MDU Resources (US:MDU)2026-02-20 13:32Financial Performance - In 2025, Montana-Dakota served 120,678 residential customers generating revenues of $136.676 million, while commercial customers numbered 23,997 with revenues of $178.991 million[47]. - Other electric revenues, primarily transmission-related, were $77.4 million in 2025, up from $58.7 million in 2024 and $53.6 million in 2023[47]. - The natural gas distribution operations serve 1,082,329 customers, generating revenues of $1,149,136,000 in 2025, with residential customers contributing $680,035,000[76]. - Transportation and other revenues for the natural gas distribution operations were $134.4 million in 2025, up from $105.8 million in 2024[76]. - Montana-Dakota's natural gas distribution operations have a net plant investment of $2.8 billion and a rate base of $2.2 billion as of December 31, 2025[74]. Investments and Assets - As of December 31, 2025, Montana-Dakota's net electric plant investment was $2.1 billion and its rate base was $1.8 billion[44]. - The company's electric generating stations have a total nameplate rating of 863,012 kW and a projected net generation of 1,839,634,000 kWh for 2025[54]. - Montana-Dakota has secured coal supply agreements for its generating stations, estimating approximately 1.5 million tons per contract year for both Coyote and Big Stone Stations, and 585,000 tons for Wygen III through 2060[55][56][57]. - The net plant investment for WBI Energy Transmission was $1.0 billion as of December 31, 2025[94]. - 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[98]. Operational Developments - Heskett Unit 4, an 88-MW natural gas-fired combustion turbine, became operational in July 2024, following the decommissioning of older units[52]. - The maximum peak demand for Montana-Dakota's retail customers was approximately 69,991 kW in July 2024[50]. - The Company completed the separation of Knife River on May 31, 2023, and Everus on October 31, 2024, enhancing stockholder value[18]. - The Company aims to enhance stockholder value through its "CORE" strategy, focusing on operational excellence and organic growth opportunities[17]. Environmental Commitment - Approximately 40% of the electricity delivered to customers in 2025 was from renewable resources, contributing to a 44% reduction in carbon dioxide emission intensity since 2005[51]. - Environmental-related capital expenditures are estimated at $1.5 million, $1.8 million, and $1.0 million for 2026, 2027, and 2028, respectively[71]. - The Company is investigating possible soil and groundwater impacts from historic manufactured gas plants, which may lead to additional costs for investigation and remediation[90]. - The Company may face significant future costs associated with compliance with legislative actions aimed at reducing greenhouse gas emissions, which could impact its results of operations[161]. Regulatory and Compliance Risks - The Company faces significant liabilities from wildfires, which could negatively impact operations and financial performance despite mitigation efforts[118]. - Changes in tax laws could adversely affect the Company's earnings and customer costs, impacting production tax credits[139]. - The Company is subject to environmental laws that may increase operational costs and expose it to liabilities, potentially affecting its financial performance[157]. - The Company may face challenges in obtaining adequate insurance coverage due to increased wildfire losses and related claims[120]. Cybersecurity and Operational Risks - The Company is subject to cybersecurity threats that could disrupt operations and lead to significant remediation costs[181][182]. - The Company has implemented a cyber risk management program to protect its information systems from various threats[193]. - The Company has ongoing cybersecurity training programs for employees to mitigate risks associated with data access and system vulnerabilities[195]. - The audit committee of the board of directors oversees risks from cybersecurity threats, receiving regular updates from the CIO[202]. Human Resources and Labor - The Company had 2,096 employees as of December 31, 2025, with 745 represented by collective-bargaining agreements[24][27]. - The Company must attract and retain skilled personnel to manage and grow its operations, facing challenges due to labor market dynamics[179]. Market and Competitive Environment - The Company is experiencing high competition in its electric utility and natural gas businesses, which could negatively affect its financial performance[176]. - The Company is exposed to capital market risks and may struggle to obtain financing required for operations and growth plans[123]. - Nonpayment or nonperformance by customers could negatively impact the Company's results of operations and cash flows[138]. Shareholder and Stock Performance - The Company has established a long-term dividend payout ratio target of 60% to 70% of regulated energy delivery earnings, maintaining an 88-year history of uninterrupted dividend payments[215]. - As of February 13, 2026, the Company's common stock was held by approximately 8,200 stockholders of record[214]. - The Company's stock price may be volatile due to various factors, including fluctuations in financial performance and market conditions, which could lead to litigation risks[167][168].