SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
TRANSITION REPORT PURSANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ___________
Commision file number 1-3480
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN FOR
COLLECTIVE BARGAINING UNIT EMPLOYEES
MDU RESOURCES GROUP, INC.
SCHUCHART BUILDING
918 EAST DIVIDE AVENUE
BISMARCK, NORTH DAKOTA 58501
CONTENTS
Required Information
Financial Statements:
Statements of Financial Condition -- December 31,
1997 and 1996
Statements of Income and Changes in Participants'
Equity -- Years ended December 31, 1997, 1996
and 1995
Notes to Financial Statements
Schedules -- Schedule I has been omitted because
the required information is shown in such
financial statements or the notes or supplemental
schedules thereto.
Schedule II -- Allocation of Plan Assets and
Liabilities to Investment Programs
Schedule III -- Allocation of Plan Income and
Changes in Plan Equity to Investment Programs
Schedule IV -- Item 27d - Schedule of Reportable
Transactions
Report of Independent Public Accountants
Signature page
Exhibit:
Consent of Independent Public Accountants
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN FOR COLLECTIVE
BARGAINING UNIT EMPLOYEES
STATEMENTS OF FINANCIAL CONDITION
December 31,
1997 1996
Assets:
Investments -- (Schedule II)
MDU Resources Group, Inc. common
stock
(1997 -- 1,669,440 shares,
cost $26,563,457;
1996 -- 1,698,980 shares,
cost $25,890,885) $52,796,040 $39,077,007
Other 1,522,454 3,722,237
Cash and cash equivalents 5,980,216 873,998
Dividends and interest receivable 484,544 471,817
$60,783,254 $44,145,059
Participants' equity:
Distributions due terminated
participants $ --- $ 691,558
Active participants' equity 60,783,254 43,453,501
$60,783,254 $44,145,059
The accompanying notes are an integral part
of these statements.
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN FOR COLLECTIVE
BARGAINING UNIT EMPLOYEES
STATEMENTS OF INCOME AND CHANGES IN PARTICIPANTS' EQUITY
Years ended December 31,
1997 1996 1995
Investment income:(Schedule III)
Dividends $ 2,036,377 $ 1,937,445 $ 1,858,604
Interest 14,073 4,670 6,255
Capital gains 76,567 12,043 5,169
Other 7,552 (303) 1,414
Realized gain on
distributions 3,635,702 766,715 815,242
Unrealized appreciation
on investments 12,020,131 4,645,842 2,683,009
17,790,402 7,366,412 5,369,693
Contributions:
Employers 763,276 759,161 790,782
Employees 2,216,040 2,149,607 2,027,866
Employee rollover --- 1,418 345
2,979,316 2,910,186 2,818,993
Distributions to terminated
participants (3,976,421) (2,130,534) (2,617,713)
Net transfers to Tax
Deferred Compensation
Savings Plan (155,102) (600,455) (133,823)
Increase in participants'
equity 16,638,195 7,545,609 5,437,150
Participants' equity at
beginning of year 44,145,059 36,599,450 31,162,300
Participants' equity at
end of year $60,783,254 $44,145,059 $36,599,450
The accompanying notes are an integral part
of these statements.
1. Description of the Plan
The MDU Resources Group, Inc. Tax Deferred Compensation Savings
Plan For Collective Bargaining Unit Employees (the Plan) was
adopted on November 6, 1986, by the Board of Directors of MDU
Resources Group, Inc. (the Company) to provide a means for
deferred savings and investment by eligible employees and to
afford additional security for their retirement. The Plan is a
defined contribution plan established effective January 1, 1987.
The Company and any of its direct or indirect subsidiaries who
choose to participate in the Plan are the Employers. Effective
January 1, 1988 (1988 Effective Date), the Plan was amended and
restated to reflect the merger and transfer of eligible employees'
accounts of the MDU Resources Group, Inc. Employee Stock Ownership
Plan (ESOP) into the Plan. The fiscal year of the Plan is the
calendar year.
The Board of Directors of the Company may amend or modify the
Plan, and the Boards of Directors of the Employers may, at any
time, terminate the Plan with respect to the respective Employer.
The Plan is administered for the Company by a five-member
committee (the Committee) appointed by the Chief Executive Officer
of the Company.
Administrative expenses of the Plan are paid by the Employers,
however, fees or commissions associated with each of the
investment options are paid primarily by participants as a
deduction from the amount invested or by an offset to investment
earnings.
The Plan contains two parts: 1) The Deferred Savings feature
which is the part of the Plan related to an eligible employee's
ability to defer a portion of the employee's current compensation
into a tax-free trust, and 2) The ESOP feature which is the part
of the Plan related to participation in the ESOP, as merged into
the Plan as of the Effective Date. Unless otherwise noted, these
disclosures are as of December 31, 1997.
Deferred Savings
Any employee who is at least 18 years of age, who has completed
at least one year of service with a minimum of 1,000 hours worked
and who is a collective bargaining unit employee of an employer
whose collective bargaining unit has been offered the Plan and
accepted it is eligible to participate in the Plan. An eligible
employee may elect to participate in the Plan as of January 1,
April 1, July 1 or October 1 following completion of one year of
service and by filing a written election with the Committee to
have savings contributions made on the employee's behalf.
A former participant or eligible employee who is reemployed shall
again become eligible to become a participant on the first day of
the month following the employee's return to employment as an
eligible employee.
Each participant may change their contribution percent at
anytime by filing a written election with the Committee or via the
toll free telephone service. The toll free telephone service was
operated by Norwest Bank Minnesota, N.A. as recordkeeper and
trustee (See Note 2 -- Changes to the Plan for 1998). The Plan
allows contributions by participants varying from one percent
through 15 percent (10 percent through December 31, 1995), in one
percent increments, of eligible compensation for each pay period.
In addition, the Plan accepts rollover contributions from other
qualified retirement plans or an Individual Retirement Account
(IRA) that only holds assets distributed from a qualified plan as
adjusted for earnings, losses and gains attributable thereto.
Such savings contributions on behalf of a participant are credited
to the participant's Rollover Account. An election is made by
each participant to allocate contributions to any or all of the
seven available investment options. The investment election made
must be designated in 10 percent increments of the total amount
contributed by the participant to be invested in common stock of
the Company, an equity indexed mutual fund, a bond market indexed
fund, a balanced fund, a small-cap fund, an international fund or
a short-term investment fund. The small-cap and international
fund options were available as investment options as of March 1,
1997. Such savings contributions reduce, on a dollar-for-dollar
basis, the participant's taxable earnings in the year in which the
savings contributions are made. Eligible compensation is defined
as the employee's total compensation (not in excess of $160,000
for 1997 and not in excess of $150,000 for 1996 and 1995) from the
Employer, unreduced by any savings contributions of the eligible
employee to the Plan, and any amount contributed by the Employer
pursuant to a salary reduction agreement and which is not
includible in the gross income of an employee, excluding other
contributions to the Plan, contributions to other employee benefit
plans and certain additional items of compensation which do not
constitute direct earnings.
A participant may authorize suspension of such participant's
savings contributions to the Plan via the toll free telephone
service. Such suspension of savings contributions is effective as
soon as administratively feasible but not later than 30 days from
the request. Suspended savings contributions may not be made up
by savings contributions at a later time.
Each participant's Employer makes a matching contribution,
equal to a percentage of such participant's monthly savings
contributions up to a specified percent of a participant's
compensation as provided under the Plan, which is credited to such
participant's Matching Contribution Account. All matching
contributions are invested in common stock of the Company.
A participant's interest in a Savings Contribution Account or a
Matching Contribution Account is at all times fully vested and
nonforfeitable. Effective March 1, 1997, participant accounts are
valued on a daily basis.
The Plan limits the elective deferral contribution for each
participant to the annual dollar limit as designated in Section
402(g) of the Internal Revenue Code of 1986 as amended (the Code)
for the calendar year, as adjusted. For each participant,
contributions (other than rollovers) credited to an account in any
plan year, when aggregated with contributions under all other
qualified plans maintained by the Employers, cannot be greater
than the maximum contribution permitted by Section 415 of the
Code. The deduction for contributions to the Plan, when taken
together with all other contributions made by the Employer to
other qualified retirement plans, cannot exceed the maximum amount
deductible under Section 404 of the Code. The Plan also limits
the aggregate savings contributions which may be made on behalf of
highly compensated employees.
