MDU Resources Group Annual Report 2023

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FY2023 Annual Report · MDU Resources Group

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2 0 2 3 A n n u a l R e po r t
F o r m 1 0 - K | P r o x y S t a t e m e n t

2 0 2 3 O p e r a t i o n s M a p

2023

Highlights

9,145

employees

Electric Utility
Natural Gas Utility
Pipeline

Construction Services Oﬃces
Construction Services Authorized
States of Operation

2.6 Bcf/day

of natural gas

pipeline capacity

1.19 million

utility

customers

10th largest

specialty contractor,

according to

Engineering News-Record

70cents

Annual dividend

per share

$414.7M

GAAP earnings

Consecutive years

of paid dividends

$2.03EPS

Diluted

$480.4M $2.36EPS

Income from continuing operations*

* Includes the gain of $186.6 million on the tax-free exchange of the retained shares of Knife River in the fourth quarter 2023. MDU

Resources has reported Knife River's results and the transaction costs and certain interest expenses associated with the spinoﬀ as

discontinued operations, and MDU Resources' prior period results have been restated to reﬂect the spinoﬀ.

For the year ended and at December 31, 2023, as applicable.

MDU Resources Group, Inc., a member of the S&P MidCap 400
index, provides essential products and services through its
regulated energy delivery and construction services businesses.

2 0 2 3 O p e r a t i o n s M a p

2023
Highlights

9,145
employees

Electric Utility

Natural Gas Utility

Pipeline

Construction Services Oﬃces

Construction Services Authorized

States of Operation

2.6 Bcf/day
of natural gas
pipeline capacity

1.19 million
utility
customers

10th largest
specialty contractor,
according to
Engineering News-Record

70cents

Annual dividend
per share

$414.7M
GAAP earnings

Consecutive years
of paid dividends

$2.03EPS
Diluted

$480.4M $2.36EPS

Income from continuing operations*

* Includes the gain of $186.6 million on the tax-free exchange of the retained shares of Knife River in the fourth quarter 2023. MDU
Resources has reported Knife River's results and the transaction costs and certain interest expenses associated with the spinoﬀ as
discontinued operations, and MDU Resources' prior period results have been restated to reﬂect the spinoﬀ.

For the year ended and at December 31, 2023, as applicable.

MDU Resources Group, Inc., a member of the S&P MidCap 400

index, provides essential products and services through its

regulated energy delivery and construction services businesses.

Highlights

Years ended December 31,

Operating revenues

Operating income

Net Income

Earnings per share, diluted

Income from continuing operations1

Earnings per share from continuing operations, diluted1

Dividends declared per common share

Weighted average common shares outstanding — diluted

Total assets

Total equity

Total debt2

Capitalization ratios:

Total equity

Total debt2

2023

2022

(In millions, where applicable)

4,657.3

426.0

414.7

2.03

480.4

2.36

.695

203.9

7,833

2,905

2,393

54.8%

45.2

100%

4,441.8

370.0

367.5

1.81

250.8

1.23

.875

203.5

9,661

3,587

3,088

53.7%

46.3

100%

17.62

172.2%

11,132

Book value per share3

Market value as a percent of book value3

Employees4

14.26

138.8%

9,145

1 On May 31, 2023, MDU Resources completed a spinoff of approximately 90% of the outstanding shares of its construction materials and contracting subsidiary, Knife River, which
became an independent, publicly traded company. MDU Resources completed a tax-free exchange of its retained shares of Knife River in the fourth quarter of 2023, and the gain is
reported as part of MDU Resources’ Other segment. MDU Resources has reported Knife River’s results and the transaction costs and certain interest expenses associated with the
spinoff as discontinued operations, and MDU Resources’ prior period results have been restated to reflect the spinoff.

2 2022 amounts include debt of discontinued operations.
3 2022 amounts include Knife River.
4 2022 amounts exclude Knife River.

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 “2023 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.

Electric and Natural Gas Utilities

MDU Resources Group’s utility companies serve more than 1.19
million customers. Cascade Natural Gas Corporation distributes
natural gas in Oregon and Washington. Intermountain Gas
Company distributes natural gas in southern Idaho. Montana-
Dakota Utilities Co. generates, transmits and distributes
electricity in Montana, North Dakota, South Dakota and Wyoming
and distributes natural gas in Minnesota, Montana, North Dakota,
South Dakota and Wyoming. These operations also supply
related value-added services.

Electric and natural gas utility areas

Electric generating stations

States of operations

Our Businesses

$401.2
$1,287.5

$71.6
$48.5
4,196.2

States of operations

Electric and natural gas utility areas

Electric generating stations

2023 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

Pipeline

122.6
190.3

Company storage ﬁelds

Pipeline systems

States of operations

Interconnecting 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.

2023 Key Statistics
Revenues (millions)
Net income (millions)
Pipeline transportation (MMdk)

$177.6
$46.9
567.2

Construction Services

MDU Resources Group’s construction services segment provides
a full spectrum of construction services through its electrical
and mechanical, and transmission and distribution specialty
contracting services across the United States. 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.

2023 Key Statistics
Revenues (millions)
Net income (millions)

$2,854.4
$137.2

States of operations

Company storage ﬁelds

Pipeline systems

Interconnecting pipeline

Company storage ﬁelds

States of operations

Pipeline systems

Interconnecting pipeline

AL GA

Authorized states of operations

Transmission & Distribution

Headquarters

Electrical & Mechanical

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

MDU Resources Group, Inc.To Our Stockholders

Through the hard work and
dedication of our employees
across the country, 2023 was
truly an outstanding year for
MDU Resources Group:

• We successfully completed
a tax-free spinoff of our
construction materials and
contracting business, Knife River
Corporation, as an independent,
publicly traded company.

• We achieved record electric

retail sales volumes at
our utility business.

• We achieved record transportation

volumes and earnings at
our pipeline business.

• We achieved record revenues

and earnings at our construction
services business while
announcing and beginning to
work toward a tax-free spinoff of
this business, which is expected
to be complete in late 2024.

The continued growth of our
utility and pipeline segments while

spinning off our construction
segments moves us closer to our
objective of being a pure-play
regulated energy delivery business,
which we expect will further
optimize value for shareholders.

Utilities continue rate base
and customer growth

Our electric and natural gas utilities
earned $120.1 million in 2023,
compared to $102.3 million in 2022.
We achieved record electric retail
sales volumes, which increased
25.5% compared to 2022. The
increase was primarily from a data
center that began operating in our
North Dakota service territory in
mid-2023. We filed a request in
October with the North Dakota
Public Service Commission to
serve another data center that is
expected to be online in mid-2024.
We look forward to continued
opportunities to serve these types
of customers as our service territory
is ideal for data center operations,
with cost-effective electric rates
and cold winters that cut down

on the facilities’ cooling needs.

Rate relief in certain jurisdictions
also contributed to 2023 results as
we continue to invest in electric and
natural gas system upgrades and
expansions to serve our growing
customer base, which was up 1.3%
in 2023. Our rate base grew 8.5%
in 2023. With ongoing capital
investments of more than $2.3
billion planned from 2024 to 2028,
we expect our rate base to continue
growing approximately 7% on a
compounded annual basis over the
next five years. These investments
in our systems ensure we continue
to provide safe, reliable and cost-
effective electricity and natural gas
as we expect our customer base
across eight states to continue to
grow 1%-2% annually from our
current 1.2 million customers.

We are proud of our employees’
ongoing dedication to serving
our customers and communities,
which is reflected in another year of
superior customer service rankings.
Intermountain Gas Company

Twelve months ended December 31,

2023

2022

(In millions, except per share amounts)

Net Income

Earnings per share, diluted

Income from continuing operations¹

Earnings per share from continuing operations, diluted¹

Regulated energy delivery earnings

Construction Services

Revenue

Earnings

414.7

2.03

480.4

2.36

167.0

2,854.4

137.2

367.5

1.81

250.8

1.23

137.6

2,699.2

124.8

¹ On May 31, 2023, MDU Resources completed a spinoff of approximately 90% of the outstanding shares of its construction materials and contracting subsidiary, Knife River, which
became an independent, publicly traded company. MDU Resources completed a tax-free exchange of its retained shares of Knife River in the fourth quarter of 2023, and the gain
of $186.6 million is reported as part of MDU Resources’ Other segment. MDU Resources has reported Knife River’s results and the transaction costs and certain interest expenses
associated with the spinoff as discontinued operations, and MDU Resources’ prior period results have been restated to reflect the spinoff.

MDU Resources Group, Inc.

Report to Stockholders

earned the highest ranking for West
Region midsize natural gas utilities
in the J.D. Power 2023 Gas Utility
Residential Customer Satisfaction
Study. Cascade Natural Gas
Corporation finished second and
Montana-Dakota Utilities ranked
fourth. The study surveys customer
satisfaction across six factors: safety
and reliability; billing and payment;
corporate citizenship; price;
communications; and customer care.

Our 88-megawatt natural-gas fired
Heskett Unit IV electric generating
facility near Mandan, North
Dakota, was expected to be online
in 2023. Initial testing identified
certain performance concerns.
Modifications are being made and,
barring any setbacks, Heskett Unit
IV is expected to be fully operational
in the second quarter of 2024.

We continue to focus on reducing
greenhouse gas emissions across our
businesses, and in 2023 established
a natural gas utility methane
emissions reduction target of 30%
by 2035 compared to 2022 levels.
The utility expects to achieve this
target through public awareness
and damage prevention programs,
expediting leak mitigation efforts,
adding more renewable natural
gas to its supplies and replacing
older pipelines with lines made
of newer materials, such as
polyethylene and coated steel.

Record volumes, earnings
for pipeline business

Our pipeline business had record
earnings of $46.9 million in 2023,
up 33% compared to $35.3 million
in 2022. Natural gas transportation
volumes set a new record, up 17%

f Montana-Dakota Utilities line workers repair downed transmission lines after a December 2023 ice storm.

compared to 2022. This growth was
primarily from expansion projects
placed in service in 2022 and 2023:

• The North Bakken Expansion in
northwestern North Dakota was
placed in service on February
1, 2022, adding 250 million
cubic feet per day of natural
gas transportation capacity.
Beginning in February 2023, we
had higher contracted volume
commitments on the pipeline,
which added to our increased
transportation volumes.

• Three additional expansion
projects were constructed in
2023. Two of those projects were
placed in service on November 1,
adding 119 million cubic feet per
day of natural gas transportation
capacity. The third project is
expected to be placed in service
on March 1, 2024, with an
additional 175 million cubic feet
per day of natural gas capacity.

Also contributing to WBI
Energy’s record earnings were

new transportation and storage
rates approved by the Federal
Energy Regulatory Commission
that took effect August 1. We look
forward to these new rates being
in effect for a full year in 2024.

We also saw strong utilization of
WBI Energy’s natural gas storage
services in 2023. WBI Energy owns
the largest naturally occurring
storage field in North America,
located near the Bakken.

Looking ahead for 2024, WBI
Energy will begin construction
in the second quarter on its
Wahpeton Expansion project, which
received FERC approval in 2023.
Supported by long-term customer
commitments, the project is
expected to be in service in late 2024
and will add 20 million cubic feet of
natural gas transportation capacity
per day in eastern North Dakota.

WBI Energy also will construct
an expansion in 2024 on its Line
Section 28, which is supported by
a long-term negotiated customer

MDU Resources Group, Inc.Report to Stockholders

agreement to serve a natural gas-
fired electric generating facility in
northwestern North Dakota. This
project will add 137 million cubic
feet of natural gas transportation
capacity per day and is expected to
be in service in the third quarter.

We have a number of additional
projects on the longer-term
horizon at WBI Energy and
expect ongoing system growth.

Construction services
continues record results

Our construction services business
had an outstanding year, with record
revenues of $2.85 billion and record
earnings of $137.2 million in 2023.

During the year, we saw particularly
high demand for hospitality,
high-tech, data center and health
care construction services on
the electrical and mechanical
side of the business. We also
saw strong demand for utility-
related transmission, distribution
and underground work.

While our construction services
business was impacted by higher
interest expense and labor costs in

f WBI Energy’s Grasslands South Expansion Project was placed into service in November 2023, adding

94 million cubic feet per day of natural gas transportation capacity.

2023, margins improved through
efficiency gains on projects and
because of the overall combination
of the type of work performed.

We announced in November that
our board approved a plan to
spin off our construction services
business to the shareholders of
MDU Resources, which will result in
this business being an independent
publicly traded company, separate
from MDU Resources. We
immediately began working toward
effectuating the spinoff and expect
it to be complete in late 2024.

With the record-breaking
momentum this business has
experienced over the past several
years and its backlog of $2.01
billion of work at the start of 2024,
this business is well-positioned
to stand on its own. We expect
significant ongoing growth
opportunities for construction
services in the coming years as
demand continues to accelerate for:

• Data centers that provide

bandwidth for the booming
artificial intelligence and cloud
computing industries.

f Rocky Mountain Contractors, an MDU Construction Services Group subsidiary, provided emergency service to repair a long-haul fiber line after a bridge

collapsed into the Yellowstone River in Montana.

MDU Resources Group, Inc.Report to Stockholders

• Consumer electrical devices,

including vehicles, that require
more power, which ultimately
requires upgrading and building
out the national electrical grid.

• Transmission, distribution
and undergrounding work
for utilities to repair, protect
and provide better resilience
from environmental events.

• Renewable energy sources, such
as solar generation. Bombard
Renewable Energy, a construction
services operating company,
is among the top-ranked solar
contractors in the U.S., according
to Solar Power World magazine.

Strategic initiatives drive
toward pure-play business

As we continue to work toward
completing the tax-free spinoff of
our construction services business
in late 2024, we are benefiting from
the experience we gained when
we completed the tax-free spinoff
of our construction materials
and contracting business, Knife
River Corporation. Knife River
became a standalone publicly
traded company on May 31, 2023,
which created significant value for
shareholders. MDU Resources also
completed the tax-free exchange of
the retained shares of Knife River
in the fourth quarter of 2023.

Spinning off our construction
businesses is part of our strategic
effort to become a pure-play
regulated energy delivery business.
We believe having a core focus on
being a pure-play regulated business
with our electric and natural gas
utility and pipeline company will
optimize value for our shareholders

while creating opportunities for
more concentrated business growth.

As MDU Resources becomes a
pure-play regulated energy delivery
business, our board remains
committed to paying a competitive
dividend to our shareholders.
Following the spinoff of the
construction services business,
MDU Resources intends to maintain
a long-term dividend payout ratio
target of 60% to 70%. We have
paid dividends uninterrupted
for 86 consecutive years.

Former MDU Resources President
and CEO Dave Goodin deserves
much credit for leading the work
toward becoming a pure-play
regulated energy delivery business.
In Dave’s time as CEO, the company
experienced incredible growth
and strategic change. We are
grateful for Dave’s leadership and
remain committed to achieving
the pure-play regulated status that
he envisioned. Dave retired on
January 5, 2024, after 40 years of
dedicated service to the company.

As we begin celebrating MDU
Resources’ 100th anniversary
in 2024, we express our sincere
gratitude to each of the thousands
of employees who have faithfully
served our customers and
communities over the past century
with the essential products and
services we provide. It is their
dedication and hard work that
have made MDU Resources
successful and provided value
for our shareholders.

We look forward to continuing
to provide safe, reliable and
cost-effective essential energy
to our customers for many
more years to come.

Dennis W. Johnson
Chair of the Board

Nicole A. Kivisto
President and Chief Executive Officer

February 22, 2024

MDU Resources Group, Inc.Serving commun ities,
energizing the fu ture

Montana-Dakota Worland Pipeline in
Worland, Wyoming – 1963
8

MDU Resources Group, Inc.Serving commun ities,
energizing the fu ture

Celebrating 100 years of
service and success

MDU Resources has come
a long way since its start in
1924 as a small electric utility
serving a handful of small
communities on the Montana
and North Dakota border. As
the company celebrates its
centennial anniversary in 2024,
it’s a fitting time to reflect on
MDU Resources’ remarkable
journey over the past 100 years.

Since its incorporation on
March 14, 1924, when it was
providing electricity to rural
communities, MDU Resources
has grown into a corporation
with operations across the United
States. It has been listed on the
New York Stock Exchange under
the ticker MDU since 1948.

Early on, MDU Resources
realized the value of building
upon its expertise to grow
the company by developing
businesses around its existing
services. The company’s success
includes growing two businesses
to be large enough to be spun
off to stand on their own as
publicly traded companies:

• Knife River Corporation,

MDU Resources’ construction
materials subsidiary,
was spun off in 2023.

• The construction services
subsidiary is expected to
be spun off in late 2024.

While MDU Resources branched
out into other industries, it has
throughout its history remained
committed to its core business
of regulated energy delivery.

Today, MDU Resources’ utility
operations serve nearly 1.2
million electric and natural
gas customers across eight
states. Its pipeline business
has approximately 3,800
miles of regulated natural gas
transmission lines and is home
to the largest underground
natural gas storage field
in North America.

As MDU Resources celebrates
100 years of serving
communities, the company’s
goal remains simple: Continue
to grow while providing safe,
reliable and cost-effective
essential energy to the customers
and communities it serves.

MDU Resources Group, Inc.Board of Directors

Dennis W. Johnson
74 (23)
Dickinson, North Dakota

Nicole A. Kivisto
50 (-)
Bismarck, North Dakota

Darrel T. Anderson
65 (1)
Eagle, Idaho

James H. Gemmel
38 (1)
New York, New York

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,
Intermountain Gas Company
and Montana-Dakota
Utilities Co.

Formerly president and chief
executive officer of IDACORP
and Idaho Power Company, an
integrated electric utility serving
customers in Idaho and Oregon.

Expertise: Finance, public utilities,
human resources management,
public company leadership,
corporate governance.

Partner of Corvex Management
LP an investment management
firm that focuses on
fundamental, valued-based
investments; outside director of
Kindred Group PLC.

Expertise: Finance, professional
investment management,
collaboration with management
teams and boards of directors.

David L. Goodin
62 (11)
Bismarck, North Dakota

Formerly president and
chief executive officer of
MDU Resources.

Expertise: Engineering and business
management.

Dale S. Rosenthal
67 (3)
Washington, D.C.

Edward A. Ryan
70 (6)
Washington, D.C.

David M. Sparby
69 (6)
North Oaks, Minnesota

Chenxi Wang
53 (5)
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
NSP-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.

Audit Committee
David M. Sparby, Chair
James H. Gemmel
Chenxi Wang

Compensation
Committee
Dennis W. Johnson, Chair
Darrel T. Anderson
Dale S. Rosenthal
Edward A. Ryan

Environmental and
Sustainability
Committee
Dale S. Rosenthal, Chair
Darrel T. Anderson
James H. Gemmel
Chenxi Wang

Nominating and
Governance Committee
Edward A. Ryan, Chair
Dennis W. Johnson
David M. Sparby

Director Changes
James H. Gemmel was appointed to the Board of
Directors on May 9, 2023.

German Carmona Alvarez, Thomas Everist, Karen B.
Fagg and Patricia L. Moss transitioned to the board of
directors of Knife River Corporation when MDU
Resources Group completed the spinoff of its
construction materials and contracting business on
May 31, 2023.

Darrel T. Anderson was appointed to the Board of
Directors on November 17, 2023.

Nicole A. Kivisto was appointed to the Board of
Directors on January 6, 2024.

Numbers indicate age and years of service ( ) on the
MDU Resources Board of Directors as of December 31, 2023.

MDU Resources Group, Inc.Corporate Management

Nicole A. Kivisto
50 (29)

Rob L. Johnson
62 (41)

Anne M. Jones
60 (42)

Peggy A. Link
57 (19)

Paul R. Sanderson
49 (1)

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, Intermountain Gas
Company and Montana-Dakota
Utilities Co.

President of WBI Energy, Inc.

Formerly executive vice
president of commercial of WBI
Energy, Inc.

Vice President and Chief
Human Resources Officer of
MDU Resources

Vice President and Chief
Information Officer of MDU
Resources

Vice President, Chief Legal
Officer and Secretary of MDU
Resources

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

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

Serves as chief legal officer and
secretary of all major subsidiary
companies; formerly a partner in
a law firm.

Garret Senger
63 (41)

Stephanie A. Sievert
51 (28)

Jeffrey S. Thiede
61 (20)

Jason L. Vollmer
46 (19)

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

Formerly executive vice president
of regulatory affairs, customer
service and administration of
Cascade Natural Gas
Corporation, Intermountain Gas
Company and Montana-Dakota
Utilities Co.

Vice President, Chief
Accounting Officer and
Controller of MDU Resources

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

Vice President, Chief Financial
Officer and Treasurer of
MDU Resources

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

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

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

Management Changes
Rob L. Johnson was named president of WBI Energy effective June
1, 2023. He replaces Trevor J. Hastings, who became an officer of
Knife River Corporation.

Paul R. Sanderson was named vice president, chief legal officer and
secretary of MDU Resources effective June 1, 2023. He replaces
Karl A. Liepitz, who became an officer of Knife River Corporation.

Nicole A. Kivisto was named president and chief executive officer
of MDU Resources effective January 6, 2024. She replaces David L.
Goodin, who retired January 5, 2024.

Garret Senger was named chief utilities officer of Cascade Natural
Gas, Intermountain Gas and Montana-Dakota Utilities effective
January 6, 2024.

Numbers indicate age and years of service ( ) as of December 31, 2023.

MDU Resources Group, Inc.Stockholder Return Comparison

Comparison of One-Year
Total Stockholder Return

(as of December 31, 2023)

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

$100 invested December 31, 2018, in MDU Resources was worth $141.10 at year-end 2023.

26%

12%

10%

-2%

MDU
Resources

S&P 500
Index

New Peer
Group

Old Peer
Group

$250

200

150

100

0
’18

’19

’20

’21

’22

’23

MDU Resources

S&P 500 Index

New Peer Group

Old Peer Group

Company Name / Index

12/31/18

12/31/19

12/31/20

12/31/21

12/31/22

12/31/23

MDU Resources Group, Inc. $100.00

$128.44

$117.77

$141.76

$143.83

$141.10

S&P 500 Index

New Peer Group

Old Peer Group

100.00

131.49

155.68

200.37

164.08

207.21

100.00

135.32

127.16

162.50

163.61

183.48

100.00

131.89

133.26

168.81

163.84

180.16

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.

Data is indexed to December 31, 2023, for
the one-year total stockholder return
comparison and December 31, 2018, for the
five-year total stockholder return
comparison for MDU Resources, the S&P
500 and the peer groups. 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.

Effective January 1, 2023, a new peer group
was established. These changes were made
to reflect the makeup of the company
following the spinoff May 31, 2023, of Knife
River Corporation. The charts show
stockholder return performance for both
the old and new peer groups.

The new peer group issuers are ALLETE,
Inc., Avista Corporation, Black Hills
Corporation, Dycom Industries, Inc.,
EMCOR Group, Inc., IDACORP, Inc., IES
Holdings, Inc., Jacobs Solutions Inc., KBR,
Inc., MasTec, Inc., MYR Group Inc.,
NiSource Inc., Northwest Natural Holding
Company, NorthWestern Energy Group,
Inc., Otter Tail Corporation, Portland
General Electric Company, Primoris
Services Corporation, Quanta Services,
Inc., Southwest Gas Holdings, Inc. and TC
Energy Corporation.

The old peer group issuers were 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 Solutions Inc., KBR,
Inc., Martin Marietta Materials, 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, 2023

☐ 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. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received
by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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, 2023: $4,264,003,259.

Indicate the number of shares outstanding of the registrant's common stock, as of February 15, 2024: 203,689,090 shares.

DOCUMENTS INCORPORATED BY REFERENCE
Relevant portions of the registrant's 2024 Proxy Statement, to be filed no later than 120 days from December 31, 2023, 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 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Discontinued Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1A

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

Item 1B

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

Item 1C

Cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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. Discontinued Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Revenue from Contracts with Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

7. Environmental Allowances and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8. Goodwill and Other Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9. Fair Value Measurements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10. Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11. Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12. Asset Retirement Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13. Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14. Stock-Based Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

2 MDU Resources Group, Inc. Form 10-K

Part II (continued)

15. Accumulated Other Comprehensive Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16. Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17. Cash Flow Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18. Business Segment Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19. Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20. Jointly Owned Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21. Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22. Commitments and Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23. Subsequent Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . . . .

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

101

102

105

113

114

115

117

120

121

122

127

129

130

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

Cascade

Centennial

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

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

CEHI, LLC, a direct wholly owned subsidiary of the Company, formally known as Centennial
Energy Holdings, Inc. prior to the separation of Knife River from the Company. References to
Centennial's historical business and operations refer to the business and operations of Centennial
Energy Holdings, Inc.

Centennial Capital

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

CERCLA
CIO

Code

Company

COVID-19

Coyote Creek

Coyote Station

CWIP

CyROC

EBITDA

EIN

EPA

ERISA

Comprehensive Environmental Response, Compensation and Liability Act

Chief Information Officer

The U.S. Internal Revenue Code, the highest form of tax law in the United States

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)

Construction work in progress, costs associated with the construction of new utility facilities
recorded on the balance sheet until these facilities are placed in service.

Cyber Risk Oversight Committee

Decatherm

Earnings before interest, taxes, depreciation and amortization

Employer Identification Number

United States Environmental Protection Agency

Employee Retirement Income Security Act of 1974

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

IRA

IRS

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

Inflation Reduction Act

Internal Revenue Service

Financial Statements and Supplementary Data

4 MDU Resources Group, Inc. Form 10-K

JETx

Knife River

K-Plan

kWh

LIBOR

MD&A

345-kV transmission line from Jamestown, North Dakota to Ellendale, North Dakota (50 percent
ownership)

Established as Knife River Corporation prior to the separation from the Company, a direct wholly
owned subsidiary of Centennial. Knife River refers to Knife River Corporation, during the period
prior to separation, now known as "KRC Materials, Inc." Following the separation Knife River
refers to Knife River Holding Company, now known as Knife River Corporation.

Definitions

Company's 401(k) Retirement Plan

Kilowatts

Kilowatt-hour

Kilovolts
London Inter-bank Offered Rate

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

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

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 cubic feet

Million dk

Minnesota Public Utilities Commission

Montana-Dakota

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

MPPAA

MTPSC

NDDEQ

NDPSC

NERC

OPUC

PCAOB

PCBs

PHMSA

Proxy Statement

PRP

RCRA

RNG

SDPUC

SEC

Securities Act

Sheridan System

SOFR

SPP

TSA

VIE

Washington DOE

WBI Energy

Multiemployer Pension Plan Amendments Act of 1980

Montana Public Service Commission

Megawatt

North Dakota Department of Environmental Quality

North Dakota Public Service Commission

North American Electric Reliability Corporation

Oregon Public Utility Commission

Public Company Accounting Oversight Board

Polychlorinated biphenyls

Pipeline and Hazardous Material Safety Administration
Company's 2023 Proxy Statement to be filed no later than April 29, 2024

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

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

MDU Resources Group, Inc. Form 10-K 5

Definitions

WBI Holdings

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

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

Index

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, trends, objectives, goals,
strategies, performance or future events, including the dividend payout ratio target, the anticipated separation of its construction services business or
the proposed future structure of the Company as a pure-play regulated energy delivery company, 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, 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, except as required by law. 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 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 and achieve industry-leading performance by becoming a pure-play regulated energy delivery
company, while pursuing organic growth opportunities. Through its regulated energy delivery businesses, 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 services business provides construction services through its electrical and mechanical and
transmission and distribution specialty contracting services.

As part of the Company's continual review of its business, the Company announced strategic initiatives that are expected to enhance its value. On
May 31, 2023, the Company executed the separation of Knife River, the construction materials and contracting business, from the Company,
resulting in Knife River becoming an independent, publicly traded company. On November 2, 2023, the Company announced that its board of
directors approved a plan to spinoff its wholly-owned construction services business, MDU Construction Services. The proposed separation of MDU
Construction Services is planned as a tax-free spinoff transaction to the Company’s stockholders for U.S. federal income tax purposes. Completion of
the proposed MDU Construction Services' separation will be subject to, among other things, the effectiveness of a registration statement on Form 10
with the SEC, final approval from the Company’s board of directors, receipt of one or more tax opinions and a private letter ruling from the IRS, and
other customary conditions. The Company may, at any time and for any reason until the proposed transaction is complete, abandon the separation or
modify or change its terms. The proposed separation is expected to be complete in late 2024, but there can be no assurance regarding the ultimate
timing of the separation or that the separation will ultimately occur.

As of December 31, 2023, the Company was organized into four reportable business segments. These business segments include: electric, natural
gas distribution, pipeline, 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

Index
Part I

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, MDU Construction Services and Centennial Capital. WBI Energy is
the pipeline 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 18.

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 The Company continues to focus on 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 27 states as of December 31, 2023. The
number of employees fluctuates during the year due to the seasonality and the number and size of construction projects. During 2023, the number
of employees, excluding the former construction materials and contracting business, which was spun off on May 31, 2023, peaked in the first
quarter at just over 11,100. Employees as of December 31, 2023, were as follows:

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

Index

Part I

The following information is as of December 31, 2023.

Company

Montana-Dakota

Intermountain

Cascade

WBI Energy Transmission

Collective-bargaining
agreement

Number of
employees

represented Agreement status

IBEW

ICWU

IBEW

293 Effective through April 30, 2024

Effective through March 31, 2027
with 2 agreements in negotiations

135

189 Effective through March 31, 2024

68 Effective through April 30, 2024

MDU Construction Services

102 various agreements

5,704 1 agreement in negotiations

Total

6,389

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

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.

• 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:

In March 2022, the chief executive officer of the Company joined more than 2,000 chief executive officers in signing the CEO Action for Diversity
and Inclusion Pledge. Through this collaboration with other companies, the Company furthers its commitment to a diverse and inclusive environment
that respects the differences and embraces the strengths of its employees to further its corporate vision.

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, partnerships with colleges and technical schools, 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.

MDU Resources Group, Inc. Form 10-K 9

Index
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:

The Company conducts employee surveys 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 Safety is a corporate value and top priority of the Company. The Company is committed to safety and health in the workplace. To ensure safe
work environments, the Company provides training, 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.

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. As legislation and regulation are
finalized, the impact of these measures can be assessed. 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 maintains 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

Index

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 22. 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 Bremerton Gasworks Superfund Site. For
more information on the Company's environmental matters, see Item 8
- Note 22 and Item 7 - MD&A - Business Section Financial and
Operating Data.

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.

For a discussion of the Company's risks related to cybersecurity, see Item 1A - Risk Factors. For more information on the Company's approach to
cybersecurity, see Item 1C - Cybersecurity.

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 13 electric generating units at
11 facilities and two small portable diesel generators, as further
described under System Supply, System Demand and Competition,
approximately 3,400 and 4,800 miles of transmission and distribution
lines, respectively, and 82 transmission and 298 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, 2023, Montana-Dakota's net electric plant investment
was $1.7 billion and its rate base was $1.4 billion.

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.

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.

MDU Resources Group, Inc. Form 10-K 11

Index
Part I

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

2023

2022

2021

Customers
Served

Revenues

Customers
Served

Revenues

Customers
Served

Revenues

(Dollars in thousands)

119,700 $

134,054

119,398 $

135,412

119,113 $

123,043

23,573

164,142

23,327

142,722

23,149

133,336

228

42,340

230

42,937

231

40,477

1,607

7,075

1,606

7,335

1,610

6,754

145,108 $

347,611

144,561 $

328,406

144,103 $

303,610

Residential

Commercial

Industrial

Other

Other electric revenues, which are largely transmission-related revenues, for Montana-Dakota were $53.6 million, $48.7 million and $46.0 million
for the years ended December 31, 2023, 2022 and 2021, respectively.

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

North Dakota

Montana

Wyoming

South Dakota

2023

66 %

20 %

9 %

5 %

2022

65 %

21 %

9 %

5 %

2021

64 %

22 %

9 %

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. In mid-2023 a data center
began operating in the Company's service territory which led to an increase in sales volumes. As of December 31, 2023, the interconnected system
consisted of 12 electric generating units at 10 facilities and two small portable diesel generators. Additional details are included in the table that
follows. For 2023, Montana-Dakota's total ZRCs, including its firm purchase power contracts, were 516.1. Montana-Dakota's planning reserve margin
requirement within MISO was 516.1 ZRCs for 2023. The maximum electric peak demand experienced to date attributable to Montana-Dakota's sales
to retail customers on the interconnected system was 746,924 kW in July 2023. 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 2023, Montana-Dakota purchased approximately 59 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 69,688 kW in August 2022. 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, 2028. Wygen III also
serves a portion of the needs of Montana-Dakota's Sheridan-area customers.

Approximately 35 percent of the electricity delivered to customers from Montana-Dakota's owned generation in 2023 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 38 percent since 2005 through the addition of renewable generation and
with the retirement of aging coal-fired electric generating units, as further discussed below.

The Company ceased operations of Lewis & Clark Station in Sidney, Montana, in March 2021 and decommissioning was completed in October 2022.
In February 2022, the Company ceased operations of Units 1 and 2 at Heskett Station near Mandan, North Dakota, and decommissioning was
completed in December 2023. In addition, in May 2022 Montana-Dakota began 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 with an in service date expected in the second
quarter of 2024, assuming no further action is needed based on the conclusion of the ongoing root cause analysis, or other unexpected delays.

12 MDU Resources Group, Inc. Form 10-K

Index

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

Part I

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

Fuel

Coal

Natural gas

Heat recovery

Wind

Coal

Nameplate
Rating (kW) at
December 31,
2023

2023 ZRCs (a)

2023 Net
Generation (kWh
in thousands)

103,647

89,038

7,500

19,500

155,500

102.6

85.9

1.8

4.5

34.4

650,039

29,339

38,008

52,440

488,369

94,111

111.6

353,842

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

18,700

75,522

23,150

30,000

3,650

15.4

49.6

17.3

5.8

3.7

20,889

2,727

312

82,375

620,318

432.6

1,718,352

Sheridan System:

Wyoming:

Wygen III (b)

Steam

Coal

28,000

N/A

197,522

648,318

432.6

1,915,874

(a) Interconnected system only. MISO requires generators to obtain their seasonal 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.

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 22.

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 2024. 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 has entered into four purchase power agreements to purchase capacity and energy between the retirement of the Lewis & Clark
Station and Heskett Station Units 1 and 2 and the timing of completion of the new Heskett Unit 4. As part of the four purchase power agreements,
Montana-Dakota purchased additional MISO replacement capacity associated with the delay in commercial operation of Heskett Unit 4. Montana-
Dakota also purchased additional capacity and energy to cover forecasted capacity deficits through May 2026.

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 2030.
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.

Montana-Dakota is not dependent on any single customer or group of customers for sales of its products and services, where the loss of which would
have a material adverse effect on its business.

MDU Resources Group, Inc. Form 10-K 13

Index
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 21.

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
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 was submitted in June 2022. Wygen III is currently allowed to operate under the facility's construction permit until the Title V
Operating Permit is issued. The Title V Operating Permit renewal application for Big Stone Station was submitted timely in October 2021 to the
South Dakota Department of Agriculture & Natural Resources with the permit issuance date not specified at this time.

State water discharge permits issued under the requirements of the federal Clean Water Act are maintained for power production facilities on the
Missouri river. 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 incurred approximately $2.9 million of capital expenditures in 2023 related to the closure of coal ash management units at Lewis &
Clark Station and Heskett Station and to maintain air emissions compliance at its co-owned electric generating facilities. Environmental related
capital expenditures are estimated to be $870,000, $1.4 million and $1.2 million in 2024, 2025 and 2026, respectively, for the closure of coal
ash management units at Lewis & Clark Station and Heskett Station and to maintain air emissions compliance at its co-owned electric generating
facilities and does not expect to incur any material capital expenditures in 2024, 2025 and 2026 for compliance with current environmental laws
and regulations. Montana-Dakota's capital and operational expenditures could also be affected by future environmental requirements, such as
existing and proposed emissions reduction plans from the EPA. For more information, see Item 1A - Risk Factors and Item 7 - MD&A - Business
Section Financial and Operating Data.

14 MDU Resources Group, Inc. Form 10-K

Part I

Index

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 21,600 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, 2023, the natural gas distribution operations' net
natural gas distribution plant investment was $2.4 billion and its rate
base was $1.8 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:

2023

2022

2021

Customers
Served

Revenues

Customers
Served

Revenues

Customers
Served

Revenues

(Dollars in thousands)

Residential

Commercial

Industrial

935,235 $

726,064

922,266 $

715,494

905,535 $

548,091

112,966

441,199

111,478

450,932

110,196

330,468

1,074

45,009

1,077

41,466

939

31,103

1,049,275 $ 1,212,272 1,034,821 $ 1,207,892 1,016,670 $

909,662

Transportation and other revenues for the natural gas distribution operations were $75.3 million, $65.9 million and $62.3 million for the years
ended December 31, 2023, 2022 and 2021, respectively.

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

Idaho

Washington

North Dakota

Oregon

Montana

South Dakota

Minnesota

Wyoming

2023

33 %

28 %

12 %

9 %

8 %

5 %

3 %

2 %

2022

28 %

26 %

16 %

8 %

10 %

6 %

4 %

2 %

2021

27 %

29 %

15 %

8 %

10 %

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

Index
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 Energy, Inc., Ruby Pipeline LLC, Foothills Pipe Lines Ltd., NOVA Gas Transmission Ltd, TC Energy Corporation,
Northwest Natural, Black Hills Energy and TransCanada. 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 in excess of 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 full 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. On May 13, 2022, Great Plains requested the continuation of the
revenue decoupling mechanism. On April 13, 2023, the MNPUC denied the Company's request to extend the decoupling mechanism.

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.

For more information on regulatory matters, see Item 8 - Note 21.

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.

16 MDU Resources Group, Inc. Form 10-K

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Part I

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. For more information, see Item 7 - MD&A - Business
Section Financial and Operating Data.

The natural gas distribution operations incurred $4.1 million of capital expenditures in 2023 to construct infrastructure supporting multiple
renewable natural gas facilities related to compliance with current environmental laws and regulations. Cascade and Montana-Dakota expect to incur
environmental related capital expenditures of $22.6 million and $7.6 million, in 2024 and 2025, respectively. The capital expenditures are to
construct infrastructure supporting multiple renewable natural gas production facilities, including the development and construction of a renewable
natural gas facility at the Deschutes County Landfill near Bend, Oregon, the implementation of an advanced natural gas leak detection system and
investigation of a historic manufactured gas plant site. Except as to what may be ultimately determined with regard to the issues described in the
following paragraph and the items noted, the natural gas distribution operations do not expect to incur any material capital expenditures related to
compliance with current environmental laws and regulations through 2026.

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 22 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 3,800 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 14 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, 2023, its net plant
investment was $887.8 million.

The non-regulated business of this segment provides a variety of
energy-related services, including cathodic protection.

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 identified growth projects discussed in Item 7 - MD&A - Pipeline Outlook, to increase
transportation and storage services through system expansion and/or other pipeline interconnections or enhancements that could provide future
benefits.

MDU Resources Group, Inc. Form 10-K 17

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Part I

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
2023 represented 22 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.

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.

WBI Energy is not dependent on any single customer or group of customers for sales of its products and services, where the loss of which would have
a material adverse effect on its business. WBI Energy had one third-party customer that accounted for approximately 11 percent of its 2023 revenue.

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.

On December 2, 2023, the EPA issued a prepublication version of its final rule to update, strengthen and expand standards intended to significantly
reduce GHG emissions and other air pollutants from emission sources in the oil and natural gas industries. The standards will apply to various
sources of GHG emissions including natural gas compressors, process controllers, natural gas driven pumps, storage vessels, natural gas wells,
fugitive emissions components and super-emitter events. The final rule has not been published in the Federal Register to date. Additionally, the EPA
is revising the current GHG reporting rules to improve the calculation, monitoring and reporting of GHG data and incorporate provisions from the IRA.
The first of these revisions was published in the Federal Register on August 1, 2023. The Company continues to monitor and assess the proposed
rules and the potential impacts they may have on its business processes, current and future projects, results of operations and disclosures.

The pipeline operations did not incur any material capital expenditures related to compliance with current environmental laws and regulations in
2023 and do not expect to incur any material capital expenditures related to compliance with current environmental laws and regulations through
2026. Capital expenditures to meet requirements of expected or anticipated rules, including the previously discussed EPA prepublished rule in
December 2023, are included in the capital expenditures for 2025 and 2026 with estimated expenditures of $4.0 million each year. For more
information on the capital expenditures for this segment, see Item 7 - MD&A - Capital Expenditures.

18 MDU Resources Group, Inc. Form 10-K

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Construction Services

Part I

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 United States.
These specialty contracting services are provided to utilities,
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 supplying
transmission and distribution 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, 2023, 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.

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 benefits from 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. MDU Construction Services had one customer that accounted for approximately 17 percent of
its revenue for 2023.

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 capital expenditures in 2023 related to compliance with current environmental laws and
regulations and does not expect to incur any material capital expenditures related to compliance with current environmental laws and regulations
through 2026.

Discontinued Operations
General Discontinued operations includes Knife River's operations, as well as associated strategic initiative costs and interest on debt facilities repaid
in connection with the Knife River separation. The Company completed the separation of Knife River on May 31, 2023. Discontinued operations also
includes the supporting activities of Fidelity other than certain general and administrative costs and interest expense. For more information on
discontinued operations, see Item 8 - Note 3.

MDU Resources Group, Inc. Form 10-K 19

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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.

Separation Risks
The proposed separation of MDU Construction Services into an independent, publicly traded company is subject to various risks and uncertainties, and may
not be completed on the terms or timeline currently contemplated, if at all.
On November 2, 2023, the Company announced its intent to pursue a tax-free spinoff of its wholly-owned construction services business, MDU
Construction Services. The proposed separation is complex, and completion of the proposed separation and the timing of its completion will be
subject to a number of factors and conditions, including the readiness of the new company to operate as an independent public company,
finalization of the capital structure of the new company and final approval by the board of directors, among other things. The uncertainties
associated with this process, foreseen and unforeseen costs incurred, and efforts involved, may negatively affect the Company's operating results,
business and the Company's relationships with employees, customers, suppliers and vendors. Unanticipated developments could delay, prevent or
otherwise adversely affect the proposed separation, including, but not limited to, changes in general economic and financial market conditions and
material adverse changes in business or industry conditions. There can be no assurances that the Company will be able to complete the proposed
separation or that the combined value of the common stock of the two companies will be equal to or greater than what the value of the Company's
common stock would have been had the proposed separation not occurred. The execution of the separation has required and may continue to require
significant time and attention from the Company’s senior management and employees, which could cause disruption in business processes and
adversely affect the Company's financial results and its results operations. Further the Company's employees may be distracted due to uncertainty
regarding the future state of the Company. Additionally, foreseen and unforeseen costs may be incurred with the proposed separation, including fees
such as advisory, accounting, tax, legal, reorganization, restructuring, and various other, some of which may be incurred regardless if the proposed
separation occurs. In addition, if the separation is completed, the Company may not be able to achieve the full strategic and financial benefits that
are expected to result from the separation.

If either the completed separation of Knife River or the proposed separation of MDU Construction Services, together with certain related transactions, were to
fail to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, the Company and its stockholders could be subject to significant
tax liabilities.
The Company completed the separation of Knife River on May 31, 2023. In connection with the completed separation of Knife River, the Company
received a private letter ruling from the IRS and opinion(s) of outside counsel regarding the qualification of certain elements of the separation and
distribution under Section 355(a) of the Code. Notwithstanding prior receipt of the IRS private letter ruling and opinion(s) of tax advisors, the IRS
could determine that the completed distribution and/or certain related transactions should be treated as taxable transactions for U.S. federal income
tax purposes if it determines that any of the representations, assumptions, or undertakings upon which the IRS private letter ruling or the opinion(s)
of tax advisors were based are false or have been violated. In addition, neither the IRS private letter ruling nor opinion(s) of tax advisors will address
all of the issues that are relevant to determining whether the distribution, together with certain related transactions, qualifies as a transaction that is
generally tax-free for U.S. federal income tax purposes. Further, opinion(s) of tax advisors represent the judgment of such tax advisors and are not
binding on the IRS or any court, and the IRS or a court may disagree with the conclusions in the opinion(s) of tax advisors. Accordingly,
notwithstanding receipt by the Company of the IRS private letter ruling and the opinion(s) of tax advisors, there can be no assurance that the IRS will
not assert that the distribution and/or certain related transactions do not qualify for tax-free treatment for U.S. federal income tax purposes or that a
court would not sustain such a challenge. In the event the IRS were to prevail in such challenge, the Company and its stockholders could be subject
to significant U.S. federal income tax liability.

Additionally, although the Company intends for the proposed separation of MDU Construction Services to be tax-free to the Company and its
stockholders for U.S. federal income tax purposes, there can be no assurance that the proposed separation will qualify as such. If the distribution,
together with related transactions, fails to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under Sections 355
and 368(a)(1)(D) of the Code, in general, for U.S. federal income tax purposes, the Company would recognize taxable gain as if it had sold MDU
Construction Services common stock in a taxable sale for its fair market value (unless the Company and MDU Construction Services jointly make an
election under Section 336(e) of the Code with respect to the distribution, in which case, in general, (a) the Company would recognize a taxable gain
as if MDU Construction Services had sold all of its assets in a taxable sale in exchange for an amount equal to the fair market value of MDU
Construction Services common stock and the assumption of all of its liabilities and (b) MDU Construction Services would obtain a related step-up in
the basis of its assets) and, if the distribution fails to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under
Section 355, the Company's stockholders who receive MDU Construction Services shares in the distribution would be subject to tax as if they had
received a taxable distribution equal to the fair market value of such shares.

20 MDU Resources Group, Inc. Form 10-K

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Part I

The Company may not achieve some or all of the expected benefits of the proposed separation of MDU Construction Services, and the separation may
materially and adversely affect its financial position, results of operations and cash flows.
The Company may be unable to achieve the full strategic and financial benefits expected to result from the proposed separation of MDU Construction
Services, or such benefits may be delayed or not occur at all, for a variety of reasons, including, among others, that: (a) the separation will require
significant time and effort from management, which may divert management’s attention from operating and growing the business; (b) following the
separation and distribution, the Company may be more susceptible to stock market fluctuations and other adverse events; (c) following the separation
and distribution, the Company may not be able to maintain its historical practices with respect to dividends; (d) following the separation and
distribution, the Company's business will be less diversified than prior to the separation and distribution; and (e) the other actions required to
separate the Company and MDU Construction Services respective businesses could disrupt their operations. If the Company fails to achieve some or
all of the benefits expected to result from the separation, or if such benefits are delayed, it could have a material adverse effect on its financial
position, results of operations and cash flows.

Following the proposed separation, there may be a substantial change in the Company's stockholder base and its stock price may fluctuate significantly.
Until the market has fully evaluated the Company's remaining businesses without MDU Construction Services, the price at which shares of the
Company common stock trade may fluctuate more significantly than might otherwise be typical, even with other market conditions, including general
volatility, held constant. There can be no assurance that the combined value of the common stock of the two companies will be equal to or greater
than what the value of the Company’s common stock would have been had the proposed separation not occurred. It is possible that the Company's
stockholders will sell shares of common stock for a variety of reasons. For example, such stockholders may not believe that the Company's remaining
business profile or its level of market capitalization fits their investment objectives. The sale of significant amounts of the Company's common stock
or the perception in the market that this will occur may lower the market price of the Company's common stock. The increased volatility of the
Company's common stock price following the distribution may have a material adverse effect on its business, financial condition and results of
operations.

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 fuel, 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 business. The level of
demand for construction 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 21

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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; cyberattacks; acts of terrorism; and acts of war. These hazards and operating risks have occurred and may reoccur in the future,
which could result in loss of human life; personal injury; property damage; environmental impacts; 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, local distribution infrastructure or interstate natural gas infrastructure could negatively impact
the Company's business and reputation. There have been cyber and physical attacks within the energy industry on energy infrastructure, such as
substations, and such attacks may occur in the future. Because the Company's electric and natural gas utility and pipeline systems are part of larger
interconnecting systems, any attacks on the interconnected systems or the Company's infrastructure causing a disruption could result in a significant
decrease in revenues and an increase in 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, 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.

• War.

• 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 stockholders and/or may adversely affect the market price of the
Company's common stock. Higher interest rates on borrowings have impacted and could further impact the Company's future operating results, as
evidenced by the Company's increased interest expense in 2023 as discussed in Item 7 - MD&A.

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 prices for commodities, labor or other production and delivery inputs could negatively affect the Company's businesses.
The Company's operations are exposed to fluctuations in prices for labor, oil, raw materials and utilities. Prices are generally subject to change in
response to fluctuations in supply and demand and other general economic and market conditions beyond the Company's control.

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 economic conditions; war
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.

22 MDU Resources Group, Inc. Form 10-K

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If oil and natural gas prices increase significantly, which has occurred and may reoccur, customer demand could decline for utility, pipeline and
construction 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.

Increased labor costs, due to labor shortages, competition from other industries, or other factors, could negatively affect the Company's results of
operations.

In 2023, 2022 and 2021, the Company experienced elevated commodity and supply chain costs including the costs of labor, raw materials, energy-
related products and other inputs used in the production and distribution of its products and services. The Company's construction business tries to
mitigate some or all cost increases through increases in selling prices, maintaining positive relationships with numerous raw material suppliers, and
escalation clauses in contracting services contracts and fuel surcharges. To the extent price increases or other mitigating factors are not sufficient to
offset these increased costs adequately or timely, and/or if the price increases result in a significant decrease in sales volumes, the Company's
results of operations, financial position and cash flows could be negatively impacted.

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, which has occurred and may reoccur in the future, 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 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.

Pandemics may have a negative impact on the Company's business operations, revenues, results of operations, liquidity and cash flows.
Pandemics have disrupted national, state and local economies. To the extent pandemics adversely impact the Company's businesses, operations,
revenues, liquidity or cash flows, they could also have a heightened effect on other risks described in this section. The degree to which pandemics
impact the Company depends on, among other things, federal and state mandates, actions taken by governmental authorities, availability, timing and
effectiveness of vaccines being administered, and the pace and extent to which the economy recovers and operates under normal market conditions.

MDU Resources Group, Inc. Form 10-K 23

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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.
Certain risks increase as the Company's energy delivery infrastructure ages, including breakdown or failure of equipment, pipeline leaks and fires
developing from power lines, all of which have occurred and may reoccur 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 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 and pipelines. 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 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; contractor performance failures; 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. 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 backlog at the Company's construction services business 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.

24 MDU Resources Group, Inc. Form 10-K

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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. Global logistic disruptions
have impacted the flow of materials and restricted global trade flows. Manufacturers are competing for a limited supply of key commodities and
logistical capacity which has impacted lead times, pricing, supply and demand. Disruptions or delays in receiving materials; price increases from
suppliers or manufacturers; or inability to source needed materials, which has occurred and could reoccur, 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. To date, the Company has not experienced any material impacts to its financial condition, results of operations or cash
flows due to the physical effects of climate change.

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 services business.

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 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 related to 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 25

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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, 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, 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.

Stakeholder actions and increased regulatory activity related to environmental, social and governance matters, particularly climate change and reducing GHG
emissions, could adversely impact the Company's operations, costs of or access to capital and impact or limit business plans.
The Company, primarily at its electric, natural gas distribution and pipeline businesses, is facing increasing stakeholder scrutiny related to
environmental, social and governance matters. The Company has seen a rise in certain stakeholders, such as investors, customers, employees and
lenders, placing increasing importance on the impacts and social cost associated with climate change. 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. For example, the SEC has published proposed rules that would require significantly increased disclosures associated with climate change
and other issues. The Company may experience significant future costs associated with compliance of such legislative actions. 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.

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 and pipeline 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 and pipeline 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.

In addition, the increasing focus on climate change and stricter regulatory requirements may result in the Company facing adverse reputational risks
associated with certain of its operations producing GHG emissions. There have also been 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 these areas, if the Company is unable to satisfy the increasing climate-related expectations
of certain stakeholders, the Company may suffer reputational harm, which may cause its stock price to decrease or difficulty in accessing the capital
or insurance markets. 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.

26 MDU Resources Group, Inc. Form 10-K

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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, which have occurred and may reoccur, such as heavy or sustained rainfall or snowfall, droughts, storms, wind and colder
weather may affect the demand for products and the ability to perform services at the construction business 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 damage, which could require additional remediation costs. 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. 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, 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 services business may be exposed to warranty claims.
The Company, particularly its construction services business, 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 from subcontractors 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 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.

MDU Resources Group, Inc. Form 10-K 27

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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.

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 an 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, 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 SEC has adopted new rules that require the Company to provide greater disclosures around cybersecurity risk
management, strategy, and governance, as well as disclose the occurrence of material cybersecurity incidents. The Company cannot predict or
estimate the amount of additional costs it will incur in order to comply with these rules or the timing of such costs. These rules may also require the
Company to report a cybersecurity incident before the Company has been able to fully assess its impact or remediate the underlying issue. Efforts to
comply with such reporting requirements could divert management's attention from the Company's incident response and could potentially reveal
system vulnerabilities to threat actors. Failure to timely report incidents under these or other similar rules could also result in monetary fines,
sanctions or subject the Company to other forms of liability. This regulatory environment is increasingly challenging and may present material
obligations and risks to the Company's business, including significantly expanded compliance burdens, costs, and enforcement risks.

28 MDU Resources Group, Inc. Form 10-K

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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. The Company may face increased cyber risk due to the increased use of employee-owned devices, work from home
arrangements, and the separation of Knife River. 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.

Artificial intelligence presents challenges that can impact our business by posing security risks to confidential or proprietary information and personal data.
The use of artificial intelligence, combined with an uncertain regulatory environment, may result in reputational harm, liability, or other adverse
consequences to our business operations. The Company may adopt and integrate artificial intelligence tools into its systems for specific use cases
after review by legal and information security. The Company’s vendors and third-party partners may incorporate artificial intelligence tools into their
offerings with or without disclosing this use to us. The providers of these artificial intelligence tools may not meet existing or rapidly evolving
regulatory or industry standards concerning privacy and data protection, which may result in a loss of intellectual property or confidential information
and/or cause harm to the Company’s reputation and the public perception of the effectiveness of its security measures. Further, bad actors around
the world use increasingly sophisticated methods, including the use of artificial intelligence, to engage in illegal activities involving the theft and
misuse of personal information, confidential information, and intellectual property. Any of these outcomes could damage the Company’s reputation,
result in the loss of valuable property and information and adversely impact its business.

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.

• 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.

• Attracting and retaining employees.

• Stockholder and environmental activism.

• 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 1C. Cybersecurity

Risk Management and Strategy
Overall Risk Management
The Company has implemented a cyber risk management program to help ensure that the Company's electronic information and information systems
are protected from various threats. The cyber risk management program is maintained as part of the Company's overall governance, enterprise risk
management program and compliance program. 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. The Company may face increased cyber risk due to the increased
use of employee-owned devices and work from home arrangements. 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. The Company continually assesses risks from cybersecurity threats and adapts and
enhances its controls accordingly.

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Risks from Cybersecurity Threats
Any risks from previous cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected or are
reasonably likely to materially affect the Company's business, financial condition, or results of operations. Such risks and incidents could have a
material adverse effect in the future as cyberattacks continue to increase in frequency and sophistication. The Company also has cyber event related
insurance.

Employee Cybersecurity Training
The Company provides ongoing cybersecurity training and compliance programs to facilitate education for employees who may have access to the
Company's data and critical systems. Employee phishing tests are conducted on a monthly basis.

Engage Third-parties on Risk Management
Periodic external reviews, including penetration tests and security framework assessments, are conducted by auditors, external assessors, and/or
consultants to assess and ensure compliance with the Company’s information security programs and practices. Internal and external auditors assess
the Company’s information technology general controls on an annual basis.

Oversee Third-party Risk
The Company has implemented a third-party management risk program to help monitor and reduce risks associated with the Company's vendors,
which includes processes such as completing due diligence on third party service providers before engaging with them for their services; assessing
the third party’s cybersecurity posture by reviewing audit reports of the third party, completing cyber questionnaires, and reviewing applicable
certification; including cybersecurity contractual language in contracts to limit risk; and monitoring and reassessing third party’s to ensure ongoing
compliance with their cybersecurity obligations.

Physical Security
The Company safeguards assets through a standard physical security design process, including access controls, surveillance and monitoring,
perimeter security controls, data center security, and incident response and reporting controls.

Operational Technology
The Company has operation technology, consisting of the hardware and software that monitors and controls devices, processes, and infrastructure
related to the Company's operational assets. Security protocols for the Company's operational technology follow applicable NERC, FERC and TSA
regulations and security directives.

Other Risk Factors
See also “Item 1A – Risk Factors – Other Risks – Technology disruptions or cyberattacks could adversely impact the Company's operations.”

Governance
Board of Directors Oversight
The board, as a whole and through its committees, has responsibility for 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. The audit committee of the board of directors of the Company is responsible for oversight of risks from
cybersecurity threats.

Management's Role Managing Risk
The CIO plays a large role in informing the audit committee on cybersecurity risks. The audit committee receives presentations and reports from the
CIO on cybersecurity related issues which include information security, technology risks and risk mitigation programs regularly at the quarterly board
meetings. In addition to scheduled meetings, the CIO and audit committee maintain an ongoing dialogue regarding emerging or potential
cybersecurity risks.

Cybersecurity Incident Response
The Company has an incident response plan to identify, protect, detect, respond to, and recover from cybersecurity threats and incidents that is also
tested on an annual basis. The incident response plan is updated based on results of the test or as new cyber related developments occur. The CIO,
executive leadership which includes the chief executive officer, chief financial officer, chief accounting officer, chief legal officer, and SEC financial
reporting department employees, and the board of directors are notified of any material cybersecurity incidents through a defined escalation process.
The defined escalation process is a risk-based process that specifies who is to be contacted and when at each risk level.

Monitor, Manage, and Safeguard Against Cybersecurity Incidents and Risks
The Company's CIO, along with the director of cybersecurity and a designated security team of professionals, are responsible for assessing and
managing risks as well as developing and implementing policies, procedures, and practices based on the range of threats faced by the Company.
There are processes around access management, data security, encryption, asset management, secure system development, security operations,
network and device security to provide safeguards from a cybersecurity incident along with continual monitoring of various threat intelligence feeds.

30 MDU Resources Group, Inc. Form 10-K

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Part I

Cyber Risk Management Personnel
The Company's director of cybersecurity reports to the CIO. The CIO, who reports to the chief executive officer, holds a degree in Business
Administration and oversees the information technology and cybersecurity portfolios for the Company with over 25 years of information technology
experience and 19 years working directly in the energy and utilities business. The director of cybersecurity has a bachelor’s degree in computer
information systems, 25 years of information security experience, and holds certified information systems security professional and certified risk and
information systems control certifications. The members of the designated cybersecurity team that report to the director of cybersecurity have a
combined 57 years of experience. The other members of information technology director level leadership also responsible for managing cybersecurity
risks have a combined 95 years of experience and have degrees including Bachelor of Computer Information Systems, information systems
management, electronics, electrical engineering, business administration, and accounting, along with certified information systems auditor
certification and a cybersecurity fundamentals certificate.

Cyber Risk Oversight Committee
Additionally, in 2014 the board of directors established CyROC to provide executive 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 CyROC is responsible for guiding the Company's comprehensive cybersecurity policies. The CyROC is chaired by the
Company's CIO and is comprised of members such as the chief financial officer, information technology leaders, internal auditors, and other leaders
from the Company's business segments.

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 22, which is incorporated herein by reference.

Item 4. Mine Safety Disclosures

Not applicable.

MDU Resources Group, Inc. Form 10-K 31

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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, 2023, the Company's common stock was held by approximately 9,200 stockholders of record.

The Company has an 86-year history of uninterrupted dividend payments to stockholders and remains committed to paying a competitive dividend as
the Company transitions to being a pure-play regulated energy delivery company. Based on this anticipated future state as a pure-play regulated
energy delivery business, the board of directors established a long-term dividend payout ratio target of 60 percent to 70 percent of regulated
earnings. The Company depends on earnings and dividends from its subsidiaries to pay dividends on common stock. 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 13.

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, 2023

November 1 through November 30, 2023

December 1 through December 31, 2023

Total

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

Average Price Paid
per Share
(or Unit)

—

50,717

—

50,717

—

$18.73

—

$18.73

Total Number of Shares
(or Units) Purchased
as Part of Publicly
Announced Plans
or Programs (2)

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

—

(1) Represents MDU original issue shares of common stock in connection with annual stock grants made to the Company's non-employee directors.
(2) Not applicable. The Company does not currently have in place any publicly announced plans or programs to repurchase equity securities.

Item 6.

Reserved.

32 MDU Resources Group, Inc. Form 10-K

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

The Company provides essential infrastructure and services. 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 constructing and
maintaining electrical and communication wiring and infrastructure. The Company is authorized to conduct business in nearly every state in the
United States. 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.

Chief Executive Officer Transition On January 5, 2024, David L. Goodin, formerly president and chief executive officer of the Company, retired after
a 40-year career with the Company. The board of directors unanimously selected Nicole A. Kivisto, formerly president and chief executive officer of
the Company's electric and natural gas utility companies, to succeed Mr. Goodin as the Company's president and chief executive officer effective
January 6, 2024. Ms. Kivisto became a member of the board of directors at the same time.

Strategic Initiatives The Company announced strategic initiatives in 2022 as part of the Company's continuous review of its business. The Company
incurred costs in connection with the announced strategic initiatives in 2022 and 2023, as noted in the Business Segment Financial and Operating
Data section, and expects to continue to incur these costs until the initiatives are completed.

On May 31, 2023, the Company completed the separation of Knife River, formerly the construction materials and contracting segment, which
resulted in two independent, publicly traded companies, MDU Resources Group, Inc. and Knife River. The Company's board of directors approved the
distribution of approximately 90 percent of the issued and outstanding shares of Knife River to the Company's stockholders. Stockholders of the
Company received one share of Knife River common stock for every four shares of the Company's common stock held on May 22, 2023, the record
date for the distribution. The Company retained approximately 10 percent or 5.7 million shares of Knife River common stock immediately following
the separation, which was disposed of in a tax-free exchange in November 2023. The separation of Knife River was a tax-free spinoff transaction to
the Company's stockholders for U.S. federal income tax purposes.

On November 2, 2023, the Company announced its intent to pursue a tax-free spinoff of its wholly owned construction services business, MDU
Construction Services. The Company's board of directors believes a tax-free spinoff of the construction services business supports the Company's goal
of enhancing value for stockholders by becoming a pure-play regulated energy delivery company. See Item 1A - Risk Factors for a description of the
risks and uncertainties with the proposed future structure.

Based on the Company's anticipated future state as a pure-play regulated energy delivery business, the Company's board of directors established a
long-term dividend payout ratio target of 60 percent to 70 percent of regulated energy delivery earnings. The Company has an 86-year history of
uninterrupted dividend payments to stockholders and remains committed to paying a competitive dividend as the Company transitions to being a
pure-play regulated energy delivery company.

Market Trends The Company continues to manage the inflationary pressures experienced throughout the United States, including the impact that
inflation, rising interest rates, commodity price volatility and supply chain disruptions may have on its business and customers and proactively looks
for ways to lessen the impact to its business. Rising interest rates have resulted in and may continue to result in higher borrowing costs on new debt,
resulting in impacts to the Company's asset valuations and negatively impacting the purchasing power of its customers. The Company has continued
to evaluate its businesses and has increased pricing for its products and services where possible. The ability to raise selling prices to cover higher
costs due to inflation are subject to regulatory approval, customer demand, industry competition and the availability of materials, among other
things. For more information on possible impacts to the Company's businesses, see the Outlook for each segment below and Item 1A - Risk Factors.

MDU Resources Group, Inc. Form 10-K 33

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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 services

Other

Income from continuing operations

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

2023

2022

2021

(In millions, except per share amounts)

71.6 $

57.1 $

48.5

47.4

142.4

170.5

480.4

(65.7)

45.2

36.2

129.5

(17.2)

250.8

116.7

414.7 $

367.5 $

2.36 $

1.23 $

(.32)

.58

2.04 $

1.81 $

2.36 $

1.23 $

(.33)

.58

2.03 $

1.81 $

51.9

51.6

41.1

112.2

(14.3)

242.5

135.6

378.1

1.20

.67

1.87

1.20

.67

1.87

2023 compared to 2022 The Company's consolidated earnings increased $47.2 million. The Company experienced increased earnings at each of its
continuing businesses.

•

The electric business experienced higher retail sales due to rate relief in North Dakota and Montana, an electric service agreement to
provide power to a data center near Ellendale, North Dakota, and higher transmission interconnect upgrades. Electric earnings were
partially offset by lower residential volumes, primarily due to cooler weather in the third quarter of the year.

Natural gas distribution experienced higher retail sales revenue due to rate relief in Idaho and Washington, higher basic service charges,
and recovery of short-term debt interest expense in Idaho related to increased gas costs. These increases were largely offset by higher
operation and maintenance expense, primarily higher payroll-related costs. The natural gas distribution business also experienced a 6.6
percent decrease in retail sales volumes to all customer classes, largely due to warmer weather, which was partially offset by weather
normalization and decoupling mechanisms.

The pipeline's earnings increase was driven by higher transportation volumes, primarily from increased contracted volume commitments
from the North Bakken Expansion project and a full year of benefit from this project; as well as organic growth projects placed in service in
November 2023 and August 2022. In addition, revenues increased from new transportation and storage rates effective August 1, 2023
and higher storage-related activity. The pipeline also benefited from higher allowance for funds used during construction on organic growth
projects, lower property taxes and higher non-regulated project margin. The increase was offset in part by higher operation and
maintenance expense primarily attributable to payroll-related costs and contract services. The pipeline business also incurred higher
interest expense as a result of higher interest rates and higher debt balances.

The construction services business experienced higher electrical and mechanical gross profit due to progress on hospitality and data center
projects in the commercial market and higher industrial margins due to efficiency in labor and material costs. The construction services
business also benefited from higher transmission and distribution gross profit. Earnings were partially offset by higher selling, general and
administrative expense, largely attributable to increased payroll-related costs associated with operational growth, and higher reserve for
uncollectible accounts on certain projects. The construction services business also experienced higher interest expense due to higher
working capital needs and interest rates.

34 MDU Resources Group, Inc. Form 10-K

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•

Other experienced a realized gain of $186.6 million related to the tax-free exchange of its retained interest in Knife River and higher
interest income. Partially offsetting these items were higher interest expense, primarily related to debt issued in connection with the Knife
River separation. Other also benefited from improved claims experience at the captive insurer in 2023 compared to 2022.

On May 31, 2023, the Company completed the separation of Knife River, its former construction materials and contracting segment, into
a new publicly traded company. As a result of the separation, the historical results of operations for Knife River are shown in discontinued
operations, net of tax, except for allocated general corporate overhead costs of the Company, which are reflected in Other and do not meet
the criteria for income (loss) from discontinued operations. Also included in discontinued operations are strategic initiative costs
associated with the separation of Knife River. The variance relates to five months of activity for Knife River in 2023 compared to the
twelve months in 2022.

The Company's earnings from continuing operations were further impacted by $17.7 million in higher returns on the Company's
nonqualified benefit plan investments, as discussed in Note 9, partially offset by higher costs incurred in connection with other strategic
initiatives of $7.6 million, after tax.

2022 compared to 2021 The Company's consolidated earnings decreased $10.6 million due to lower earnings at the natural gas distribution and
pipeline businesses, as well as in discontinued operations. Partially offsetting were higher earnings at the construction services and electric
businesses.

•

The electric business benefited from interim rate relief in North Dakota, higher net transmission revenues and higher retail sales volumes
as a result of colder weather, as well as lower operation and maintenance expenses, largely related to plant closures.

The natural gas distribution business experienced higher operating expenses, including subcontractor costs, as well as higher interest and
depreciation expenses, partially offset by increased sales volumes and approved rate recovery in certain jurisdictions.

The pipeline business experienced higher interest expense and lower non-regulated project margins, partially offset by the net benefit of
the North Bakken Expansion project.

Increased earnings at the construction services business resulting from higher electrical and mechanical project margins and earnings from
the segment's joint ventures, partially offset by higher overall operating expenses related to increased payroll-related costs and expected
credit losses.

As previously discussed, the historical results of Knife River are shown in discontinued operations, except for allocated general corporate
costs of the Company. The decrease in earnings in 2022 was a result of Knife River being negatively impacted by ongoing inflationary
pressures, including energy and other operating costs. In addition, costs incurred in 2022 associated with the separation of Knife River
had a negative impact on earnings.

The Company's earnings from continuing operations were further impacted by $17.0 million in lower returns on the Company's
nonqualified benefit plan investments, as discussed in Note 9, and the costs incurred in 2022 in connection with other strategic
initiatives, which do not meet the criteria for income (loss) from discontinued operations of $3.7 million, after tax.

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 18.

MDU Resources Group, Inc. Form 10-K 35

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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 stockholder return. The segments provide safe, reliable, competitively priced and environmentally
responsible energy service to customers while focusing on growth and expansion opportunities within and beyond its existing territories. 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; weather; climate change laws, regulations and 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, reliable, affordable and environmentally
responsible 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. The Company also seeks rate adjustments for operating costs and capital investments, as well as reasonable returns on
investments not covered by tracking mechanisms. For more information on the Company's tracking mechanisms and recent rate cases, see Items 1
and 2 - Business Properties and Item 8 - Note 21.

These segments are also subject to extensive regulation related to certain operational and environmental compliance, cybersecurity, permit terms and
system integrity. 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. Within the past year, there have been
cyber and physical attacks within the energy industry on infrastructure, such as substations, and the Company continues to evaluate the safeguards
implemented to protect its electric and natural gas utility systems. Implementation of enhancements and additional requirements to protect the
Company's infrastructure 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, as further discussed in the
Outlook section. 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.
Recently, MISO and NERC announced concerns with reliability of the electric grid due to capacity shortages, which has resulted from rapid
expansion of renewables and rapid reduction of baseload resources such as coal, while load growth has increased faster than expected. MISO
received FERC approval of a seasonal resource adequacy construct, or accreditation process, versus the previous annual summer peak capacity
requirement process. These changes have not had a significant impact on the requirements for Montana-Dakota. The Company will continue to
monitor the progress of these changes 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 December 2022 and January 2023, natural gas prices significantly increased across the Pacific Northwest from multiple price-pressuring events
including wide-spread below-normal temperatures and higher natural gas consumption; reduced natural gas flows due to pipeline constraints,
including maintenance in West Texas; and historically low regional natural gas storage levels. Natural gas prices stabilized by March 2023. The
higher natural gas prices in December 2022 and January 2023 impacted both Intermountain and Cascade, both of which borrowed short-term debt
of $125.0 million and $150.0 million, respectively, in January 2023 to finance the increased natural gas costs. To assist in the recovery of higher
natural gas costs, Intermountain filed an out-of-cycle purchased gas adjustment with the IPUC that was effective February 1, 2023, and is collecting
interest costs associated with short-term borrowing with rates effective October 1, 2023. Effective November 1, 2023, as approved by the WUTC,
Cascade started recovery in Washington of these increased gas costs over a period of two years rather than the normal one year period. As of
December 2023, Intermountain and Cascade have repaid $80.0 million and $100.0 million of the $125.0 million and $150.0 million short-term
debt, respectively. For a discussion of the Company's most recent cases by jurisdiction, see Item 8 - Note 21.

36 MDU Resources Group, Inc. Form 10-K

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In late summer and fall of 2023, electric fuel and purchased power prices increased across Montana-Dakota's integrated system. This was caused by
transmission congestion in northwest North Dakota due to delays in additional SPP transmission line build-out, as well as additional load growth in
the Bakken region. Electric fuel and purchased power prices remained elevated into November. To assist in the recovery of the higher fuel and
purchased power costs, Montana-Dakota filed waiver requests with the NDPSC and SDPUC, which were approved on October 24, 2023 and
November 7, 2023, respectively, deferring the increased costs to the annual fuel clause adjustment. In Montana, the waiver request is filed monthly
and is unopposed by the MTPSC. On December 22, 2023, MISO filed a complaint letter with SPP regarding concerns related to the coordination of
the constraint. Montana-Dakota filed a complaint letter with FERC related to this issue on January 23, 2024.

The Company continues to proactively monitor and work with its manufacturers to reduce the effects of increased pricing and lead times on delivery
of certain raw materials and equipment used in electric generation, 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 and shipping of electrical equipment and increased
demand for electrical equipment due to regulatory activity and grid expansion. The Company has been able to minimize the effects by working closely
with suppliers or obtaining additional suppliers, as well as modifying project plans to accommodate extended lead times and increased costs. The
Company expects these delays and inflationary pressures to continue.

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, population
changes and competition from other energy providers and fuel. 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. As the industry continues to expand the use of renewable energy sources, the
need for additional transmission infrastructure is growing. As part of MISO's long range transmission plan, in August 2022, the Company announced
its intent to develop, construct and co-own JETx with Otter Tail Power Company in central North Dakota. On October 6, 2023, the FERC issued an
order approving the Company's request for CWIP Incentive Rate and Abandoned Plant Incentive treatment on this project.

MDU Resources Group, Inc. Form 10-K 37

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

Years ended December 31,

2023

2022

2021

Variance

2023 vs. 2022 2022 vs. 2021

Operating revenues

Operating expenses:

Electric fuel and purchased power

Operation and maintenance

Depreciation and amortization

Taxes, other than income

Total operating expenses

Operating income

Other income

Interest expense

Income before income taxes

Income tax benefit

Net income

NM - not meaningful

Operating statistics

Revenues (millions)

Retail sales:

Residential

Commercial

Industrial

Other

Volumes (million kWh)

Retail sales:

Residential

Commercial

Industrial

Other

(In millions)

$ 401.2 $ 377.1 $ 349.6

6 %

8 %

17 %

(1) %

(5) %

(1) %

4 %

16 %

(2) %

37 %

(81) %

25 %

24 %

(3) %

1 %

(3) %

5 %

20 %

(89) %

7 %

17 %

(30) %

10 %

107.9

92.0

74.1

119.6

120.7

124.9

64.2

16.7

67.8

16.9

66.8

17.5

308.4

297.4

283.3

92.8

79.7

5.8

28.0

70.6

(1.0)

28.5

51.7

(5.4)

66.3

4.6

26.7

44.2

(7.7)

71.6 $

57.1 $

51.9

2023

2022

2021

$ 134.1 $ 135.4 $ 123.0

164.1

142.7

133.3

42.3

43.0

7.1

7.3

40.5

6.8

347.6

328.4

303.6

53.6

48.7

46.0

$ 401.2 $ 377.1 $ 349.6

1,180.2 1,226.4 1,164.8

2,350.5 1,437.7 1,433.0

583.7

596.1

589.4

81.8

83.7

84.4

4,196.2 3,343.9 3,271.6

Average cost of electric fuel and purchased power per kWh

.024 $

.026 $

.021

2023 compared to 2022 Electric earnings increased $14.5 million as a result of:
• Revenue increased $24.1 million.

◦ Largely attributable to:

▪ Higher fuel and purchased power costs of $15.9 million recovered in customer rates and offset in expense, as described below.
▪ Rate relief of $4.4 million in North Dakota and Montana.
▪ Higher data center revenue of $3.4 million, including net transmission.
▪ Higher transmission interconnect upgrades of $2.9 million.

◦ Partially offset by lower retail sales volumes of $2.4 million, driven primarily by lower residential volumes, largely due to cooler weather in the
third quarter of the year. Although residential volumes were lower, there was a 25.5 percent increase in volumes overall, which was largely
driven by the data center as previously discussed and further discussed in the outlook section.

• Electric fuel and purchased power increased $15.9 million, largely the result of higher retail sales volumes, partially offset by lower commodity

prices.

• Operation and maintenance decreased $1.1 million.

◦ Largely the result of:

▪ Decreased Coyote Station costs of $1.7 million due to the absence of the planned outage in 2022.
▪ Lower materials expense of $500,000, partially due to the closure of Units 1 and 2 at Heskett Station.

◦ Partially offset by increased payroll-related costs of $700,000, which include higher employee incentive accruals.

38 MDU Resources Group, Inc. Form 10-K

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• Depreciation and amortization decreased $3.6 million.

◦ Primarily due to decreased amortization of plant retirement and closure costs of $5.3 million resulting from an extension to the recovery period

for these costs, which are recovered in operating revenues, as discussed in Note 12.

◦ Partially offset by increased depreciation of $1.2 million associated with higher property, plant and equipment balances, the result of

transmission projects placed in service to improve reliability and update aging infrastructure.

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

• Other income increased $5.3 million, primarily resulting from higher returns on the Company's nonqualified benefit plan investments of $4.7

million, as discussed in Note 9, and higher interest income of $1.3 million, largely related to contributions in aid of construction, offset in part by
lower AFUDC equity due to higher average debt balance.

• Interest expense decreased $500,000, as a result of higher AFUDC debt, largely due to higher rates, partially offset by higher average interest

rates.

• Income tax benefit decreased $4.4 million.

◦ Largely due to:

▪ Higher income taxes of $4.7 million related to higher taxable income.
▪ Decreased excess deferred income tax amortization.

◦ Partially offset by lower permanent tax adjustments.

2022 compared to 2021 Electric earnings increased $5.2 million as a result of:
• Revenue increased $27.5 million.

◦ Largely attributable to:

▪ Higher fuel and purchased power costs of $17.9 million recovered in customer rates and offset in expense, as described below.
▪
▪ Higher net transmission revenues of $3.9 million, largely from increased investment, and higher transmission interconnect upgrades of

Interim rate relief in North Dakota of $5.0 million.

$800,000.

▪ Higher retail sales volumes of 2.2 percent, primarily to residential customers, largely due to colder weather in the first and fourth quarters

of the year.

◦ Partially offset by:

▪ Lower renewable tracker revenues associated with higher production tax credits offset in expense, as described below.
▪ Lower per unit average rates of $1.0 million related to block rates in certain jurisdictions.

• Electric fuel and purchased power increased $17.9 million.

◦ Primarily the result of $17.4 million higher commodity price, including higher recovery of fuel clause adjustments, and increased retail sales

volumes.

• Operation and maintenance expense decreased $4.2 million.

◦ Primarily due to:

▪ Decreased payroll-related costs, largely $2.8 million related to the Heskett Station and Lewis & Clark Station plant closures and lower

incentive accruals of $1.9 million.

▪ Reduced materials costs and contract services from the Heskett Station and Lewis & Clark Station plant closures.
▪ Reduced costs due to the absence of the Big Stone Station outage in 2021.

◦ Partially offset by increased contract services associated with a planned outage at Coyote Station of $2.6 million.

• Depreciation and amortization increased $1.0 million, largely resulting from increased property, plant and equipment balances placed in service,

mostly related to growth and replacement projects.

• Taxes, other than income decreased $600,000, largely as a result of lower coal conversion taxes in certain jurisdictions.

• Other income decreased $4.1 million, primarily due to lower returns on the Company's nonqualified benefit plan investments of $4.6 million, as

discussed in Note 9, partially offset by higher AFUDC equity largely due to higher rates.

• Interest expense increased $1.8 million, largely resulting from $3.2 million due to higher long-term debt balances, partially offset by higher

AFUDC debt largely due to higher rates.

• Income tax benefit decreased $2.3 million.

◦ Largely due to:

▪ Higher income taxes of $1.8 million related to higher taxable income.
▪ Higher permanent tax adjustments and decreased excess deferred amortization.

◦ Partially offset by higher production tax credits of $1.4 million driven by higher wind production.

MDU Resources Group, Inc. Form 10-K 39

Index
Part II

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

Years ended December 31,

2023

2022

2021

Variance

2023 vs. 2022 2022 vs. 2021

(In millions)

$ 1,287.5 $ 1,273.8 $ 971.9

1 %

31 %

(1) %

7 %

6 %

1 %

— %

36 %

5 %

(12) %

7 %

51 %

6 %

4 %

17 %

34 %

3 %

(59) %

13 %

(12) %

(7) %

(12) %

Operating revenues

Operating expenses:

Purchased natural gas sold

Operation and maintenance

Depreciation and amortization

Taxes, other than income

805.1

816.1

542.0

219.7

205.3

194.1

95.3

75.2

89.4

71.1

86.0

60.6

Total operating expenses

1,195.3 1,181.9

882.7

Operating income

Other income

Interest expense

Income before income taxes

Income tax expense

Net income

NM - not meaningful

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

92.2

20.8

57.6

55.4

6.9

91.9

3.3

42.2

53.0

7.8

89.2

8.1

37.3

60.0

8.4

48.5 $

45.2 $

51.6

2023

2022

2021

$ 726.1 $ 715.5 $ 548.1

441.2

450.9

330.4

45.0

41.5

31.1

1,212.3 1,207.9

909.6

75.2

65.9

62.3

$ 1,287.5 $ 1,273.8 $ 971.9

69.3

47.9

5.4

74.8

51.0

5.4

65.6

44.7

5.0

122.6

131.2

115.3

1.9

2.0

1.9

188.4

165.7

172.5

190.3

167.7

174.4

312.9

298.9

289.7

Average cost of natural gas per dk

6.57 $

6.22 $

4.70

40 MDU Resources Group, Inc. Form 10-K

Index

Part II

2023 compared to 2022: Natural gas distribution earnings increased $3.3 million as a result of:
• Revenue increased $13.7 million.

◦ Largely from:

▪ Rate relief of $7.9 million in Idaho and Washington, including the excess deferred income tax tariff settlement of $1.1 million in

Washington.
Increased revenue-based taxes recovered in rates of $6.1 million that were offset in expense, as described below.

▪
▪ Higher basic service charges of $4.7 million.
▪ Higher transportation revenue of $3.8 million due to 13.5 percent higher volumes, largely higher electric generation.
▪ Approved rate recovery of short-term debt interest expense related to increased gas costs in Idaho of $3.2 million.
▪ Higher nonregulated revenue of $1.7 million, largely higher liquefied natural gas sales.
▪ Recovery of COVID-19 response costs, including bill assistance programs and waived late payment fees, in Oregon of

$700,000.

◦ Partially offset by:

▪
▪

Lower purchased gas sold of $10.8 million, recovered in customer rates that was offset in expense, as described below.
A 6.6 percent decrease in retail sales volumes to all customer classes, offset in part by weather normalization and decoupling
mechanisms in certain jurisdictions.

• Purchased natural gas sold decreased $11.0 million, primarily due to lower volumes of natural gas purchased of $59.8 million, largely offset by
higher natural gas costs of $48.7 million as a result of higher market prices. Purchased natural gas sold includes the absence of the prior year
disallowance of $845,000 ordered by the MNPUC.

• Operation and maintenance increased $14.4 million.

◦

Increased uncollectible accounts expense of $1.6 million, largely due to higher revenue.

Primarily due to:
▪ Higher payroll-related costs of $12.6 million, primarily higher employee incentive accruals and straight-time payroll
▪
▪ Higher insurance expense of $1.0 million.
▪ Higher software related expenses of $900,000.
Partially offset by:
▪ Lower contract services of $1.2 million, largely lower subcontract labor and consulting fees.
▪ Decreased other expenses, including regulatory deferrals, miscellaneous employee expenses, and gain on sale of the Company's customer

service center.

• Depreciation and amortization increased $5.9 million, primarily resulting from growth and replacement projects placed in service.

• Taxes, other than income increased $4.1 million, largely from higher revenue-based taxes of $6.1 million which are recovered in rates, partially

offset by lower property taxes due to lower assessed values of $2.3 million.

• Other income increased $17.5 million, driven by higher interest income of $11.3 million, largely related to purchased gas costs, and higher

returns on the Company's nonqualified benefit plans of $6.9 million, as discussed in Note 9. These increases were offset in part by higher pension
and postretirement expense.

• Interest expense increased $15.4 million, primarily from higher short-term and long-term debt balances from debt issued in 2023 and 2022 and

higher interest rates, partially offset by higher AFUDC debt of $2.6 million, due to higher rates.

• Income tax expense decreased $900,000 largely the result of higher permanent tax adjustments, partially offset by higher income before income

taxes.

2022 compared to 2021 Natural gas distribution earnings decreased $6.4 million as a result of:
• Revenue increased $301.9 million.

◦

Largely from:
▪ Higher purchased natural gas sold of $273.3 million recovered in customer rates that was offset in expense, as described below.
▪ Higher retail sales volumes of 13.7 percent across all customer classes due to colder weather, partially offset by weather normalization and

decoupling mechanisms in certain jurisdictions.

▪ Higher revenue-based taxes recovered in rates of $10.1 million that were offset in expense, as described below.
▪ Approved rate relief of $3.6 million in certain jurisdictions and higher pipeline replacement mechanisms of $1.8 million.

• Purchased natural gas sold increased $274.1 million.

◦

Primarily due to:
▪ Higher natural gas costs as a result of higher market prices of $198.1 million, including the higher recovery of purchase gas adjustments

related to the February 2021 cold weather event and the 2018 Enbridge pipeline rupture.

▪ Higher volumes of natural gas purchased due to increased retail sales volumes.
▪ Purchased natural gas sold includes the disallowance of $845,000 ordered by the MNPUC, as discussed in Note 21.

MDU Resources Group, Inc. Form 10-K 41

Index
Part II

• Operation and maintenance increased $11.2 million.

◦

Primarily due to:
▪ Higher contract services of $6.4 million, primarily higher subcontractor costs.
▪ Higher payroll-related costs, including higher straight-time payroll of $4.7 million, partially offset by lower incentive accruals of

$3.3 million.

▪ Higher other costs, partially resulting from inflation, including higher expected credit losses of $1.8 million from higher receivables
balances associated with colder weather and higher gas costs; higher software costs of $1.6 million; higher vehicle fuel cost of
$1.3 million; and higher office, travel, materials and other miscellaneous employee costs.

• Depreciation and amortization increased $3.4 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 $1.0 million.

• Taxes, other than income increased $10.5 million, largely resulting from higher revenue-based taxes which are recovered in rates.

• Other income decreased $4.8 million primarily related to lower returns on the Company's nonqualified benefit plan investments of $7.0 million, as

discussed in Note 9, partially offset by increased interest income.

• Interest expense increased $4.9 million, primarily from higher long-term debt balances and interest rates, partially offset by higher AFUDC debt

largely due to higher rates.

• Income tax expense decreased $600,000 due to lower income taxes of $1.5 million related to lower taxable income, partially offset by higher

permanent tax adjustments.

Outlook In 2023, the Company experienced rate base growth of 8.5 percent and expects these segments will grow rate base by approximately
7 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 2023 and 2022, these segments experienced retail customer growth of approximately 1.3 percent
and 1.6 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.

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 natural 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. In 2022, the Company experienced increased natural gas prices across its service
areas, and in January 2023, experienced higher natural gas prices in the Pacific Northwest, as previously discussed in Strategy and Challenges. As a
result, the Company filed an out-of-cycle cost of gas adjustment in Idaho, which assisted in the timely recovery of these costs, and received approval
from the WUTC to recover these increased gas costs over a period of two years rather than the normal one year period. The Company will continue to
monitor natural gas prices, as well as oil and natural gas production levels.

In May 2022, the Company began 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 in service date has been delayed past 2023 due to unforeseen operational setbacks. While
performing start-up testing an incident occurred resulting in damage to the generator field and turbine components. Repairs are ongoing with the in
service date now expected in the second quarter of 2024, assuming no further action is needed based on the conclusions of the ongoing root cause
analysis, or other unexpected delays.

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. The joint owners continue to collaborate in analyzing data and weighing decisions that impact
the plant and its employees as well as each company's customers and communities served. Existing and proposed emissions reduction plans from
the EPA 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 its state implementation plan to the EPA in August 2022.

On March 4, 2023, the Company began to provide power for Applied Digital Corporation's data center near Ellendale, North Dakota under an interim
electric service agreement approved by the NDPSC, and on June 6, 2023, the NDPSC unanimously approved the Company's electric service
agreement request. At full capacity, the data center requires 180 megawatts of electricity, which is the equivalent of about 28 percent of the
Company's generation portfolio. The Applied Digital Corporation's load will be purchased from the MISO market and will not impact other customers'
power supply. On October 2, 2023, the Company filed with the NDPSC an electric service agreement request to serve an additional data center in its
service territory.

42 MDU Resources Group, Inc. Form 10-K

Index

The Infrastructure Investment and Jobs Act, commonly known as the Bipartisan Infrastructure Law, was enacted in the fourth quarter of 2021 and is
providing long-term opportunities by designating funds for investments such as upgrades to electric and grid infrastructure, transportation systems,
and electric vehicle infrastructure. The Company is pursuing various opportunities under the Grid Resilience and Innovative Partnerships Program,
which is a part of the Infrastructure Investment and Jobs Act, and will continue to monitor additional opportunities from this law.

Legislation and rulemaking The Company continues to monitor legislation and rulemaking related to clean energy standards that may impact its
segments. Below are some of the specific legislative actions the Company is monitoring.

• The EPA released rulemaking under the federal Clean Air Act in the Federal Register on May 23, 2023, amending GHG emission standards for

new fossil-fired electric generating units and re-proposing GHG emission guidelines for existing fossil-fired electric generating units. The
proposed standards for new natural gas-fired electric generating units have been made more stringent, requiring units that operate more
frequently to install carbon capture controls or co-fire with hydrogen.

Part II

For existing coal and natural gas-fired units operating more frequently and long-term, the EPA’s emissions guidelines include standards
equivalent to installation of carbon capture pollution control or co-firing with lower or zero-carbon fuels, such as hydrogen. States must
evaluate individual units and develop, adopt, and submit a plan to the EPA which would include emission standards for each individual unit.
State plans are required to be submitted to the EPA no later than 24 months after the final rule effective date. The EPA requested comment
on the proposed GHG emission standards and guidelines by August 8, 2023, and intends to finalize the rules in 2024. The EPA has not
currently proposed GHG emission standards for existing simple cycle combustion turbines and intends to explore setting emission standards in
the future for these units. It is unknown at this time what emission limits or controls would be required for each Montana-Dakota owned and
jointly owned fossil-fired electric generating unit. Due to the uncertainty of the EPA rulemaking, Montana-Dakota cannot determine the
potential financial impact on its operations.

• 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. Each year, compliance instruments will be
distributed to the Company by the Oregon Department of Environmental Quality at no cost and will decline annually in step with the reduction
from baseline. The Company intends to meet its obligations through surrendering no cost emissions allowances and will fill remaining
compliance obligations by 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. Due to timing of regulatory recovery, future compliance obligation purchases could impact
the Company's operating cash flow. For more information about this rule and associated compliance costs, see Items 1 and 2 - Business
Properties.

Cascade's 2023 Oregon integrated resource plan projects customer bills could increase substantially as a result of the legislation. Projected
customer bill impacts are estimates, subject to change as legislation is implemented and compliance begins, as well as, numerous
assumptions used in the complex analysis of integrated resource planning. On September 30, 2022, the Company filed a request for the use
of deferred accounting for costs related to the rule and began deferring those costs. The OPUC approved the deferred accounting order on June
27, 2023. The Company, along with the other two local natural gas distribution companies in Oregon, filed a lawsuit on March 18, 2022,
challenging the Climate Protection Program Rule. The lawsuit was filed on behalf of customers as the Company does not believe the rule
accomplishes environmental stewardship in the most effective and affordable way possible. On December 20, 2023, the Oregon Court of
Appeals ruled that the Climate Protection Program rules are invalid. On January 22, 2024, the Oregon Department of Environmental Quality
issued a news release stating it will not appeal the court decision invalidating the rule. As a result, the Company did not record any associated
emissions compliance obligations as of December 31, 2023. The Oregon Department of Environmental Quality announced its intent to begin
the process to reinstate the Climate Protection Program in the first quarter of 2024 and expects the process to take about 12 months.

• 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. As
directed by the Climate Commitment Act, in September 2022, the Washington DOE published its final rule on the Climate Commitment Act,
which was effective on October 30, 2022, and emissions compliance began on January 1, 2023. The Company must demonstrate that they
have met GHG emissions reduction goals through a combination of on-site emissions reductions and the use of approved allowances and
offsets. Emissions compliance may be achieved through increased energy efficiency and conservation measures, purchased allowances and
offsets, and purchases of low carbon fuels. Emissions allowances are allocated by the Washington DOE to the Company at no cost and
additional allowances are required to be purchased at auction. Auctions for allowances are held quarterly. The Company intends to meet the
first compliance period requirements, in part, by purchasing allowances through auction. The Company expects compliance costs for these
regulations will be recovered through customer rates. Due to the timing of regulatory recovery, the purchase of allowances could impact the
Company's operating cash flow. For more information about this rule and associated compliance costs, see Items 1 and 2 - Business
Properties.

MDU Resources Group, Inc. Form 10-K 43

Index
Part II

Cascade's 2023 Washington integrated resource plan projects customer bills could increase substantially as a result of the legislation. In
2023, related to this legislation, the Company recorded a liability of $66.8 million for environmental compliance obligations and received
proceeds of $62.0 million from the sale of the allocated allowances. Projected customer bill impacts are estimates, subject to change as the
legislation is implemented and compliance costs begin, as well as, numerous assumptions used in the complex analysis of integrated resource
planning. On October 14, 2022, the Company filed a request for the use of deferred accounting for costs related to the rule and began
deferring those costs. The WUTC approved the deferred accounting order on February 28, 2023.

• On April 22, 2022, the Washington State Building Code Council approved revisions to the state's commercial energy code that will

significantly limit the use of natural gas for space and water heating in new and retrofitted commercial and multifamily buildings and proposed

the review of similar restrictions in the future for residential buildings. On November 4, 2022, the Washington State Building Code Council

adopted new residential codes requiring gas or electric heat pumps for most new space and water heating installations.

The Company, along with two other local natural gas distribution companies in Washington, filed a lawsuit on May 22, 2023, challenging
these amendments which the Company believes will stifle innovation, increase the cost of housing and energy for our customers, and do not
consider the limitations of electric heat pumps in colder climates. On June 1, 2023, the plaintiffs filed a motion for a preliminary injunction to
preliminarily enjoin the challenged building code amendments. Oral arguments on the preliminary injunction were held on July 18, 2023. The
court denied the preliminary injunction, finding no immediate harm and confirming the building code amendments were not yet in effect due
to the stay of 120 days issued by the Washington State Building Code Council. On September 15, 2023, the Washington State Building Code
Council voted to delay the implementation of the State Building and Energy Codes until March 15, 2024.

Pipeline
Strategy and challenges The pipeline segment provides natural gas transportation, underground storage and non-regulated 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 Company completed the following organic growth projects in
2022 and 2023:

• In February 2022, the North Bakken Expansion project in western North Dakota was placed in service. 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.

• In August 2022, the Line Section 7 Expansion project was placed in service and increased system capacity by 6.7 MMcf per day.
• In November 2023, the Grasslands South Expansion project was placed in service. The project increased system capacity by 94 MMcf of

natural gas per day.

• In November 2023, the Line Section 15 Expansion project was placed in service and increased system capacity by 25 MMcf of natural gas

per day.

The segment is exposed to natural gas and oil price volatility including fluctuations in basis differentials. 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 subject to extensive regulation related to 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 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.

The Company continues to actively manage the national supply chain challenges being faced by working with its manufacturers and suppliers to help
mitigate some of these risks on its business. The segment regularly experiences extended lead times on raw materials that are critical to the
segment's construction and maintenance work which could delay maintenance work and construction projects potentially causing lost revenues and/
or increased costs. The Company is partially mitigating these challenges by planning for extended lead times further in advance. However, supply
chain challenges related to electrical equipment have delayed the anticipated in-service date of one of the Company's growth projects as noted in the
Outlook section. The segment is also currently experiencing inflationary pressures with increased raw material and contract services costs. The
Company expects supply chain challenges and inflationary pressures to continue.

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.

44 MDU Resources Group, Inc. Form 10-K

Index

Part II

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

Years ended December 31,

2023

2022

2021

Variance

2023 vs. 2022 2022 vs. 2021

Operating revenues

Operating expenses:

Operation and maintenance

Depreciation and amortization

Taxes, other than income

Total operating expenses

Operating income

Other income

Interest expense

Income before income taxes

Income tax expense

Income from continuing operations

Discontinued operations, net of tax*

Net income

(In millions)

$ 177.6 $ 155.6 $ 142.6

14 %

9 %

70.8

26.8

10.8

60.9

26.9

12.3

108.4

100.1

69.2

55.5

3.9

13.3

59.8

12.4

1.3

10.1

46.7

10.5

61.3

20.5

12.7

94.5

48.1

9.4

6.7

50.8

9.7

47.4 $

36.2 $

41.1

(.5) $

(.9) $

(.2)

46.9 $

35.3 $

40.9

16 %

— %

(12) %

8 %

25 %

200 %

32 %

28 %

18 %

31 %

(44) %

33 %

(1) %

31 %

(3) %

6 %

15 %

(86) %

51 %

(8) %

8 %

(12) %

(14) %

*Discontinued operations includes interest on debt facilities repaid in connection with the Knife River separation.

NM - not meaningful

Operating statistics

Transportation volumes (MMdk)

Customer natural gas storage balance (MMdk):

Beginning of period

Net injection (withdrawal)

End of period

2023

2022

2021

567.2

482.9

471.1

21.2

16.5

23.0

25.5

(1.8)

(2.5)

37.7

21.2

23.0

2023 compared to 2022 Pipeline earnings increased $11.6 million as a result of:
• Revenues increased $22.0 million.

◦ Driven by increased transportation volumes, largely due to:

▪
▪

Increased contracted volume commitments and a full year of benefit from the North Bakken Expansion project of $9.9 million.
Increased transportation volumes and demand revenue from other organic growth projects placed in service in November 2023 and
August 2022.

◦ New rates effective August 1, 2023 of $5.0 million.
◦ Higher storage-related revenues.
◦ Higher non-regulated project revenues of $2.6 million.
◦ Partially offsetting these increases was non-renewal of certain contracts.

• Operation and maintenance increased $9.9 million.

◦ Primarily due to:

▪ Higher payroll-related costs of $6.9 million, largely related to higher incentive accruals and benefit-related costs.
▪ Higher non-regulated project costs of $1.2 million directly associated with higher non-regulated project revenues, as previously discussed.
▪ Higher contract services and insurance costs.

• Depreciation and amortization decreased $100,000 due to fully depreciated plant, largely offset by higher plant balances associated with growth

projects placed in-service, as previously discussed.

• Taxes, other than income decreased $1.5 million largely resulting from lower property taxes in Montana.

• Other income increased $2.6 million, primarily due to:

◦ Higher returns on the Company's nonqualified benefit plan investments, as discussed in Note 9.
◦ Higher AFUDC of $800,000 for the construction of the company's growth projects.

• Interest expense in continuing operations increased $3.2 million, resulting from higher average interest rates and higher debt balances to fund

capital expenditures, partially offset by higher AFUDC, as previously discussed.

• Income tax expense in continuing operations increased $1.9 million, largely due to higher income before income taxes, partially offset by

permanent tax adjustments.

MDU Resources Group, Inc. Form 10-K 45

Index
Part II

2022 compared to 2021 Pipeline earnings decreased $5.6 million as a result of:
• Revenues increased $13.0 million.

◦ Driven by increased transportation volume revenues of $16.4 million, largely due to the North Bakken Expansion project placed in service in

February 2022.
◦ Partially offset by:

▪ Lower non-regulated project revenue of $2.3 million.
▪ Lower transmission rates due to expired negotiated contracts converted to tariff rates.

• Operation and maintenance decreased $400,000.

◦ Primarily due to:

▪ Lower payroll-related costs of $2.2 million, largely related to lower incentive accruals and benefit-related costs.
▪ Lower non-regulated project costs of $1.3 million directly associated with lower non-regulated project revenues, as previously discussed.

◦ Partially offset by higher legal, maintenance materials and contract services.

• Depreciation and amortization increased $6.4 million due to increased property, plant and equipment balances, largely related to the North

Bakken Expansion project.

• Taxes, other than income decreased $400,000 resulting from lower property taxes of $700,000 in Montana, partially offset by higher property

taxes in North Dakota.

• Other income decreased $8.1 million, primarily due to:

◦ Lower AFUDC of $7.8 million as a result of the completion of the North Bakken Expansion project placed in service in February 2022.
◦ Lower returns on the Company's nonqualified benefit plan investments, as discussed in Note 9.

• Interest expense in continuing operations increased $3.4 million, resulting from interest associated with higher debt balances to fund capital

expenditures and lower AFUDC as a result of the North Bakken Expansion project placed in service in February 2022.

• Income tax expense in continuing operations increased $800,000, largely a result of a reduction in tax credits, partially offset by lower income

before income taxes.

Outlook The Company continues to monitor and assess the potential impacts of two FERC draft policy statements issued in the first quarter of 2022.
One is the Updated Certificate of Policy Statement, which describes how the FERC will determine whether a new interstate natural gas transportation
project is required by public convenience and necessity. It includes increased focus on a project's purpose and need and the environmental impacts;
as well as impacts on landowners and environmental justice communities. The second draft policy statement, the Interim GHG Policy Statement,
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.

The Company continues to monitor, evaluate and implement additional GHG emissions reduction strategies, including increased monitoring
frequency and emission source control technologies to minimize potential risk.

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 higher volumes of natural gas the
Company transports through its system. Associated natural gas production in the Bakken fell during the COVID-19 pandemic delaying previously
forecasted production growth. The production delay, along with the long-term contractual commitments on the North Bakken Expansion project
placed in service in February 2022, negatively impacted customer renewal of certain contracts. Natural gas production has since rebounded, and is
currently at record levels and the Company expects gradual increases in oil well drilling activity over the next two years. Bakken natural gas
production outlook remains positive with continued growth expected due to new oil wells and increasing gas to oil ratios.

Increases in national and global natural gas supply has moderated pressure on natural gas prices and 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 natural gas prices continues to
provide growth opportunity for industrial supply and demand related projects and seasonal pricing differentials provide opportunities for natural gas
storage services.

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

46 MDU Resources Group, Inc. Form 10-K

Index

Part II

In July 2021, the Company announced plans for a natural gas pipeline expansion project in eastern North Dakota. The Wahpeton Expansion project
consists of approximately 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. On May 27, 2022, the Company filed with FERC its application for
the project and received FERC's approval on October 19, 2023. Construction is anticipated to begin in the second quarter of 2024 with an estimated
completion in late 2024.

On September 19, 2022, the Company filed with the FERC its prior notice application for its 2023 Line Section 27 expansion project. This project
consists of a new compressor station and ancillary facilities and is designed to increase capacity by 175 MMcf per day, which is supported by a long-
term customer agreement. Construction began in the second quarter of 2023, with an anticipated completion date in the first quarter of 2024.
Supply chain challenges related to electrical equipment have impacted the project's schedule, resulting in a delay from the original anticipated in-
service date of late 2023.

Construction is expected to begin in the second quarter of 2024 on the Line Section 28 expansion project, to serve a natural gas-fired power plant in
northwestern North Dakota which will add 137 million cubic feet of natural gas transportation capacity per day. This project is supported by a long-
term negotiated customer agreement and is expected to be in service in the third quarter of 2024.

See Capital Expenditures within this section for information on the expenditures related to these growth projects.

Construction Services
Strategy and challenges The construction services segment provides electrical, 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 the
project awards in the markets served and the 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 markets in which it operates, including
those described in Item 1A - Risk Factors. These factors, and those noted below, have caused fluctuations in revenues, gross margins and earnings in
the past and are likely to cause fluctuations in the future.

• Revenue mix and impact on margins. The mix of revenues based on the types of services the segment provides can impact margins as certain
industries and services provide higher margin opportunities. Larger or more complex projects typically result in higher margin opportunities
since the segment assumes a higher degree of performance risk and there is greater utilization of the segment's resources for longer
construction timelines. However, larger or more complex projects can have a higher risk of regulatory and seasonal or cyclical delay. Project
schedules fluctuate, which can affect the amount of work performed in a given period. Smaller or less complex projects typically have a greater
number of companies competing for them, and competitors at times may be more aggressive on pricing when pursuing available work. A
greater percentage of smaller scale or less complex work in a given period could negatively impact margins due to the inefficiency of
transitioning between a greater number of smaller projects versus continuous production on a few larger projects.

• Project variability and performance. Margins for a single project may fluctuate period to period due to changes in the volume or type of work
performed, the pricing structure under the project contract or job productivity. Productivity and performance on a project can vary period to
period based on a number of factors, including unexpected project difficulties; unexpected project site conditions; project location, including
locations with challenging operating conditions or difficult geographic characteristics; whether the work is on an open or encumbered right of
way; inclement weather or severe weather events; environmental restrictions or regulatory delays; political or legal challenges related to a
project; and the performance of third parties. In addition, the type of contract can impact the margin on a project. Under fixed-price contracts,
which are more common with larger or more complex projects, the segment assumes risk related to project estimates versus actual execution.
Revenues under this type of contract can vary, sometimes significantly, from original projects due to additional project complexity; timing
uncertainty or extended bidding; extended regulatory or permitting processes; and other factors, which can result in a reduction in profit or
losses on a project.

• Subcontractor work and provision of materials. Some work under project contracts is subcontracted out to other companies and margins on
subcontractor work is generally lower than work performed by the Company. Increased subcontractor work in a given period may therefore
result in lower margins. In addition, inflationary or other pressures may increase the cost of materials under fixed-price contracts and may
result in decreased margins on the project. The Company has worked to implement provisions in project contracts to allow for the pass-through
of inflationary costs to customers where feasible and will continue to do so to mitigate the impacts.

MDU Resources Group, Inc. Form 10-K 47

Index
Part II

The segment's management continually monitors its operating margins and has been proactive in attempting to mitigate the inflationary impacts seen
across the United States. The segment is currently experiencing continued labor constraints and material costs, as well as impacts from delays in the
national supply chain. The segment is working with suppliers and providers of goods and services in advance of construction to secure pricing and
reduce delays for goods and services. The inflationary costs and national supply chain challenges experienced by the segment have increased costs
but have not had significant impacts to the procurement of project materials. Such volatility and inflationary pressures may continue to 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. These increases are partially offset by mitigation measures implemented by the Company, including escalation clauses in contracts, pre-
purchased materials and other cost savings initiatives. The segment also continues recruitment and retention efforts to attract and retain employees.
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.
Challenges faced by the Company to ensure available specialized labor resources include an aging workforce and labor availability issues, as well as
increasing duration and complexity of customer capital programs. Most of the markets the segment operates in have experienced labor shortages
which in some cases have caused increased labor-related costs. The Company continues to monitor the labor markets and expects labor costs to
continue to increase based on increases included in the collective bargaining agreements 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. In order to meet customer demand, the Company is planning for future labor needs, increasing recruiting efforts and
developing labor both locally and nationally.

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

Years ended December 31,

2023

2022

2021

Variance

2023 vs. 2022 2022 vs. 2021

(In millions)

$ 2,854.4 $ 2,699.2 $ 2,051.6

6 %

32 %

4 %

8 %

10 %

5 %

17 %

20 %

7 %

(4) %

18 %

16 %

23 %

10 %

11 %

10 %

11 %

10 %

35 %

7 %

29 %

34 %

11 %

9 %

2 %

10 %

9 %

13 %

181 %

16 %

17 %

15 %

68 %

14 %

Operating revenues

Cost of sales:

Operation and maintenance

Depreciation and amortization

Taxes, other than income

Total cost of sales

Gross profit

Selling, general and administrative expense:

Operation and maintenance

Depreciation and amortization

Taxes, other than income

2,426.1 2,325.9 1,725.5

18.3

88.1

16.9

80.4

15.8

62.4

2,532.5 2,423.2 1,803.7

321.9

276.0

247.9

121.4

101.5

92.9

4.9

5.1

4.6

5.3

4.5

4.8

Total selling, general and administrative expense

131.4

111.4

102.2

Operating income

Other income

Interest expense

Income before income taxes

Income tax expense

Income from continuing operations

Discontinued operations, net of tax*

190.5

164.6

145.7

9.0

10.1

7.3

2.6

(.1)

189.4

171.7

148.4

47.0

42.2

36.2

142.4

129.5

112.2

(5.2)

(4.7)

(2.8)

Net income

$ 137.2 $

124.8 $

109.4

*Discontinued operations includes interest on debt facilities repaid in connection with the Knife River separation.

NM - not meaningful

48 MDU Resources Group, Inc. Form 10-K

Index

Operating Statistics

Part II

Business Line

2023

2022

2021

2023

2022

2021

Revenues

Gross profit (loss)

(In millions)

Electrical & mechanical

Commercial

Industrial

Institutional

Renewables

Service & other

Transmission & distribution

Utility

Transportation

$ 1,204.0 $ 1,082.5 $

553.2

129.1 $

105.2 $

473.3

262.4

405.7

215.5

55.4

151.1

457.5

123.1

12.3

139.8

143.0

188.4

45.3

16.3

3.5

19.6

43.4

3.8

(0.6)

19.8

59.8

51.3

6.2

1.2

25.1

2,134.9

1,997.8

1,334.5

213.8

171.6

143.6

677.5

645.1

57.1

72.3

734.6

717.4

630.5

103.1

733.6

105.1

100.3

3.0

4.1

92.4

11.9

108.1

104.4

104.3

Intrasegment eliminations

(15.1)

(16.0)

(16.5)

—

$ 2,854.4 $ 2,699.2 $ 2,051.6

321.9 $

276.0 $

247.9

2023 compared to 2022 Construction services earnings increased $12.4 million as a result of:
• Revenues increased $155.2 million.

◦ Largely due to:

▪

Increased electrical and mechanical revenues as a result of:
◦ Higher commercial revenues driven largely by a $102.2 million increase in hospitality projects and $49.9 million in data center
projects, both due to higher workloads, partially offset by lower general commercial and mechanical workloads of $23.0 million.
◦ Higher industrial revenues on high-tech and government projects of $66.4 million and $15.5 million, respectively, partially offset by

lower industrial and low voltage projects of $12.9 million.
Institutional revenues increased $46.8 million, largely the result of higher project workloads in the healthcare market.

◦

Increased transmission and distribution revenues as a result of higher utility workloads for distribution projects of $71.0 million,
transmission projects of $26.0 million, and gas and underground projects of $25.1 million. These increases were largely offset by lower
workloads on electrical projects of $94.6 million.

◦ Partially offset by:

▪ Lower renewable revenues of $95.7 million due to timing of projects.
▪ Lower transportation revenues of $15.2 million, primarily from lower workloads on street lighting, government, and electrical projects.

These decreases were partially offset by higher traffic signalization projects.

• Gross profit increased $45.9 million.

◦ Largely due to the increased electrical and mechanical revenues previously discussed.
◦

Increased also as a result of margin improvement due to project mix and efficiency in labor and materials costs compared to the prior year.

• Selling, general and administrative expense increased $20.0 million resulting from higher payroll-related costs of $7.3 million, higher reserves for

uncollectible accounts on certain projects of $6.0 million, increased office expense, and higher professional services related to operational
activity.

• Other income increased $1.7 million, primarily related to the Company's joint ventures.

• Interest expense in continuing operations increased $9.9 million due to higher working capital needs and higher interest rates.

• Income tax expense in continuing operations increased $4.8 million as a result of higher income before income taxes.

MDU Resources Group, Inc. Form 10-K 49

Index
Part II

2022 compared to 2021 Construction services earnings increased $15.4 million as a result of:
• Revenues increased $647.6 million.

◦ Largely due to:

▪

Increased electrical and mechanical revenues, partially as a result of inflationary pressures as well as:
◦ Higher commercial revenues driven largely by a $251.5 million increase in hospitality projects due to the progress on large projects, a
$121.8 million increase in data center projects driven by both the number of and progress on projects and an increase in general
commercial projects as a result of project mix and progression of contracts.

◦ Higher renewable revenues from the timing of and progress on projects.
◦ Higher institutional revenues largely the result of increased activity and progress on projects from education projects of $26.0 million,

healthcare projects of $24.1 million and government projects.

Increased utility revenues for electrical projects of $37.5 million, underground projects of $24.5 million, distribution projects of
$12.7 million, telecommunications projects of $7.0 million and substation projects, with each sector being driven by higher customer
demand. These increases were partially offset by lower transmission and storm work projects.

◦ Partially offset by:

▪ Lower industrial revenues driven by decreased demand for maintenance, high-tech and refinery projects and lower service revenues driven

by decreased demand for the repair and maintenance of electrical and mechanical projects.

▪ Lower transportation revenues, primarily from lower customer demand for street lighting projects of $39.8 million.

• Gross profit increased $28.1 million.

◦ Largely due to the increased electrical and mechanical revenues previously discussed.
◦ Partially offset by higher operating costs related to inflationary pressures, including labor, materials and equipment costs.

• Selling, general and administrative expense increased $9.2 million resulting from higher payroll-related costs of $5.7 million, increased expected

credit losses of $2.4 million due to changes in estimates during 2021 and higher office expenses.

• Other income increased $4.7 million, primarily related to the Company's joint ventures.

• Interest expense in continuing operations increased $300,000 due to higher working capital needs and higher interest rates.

• Income tax expense in continuing operations increased $6.0 million as a result of higher income before income taxes.

Outlook On November 2, 2023, the Company announced its intent to pursue a tax-free spinoff of its wholly owned construction services business,
MDU Construction Services. The Company's board of directors believes a tax-free spinoff of the construction services business supports the
Company's goal of enhancing value for stockholders by becoming a pure-play regulated energy delivery company.

Some of the construction services projects are publicly funded, which is highly dependent on federal and state funding. The American Rescue Plan
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 Infrastructure Investment and Jobs Act, was enacted in the fourth quarter of 2021 and is providing
long-term opportunities by designating funds for investments for upgrades to electric and grid infrastructure, transportation systems, airports and
electric vehicle infrastructure, all industries this segment supports. In addition, the IRA provides $369 billion in new funding for clean energy
programs. These programs include new tax incentives for solar, battery storage and hydrogen development along with funding to expand the
production of electric vehicles and the build out of infrastructure to support electric vehicles. The Company will continue to monitor the
implementation of these legislative items.

The Company continues to have bidding opportunities in the specialty contracting markets in which it operated in during 2023, 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, solar generation and energy
storage markets that complement existing renewable projects performed by the Company.

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 our backlog are subject to changes in the scope of services to be provided, as well as adjustments to the costs.
Backlog may also be affected by project delays or cancellations resulting from weather conditions, external market factors and economic factors
beyond our control, among other things. Accordingly, there is no assurance that backlog will be realized. As of December 31, 2023, the Company
has not experienced any material impacts related to customer notices indicating that they no longer wish to proceed with the planned projects that
have been included in backlog. 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 Operating revenues and Net income expected to be earned in the following year and should not
be relied upon as a standalone indicator of future Operating revenues or Net income. Factors noted in Item 1A - Risk Factors can cause revenues to
be realized in periods and at levels that are different from originally projected.

50 MDU Resources Group, Inc. Form 10-K

Index

Part II

Subject to the foregoing discussion, the construction services segment's backlog at December 31 was as follows:

2023

2022

(In millions)

Electrical & mechanical

1,686 $

1,861

Transmission & distribution

325

270

2,011 $

2,131

The decrease in backlog at December 31, 2023, as compared to backlog at December 31, 2022, was largely attributable to the progress of
completion on certain electrical and mechanical projects within industrial, renewables and commercial markets. This decrease in backlog has been
partially offset by an increase in transmission and distribution project awards in both the transportation and utility markets.

Other

Years ended December 31,

2023

2022

2021

Variance

2023 vs. 2022 2022 vs. 2021

(In millions)

8.0 $

5.8 $

4.6

38 %

26 %

Operating revenues

Operating expenses:

Operation and maintenance

Depreciation and amortization

Taxes, other than income

Total operating expenses

Operating loss

Other income (expense)

Interest expense

Income (loss) before income taxes

Income tax benefit

Gain on tax-free exchange of retained shares in Knife River

186.6

22.5

22.9

18.2

4.1

4.4

4.7

—

26.7

27.5

22.9

(18.7)

(21.7)

(18.3)

15.7

18.9

—

(.6)

—

1.1

164.7

(22.6)

(17.4)

(5.8)

(5.4)

(3.1)

(2) %

(7) %

(50) %

(3) %

(14) %

7 %

(149) %

5 %

26 %

(6) %

100%

20 %

(19) %

(155) %

50 %

(30) %

(74) %

(20) %

(12) %

(15) %

Income (loss) from continuing operations

170.5

(17.2)

(14.3)

Discontinued operations, net of tax

(60.0)

122.3

138.6

Net income

NM - not meaningful

$ 110.5 $ 105.1 $ 124.3

On May 31, 2023, the Company completed the separation of Knife River, its former construction materials and contracting segment, into a new
publicly traded company. As a result of the separation, the historical results of operations for Knife River are shown in discontinued operations, net
of tax, except for allocated general corporate overhead costs of the company, which do not meet the criteria for income (loss) from discontinued
operations. Also included in discontinued operations are strategic initiative costs associated with the separation of Knife River.

Also 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.

In November 2023, the Company completed a tax-free exchange of its 5.7 million shares of its retained interest in Knife River, which is reflected in
Other. This tax-free exchange resulted in a gain of $186.6 million. Other also benefited from higher interest income. Partially offsetting these items
were higher interest expense, primarily related to debt issued in connection with the Knife River separation. Other also benefited from lower
insurance claims experience in 2023 at the captive insurer compared to 2022.

During 2022, Other experienced higher operation and maintenance expense primarily related to costs that do not meet the criteria for income (loss)
from discontinued operations, including costs associated with other strategic initiatives and general corporate overhead costs allocated to Knife
River, partially offset by a reduction in the estimated losses recorded at the captive insurer. Other was positively impacted by higher premiums
included in operating revenues in 2022 for the captive insurer compared to 2021. Discontinued operations reflect the historical results of operations
for Knife River, as previously discussed.

MDU Resources Group, Inc. Form 10-K 51

Index
Part II

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,

2023

2022

2021

(In millions)

Intersegment transactions:

Operating revenues

71.4 $

69.7 $

65.9

Operation and maintenance

Purchased natural gas sold

Other income

Interest expense

9.3

62.1

13.6

11.5

58.2

0.6

7.0

58.9

0.1

For more information on intersegment eliminations, see Item 8 - Note 18.

Liquidity and Capital Commitments
At December 31, 2023, the Company had cash, cash equivalents and restricted cash of $77.0 million and available borrowing capacity of
$525.8 million under the outstanding credit facilities of the Company and its subsidiaries. The Company expects to meet its obligations for debt
maturing within one year and its other operating and capital requirements from various sources, including internally generated funds; credit facilities
and commercial paper of the Company and its subsidiaries, as described in Capital resources; and issuance of debt and equity securities if
necessary.

Cash flows

Years ended December 31,

Net cash provided by (used in)

Operating activities

Investing activities

Financing activities

2023

2022

2021

(In millions)

$ 332.6 $ 510.0 $ 495.8

(540.7)

(638.9)

(885.9)

204.6

155.2

384.7

Increase (decrease) in cash, cash equivalents and restricted cash

(3.5)

26.3

(5.4)

Cash, cash equivalents and restricted cash -- beginning of year

80.5

54.2

59.6

Cash, cash equivalents and restricted cash -- end of year

77.0 $

80.5 $

54.2

Operating activities

Years ended December 31,

2023

2022

2021

Variance

2023 vs. 2022 2022 vs. 2021

Income from continuing operations

$ 480.4 $ 250.8 $ 242.5

229.6 $

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

22.5

243.1

222.0

(220.6)

Changes in current assets and current liabilities, net of acquisitions:

(In millions)

Receivables

Inventories

Other current assets

Accounts payable

Other current liabilities

Pension and postretirement benefit plan contributions

Other noncurrent changes

Net cash provided by continuing operations

Net cash (used in) provided by discontinued operations

110.4

(330.8)

(75.4)

(27.6)

(15.6)

(52.9)

(9.4)

(67.4)

(76.7)

172.7

25.5

67.0

(7.6)

7.6

(.1)

3.5

(.1)

(22.8)

(10.7)

(51.7)

492.7

307.6

299.0

(160.1)

202.4

196.8

441.2

(12.0)

(43.5)

(249.4)

59.4

(7.5)

(12.1)

185.1

(362.5)

Net cash provided by operating activities

$ 332.6 $ 510.0 $ 495.8

(177.4) $

8.3

21.1

(255.4)

(15.7)

58.0

147.2

4.1

—

41.0

8.6

5.6

14.2

52 MDU Resources Group, Inc. Form 10-K

Index

Part II

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 affected by changes in working capital. The decrease in cash flows provided by operating activities in 2023 from 2022 was
largely driven by increased cash used in discontinued operations, primarily cash used at Knife River in the five months of 2023 compared to cash
provided by Knife River in the twelve months of 2022 and higher costs incurred in 2023 associated with the Knife River separation. Also
contributing were the payment of increased natural gas costs and the purchase/sale of environmental allowances in 2023, as discussed in Note 7, all
at the natural gas distribution business. Partially offsetting these items was higher cash from receivables due to the timing of the job activity, billing
fluctuations and higher cash collections at the construction services business and the timing of collection of accounts receivable from customers at
the natural gas distribution business.

The increase in cash flows provided by operating activities in 2022 from 2021 was driven by higher 2022 accounts payable for natural gas
purchases due to higher natural gas prices and colder weather at the natural gas distribution business. In addition, an increase in cash from other
current assets contributed to the improvement, largely related to a 2021 income tax overpayment that was utilized in 2022. Partially offsetting the
increase was higher working capital needs at the construction services business due to fluctuations in job activity resulting in higher receivables in
the period, as well as lower collections of accounts receivable compared to 2021, offset in part by increased accounts payable.

Investing activities

Years ended December 31,

2023

2022

2021

Variance

2023 vs. 2022 2022 vs. 2021

Capital expenditures

Acquisitions, net of cash acquired

(519.7) $

(478.4) $

(485.2)

(41.3) $

(In millions)

—

(2.5)

Net proceeds from sale or disposition of property

16.5

11.3

14.6

Cost of removal, net of salvage value

Investments

1.1

(11.8)

(11.4)

16.3

(4.1)

(3.1)

Net cash used in continuing operations

(485.8)

(483.0)

(487.6)

Net cash used in discontinued operations

(54.9)

(155.9)

(398.3)

101.0

Net cash used in investing activities

(540.7) $

(638.9) $

(885.9)

98.2 $

—

5.2

12.9

20.4

(2.8)

6.8

2.5

(3.3)

(.4)

(1.0)

4.6

242.4

247.0

The decrease in cash used in investing activities in 2023 from 2022 was primarily the result of lower cash used in discontinued operations in the
five months of 2023 versus twelve months of 2022, higher proceeds from investments in 2023, and the absence of 2022 plant removal costs at the
electric business. This was partially offset by higher capital expenditures at the pipeline business for its expansion projects and increased capital
expenditures at the natural gas distribution business, primarily higher natural gas distribution system improvements related to increased capacity,
largely offset by lower capital expenditures for electric production and transmission projects.

The decrease in cash used in investing activities in 2022 from 2021 was primarily the result of lower cash used in discontinued operations for
acquisition activity. Decreased capital expenditures at the pipeline business as a result of the North Bakken Expansion project being placed in
service in February 2022 were mostly offset by increased capital expenditures at the natural gas distribution business for higher natural gas
distribution projects, including natural gas mains and meters, and at the electric business for increased electric production projects, including the
construction of Heskett Unit 4 and the repower of Diamond Willow.

Financing activities

Years ended December 31,

2023

2022

2021

Variance

2023 vs. 2022 2022 vs. 2021

810.0 $

38.5 $

50.0

771.5 $

(In millions)

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

(460.9)

—

(100.0)

726.6

373.0

272.0

(793.0)

(65.8)

(24.8)

(2.5)

—

(1.1)

(.1)

(.9)

88.8

(161.3)

(176.9)

(171.4)

(4.8)

(3.0)

(7.4)

(4.9)

(6.7)

(4.1)

Net cash provided by continuing operations

111.1 $

155.3 $

102.9

Net cash provided by (used in) discontinued operations

93.5

(0.1)

281.8

Net cash provided by financing activities

204.6 $

155.2 $

384.7

49.4 $

(460.9)

353.6

(727.2)

(1.4)

15.6

2.6

1.9

(44.2)

93.6

(11.5)

100.0

101.0

(41.0)

(.2)

(88.9)

(5.5)

(.7)

(.8)

52.4

(281.9)

(229.5)

MDU Resources Group, Inc. Form 10-K 53

Index
Part II

The increase in cash provided by financing activities in 2023 from 2022 was primarily due to higher issuance of short-term borrowings associated
with the debt for equity exchange of the Knife River retained shares, as well as the issuance of short-term borrowings at the natural gas distribution
business to fund higher natural gas costs. Also contributing were higher issuance of long-term debt at the Company to replace the Centennial debt
repayment and to fund capital expenditures and increased cash provided by discontinued operations. Partially offsetting the increase was higher
repayments of short-term and long-term debt at the construction services and natural gas distribution businesses. In addition, due to the Knife River
separation, Centennial repaid all of its outstanding debt in the second quarter of 2023, which was facilitated by the Knife River repayment and the
Company entering into various new debt instruments. Refer to Note 3 for additional information related to the repayment of debt associated with the
Knife River separation. Refer to Note 10 for additional information related to the short-term debt related to the retained shares of Knife River.

The decrease in cash provided by financing activities in 2022 from 2021 was largely the result of increased repayment and decreased issuance of
long-term debt in discontinued operations and the absence of the issuance of common stock under the Company's "at-the-market" offering during
2022, as discussed in Note 13. Partially offsetting these items were increased issuance of short-term debt as long-term debt replaced short-term
debt in preparation of the separation of Knife River, the absence of a 2021 repayment of short-term borrowings at Montana-Dakota, and the
increased issuance of long-term debt at the construction services business as a result of higher working capital needs.

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. For 2023, the Company
assumed a long-term rate of return on its qualified defined pension plan assets of 6.5 percent. Due to market performance in the equity and fixed-
income markets, the Company experienced an increase in the qualified defined pension plan assets. Differences between actuarial assumptions and
actual plan results are deferred and amortized into expense when the accumulated differences exceed 10 percent of the greater of the projected
benefit obligation or the market-related value of plan assets. Therefore, this change in asset values will be reflected in future expenses of the plans
beginning in 2024. The funded status of the plans improved $9.2 million, primarily due to the increase in plan assets, as discussed previously.

At December 31, 2023, the pension plans' accumulated benefit obligations exceeded these plans' assets by approximately $27.0 million. Pretax
pension income reflected in the Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021, was $580,000,
$2.3 million and $1.7 million, respectively. The Company's pension expense is currently projected to be approximately $800,000 in 2024. Funding
for the pension plans is actuarially determined. The Company expects to contribute the minimum funding requirement of $3.3 million in 2024.
There were no minimum required contributions for the years ended December 31, 2023, 2022, or 2021 due to an additional contribution of $20.0
million in 2019, which created prefunding credits that were used in future periods. For more information on the Company's pension plans, see
Item 8 - Note 19.

Capital expenditures
The Company's capital expenditures for 2021 through 2023 and as anticipated for 2024 through 2026 are summarized in the following table.

Capital expenditures:

Electric

Actual (a)

Estimated

2021

2022

2023 (b)

2024

2025

2026

(In millions)

82 $ 134 $ 110

$ 113 $ 154 $ 199

Natural gas distribution

170

240

275

337

301

288

Pipeline

Construction services (c)

Other

235

116

107

—

Total capital expenditures

$ 518 $ 475 $ 537

$ 612 $ 535 $ 532

(a) Capital expenditures for 2023, 2022 and 2021 include noncash transactions such as capital expenditure-related

accounts payable and AFUDC totaling $13.1 million, $(3.8) million and $30.6 million, respectively.

(b)2023 capital expenditures were funded by internal sources, long-term debt issuances and borrowings under credit

facilities and issuance of commercial paper of the Company and its subsidiaries.

54 MDU Resources Group, Inc. Form 10-K

Index

Planned utility investments in the Company's estimated capital expenditures for 2024 through 2026 include construction of electric transmission
lines and substations, as well as natural gas delivery infrastructure, to serve a customer base that is expected to continue growing at 1 percent to 2
percent annually over the next five years; construction of JETx, a MISO approved project, in partnership with Otter Tail Power Company; and
replacing and modernizing certain existing electric and natural gas utility infrastructure to ensure continued safe and reliable service to customers. At
the pipeline business, the Company will focus on system growth to expand natural gas transmission capacity. A number of projects are included in
the planned investments, including the Wahpeton Expansion project in North Dakota that is expected to be constructed in 2024. Planned
investments at the construction services business include normal replacements and upgrades of the equipment that is used in the transmission and
distribution, and electrical and mechanical services the company performs. For more information on the Company's growth projects, see Business
Segment Financial and Operating Data.

