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, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-3480
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN
MDU RESOURCES GROUP, INC.
SCHUCHART BUILDING
918 EAST DIVIDE AVENUE
P.O. BOX 5650
BISMARCK, NORTH DAKOTA 58506-5650
CONTENTS
Required Information
Financial Statements:
Statements of Financial Condition -- December 31,
1998 and 1997
Statements of Income and Changes in Participants'
Equity -- Years ended December 31, 1998, 1997
and 1996
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,
1998 1997
Assets:
Investments -- (Schedule II)
MDU Resources Group, Inc. common
stock
(1998 -- 6,064,118 shares,
cost $103,035,875;
1997 -- 2,760,054 shares,
cost $43,632,742) $159,562,105 $ 87,286,708
Other 29,897,044 4,034,826
Cash and cash equivalents 1,711,482 12,908,879
Dividends and interest receivable 1,281,649 800,500
Participant loans receivable 2,318,857 ---
$194,771,137 $105,030,913
Participants' equity:
Distributions due terminated
participants $ 333,123 $ 6,271
Active participants' equity 194,438,014 105,024,642
$194,771,137 $105,030,913
The accompanying notes are an integral part
of these financial statements.
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN
STATEMENTS OF INCOME AND CHANGES IN PARTICIPANTS' EQUITY
Years ended December 31,
1998 1997 1996
Investment income:(Schedule III)
Dividends $ 3,484,873 $ 3,454,643 $ 3,325,827
Interest 193,431 53,480 33,247
Capital gains 603,798 200,226 25,681
Other (20,091) (890) (108,279)
Realized gains, net 8,693,580 6,976,940 1,369,749
Unrealized appreciation on
investments 14,766,451 19,279,470 8,518,996
27,722,042 29,963,869 13,165,221
Contributions:
Employers 1,274,909 1,213,664 1,170,200
Employees 3,885,912 3,553,477 3,332,996
Employee rollover 205,540 1,104 15,179
Total contributions 5,366,361 4,768,245 4,518,375
Distributions to terminated
participants (8,998,730) (6,769,572) (4,164,626)
Net transfers from Tax
Deferred Compensation
Savings Plan for
Collective Bargaining
Unit Employees 483,019 155,102 600,455
Transfers related to Coyote
Station (Note 4) (2,518,578) --- ---
Transfers related to
Merger of Plans (Note 1) 67,686,110 --- ---
Increase in participants'
equity 89,740,224 28,117,644 14,119,425
Participants' equity at
beginning of year 105,030,913 76,913,269 62,793,844
Participants' equity at
end of year $194,771,137 $105,030,913 $76,913,269
The accompanying notes are an integral part
of these financial statements.
NOTES TO FINANCIAL STATMENTS
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. Effective January 1, 1999, the
Plan was amended to reflect the merger of the MDU Resources Group,
Inc. Tax Deferred Compensation Savings Plan for Collective
Bargaining Unit Employees (Bargaining Plan) into the Plan. The
assets of the Bargaining Plan were transferred to the Plan on
December 31, 1998. Each participant in the Bargaining Plan
automatically became a participant in the Plan. The merger and
the transfer of assets were effectuated in accordance with Sections
401(a)(12), 411(d)(6) and 414(l) of the Internal Revenue Code of
1986, as amended (Code) and the regulations thereunder. In
addition, effective January 1, 1999, the Plan's name was changed
to the MDU Resources Group, Inc. 401(k) Retirement 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 seven-member
committee (the Committee) appointed by the Chief Executive Officer
of the Company.
The recordkeeper and trustee of the Plan are New York Life
Benefits Services, Inc. (recordkeeper) and New York Life Trust
Company (trustee), respectively.
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 three 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, 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, and 3) The
profit sharing feature which was added effective January 1, 1999.
This profit sharing feature will allow the Company and any of its
direct or indirect subsidiaries who choose to participate in the
Plan to make discretionary contributions to eligible employees,
based on attainment of pre-determined earnings levels.
