MDU RESOURCES GROUP INC

For the period ended Dec 31, 2025. Filed Feb 20, 2026.

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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.

FY2025 · Filed Feb 20, 2026

MDU$19.28+0.2%Stored close · as of Nov 10, 2026

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Contents

13. Income Taxes

Note 13 -Income Taxes

The components of income before income taxes from continuing operations for each of the years ended December 31 were as follows:

	2025	2024	2023
(In thousands)
United States	$210,977	$198,662	$340,330
Income before income taxes from continuing operations	$210,977	$198,662	$340,330

Income tax expense (benefit) from continuing operations for the years ended December 31 was as follows:

	2025	2024	2023
(In thousands)
Current:
Federal	$25,971	$30,412	$8,271
State	2,522	3,255	3,251
	28,493	33,667	11,522
Deferred:
Income taxes:
Federal	(13,970)	(17,321)	(3,331)
State	1,171	(1,805)	(125)
Investment tax credit - net	3,876	3,048	2,147
	(8,923)	(16,078)	(1,309)
Total income tax expense	$19,570	$17,589	$10,213

MDU Resources Group, Inc. Form 10-K 95

Index

Part II

Components of deferred tax assets and deferred tax liabilities at December 31 were as follows:

	2025	2024
(In thousands)
Deferred tax assets:
Environmental compliance	$49,750	$33,730
Pension and postretirement	23,443	25,508
Compensation-related	16,249	15,651
Customer advances	10,590	9,719
Cost recovery mechanisms	10,077	7,402
Legal and environmental contingencies	5,474	5,317
Other	17,989	20,386
Total deferred tax assets	133,572	117,713
Deferred tax liabilities:
Basis differences on property, plant and equipment	451,595	426,493
Pension and postretirement	47,931	48,355
Cost recovery mechanisms	18,109	19,245
Environmental compliance	17,173	17,260
Legal and environmental contingencies	6,399	6,300
Purchased gas adjustment	5,137	20,441
Other	23,695	19,931
Total deferred tax liabilities	570,039	558,025
Valuation allowance	819	1,008
Net deferred income tax liability	$437,286	$441,320

As of December 31, 2025 and 2024, the Company had various state income tax net operating loss carryforwards of $819,000 and $1.0 million, respectively, and state income tax credit carryforwards, excluding alternative minimum tax credit carryforwards, of $28.5 million and $31.6 million, respectively. The state income tax credit carryforwards are due to expire between 2027 and 2039. Changes in tax regulations or assumptions regarding current and future taxable income could require additional valuation allowances in the future.

The following table reconciles the change in the net deferred income tax liability from December 31, 2024, to December 31, 2025, to deferred income tax benefit:

	2025
(In thousands)
Change in net deferred income tax liability from the preceding table	$(4,034)
Effects of rate-regulated accounting	(4,890)
Deferred taxes associated with other comprehensive income	1
Deferred income tax benefit for the period	$(8,923)

96 MDU Resources Group, Inc. Form 10-K

Index

Part II

Total income tax expense differs from the amount computed by applying the statutory federal income tax rate to income before taxes. The reasons for this difference were as follows:

Year ended December 31,	2025
	Amount	%
U.S. federal statutory tax rate	$44,305	21.0
State and local income taxes, net of federal income tax effect *	2,917	1.4
Tax credits
Federal renewable energy credit	(19,324)	(9.2)
Other	(1,938)	(0.9)
Nontaxable or nondeductible Items	(265)	(0.1)
Other
Effects of rate-regulated accounting	(5,169)	(2.5)
Other	(956)	(0.4)
Total income tax expense and effective tax rate	$19,570	9.3
* In 2025, state income taxes in Oregon and Montana made up the majority (greater than 50%) of the tax effect in this category.

Years ended December 31,	2024		2023
	Amount	%	Amount	%
Computed tax at federal statutory rate	$41,719	21.0	$71,469	21.0
Increases (reductions) resulting from:
State income taxes, net of federal income tax	4,047	2.0	3,605	1.1
State investment tax credit, net of federal income tax	2,400	1.2	1,545	0.5
Executive compensation	2,111	1.1	564	0.2
Federal renewable energy credit	(16,871)	(8.5)	(15,175)	(4.5)
Excess deferred income tax amortization	(8,121)	(4.1)	(8,383)	(2.5)
State tax rate change	(2,317)	(1.2)	(9)	—
Research and development tax credit	(1,465)	(0.7)	(1,985)	(0.6)
Nonqualified benefit plans	(1,142)	(0.6)	(1,313)	(0.4)
Tax-free debt for equity exchange	—	—	(38,967)	(11.4)
Other	(2,772)	(1.4)	(1,138)	(0.3)
Total income tax expense	$17,589	8.8	$10,213	3.1

The Company's effective tax rate for 2025 differs from the U.S. federal statutory rate of 21 percent due primarily to the impact of credits and deductions provided by law and the effects of rate-regulated accounting, primarily the amortizations of excess deferred income taxes and deferred investment tax credits.

Income taxes paid (net of refunds) for the year ended December 31, 2025, was $30.8 million, consisting of $27.7 million in federal income taxes and $3.1 million in state income taxes. Income taxes paid (net of refunds) in Montana of $1.8 million exceeded 5 percent of total income taxes paid (net of refunds).

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and local jurisdictions. The Company is no longer subject to U.S. federal, non-U.S., state or local income tax examinations by tax authorities for years ending prior to 2021.

Total reserves for uncertain tax positions were not material. The Company recognizes interest and penalties accrued relative to unrecognized tax benefits in income tax expense.

MDU Resources Group, Inc. Form 10-K 97

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