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
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
STATEMENTS OF FINANCIAL CONDITION
December 31,
1997 1996
Assets:
Investments -- (Schedule II)
MDU Resources Group, Inc. common
stock
(1997 -- 2,760,054 shares,
cost $43,632,742;
1996 -- 2,838,640 shares,
cost $43,045,573) $ 87,286,708 $65,289,050
Other 4,034,826 8,143,804
Cash and cash equivalents 12,908,879 2,690,638
Dividends and interest receivable 800,500 789,777
$105,030,913 $76,913,269
Participants' equity:
Distributions due terminated
participants $ 6,271 $ 1,768,833
Active participants' equity 105,024,642 75,144,436
$105,030,913 $76,913,269
The accompanying notes are an integral part
of these statements.
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN
STATEMENTS OF INCOME AND CHANGES IN PARTICIPANTS' EQUITY
Years ended December 31,
1997 1996 1995
Investment income:(Schedule III)
Dividends $ 3,454,643 $ 3,325,827 $ 3,085,049
Interest 53,480 33,247 21,542
Capital gains 200,226 25,681 10,645
Other (890) (108,279) (19,297)
Realized gain on
distributions 6,976,940 1,369,749 1,238,330
Unrealized appreciation on
investments 19,279,470 8,518,996 4,817,153
29,963,869 13,165,221 9,153,422
Contributions:
Employers 1,213,664 1,170,200 1,236,820
Employees 3,553,477 3,332,996 2,921,030
Employee rollover 1,104 15,179 19,784
Total contributions 4,768,245 4,518,375 4,177,634
Distributions to terminated
participants (6,769,572) (4,164,626) (4,694,993)
Net transfers from Tax
Deferred Compensation
Savings Plan for
Collective Bargaining
Unit Employees 155,102 600,455 678,285
Increase in participants'
equity 28,117,644 14,119,425 9,314,348
Participants' equity at
beginning of year 76,913,269 62,793,844 52,611,360
Merger of Profit Sharing
feature (Note 1) --- --- 868,136
76,913,269 62,793,844 53,479,496
Participants' equity at
end of year $105,030,913 $76,913,269 $62,793,844
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 (the Plan) was adopted on August 4, 1983, 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,
1984. 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. Effective
January 1, 1995 (1995 Effective Date), the Plan was amended to
reflect the merger and transfer of eligible employees' accounts of
the Anchorage Sand and Gravel Company, Inc. (AS&G) Profit
Sharing/401(k) Plan 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 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 1988 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 not a collective bargaining unit employee 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 nonconvertible
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.
On the 1995 Effective Date, the 401(k) feature of the AS&G
Profit Sharing/401(k) Plan was merged into the Deferred Savings
feature of the Plan with the Profit Sharing feature being merged
into the Plan as a separate feature. On September 30, 1996, the
assets of the Profit Sharing feature were liquidated and
transferred to the available investment options of the Deferred
Savings feature as directed by the AS&G participants.
Participation in the Profit Sharing feature of the Plan is
limited to participants who are non-bargaining employees of AS&G.
On an annual basis, AS&G may contribute a discretionary amount to
the non-highly compensated AS&G employees out of its current or
accumulated net profit, as defined in the summary plan
description.
ESOP
Participation in the ESOP feature of the Plan is limited to
participants in the ESOP as of the 1988 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:
<TABLE>
<CAPTION>
Deferred Savings ESOP
1997 1996 1995 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
MDU Stock:
Number
of
shares 179,393 123,334 116,987 78,710 61,030 48,350
Market
value $4,200,722 $2,599,731 $2,986,213 $1,701,461 $1,283,160 $1,248,156
Average
cost $2,876,791 $1,969,443 $2,361,202 $966,733 $715,030 $728,333
Cash $856,763 $264,405 $337,286 $10,626 $16,718 $17,582
</TABLE>
Cash distributions made in 1996 and 1995 from the Profit Sharing
feature were $612 and $105,756, respectively.
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 $16,363,392 $ 9,807,996 $5,865,526 $ 8,269,125 $6,305,525 $5,443,782
Change
during
the year 14,053,556 6,555,396 3,942,470 5,225,914 1,963,600 861,743
Unrealized
appreciation
- December 31 $30,416,948 $16,363,392 $9,807,996 $13,495,039 $8,269,125 $6,305,525
</TABLE>
Profit
Sharing
1995
Unrealized
depreciation
- January 1 $(46,874)
Change
during
the year 12,940
Unrealized
appreciation
- December 31 $(33,934)
Due to the transfer of assets for the Profit Sharing feature in
1996 to the Deferred Savings feature, 1997 and 1996 information is
not presented for the Profit Sharing feature but has been included
with the Deferred Savings feature above.