Deferred Savings
Prior to January 1, 1999, any employee who was at least 18
years of age, who completed at least one year of service with a
minimum of 1,000 hours worked and who was not a collective
bargaining unit employee was eligible to participate in the Plan.
As of January 1, 1999, generally an employee may participate upon
hire if they are at least 18 years of age and a regular full time
or part time employee. An eligible employee may elect to par-
ticipate in the Plan and by filing an election with the Company to
have savings contributions made on the employee's behalf. Prior
to January 1, 1999, a former participant or eligible employee who
was reemployed became eligible to be a participant on the first
day of the month following the employee's return to employment as
an eligible employee. Effective January 1, 1999, the reemployed
employee is eligible on the first day of reemployment.
Each participant may change their contribution percentage at
any time via the recordkeeper's toll free telephone service or
internet website. The Plan allows contributions by participants
varying from one percent through 15 percent, 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 in one percent
increments to any or all of the seven available investment
options. Participants may choose to invest 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 stable value option. 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 1998 and 1997 and not in excess of $150,000 for 1996) 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 or internet website. 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 non-discretionary 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. Effective January 1,
1999, the Company may make an additional discretionary variable
matching contribution to a participant's Matching Contribution
Account based on attainment of pre-determined earnings levels.
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. 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 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, 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 on 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 are invested in the MainStay
Institutional Indexed Equity Fund (MainStay 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 are invested in the MainStay Institutional
Indexed Bond Fund (MainStay Bond), which invests in investment
grade corporate and U.S. government bonds, mortgage-backed
securities and asset-backed securities. The funds contributed to
the balanced fund are invested in the Dodge & Cox Balanced Fund
(Dodge & Cox Balanced), which invests in 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 are invested in the Templeton Foreign Fund
(Class I) (Templeton International), which invests primarily in
stocks of companies located outside of the United States. The
funds contributed to the stable value option (Stable Value) are
invested in the New York Life Anchor Account, which also invests
in cash and cash equivalents. On January 2, 1998, the Vanguard
Index - 500 Portfolio (Vanguard Equity), Vanguard Total Bond
Market Index Fund (Vanguard Bond), EuroPacific Growth Fund
(International) and the short-term investment fund (Money Market)
were replaced with the MainStay Equity, MainStay Bond, Templeton
International and Stable Value funds, respectively. 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).
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 62 without the written consent of the participant if the value
of such accounts exceeds $5,000.
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
percentage point.
A participant may make other in-service withdrawals (hardship
or age 59 1/2) 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.
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.
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, except for participant loans which are not
available to ESOP Accounts.
Prior to January 1, 1999 each participant with an ESOP Account,
who had attained age 55 and who had completed at least 10 years of
participation under the ESOP, the Plan or both, was 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 was offered to allow the participant to diversify
the investment of a portion of their ESOP account. Effective
January 1, 1999, the entire ESOP account balance may be
diversified within the Plan for participants who have both
attained age 55 and completed at least 10 years of participation.
2. Summary of Significant Accounting Policies
Investment valuation -
Investments held by the Plan are carried at market value.
Market value for the Stable Value and Money Market funds
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.
3. 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 1998, 1997 and 1996
was as follows:
Deferred Savings ESOP
1998 1997 1996 1998 1997 1996
MDU Stock:
Number
of
shares 151,445 179,393 123,334 77,060 78,710 61,030
Market
value $4,691,953 $4,200,722 $2,599,731 $2,164,686 $1,701,461 $1,283,160
Average
cost $2,294,918 $2,876,791 $1,969,443 $ 650,089 $ 966,733 $ 715,030
Cash $2,124,820 $ 856,763 $ 264,405 $ 17,271 $ 10,626 $ 16,718
Cash distributions made in 1996 from the Profit Sharing feature
were $612.