Other estimated capital expenditures for the years 2024 through 2026 include those for:

Part II

• 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 2024 through 2026 will be
funded by various sources, including internally generated funds; credit facilities and commercial paper of the Company and its subsidiaries, as
described later; and issuance of debt and equity securities if necessary.

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, the issuance of long-term debt and the sale of equity securities.

Debt resources
Certain debt instruments of the Company's subsidiaries contain restrictive and financial covenants and cross-default provisions. In order to borrow
under the respective debt instruments, 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, 2023. 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, 2023, 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 10.

The following table summarizes the outstanding revolving credit facilities of the Company's subsidiaries at December 31, 2023:

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

MDU Resources Group, Inc.

Revolving credit agreement

MDU Resources Group, Inc.

Revolving credit agreement

Facility
Limit

Amount
Outstanding

Letters
of Credit

Expiration
Date

(In millions)

200.0

144.2 $

—

10/18/28

100.0 (b) $

100.0 (d) $

150.0

200.0 (e) $

15.4 $

30.7 $

— $

25.0 (c)

11/30/27

—

8.9

10/13/27

5/29/24

5/31/28

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

Dakota on stated conditions, up to a maximum of $250.0 million). At December 31, 2023, 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 $125.0 million.
(e) Certain provisions allow for increased borrowings, up to a maximum of $250.0 million.

MDU Resources Group, Inc. Form 10-K 55

Index
Part II

On April 25, 2023, Knife River issued $425.0 million of senior notes, pursuant to an indenture, due in 2031 to qualified institutional buyers. Knife
River also entered into a new credit agreement which provided a revolving credit facility in an initial amount of up to $350.0 million and a senior
secured term loan facility in an amount up to $275.0 million. The net proceeds from the notes offering, revolving credit facility and the term loan
were used to repay $825.0 million of Knife River's intercompany obligations owed to Centennial. Centennial used the entirety of these proceeds from
Knife River to repay a portion of its existing third-party indebtedness. Centennial repaid the remainder of its outstanding debt in the second quarter
of 2023 with proceeds from various new debt instruments entered into by the Company.

The Montana-Dakota commercial paper program is supported by a revolving credit agreement. While the amount of commercial paper outstanding
does not reduce available capacity under the revolving credit agreement, Montana-Dakota does not issue commercial paper in an aggregate amount
exceeding the available capacity under their credit agreement. The commercial paper and revolving credit agreement borrowings may vary during the
period, largely the result of fluctuations in working capital requirements due to the seasonality of certain operations of Montana-Dakota.

Total equity as a percent of total capitalization was 55 percent at December 31, 2023 and 54 percent at December 31, 2022, which includes
discontinued operations. 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, excluding debt in discontinued operations and including short-term borrowings and long-term debt due within 12 months, plus total
equity. Management believes this ratio is an indicator of how the Company is financing its operations, as well as its financial strength.

Montana-Dakota On October 18, 2023, Montana-Dakota amended and restated its revolving credit agreement to increase the borrowing capacity to
$200.0 million and extend the maturity date to October 18, 2028. 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.

Cascade Any borrowings under the revolving credit agreement are classified as long-term debt as they are intended to be refinanced on a long-term
basis through continued borrowings. The credit agreement contains customary covenants and provisions, including a covenant of Cascade not to
permit, at any time, the ratio of total debt to total capitalization to be greater than 65 percent. Other covenants include restrictions on the sale of
certain assets, limitations on indebtedness and the making of certain investments.

On January 20, 2023, Cascade entered into a $150.0 million term loan agreement with a SOFR-based variable interest rate and a maturity date of
January 19, 2024. On December 5, 2023, Cascade paid down $100.0 million of the outstanding balance, with the final $50.0 million repayment
made on January 19, 2024.

On November 29, 2023, Cascade issued $100.0 million of senior notes under a note purchase agreement with a maturity date of November 30,
2033 and an interest rate of 6.39 percent. The agreement contains customary covenants and provisions, including a covenant of Cascade not to
permit, at any time, the ratio of debt to total capitalization to be greater than 65 percent. Other covenants include restrictions on the sale of certain
assets, limitations on indebtedness and the making of certain investments.

Intermountain Any borrowings under the revolving credit agreement are classified as long-term debt as they are intended to be refinanced on a long-
term basis through continued borrowings. The credit agreement contains customary covenants and provisions, including a covenant of Intermountain
not to permit, at any time, the ratio of total debt to total capitalization to be greater than 65 percent. Other covenants include restrictions on the sale
of certain assets, limitations on indebtedness and the making of certain investments.

On January 20, 2023, Intermountain entered into a $125.0 million term loan agreement with a SOFR-based variable interest rate and a maturity
date of January 19, 2024. In March, April and May 2023, Intermountain paid down $20.0 million, $30.0 million and $30.0 million, respectively, of
the outstanding balance, with the final $45.0 million repayment made on January 19, 2024.

On November 29, 2023, Intermountain issued $25.0 million of senior notes under a note purchase agreement with a maturity date of November 30,
2033 and an interest rate of 6.19 percent. The agreement contains customary covenants and provisions, including a covenant of Intermountain not
to permit, at any time, the ratio of debt to total capitalization to be greater than 65 percent. Other covenants include restrictions on the sale of
certain assets, limitations on indebtedness and the making of certain investments.

Centennial On March 18, 2022, Centennial entered into a $100.0 million term loan agreement with a SOFR-based variable interest rate and a
maturity date of March 17, 2023. On March 17, 2023, Centennial amended the agreement to extend the maturity date to September 15, 2023. On
May 31, 2023, Centennial repaid the full balance outstanding under the term loan agreement.

On December 19, 2022, Centennial entered into a $135.0 million term loan agreement with a SOFR-based variable interest rate and a maturity date
of December 18, 2023. On May 31, 2023, Centennial repaid the full balance outstanding under the term loan agreement.

56 MDU Resources Group, Inc. Form 10-K

Index

Part II

On June 9, 2023, Centennial repaid the full balances outstanding on all its long-term senior note debt, which aggregated $455.0 million, as
previously discussed.

MDU Resources Group, Inc. On May 1, 2023, the Company entered into a $75.0 million term loan agreement with a SOFR-based variable interest rate
and a maturity date of November 1, 2023. On May 31, 2023, the Company repaid the full balance outstanding under the term loan agreement.

On May 31, 2023, the Company entered into a $150.0 million revolving credit agreement with a SOFR-based variable interest rate and a maturity
date of May 29, 2024. At December 31, 2023, the Company had no amount outstanding. The agreement contains customary covenants and
provisions, including a covenant of the Company not to permit, at any time, the ratio of total debt to total capitalization to be greater than 65
percent. The covenants also include certain restrictions on the sale of certain assets, loans and investments.

On May 31, 2023, the Company entered into a $200.0 million revolving credit agreement with a SOFR-based variable interest rate and a maturity
date of May 31, 2028. Any borrowings under the revolving credit agreement are classified as long-term debt as they are intended to be refinanced on
a long-term basis through continued borrowings. The credit agreement contains customary covenants and provisions, including a covenant of the
Company 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.

On May 31, 2023, the Company entered into a $375.0 million term loan agreement with a SOFR-based variable interest rate and a maturity date of
May 31, 2025. On November 15, 2023, the Company paid down $185.0 million of this term loan. The term loan agreement contains customary
covenants and provisions, including a covenant of the Company not to permit, at any time, the ratio of total debt to total capitalization to be greater
than 65 percent. The covenants also include certain restrictions on the sale of certain assets, loan and investments.

As discussed in Note 3, the Company retained 10 percent of the shares of Knife River with the intent to monetize its investment and provide
proceeds to the Company. On November 6, 2023, the Company entered into a $310.0 million term loan agreement which was used to facilitate the
tax-free debt for equity exchange. This term loan was repaid through a noncash exchange of the Company's shares in Knife River for $293.2 million
and the remaining balance of this term loan was repaid in cash on November 10, 2023.

Equity Resources
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. On August 10, 2023, the Company terminated the distribution agreement. Prior to the
termination, the Company had capacity to issue up to 3.6 million additional shares of common stock under the "at-the-market" offering program. The
Company was not subject to any termination penalties related to the termination of the distribution agreement. The Company had no issuances of
shares under the "at-the-market" offering program in 2023 or 2022.

Dividend restrictions
For information on the Company's dividends and dividend restrictions, see Item 8 - Note 13.

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 10, 11 and 22. At December 31, 2023, the Company's material cash requirements under these obligations were as follows:

Less than 1
year

1-3 years

3-5 years

(In millions)

More than 5
years

Total

Short-term debt

95.0 $

— $

95.0

Long-term debt maturities*

Estimated interest payments**

Operating leases

Purchase commitments

61.3

112.3

25.9

488.4

192.3

28.7

286.7

1,468.2

2,304.6

156.3

833.8

1,294.7

10.4

25.7

90.7

674.9

466.7

244.5

670.3

2,056.4

969.4 $

1,176.1 $

697.9 $

2,998.0 $

5,841.4

* 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, 2023, 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,
2023, the current portion of asset retirement obligations was $784,000 and was included in other accrued liabilities on the Consolidated Balance
Sheets.

MDU Resources Group, Inc. Form 10-K 57

Index
Part II

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,
2023, the Company had total liabilities of $385.2 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 12.

Not reflected in the previous table are $2.3 million in uncertain tax positions at December 31, 2023.

The Company's minimum funding requirements for its defined benefit pension plans for 2024, which are not reflected in the previous table, is $3.3
million. For information on potential contributions above the funding minimum requirements, see item 8 - Note 19.

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 19.

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.

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 18. 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, 2023, 2022 and 2021, there were no impairment losses recorded.

At October 31, 2023, the fair value substantially exceeded the carrying value at the Company's construction services reporting unit. The Company's
annual impairment testing indicated the natural gas distribution reporting unit's fair value is not substantially in excess of its carrying value
("cushion"). Based on the Company's assessment, the estimated fair value of the natural gas distribution reporting unit exceeded its carrying value,
which includes $345.7 million of goodwill, by approximately 4 percent as of October 31, 2023. The decrease in the natural gas distribution
reporting unit's cushion from the prior year was primarily attributable to the risk adjusted cost of capital increasing from 6.4 percent in 2022 to
6.7 percent 2023, which directly correlates with the treasury rates at the date of the test. The natural gas distribution reporting unit is at risk of
future impairment if projected operating results are not met or other inputs into the fair value measurement model change.

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, long-term growth rates, 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.

58 MDU Resources Group, Inc. Form 10-K

Index

Part II

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 6 percent to 10 percent in 2023, 6 percent to
9 percent for 2022 and 5 percent to 8 percent for 2021 from its continuing reporting units.

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 also uses a rate base multiple, based on recent comparable industry transactions, at its natural gas distribution
reporting unit. With the exception of the rate base trading multiple, 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 20 percent control premium in 2023 and 2022 and a 15 percent control premium in 2021.

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 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. Construction
services long-term growth rate was 3.0 percent in 2023, 2022 and 2021. Natural gas distribution's long-term growth rate was 3.0 percent, 2.85
percent and 1.6 percent in 2023, 2022 and 2021, respectively.

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, 2023 and
2022, the Company's regulatory assets were $619.6 million and $494.8 million, respectively, and regulatory liabilities were $591.8 million and
$474.9 million, respectively. At December 31, 2023 and 2022, regulatory assets in recovery were $496.1 million and $427.8 million, respectively,
and regulatory assets not in recovery were $123.5 million and $67.0 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,
2023 and 2022, the Company's total construction contract revenue was $2.8 billion and $2.6 billion, respectively.

MDU Resources Group, Inc. Form 10-K 59

Index
Part II

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.

The Company's construction contracts generally contain variable consideration including liquidated damages, performance bonuses or incentives,
claims, 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 one of the two prescribed
estimation methods, the expected value method or the most likely amount method, depending on which method best predicts the most likely amount
of consideration the Company expects to be entitled to or expects to incur. Assumptions as to the occurrence of future events and the likelihood and
amount of variable consideration are made during the contract performance period. Estimates of variable consideration and assessment of
anticipated performance and all information (historical, current and forecasted) that is reasonably available to management. The Company only
includes variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue
recognized will not occur or when the uncertainty associated with the variable consideration is resolved. Changes in circumstances could impact
management's estimates made in determining the value of variable consideration recorded. When determining if the variable consideration is
constrained, the Company considers if factors exist that could increase the likelihood of the magnitude of a potential reversal of revenue. 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 received notification from a customer on a large project with a contract that was billed on a time and materials basis with no stated
maximum price, that it is withholding payment of approximately $31.0 million on remaining outstanding billings, including retention. The Company
believes it has substantial defenses against these claims based upon the terms of the contract and the Company's belief that it has performed under
the terms of the contract. The Company believes collection of the remaining outstanding billings, including retention is probable and, as a result, the
Company has recognized the revenue from this project in its results. However, there is uncertainty surrounding this matter, including the potential
long-term nature of dispute resolution, the Company filing a lien on the property and the broad range of possible consideration amounts as a result of
negotiations and potential litigation to resolve the dispute.

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, 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. Health care cost trend rates are determined by
historical and future trends.

60 MDU Resources Group, Inc. Form 10-K

Index

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 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, 2023:

Part II

Pension Benefits

Other
Postretirement Benefits

2023

2022

2023

2022

Service cost

Interest cost

Plan participants' contributions

Actuarial loss/(gain)

Benefits paid

Benefit obligation at end of year

Change in net plan assets:

—

13,521

9,396

—

5,395

(76,130)

534

1,956

479

(215)

894

1,383

566

(13,083)

(21,616)

(22,114)

(3,479)

(3,426)

275,586

278,286

39,590

40,315

Fair value of plan assets at beginning of year

242,031

333,764

76,640

99,844

Actual return on plan assets

Employer contribution

Plan participants' contributions

Benefits paid

20,576

(69,619)

5,518

(20,419)

7,567

—

479

566

(21,616)

(22,114)

(3,479)

(3,426)

Fair value of net plan assets at end of year

248,558

242,031

79,234

76,640

Funded status - (under) over

Amounts recognized in the Consolidated Balance Sheets at December 31:

Noncurrent assets - other

Noncurrent liabilities - other

Benefit obligation (liabilities) assets - net amount recognized

Amounts recognized in accumulated other comprehensive loss:

Actuarial loss (gain)

Prior service credit

Total

Amounts recognized in regulatory assets or liabilities:

Actuarial loss (gain)

Prior service credit

Total

(27,028) $

(36,255) $

39,644 $

36,325

— $

39,644 $

36,325

27,028

36,255

—

(27,028) $

(36,255) $

39,644 $

36,325

32,273 $

32,378 $

(3,515) $

(2,923)

—

(115)

(289)

32,273 $

32,378 $

(3,630) $

(3,212)

140,232 $

141,207 $

(1,146) $

—

(2,619)

(1,439)

(3,796)

140,232 $

141,207 $

(3,765) $

(5,235)

MDU Resources Group, Inc. Form 10-K 105

Index
Part II

Employer contributions and benefits paid in the preceding table include only those amounts contributed directly to, or paid directly from, plan
assets. Amounts related to regulated operations are recorded as regulatory assets or liabilities and are expected to be reflected in rates charged to
customers over time. For more information on regulatory assets and liabilities, see Note 6.

In 2023, the actuarial loss recognized in the benefit obligation was primarily the result of a decrease in the discount rate. In 2022, the actuarial
gain recognized in the benefit obligation was primarily the result of an increase in the discount rate. For more information on the discount rates, see
the table below. Unrecognized pension actuarial gains and losses in excess of 10 percent of the greater of the projected benefit obligation or the
market-related value of assets are amortized over the average life expectancy of plan participants for frozen plans. The market-related value of assets
is determined using a five-year average of assets.

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

2023

2022

(In thousands)

275,586 $

278,286

275,586 $

278,286

248,558 $

242,031

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

2023

2022

2021

2023

2022

2021

Components of net periodic benefit credit:

(In thousands)

Service cost

Interest cost

Expected return on assets

Amortization of prior service credit

Recognized net actuarial loss (gain)

— $

534 $

894 $

13,521

9,396

8,767

1,956

1,383

(17,194)

(17,482)

(17,548)

(5,361)

(5,277)

—

(1,318)

3,093

5,826

7,046

(504)

(570)

1,033

1,370

(5,079)

(1,318)

(111)

Net periodic benefit credit, including amount capitalized

(580)

(2,260)

(1,735)

(4,693)

(4,888)

(4,105)

Less amount capitalized

Net periodic benefit cost credit

—

107

175

150

(580)

(2,260)

(1,735)

(4,800)

(5,063)

(4,255)

Other changes in plan assets and benefit obligations recognized in

accumulated comprehensive loss:

Net (gain) loss

Amortization of actuarial (loss) gain

Amortization of prior service credit

187

(292)

—

Reclassification of postretirement liability adjustment from

regulatory asset

—

5,343

2,369

(265)

(1,310)

(1,286)

—

(604)

108

(4,141)

(2,811)

(281)

125

(135)

100

—

(992)

—

Total recognized in accumulated other comprehensive loss

(105)

6,402

(1,551)

(418)

(5,289)

(2,846)

Other changes in plan assets and benefit obligations recognized in

regulatory assets or liabilities:

Net (gain) loss

Amortization of actuarial (loss) gain

Amortization of prior service credit

1,826

9,757

(5,116)

(2,801)

(5,373)

(6,731)

(107)

304

—

1,273

11,920

(6,292)

500

110

1,298

Reclassification of postretirement liability adjustment from

regulatory asset

—

(5,343)

—

992

—

Total recognized in regulatory assets or liabilities

(975)

(959)

(11,847)

1,470

14,685

(4,884)

Total recognized in net periodic benefit credit, accumulated other

comprehensive loss and regulatory assets or liabilities

(1,660) $

3,183 $

(15,133) $

(3,748) $

4,333 $

(11,985)

106 MDU Resources Group, Inc. Form 10-K

Index

Part II

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

Discount rate

Expected return on plan assets

Pension Benefits

2023

4.84 %

6.50 %

2022

5.06 %

6.50 %

Other
Postretirement Benefits

2023

4.85 %

6.00 %

2022

5.07 %

6.00 %

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

Pension Benefits

Other
Postretirement Benefits

2023

5.06 %

6.50 %

2022

2.64 %

6.00 %

2023

5.07 %

6.00 %

2022

2.65 %

5.50 %

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, 2023, the expected rate of return on pension plan assets is based on the targeted asset allocation range of 40 percent to 50 percent
equity securities and 50 percent to 60 percent fixed-income securities and the expected rate of return from these asset categories. The expected rate
of return on other postretirement plan assets is based on the targeted asset allocation range of 10 percent to 20 percent equity securities and
80 percent to 90 percent fixed-income securities and the expected rate of return from these asset categories. The expected return on plan assets for
other postretirement benefits reflects insurance-related investment costs.

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

Health care trend rate assumed for next year

Health care cost trend rate - ultimate

Year in which ultimate trend rate achieved

2023

2022

6.5 %

4.5 %

2033

6.5 %

4.5 %

2032

The Company's other postretirement benefit plans include health care and life insurance benefits for certain retirees. The plans underlying these
benefits may require contributions by the retiree depending on such retiree's age and years of service at retirement or the date of retirement. The
Company contributes a flat dollar amount to the monthly premiums which is updated annually on January 1.

The Company expects to contribute to its defined benefit pension plans in 2024 the minimum funding requirement of $3.3 million. The Company
expects to contribute approximately $22,000 to its postretirement benefit plans in 2024.

The following benefit payments, which reflect future service, as appropriate, and expected Medicare Part D subsidies at December 31, 2023, are as
follows:

Years

2024

2025

2026

2027

2028

2029-2033

Pension
Benefits

Other
Postretirement
Benefits

Expected
Medicare
Part D Subsidy

(In thousands)

22,050 $

3,498 $

21,980

21,810

21,660

21,320

99,970

3,473

3,359

3,265

3,171

14,580

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.

MDU Resources Group, Inc. Form 10-K 107

Index
Part II

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.

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

Collective and mutual funds (a)

U.S. Government securities

Investments measured at net asset value (b)

Fair Value Measurements
at December 31, 2023, 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,
2023

— $

7,197 $

— $

7,197

(2)

84,761

30,162

—

88,219

33,141

—

(2)

172,980

63,303

5,080

Total assets measured at fair value

114,921 $

128,557 $

— $

248,558

(a) Collective and mutual funds invest approximately 51 percent in corporate bonds, 15 percent in common stock of international companies, 11 percent in common
stock of large-cap and mid-cap U.S. companies, 7 percent cash and cash equivalents, 7 percent in U.S. Government securities and 9 percent in other investments.
In accordance with ASC 820 - Fair Value Measurements, certain investments that were measured at net asset value per share (or its equivalent) have not been
classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items
presented in the Consolidated Balance Sheets.

(b)

108 MDU Resources Group, Inc. Form 10-K

Index

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)

Part II

Fair Value Measurements
at December 31, 2022, 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,
2022

— $

7,311 $

— $

7,311

6,611

—

108,343

—

2,724

—

418

29,863

72,809

5,283

788

2,904

—

6,611

418

138,206

72,809

5,283

3,512

2,904

4,977

Total assets measured at fair value

117,678 $

119,376 $

— $

242,031

(a) Collective and mutual funds invest approximately 29 percent in corporate bonds, 24 percent in common stock of large-cap U.S. companies, 16 percent in common

stock of international companies, 7 percent cash and cash equivalents, 7 percent in U.S. Government securities and 17 percent in other investments.

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

In accordance with ASC 820 - Fair Value Measurements, certain investments that were measured at net asset value per share (or its equivalent) have not been
classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items
presented in the Consolidated Balance Sheets.

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

The estimated fair value of the other postretirement benefit plans' Level 2 cash equivalents is valued at the net asset value of shares held at year
end, based on published market quotations on active markets, or using other known sources including pricing from outside sources. The estimated
fair value of the other postretirement benefit plans' Level 1 and Level 2 equity securities is based on the closing price reported on the active market
on which the individual securities are traded or other known sources including pricing from outside sources. The estimated fair value of the other
postretirement benefit plans' Level 2 insurance contract is based on contractual cash surrender values that are determined primarily by investments
in managed separate accounts of the insurer. These amounts approximate fair value. The managed separate accounts are valued based on other
observable inputs or corroborated market data.

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

Insurance contract (a)

Total assets measured at fair value

Fair Value Measurements
at December 31, 2023, 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,
2023

— $

4,562 $

— $

4,562

2,369

—

72,303

2,369 $

76,865 $

—

— $

2,369

72,303

79,234

(a) The insurance contract invests approximately 60 percent in corporate bonds, 16 percent in common stock of large-cap U.S. companies, 15 percent in U.S.

Government securities, 5 percent in common stock of small-cap U.S. companies and 4 percent in other investments.

MDU Resources Group, Inc. Form 10-K 109

Index
Part II

Assets:

Cash equivalents

Equity securities:

U.S. companies

Collective and mutual funds (a)

Insurance contract (b)

Total assets measured at fair value

Fair Value Measurements
at December 31, 2022, 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,
2022

— $

4,213 $

— $

4,213

2,583

—

69,834

2,588 $

74,052 $

—

— $

2,583

69,834

76,640

(a) Collective and mutual funds invest approximately 29 percent in corporate bonds, 24 percent in common stock of large-cap U.S. companies, 16 percent in common

stock of international companies, 7 percent in cash and cash equivalents, 7 percent in U.S. Government securities and 17 percent in other investments.
(b) The insurance contract invests approximately 69 percent in corporate bonds, 14 percent in common stock of large-cap U.S. companies, 13 percent in U.S.

Government securities and 4 percent in common stock of small-cap U.S. companies.

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

2023

2022

(In thousands)

57,033 $

58,683

57,033 $

58,683

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:

Components of net periodic benefit cost:

Interest cost

Recognized net actuarial loss

2023

2022

2021

(In thousands)

2,740

1,681

273

911

1,505

942

Net periodic benefit cost

3,013 $

2,592 $

2,447

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

2023

2022

4.73 %

4.97 %

N/A

4.97 %

2.40 %

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, 2023, are expected to aggregate as
follows:

Nonqualified benefits

5,584 $

5,726 $

5,795 $

5,807 $

5,481 $

21,962

2024

2025

2026

2027

2028

2029-2033

(In thousands)

110 MDU Resources Group, Inc. Form 10-K

Index

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 2023, 2022 and 2021 were $5.5 million, $2.2 million and $1.5 million,
respectively.

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

Part II

Investments

Insurance contracts*

Life insurance**

Other

Total investments

2023

2022

(In thousands)

66,283 $

77,958

31,303

31,214

6,409

4,913

103,995 $

114,085

* For more information on the insurance contracts, see Note 9.

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

employee's death).

Defined contribution plans
The Company sponsors a defined contribution plan for eligible employees and the costs incurred under this plan were $23.2 million in 2023,
$18.7 million in 2022 and $18.8 million in 2021.

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 2023 and 2022 is for the plan's year-end at December 31, 2022, and December 31, 2021, 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.

MDU Resources Group, Inc. Form 10-K 111

National Electrical

Benefit Fund

Pension and Retirement
Plan of Plumbers and
Pipefitters Local 525

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

Other funds

Total contributions

Index
Part II

Pension Fund

EIN/Pension
Plan Number

Pension Protection Act
Zone Status

2023

2022

FIP/RP Status
Pending/
Implemented

Contributions

2023

2022

2021

(In thousands)

Surcharge
Imposed

Expiration Date
of Collective
Bargaining
Agreement

Edison Pension Plan

936061681-001

Green

No $ 16,957 $ 18,750 $ 18,331

IBEW Local 212 Pension

Trust

316127280-001

Green as of
4/30/2022

Green as of
4/30/2021

1,350

1,622

1,733

IBEW Local 357 Pension

Plan A

886023284-001

Green

No 18,936 12,876

6,485

IBEW Local 82 Pension

Plan

316127268-001

Green as of
6/30/2023

Green as of
6/30/2022

2,149

1,854

1,353

IBEW Local 683 Pension

Fund Pension Plan

341442087-001

Green

3,986

3,362

1,238

Idaho Plumbers and

Pipefitters Pension Plan

826010346-001

Green as of
5/31/2023

Green as of
5/31/2022

1,690

1,613

1,528

530181657-001

Green

No 19,040 18,060 14,361

886003864-001

Green as of
6/30/2022

8,020

6,304

4,345

12/31/2026

6/1/2025

5/31/2024

12/6/2026

5/26/2024

3/31/2027

12/31/2023-
12/27/2027 *

9/30/2024

956052257-001

Green

3,631

3,400

2,615

6/30/2024

21,289 20,437 17,930

$ 97,048 $ 88,278 $ 69,919

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.

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

Eighth District Electrical Pension Fund

Electrical Workers Local No. 26 Pension Fund

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

Idaho Plumbers and Pipefitters Pension Plan

National Electrical Benefit Fund

Pension and Retirement Plan of Plumbers and Pipefitters Local 525

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

Western States Insulators and Allied Workers' Pension Plan

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

2022 and 2021

2022

2022 and 2021

2021

2022 and 2021

2022

2022 and 2021

2022

The Company also contributes to a number of multiemployer other postretirement plans under the terms of collective-bargaining agreements that
cover its union-represented employees. 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 $86.6 million, $79.1 million and $64.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Amounts contributed in 2023, 2022 and 2021 to defined contribution multiemployer plans were $73.3 million, $67.6 million and $54.6 million,
respectively.

112 MDU Resources Group, Inc. Form 10-K

Index

Part II

Note 20 - 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 two major transmission lines (BSSE and JETx). 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:

Ownership
Percentage

2023

2022

(In thousands)

Big Stone Station:

22.7 %

Utility plant in service

159,437 $

157,699

Construction work in progress

Less accumulated depreciation

197

231

52,264

48,590

107,370 $

109,340

BSSE:

50.0 %

Utility plant in service

107,260 $

107,260

Construction work in progress

Less accumulated depreciation

—

8,111

6,182

99,149 $

101,078

Coyote Station:

25.0 %

Utility plant in service

160,208 $

158,274

Construction work in progress

Less accumulated depreciation

159

1,807

113,187

111,203

47,180 $

48,878

JETx:

50.0 %

Utility plant in service

— $

Construction work in progress

Less accumulated depreciation

1,372

—

1,372 $

—

Wygen III:

25.0 %

Utility plant in service

66,852 $

66,238

Construction work in progress

Less accumulated depreciation

127

273

13,728

12,477

53,251 $

54,034

MDU Resources Group, Inc. Form 10-K 113

Index
Part II

Note 21 - 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.

NDPSC
On November 1, 2023, Montana-Dakota filed a request with the NDPSC for a natural gas general rate increase of approximately $11.6 million
annually or 7.5 percent above current rates. The requested increase is primarily to recover investments in system upgrades and pipeline replacement
projects enhancing the reliability, safety and integrity of the natural gas system, as well as increased costs to operate and maintain that system. On
December 13, 2023, the NDPSC approved an interim rate increase of approximately $10.1 million annually or 6.5 percent above current rates,
subject to refund, for service rendered on and after January 1, 2024. This matter is pending before the NDPSC.

Montana-Dakota has a renewable resource cost adjustment rate tariff that allows for annual adjustments for recent projected capital costs and related
expenses for projects determined to be recoverable under the tariff. On October 31, 2023, Montana-Dakota filed an annual update to its renewable
resource cost adjustment requesting to recover a revenue requirement of approximately $21.0 million annually, which was revised to $19.5 million
on January 29, 2024. The update reflects an increase of approximately $4.2 million from the revenues currently included in rates. The NDPSC
approved the renewable resource cost adjustment on February 7, 2024, with rates effective March 1, 2024.

SDPUC
On August 15, 2023, Montana-Dakota filed a request with the SDPUC for an electric general rate increase of approximately $3.0 million annually or
17.3 percent above current rates. The requested increase is primarily to recover investments in system upgrades and pipeline replacement projects
enhancing the reliability, safety and integrity of the natural gas system, as well as increased costs to operate and maintain that system. On January
26, 2024, Montana-Dakota filed a notice of intent to implement interim rates of $2.7 million annually or 15.4 percent above current rates, which
reflects the removal of Heskett Unit 4 due to the project delay caused by unforeseen operational setbacks. The interim rates, subject to refund, will
be effective March 1, 2024. This matter is pending before the SDPUC.

On August 15, 2023, Montana-Dakota filed a request with the SDPUC for a natural gas general rate increase of approximately $7.4 million annually
or 11.2 percent above current rates. The requested increase is primarily to recover investments and the associated depreciation, operation and
maintenance expenses and taxes associated with the increased investment. On January 26, 2024, Montana-Dakota filed a notice of intent to
implement interim rates, subject to refund, effective March 1, 2024. This matter is pending before the SDPUC.

FERC
On January 27, 2023, WBI Energy Transmission filed a general rate case with the FERC for increases in its transportation and storage services rates
that also includes a Greenhouse Gas Cost Recovery Mechanism for anticipated future costs. In August 2023, the Company reached a rate case
settlement agreement with its customers and FERC staff and the agreed-upon rates were placed into effect as of August 1, 2023. The settlement
agreement did not include a Greenhouse Gas Cost Recovery Mechanism. On October 17, 2023, the Administrative Law Judge certified the
Company's rate case settlement agreement to the FERC for final approval. On November 27, 2023, the request was approved by FERC.

On August 31, 2023, Montana-Dakota filed an update to its transmission formula rate under the MISO tariff for its multi-value project and network
upgrade charges for $15.2 million, which was updated to $15.4 million on November 16, 2023. Rates were effective January 1, 2024.

114 MDU Resources Group, Inc. Form 10-K

Index

Part II

Note 22 - 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, 2023 and 2022, the Company accrued liabilities which have not been discounted of $22.5 million and $31.9 million,
respectively. At December 31, 2023 and 2022, the Company also recorded corresponding insurance receivables of $202,000 and $10.0 million,
respectively, and regulatory assets of $21.6 million and $20.9 million, respectively, related to the accrued liabilities. The accruals are for
contingencies resulting from litigation and environmental matters. 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
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,
which was started in 2020 and is still underway, is estimated to cost approximately $1.8 million. Montana-Dakota and another party agreed to
voluntarily investigate and remediate the site and that Montana-Dakota will pay two-thirds of the costs for further investigation and remediation of the
site. Montana-Dakota has accrued costs of $610,000 for the remediation and investigation costs, and has incurred costs of $1.0 million as of
December 31, 2023. Montana-Dakota received notice from a prior insurance carrier that it will participate in payment of defense costs incurred in
relation to the claim. 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. The MTPSC approved the application for deferred accounting treatment as requested on
July 26, 2022.

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 $13.7 million of which $10.6 million has been incurred as of December 31, 2023.
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 $71.5 million. At December 31, 2023, Cascade has accrued
$3.2 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.

MDU Resources Group, Inc. Form 10-K 115

Index
Part II

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. The development of the remediation design is underway, with the Pre-
Remedial Design Investigation Data Report submitted to Washington Ecology on June 28, 2023. The remedy construction is expected to occur
following the approval of the final design. 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.

Purchase commitments
The Company has entered into various commitments largely consisting of contracts for natural gas and coal supply; purchased power; natural gas
transportation and storage; and information technology. Certain of these contracts are subject to variability in volume and price. The commitment
terms vary in length, up to 36 years. The commitments under these contracts as of December 31, 2023, were:

Purchase commitments

674,932 $

298,785 $

167,915 $

124,893 $

119,600 $

670,311

2024

2025

2026

2027

2028

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, 2023, 2022 and 2021, were $1.0 billion, $870.6 million and $711.9 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, 2023, the fixed maximum amounts guaranteed under these agreements aggregated $341.4 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 $80.9 million in 2024; $255.1 million in 2025; $4.1 million in 2026; $1.0 million in 2027; $300,000 in 2028; and $0 thereafter.
There were no amounts outstanding under the previously mentioned guarantees at December 31, 2023. In the event of default under these
guarantee obligations, the subsidiary issuing the guarantee for that particular obligation would be required to make payments under its guarantee.

The Company and certain subsidiaries have outstanding letters of credit to third parties related to insurance policies and other agreements, some of
which are guaranteed by other subsidiaries of the Company. At December 31, 2023, the fixed maximum amounts guaranteed under these letters of
credit aggregated $33.9 million. The amounts of scheduled expiration of the maximum amounts guaranteed under these letters of credit aggregate to
$33.9 million in 2024. There were no amounts outstanding under the previously mentioned letters of credit at December 31, 2023. In the event of
default under these letter of credit obligations, the Company or subsidiary guaranteeing the letter of credit would be obligated for reimbursement of
payments made under the letter of credit.

In addition, Centennial and MDU Construction Services have issued guarantees to third parties related to the routine purchase of maintenance items,
materials and lease obligations for which no fixed maximum amounts have been specified. These guarantees have no scheduled maturity date. In the
event a subsidiary of the Company defaults under these obligations, Centennial or MDU Construction Services would be required to make payments
under these guarantees. Any amounts outstanding by subsidiaries of the Company were reflected on the Consolidated Balance Sheet at
December 31, 2023.

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, 2023, approximately $313.0 million of surety bonds were
outstanding, which were not reflected on the Consolidated Balance Sheet.

116 MDU Resources Group, Inc. Form 10-K

Index

Part II

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, 2023, 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 $27.6 million.

Note 23 - Subsequent Events
On January 19, 2024, Cascade made the final $50.0 million repayment on the $150.0 million term loan agreement which Cascade had entered into
on January 20, 2023, with a SOFR-based variable interest rate and a maturity date of January 19, 2024.

On January 19, 2024, Intermountain made the final $45.0 million repayment on the $125.0 million term loan agreement which Intermountain had
entered into on January 20, 2023, with a SOFR-based variable interest rate and a maturity date of January 19, 2024.

MDU Resources Group, Inc. Form 10-K 117

Index
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

Cascade

Centennial

Centennial Capital

Company

Coyote Creek

Coyote Station

EBITDA

EIN

EPA

FASB

FERC

Fidelity

FIP

GAAP

Great Plains

IBEW

Intermountain

IPUC

IRS

JETx

Knife River

K-Plan

LIBOR

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

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

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

MDU Resources Group, Inc.

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 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

Idaho Public Utilities Commission

Internal Revenue Service

345-kV transmission line from Jamestown, North Dakota to Ellendale, North Dakota (50 percent
ownership)

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

MNPUC

Montana-Dakota

MTPSC
MW

NDPSC

PRP

SDPUC

118 MDU Resources Group, Inc. Form 10-K

Multiemployer pension plan

Minnesota Public Utilities Commission

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

Montana Public Service Commission

Megawatt

North Dakota Public Service Commission

Potentially Responsible Party

Rehabilitation plan

South Dakota Public Utilities Commission

Index

SEC

Securities Act

SOFR

VIE

United States Securities and Exchange Commission

Securities Act of 1933, as amended

Secured Overnight Financing Rate

Variable interest entity

Part II

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)

MDU Resources Group, Inc. Form 10-K 119

Index
Part II

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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, 2023, 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

During the three months ended December 31, 2023, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading
arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

120 MDU Resources Group, Inc. Form 10-K

Index

Part III

Item 10. Directors, Executive Officers and Corporate Governance

Information required by this item will be included in the Company's Proxy Statement, which is incorporated herein by reference.

Item 11. Executive Compensation

Information required by this item will be included in the Company's Proxy Statement, which is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters

Equity Compensation Plan Information
The following table includes information as of December 31, 2023, with respect to the Company's equity compensation plans:

Plan Category

Number of securities to
be issued upon exercise
of outstanding options,

warrants and rights

Weighted average
exercise price of
outstanding options,
warrants and rights

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)

873,300 (2) $

Equity compensation plans not approved by stockholders

Total

N/A

873,300

— (3)

N/A

—

2,139,336 (4)(5)

N/A

2,139,336

(1) Consists of the Non-Employee Director Long-Term Incentive Compensation Plan and the Long-Term Performance-Based Incentive Plan. For more

information, see Note 14.

(2) Consists of restricted stock units.
(3) No weighted average exercise price is shown for the restricted stock units or performance share awards because such awards have no exercise price.
(4) This amount includes 2,047,439 shares available for future issuance under the Long-Term Performance-Based Incentive Plan in connection with grants of

restricted stock units, performance units, performance shares or other equity-based awards.

(5) This amount includes 91,897 shares available for future issuance under the Non-Employee Director Long-Term Incentive Compensation Plan.

The remaining information required by this item will be included in the Company's Proxy Statement, which is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information required by this item will be included in the Company's Proxy Statement, which is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

Information required by this item about aggregate fees billed to the Company by its principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34),
will be included in the Company's Proxy Statement, which is incorporated herein by reference.

MDU Resources Group, Inc. Form 10-K 121

Index
Part IV

Item 15. Exhibits, Financial Statement Schedules

(a) Financial Statements, Financial Statement Schedules and Exhibits

Index to Financial Statements and Financial Statement Schedules

1. Financial Statements

The following consolidated financial statements required under this item are
included under Item 8 - Financial Statements and Supplementary Data.

Page

Consolidated Statements of Income for each of the three years in the period ended

December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Comprehensive Income for each of the three years in the
period ended December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Balance Sheets at December 31, 2023 and 2022 . . . . . . . . . . . . . . . . . .

Consolidated Statements of Equity for each of the three years in the period ended

December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Cash Flows for each of the three years in the period

ended December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Condensed Balance Sheets at December 31, 2023 and 2022 . . . . . . . . . . . . . . . . . . . .

Condensed Statements of Cash Flows for each of the three years in the period ended
December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notes to Condensed Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

123

124

125

126

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

127

122 MDU Resources Group, Inc. Form 10-K

Index

Part IV

MDU RESOURCES GROUP, INC.
Schedule I - Condensed Financial Information of Registrant (Unconsolidated)
Condensed Statements of Income and Comprehensive Income

Years ended December 31,

2023

2022

2021

Operating revenues

Operating expenses

Operating loss

Realized gain on tax-free exchange of the retained shares in Knife River

Interest expense

Income (loss) before income taxes

Income tax benefit

(In thousands)

— $

14,959

4,888

(14,959)

(4,888)

186,556

16,099

155,498

(7,705)

—

(4,888)

(1,193)

—

Equity in earnings of subsidiaries from continuing operations

Income from continuing operations

317,222

254,463

242,522

480,425

250,768

242,522

Equity in earnings (loss) of subsidiaries from discontinued operations

(17,922)

125,726

135,609

Discontinued operations, net of tax

Net income

Comprehensive income

(47,796)

(9,005)

—

$ 414,707 $ 367,489 $ 378,131

$ 414,600 $ 377,910 $ 385,205

The accompanying notes are an integral part of these condensed financial statements.

MDU Resources Group, Inc. Form 10-K 123

Index
Part IV

MDU RESOURCES GROUP, INC.
Schedule I - Condensed Financial Information of Registrant (Unconsolidated)
Condensed Balance Sheets

(In thousands, except shares and per share amounts)

2023

2022

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

Notes receivable from 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

Notes payable to subsidiaries

Taxes payable

Dividends payable

Accrued compensation

Operating lease liabilities due within one year

Other accrued liabilities

Total current liabilities

Noncurrent liabilities:

Long-term debt

Operating lease liabilities

Other

Total noncurrent liabilities

Commitments and contingencies

Stockholders' equity:

Common stock
Authorized - 500,000,000 shares, $1.00 par value
Shares issued - 203,689,090 at December 31, 2023 and 204,162,814 at December 31, 2022

Other paid-in capital

Retained earnings

Accumulated other comprehensive loss

Treasury stock at cost - 538,921 shares at December 31, 2022

Total stockholders' equity

Total liabilities and stockholders' equity

The accompanying notes are an integral part of these condensed financial statements.

124 MDU Resources Group, Inc. Form 10-K

33,039 $

6,568

30,526

8,261

78,394

19,486

4,410

53,285

3,237

80,418

37,722

50,206

3,146,122

3,581,754

58,000

12,596

2,593

—

12,668

2,068

3,257,064

3,646,768

$ 3,335,458 $ 3,727,186

4,264 $

3,435

134,107

542

25,461

9,651

8,008

185,493

189,048

55,678

244,732

2,354

4,402

—

572

45,246

4,312

17,907

74,835

—

65,192

65,222

203,689

204,163

1,466,235

1,466,037

1,253,693

1,951,138

(18,384)

(30,583)

—

(3,626)

2,905,233

3,587,129

$ 3,335,458 $ 3,727,186

Index

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 of continuing operations

Net cash used in operating activities of discontinued operations
Net cash provided by operating activities
Investing activities:

Investments in and advances to subsidiaries
Investments
Issuance of notes receivable

Net cash used in investing activities of continuing operations
Financing activities:

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

Net cash used in financing activities of continuing operations
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents - beginning of year

Cash and cash equivalents - end of year

The accompanying notes are an integral part of these condensed financial statements.

