MDU RESOURCES GROUP INC

Note 3 -Discontinued operations

Discontinued operations includes certain costs associated with legacy business activities other than certain general and administrative costs (reflected in operation and maintenance expense) and interest expense, which were previously allocated to the Company's former businesses which do not meet the criteria for discontinued operations.

On October 31, 2024, the Company completed the separation of Everus, its former construction services segment, into a new independent, publicly-traded company. As a result of the separation, the Company provided to Everus and Everus provided to the Company transition services in accordance with the TSA entered into on October 31, 2024. The Company didnot provide nor receive any transition services for the three months ended September 30, 2026. For the nine months ended September 30, 2026, the Company received $1.3 million for these related activities. For the three and nine months ended September 30, 2025, the Company received $1.3 million and $6.8 million, respectively, and paid $17,000 and $42,000, respectively, for these related activities. All transition services were completed as of March 31, 2026.

Separation related costs for the three months ended September 30, 2026 were not material. Separation related costs of $131,000, net of tax, were incurred during the nine months ended September 30, 2026 and $39,000 and $586,000, net of tax, for the three and nine months ended September 30, 2025, respectively. In the second quarter of 2026, the Company recorded a tax benefit of $1.5 million related to an election for a change in tax method for certain strategic initiative costs. Separation costs incurred and the tax benefit are presented in Discontinued operations, net of tax in the Consolidated Statements of Income. Separation costs primarily relate to transaction and third-party support costs, one-time business separation fees and related tax charges.

Index

The Company had no assets or liabilities related to the discontinued operations of Everus on its balance sheet as of September 30, 2026, September 30, 2025, or December 31, 2025.

The reconciliation of the major classes of income and expense constituting pretax income (loss) from discontinued operations to the after-tax income (loss) from discontinued operations on the Consolidated Statements of Income were as follows: