1

MDU RESOURCES G ROUP, INC.

Highlights

Increase/Decrease

Years Ended December 31,

2007

2006

Amount

Percent

(In millions, where applicable)

Operating revenues

$ 4,247.9

$4,004.6

$243.3

6

Operating income

$

557.1

$ 523.0

$ 34.1

7

Earnings on common stock:

Earnings before discontinued operations

$ 322.1

$ 307.1

$ 15.0

5

Discontinued operations, net of tax

109.3

8.0

101.3

--

Earnings on common stock

$ 431.4

$ 315.1

$ 116.3

37

Earnings per common share -- basic:

Earnings before discontinued operations

$

1.77

$

1.70

$

.07

4

Discontinued operations, net of tax

.60

.05

.55

--

Earnings per common share -- basic

$

2.37

$

1.75

$

.62

35

Earnings per common share -- diluted:

Earnings before discontinued operations

$

1.76

$

1.69

$

.07

4

Discontinued operations, net of tax

.60

.05

.55

--

Earnings per common share -- diluted

$

2.36

$

1.74

$

.62

36

Dividends per common share

$ .5600

$ .5234

$.0366

7

Weighted average common shares outstanding -- diluted

182.9

181.4

1.5

1

Total assets

$5,592.4

$4,903.5

$688.9

14

Total equity

$ 2,531.3

$ 2,164.9

$366.4

17

Total debt

$ 1,310.2

$1,254.6

$ 55.6

4

Capitalization ratios:

Common equity

66%

63%

Total debt

34

37

100%

100%

Return on average common equity

18.5%

15.6%

Price/earnings ratio

11.7x

14.7x

Book value per common share

$ 13.80

$ 11.88

Market value as a percent of book value

200.1%

215.8%

Employees

12,293

11,526

NOTE: Common stock share amounts reflect the company's three-for-two common stock split effected in July 2006.

Forward-looking statements: This Annual Report contains forward-looking statements within the meaning of section 21E of the Securities Exchange Act of 1934.

Forward-looking statements should be read with the cautionary statements and important factors included in Part I, Forward-Looking Statements and Item 1A --

Risk Factors of the company's 2007 Form 10-K. Forward-looking statements are all statements other than statements of historical fact, including without limitation those

statements that are identified by the words anticipates, estimates, expects, intends, plans, predicts and similar expressions.

2007 was an outstanding year

Earned record $431.4 million

■

Increased earnings per share by 36 percent

■

10 percent total shareholder return

■

Five-year annual total shareholder return of 22 percent; outperformed S&P 500

■

Increased common stock dividend for 17th consecutive year

■

Completed largest acquisition in company history, nearly doubling number of

■

natural gas customers