peer group over a three-year
performance period.

Time-vesting restricted stock
units represent 25% of the total
long-term incentive award
recommended by the CEO and
approved by the compensation
committee for executives other
than himself and determined by
the compensation committee
based on input from the
independent compensation
consultant for the CEO. Vesting of
the awards is at the end of a
three-year vesting period as long
as the executive remains
employed with the company
through the vesting period.

50 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Allocation of Total Target Compensation for 2021
Total target compensation consists of base salary plus target annual and long-term incentive compensation. Incentive compensation, which
consists of annual cash incentive and three-year long-term incentive award opportunities, comprises the largest portion of our named
executive officers’ total target compensation because:

• equity awards align the interests of the named executive officers with those of stockholders by making a significant portion of their target

compensation contingent upon results beneficial to stockholders;

• our named executive officers are in positions of authority to drive, and therefore bear high levels of responsibility for, our corporate

performance;

• variable compensation helps ensure focus on the goals that are aligned with overall company strategy; and

• incentive compensation is more variable than base salary and dependent upon company performance and the satisfaction of performance

objectives.

The compensation committee generally allocates a higher percentage of total target compensation to the target long-term incentive than to
the target annual incentive for our higher level executives because they are in a better position to influence long-term performance. The
long-term incentive awards are paid in company common stock. These awards, combined with our stock retention requirements and our
stock ownership policy, promote ownership of our stock by the executive officers. As a result, the compensation committee believes the
executive officers, as stockholders, will be motivated to deliver long-term value to all stockholders.

Peer Groups
The compensation committee reviews the peer companies used for compensation analysis of executive positions and the company’s relative
total stockholder return performance periodically to assess their ongoing relevance and credibility. The compensation committee’s
consultant, Meridian, aids in the selection of appropriate peer companies by evaluating potential peer companies in the construction and
engineering, construction materials, utility and other related industries which are similar in size in terms of revenues and market
capitalization.

For review of compensation of the CEO and CFO positions, Meridian used market data from 21 peer companies, shown in bold in the table
below. For review of compensation of all other executive officer positions, Meridian used compensation data from additional companies in
Willis Towers Watson’s 2020 General Industry Executive Compensation Survey.

MDU Resources Group, Inc. Proxy Statement 51

Proxy Statement

Companies used for compensation peer group included:

2021 Compensation Peer Companies

Alcoa Corporation

Eastman Chemical Company

Portland General Electric Company

Allegheny Technologies Incorporated

Edison International

PPL Corporation

Alliant Energy Corporation

Ameren Corporation

EMCOR Group, Inc.

Entergy Corporation

Ashland Global Holdings, Inc.

Evergy Inc.

Public Service Enterprise Group Incorporated

Quanta Services, Inc.

Scotts Miracle-Gro Company

Atmos Energy Corporation

Eversource Energy

Sealed Air Corporation

Avery Dennison Corporation

Granite Construction Incorporated

SNC-Lavalin Group Inc.

Avient Corporation

Graphic Packaging Holding Company

Sonoco Products Company

Axalta Coating Systems LTD.

H.B. Fuller Company

Southwest Gas Holdings, Inc.

Ball Corporation

International Flavors & Fragrances, Inc.

Spire Inc.

Berry Global Group, Inc.

Jacobs Engineering Group, Inc.

Summit Materials, Inc.

Black Hills Corporation

Cabot Corporation

Celanese Corporation

KBR, Inc.

UGI Corporation

Kinross Gold Corporation

United States Steel Corporation

Martin Marietta Materials, Inc.

Valvoline Inc.

CenterPoint Energy, Inc.

MasTec, Inc.

CF Industries Holdings, Inc.

The Chemours Company

Cheniere Energy, Inc.

Cleveland-Cliffs Inc.

CMS Energy Corporation

Crown Holdings, Inc.

Dycom Industries, Inc.

The Mosaic Company

Newmont Corporation

NiSource Inc.

OGE Energy Corp.

ONE Gas, Inc.

Owens-Illinois, Inc.

Pinnacle West Capital Corporation

Vulcan Materials Company

WEC Energy Group, Inc.

Westlake Chemical Corporation

Worthington Industries, Inc.

W.R. Grace & Co.

Xcel Energy Inc.

Companies shown in bold are the companies used for compensation benchmarking of the CEO and CFO positions.

To determine relative total stockholder return performance in conjunction with our 2021-2023 performance share award, Meridian
recommended, and the compensation committee approved, using a peer group of 49 select companies within the utility, materials and
construction and engineering industries from the S&P MidCap 400 Index as it is a stable, robust group of companies reflective of our
company’s size, value, and risk profile.

2021 Compensation for Our Named Executive Officers

2021 Base Salary and Incentive Targets
At its November 2020 meeting, the compensation committee approved 2021 base salaries as well as the target annual and long-term
incentive compensation opportunities for the named executive officers. At its February 2021 meeting, the compensation committee
approved the annual and long-term incentive performance measures for our named executive officers. In determining base salaries, target
annual cash incentives, target long-term equity incentives, and target total direct compensation for our named executive officers, the
compensation committee received and considered company and individual performance, market and peer data, responsibilities, experience,
tenure in position, internal equity, and input and recommendations from the CEO, and the independent compensation consultant, Meridian.
The following information relates to each named executive officer’s 2021 base salary, target annual cash incentive, target long-term equity
incentive, and target total direct compensation:

52 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

David L. Goodin

Base Salary

Target Annual Cash Incentive Opportunity

Target Long-Term Equity Incentive Opportunity

Target Total Direct Compensation

2021
($)

Compensation Component
as a % of Base Salary

1,000,000

1,250,000

2,800,000

5,050,000

125%

280%

The compensation committee considered information provided in Meridian’s 2020 compensation study
showing Mr. Goodin's base salary, total cash compensation, and long-term incentives were below the median
of the compensation peer group and increased Mr. Goodin’s base salary by 4.2%. Mr. Goodin’s 2021 annual
incentive target remained at 125% of his base salary. The compensation committee, based on
recommendations from Meridian, set Mr. Goodin’s long-term incentive target at $2,800,000, which is an
increase from 250% to 280% of his base salary.

Jason L. Vollmer

Base Salary

Target Annual Cash Incentive Opportunity

Target Long-Term Equity Incentive Opportunity

Target Total Direct Compensation

2021
($)

490,000

367,500

735,000

1,592,500

Compensation Component
as a % of Base Salary

75%

150%

Mr. Vollmer received an 11.4% increase in his base salary in 2021. The compensation committee
considered information provided in Meridian’s 2020 compensation study showing Mr. Vollmer’s base salary
was below market based on peer group and compensation survey data. The compensation committee
maintained Mr. Vollmer’s target annual cash incentive opportunity at 75% of base salary but the
compensation committee increased his long-term incentive target from 120% to 150% of his base salary.

David C. Barney

Base Salary

Target Annual Cash Incentive Opportunity

Target Long-Term Equity Incentive Opportunity

Target Total Direct Compensation

2021
($)

512,500

384,375

768,750

1,665,625

Compensation Component
as a % of Base Salary

75%

150%

Mr. Barney received a 5.2% increase in base salary for 2021. The compensation committee maintained
Mr. Barney’s target annual cash incentive opportunity at 75% of his base salary and increased his long-term
incentive target from 120% to 150% of his base salary.

Jeffrey S. Thiede

Base Salary

Target Annual Cash Incentive Opportunity

Target Long-Term Equity Incentive Opportunity

Target Total Direct Compensation

2021
($)

507,500

380,625

761,250

1,649,375

Compensation Component
as a % of Base Salary

75%

150%

Mr. Thiede received a 4.2% increase in his base salary for 2021. The compensation committee maintained
Mr. Thiede’s target annual cash incentive opportunity at 75% of his base salary and increased his long-term
incentive target from 120% to 150% of his base salary.

MDU Resources Group, Inc. Proxy Statement 53

Proxy Statement

Nicole A. Kivisto

Base Salary

Target Annual Cash Incentive Opportunity

Target Long-Term Equity Incentive Opportunity

Target Total Direct Compensation

2021
($)

507,500

380,625

761,250

1,649,375

Compensation Component
as a % of Base Salary

75%

150%

Ms. Kivisto received a base salary increase of 4.2% for 2021. The compensation committee maintained her
target annual cash incentive opportunity at 75% of her base salary and increased her long-term incentive
target from 120% to 150% of her base salary.

Annual Cash Incentives
Annual cash incentive awards are received by business segment executives through the achievement of financial performance measures
specific to each business segment plus a performance measure tied to overall company earnings per share. For corporate executives,
including our CEO and CFO, the annual cash incentive award was based solely on the achievement of overall company EPS. Through this,
our business segment executives are incentivized to primarily focus on the success and performance of their business segments while
keeping the overall financial success of the company in mind, whereas our corporate executives are incentivized to assist in the success and
performance of all lines of business.

The compensation committee selected objective financial performance measures to ensure that compensation to the executives reflects the
success of their respective business segments and the company. The annual incentive performance measures for each business segment
president include a corporate earnings per share performance measure representing 20% of the target award opportunity and a business
segment financial performance measure representing 80% of the target award opportunity. In February 2021, the compensation committee
set performance targets that it believed were rigorous based on the company’s capital and business plans, prior year results, and anticipated
future market conditions. To incentivize executives to make decisions that have long-term positive impact, even at the expense of short-term
results, and to prevent one-time gains and losses from having an undue impact on incentive payments, the compensation committee
designed its annual incentive measures to allow for adjustments for certain unplanned events that impact our performance targets but are
not indicative of underlying business performance. The following annual incentive performance measures for 2021 were adopted by the
compensation committee for the business segment presidents at its February 2021 meeting:

54 MDU Resources Group, Inc. Proxy Statement

Measure

Applies to

Purpose

Measurement

Target Weight How Target was Selected

Proxy Statement

All Business
Segment
Presidents

MDU
Resources
Diluted
Adjusted
Earnings per
Share (EPS)

MDU Resources
Corporate Officers

EPS is a generally
accepted accounting
principle (GAAP)
measurement and is a
key driver of stockholder
return. This is the basis
on which we provide
annual performance
expectations and
consistent with how we
report results to the
financial community.
This goal applies to the
presidents of all business
segments and corporate
officers to engage them
as members of the
company’s management
policy committee in the
overall success of the
company.

Business
Segment
Earnings

Electric and
Natural Gas
Distribution
Segments
President

Provides a measure of
financial performance
and an incentive to drive
business results.
Regulated entities are
valued based on earnings
potential and rate base.

Pipeline
Segment
President

GAAP EPS (diluted) before
discontinued operations plus
earnings/losses from any
operations discontinued after
December 31, 2020, and
adjustments approved by the
compensation committee to
remove:
- the effect on earnings at the

company level of intersegment
earnings eliminations;

- the negative effect on earnings
from asset sales/dispositions/
retirements;

- the effect on earnings from

withdrawal liabilities relating to
multiemployer pension plans;

- the effect on earnings from

transaction costs incurred for
acquisitions or mergers; and
- the effect on earnings from
unanticipated changes and
interpretation of tax law.

The positive effect on earnings
from asset sales/dispositions/
retirements will be considered for
removal if the compensation
committee determines such
positive effect is not indicative of
underlying business
performance.