The net changes in unrealized appreciation of Plan investments
during 1998, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
Deferred Savings ESOP
1998 1997 1996 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C>
Unrealized
appreciation
- January 1 $30,416,948 $16,363,392 $ 9,807,996 $13,495,039 $ 8,269,125 $6,305,525
Change
during
the year 11,484,137 14,053,556 6,555,396 3,282,314 5,225,914 1,963,600
Unrealized
appreciation
- December 31 $41,901,085 $30,416,948 $16,363,392 $16,777,353 $13,495,039 $8,269,125
</TABLE>
4. Transfers Related to Coyote Station
Effective July 1, 1998, Montana-Dakota Utilities Co., a
division of the Company, was replaced by Otter Tail Power Company
(Otter Tail) as operator of the Coyote electric generating station
(Coyote Station) at Beulah, North Dakota. At such time, employees
at the Coyote Station became employees of Otter Tail. Assets for
those employees who were participants in the Plan and Bargaining
Plan were transferred to the trustee of the Otter Tail defined
contribution retirement plan. Montana-Dakota Utilities Co.,
maintains its ownership interest in the Coyote Station.
5. Federal Income Taxes
The Internal Revenue Service (IRS) has informed the Company
that the Plan, as amended through July 31, 1998, 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>
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN
ALLOCATION OF PLAN ASSETS AND
LIABILITIES TO INVESTMENT PROGRAMS
December 31, 1998
<CAPTION>
ESOP Deferred Savings and Profit Sharing
MainStay MainStay Dodge & Cox
MDU Stock MDU Stock Equity Bond Balanced Small-Cap
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments --
Participants 1,080 1,811 1,134 407 512 383
Number of shares/
units 1,771,753 4,292,365 596,937 178,972 53,010 43,561
Cost $29,841,898 $ 73,193,977 $17,675,953 $1,958,405 $3,542,031 $2,124,587
Market value $46,619,251 $112,942,854 $19,931,733 $1,956,161 $3,457,324 $2,201,585
Cash and cash
equivalents 85,908 1,625,574 --- --- --- ---
Dividends and
interest
receivable 372,950 901,645 --- --- --- ---
Participant loans
receivable --- --- --- --- --- ---
$47,078,109 $115,470,073 $19,931,733 $1,956,161 $3,457,324 $2,201,585
Participants' equity:
Distributions due
terminated
participants $ 112,621 $ 135,293 $ 25,551 $ 9,898 $ 10,893 $ 19,121
Active participants'
equity 46,965,488 115,334,780 19,906,182 1,946,263 3,446,431 2,182,464
$47,078,109 $115,470,073 $19,931,733 $1,956,161 $3,457,324 $2,201,585
<FN>
The accompanying notes are an integral part of this schedule.
</FN>
</TABLE>
<TABLE>
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN
ALLOCATION OF PLAN ASSETS AND
LIABILITIES TO INVESTMENT PROGRAMS (Continued)
December 31, 1998
<CAPTION>
Deferred Savings and Profit Sharing (Continued)
Templeton Total
Inter- Stable Loan Deferred
national Value Fund Savings Total
<S> <C> <C> <C> <C> <C>
Assets:
Investments --
Participants 216 150 179
Number of shares/
units 91,918 1,579,053 --- 6,835,816 8,607,569
Cost $864,807 $1,579,053 --- $100,938,813 $130,780,711
Market value $771,188 $1,579,053 $ --- $142,839,898 $189,459,149
Cash and cash
equivalents --- --- --- 1,625,574 1,711,482
Dividends and
interest
receivable --- 7,054 --- 908,699 1,281,649
Participant loans
receivable --- --- 2,318,857 2,318,857 2,318,857
$771,188 $1,586,107 $2,318,857 $147,693,028 $194,771,137
Participants' equity:
Distributions due
terminated
participants $ 18,491 $ 1,255 $ --- $ 220,502 $ 333,123
Active participants'
equity 752,697 1,584,852 2,318,857 147,472,526 194,438,014
$771,188 $1,586,107 $2,318,857 $147,693,028 $194,771,137
<FN>
The accompanying notes are an integral part of this schedule.