2023

2022

2021

(In thousands)

271,337 $
(47,796) $
223,541

251,204 $

187,297

(9,005) $

242,199

—
187,297

(476,000)
7,422
(58,000)
(526,578)

(45,000)
(885)
—

(102,000)
(391)
—

(45,885)

(102,391)

535,000
(242,401)
575,000
(385,000)
(952)
—
(161,316)
(2,270)
(1,471)
316,590
13,553
19,486
33,039 $

—
—
—
—
—
(149)
(176,915)
(3,525)
(2,398)

(182,987)
13,327
6,159

—
—
—
—
—
88,767
(171,354)
(2,992)
(1,949)

(87,528)
(2,622)
8,781

19,486 $

6,159

MDU Resources Group, Inc. Form 10-K 125

Index
Part IV

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, 2023, 2022 and 2021. 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 debt and 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
MDU Resources Group, Inc. On May 1, 2023, the Company entered into a $75.0 million term loan agreement with a SOFR-based variable interest rate
and a maturity date of November 1, 2023. On May 31, 2023, the Company repaid the full balance outstanding under the term loan agreement.

On November 6, 2023, the Company entered into a $310 million term loan agreement which was used to facilitate the tax-free debt for equity
exchange. This term loan was repaid through a noncash exchange of the Company's shares in Knife River for $293.2 million and the remaining
balance of this term loan was repaid in cash on November 10, 2023.

At December 31, 2023, the Company had $190 million of long-term debt maturities for 2025. For more information on debt, see Item 8 - Note 10.

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 $165.5 million, $242.1 million and $188.1 million for the years ended December 31, 2023, 2022 and 2021,
respectively.

126 MDU Resources Group, Inc. Form 10-K

Index

Exhibits

Exhibit
Number

*2(a)

3(a)

3(b)

4(a)

4(b)

**4(c)

4(d)

4(e)

**4(f)

Exhibit Description

Separation and Distribution Agreement, dated as of May 30,
2023, by and between Knife River Corporation and MDU
Resources Group, Inc.

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

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

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. Second Amendment and
Restatement Note Purchase and Private Shelf Agreement,
effective as of December 22, 2022, among Prudential
Investment Management, Inc. and certain investors described
therein

**10(a)

Transition Services Agreement, dated as of May 30, 2023, by
and between Knife River Corporation and MDU Resources
Group, Inc.

10(b)

10(c)

**10(d)

**10(e)

**10(f)

+10(g)

+10(h)

+10(i)

+10(j)

+10(k)

Tax Matters Agreement, dated as of May 30, 2023, by and
between Knife River Corporation and MDU Resources Group,
Inc.

Employee Matters Agreement, dated as of May 30, 2023, by
and between Knife River Corporation and MDU Resources
Group, Inc.

5-Year Revolving Credit Agreement, dated as of May 31,
2023, by and among MDU Resources Group, Inc., the
financial institutions from time to time party thereto and U.S.
Bank National Association.

364-Day Revolving Credit Agreement, dated as of May 31,
2023, by and among MDU Resources Group, Inc., the
financial institutions from time to time party thereto and U.S.
Bank National Association.

Term Loan Agreement, dated as of May 31, 2023, by and
among MDU Resources Group, Inc., the lenders from time to
time party thereto and U.S. Bank National Association.

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 11, 2022

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

Part IV

Filed
Herewith

Form

8-K

S-8

Incorporated by Reference

Period
Ended Exhibit

Filing
Date

File
Number

2.1

6/1/23

1-03480

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(d)

2/21/20

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 12/31/22

4(h)

2/24/23

1-03480

8-K

10.1

6/1/23

1-03480

10.2

6/1/23

1-03480

10.3

6/1/23

1-03480

10.5

6/1/23

1-03480

10.6

6/1/23

1-03480

10.7

6/1/23

1-03480

10-Q

6/30/17

10(d)

8/4/17

1-03480

10-Q

6/30/22

10(b)

8/5/22

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

MDU Resources Group, Inc. Form 10-K 127

Index
Part IV

Exhibit
Number

+10(l)

Exhibit Description

MDU Resources Group, Inc. Long-Term Performance-Based
Incentive Plan, as amended February 15, 2024

Incorporated by Reference

Filed
Herewith

Form

8-K

Period
Ended Exhibit

Filing
Date

File
Number

10.2

2/21/24

1-03480

+10(m) MDU Resources Group, Inc. Executive Incentive

10-K 12/31/20

10(h)

2/19/21

1-03480

+10(n)

+10(o)

+10(p)

+10(q)

+10(r)

+10(s)

+10(t)

+10(u)

+10(v)

Compensation Plan, as amended November 12, 2020, and
Rules and Regulations, as amended November 12, 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

Restricted Stock Unit 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 16,
2023

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 14,
2024

MDU Resources Group, Inc. Nonqualified Defined
Contribution Plan, as amended and restated November 12,
2020

10-K 12/31/20

10(l)

2/19/21

1-03480

10-K 12/31/21

10(k)

2/23/22

1-03480

10-K 12/31/20

10(n)

2/19/21

1-03480

10-K 12/31/21 10(m)

2/23/22

1-03480

10-K 12/31/22 10(m)

2/24/23

1-03480

8-K

10.1

5/15/14

1-03480

10.2

5/15/14

1-03480

10-K 12/31/20

10(r)

2/19/21

1-03480

+10(w)

MDU Resources Group, Inc. Deferred Compensation Plan
Adoption Agreement, as amended August 12, 2021

10-Q

9/30/21

10(c)

11/4/21

1-03480

+10(x)

+10(y)

+10(z)

+10(aa)

+10(ab)

+10(ac)

+10(ad)

+10(ae)

+10(af)

+10(ag)

MDU Resources Group, Inc. Deferred Compensation Plan
Document, dated November 12, 2020

MDU Resources Group, Inc. 401(k) Retirement Plan, as
restated April 1, 2020

First Amendment to MDU Resources Group, Inc. 401(k)
Retirement Plan, as amended December 17, 2020

Second Amendment to MDU Resources Group, Inc. 401(k)
Retirement Plan, as amended January 1, 2021

Third Amendment to MDU Resources Group, Inc. 401(k)
Retirement Plan, as amended January 1, 2022

Fourth Amendment to MDU Resources Group, Inc. 401(k)
Retirement Plan, as amended August 17, 2022

Fifth Amendment to MDU Resources Group, Inc. 401(k)
Retirement Plan, as amended December 28, 2022

Sixth Amendment to MDU Resources Group, Inc. 401(k)
Retirement Plan, as amended May 1, 2023

Seventh Amendment to MDU Resources Group, Inc. 401(k)
Retirement Plan, as amended August 23, 2023

Eighth Amendment to MDU Resources Group, Inc. 401(k)
Retirement Plan, as amended January 1, 2024

8-K

10.2

11/12/20

1-03480

10-Q

3/31/20

10(a)

5/8/20

1-03480

10-K 12/31/20

10(u)

2/19/21

1-03480

10-Q

3/31/21

10(a)

5/6/21

1-03480

10-K 12/31/21

10(w)

2/23/22

1-03480

10-Q

9/30/22

10(a)

11/3/22

1-03480

10-K 12/31/22

10(w)

2/24/23

1-03480

+10(ah)

Employment Letter for Jeffrey S. Thiede, dated May 16, 2013

10-K 12/31/13 10(ab)

2/21/14

1-03480

+10(ai)

Jason L. Vollmer Offer Letter, dated September 20, 2017

8-K

10.1

9/21/17

1-03480

128 MDU Resources Group, Inc. Form 10-K

Index

Exhibit
Number

+10(aj)

Exhibit Description

Cooperation Agreement, dated as of January 24, 2023, by and
among Keith A. Meister, Corvex Management LP and MDU
Resources Group, Inc.

Part IV

Incorporated by Reference

Filed
Herewith

Form

8-K

Period
Ended Exhibit

Filing
Date

File
Number

10.1

1/24/23

1-03480

+10(ak)

David C. Barney Offer Letter, dated February 17, 2023

10-K 12/31/22 10(ab)

2/24/23

1-03480

+10(al)

MDU Resources Group, Inc. Change in Control Severance Plan

8-K

10.1

2/21/24

1-03480

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

+97

Incentive Compensation Recovery Policy

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

104

Cover Page Interactive Data File (formatted as Inline XBRL
and contained in Exhibit 101)

* Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish
supplementally to the Securities and Exchange Commission a copy of any omitted exhibits or schedules upon request; provided that the
Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

** 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 129

Index
Part IV

Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

MDU Resources Group, Inc.

Date:

February 22, 2024

By:

/s/ Nicole A. Kivisto

Nicole A. Kivisto

(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/ Nicole A. Kivisto

Nicole A. Kivisto

(President and Chief Executive Officer)

/s/ Jason L. Vollmer

Jason L. Vollmer

(Vice President, Chief Financial Officer and Treasurer)

/s/ Stephanie A. Sievert

Stephanie A. Sievert

(Vice President, Chief Accounting Officer and Controller)

Title

Date

Chief Executive Officer and Director

February 22, 2024

Chief Financial Officer

February 22, 2024

Chief Accounting Officer

February 22, 2024

Director

February 22, 2024

/s/ Dennis W. Johnson

Dennis W. Johnson

(Chair of the Board)

/s/ Darrel T. Anderson

Darrel T. Anderson

/s/ James H. Gemmel

James H. Gemmel

/s/ David L. Goodin

David L. Goodin

/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

130 MDU Resources Group, Inc. Form 10-K

(This page is intentionally left blank.)

March 29, 2024

Fellow Stockholders:

I invite you to attend our annual meeting at 10:30 a.m. CDT May 14, 2024, at 1200 W. Century Ave. in Bismarck,
North Dakota. You can join our Board of Directors and senior management team starting at 10 a.m. for coffee and
light refreshments before the meeting begins. Please check our website at www.mduproxy.com for more 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 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.

Thanks to the hard work and dedication of our employees, we had record results in 2023. I look forward to sharing our
operational highlights with you, including record electric retail sales, record pipeline earnings and transportation
volumes, and record construction services revenues and earnings.

I will also provide an update on our progress toward spinning off the construction services business, as we prepare for
it to become its own publicly traded company in late 2024. The construction services business is well-positioned to
continue its strong growth trajectory as a standalone business with more than $2 billion in backlog at the start of this
year.

We are very optimistic about our future as we move toward becoming a pure-play regulated energy delivery business.
We have $2.7 billion in planned capital investments over the next five years at our utility and pipeline businesses that
will help ensure we continue safely and cost-effectively serving our customers.

I look forward to telling you more about all the exciting initiatives underway at MDU Resources at our May 14
meeting.

Thank you for your continued investment in MDU Resources.

Sincerely,

Nicole A. Kivisto
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 14, 2024

March 29, 2024

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of MDU Resources Group, Inc. will be held at 1200 West Century Avenue,
Bismarck, North Dakota 58506, on Tuesday, May 14, 2024, at 10:30 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

2024; 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 15, 2024, 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 15, 2024, 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 15, 2024, 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 7, 2024. You must present your admission ticket and state-
issued photo identification, such as a driver’s license, to gain admittance to the meeting.

Proxy
Materials

This Proxy Statement will first be sent to stockholders requesting written materials on or about March 29, 2024. A Notice of
Availability of Proxy Materials (Notice) will also be sent to certain stockholders on or about March 29, 2024. The Notice contains
basic information about the annual meeting and instructions on how to view our proxy materials and vote online. The list of
stockholders entitled to vote at the annual meeting will be available for examination ten (10) days prior to the annual meeting at
the company’s principal executive office, 1200 West Century Avenue, P.O. Box 5650, Bismarck, ND 58506.

By order of the Board of Directors,

Paul R. Sanderson

Secretary

Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to be Held on May 14, 2024.
The 2024 Notice of Annual Meeting and Proxy Statement and 2023 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)

Annual Meeting Information . . . . . . . . . . . . . . . . . . . . . . . .

Company Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Business Performance Highlights . . . . . . . . . . . . . . . . . . . .

Financial Performance Highlights . . . . . . . . . . . . . . . . . . . .

Corporate Governance Practices . . . . . . . . . . . . . . . . . . . . .

Compensation Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . .

Compensation Committee Report . . . . . . . . . . . . . . . . . . .

Compensation Policies and Practices as They

Relate to Risk Management . . . . . . . . . . . . . . . . . . . . . . .

Executive Compensation Tables . . . . . . . . . . . . . . . . . . . . . .

Summary Compensation Table . . . . . . . . . . . . . . . . . . . . .

Grants of Plan-Based Awards . . . . . . . . . . . . . . . . . . . . . . .

Sustainability Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . .

Outstanding Equity Awards at Fiscal Year-End . . . . . . . .

Option Exercises and Stock Vested . . . . . . . . . . . . . . . . . .

Pension Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nonqualified Deferred Compensation . . . . . . . . . . . . . . . .

Potential Payments upon Termination or

Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CEO Pay Ratio Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . .

Pay Versus Performance . . . . . . . . . . . . . . . . . . . . . . . . . . .

AUDIT MATTERS

Item 3. Ratification of the Appointment of

Deloitte & Touche LLP as the Company’s Independent

Registered Public Accounting Firm for 2024 . . . . . . . . .

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notice and Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 2025 Annual Meeting . .

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 . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stockholder Communications with the Board . . . . . . . . . .

Board Leadership Structure . . . . . . . . . . . . . . . . . . . . . . . . .

Board’s Role in Risk Oversight . . . . . . . . . . . . . . . . . . . . . .

Board Meetings and Committees . . . . . . . . . . . . . . . . . . . .

Additional Governance Features . . . . . . . . . . . . . . . . . . . . .

Corporate Governance Materials . . . . . . . . . . . . . . . . . . . . .

Related Person Transaction Disclosure . . . . . . . . . . . . . . .

COMPENSATION OF NON-EMPLOYEE DIRECTORS

Director Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SECURITY OWNERSHIP

Security Ownership Table . . . . . . . . . . . . . . . . . . . . . . . . . .

Hedging Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Greater than 5% Beneficial Owners . . . . . . . . . . . . . . . . . .

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2023 Compensation Framework . . . . . . . . . . . . . . . . . . . . .

2023 Compensation for Our Named Executive Officers .

Other Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Compensation Governance . . . . . . . . . . . . . . . . . . . . . . . . . .

MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Cautionary information and forward-looking statements. This Proxy Statement contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. From
time to time, we may also provide oral or written forward-looking statements in other materials we release to the public. Such forward-
looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995.

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, trends, objectives, goals, strategies, including the anticipated separation of the company’s construction services business
or the proposed future structure of two pure-play publicly traded companies, 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.
Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those
expressed.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those
indicated (both favorably and unfavorably). These risks and uncertainties include, but are not limited to, those described in Part I—Item 1A
“Risk Factors” in our 2023 Annual Report on Form 10-K (2023 Form 10-K) and subsequent Securities and Exchange Commission (SEC)
filings. Caution should be taken not to place undue reliance on any such forward-looking statements. We undertake no obligation to update
or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable
law. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not
incorporated by reference into this document.

MDU Resources Group, Inc. Proxy Statement

Proxy Statement

PROXY STATEMENT SUMMARY

To assist you in reviewing the company’s 2023 performance and voting your shares, we call your attention to key elements of our 2024
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 2023
Annual Report to Stockholders.

■ Annual Meeting Information
Meeting Information

Summary of Stockholder Voting Matters

Time and Date

Voting Matters

10:30 a.m.
Central Daylight Saving Time
Tuesday, May 14, 2024

Place

MDU Resources Corporate
Office
1200 West Century Avenue
Bismarck, ND 58506

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 2024

Board Vote
Recommendation

FOR Each Nominee

FOR

See Page

Proxy Distribution
This Proxy Statement will first be sent to stockholders requesting written materials on or about March 29, 2024.

Who Can Vote
If you held shares of MDU Resources Group, Inc. common stock at the close of business on March 15, 2024, 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 13, 2024.

* 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 hold 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.

1 MDU Resources Group, Inc. Proxy Statement

■ Company Overview
About MDU Resources Group, Inc.
A diversified energy and infrastructure company operated primarily
through two business segments: regulated energy delivery and
construction 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 Strategy
Deliver superior value and achieve industry-leading performance by
becoming a pure-play regulated energy delivery company, while
pursuing organic growth opportunities.

Proxy Statement

Our Businesses

Electric and Natural Gas Utilities

Our utility companies serve approximately
1.19 million customers across eight states.

Pipeline

We provide natural gas transportation,
underground natural gas storage, cathodic
protection and other energy-related
services.

Construction Services

One of the largest electrical contractors in
the United States, with approximately
7,000 employees.

Our Integrity Code

Commitment to Integrity

Commitment to Customers, Suppliers and Competitors

We will conduct business legally and ethically with
our best skills and judgment.

We will compete in business only by lawful and ethical
means.

Commitment to Shareholders

Commitment to Communities

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.

We will be a responsible and valued corporate citizen.

MDU Resources Group, Inc. Proxy Statement 2

Proxy Statement

Celebrating 100 years of Service and Success

MDU Resources has come a long way since its start in 1924 as a small electric utility serving a handful of small communities on the
Montana and North Dakota border. As the company celebrates its centennial anniversary in 2024, it’s a fitting time to reflect on MDU
Resources’ remarkable journey over the past 100 years.

Since its incorporation on March 14, 1924, when it was providing electricity to rural communities, MDU Resources has grown into a
corporation with operations across the United States. It has been listed on the New York Stock Exchange under the ticker MDU since 1948.

Early on, MDU Resources realized the value of building upon its expertise to grow the company by developing businesses around its existing
services. The company’s success includes growing two businesses to be large enough to be spun off to stand on their own as publicly traded
companies:

■ Knife River Corporation (Knife River), MDU Resources’ construction materials and contracting subsidiary, was spun off in 2023.
■ The construction services business is expected to be spun off in late 2024.

While MDU Resources branched out into other industries, it has throughout its history remained committed to its core business of regulated
energy delivery.

Today, MDU Resources’ utility operations serve nearly 1.2 million electric and natural gas customers across eight states. Its pipeline
business has approximately 3,800 miles of regulated natural gas transmission lines and is home to the largest underground natural gas
storage field in North America.

As MDU Resources celebrates 100 years of serving communities, the company’s goal remains simple: Continue to grow while providing safe,
reliable and cost-effective energy to the customers and communities it serves.

3 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

■ Business Performance Highlights

Future Structure of MDU Resources
The company’s board of directors has determined the future company structure that is most likely to maximize long-term value for
stockholders is to create two pure-play publicly traded companies, one focused on regulated energy delivery and the other on
construction services. To achieve this future structure, the company is working toward a spinoff its construction services business to
create a standalone leading construction services company.

In addition to pursuing each of these strategic initiatives, all of our business segments performed well despite inflationary pressures and
supply chain challenges throughout 2023.

Operational Achievements

Record Electric Retail
Sales Volumes

Record Pipeline Earnings
and Natural Gas
Transportation Volumes

Record Construction
Services Revenues and
Earnings

Regulated Energy Delivery

■ Continued Growth with New Customers. Over 15,000 new customers were connected to our utilities system, representing customer growth

of 1.3%.

■ Increased Electric Retail Sales Volume. Electric retail sales volumes increased 25.5% compared to 2022, to an all-time record high for
the company. The increase was primarily from electricity usage at a data center that began operating in the company’s service territory
near Ellendale, North Dakota in mid-2023.

■ Record Pipeline Earnings and Volumes. The pipeline business had record earnings of $46.9 million in 2023, up 33% compared to

$35.3 million in 2022. The pipeline business had record annual transportation volumes, which increased 17% compared to 2022. The
volume increases were largely from higher contracted volume commitments on the North Bakken Expansion project and other expansion
projects placed in service in 2022 and 2023. The company now has capacity to transport approximately 2.6 billion cubic feet of
natural gas per day.

■ Natural Gas Pipeline Expansion. The 2023 Line Section 27 expansion project in northwestern North Dakota was placed in service

March 1, 2024. The project added 175 million cubic feet of natural gas transportation capacity per day. Construction is expected to
begin in the second quarter of 2024 on the Wahpeton expansion project, which will add approximately 20 million cubic feet of natural
gas transportation capacity per day in eastern North Dakota. An expansion project to serve a natural gas-fired power plant in
northwestern North Dakota is expected to be in service in the third quarter of 2024. The project will add 137 million cubic feet of
natural gas transportation capacity per day.

Construction Services

■ Record Revenues. The construction services segment earned record net income of $137.2 million in 2023, compared to $124.8 million
in 2022. Revenues were a record $2.85 billion, compared to $2.70 billion in 2022. Demand continues to be extremely strong for
construction services work, with the construction services backlog at $2.01 billion at December 31, 2023.

■ Industry Leading. The construction services segment climbed two spots to No. 10 on the top 600 specialty contractors list in 2023. The
company ranked in the top 10 in three subcategories: fire protection, utility, and electrical. The company ranked 26th in mechanical.
The construction services segment was ranked No. 4 on the 2023 Top 50 Electrical Contractors list.

MDU Resources Group, Inc. Proxy Statement 4

Proxy Statement

Results of Knife River Corporation Separation

On May 31, 2023, the Company completed the previously announced separation of Knife River, its former construction materials and
contracting segment, into a new publicly traded company. The separation was achieved through the company's pro-rata distribution of
approximately 90 percent of the outstanding shares of Knife River to the company's common stockholders. To effect the separation, the
company distributed to its stockholders one share of Knife River common stock for every four shares of the company's common stock held
on May 22, 2023, the record date for the distribution, with the company retaining approximately 10 percent, or 5.7 million shares of Knife
River common stock immediately following the separation. In the fourth quarter of 2023, the company completed the tax-free exchange of
its retained shares and recognized a gain of $186.6 million, which was reflected in continuing operations.

Performance from Continuing Operations

Electric Distribution

Retail Sales (million kWh)

Customers

Natural Gas Distribution

Retail Sales (MMdk)

Transportation (MMdk)

Customers

Pipeline Transportation (MMdk)

Construction Services Revenues (millions)

2019

2020

2021

2022

2023

3,314.3

143,346

3,204.5

143,782

3,271.6

144,103

3,343.9

4,196.2

144,561

145,108

123.7

166.1

114.5

160.0

115.3

174.4

131.2

167.7

122.6

190.3

977,468

997,146

1,016,670

1,034,821

1,049,275

429.7

438.6

471.1

482.9

567.2

$1,849.3

$2,095.7

$2,051.6

$2,699.2

$2,854.4

■ Financial Performance Highlights

■ The company achieved earnings of $480.4 million from continuing operations, or $2.36 per share, which includes the gain of

$186.6 million on the tax-free exchange of the retained shares of Knife River, or $0.91 per share.

■ The chart below shows earnings per share from continuing operations and compound annual growth rate (CAGR) of 10.8% over the last

five years.

Results include the gain of $186.6 million on the tax-free exchange of the retained shares of Knife River in the fourth quarter
2023. MDU Resources has reported Knife River’s results and the transaction costs and certain interest expenses associated with
the separation as discontinued operations, and MDU Resources’ prior period results have been restated to reflect the separation.

** The compound annual growth rate (CAGR) was calculated using earnings per share from continuing operations of $1.45 per share,

which excludes the non-recurring gain on the tax-free exchange of retained shares of Knife River of $0.91 per share.

5 MDU Resources Group, Inc. Proxy Statement

Earnings per Share from Continuing Operations**CAGR = 10.8%$1.06$1.19$1.20$1.23$1.45$0.9120192020202120222023*$0.00$0.25$0.50$0.75$1.00$1.25$1.50$1.75$2.00$2.25$2.50
Proxy Statement

■ Returned $142 million to stockholders through dividends during 2023:

¨ Established future dividend target in 2023 targeting a dividend payout ratio of 60% to 70% of regulated energy delivery

earnings relating to the company’s anticipated future as a pure-play regulated energy delivery business; and

¨ Paid uninterrupted dividends for 86 straight years.

■ Member of the S&P MidCap 400.

$142 million

Stockholder Returns

Dividends Paid

$822 Million

86 Years

of Uninterrupted

Through Dividends

Over the Last 5 Years

Dividend Payments

■ 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 Majority Voting for Directors

ü No Shareholder Rights Plan

ü Standing Committees Consist Entirely of Independent

Directors

ü Active Investor Outreach Program

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

Company Boards Including the Company’s Board

ü All Director Nominees are Independent Other Than Our CEO

ü Diverse Board in Terms of Gender, Race, Experience, Skills

and Tenure

MDU Resources Group, Inc. Proxy Statement 6

Proxy Statement

Director Nominees

The board recommends a vote FOR the election of each of the following nominees for director. Eight directors stand for election; one new
nominee stands for election. David L. Goodin has not been renominated for reelection and his term will expire at the company’s 2024
annual meeting. See the section entitled “Board of Directors” for further information. The nominees’ ages are current as of December 31,
2023. Additional information about each director’s background and experience can be found beginning on page 18.

Name

Darrel T. Anderson

Director
Since
2023

Age

James H. Gemmel

2023

Douglas W. Jaeger

Nominee

Dennis W. Johnson

2001

Primary Occupation

Board Committees

Former president and chief executive officer of
IDACORP and Idaho Power Company, a
regulated electric utility company

Partner of Corvex Management LP, an
investment management firm focused on
fundamental, valued-based investments

President and chief executive officer of Ulteig,
Inc., a professional engineering services firm

• Compensation
• Environmental and Sustainability

• Audit
• Environmental and Sustainability

Chair, president, and chief executive officer of
TMI Group Incorporated, manufacturers of
casework and architectural woodwork

Chair of the board
• Compensation (Chair)
• Nominating and Governance

Nicole A. Kivisto

2024

President and chief executive officer, MDU
Resources Group, Inc.

Executive officer

Dale S. Rosenthal

2021

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

• Compensation
• Environmental and Sustainability (Chair)

Edward A. Ryan

2018

Former executive vice president and general
counsel of Marriott International

• Nominating and Governance (Chair)
• Compensation

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)
• Nominating and Governance

• Audit
• Environmental and Sustainability

Independence

Board Refreshment

Tenure

89%

New Members

The board has determined that all
director nominees, other than Ms.
Kivisto, meet the independence
standards set by the NYSE and SEC.

Five new
members have
been elected,
nominated or
appointed to
the board over
the last five
years.

0-4
Years

5-10
Years

11+
Years

Diversity

Gender

Three director
nominees are
women.

33%

Race/Ethnicity

Average
Tenure

5.6
Years

The average tenure of the current directors
nominated for election reflects a balance of
company experience and new perspective.

One director
nominee is

ethnically diverse. 11%

On May 31, 2023, the company successfully completed the tax-free spinoff of Knife River. To ensure a successful separation, several board
members transitioned to Knife River’s board of directors. The company appointed two new directors in 2023 and Nicole A. Kivisto was
appointed as the new president and chief executive officer and director on January 6, 2024. The board of directors brings a dynamic blend
of seasoned professionals and new members, each contributing unique insights. The new directors’ fresh perspective aligns with the
company’s goal of enhancing value for stockholders by becoming a pure-play regulated energy delivery company.

7 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

■ Compensation Highlights

In this year of significant change, the compensation committee continued in 2023 to focus its compensation decisions to ensure
management’s interests are aligned with those of our stockholders and the performance of the company. Executive compensation for 2023
combined a market competitive base salary with an annual incentive based on the achievement of company performance and long-term
incentive in the form of equity to further align management’s interests with those of our stockholders. The company’s executive
compensation is based on providing compensation opportunities to attract and retain top talent focused on achievement of short and long-
term business results.

■ Over 80% of our chief executive officer’s target compensation and approximately 70% of our other named executive officers’ target

compensation are at risk.

■ 100% of our named executive officers’ annual incentive is performance-based and tied to performance against pre-established,

specific, measurable goals. Time-vesting restricted stock units were awarded to our named executive officers’ long-term incentive in this
year of change and require the executive to remain employed with the company through the vesting period.

■ We require our named executive officers to own a significant amount of company stock based upon a multiple of their base salary.

■ The 2023 annual cash incentive award program for executive officers included a diversity, equity and inclusion performance modifier

based upon the company’s achievement of certain measures to attract, retain, and develop a diverse and inclusive workforce.

2023 Named Executive Officer Target Pay Mix

At the 2023 Annual Meeting, the company’s advisory vote
to approve executive compensation received support from
over 97% of the common stock represented at the
meeting and entitled to vote on the matter.

MDU Resources Group, Inc. Proxy Statement 8

2023 CEO Target Pay MixBase Salary19.23%Annual Incentive24.04%Long Term Incentive56.73%2023 Other Named Executive Officers Average Target Pay MixBase Salary31.01%Annual Incentive21.74%Long Term Incentive47.25%Proxy Statement

Key Features of Our Executive Compensation Program

What We Do

þ At Risk Compensation - In 2023, the compensation committee tied the annual cash incentive to financial and strategic performance
measures intended to reward the named executive officers for the accomplishment of these goals. Typically, the compensation
committee awards a combination of performance share awards and time-vesting restricted stock units. But for 2023, due to the
spinoff of Knife River, long-term incentive awards consisted solely of time-vesting restricted stock units which may be earned
based on continued service of the named executive officer 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 named executive officers.

þ Independent Compensation Committee - All members of the compensation committee meet the independence standards under the

NYSE listing standards and the SEC 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, corporate and business segment economic
environment, and the actual performance of the overall company and the business segments.

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 and Strategic Goals - Use of a mixture of financial and strategic goals to measure performance prevents

overemphasis on a single metric.

þ Diversity, Equity and Inclusion (DEI) Modifier - The 2023 annual cash incentive included a DEI modifier aimed at furthering the

company’s diversity, equity and inclusion initiatives. The DEI modifier increases or decreases the annual incentive up to 5% based
on the compensation committee’s consideration of the company’s progress on DEI initiatives.

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 their base
salary. The other named executive officers are required to own stock equal to three times their base salary. The named 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 - The company’s Incentive Compensation Recovery policy provides for the recovery of certain incentive-based

compensation in the event of an accounting restatement. The recoverable amount is the amount of incentive-based compensation
which exceeded the amount the executive officer would have received if it had been determined based on the restated financial
reporting measure.

What We Do Not Do

ý Stock Options - The company does not use stock options as a form of incentive compensation.
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.

9 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

■ Sustainability Highlights

MDU Resources manages its business with a long-term view toward
sustainable operations, focusing on how economic, environmental, and
social considerations can help us continue to provide affordable and
reliable essential products and services to our customers. We integrate
sustainability considerations into our business strategy because it
directly affects long-term business viability and profitability.
MDU Resources celebrated 100 years in business on March 14,
2024. We are proud of this accomplishment, and it is a testament to
how we do business. We view sustainability as doing business
responsibly, which is a cornerstone to our lasting success. Our focus
on sustainability makes our company a better corporate citizen while
creating opportunities to increase revenues and profitability, create a
competitive advantage, and attract a skilled and diverse workforce. We
have invested significantly more time and resources into our
environmental, social and governance efforts in the past several years.
Highlights of our enhanced efforts and achievements in the past year
are set forth below. For the company’s complete outline of
environmental, social and governance responsibilities, see our
Sustainability Report. The information provided in the Sustainability
Report is not part of this Proxy Statement and is not incorporated by
reference as part of this Proxy Statement.

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), and the reporting
templates developed by the Edison Electric Institute (EEI) and the American Gas Association (AGA), and we continue to incorporate
guidance from the Task Force on Climate-Related Financial Disclosures (TCFD) into our reporting as summarized below:

Reporting Frameworks

Business Segment

SASB

AGA

EEI / AGA

TCFD

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 10

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:

Board of Directors

The board of directors is ultimately responsible for oversight
responsibility with respect to environmental, health, safety, social,
and other sustainability matters applicable to the company.

Environmental and Sustainability
Committee

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 and
opportunities, health, and safety.

Management Policy Committee

Executive Sustainability Committee

The management policy committee is comprised of the business unit
presidents and senior company officers. The committee meets
weekly, 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, and safety.

The executive sustainability committee 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.

11 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Environmental Stewardship

MDU Resources operates in a way that minimizes impacts and promotes conservation while maximizing resource use in meeting our
customers’ needs because we know having a sound, stable environment is critical to continuing our businesses. Some of MDU Resources’
efforts include engaging in wildlife protection practices, promoting emission reduction and fuel conservation, working with wildlife regulatory
agencies, developing water enhancement practices, protecting water quality, controlling and preventing the spread of noxious weeds,
reducing noise, and implementing programs to develop and enhance public spaces in the communities we serve.

MDU Resources operates with three primary environmental goals:

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.

Greenhouse Gas Scope 1 and Scope 2 Emissions

■ Carbon Footprint. While we have reported carbon emissions from our electric generating fleet for many years, as of January 1,
2022, we began tracking our Scope 1 and Scope 2 carbon emissions across the company to establish our corporatewide
baseline of emissions. The results of our 2022 inventory established our corporatewide emissions baseline and practices for
collecting data. With this knowledge, we are evaluating potential additional opportunities for corporatewide carbon emission
intensity reductions. For more information on anticipated future reporting and emission reduction goals, see our Sustainability
Report.

Renewable Natural Gas and Electric Generation

■ Generation Capacity by Fuel Type. Montana-Dakota Utilities’ historical and year-end 2023 total generating capacity by

fuel type shows the shift from coal to more renewable resources as follows:

MDU Resources Group, Inc. Proxy Statement 12

Proxy Statement

■ Wind Generation Capacity. Montana-Dakota Utilities has 205 megawatts of installed wind generation capacity at three locations,

providing more than 32% of customers’ electric energy requirements in 2023. Montana-Dakota Utilities also owns a 7.5-megawatt heat
recovery facility in south-central North Dakota, which uses high-temperature exhaust gas as the primary heat source. Because waste
heat is used to drive this generating facility, no additional fossil fuel is required and incremental emissions to generate electricity are
negligible.

Montana-Dakota Utilities owned renewable generation facilities include:

☐

155.5-megawatt Thunder Spirit Wind farm near Hettinger, North Dakota.

30-megawatt Diamond Willow Wind farm near Baker, Montana.

19.5-megawatt Cedar Hills Wind farm near Rhame, North Dakota.

7.5-megawatt Glen Ullin Waste Heat electric generation facility near Glen Ullin, North Dakota.

Montana-Dakota Utilities is constructing an 88-megawatt simple-cycle, natural gas-fired combustion turbine peaking unit at the Heskett
Station site in Mandan, North Dakota. For additional information about Montana-Dakota Utilities’ electric load forecasting, demand and
supply analysis, and risk analysis, see our Sustainability Report.

■ Methane Emissions. We have established a near-term methane emissions intensity reduction target of 25% by 2030, compared to our
2020 rate, at our natural gas pipeline business. In addition, WBI Energy joined the One Nation’s Energy Future Coalition (ONE Future
Coalition) in 2022. The ONE Future Coalition is a group of more than 55 natural gas companies working together to voluntarily reduce
methane emissions across the natural gas value chain to 1% or less by 2025. It is comprised of some of the largest natural gas
production, gathering and boosting, processing, transmission and storage, and distribution companies in the U.S.

The natural gas distribution segment established in 2023 a methane emissions reduction target of 30% by 2035 compared to 2022
levels. We continue working toward our electric generation greenhouse gas emissions intensity reduction target of 45% by 2030
compared to 2005 levels. As of December 31, 2022, we had achieved an electric generation emissions intensity reduction of 40% since
2005.

■ Climate Scenario Analysis. The company completed a climate scenario analysis in 2021 for its electric generation operations following

guidance from the TCFD.

■ Climate-Related Risks and Opportunities. In 2022, according to TCFD guidance, our businesses enhanced their understanding and

identification of our climate-related risks and opportunities over the short, medium and long term. This exercise helps us strategically
prepare to mitigate potential risks and optimize opportunities. Examples of some of the key items identified include:

☐

Both risks and opportunities from increased frequency and duration of severe weather events. For instance, property and facility
damage is a risk that can result from inclement weather. Weather-related damage also presents an opportunity, however, as our
construction services business can provide infrastructure repair and reconstruction services.

Both risks and opportunities from efforts to decarbonize electric generation sources. This requires investment in, partnership with,
and construction of renewable energy sources, such as wind and solar generation and biogas producers. It is also expected that
natural gas will be needed as a backup generation fuel source for periods when renewable sources are unavailable.

Changes in public policy to address climate change could create risks and opportunities as demand for the company’s products
and services could be impacted, costs could escalate, and modifications and additional investment in our regulated energy
delivery business may be necessary to ensure reliability of service to customers.

As suggested by TCFD guidance, MDU Resources continues its effort to assess and document our climate-related risks and
opportunities. For our full risks and opportunities assessment, see our Sustainability Report.

■ 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.

13 MDU Resources Group, Inc. Proxy Statement

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■ Renewable Natural Gas. Our utility companies are pursuing

additional opportunities to provide renewable natural gas to
customers. We have produced renewable natural gas from the
Billings, Montana, landfill for customer use since 2010. In
Idaho, three dairy digesters have been adding renewable
natural gas to our system for customer. Two additional
projects are expected to begin delivery in 2024. In Oregon,
Cascade Natural Gas plans to construct a renewable natural
gas production facility at the landfill in Deschutes County.
This renewable natural gas will be delivered into the Cascade
Natural Gas distribution system. The utility companies
continue to pursue renewable natural gas project
opportunities.

The cumulative production is enough to heat 48,000 households
for a year based on annual consumption of 75 dekatherms.

■ Natural Gas Utility Customer Energy Efficiency and Conservation Programs. In Washington, Cascade Natural Gas manages and offers rebates
through its long-standing Conservation Incentive Program, which encourages customers to install high-efficiency appliances and use
efficiency measures. The rebates are available to residential, commercial and industrial customers. Cascade Natural Gas also offers
rebates to qualified agencies for delivery of weatherization services to income-qualified natural gas customers. In Oregon, as part of
Cascade Natural Gas’ efforts to mitigate greenhouse gas impacts, and serve as a good steward of our environment, Cascade Natural Gas
partners with the Energy Trust of Oregon to deliver energy efficiency opportunities to core residential and commercial natural gas
customers.

■ Environmental Recognitions.

☐ The construction services segment’s subsidiary Bombard Electric, LLC was named one of the top U.S. solar contractors
by Solar Power Magazine, ranking No. 2 in Nevada in the solar contractor’s division and No. 29 nationwide in the
engineering, procurement and construction division.

■ Vehicle Emission Reduction Efforts. The construction services segment continues to evaluate efforts to reduce vehicle emissions including
electric vehicles and improving fuel efficiency with smaller vehicles to mitigate fuel costs and help reduce emissions whenever feasible.

■ Renewable and Climate-Related Opportunities. The national interest in renewable electric generation sources provides growth opportunities
and the construction services segment continues to expand renewable installation offerings, including battery energy storage systems,
electric vehicle charging infrastructure, microgrids and renewable natural gas/hydrogenfueled electric generating units. In addition to
renewable-related projects, the construction services segment provides electric distribution fire-hardening services for utility customers.
This typically involves converting overhead power line facilities to underground facilities, where they are less susceptible to wildfire and
weather impacts.

Social Responsibility

MDU Resources 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.

MDU Resources Group, Inc. Proxy Statement 14

Proxy Statement

■ Consideration for Environmental and Social Justice. MDU Resources strives to ensure all stakeholders are afforded the same degree of

protection from environmental and health hazards, and have equal opportunity for engagement in our projects. Our operating companies
give consideration and special outreach to stakeholders identified as potentially having reduced accessibility to information about active
projects and engagement opportunities because of race, color, national origin or income. Our outreach efforts include identifying
stakeholders within project areas and attempting to convey information and receive feedback via a form that best fits those stakeholders’
needs, which may include direct mailings, community meetings, trusted partnerships and face-to-face conversations.

■ Employees and Human Capital Management. At MDU Resources, we strive to build a strong team of employees with a focus on integrity and

safety and a commitment to diversity, equity, and inclusion. Our team included 9,145 employees located in 27 states as of
December 31, 2023. Our number of employees peaked in the first quarter of 2023 at just over 11,000. Our 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. 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 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 that values all perspectives and methods of

accomplishing work.

☐ Energize Diversability. In 2024, the regulated energy delivery companies implemented a pilot program "Energize Diversability". This

program brings disabled individuals into the workplace through customized employment opportunities.

☐ Compensation and Pay Equity. Equity in the workplace includes pay equity, regardless of an employee’s gender, race or other

individual attributes. MDU Resources and its companies annually analyze pay equity by comparing the compensation of employees in
the same or similar positions. MDU Resources also annually reviews our pay structure by position compared to like positions across
the market using information from leading compensation consulting firms. MDU Resources engages a third-party compensation
consultant every three years to review the salary grade structure and job compensation. This study was most recently completed and
fully implemented in 2023 for calendar year 2024.

☐ Executive Compensation and Diversity, Equity, and Inclusion. In February 2022, the board of directors first approved a performance

modifier for the 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. Each year since that time, the board of directors has tracked and
measured success of a DEI modifier goal annually for executives. 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.
For more information on the DEI modifier and the results for 2023, please refer to the “2023 Compensation for Our Named
Executive Officers” section in the “Compensation Discussion and Analysis.” In February 2024, the compensation committee and
board of directors approved new executive goals that cover environmental, social, and diversity, equity, and inclusion.

☐ CEO Action for Diversity and Inclusion Pledge. In March 2022, MDU Resources’ chief executive officer signed the CEO Action for
Diversity and Inclusion Pledge, joining more than 2,000 chief executive officers in signing and committing to four goals to be a
catalyst for further conversations and action around diversity and inclusion in the workplace. The four goals include:

• Cultivating environments that support open dialogue on complex and often-difficult conversations.

• Implementing and expanding unconscious bias education and training.

15 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

• Sharing best-practice diversity, equity and inclusion programs and initiatives.

• Engaging boards of directors when developing and evaluating diversity, equity and inclusion strategies.

☐ 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, partnerships with colleges and technical schools, 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.

Building a Strong Workforce Program. The regulated energy delivery companies provide all employees an opportunity in
mentoring and job shadow programs on an annual basis. Additionally, through succession planning, high potential
employees are identified and provided with additional developmental opportunities that help prepare them for future
opportunities and advancement within the organization. The companies partner with third party leadership development
groups as well as providing internal development opportunities that help prepare our future leaders. The MDU Resources’
Environmental and Sustainability Committee receives annual reports on the individuals and the development that is
being provided to all candidates for succession.

Building Leaders Program. The construction services segment’s Building Leaders program gives high-performing
employees an opportunity to enhance their leadership skills. Participants attend a two-day, in-person training session
focused on communication, teamwork and other professional development topics. Following the training, participants are
assigned an advisor who has been selected from their company’s leaders. Participants, drawing from a personal
development plan created during training, are responsible for setting up and leading discussions with their advisors for
one year following training.

☐ 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. To
help facilitate a strong safety culture, MDU Resources also has a safety leadership council that aims to identify and adopt best
management practices to aid in the prevention of occupation injuries and illness.

☐ 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.

■ Vendor Code of Conduct. MDU Resources has a Vendor Code of Conduct that outlines our expectations of vendors, including ethical

business practices, workplace safety, environmental stewardship and compliance with applicable laws and regulations.

■ 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.