GAAP business segment earnings
before discontinued operations
plus earnings/losses from any
operations discontinued after
December 31, 2020, and
adjustments approved by the
compensation committee to
remove:
- the negative effect on earnings
from asset sales/dispositions/
retirements;

- the effect on earnings from

transaction costs incurred for
acquisitions or mergers; and
- the effect on earnings from
unanticipated changes and
interpretation of tax law.

$2.05

20% Target reflects 2021 financial goal

to achieve an estimated return on
invested capital of 8.6%. The 2021
target is 29 cents more than the
2020 target and 10 cents more
than 2020 actual EPS before
discontinued operations (diluted).

100%

$104.5
million

80% Target reflects the 2021 financial
goal for the business segments to
achieve an estimated return on
invested capital of 4.9%. The 2021
target is 4.8% above 2020 actual
results reflecting continued
investment in its infrastructure and
regulatory recovery from completed
and pending rate cases.

$37.5
million

80% Target reflects the 2021 financial

goal of the business segment to
achieve an estimated return on
invested capital of 7.3%. The 2021
target is 1.4% above the 2020
actual results and reflects the
business segment’s continued
execution of pipeline expansion
projects.

MDU Resources Group, Inc. Proxy Statement 55

Proxy Statement

Measure

Applies to

Purpose

Measurement

Target Weight How Target was Selected

Construction
Materials and
Contracting
Segment
President

Business
Segment
Earnings
Before
Interest, Tax,
Depreciation,
and
Amortization
(EBITDA)

Provides a measure of
financial performance
common to the industries
in which these segments
operate. Focusing on
EBITDA encourages
growth by excluding the
impact of decisions
regarding interest, taxes,
depreciation, and
amortization made during
the acquisition process.

Construction
Services
Segment
President

$308.6
million

80% Target reflects the 2021 financial

goal of the business segment to
achieve an estimated return on
invested capital of 11.5% and is
0.9% above the actual 2020
EBITDA results. The increase
reflects acquisitions completed in
2020 and backlog at 2020 year-
end.

$183.9
million

80% Target reflects the 2021financial

goal of the business segment to
achieve an estimated return on
invested capital of 26.0% and is
6.1% above the actual 2020
EBITDA results reflecting backlog at
2020 year-end and anticipated
organic and acquisition growth.

EBITDA from continuing
operations adjusted plus EBITDA
from any operations discontinued
after December 31, 2020, and
adjustments approved by the
compensation committee to
remove:

- the negative effect on EBITDA
from asset sales/dispositions/
retirements;

- the effect on EBITDA from

withdrawal liabilities relating to
multiemployer pension plans;
and

- the effect on EBITDA from

transaction costs incurred for
acquisitions or mergers.

Actual performance results are compared to target performance measures to arrive at a percent of target achieved. The percent of target
achieved is translated into a payout percentage of the target award opportunity. Achievement of 100% of the target performance measure
results in a payout of 100% of the target award opportunity. Achievement of an established threshold is required to receive partial payment
of the target award opportunity. Results achieved below the established threshold result in no payout. The threshold and maximum
performance as well as the associated payout opportunity are depicted in the following chart:

Measure

Weighting

% of Target

Payout %

% of Target

Payout %

MDU Resources Diluted Adjusted EPS

20% / 100%

Electric and Natural Gas Distribution Earnings

Pipeline Earnings

Construction Materials and Contracting EBITDA

Construction Services EBITDA

80%

85%

90%

85%

75%

65%

25%

50%

25%

115%

110%

115%

200%

250%

Threshold

Maximum

Results achieved between payout levels are calculated using linear interpolation.

56 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

2021 Annual Incentive Results
The 2021 performance measure results, percent of target achieved based on those results, and the associated payout percentages reflect
the company’s 2021 financial performance and are presented below:

Business Segment

Performance
Measure

MDU Resources Corporate Officers

Earnings per Share

All Business Segment Presidents

Earnings per Share

Electric and Natural Gas Distribution

Pipeline*

Construction Materials and Contracting*

Construction Services*

Earnings

EBITDA

Percent of
Performance
Measure
Achieved

Percent
of Award
Opportunity
Payout

91.2%

99.0%

56.1%

95.2%

Result

$1.87

$103.5 million

$40.9 million

109.0%

159.9%

$295.1 million

$168.7 million

95.6%

91.8%

86.9%

82.4%

Weighted
Award
Opportunity
Payout %

56.1%

11.2%

76.2%

127.9%

69.5%

65.9%

Weight

100%

20%

80%

*The pipeline, construction materials and contracting, and construction services results were adjusted to remove the effect of transaction costs incurred for acquisitions

and mergers.

Based on the achievement of the performance targets, the named executive officers received the following 2021 annual incentive
compensation:

Name

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

Target Annual
Incentive
($)

1,250,000

367,500

384,375

380,625

Annual Incentive Earned

Payout as a % of Target
(%)

56.1

80.7

77.1

87.4

Amount
($)

701,250

206,168

310,191

293,462

332,666

Long-Term Incentives
All of our named executive officers participated in the 2021 long-term incentive plan which consists of 75% performance shares that align
long-term compensation with the achievement of pre-determined financial goals and 25% time-vesting restricted stock units that incentivize
retention of our executives and alignment with the interests of our stockholders. Long-term incentive compensation comprised 55.4% of the
CEO’s 2021 total target direct compensation and 46.1% of the average of the other named executive officer’s total target direct
compensation. Stock earned under long-term incentive compensation is subject to our stock retention requirements.

Grant of 2021-2023 Long-Term Equity Incentive Awards
On February 11, 2021, for the 2021-2023 period, the compensation committee determined the target number of performance shares and
time-vesting restricted stock units to be granted to each named executive officer by dividing a selected target long-term award amount by
the average of the closing prices of our stock from January 1 through January 22, 2021, which was $27.22 per share. Based on this price,
the compensation committee awarded 75% of the target long-term incentive shares as performance share opportunities and 25% of the
target long-term incentive shares as time-vesting restricted stock units. The following depicts the long-term incentive opportunities for the
named executive officers:

Name

Base Salary
($)

David L. Goodin

1,000,000

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

490,000

512,500

507,500

Target
Long-Term
Incentive of
Base Salary
(%)

280

150

Long-Term
Incentive
Target
($)

2,800,000

735,000

768,750

761,250

Total Target
Long-Term
Incentive Share
Opportunities
(#)

75%
Performance
Share
Opportunities
(#)

25%
Time-Vesting
Restricted Stock
Unit Opportunities
(#)

102,865

27,002

28,242

27,966

77,149

20,252

21,182

20,975

25,716

6,750

7,060

6,991

MDU Resources Group, Inc. Proxy Statement 57

Proxy Statement

The performance share portion of the grant may vest at the end of a three-year period between 0% and 200%. Determination of vesting is
based on the achievement of two separate performance measures each making up 50% of the award:

• Total stockholder return relative to that of a group of peer companies selected from the S&P 400 MidCap Index is the measure to align

with the company's performance relative to our peers;

• Compound annual growth rate in earnings from continuing operations is the measure to encourage continued growth of the company.

Earnings used to calculate earnings growth from continuing operations for the 2021 awards may be adjusted, as such adjustments are
approved by the compensation committee, to remove:

• the effect on earnings from losses/impairments on asset sales/dispositions/retirements;

• the effect on earnings from withdrawal liabilities relating to multiemployer pension plans;

• the effect on earnings from costs incurred for acquisitions or mergers; and

• the effect on earnings from unanticipated tax law changes.

Vesting of performance shares and associated dividend equivalents is predicated on achievement of an established threshold associated with
each performance measure. We do not disclose actual financial performance targets of our long-term incentive plan as such disclosure could
result in competitive harm. Achievement at the threshold level of the performance measure results in vesting of 20% of the associated
portion of the performance share award. Actual results of the performance measure achieved below the threshold lead to zero vesting of the
associated portion of the performance share award. Maximum performance measure levels have also been established for each performance
measure and result in vesting of 200% of the associated portion of the performance share award. Thresholds and maximum payouts as a
percentage of target performance for the 2021 measures are:

The Company’s Peer
TSR Percentile Rank

75th or higher

50th

25th

The Company’s Earnings
Growth Rate as a
Percentage of Target

153.8% or higher

Target

46.2%

Less than 25th

less than 46.2%

Vesting Percentage
of Award Target

200%

100%

20%

Vesting for performance falling between the intervals is interpolated.

The time-vesting restricted stock units represent 25% of the long-term incentive opportunity and will vest on December 31, 2024, as long
as the executive remains continuously employed with the company.

Vesting of 2019-2021 Performance Share Awards
For the 2019-2021 period, the long-term incentive program consisted solely of performance shares. The performance criteria used for
vesting of the 2019-2021 performance share awards was:

• 50% based on our company’s total stockholder return as a percentile of the total stockholder return of our peer companies over the three-

year performance period;

• 25% based on EBITDA growth over the three-year performance period; and

• 25% based on earnings growth over the three-year performance period.

Performance Criteria

Relative TSR Percentile Ranking

EBITDA Growth*

Earnings Growth*

Total Weighted Payout

Result

41st

11.5%

12.1%

Vesting %

71.2%

200.0%

Weighting

Weighted Payout

50%

25%

35.6%

50.0%

135.6%

*The 2021 EBITDA and earnings results used in the calculation of EBITDA Growth and Earnings Growth were adjusted to remove the effect of costs incurred for

acquisitions and mergers. These adjustments had no impact on the vesting percentages.

58 MDU Resources Group, Inc. Proxy Statement

The named executive officers received the following long-term compensation for the 2019-2021 performance period:

Name

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

Target
Performance
Shares
(#)

98,806

19,761

24,083

Performance
Shares
Vested
(#)

133,980

26,795

32,656

Proxy Statement

Dividend
Equivalents
($)

335,620

67,121

81,803

Stock Retention Requirement
The named executive officers must retain 50% of the net after-tax shares vested pursuant to the long-term incentive awards for the earlier of
two years from the date the vested shares are issued or the executive’s termination of employment. The executive officer is also required to
retain all vested share awards net of taxes if the executive has not met the stock ownership requirements under the company’s stock
ownership policy for executives.

Other Benefits

The company provides post-employment benefit plans and programs in which our named executive officers may be participants. We believe
it is important to provide post-employment benefits which approximate retirement benefits paid by other employers to executives in similar
positions. The compensation committee periodically reviews the benefits provided to maintain a market-based benefits package. Our named
executive officers participated in the following plans during 2021 which are described below:

Plans

Pension Plans

401(k) Retirement Plan

Supplemental Income Security Plan

Company Credit to MDUR Deferred
Compensation Plan

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

Yes

Pension Plans
Effective in 2006, the defined benefit pension plans were closed to new non-bargaining unit employees and as of December 31, 2009, the
defined benefit plans were frozen. For further details regarding the company’s pension plans, refer to the section entitled “Pension Benefits
for 2021.”

401(k) Retirement Plan
The named executive officers as well as employees working a minimum of 1,000 hours per year are eligible to participate in the 401(k) plan
and defer annual income up to the IRS limit. The named executive officers receive a company match up to 3% depending on their elected
deferral rate. Contributions and the company match are invested in various funds based on the employee’s election including company
common stock.