</FN>
</TABLE>
<TABLE>
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN
ALLOCATION OF PLAN ASSETS AND
LIABILITIES TO INVESTMENT PROGRAMS
December 31, 1997
<CAPTION>
ESOP Deferred Savings and Profit Sharing 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>
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN
ALLOCATION OF PLAN INCOME AND CHANGES
IN PLAN EQUITY TO INVESTMENT PROGRAMS
Year ended December 31, 1998
<CAPTION>
ESOP Deferred Savings and Profit Sharing
MainStay MainStay Dodge & Cox
MDU Stock MDU Stock Equity Bond Balanced Small-Cap
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends $ 801,976 $ 2,333,142 $ 152,155 $ 92,387 $ 88,797 $ 1,265
Interest 5,238 36,939 --- 6,680 --- ---
Capital gains --- --- 414,078 --- 145,141 ---
Other 8,713 (27,686) (474) (59) (510) ---
Realized gain (loss) 2,102,658 6,080,362 264,327 13,417 161,748 74,095
Unrealized appreciation
(depreciation) on
investments 3,282,314 9,589,950 2,255,780 (2,244) (239,435) (26,315)
6,200,899 18,012,707 3,085,866 110,181 155,741 49,045
Contributions:
Employers --
MDU --- 698,974 --- --- --- ---
WBI Holdings --- 233,745 --- --- --- ---
Knife River --- 342,190 --- --- --- ---
--- 1,274,909 --- --- --- ---
Employees --
MDU --- 1,052,741 679,935 69,526 180,509 149,187
WBI Holdings --- 248,569 240,004 24,259 85,326 63,500
Knife River --- 361,501 347,623 51,514 98,367 33,610
--- 1,662,811 1,267,562 145,299 364,202 246,297
Employee rollover --
MDU --- 772 6,562 --- 173 12,592
WBI Holdings --- 1,703 7,177 851 5,110 3,222
Knife River --- 73,114 72,392 4,136 --- 13,527
--- 75,589 86,131 4,987 5,283 29,341
--- 3,013,309 1,353,693 150,286 369,485 275,638
Distributions to
terminated
participants (2,181,957) (4,912,143) (639,370) (108,825) (360,944) (86,699)
Net loan activity --- (859,025) (209,654) 2,802 (37,150) (25,006)
Transfers of
participants' equity:
Fund to Fund --- (1,747,822) (413,008) 149,241 316,352 484,684
Plan to Plan 49,440 382,027 18,359 13,068 5,060 682
Plan to Plan
(Coyote Station) (692,514) (1,381,724) (219,444) (53,219) (49,660) (37,186)
Plan to Plan (Merger) 21,171,336 37,277,587 5,890,180 435,714 778,579 632,778
20,528,262 34,530,068 5,276,087 544,804 1,050,331 1,080,958
Increase in participants'
equity 24,547,204 49,784,916 8,866,622 699,248 1,177,463 1,293,936
Participants'
equity at
beginning of
year 22,530,905 65,685,157 11,065,111 1,256,913 2,279,861 907,649
Participants'
equity at end
of year $47,078,109 $115,470,073 $19,931,733 $1,956,161 $3,457,324 $2,201,585
<FN>
The accompanying notes are an integral part of this schedule.