MDU Resources Group, Inc. Proxy Statement 16

Proxy Statement

☐ 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
$44 million to worthwhile organizations. In 2023, the MDU
Resources Foundation contributed $2.09 million to charitable
organizations. In addition to contributions through the MDU
Resources Foundation, our business segments and companies
regularly make charitable donations and in-kind donations to the
communities where they do business.

☐ 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 in 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
2023, the foundation granted $99,000 under this program, matching over 7,694 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 MDU Resources Foundation maintains two separate
scholarship programs, which includes funding scholarship programs at institutions of higher education and scholarships for employee
family members.

■ Our Customers.

☐ Cascade Arrearage Relief and Energy Savings (CARES Program). Cascade Natural Gas understands that our customers occasionally

experience financial difficulties. Cascade Natural Gas has established the CARES program for customers to qualify for a one-time
grant as well as a monthly discount on the customer’s billing statement.

☐ Our utility companies consistently rank high in customer satisfaction. In the J.D. Power 2023 Gas Utility Residential
Customer Satisfaction StudySM, Intermountain Gas Company ranked first, Cascade Natural Gas ranked second, and
Montana-Dakota Utilities ranked fourth among mid-size natural gas utilities in the west region.

The company believes in corporate social responsibility and the fundamental commitment to its stakeholders: customers,
employees, suppliers, communities, and stockholders. MDU Resources manages its business with a long-term view toward
sustainable operations, focusing on how economic, environmental and social efforts can help us continue to provide
affordable and reliable essential products and services to our customers.

17 MDU Resources Group, Inc. Proxy Statement

2023 Foundation ContributionsCivic/Community (45%)Culture/Art (4%)Education (22%)Environment (5%)Health/Human Services (24%)

Proxy Statement

BOARD OF DIRECTORS

ITEM 1. ELECTION OF DIRECTORS

The board expresses its thanks to David L. Goodin, who retired as president and chief executive officer on January 5, 2024, whose term as a
director will expire at the 2024 annual meeting. Mr. Goodin began his career in 1983 as an electrical engineer with subsidiary Montana-
Dakota Utilities. He served in various positions of increasing responsibility, becoming MDU Resources' president and chief executive officer
and director of the company in 2013. Prior to January 4, 2013, Mr. Goodin 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.

The board currently consists of nine directors. All of the nominees are current directors of MDU Resources with the exception of Douglas W.
Jaeger. All of the nominees are standing for election to the board at the 2024 annual meeting to hold office until the 2025 annual meeting
and until their successors are duly elected and qualified. David L. Goodin has not been renominated for reelection and his term will expire
at the company’s 2024 annual meeting.

The board has affirmatively determined all the director nominees, other than Nicole A. Kivisto, our president and chief executive officer, are
independent in accordance with New York Stock Exchange (NYSE) rules, our corporate governance guidelines, and our bylaws. There are no
arrangements or understandings between any director or executive officer and any other person pursuant to which he or she is or was to be
selected as a director or officer of our company. There are no family relationships among our executive officers and directors.

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 their successor has been duly elected and qualified or until the earliest of their resignation,
retirement, or death.

The nine nominees for election to the board at the 2024 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, 2023.

On January 24, 2023, the company entered into the Cooperation Agreement with Corvex Management LP (Cooperation Agreement),
pursuant to which Corvex Management LP partner, James H. Gemmel, was appointed as a non-voting board observer and, subject to FERC
approval, to the board of directors. FERC approval was received on May 1, 2023, and in accordance with the terms of the Cooperation
Agreement, Mr. Gemmel was appointed to the board of directors on May 9, 2023. On March 14, 2024, the company entered into an
Amended and Restated Cooperation Agreement with Keith A. Meister and Corvex Management LP (Mr. Meister and Corvex Management LP,
together with their respective affiliates, the Corvex Group) (Amended and Restated Cooperation Agreement). For further details on the
Amended and Restated Cooperation Agreement, see the “Related Person Transaction Disclosure” within the section entitled “Corporate
Governance.”

On November 2, 2023, the company announced its intention to separate its construction services business, from the company. The
separation is anticipated to result in two independent, publicly traded companies. If the spinoff transaction is completed, the company
expects that one or more of its directors may become directors of the new construction services company, in which case they will resign from
the company’s board of directors at such time.

The board of directors recommends that the stockholders

vote FOR the election of each nominee.

MDU Resources Group, Inc. Proxy Statement 18

Proxy Statement

Director Nominees

Darrel T. Anderson
Age 65

Independent Director Since 2023
Compensation Committee
Environmental and Sustainability Committee

Key Contributions to the Board: With over 28 years of experience in the integrated electric utility industry,
holding several positions including executive vice president of administrative services, chief financial officer,
and president and CEO, Mr. Anderson brings extensive financial and leadership experience in the regulated
utility industry. Mr. Anderson also contributes experience with risk oversight and human resources
management.

Career Highlights

• President and chief executive officer of IDACORP, a holding company comprised of Idaho Power, a regulated electric utility company,
from 2014 to 2020; executive vice president-administrative services and chief financial officer of IDACORP from 2009 to 2014;
president and chief financial officer of Idaho Power from 2012 to 2013; executive vice president-administrative services and chief
financial officer of Idaho Power from 2009 to 2011.

• Board chair of Blue Cross of Idaho, a non-profit mutual insurance company, since May 2023; serving as a board member since 2018.

Other Leadership Experience

• Former board member of Saint Alphonsus Health System, a non-profit organization that provides medical and health services in Idaho

and Oregon, from 2013 to 2019.

• Former board member and chair of Women's and Children's Alliance, a non-profit organization that provides services to individuals

recovering from domestic abuse and sexual assault, from 2008 to 2017.

James H. Gemmel
Age 38

Independent Director Since 2023
Audit Committee
Environmental and Sustainability Committee

Key Contributions to the Board: With over 11 years of experience with investment funds and institutions on
elevating and valuing public and private companies, Mr. Gemmel brings extensive financial, professional
investment management, and collaboration with public company board of directors and senior management
teams.

Career Highlights

• Partner of Corvex Management LP, an investment management firm that focuses on fundamental, valued-based investments, since

January 2011.

• Outside director of Kindred Group PLC, an online gaming company incorporated in Malta and traded on the Swedish stock exchange,

since November 2022, serving as chair of the audit committee since April 2023.

Other Leadership Experience

• Former investment analyst at Federated Hermes Inc., an investment company focused on solutions to help investors target a broad range

of outcomes, from 2008 to 2010.

• Former investment analyst at Prudent Bear Fund of David W. Tice & Associates from 2007 to 2008.

19 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Douglas W. Jaeger
Age 56

Independent Director Nominee

Key Contributions to the Board: As the current president and chief executive officer of Ulteig, Inc., an employee-
owned professional engineering services firm focused on comprehensive engineering, program management,
and technical and field services, Mr. Jaeger brings expertise in strategic planning and organizational
development. Mr. Jaeger also contributes extensive knowledge in governance, mergers and acquisitions,
marketing, financial management, engineering, and construction services. Mr. Jaeger held several executive
leadership positions with a publicly traded electric and natural gas company as well as experience with
corporate board services and community leadership boards.

Career Highlights

• Director, president and chief executive officer of Ulteig, Inc., an employee-owned professional engineering services firm since 2015.

• Former chief executive officer of Adolfson & Peterson, Inc., a privately held construction services firm serving commercial and industrial

clients nationally, leading the industry in quality, client loyalty, safety and sustainability, from 2008 to 2013.

• Former executive positions at Xcel Energy, Inc. including vice president of transmission from 2004 to 2008, vice president of business
operations from 2003 to 2004, vice president of retail marketing and sales from 2001 to 2003, and director of product development
from 2000 to 2001.

• Former director of Qualus Power Services/CE Power, a leading pure-play power services firm of energy transitions, with differentiated

capabilities across grid modernization, resiliency, security, and sustainability, from 2015 to 2022.

• Director of Computype Inc., a private company that identifies and tracks critical assets with innovated programs that improve customers’

processes, performance, and control, since January 2011.

Other Leadership Experience

• Former member of the board of trustees of North American Electric Reliability, a nonprofit international regulatory authority whose
mission is to assure the effective and efficient reduction of risks to the reliability and security of the grid, from 2013 to 2015.

• Former founder of AMP Advisors, a firm that provided executive advisory services to private equity investment firms and growth-oriented,
technical services businesses around market strategy, business development, acquisition guidance, integration and governance, from
2014 to 2015.

Dennis W. Johnson
Age 74

Independent Director Since 2001
Chair of the Board
Compensation Committee
Nominating and Governance Committee

Key Contributions to the Board: With over 49 years of experience in business management, manufacturing,
and finance, holding various positions including chair, president, and chief executive officer of TMI Group
Incorporated for 42 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, currently serving as vice chair.

• 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.

MDU Resources Group, Inc. Proxy Statement 20

Proxy Statement

Nicole A. Kivisto
Age 50

Director Since 2024
President and Chief Executive Officer

Key Contributions to the Board: Serving as president and chief executive officer of MDU Resources Group, Inc.
since 2024. Ms. Kivisto is the only officer of the company that serves on our board. With 29 years of operating
and leadership positions with the company, Ms. Kivisto brings utility industry experience to the board as well
as extensive knowledge of our company and its business operations. Ms. Kivisto contributes valuable insight
into management’s views and perspectives and the daily operations of the company.

Career Highlights

• President and chief executive officer and a director of the company since January 6, 2024.

• Served as president and chief executive officer of Montana-Dakota Utilities Co., Cascade Natural Gas Corporation, and Intermountain

Gas Company from January 9, 2015 to January 5, 2024.

• Began her career in 1995 at MDU Resources Group, Inc., as a financial analyst and served in positions of increasing responsibility until
2015 when she was named president and chief executive officer of Montana-Dakota Utilities Co., Cascade Natural Gas Corporation, and
Intermountain Gas Company; positions included controller and vice president, controller and chief accounting officer of MDU Resources
Group, Inc., and vice president of operations for Montana-Dakota Utilities Co. and Great Plains Natural Gas Co.

Other Leadership Experience

• Board member of numerous industry associations, including current member of the American Gas Association, the Edison Electric

Institute since 2015; former board member of the North Dakota Lignite Energy Council from 2015 to 2023; and former member of the
North Central Electric Association from 2015 to 2016.

• Member, Board of Trustees of the University of Mary from 2017 to 2023, serving on the audit and finance committees.

• Director of Bravera, a bank that provides financial services, since February 2018.

Dale S. Rosenthal
Age 67

Independent Director Since 2021
Compensation Committee
Environmental and Sustainability 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 from 2018 to 2022. Washington Gas is a regulated public utility company that sells and delivers natural
gas in the District of Columbia and surrounding metropolitan areas.

• Former 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, from March
2020 to December 2023.

• 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,

and chair of the audit committee since 2022.

21 MDU Resources Group, Inc. Proxy Statement

Edward A. Ryan
Age 70

Independent Director Since 2018
Compensation Committee
Nominating and Governance Committee

Proxy Statement

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; partner at Hogan & Hartson, dba Hogan Lovells, from 1991 to 1996.

Other Leadership Experience

• Director of the C&O Canal Trust, the non-profit partner of the Chesapeake & Ohio Canal National Historical Park, since 2022; and chair

of the nominating and governance and canal quarters committees since 2023. The C&O Canal Trust works in conjunction with the
National Park Service and local communities for park preservation highlighting the park’s historical, natural and cultural heritage, along
with managing and developing a series of lockhouse accommodations along the entire quarters.

• Former director of Goodwill of Greater Washington, D.C., a non-profit organization whose mission is to transform lives and communities
through education and employment, from 2015 to 2023, 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.

• Board advisor of Workbox Company, a startup company that provides collaborative coworking space and accelerator services, since

January 2020.

David M. Sparby
Age 69

Independent Director Since 2018
Audit Committee
Nominating and Governance 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, Inc. 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 from 2012 to 2023, including service as chair from 2020 to 2023.

MDU Resources Group, Inc. Proxy Statement 22

Proxy Statement

Chenxi Wang
Age 53

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, Inc., an automated and scalable cloud native cybersecurity platform, from 2015 to 2017.

• Vice president, cloud security & strategy of CipherCloud, LLC, 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.

• Founder and director of Forte Group, an advocacy and education non-profit organization focusing on women in the cybersecurity

industry, since November 2022.

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 technology industry.

• Board observer of ProjectDiscovery, Inc., an open-source software company that simplifies security operations for engineers and

developers, since October 2022.

• Board observer of Stanza System, Inc., a company that specializes in site reliability engineering, since November 2022.

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.

23 MDU Resources Group, Inc. 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:

Proxy Statement

1 QUESTIONNAIRES
During 2023, each director completed an anonymous written questionnaire with the
opportunity to provide comments. In addition, committee members completed a
separate written questionnaire related to the operation of the respective committees.

2 BOARD SUMMARY AND FEEDBACK
The results of the written questionnaires were anonymously aggregated and provided
to the board and each committee. Key strengths and opportunities for improvement of
the board and each committee were reviewed and discussed in an executive session
of the board in connection with this process.

3 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 corporate 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 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.

MDU Resources Group, Inc. Proxy Statement 24

Anderson

Gemmel

Jaeger

Johnson Kivisto Rosenthal

Ryan

Sparby Wang

—

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, and construction services

LEGAL/CORPORATE GOVERNANCE

Experience in dealing with complex legal and public company
governance issues

HUMAN CAPITAL MANAGEMENT

Experience in enterprise-wide human capital management and the
development of talent, including overseeing diversity and inclusion
efforts

ENVIRONMENT AND SUSTAINABILITY

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
Age1
Tenure2

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+

1 Director nominee’s age as of December 31, 2023.

2 Director nominee’s tenure as of March 15, 2024.

25 MDU Resources Group, Inc. Proxy Statement

Independence

Board Refreshment

Tenure

89%

New Members

The board has determined that all
director nominees, other than Ms.
Kivisto, meet the independence
standards set by the NYSE and SEC.

Board Composition and Refreshment

Five new
members have
been elected,
nominated or
appointed to
the board over
the last five
years.

0-4
Years

5-10
Years

11+
Years

Proxy Statement

Diversity

Gender

Three director
nominees are
women.

33%

Race/Ethnicity

Average
Tenure

5.6
Years

The average tenure of the current directors
nominated for election reflects a balance of
company experience and new perspective.

One director
nominee is

ethnically diverse. 11%

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.

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 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. Potential director nominees are brought to the attention of the nominating and governance committee by board
members, management, advisory firms, and various organizations.

On January 24, 2023, the company entered into the Cooperation Agreement with Corvex Management LP, pursuant to which Corvex
Management LP partner, James H. Gemmel, was appointed as a non-voting board observer and, subject to the approval of Federal Energy
Regulatory Commission under the Federal Power Act (the FERC Approval), to the board of directors. The FERC Approval was received on
May 1, 2023, and in accordance with the terms of the Cooperation Agreement, Mr. Gemmel was appointed to the board of directors on
May 9, 2023. On March 14, 2024, the company entered into an Amended and Restated Cooperation Agreement with the Corvex Group.

On June 1, 2023, as a result of the spinoff of Knife River as a separate publicly traded company, four of our directors resigned from the
board and became directors of the Knife River board. On August 17, 2023, David L. Goodin announced his retirement as president and
chief executive officer of the company effective January 5, 2024. The board of directors unanimously selected Nicole A. Kivisto to succeed
Mr. Goodin as the president and chief executive officer of the company effective January 6, 2024. Ms. Kivisto became a director of the
board effective January 6, 2024.

The nominating and governance committee continues to identify individuals as potential board of director candidates, particularly
individuals with industry experience to support the company’s strategy to deliver superior value and achieve industry-leading performance by
becoming a pure-play regulated energy delivery company, while pursuing organic growth opportunities. The nominating and governance
committee identified and recommended Darrel T. Anderson be appointment to the board in 2023 based on his expertise with human capital
management, corporate governance, finance, and experience in management and leadership of a publicly traded utility company. In
addition, the nominating and governance committee identified Douglas W. Jaeger for nomination to the board in 2024 based on his
expertise with strategic planning, organizational development, engineering and construction services. The nominating and governance
committee subsequently recommended, and the board of directors approved, the nomination of Mr. Jaeger for election to the board of
directors at the 2024 annual meeting.

By tenure, if the nominees are elected, the board will be comprised of five directors who have served from 0-4 years, three directors who
have served from 5-10 years, and one director who has 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. The nominating and governance
committee also takes into consideration any written agreement for director nominations the company is a party to such as the Amended and
Restated Cooperation Agreement. For further details on the Amended and Restated Cooperation Agreement, see the “Related Person
Transaction Disclosure” within the section entitled “Corporate Governance.”

MDU Resources Group, Inc. Proxy Statement 26

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 New York Stock Exchange (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 Ms. Kivisto, 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 two such nonprofit organizations that collectively totaled $7,750.
None of the contributions made to any of the nonprofit entities exceeded 2% of the relevant entity’s consolidated gross revenues.

• Business relationships with entities with which a director or director nominee is affiliated.

◦ Mr. Gemmel is a partner of Corvex Management LP, a hedge fund company, that owns 10,147,041 shares or 4.98% percent of

common stock in the company as of December 31, 2023. On January 24, 2023, the company entered into a Cooperation Agreement
with Keith A. Meister and Corvex Management LP (Mr. Meister and Corvex Management LP, together with their respective affiliates,
the Corvex Group), pursuant to which Corvex Management LP partner, James H. Gemmel, was appointed as a non-voting board
observer and, subject to the FERC Approval, to the board of directors. The FERC Approval was received on May 1, 2023, and in
accordance with the terms of the Cooperation Agreement, Mr. Gemmel was appointed to the board of directors on May 9, 2023.
Pursuant to the Cooperation Agreement, the Corvex Group agreed that it shall not, directly or indirectly, compensate or agree to
compensate, any director or director nominee of the company for such person’s service as a board observer or a member of the board
including Mr. Gemmel (or any replacement designee appointed pursuant to Section 1(f) of the Cooperation Agreement). Mr. Gemmel
qualifies as independent director of the company under all applicable listing standards, applicable rules of the SEC and publicly
disclosed standards used by the board in determining the independence of the company’s directors. On March 14, 2024, the
company entered into an Amended and Restated Cooperation Agreement with the Corvex Group. For further details on the Amended
and Restated Cooperation Agreement, see the “Related Person Transaction Disclosure” within the section entitled “Corporate
Governance.”

The board has also determined that all members of the audit, compensation, nominating and governance, and environmental and
sustainability committees of the board are independent in accordance with our corporate governance guidelines and applicable NYSE and
Securities Exchange Act of 1934 rules, as applicable.

Oversight of Sustainability

We are an essential infrastructure company and manage our business with a long-term view toward sustainable operations, focusing on
economic, environmental, and social impacts. 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, social, and other 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

27 MDU Resources Group, Inc. Proxy Statement

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:

Proxy Statement

• 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 35.

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 weekly, 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.

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.

MDU Resources Group, Inc. Proxy Statement 28

Proxy Statement

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 large institutional stockholders. Management regularly attends and presents at investor and financial conferences
and holds one-on-one meetings with investors. During 2023, the company held meetings, conference calls, and webcasts with numerous
stockholders and investment firms, including focused outreach to our top 30 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

Rating Agencies/Firms

•
•
•
•
•
•

One-on-One and Group Meetings

•
Quarterly Earnings Conference Calls
•
• Written and Electronic Communications
Company-Hosted Events and Presentations
•
• Webcasts with Stockholders and Analysts
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

•
•
•
•
•

OUTCOMES OF STOCKHOLDER ENGAGEMENT

•

Received stockholder feedback regarding
strategic initiatives

Enhanced sustainability reporting with
expanded disclosures of risk and
opportunities in accordance with TCFD

•

Stockholder feedback regularly shared with
our board of directors

Expanded disclosure of financial metrics
for our business segments to help investors
better understand key business drivers

•
•
•
•
•

•

•
•

Executive Management

Investor Relations

Senior Leadership

Subject Matter Experts

Board Members

KEY TOPICS OF ENGAGEMENT

Company Strategy

Executive Compensation

Operational and Financial Updates

Knife River Corporation Tax-Free Spinoff

Construction Services Business

Tax-Free Spinoff

Capital Expenditure Forecast/Capital

Allocation

Sustainability

Environmental, Social, and Corporate
Governance Practices

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.

29 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 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. The board believes 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. The board has found that 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 company’s risk
oversight framework also aligns with its disclosure controls and procedures. For example, the company’s quarterly and annual financial
statements and related disclosures are reviewed by the disclosure committee, which includes certain senior management, who participate in
the risk assessment practices described below.

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 with our chief
executive officer, chief financial officer, and chief legal officer 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.

In addition, in 2023 a survey was completed by both the board of directors and members of the management policy committee to identify
critical enterprise risks. The company believes this program, which was designed to enable effective and efficient identification of, and
visibility into, critical enterprise risks over the short, intermediate, and long-term, and to facilitate the incorporation of risk considerations
into decision making across the company, and assessing and managing the company’s legal, regulatory, and other compliance obligations on
a global basis, provides valuable insight to the board of directors in its risk oversight efforts. In particular, the company believes its
enterprise risk management programs help clearly define risk management roles and responsibilities among the board, its committees and
management, bring together senior management to discuss risk, promote visibility and facilitate constructive dialogue around the risks
relevant to the company’s strategy and operations and help facilitate appropriate risk response strategies at the board of directors, board
committees, and management.

MDU Resources Group, Inc. Proxy Statement 30

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 Assess Consultant

Independence

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 weekly, 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 2023, 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 cybersecurity risk presentations and had
access to the reports. The audit committee discussed 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.

31 MDU Resources Group, Inc. Proxy Statement

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• 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, social and
other 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. The environmental and sustainability committee receives regular reports on the company’s
safety statistics relating to organization-wide year-to-date recordable incident rates, days away, restricted or transferred rates, and
preventable vehicle accident rates.

Board Meetings and Committees

During 2023, the board of directors held 17 meetings. Each director attended at least 75% of the combined total meetings of the board
and the committees on which the director served during 2023, in each case, during the time period which each director served. Directors
are encouraged to attend our annual meeting of stockholders. All current directors who were serving at the time attended our 2023 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

Darrel T. Anderson

James H. Gemmel

Dennis W. Johnson

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

●

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 Ten Times in 2023

The nominating and governance committee met ten times during 2023. The current committee members are Edward A. Ryan, chair,
Dennis W. Johnson, and David M. Sparby.

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

• corporate governance guidelines.

MDU Resources Group, Inc. Proxy Statement 32

Proxy Statement

The nominating and governance committee assists the board in overseeing the management of risks in the committee’s areas of
responsibility.

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,
including establishing, coordinating and reviewing the criteria and methods for such evaluation.

In identifying nominees for director, the committee consults with board members, management, 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.

Our bylaws also contain requirements that a person must meet to qualify for service as a director.

In addition, on January 24, 2023, the company entered into the Cooperation Agreement with Corvex Management LP, pursuant to which
Corvex Management LP partner, James H. Gemmel, was appointed as a non-voting board observer and, subject to FERC approval, to the
board of directors. FERC approval was received on May 1, 2023, and in accordance with the terms of the Cooperation Agreement,
Mr. Gemmel was appointed to the board of directors on May 9, 2023. On March 14, 2024, the company entered into an Amended and
Restated Cooperation Agreement with the Corvex Group. For further details on the Amended and Restated Cooperation Agreement, see the
“Related Person Transaction Disclosure” within the section entitled “Corporate Governance.”

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 Ten Times in 2023

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 ten times during 2023. The current audit committee members are David M. Sparby, chair, James H. Gemmel, and
Chenxi Wang. The board of directors determined that Mr. Sparby is “audit committee financial expert” 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

33 MDU Resources Group, Inc. Proxy Statement

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independence standard for audit committee members under our director independence guidelines, the NYSE listing standards, and SEC
rules.

The audit committee assists the board 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 audit committee reviews
and discusses with management and the independent registered public accounting firm, before filing with the SEC, the annual audited
financial statements and quarterly financial statements. The audit committee also:

• assists the board’s oversight of:

◦

the integrity of our financial statements and system of internal controls and the audits of the company’s financial statements;

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 Eleven Times in 2023

During 2023, the compensation committee met eleven 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
Dennis W. Johnson, chair, Darrel T. Anderson, Dale S. Rosenthal, and Edward A. Ryan.

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 considers the
outcome of the latest stockholder advisory vote on executive compensation when making compensation decisions and reviews and
recommends to the board of directors for approval the frequency with which the company will conduct a stockholder advisory vote on
executive compensation. In determining the long-term incentive component of CEO compensation, the compensation committee may
consider, among others, the company’s performance and relative stockholder return, the value of similar incentive awards given to CEOs at
comparable companies and the awards given to the company’s CEO in past years. The compensation committee reviews the incentive
compensation arrangements to consider whether they encourage excessive risk-taking. 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 chief
legal officer 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 2023 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 2023 that Meridian was independent
from management. Meridian does not provide any services other than consultation services to the compensation committee on executive and

MDU Resources Group, Inc. Proxy Statement 34

Proxy Statement

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 2023, the compensation committee retained Meridian to conduct an analysis of the company’s compensation for non-
employee directors.

Environmental and Sustainability Committee

Met Four Times in 2023

The environmental and sustainability committee met four times during 2023. 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 Dale. S. Rosenthal, chair, Darrel T. Anderson, James H. Gemmel, 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,
social and other sustainability matters that fundamentally affect the company’s business interests and long-term viability. The
environmental and sustainability committee:

• reviews significant risks, opportunities 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, goals, commitments, 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 policies and procedures used to prepare environmental and social sustainability-related statements and

disclosures, including preparation of the company’s annual sustainability report, and any communication strategy and significant public
disclosures relating to environmental and social sustainability matters;

• oversees the engagement of third-party environmental and social sustainability assurance providers;

• 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;

• oversees, in conjunction with the nominating and governance committee, the company’s environmental and social sustainability related

engagement efforts with stockholders, other key stakeholders, and proxy advisory firms; and

• reviews stockholder proposals related to environmental and social sustainability matters.

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

35 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

committee members are provided with a questionnaire and the results were anonymously aggregated and provided to the board and each
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.”

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 2023,
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; Ms. Rosenthal joined the board in 2021; and Mr. Anderson and
Mr. Gemmel joined in 2023. On January 24, 2023, the company entered into the Cooperation Agreement with Corvex Management LP,
pursuant to which Mr. Gemmel, was appointed as a non-voting board observer and, subject to FERC approval, to the board of directors.
FERC approval was received on May 1, 2023, and in accordance with the terms of the Cooperation Agreement, Mr. Gemmel was appointed
to the board of directors on May 9, 2023. On March 14, 2024, the company entered into an Amended and Restated Cooperation Agreement
with the Corvex Group. For further details on the Amended and Restated Cooperation Agreement, see the “Related Person Transaction
Disclosure” within the section entitled “Corporate Governance.” The board unanimously selected Ms. Kivisto to succeed David L. Goodin
following his retirement as president and chief executive officer of the company. Ms. Kivisto became a board member on January 6, 2024.
In 2024, the nominating and governance committee considered potential director candidates for board refreshment particularly individuals
with industry experience to support the company’s strategy to deliver superior value and achieve industry-leading performance by becoming
a pure-play regulated energy delivery company, while pursuing organic growth opportunities. The nominating and governance committee
subsequently recommended, and the board of directors approved, the nomination of Mr. Jaeger for election to the board of directors at the
2024 annual meeting.

MDU Resources Group, Inc. Proxy Statement 36

Proxy Statement

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 corporate governance 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 2025 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.

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 2025 Annual Meeting.”

Cybersecurity Oversight
The audit committee reviewed reports and received presentations at each of its regular quarterly meetings in 2023 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, information technology, and other
leaders from 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's chief information officer, along with the director of cybersecurity and a designated security team of
professionals, are responsible for assessing and managing risks as well as developing and implementing policies, procedures, and practices
based on the range of threats faced by the company. There are processes around access management, data security, encryption, asset

37 MDU Resources Group, Inc. Proxy Statement

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management, secure system development, security operations, network and device security to provide safeguards from a cybersecurity
incident along with continual monitoring of various threat intelligence feeds. The company has an incident response plan to identify,
protect, detect, respond to, and recover from cybersecurity threats and incidents that is also tested on an annual basis. The incident
response plan is updated based on results of the test or as new cyber related developments occur. The chief information officer, executive
leadership which includes the chief executive officer, chief financial officer, chief accounting officer, chief legal officer, and SEC financial
reporting department employees, and the board of directors are notified of any material cybersecurity incidents through a defined escalation
process. The defined escalation process is a risk-based process that specifies who is to be contacted and when at each risk level. 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. Please refer to Item 1C.
Cybersecurity in Part I of our 2023 Form 10-K for additional information regarding cybersecurity matters.

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

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:

• 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 chief legal officer all proposed or existing related person transactions in
which they are involved.

We had no related person transactions in 2023, other than as set forth below.

Amended and Restated Cooperation Agreement
On January 24, 2023, the company entered into the Cooperation Agreement with Keith A. Meister and Corvex Management LP (Mr. Meister
and Corvex Management LP, together with their respective affiliates, the Corvex Group).

Pursuant to the Cooperation Agreement, the company agreed, among other things, to appoint Corvex Management LP partner James H.
Gemmel to the board of directors, subject to the approval of the Federal Energy Regulatory Commission under the Federal Power Act (FERC

MDU Resources Group, Inc. Proxy Statement 38

Proxy Statement

Approval). The Cooperation Agreement also provided that, prior to the receipt of the FERC Approval, Mr. Gemmel would be appointed as a
non-voting board observer of the board of directors, effective immediately following the execution of the Cooperation Agreement on
January 24, 2023, which he was on January 24, 2023.

Under the terms of the Cooperation Agreement, if FERC Approval had been obtained on or before the date that was fifteen (15) business
days prior to the date on which the company expected to mail its proxy statement relating to the 2023 annual meeting of stockholders, then
(i) immediately following the date of the FERC Approval, the size of the board of directors would have been increased by one director and
Mr. Gemmel would have been appointed to the board of directors for a term expiring at the 2023 annual meeting and (ii) the company
would nominate Mr. Gemmel for re-election at the 2023 annual meeting for a term expiring at the 2024 annual meeting of stockholders.
The FERC Approval was not obtained prior to the 2023 proxy mailing deadline. The FERC Approval was obtained after the 2023 proxy
deadline, then, immediately after the later of the date the FERC Approval was received and the completion of the 2023 annual meeting, the
size of the board of directors increased by one director and Mr. Gemmel was appointed to the board of directors for a term expiring at the
2024 annual meeting. Upon Mr. Gemmel’s appointment to the board of directors, Mr. Gemmel ceased to be a non-voting board observer.

Pursuant to the Cooperation Agreement, the Corvex Group has agreed to abide by certain customary standstill restrictions, voting
commitments, and other provisions. In addition, the Cooperation Agreement provides for customary director replacement procedures in the
event Mr. Gemmel ceases to serve as a director or non-voting board observer under certain circumstances as specified in the Cooperation
Agreement. Furthermore, in connection with Mr. Gemmel’s appointment, Corvex Management LP and Mr. Meister also entered into a
customary confidentiality agreement with respect to the company’s information.

The Cooperation Agreement provided that Mr. Gemmel (or his replacement pursuant to the Cooperation Agreement) would resign from the
board of directors effective upon the earliest of the following (Resignation Event): (i) the second business day following such time as the
Corvex Group ceases to hold a “net long position” (as defined in the Cooperation Agreement) of at least 8,100,000 shares of the company’s
common stock; (ii) the later of each of (a) the closing of the company’s previously announced distribution of the equity of Knife River to the
company’s stockholders and/or the closing of the sale, distribution or other disposal (in one or a series of transactions) of any such shares
not so distributed, in each case, such that the company and any subsidiary thereof, no longer holds, directly or indirectly, any equity interest
or any other securities in Knife River, and (b) the closing of the sale, distribution or other complete disposition of 100% of the construction
services segment or its business (in one or a series of transactions), such that the company and any subsidiary thereof, no longer holds any
interest in the business of the construction services segment; (iii) the date of the 2024 annual meeting, unless the board of directors has
determined to nominate Mr. Gemmel (or his replacement pursuant to the Cooperation Agreement) for election at the 2024 annual meeting;
and (iv) the material breach by the Corvex Group or Mr. Gemmel (or his replacement pursuant to the Cooperation Agreement) of the
confidentiality agreement or certain provisions of the Cooperation Agreement.

On March 14, 2024, the company entered into an Amended and Restated Cooperation Agreement with the Corvex Group. Pursuant to the
Amended and Restated Cooperation Agreement, the company agreed to include James H. Gemmel as a nominee for election to the board of
directors of the company at the 2024 annual meeting for a term expiring at the company’s 2025 annual meeting of stockholders.

The Amended and Restated Cooperation Agreement amends the terms upon which Mr. Gemmel (or his replacement) will be required to
resign from the board of directors, such that his future resignation will be effective upon the earliest of the following: (i) the second business
day following such time as the Corvex Group ceases to hold a “net long position” (as defined in the Amended and Restated Cooperation
Agreement) of at least 8,100,000 shares of the company’s common stock, par value $1.00 per share; (ii) the completion of the company’s
previously announced distribution of the equity of the construction services segment, to the company’s stockholders (in one or a series of
transactions), and/or the closing of any sale, distribution or other disposal (in one or a series of transactions) of any such shares or the
business of the construction services segment, not so distributed, in each case, such that the company and any subsidiary thereof, no longer
holds, directly or indirectly, any equity interest or any other securities in the construction services segment, or its business; (iii) the date of
the 2025 annual meeting, unless the board of directors has determined to nominate Mr. Gemmel (or his replacement pursuant to the
Amended and Restated Cooperation Agreement) for election at the 2025 annual meeting; and (iv) the material breach by the Corvex Group
or Mr. Gemmel (or his replacement pursuant to the Amended and Restated Cooperation Agreement) of the confidentiality agreement
previously entered into or certain provisions of the Amended and Restated Cooperation Agreement.

Pursuant to the Amended Cooperation Agreement, the parties agreed to extend the customary standstill restrictions, voting commitments,
and other provisions to coincide with Mr. Gemmel’s tenure on the board of directors. Furthermore, the Corvex Group agreed to extend the
confidentiality agreement with respect to the company’s information.

39 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

COMPENSATION OF NON-EMPLOYEE DIRECTORS

Director Compensation for 2023

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 former president and chief executive officer, served as a
director during 2023. Mr. Goodin received no additional compensation for his service on the board during 2023. Director compensation is
reviewed annually by the compensation committee. The committee’s independent compensation consultant, Meridian provided an analysis
of the company’s director compensation for 2023. The analysis included research on market trends in director compensation as well as a
review of director compensation practices of companies in our compensation benchmarking peer group. Meridian’s report on director
compensation indicated the company’s average annual cash and equity compensation for the company’s non-employee directors was slightly
above the 50th percentile of the company’s peer group but consistent with market practices. The compensation committee and board
concurred with Meridian’s recommendations and made no changes to the annual compensation of non-employee directors for 2023.
Compensation for our non-employee directors during 2023 was 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

$110,000

125,000

20,000

15,000

150,000

175,000

1 The annual stock grant is a grant of shares of company common stock equal in value to $150,000.
2 The annual stock grant is a grant of shares of company common stock equal in value to $175,000.

Cash retainers are paid monthly. The annual stock grant for non-employee directors is for the director’s service provided during the calendar
year. The award is granted as fully vested stock in November each year following the regularly scheduled board of directors meeting.
Directors serving less than a full year receive a prorated stock award based on the number of months served in the applicable calendar year.

There are no meeting fees paid to the directors.

MDU Resources Group, Inc. Proxy Statement 40

Proxy Statement

The following table outlines the compensation paid to our non-employee directors for 2023.

Name
Darrel T. Anderson3
German Carmona Alvarez7
Thomas Everist7
Karen B. Fagg7
James H. Gemmel4

Dennis W. Johnson5
Patricia L. Moss7

Dale S. Rosenthal6

Edward A. Ryan

David M. Sparby

Chenxi Wang

Fees Earned or
Paid in Cash
($)

18,333

45,833

52,083

110,000

235,000

52,083

118,750

125,000

130,000

110,000

Stock
Awards
($)1

25,000

—

150,000

175,000

—

150,000

All Other
Compensation
($)2

5,043

3,643

103

5,103

3,043

103

5,103

2,103

Total
($)

43,342

45,876

50,876

55,726

260,103

415,103

55,126

268,853

275,103

285,103

262,103

1 Directors receive an annual stock award with a value of $150,000, except the non-executive chair who receives a stock award with a value of

$175,000, 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 awards 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 the
closing stock price on the grant date of November 15, 2023, which was $18.73 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.

Mr. Anderson was appointed to the board on November 16, 2023. The amounts reflected above are prorated for his service during 2023.

4 Pursuant to the Cooperation Agreement with Corvex Management LP, Mr. Gemmel was appointed as a non-voting board observer on January 24,

2023 and was subsequently appointed to the board on May 9, 2023. Mr. Gemmel received compensation for his service associated with the board
for all of 2023.

5 Mr. Johnson receives no additional compensation as chair of the compensation committee.

6 Ms. Rosenthal became chair of the Environment & Sustainability Committee effective June 1, 2023. The amounts reflected above include a

prorated additional cash retainer for her service as a committee chair during 2023.

7 Messrs. Carmona Alvarez and Everist and Mss. Fagg and Moss served on the board through May 31, 2023 and then became members of the Knife

River board of directors effective upon the completion of the separation on June 1, 2023. The amounts reflected above are prorated for their
service during 2023.

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 up to four charities to receive donations from the company, depending on the amount
of the director’s contribution 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.

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.

41 MDU Resources Group, Inc. Proxy Statement

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 directors’ stock ownership, see the section entitled “Security Ownership.”

MDU Resources Group, Inc. Proxy Statement 42

Proxy Statement

SECURITY OWNERSHIP

Security Ownership Table

The table below sets forth the number of shares of our common stock that each director, each director nominee, each named executive
officer, and all directors and executive officers as a group owned beneficially as of February 29, 2024. Unless otherwise indicated, each
person has sole investment and voting power (or share such power with his or her spouse) of the shares noted.

Name1

Darrel T. Anderson

James H. Gemmel

David L. Goodin

Douglas W. Jaeger

Dennis W. Johnson

Anne M. Jones

Nicole A. Kivisto

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

1,334

8,008

409,822 2

—

140,013 3

45,231 2

120,520 2,4

16,124

44,727

43,463

138,484 2

81,639 2

25,513
1,210,930 2,5

* Less than one percent of the class. Percent of class is calculated based on 203,888,237 outstanding shares as of February 29, 2024.

The table includes the ownership of all current directors, director nominees, 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 Mr. Johnson disclaims all beneficial ownership of the 163 shares owned by his spouse.
4 The total includes 531 shares owned by Ms. Kivisto’s spouse.

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 (LTIP) and its Executive Incentive Compensation Plan (EICP). 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.

43 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

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.

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.

50 Hudson Yards

New York, NY 10001

Amount and Nature
of Beneficial Ownership

20,809,666 1

Percent
of Class

10.22%

18,989,946 2

9.30%

1 Based solely on the Schedule 13G, Amendment No. 12, filed on February 13, 2024, The Vanguard Group reported sole dispositive
power with respect to 20,531,409 shares, shared dispositive power with respect to 278,257 shares, and shared voting power with
respect to 94,035 shares.

2 Based solely on the Schedule 13G, Amendment No. 1, filed on January 24, 2024, BlackRock, Inc. reported sole voting power with

respect to 18,360,955 shares and sole dispositive power with respect to 18,989,946 shares as the parent holding company or control
person of BlackRock Life Limited; BlackRock Advisors, LLC; Aperio Group, 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 Investment Management (Australia)
Limited; BlackRock Advisors (UK) Limited; and BlackRock Fund Managers Ltd.

MDU Resources Group, Inc. Proxy Statement 44

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 is built on a foundation of these guiding principles:

• 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, and earnings before interest, taxes, depreciation, and amortization (EBITDA); and

• we align executive compensation with the interests of our stockholders by awarding the largest component of executive compensation in

the form of stock awards where the value of the award is tied to the performance of our stock.

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 2023. Accordingly,
the following resolution is submitted for stockholder vote at the 2024 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. The board of directors has adopted a policy to hold this advisory vote on executive compensation annually.
Unless the board of directors modifies this policy, the next advisory vote will be held at our 2025 annual meeting of stockholders.

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.

45 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

INFORMATION CONCERNING EXECUTIVE OFFICERS

Information concerning the executive officers, including their ages as of December 31, 2023, present corporate positions, and business
experience during the past five years, is as follows:

Name

Nicole A. Kivisto

Rob L. Johnson

Anne M. Jones

Age

Margaret (Peggy) A. Link

Paul R. Sanderson

Garret Senger

Stephanie A. Sievert

Jeffrey S. Thiede

Jason L. Vollmer

Present Corporate Position and Business Experience

Ms. Kivisto was elected president and chief executive officer of the company and a director
effective January 6, 2024. For more information about Ms. Kivisto, see the section entitled
“Item 1. Election of Directors.”

Mr. Johnson was elected to president of WBI Energy, Inc. effective June 1, 2023. Prior to that,
he was vice president- commercial effective October 5, 2015 and vice president - market
services effective September 30, 2013 for WBI Energy, Inc.

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
effective January 1, 2016, 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. 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. Sanderson was elected vice president, chief legal officer and secretary of the company
June 1, 2023. Prior to that, Mr. Sanderson was a partner of a private law firm since 2008,
primarily focused on regulatory matters for public utilities and civil litigation.

Mr. Senger was elected to chief utilities officer of Montana-Dakota Utilities Co., Cascade
Natural Gas Corporation, and Intermountain Gas Company effective January 6, 2024. Prior to
that, he was executive vice president - regulatory affairs, customer service and administration
effective June 1, 2018, executive vice president – regulatory affairs, customer service and gas
supply effective March 7, 2016, and executive vice president - regulatory affairs and chief
accounting officer effective January 1, 2015. He also served as vice president - regulatory
affairs and chief accounting officer effective January 1, 2012, and controller effective
January 1, 2007 of Montana-Dakota Utilities Co and Great Plains Natural Gas Co.

Ms. Sievert 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. 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 and treasurer effective
June 1, 2023. Prior to that, he was vice president and chief financial officer from
November 23, 2020 to May 31, 2023; 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.

On November 2, 2023, the company announced its intention to separate its construction services business from the company. The
separation is expected to be effected as a tax-free spinoff to the company’s stockholders. If the spin-off transaction is completed, the
company expects some officers will transfer to the new construction services company, in which case they will resign from the company at
the time of the spinoff.

MDU Resources Group, Inc. Proxy Statement 46

Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Discussion and Analysis describes how our named executive officers were compensated for 2023 and how their 2023
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 2023 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 2023 were:

David L. Goodin1

President and Chief Executive Officer (CEO)

Jason L. Vollmer

Vice President, Chief Financial Officer (CFO) and Treasurer

Jeffrey S. Thiede
Nicole A. Kivisto1

President and Chief Executive Officer - Construction Services Segment

President and Chief Executive Officer - Electric and Natural Gas Distribution Segments

Anne M. Jones

Vice President and Chief Human Resources Officer (CHRO)

1 Mr. Goodin retired as President and Chief Executive Officer effective January 5, 2024, and Ms. Kivisto was appointed President and Chief Executive Officer
effective January 6, 2024.