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 696 1,125 767 309 350 173 141 88
Number of shares/
units 705,683 2,054,371 --- --- 34,140 18,710 10 847,049 2,954,280 3,659,963
Cost $ 8,822,186 $34,810,556 $ --- $ --- $2,125,133 $804,336 $ 287 $847,049 $38,587,361 $ 47,409,547
Market value $22,317,225 $64,969,483 $ --- $ --- $2,279,861 $907,649 $ 267 $847,049 $69,004,309 $ 91,321,534
Cash and cash
equivalents 10,507 122,890 11,065,111 1,256,913 --- --- 453,457 1 12,898,372 12,908,879
Dividends and
interest
receivable 203,173 592,784 --- --- --- --- --- 4,543 597,327 800,500
$22,530,905 $65,685,157 $11,065,111 $1,256,913 $2,279,861 $907,649 $453,724 $851,593 $82,500,008 $105,030,913
Participants' equity:
Distributions due
terminated
participants $ --- $ 5,138 $ 222 $ 164 $ --- $ --- $ --- $ 747 $ 6,271 $ 6,271
Active participants'
equity 22,530,905 65,680,019 11,064,889 1,256,749 2,279,861 907,649 453,724 850,846 82,493,737 105,024,642
$22,530,905 $65,685,157 $11,065,111 $1,256,913 $2,279,861 $907,649 $453,724 $851,593 $82,500,008 $105,030,913
<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 Profit
MDU Stock MDU Stock Equity Bond Balanced Market Savings Sharing Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments --
Participants 700 1,102 719 320 300 68
Number of
shares/units 748,941 2,089,699 106,804 652 --- 750,577 2,947,732 --- 3,696,673
Cost $ 8,956,510 $34,089,046 $4,997,832 $ 6,371 $ --- $750,578 $39,843,827 $ --- $48,800,337
Market value $17,225,635 $48,063,415 $7,386,852 $ 6,375 $ --- $750,577 $56,207,219 $ --- $73,432,854
Cash and cash
equivalents --- 19 --- 1,249,209 1,441,409 1 2,690,638 --- 2,690,638
Dividends and
interest
receivable 207,830 580,134 15 1 8 1,789 581,947 --- 789,777
$17,433,465 $48,643,568 $7,386,867 $1,255,585 $1,441,417 $752,367 $59,479,804 $ --- $76,913,269
Participants'
equity:
Distributions
due terminated
participants $ 481,177 $ 1,135,606 $ 97,219 $ 47,131 $ 6,894 $ 806 $ 1,287,656 $ --- $ 1,768,833
Active
participants'
equity 16,952,288 47,507,962 7,289,648 1,208,454 1,434,523 751,561 58,192,148 --- 75,144,436
$17,433,465 $48,643,568 $7,386,867 $1,255,585 $1,441,417 $752,367 $59,479,804 $ --- $76,913,269
<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
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 $ 815,775 $ 2,341,364 $ 154,705 $ 73,592 $ 62,110 $ --- $ 7,097 $ --- $ 2,638,868 $ 3,454,643
Interest 866 11,446 509 218 48 --- --- 40,393 52,614 53,480
Capital gains --- --- 70,544 --- 103,511 --- 26,171 --- 200,226 200,226
Other 37 (193) 329 7 108 2 --- (1,180) (927) (890)
Realized gain
(loss) on
distri-
butions 739,779 1,431,823 4,775,215 37,316 21,409 6,756 (35,358) --- 6,237,161 6,976,940
Unrealized
appreciation
(depreciation)
on invest-
ments 5,225,914 16,184,557 (2,389,019) (3) 154,728 103,313 (20) --- 14,053,556 19,279,470
6,782,371 19,968,997 2,612,283 111,130 341,914 110,071 (2,110) 39,213 23,181,498 29,963,869
Contributions:
Employers --
MDU --- 670,480 --- --- --- --- --- --- 670,480 670,480
Williston
Basin --- 218,362 --- --- --- --- --- --- 218,362 218,362
Knife River --- 324,822 --- --- --- --- --- --- 324,822 324,822
--- 1,213,664 --- --- --- --- --- --- 1,213,664 1,213,664
Employees --
MDU --- 959,057 682,656 78,641 182,436 66,127 66,775 15,606 2,051,298 2,051,298
Williston Basin --- 274,374 225,684 27,707 60,831 21,744 17,609 7,898 635,847 635,847
Knife River --- 332,457 339,315 50,247 87,863 6,042 4,081 46,327 866,332 866,332
--- 1,565,888 1,247,655 156,595 331,130 93,913 88,465 69,831 3,553,477 3,553,477
Employee rollover --
MDU --- --- --- --- --- --- --- --- --- ---
Williston Basin --- --- --- --- --- --- --- --- --- ---
Knife River --- 552 --- --- 221 110 221 --- 1,104 1,104
--- 552 --- --- 221 110 221 --- 1,104 1,104
--- 2,780,104 1,247,655 156,595 331,351 94,023 88,686 69,831 4,768,245 4,768,245
Distributions to
terminated
partici-
pants (1,712,087) (4,265,456) (441,830) (135,612) (91,652) (5,574) (6,567) (110,794) (5,057,485) (6,769,572)
Transfers of
participants'
equity:
Fund to Fund --- (1,503,786) 195,761 (127,807) 256,034 705,796 373,035 100,967 --- ---
Plan to Plan 27,156 61,730 64,375 (2,978) 797 3,333 680 9 127,946 155,102
27,156 (1,442,056) 260,136 (130,785) 256,831 709,129 373,715 100,976 127,946 155,102
Increase in
participants'
equity 5,097,440 17,041,589 3,678,244 1,328 838,444 907,649 453,724 99,226 23,020,204 28,117,644
Participants'
equity at
beginning of
year 17,433,465 48,643,568 7,386,867 1,255,585 1,441,417 --- --- 752,367 59,479,804 76,913,269
Participants'
equity at
end of
year $22,530,905 $65,685,157 $11,065,111 $1,256,913 $2,279,861 $907,649 $453,724 $851,593 $82,500,008 $105,030,913
<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 Profit
MDU Stock MDU Stock Equity Bond Balanced Market Savings Sharing Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends $ 832,432 $ 2,240,465 $ 127,247 $ 68,953 $ 52,482 $ --- $ 2,489,147 $ 4,248 $ 3,325,827
Interest 4 3,911 560 386 211 16,229 21,297 11,946 33,247
Capital gains --- --- 25,681 --- --- --- 25,681 --- 25,681
Other --- --- --- --- --- (760) (760) (107,519) (108,279)
Realized gain on
distributions 572,641 648,125 214 31,722 103,641 --- 783,702 13,406 1,369,749
Unrealized
appreciation
(depreciation)
on investments 1,963,600 5,559,439 1,105,398 (69,959) (39,482) --- 6,555,396 --- 8,518,996
3,368,677 8,451,940 1,259,100 31,102 116,852 15,469 9,874,463 (77,919) 13,165,221
Contributions:
Employers--
MDU --- 695,789 --- --- --- --- 695,789 --- 695,789
Williston Basin --- 199,352 --- --- --- --- 199,352 --- 199,352
Knife River --- 275,059 --- --- --- --- 275,059 --- 275,059
--- 1,170,200 --- --- --- --- 1,170,200 --- 1,170,200
Employees--
MDU --- 1,096,580 674,281 90,944 200,526 18,738 2,081,069 --- 2,081,069
Williston Basin --- 310,752 161,998 32,790 44,514 3,183 553,237 --- 553,237
Knife River --- 284,305 254,419 44,331 88,674 26,961 698,690 --- 698,690
--- 1,691,637 1,090,698 168,065 333,714 48,882 3,332,996 --- 3,332,996
Employee rollover
MDU --- 536 2,073 --- --- --- 2,609 --- 2,609
Williston Basin --- --- --- --- --- --- --- --- ---
Knife River --- --- 5,028 3,771 3,771 --- 12,570 --- 12,570
--- 536 7,101 3,771 3,771 --- 15,179 --- 15,179
--- 2,862,373 1,097,799 171,836 337,485 48,882 4,518,375 --- 4,518,375
Distributions to
terminated
participants (1,299,878) (2,642,325) (151,907) (50,023) (14,099) (5,782) (2,864,136) (612) (4,164,626)
Transfers of
participants'
equity:
Fund to Fund --- (35,978) 252,031 (5,528) 209,527 447,291 867,343 (867,343) ---
Plan to Plan 286,464 214,882 97,313 1,796 --- --- 313,991 --- 600,455
286,464 178,904 349,344 (3,732) 209,527 447,291 1,181,334 (867,343) 600,455
Increase (decrease)
in participants'
equity 2,355,263 8,850,892 2,554,336 149,183 649,765 505,860 12,710,036 (945,874) 14,119,425
Participants'
equity
at beginning
of year 15,078,202 39,792,676 4,832,531 1,106,402 791,652 246,507 46,769,768 945,874 62,793,844
Participants'
equity
at end
of year $17,433,465 $48,643,568 $7,386,867 $1,255,585 $1,441,417 $752,367 $59,479,804 $ --- $76,913,269
<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 Profit
MDU Stock MDU Stock Equity Bond Balanced Market Savings Sharing Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends $ 811,566 $ 2,071,881 $ 94,903 $ 56,651 $ 25,695 $ --- $ 2,249,130 $ 24,353 $ 3,085,049
Interest 42 5,075 959 330 862 11,566 18,792 2,708 21,542
Capital gains --- --- 10,645 --- --- --- 10,645 --- 10,645
Other --- 4,864 1,162 --- 809 (292) 6,543 (25,840) (19,297)
Realized gain (loss)
on distributions 525,653 641,926 977 (82) 523 --- 643,344 69,333 1,238,330
Unrealized
appreciation
on investments 861,743 2,707,985 1,086,893 99,432 48,160 --- 3,942,470 12,940 4,817,153
2,199,004 5,431,731 1,195,539 156,331 76,049 11,274 6,870,924 83,494 9,153,422
Contributions:
Employers--
MDU --- 738,820 --- --- --- --- 738,820 --- 738,820
Williston Basin --- 183,574 --- --- --- --- 183,574 --- 183,574
Knife River --- 214,426 --- --- --- --- 214,426 100,000 314,426
--- 1,136,820 --- --- --- --- 1,136,820 100,000 1,236,820
Employees--
MDU --- 1,151,433 491,880 95,396 191,473 21,074 1,951,256 --- 1,951,256
Williston Basin --- 287,190 112,832 28,823 40,012 2,748 471,605 --- 471,605
Knife River --- 238,396 127,147 34,792 65,950 31,884 498,169 --- 498,169
--- 1,677,019 731,859 159,011 297,435 55,706 2,921,030 --- 2,921,030
Employee rollover--
MDU --- 17,660 --- --- --- 1,742 19,402 --- 19,402
Williston Basin --- --- --- --- --- --- --- --- ---
Knife River --- 344 38 --- --- --- 382 --- 382
--- 18,004 38 --- --- 1,742 19,784 --- 19,784
--- 2,831,843 731,897 159,011 297,435 57,448 4,077,634 100,000 4,177,634
Distributions to
terminated
participants (1,265,738) (3,172,483) (94,019) (29,841) (17,489) (9,667) (3,323,499) (105,756) (4,694,993)
Transfer of
participants'
equity:
Fund to Fund --- 4,803 24,383 11,857 9,225 (50,268) --- --- ---
Plan to Plan 59,204 134,919 140,410 29,223 143,342 171,187 619,081 --- 678,285
59,204 139,722 164,793 41,080 152,567 120,919 619,081 --- 678,285
Increase
in participants'
equity 992,470 5,230,813 1,998,210 326,581 508,562 179,974 8,244,140 77,738 9,314,348
Participants'
equity
at beginning
of year 14,085,732 34,561,863 2,834,321 779,821 283,090 66,533 38,525,628 868,136 53,479,496
Participants'
equity
at end
of year $15,078,202 $39,792,676 $4,832,531 $1,106,402 $791,652 $246,507 $46,769,768 $945,874 $62,793,844
<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 160 $6,409,074 175 $6,022,426 ---
MDU Resources Group, Inc.
Common Stock 29 $4,628,537 9 $353,128 $112,942
Vanguard Equity Vanguard Index - 500 Portfolio 94 $2,117,131 57 $11,889,917 $4,775,215
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 --- $11,065,109 $6,608,660 $11,065,109 $4,456,449
</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 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 as of
December 31, 1997 and 1996 and the results of its operations and
the changes in 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 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
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. 33-53896 and No. 333-06105).
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
March 24, 1998