Generally, once each month, the Employers remit all authorized
contributions made by the participants to the trustee to be held
in trust and invested for the respective accounts of the
participants, pursuant to the terms of a trust agreement effective
January 1, 1994 (See Note 2 -- Changes to the Plan for 1998).
Contributions for common stock, including the Employers' matching
contribution, are used by the trustee to purchase shares of MDU
Resources Group, Inc. common stock (MDU stock) directly in the
open market. All such market purchases may be made at such prices
as the trustee may determine in its sole and absolute discretion.
The trustee may also purchase shares of authorized but unissued
common stock directly from the Company if the Company chooses to
issue new stock. The funds contributed to the equity indexed
mutual fund were invested in the Vanguard Index-500 Portfolio
(Vanguard Equity), which trades in the 500 common stocks listed on
the Standard & Poor's 500 Composite Stock Price Index. The funds
contributed to the bond market indexed fund were invested in the
Vanguard Total Bond Market Index Fund (Vanguard Bond), which
invests in corporate bonds which attempt to match the Lehman
Brothers Aggregate Bond Index. The funds contributed to the
balanced fund are invested in the Dodge & Cox Balanced Fund (Dodge
& Cox Balanced), which invests in well-established companies'
stocks and bonds. The funds contributed to the small-cap fund are
invested in the Baron Asset Fund (Small-Cap), which invests in
common stock of small and medium-sized companies. The funds
contributed to the international fund were invested in the
EuroPacific Growth Fund (International), which invests in equity
securities of issuers domiciled in Europe or the Pacific Basin,
securities through depository receipts which may be denominated in
various currencies or securities convertible into common stocks,
straight debt securities, government securities, or noncovertible
preferred stocks. The funds contributed to the short-term
investment fund (Money Market) were invested in short-term, high-
quality, money market investments. Effective January 1, 1997, the
Dodge & Cox Balanced replaced the Fidelity Balanced Fund (Fidelity
Balanced) and the Vanguard Bond replaced the Dreyfus Bond Market
Index Fund (Mellon Bond) (See Note 2 -- Changes to the Plan for
1998).
Any dividends, interest, gains, losses or other distributions
on the above mentioned investments and short-term investment
income allocated to a participant's accounts are reinvested in the
appropriate investment medium, which is credited to the
participant's accounts. As amounts are allocated to each
participant's accounts, they become fully vested.
The amount credited to a participant's Savings Contribution
Account and Matching Contribution Account shall become payable to
the participant or the participant's beneficiary/beneficiaries, as
applicable (see tax rules related to rollover options), upon
death, retirement, disability, or other termination of employment
with the Employers. The distribution of such amounts will be in
accordance with the Plan, based on the method of payment elected
by the participant or designated beneficiary/beneficiaries.
Amounts credited to such accounts will be paid as soon as
practicable after such amounts are ascertained; provided that such
payment shall not be made prior to the participant's attainment of
age 65 without the written consent of the participant if the value
of such accounts exceeds $3,500.
A participant may make withdrawals from such participant's
Savings Contribution Account or Matching Contribution Account
under certain conditions.
ESOP
Participation in the ESOP feature of the Plan is limited to
participants in the ESOP as of the Effective Date or the date as
of which an ESOP Account is established under the Plan, whichever
is later.
As of the 1988 Effective Date, ESOP Accounts have been
suspended and no additional contributions shall be made by the
Company to such accounts, other than to reflect dividends or other
earnings, unless and to the extent the Company in its sole
discretion shall make additional contributions.
A participant's interest in an ESOP Account is at all times
fully vested and nonforfeitable.
Distributions are consistent with the Deferred Savings feature
previously mentioned.
Each participant with an ESOP Account, who has attained age 55
and who has completed at least 10 years of participation under the
ESOP, the Plan or both, is entitled to elect the distribution of a
percentage of the value of the participant's ESOP Account
attributable to common stock acquired under the ESOP or ESOP
feature after December 31, 1986. This form of distribution is
offered to allow the participant to diversify the investment of a
portion of their ESOP account.
2. Changes to the Plan for 1998
The recordkeeper and trustee of the Plan was changed on
January 1, 1998 from Norwest Bank Minnesota, N.A. to New York Life
Benefit Services, Inc. (NYLBSI) and New York Life Trust Company
(NYLTC), respectively. A new trust agreement with NYLTC was
entered into effective January 1, 1998.
On January 2, 1998 four of the investment options were replaced
due to the conversion to NYLBSI/NYLTC. The Vanguard Equity,
Vanguard Bond, International and the Money Market funds were
replaced with the MainStay Institutional Indexed Equity Fund
(MainStay Equity), MainStay Institutional Indexed Bond Fund
(MainStay Bond), Templeton Foreign Fund Class I (Templeton) and
New York Life Insurance Company Anchor Account (Anchor),
respectively. The MainStay Equity invests in the 500 common
stocks listed on the Standard & Poor's 500 Composite Stock Price
Index. The MainStay Bond invests in investment grade corporate
and U.S. government bonds, mortgage backed securities and asset
backed securities. The Templeton invests primarily in stock and
debt obligations of companies and governments outside the United
States. The Anchor invests in high quality fixed income
securities.
Effective in 1998, a participant may be eligible to obtain a
loan from the Plan. The maximum amount available for a loan is
the lessor of $50,000 or one-half of the participant's account
balance subject to certain limitations. Loans must be repaid over
specified periods through payroll deduction and bear interest at
the prevailing prime rate in effect at the time the loan is made,
plus one percent.
3. Summary of Significant Accounting Policies
Investment valuation --
Investments held by the Plan are carried at market value.
Market value for Mellon Bond was determined from several
independent pricing sources. Market value for the Money Market
approximates cost. The Plan's other investment valuations are
based on published market quotations.
Contributions --
Employer and employee contributions are recorded by the Plan
when received or determined to be receivable. Employee
contributions are accumulated by the Employers through payroll
reductions.
Other --
Securities transactions are recorded on a trade date basis.
Dividend income is recorded on the ex-dividend date. Interest
income is recorded as earned.
4. Investments
The cost basis for distributions from the Plan is calculated
using the average cost per participant. Information concerning
distributions to terminated participants and other participants
meeting certain conditions of the Plan during 1997, 1996 and 1995
was as follows:
Deferred Savings ESOP
1997 1996 1995 1997 1996 1995
MDU Stock:
Number of
shares 83,949 43,186 39,459 54,948 47,798 59,062
Market value $2,063,772 $943,533 $944,138 $1,327,177 $1,037,104 $1,355,176
Average cost $1,482,426 $728,258 $769,184 $684,293 $555,131 $744,054
Cash $584,875 $137,448 $314,555 $597 $12,449 $16,518
The net changes in unrealized appreciation of Plan investments
during 1997, 1996 and 1995 were as follows:
<TABLE>
<CAPTION> Deferred Savings ESOP
1997 1996 1995 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Unrealized
appreciation
- January 1 $7,220,907 $3,918,743 $1,924,203 $7,090,970 $5,747,292 $5,058,823
Change during
the year 7,340,800 3,302,164 1,994,540 4,679,331 1,343,678 688,469
Unrealized
appreciation
- December 31 $14,561,707 $7,220,907 $3,918,743 $11,770,301 $7,090,970 $5,747,292
</TABLE>
5. Federal Income Taxes
The Internal Revenue Service (IRS) has informed the Company that
the Plan, as amended through August 16, 1994, is qualified under
Section 1.401-1 of the Income Tax Regulations. The Company intends
to file subsequent plan amendments with the IRS to receive final
determination. The Company believes the Plan, as amended, will
remain exempt from federal income tax under Section 501(a) of the
Code. Contributions under the Plan and earnings of the trust will
not be taxable to the participants until distributed. Except as
stated below, any distribution made to a participant is taxable as
ordinary income in the year of distribution.
Under current law, the amount taxable as ordinary income may be
eligible for a special five-year averaging method of taxation
(participants who reached age 50 before 1986 may be eligible for
ten-year averaging) if the participant has participated in the Plan
for five years prior to the year in which the distribution is
received. Any net unrealized appreciation at the time of
distribution will be treated as long-term capital gain upon the
subsequent sale of the common stock (unless the participant has
previously elected to include this amount as income in the year of
distribution) and any further appreciation subsequent to the date
of distribution will be treated as long-term or short-term capital
gain depending on the participant's holding period.
