Our Board of Directors regularly reviews opportunities to unlock value for our shareholders. Following a thorough assessment, the board determined that a spinoff of Knife River Corporation is the best path forward to maximize value for all stakeholders.

Since MDU Resources’ first aggregate company acquisition in 1992, we’ve built Knife River into a leading aggregates-based construction materials business. The board and our management team are confident that MDU Resources and Knife River will be best positioned as two focused, independent companies.

We are always looking at our business mix for opportunities to enhance shareholder value. We have built Knife River into a leading construction materials business and believe now is the right time to spin it off to unlock additional value for both MDU Resources and Knife River.

We believe the spinoff will create many compelling benefits, including:

• Enhanced strategic focus: Each business will be able to pursue individualized strategies specific to the industries in which it operates, and use equity tailored to its own business to enhance acquisition programs and retention and hiring.
• Optimized capital structures: Each company will benefit from distinct capital structures and financial policies tailored to their separate business profiles and needs.
• Tailored capital allocation strategies: Each company will have enhanced flexibility to deploy capital to its specific growth opportunities.
• Distinct investment opportunities: Investors will have two compelling investment opportunities and will be able to better assess the value of the two companies based on their respective operational and financial characteristics.

With a successful track record of organic and M&A-driven growth, we have built Knife River into a leading aggregates-based construction materials business. Given its size and scale today, the MDU Resources Board of Directors believes now is the right time to spin off Knife River to unlock additional value for both MDU Resources and Knife River.

With our nation’s focus on infrastructure, the recent passage of the Investment in Infrastructure and Jobs Act will provide federal funding to support the type of public and private work Knife River does.

The spinoff is expected to be completed during 2023, subject to customary closing conditions, including final approval by MDU Resources’ Board of Directors, receipt of a tax opinion, the filing and effectiveness of a Form 10 registration statement with the SEC and, if determined advisable, a private letter ruling from the IRS.

MDU Resources’ company charter does not require a shareholder vote to complete the transaction.

It is expected that MDU Resources shareholders will retain their current shares of MDU Resources stock and also receive a pro rata distribution of shares of Knife River stock in a transaction that is expected to be tax free. The actual number of shares to be distributed to MDU Resources shareholders will be determined prior to completing the spinoff, as will the specific transaction structure.

Updates will be provided as the company moves toward completing the spinoff.

We expect Knife River shares to be distributed immediately upon the completion of the spinoff transaction, which we expect to occur during 2023. We expect this distribution to be tax free to MDU Resources and its shareholders for U.S. federal income tax purposes.

Updates will be provided as the company moves toward completing the spinoff.

MDU Resources expects there will be no changes to its historic dividend practices through the completion of the spinoff. Post-spinoff, MDU Resources intends to maintain a policy consistent with its historic practices.

Knife River’s dividend policy will be determined in the future in a manner consistent with its stated capital allocation strategies.

Further details related to capital structure, governance and other elements of the transaction will be announced at a later date.