In 2010, the company began offering increased company contributions to our 401(k) plan in lieu of pension plan contributions. For non-
bargaining unit employees hired after 2006 or employees who were not previously participants in the pension plan, the added retirement
contribution is 5% of plan eligible compensation. For non-bargaining unit employees hired prior to 2006 who were participants in the
pension plan, the added retirement contributions are based on the employee’s age as of December 31, 2009. The retirement contribution is
11.5% for Mr. Goodin, 9.0% for Ms. Kivisto, 7.0% for Mr. Vollmer, and 5.0% for Messrs. Barney and Thiede. These amounts may be
reduced in accordance with the provisions of the 401(k) plan to ensure compliance with IRS limits.

MDU Resources Group, Inc. Proxy Statement 59

Proxy Statement

Supplemental Income Security Plan
We offered certain key managers and executives benefits under a nonqualified retirement plan referred to as the Supplemental Income
Security Plan (SISP). The SISP provides participants with additional retirement income and death benefits payable for 15 years. Effective
February 11, 2016, the SISP was amended to exclude new participants to the plan and freeze current benefit levels for existing
participants. For further details regarding the company’s SISP, refer to the section entitled “Pension Benefits for 2021.” Named executive
officers participating in the SISP are Messrs. Goodin and Barney and Ms. Kivisto.

The following table reflects our named executive officers’ SISP benefits as of December 31, 2021:

Name

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

SISP Benefits

Annual Death Benefit
($)

Annual Retirement Benefit
($)

552,960

n/a

262,464

n/a

157,728

276,480

n/a

131,232

n/a

78,864

Nonqualified Defined Contribution Plan
The company adopted the Nonqualified Defined Contribution Plan (NQDCP) effective January 1, 2012, to provide retirement and deferred
compensation for a select group of management and other highly compensated employees. After satisfying a vesting requirement for each
contribution, distributions will be made in accordance with the terms of the plan. The Nonqualified Defined Contribution Plan was frozen to
new participants and contributions and replaced with the MDU Resources Group, Inc. Deferred Compensation Plan (DCP) effective
January 1, 2021. For further details regarding the company’s NQDCP, refer to the section entitled “Nonqualified Deferred Compensation for
2021.”

MDU Resources Group, Inc. Deferred Compensation Plan
The company adopted the MDU Resources Group, Inc. Deferred Compensation Plan (DCP) effective January 1, 2021, which provides a
select group of management and other highly compensated employees the opportunity to defer compensation for retirement and other
financial purposes. Participants in the plan may defer a portion of their salary and/or annual incentive. The compensation committee, upon
recommendation from the CEO, may approve company contributions for select participants which vest over a three-year period. Company
contributions recognize the participant’s contributions to the company and serve as a retention tool. After satisfying the vesting
requirements, distribution will be made in accordance with the terms of the plan. For further details regarding the company’s DCP, refer to
the section entitled “Nonqualified Deferred Compensation for 2021.”

For 2021, the compensation committee selected and approved company contributions of $49,000 to Mr. Vollmer, $150,000 to Mr. Barney,
and $100,000 to Mr. Thiede. The contributions awarded to Messrs. Vollmer, Barney, and Thiede represent 10.0%, 29.3%, and 19.7% of
their base salaries, respectively.

Deferral of Annual Incentive Compensation
Through 2020, our executives had the opportunity to defer receipt of earned annual incentives through the Executive Incentive
Compensation Plan (EICP). If an executive chose to defer all or part of an annual incentive through the EICP, we credit the deferral with
interest at a rate based on an average of the Treasury High Quality Market Corporate Bond Yield Curve for the last business day of each
month for the twelve-month period from October to September. For 2021, the interest rate for deferrals was 3.2%. The compensation
committee’s reasons for using this interest rate recognize incentive deferrals are a low-cost source of capital for the company and are
unsecured obligations and, therefore, carry an associated level of risk to the executives. The option to defer incentive compensation under
the EICP was eliminated beginning 2021 and replaced by the MDU Resources Group, Inc. Deferred Compensation Plan (DCP). Under the
DCP, participants may defer salary and/or annual incentive and choose from a selection of hypothetical investment options. For further
details regarding the company’s DCP, refer to the section entitled “Nonqualified Deferred Compensation for 2021.”

Employment and Severance Agreements
We currently do not have employment or severance agreements with our executives entitling them to specific payments upon termination of
employment or a change of control of the company. The compensation committee generally considers providing severance benefits on a
case-by-case basis. Any post-employment or change of control benefits available to our executives are addressed within our incentive and
retirement plans. Refer to the section entitled “Potential Payments upon Termination or Change of Control.”

60 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Compensation Governance

Impact of Tax and Accounting Treatment
The compensation committee may consider the impact of tax or accounting treatment in determining compensation. The compensation
committee did not make any adjustments to the 2021 compensation program to address the impact of tax or accounting treatment. The
compensation committee may also consider the accounting and cash flow implications of various forms of executive compensation. We
expense salaries and annual incentive compensation as earned. For our equity awards, we record the accounting expense in accordance with
Accounting Standards Codification Topic 718, which is generally expensed over the vesting period.

Stock Ownership Requirements
Executives participating in our Long-Term Performance-Based Incentive Plan are required within five years of appointment or promotion into
an executive level to beneficially own our common stock equal to a multiple of their base salary as outlined in the stock ownership policy. In
May 2021, the ownership multiple for our CEO was increased from 4 times to 6 times base salary. Stock owned through our 401(k) plan or
by a spouse is considered in ownership calculations. The level of stock ownership compared to the ownership requirement is determined
based on the closing sale price of our stock on the last trading day of the year and base salary at December 31 of the same year. The table
shows the named executive officers’ holdings as a multiple of their base salary.

Name

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

Ownership Policy Multiple of
Base Salary Within 5 Years

Actual Holdings as a
Multiple of Base Salary1

Ownership Requirement
Must Be Met By:

9.7

3.4

5.7

6.4

5.7

01/01/2018

01/01/2023

01/01/2019

01/01/2020

1 Includes performance share awards earned net of taxes for the 2019-2021 performance period and unvested restricted stock units granted in
February 2021.

Clawback
Our Long-Term Performance-Based Incentive Plan and EICP include provisions commonly referred to as a clawback policy. The
compensation committee may, or shall if required, take action to recover incentive-based compensation from specific executives in the event
the company is required to restate its financial statements due to material noncompliance with any financial reporting requirements under
the securities laws.

Policy Regarding Hedging Stock Ownership
Our executive compensation policy prohibits executive officers, which includes our named executive officers, from hedging their ownership
of company common stock. Executives may not enter into transactions that allow the executive to benefit from devaluation of our stock or
otherwise own stock technically but without the full benefits and risks of such ownership. See the section entitled “Security Ownership” for
our policy on margin accounts and pledging of our stock.

COMPENSATION COMMITTEE REPORT

The compensation committee is primarily responsible for reviewing, approving, and overseeing the company’s compensation plans and
practices and works with management and the committee’s independent compensation consultant to develop the company executive
compensation programs. The compensation committee has reviewed and discussed the Compensation Discussion and Analysis required by
Regulation S-K, Item 402(b), with management. Based on the review and discussions referred to in the preceding sentence, the
compensation committee recommended to the board of directors that the Compensation Discussion and Analysis be included in our Proxy
Statement on Schedule 14A.

Karen B. Fagg, Chair
Thomas Everist
Patricia L. Moss

MDU Resources Group, Inc. Proxy Statement 61

Proxy Statement

EXECUTIVE COMPENSATION TABLES

Summary Compensation Table for 2021

Year
(b)

Salary
($)
(c)

Stock
Awards
($)
(e)1

Non-Equity
Incentive Plan
Compensation
($)
(g)

Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
(h)2

All Other
Compensation
($)
(i)3

Total
($)
(j)

2021 1,000,000

3,222,639

701,250

65,571

221,007

5,210,467

Name and
Principal Position
(a)

David L. Goodin

President and CEO

2020

960,000

2,974,497

1,818,000

2019

860,000

3,029,392

1,403,520

484,134

735,366

186,779

6,423,410

116,077

6,144,355

Jason L. Vollmer

2021

490,000

845,942

Vice President and CFO

2020

440,000

654,388

2019

400,000

605,877

206,168

499,950

489,600

—

6,880

8,455

122,163

1,664,273

105,928

1,707,146

86,049

1,589,981

David C. Barney

2021

512,500

884,789

310,191

—

219,420

1,926,900

President and CEO of

2020

487,000

Knife River Corporation

2019

468,500

725,030

738,389

804,646

843,300

86,980

174,117

220,062

2,323,718

201,771

2,426,077

Jeffrey S. Thiede

President and CEO of

MDU Construction

Services Group, Inc.

2021

507,500

876,148

293,462

2020

487,000

2019

468,500

725,030

738,389

852,128

843,300

—

171,822

1,848,932

170,362

2,234,520

151,751

2,201,940

Nicole A. Kivisto

2021

507,500

876,148

President and CEO of

2020

487,000

725,030

Montana-Dakota Utilities Co.,

2019

455,000

738,389

332,666

436,839

480,139

2,645

184,058

243,761

83,272

1,802,231

73,374

1,906,301

54,763

1,972,052

Cascade Natural Gas Corporation,

and Intermountain Gas Company

1 Amounts in this column represent the aggregate grant date fair value of performance share award opportunities at target calculated in accordance
with generally accepted accounting principles for stock-based compensation in Accounting Standards Codification Topic 718. This column was
prepared assuming none of the awards were or will be forfeited. The amounts were calculated as described in Note 13 of our audited financial
statements in our Annual Report on Form 10-K for the year ended December 31, 2021. For 2021, the aggregate grant date fair value of
outstanding performance share award opportunities assuming the highest level of payout would be as follows:

Name

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

Aggregate Grant Date Fair
Value at Highest Payout
($)

5,741,944

1,507,271

1,576,487

1,561,092

62 MDU Resources Group, Inc. Proxy Statement

2 Amounts shown for 2021 represent the change in the actuarial present value for the named executive officers’ accumulated benefits
under the pension plan, SISP, and Excess SISP, collectively referred to as the “accumulated pension change,” plus above-market
earnings on deferred annual incentives as of December 31, 2021.

Proxy Statement

Name

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

Accumulated Pension Change
($)

Above Market Earnings
($)

(111,487)

(2,516)

(46,638)

—

(73,377)

65,571

—

2,645

3 All Other Compensation for 2021 is comprised of:

Name

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

401(k) Plan
($)a

Nonqualified Deferred
Compensation Plan
($)b

Life Insurance
Premium
($)

Matching Charitable
Contributions
($)

Dividend
Equivalents
($)c

Total
($)

42,050

29,000

23,200

34,800

—

49,000

150,000

100,000

—

774

759

774

3,600

174,583

221,007

4,350

39,054

122,163

1,200

44,246

219,420

3,750

44,098

171,822

3,600

44,098

83,272

Represents company contributions to the 401(k) plan, which includes matching contributions and retirement contributions associated with the
frozen pension plans as of December 31, 2009.

b Represents company contribution amounts to the MDU Resources Group, Inc. Deferred Compensation Plan (DCP) which are approved by the
compensation committee and the board of directors. The purpose of the plan is to recognize outstanding performance coupled with enhanced
retention as the DCP requires a vesting period. For further information, see the section entitled “Nonqualified Deferred Compensation for 2021.”

c Represents accrued dividend equivalents for 2021 on the 2021-2023, 2020-2022, and 2019-2021 performance share awards associated with
financial performance measures and restricted stock units. The 2021-2023 and 2020-2022 awards are presented at target, and the 2019-2021
performance share awards are presented based on the actual achievement of the performance measures.

