Schedule I-Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Schedule I-Condensed Financial Information of Registrant

Condensed Financial Information of Registrant (Unconsolidated)

Condensed Statements of Income and Comprehensive Income

Years ended December 31,	2019		2018			2017
	(In thousands)
Operating revenues	$	—	$	628,331		$	623,693
Operating expenses	—		540,125			520,069
Operating income	—		88,206			103,624
Other income	—		1,504			4,876
Interest expense	—		32,761			31,997
Income before income taxes	—		56,949			76,503
Income taxes	—		(4,259		)	13,800
Equity in earnings of subsidiaries from continuing operations	335,166		208,177			222,283
Net income from continuing operations	335,166		269,385			284,986
Equity in earnings (loss) of subsidiaries from discontinued operations	287		2,933			(3,783		)
Loss on redemption of preferred stock	—		—			600
Dividends declared on preferred stock	—		—			171
Earnings on common stock	$	335,453	$	272,318		$	280,432
Comprehensive income	$	331,693	$	279,269		$	279,602

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

Condensed Financial Information of Registrant (Unconsolidated)

Condensed Balance Sheets

December 31,	2019			2018
(In thousands, except shares and per share amounts)
Assets
Current assets:
Cash and cash equivalents	$	12,326		$	2,271
Receivables, net	4,727			92,724
Accounts receivable from subsidiaries	49,943			36,015
Inventories	—			13,293
Prepayments and other current assets	501			14,488
Total current assets	67,497			158,791
Investments	46,294			76,202
Investment in subsidiaries	2,842,068			1,790,886
Property, plant and equipment	—			2,846,715
Less accumulated depreciation, depletion and amortization	—			836,735
Net property, plant and equipment	—			2,009,980
Deferred charges and other assets:
Goodwill	—			4,812
Operating lease right-of-use assets	153			—
Other	34,367			180,473
Total deferred charges and other assets	34,520			185,285
Total assets	$	2,990,379		$	4,221,144
Liabilities and Stockholders' Equity
Current liabilities:
Long-term debt due within one year	$	—		$	200,711
Accounts payable	2,981			50,051
Accounts payable to subsidiaries	4,752			12,438
Taxes payable	1,253			24,704
Dividends payable	41,580			39,695
Accrued compensation	8,812			14,346
Current operating lease liabilities	96			—
Other accrued liabilities	7,690			54,099
Total current liabilities	67,164			396,044
Long-term debt	—			586,012
Deferred credits and other liabilities:
Deferred income taxes	—			165,122
Noncurrent operating lease liabilities	56			—
Other	75,913			507,191
Total deferred credits and other liabilities	75,969			672,313
Commitments and contingencies
Stockholders' equity:
Common stock
Authorized - 500,000,000 shares, $1.00 par value
Shares issued - 200,922,790 at December 31, 2019 and 196,564,907 at December 31, 2018	200,923			196,565
Other paid-in capital	1,355,404			1,248,576
Retained earnings	1,336,647			1,163,602
Accumulated other comprehensive loss	(42,102		)	(38,342		)
Treasury stock at cost - 538,921 shares	(3,626		)	(3,626		)
Total stockholders' equity	2,847,246			2,566,775
Total liabilities and stockholders' equity	$	2,990,379		$	4,221,144

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

Condensed Financial Information of Registrant (Unconsolidated)

Condensed Statements of Cash Flows

Years ended December 31,	2019			2018			2017
	(In thousands)
Net cash provided by operating activities	$	168,520		$	294,379		$	284,075
Investing activities:
Capital expenditures	—			(242,692		)	(146,370		)
Net proceeds from sale or disposition of property and other	—			5,032			(5,665		)
Investments in and advances to subsidiaries	(120,000		)	(40,000		)	(40,000		)
Advances from subsidiaries	17,000			70,000			40,000
Investments	(236		)	(528		)	(468		)
Net cash used in investing activities	(103,236		)	(208,188		)	(152,503		)
Financing activities:
Issuance of long-term debt	—			199,422			70,080
Repayment of long-term debt	—			(125,961		)	(37,569		)
Payments of stock issuance costs	—			(10		)	—
Proceeds from issuance of common stock	106,848			—			—
Dividends paid	(160,256		)	(154,573		)	(150,727		)
Redemption of preferred stock	—			—			(15,600		)
Repurchase of common stock	—			(1,920		)	(564		)
Tax withholding on stock-based compensation	(1,821		)	(1,721		)	(508		)
Net cash used in financing activities	(55,229		)	(84,763		)	(134,888		)
Increase (decrease) in cash and cash equivalents	10,055			1,428			(3,316		)
Cash and cash equivalents - beginning of year	2,271			843			4,159
Cash and cash equivalents - end of year	$	12,326		$	2,271		$	843

The accompanying notes are an integral part of these 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 year ended December 31, 2019. Prior to the Holding Company Reorganization, the Company included Montana-Dakota and Great Plains, public utility divisions of the Company as of December 31, 2018. On January 2, 2019, the Company announced the completion of the Holding Company Reorganization, which resulted in Montana-Dakota and Great Plains becoming a subsidiary of the Company. Immediately after consummation, the Company had, on a consolidated basis, the same assets, businesses and operations as it had immediately prior to the reorganization. For more information on the reorganization, see Item 8 - Note 1. The prior periods have not been restated and reflect the condensed financial information of Montana-Dakota and Great Plains as of and for the years ended December 31, 2018 and 2017. Due to the completion of the Holding Company Reorganization, the presentation of prior periods will vary from that of and for the year ended December 31, 2019. In Schedule I, investments in subsidiaries are presented under the equity method of accounting where the assets and liabilities of the subsidiaries are not consolidated. The investments in net assets of the subsidiaries are recorded on the Condensed Balance Sheets. The income from subsidiaries is reported as equity in earnings of subsidiaries on the Condensed Statements of Income. The material cash inflows on the Condensed Statements of Cash Flows are primarily from the dividends and other payments received from its subsidiaries and the proceeds raised from the issuance of equity securities. The consolidated financial statements of MDU Resources Group, Inc. reflect certain businesses as discontinued operations. These statements should be read in conjunction with the consolidated financial statements and notes thereto of MDU Resources Group, Inc.

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 1 for information on the computation of earnings per common share.

Note 2 - Debt At December 31, 2019, the Company had no long-term debt maturities. For more information on debt, see Item 8 - Note 9.

Note 3 - Dividends The Company depends on earnings and dividends from its subsidiaries to pay dividends on common stock. Cash dividends paid to the Company by subsidiaries were $177.1 million, $115.9 million and $116.1 million for the years ended December 31, 2019, 2018 and 2017, respectively.