MDU RESOURCES GROUP INC (Exact Name of Registrant As Specified in Its Charter)
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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, 2020 OR ☐ 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 30-1133956 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 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 Trading symbol(s) Name of each exchange on which registered Common Stock, par value $1.00 per share 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 ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒. State the aggregate market value of the voting common stock held by non-affiliates of the registrant as of June 30, 2020: $4,447,584,104. Indicate the number of shares outstanding of the registrant's common stock, as of February 11, 2021: 200,522,277 shares. DOCUMENTS INCORPORATED BY REFERENCE Relevant portions of the registrant's 2021 Proxy Statement, to be filed no later than 120 days from December 31, 2020, are incorporated by reference in Part III, Items 10, 11, 12, 13 and 14 of this Report. Contents Part I Page Forward-Looking Statements 7 Items 1 and 2 Business and Properties 7 General 7 Electric 10 Natural Gas Distribution 13 Pipeline 15 Construction Materials and Contracting 16 Construction Services 19 Item 1A Risk Factors 20 Item 1B Unresolved Staff Comments 27 Item 3 Legal Proceedings 28 Item 4 Mine Safety Disclosures 28 Part II Item 5 Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29 Item 6 Selected Financial Data 30 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A Quantitative and Qualitative Disclosures About Market Risk 54 Item 8 Financial Statements and Supplementary Data 55 Consolidated Statements of Income 60 Consolidated Statements of Comprehensive Income 61 Consolidated Balance Sheets 62 Consolidated Statements of Equity 63 Consolidated Statements of Cash Flows 64 Notes to Consolidated Financial Statements 65 1. Basis of Presentation 65 2. Significant Accounting Policies 66 3. Revenue from Contracts with Customers 72 4. Business Combinations 75 5. Property, Plant and Equipment 76 6. Regulatory Assets and Liabilities 77 7. Goodwill and Other Intangible Assets 78 8. Fair Value Measurements 79 9. Debt 81 10. Leases 83 11. Asset Retirement Obligations 84 12. Equity 84 13. Stock-Based Compensation 85 14. Accumulated Other Comprehensive Income (Loss) 86 15. Income Taxes 87 16. Cash Flow Information 88 2 MDU Resources Group, Inc. Form 10-K Contents Part II (continued) Page 17. Business Segment Data 89 18. Employee Benefit Plans 92 19. Jointly Owned Facilities 100 20. Regulatory Matters 101 21. Commitments and Contingencies 102 Item 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 108 Item 9A Controls and Procedures 108 Item 9B Other Information 108 Part III Item 10 Directors, Executive Officers and Corporate Governance 109 Item 11 Executive Compensation 109 Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 109 Item 13 Certain Relationships and Related Transactions, and Director Independence 109 Item 14 Principal Accountant Fees and Services 109 Part IV Item 15 Exhibits, Financial Statement Schedules 110 3. Exhibits 114 Item 16 Form 10-K Summary 116 Signatures 117 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 Allowance for funds used during construction Army Corps U.S. Army Corps of Engineers ASC FASB Accounting Standards Codification ASU FASB Accounting Standards Update Audit Committee Audit Committee of the board of directors of the Company Bcf Billion cubic feet Big Stone Station 475-MW coal-fired electric generating facility near Big Stone City, South Dakota (22.7 percent ownership) Brazilian Transmission Lines Company's former investment in companies owning three electric transmission lines in Brazil BSSE 345-kilovolt transmission line from Ellendale, North Dakota, to Big Stone City, South Dakota (50 percent ownership) Btu British thermal unit CARES Act United States Coronavirus Aid, Relief, and Economic Security Act Cascade Cascade Natural Gas Corporation, an indirect wholly owned subsidiary of MDU Energy Capital CDC Centers for Disease Control and Prevention Centennial Centennial Energy Holdings, Inc., a direct wholly owned subsidiary of the Company Centennial Capital Centennial Holdings Capital LLC, a direct wholly owned subsidiary of Centennial Centennial's Consolidated EBITDA Centennial's consolidated net income from continuing operations plus the related interest expense, taxes, depreciation, depletion, amortization of intangibles and any non-cash charge relating to asset impairment for the preceding 12-month period Centennial Resources Centennial Energy Resources LLC, a direct wholly owned subsidiary of Centennial CERCLA Comprehensive Environmental Response, Compensation and Liability Act Clean Air Act Federal Clean Air Act Clean Water Act Federal Clean Water Act Company MDU Resources Group, Inc. (formerly known as MDUR Newco), which, as the context requires, refers to the previous MDU Resources Group, Inc. prior to January 1, 2019, and the new holding company of the same name after January 1, 2019 COVID-19 Coronavirus disease 2019 Coyote Creek Coyote Creek Mining Company, LLC, a subsidiary of The North American Coal Corporation Coyote Station 427-MW coal-fired electric generating facility near Beulah, North Dakota (25 percent ownership) CyROC Cyber Risk Oversight Committee Dakota Prairie Refining Dakota Prairie Refining, LLC, a limited liability company previously owned by WBI Energy and Calumet Specialty Products Partners, L.P. (previously included in the Company's refining segment) dk Decatherm Dodd-Frank Act Dodd-Frank Wall Street Reform and Consumer Protection Act EBITDA Earnings before interest, taxes, depreciation, depletion and amortization EIN Employer Identification Number EPA United States Environmental Protection Agency ERISA Employee Retirement Income Security Act of 1974 ESA Endangered Species Act Exchange Act Securities Exchange Act of 1934, as amended FASB Financial Accounting Standards Board FERC Federal Energy Regulatory Commission Fidelity Fidelity Exploration & Production Company, a direct wholly owned subsidiary of WBI Holdings (previously referred to as the Company's exploration and production segment) FIP Funding improvement plan GAAP Accounting principles generally accepted in the United States of America GHG Greenhouse gas Great Plains Great Plains Natural Gas Co., a public utility division of the Company prior to the closing of the Holding Company Reorganization and a public utility division of Montana-Dakota as of January 1, 2019 GVTC Generation Verification Test Capacity 4 MDU Resources Group, Inc. Form 10-K Definitions