MDU Resources Group, Inc. Proxy Statement 63

Proxy Statement

Grants of Plan-Based Awards in 2021

Estimated Future
Payouts Under Non-Equity
Incentive Plan Awards

Estimated Future
Payouts Under Equity
Incentive Plan Awards

Grant
Date
(b)

Threshold
($)
(c)

Target
($)
(d)

Maximum
($)
(e)

Threshold
(#)
(f)

Target
(#)
(g)

Maximum
(#)
(h)

All Other
Stock Awards:
Number of
Shares of
Stock or Units
(#)
(i)

Grant Date
Fair Value of
Stock and
Option Awards
($)
(l)

2/11/2021
2/11/2021 2
2/11/2021 3
1

2/11/2021
2/11/2021 2
2/11/2021 3

312,500

1,250,000

2,500,000

91,875

367,500

735,000

96,094

384,375

922,500

95,156

380,625

913,500

171,281

380,625

761,250

15,429

77,149

154,298

2,519,306

25,716

703,333

4,050

20,252

40,504

661,329

6,750

184,613

4,236

21,182

42,364

691,698

7,060

193,091

4,195

20,975

41,950

684,944

6,991

191,204

4,195

20,975

41,950

684,944

6,991

191,204

Name
(a)

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

1 Annual incentive for 2021 granted pursuant to the MDU Resources Group, Inc. Executive Incentive Compensation Plan.
2 Performance shares for the 2021-2023 performance period granted pursuant to the MDU Resources Group, Inc. Long-Term Performance-Based

Incentive Plan.

3 Restricted Stock Units for the 2021-2023 period granted pursuant to the MDU Resources Group, Inc. Long-Term Performance-Based Incentive

Plan.

Narrative Discussion Relating to the Summary Compensation Table
and Grants of Plan-Based Awards Table

Annual Incentive
The compensation committee recommended the 2021 annual cash incentive award opportunities for our named executive officers and the
board approved these opportunities at its meeting on February 11, 2021. The award opportunities at threshold, target, and maximum are
reflected in columns (c), (d), and (e), respectively, of the Grants of Plan-Based Awards Table. The actual amount paid with respect to 2021
performance is reflected in column (g) of the Summary Compensation Table.

As described in the “Annual Incentives” section of the “Compensation Discussion and Analysis,” payment of annual award opportunities is
dependent upon achievement of performance measures; actual payout may range from 0% to 200% of the target except for the construction
materials and contracting and construction services segments which may range from 0% to 240%.

All our named executive officers were awarded their annual incentive opportunities pursuant to the MDU Resources Group, Inc. Executive
Incentive Compensation Plan. Under the Executive Incentive Compensation Plan, executives who retire during the year at or after age 65
remain eligible to receive a prorated award, but executives who terminate employment for other reasons are not eligible for an award. The
compensation committee generally does not modify the performance measures; however, if in years of unusually adverse or favorable
external conditions or other unforeseen significant factors beyond the control of management, the compensation committee may modify the
performance measures. No performance measures were modified in determining 2021 annual incentives. The compensation committee has
full discretion to determine the extent to which goals have been achieved, the payment level, and whether to adjust payment of awards
downward based upon individual performance. For further discussion of the specific 2021 incentive plan performance measures and results,
see the “Annual Incentives” section in the “Compensation Discussion and Analysis.”

64 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Long-Term Incentive
The compensation committee recommended long-term incentive award opportunities for the named executive officers in the form of 75%
performance shares and 25% time-vesting restricted stock units, and the board approved the award opportunities at its meeting on
February 11, 2021. The portion of the long-term incentive opportunities associated with performance shares are presented as the number of
performance shares at threshold, target, and maximum in columns (f), (g), and (h) of the Grants of Plan-Based Awards Table. The value of
the long-term performance-based incentive opportunities is based on the aggregate grant date fair value and is included in the amount
recorded in column (e) of the Summary Compensation Table and column (l) of the Grant of Plan-Based Awards Table.

Depending on the achievement of the performance measures associated with our 2021-2023 performance period, executives will receive
from 0% to 200% of the target performance share awards in February 2024. We also will pay dividend equivalents in cash on the number of
shares actually vested for the performance period. The dividend equivalents will be paid in 2024 if and to the extent they vest and at the
same time as the performance share awards are settled.

The portion of the long-term incentive opportunities associated with time-vesting restricted stock units are presented as the number of units
in column (i) of the Grants of Plan-Based Awards Table. The value of the time-vesting restricted stock units is based on the aggregate grant
date value and is included in the amount recorded in column (e) of the Summary Compensation Table and column (l) of the Grant of Plan-
Based Awards Table.

Salary and Bonus in Proportion to Total Compensation
The following table shows the proportion of salary and bonus to total compensation as presented in the Summary Compensation Table.
Bonuses for purposes of this table and the Summary Compensation Table refer to discretionary payments to executive officers outside of our
executive incentive plans as described above. No bonuses were paid to the executive officers in 2021.

Name

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

Salary
($)

1,000,000

490,000

512,500

507,500

Bonus
($)

—

Total
Compensation
($)

Salary and Bonus
as a % of
Total Compensation

5,210,467

1,664,273

1,926,900

1,848,932

1,802,231

19.2%

29.4%

26.6%

27.4%

28.2%

MDU Resources Group, Inc. Proxy Statement 65

Proxy Statement

Outstanding Equity Awards at Fiscal Year-End 2021

Stock Awards

Market or Payout
Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
($)
(h)2

Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
(#)
(i)3

Equity Incentive
Plan Awards:
Market or Payout
Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
($)
(j)2

793,081

208,170

217,730

215,602

356,952

11,008,400

77,856

89,382

89,175

2,401,079

2,756,541

2,750,157

Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
(#)
(g)1

25,716

6,750

7,060

6,991

Name
(a)

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

1 Below is the breakdown by year of the outstanding restricted stock unit awards:

Name

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

2021-2023 Grant
(#)

25,716

6,750

7,060

6,991

Total
(#)

25,716

6,750

7,060

6,991

2 Value based on the number of performance shares and restricted stock units reflected in columns (g) and (i) multiplied by $30.84, the year-end

per share closing stock price for 2021.

3 Below is a breakdown by year of the outstanding performance share awards:

Name

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

2019-2021 Award

2020-2022 Award

2021-2023 Award

(#)

197,612

39,522

48,166

(#)

82,191

18,082

20,034

(#)

77,149

20,252

21,182

20,975

Total

(#)

356,952

77,856

89,382

89,175

Performance shares for the 2019 award are shown at the maximum level (200%) based on results for the 2019-2021 performance period being
between threshold and target.

Performance shares for the 2020 award are shown at the target level (100%) based on results for the first two years of the 2020-2022
performance period being between threshold and target.

Performance shares for the 2021 award are shown at the target level (100%) based on results for the first year of the 2021-2023 performance
period being above target.

While for purposes of the Outstanding Equity Awards at Fiscal Year-End 2021 Table, the number of shares and value shown for the
2019-2021 performance period is at 200% of target, the actual results for the performance period certified by the compensation committee
and settled on February 16, 2022, was 135.6% of target. For further information, see the “Long-Term Incentives” section of the
“Compensation Discussion and Analysis.”

66 MDU Resources Group, Inc. Proxy Statement

Option Exercises and Stock Vested During 2021

Name
(a)

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Proxy Statement

Stock Awards

Number of Shares
Acquired on Vesting
(#)
(d)1

105,921

21,581

39,477

Value Realized
on Vesting
($)
(e)2

3,155,916

643,006

1,176,217

Nicole A. Kivisto
1 Reflects performance shares for the 2018-2020 performance period ended December 31, 2020, and restricted stock units for Messrs. Barney

26,516

790,044

and Thiede, all of which were settled February 11, 2021.

2 Reflects the value of vested performance shares based on the closing stock price of $27.35 per share on February 11, 2021, and the dividend

equivalents paid on the vested shares.

Pension Benefits for 2021

Name
(a)

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Plan Name
(b)

Pension

Basic SISP
Excess SISP 2

Pension
Basic SISP 2
Excess SISP 2
Pension 2

Basic SISP
Excess SISP 2
Pension 2
Basic SISP 2
Excess SISP 2

Nicole A. Kivisto

Pension

Basic SISP
Excess SISP 2

Number of Years
Credited Service
(#)
(c)1

Present Value of
Accumulated Benefit
($)
(d)

n/a

1,409,516

3,120,841

45,034

33,676

—

1,663,746

—

324,230

673,647

—

1 Years of credited service related to the pension plan reflects the years of participation in the plan as of December 31, 2009, when the pension

plan was frozen. Years of credited service related to the Basic SISP reflects the years toward full vesting of the benefit which is 10 years. Years of
credited service related to Excess SISP reflects the same number of credited years of service as the pension plan.

2 Messrs. Barney and Thiede are not eligible to participate in the pension plans. Messrs. Vollmer and Thiede do not participate in the SISP.

Mr. Goodin is the only named executive officer eligible to participate in the Excess SISP.

MDU Resources Group, Inc. Proxy Statement 67

Proxy Statement

The amounts shown for the pension plan, Basic SISP, and Excess SISP represent the actuarial present values of the executives’
accumulated benefits accrued as of December 31, 2021, calculated using:

• a 2.38% discount rate for the Basic SISP and Excess SISP;

• a 2.60% discount rate for the pension plan;

• the Society of Actuaries Pri-2012 Total Dataset Mortality with Scale MP-2021 (post commencement only); and

• no recognition of pre-retirement mortality.

The actuary assumed a retirement age of 60 for the pension, Basic SISP, and Excess SISP benefits and assumed retirement benefits
commence at age 60 for the pension and Excess SISP and age 65 for Basic SISP benefits.

Pension Plan
The MDU Resources Group, Inc. Pension Plan for Non-Bargaining Unit Employees (pension plan) applies to employees hired before 2006
and was amended to cease benefit accruals as of December 31, 2009. The benefits under the pension plan are based on a participant’s
average annual salary over the 60 consecutive month period where the participant received the highest annual salary between 1999 and
2009. Benefits are paid as straight life annuities for single participants and as actuarially reduced annuities with a survivor benefit for
married participants unless they choose otherwise.

Supplemental Income Security Plan
The Supplemental Income Security Plan (SISP), a nonqualified defined benefit retirement plan, was offered to select key managers and
executives. SISP benefits are determined by reference to levels defined within the plan. Our compensation committee, after receiving
recommendations from our CEO, determined each participant’s level within the plan. On February 11, 2016, the SISP was amended to
exclude new participants to the plan and freeze current benefit levels for existing participants.

Basic SISP Benefits
Basic SISP is a supplemental retirement benefit intended to augment the retirement income provided under the pension plans. SISP
benefits are payable to the participant or their beneficiary for a period of 15 years. The Basic SISP benefits are subject to a vesting
schedule where participants are 100% vested after ten years of participation in the plan.

Participants can elect to receive the Basic SISP as:

• monthly retirement benefits only;

• monthly death benefits paid to a beneficiary only; or

• a combination of retirement and death benefits, where each benefit is reduced proportionately.

Regardless of the election, if the participant dies before the SISP retirement benefit commences, only the SISP death benefit is provided.