</FN>
</TABLE>
<TABLE>
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN
ALLOCATION OF PLAN INCOME AND CHANGES
IN PLAN EQUITY TO INVESTMENT PROGRAMS (Continued)
Year ended December 31, 1998
<CAPTION>
Deferred Savings and Profit Sharing (Continued)
Templeton Total
Inter- Stable Loan Deferred
national Value Fund Savings Total
<S> <C> <C> <C> <C> <C>
Investment income:
Dividends $ 15,151 $ --- $ --- $ 2,682,897 $ 3,484,873
Interest --- 83,797 60,777 188,193 193,431
Capital gains 44,579 --- --- 603,798 603,798
Other --- (75) --- (28,804) (20,091)
Realized gain (loss) (3,027) --- --- 6,590,922 8,693,580
Unrealized appreciation
(depreciation) on
investments (93,599) --- --- 11,484,137 14,766,451
(36,896) 83,722 60,777 21,521,143 27,722,042
Contributions:
Employers --
MDU --- --- --- 698,974 698,974
WBI Holdings --- --- --- 233,745 233,745
Knife River --- --- --- 342,190 342,190
--- --- --- 1,274,909 1,274,909
Employees --
MDU 83,604 30,170 --- 2,245,672 2,245,672
WBI Holdings 34,262 5,059 --- 700,979 700,979
Knife River 10,806 35,840 --- 939,261 939,261
128,672 71,069 --- 3,885,912 3,885,912
Employee rollover --
MDU 520 --- --- 20,619 20,619
WBI Holdings 1,155 852 --- 20,070 20,070
Knife River 841 841 --- 164,851 164,851
2,516 1,693 --- 205,540 205,540
131,188 72,762 --- 5,366,361 5,366,361
Distributions to
terminated
participants (36,107) (628,682) (44,003) (6,816,773) (8,998,730)
Net loan activity (6,330) (8,423) 1,142,786 --- ---
Transfers of
participants' equity:
Fund to Fund 129,344 1,081,209 --- --- ---
Plan to Plan 257 14,126 --- 433,579 483,019
Plan to Plan
(Coyote Station) (16,309) (68,522) --- (1,826,064) (2,518,578)
Plan to Plan (Merger) 152,317 188,322 1,159,297 46,514,774 67,686,110
265,609 1,215,135 1,159,297 45,122,289 65,650,551
Increase in participants'
equity 317,464 734,514 2,318,857 65,193,020 89,740,224
Participants'
equity at
beginning of
year 453,724 851,593 --- 82,500,008 105,030,913
Participants'
equity at end
of year $771,188 $1,586,107 $2,318,857 $147,693,028 $194,771,137
<FN>
The accompanying notes are an integral part of this schedule.
</FN>
</TABLE>
<TABLE>
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN
ALLOCATION OF PLAN INCOME AND CHANGES
IN PLAN EQUITY TO INVESTMENT PROGRAMS
Year ended December 31, 1997
ESOP Deferred Savings and Profit Sharing 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) 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
investments 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
participants (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>
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN
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 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>
MDU RESOURCES GROUP, INC.
TAX DEFERRED COMPENSATION SAVINGS PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
As of DECEMBER 31, 1998
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 MDU Resources Group, Inc.
Common Stock 8 $22,192,742* --- --- ---
DEFERRED SAVINGS
MDU Stock MDU Resources Group, Inc.
Common Stock 34 $43,937,244* 127 $11,634,184 $2,963,074
MDU Stock MainStay Inst. Money Market 111 $17,830,176* 116 $16,204,602 ---
MainStay Equity MainStay Index - 500 Portfolio 80 $19,570,260* --- --- ---
MainStay Bond No reportable transactions
Dodge & Cox Balanced No reportable transactions
Small-Cap No reportable transactions
Templeton International No reportable transactions
Stable Value New York Life Anchor Account 89 $ 8,069,623* 75 $ 6,566,745 ---
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
ESOP
MDU Stock MDU Resources Group, Inc.
Common Stock $20,963,353* --- --- $20,963,353 ---
DEFERRED SAVINGS
MDU Stock MDU Resources Group, Inc.
Common Stock $36,544,484* --- --- $36,544,484 ---
MainStay Equity MainStay Index - 500 Portfolio $11,065,124 --- --- $11,065,124 ---
MainStay Equity MainStay Index - 500 Portfolio $ 5,890,180* --- --- $ 5,890,180 ---
<FN>
* Includes amounts related to Merger of Plans (Note 1)
</FN>
</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, 1998 and 1997, and the related statements
of income and changes in participants' equity for each of the
three years in the period ended December 31, 1998. 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, 1998 and 1997 and the results of its operations and
the changes in participants' equity for each of the three years in
the period ended December 31, 1998 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 15, 1999
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 29, 1999 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.
333-06105 and No. 333-72595).
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
March 29, 1999