Executive Summary

Events of 2023

The company produced strong financial results in 2023 even in the midst of significant change to the business with the completion of the
spinoff of its construction materials and contracting segment Knife River in May 2023. Earnings from continuing operations for 2023 were
$480.4 million compared to $250.8 million for 2022 and $242.5 million for 2021. The 2023 earnings from continuing operations
includes a gain of $186.6 million on the tax-free exchange of the retained shares of Knife River.

Earnings from continuing operations for 2023, 2022 and 2021 reflect results of our remaining business segments absent Knife River results which are reported as
discontinued operations.

As mentioned above, we successfully completed the spinoff of Knife River, our construction materials and contracting segment in May
2023. Knife River’s common stock began trading on the NYSE on June 1, 2023 under the symbol “KNF”. As a result of the Knife River
spinoff, our stockholders received one share of Knife River stock for every four shares of MDU Resources stock they owned. From an
executive compensation standpoint, outstanding equity awards were converted into shares of the company the executive was employed with

47 MDU Resources Group, Inc. Proxy Statement

Earnings from Continuing Operations$480.4$250.8$242.5202320222021Earnings $0.0$200.0$400.0$600.0Proxy Statement

after the Knife River spinoff. Executives transferring to Knife River received converted Knife River equity awards while executives staying
with MDU Resources received converted MDU Resources equity awards. See the “Long-Term Incentives” section within this “Compensation
Discussion and Analysis” for further details on the conversion of the named executive officers’ equity awards.

In addition to the Knife River spinoff, on November 2, 2023, the board of directors approved the plan to spin off the company’s
construction services business.

During this period of significant change in our business, the compensation committee recognized certain compensation practices
traditionally used in our executive compensation programs would be difficult to use for 2023 with the spinoff of Knife River as well as in
2024 with the contemplated spinoff of our construction services business. As a result the compensation committee made the following
temporary modifications to our executive compensation program:

Compensation Area

Traditional Program

Modified Program

Annual Incentive

Primary use of financial performance measures

Use of earnings per share as a shared performance measure for
executives, representing 20% and 100% of the incentive for a
business segment executive and corporate executive, respectively.

Long-Term Incentive

Use of performance share awards as a significant portion of our
long-term incentive program.

Introduction of strategic initiatives as performance
measures to reward executives for their efforts toward the
successful spinoff of Knife River and strategic review of
the construction services business to maximize its value
in 2023.

Likewise, with the contemplated spinoff of the
construction services segment in 2024, strategic
initiatives as well as financial performance will be used
in the annual incentive program.

Use of tailored performance measures for each business
segment executive to focus on performance and the
completion of strategic initiatives associated with their
line of business and a combination of business segment
earnings and strategic initiatives for corporate executives
to motivate our corporate executives to assist in the
success and performance of all lines of business.

Exclusive use of time-vesting restricted stock units to
promote retention of executives and due to the challenge
of setting 3-year financial performance goals during this
period of transformational change.

Pay for Performance
While in the midst of this significant strategic and structural change to our business, the compensation committee continued in 2023 to
focus its compensation decisions to ensure our named executive officers’ interests are aligned with those of our stockholders and the
performance of the company. Executive compensation combines a reliable base salary with an annual incentive based on the achievement of
company performance and long-term incentive in the form of equity to further align our named executive officers’ interests with those of our
stockholders. The following charts show the 2023 pay mix for the CEO and average 2023 pay of the other named executive officers,
including base salary and the annual and long-term incentives at target.

MDU Resources Group, Inc. Proxy Statement 48

Proxy Statement

Annual Base Salary
We provide our named 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 named executive officers 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 named executive officer’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
We linked our 2023 annual cash incentive awards for our named executive officers to performance by rewarding achievement of financial
and strategic performance measures thereby ensuring our named executive officers are focused and accountable for our success and
profitability. Each named executive officer was assigned a target annual incentive award based on a percentage of the named executive
officer’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 named executive officer’s performance measures.

Sixty percent (60%) of the annual cash incentive award for corporate executives (including our CEO, CFO and CHRO) was based on the
combined business segment earnings as adjusted and as defined and described under the “Annual Cash Incentives” section in this
Compensation Discussion and Analysis. The remaining forty percent (40%) was based on the achievement of two equally weighted strategic
initiatives involving the successful spinoff of Knife River and the strategic review of the construction services business to maximize its value.
This incentivizes the corporate executives to assist the business segments in their success and the focus on strategic initiatives while further
linking executive pay with the performance of the company.

One hundred percent of the annual cash incentive award for the president and CEO of our electric and natural gas delivery businesses was
based on business segment earnings while 80% of the annual incentive award for our construction services president and CEO was based on
business segment earnings before interest, taxes, depreciation and amortization (EBITDA) and 20% on the achievement of the strategic
review to maximize the value of the construction services business. Business segment earnings and EBITDA are adjusted as described under
the “Annual Cash Incentives” section in this Compensation Discussion and Analysis. These measures incentivize our business segment
executives to focus on the success and performance of their individual business segments.

As shown in the following chart, the percentage payout of the annual incentive target realized by our CEO compared to earnings from
continuing operations for the last three years demonstrates the alignment between our financial performance and realized annual cash
incentive compensation.

49 MDU Resources Group, Inc. Proxy Statement

Earnings from continuing operations excludes the results of Knife River for all years presented. As of the Knife River spinoff, it is presented as
discontinued operations.

In addition, the compensation committee continued to utilize the diversity, equity and inclusion (DEI) modifier as part of the 2023 annual
cash incentive award program for named executive officers. The DEI modifier is based upon the company’s achievement of certain initiatives
to attract, retain, and develop a diverse and inclusive workforce. It includes a focus on representation of diverse employees in leadership
succession plans, increased outreach efforts to attract diverse candidates, implementation of human resources information systems at all
companies and implementing enhanced diversity, equity, and inclusion training. The 2023 DEI modifier provides executives with the
opportunity to attain up to an additional 5% of their annual incentive target based on the achievement of the DEI initiatives as determined
by the compensation committee. The compensation committee may also deduct up to 5% of the named executive officers’ annual incentives
target if the compensation committee determines insufficient progress is made toward achieving the DEI initiatives.

See the “Annual Cash Incentives” section within this Compensation Discussion and Analysis for further details on our company’s annual
cash incentive program.

MDU Resources Group, Inc. Proxy Statement 50

% of Target PaidEarnings from continuing operations (millions)CEOAnnual Incentive Payout56.1%56.7%179.5%CEO % of Target PaidEarnings from continuing operations2021202220230%100%200%$0$100$200$300$400$500Proxy Statement

Long-Term Equity-Based Incentive Awards
In February 2023, due to the then-pending Knife River spinoff and the challenge in selecting performance measures that would be
measurable over the full vesting period, the compensation committee and the board approved grants of time-vesting restricted stock units
which are eligible to vest into company stock, plus dividend equivalents, at the end of 2025 as long as the named executive officer remains
continuously employed with the company. The restricted stock units serve to enhance alignment of the named executive officers with
stockholders and enhance retention of executive talent.

The long-term incentive originally granted for the 2021-2023 period by the compensation committee and approved by the board consisted
of 75% performance shares and 25% time-vesting restricted stock units. Performance measures associated with the 2021-2023
performance share award included growth in earnings from continuing operations and total stockholder return (TSR) relative to our
stockholder return performance peer group. In May 2023, due to the pending spinoff of Knife River, the compensation committee decided
to split the 2021- 2023 performance shares award with two-thirds of the award based on performance results for 24 months of the 36-
month performance period ended December 31, 2022 and one-third of the award, representing fiscal year 2023, deemed to be achieved at
target. The payout of the performance share awards was determined as follows:

2021-2023 Performance Share Awards

Relative TSR

January 1, 2021 to December 31, 2022

51st Percentile

104% payout Achieved

Earnings Growth

January 1, 2021 to December 31, 2022

-1.3% CAGR

0% payout Achieved

50%

weighting

50%

weighting

= 52%

achieved

x 2/3

= 34.7%

Performance
Factor
Achieved =
68.0%

Target Results for 2023

= 100%

x 1/3

= 33.3%

achieved

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 named executive officers’ compensation dependent on the achievement of robust performance measures set in
advance by the compensation committee, we believe there is substantial alignment between executive pay and the company’s performance.

Stockholder Advisory Vote (“Say on Pay”)
At our 2023 annual meeting of stockholders, 97% of the votes cast on the “Say on Pay” proposal approved the compensation of our named
executive officers. The compensation committee viewed the 2023 vote as an expression of the stockholders’ general satisfaction with the
company’s executive compensation programs for 2022. The compensation committee reviewed the vote on “Say on Pay” as well as market
data provided by its compensation consultants in establishing the 2023 compensation program.

2023 Compensation Framework

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 program for executive officers are to:

51 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

• recruit, motivate, reward, and retain high performing executive talent required to create superior stockholder 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 including 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.

The above executive compensation objectives are directly linked to our business strategy to ensure officers are focused on elements that
drive our business success and create stockholder value.

Compensation Decision Process for 2023
The key activities and decisions regarding executive compensation made by the compensation committee during the 2023 included:

Meeting

Compensation Decisions

August 2022

Receive Market Analysis Report on Executive Compensation prepared by Meridian.

Approve 2023 Salary Grade Structure

October 2022

Receive Meridian reports on the Treatment of Equity Awards in Connection with a Spinoff and Equity
Conversion Methodology

November 2022

Approve Base Salary and Target Incentive Compensation for 2023

February 2023

May 2023

February 2024

Approve 2023 EICP Performance Measures

Approve Grant of 2023-2025 Time-Vesting Restricted Stock Units

Approve Treatment of Outstanding LTIP Awards including Certification of Performance Results for
2021-2023 and 2022-2024 Performance Share Awards and Conversion method associated with the
Knife River Spinoff

Approve Results and Payment of 2023 annual cash incentives

Approve Payment of the 2021-2023 Time-Vesting Restricted Stock Units and Dividend Equivalents

Components of Compensation
Our executive compensation program is designed to promote sustained long-term profitability and create stockholder value. The components
of our named executive officers’ compensation are selected to drive financial and operational results as well as align the named executive
officers’ interests with those of our stockholders. Pay components and performance measures are considered by the compensation
committee as fundamental measures of successful company performance and long-term value creation. The components of our 2023
executive compensation include:

MDU Resources Group, Inc. Proxy Statement 52

Proxy Statement

Component

Purpose

How Determined

How it Links to Performance

Base Salary

Provides sufficient, regularly paid
income to attract and retain
executives with the knowledge, skills,
and abilities necessary to
successfully execute their job
responsibilities.

Annual Cash
Incentive

Provides an opportunity to earn
annual cash incentive compensation
based on the achievement of
financial, strategic and operating
results important to the success of
the company.

Time-Vesting
Restricted Stock
Units

Provides an opportunity to earn long-
term equity compensation via
continued service 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, strategic and DEI goals
aimed to drive the success of the
company and the individual
businesses.

Fosters continued leadership in the
company to achieve company
objectives through retention of key
executives as well as aligning the
named executive officer’s interests
with those of stockholders in
increasing long-term stockholder
value.

Base salaries are recommended by the
CEO for executives other than the CEO
position to the compensation committee
using analysis provided by the
independent compensation consultant to
target compensation within range of the
50th percentile using peer company and
salary survey data. The compensation
committee determines the base salary of
the CEO based on input from the
independent compensation consultant.

The annual cash incentive target is a
percentage of base salary for the given
executive position established by the
compensation committee. Actual payment
of the incentive is determined based on
the achievement of performance measures
and goals approved by the compensation
committee.

For 2023, time-vesting restricted stock
units represent 100% of a named
executive officer’s long-term incentive
award. The compensation committee
chose the use of time-vesting restricted
stock units to incentivize named executive
officers to provide continued leadership
through the Knife River spinoff and the
strategic review of the construction
services business. The CEO recommends
the target award amount for executives
other than the CEO position to the
compensation committee based on
analysis provided by the independent
compensation consultant. The
compensation committee determines the
target award for the CEO after
consideration of input by the independent
compensation consultant. Vesting of the
award occurs at the end of a three-year
period as long as the executive remains
employed with the company through the
vesting period.

Allocation of Total Target Compensation for 2023
Total target compensation consists of base salary plus target annual and long-term incentive compensation. Incentive compensation, which
consists of annual cash incentive and long-term equity awards vesting after three years, 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 future stock price performance;

• our named executive officers are in positions of authority to drive results, and therefore bear high levels of responsibility for our corporate

performance;

• variable compensation helps ensure focus on goals that are aligned with overall company strategy; and

• annual cash incentive compensation is at risk and dependent upon company performance and the satisfaction of performance objectives.

53 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

The compensation committee generally allocates a higher percentage of total target compensation to the long-term incentive than to the
target annual cash incentive for our higher level executives because they are in a better position to influence the company’s 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 named executive officers. As a result, the
compensation committee believes the named 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
TSR performance periodically to assess their ongoing relevance and credibility.

Compensation Benchmarking Peer Group

The compensation committee’s independent compensation consultant, Meridian, aids in the selection of appropriate peer companies for our
compensation benchmarking peer group by evaluating potential peer companies in the construction and engineering, utility and other
related industries which are similar in size in terms of revenues and market capitalization. Meridian then uses this peer group along with
other market survey information to evaluate and make recommendations regarding executive compensation. For the evaluation of 2023
executive compensation for our CEO and CFO performed in August 2022, the peer group used was unchanged from the prior year and
consisted of the following companies:

2023 Compensation Peer Companies for CEO and CFO Positions

Alliant Energy Corporation

Evergy, Inc.

Pinnacle West Capital Corporation

Ameren Corporation

Granite Construction Incorporated

Portland General Electric Company

Atmos Energy Corporation

KBR, Inc.

Quanta Services, Inc.

Black Hills Corporation

Martin Marietta Materials, Inc.

Southwest Gas Holdings, Inc.

CMS Energy Corporation

MasTec, Inc.

Dycom Industries, Inc.

EMCOR Group, Inc.

MYR Group Inc.

NiSource Inc.

Summit Materials, Inc.

Vulcan Materials Company

WEC Energy Group, Inc.

For review of compensation of all other named executive officer positions, the independent compensation consultant used compensation
data from additional companies in Willis Towers Watson’s 2022 General Industry Executive Compensation Survey which included the
following companies:

Companies used in 2023 Compensation Analysis for non-CEO and CFO Positions

Alcoa Corporation

Crown Holdings, Inc.

Pinnacle West Capital Corporation

Allegheny Technologies Incorporated

Eastman Chemical Company

Portland General Electric Company

Alliant Energy Corporation

Ameren Corporation

Atmos Energy Corporation

Avery Dennison Corporation

Avient Corporation

Edison International

EMCOR Group, Inc.

Entergy Corporation

Evergy Inc.

Eversource Energy

PPL Corporation

Public Service Enterprise Group Incorporated

Quanta Services Inc.

Scotts Miracle-Gro Company

Sealed Air Corporation

Axalta Coating Systems LTD.

Graphic Packaging Holding Company

Sonoco Products Company

Ball Corporation

Berry Global Group, Inc.

Black Hills Corporation

Cabot Corporation

Celanese Corporation

CenterPoint Energy, Inc.

CF Industries Holdings, Inc.

The Chemours Company

CMS Energy Corporation

H.B. Fuller Company

KBR, Inc.

Kinross Gold Corporation

Martin Marietta Materials, Inc.

The Mosaic Company

Newmont Corporation

NiSource Inc.

OGE Energy Corp.

ONE Gas, Inc.

Southwest Gas Holdings, Inc.

Spire Inc.

UGI Corporation

Valvoline Inc.

Vulcan Materials Company

WEC Energy Group, Inc.

Westlake Chemical Corporation

Worthington Industries, Inc.

Xcel Energy Inc.

MDU Resources Group, Inc. Proxy Statement 54

Proxy Statement

2023 Compensation for Our Named Executive Officers

2023 Base Salary and Incentive Targets
At its November 2022 meeting, the compensation committee approved the 2023 base salaries as well as the target annual and long-term
incentive compensation for the named executive officers. At its February 2023 meeting, the compensation committee approved the annual
cash incentive performance measures and goals for our named executive officers. In determining base salaries, target annual cash
incentives, long-term equity incentives, and total target 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 2023 base salary, target annual cash incentive, long-term equity incentive, and total
target compensation:

David L. Goodin

Base Salary

Target Annual Cash Incentive Opportunity

Long-Term Equity Incentive - Restricted Stock Units

Total Target Compensation

2023
($)

Compensation Component
as a % of Base Salary

1,085,000

1,356,250

3,200,000

5,641,250

125%

295%

The compensation committee considered information provided in Meridian’s August 2022 compensation
study showing Mr. Goodin's base salary, total cash compensation, and long-term incentives were below the
median of the compensation peer group, as well as his experience and the company’s performance. Based
in part on Meridian’s recommendation to move Mr. Goodin’s compensation closer to the market median, the
compensation committee increased Mr. Goodin’s base salary by 3.9% and maintained his 2023 annual
incentive target at 125% of his base salary. The compensation committee maintained Mr. Goodin’s long-
term incentive award at $3,200,000, which is 295% of his base salary and more closely aligns his long-
term incentive with the market median for his position.

Jason L. Vollmer

Base Salary

Target Annual Cash Incentive Opportunity

Long-Term Equity Incentive - Restricted Stock Units

Total Target Compensation

2023
($)

565,000

423,750

960,500

1,949,250

Compensation Component
as a % of Base Salary

75%

170%

The compensation committee considered information provided in Meridian’s August 2022 compensation
study showing Mr. Vollmer’s base salary was below the market median based on peer group and
compensation survey data as well as his accomplishments and the company’s performance. To move Mr.
Vollmer closer to the market median, the CEO recommended and the compensation committee approved a
base salary increase of 6.6% for Mr. Vollmer in 2023. The compensation committee maintained Mr.
Vollmer’s target annual cash incentive opportunity at 75% of base salary and increased his long-term
incentive award from 160% to 170% of his base salary to more closely align with the market median for his
position.

55 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Jeffrey S. Thiede

Base Salary

Target Annual Cash Incentive Opportunity

Long-Term Equity Incentive - Restricted Stock Units

Total Target Compensation

2023
($)

550,000

412,500

935,000

1,897,500

Compensation Component
as a % of Base Salary

75%

170%

The compensation committee considered information provided in Meridian’s August 2022 compensation
study as well as the the performance of the construction services segment in their review of the
recommendation made by the CEO concerning Mr. Thiede’s compensation. Mr. Thiede received a 3.8%
increase in base salary for 2023. The compensation committee maintained Mr. Thiede’s target annual cash
incentive opportunity at 75% of his base salary and increased his long-term incentive award from 160% to
170% of his base salary to more closely align with the market median for his position.

Nicole A. Kivisto

Base Salary

Target Annual Cash Incentive Opportunity

Long-Term Equity Incentive - Restricted Stock Units

Total Target Compensation

2023
($)

550,000

412,500

935,000

1,897,500

Compensation Component
as a % of Base Salary

75%

170%

The compensation committee considered information provided in Meridian’s August 2022 compensation
study as well as the performance of the electric and natural gas distribution segment in their review of the
recommendation made by the CEO concerning Ms. Kivisto’s compensation. Ms. Kivisto received a 3.8%
increase in her base salary for 2023. The compensation committee maintained Ms. Kivisto’s target annual
cash incentive opportunity at 75% of her base salary and increased her long-term incentive award from
160% to 170% of her base salary to more closely align with the market median for her position.

Anne M. Jones

Base Salary

Target Annual Cash Incentive Opportunity

Long-Term Equity Incentive - Restricted Stock Units

Total Target Compensation

2023
($)

405,000

202,500

324,000

931,500

Compensation Component
as a % of Base Salary

50%

80%

The compensation committee considered information provided in Meridian’s August 2022 compensation
study as well as Ms. Jones’ experience and accomplishments in their review of the recommendation made by
the CEO concerning Ms. Jones’s compensation. Ms. Jones received a base salary increase of 5.2% for 2023.
The compensation committee maintained her target annual cash incentive opportunity at 50% of her base
salary and maintained her long-term incentive award at 80% of her base salary to remain closely aligned
with the market median for her position.

MDU Resources Group, Inc. Proxy Statement 56

Proxy Statement

Annual Cash Incentives
In 2023, the compensation committee realized the difficulty in setting a shared earnings per share target as part of the annual cash
incentive program without knowing the timing of the Knife River spinoff. Therefore, they set the annual performance measures based on the
achievement of financial performance as well as performance measures based on strategic initiatives set for 2023. The compensation
committee’s intent was to motivate our business segment executives to focus primarily on the success and performance of their businesses
during this year of change while motivating our corporate executives to assist in the success and performance of all lines of business and to
successfully complete the transformation of the businesses based on the company’s strategic initiatives.

Financial and Strategic Performance Measures - Corporate Executives

Our corporate executives, including the CEO, CFO and CHRO earn their annual cash incentive award based on the financial performance of
the combined business segments plus performance measures associated with the company’s strategic initiatives.

Adjustments to Business Segment Earnings as Approved by the
Compensation Committee for the Following Events:

☐ the effect on earnings from asset sales, dispositions or

retirements.

☐ the effect on earnings from transaction costs incurred for
acquisitions, divestitures, mergers, spin-offs, or other
strategic transactions, including differences in interest
costs from those assumed in the company’s original plan.

☐ the effect on earnings for unanticipated changes and

interpretations of tax law.

☐ the effect on earnings from withdrawal liabilities relating to

multiemployer pension plans.

☐ the effect on earnings of corporate overhead allocation
differences due to the spin-off or strategic review.

☐ the effect on earnings of approved retention agreement
costs which differ from costs included in the company’s
original plan.

The compensation committee selected Business Segment Earnings of each business segment with adjustments for specific situations
approved by the compensation committee as the financial performance measure which represents 60% of the incentive for the corporate
officers. It provides a key measure of success for each business segment and the overall company. Business Segment Earnings equals the
company’s Net Income less earnings from the Other segment and represents the full year of earnings from the electric, natural gas
distribution and construction services businesses plus earnings from Knife River through its separation date.

To determine the payout associated with the financial performance measure for the corporate named executive officers, actual performance
measure results were compared to the target performance measure which resulted in the percent of target performance measure achieved.
Then the percent of target performance measure achieved was translated into a payout percentage of the named executive officer’s target
award opportunity using linear interpolation for results between threshold and target as well as target and maximum.

Achievement of 100% of the financial performance measure results in a payout of 100% of the target award opportunity. Results achieved
below the established threshold result in no payout. The threshold, target and maximum performance levels as well as the associated payout
opportunity are depicted in the following chart:

Measure

Threshold

Target Performance Measure

Maximum

% of Target
Performance
Measure

Incentive Payout
%

% of Target
Performance
Measure

Incentive Payout
%

Business Segment Earnings

85%

25%

$253.6 million

100%

115%

200%

57 MDU Resources Group, Inc. Proxy Statement

Performance Measures for Corporate OfficersBusiness Segment Earnings = 60%Knife River Spinoff = 20%Construction Services Strategic Review = 20%The compensation committee set two additional performance measures for the corporate named executive officers based on the completion
of work associated with the Knife River spinoff and completion of work associated with the strategic review of the construction services
business to optimize its value. Each strategic performance measure represented 20% of the annual cash incentive for the corporate named
executive officers. Determination of the performance measures is based on the following:

Proxy Statement

Work Associated with the Knife River Spinoff

Threshold

Target

Maximum

Work necessary to complete the spinoff is underway

= 25% incentive payout

Completion of the final Form 10 filed with the SEC

= 100% incentive payout

Successful completion of the spinoff

= 200% incentive payout

Work Associated with the Strategic Review of the Construction Services Business to Optimize its Value

Threshold

Work necessary to complete the strategic review is
underway

= 25% incentive payout

Target

Publicly announce the completion of the strategic review

= 100% incentive payout

Maximum

Completion of a transaction

= 200% incentive payout

Financial and Strategic Performance Measures - Construction Services Segment

The compensation committee selected Construction Services EBITDA with adjustments for specific situations approved by the compensation
committee as the financial performance measure representing 80% of the the construction services president and CEO’s annual cash
incentive. Construction Services EBITDA equals the construction services segment earnings plus interest, income taxes, depreciation and
earnings from discontinued operations. It is a financial performance measure common to the construction industry and encourages the focus
on growth by excluding the impact of items such as taxes, interest, depreciation and amortization from the performance result which are
largely out of the named executive officer’s control.

Adjustments to Construction Services EBITDA as Approved by the
Compensation Committee for the Following Events:

☐ the effect on EBITDA from asset sales, dispositions or

retirements.

☐ the effect on EBITDA from transaction costs incurred for
acquisitions, divestitures, mergers, spin-offs, or other
strategic transactions, including differences in interest
costs from those assumed in the company’s original plan.

☐ the effect on EBITDA from withdrawal liabilities relating to

multiemployer pension plans.

☐ the effect on EBITDA of corporate overhead allocation
differences due to the spin-off or strategic review.

☐ the effect on EBITDA of approved retention agreement

costs which differ from costs included in the company’s
original plan.

MDU Resources Group, Inc. Proxy Statement 58

Performance Measures for Construction ServicesConstruction Services EBITDA = 80%Construction Services Strategic Review = 20%Proxy Statement

To determine the payout associated with the financial performance measure for the construction services business, actual performance
measure results were compared to the target performance measure which resulted in the percent of target performance measure achieved.
Then the percent of target performance measure achieved was translated into a payout percentage of the named executive officer’s target
award opportunity using linear interpolations for results between threshold and target as well as target and maximum.

Measure

Threshold

Target Performance Measure

Maximum

% of Target
Performance
Measure

Incentive Payout
%

% of Target
Performance
Measure

Incentive Payout
%

Construction Services EBITDA

65%

25%

$212.2 million

100%

115%

250%

In addition to the financial performance measure, the compensation committee set a performance measure based on the completion of work
associated with the strategic review of the construction services segment to optimize its value which represents 20% of annual cash
incentive for the construction services segment president. Determination of the performance measure is based on the following:

Work Associated with the Strategic Review of the Construction Services Segment to Optimize its Value

Threshold

Target

Maximum

Work necessary to complete the strategic review is underway

= 25% incentive payout

Publicly announce the completion of the strategic review

= 100% incentive payout

Completion of a transaction

= 200% incentive payout

Financial and Strategic Performance Measures - Electric and Natural Gas Distribution Segments

The compensation committee selected Electric and Natural Gas Distribution Earnings with adjustments for specific situations as approved
by the compensation committee as the performance measure representing 100% of the electric and natural gas distribution president and
CEO’s annual cash incentive. The compensation committee selected earnings associated with the electric and natural gas businesses
because regulated utilities are valued based on earnings potential and rate base. The 2023 target of $108.5 million reflects the continued
investment in infrastructure and regulatory recovery from completed and pending rate cases.

Adjustments to Electric & Natural Gas Distribution Earnings as
Approved by the Compensation Committee for the Following Events:

☐ the effect on earnings from asset sales, dispositions or

retirements.

☐ the effect on earnings from transaction costs incurred for
acquisitions, divestitures, mergers, spin-offs, or other
strategic transactions, including differences in interest costs
from those assumed in the company’s original plan.

☐ the effect on earnings from unanticipated changes and

interpretation of tax law.

☐ the effect on earnings of corporate overhead allocation
differences due to the spin-off or strategic review.

☐ the effect on earnings of approved retention agreement costs
which differ from costs included in the company’s original
plan.

59 MDU Resources Group, Inc. Proxy Statement

Performance Measure for Electric & Natural Gas DistributionElectric & Natural Gas Distribution Earnings = 100%Proxy Statement

To determine the payout associated with the financial performance measure, actual performance measure results were compared to the
target performance measure which resulted in the percent of target performance measure achieved. Then the percent of target performance
measures achieved was translated into a payout percentage of the named executive officer’s target award opportunity using linear
interpolations for results between threshold and target as well as target and maximum.

Achievement of 100% of the target performance measure results in a payout of 100% of the target award opportunity. Results achieved
below the established threshold result in no payout. The threshold, target and maximum performance levels as well as the associated payout
opportunity are depicted in the following chart:

Threshold

Target Performance Measure

Maximum

% of Target
Performance
Measure

Incentive Payout
%

% of Target
Performance
Measure

Incentive Payout
%

90%

50%

$108.5 million

100%

110%

200%

Measure

Electric and Natural Gas
Distribution Earnings

DEI Modifier

In 2023, the environmental and sustainability committee again approved and recommended a DEI modifier be included as part of the
named executive officer’s 2023 annual incentive which was then approved by the compensation committee at its February 2023 meeting.
The DEI modifier is a separate performance measure, independent of the achievement of the financial and strategic initiative performance
measures and is based on the compensation committee’s assessment of management’s progress toward the completion of the following DEI
initiatives:

• Continue the formal succession planning process to include the review of the positions of all Section 16 officers, key executives, and

business segment officers and directors to ensure diverse representation in terms of gender, ethnicity, individuals with disabilities and
veteran status and the development of candidates being prepared for these positions.

• Increase outreach activities by 10% over prior year efforts aimed at attracting diverse candidates to positions within our businesses.

• Prepare for the implementation of Human Resources Information Systems (HRIS) at the construction materials and contracting and

construction services segments to enhance the gathering of employee data for the human resources dashboard to track key metrics which
provide insight into the make-up and diversity of our employee population.

• Advance a culture that supports diverse views and backgrounds through training of all employees on fostering a culture of diversity and

inclusion.

The DEI modifier applies equally to all named executive officers and adds or deducts up to 5% of their annual incentive target based on the
compensation committee’s assessment.

MDU Resources Group, Inc. Proxy Statement 60

Proxy Statement

2023 Annual Incentive Results

The 2023 performance measure results, percent of target performance measure achieved based on those results, and the associated payout
percentages reflect the company’s 2023 performance and are presented below:

Performance Measure

Result

Percent of
Performance
Measure
Achieved

Percent
of Award
Opportunity
Payout

MDUR Resources
Corporate Officers

Electric & Natural
Gas Distribution

Construction Services

Weight

Weighted
Payout

Weight

Weighted
Payout

Weight

Weighted
Payout

Business Segment Earnings,
as Adjusted1

Electric & Natural Gas
Distribution Earnings, as
Adjusted1

Construction Services
EBITDA, as Adjusted2

Knife River Spinoff

Construction Services
Strategic Review

$288.2 million

113.6 %

190.9 % 60.0 %

114.5 %

$120.1 million

110.7 %

200.0 %

100.0 %

200.0 %

$223.2 million

105.2 %

152.1 %

80.0 %

121.7 %

Completion of Knife
River Spinoff

Public
Announcement of
completion of the
strategic review

200.0 %

200.0 % 20.0 %

40.0 %

100.0 %

100.0 % 20.0 %

20.0 %

Total Weighted Payout

174.5 %

200.0 %

141.7 %

Reconciliation of Business
Segment Earnings to Net
Income

presented in thousands

Electric & Natural Gas
Distribution Earnings

Pipeline Earnings

Construction Services Earnings

Knife River Earnings

Business Segment Earnings

Other

Net Income

2023 Financial Results

Adjustments Approved
by the Compensation
Committee1

Business Segment
Earnings used for
Incentive Purposes

120,079

46,918

137,230

(18,456)

285,771

128,936

414,707

(1)

123

1,049

1,228

2,399

120,078

47,041

138,279

(17,228)

288,170

1 Adjustments include the effect on earnings from 1) transaction costs incurred for acquisitions, divestitures, mergers,
spinoffs or other strategic transactions including differences in interest costs from those assumed in the company’s original
financial plan and 2) corporate overhead allocation differences due to the spinoff or strategic review.

Reconciliation of Construction
Services Earnings to
Construction Services EBITDA

presented in thousands

2023 Financial Results

Adjustments Approved
by the Compensation
Committee2

Business Segment
Earnings used for
Incentive Purposes

Construction Services Earnings

Interest

Taxes

Depreciation

Discontinued Operations

Construction Services EBITDA

137,230

10,057

46,968

23,148

5,214

222,617

1,049

—

(447)

—

602

138,279

10,057

46,521

23,148

5,214

223,219

2 Adjustments include the effect on earnings from 1) transaction costs incurred for acquisitions, divestitures, mergers,
spinoffs or other strategic transactions including differences in interest costs from those assumed in the company’s original
financial plan, and 2) corporate overhead allocation differences due to the spinoff or strategic review.

61 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

These adjustments resulted in payout percentages of 174.5% instead of 170.7% for the CEO, CFO and CHRO and 141.7% instead of
139.4% for the construction services business president and CEO.

The compensation committee further assessed management’s progress toward completing the performance measures related to the
company’s DEI initiatives, and found:

• The company continued to enhance the succession planning process to include all executive officer and director positions at the corporate

and business unit level along with the identification of candidate diversity in terms of gender, ethnicity, veteran status and disability.

• The company increased its outreach efforts by 95% above prior year with efforts aimed at attracting diverse candidates to positions within

the company.

• The company completed the implementation of HRIS system at all businesses to aid in the consistent tracking of employment metrics

and trends.

• The company completed all training on fostering a culture of diversity and inclusion.

Based on these accomplishments the compensation committee approved a DEI modifier award of 5.0% to each of the named executive
officer’s target annual incentive. The resulting 2023 annual cash incentive compensation rewarded to the named executive officers was:

Name

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Anne M. Jones

Target Annual
Incentive
($)

Payout Percentage on
performance measures
(%)

Annual Incentive Earned

DEI Modifier
(%)

Total payout percentage
(%)

1,356,250

423,750

412,500

202,500

174.5

141.7

200.0

174.5

5.0

179.5

146.7

205.0

179.5

Amount
($)

2,434,469

760,631

605,138

845,625

363,488

Long-Term Incentives
All of our named executive officers participated in the 2023 long-term incentive plan which comprised 56.73% of the CEO’s 2023 total
target compensation and, on average, 47.25% of the other named executive officers’ total target compensation. Stock earned under the
long-term incentive plan (LTIP) is subject to our stock retention requirements.

Effect of the Spinoff on Outstanding Long-Term Equity Awards
Our 2021-2023 and 2022-2024 performance share awards were designed to vest based on the achievement of performance measures,
which as a result of the Knife River spinoff, were no longer correlated to the company’s performance. As a result, the compensation
committee decided to convert the outstanding performance share awards entirely into time-vesting restricted stock unit awards effective with
the Knife River spinoff. The performance factor adjustment formula was applied to the outstanding performance share awards based on the
company’s performance through December 31 2022 and the remaining portion of the outstanding awards assuming target-level
performance. Following the Knife River spinoff, the 2021-2023 and 2022-2024 awards will vest according to their original vesting dates,
subject to the named executive officer’s continued employment with the company.

The following tables show the performance factor adjustment formula for the 2021-2023 and 2022-2024 performance share awards:

MDU Resources Group, Inc. Proxy Statement 62

Proxy Statement

2021-2023 Performance Share Awards

Performance Measure

Weight

Threshold

Target

Maximum

Actual
12/31/22

Relative Total Stockholder Return

50 % 25th Percentile 50th Percentile 75th Percentile

51st Percentile

Earnings Growth

50 %

3.0 %

6.5 %

10.0 %

(1.3) %

Performance Achieved

Achieved

104.0 %

— %

Weighted
Achievement

52.0 %

— %

52.0 %

Portion of Award

Performance Achieved

Performance Factor

Performance shares applicable to the Performance Factor

Performance shares at Target Level Performance

2/3

1/3

Combined Performance Factor for 2021-2023 Performance Shares

2022-2024 Performance Share Awards

Performance Measure

Weight

Threshold

Target

Maximum

52 %

100 %

Actual
12/31/22

Relative Total Stockholder Return

50 % 25th Percentile 50th Percentile 75th Percentile 62nd Percentile

Earnings Growth

50 %

3.0 %

6.5 %

10.0 %

0.8 %

Performance Achieved

34.7 %

33.3 %

68.0 %

Achieved

148.0 %

— %

Weighted
Achievement

74.0 %

— %

74.0 %

Performance shares applicable to the Performance Factor

Performance shares at Target Level Performance

1/3

2/3

74 %

100 %

Combined Performance Factor for 2022-2024 Performance Shares

24.6 %

66.7 %

91.3 %

Portion of Award

Performance Achieved

Performance Factor

After the completion of the Knife River spinoff, the outstanding equity awards, which included the adjusted performance shares and time-
vesting restricted stock units for the 2021-2023 and 2022-2024 vesting periods, were adjusted using the concentration (employer) method
as approved by the compensation committee which adjusts the number of outstanding shares for participants remaining with the company
by the ratio of the pre-spin MDU Resources closing stock price on May 31, 2023 of $29.18 compared to the post-spin MDU Resources
closing stock price on June 1, 2023 of $19.68. This conversion resulted in an incremental increase in fair value for each named executive
officer as reflected in the Summary Compensation Table for 2023 and the Grants of Plan-Based Awards in 2023.

The table below shows the number of shares originally awarded as performance shares (PSA) and time-vesting restricted stock units (RSU)
for our named executive officer’s and the number of time-vesting restricted stock units after the conversion:

Name

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Anne M. Jones

Original Award

Converted Award

Type

Target Shares

Type

2021-2023

2022-2024

2021-2023

2022-2024

2021-2023

2022-2024

2021-2023

2022-2024

2021-2023

2022-2024

75% PSA 25% RSU

102,865

105,021

27,002

27,830

27,966

27,830

27,966

27,830

10,139

10,108

100% RSU

115,914

145,555

30,426

38,571

31,513

38,571

31,513

38,571

11,425

14,007

The converted 2021-2023 award of time-vesting restricted stock units vested on December 31, 2023 and provided the participants with the
following shares and dividend equivalents:

63 MDU Resources Group, Inc. Proxy Statement

Name

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Anne M. Jones

Proxy Statement

Dividend
Equivalents
($)

207,410

54,444

56,388

20,444

Shares
Vested
(#)

115,914

30,426

31,513

11,425

Grant of 2023 Long-Term Equity Incentive Awards
With the anticipated spinoff of Knife River during the second quarter of 2023 and the strategic review of the construction services segment,
it was not practical for the compensation committee to establish three-year performance goals for performance share awards under our LTIP
as it normally would. Instead, in February 2023, the compensation committee granted the 2023-2025 LTIP award in the form of time-
vesting restricted stock units which will vest on December 31, 2025, as long as the named executive officer remains continuously employed
with the company. The purpose was to incentivize the retention of our named executive officers during this period of significant transition
and change and align their interest with those of our stockholders.

The compensation committee determined the number of time-vesting restricted stock units to grant to each named executive officer for
2023 by dividing the named executive officer’s long-term award amount by the average of the closing prices of our stock from January 1
through January 22, 2023, which was $30.42 per share. After the spinoff of Knife River, the granted shares were converted using the pre-
spin MDU Resources closing stock price on May 31, 2023 of $29.18 compared to the post-spin MDU Resources closing stock price on
June 1, 2023 of $19.68. This conversion resulted in an incremental increase in the fair value for each named executive officer as reflected
in the Summary Compensation Table for 2023 and the Grants of Plan-Based Awards in 2023 table.

The number of shares originally granted and converted post Knife River spinoff are shown below:

Base Salary
($)

1,085,000

565,000

550,000

405,000

Long-Term Incentive
of Base Salary
(%)

295

170

Long-Term
Incentive
Target
($)

3,200,000

960,500

935,000

324,000

Original Grant of
Restricted Stock Units
(#)

Converted Grant of
Restricted Stock Units
(#)

105,193

155,972

31,574

30,736

10,650

46,815

45,572

15,791

Name

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Anne M. Jones

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 2023 which are described below:

Plans

Pension Plans

401(k) Retirement Plan

Supplemental Income Security Plan

Company Credit to Deferred Compensation Plan

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede Nicole A. Kivisto

Anne M. Jones

Yes

MDU Resources Group, Inc. Proxy Statement 64

Proxy Statement

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 2023.”

401(k) Retirement Plan
The named executive officers as well as the majority of employees who are at least 18 years of age are eligible to participate in the 401(k)
retirement plan (401(k) plan) and defer annual income up to the Internal Revenue Service (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 additional 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 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 contributions are based on the employee’s age as of December 31, 2009. The contribution is 11.5% for Mr. Goodin and Ms. Jones,
9.0% for Ms. Kivisto, 7.0% for Mr. Vollmer, and 5.0% for Mr. Thiede. These amounts may be reduced in accordance with the provisions of
the 401(k) plan to ensure compliance with IRS limits.

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 Basic SISP benefit is intended to augment the retirement income under the pension plan by providing
participants with additional retirement income and/or death benefits payable for 15 years. In addition, the plan includes a benefit referred
to as Excess SISP which relates to the Internal Revenue Code limitations on retirement benefits provided under the pension plans. 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 2023.”

Deferred Compensation Plan
The company adopted the 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 2023.”

For 2023, in recognition of their achievements and service to the company the compensation committee approved company contributions of
$84,750 to Mr. Vollmer, $100,000 to Mr. Thiede, and $40,500 to Ms. Jones. The contributions awarded to Messrs. Vollmer and Thiede
and Ms. Jones represent 15.0%, 18.2%, and 10.0% of their base salaries, respectively.

Employment and Severance Agreements
For 2023, our named executive officers did not have employment or severance agreements entitling them to specific payments upon
termination of employment or a change in control of the company with the exception of Jeffrey S. Thiede as explained below. The
compensation committee generally considered providing severance benefits on a case-by-case basis. Post-employment or change in control
benefits available to our named executives officers during 2023 are addressed within our incentive and retirement plans. Refer to the
section entitled “Potential Payments upon Termination or Change of Control.”

In connection with the strategic review of the construction services business to optimize its value, in February 2023 the company and
MDU Construction Services Group entered into a retention agreement with Jeffrey S. Thiede, the current president and chief executive
officer of the construction services business, to retain Mr. Thiede through the completion of the review and any resulting transaction
involving the business. The agreement provided for, among other things, continuation of Mr. Thiede’s then-effective base salary, entitlement
to incentive compensation, vesting of company credits to his deferred compensation account, a retention bonus equal to $1,100,000 to be
paid within fifteen (15) days after the closing of any transaction, and accelerated vesting of outstanding equity awards as set forth in the
agreement. The term of the agreement was until the earlier of the closing of any transaction and December 31, 2023. The agreement
expired on December 31, 2023 without payment.

65 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 2023 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 are required within five years of appointment or promotion into an executive level position to beneficially own our common stock
equal to a multiple of their base salary as outlined in the stock ownership policy. Stock owned through our 401(k) plan or by a spouse is
considered in ownership calculations as well as unvested restricted stock units. 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 as of December 31
of the same year. The table shows the named executive officers’ holdings as a multiple of their base salary as of December 31, 2023.