Excess SISP Benefits
Excess SISP is an additional retirement benefit relating to Internal Revenue Code limitations on retirement benefits provided under the
pension plans. Excess SISP benefits are equal to the difference between the monthly retirement benefits that would have been payable to
the participant under the pension plans absent the limitations under the Internal Revenue Code and the actual benefits payable to the
participant under the pension plans. Participants are only eligible for the Excess SISP benefits if the participant is fully vested under the
pension plan, their employment terminates prior to age 65, and benefits under the pension plan are reduced due to limitations under the
Internal Revenue Code on plan compensation.

In 2009, the SISP was amended to limit eligibility for the Excess SISP benefit. Mr. Goodin is the only named executive officer eligible for
the Excess SISP benefit. Benefits generally commence six months after the participant’s employment terminates and continue to age 65 or
until the death of the participant, if prior to age 65.

Both Basic and Excess SISP benefits are forfeited if the participant’s employment is terminated for cause.

68 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Nonqualified Deferred Compensation for 2021

Deferred Annual Incentive Compensation
Executives participating in the Executive Incentive Compensation Plan could elect to defer up to 100% of their annual incentive awards
which would accrue interest at a rate determined each year based on an average of the Treasury High Quality Market Corporate Bond Yield
Curve for the last business day of each month for the twelve month period from October to September. The interest rate in effect for 2021
was 3.2%. Payment of deferred amounts is in accordance with the participant’s election either as lump sum or in monthly installments not
to exceed 120 months, following termination of employment or beginning in the fifth year following the year the award was earned. In the
event of a change of control, all amounts deferred would immediately become payable. For purposes of deferred annual incentive
compensation, a change of control is defined as:

• an acquisition during a 12-month period of 30% or more of the total voting power of our stock;

• an acquisition of our stock that, together with stock already held by the acquirer, constitutes more than 50% of the total fair market value

or total voting power of our stock;

• replacement of a majority of the members of our board of directors during any 12-month period by directors whose appointment or

election is not endorsed by a majority of the members of our board of directors; or

• acquisition of our assets having a gross fair market value at least equal to 40% of the gross fair market value of all of our assets.

The deferred compensation provision of the Executive Incentive Compensation Plan was frozen to new contributions effective January 1,
2021.

Nonqualified Defined Contribution Plan
The company adopted the Nonqualified Defined Contribution Plan, effective January 1, 2012, to provide deferred compensation for a select
group of employees. Company contributions to participant accounts were approved by the compensation committee and constitute an
unsecured promise of the company to make such payments. Participant accounts capture the hypothetical investment experience based on
the participant’s elections. Participants may select from a group of investment options including fixed income, balance/asset allocation, and
various equity offerings. Contributions made prior to 2017 vest four years after each contribution while contributions made in and after
2017 vest ratably over a three-year period in accordance with the terms of the plan. Participants may elect to receive their vested
contributions and investment earnings either in a lump sum upon separation from service with the company or in annual installments over a
period of years upon the latter of (i) separation from service and (ii) age 65. Plan benefits become fully vested if the participant dies while
actively employed. Benefits are forfeited if the participant’s employment is terminated for cause. The Nonqualified Defined Contribution
Plan was frozen to new participants and contributions effective January 1, 2021.

MDU Resources Group, Inc. Deferred Compensation Plan
The company adopted the MDU Resources Group, Inc. Deferred Compensation Plan, effective January 1, 2021, to replace the option to
defer annual incentive payments available under the Executive Incentive Compensation Plan and company contributions to participants’
accounts through the Nonqualified Defined Contribution Plan. Under the MDU Resources Group, Inc. Deferred Compensation Plan,
participants can defer up to 80% of base salary and up to 100% of their annual incentive payment. The company provides discretionary
credits to select individuals recommended by the CEO and approved by the compensation committee, similar to the prior Nonqualified
Defined Contribution Plan. Participants are 100% vested in their contributions of salary and/or annual incentive but vesting of discretionary
employer credits occurs ratably over three years. Participants can establish one or more retirement or in-service accounts which capture the
hypothetical investment experience based on a suite of investment options similar to the Nonqualified Defined Contribution Plan.
Participants may elect to receive their vested contributions and investment earnings either in a lump sum or in annual installments over a
period of years upon a qualifying distribution event. Plan benefits become fully vested if the participant dies or becomes disabled while
actively employed. Benefits are forfeited if the participant’s employment is terminated for cause.

The table below includes individual contributions and company contributions made during 2021 under the MDU Resources Group, Inc.
Deferred Compensation Plan as well as elections under the Executive Incentive Compensation Plan to defer any 2020 annual incentive.
Aggregate earnings and the balance represent the combined participant earnings and participant balances under all three nonqualified
plans.

MDU Resources Group, Inc. Proxy Statement 69

Proxy Statement

Name
(a)

David L. Goodin

Jason L. Vollmer

David C. Barney

Jeffrey S. Thiede

Nicole A. Kivisto

Executive
Contributions in
Last FY
($)
(b)

Registrant
Contributions in
Last FY
($)
(c)

Aggregate
Earnings in
Last FY
($)
(d)

Aggregate
Withdrawals/
Distributions
($)
(e)

909,000

22,615

—

115,788

49,000

150,000

100,000

—

38,864

71,867

157,981

4,669

—

Aggregate
Balance at
Last FYE
($)
(f)

3,820,617 1
304,486 2
1,012,863 3
1,374,780 4

148,255

1 Mr. Goodin deferred 50% of his 2020 annual incentive compensation paid in 2021 which was $1,818,000 as reported in the Summary Compensation

Table for 2020.

2 Mr. Vollmer deferred 5% of his base salary and received company credit of $49,000 under the MDU Resources Group, Inc. Deferred Compensation Plan

for 2021. Mr. Vollmer’s balance also includes contributions of $44,000, $40,000, $35,000, and $22,550 for 2020, 2019, 2018, and 2017,
respectively to the Nonqualified Defined Contribution Plan. Each of these amounts are reported in column (i) of the Summary Compensation Table for its
respective year, where applicable.

3 Mr. Barney received $150,000 under the MDU Resources Group, Inc. Deferred Compensation Plan for 2021. Mr. Barney’s balance also includes

contributions of $150,000 for each of 2020, 2019, 2018, and 2017 to the Nonqualified Defined Contribution Plan. Each of these amounts are reported
in column (i) of the Summary Compensation Table for its respective year.

4 Mr. Thiede received $100,000 under the MDU Resources Group, Inc. Deferred Compensation Plan for 2021. Mr. Thiede’s balance also includes

contributions of $100,000 for each of 2020, 2019, 2018, 2017, and 2016; $150,000 for 2015; $75,000 for 2014; and $33,000 for 2013 to the
Nonqualified Defined Contribution Plan. Each of these amounts was reported in column (i) of the Summary Compensation Table in the Proxy Statement
for its respective year, where applicable.

70 MDU Resources Group, Inc. Proxy Statement

Potential Payments upon Termination or Change of Control

The Potential Payments upon Termination or Change of Control Table shows the payments and benefits our named executive officers would
receive in connection with a variety of employment termination scenarios or upon a change of control. The scenarios include:

Proxy Statement

• Voluntary or Not for Cause Termination;

• Death;

• Disability;

• Change of Control with Termination; and

• Change of Control without Termination.

For the named executive officers, the information assumes the terminations or the change of control occurred on December 31, 2021.

The table excludes compensation and benefits our named executive officers would earn during their employment with us whether or not a
termination or change of control event had occurred. The tables also do not include benefits under plans or arrangements generally available
to all salaried employees and that do not discriminate in favor of the named executive officers, such as benefits under our qualified defined
benefit pension plan (for employees hired before 2006), accrued vacation pay, continuation of health care benefits, and life insurance
benefits. The tables also do not include deferred compensation under our Executive Incentive Compensation Plan, Nonqualified Defined
Contribution Plan, or MDU Resources Group, Inc. Deferred Compensation Plan. These amounts are shown and explained in the
“Nonqualified Deferred Compensation for 2021” Table.

Compensation
None of our named executive officers have employment or severance agreements entitling them to their base salary, some multiple of base
salary or severance upon termination or change of control. Our compensation committee generally considers providing severance benefits on
a case-by-case basis. Because severance payments are discretionary, no amounts are presented in the tables.

All our named executive officers were granted their 2021 annual incentive award under the Executive Incentive Compensation Plan (EICP)
which has no change of control provision in regards to annual incentive compensation other than for deferred compensation. The EICP
requires participants to remain employed with the company through the service year to be eligible for a payout unless otherwise determined
by the compensation committee for executive officers or employment termination after age 65. All our scenarios assume a termination or
change in control event on December 31st. In these scenarios, the named executive officers would be considered employed for the entire
performance period and would be eligible to receive their annual incentive award based on the level that the performance measures were
achieved. Therefore, no amounts are shown for annual incentives in the tables for our named executive officers, as they would be eligible to
receive their annual incentive award with or without a termination or change of control on December 31, 2021.

All named executive officers received their equity share awards under the Long-Term Performance-Based Incentive Plan (LTIP) which
consist of performance share awards for the 2019-2021, 2020-2022, and 2021-2023 vesting periods and restricted stock units for the
2021-2023 vesting period.

Upon a change of control (with or without termination), the performance share and restricted stock unit awards would be deemed fully
earned and vest at their target levels for the named executive officers. For this purpose, the term “change of control” is defined in the LTIP
as:

• the acquisition by an individual, entity, or group of 20% or more of our outstanding common stock;

• a majority of our board of directors whose election or nomination was not approved by a majority of the incumbent board members;

• consummation of a merger or similar transaction or sale of all or substantially all of our assets, unless our stockholders immediately prior
to the transaction beneficially own more than 60% of the outstanding common stock and voting power of the resulting corporation in
substantially the same proportions as before the merger, no person owns 20% or more of the resulting corporation’s outstanding common
stock or voting power except for any such ownership that existed before the merger and at least a majority of the board of the resulting
corporation is comprised of our directors; or

• stockholder approval of our liquidation or dissolution.

MDU Resources Group, Inc. Proxy Statement 71

Proxy Statement

For termination scenarios other than a change of control which include voluntary or not for cause termination, death or disability, our
performance share award agreements provide that performance share awards are forfeited if the participant’s employment terminates before
the participant has reached age 55 and completed 10 years of service. If a participant’s employment terminates other than for cause after
reaching age 55 and completing 10 years of service, performance share awards are prorated as follows:

• termination of employment during the first year of the vesting period = equity shares awards are forfeited;

• termination of employment during the second year of the vesting period = equity shares awards earned are prorated based on the number

of months employed during the vesting period; and

• termination of employment during the third year of the vesting period = full amount of any equity shares awards earned are received.

Under the termination scenarios, Messrs. Goodin, Barney, and Thiede would receive performance shares as they have each reached age 55
and have 10 or more years of service. The number of performance shares received would be based on the following:

• 2019-2021 performance shares would vest based on the achievement of the performance measure for the period ended December 31,

2021, which was 135.6%;

• 2020-2022 performance shares would be prorated at 24 out of 36 months (2/3) of the vesting period and vest based on the actual
achievement of the performance measure for the period ended December 31, 2022. For purposes of the Potential Payments upon
Termination or Change of Control Table, the performance achievement for the performance period is shown at target; and

• 2021-2023 performance shares would be forfeited.