Distributions from the Plan may qualify under the Code as
"eligible rollover distributions." An eligible rollover
distribution is a distribution paid directly from the Plan to an
IRA or another employer plan that accepts rollovers or paid to the
participant and rolled over by the participant within 60 days to a
qualifying IRA or another employer qualified plan. If a
participant chooses either of these options, such participant is
not taxed on the amount rolled over until the participant later
receives a distribution from the IRA or the employer plan.
The foregoing covers only the general federal income tax aspects
of Plan participation and distributions.
SUPPLEMENTAL
SCHEDULES
<TABLE>
ALLOCATION OF PLAN ASSETS AND
LIABILITIES TO INVESTMENT PROGRAMS
December 31, 1997
<CAPTION>
ESOP Deferred Savings Total
Vanguard Vanguard Dodge & Cox Inter- Money Deferred
MDU Stock MDU Stock Equity Bond Balanced Small-Cap national Market Savings Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments --
Participants 536 697 391 144 139 103 65 30
Number of shares/
units 615,695 1,053,745 --- --- 11,149 14,455 16 76,280 1,155,645 1,771,340
Cost $ 7,701,054 $18,862,403 $ --- $ --- $712,847 $633,453 $ 449 $76,280 $20,285,432 $27,986,486
Market value $19,471,355 $33,324,685 $ --- $ --- $744,521 $701,234 $ 419 $76,280 $34,847,139 $54,318,494
Cash and cash
equivalents 9,660 152,254 5,116,364 494,785 --- --- 207,153 --- 5,970,556 5,980,216
Dividends and
interest
receivable 178,719 305,442 --- --- --- --- --- 383 305,825 484,544
$19,659,734 $33,782,381 $5,116,364 $494,785 $744,521 $701,234 $207,572 $76,663 $41,123,520 $60,783,254
Participants' equity:
Distributions due
terminated
participants $ --- $ --- $ --- $ --- $ --- $ --- $ --- $ --- $ --- $ ---
Active participants'
equity 19,659,734 33,782,381 5,116,364 494,785 744,521 701,234 207,572 76,663 41,123,520 60,783,254
$19,659,734 $33,782,381 $5,116,364 $494,785 $744,521 $701,234 $207,572 $76,663 $41,123,520 $60,783,254
<FN>
The accompanying notes are an integral part
of this schedule.
</FN>
</TABLE>
<TABLE>
ALLOCATION OF PLAN ASSETS AND
LIABILITIES TO INVESTMENT PROGRAMS
December 31, 1996
<CAPTION>
ESOP Deferred Savings Total
Vanguard Mellon Fidelity Money Deferred
MDU Stock MDU Stock Equity Bond Balanced Market Savings Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments --
Participants 546 689 366 153 109 26
Number of shares/
units 643,521 1,055,459 49,996 257 --- 261,898 1,367,610 2,011,131
Cost $ 7,710,244 $18,180,641 $2,332,074 $ 2,510 $ --- $261,898 $20,777,123 $28,487,367
Market value $14,801,214 $24,275,793 $3,457,828 $ 2,511 $ --- $261,898 $27,998,030 $42,799,244
Cash and cash
equivalents --- --- 1 492,254 381,742 1 873,998 873,998
Dividends and
interest
receivable 178,578 293,075 7 1 2 154 293,239 471,817
$14,979,792 $24,568,868 $3,457,836 $494,766 $381,744 $262,053 $29,165,267 $44,145,059
Participants' equity:
Distributions due
terminated
participants $ 303,994 $ 374,321 $ 8,624 $ 4,619 $ --- $ --- $ 387,564 $ 691,558
Active participants'
equity 14,675,798 24,194,547 3,449,212 490,147 381,744 262,053 28,777,703 43,453,501
$14,979,792 $24,568,868 $3,457,836 $494,766 $381,744 $262,053 $29,165,267 $44,145,059
<FN> The accompanying notes are an integral part
of this schedule.