Name

David L. Goodin

Jason L. Vollmer

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:

13.0

5.8

8.0

7.4

4.2

1/1/2018

1/1/2023

1/1/2019

1/1/2020

1/1/2024

Anne M. Jones
3X
1 Includes unvested restricted stock units granted in February 2022 and 2023.

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 named executive officer’s termination of employment. The named executive
officer is also required to retain all vested share awards net of taxes if the named executive officer has not met the stock ownership
requirements under the company’s stock ownership policy for executives.

Incentive Compensation Recovery Policy

The company’s Incentive Compensation Recovery policy, effective as of October 2, 2023, provides for the recovery of certain incentive-
based compensation in the event we are required to prepare an accounting restatement. The recoverable amount is the amount of incentive-
based compensation which exceeded the amount the executive officer would have received if it had been determined based on the restated
financial reporting measure. The recovery of such compensation applies regardless of misconduct or other contribution to the requirement
for a restatement. Incentive-based compensation includes the annual cash incentive compensation, long-term incentive compensation or
any compensation granted, earned or vested based in whole or in part on the company’s attainment of a financial reporting measure. The
policy is intended to comply with Rule 10D-1 of the Securities and Exchange Act of 1934, as amended, and Listing Standard 303A.14
adopted by the NYSE.

Insider Trading Policy
The company’s Insider Trading 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. The policy also prohibits executive
officers from holding company common stock in a margin account or pledging company securities as collateral for a loan unless the
company common stock is explicitly excluded from any margin, pledge or security provisions in the customer agreement.

Preview of 2024 Compensation Changes

In 2024, Meridian, the company’s independent compensation consultant provided a study regarding best practices in terms of change in
control provisions in compensation plans. Based on this information, the company revised its LTIP to remove the automatic accelerated
vesting of equity awards upon a change in control for awards granted after January 1, 2024. The revised plan requires a qualifying
termination of employment following a change in control for accelerated vesting. In connection with the revision to the LTIP, the company
also adopted a change in control severance plan for certain executive officers including the named executive officers which provides for cash
compensation to the named executive officer in the event of a qualifying termination of employment following a change in control.

MDU Resources Group, Inc. Proxy Statement 66

Proxy Statement

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 with
management, as required by Regulation S-K, Item 402(b). 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.

Dennis W. Johnson, Chair

Darrel T. Anderson

Dale S. Rosenthal

Edward A. Ryan

Compensation Policies and Practices as They Relate to Risk Management

We completed an annual risk assessment of our 2023 compensation programs and concluded 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 chief
legal officer, chief human resources officer, and the chief executive officer, 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;

◦ use of independent consultants to assist in establishing pay targets and compensation structure;

◦

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;

◦ a balanced compensation mix of base salary as well as annual and long-term incentives;

◦ use of interpolation for annual and long-term incentive awards to avoid payout cliffs;

◦ compensation committee 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 services business executives;

◦ use of caps on long-term incentive performance share stock grants, when awarded, with a maximum of 200% of target;

◦ ability to clawback incentive payments in the event of a financial restatement;

◦ use of performance shares and/or restricted stock units, rather than stock options or stock appreciation rights, as an equity component

of incentive compensation;

67 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

◦

typically, the use of performance shares for 75% of the long-term incentive award opportunity with relative TSR and earnings growth
performance measures and the use of restricted stock units for 25% of the long-term incentive award opportunity to serve as a
retention tool. In light of the Knife River spinoff and the strategic review of the construction services business, the 2023-2025 award
was exclusively time-vesting restricted stock units to incentivize executives to stay with the company through the end of the strategic
initiatives process;

◦ use of three-year vesting periods for performance shares and restricted stock units to discourage short-term risk-taking;

◦ substantive annual incentive goals measured by business segment EBITDA for all Section 16 officers which are measures important to

stockholders and encourage balanced performance;

◦

inclusion of a DEI modifier tied to the achievement of specific diversity, equity and inclusion initiatives;

◦ use of financial performance metrics that are readily monitored and reviewed;

◦

regular review of the companies in the peer groups to ensure appropriateness and industry match;

◦ stock ownership requirements for board members and executives participating in the LTIP; and

◦ 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.

MDU Resources Group, Inc. Proxy Statement 68

Proxy Statement

EXECUTIVE COMPENSATION TABLES

Summary Compensation Table for 2023

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)

2023 1,085,000

3,359,339

2,434,469

173,094

48,691

7,100,593

Name and
Principal Position
(a)
David L. Goodin4

President and CEO

2022 1,044,000

3,247,775

2021 1,000,000

3,222,639

Jason L. Vollmer

2023

565,000

1,007,320

Vice President, CFO and

2022

530,000

860,649

Treasurer

2021

490,000

845,942

739,935

701,250

760,631

225,383

206,168

Jeffrey S. Thiede

President and CEO of

Construction Services

Segment

2023

550,000

980,883

605,138

2022

530,000

2021

507,500

860,649

876,148

613,343

293,462

33,340

65,571

192,238

5,257,288

221,007

5,210,467

1,966

122,874

2,457,791

—

150,957

1,766,989

122,163

1,664,273

131,524

2,267,545

166,470

2,170,462

171,822

1,848,932

Nicole A. Kivisto4

2023

550,000

980,883

President and CEO of

2022

530,000

860,649

Electric and Natural Gas

2021

507,500

876,148

845,625

266,723

332,666

58,798

1,294

2,645

43,974

2,479,280

78,795

1,737,461

83,272

1,802,231

Distribution Segments

Anne M. Jones5

Vice President and CHRO

2023

405,000

339,977

363,488

34,811

106,666

1,249,942

1 Amounts in this column represent the aggregate grant date fair value of 2023-2025 time-vesting restricted stock unit share awards 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 14 of our audited
financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023. The amounts reported also include the
incremental increase in fair value resulting from the conversion of outstanding unvested restricted stock units and performance shares into
restricted stock units upon the spinoff of Knife River which was determined by comparing the fair value of the outstanding awards before and after
the Knife River spinoff. See the “Long-Term Incentives” section within the “Compensation Discussion and Analysis” for further details on the
company’s long-term incentive program.

Grant Date Fair Value of Stock
Awards Granted in 2023

Incremental Increase in Fair Value of Stock
Awards from the Spin-off Conversions

Name

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Anne M. Jones

($)

3,277,814

983,846

957,734

331,854

($)

81,525

23,474

23,149

8,123

69 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

2 Amounts shown for 2023 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” which were calculated
using the following assumptions:

Assumed Retirement Age

Benefits payable at

Interest Rate

Dataset

Pension Plan

SISP

Excess SISP

At retirement

At age 65 for 15 years

Benefits payable to age 65

4.82 %

Society of Actuaries Pri-2012 Total
Dataset Mortality with Scale MP-2021
(post commencement only)

4.73 %

N/A

4.73 %

Society of Actuaries Pri-2012 Total
Dataset Mortality with Scale MP-2021
(post commencement only)

Please see the “Pension Benefits for 2023” section for further details.

3 All Other Compensation for 2023 is comprised of:

Name

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Anne M. Jones

43,500

33,000

26,400

39,600

43,500

401(k) Plan
($)a

Nonqualified Deferred
Compensation Plan
($)b

Vacation Payout

($)

—

84,750

100,000

—

40,500

20,240

Life Insurance
Premium
($)

Matching Charitable
Contributions
($)

774

626

4,417

4,350

3,600

1,800

Total
($)

48,691

122,874

131,524

43,974

106,666

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 DCP which are approved by the compensation committee and the board of directors. For

further information, see the section entitled “Nonqualified Deferred Compensation for 2023.”

4 Mr. Goodin retired as president and CEO effective January 5, 2024 and Ms. Kivisto succeeded him as president and CEO effective

January 6, 2024.

5 Ms. Jones became a named executive officer for the first time in 2023.

MDU Resources Group, Inc. Proxy Statement 70

Proxy Statement

Grants of Plan-Based Awards in 2023

Estimated Future
Payouts Under Non-Equity
Incentive Plan Awards

Estimated Future
Payouts Under Equity
Incentive Plan Awards

Name
(a)

Grant
Date
(b)

Threshold
($)
(c)

Target
($)
(d)

Maximum
($)
(e)

Threshold
(#)
(f)

Target
(#)
(g)

Maximum
(#)
(h)

David L. Goodin

2/16/2023

6/1/2023

Jason L. Vollmer

2/16/2023

6/1/2023

Jeffrey S. Thiede

2/16/2023

6/1/2023

Nicole A. Kivisto

2/16/2023

6/1/2023

Anne M. Jones

2/16/2023

6/1/2023

339,063

1,356,250

2,780,313

105,938

423,750

868,688

103,125

412,500

1,010,625

206,250

412,500

845,625

50,625

202,500

415,125

1 Annual cash incentive for 2023 granted pursuant to the EICP.

—

All Other
Stock Awards:
Number of
Shares of
Stock or Units
(#)
(i)

Grant Date
Fair Value of
Stock and
Option Awards
($)
(l)

105,193

3,277,814

81,525

31,574

983,846

23,474

30,736

957,734

23,149

30,736

957,734

23,149

10,650

331,854

8,123

2 Time-vesting restricted stock units granted pursuant to the LTIP. Following the spinoff of Knife River, these awards were converted, as follows:
Mr. Goodin 155,972 restricted stock units, Mr. Vollmer 46,815 restricted stock units, Mr. Thiede 45,572 restricted stock units, Ms. Kivisto
45,572 restricted stock units, and Ms. Jones 15,791 restricted stock units. See the “Long-Term Incentives” section within the “Compensation
Discussion and Analysis” for further details on the company’s long-term incentive program.

3 Reflects the incremental increase in fair value resulting from the conversion of outstanding restricted stock units and performance share awards

into restricted stock units upon the spinoff of Knife River. Incremental increase in fair value for each outstanding award is shown below:

2021-2023 Award

2022-2024 Award

2023-2025 Award

Total Incremental Value

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Anne M. Jones

($)

13,331

3,495

3,614

1,301

($)

13,607

3,604

1,295

($)

54,587

16,375

15,931

5,527

($)

81,525

23,474

23,149

8,123

71 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Narrative Discussion Relating to the Summary Compensation Table and Grants of Plan-Based Awards Table

Annual Incentive
All our named executive officers were awarded their annual cash incentives pursuant to the EICP. The compensation committee
recommended the 2023 annual cash incentive award for our named executive officers and the board approved these opportunities at its
meeting on February 16, 2023. The awards 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 2023 performance is reflected in column (g) of the Summary
Compensation Table.

As described in the “Annual Cash Incentives” section of the “Compensation Discussion and Analysis,” payment of annual cash incentive
awards is dependent upon achievement of performance measures; actual payout may range from 0% to 200% of the target except for the
construction services segment which may range from 0% to 240%. The DEI modifier adds or deducts up to 5% of the executives’ annual
incentive target based on the compensation committee’s assessment.

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 2023 annual incentive
plan performance measures and results, see the “Annual Cash Incentives” section in the “Compensation Discussion and Analysis.”

Long-Term Incentive
For 2023, because of the Knife River spinoff, the compensation committee recommended long-term incentive awards for the named
executive officers in the form of time-vesting restricted stock units, and the board approved the awards at its meeting on February 16,
2023. The value of the long-term incentive award is based on the grant date fair value and is included in the amount recorded in column (e)
of the Summary Compensation Table and column (l) of the Grants of Plan-Based Awards Table.

The time-vesting restricted stock units shown in column (i) of the Grants of Plan-Based Awards Table are the original number of units
granted prior to the conversion associated with the Knife River spinoff. For further details on the conversion of outstanding equity awards
and the company’s long-term incentive program, see the “Long-Term Incentives” section within the “Compensation Discussion and
Analysis.” The converted 2023 time-vesting restricted stock units will vest on the original vesting schedule of December 31, 2025, if the
named executive officers remain employed with the company through the vesting date. Settlement of the time-vesting restricted stock units
and payment of dividend equivalents will occur in February 2026.

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 named executive officers
outside of our executive incentive plans as described above. No bonuses were paid to the named executive officers in 2023.

Name

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Anne M. Jones

Salary
($)

1,085,000

565,000

550,000

405,000

Bonus
($)

—

Total
Compensation
($)

Salary and Bonus
as a % of
Total Compensation

7,100,593

2,457,791

2,267,545

2,479,280

1,249,942

15.3%

23.0%

24.3%

22.2%

32.4%

MDU Resources Group, Inc. Proxy Statement 72

Proxy Statement

Outstanding Equity Awards at Fiscal Year-End 2023

Stock Awards

Number of Shares, or
Units That Have Not
Vested
(#)
(g)1

301,527

85,386

84,143

29,798

Market Value of
Shares, or Units
That Have Not
Vested
($)
(h)2

5,970,235

1,690,643

1,666,031

590,000

Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
(#)
(i)

Equity Incentive
Plan Awards:
Market or Payout
Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
($)
(j)

—

Name
(a)

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Anne M. Jones

1 The 2022 awards consisted of 75% performance shares and 25% time-vesting restricted stock units. Due to the Knife River spinoff, the 2022

performance shares were deemed achieved at 91.3% based on performance results of 74% for the period January 1, 2022 through
December 31, 2022 and 100% for the period January 1, 2023 through December 31, 2023. With the performance adjustment made, the
performance share awards were no longer subject to the performance-based vesting conditions but remained subject to the applicable time-vesting
conditions. The 2023 award consisted 100% of time-vesting restricted stock units due to the contemplated Knife River spinoff. Upon completion
of the Knife River spinoff, all outstanding awards were converted based on the pre-spin MDU Resources stock price compared to the post-spin
MDU Resources stock price. See the “Long-Term Incentives” section within the “Compensation Discussion and Analysis” for further details on the
company’s long-term incentive program. Below is the breakdown by year of the outstanding restricted stock unit awards:

Name

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Anne M. Jones

2022 Award

2023 Award

To vest in full on
12/31/24

To vest in full on
12/31/25

(#)

Total

(#)

145,555

155,972 3

301,527

38,571

14,007

46,815

45,572

15,791

85,386

84,143

29,798

2 Value based on the number of restricted stock units reflected in column (g) multiplied by $19.80, the closing stock price of the company’s

common stock on the last trading day of 2023.

3 Mr. Goodin retired on January 5, 2024 and in accordance with the restricted stock unit agreement, his 2023 award will be reduced based on the
number of months employed during the 36-month vesting period. As a result, his award of 155,972 restricted stock units will be reduced to
56,323 restricted stock units which will vest on December 31, 2025.

73 MDU Resources Group, Inc. Proxy Statement

Option Exercises and Stock Vested During 2023

Name
(a)

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Proxy Statement

Stock Awards1

Number of Shares
Acquired on Vesting
(#)
(d)

Value Realized
on Vesting
($)
(e)

191,283

4,982,524

47,007

1,202,477

49,884

1,284,843

49,884

1,284,843

Anne M. Jones
1 Reflects the aggregate number of shares that vested under the 2020 and 2021 LTIP awards. The 2020 LTIP award consists of performance
shares for the performance period ended December 31, 2022 that were settled in shares on February 16, 2023, prior to the spinoff of Knife
River, and those shares are valued at the closing stock price of $30.34 on December 31, 2022 plus dividend equivalents. The 2021 LTIP
consists of restricted stock units, including performance shares that were converted into restricted stock units in connection with the spinoff of
Knife River, that vested on December 31, 2023 and those shares are valued at the closing stock price of $19.80 on December 29, 2023 (the
last market day of the year) plus dividend equivalents. The number of shares and value for each award is shown below:

17,077

432,638

2020 Performance
Share Awards
(#)

Value at Vesting
($)

Dividend Equivalents
($)

2021 Restricted
Stock Units
(#)

Value at Vesting
($)

Dividend Equivalents
($)

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Anne M. Jones

75,369

2,286,695

193,322

115,914

2,295,097

207,410

16,581

18,371

503,068

557,376

5,652

171,482

42,530

47,122

14,497

30,426

31,513

11,425

602,435

623,957

226,215

54,444

56,388

20,444

MDU Resources Group, Inc. Proxy Statement 74

Proxy Statement

Pension Benefits for 2023

Name
(a)

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Anne M. Jones

Plan Name
(b)

Pension
Basic SISP 2

Excess SISP 5

Pension
Basic SISP 4

Excess SISP
Pension 3
Basic SISP 4

Excess SISP

Pension
Basic SISP 2

Excess SISP

Pension
Basic SISP 4

Excess SISP

Number of Years
Credited Service
(#)
(c)1

Present Value of
Accumulated Benefit
($)
(d)6

Payments During
Last Fiscal Year
($)
(e)

—

1,063,746

2,609,192

26,973

20,828

—

211,510

427,433

—

498,183

—

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 Amount presented for the Basic SISP assumes the participant elected to receive the benefit in the form of retirement payments.

3 Mr. Thiede does not participate in the pension plan.

4 Messrs. Vollmer and Thiede and Ms. Jones do not participate in the SISP.

5 Mr. Goodin is the only named executive officer eligible to participate in the Excess SISP.

6 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, 2023, calculated using:

•

a 4.73% discount rate for the Basic SISP and Excess SISP;

a 4.82% discount rate for the pension plan;

the Society of Actuaries Pri-2012 Total Dataset Mortality with Scale MP-2021 (post commencement only);

no recognition of pre-retirement mortality; and

assumed 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 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.

75 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Basic SISP Benefits
Basic SISP is intended to augment the retirement income provided under the pension plans and is 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.

Mr. Goodin and Ms. Kivisto are the only named executive officers eligible for the Basic SISP benefit. The amounts in the Pension Benefits
table represent the present value of the vested Basic SISP benefit as of December 31, 2023, using the monthly retirement benefit shown in
the table below and a discount rate of 4.73%. In the event of death, Mr. Goodin and Ms. Kivisto’s beneficiaries would receive monthly death
benefit payments for 15 years.

Monthly SISP Retirement Payment
($)

Monthly SISP Death Payment
($)

David L. Goodin

Nicole A. Kivisto

23,040

6,572

46,080

13,144

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 which is $812 per month. 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.

Nonqualified Deferred Compensation for 2023

Deferred Annual Incentive Compensation
Executives participating in the EICP 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 2023 was 4.04%. 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 in control, all
amounts deferred would immediately become payable. For purposes of deferred annual incentive compensation, a change in 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 EICP was frozen to new contributions effective January 1, 2021.

MDU Resources Group, Inc. Proxy Statement 76

Proxy Statement

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 or in annual installments over a period of years upon separation from service
with the company. 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 Deferred Compensation Plan, effective January 1, 2021, to replace the option to defer annual incentive payments
available under the EICP and company contributions to participants’ accounts through the Nonqualified Defined Contribution Plan. Under
the 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 deferrals of salary and/or annual incentive and company contributions made during 2023 under the
Deferred Compensation Plan. Aggregate earnings and the balance represent the combined participant earnings and participant balances
under all three nonqualified plans.

Name
(a)

David L. Goodin

Jason L. Vollmer

Jeffrey S. Thiede

Nicole A. Kivisto

Anne M. Jones

Executive
Contributions in
Last FY
($)
(b)1

Registrant
Contributions in
Last FY
($)
(c)2

—

38,954

—

84,750

100,000

—

21,830

40,500

Aggregate
Earnings in
Last FY
($)
(d)

162,398

82,116

185,134

6,302

62,839

Aggregate
Withdrawals/
Distributions
($)
(e)

—

Aggregate
Balance at
Last FYE
($)
(f)

4,101,728

550,229

1,543,359

159,164

470,187

1 These amounts are included in the amount reported in column (c) of the Summary Compensation Table for 2023.

2 The amounts are included in the amounts reported in column (i) of the Summary Compensation Table for 2023.

77 MDU Resources Group, Inc. Proxy Statement

Potential Payments upon Termination or Change in Control

The Potential Payments upon Termination or Change in 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 in control. The scenarios include:

Proxy Statement

•

Voluntary or Not for Cause Termination;

Death;

Disability;

Change in Control with Termination; and

Change in Control without Termination.

For the named executive officers, the information assumes the terminations or the change in control occurred on December 31, 2023.

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 table also does 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 pension or SISP benefits as described in the “Pension Benefits for 2023” Table or
deferred compensation under our EICP, Nonqualified Defined Contribution Plan, or Deferred Compensation Plan. These amounts are shown
and explained in the “Nonqualified Deferred Compensation for 2023” Table.

Compensation
We typically do not have employment or severance agreements with our executives entitling them to specific payments upon termination of
employment or a change in control of the company. The compensation committee generally considers providing severance benefits on a
case-by-case basis. Any post-employment or change in control benefits available to our executives are addressed within our incentive and
retirement plans. Because severance payments are discretionary, no amounts are presented in the tables.

All our named executive officers were granted their 2023 annual incentive award under the EICP, which has no change in 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 named
executive officers or employment termination after age 65. All our scenarios assume a termination or change in control event on
December 31. 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 in control on December 31, 2023.

All named executive officers received their equity share awards under the LTIP, which after the spinoff of Knife River consist entirely of
time-vesting restricted stock units.

For 2023, a change in control (with or without termination), 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.

In the case of a change in control (with or without termination) the outstanding time-vesting restricted stock unit awards would become fully
vested for the named executive officers.

MDU Resources Group, Inc. Proxy Statement 78

Proxy Statement

The restricted stock unit award agreement provides that time-vesting restricted stock units are forfeited if the participant’s employment
terminates for situations other than death, disability or before the participant has reached age 55 with 10 years of service. If a participant’s
employment terminates after reaching age 55 and completing 10 years of service, time-vesting restricted stock units are prorated as follows:

• termination of employment during the first year of the vesting period = time-vesting restricted stock units are forfeited;

• termination of employment during the second year of the vesting period = time-vesting restricted stock units 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 time-vesting restricted stock units are received.

In situations of death or disability, the time-vesting restricted stock units would be prorated based on the number of full months of
employment completed prior to death or disability during the vesting period.

For 2023, our outstanding awards include time-vesting restricted stock units granted in 2021, 2022 and 2023. The time-vesting restricted
stock units granted in 2021 vested on December 31, 2023 pursuant to their terms. In the case of voluntary or not for cause termination on
December 31, 2023, Messrs. Goodin and Thiede and Ms. Jones would forfeit their 2023 time-vesting restricted stock units but vest in their
2022 time-vesting restricted stock units based on a proration of 24 out of 36 months (2/3). Since neither Ms. Kivisto or Mr. Vollmer have
reached age 55, in the case of voluntary or not for cause termination on December 31, 2023, they would forfeit their time-vesting restricted
stock units.

In the case of termination due to death or disability on December 31, 2023, all our named executive officers would vest in 1/3 of the 2023
time-vesting restricted stock units based on 12 out of 36 months of the vesting period and 2/3 of the 2022 time-vesting restricted stock
units based on 24 out of 36 months of the vesting period.

For purposes of calculating the time-vesting restricted stock units value shown in the Potential Payments upon Termination or Change in
Control Table, the number of vesting shares was multiplied by the closing stock price for the last market day of the year, which was $19.80
on December 29, 2023. Dividend equivalents based on the number of vesting shares are also included in the amounts presented.

Benefits

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 as follows:

Age When Disabled

Benefits Payable

Prior to age 60

Ages 60 to 64

Ages 65-67

Age 68 and over

To age 65

60 months

To age 70

24 months

Disability benefits are reduced for amounts paid as retirement benefits which include pension and SISP benefits. The disability payments in
the Potential Payments upon Termination or Change in 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 Mr. Vollmer and Mss. Kivisto and Jones, 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 4.82%. Because
Mr. Goodin’s retirement benefits are greater than the disability benefit, the amount shown is zero. For Mr. Thiede, who does 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 4.73%, which is considered a reasonable rate for purposes of the calculation.

79 MDU Resources Group, Inc. Proxy Statement

Potential Payments upon Termination or Change in 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)
($)

Proxy Statement

David L. Goodin

Compensation:

Restricted Stock Units

Benefits and Perquisites:

Disability Benefits

Total

Jason L. Vollmer

Compensation:

Restricted Stock Units

Benefits and Perquisites:

Disability Benefits

Total

Jeffrey S. Thiede

Compensation:

Restricted Stock Units

Benefits and Perquisites:

Disability Benefits

Total

Nicole A. Kivisto

Compensation:

Restricted Stock Units

Benefits and Perquisites:

Disability Benefits

Total

Anne M. Jones

Compensation:

Restricted Stock Units

Benefits and Perquisites:

Disability Benefits

Total

4,541,509

5,603,292

8,746,358

—

4,541,509

5,603,292

8,746,358

—

1,515,893

2,423,442

—

262,802

—

1,515,893

1,778,695

2,423,442

1,220,666

1,530,899

2,421,524

—

267,749

—

1,220,666

1,530,899

1,798,648

2,421,524

—

1,530,899

2,421,524

—

214,175

—

1,530,899

1,745,073

2,421,524

442,877

550,374

863,478

—

115,193

—

442,877

550,374

665,567

863,478

MDU Resources Group, Inc. Proxy Statement 80

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 in 2023, 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 70% of our employee workforce is employed under union bargained labor contracts which
define compensation and benefits for participants that 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 2023 taxable wage information for all individuals on the company’s payroll records as
of December 31, 2023, excluding Mr. Goodin. 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 IRS on Form W-2
for 2023 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 our natural gas
distribution business with compensation consisting of wages and company 401(k) contributions.

Once identified, we categorized the median employee’s compensation using the same methodology as the compensation components
reported in the Summary Compensation Table. For 2023, the total annual compensation of Mr. Goodin as reported in the Summary
Compensation Table included in this Proxy Statement was $7,100,593, and the total annual compensation of our median employee was
$109,485. Based on this information, the 2023 ratio of annual total compensation of Mr. Goodin to the median employee was 65 to 1.

Pay Versus Performance

As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we
are providing information regarding the Compensation Actually Paid (CAP), as defined by SEC rules, to our named executive officers versus
company financial performance. The CAP amounts shown in the table below do not reflect the actual amount of compensation earned by or
paid to our named executive officers during the applicable year.

Summary
Compensation
Table Total
Compensation for
Principal
Executive Officer
(PEO)2
($)

Year1

Compensation
Actually Paid to
PEO3
($)

Average
Summary
Compensation
Table Total
Compensation for
Non-PEO Named
Executive
Officers4
($)

Average
Compensation
Actually Paid to
Non-PEO Named
Executive
Officers5
($)

Value of initial fixed $100
investment based on:

Total
Stockholder
Return6
($)

Peer Group Total
Stockholder
Return7
($)

Net Income8
(in thousands)
($)

Company
Selected
Measure -
Business
Segment
Earnings9
(in thousands)
($)

2023

7,100,593

4,987,034

2,113,640

1,648,546

110.18

136.68

414,707

288,170

2022

5,257,288

5,644,274

1,901,639

1,998,863

111.98

123.90

367,489

379,149

2021

5,210,467

7,143,972

1,810,584

2,273,834

110.37

128.00

378,131

385,210

2020

6,423,410

5,664,783

2,042,921

1,901,274

91.69

101.04

390,205

394,570

1 Our PEO for years 2020 through 2023 was David L. Goodin. Our non-PEO named executive officers were as follows:

• 2020 to 2022 - Jason L. Vollmer, David C. Barney, Jeffrey S. Thiede and Nicole A. Kivisto

• 2023 - Jason L. Vollmer, Jeffrey S. Thiede, Nicole A. Kivisto and Anne M. Jones

2 Represents Mr. Goodin’s total compensation as shown in the Summary Compensation Table (SCT) for the respective years.

3 To arrive at 2023 CAP for Mr. Goodin, total compensation as reported in the 2023 SCT was adjusted for the following:

81 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

SCT Total Compensation for the PEO

less: Reported Value of Stock Awards in the SCTa

plus: Stock Award Adjustmentsa,b

less: Change in Actuarial Present Value of Defined Benefit and Pension Plans as
Reported in the SCT

plus: Aggregate Service Cost and Prior Service Costs on Defined Benefit and
Pension Plans

2023

7,100,593

3,359,339

1,418,874

173,094

—

4,987,034
CAP for the PEO
a Equity compensation grant date and year-end fair value for time-vesting awards was determined by

the closing stock price on the date of grant or year-end, as applicable.

b Stock Award Adjustments in determining CAP:

Year-end Fair
Value of Equity
Awards Granted
in the Year that
are Unvested

Year-over-Year
Change in Fair
Value of Equity
Awards Granted
in Prior Years
that are Unvested

Fair Value as of
Vesting Date of
Equity Awards
Granted and
Vested in the
Year

Year

Year-over-Year
Change in Fair
Value of Equity
Award Granted in
Prior Years that
Vested in the
Year

Prior Year-end
Fair Value of
Equity Awards
that Failed to
Meet Vesting
Conditions in the
Year

Value of
Dividends or
Other Earnings
Paid on Equity
Awards not
Otherwise
Reflected in Fair
Value or Total
Compensation

Total Equity
Award
Adjustments

2023

3,088,246

(783,245)

—

(886,127)

—

1,418,874

4 Represents the average total compensation of our non-PEO named executive officers as shown in the SCT for the respective year.

5 To arrive at the Average 2023 CAP for our non-PEO named executive officers, total compensation as reported in the 2023 SCT was adjusted

for the following:

Average of SCT Total Compensation for Non-PEO Named Executive Officers

less: Reported Value of Stock Awards in the SCTa

plus: Stock Award Adjustmentsa,b

less: Change in Actuarial Present Value of Defined Benefit and Pension
Plans as Reported in the SCT

plus: Aggregate Service Cost and Prior Service Costs on Defined Benefit and
Pension Plans

Average CAP for the Non-PEO Named Executive Officers

2,113,640

827,266

386,066

23,894

—

1,648,546

a Equity compensation grant date and year-end fair value for time-vesting awards was determined by the closing stock price on the date of grant or year-

end, as applicable.

b Stock Award Adjustments in determining CAP:

Year-end Fair
Value of Equity
Awards Granted
in the Year that
are Unvested

Year-over-Year
Change in Fair
Value of Equity
Awards Granted
in Prior Years
that are Unvested

Fair Value as of
Vesting Date of
Equity Awards
Granted and
Vested in the
Year

Year

Year-over-Year
Change in Fair
Value of Equity
Award Granted in
Prior Years that
Vested in the
Year

Prior Year-end
Fair Value of
Equity Awards
that Failed to
Meet Vesting
Conditions in the
Year

Value of
Dividends or
Other Earnings
Paid on Equity
Awards not
Otherwise
Reflected in Fair
Value or Total
Compensation

Total Equity
Award
Adjustments

2023

761,063

(174,537)

—

(200,460)

—

386,066

6 Represents value of $100 invested in company stock on December 31, 2019, as of December 31, 2020, December 31, 2021, December 31, 2022 and

December 31, 2023, assuming dividends are reinvested in company stock at the frequency paid.

7 Represents the value of $100 invested in the compensation peer group company stock on December 31, 2019, as of December 31, 2020, December 31,
2021, December 31, 2022, and December 31, 2023, assuming dividends are reinvested in the compensation peer group stock at the frequency paid.
Returns of each peer group company are weighted according to the peer group company’s market capitalization at the beginning of the period. Our
compensation benchmarking peer group companies for 2020, 2021, 2022 and 2023 included:

MDU Resources Group, Inc. Proxy Statement 82

Proxy Statement

2020 and 2021

2022 and 2023*

Alliant Energy

Ameren Corporation

Alliant Energy

Ameren Corporation

Atmos Energy Corporation

Black Hills Corporation

CMS Energy Corporation

Dycom Industries, Inc.

EMCOR Group, Inc.

Evergy, Inc.

Black Hills Corporation

CMS Energy Corporation

Dycom Industries, Inc.

EMCOR Group, Inc.

Evergy, Inc.

Granite Construction Incorporated

Jacobs Engineering Group Inc.

KRB, Inc.

Martin Marietta Materials, Inc.

MasTec, Inc.

NiSource Inc.

MasTec, Inc.

MYR Group, Inc.*

NiSource Inc.

Pinnacle West Capital Corporation

Portland General Electric Company

Quanta Services, Inc.

Southwest Gas Holdings, Inc.

Summit Materials, Inc.

Vulcan Materials Company

WEC Energy Group, Inc.

Summit Materials, Inc.

Vulcan Materials Company

WEC Energy Group, Inc.

Jacobs Engineering Group, Inc. was replaced with MYR Group Inc. in 2022 due to size.

Total stockholder return for the peer group companies were as follows:

12/31/2019

12/31/2020

12/31/2021

12/31/2022

12/31/2023

2020 & 2021
Peer Group

2022 & 2023
Peer Group

100.00 $

101.04 $

128.00 $

124.22 $

136.60

100.00 $

100.01 $

126.85 $

123.90 $

136.68

8 Represents GAAP Net Income reported for the company in 2020, 2021, 2022 and 2023.

9 Business segment earnings represent the earnings generated by our strategic business units lead by our non-corporate executives. The combined earnings of

each of these strategic business units plus results of activities classified as Other and Discontinued Operations reflect net income as reported in our
financial statements as follows:

Electric & Natural Gas Distribution

Pipeline

Construction Services

Construction Materials & Contracting

Business Segment Earnings1

Other

Net Income

2023

2022

2021

120,079

102,248

103,502

46,918

35,288

40,896

2020

99,650

37,012

137,230

124,781

109,402

109,721

(18,456)

116,220

129,755

147,325

285,771

378,537

383,555

393,708

128,936

(11,048)

(5,424)

(3,503)

414,707

367,489

378,131

390,205

1 Business Segment Earnings includes earnings from continuing and discontinued operations associated with each business segment.

Business Segment Earnings

285,771

378,537

383,555

393,708

Adjustments approved by the Compensation Committee for Incentive Purposes

2,399

612

1,655

862

Business Segment Earnings for Incentive Purposes2
2 Business Segment Earnings are adjusted for certain events approved by the compensation committee. Business Segment Earnings for incentive
compensation purposes.

288,170

385,210

379,149

394,570

83 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

2023 Most Important Financial Measures
The financial performance measures identified as the most important measures used by the company to link PEO and non-PEO named
executive officer 2023 CAP to company performance are listed below in unranked order each of which is described in more detail in the
“Compensation Discussion and Analysis”.

Performance Metrics Most Closely Linked to CAP for 2023

Business Segment Earnings

Electric & Natural Gas Distribution Earnings

Construction Services Earnings before income tax, interest, depreciation and amortization (EBITDA)

Strategic Initiatives including work associated with the spinoff of Knife River and the strategic review of the construction services
business to maximize its value.

Descriptions of the Information Presented in the Pay Versus Performance Table
We are providing the following graphics to illustrate the relationship between our PEO CAP and our non-PEO named executive officers’ CAP
as a group and company performance, as set forth and described in and under the “Pay Versus Performance” table, including the company’s
cumulative TSR, net income and Business Segment Earnings. In addition, we are providing a graphic to illustrate the relationship between
the company’s cumulative TSR and our compensation benchmarking peer group’s cumulative TSR.

CAP vs. TSR
Our TSR is a reflection of our stock price and dividends paid over a period of time and is important to stockholders as it measures the
performance of an investment in our company stock in the marketplace. The following chart depicts the PEO and average non-PEO named
executive officer CAP compared to the value of $100 invested in company and peer company stock on December 31, 2019 as of
December 31, 2020, December 31, 2021, December 31, 2022, and December 31, 2023, assuming dividends are reinvested in company
stock at the frequency paid.

MDU Resources Group, Inc. Proxy Statement 84

Compensation Actually Paid(in thousands)Total Stockholder ReturnCompensation Actually Paid vs. Total Stockholder ReturnPEO CAPAverage Non-PEO NEO CAPTSRPeer TSR12/31/2012/31/2112/31/2212/31/23$0$2,500$5,000$7,500$0$50$100$150Proxy Statement

CAP vs. Net Income
The following charts depicts the PEO and average non-PEO named executive officer CAP compared to the company’s net income for 2020,
2021, 2022 and 2023.

CAP vs. Business Segment Earnings
The following charts depicts the PEO and average non-PEO named executive officer CAP compared to the company’s Business Segment
Earnings for 2020, 2021, 2022 and 2023.

85 MDU Resources Group, Inc. Proxy Statement

Compensation Actually Paid(in thousands)Net Income(in millions)Compensation Actually Paid vs. Net IncomePEO CAPAverage Non-PEO NEO CAPNet Income12/31/2012/31/2112/31/2212/31/23$0$2,500$5,000$7,500$0$100$200$300$400$500Compensation Actually Paid(in thousands)Business Segment Earnings (in millions)Compensation Actually Paid vs. Business Segment Earnings PEO CAPAverage Non-PEO NEO CAPBusiness Segment Earnings used for Incentive Purposes12/31/2012/31/2112/31/2212/31/23$0$2,500$5,000$7,500$0$100$200$300$400$500Proxy Statement

AUDIT MATTERS

ITEM 3: RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2024

The audit committee at its February 2024 meeting appointed Deloitte & Touche LLP as our independent registered public accounting firm
for fiscal year 2024. 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 2024, 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, they will be free to do so if
they choose.

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 2024.

Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024 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.

MDU Resources Group, Inc. Proxy Statement 86

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, 2024, is in the best interests of our company and its
stockholders.

In accordance with rules applicable to mandatory partner rotation, Deloitte & Touche LLP’s lead engagement partner for our audit was
changed in 2022. The audit committee oversees the process for, and ultimately approves, the selection of the lead engagement partner.

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 2022 and 2023:

Audit Fees 1
Audit-Related Fees2
Tax Fees

All Other Fees
Total Fees 3

2022

2023

$ 3,160,291

3,080,040

1,319,159

$ 2,150,954

—

$ 4,479,450

5,230,994

Ratio of Tax and All Other Fees to Audit and Audit-Related Fees

0 %

1 Audit fees for 2022 and 2023 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 Fees for Knife River and MDU Construction Services Group audits in connection with the company’s separation of Knife River and intent

to separate MDU Construction Services Group and other filings with the SEC.

3 Total fees reported above include out-of-pocket expenses related to the services provided of $181,026 for 2022 and $419,766 for 2023.

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 2023 and 2022 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 are
required to 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.

87 MDU Resources Group, Inc. Proxy Statement

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, 2023, 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, 2023, for filing with the SEC. The audit committee has appointed Deloitte & Touche LLP as the company’s independent
auditors for 2024. Stockholder ratification of this appointment is included as Item 3 in these proxy materials.

David M. Sparby, Chair

James H. Gemmel

Chenxi Wang

MDU Resources Group, Inc. Proxy Statement 88

Proxy Statement

INFORMATION ABOUT THE ANNUAL MEETING

Who Can Vote

Stockholders of record at the close of business on March 15, 2024, 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 15, 2024,
we had 203,888,237 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 29, 2024, we mailed a Notice Regarding the Availability of Proxy
Materials (Notice) that contains basic information about our 2024 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 2024 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 13, 2024.

* 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

89 MDU Resources Group, Inc. Proxy Statement

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 2024.

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
present in person or represented by
proxy at the annual meeting and
entitled to vote thereon

Same
effect as
votes
against

No effect

3 Ratification of the

Appointment of Deloitte
& Touche LLP as the
Company’s Independent
Registered Public
Accounting Firm for
2024

For,
against,
or abstain

The affirmative vote of a majority of
the shares of common stock
present in person or represented by
proxy at the annual meeting and
entitled to vote thereon

Same
effect as
votes
against

Brokers have
discretion to
vote

Proxy Solicitation

The board of directors is furnishing proxy materials to solicit proxies for use at the Annual Meeting of
Stockholders on May 14, 2024, 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 $9,500 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.

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.

• 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.

MDU Resources Group, Inc. Proxy Statement 90

Proxy Statement

Electronic Delivery
of Proxy Statement
and Annual Report
Documents Cont.

Householding of
Proxy Materials

MDU Resources
Group, Inc.
401(k) Plan

• 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 procedure called “householding,” which has been approved by the SEC, we are
sending only one Notice or Annual Report and one Proxy Statement, as applicable, to eligible stockholders
who share a single address unless we received instructions to the contrary from any stockholder at that
address. This practice is designed to reduce our printing and postage costs. However, if a stockholder of
record wishes to receive a separate Notice or Annual Report and Proxy Statement, as applicable, 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 Notice or Annual Report and Proxy Statement, as applicable, 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 such bank, broker, or other 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 9, 2024.

Annual Meeting
Admission and
Guidelines

Admission: All stockholders as of the record date of March 15, 2024, 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 15, 2024, 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 7, 2024. 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.

91 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

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 2025
Annual Meeting

Stockholder Proposals for Inclusion in Next Year’s Proxy Statement: To be included in the proxy materials for our
2025 annual meeting, a stockholder proposal must be received by the corporate secretary no later than
November 29, 2024, unless the date of the 2025 annual meeting is more than 30 days before or after May 14,
2025, 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
2025 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 30,
2024 and November 29, 2024. In the event that the 2025 annual meeting is more than 30 days before or after
May 14, 2025, 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. 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. In addition, Rule 14a-19 under the
Exchange Act requires additional information be included in director nomination notices, including a statement
that the stockholder intends to solicit the holders of shares representing at least 67% of the voting power of shares
entitled to vote on the election of directors. If any change occurs with respect to such stockholder’s intent to
solicit the holders of shares representing at least 67% of such voting power, such stockholder must notify us
promptly.

Director Nominations and Other Stockholder Proposals Raised From the Floor at the 2025 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 not earlier than the 120th day prior to the first anniversary of the preceding year’s annual
meeting of stockholders and not later than the close of business of the 90th day prior to the first anniversary of the
preceding year’s annual meeting of stockholders. Notice of director nominations or stockholder proposals for our
2025 annual meeting must be received between January 14, 2025 and February 13, 2025, and meet all the
requirements and contain all the information, including the completed questionnaire for director nominations,
provided by our bylaws. Notwithstanding the foregoing, in the event the 2025 annual meeting is scheduled to be
held more than 30 days prior to or after May 14, 2025, then to be timely such notice must be received by the us
no earlier than the 120th day prior to the scheduled date of the 2025 annual meeting and not later than the later
of close of business on the 90th day before the scheduled date of the 2025 annual meeting or the 10th day
following the date on which public disclosure of the scheduled date of the 2025 annual meeting is first made. 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, 2023, 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,

Paul R. Sanderson

Secretary

March 29, 2024

MDU Resources Group, Inc. Proxy Statement 92

Stockholder Information

Annual Meeting
10:30 a.m. CDT May 14, 2024
MDU Resources Group, Inc.
1200 W. Century Ave.
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 and Analyst Contact
Brent L. Miller
Telephone: 866-866-8919 or 701-530-1730
Email: Brent.Miller@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.

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 index. Average daily trading volume in 2023 was 1,311,340
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.

2024 Key Dividend Dates

Ex-Dividend Date

Record Date

Payment Date

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

March 13
June 12
September 11
December 11

April 1
July 1

March 14
June 13
September 12 October 1
December 12

January 1, 2025

Key dividend dates are subject to the discretion of the Board of Directors.

Design: MDU Resources
Printing: Broadridge

Trading Symbol: MDU
www.mdu.com

Street Address
1200 W. Century Ave.
Bismarck, ND 58503

Mailing Address
P.O. Box 5650
Bismarck, ND 58506-5650

701-530-1000
866-760-4852