Neither Ms. Kivisto nor Mr. Vollmer have reached age 55; therefore, they are not eligible for vesting of performance shares in the event of
their termination.

For termination scenarios other than a change of control, our restricted share award agreement provides that restricted stock unit share
awards are forfeited if the participant’s employment terminates for situations other than death or disability before the participant has
reached age 55 and completed 10 years of service. If a participant’s employment terminates after reaching age 55 and completing 10 years
of service, restricted stock unit share awards are prorated as follows:

• termination of employment during the first year of the vesting period = restricted stock unit awards are forfeited;

• termination of employment during the second year of the vesting period = restricted stock unit awards earned are prorated based on the

number of months employed during the vesting period; and

• termination of employment during the third year of the vesting period = full amount of any restricted stock unit awards earned are

received.

In situations of death or disability, the restricted stock unit awards earned would be prorated based on the number of full months of
employment completed from the grant date through the date of death or disability.

For 2021, our restricted stock unit awards are all in the first year of the vesting period. In the case of termination other than for cause,
death or disability, our named executive officers would forfeit their 2021-2023 restricted stock units. In the case of termination due to
death or disability, our named executive officers would receive 1/3 of the granted shares based on 12 out of 36 months of the vesting
period.

For purposes of calculating the performance share and restricted stock unit award value shown in the Potential Payments upon Termination
or Change of Control Table, the number of vesting shares was multiplied by the average of the high and low stock price for the last market
day of the year, which was December 31, 2021. Dividend equivalents based on the number of vesting shares are also included in the
amounts presented.

72 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Benefits and Perquisites

Supplemental Income Security Plan
As described in the “Pension Benefits for 2021” section, the Basic SISP provides a benefit of payments for 15 years commencing at the
latter of retirement or age 65. Of the named executive officers, only Messrs. Goodin, Barney, and Ms. Kivisto participate in the Basic SISP
benefits and are 100% vested in their benefit.

Under all scenarios except death and change of control without termination, the payment represents the present value of the vested Basic
SISP benefit as of December 31, 2021, using the monthly retirement benefit shown in the table below and a discount rate of 2.38%. In the
event of death, Messrs. Goodin, Barney, and Ms. Kivisto’s beneficiaries would receive monthly death benefit payments for 15 years. The
Potential Payments upon Termination or Change of Control Table shows the present value calculations of the monthly death benefit using
the 2.38% discount rate.

David L. Goodin

David C. Barney

Nicole A. Kivisto

Monthly SISP Retirement Payment
($)

Monthly SISP Death Payment
($)

23,040

10,936

6,572

46,080

21,872

13,144

Because the plan requires a participant to be no longer actively employed by the company in order to be eligible for payments, we do not
show benefits for the change of control without termination scenario.

Mr. Goodin is the only named executive officer eligible for the Excess SISP. Benefits generally commence six months after the participant’s
employment terminates and continue to age 65 or until the death of the participant, if prior to age 65. As explained in the “Pension
Benefits for 2021”, Excess SISP benefits are equal to the difference between the monthly retirement benefits that would have been payable
to the participant under the pension plans absent the limitations under the Internal Revenue Code and the actual benefits payable to the
participant under the pension plans. Under all scenarios except death or change of control without termination, the payment represents the
present value of the monthly Excess SISP benefit discounted using a rate of 2.38%

Disability
We provide disability benefits to some of our salaried employees equal to 60% of their base salary, subject to a salary limit of $200,000 for
officers and $100,000 for other salaried employees. For all eligible employees, disability payments continue until age 65 if disability occurs
at or before age 60 and for five years if disability occurs between the ages of 60 and 65. Disability benefits are reduced for amounts paid as
retirement benefits. The disability payments in the Potential Payments upon Termination or Change of Control Table reflect the present
value of the disability benefits attributable to the additional $100,000 of base salary recognized for executives under our disability program,
subject to the 60% limitation, after reduction for amounts that would be paid as retirement benefits. For Messrs. Goodin and Vollmer and
Ms. Kivisto, who participate in the pension plan, the amount represents the present value of the disability benefit after reduction for
retirement benefits using a discount rate of 2.60%. Because Mr. Goodin’s retirement benefit is greater than the disability benefit, the
amount shown is zero. For Messrs. Barney and Thiede, who do not participate in the pension plan, the amount represents the present value
of the disability benefit without reduction for retirement benefits using the discount rate of 2.38%, which is considered a reasonable rate for
purposes of the calculation.

MDU Resources Group, Inc. Proxy Statement 73

Proxy Statement

Potential Payments upon Termination or Change of Control Table

Executive Benefits and Payments upon
Termination or Change of Control

Voluntary or
Not for
Cause
Termination
($)

Death
($)

Disability
($)

Change of
Control
(With
Termination)
($)

Change of
Control
(Without
Termination)
($)

David L. Goodin

Compensation:

Performance Shares

Restricted Stock Units

Benefits and Perquisites:

Basic SISP

Excess SISP

SISP Death Benefits

Disability Benefits

Total

Jason L. Vollmer

Compensation:

Performance Shares

Restricted Stock Units

Benefits and Perquisites:

Disability Benefits

Total

David C. Barney

Compensation:

Performance Shares

Restricted Stock Units

Benefits and Perquisites:

Basic SISP

SISP Death Benefits

Disability Benefits

Total

Jeffrey S. Thiede

Compensation:

Performance Shares

Restricted Stock Units

Benefits and Perquisites:

Disability Benefits

Total

Nicole A. Kivisto

Compensation:

Performance Shares

Restricted Stock Units

Benefits and Perquisites:

Basic SISP

SISP Death Benefits

Disability Benefits

Total

74 MDU Resources Group, Inc. Proxy Statement

6,249,068

8,412,306

271,647

814,940

3,112,653

45,965

—

3,112,653

45,965

—

6,983,444

—

9,679,333

13,504,159

9,679,333

12,385,864

9,227,246

—

1,888,735

71,303

213,908

—

926,791

—

71,303

998,094

2,102,643

1,500,583

2,217,723

74,567

223,731

1,657,355

—

1,657,355

—

3,314,711

—

283,134

—

3,232,505

4,889,861

3,515,639

4,098,809

2,441,454

1,045,241

1,894,948

73,838

221,545

—

287,574

—

1,119,079

1,406,653

2,116,493

—

2,221,104

73,838

221,545

670,124

—

670,124

—

1,991,979

—

676,057

—

743,962

2,065,817

1,420,019

3,112,773

2,442,649

Proxy Statement

CEO Pay Ratio Disclosure

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we
are providing information regarding the relationship of the annual total compensation of David L. Goodin, our president and chief executive
officer, to the annual total compensation of our median employee.

Our employee workforce fluctuates during the year largely depending on the seasonality, number, and size of construction project activity
conducted by our businesses. Approximately 51% of our employee workforce is employed under union bargained labor contracts which
define compensation and benefits for participants which may include payments made by the company associated with employee
participation in union benefit and pension plans.

We identified the median employee by examining the 2021 taxable wage information for all individuals on the company’s payroll records as
of December 31, 2021, excluding Mr. Goodin and the employees of Baker Rock Resources and Oregon Mainline Paving which were
acquired by our construction materials and contracting business segment during the fourth quarter. Because of the timing of these
acquisitions and their integration, payroll records were not available to include in the pay ratio analysis. Baker Rock Resources and Oregon
Mainline Paving reported 119 employees which represented less than 1% of the company’s employee population as of December 31, 2021.
All of the company’s employees are located in the United States. We made no adjustments to annualize compensation for individuals
employed for only part of the year. We selected taxable wages as reported to the Internal Revenue Service on Form W-2 for 2021 to identify
the median employee as it includes substantially all of the compensation for our median employee and provided a reasonably efficient and
cost-effective manner for the identification of the median employee. Our median employee works for a subsidiary of our construction
materials and contracting segment with compensation consisting of wages, bonus, company 401(k) matching contributions, life insurance
premiums, car allowance, and a healthy living credit.

Once identified, we categorized the median employee’s compensation using the same methodology as the compensation components
reported in the Summary Compensation Table. For 2021, the total annual compensation of Mr. Goodin as reported in the Summary
Compensation Table included in this Proxy Statement was $5,210,467, and the total annual compensation of our median employee was
$78,907. Based on this information, the 2021 ratio of annual total compensation of Mr. Goodin to the median employee was 66 to 1.

MDU Resources Group, Inc. Proxy Statement 75

Proxy Statement

AUDIT MATTERS

ITEM 3: RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2022

The audit committee at its February 2022 meeting appointed Deloitte & Touche LLP as our independent registered public accounting firm
for fiscal year 2022. The board of directors concurred with the audit committee’s decision. Deloitte & Touche LLP has served as our
independent registered public accounting firm since fiscal year 2002.

Although your ratification vote will not affect the appointment or retention of Deloitte & Touche LLP for 2022, the audit committee will
consider your vote in determining its appointment of our independent registered public accounting firm for the next fiscal year. The audit
committee, in appointing our independent registered public accounting firm, reserves the right, in its sole discretion, to change an
appointment at any time during a fiscal year if it determines that such a change would be in our best interests.

A representative of Deloitte & Touche LLP will be present at the annual meeting and will be available to respond to appropriate questions.
We do not anticipate that the representative will make a prepared statement at the annual meeting; however, he or she will be free to do so
if he or she chooses.

The board of directors recommends a vote “for” the ratification of the
appointment of Deloitte & Touche LLP as our independent registered
public accounting firm for fiscal year 2022.

Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2022 requires the
affirmative vote of a majority of our common stock present in person or represented by proxy at the annual meeting and entitled to vote on
the proposal. Abstentions will count as votes against this proposal.

Annual Evaluation and Selection of Deloitte & Touche LLP

The audit committee annually evaluates the performance of its independent registered public accounting firm, including the senior audit
engagement team, and determines whether to re-engage the current independent accounting firm or consider other firms. Factors
considered by the audit committee in deciding whether to retain the current independent accounting firm include:

• Deloitte & Touche LLP’s capabilities considering the complexity of our business and the resulting demands placed on Deloitte & Touche

LLP in terms of technical expertise and knowledge of our industry and business;

• the quality and candor of Deloitte & Touche LLP’s communications with the audit committee and management;

• Deloitte & Touche LLP’s independence;

• the quality and efficiency of the services provided by Deloitte & Touche LLP, including input from management on Deloitte & Touche
LLP’s performance and how effectively Deloitte & Touche LLP demonstrated its independent judgment, objectivity, and professional
skepticism;

• the workload capacity and resources of Deloitte & Touche LLP’s senior audit engagement team;

• external data on audit quality and performance, including recent Public Company Accounting Oversight Board reports on Deloitte &

Touche LLP and its peer firms; and

• the appropriateness of Deloitte & Touche LLP’s fees, tenure as our independent auditor, including the benefits of a longer tenure, and the

controls and processes in place that help ensure Deloitte & Touche LLP’s continued independence.

76 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Based on this evaluation, the audit committee and the board believe that retaining Deloitte & Touche LLP to serve as our independent
registered public accounting firm for the fiscal year ending December 31, 2022, is in the best interests of our company and its
stockholders.