</FN>
</TABLE>
<TABLE> ALLOCATION OF PLAN INCOME AND CHANGES
IN PLAN EQUITY TO INVESTMENT PROGRAMS
Year ended December 31, 1997
<CAPTION>
ESOP Deferred Savings Total
Vanguard Vanguard Dodge & Cox Inter- Money Deferred
MDU Stock MDU Stock Equity Bond Balanced Small-Cap national Market Savings Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends $ 711,945 $ 1,201,123 $ 72,394 $ 28,919 $ 19,208 $ --- $ 2,788 $ --- $ 1,324,432 $2,036,377
Interest 712 7,478 115 28 19 --- --- 5,721 13,361 14,073
Capital gains --- --- 32,926 --- 33,688 --- 9,953 --- 76,567 76,567
Other --- (3,740) 1,927 220 511 7,054 1,835 (255) 7,552 7,552
Realized gain (loss)
on distributions 642,884 705,130 2,261,280 14,277 17,333 9,096 (14,298) --- 2,992,818 3,635,702
Unrealized
appreciation
(depreciation) on
investments 4,679,331 8,367,131 (1,125,754) (1) 31,674 67,781 (31) --- 7,340,800 12,020,131
6,034,872 10,277,122 1,242,888 43,443 102,433 83,931 247 5,466 11,755,530 17,790,402
Contributions:
Employers --
MDU --- 559,114 --- --- --- --- --- --- 559,114 559,114
Williston Basin --- 89,958 --- --- --- --- --- --- 89,958 89,958
Knife River --- 114,204 --- --- --- --- --- --- 114,204 114,204
--- 763,276 --- --- --- --- --- --- 763,276 763,276
Employees --
MDU --- 946,006 425,915 51,919 92,543 65,706 39,710 9,659 1,631,458 1,631,458
Williston Basin --- 143,677 77,388 8,167 21,153 8,752 4,350 4,136 267,623 267,623
Knife River --- 218,565 66,397 11,753 8,484 5,855 3,326 2,579 316,959 316,959
--- 1,308,248 569,700 71,839 122,180 80,313 47,386 16,374 2,216,040 2,216,040
Employee rollover --
MDU --- --- --- --- --- --- --- --- --- ---
Williston Basin --- --- --- --- --- --- --- --- --- ---
Knife River --- --- --- --- --- --- --- --- --- ---
--- --- --- --- --- --- --- --- --- ---
--- 2,071,524 569,700 71,839 122,180 80,313 47,386 16,374 2,979,316 2,979,316
Distributions to
terminated
participants (1,327,774) (2,201,403) (159,986) (32,428) (15,313) (1,317) (461) (237,739) (2,648,647) (3,976,421)
Transfers of
participants' equity:
Fund to Fund --- (872,000) 70,301 (85,813) 154,274 541,640 161,080 30,518 --- ---
Plan to Plan (27,156) (61,730) (64,375) 2,978 (797) (3,333) (680) (9) (127,946) (155,102)
(27,156) (933,730) 5,926 (82,835) 153,477 538,307 160,400 30,509 (127,946) (155,102)
Increase (decrease)
in participants'
equity 4,679,942 9,213,513 1,658,528 19 362,777 701,234 207,572 (185,390) 11,958,253 16,638,195
Participants' equity
at beginning
of year 14,979,792 24,568,868 3,457,836 494,766 381,744 --- --- 262,053 29,165,267 44,145,059
Participants' equity
at end of year $19,659,734 $33,782,381 $5,116,364 $494,785 $744,521 $701,234 $207,572 $ 76,663 $41,123,520 $60,783,254
<FN>
The accompanying notes are an integral part of this schedule.