The audit committee also oversees the process for, and ultimately approves, the selection of our independent registered public accounting
firm’s lead engagement partner at the five-year mandatory rotation period. Prior to the mandatory rotation period in 2022, the audit
committee and members of company management were presented a summary of various candidates selected by Deloitte & Touche LLP to be
considered for the lead engagement partner role. After discussing the qualifications of the proposed lead engagement partner, the audit
committee chair met with the leading candidate, who was also known to other audit committee members due to prior Deloitte & Touche LLP
engagement work for the company, and the audit committee then considered the appointment and voted as an audit committee on the
selection. The change in lead engagement partner after the current five-year rotation period occurred in February 2022.

Audit Fees and Non-Audit Fees

The following table summarizes the aggregate fees that our independent registered public accounting firm, Deloitte & Touche LLP, billed or
is expected to bill us for professional services rendered for 2020 and 2021:

Audit Fees 1
Audit-Related Fees
Tax Fees

All Other Fees
Total Fees 2

2020

2021

$ 2,798,015

$ 2,910,640

—

$ 2,798,015

$ 2,910,640

Ratio of Tax and All Other Fees to Audit and Audit-Related Fees

0 %

1 Audit fees for 2020 and 2021 consisted of fees for the annual audit of our consolidated financial statements and internal control over financial
reporting, statutory and regulatory audits, reviews of quarterly financial statements, comfort letters in connection with securities offerings, and
other filings with the SEC.

2 Total fees reported above include out-of-pocket expenses related to the services provided of $85,000 for 2020 and $100,000 for 2021.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of the Independent
Registered Public Accounting Firm

The audit committee pre-approved all services Deloitte & Touche LLP performed in 2021 in accordance with the pre-approval policy and
procedures the audit committee adopted in 2003. This policy is designed to achieve the continued independence of Deloitte & Touche LLP
and to assist in our compliance with Sections 201 and 202 of the Sarbanes-Oxley Act of 2002 and related rules of the SEC.

The policy defines the permitted services in each of the audit, audit-related, tax, and all other services categories, as well as prohibited
services. The pre-approval policy requires management to submit annually for approval to the audit committee a service plan describing the
scope of work and anticipated cost associated with each category of service. At each regular audit committee meeting, management reports
on services performed by Deloitte & Touche LLP and the fees paid or accrued through the end of the quarter preceding the meeting.
Management may submit requests for additional permitted services before the next scheduled audit committee meeting to the designated
member of the audit committee, currently David M. Sparby, for approval. The designated member updates the audit committee at the next
regularly scheduled meeting regarding any services approved during the interim period. At each regular audit committee meeting,
management may submit to the audit committee for approval a supplement to the service plan containing any request for additional
permitted services.

In addition, prior to approving any request for audit-related, tax, or all other services of more than $50,000, Deloitte & Touche LLP will
provide a statement setting forth the reasons why rendering of the proposed services does not compromise Deloitte & Touche LLP’s
independence. This description and statement by Deloitte & Touche LLP may be incorporated into the service plan or included as an exhibit
thereto or may be delivered in a separate written statement.

MDU Resources Group, Inc. Proxy Statement 77

Proxy Statement

AUDIT COMMITTEE REPORT

The audit committee assists the board in fulfilling its oversight responsibilities and serves as a communication link among the board,
management, the independent auditors, and the internal auditors. The audit committee (a) assists the board’s oversight of (i) the integrity of
the company’s financial reporting process and system of internal controls, (ii) the company’s compliance with legal and regulatory
requirements and the code of conduct, (iii) the independent auditors’ qualifications and independence, (iv) the performance of the
company’s internal audit function and independent auditors, and (v) the company’s management of risks in the audit committee’s areas of
responsibility; (b) arranges for the preparation of and approves the report that SEC rules require be included in the company’s annual proxy
statement; and (c) is also responsible for the appointment, compensation, retention, and oversight of the independent auditors including
pre-approval of all audit and non-audit services by the independent auditors. The audit committee acts under a written charter which it
reviews at least annually and a copy of which is available on our website.

Management has primary responsibility for the company’s financial statements and the reporting process, including the systems of internal
control over financial reporting. The independent auditors are responsible for performing an independent audit of the company’s
consolidated financial statements, issuing an opinion on the conformity of those audited financial statements with generally accepted
accounting principles, and assessing the effectiveness of the company’s internal controls over financial reporting. The audit committee
oversees the company’s financial reporting process and internal controls on behalf of the board.

In performing its oversight responsibilities in connection with our financial statements for the year ended December 31, 2021, the audit
committee:

• reviewed and discussed the audited financial statements with management;

• discussed with the independent auditors the matters required to be discussed by the applicable requirements of the Public Company

Accounting Oversight Board and the SEC; and

• received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company
Accounting Oversight Board regarding the independent auditors’ communications with the audit committee concerning independence and
discussed with the independent auditors their independence.

Based on the review and discussions referred to above, the audit committee recommended to the board of directors, and the board of
directors has approved, that the audited financial statements be included in our Annual Report on Form 10-K for the year ended
December 31, 2021, for filing with the SEC. The audit committee has appointed Deloitte & Touche LLP as the company’s independent
auditors for 2022. Stockholder ratification of this appointment is included as Item 3 in these proxy materials.

David M. Sparby, Chair

Dale S. Rosenthal

Edward A. Ryan

Chenxi Wang

78 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

INFORMATION ABOUT THE ANNUAL MEETING

Who Can Vote?

Stockholders of record at the close of business on March 11, 2022, are entitled to vote each share they owned
on that date on each matter presented at the meeting and any adjournment(s) thereof. As of March 11, 2022,
we had 203,350,740 shares of common stock outstanding each entitled to one vote per share.

Distribution of Our
Proxy Materials
Using Notice and
Access

We distributed proxy materials to certain of our stockholders via the Internet under the SEC’s “Notice and
Access” rules to reduce our costs and decrease the environmental impact of our proxy materials. Using this
method of distribution, on or about March 25, 2022, we mailed a Notice Regarding the Availability of Proxy
Materials (Notice) that contains basic information about our 2022 annual meeting and instructions on how to
view all proxy materials, and vote electronically, on the Internet. If you received the Notice and prefer to receive
a paper copy of the proxy materials, follow the instructions in the Notice for making this request and the
materials will be sent promptly to you via your preferred method.

How to Vote

You are encouraged to vote in advance of the meeting using one of the following voting methods, even if you are
planning to attend the 2022 Annual Meeting of Stockholders.

Registered Stockholders: Stockholders of record who hold their shares directly with our stock registrar can vote
any one of four ways:

instructions.

: By Internet: Go to the website shown on the Notice or Proxy Card, if you received one, and follow the
) By Telephone: Call the telephone number shown on the Notice or Proxy Card, if you received one, and

follow the instructions given by the voice prompts.

Voting via the Internet or by telephone authorizes the named proxies to vote your shares in the same
manner as if you marked, signed, dated, and returned the Proxy Card by mail. Your voting instructions may
be transmitted up until 11:59 p.m. Eastern Time on May 9, 2022.

* By Mail: If you received a paper copy of the Proxy Statement, Annual Report, and Proxy Card, mark, sign,

date, and return the Proxy Card in the postage-paid envelope provided.

In Person: Attend the annual meeting, or send a personal representative with an appropriate proxy, to vote
by ballot at the meeting.

Beneficial Stockholders: Stockholders whose shares are held beneficially in the name of a bank, broker, or other
holder of record (sometimes referred to as holding shares “in street name”), will receive voting instructions from
said bank, broker, or other holder of record. If you wish to vote in person at the meeting, you must obtain a legal
proxy from your bank, broker, or other holder of record of your shares and present it at the meeting.

See discussion below regarding the MDU Resources Group, Inc. 401(k) Plan for voting instructions for shares held
under our 401(k) plan.

You may change your vote at any time before the proxy is exercised.

Registered Stockholders:

• If you voted by mail: you may revoke your proxy by executing and delivering a timely and valid later dated

proxy, by voting by ballot at the meeting, or by giving written notice of revocation to the corporate secretary.

• If you voted via the Internet or by telephone: you may change your vote with a timely and valid later Internet

or telephone vote, as the case may be, or by voting by ballot at the meeting.

• Attendance at the meeting will not have the effect of revoking a proxy unless (1) you give proper written

notice of revocation to the corporate secretary before the proxy is exercised, or (2) you vote by ballot at the
meeting.

Beneficial Stockholders: Follow the specific directions provided by your bank, broker, or other holder of record to
change or revoke any voting instructions you have already provided. Alternatively, you may vote your shares by
ballot at the meeting if you obtain a legal proxy from your bank, broker, or other holder of record and present it
at the meeting.

Revoking Your
Proxy or Changing
Your Vote

MDU Resources Group, Inc. Proxy Statement 79

Proxy Statement

Discretionary
Voting Authority

If you complete and submit your proxy voting instructions, the individuals named as proxies will follow your
instructions. If you are a stockholder of record and you submit proxy voting instructions but do not direct how to
vote on each item, the individuals named as proxies will vote as the board recommends on each proposal. The
individuals named as proxies will vote on any other matters properly presented at the annual meeting in
accordance with their discretion. Our bylaws set forth requirements for advance notice of any nominations or
agenda items to be brought up for voting at the annual meeting, and we have not received timely notice of any
such matters, other than the items from the board of directors described in this Proxy Statement.

Voting Standards

A majority of outstanding shares of stock entitled to vote must be present in person or represented by proxy to
hold the meeting. Abstentions and broker non-votes are counted for purposes of determining whether a quorum
is present at the annual meeting.

If you are a beneficial holder and do not provide specific voting instruction to your broker, the organization that
holds your shares will not be authorized to vote your shares, which would result in broker non-votes, on proposals
other than the ratification of the selection of our independent registered public accounting firm for 2022.

The following chart describes the proposals to be considered at the annual meeting, the vote required to elect
directors and to adopt each other proposal, and the manner in which votes will be counted:

Item
No.

Proposal

Election of Directors

Voting
Options

For,
against,
or abstain
on each
nominee

Vote Required to Adopt the Proposal

A nominee for director will be
elected if the votes cast for such
nominee exceed the votes cast
against such nominee.

Effect of
Abstentions

Effect of “Broker
Non-Votes”

No effect

Advisory Vote to Approve
the Compensation Paid
to the Company’s Named
Executive Officers

For,
against,
or abstain

The affirmative vote of a majority
of the shares of common stock
represented at the annual meeting
and entitled to vote thereon

Same
effect as
votes
against

No effect

For,
against,
or abstain

The affirmative vote of a majority
of the shares of common stock
represented at the annual meeting
and entitled to vote thereon

Same
effect as
votes
against

Brokers have
discretion to
vote

3 Ratification of the

Appointment of Deloitte
& Touche LLP as the
Company’s Independent
Registered Public
Accounting Firm for
2022

Proxy Solicitation

The board of directors is furnishing proxy materials to solicit proxies for use at the Annual Meeting of
Stockholders on May 10, 2022, and any adjournment(s) thereof. Proxies are solicited principally by mail, but
directors, officers, and employees of MDU Resources Group, Inc. or its subsidiaries may solicit proxies
personally, by telephone, or by electronic media, without compensation other than their regular compensation.
Okapi Partners, LLC, additionally will solicit proxies for approximately $9,000 plus out-of-pocket expenses. We
will pay the cost of soliciting proxies and will reimburse brokers and others for forwarding proxy materials to
stockholders.

80 MDU Resources Group, Inc. Proxy Statement

Electronic Delivery
of Proxy Statement
and Annual Report
Documents

For stockholders receiving proxy materials by mail, you can elect to receive an email in the future that will
provide electronic links to these documents. Opting to receive your proxy materials online will save the company
the cost of producing and mailing documents to your home or business and will also give you an electronic link
to the proxy voting site.

Proxy Statement

• Registered Stockholders: If you vote on the Internet, simply follow the prompts for enrolling in the electronic

proxy delivery service. You may also enroll in the electronic proxy delivery service at any time in the future by
going directly to http://enroll.icsdelivery.com/mdu to request electronic delivery. You may revoke an electronic
delivery election at this site at any time.

• Beneficial Stockholders: If you hold your shares in a brokerage account, you may also have the opportunity to
receive copies of the proxy materials electronically. You may enroll in the electronic proxy delivery service at
any time by going directly to http://enroll.icsdelivery.com/mdu to request electronic delivery. You may also
revoke an electronic delivery election at this site at any time. In addition, you may also check the information
provided in the proxy materials mailed to you by your bank or broker regarding the availability of this service
or contact your bank or broker to request electronic delivery.

In accordance with a Notice sent to eligible stockholders who share a single address, we are sending only one
Annual Report to Stockholders and one Proxy Statement to that address unless we received instructions to the
contrary from any stockholder at that address. This practice, known as “householding,” is designed to reduce our
printing and postage costs. However, if a stockholder of record wishes to receive a separate Annual Report to
Stockholders and Proxy Statement in the future, he or she may contact the Office of the Treasurer at MDU
Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506-5650, Telephone Number: (701) 530-1000.
Eligible stockholders of record who receive multiple copies of our Annual Report to Stockholders and Proxy
Statement can request householding by contacting us in the same manner. Stockholders who own shares through
a bank, broker, or other nominee can request householding by contacting the nominee.

We will promptly deliver, upon written or oral request, a separate copy of the Annual Report to Stockholders and
Proxy Statement to a stockholder at a shared address to which a single copy of the document was delivered.

This Proxy Statement is being used to solicit voting instructions from participants in the MDU Resources Group,
Inc. 401(k) Plan with respect to shares of our common stock that are held by the trustee of the plan for the
benefit of plan participants. If you are a plan participant and also own other shares as a registered stockholder or
beneficial owner, you will separately receive a Notice or proxy materials to vote those other shares you hold
outside of the MDU Resources Group, Inc. 401(k) Plan. If you are a plan participant, you must instruct the plan
trustee to vote your shares by utilizing one of the methods described on the voting instruction form that you
receive in connection with shares held in the plan. If you do not give voting instructions, the trustee generally
will vote the shares allocated to your personal account in accordance with the recommendations of the board of
directors. Your voting instructions may be transmitted up until 11:59 p.m. Eastern Time on May 5, 2022.

Householding of
Proxy Materials

MDU Resources
Group, Inc.
401(k) Plan

Annual Meeting
Admission and
Guidelines

Admission: All stockholders as of the record date of March 11, 2022, are cordially invited to attend the annual
meeting. You must request an admission ticket to attend. If you are a stockholder of record and plan to attend the
meeting, please contact MDU Resources by email at CorporateSecretary@mduresources.com or by telephone at
701-530-1010 to request an admission ticket. A ticket will be sent to you by mail.

If your shares are held beneficially in the name of a bank, broker, or other holder of record, and you plan to
attend the annual meeting, you will need to submit a written request for an admission ticket by mail to:
Investor Relations, MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506 or email at
CorporateSecretary@mduresources.com. The request must include proof of stock ownership as of March 11,
2022, such as a bank or brokerage firm account statement or a legal proxy from the bank, broker, or other holder
of record confirming ownership. A ticket will be sent to you by mail.

Requests for admission tickets must be received no later than May 3, 2022. You must present your admission
ticket and state-issued photo identification, such as a driver’s license, to gain admittance to the meeting.

Guidelines: The use of cameras or sound recording equipment is prohibited except by the media or those
employed by the company to provide a record of the proceedings. The use of cell phones and other personal
communication devices is also prohibited during the meeting. All devices must be turned off or muted. No
firearms or weapons, banners, packages, or signs will be allowed in the meeting room. MDU Resources Group,
Inc. reserves the right to inspect all items, including handbags and briefcases, that enter the meeting room.

MDU Resources Group, Inc. Proxy Statement 81

Proxy Statement

Annual Meeting
Admission and
Guidelines
(continued)

Public Health Concerns: We are actively monitoring the public health and travel safety concerns relating to
COVID-19 and the advisories or mandates that federal, state, and local governments and related agencies may
issue. In the event it is not possible or advisable to hold our annual meeting as currently planned, we will issue a
press release and make a public filing with the SEC announcing any changes to the annual meeting. This may
include a change in venue or holding the meeting solely by remote communication. If you are planning to attend
our meeting, you may also check our company website at www.mduproxy.com for updates on meeting and public
health safety protocols that may be required. As always, we encourage you to vote your shares prior to the annual
meeting.

Conduct of the
Meeting

Neither the board of directors nor management intends to bring before the meeting any business other than the
matters referred to in the Notice of Annual Meeting and this Proxy Statement. We have not been informed that any
other matter will be presented at the meeting by others. However, if any other matters are properly brought before
the annual meeting, or any adjournment(s) thereof, your proxies include discretionary authority for the persons
named in the proxy to vote or act on such matters in their discretion.

Stockholder
Proposals, Director
Nominations, and
Other Items of
Business for 2023
Annual Meeting

Stockholder Proposals for Inclusion in Next Year’s Proxy Statement: To be included in the proxy materials for our
2023 annual meeting, a stockholder proposal must be received by the corporate secretary no later than
November 25, 2022, unless the date of the 2023 annual meeting is more than 30 days before or after May 10,
2023, in which case the proposal must be received a reasonable time before we begin to print and mail our proxy
materials. The proposal must also comply with all applicable requirements of Rule 14a-8 under the Securities
Exchange Act of 1934.

Director Nominations From Stockholders for Inclusion in Next Year’s Proxy Statement: If a stockholder or group of
stockholders wishes to nominate one or more director candidates to be included in our proxy statement for the
2023 annual meeting through our proxy access bylaw provision, we must receive proper written notice of the
nomination not later than 120 days or earlier than 150 days before the anniversary date that the definitive proxy
statement was first released to stockholders in connection with the annual meeting, or between October 26,
2022 and November 25, 2022. In the event that the 2023 annual meeting is more than 30 days before or after
May 10, 2023, the notice must be delivered no earlier than the 150th day prior to such meeting and no later than
the 120th day prior to such meeting or the 10th day following the date on which public announcement of the
meeting date is first made. In addition, the nomination must otherwise comply with the requirements in our
bylaws. In addition, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support
of director nominees other than our nominees must provide notice that sets forth the information required by Rule
14a-19 under the Exchange Act no later than March 11, 2023. The requirements of such notice can be found in
our bylaws, a copy of which is on our website, at https://investor.mdu.com/governance/governance-documents.

Director Nominations and Other Stockholder Proposals Raised From the Floor at the 2023 Annual Meeting of
Stockholders: Under our bylaws, if a stockholder intends to nominate a person as a director, or present other items
of business at an annual meeting, the stockholder must provide written notice of the director nomination or
stockholder proposal within 90 to 120 days prior to the anniversary of the most recent annual meeting. Notice of
director nominations or stockholder proposals for our 2023 annual meeting must be received between January 10,
2023 and February 9, 2023, and meet all the requirements and contain all the information, including the
completed questionnaire for director nominations, provided by our bylaws. The requirements for such notice can
be found in our bylaws, a copy of which is on our website, at https://investor.mdu.com/governance/governance-
documents.

We will make available to our stockholders to whom we furnish this Proxy Statement a copy of our Annual Report on Form 10-K, excluding exhibits,
for the year ended December 31, 2021, which is required to be filed with the SEC. You may obtain a copy, without charge, upon written or oral
request to the Office of the Treasurer of MDU Resources Group, Inc., 1200 West Century Avenue, Mailing Address: P.O. Box 5650, Bismarck, North
Dakota 58506-5650, Telephone Number: (701) 530-1000. You may also access our Annual Report on Form 10-K through our website at
www.mdu.com.

By order of the Board of Directors,

Karl A. Liepitz

Secretary

March 25, 2022

82 MDU Resources Group, Inc. Proxy Statement

Corporate Headquarters
Street Address:
1200 W. Century Ave.
Bismarck, ND 58503

Mailing Address:
P.O. Box 5650
Bismarck, ND 58506-5650

Telephone: 701-530-1000
Toll-Free Telephone: 866-760-4852
www.mdu.com

The company has filed as exhibits to its Annual Report on Form
10-K the CEO and CFO certifications as required by Section 302
of the Sarbanes-Oxley Act.

Common Stock
MDU Resources’ common stock is listed on the New York Stock
Exchange under the symbol MDU. The stock began trading on the
NYSE in 1948 and is included in the Standard & Poor’s MidCap
400 and the S&P High-Yield Dividend Aristocrats indices.
Average daily trading volume in 2021 was 952,048 shares.

Shareowner Service Plus Plan
The Shareowner Service Plus Plan provides interested investors
the opportunity to purchase shares of MDU Resources’ common
stock and to reinvest all or a percentage of dividends without
incurring brokerage commissions or service charges. The plan is
sponsored and administered by Equiniti Trust Company, transfer
agent and registrar for MDU Resources. For more information,
contact Equiniti Trust Company at 877-536-3553 or visit
www.shareowneronline.com.

2022 Key Dividend Dates

Ex-Dividend Date

Record Date

Payment Date

March 10
March 9
First Quarter
June 9
June 8
Second Quarter
September 8
September 7
Third Quarter
December 8
December 7
Fourth Quarter
Key dividend dates are subject to the discretion of the Board of Directors.

April 1
July 1
October 1
January 1, 2023

Stockholder Information

Annual Meeting
11 a.m. CDT May 10, 2022
Montana-Dakota Utilities Co. Service Center
909 Airport Road
Bismarck, North Dakota

Shareholder Information and Inquiries
Registered shareholders have electronic access to their accounts by
visiting www.shareowneronline.com. Shareowner Online allows
shareholders to view their account balance, dividend information,
reinvestment details and more. The stock transfer agent maintains
stockholder account information.

Communications regarding stock transfer requirements, lost
certificates, dividends or change of address should be directed to
the stock transfer agent.

Company information, including financial reports, is available at
www.mdu.com and investor.mdu.com.

Shareholder Contact
Dustin J. Senger
Telephone: 866-866-8919
Email: investor@MDUResources.com

Analyst Contact
Jason L. Vollmer
Telephone: 701-530-1755
Email: Jason.Vollmer@MDUResources.com

Transfer Agent and Registrar for All Classes of Stock
Equiniti Trust Company
Stock Transfer Department
P.O. Box 64874
St. Paul, MN 55164-0874
Telephone: 877-536-3553
www.shareowneronline.com

Independent Registered Public Accounting Firm
Deloitte & Touche LLP
50 S. Sixth St., Suite 2800
Minneapolis, MN 55402-1538

Note: This information is not given in connection with any sale or
offer for sale or offer to buy any security.

Design: MDU Resources
Printing: AFPI