</FN>
</TABLE>
<TABLE>
ALLOCATION OF PLAN INCOME AND CHANGES
IN PLAN EQUITY TO INVESTMENT PROGRAMS
Year ended December 31, 1996
<CAPTION>
ESOP Deferred Savings Total
Vanguard Mellon Fidelity Money Deferred
MDU Stock MDU Stock Equity Bond Balanced Market Savings Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends $ 711,730 $ 1,122,376 $ 60,055 $ 27,185 $ 16,099 $ --- $ 1,225,715 $ 1,937,445
Interest 208 2,312 294 82 55 1,719 4,462 4,670
Capital gains --- --- 12,043 --- --- --- 12,043 12,043
Other --- --- --- --- --- (303) (303) (303)
Realized gain on
distributions 490,598 218,851 15,393 11,221 30,652 --- 276,117 766,715
Unrealized appreciation
(depreciation) on
investments 1,343,678 2,831,555 511,367 (26,310) (14,448) --- 3,302,164 4,645,842
2,546,214 4,175,094 599,152 12,178 32,358 1,416 4,820,198 7,366,412
Contributions:
Employers --
MDU --- 551,752 --- --- --- --- 551,752 551,752
Williston Basin --- 86,159 --- --- --- --- 86,159 86,159
Knife River --- 121,250 --- --- --- --- 121,250 121,250
--- 759,161 --- --- --- --- 759,161 759,161
Employees --
MDU --- 1,029,139 390,154 60,887 86,261 8,772 1,575,213 1,575,213
Williston Basin --- 155,618 74,084 8,968 8,363 4,220 251,253 251,253
Knife River --- 245,156 57,859 12,049 6,501 1,576 323,141 323,141
--- 1,429,913 522,097 81,904 101,125 14,568 2,149,607 2,149,607
Employee rollover --
MDU --- 871 547 --- --- --- 1,418 1,418
Williston Basin --- --- --- --- --- --- --- ---
Knife River --- --- --- --- --- --- --- ---
--- 871 547 --- --- --- 1,418 1,418
--- 2,189,945 522,644 81,904 101,125 14,568 2,910,186 2,910,186
Distributions to
terminated
participants (1,049,553) (977,874) (75,325) (14,638) (8,961) (4,183) (1,080,981) (2,130,534)
Transfers of
participants' equity:
Fund to Fund --- (346,851) 160,000 (6,723) (20,353) 213,927 --- ---
Plan to Plan (286,464) (214,882) (97,313) (1,796) --- --- (313,991) (600,455)
(286,464) (561,733) 62,687 (8,519) (20,353) 213,927 (313,991) (600,455)
Increase in
participants' equity 1,210,197 4,825,432 1,109,158 70,925 104,169 225,728 6,335,412 7,545,609
Participants' equity
at beginning of year 13,769,595 19,743,436 2,348,678 423,841 277,575 36,325 22,829,855 36,599,450
Participants' equity
at end of year $14,979,792 $24,568,868 $3,457,836 $494,766 $381,744 $262,053 $29,165,267 $44,145,059
<FN> The accompanying notes are an integral part
of this schedule.
</FN>
</TABLE>
<TABLE>
ALLOCATION OF PLAN INCOME AND CHANGES
IN PLAN EQUITY TO INVESTMENT PROGRAMS
Year ended December 31, 1995
<CAPTION>
ESOP Deferred Savings Total
Vanguard Mellon Fidelity Money Deferred
MDU Stock MDU Stock Equity Bond Balanced Market Savings Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends $ 767,861 $ 1,012,285 $ 46,899 $ 21,874 $ 9,685 $ --- $ 1,090,743 $ 1,858,604
Interest 45 4,022 239 91 63 1,795 6,210 6,255
Capital gains --- --- 5,169 --- --- --- 5,169 5,169
Other --- 1,482 --- --- --- (68) 1,414 1,414
Realized gain (loss)
on distributions 605,311 186,746 22,762 522 (99) --- 209,931 815,242
Unrealized appreciation
on investments 688,469 1,416,242 521,231 37,782 19,285 --- 1,994,540 2,683,009
2,061,686 2,620,777 596,300 60,269 28,934 1,727 3,308,007 5,369,693
Contributions:
Employers --
MDU --- 567,306 --- --- --- --- 567,306 567,306
Williston Basin --- 86,123 --- --- --- --- 86,123 86,123
Knife River --- 137,353 --- --- --- --- 137,353 137,353
--- 790,782 --- --- --- --- 790,782 790,782
Employees --
MDU --- 1,014,255 291,358 56,685 91,978 6,060 1,460,336 1,460,336
Williston Basin --- 143,289 53,697 8,462 6,396 7,750 219,594 219,594
Knife River --- 273,698 50,124 14,188 7,739 2,187 347,936 347,936
--- 1,431,242 395,179 79,335 106,113 15,997 2,027,866 2,027,866
Employee rollover --
MDU --- 345 --- --- --- --- 345 345
Williston Basin --- --- --- --- --- --- --- ---
Knife River --- --- --- --- --- --- --- ---
--- 345 --- --- --- --- 345 345
--- 2,222,369 395,179 79,335 106,113 15,997 2,818,993 2,818,993
Distributions to
terminated
participants (1,359,020) (1,153,967) (78,875) (18,442) (2,821) (4,588) (1,258,693) (2,617,713)
Transfers of
participants' equity:
Fund to Fund --- 44,885 (45,143) 3,208 (6,487) 3,537 --- ---
Plan to Plan (59,204) (63,147) (11,472) --- --- --- (74,619) (133,823)
(59,204) (18,262) (56,615) 3,208 (6,487) 3,537 (74,619) (133,823)
Increase in
participants' equity 643,462 3,670,917 855,989 124,370 125,739 16,673 4,793,688 5,437,150
Participants' equity
at beginning of year 13,126,133 16,072,519 1,492,689 299,471 151,836 19,652 18,036,167 31,162,300
Participants' equity
at end of year $13,769,595 $19,743,436 $2,348,678 $423,841 $277,575 $36,325 $22,829,855 $36,599,450
<FN>
The accompanying notes are an integral part
of this schedule.
</FN>
</TABLE>
<TABLE> ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
As of December 31, 1997
Series of Transactions within the Plan Year in Aggregate Involving more than Five Percent:
<CAPTION>
Purchases Sales/Redemptions Gain on
Fund Description Number Amount Number Amount Transactions
<S> <C> <C> <C> <C> <C> <C>
ESOP
MDU Stock No reportable transactions
Deferred Savings
MDU Stock Norwest Short-term
Investment Fund 129 $4,772,260 164 $4,650,885 ---
MDU Resources Group, Inc.
Common Stock 26 $3,202,325 7 $443,649 $123,784
Vanguard Equity Vanguard Index - 500 Portfolio 72 $1,235,001 55 $5,828,261 $2,261,280
Vanguard Bond No reportable transactions
Dodge & Cox
Balanced No reportable transactions
Small-Cap No reportable transactions
International No reportable transactions
Money Market No reportable transactions
Single Security Transaction within the Plan Year Involving more than Five Percent:
Current Value
Purchase Selling Cost of of asset on Gain on
Fund Description Price Price Asset Transaction Date Transactions
Vanguard Equity Vanguard Index - 500 Portfolio --- $5,116,362 $3,132,480 $5,116,362 $1,983,882
</TABLE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To MDU Resources Group, Inc.:
We have audited the accompanying statements of financial condition
of MDU Resources Group, Inc. Tax Deferred Compensation Savings
Plan for Collective Bargaining Unit Employees as of December 31,
1997 and 1996, and the related statements of income and changes in
participants' equity for each of the three years in the period
ended December 31, 1997. These financial statements and the
schedules referred to below are the responsibility of the Plan
Administrator. Our responsibility is to express an opinion on
these financial statements and supplemental schedules based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of MDU
Resources Group, Inc. Tax Deferred Compensation Savings Plan For
Collective Bargaining Unit Employees as of December 31, 1997 and
1996, and the results of its operations and the changes in its
participants' equity for each of the three years in the period
ended December 31, 1997 in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
schedules are presented for purposes of additional analysis and
are not a required part of the basic financial statements. This
information has been subjected to the auditing procedures applied
in our audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
March 18, 1998
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Tax Deferred Compensation Savings Plan For Collective
Bargaining Unit Employees committee has duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly
authorized.
MDU Resources Group, Inc.
Tax Deferred Compensation
Savings Plan for Collective
Bargaining Unit Employees
Date: March 27, 1998 By /s/ Douglas C. Kane
Douglas C. Kane (Chairman)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 11-K, into the
Company's previously filed Registration Statements (Form S-8
No. 33-53898 and No. 333-06103).
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
March 24, 1998
